Document:

Exhibit 10.1

 

EXECUTION COPY

 

WAIVER AND AMENDMENT NO. 2 

TO THE CREDIT AGREEMENT

 

Dated as of October 1, 2010

 

WAIVER AND AMENDMENT NO. 2 TO THE CREDIT AGREEMENT among
GEOKINETICS HOLDINGS USA, INC., a Delaware corporation (the “Borrower”),
the banks, financial institutions and other institutional lenders parties to
the Credit Agreement referred to below (collectively, the “Lenders”) and
ROYAL BANK OF CANADA, as agent (the “Agent”) for the Lenders.

 

PRELIMINARY STATEMENTS:

 

(1)           The Borrower, the Lenders and the
Agent have entered into a Credit Agreement dated as of February 12, 2010
(as amended by Amendment No. 1 to the Credit Agreement dated as of June 30,
2010, and as otherwise amended, supplemented or otherwise modified through the
date hereof, the “Credit Agreement”). 
Capitalized terms not otherwise defined in this Amendment have the same
meanings as specified in the Credit Agreement.

 

(2)           The Borrower has requested a waiver
of any Default or Event of Default resulting from the failure by the Loan Parties
to comply with the requirements of Sections 7.13, 7.14 and 7.15 of the Credit
Agreement for the fiscal quarter ended September 30, 2010 (collectively,
the “Specified Defaults”).

 

(3)           The Lenders are, on the terms and
conditions stated below, willing to grant the request of the Borrower and the
Borrower and the Lenders have agreed to amend the Credit Agreement as
hereinafter set forth.

 

SECTION 1.        Waiver.  (a)          In reliance upon the representations,
warranties and covenants of Borrower and the other Loan Parties contained in
this Amendment, and subject to the terms and conditions of this Amendment, the
Lenders hereby waive the Specified Defaults.

 

(b)           Each Lender reserves the right, in
its discretion, to exercise any or all of its rights and remedies under the
Credit Agreement and the other Loan Documents as a result of any Event of
Default which may be continuing on the date hereof or any Event of Default
which may occur after the date hereof (other than the Specified Defaults), and
each Lender has not waived any such Event of Default (other than the Specified
Defaults), rights or remedies, and nothing in this Amendment, and no delay on
its part in exercising any such rights or remedies, should be construed as a
waiver of any such Events of Default (other than the Specified Defaults),
rights or remedies.

 

SECTION 2.        Amendments to Credit Agreement.  The Credit
Agreement is, effective as of the date hereof and subject to the satisfaction
of the conditions precedent set forth in Section 3, hereby amended as follows:

 

(a)           Section 4.02 is amended by
adding thereto a new clause (d), to read as follows:

 

(d) The
Administrative Agent shall have received a certificate of the chief financial
officer of the Borrower in form, scope and substance reasonably satisfactory to
Administrative Agent, certifying that after giving effect to such proposed
Credit Extension, the Loan Parties (taken as a whole) are Solvent.

 

 

(b)           Section 6.01(c) is amended
and restated in its entirety to read as follows:

 

“(c) Monthly
Financials. As soon as available, but in any event, within fifteen (15)
Business Days after the end of each fiscal month of each fiscal year of the
Parent (commencing with the month ending September 30, 2010), a
consolidated balance sheet of the Parent and its Subsidiaries as at the end of
such fiscal month, and the related (i) consolidated statements of income
or operations for such fiscal month and for the portion of the fiscal year then
ended and (ii) consolidated statements of cash flows for the portion of
the fiscal year then ended, setting forth in each case (A) in comparative
form the figures for the corresponding fiscal month of the previous fiscal year
and the corresponding portion of the previous fiscal year and (B) a
comparison of actual figures for such fiscal month against the forecasts for
such fiscal month, all in reasonable detail and certified by a Responsible
Officer of the Borrower as fairly presenting in all material respects the
financial condition, results of operations, stockholders’ equity and cash flows
of the Parent and its Subsidiaries in accordance with GAAP, subject only to
normal year-end adjustments and the absence of footnotes.”

 

(c)           Section 6.02(a) is amended
and restated in its entirety to read as follows:

 

“(i) upon
delivery of the financial statements referred to in Section 6.01(a), (b) and
(c), a duly completed Compliance Certificate signed by a Responsible Officer of
the Parent.”

 

(d)           Article 6 is amended by adding
thereto a new Section 6.20, to read as follows:

 

“Section 6.20        Revenue by Customer.  During the period from September 1, 2010
to December 31, 2010, within twelve (12) Business Days after the end of
each fiscal month, deliver to the Administrative Agent a list of clients and/or
projects which represent at least 80% of the consolidated total revenue for the
Parent and its Subsidiaries for such month.”

 

(e)           Article 6 is amended by adding
thereto a new Section 6.21, to read as follows:

 

“Section 6.21        Outside Consultant.  Within a reasonable time after the
request of the Administrative Agent or the Required Lenders, engage an
outside consultant reasonably acceptable to the Required Lenders to inspect any
properties of the Borrower and its Subsidiaries (subject, in the case of third
party customer sites, to customary access agreements), to review the books and
records of the Borrower and to discuss its affairs, finances and accounts
with its directors, officers, independent auditors and the Administrative
Agent, all at the reasonable expense of the Borrower.”

 

(f)            Article 7 is amended by adding
thereto a new Section 7.17, to read as follows:

 

“Section 7.17        Consolidated
Total Revenue.  Permit the
consolidated total revenue for the Parent and its Subsidiaries for each fiscal
month set forth below to be less than the amount set forth opposite such month
below:

 

	
  Fiscal Month Ending

  	
   

  	
  Consolidated Total Revenue

  	
   

  
	
  September 30,
  2010

  	
   

  	
  $

  	
  50,000,000

  	
   

  
	
  October 31,
  2010

  	
   

  	
  $

  	
  60,000,000

  	
   

  
	
  November 30,
  2010

  	
   

  	
  $

  	
  60,000,000

  	
   

  

”

 

2

 

(g)           Article 7 is amended by adding
thereto a new Section 7.18, to read as follows:

 

“Section 7.18        Consolidated
Adjusted EBITDA.  Permit the
Consolidated Adjusted EBITDA for the Parent and its Subsidiaries for each
period set forth below to be less than the amount set forth opposite such
period below:

 

	
  For the Period On and From

  September 1, 2010 Until and Including

  	
   

  	
  Consolidated Adjusted EBITDA

  	
   

  
	
  September 30,
  2010

  	
   

  	
  $

  	
  7,860,000

  	
   

  
	
  October 31,
  2010

  	
   

  	
  $

  	
  17,580,000

  	
   

  
	
  November 30,
  2010

  	
   

  	
  $

  	
  30,050,000

  	
   

  

”

 

(h)           Exhibit D to the Credit Agreement
is amended and restated as set forth in Annex I to this Amendment.

 

SECTION 3.        Conditions of Effectiveness.  This Amendment shall become effective as of
the date first above written when, and only when, each of the following
conditions shall have been satisfied:

 

(a)           The Agent shall have received
counterparts of this Amendment executed by the Borrower and the Required
Lenders or, as to any of the Lenders, advice satisfactory to the Agent that
such Lender has executed this Amendment and the consent attached hereto (the “Consent”)
executed by each Guarantor and Grantor.

 

(b)           The Agent shall have received a
certificate of the Secretary or Assistant Secretary of the Borrower, in form
and substance satisfactory to the Agent, which certificate shall (i) certify
as to the incumbency and signature of the officers of the Borrower executing
this Amendment, (ii) have attached to it a true and correct copy of the
resolutions of the Board of Directors of the Borrower, which resolutions shall
authorize the execution, delivery and performance of this Amendment and (iii) certify
that, as of the date of such certificate (which shall not be earlier than the
date hereof), none of such resolutions shall have been amended, supplemented,
modified, revoked or rescinded.

 

(c)           The Agent shall have received a
certificate of the Secretary or an Assistant Secretary of each Guarantor and
Grantor certifying the names and true signatures of the officers of the
Guarantors and the Grantors authorized to sign the Consent and the other documents
to be delivered hereunder.

 

(d)           A certificate signed by a duly
authorized officer of the Borrower stating that:

 

(i)            each
of the representations and warranties contained in Article V of the Credit
Agreement and each other Loan Document is true and correct in all material
respects on and as of the date hereof, as if made on and as of such date,
except to the extent that such representations and warranties relate to a
specific date, in which case such representations and warranties shall be true
and correct in all material respects as of such specific date; provided, however, that references in the
Credit Agreement to “this Agreement” and references in each other Loan Document
to the “Credit Agreement” shall be deemed to refer to the Credit Agreement as amended
hereby; and

 

3

 

(ii)           no
event has occurred and is continuing that constitutes a Default (other than the
Specified Defaults).

 

(e)           The Borrower shall have paid to the
Agent, for the account of each Lender executing this Amendment within the time
period required by the Agent in accordance with its Pro Rata Share, a
nonrefundable fee equal to 0.25% in respect of such Lender’s Revolving Credit
Commitment.

 

(f)            The Borrower shall have paid all
fees and expenses of the Agent and the Lenders (including all reasonable fees
and out-of-pocket costs and expenses of legal counsel to the Agent) for which
invoices in reasonable detail have been provided to Borrower at least two
Business Days prior to the date hereof.

 

SECTION 4.        Reference to and Effect on the Loan
Documents.  (a)  On and after the effectiveness of
this Amendment, each reference in the Credit Agreement to “this Agreement”, “hereunder”,
“hereof” or words of like import referring to the Credit Agreement, and each
reference in the Notes and each of the other Loan Documents to “the Credit
Agreement”, “thereunder”, “thereof” or words of like import referring to the
Credit Agreement, shall mean and be a reference to the Credit Agreement, as
amended by this Amendment.

 

(b)           The Credit Agreement, as specifically
amended by this Amendment, is and shall continue to be in full force and effect
and are hereby in all respects ratified and confirmed.

 

(c)           The execution, delivery and
effectiveness of this Amendment shall not, except as expressly provided herein,
operate as a waiver of any right, power or remedy of any Lender or the Agent
under any of the Loan Documents, nor constitute a waiver of any provision of
any of the Loan Documents.

 

SECTION 5.        Costs and Expenses  The Borrower agrees to pay on demand all
costs and expenses of the Agent in connection with the preparation, execution,
delivery and administration, modification and amendment of this Amendment and
the other instruments and documents to be delivered hereunder (including,
without limitation, the reasonable fees and expenses of counsel for the Agent)
in accordance with the terms of Section 11.04 of the Credit Agreement.

 

SECTION 6.        Execution in Counterparts.  This Amendment may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute but one and the same agreement.  Delivery of an executed counterpart of a
signature page to this Amendment by telecopier or electronic email of a
..pdf copy shall be effective as delivery of a manually executed counterpart of
this Amendment.

 

SECTION 7.        Governing Law.  This Amendment shall be governed by, and
construed in accordance with, the laws of the State of New York.

 

[Remainder of Page Intentionally Blank]

 

4

 

IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
by their respective officers thereunto duly authorized, as of the date first
above written.

 

GEOKINETICS
HOLDINGS USA, INC.,

as
Borrower

 

 

	
  By

  	
  /s/
  Chin Yu

  	
   

  
	
   

  	
  Name:
  Chin Yu

  	
   

  
	
   

  	
  Title:    Vice President

  	
   

  

 

 

	
  ROYAL BANK OF CANADA,

  	
   

  
	
  as Agent

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
  /s/
  Ann Hurley

  	
   

  
	
   

  	
  Name:
  Ann Hurley

  	
   

  
	
   

  	
  Title:   Manager, Agency

  	
   

  

 

 

ROYAL
BANK OF CANADA,

as Lender

 

 

	
  By

  	
  /s/
  Jason S. York

  	
   

  
	
   

  	
  Name:
  Jason S. York

  	
   

  
	
   

  	
  Title:   Authorized Signatory

  	
   

  

 

 

	
  PNC Bank, N.A.,

  	
   

  
	
  as Lender

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
  /s/
  Anita Inkollu

  	
   

  
	
   

  	
  Name:
  Anita Inkollu

  	
   

  
	
   

  	
  Title:   Vice President

  	
   

  

 

 

 

	
  SFS, Inc.,

  	
   

  
	
  as Lender

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
  /s/
  Uri Sky

  	
   

  
	
   

  	
  Name:
  Uri Sky

  	
   

  
	
   

  	
  Title:   VP Credit

  	
   

  

 

	
   

  	
   

  
	
  /s/ Jennifer Humphrey

  	
   

  
	
  Jennifer Humphrey

  	
   

  
	
  Vice President, Operations

  	
   

  

 

 

	
  Capital One, N.A.,

  	
   

  
	
  as Lender

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
  /s/
  Don Backer

  	
   

  
	
   

  	
  Name:
  Don Backer

  	
   

  
	
   

  	
  Title:   SVP

  	
   

  

 

 

CONSENT

 

Dated as of September     ,
2010

 

The
undersigned,                                                 ,
a                                                 
corporation, as Guarantor under the Guaranty dated February 12, 2010 (the “Guaranty”)
in favor of the Agent and the Lenders parties to the Credit Agreement referred
to in the foregoing Amendment, hereby consents to such Amendment and hereby
confirms and agrees that notwithstanding the effectiveness of such Amendment,
the Guaranty is, and shall continue to be, in full force and effect and is
hereby ratified and confirmed in all respects, except that, on and after the
effectiveness of such Amendment, each reference in the Guaranty to the “Credit
Agreement”, “thereunder”, “thereof” or words of like import shall mean and be a
reference to the Credit Agreement, as amended by such Amendment.

 

 

[NAME
OF GUARANTOR]

 

	
  By

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  

 

 

CONSENT

 

Dated
as of September     , 2010

 

The undersigned,                                                 ,
a                                                 
corporation, as Grantor under the Pledge and Security Agreement dated February
12, 2010 (the “Pledge and Security Agreement”) in favor of the Agent and
the Lenders parties to the Credit Agreement referred to in the foregoing
Amendment, hereby consents to such Amendment and hereby confirms and agrees
that notwithstanding the effectiveness of such Amendment, the Pledge and
Security Agreement is, and shall continue to be, in full force and effect and
is hereby ratified and confirmed in all respects, except that, on and after the
effectiveness of such Amendment, each reference in the Pledge and Security
Agreement to the “Senior Credit Agreement”, “thereunder”, “thereof” or words of
like import shall mean and be a reference to the Credit Agreement, as amended
by such Amendment.

 

 

[NAME
OF GRANTOR]

 

	
  By

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  

 

 

ANNEX I

 

EXHIBIT D

 

FORM OF COMPLIANCE CERTIFICATE

 

Financial Statement Date:            

 

THE
UNDERSIGNED HEREBY CERTIFIES AS FOLLOWS:

 

1.             I am the Chief
Financial Officer of GEOKINETICS HOLDINGS USA, INC. (the “Parent”).

 

2.             I have reviewed the
terms of that certain Credit Agreement, dated as of February 12, 2010 (as
amended, supplemented or otherwise modified through the date hereof, the “Credit
Agreement”; the terms defined therein and not otherwise defined herein
being used herein as therein defined), among Geokinetics Holdings USA, Inc.
(the “Borrower”), the Lenders party thereto, Royal Bank of Canada, as
Collateral Agent and Administrative Agent for the Lenders and RBC Capital
Markets, as Sole Lead Arranger and Bookrunner.

 

3.             [Use following paragraph 3 for annual financial statements]This
Certificate is delivered in conjunction with the annual audited consolidated
financial statements for the Parent and its Subsidiaries for the Fiscal Year of
the Parent ended as of
                                ,
20       required to be delivered by Section 6.01(a) of
the Credit Agreement, together with the report and opinion of an independent
registered public accounting firm of nationally recognized standing.][Use following paragraph 3 for fiscal quarter-end
financial statements] [This
Certificate is delivered in conjunction with the consolidated balance sheet and
the related consolidated statement of income or operations and a consolidated
statement of cash flows of the Parent and its Subsidiaries required by Section 6.01(b) of
the Credit Agreement for the fiscal quarter of the Parent ended as of the above
date.  Such financial statements fairly
present, in all material respects, the financial condition, results of
operations, stockholder’s equity and cash flows of the Parent 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.][Use following paragraph 3 for
fiscal month-end financial statements] [This Certificate is delivered in conjunction with the
consolidated balance sheet and the related consolidated statement of income or
operations and a consolidated statement of cash flows of the Parent and its
Subsidiaries required by Section 6.01(c) of the Credit
Agreement for the fiscal month of the Parent ended as of the above date.  Such financial statements fairly present, in
all material respects, the financial condition, results of operations,
stockholder’s equity and cash flows of the Parent 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.]

 

4.             Based on my
knowledge, the financial statements when taken as a whole do not contain when
furnished any material misstatement of fact or omit to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they are made, not materially misleading; provided, that, with
respect to projected financial information and pro forma financial information,
such information was prepared in good faith based upon assumptions believed to
be reasonable at the time of preparation; it being understood that such
projections may vary from actual results and that such variances may be
material.

 

 

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

 

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

 

[select one:]

 

[each
of the Loan Parties performed and observed each covenant and condition of the
Loan Documents applicable to it, and no Event of Default or Default has
occurred and is continuing.]

 

—or—

 

[the
following covenants or conditions have not been performed or observed and the
following is a list of each such Default, its nature and status and steps
implemented to correct such Default or Event of Default:]

 

7.             The representations
and warranties of the Borrower contained in Article V of the
Agreement, or which are contained in any document furnished at any time under
or in connection with the Loan Documents, are true and correct in all material
respects on and as of the date hereof, except to the extent that such
representations and warranties specifically refer to an earlier date, in which
case they are true and correct as of such earlier date, including the
statements in connection with which this Certificate is delivered.

 

8.             [Use following paragraph
8 for annual financial statements][The financial covenant
analyses and information set forth on Schedules 2, 3, 4
and 5 attached hereto, demonstrating compliance (unless compliance with such covenant was duly waived by the requisite
Lenders) with the covenants set forth in Sections 7.02(j)(v), 7.05(l), 7.13,
7.14, 7.15 and 7.16 of the Credit Agreement, are true and accurate on and as of
the date of this Certificate][Use following paragraph 8
for fiscal quarter-end financial statements] [The financial covenant
analyses and information set forth on Schedules 2 and 3 attached
hereto, demonstrating compliance (unless
compliance with such covenant was duly waived by the requisite Lenders) with the
covenants set forth in Sections 7.13, 7.14, 7.15 and 7.16 of the Credit
Agreement, are true and accurate on and as of the date of this Certificate][Use following paragraph 8 for fiscal month-end financial statements] [The
financial covenant analyses and information set forth in the financial
statements and on Schedule 1 attached hereto, demonstrating compliance
with the covenants (unless compliance with such covenant
was duly waived by the requisite Lenders) set forth in Sections 7.17
and 7.18 of the Credit Agreement, are true and accurate on and as of the date of
this Certificate].

 

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

 

IN WITNESS WHEREOF, the undersigned
has signed this Certificate as of the
           day of
                    ,
20    .

 

	
   

  	
  GEOKINETICS
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Chief
  Financial Officer

  

 

 

	
  Schedule 1

  	
  -

  	
  Consolidated
  Adjusted EBITDA Calculation

  
	
   

  	
   

  	
   

  
	
  [Schedule 2

  	
  -

  	
  Calculations
  Demonstrating Compliance With Financial Covenants

  
	
   

  	
   

  	
   

  
	
  Schedule 3

  	
  -

  	
  Calculations
  Regarding Capital Expenditures](1)

  
	
   

  	
   

  	
   

  
	
  [Schedule
  4

  	
  -

  	
  Permitted
  Acquisitions

  
	
   

  	
   

  	
   

  
	
  Schedule
  5

  	
  -

  	
  Permitted
  Dispositions](2)

  

 

(1)  Add Schedules 4
and 5 only for annual financial statements.

(2) 
Add Schedules 2 and 3 only for annual and quarterly financial statements.

 

 

 SCHEDULE 1

CONSOLIDATED ADJUSTED EBITDA CALCULATION

(FOR THE [FISCAL MONTH] [FISCAL QUARTER] [FISCAL YEAR] 

COMMENCING            AND
ENDING          )

 

	
  Consolidated
  Adjusted EBITDA:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (1) The
  sum of (without duplication, including for purposes of
  determining Consolidated Net Income), determined on a consolidated basis for
  Borrower and its Subsidiaries, to the extent deducted in determining
  Consolidated Net Income for such period:

  
	
   

  	
   

  	
   

  	
   

  
	
  (a)  Consolidated Net Income (or net loss)

  	
   

  	
  $

  	
               

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (b)  Consolidated Interest Expense (including
  amortization or write-off of debt discount)

  	
   

  	
  $

  	
               

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (c)  taxes based on income

  	
   

  	
  $

  	
               

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (d)  non-cash unrealized net losses under any
  permitted Swap Contracts

  	
   

  	
  $

  	
               

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (e)  Consolidated Depreciation and Amortization
  Expense

  	
   

  	
  $

  	
               

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (f)  
  Expenses related to the Transaction to the extent not capitalized

  	
   

  	
  $

  	
               

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (g)  Any one-time non-cash charges in
  connection with a Permitted Acquisition or permitted Investments

  	
   

  	
  $

  	
               

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (h) Any one-time non-cash expenses or charges
  incurred in connection with the issuance, exercise, cancellation or
  appreciation of options and other equity grants in respect of Equity
  Interests

  	
   

  	
  $

  	
               

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (i) To the extent decreasing consolidated net
  income for such period, any extraordinary items in accordance with GAAP

  	
   

  	
  $

  	
               

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (j)  other non-recurring, non-cash charges
  and non-cash losses in respect of unrealized currency translations, in each
  case, deducted in arriving at Consolidated Net Income

  	
   

  	
  $

  	
               

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Minus

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   (2) The sum of:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (a) non-cash credits included in arriving at
  such Consolidated Net Income (or net loss)

  	
   

  	
  $

  	
               

  	
   

  
	
   

  	
   

  	
  $

  	
               

  	
   

  

 

 

	
  (b) non-cash unrealized net gains in respect
  of permitted Swap Contracts 

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (c) other non-cash extraordinary gains to the
  extent included in calculating Consolidated Net Income

  	
   

  	
  $

  	
               

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  CONSOLIDATED ADJUSTED EBITDA 

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  $

  	
               

  	
   

  

 

 

SCHEDULE 2

 

CALCULATIONS
DEMONSTRATING COMPLIANCE

WITH FINANCIAL COVENANTS

 

1.              Total Leverage Ratio  (Section 7.13
of the Credit Agreement)

 

	
  (i)    Consolidated
  Total Debt of the Parent and its Subsidiaries (determined on a consolidated
  basis in accordance with GAAP but excluding the effect of any discounting of
  Indebtedness resulting from the application of purchase accounting in
  connection with the Transaction or any Permitted Acquisition) as of the last
  day of the Test Period, consisting of the sum of:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (a)       Indebtedness for borrowed money

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (b)      obligations in respect of Capitalized
  Leases

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (c)       debt obligations evidenced by
  promissory notes or similar instruments

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  [Exclude
  Indebtedness in respect of (i) all letters of credit except (x) to
  the extent of unreimbursed amounts thereunder and (y) in respect of the
  L/C Exposure of any Defaulting Lender to the extent not Cash Collateralized,
  (ii) Parent’s Series C Preferred Stock and any other Equity
  Interest or hybrid security of the Parent that is determined to constitute
  Indebtedness in accordance with GAAP and (iii) obligations under Swap
  Contracts.]

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Consolidated Total Debt [(a) +
  (b) + (c)]

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (ii)   Consolidated
  Adjusted EBITDA for the Test Period ending on the computation date (per
  Schedule 1)

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (iii)  Total
  Leverage Ratio (i)/(ii): 

  	
   

  	
      .    :1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (iv)  Total
  Leverage Ratio not to be greater than:

  	
   

  	
  .    :1.00

  	
   

  

 

 

2.              Interest Coverage Ratio  (Section 7.14
of the Credit Agreement)

 

	
  (i)    Consolidated
  Adjusted EBITDA for the Test Period as of the computation date (per
  Schedule 1):

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (ii)   Consolidated
  Interest Expense for the Test Period ((a) minus (b)):

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (a)   consolidated
  cash interest expense of the Borrower and its Subsidiaries, to the extent
  such expense was deducted (and not added back) in computing Consolidated Net
  Income  

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [include (i) all cash commissions,
  discounts and other fees and charges owed with respect to letters of credit
  or bankers acceptances, (ii) the cash interest component of Capitalized
  Lease Obligations, and (iii) net cash payments, if any, made (less net
  payments, if any, received) pursuant to interest rate obligations under any
  Swap Contracts with respect to Indebtedness] 

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [exclude (i) penalties and interest
  relating to taxes, (ii) any additional cash interest owing pursuant to
  any registration rights agreement with respect to securities, (iii) any
  expensing of bridge, commitment and other financing fees, (iv) any
  interest expense associated with the Parent’s Series C Preferred Stock
  or any other Equity Interest or hybrid security that is determined to
  constitute Indebtedness in accordance with GAAP and (v) any accretion of
  accrued and unpaid interest on discounted liabilities]

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (b)   cash interest income

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (iii)  Interest
  Coverage Ratio (i)/(ii):

  	
   

  	
      .    :1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (iii)  Interest
  Coverage Ratio not to be less than:

  	
   

  	
  .    :1.00

  	
   

  

 

 

3.              Fixed Charge Coverage Ratio  (Section 7.15
of the Credit Agreement)

 

	
  1.

  	
   

  	
  Consolidated
  Adjusted EBITDA for the Test Period (per Schedule 1)

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  Maintenance
  Capital Expenditures for the Test Period

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  Cash
  tax payments for the Test Period

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  Consolidated
  Interest Expense for subject period (per item 2(ii) of Interest Coverage
  Ratio calculation above)

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  Scheduled
  repayments of principal amounts of Indebtedness for such Test Period whether
  or not actually paid during such Test Period

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  Fixed
  Charge Coverage Ratio [{1 - (2 + 3)} / (4 + 5 )]:

  	
   

  	
  : 1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  Fixed
  Charge Coverage Ratio not to be less than:

  	
   

  	
  : 1.00

  	
   

  

 

 

SCHEDULE 3

 

CALCULATIONS REGARDING CAPITAL EXPENDITURES

 

Capital Expenditures
(Section 7.16 of the Credit Agreement)

 

	
  (v)
  (i) Capital Expenditures for the Test Period [any Capital Expenditures
  related to the prefunded amount of any investment in a multi-client data
  acquisition program shall be excluded from the calculation of Capital
  Expenditures if such multi-client program is at least 75% prefunded at the
  time that surveying commences for such program, provided that the
  non-prefunded amount of any such multi-client program shall not exceed
  $5,000,000 in the aggregate for any such program]:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (vi)
  (ii) Capital Expenditures as of the last day of the immediately preceding
  Fiscal Quarter (or $0 in the case of a test Period which is the first Fiscal
  Quarter of a Fiscal Year):

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (vii)
  (iii) Capital Expenditures permitted for the current Fiscal Year:

  	
   

  	
  $

  	
  150,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (viii)
  (iv) Excess Amount carryover, if any, from the prior Fiscal Year:(1)

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (ix)
  (v) Total permitted Capital Expenditures (sum of (iii) and (iv))

  	
   

  	
  $

  	
   

  	
   

  

 

(1)  100% of
the Excess Amount from the immediately preceding fiscal year, to the extent it
has not already been expended.

 

 

SCHEDULE 4

 

PERMITTED
ACQUISITIONS

 

Permitted
Acquisitions made during the current Reporting Period pursuant to the
definition of Permitted Acquisitions:

 

[Date]     [Acquisition]         [Amount]

 

[Date]     [Acquisition]         [Amount]

 

(a) Consideration Paid:

 

Aggregate
total consideration paid in respect

of all acquisitions made after the Closing Date:           $                       

 

Maximum Permitted: $50,000,000 in the aggregate

 

(b)
Available domestic unrestricted cash (determined in accordance with GAAP),
together with undrawn amounts under the Revolving Credit Facility after giving
effect to the Permitted Acquisitions:                      $           

 

Minimum Required:    $10,000,000

 

(c)
Pro Forma Compliance:  After giving Pro
Forma Effect to the Permitted Acquisitions, Borrower is in pro forma compliance
with the Financial Covenants set forth in Section 7.13 (Total Leverage Ratio)
and Section 7.14 (Interest Coverage Ratio):   
Yes      No

 

 

SCHEDULE 5

 

PERMITTED
DISPOSITIONS

 

[Date]     [Disposition]         [Amount]

 

[Date]     [Disposition]         [Amount]

 

Consideration
Paid:

 

Aggregate fair market value
of Dispositions made pursuant to Section 7.05(l):

$          

 

Maximum Permitted:   $10,000,000

 

Purchase price paid to the Borrower or such Subsidiary for such
Disposition shall be no less than the fair market value of such asset at the
time of such sale.

 

Amount actually received as
cash consideration:  $                        

 

Percentage
of Disposition consideration received as cash: 
            %

[To be not less than 75%]Exhibit 10.1.1

 

LOAN AND SECURITY AGREEMENT

 

THIS LOAN AND SECURITY AGREEMENT, dated as of September 30,
2010 (as amended, restated, supplemented or otherwise modified from time to
time, this “Agreement”) is among GENERAL ELECTRIC CAPITAL CORPORATION (“GECC”), in its capacity as agent for
Lenders (as defined below) (together with its successors and assigns in such
capacity, “Agent”), the financial institutions who are
or hereafter become parties to this Agreement as lenders (together with GECC,
collectively the “Lenders”,
and each individually, a “Lender”),
SYNTA PHARMACEUTICALS CORP., a Delaware
corporation (“Borrower”), and the other entities or persons, if any, who
are or hereafter become parties to this Agreement as guarantors (each a “Guarantor”
and collectively, the “Guarantors”, and together with Borrower, each a “Loan
Party” and collectively, “Loan Parties”).

 

RECITALS

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

 

AGREEMENT

Loan
Parties, Agent and Lenders agree as follows:

 

1.              DEFINITIONS.

 

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

 

2.              LOANS AND
TERMS OF PAYMENT.

 

2.1.    Promise to Pay.  Borrower promises to pay Agent, for the
ratable accounts of Lenders, when due pursuant to the terms hereof, the aggregate
unpaid principal amount of all loans, advances and other extensions of credit
made severally by the Lenders to Borrower under this Agreement, together with
interest on the unpaid principal amount of such loans, advances and other
extensions of credit at the interest rates set forth herein.

 

2.2.    Term Loan.

 

(a)                                  Commitment.  Subject to the terms and conditions hereof,
each Lender, severally, but not jointly, agrees to make a term loan
(collectively, the “Term Loan”) to Borrower on the Closing Date (as
defined below) in an aggregate principal amount not to exceed such Lender’s
commitment as identified on Schedule A hereto (such commitment of each
Lender as it may be amended to reflect assignments made in accordance with this
Agreement or terminated or reduced in accordance with this Agreement, its “Commitment”,
and the aggregate of all such commitments, the “Commitments”).  Notwithstanding the foregoing, the aggregate
principal amount of the Term Loan made 

 

 

hereunder
shall not exceed $15,000,000 (the “Total Commitment”).  Each Lender’s obligation to fund the Term
Loan shall be limited to such Lender’s Pro Rata Share (as defined below) of the
Term Loan.

 

(b)                                 Funding of Term Loan.  On the
Closing Date, after all conditions in Section 4.1 have been satisfied,
each Lender, severally and not jointly, shall make available to Agent its Pro
Rata Share of the Term Loan, in lawful money of the United States of America in
immediately available funds, to the Collection Account (as defined below) prior
to 11:00 a.m. (New York time) on the specified date.  Agent shall, unless it shall have determined
that one of the conditions set forth in Section 4.1 has not been
satisfied, by 4:00 p.m. (New York time) on such day, credit the amounts
received by it in like funds to Borrower by
wire transfer to, unless otherwise specified in a Disbursement Letter (as
defined below), the following deposit account of Borrower (or such other
deposit account as specified in writing by an authorized officer of Borrower
and acceptable to Agent) (the “Designated Deposit Account”):

 

	
  Bank Name: State Street
  Bank & Trust Company

  
	
  Bank
  Address:

  	
  XXXXXXXXXX

  
	
   

  	
  XXXXXXXXXX

  
	
  ABA#:
  XXXXXXXXXX

  
	
  Account
  #: XXXXXXXXXX

  
	
  Account
  Name: Synta Pharmaceuticals Corp.

  
	
  Ref:
  XXXXXXXXXX

  

 

(c)                                  Notes.  If
requested by a Lender, the portion of the Term Loan of such Lender shall be
evidenced by a promissory note substantially in the form of Exhibit A
hereto (each a “Note” and, collectively, the “Notes”), and
Borrower shall execute and deliver a Note to such Lender.  Each Note shall represent the obligation of
Borrower to pay to such Lender the lesser of (a) the aggregate unpaid
principal amount of the Term Loan made by such Lender to or on behalf of
Borrower under this Agreement or (b) the amount of such Lender’s Commitment,
in each case together with interest thereon as prescribed in Section 2.3(a).

 

2.3.    Interest and Repayment.

 

(a)                                  Interest.  The Term Loan shall accrue interest in arrears  from the Closing
Date until the Term Loan is fully repaid at a fixed per annum rate of interest
equal to the sum of (i) the Treasury Rate (as defined below) in effect on
the day that is three (3) Business Days prior to the making of the Term
Loan as determined by Agent plus (ii) 8.72%; provided however that
the interest rate for the Term Loan will not be less than 9.75% per annum.  All computations of interest and fees
calculated on a per annum basis shall be made by Agent on the basis of a
360-day year, in each case for the actual number of days occurring in the
period for which such interest and fees are payable.  Each determination of an interest rate or the
amount of a fee hereunder shall be made by Agent and shall be conclusive,
binding and final for all purposes, absent manifest error.  As used herein, the term “Treasury Rate” means
a per annum rate of interest equal to the rate published by the Board of
Governors of the Federal Reserve System in Federal Reserve Statistical Release
H.15 entitled “Selected Interest Rates” under the heading “U.S. Government
Securities/Treasury Constant Maturities” as the three year treasuries constant
maturities rate.  In the event Release
H.15 is no longer published, Agent shall select a comparable publication to
determine the U.S. Treasury note yield to maturity.

 

2

 

(b)                                 Payments of Principal and Interest.

 

(i)                      Interest Payments.  Borrower shall pay interest on the Term Loan
to the Agent, for the ratable benefit of Lenders, in arrears on the first day
of each calendar month (each, a “Scheduled Payment Date”) at the rate of
interest determined in accordance with Section 2.3(a), commencing
on November 1, 2010.

 

(ii)                     Principal Payments.  Borrower shall repay principal on the Term
Loan to the Agent, for the ratable benefit of the Lenders, in (A) twenty-six
(26) equal consecutive monthly installments of $555,555.56 on each Scheduled
Payment Date, commencing on July 1, 2011 and (B) one monthly
installment of $555,555.44 on September 1, 2013.

 

(iii)                    Payments Generally.  Notwithstanding the foregoing provisions of
this Section 2.3(b), all unpaid principal and accrued interest with
respect to the Term Loan is due and payable in full to Agent, for the ratable
benefit of Lenders, on the earlier of (A) September 1, 2013 or (B) the
date that the Term Loan otherwise becomes due and payable hereunder, whether by
acceleration of the Obligations pursuant to Section 8.2 or
otherwise (the earlier of (A) or (B), the “Term Loan Maturity Date”).  Each scheduled payment of interest or
principal hereunder is referred to herein as a “Scheduled Payment.”  Without limiting the foregoing, all
Obligations shall be due and payable on the Term Loan Maturity Date.

 

(c)                                  No Reborrowing.  Once any portion of the Term Loan is repaid
or prepaid, it cannot be reborrowed.

 

(d)                                 Payments.  All payments (including prepayments) to be
made by any Loan Party under any Debt Document shall be made by wire transfer
or ACH transfer in immediately available funds (which shall be the exclusive
means of payment hereunder) in U.S. dollars, without setoff or counterclaim to
the Collection Account (as defined below) before 11:00 a.m. (New York
time) on the date when due.  All payments
received by Agent after 11:00 a.m. (New York time) on any Business Day or
at any time on a day that is not a Business Day may, in Agent’s sole
discretion, be deemed to be received on the next Business Day.  Whenever any payment required under this
Agreement would otherwise be due on a date that is not a Business Day, such
payment shall instead be due on the next Business Day, and additional fees or
interest, as the case may be, shall accrue and be payable for the period of
such extension.  All Scheduled Payments
due to Agent and Lenders under Section 2.3(b) shall be
effected by automatic debit by Agent of the appropriate funds from Borrower’s
operating account specified on the EPS Setup Form (as defined below) to be
distributed by Agent to Lenders in accordance with their Pro Rate Share.  As used herein, the term “Collection Account” means the following
account of Agent (or such other account as Agent shall identify to Borrower in
writing):

 

Bank
Name: Deutsche Bank

Bank
Address: XXXXXXXXXX

ABA Number: XXXXXXXXXX

Account
Number: XXXXXXXXXX

Account
Name: GECC HH Cash Flow Collections

Ref:  XXXXXXXXXX

 

3

 

(e)                                  Withholdings and Increased Costs.  All payments shall be made free and clear of
any taxes, withholdings, duties, impositions or other charges (other than taxes
on the overall net income of any Lender and comparable taxes), such that Agent
and Lenders will receive the entire amount of any Obligations (as defined
below), regardless of source of payment. 
If Agent or any Lender shall have determined that the introduction of or
any change in, after the date hereof, any law, treaty, governmental (or
quasi-governmental) rule, regulation, guideline or order reduces the rate of
return on Agent or such Lender’s capital as a consequence of its obligations
hereunder or increases the cost to Agent or such Lender of agreeing to make or
making, funding or maintaining the Term Loan, then Borrower shall from time to
time upon demand by Agent or such Lender (with a copy of such demand to Agent)
promptly pay to Agent for its own account or for the account of such Lender, as
the case may be, additional amounts sufficient to compensate Agent or such
Lender for such reduction or for such increased cost.  A certificate as to the amount of such
reduction or such increased cost submitted by Agent or such Lender (with a copy
to Agent) to Borrower shall be conclusive and binding on Borrower, absent
manifest error, provided that, neither Agent nor any Lender shall be entitled
to payment of any amounts under this Section 2.3(e) unless it has
delivered such certificate to Borrower within 180 days after the occurrence of the
changes or events giving rise to the increased costs to, or reduction in the
amounts received by, Agent or such Lender. 
This provision shall survive the termination of this Agreement.

 

(f)                                    Loan Records.  Each Lender shall maintain in accordance with
its usual practice accounts evidencing the Obligations of Borrower to such
Lender resulting from such Lender’s Pro Rata Share of the Term Loan, including
the amounts of principal and interest payable and paid to such Lender from time
to time under this Agreement.  Agent
shall maintain in accordance with its usual practice a loan account on its
books to record the Term Loan and any other extensions of credit made by
Lenders hereunder, and all payments thereon made by Borrower.  The entries made in such accounts shall, to
the extent permitted by applicable law, be prima facie evidence of the
existence and amounts of the Obligations recorded therein absent manifest
error; provided, however, that no error in such account and no
failure of any Lender or Agent to maintain any such account shall affect the
obligations of Borrower to repay the Obligations in accordance with their
terms.

 

(g)                                 Payment of Expenses and other Obligations.  Agent is authorized to, and at its sole
election may, debit funds from Borrower’s operating account specified on the
EPS Setup Form (as defined below) to pay all Obligations under this
Agreement or any of the other Debt Documents if and to the extent Borrower
fails to promptly pay any such amounts as and when due (after taking into
account any applicable grace periods for such payment set forth in Section 8.1(a)).

 

2.4.    Prepayments.  Borrower can voluntarily prepay, upon five (5) Business
Days’ prior written notice to Agent, the Term Loan in full, but not in part.  Upon the date of (a) any voluntary prepayment of the Term Loan in
accordance with the immediately preceding sentence or (b) any mandatory
prepayment of the Term Loan required under this Agreement (whether by
acceleration of the Obligations pursuant to Section 8.2 or
otherwise), Borrower shall pay to Agent, for the ratable benefit of the
Lenders, a sum equal to (i) all outstanding principal plus accrued
interest with respect to the Term Loan, plus (ii) the Final Payment
Fee (as such term is defined in Section 2.7(c)) for the Term Loan,
and plus (iii) a prepayment premium (as yield maintenance for the
loss of a bargain and not as a penalty) equal to: (i) 4% of the prepayment
amount, if such prepayment is made on or before the one year anniversary of the
Closing Date, (ii) 2% of the prepayment amount, if such prepayment is made
after the one year anniversary of the Closing Date but on or before the two
year anniversary of the Closing Date, and (iii) 1% of the

 

4

 

prepayment
amount, if such prepayment is made after the two year anniversary of the
Closing Date but before the Term Loan Maturity Date.  Notwithstanding the foregoing, Borrower shall
not be required to pay a prepayment premium solely in the instance where (x) the
Agent in its discretion in accordance with Section 6.4 has applied
insurance proceeds against the Obligations prior to the occurrence of a Default
or Event of Default; provided, that, the prepayment premium exclusion in
this sentence shall not apply to any application of insurance proceeds
(regardless of whether a Default or Event of Default has occurred or is
continuing) if Borrower has not reinvested insurance proceeds as permitted and
in accordance with Section 6.4 within the Reinvestment Period (as
defined in Section 6.4), or (y) the outstanding Obligations
are paid in full either (A) at the request of the Agent and/or Required
Lenders solely as a result of an Event of Default pursuant to Section 8.1(k)(iii) or
(B) at the election of the Borrower after requesting in writing a consent
and/or waiver to an Event of Default pursuant to Section 8.1(k)(iii) (so
long as such request is based upon a bona fide request or action by Kovner (as
defined below) to purchase Stock in excess of what is permitted pursuant to Section 8.1(k)(iii))
which Agent and/or the Required Lenders have indicated in writing will not be
granted.

 

2.5.     Late Fees. 
If Agent does not receive any Scheduled Payment or other payment under
any Debt Document from any Loan Party within 5 days after its due date, then,
at Agent’s election, such Loan Party agrees to pay to Agent for the ratable
benefit of all Lenders, a late fee equal to (a) 5% of the amount of such
unpaid payment or (b) such lesser amount that, if paid, would not cause
the interest and fees paid by such Loan Party under this Agreement to exceed
the Maximum Lawful Rate (as defined below) (the “Late Fee”).

 

2.6.    Default Rate.  The Term Loan and all other Obligations shall
bear interest, at the option of Agent or upon the request of the Requisite Lenders
(as defined below), from and after the occurrence and during the continuation
of an Event of Default (as defined below), at a rate equal to the lesser of (a) 5%
above the rate of interest applicable to such Obligations as set forth in Section 2.3(a) immediately
prior to the occurrence of the Event of Default and (b) the Maximum Lawful
Rate (the “Default Rate”).  The
application of the Default Rate shall not be interpreted or deemed to extend
any cure period or waive any Default or Event of Default or otherwise limit the
Agent’s or any Lender’s right or remedies hereunder.  All interest payable at the Default Rate
shall be payable on demand.

 

2.7.    Lender Fees.

 

(a)                                  Agency Fee.  On
the Closing Date, Borrower shall pay to Agent, for benefit of the Lenders on
the Closing Date in accordance with their Pro Rata Shares, a non-refundable
agency fee in an amount equal to $75,000.00, which fee shall be fully earned
when paid.

 

(b)                                 Closing Fee.  On the Closing Date, Borrower shall pay to
Agent, for the benefit of Lenders on the Closing Date in accordance with their
Pro Rata Shares, a non-refundable closing fee in an amount equal to $75,000.00,
which fee shall be fully earned when paid.

 

(c)                                  Final Payment
Fee.  On the date upon which the outstanding principal amount of the Term Loan
is repaid in full, or if earlier, is required to be repaid in full (whether by
scheduled payment, voluntary prepayment, acceleration of the Obligations
pursuant to Section 8.2 or otherwise), Borrower shall pay to Agent,
for benefit of the Lenders on such date in accordance with their Pro Rata
Shares, a fee equal to 3% of the original principal amount of the Term Loan
(the “Final Payment Fee”), which Final Payment Fee shall be deemed to be
fully-earned on the Closing Date.

 

2.8.    Maximum Lawful Rate.  Anything herein, any Note or any other Debt
Document (as defined below) to the contrary notwithstanding, the obligations of
Loan Parties hereunder and thereunder

 

5

 

shall
be subject to the limitation that payments of interest shall not be required,
for any period for which interest is computed hereunder, to the extent (but
only to the extent) that contracting for or receiving such payment by Agent and
Lenders would be contrary to the provisions of any law applicable to Agent
and  Lenders limiting the highest rate of
interest which may be lawfully contracted for, charged or received by  Agent and Lenders, and in such event Loan
Parties shall pay Agent and Lenders interest at the highest rate permitted by
applicable law (“Maximum Lawful Rate”); provided, however,
that if at any time thereafter the rate of interest payable hereunder or
thereunder is less than the Maximum Lawful Rate, Loan Parties shall continue to
pay interest hereunder at the Maximum Lawful Rate until such time as the total
interest received by Agent and Lenders is equal to the total interest that
would have been received had the interest payable hereunder been (but for the
operation of this paragraph) the interest rate payable since the making of the
Term Loan as otherwise provided in this Agreement, any Note or any other Debt
Document.

 

3.              CREATION OF
SECURITY INTEREST.

 

3.1.    Grant of Security Interest.  As security for the prompt payment and
performance, whether at the stated maturity, by acceleration or otherwise, of
the Term Loan and other debt, obligations and liabilities of any kind
whatsoever of Borrower to Agent and Lenders under the Debt Documents (whether
for principal, interest, fees, expenses, prepayment premiums, indemnities, reimbursements
or other sums, and whether or not such amounts accrue after the filing of any
petition in bankruptcy or after the commencement of any insolvency,
reorganization or similar proceeding, and whether or not allowed in such case
or proceeding), absolute or contingent, now existing or arising in the future,
including but not limited to the payment and performance of any outstanding
Notes, and any renewals, extensions and modifications of the Term Loan (such
indebtedness under the Notes, Term Loan and other debt, obligations and
liabilities in connection with the Debt Documents are collectively called the “Obligations”),
and as security for the prompt payment and performance by each Guarantor of the
Guaranteed Obligations as defined in the Guaranty (as defined below), each Loan
Party does hereby grant to Agent, for the benefit of Agent and Lenders, a
security interest in the property listed below (all hereinafter collectively
called the “Collateral”):

 

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

 

; provided, that, the
grant of security interest herein shall not extend to and the term “Collateral”
shall not include (a) Intellectual Property (as defined below) to the
extent excluded under Section 3.3, (b) equipment subject to
liens permitted pursuant to Section 7.2(c) solely to the
extent that with respect to financing agreements entered into in connection
therewith (i) prior to the Closing Date, such agreements prohibit the
granting of a lien in such equipment or (ii) after the Closing Date, such
agreements prohibit the granting of a lien in such equipment after the Loan
Parties have used commercially reasonable efforts to get such restriction
removed; provided that, upon

 

6

 

the termination or
expiration of any such financing arrangement or prohibition on such lien such
equipment shall automatically be subject to the security interest granted in
favor of the Agent hereunder and become part of the “Collateral”, and (c) more
than 65% of the issued and outstanding voting capital stock of any Subsidiary
of the Borrower that is incorporated or organized in a jurisdiction other than
the United States or any state or territory thereof (each a “Foreign
Subsidiary”).

 

For the avoidance of doubt,
any security interest granted by any Loan Party in Intellectual Property which
constitutes license, contract or other general intangible rights of such Loan
Party, shall not include any rights retained by the third Person licensor in
the underlying licensed Intellectual Property owned by such Person.

 

Each Loan Party hereby
represents and covenants that such security interest constitutes a valid, first
priority security interest in the presently existing Collateral (subject only
to Permitted Liens that would be prior to the security interest granted
hereunder as a matter of law, but not solely as a result of a prior UCC
financing statement filing), and will constitute a valid, first priority
security interest in Collateral acquired after the date hereof (subject only to
Permitted Liens that would be prior to the security interest granted hereunder
as a matter of law, but not solely as a result of a prior UCC financing statement
filing).  Each Loan Party hereby
covenants that it shall give written notice to Agent promptly upon the
acquisition by such Loan Party or creation in favor of such Loan Party of any
commercial tort claim after the Closing Date.

 

3.2.    Financing Statements.  Each Loan Party hereby authorizes Agent to
file UCC financing statements with all appropriate jurisdictions to perfect
Agent’s security interest (for the benefit of itself and the Lenders) granted
hereby.

 

3.3.    Grant of Security Interest in Proceeds of Intellectual
Property.   Subject to the
terms and conditions of Section 3.4 below, the Collateral shall not
include any Intellectual Property of any Loan Party; provided  however, that the Collateral shall
include all cash, royalty fees, claims, products, awards, judgments, insurance
claims, claims for damages by way of any past, present or future infringement,
other proceeds, accounts and general intangibles that consist of rights of
payment to or on behalf of a Loan Party or proceeds from the sale, licensing or
other disposition of all or any part of, or rights in, the Intellectual
Property by or on behalf of a Loan Party (“Rights to Payment”) whether
or not the foregoing is included in the definition of the Intellectual
Property.  Notwithstanding the foregoing,
to the extent it is necessary under applicable law to have a security interest
in the underlying Intellectual Property in order for Agent to have (i) a
security interest in the Rights to Payment and (ii) a security interest in
any payments with respect to Rights to Payment that are received after the
commencement of a  bankruptcy or
insolvency proceeding, then the Collateral shall automatically, and effective
as of the date hereof, include the Intellectual Property to the extent
necessary to permit attachment and perfection of Agent’s security interest (on
behalf of itself and Lenders) in the Rights to Payment and any payments in
respect thereof that are received after the commencement of any bankruptcy or
insolvency proceeding.  Agent hereby agrees
on behalf of itself and the Lenders that, if Agent obtains a security interest
in the Intellectual Property pursuant to the immediately preceding sentence
(but not pursuant to Section 3.4), Agent will not exercise any
remedies (under the UCC or otherwise) with respect to the Intellectual Property
(other than remedies with respect to Rights to Payment).  As used herein, “Intellectual Property”
shall mean any and all copyright,
trademark, servicemark, patent, design right, software, trade secret and
intangible rights of a Loan Party related thereto and any applications,
registrations, claims, products, awards, judgments, amendments, renewals,
extensions, improvements and insurance claims related thereto, whether now
owned or hereafter acquired, or any claims for damages by way of any past,
present or future infringement of any of the foregoing.

 

7

 

3.4.    Automatic Grant of Security Interest in Intellectual
Property.

 

(a)                                  IP Security Interest Event.  As used in this Section 3.4, the
term “IP Security Interest Event” shall mean the occurrence of the
following at any time: Borrower shall fail at any time to have unrestricted
balance sheet cash and Cash Equivalents (as defined below) in one or more
deposit accounts or securities accounts subject to an Account Control Agreement
in an aggregate amount of at least the product of (i) negative nine (-9) multiplied
by (ii) the Cash Burn Amount at such time.

 

(b)                                 Cash Burn Amount.  As used in this Section 3.4, the term “Cash
Burn Amount” shall mean, with respect to Borrower and its consolidated
Subsidiaries, as of any date of determination and based on the financial
statements most recently delivered to Agent and the Lenders in accordance with
this Agreement, the difference between:

 

(1) the
product of (i) the sum of, without duplication, (A) net income
(loss), plus (B) depreciation, amortization and other non-cash charges
(excluding accruals for cash expenses made in the ordinary course of business),
minus (C) non-financed capital expenditures, minus (D) non-cash
revenue (excluding, in the reasonable discretion of the Agent, payments that
are accrued as non-cash revenue by Borrower which constitute contractual
obligations by third Persons intended to reimburse Borrower for actual costs
incurred pursuant to such contract but, for the avoidance of doubt and without
limitation, including up-front payments and payments for at-risk scientific
achievement) in each case of clauses (A), (B), (C) and (D), for the
immediately preceding three (3) month period on a trailing basis, divided
by (ii) three (3),

 

Minus

 

(2)           the product of (i) the current
portion of interest bearing liabilities due and payable in the immediately
succeeding three months divided by (ii) three.

 

(c)                                  Effect of Occurrence of IP Security Interest Event.  Immediately upon the occurrence,
if at all, of the IP Security Interest Event, (1) Borrower shall
automatically and irrevocably and without any further action by Agent or any
other party be deemed to pledge and grant to Agent a continuing first priority
lien on and security interest in, upon, and to all right, title and interest of
Borrower in and to all now owned and hereafter acquired Intellectual Property, (2) Agent
shall be automatically authorized to file any UCC financing statements or
financing statement amendments to perfect such security interest in
Intellectual Property, (3) the IP Security Agreements delivered to the
Agent in escrow on the Closing Date pursuant to Section 4.1(g) shall
be automatically released from escrow and Agent shall be automatically
authorized to file such IP Security Agreements (the schedules to which may be
updated by Agent if Borrower acquires or develops additional Intellectual
Property between the Closing Date and the IP Security Interest Event) with the
United States Patent and Trademark Office or United States Copyright Office, as
applicable, and (4) Borrower shall promptly execute such other agreements
and take such other actions as Agent may reasonably request to establish,
evidence or perfect Agent’s security interest in the Intellectual Property.

 

(d)                                 Amendments Effective Upon Occurrence of IP Security Interest Event.  Immediately upon the occurrence,
if at all, of the IP Security Interest Event, Sections 3.1 and 3.3
of this Agreement shall be automatically and irrevocably and without any
further action by Agent or any other party amended as follows:

 

8

 

(i)                      Section 3.1 of
the Loan Agreement shall be amended by deleting the definition of “Collateral”
provided therein and by substituting, in lieu thereof, the following new
definition of “Collateral”:

 

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

 

provided, that, the grant of security interest herein shall
not extend to and the term “Collateral” shall not include (a) equipment
subject to liens permitted pursuant to Section 7.2(c) solely
to the extent that with respect to financing agreements entered into in
connection therewith (i) prior to the Closing Date, such agreements
prohibit the granting of a lien in such equipment or (ii) after the
Closing Date, such agreements prohibit the granting of a lien in such equipment
after the Loan Parties have used commercially reasonable efforts to get such
restriction removed; provided that, upon the termination or expiration of any
such financing arrangement or prohibition on such lien such equipment shall
automatically be subject to the security interest granted in favor of the Agent
hereunder and become part of the “Collateral” or (b) more than 65% of the
issued and outstanding voting capital stock of any Subsidiary of the Borrower
that is incorporated or organized in a jurisdiction other than the United
States or any state or territory thereof.

 

(ii)                     Section 3.3 of
the Loan Agreement shall be amended by deleting such Section 3.3 in
its entirety and by substituting in lieu thereof the following new Section 3.3:

 

3.3.          Grant of Security Interest in Intellectual
Property.  The Collateral
shall include all intellectual property of each Loan Party, which shall be
defined as any and all copyright, trademark, servicemark, patent, design right,
software, trade secret and intangible rights of a Loan Party related thereto
and any applications, registrations, claims, products, awards, judgments,
amendments, renewals, extensions, improvements and insurance claims related
thereto, whether now owned or hereafter 

 

9

 

acquired,
or any claims for damages by way of any past, present or future infringement of
any of the foregoing (collectively, “Intellectual Property”), together
with all accessions and additions thereto, proceeds and products thereof
(including, without limitation, any proceeds resulting under insurance
policies); provided, further, that the Intellectual Property shall
include, without limitation, all cash, royalty fees, other proceeds, accounts
and general intangibles that consist of rights of payment to or on behalf of
such Loan Party or proceeds from the sale, licensing or other disposition of
all or any part of, or rights in, the Intellectual Property by or on behalf of
such Loan Party.  In order to perfect or
protect Agent’s security interest and other rights in each Loan Party’s
Intellectual Property, each Loan Party hereby authorizes Agent to file an
intellectual property security agreement, substantially in the form provided by
Agent (“IP Security Agreement”) with the United States Patent and
Trademark Office or United States Copyright Office, as applicable, and, if requested
by Agent, any  similar agreement with any
applicable foreign filing office.  If any
Loan Party licenses or has licensed (including any sublicenses) any
Intellectual Property to a third person in a transaction permitted pursuant to Section 7.3,
upon the reasonable request of such Loan Party, Agent shall execute a
non-disturbance and attornment agreement (either substantially in the form
attached hereto as Exhibit F, with such changes as Agent may
reasonably require, or such other form as may be requested by such third party
licensee as is reasonably acceptable to the Agent) among the Agent, such Loan
Party and the applicable third party licensee, pursuant to which the Agent
acknowledges that any transfer of Intellectual Property that is subject to such
license would be made subject to the rights and remedies of such licensee under
such license so long as such licensee agrees that such license shall continue
after such transfer and recognizes the transferee as the licensor of such
Intellectual Property for the remainder of the unexpired term of such license.

 

(e)                                  After the occurrence, if at all, of the first and second IP Security
Interest Event after the Closing Date (each a “Subject IP Security Interest
Event”) and the exercise of Agent’s rights under Section 3.4 in
connection with such Subject IP Security Interest Event, if (i) Borrower
has unrestricted balance sheet cash and Cash Equivalents in one or more deposit
accounts or securities accounts over which Agent has obtained control by an
Account Control Agreement under Section 7.10 below with the aggregate
amount greater than the product of (x) twelve (12) multiplied by
(y) the Cash Burn Amount, (ii) no Default or Event of Default exists
under the Debt Documents, and (iii) Borrower provides to Agent a certificate
from an authorized executive officer of Borrower (x) providing a true,
correct and complete calculation of the Cash Burn Amount and other amounts
required in this Section 3.4(e), accompanied by all financial statements
used in such calculations, which such financials shall be certified as true,
correct and complete by an authorized executive officer of Borrower, and (y) acknowledging
Borrower is exercising its right under this Section 3.4 to cause Agent to
release and terminate its security interest in the Intellectual Property,
Borrower shall have the right, at Borrower’s sole election, to cause Agent to
take all necessary actions to terminate and release Agent’s and Lenders’
security interest in the Intellectual Property. 
Notwithstanding anything in the foregoing, if a subsequent IP Security
Interest Event shall occur after either of the Subject IP Security Interest
Events occur, Agent may exercise any rights that Agent may have under

 

10

 

Section 3.4
of this Agreement with respect to such IP Security Interest Event and, except
in the case of a Subject IP Security Interest Event (and then only in
accordance with this clause (e)), Borrower shall have no further right to cause
Agent to release and terminate its lien with respect to any Intellectual
Property of Borrower.

 

3.5.    Termination of Security Interest.  Upon the date on which all of the Obligations
(other than contingent indemnity obligations not yet due and payable) are
repaid in full in cash, all of the Commitments hereunder are terminated, and
this Agreement shall have been terminated (the “Termination Date”), and upon
receipt of a payoff letter or termination agreement executed by the Loan
Parties in form and substance reasonably acceptable to Agent, Agent shall, at
Loan Parties’ sole cost and expense and without any recourse, representation or
warranty, release its liens in the Collateral.

 

4.              CONDITIONS
OF CREDIT EXTENSIONS

 

4.1.    Conditions Precedent to Term Loan.  No Lender shall be obligated to make its Pro
Rata Share of the Term Loan, or to take, fulfill, or perform any other action
hereunder, until the following have been delivered to the Agent (the date on
which the Lenders make the Term Loan after all such conditions shall have been
satisfied in a manner satisfactory to Agent or waived in accordance with this
Agreement, the “Closing Date”):

 

(a)                                  a counterpart of this Agreement duly executed by each Loan Party, Agent
and each Lender;

 

(b)                                 a certificate executed by the Secretary of each Loan Party, the form of
which is attached hereto as Exhibit B (the “Secretary’s
Certificate”), providing verification of incumbency and attaching (i) such
Loan Party’s board resolutions approving the transactions contemplated by this
Agreement and the other Debt Documents and (ii) such Loan Party’s articles
of incorporation or organization and by-laws, operating agreement or limited
liability company agreement, as applicable;

 

(c)                                  Notes duly executed by Borrower in favor of each applicable Lender (if
requested by such Lender);

 

(d)                                 filed copies of UCC financing statements, collateral assignments, and
terminations statements, with respect to the Collateral, as Agent shall
request;

 

(e)                                  certificates of insurance evidencing the insurance coverage, and satisfactory
additional insured and lender loss payable endorsements, in each case as
required pursuant to Section 6.4 herein;

 

(f)                                    current UCC lien, judgment, bankruptcy and tax lien search results
demonstrating that there are no other security interests or liens on the
Collateral, other than Permitted Liens (as defined below);

 

(g)                                 one or more IP Security Agreements described in Section 3.4
above, duly executed by each Loan Party (which agreements shall be held in
escrow by Agent, subject to the confidentiality restrictions set forth in Section 10.13
and not filed in any public office or registry, until the occurrence, if at
all, of an IP Security Interest Event);

 

(h)                                 a certificate of good standing of each Loan Party from the jurisdiction
of such Loan Party’s organization and a certificate of foreign qualification
from each jurisdiction 

 

11

 

where
such Loan Party’s failure to be so qualified could reasonably be expected to
have a Material Adverse Effect (as defined below), in each case as of a recent
date acceptable to Agent;

 

(i)                                     a landlord consent and/or bailee letter in favor of Agent executed by the
landlord or bailee, as applicable, for any third party location where (a) any
Loan Party’s principal place of business, (b) any Loan Party’s books or
records or (c) Collateral with an aggregate value in excess of $50,000 is
located, a form of which is attached hereto as Exhibit C-1 and Exhibit C-2,
as applicable or such other form as Agent may agree to in its reasonable
discretion (each an “Access Agreement”);

 

(j)                                     a legal opinion of Loan Parties’ counsel, in form and substance
satisfactory to Agent;

 

(k)                                  a completed EPS set-up form, a form of which is attached hereto as Exhibit E
(the “EPS Setup Form”);

 

(l)                                     a completed perfection certificate, duly executed by each Loan Party (the
“Perfection Certificate”), a form of which Agent previously delivered to
Borrower;

 

(m)                               one or more Account Control Agreements (as defined below), in form and
substance reasonably acceptable to Agent, duly executed by the applicable Loan
Parties and the applicable depository or financial institution, for each
deposit and securities account to the extent required pursuant to Section 7.10;

 

(n)                                 a pledge agreement, in form and substance satisfactory to Agent, executed
by each Loan Party and pledging to Agent, for the benefit of itself and the
Lenders, a security interest in (a) 100% of the shares of the outstanding
capital stock, of any class, of each Subsidiary (as defined below) of each Loan
Party that is incorporated under the laws of any State of the United States or
the District of Columbia, (b) 65% of the shares of the outstanding voting
capital stock of each such Foreign Subsidiary and (c) any and all
Indebtedness (as defined in Section 7.2 below) owing to Loan
Parties (the “Pledge Agreement”);

 

(o)                                 a guaranty agreement (together with any other
guaranty that purports to provide for a guaranty of the Obligation, the “Guaranty”),
in form and substance satisfactory to Agent,
executed by each Guarantor;

 

(p)                                 a disbursement instruction letter, in form and substance satisfactory to
Agent, executed by each Loan Party, Agent and each Lender (the “Disbursement
Letter”);

 

(q)                                 payment of
$786,789.02 of outstanding obligations owing to GECC pursuant to that certain
Master Lease Agreement, dated as of November 10, 2004 by and between
Borrower, as lessee and GECC, as lessor, together with all schedules relating
thereto (the “Outstanding GE Equipment Debt”);

 

(r)                                    all other documents and instruments as Agent or the Lenders may
reasonably deem necessary or appropriate to effectuate the intent and purpose
of this Agreement (together with the Agreement, the Notes, the IP Security
Agreement (if and when effective in accordance with the terms and conditions of
Section 3.4(c)), the Account Control Agreements, the Access
Agreements, the Perfection Certificate, the Pledge Agreement, the Guaranty, if any, the Secretary’s
Certificate and the Disbursement Letter, and all other agreements, instruments,
documents and certificates executed and/or delivered to or 

 

12

 

in
favor of Agent from time to time in connection with this Agreement or the
transactions contemplated hereby, the “Debt Documents”);

 

(s)                                  Agent and Lenders shall have received the fees
required to be paid by Borrower, if any, in the respective amounts specified in
Section 2.7, and Borrower shall have reimbursed Agent and Lenders
for all fees, costs and expenses of closing presented as of the date of this Agreement;
and

 

(t)                                    (i) all representations and warranties in Section 5
below shall be true as of the date of the Term Loan; (ii) no Event of
Default or any other event, which with the giving of notice or the passage of
time, or both, would constitute an Event of Default (such event, a “Default”)
has occurred and is continuing or will result from the making of any Term Loan,
and (iii) Agent shall have received a certificate from an authorized
officer of each Loan Party confirming each of the foregoing.

 

4.2.    Post Closing Obligations.  Notwithstanding anything in Section 4.1
to the contrary, the Loan Parties shall deliver those items set forth on that
certain Post-Closing Letter, dated of even date herewith, among Agent and the
Loan Parties (the “Post-Closing Letter”) in such time periods as are
required by such Post-Closing Letter, as the same may be extended by Agent in
its discretion in writing pursuant to the terms thereof.  Any failure to deliver such items in
accordance with the provisions of the Post-Closing Letter shall constitute an
immediate Event of Default.

 

5.              REPRESENTATIONS
AND WARRANTIES OF LOAN PARTIES.

 

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

 

5.1.    Due Organization and Authorization.  Each Loan Party’s exact legal name is as set
forth in the Perfection Certificate and each Loan Party is, and will remain,
duly organized, existing and in good standing under the laws of the State of
its organization as specified in the Perfection Certificate, has its chief
executive office at the location specified in the Perfection Certificate, and
is, and will remain, duly qualified and licensed in every jurisdiction wherever
necessary to carry on its business and operations, except where the failure to
be so qualified and licensed could not reasonably be expected to have a
Material Adverse Effect.  This Agreement
and the other Debt Documents have been duly authorized, executed and delivered
by each Loan Party and constitute legal, valid and binding agreements
enforceable in accordance with their terms. 
The execution, delivery and performance by each Loan Party of each Debt
Document executed or to be executed by it is in each case within such Loan
Party’s powers.

 

5.2.    Required Consents.  No filing, registration, qualification with,
or approval, consent or withholding of objections from, any governmental
authority or instrumentality or any other entity or person is required with
respect to the entry into, or performance by any Loan Party of, any of the Debt
Documents, except any already obtained.

 

5.3.    No Conflicts.  The entry into, and performance by each Loan
Party of, the Debt Documents will not (a) violate any of the
organizational documents of such Loan Party, (b) violate any law, rule,
regulation, order, award or judgment applicable to such Loan Party, or (c) result
in any breach of or constitute a default under, or result in the creation of
any lien, claim or encumbrance on any of such Loan Party’s property (except for
liens in favor of Agent, on behalf of itself and Lenders) pursuant to, any
indenture, mortgage, deed of trust, bank loan, credit agreement, or other
Material Agreement (as defined below) to which such Loan Party is a party.  As used herein, “Material Agreement”
means (i) any agreement or contract to which such Loan Party is a party
and involving the receipt or payment of

 

13

 

amounts
in the aggregate exceeding $100,000 per year (excluding any agreement or
contract that involves payment by the Company to another party for materials or
supplies (but, for the avoidance of doubt, not equipment) and services in the
ordinary course of business and any inbound software license agreement unless
such agreement, contract or license grants or purports to grant a security
interest or lien in favor of such other party or otherwise constitutes a
Material Agreement pursuant to clauses (ii) hereof, but including any
other license or other agreement relating to Intellectual Property) and (ii) any
agreement or contract to which such Loan Party is a party the termination of
which could reasonably be expected to have a Material Adverse Effect.  A description of all Material Agreements as
of the Closing Date is set forth on Schedule B hereto.

 

5.4.    Litigation.  There are no actions, suits, proceedings or
investigations pending against or, to the Knowledge of any Loan Party,
affecting any Loan Party before any court, federal, state, provincial,
municipal or other governmental department, commission, board, bureau, agency
or instrumentality, domestic or foreign, or, to the Knowledge of any Loan
Party, any basis thereof, which involves the possibility of any judgment or
liability that could reasonably be expected to have a Material Adverse Effect,
or which questions the validity of the Debt Documents, or the other documents
required thereby or any action to be taken pursuant to any of the foregoing,
nor does any Loan Party have reason to believe that any such actions, suits,
proceedings or investigations are threatened. 
As used in this Agreement, the term “Material Adverse Effect”
means a material adverse effect on any of (a) the operations, business,
assets, properties, or condition (financial or otherwise) of Borrower and the
Loan Parties, collectively as a whole, (b) the ability of (i) the
Loan Parties as a whole to perform any of its repayment obligations or (ii) any
Loan Party to perform any other obligation, in each case under any Debt
Document to which it is a party, (c) the legality, validity or
enforceability of any Debt Document, (d) the rights and remedies of Agent
or Lenders under any Debt Document or (e) the validity, perfection or
priority of any lien in favor of Agent, on behalf of itself and Lenders, on any
of the Collateral.  As used in this
Agreement, the term “Knowledge” means, as to any person or entity, such person
or entity has knowledge or should have had knowledge after using reasonable
diligence.

 

5.5.    Financial Statements.  (a) All annual and quarterly financial
statements delivered to Agent and Lenders pursuant to Section 6.3
have been prepared in accordance with GAAP (subject, in the case of unaudited
financial statements, to the absence of footnotes and normal year end audit
adjustments), (b) all monthly financial statements delivered to the Agent
and Lenders pursuant to Section 6.3 have been prepared in accordance with
historical practices and are consistent in form to those financial statements
previously provided to Agent, and (c) since the date of the most recent
audited financial statement, no event has occurred which has had or could
reasonably be expected to have a Material Adverse Effect.  There has been no material adverse deviation
from the most recent annual operating plan of Borrower delivered to Agent and
Lenders in accordance with Section 6.3.

 

5.6.    Use of Proceeds; Margin Regulations.  The proceeds of the Term Loan shall be used (i) to
repay the Outstanding GE Equipment Debt  and
(ii) for working capital and general corporate purposes.  As of the Closing Date, except as set forth on
Schedule B, no Loan Party and no Subsidiary of any Loan Party owns any Margin
Stock.  “Margin Stock” means “margin
stock” as such term is defined in Regulation T, U  or X of the Federal Reserve Board.

 

5.7.    Collateral. 
Each Loan Party is, and will remain, the sole and lawful owner, and in
possession of, the Collateral, and has the sole right and lawful authority to
grant the security interest described in this Agreement.  The Collateral is, and will remain, free and
clear of all liens, claims and encumbrances of any kind whatsoever, except for (a) liens
in favor of Agent, on behalf of itself and Lenders, to secure the Obligations, (b) liens
(i) with respect to the payment of taxes, assessments or other
governmental charges or (ii) of suppliers, carriers, materialmen,
warehousemen, workmen or mechanics and other similar liens, in each case
imposed by law and arising in the ordinary course of business, and 

 

14

 

securing
amounts that are not yet due or that are being contested in good faith by
appropriate proceedings diligently conducted and with respect to which adequate
reserves or other appropriate provisions are maintained on the books of the
applicable Loan Party in accordance with GAAP and which do not involve, in the
judgment of Agent, any risk of the sale, forfeiture or loss of any of the
Collateral (a “Permitted Contest”), (c) liens existing on the date
hereof and set forth on Schedule B hereto, (d) liens securing
Indebtedness (as defined in Section 7.2 below) permitted under Section 7.2(c) or
(g) below, provided that such liens (i) in the case of Section 7.2(c),
do not extend to any property of a Loan Party other than the property (and
proceeds thereof) acquired or built, or the improvements or repairs, financed
by such Indebtedness or (ii) in the case of Section 7.2(g), do not
extend to any property other than the equipment permitted to be financed
therewith and the proceeds from the sale or other disposition of such
equipment, (e) licenses described in Section 7.3(c) below,
(f) pledges or cash deposits made in the ordinary course of business in
connection with workers’ compensation, unemployment insurance or other types of
social security benefits (but not including any lien imposed by ERISA) that
secure amounts that are not past due or payable, (g) statutory bankers’
liens or rights of set off in deposit or securities accounts in favor of the
financial institution at which such deposit or securities account is located,
so long as, if an Account Control Agreement is required for such deposit or
securities account, such liens or rights of set off have been waived or
subordinated in a manner satisfactory to Agent therein, (h) liens arising
from deposits of cash or Cash Equivalents securing letters of credit permitted
pursuant to Section 7.2(h)  and (i) rights retained by
licensors in such licensor’s owned Intellectual Property in connection with
inbound licenses and collaboration agreements permitted pursuant to this
Agreement (all of such liens described in the foregoing clauses (a) through
(i) are called  “Permitted Liens”).

 

5.8.    Compliance with Laws.

 

(a)                                  Each Loan Party is and will remain in compliance in all material respects
with all laws, statutes, ordinances, rules and regulations applicable to
it.

 

(b)                                 Without limiting the generality of the immediately preceding clause (a),
each Loan Party further agrees that it and each of its subsidiaries is and will
remain in compliance in all material respects with all U.S. economic sanctions
laws, Executive Orders and implementing regulations as promulgated by the U.S.
Treasury Department’s Office of Foreign Assets Control (“OFAC”), and all
applicable anti-money laundering and counter-terrorism financing provisions of
the Bank Secrecy Act and all regulations issued pursuant to it.  No Loan Party nor any of its subsidiaries,
affiliates or joint ventures (i) is a person or entity designated by the
U.S. Government on the list of the Specially Designated Nationals and Blocked
Persons (the “SDN List”) with which a U.S. person or entity cannot deal
with or otherwise engage in business transactions, (ii) is a person or
entity who is otherwise the target of U.S. economic sanctions laws such that a
U.S. person or entity cannot deal or otherwise engage in business transactions
with such person or entity, or (iii) is controlled by (including without
limitation by virtue of such person being a director or owning voting shares or
interests), or acts, directly or indirectly, for or on behalf of, any person or
entity on the SDN List or a foreign government that is the target of U.S.
economic sanctions prohibitions such that the entry into, or performance under,
this Agreement or any other Debt Document would be prohibited under U.S. law.

 

(c)                                  Each Loan Party and each of its subsidiaries is in compliance with (i) the
Trading with the Enemy Act of 1917, Ch. 106, 40 Stat. 411, as amended, and each
of the foreign assets control regulations of the United States Treasury
Department (31 CFR, Subtitle B Chapter V, as amended) and any other enabling
legislation or executive order relating thereto, (ii) the Uniting and
Strengthening America by Providing Appropriate Tools

 

15

 

Required
to Intercept and Obstruct Terrorism Act of 2001, P.L. 107-56, as amended, and (iii) other
federal or state laws relating to “know your customer” and anti-money
laundering rules and regulations. 
No part of the proceeds of any Loan will be used directly or indirectly
for any payments to any government official or employee, political party,
official of a political party, candidate for political office, or anyone else
acting in an official capacity, in order to obtain, retain or direct business
or obtain any improper advantage, in violation of the United States Foreign Corrupt
Practices Act of 1977.

 

(d)                                 Each Loan Party has met the minimum funding requirements of the United
States Employee Retirement Income Security Act of 1974 (as amended, “ERISA”)
with respect to any employee benefit plans subject to ERISA.  No Loan Party is an “investment company” or a
company “controlled” by an “investment company” within the meaning of the
Investment Company Act of 1940.  No Loan
Party is engaged principally, or as one of the important activities, in the
business of extending credit for the purpose of purchasing or carrying margin
stock (within the meaning of Regulations T, U and X of the Board of Governors
of the Federal Reserve System (the “Federal Reserve Board”).

 

5.9.    Intellectual Property.  The
Intellectual Property owned by any Loan Party and any Loan Party’s rights in
Intellectual Property is and will remain free and clear of all liens, claims
and encumbrances of any kind whatsoever, except for Permitted Liens described
in clauses (b)(i), (e) and (i) of Section 5.7.  No Loan Party has nor will it enter into any
other agreement or financing arrangement in which a negative pledge in such
Loan Party’s Intellectual Property is granted to any other party. As of the
Closing Date, except as disclosed in the Perfection Certificate, no Loan Party
has any interest in, or title to any Intellectual Property that is (i) a
registered trademark or pending trademark application, (ii) a registered
copyright or copyright for which an application has been filed or (iii) an
issued patent or pending patent application. 
Each Loan Party owns or has rights to use all Intellectual Property
material to the conduct of its business as conducted by it or proposed to be
conducted by it, on the Closing Date and each subsequent date that this
representation is remade without, to its Knowledge, any actual or claimed
infringement upon the rights of third parties. 
Upon filing of the IP Security Agreement in accordance with the terms
and conditions of Section 3.4 with the United States Patent and
Trademark Office and the United States Copyright Office, as applicable, and the
filing of appropriate financing statements, all action necessary or desirable
to perfect Agent’s lien on Borrower’s Intellectual Property shall have been
duly taken.

 

5.10.        Solvency.  Both before and after giving effect to the
Term Loan, the transactions contemplated herein, and the payment and accrual of
all transaction costs in connection with the foregoing, each Loan Party is and
will be Solvent.  As used herein, “Solvent”
means, with respect to a Loan Party on a particular date, that on such date (a) the
fair value of the property of such Loan Party is greater than the total amount
of liabilities, including contingent liabilities, of such Loan Party; (b) the
present fair salable value of the assets of such Loan Party is not less than
the amount that will be required to pay the probable liability of such Loan
Party on its debts as they become absolute and matured; (c) such Loan
Party does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Loan Party’s ability to pay as such debts and
liabilities mature; (d) such Loan Party is not engaged in a business or
transaction, and is not about to engage in a business or transaction, for which
such Loan Party’s property would constitute an unreasonably small capital; and (e) such
Loan Party is not “insolvent” within the meaning of Section 101(32) of the
United States Bankruptcy Code (11 U.S.C. § 101, et. seq), as amended from time
to time.  The amount of contingent
liabilities (such as litigation, guaranties and pension plan liabilities) at
any time shall be computed as the amount that, in light of all the facts and
circumstances existing at the time, represents the amount that can be
reasonably be expected to become an actual or matured liability.

 

16

 

5.11.        Taxes;
Pension.  All tax returns,
reports and statements, including information returns, required by any
governmental authority to be filed by each Loan Party and its Subsidiaries have
been filed with the appropriate governmental authority and all taxes, levies,
assessments and similar charges have been paid prior to the date on which any
fine, penalty, interest or late charge may be added thereto for nonpayment
thereof (or any such fine, penalty, interest, late charge or loss has been
paid), excluding taxes, levies, assessments and similar charges or other
amounts which are the subject of a Permitted Contest.  Proper and accurate amounts have been
withheld by each Loan Party from its respective employees for all periods in
compliance with applicable laws and such withholdings have been timely paid to
the respective governmental authorities. 
Each Loan Party has paid all amounts necessary to fund all present
pension, profit sharing and deferred compensation plans in accordance with
their terms, and no Loan Party has withdrawn from participation in, or has
permitted partial or complete termination of, or permitted the occurrence of
any other event with respect to, any such plan which could reasonably be
expected to result in any liability of a Loan Party, including any liability to
the Pension Benefit Guaranty Corporation or its successors or any other
governmental authority.

 

5.12.        Full
Disclosure.  Loan Parties
hereby confirm that all of the information disclosed on the Perfection
Certificate is true, correct and complete as of the date of this Agreement and
as of the date of the Term Loan.  No
representation, warranty or other statement made by or on behalf of a Loan
Party contains any untrue statement of a material fact or omits to state a
material fact necessary to make the statements contained therein not
misleading, it being recognized by Agent and Lenders that the projections and
forecasts provided by Loan Parties in good faith and based upon reasonable and
stated assumptions are not to be viewed as facts and that actual results during
the period or periods covered by any such projections and forecasts may differ
from the projected or forecasted results.

 

5.13.        Regulatory
Compliance.

 

(a)                                  Each Loan Party has all valid registrations from the U.S. Food and Drug
Administration (“FDA”) or other governmental authority required to
conduct its business as currently conducted. 
To the Knowledge of the Loan Parties, the FDA is not considering
limiting, suspending, or revoking such registrations or changing the marketing
classification or labeling of the products of the Loan Parties.  To the Knowledge of the Loan Parties, there
is no false or misleading information or significant omission in any product
application or other submission to the FDA or any comparable governmental
authority.  The Loan Parties have
fulfilled and performed their obligations under each FDA registration, and no
event has occurred or condition or state of facts exists which would constitute
a breach or default or would cause revocation or termination of any such
registration.  To the Knowledge of the
Loan Parties, any third party that is a manufacturer or contractor for the Loan
Parties is in compliance with all registrations required by the FDA or
comparable governmental authority insofar as they pertain to the manufacture of
product components or products regulated as medical devices and marketed or
distributed by the Loan Parties.

 

(b)                                 All products developed, manufactured, tested, distributed or marketed by
or on behalf of the Loan Parties that are subject to the jurisdiction of the
FDA or a comparable governmental authority have been and are being developed,
tested, manufactured, distributed and marketed in compliance with the FDA laws
and regulations and all other applicable laws, statutes, ordinances, rules and
regulations (each a “Requirement of Law”), including, without
limitation, product approval, good manufacturing practices, labeling,
advertising, record-keeping, and adverse event reporting, and have been and are
being tested, investigated, distributed, marketed, and sold in compliance
therewith, 

 

17

 

except
where the failure to do so could not reasonably be expected to result in a
Material Adverse Effect.

 

(c)                                  The Loan Parties are not subject to any obligation arising under an
administrative or regulatory action, FDA inspection, FDA warning letter, FDA
notice of violation letter, or other notice, response or commitment made to or
with the FDA or any comparable governmental authority.  The Loan Parties have made all notifications,
submissions, and reports required by any such obligation, and all such
notifications, submissions and reports were true, complete, and correct in all
material respects as of the date of submission to FDA or any comparable
governmental authority.

 

(d)                                 No product has been seized, withdrawn, recalled, detained, or subject to
a suspension of manufacturing, and there are no facts or circumstances
reasonably likely to cause (i) the seizure, denial, withdrawal, recall,
detention, public health notification, safety alert or suspension of
manufacturing relating to any product; (ii) a change in the labeling of
any product; or (iii) a termination, seizure or suspension of marketing of
any product.  No proceedings in the
United States or any other jurisdiction seeking the withdrawal, recall,
suspension, import detention, or seizure of any product are pending or
threatened against the Loan Parties.

 

(e)                                  No Loan Party has granted rights to develop, manufacture, produce,
assemble, distribute, license, market or sell its products to any other person
nor is it bound by any agreement that affects any Loan Party’s exclusive right
to develop, manufacture, produce, assemble, distribute, license, market or sell
its products, other than (i) licenses permitted pursuant to Section 7.3(c) and
(ii) outsourcing service arrangements that do not involve the licensing or
other grant of rights in or to Intellectual Property and are not otherwise
prohibited by the terms of this Agreement, which are entered into in the
ordinary course of business, in all cases described in clause (i) or (ii) above,
so long as, to the Knowledge of the Loan Parties, the contracting counter-party
is in compliance with all Requirements of Law.

 

6.              AFFIRMATIVE
COVENANTS.

 

6.1.    Good Standing.  Each Loan Party shall maintain its and each
of its Subsidiaries’ existence and good standing in its jurisdiction of
organization and maintain qualification in each jurisdiction in which the
failure to so qualify could reasonably be expected to have a Material Adverse
Effect.  Each Loan Party shall maintain,
and shall cause each of its Subsidiaries to maintain, in full force all
licenses, approvals and agreements, the loss of which could reasonably be
expected to have a Material Adverse Effect. 
“Subsidiary” means, with respect to a Loan Party, any entity the
management of which is, directly or indirectly controlled by, or of which an
aggregate of more than 50% of the outstanding voting capital stock (or other
voting equity interest) is, at the time, owned or controlled, directly or
indirectly by, such Loan Party or one or more Subsidiaries of such Loan Party,
and, unless the context otherwise requires each reference to a Subsidiary
herein shall be a reference to a Subsidiary of Borrower.

 

6.2.    Notice to Agent and Lenders.  Loan Parties shall provide Agent and Lenders
with (a) notice of any change in the accuracy of the Perfection
Certificate or any of the representations and warranties provided in Section 5
above, either (x) immediately upon the occurrence of any such change if
such change affects Agent’s liens or priority with respect to such liens in the
Collateral or (y) quarterly (at such time as Borrower’s quarterly
financial statements are due) any update to any other information that does not
constitute a change described in the immediately preceding clause (x), (b) notice
of the occurrence of any Default or Event of Default, promptly (but in any
event within 5 days) after the date on which any officer of a Loan Party
obtains Knowledge of the occurrence of any such event, (c) notice 

 

18

 

(which
shall include a copy or electronic link) of all filings and reports any Loan
Party is required to file with the Securities and Exchange Commission (“SEC”)
pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 and any other filings related to any Loan Parties’ purchase or sale of
securities, and copies of all notices or other written communication received
by any Loan Party from the SEC or any securities exchange or governmental
authority exercising a similar function, promptly, but in any event within 5
days of delivering or receiving such information to or from such persons
(provided that an electronic link to any such statement, report or notice filed
with the SEC shall be sufficient to constitute a copy of the same), (d) a
report of any legal actions pending or threatened in writing against any Loan
Party or any Subsidiary that could reasonably be expected to result in damages
or costs to any Loan Party or any Subsidiary of $250,000 or more promptly, but in any event within 5
days, upon receipt of notice thereof, including without limitation any such legal
actions alleging violations of FDA Laws (as such term is defined in Section 6.10
below, (e) on a quarterly basis (at such time as Borrower’s quarterly
financial statements are due) a list of any new applications or registrations
that any Loan Party has made or filed in respect of any Intellectual Property
or a change in status of any outstanding application or registration, (f) notice
and copies of (i) any material amendments to any Material Agreements
promptly (and in any event within 5 days) of the later of the consummation
thereof or the filing with the SEC (provided, that if such documents are filed
with the SEC, the Loan Parties shall have satisfied the requirement to deliver
the executed documents by providing an electronic link to the applicable SEC
filing containing such documents), and (ii) any statements, reports or
notices delivered to or by a Loan Party in connection with any Material
Agreement with respect to or which allege any breach or default of such
Material Agreement promptly (but in any event within 3 days) upon execution or
receipt thereof, (g) any notice that the FDA or other similar governmental
authority is limiting, suspending or revoking any FDA registration, changing
the market classification or labeling of the products of the Loan Parties, or
considering any of the foregoing, or (h) notice that any Loan Party has
become subject to any administrative or regulatory action, FDA inspection
(other than a routine inspection that is not related to any actual or potential
violation of a Requirement of Law), Form FDA 483 observation, FDA warning
letter, FDA notice of violation letter, or other notice, response or commitment
made to or with the FDA or any comparable governmental authority, or notice
that any product of any Loan Party has been seized, withdrawn, recalled,
detained, or subject to a suspension of manufacturing, or the commencement of
any proceedings in the United States or any other jurisdiction seeking the
withdrawal, recall, suspension, import detention, or seizure of any product are
pending or threatened in writing against any Loan Party.

 

6.3.    Financial Statements.  Borrower shall deliver to Agent and Lenders (x) monthly
unaudited consolidated and, if available, consolidating balance sheets,
statements of operations and cash flow statements within 30 days of each month
end, in a form acceptable to Agent and certified by Borrower’s president, chief
executive officer or chief financial officer, and (y) quarterly unaudited
consolidated and, if available, consolidating balance sheets, statements of
operations and cash flow statements within 5 days after the statements are
required to be provided to the SEC and (z) annual audited consolidated
and, if available, consolidating balance sheets, statements of operations and
cash flow statements, certified by a recognized firm of certified public
accountants, within 5 days after the statements are required to be provided to
the SEC.  All audited financial
statements delivered pursuant to this Section 6.3 shall be
accompanied by the report of an independent certified public accounting firm
acceptable to Agent which report shall (i) contain an unqualified opinion,
stating that such consolidated financial statements present fairly in all
material respects the financial position for the periods indicated in
conformity with GAAP applied on a basis consistent with prior years and (ii) not
include any explanatory paragraph expressing substantial doubt as to going
concern status (other than any going concern statement based solely on the
amount of cash and Cash Equivalents held by the Loan Parties).  All such monthly statements are to be
prepared in accordance with the form previously provided to Agent (with such
changes as Agent may approve) and all such quarterly and annual statements are
to be prepared using GAAP (subject, in the case of unaudited financial
statements, to the absence of footnotes and normal year end audit adjustments)
and, if Borrower is a publicly held company, are to be in compliance with
applicable SEC requirements.  All 

 

19

 

financial
statements delivered pursuant to this Section 6.3 shall be
accompanied by a compliance certificate, signed by the chief financial officer
of Borrower, in the form attached hereto as Exhibit D, and a
management discussion and analysis that includes, with respect to such monthly
statements, a comparison to budget for the respective fiscal period and, with
respect to such quarterly and annual financial statements, a comparison of
performance for such fiscal period to the corresponding period in the prior
year.  Borrower shall deliver to Agent
and Lenders (i) as soon as available and in any event not later than 60
days after
the end of each fiscal year of Borrower, an annual operating plan for Borrower,
on a consolidated and, if available, consolidating basis, approved by the Board
of Directors of Borrower, for the current fiscal year, in form and substance reasonably satisfactory to Agent and (ii) such
budgets, sales projections, or other business, financial, corporate affairs and
other information as Agent or any Lender may reasonably request from time to
time.

 

6.4.    Insurance.  Each Loan Party, at its expense, shall
maintain, and shall cause each Subsidiary to maintain, insurance (including,
without limitation, comprehensive general liability, hazard, and business
interruption insurance) with respect to all of its properties and businesses
(including, the Collateral), in such amounts and covering such risks as is
carried generally in accordance with sound business practice by companies in
similar businesses similarly situated and in any event with deductible amounts,
insurers and policies that shall be reasonably acceptable to Agent.  Borrower shall deliver to Agent certificates
of insurance evidencing such coverage, together with endorsements to such
policies naming Agent as a lender loss payee or additional insured, as
appropriate, in form and substance reasonably satisfactory to Agent.  Each policy shall provide that coverage may
not be canceled or altered by the insurer except upon 30 days prior written
notice to Agent and shall not be subject to co-insurance.  Each Loan Party appoints Agent as its
attorney-in-fact to make, settle and adjust all claims under and decisions with
respect to such Loan Party’s policies of insurance, and to receive payment of
and execute or endorse all documents, checks or drafts in connection with
insurance payments. Agent shall not act as such Loan Party’s attorney-in-fact
unless an Event of Default has occurred and is continuing.  The appointment of Agent as any Loan Party’s
attorney in fact is a power coupled with an interest and is irrevocable until
the Termination Date. Proceeds of insurance shall be applied, at the option of
Agent, to repair or replace the Collateral or to reduce any of the
Obligations.  Notwithstanding the
foregoing, if at the time of the receipt of such insurance proceeds no Default
or Event of Default has occurred and is continuing and the Borrower delivers to
the Agent a certificate, signed by the Borrower’s chief financial officer, that
it intends within one hundred twenty (120) days of receipt thereof (the “Reinvestment
Period”) to use all or a portion of such proceeds to purchase assets used
or useful in the ordinary course of business, the Borrower may use all or such
portion of the proceeds in the manner set forth in such certificate; provided
that (i) the aggregate amount of such insurance proceeds so used and not
subject to prepayment under this Section 6.4 shall not exceed $500,000 in
any fiscal year and (ii) any such proceeds not so used or committed to
such use pursuant to a binding agreement within the Reinvestment Period shall,
on the first Business Day immediately following such period, be applied in
accordance with the immediately preceding sentence.

 

6.5.    Taxes. 
Each Loan Party shall, and shall cause each Subsidiary to, timely file
all tax reports and pay and discharge all taxes, assessments and governmental
charges or levies imposed upon it, or its income or profits or upon its
properties or any part thereof, before the same shall be in default and before
the date on which penalties attach thereto, except to the extent such taxes,
assessments and governmental charges or levies are the subject of a Permitted
Contest.

 

6.6.    Agreement with Landlord/Bailee.  Unless otherwise agreed to by the Agent in
writing, each Loan Party shall obtain and maintain such Access Agreement(s) with
respect to any real property on which (a) a Loan Party’s principal place
of business, (b) a Loan Party’s books or records or (c) Collateral
with an aggregate value in excess of $50,000 is located (other than real
property owned by such Loan Party) as Agent may require. With respect to any
location described in the immediately preceding

 

20

 

sentence
where an Access Agreement has not been obtained or required, within five (5) Business
Days after the due date for any rental payments with respect to such location,
the Borrower shall deliver to Agent evidence in form reasonably satisfactory to
Agent that such rental payment was made.

 

6.7.    Protection of Intellectual Property.  Each Loan Party shall take all necessary
actions to: (a) protect, defend and maintain the validity and
enforceability of its Intellectual Property to the extent material to the
conduct of its business now or heretofore conducted by it or proposed to be
conducted by it (the “Material Intellectual Property”), (b) promptly
advise Agent in writing of material infringements of such Material Intellectual
Property and take all appropriate actions to enforce its rights in such
Material Intellectual Property against infringement, misappropriation or
dilution and to recover any and all damages for such infringement,
misappropriation or dilution, (c) not allow any such Material Intellectual
Property to be abandoned, forfeited or dedicated to the public without Agent’s
written consent, and (d) notify Agent promptly, but in any event within 5
days, if it knows or has reason to know that any application or registration
relating to any patent, trademark or copyright (now or hereafter existing)
material to its business is reasonably likely to become abandoned or dedicated,
or if any adverse determination (including the institution of, or any such
determination in, any proceeding in the United States Patent and Trademark
Office, the United States Copyright Office or any court) regarding such Loan
Party’s ownership of any Intellectual Property material to its business, its
right to register the same, or to keep and maintain the same.  Each Loan Party shall comply with and
preserve each of its Intellectual Property licenses pursuant to which it is a
licensee (“Licenses”) and observe and perform all of the conditions and
obligations to be observed and performed by it thereunder, except (i) solely
in the case of software licenses, to the extent such non-compliance could not
reasonably be expected to have a Material Adverse Effect or (ii) with
respect to the preservation of any such License, where such preservation is no
longer useful in the business.  None of
Agent or any Lender shall have any obligation or liability under any such
License by reason of or arising out of this Agreement, the granting of a lien,
if any, in such License or the receipt by Agent (on behalf of itself and
Lenders) of any payment relating to any such License.  None of Agent or any Lender shall be required
or obligated in any manner to perform or fulfill any of the obligations of any
Loan Party under or pursuant to any License, or to make any payment, or to make
any inquiry as to the nature or the sufficiency of any payment received by it
or the sufficiency of any performance by any party under any License, or to
present or file any claims, or to take any action to collect or enforce any
performance or the payment of any amounts which may have been assigned to it or
which it may be entitled at any time or times.

 

6.8.    Special Collateral Covenants.

 

(a)                                  Each Loan Party shall remain in possession of its respective Collateral
solely at the location(s) specified on the Perfection Certificate (as the
same may be updated in accordance with Section 6.2; provided
that prior to such Loan Party occupying or allowing Collateral to be located at
any new location, Agent shall have received prior written notice thereof and,
if required by Section 6.6, a fully executed and delivered Access
Agreement with respect thereto); except that (i) Agent, on behalf of
itself and Lenders, shall have the right to possess (A) any chattel paper
or instrument that constitutes a part of the Collateral, (B) any other
Collateral in which Agent’s security interest (on behalf of itself and Lenders)
may be perfected only by possession and (C) any Collateral after the
occurrence of an Event of Default in accordance with this Agreement and the
other Debt Documents and (ii) the Loan Parties shall be permitted to allow
employees to travel with Collateral that constitutes portable goods of a
deminimis nature (such as laptop computers, cell phones and similar equipment)
so long as such Collateral does not contain the only or primary copy of any
books and records or other important information related to the Loan Parties’
business and is not subject to any landlord lien.

 

21

 

(b)                                 Each Loan Party shall (i) use the Collateral only in its trade or
business, (ii) maintain all of the Collateral in good operating order and
repair, normal wear and tear excepted, and (iii) use and maintain the
Collateral only in material compliance with manufacturers’ recommendations and
all applicable laws.

 

(c)                                  Agent and Lenders do not authorize and each Loan Party agrees it shall
not (i) part with possession of any of the Collateral (except to Agent (on
behalf of itself and Lenders), for maintenance and repair or for a Permitted
Disposition), or (ii) remove any of the Collateral from the continental
United States other than Collateral (A) described in Section 6.8(a)(ii) or
(B) that constitutes applications or registrations of Intellectual
Property outside of the United States.

 

(d)                                 Each Loan Party shall pay promptly when due all taxes, license fees,
assessments and public and private charges levied or assessed on any of the
Collateral, on its use, or on this Agreement or any of the other Debt
Documents.  At its option, Agent may
discharge taxes, liens, security interests or other encumbrances at any time
levied or placed on the Collateral and, if the applicable Loan Party fails to
do so, may pay for the maintenance, insurance and preservation of the
Collateral and effect compliance with the terms of this Agreement or any of the
other Debt Documents.  Each Loan Party
agrees to reimburse Agent, on demand, all costs and expenses incurred by Agent
in connection with such payment or performance and agrees that such reimbursement
obligation shall constitute Obligations.

 

(e)                                  Each Loan Party shall, at all times, keep accurate and complete records
of the Collateral.

 

(f)                                    Each Loan Party agrees and acknowledges that any third person who may at
any time possess all or any portion of the Collateral shall be deemed to hold,
and shall hold, the Collateral as the agent of, and as pledge holder for, Agent
(on behalf of itself and Lenders). Agent may at any time give notice to any
third person described in the preceding sentence that such third person is
holding the Collateral as the agent of, and as pledge holder for, Agent (on
behalf of itself and Lenders).

 

(g)                                 Each Loan Party shall, during normal business hours, and in the absence
of a Default or an Event of Default, upon one Business Day’s prior notice, as
frequently as Agent reasonably determines to be appropriate: (i) provide
Agent (who may be accompanied by representatives of any Lender at such Lender’s
sole expense except as otherwise agreed in Section 10.5) and any of
its officers, employees and agents access to the properties, facilities,
principal advisors and employees (including officers) of each Loan Party and to
the Collateral, (ii) permit Agent (who may be accompanied by
representatives of any Lender at such Lender’s sole expense except as otherwise
agreed in Section 10.5), and any of its officers, employees and
agents, to inspect, audit and make extracts from any Loan Party’s books and
records (or at the request of Agent, deliver true and correct copies of such
books and records to Agent); provided, that, so long as no Default or
Event of Default has occurred and is continuing, the Loan Parties shall only be
required to reimburse Agent and any applicable Lender for costs and expenses
under Section 10.5 with respect to four (4) such inspections
and audits under this Section 6.8(g) during any calendar year,
and (iii) permit Agent (who may be accompanied by representatives of any
Lender at such Lender’s sole expense except as otherwise agreed in Section 10.5),
and its officers, employees and agents, to inspect, audit, appraise, review,
evaluate and make test verifications and counts of the Collateral of any Loan
Party.  Upon Agent’s request, each Loan
Party will promptly notify Agent in writing of the location of any
Collateral.  If a 

 

22

 

Default
or Event of Default has occurred and is continuing or if access is necessary to
preserve or protect the Collateral as determined by Agent, each such Loan Party
shall provide such access to Agent and to each Lender at all times and without
advance notice.  Each Loan Party shall
make available to Agent and its auditors, as quickly as is possible under the
circumstances, originals or copies of all books and records that Agent may
reasonably request.

 

(h)                                 No later than 30 days after the end of each fiscal quarter, a certificate
of the chief financial officer of Borrower setting forth in reasonable detail
any Margin Stock owned by any Loan Party as of the last day of such fiscal
quarter.

 

6.9.    Further Assurances.  Each Loan Party shall, upon request of Agent
or the Requisite Lenders, furnish to Agent and/or Lenders such further
information, execute and deliver to Agent such documents and instruments
(including, without limitation, UCC financing statements) and shall do such
other acts and things as Agent or Requisite Lenders may at any time reasonably
request relating to the perfection or protection of the security interest
created by this Agreement or for the purpose of carrying out the intent of this
Agreement and the other Debt Documents.

 

6.10.        Compliance
with Law.  Each Loan Party
shall comply with all applicable statutes, rules, regulations, standards,
guidelines, policies and orders administered or issued by any governmental
authority having jurisdiction over it or its business, except where the failure
to comply would not reasonably be expected to have, either individually or in
the aggregate, a Material Adverse Effect. 
Further, each Loan Party shall comply with all applicable statutes, rules,
regulations, standards, guidelines, policies and orders administered or issued
by the FDA (“FDA Laws”) or any comparable governmental authority, except
where the failure to comply would not reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect.  All products developed, manufactured, tested,
distributed or marketed by or on behalf of the Loan Parties that are subject to
the jurisdiction of the FDA or comparable governmental authority shall be
developed, tested, manufactured, distributed and marketed in compliance with
the FDA Laws and all other Requirements of Law, including, without limitation,
product approval, good manufacturing practices, labeling, advertising,
record-keeping, and adverse event reporting, and have been and are being
tested, investigated, distributed, marketed, and sold in compliance with FDA
Laws and all other Requirements of Law, except, in all such cases, where the
failure to comply would not reasonably be expected to have, either individually
or in the aggregate, a Material Adverse Effect,

 

6.11.  Additional Subsidiaries.  At the time of or prior to the
formation or acquisition of any Subsidiary of Borrower, Borrower shall cause to
be executed and delivered to Agent the following: (i) by such new
Subsidiary other than a Foreign Subsidiary, a Guaranty pursuant to which such
Subsidiary shall guarantee the payment and performance of all of the
Obligations and pursuant to which Agent, for the benefit of itself and the
Lenders, shall be granted a first priority (subject to Permitted Liens) and
perfected security interest in all assets of such Subsidiary of the same types
constituting “Collateral” under Section 3.1 hereof to secure the
Obligations, (ii) by the Borrower or any Guarantor (as applicable) that is
such Subsidiary’s direct parent company, an amendment to the Pledge Agreement
delivered on the Closing Date or a new Pledge Agreement substantially in the
form of the Pledge Agreement delivered on the Closing Date (or otherwise in
form and substance reasonably satisfactory to Lender), as applicable, and
pursuant to which either (1) all of the capital stock of such new
Subsidiary (if such Subsidiary is not a Foreign Subsidiary) or (2) 65% of
the capital stock of such new Subsidiary (if such Subsidiary is a Foreign
Subsidiary) shall be pledged to Agent, for the benefit of the Lenders, on a
first priority and perfected basis to secure the Obligations, and (iii) by
the Borrower, such other related documents (including closing certificates,
legal opinions and other similar documents) as Agent may reasonably request,
all in form and substance reasonably satisfactory to Agent; provided,
however, that this Section 

 

23

 

6.11
shall not operate as a consent to any formation or acquisition of a Subsidiary
that is not expressly permitted under this Agreement.

 

7.              NEGATIVE COVENANTS

 

7.1.    Liens. 
No Loan Party shall, and no Loan Party shall permit any of its
Subsidiaries to, create, incur, assume or permit to exist any lien, security
interest, claim or encumbrance or grant any negative pledges on any Collateral
or Intellectual Property, except Permitted Liens.

 

7.2.    Indebtedness.  No Loan Party shall, and no Loan Party shall
permit any of its Subsidiaries to, directly or indirectly create, incur, assume,
permit to exist, guarantee or otherwise become or remain directly or indirectly
liable with respect to, any Indebtedness (as hereinafter defined), except for (a) the
Obligations, (b) Indebtedness existing on the date hereof and set forth on
Schedule B to this Agreement, (c) Indebtedness consisting of capitalized
lease obligations and purchase money Indebtedness, in each case incurred by
Borrower or any of its Subsidiaries to finance the acquisition, repair,
improvement or construction of fixed or capital assets of such person, provided
that (i) the aggregate outstanding principal amount of all such
Indebtedness does not exceed, at any time, $4,000,000 less any
Indebtedness permitted to be incurred, and incurred, pursuant to clause (g) below
and (ii) the principal amount of such Indebtedness does not exceed the
lower of the cost or fair market value (plus taxes, shipping and installation
expenses) of the property so acquired or built or of such repairs or
improvements financed with such Indebtedness (each measured at the time of such
acquisition, repair, improvement or construction is made), (d) obligations
under any foreign exchange contract, currency swap agreement, interest rate
swap, cap or collar agreement or other similar agreement or arrangement entered
into by a Loan Party in the ordinary course of business, consistent with
industry practice and designed to alter the risks arising from fluctuations in
currency values or interest rates, but not for speculative purposes and where
the principal amount subject to such agreement or arrangement does not exceed
$100,000, guaranties by one or more Loan Parties of the Indebtedness of another
Loan Party, so long as such Indebtedness is otherwise permitted pursuant to
this Section 7.2, (f) Indebtedness owing by any Loan Party to
another Loan Party, provided that (i) each Loan Party shall have executed
and delivered to each other Loan Party a demand note (each, an “Intercompany
Note”) to evidence such intercompany loans or advances owing at any time by
each Loan Party to the other Loan Parties, which Intercompany Note shall be in
form and substance reasonably satisfactory to Agent and shall be pledged and
delivered to Agent pursuant to the Pledge Agreement as additional Collateral
for the Obligations, (ii) any and all Indebtedness of any Loan Party to
another Loan Party shall be subordinated to the Obligations pursuant to the
subordination terms set forth in each Intercompany Note, and (iii) no
Default or Event of Default would occur either before or after giving effect to
any such Indebtedness, (g) Indebtedness to finance existing equipment of
the Borrower as of the Closing Date in an amount not to exceed $2,000,000
provided that (A) the principal amount of such Indebtedness does not
exceed the lower of the cost or fair market value of such equipment and, (B) if
requested by such equipment lender, Agent shall execute an intercreditor
agreement with such equipment lender in form and substance satisfactory to
Agent pursuant to which Agent agrees to subordinate its lien in such equipment
to such equipment lender in a manner reasonably satisfactory to Agent, (h) reimbursement
obligations in connection with letters of credit in an amount not to exceed
$300,000 and (i) obligations owing to trade creditors incurred in the ordinary
course of business and past due by more than 90 days in an amount not to exceed
$500,000 in the aggregate so long any such outstanding amounts in excess of
$100,000 are subject to a good faith dispute by Borrower and such dispute is
customary for arrangements of this type in Borrower’s business.  The term “Indebtedness” means, with
respect to any person, at any date, without duplication, (i) all
obligations of such person for borrowed money, (ii) all obligations of
such person evidenced by bonds, debentures, notes or other similar instruments,
or upon which interest payments are customarily made, (iii) all
obligations of such person to pay the deferred purchase price of property or
services, but excluding obligations to trade creditors incurred in the ordinary
course of business and not past due by more than 90 

 

24

 

days,  (iv) all capital lease obligations of
such person, (v) the principal balance outstanding under any synthetic
lease, tax retention operating lease, off-balance sheet loan or similar
off-balance sheet financing product, (vi) all obligations of such person
to purchase securities (or other property) which arise out of or in connection
with the issuance or sale of the same or substantially similar securities (or
property), (vii) all contingent or non-contingent obligations of such
person to reimburse any bank or other person in respect of amounts paid under a
letter of credit or similar instrument, (viii) all equity securities of
such person subject to repurchase or redemption otherwise than at the sole
option of such person, (ix) all “earnouts” and similar payment obligations
of such person, (x) all indebtedness secured by a lien on any asset of
such person, whether or not such indebtedness is otherwise an obligation of
such person, (xi) all obligations of such person under any foreign
exchange contract, currency swap agreement, interest rate swap, cap or collar
agreement or other similar agreement or arrangement designed to alter the risks
of that person arising from fluctuations in currency values or interest rates,
in each case whether contingent or matured, and (xii) all obligations or
liabilities of others guaranteed by such person.

 

7.3.    Dispositions.  No Loan Party shall, and no Loan Party shall
permit any of its Subsidiaries to, convey, sell, rent, lease, sublease,
mortgage, license, transfer or otherwise dispose of (collectively, “Transfer”)
any of the Collateral or any Intellectual Property, except for the following
(collectively, “Permitted Dispositions”):  (a) sales of inventory in the ordinary
course of business, (b) dispositions by a Loan Party or any of its
Subsidiaries of assets that are no longer used or useful in the business of
such Loan Party or Subsidiary for cash and fair value so long as (i) no
Default or Event of Default exists at the time of such disposition or would be
caused after giving effect thereto and (ii) the fair market value of all
such assets disposed of does not exceed $50,000 in any calendar year, (c) non-exclusive
and/or exclusive licenses and similar agreements providing for the use and
collaboration of any Loan Party’s Intellectual Property in the ordinary course
of business, so long as, with respect to each such license or other agreement, (i) no
Default or Event of Default has occurred and is continuing at the time of such
Transfer, (ii) the license constitutes an arms-length transaction in the
ordinary course of business (and in the case of an exclusive license, made in
connection with a bona fide corporate collaboration or arrangement in the
ordinary course of business and approved by the board of directors of the
applicable Loan Party) and the terms of which, on their face, do not provide
for a sale or assignment of any Intellectual Property and do not restrict such
Loan Party’s ability to pledge, grant a security interest in or lien on, or
assign or otherwise Transfer any Intellectual Property, (iii) the
applicable Loan Party delivers at least fifteen (15) days prior written notice
and a brief summary of the terms of the license to Agent (with such updated
terms as may become available during such 15 day period), (iv) the
applicable Loan Party delivers to Agent copies of the final executed documents
in connection with such arrangement promptly (and in any event within 5 days)
of the later of the consummation thereof or the filing with the SEC (provided,
that if such documents are filed with the SEC, the Loan Parties shall have
satisfied the requirement to deliver the executed documents by providing an
electronic link to the applicable SEC filing containing such documents) and (v) all
royalties, milestone payments or other proceeds paid or payable to or for the
benefit of a Loan Party arising from such agreement or arrangement are paid to
a deposit account that is governed by an Account Control Agreement, and (d) sales
of equipment that has been acquired by a Loan Party solely for the purpose of a
sale-leaseback transaction so long as such Loan Party has entered into such
sale-leaseback transaction within 180 days of the original acquisition of such
equipment and the equipment is sold by such Loan Party for not less than 100%
of its original cost to such Loan Party.

 

7.4.    Change in Name, Location or Executive Office; Change
in Business; Change in Fiscal Year. 
No Loan Party shall, and no Loan Party shall permit any of its
Subsidiaries to, (a) change its name or its state of organization, unless
the applicable Loan Party shall have given Agent prior written notice thereof
and Agent shall have provided to the applicable Loan Party confirmation in
writing that all actions reasonably requested by Agent (including any actions
necessary to continue the perfection of the Agent’s security interest in the
Collateral) have been taken, (b) relocate its chief executive office
without 30 days prior written notification to Agent, (c) engage in any
business other than or reasonably related or 

 

25

 

incidental
to the businesses currently engaged in by such Loan Party or Subsidiary, (d) cease
to conduct business substantially in the manner conducted by such Loan Party or
Subsidiary as of the date of this Agreement or (e) without the prior
written consent of the Agent (which shall not be unreasonably withheld), change
its fiscal year end.

 

7.5.    Mergers or Acquisitions.  No Loan Party shall merge or consolidate, and
no Loan Party shall permit any of its Subsidiaries to merge or consolidate,
with or into any other person or entity (other than mergers of a Subsidiary
into Borrower in which Borrower is the surviving entity) or acquire, or permit
any of its Subsidiaries to acquire, all or substantially all of the capital
stock or property of another person or entity or all or substantially all of
the assets constituting any line of business, division, branch, operating
division or other unit operation of another person or entity.

 

7.6.    Restricted Payments.  No Loan Party shall, and no Loan Party shall
permit any of its Subsidiaries to, (a) declare or pay any dividends or
make any other distribution or payment on account of or redeem, retire, defease
or purchase any capital stock (other than (i) the payment of dividends to
Borrower or the payment of dividends by a Subsidiary of any Loan Party to such
Loan Party, (ii) the payment of dividends or distributions payable solely
in Borrower’s capital stock, (iii) the issuance of capital stock upon the
exercise or conversion of warrants or options, or (iv) the repurchase of
Borrower’s capital stock from employees, former employees, directors or former
directors or their permitted transferees or estates upon their death,
termination of employment or retirement in an amount not to exceed $100,000 in
any fiscal year), (b) purchase, redeem, defease or prepay any principal
of, premium, if any, interest or other amount payable in respect of any
Indebtedness prior to its scheduled maturity, (c) make any payment in
respect of management fees or consulting fees (or similar fees) to any
Affiliate of Borrower (other than that certain Consulting Agreement date April 18,
2005 between Borrower and one of its members of the Board of Directors for
scientific advisory services in an amount not to exceed $120,000 in any fiscal
year (the “Subject Consulting Agreement”)), (d) be a party to or
bound by an agreement that restricts a Subsidiary from paying dividends or
otherwise distributing property to Borrower, or (e) make any payments on
account of intercompany Indebtedness permitted under Section 7.2(f) (except
in accordance with the terms of the applicable Intercompany Note then in effect
with respect to such intercompany Indebtedness).

 

7.7.    Investments.  No Loan Party shall, and no Loan Party shall
permit any of its Subsidiaries to, directly or indirectly (a) acquire or
own, or make any loan, advance or capital contribution (an “Investment”)
in or to any person or entity, (b) acquire or create any Subsidiary (other
than the creation of Subsidiaries to engage in businesses reasonably related or
incidental to the businesses engaged in by the Loan Parties as of the Closing
Date, provided that each of the conditions set forth in Section 6.11
shall have been satisfied on or prior to the date such Subsidiary is created),
or (c) engage in any joint venture or partnership with any other person or
entity, other than: (i) Investments existing on the date hereof and set
forth on Schedule B to this Agreement, (ii) Investments in cash and
Cash Equivalents (as defined below), (iii) loans or advances to employees
of Borrower or any of its Subsidiaries to finance travel, entertainment and
relocation expenses and other ordinary business purposes in the ordinary course
of business as presently conducted, provided that the aggregate outstanding
principal amount of all loans and advances permitted pursuant to this clause (iii) shall
not exceed $50,000 at any time, (iv) intercompany loans among Loan Parties
to the extent permitted and subject to the terms and conditions of Section 7.2(e),
(v) non-recourse equity capital contributions made by Borrower to any of
its Subsidiaries that constitutes a Loan Party, (vi) investments in joint
ventures that are entering into license agreements with a Loan Party permitted
pursuant to the terms and conditions of Section 7.3, so long as the
aggregate value of cash and other assets invested in or contributed to such
joint ventures does not exceed $250,000 in the aggregate during the term of
this Agreement and all of the applicable Loan Party’s stock or other ownership
interests in such joint ventures are pledged to Agent pursuant to an amendment
to the Pledge Agreement, and (vii) capital contributions by Borrower or
any Guarantor to the Foreign Subsidiaries in an aggregate 

 

26

 

amount
not to exceed $250,000 (collectively, the “Permitted Investments”).  The term “Cash Equivalents” means (u) corporate
notes rated at least “A2” by Moody’s and at least “A” by S&P
with maturities of less than 365 days (v) any readily-marketable
securities (i) issued by, or directly, unconditionally and fully
guaranteed or insured by the United States federal government or
(ii) issued by any agency of the United States federal government the
obligations of which are fully backed by the full faith and credit of the
United States federal government, (w) any readily-marketable direct
obligations issued by any other agency of the United States federal government,
any state of the United States or any political subdivision of any such state
or any public instrumentality thereof, in each case having a rating of at least
“A-1” from S&P or at least “P-1” from Moody’s or at least “A” from
S&P and “A2” from Moody’s, (x) any commercial paper rated at
least “A-1” by S&P or “P-1” by Moody’s and issued by any
entity organized under the laws of any state of the United States, (y) any
U.S. dollar-denominated time deposit, insured certificate of deposit, overnight
bank deposit or bankers’ acceptance issued or accepted by (i) Agent or (ii) any
commercial bank that is (A) organized under the laws of the United States,
any state thereof or the District of Columbia, (B) “adequately capitalized”
(as defined in the regulations of its primary federal banking regulators) and (C) has
Tier 1 capital (as defined in such regulations) in excess of $250,000,000 or (z) shares
of any United States money market fund that (i) has substantially all of
its assets invested continuously in the types of investments referred to in clause
(v), (w), (x) or (y) above with maturities as set
forth in the proviso below, (ii) has net assets in excess of $500,000,000
and (iii) has obtained from either S&P or Moody’s the highest rating
obtainable for money market funds in the United States; provided, however,
that the maturities of all obligations specified in any of clauses (v), (w),
(x) and (y) above shall not exceed 365 days.  For the avoidance of doubt, “Cash Equivalents”
does not include (and each Loan Party is prohibited from purchasing or
purchasing participations in) any auction rate securities or other corporate or
municipal bonds with a long-term nominal maturity for which the interest rate
is reset through a Dutch auction.

 

7.8.    Transactions with Affiliates.  No Loan Party shall, and no Loan Party shall
permit any of its Subsidiaries to, directly or indirectly enter into or permit
to exist any transaction with any Affiliate (as defined below) of a Loan Party
or any Subsidiary of a Loan Party except for (a) Permitted Investments
described in clauses (iv) and (v) of such definition, (b) transactions
that are in the ordinary course of such Loan Party’s or such Subsidiary’s
business, upon fair and reasonable terms that are no more favorable to such
Affiliate than would be obtained in an arm’s length transaction and (c) the
Subject Consulting Agreement.  As used
herein, “Affiliate” means, with respect to a Loan Party or any
Subsidiary of a Loan Party, (a) each person that, directly or indirectly,
owns or controls 5% or more of the stock or membership interests having
ordinary voting power in the election of directors or managers of such Loan
Party or such Subsidiary, and (b) each person that controls, is controlled
by or is under common control with such Loan Party or such Subsidiary.

 

7.9.    Compliance. 
No Loan Party shall, and no Loan Party shall permit any of its
Subsidiaries to, (a) fail to comply with the laws and regulations
described in clauses (b) or (c) of Section 5.8 herein, (b) use
any portion of the Term Loan to purchase or carry margin stock (within the
meaning of Regulation U of the Federal Reserve Board) or (c) fail to
comply in any material respect with, or violate in any material respect any
other law or regulation (including without limitation any FDA Law) applicable
to it.

 

7.10.   Deposit Accounts and Securities Accounts.  No Loan Party shall directly or indirectly
maintain or establish any deposit account or securities account, unless Agent,
the applicable Loan Party or Loan Parties and the depository institution or
securities intermediary at which the account is or will be maintained enter
into a deposit account control agreement or securities account control
agreement, as the case may be, in form and substance satisfactory to Agent (an “Account
Control Agreement”) (which agreement shall provide, among other things,
that (i) such depository institution or securities intermediary has no
rights of setoff or recoupment or any other claim against such deposit or
securities account (except as agreed to by Agent), other than for payment of
its service fees and other charges directly related to the 

 

27

 

administration
of such account and for returned checks or other items of payment, and (ii) such
depository institution or securities intermediary shall comply with all
instructions of Agent without further consent of such Loan Party or Loan
Parties, as applicable, including, without limitation, an instruction by Agent
to comply exclusively with instructions of the Agent with respect to such
account (such notice, a “Notice of Exclusive Control”)), prior to or
concurrently with the establishment of such deposit account or securities
account (or in the case of any such deposit account or securities account
maintained as of the date hereof, on or before the Closing Date); provided,
however, that an Account Control Agreement shall not be required for (x) deposit
accounts used solely for the purpose of paying payroll, employee benefits or
withholding taxes or (y) any certificate of deposit being used to secure
reimbursement obligations for a letter of credit permitted pursuant to Section 7.2(h),
in the case of any such deposit account or certificate of deposit described in
clauses (x) and (y) so long as the amount of deposits in such
accounts does not exceed the amounts necessary to cover such liabilities.  Agent may only give a Notice of Exclusive
Control with respect to any deposit account or securities account at any time
at which an Event of Default has occurred and is continuing.  At the request of Agent, Borrower shall
create or designate a dedicated deposit account or accounts to be used
exclusively for payroll or withholding tax purposes.

 

7.11.  Amendments to Other Agreements.  No Loan Party shall (a) amend, modify or
waive any provision of (i) any Material Agreement (unless the net effect
of such amendment, modification or waiver is not materially adverse to any Loan
Party or adverse in any way to Agent or Lenders), or  (ii) any of such Loan Party’s organizational documents
(other than in connection with and limited to an action permitted pursuant to Section 7.4(a)),
in each case, without the prior written consent of Agent and the Requisite
Lenders (not to be unreasonably withheld) or (b) terminate any Material
Agreement unless such termination could not reasonably be expected to have a
Material Adverse Effect.

 

8.              DEFAULT AND
REMEDIES.

 

8.1.    Events of Default.  Loan Parties shall be in default under this
Agreement and each of the other Debt Documents if (each of the following, an “Event
of Default”):

 

(a)                                  Borrower shall fail to pay (i) any principal when due, or (ii) any
interest, fees or other Obligations (other than as specified in clause (i))
within a period of 3 Business Days after the due date thereof (other than on
the Term Loan Maturity Date);

 

(b)                                 any Loan Party breaches any of its obligations under Section 6.1
(solely as it relates to maintaining its existence), Section 6.2, Section 6.3,
Section 6.4, or Article 7;

 

(c)                                  any Loan Party breaches any of its other obligations under any of the
Debt Documents and fails to cure such breach within 30 days after the earlier
of (i) the date on which an officer of such Loan Party becomes aware, or
through the exercise of reasonable diligence should have become aware, of such
failure and (ii) the date on which notice shall have been given to
Borrower from Agent;

 

(d)                                 any warranty, representation or statement made or deemed made by or on
behalf of any Loan Party in any of the Debt Documents or otherwise in
connection with any of the Obligations shall be false or misleading in any
material respect at the time such warranty, representations or statement was
made or deemed to be made;

 

(e)                                  any portion of the Collateral in excess of $100,000 is subjected to
attachment, execution, levy, seizure or confiscation in any legal proceeding or
otherwise, or if any legal or administrative proceeding is commenced against
any Loan Party or any portion of the Collateral in excess of $100,000, which in the good faith judgment of
Agent subjects any 

 

28

 

of
the Collateral to a material risk of attachment, execution, levy, seizure or
confiscation and no bond is posted or protective order obtained to negate such
risk;

 

(f)                                    one or more judgments, orders or decrees shall be rendered against any
Loan Party or any Subsidiary of a Loan Party that exceeds by more than $250,000 any insurance coverage applicable thereto
(to the extent the relevant insurer has been notified of such claim and has not
denied coverage therefor) and either (i) enforcement proceedings shall
have been commenced by any creditor upon any such judgment, order or decree or (ii) such
judgment, order or decree shall not have been vacated or discharged for a
period of 10 consecutive days and there shall not be in effect (by reason of a
pending appeal or otherwise) any stay of enforcement thereof;

 

(g)                                 (i)      any Loan Party or any
Subsidiary of a Loan Party shall generally not pay its debts as such debts
become due, shall admit in writing its inability to pay its debts generally,
shall make a general assignment for the benefit of creditors, or shall cease
doing business as a going concern, (ii) any proceeding shall be instituted
by or against any Loan Party or any Subsidiary of a Loan Party seeking to
adjudicate it a bankrupt or insolvent or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief, composition of it
or its debts or any similar order, in each case under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors or seeking the
entry of an order for relief or the appointment of a custodian, receiver,
trustee, conservator, liquidating agent, liquidator, other similar official or
other official with similar powers, in each case for it or for any substantial
part of its property and, in the case of any such proceedings instituted
against (but not by or with the consent of) such Loan Party or such Subsidiary,
either such proceedings shall remain undismissed or unstayed for a period of
45 days or more or any action sought in such proceedings shall occur or (iii) any
Loan Party or any Subsidiary of a Loan Party shall take any corporate or
similar action or any other action to authorize any action described in clause
(i) or (ii) above;

 

(h)                                 a Material Adverse Effect has occurred;

 

(i)                                     (i) any provision of any Debt Document shall fail to be valid and
binding on, or enforceable against, a Loan Party party thereto, or (ii) any
Debt Document purporting to grant a security interest to secure any Obligation
shall fail to create a valid and enforceable security interest on any
Collateral purported to be covered thereby or such security interest shall fail
or cease to be a perfected lien with the priority required in the relevant Debt
Document, or any Loan Party shall state in writing that any of the events
described in clause (i) or (ii) above shall have
occurred;

 

(j)                                     (i) any Loan Party or any Subsidiary of a Loan Party defaults under
any Material Agreement (after any applicable grace period contained therein)
where the damages against or other losses incurred by such Loan Party could
reasonably be expected to exceed $500,000 or such default gives the other party
to such Material Agreement the right to terminate the Material Agreement, (ii) (A) any
Loan Party or any Subsidiary of a Loan Party fails to make (after any
applicable grace period) any payment when due (whether due because of scheduled
maturity, required prepayment provisions, acceleration, demand or otherwise) on
any Indebtedness (other than the Obligations and Indebtedness permitted
pursuant to Section 7.2(i)) of such Loan Party or such Subsidiary
having an aggregate principal amount (including undrawn committed or available
amounts and including amounts owing to all creditors under any combined or
syndicated credit arrangement) of more than $250,000  (“Material Indebtedness”), (B) any other 

 

29

 

event
shall occur or condition shall exist under any contractual obligation relating
to any such Material Indebtedness, if the effect of such event or condition is
to accelerate, or to permit the acceleration of (without regard to any
subordination terms with respect thereto), the maturity of such Material
Indebtedness or (C) any such Material Indebtedness shall become or be
declared to be due and payable, or be required to be prepaid, redeemed,
defeased or repurchased (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof, or (iii) Borrower or
any Subsidiary defaults (beyond any applicable grace period) under any
obligation for payments due, or which gives the lessor the ability to terminate
the lease, levy upon any Collateral or remove the Borrower or any Collateral
from the premises, under any lease agreement that meets the criteria for the
requirement of an Access Agreement under Section 6.6;

 

(k)                                  (i) any of the chief executive officer or the chief financial
officer of Borrower as of the date hereof shall cease to be involved in the day
to day operations (including research development) or management of the
business of Borrower, and an appropriately qualified (including in accordance
with industry standards) successor of such officer is not appointed by the
board of directors of the Borrower within 120 days of such cessation or
involvement, (ii) the acquisition, directly or indirectly, by any person
or group (as such term is used in Section 13(d)(3) of the Securities
Exchange Act of 1934) (other than Kovner (as defined below) of more than
thirty-five percent (35%) of the voting power of the voting stock of Borrower
by way of merger or consolidation or otherwise, (iii) the acquisition,
directly or indirectly, by Bruce Stanley Kovner or, so long as such entity is
controlled directly or indirectly by Bruce Stanley Kovner,  CxSynta LLC, a Delaware limited liability
company (collectively referred to herein as “Kovner”) of more than fifty
percent (50%) of the voting power of the voting stock of Borrower by way of
merger or consolidation or otherwise, (iv) during
any period of twelve consecutive calendar months, individuals who at the
beginning of such period constituted the board of directors of Borrower
(together with any new directors whose election by the board of directors of
Borrower or whose nomination for election by the stockholders of Borrower was
approved by a vote of at least two-thirds of the directors then still in office
who either were directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason other
than death or disability to constitute a majority of the directors then in
office, or  (v) Borrower
ceases to own and control, directly or indirectly, all of the economic and
voting rights associated with the outstanding voting capital stock (or other
voting equity interest) of each of its Subsidiaries;

 

(l)                                     Any event
occurs, whether or not insured or insurable, as a result of which
revenue-producing activities resulting from product sales cease or are
substantially curtailed at facilities of Borrower generating more than 25% of
Borrower’s consolidated revenues from product sales for the fiscal year
preceding such event and such cessation or curtailment continues for more than
thirty (30) days; or

 

(m)                               (i) The FDA or any other governmental authority initiates
enforcement action against any Loan Party, or any supplier of a Loan Party,
that causes any Loan Party to discontinue marketing any of its products; (ii) the
FDA or any other governmental authority issues a warning letter with respect to
any products to any Loan Party which could reasonably be expected to have a
Material Adverse Effect; or (iii) any Loan Party conducts a recall of its
products which could reasonably be expected to result in liability and expense
to any Loan Party of $250,000 or more.

 

30

 

8.2.    Lender Remedies.  Upon the occurrence of any Event of Default,
Agent may, and at the written request of the Requisite Lenders shall, terminate
the Commitments and declare any or all of the Obligations to be immediately due
and payable, without demand or notice to any Loan Party and the accelerated
Obligations shall bear interest at the Default Rate pursuant to Section 2.6,
provided that, upon the occurrence of any Event of Default specified in Section 8.1(g) above,
the Obligations shall be automatically accelerated.  After the occurrence of an Event of Default,
Agent shall have (on behalf of itself and Lenders) all of the rights and
remedies of a secured party under the UCC, and under any other applicable law.  Without limiting the foregoing, Agent shall
have the right to, and at the written request of the Requisite Lenders
shall,  (a) notify any account
debtor of any Loan Party or any obligor on any instrument which constitutes
part of the Collateral to make payments to Agent (for the benefit of itself and
Lenders), (b) with or without legal process, enter any premises where the
Collateral may be and take possession of and remove the Collateral from the
premises or store it on the premises, (c) sell the Collateral at public or
private sale, in whole or in part, and have the right to bid and purchase at
such sale, or (d) lease or otherwise dispose of all or part of the
Collateral, applying proceeds from such disposition to the Obligations in
accordance with Section 8.4. 
If requested by Agent, Loan Parties shall promptly assemble the
Collateral and make it available to Agent at a place to be designated by
Agent.  Agent may also render any or all
of the Collateral unusable at a Loan Party’s premises and may dispose of such
Collateral on such premises without liability for rent or costs.  Any notice that Agent is required to give to
a Loan Party under the UCC of the time and place of any public sale or the time
after which any private sale or other intended disposition of the Collateral is
to be made shall be deemed to constitute reasonable notice if such notice is
given in accordance with this Agreement at least 10 days prior to such
action.  Effective only upon the
occurrence and during the continuance of an Event of Default, each Loan Party
hereby irrevocably appoints Agent (and any of Agent’s designated officers or
employees) as such Loan Party’s true and lawful attorney to: (i) take any
of the actions specified above in this paragraph; (ii) endorse such Loan
Party’s name on any checks or other forms of payment or security that may come
into Agent’s possession; (iii) settle and adjust disputes and claims
respecting the accounts directly with account debtors, for amounts and upon
terms which Agent determines to be reasonable; and (iv) do such other and
further acts and deeds in the name of such Loan Party that Agent may deem
necessary or desirable to enforce its rights in or to any of the Collateral or
to perfect or better perfect Agent’s security interest (on behalf of itself and
Lenders) in any of the Collateral.  The
appointment of Agent as each Loan Party’s attorney in fact is a power coupled
with an interest and is irrevocable until the Termination Date.

 

8.3.    Additional Remedies. In addition to the
remedies provided in Section 8.2 above, each Loan Party hereby
grants to Agent (on behalf of itself and Lenders) and any transferee of
Collateral, solely for purposes of exercising its remedies as provided herein,
an irrevocable, nonexclusive license (exercisable without payment of royalty or
other compensation to any Loan Party) to use, license or sublicense any
Intellectual Property now owned or hereafter acquired by such Loan Party, and
wherever the same may be located, and including in such license access to all
media in which any of the licensed items may be recorded or stored and to all
computer software and programs used for the compilation or printout thereof;
provided, that, such license rights shall be exercisable only during the
continuance of an Event of Default and in any event shall terminate on the Termination
Date.

 

8.4.    Application of Proceeds.  Proceeds from any Transfer of the Collateral
or the Intellectual Property (other than Permitted Dispositions) and all
payments made to or proceeds of Collateral received by Agent during the
continuance of an Event of Default shall be applied as follows: (a) first,
to pay all fees, costs, indemnities, reimbursements and expenses then due to
Agent under the Debt Documents in its capacity as Agent under the Debt
Documents, until paid in full in cash, (b) second, to pay all fees, costs,
indemnities, reimbursements and expenses then due to Lenders under the Debt
Documents in accordance with their respective Pro Rata Shares, until paid in
full in cash, (c) third, to pay all interest on the Term Loan then due to
Lenders in accordance with their respective Pro Rata Shares (other than
interest, fees, expenses and other amounts accrued after the commencement of
any proceeding referred to in Section 

 

31

 

8.1(g) if a claim for such amounts is not
allowable in such proceeding), until paid in full in cash, (d) fourth, to
pay all principal on the Term Loan then due to Lenders in accordance with their
respective Pro Rata Shares, until paid in full in cash, (e) fifth, to pay all
other Obligations then due to Lenders in accordance with their respective Pro
Rata Shares (including, without limitation, all interest, fees, expenses and
other amounts accrued after the commencement of any proceeding referred to in Section 8.1(g) whether
or not a claim for such amounts is allowable in such proceeding), until paid in
full in cash, and (f) sixth, to Borrower or as otherwise required by
law.  Borrower shall remain fully liable
for any deficiency.

 

9.              THE AGENT.

 

9.1.    Appointment of Agent.

 

(a)                                  Each Lender hereby appoints GECC (together with any successor Agent
pursuant to Section 9.9) as Agent under the Debt Documents and
authorizes the Agent to (a) execute and deliver the Debt Documents and
accept delivery thereof on its behalf from Loan Parties, (b) take such
action on its behalf and to exercise all rights, powers and remedies and
perform the duties as are expressly delegated to the Agent under such Debt
Documents and (c) exercise such powers as are reasonably incidental
thereto.  The provisions of this Article 9
are solely for the benefit of Agent and Lenders and none of Loan Parties nor
any other person shall have any rights as a third party beneficiary of any of
the provisions hereof.  In performing its
functions and duties under this Agreement and the other Debt Documents, Agent
shall act solely as an agent of Lenders and does not assume and shall not be
deemed to have assumed any obligation toward or relationship of agency or trust
with or for any Loan Party or any other person. 
Agent shall have no duties or responsibilities except for those
expressly set forth in this Agreement and the other Debt Documents.  The duties of Agent shall be mechanical and
administrative in nature and Agent shall not have, or be deemed to have, by
reason of this Agreement, any other Debt Document or otherwise a fiduciary or
trustee relationship in respect of any Lender. 
Except as expressly set forth in this Agreement and the other Debt
Documents, Agent shall not have any duty to disclose, and shall not be liable
for failure to disclose, any information relating to Borrower or any of its
Subsidiaries that is communicated to or obtained by GECC or any of its
affiliates in any capacity.

 

(b)                                 Without limiting the generality of clause (a) above, Agent shall
have the sole and exclusive right and authority (to the exclusion of the
Lenders), and is hereby authorized, to (i) act as the disbursing and
collecting agent for the Lenders with respect to all payments and collections
arising in connection with the Debt Documents (including in any other
bankruptcy, insolvency or similar proceeding), and each person making any
payment in connection with any Debt Document to any Lender is hereby authorized
to make such payment to Agent, (ii) file and prove claims and file other
documents necessary or desirable to allow the claims of Agent and Lenders with
respect to any Obligation in any proceeding described in any bankruptcy,
insolvency or similar proceeding (but not to vote, consent or otherwise act on
behalf of such Lender), (iii) act as collateral agent for Agent and each
Lender for purposes of the perfection of all liens created by the Debt
Documents and all other purposes stated therein, (iv) manage, supervise
and otherwise deal with the Collateral, (v) take such other action as is
necessary or desirable to maintain the perfection and priority of the liens
created or purported to be created by the Debt Documents, (vi) except as
may be otherwise specified in any Debt Document, exercise all remedies given to
Agent and the other Lenders with respect to the Collateral, whether under the
Debt Documents, applicable law or otherwise and (vii) execute any
amendment, consent or waiver under the Debt 

 

32

 

Documents
on behalf of any Lender that has consented in writing to such amendment,
consent or waiver; provided, however, that Agent hereby appoints,
authorizes and directs each Lender to act as collateral sub-agent for Agent and
the Lenders for purposes of the perfection of all liens with respect to the
Collateral, including any deposit account maintained by a Loan Party with, and
cash and cash equivalents held by, such Lender, and may further authorize and
direct the Lenders to take further actions as collateral sub-agents for
purposes of enforcing such liens or otherwise to transfer the Collateral
subject thereto to Agent, and each Lender hereby agrees to take such further
actions to the extent, and only to the extent, so authorized and directed.  Agent may, upon any term or condition it
specifies, delegate or exercise any of its rights, powers and remedies under,
and delegate or perform any of its duties or any other action with respect to,
any Debt Document by or through any trustee, co-agent, employee,
attorney-in-fact and any other person (including any Lender).  Any such person shall benefit from this
Article 9 to the extent provided by Agent.

 

(c)                                  If Agent shall request instructions from Requisite Lenders or all
affected Lenders with respect to any act or action (including failure to act)
in connection with this Agreement or any other Debt Document, then Agent shall
be entitled to refrain from such act or taking such action unless and until
Agent shall have received instructions from Requisite Lenders or all affected
Lenders, as the case may be, and Agent shall not incur liability to any person
by reason of so refraining.  Agent shall
be fully justified in failing or refusing to take any action hereunder or under
any other Debt Document (a) if such action would, in the opinion of Agent,
be contrary to law or any Debt Document, (b) if such action would, in the
opinion of Agent, expose Agent to any potential liability under any law,
statute or regulation or (c) if Agent shall not first be indemnified to
its satisfaction against any and all liability and expense which may be
incurred by it by reason of taking or continuing to take any such action.  Without limiting the foregoing, no Lender
shall have any right of action whatsoever against Agent as a result of Agent
acting or refraining from acting hereunder or under any other Debt Document in
accordance with the instructions of Requisite Lenders or all affected Lenders,
as applicable.

 

9.2.    Agent’s Reliance, Etc.  Neither Agent nor any of its affiliates nor
any of their respective directors, officers, agents, employees or
representatives shall be liable for any action taken or omitted to be taken by
it or them hereunder or under any other Debt Documents, or in connection
herewith or therewith, except for damages caused by its or their own gross
negligence or willful misconduct as finally determined by a court of competent
jurisdiction.  Without limiting the
generality of the foregoing, Agent:  (a) may
treat the payee of any Note as the holder thereof until such Note has been
assigned in accordance with Section 10.1; (b) may consult with
legal counsel, independent public accountants and other experts, whether or not
selected by it, and shall not be liable for any action taken or omitted to be
taken by it in good faith in accordance with the advice of such counsel,
accountants or experts; (c) shall not be responsible or otherwise incur
liability for any action or omission taken in reliance upon the instructions of
the Requisite Lenders, (d) makes no warranty or representation to any
Lender and shall not be responsible to any Lender for any statements,
warranties or representations made in or in connection with this Agreement or
the other Debt Documents; (e) shall not have any duty to inspect the
Collateral (including the books and records) or to ascertain or to inquire as
to the performance or observance of any provision of any Debt Document, whether
any condition set forth in any Debt Document is satisfied or waived, as to the
financial condition of any Loan Party or as to the existence or continuation or
possible occurrence or continuation of any Default or Event of Default and
shall not be deemed to have notice or knowledge of such occurrence or
continuation unless it has received a notice from Borrower or any Lender
describing such Default or Event of Default clearly labeled “notice of default”;
(f) shall not be responsible to any Lender for the due execution,
legality, validity, enforceability, effectiveness, 

 

33

 

genuineness,
sufficiency or value of, or the attachment, perfection or priority of any lien
created or purported to be created under or in connection with, any Debt
Document or any other instrument or document furnished pursuant hereto or
thereto; and (g) shall incur no liability under or in respect of this
Agreement or the other Debt Documents by acting upon any notice, consent,
certificate or other instrument or writing (which may be by telecopy, telegram,
cable or telex) believed by it to be genuine and signed or sent or otherwise
authenticated by the proper party or parties.

 

9.3.    GECC and Affiliates.  GECC shall have the same rights and powers
under this Agreement and the other Debt Documents as any other Lender and may
exercise the same as though it were not Agent; and the term “Lender” or “Lenders”
shall, unless otherwise expressly indicated, include GECC in its individual
capacity.  GECC and its affiliates may
lend money to, invest in, and generally engage in any kind of business with,
Borrower, any of Borrower’s Subsidiaries, any of their Affiliates and any
person who may do business with or own securities of Borrower, any of Borrower’s
Subsidiaries or any such Affiliate, all as if GECC were not Agent and without
any duty to account therefor to Lenders. 
GECC and its affiliates may accept fees and other consideration from
Borrower for services in connection with this Agreement or otherwise without
having to account for the same to Lenders. 
Each Lender acknowledges the potential conflict of interest between GECC
as a Lender holding disproportionate interests in the Term Loan and GECC as
Agent, and expressly consents to, and waives, any claim based upon, such
conflict of interest.

 

9.4.    Lender Credit Decision.  Each Lender acknowledges that it has,
independently and without reliance upon Agent or any other Lender and based on
the financial statements referred to in Section 6.3 and such other
documents and information as it has deemed appropriate, made its own credit and
financial analysis of each Loan Party and its own decision to enter into this
Agreement.  Each Lender also acknowledges
that it will, independently and without reliance upon Agent or any other Lender
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement.  Each Lender
acknowledges the potential conflict of interest of each other Lender as a
result of Lenders holding disproportionate interests in the Term Loan, and
expressly consents to, and waives, any claim based upon, such conflict of
interest.

 

9.5.    Indemnification.  Lenders shall and do hereby indemnify Agent
(to the extent not reimbursed by Loan Parties and without limiting the
obligations of Loan Parties hereunder), ratably according to their respective
Pro Rata Shares from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever that may be imposed on, incurred by, or
asserted against Agent in any way relating to or arising out of this Agreement
or any other Debt Document or any action taken or omitted to be taken by Agent
in connection therewith; provided that no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from Agent’s gross
negligence or willful misconduct as finally determined by a court of competent
jurisdiction. Without limiting the foregoing, each Lender agrees to reimburse
Agent promptly upon demand for its Pro Rata Share of any out-of-pocket expenses
(including reasonable counsel fees) incurred by Agent in connection with the
preparation, execution, delivery, administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or legal
advice in respect of rights or responsibilities under, this Agreement and each
other Debt Document, to the extent that Agent is not reimbursed for such
expenses by Loan Parties.  The provisions
of this Section 9.5 shall survive the termination of this
Agreement.

 

9.6.    Successor Agent.  Agent may resign at any time by delivering
notice of such resignation to the Lenders and the Borrower, effective on the
date set forth in such notice.  Upon any
such resignation, the Requisite Lenders shall have the right to appoint a
successor Agent.  If no successor Agent
shall have been so appointed by the Requisite Lenders and shall have accepted such
appointment within 30 days

 

34

 

after
the resigning Agent’s giving notice of resignation, then the resigning Agent
may, on behalf of Lenders, appoint a successor Agent, which shall be a Lender,
if a Lender is willing to accept such appointment, or otherwise shall be a
commercial bank or financial institution or a subsidiary of a commercial bank
or financial institution if such commercial bank or financial institution is
organized under the laws of the United States of America or of any State thereof
and has a combined capital and surplus of at least $300,000,000.  If no successor Agent has been appointed
pursuant to the foregoing, within 30 days after the date such notice of
resignation was given by the resigning Agent, the Requisite Lenders shall thereafter
perform all the duties of Agent hereunder until such time, if any, as the
Requisite Lenders appoint a successor Agent as provided above.  Upon the acceptance of any appointment as
Agent hereunder by a successor Agent, such successor Agent shall succeed to and
become vested with all the rights, powers, privileges and duties of the
resigning Agent.  Upon the earlier of the
acceptance of any appointment as Agent hereunder by a successor Agent or the
effective date of the resigning Agent’s resignation, the resigning Agent shall
be discharged from its duties and obligations under this Agreement and the
other Debt Documents, except that any indemnity rights or other rights in favor
of such resigning Agent shall continue. 
After any resigning Agent’s resignation hereunder, the provisions of
this Section 9 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was acting as Agent under this Agreement
and the other Debt Documents.

 

9.7.    Setoff and Sharing of Payments.  In addition to any rights now or hereafter
granted under applicable law and not by way of limitation of any such rights,
upon the occurrence and during the continuance of any Event of Default and
subject to Section 9.8(e), each Lender is hereby authorized at any
time or from time to time upon the direction of Agent, without notice to
Borrower or any other person, any such notice being hereby expressly waived, to
offset and to appropriate and to apply any and all balances held by it at any
of its offices for the account of Borrower (regardless of whether such balances
are then due to Borrower) and any other properties or assets at any time held
or owing by that Lender or that holder to or for the credit or for the account
of Borrower against and on account of any of the Obligations that are not paid
when due.  Any Lender exercising a right
of setoff or otherwise receiving any payment on account of the Obligations in
excess of its Pro Rata Share thereof shall purchase for cash (and the other
Lenders or holders shall sell) such participations in each such other Lender’s
or holder’s Pro Rata Share of the Obligations as would be necessary to cause
such Lender to share the amount so offset or otherwise received with each other
Lender or holder in accordance with their respective Pro Rata Shares of the
Obligations.  Borrower agrees, to the
fullest extent permitted by law, that (a) any Lender may exercise its
right to offset with respect to amounts in excess of its Pro Rata Share of the
Obligations and may sell participations in such amounts so offset to other
Lenders and holders and (b) any Lender so purchasing a participation in
the Term Loan made or other Obligations held by other Lenders or holders may
exercise all rights of offset, bankers’ lien, counterclaim or similar rights
with respect to such participation as fully as if such Lender or holder were a
direct holder of the Term Loan and the other Obligations in the amount of such
participation.  Notwithstanding the
foregoing, if all or any portion of the offset amount or payment otherwise
received is thereafter recovered from the Lender that has exercised the right
of offset, the purchase of participations by that Lender shall be rescinded and
the purchase price restored without interest. 
The term “Pro Rata Share” means, with respect to any Lender at
any time, the percentage obtained by dividing (x) the Commitment of such
Lender then in effect (or, if such Commitment is terminated, the aggregate
outstanding principal amount of the Term Loan owing to such Lender) by
(y) the Total Commitment then in effect (or, if the Total Commitment is
terminated, the outstanding principal amount of the Term Loan owing to all
Lenders).

 

9.8.    Advances; Payments; Non-Funding Lenders; Information;
Actions in Concert.

 

(a)                                  Advances; Payments.  If Agent receives any payment for the account
of Lenders on or prior to 11:00 a.m. (New York time) on any Business Day,
Agent shall pay to each applicable Lender such Lender’s Pro Rata Share of such
payment on such Business Day. 

 

35

 

If
Agent receives any payment for the account of Lenders after 11:00 a.m.
(New York time) on any Business Day, Agent shall pay to each applicable Lender
such Lender’s Pro Rata Share of such payment on the next Business Day. To the
extent that any Lender has failed to fund any such payments and Term Loan (a “Non-Funding
Lender”), Agent shall be entitled to set off the funding short-fall against
that Non-Funding Lender’s Pro Rata Share of all payments received from
Borrower.

 

(b)                                 Return of Payments.

 

(i)                      If Agent pays an amount to
a Lender under this Agreement in the belief or expectation that a related
payment has been or will be received by Agent from a Loan Party and such
related payment is not received by Agent, then Agent will be entitled to
recover such amount (including interest accruing on such amount at the Federal
Funds Rate for the first Business Day and thereafter, at the rate otherwise
applicable to such Obligation) from such Lender on demand without setoff,
counterclaim or deduction of any kind.

 

(ii)                     If Agent determines at any
time that any amount received by Agent under this Agreement must be returned to
a Loan Party or paid to any other person pursuant to any insolvency law or
otherwise, then, notwithstanding any other term or condition of this Agreement
or any other Debt Document, Agent will not be required to distribute any
portion thereof to any Lender.  In
addition, each Lender will repay to Agent on demand any portion of such amount
that Agent has distributed to such Lender, together with interest at such rate,
if any, as Agent is required to pay to a Loan Party or such other person,
without setoff, counterclaim or deduction of any kind.

 

(c)                                  Non-Funding Lenders.  The failure of any Non-Funding Lender to make
any Term Loan or any payment required by it hereunder shall not relieve any
other Lender (each such other Lender, an “Other Lender”) of its
obligations to make the Term Loan, but neither any Other Lender nor Agent shall
be responsible for the failure of any Non-Funding Lender to make a Term Loan or
make any other payment required hereunder. 
Notwithstanding anything set forth herein to the contrary, a Non-Funding
Lender shall not have any voting or consent rights under or with respect to any
Debt Document or constitute a “Lender” (or be included in the calculation of “Requisite
Lender” hereunder) for any voting or consent rights under or with respect to
any Debt Document.  At Borrower’s
request, Agent or a person reasonably acceptable to Agent shall have the right
with Agent’s consent and in Agent’s sole discretion (but shall have no
obligation) to purchase from any Non-Funding Lender, and each Non-Funding
Lender agrees that it shall, at Agent’s request, sell and assign to Agent or
such person, all of the Commitments and all of the outstanding Term Loan of
that Non-Funding Lender for an amount equal to the principal balance of the
Term Loan held by such Non-Funding Lender and all accrued interest and fees
with respect thereto through the date of sale, such purchase and sale to be
consummated pursuant to an executed Assignment Agreement (as defined below).

 

(d)                                 Dissemination of Information.  Agent shall use reasonable efforts to provide
Lenders with any notice of Default or Event of Default received by Agent from, or
delivered by Agent to Borrower, with notice of any Event of Default of which
Agent has actually become aware and with notice of any action taken by Agent
following any Event of Default; provided that Agent shall not be liable
to any Lender for any failure to do so, except to the extent that such failure
is attributable to Agent’s gross negligence or willful misconduct as finally
determined by a court of competent jurisdiction.  Lenders 

 

36

 

acknowledge
that Borrower is required to provide financial statements to Lenders in
accordance with Section 6.3  hereto
and agree that Agent shall have no duty to provide the same to Lenders.

 

(e)           Actions in Concert.  Anything in this Agreement to the contrary
notwithstanding, each Lender hereby agrees with each other Lender that no
Lender shall take any action to protect or enforce its rights arising out of
this Agreement, the Notes or any other Debt Documents (including exercising any
rights of setoff) without first obtaining the prior written consent of Agent
and Requisite Lenders, it being the intent of Lenders that any such action to
protect or enforce rights under this Agreement and the Notes shall be taken in
concert and at the direction or with the consent of Agent and Requisite
Lenders.

 

10.       MISCELLANEOUS.

 

10.1.        Assignment. 
Subject to the terms of this Section 10.1, any Lender may
make an assignment to an assignee of, or sell participations in, at any time or
times, the Debt Documents, its Commitment, Term Loan or any portion thereof or
interest therein, including any Lender’s rights, title, interests, remedies,
powers or duties thereunder.  Any
assignment by a Lender shall: (i) except in the case of an assignment to a
Qualified Assignee (as defined below), require the consent of each Lender
(which consent shall not be unreasonably withheld, conditioned or delayed), (ii) require
the execution of an assignment agreement in form and substance reasonably
satisfactory to, and acknowledged by, Agent (an “Assignment Agreement”);
(iii) be conditioned on such assignee Lender representing to the assigning
Lender and Agent that it is purchasing the applicable Commitment and/or Term
Loan to be assigned to it for its own account, for investment purposes and not
with a view to the distribution thereof; (iv) be in an aggregate amount of
not less than $1,000,000, unless such assignment is made to an existing Lender
or an affiliate of an existing Lender or is of the assignor’s (together with
its affiliates’) entire interest of the Term Loan or is made with the prior
written consent of Agent; and (v) include a payment to Agent of an
assignment fee of $3,500 (unless otherwise agreed by Agent).  In the case of an assignment by a Lender
under this Section 10.1, the assignee shall have, to the extent of
such assignment, the same rights, benefits and obligations as all other Lenders
hereunder.  The assigning Lender shall be
relieved of its obligations hereunder with respect to its Commitment and Term Loan,
as applicable, or assigned portion thereof from and after the date of such
assignment.  Borrower hereby acknowledges
and agrees that any assignment shall give rise to a direct obligation of
Borrower to the assignee and that the assignee shall be considered to be a “Lender”.  In the event any Lender assigns or otherwise
transfers all or any part of the Commitments and Obligations, upon the assignee’s
or the assignor’s request, Agent shall request that Borrower execute new Notes
in exchange for the Notes, if any, being assigned.  Agent may amend Schedule A to this Agreement
to reflect assignments made in accordance with this Section.

 

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

 

37

 

10.2.        Notices.  All notices, requests or other communications
given in connection with this Agreement shall be in writing, shall be addressed
to the parties at their respective addresses set forth on the signature pages hereto
below such parties’ name or in the most recent Assignment Agreement executed by
any Lender (unless and until a different address may be specified in a written
notice to the other party delivered in accordance with this Section), and shall
be deemed given  (a) on the date of
receipt if delivered by hand, (b) on the date of sender’s receipt of
confirmation of proper transmission if sent by facsimile transmission, (c) on
the next Business Day after being sent by a nationally-recognized overnight
courier, and (d) on the fourth Business Day after being sent by registered
or certified mail, postage prepaid.  As
used herein, the term “Business Day” means and includes any day other
than Saturdays, Sundays, or other days on which commercial banks in New York,
New York are required or authorized to be closed.

 

10.3.        Correction
of Debt Documents.  Agent may
correct patent errors and fill in all blanks in this Agreement or the Debt
Documents consistent with the agreement of the parties.

 

10.4.        Performance.  Time is of the essence of this
Agreement.  This Agreement shall be
binding, jointly and severally, upon all parties described as the “Borrower”
and their respective successors and assigns, and shall inure to the benefit of
Agent, Lenders, and their respective successors and assigns.

 

10.5.        Payment
of Fees and Expenses.  Loan
Parties agree, jointly and severally, to pay or reimburse upon demand for all
reasonable fees, costs and expenses incurred by Agent and the Lenders that are
Lenders on the Closing Date in connection with (a) the investigation,
preparation, negotiation, execution, administration of, or any amendment,
modification, waiver or termination of, this Agreement or any other Debt
Document, (b) any legal advice relating to Agent’s rights or responsibilities
under any Loan Document, (c) the administration of the Loans and the
facilities hereunder and any other transaction contemplated hereby or under the
Debt Documents and (d) the enforcement, assertion, defense or preservation
of Agent’s and Lenders’ rights and remedies under this Agreement or any other
Debt Document, in each case of clauses (a) through (d), including, without
limitation, reasonable attorney’s fees and expenses, the reasonable or
allocated cost of in-house legal counsel, reasonable fees and expenses of
consultants, auditors (including internal auditors) and appraisers and UCC and
other corporate search and filing fees and wire transfer fees.  Borrower further agrees that such fees, costs
and expenses shall constitute Obligations. 
This provision shall survive the termination of this Agreement.

 

10.6.        Indemnity.
Each Loan Party shall and does hereby jointly and severally indemnify and
defend Agent, Lenders, and their respective successors and assigns, and their
respective directors, officers, employees, consultants, attorneys, agents and
affiliates (each an “Indemnitee”) from and against all liabilities,
losses, damages, expenses, penalties, claims, actions and suits (including,
without limitation, related reasonable attorneys’ fees and the allocated costs
of in-house legal counsel) of any kind whatsoever arising, directly or
indirectly, which may be imposed on, incurred by or asserted against such
Indemnitee as a result of or in connection with this Agreement, the other Debt
Documents or any of the transactions contemplated hereby or thereby (the “Indemnified
Liabilities”); provided that, no Loan Party shall have any obligation to
any Indemnitee with respect to any Indemnified Liabilities to the extent such
Indemnified Liabilities arise from the gross negligence or willful misconduct
of such Indemnitee as determined by a final non-appealable judgment of a court
of competent jurisdiction.  In no event
shall any Indemnitee be liable on any theory of liability for any special,
indirect, consequential or punitive damages (including, without limitation, any
loss of profits, business or anticipated savings).  Each Loan Party waives, releases and agrees
(and shall cause each other Loan Party to waive, release and agree) not to sue
upon any such claim for any special, indirect, consequential or punitive
damages, whether or not accrued and whether or not known or suspected to exist
in its favor.  This provision shall
survive the termination of this Agreement.

 

38

 

10.7.        Rights
Cumulative.  Agent’s and
Lenders’ rights and remedies under this Agreement or otherwise arising are
cumulative and may be exercised singularly or concurrently.  Neither the failure nor any delay on the part
of Agent or any Lender to exercise any right, power or privilege under this
Agreement shall operate as a waiver, nor shall any single or partial exercise
of any right, power or privilege preclude any other or further exercise of that
or any other right, power or privilege.  NONE
OF AGENT OR ANY LENDER SHALL BE DEEMED TO HAVE WAIVED ANY OF ITS RESPECTIVE
RIGHTS UNDER THIS AGREEMENT OR UNDER ANY OTHER AGREEMENT, INSTRUMENT OR
PAPER SIGNED BY BORROWER UNLESS SUCH WAIVER IS EXPRESSED IN WRITING AND SIGNED
BY AGENT, REQUISITE LENDERS OR ALL LENDERS, AS APPLICABLE.  A waiver on any one occasion shall not be
construed as a bar to or waiver of any right or remedy on any future occasion.

 

10.8.        Entire
Agreement; Amendments, Waivers.

 

(a)                                  This Agreement and the other Debt Documents constitute the entire
agreement between the parties with respect to the subject matter hereof and
thereof and supersede all prior understandings (whether written, verbal or
implied) with respect to such subject matter. 
Section headings contained in this Agreement have been included for
convenience only, and shall not affect the construction or interpretation of
this Agreement.

 

(b)                                 No amendment, modification, termination or waiver of any provision of
this Agreement or any other Debt Document, or any consent to any departure by
Borrower therefrom, shall in any event be effective unless the same shall be in
writing and signed by Agent, Borrower and Lenders having more than (x) 60%
of the aggregate Commitments of all Lenders or (y) if such Commitments
have expired or been terminated, 60% of the aggregate outstanding principal
amount of the Term Loan (the “Requisite Lenders”); provided,
however, that so long as a party that is a Lender hereunder on the Closing Date
does not assign any portion of its Commitment or Term Loan, the “Requisite
Lenders” shall include such Lender.  Except as set forth in clause (c) below,
all such amendments, modifications, terminations or waivers requiring the
consent of any Lenders shall require the written consent of Requisite Lenders.

 

(c)                                  No amendment, modification, termination or waiver of any provision of
this Agreement or any other Debt Document shall, unless in writing and signed
by Agent and each Lender directly affected thereby: (i) increase or
decrease any Commitment of any Lender or increase or decrease the Total
Commitment (which shall be deemed to affect all Lenders), (ii) reduce the
principal of or rate of interest on any Obligation or the amount of any fees
payable hereunder (other than waiving the imposition of the Default Rate), (iii) postpone
the date fixed for or waive any payment of principal of or interest on any Term
Loan, or any fees hereunder, (iv) release all or substantially all of the
Collateral, or consent to a transfer of all or substantially all of the
Intellectual Property, in each case, except as otherwise expressly permitted in
the Debt Documents (which shall be deemed to affect all Lenders), (v) subordinate
the lien on all or substantially all of the Collateral granted in favor of the
Agent securing the Obligations (which shall be deemed to affect all Lenders), (vi) release
a Loan Party  from, or consent to a
Loan Party’s assignment or delegation of, such Loan Party’s obligations
hereunder and under the other Debt Documents  or
any Guarantor from its guaranty of the Obligations  (which shall be deemed to affect all Lenders) or (vii) amend,
modify, terminate or waive Section 8.4, 9.7 or 10.8(b) or
(c).

 

39

 

(d)                                 Notwithstanding any provision in this Section 10.8 to the
contrary, no amendment, modification, termination or waiver affecting or
modifying the rights or obligations of Agent hereunder shall be effective
unless signed by Borrower, Agent and Requisite Lenders.

 

(e)                                  Each Lender hereby consents to the release by Agent of any lien held by
the Agent for the benefit of itself and the Lenders in any or all of the
Collateral to secure the Obligations upon (i) the occurrence of any
Permitted Disposition pursuant to Section 7.3 and (ii) the
termination of the Commitments and the payment and satisfaction in full of the
Obligations.

 

10.9.        Binding
Effect.  This Agreement shall
continue in full force and effect until the  Termination Date; provided,
however, that the provisions of this Section and Sections 2.3(e), 9.5,
10.5 and 10.6 and the other indemnities contained in the Debt
Documents shall survive the Termination Date. 
The surrender, upon payment or otherwise, of any Note or any of the
other Debt Documents evidencing any of the Obligations shall not affect the
right of Agent to retain the Collateral for such other Obligations as may then
exist or as it may be reasonably contemplated will exist in the future.  This Agreement and the grant of the security
interest in the Collateral pursuant to Section 3.1 shall
automatically be reinstated if Agent or any Lender is ever required to return
or restore the payment of all or any portion of the Obligations (all as though
such payment had never been made).

 

10.10.      Use of
Logo.  Each Loan Party
authorizes Agent and Lenders to use its name, logo and/or trademark without
notice to or consent by such Loan Party, in connection with certain promotional
materials that Agent may disseminate to the public.  The promotional materials may include, but are
not limited to, brochures, video tape, internet website, press releases,
advertising in newspaper and/or other periodicals, lucites, and any other
materials relating the fact that Agent has a financing relationship with
Borrower and such materials may be developed, disseminated and used without
Loan Parties’ review.  Nothing herein
obligates Agent or any Lender to use a Loan Party’s name, logo and/or
trademark, in any promotional materials of Agent or such Lender.  Loan Parties shall not, and shall not permit
any of its respective Affiliates to, issue any press release or other public
disclosure (other than any document filed with any governmental authority
relating to a public offering of the securities of Borrower or otherwise
required to be filed with the SEC) using the name, logo or otherwise referring
to General Electric Capital Corporation, GE Healthcare Financial Services, Inc.
or of any of their affiliates, or any other Lender or its affiliates, the Debt
Documents or any transaction contemplated herein or therein without at least
two (2) Business Days prior written notice to and the prior written
consent of Agent or such Lender, as applicable, unless, and only to the extent
that, Loan Parties or such Affiliate is required to do so under applicable law
and then, only after consulting with Agent or such Lender, as applicable, prior
thereto.

 

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

 

40

 

TRANSACTION
OR ANY RELATED TRANSACTION.  THIS
AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

 

10.12.     Governing Law.  THIS AGREEMENT, THE OTHER DEBT DOCUMENTS AND
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL IN ALL
RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF
THE STATE OF NEW YORK (WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES OF
SUCH STATE), INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, REGARDLESS OF THE LOCATION OF THE COLLATERAL; PROVIDED, HOWEVER,
THAT IF THE LAWS OF ANY JURISDICTION OTHER THAN NEW YORK SHALL GOVERN IN REGARD
TO THE VALIDITY, PERFECTION OR EFFECT OF PERFECTION OF ANY LIEN OR IN REGARD TO
PROCEDURAL MATTERS AFFECTING ENFORCEMENT OF ANY LIENS IN COLLATERAL, SUCH LAWS
OF SUCH OTHER JURISDICTIONS SHALL CONTINUE TO APPLY TO THAT EXTENT.  IF ANY ACTION ARISING OUT OF THIS AGREEMENT
OR ANY OTHER DEBT DOCUMENT IS COMMENCED BY AGENT IN THE STATE COURTS OF THE
STATE OF NEW YORK IN THE COUNTY OF NEW YORK OR IN THE U.S. DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF NEW YORK, EACH LOAN PARTY HEREBY CONSENTS TO THE
JURISDICTION OF ANY SUCH COURT IN ANY SUCH ACTION AND TO THE LAYING OF VENUE IN
THE STATE OF NEW YORK.  NOTWITHSTANDING
THE FOREGOING, THE AGENT AND LENDERS SHALL HAVE THE RIGHT TO BRING ANY ACTION
OR PROCEEDING AGAINST ANY LOAN PARTY (OR ANY PROPERTY) IN THE COURT OF ANY
OTHER JURISDICTION THE AGENT OR THE LENDERS DEEM NECESSARY OR APPROPRIATE IN
ORDER TO REALIZE ON THE COLLATERAL OR OTHER SECURITY FOR THE OBLIGATIONS.  ANY PROCESS IN ANY SUCH ACTION SHALL BE DULY
SERVED IF MAILED BY REGISTERED MAIL, POSTAGE PREPAID, TO LOAN PARTIES AT THEIR
ADDRESS DESCRIBED IN SECTION 10.2, OR IF SERVED BY ANY OTHER MEANS
PERMITTED BY APPLICABLE LAW.

 

10.13.     Confidentiality.  Each Lender and Agent agrees to use all
reasonable efforts to maintain, in accordance with its customary practices, the
confidentiality of information obtained by it pursuant to any Debt Document and
designated in writing by any Loan Party as confidential, except that such
information may be disclosed (a) with the Borrower’s consent, (b) to
such Lender’s or Agent’s Related Persons (as defined below) or financing
sources, as the case may be, that are advised of the confidential nature of
such information and are instructed to keep such information confidential in
accordance with the terms hereof, (c) to the extent such information
presently is or hereafter becomes (i) publicly available other than as a
result of a breach of this Section 10.13 or (ii) available to such
Lender or Agent or any of their Related Persons, as the case may be, from a
source (other than any Loan Party) not known by them to be subject to
disclosure restrictions, (d) to the extent disclosure is required by any
applicable law, rule, regulation, court decree, subpoena or other legal,
administrative, governmental or regulatory request, order or proceeding or
otherwise requested or demanded by any governmental authority, (e) to the
extent necessary or customary for inclusion in league table measurements, (f) (i) to
the National Association of Insurance Commissioners or any similar
organization, any examiner or any nationally recognized rating agency or (ii) otherwise
to the extent consisting of general portfolio information that does not
identify Loan Parties, (g) to current or prospective assignees or
participants and to their respective Related Persons, in each case to the
extent such assignees, participants or Related Persons agree to be bound by
provisions substantially similar to the provisions of this Section 10.13
(and such persons or entities may disclose information to their respective
Related Persons in accordance with clause (b) above), (h) to any
other party hereto, and (i) in connection with the exercise or enforcement
of any right or remedy under any Debt Document, in connection with any
litigation or other proceeding to which such Lender or Agent or any of their
Related Persons is a party or bound, or to the extent necessary to respond to
public statements or disclosures by Loan Parties or their Related Persons
referring to a Lender or Agent or any of 

 

41

 

their
Related Persons.  In the event of any
conflict between the terms of this Section 10.13 and those of any other
contractual obligation entered into with any Loan Party (whether or not a Debt
Document), the terms of this Section 10.13 shall govern.  “Related Persons” means, with respect to any
person or entity, each affiliate of such person or entity and each director,
officer, employee, agent, trustee, representative, attorney, accountant and
each insurance, environmental, legal, financial and other advisor and other
consultants and agents of or to such person or entity or any of its affiliates.

 

10.14.     Counterparts.  This Agreement may be executed in any number
of counterparts and by different parties in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which when
taken together shall constitute one and the same agreement.  Delivery of an executed signature page of
this Agreement by facsimile transmission or electronic transmission shall be as
effective as delivery of a manually executed counterpart hereof.

 

[Signature Page Follows]

 

42

 

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

 

 

	
  BORROWER:

  	
   

  
	
   

  	
   

  
	
  SYNTA PHARMACEUTICALS CORP.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Keith Ehrlich

  	
   

  
	
  Name:

  	
  Keith
  Ehrlich

  	
   

  
	
  Title:

  	
  Chief
  Financial Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  GUARANTOR:

  	
   

  
	
   

  	
   

  
	
  SYNTA SECURITIES CORP.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Keith Ehrlich

  	
   

  
	
  Name:

  	
  Keith
  Ehrlich

  	
   

  
	
  Title:

  	
  Treasurer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Address
  For Notices For All Loan Parties:

  	
   

  
	
   

  	
   

  
	
  c/o Synta Pharmaceuticals Corp.

  	
   

  
	
  45 Hartwell Avenue

  	
   

  
	
  Lexington, Massachusetts 02421

  	
   

  
	
  Attention:
  Chief Financial Officer

  	
   

  
	
  Phone:
  (781) 274-8200

  	
   

  
	
  Facsimile:
  (781) 541-7117

  	
   

  

 

 

	
  AGENT AND LENDER:

  	
   

  
	
   

  	
   

  
	
  GENERAL ELECTRIC CAPITAL CORPORATION

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  R. Hanes Whiteley

  	
   

  
	
  Name:

  	
  R.
  Hanes Whiteley

  	
   

  
	
  Title:

  	
  Duly
  Authorized Signatory

  	
   

  
	
   

  	
   

  
	
  Address
  For Notices:

  	
   

  
	
   

  	
   

  
	
  General
  Electric Capital Corporation

  	
   

  
	
  c/o
  GE Healthcare Financial Services, Inc.

  	
   

  
	
  Two
  Bethesda Metro Center, Suite 600

  	
   

  
	
  Bethesda,
  Maryland 20814

  	
   

  
	
  Attention:
  Senior Vice President of Risk — Life Science Finance

  	
   

  
	
  Phone:
  (301) 961-1640

  	
   

  
	
  Facsimile:
  (301) 664-9891

  	
   

  
	
   

  	
   

  
	
  With
  a copy to:

  	
   

  
	
   

  	
   

  
	
  General
  Electric Capital Corporation

  	
   

  
	
  c/o
  GE Healthcare Financial Services, Inc.

  	
   

  
	
  Two
  Bethesda Metro Center, Suite 600

  	
   

  
	
  Bethesda,
  Maryland 20814

  	
   

  
	
  Attention:
  General Counsel

  	
   

  
	
  Phone:
  (301) 961-1640

  	
   

  
	
  Facsimile: (301) 664-9866

  	
   

  

 

 

	
  LENDER:

  	
   

  
	
  MIDCAP FUNDING III, LLC

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Josh Groman

  	
   

  
	
  Name:

  	
  Josh
  Groman

  	
   

  
	
  Title:

  	
  Managing
  Director

  	
   

  
	
   

  	
   

  
	
  Address
  For Notices:

  	
   

  
	
   

  	
   

  
	
  7735 Old Georgetown Road

  	
   

  
	
  Suite 400

  	
   

  
	
  Bethesda, Maryland 20814

  	
   

  
	
  Attention:
  Portfolio Management — Life Sciences

  	
   

  
	
  Phone:
  301-641-6700

  	
   

  
	
  Facsimile:
  301-941-1450

  	
   

  

 

 

SCHEDULE
A

COMMITMENTS

 

	
  Name of Lender

  	
   

  	
  Commitment of

  such Lender

  	
   

  	
  Pro Rata Share

  	
   

  
	
  General Electric Capital Corporation

  	
   

  	
  $

  	
  10,000,000

  	
   

  	
  66.66667

  	
  %

  
	
  MidCap
  Funding III, LLC

  	
   

  	
  $

  	
  5,000,000

  	
   

  	
  33.33333

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TOTAL

  	
   

  	
  $

  	
  15,000,000

  	
   

  	
  100

  	
  %

  

 

 

EXHIBIT A

 

FORM OF
PROMISSORY NOTE

 

[                 ,
      ]

 

FOR VALUE RECEIVED, SYNTA PHARMACEUTICALS CORP., a Delaware
corporation located at the address stated below (“Borrower”), promises to pay to the order of [Lender] or any subsequent holder hereof (each, a “Lender”),
the principal sum of                     
and     /100 Dollars
($                              ).  All capitalized terms, unless otherwise
defined herein, shall have the respective meanings assigned to such terms in
the Agreement.

 

This Promissory Note is
issued pursuant to that certain Loan and Security Agreement, dated as of [September    ], 2010, among Borrower,
the guarantors from time to time party thereto, General Electric Capital
Corporation, as agent, [the other lenders
signatory thereto], and Lender (as amended, restated, supplemented
or otherwise modified from time to time, the “Agreement”), is one of the
Notes referred to therein, and is entitled to the benefit and security of the
Debt Documents referred to therein, to which Agreement reference is hereby made
for a statement of all of the terms and conditions under which the loans
evidenced hereby were made.

 

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

 

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

 

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

 

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

 

Time is of the essence
hereof.  If Lender does not receive from
Borrower payment in full of any Scheduled Payment or any other sum due under
this Note or any other Debt Document within 5 days after its due date, Borrower
agrees to pay the Late Fee in accordance with the Agreement.  Such Late Fee will be immediately due and
payable, and is in addition to any other costs, fees and expenses that Borrower
may owe as a result of such late payment.

 

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

 

Borrower and all parties now
or hereafter liable with respect to this Note, hereby waive presentment, demand
for payment, notice of nonpayment, protest, notice of protest, notice of
dishonor, and all other

 

 

notices in connection
herewith, as well as filing of suit (if permitted by law) and diligence in
collecting this Note or enforcing any of the security hereof, and agree to pay
(if permitted by law) all expenses incurred in collection, including reasonable
attorneys’ fees and expenses, including without limitation, the allocated costs
of in-house counsel.

 

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

 

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

 

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

 

	
   

  	
  SYNTA
  PHARMACEUTICALS CORP.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Federal Tax ID #:  04-3508648

  
	
   

  	
  Address:

  	
  45
  Hartwell Avenue

  
	
   

  	
   

  	
  Lexington,
  Massachusetts 02421

  
				

 

 

EXHIBIT B

 

SECRETARY’S
CERTIFICATE OF AUTHORITY

 

[DATE]

 

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

 

I, [                                          ], do hereby certify that:

 

(i)            I am the duly elected, qualified and acting [Assistant] Secretary of SYNTA PHARMACEUTICALS CORP. (the “Company”);

 

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

 

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

 

	
  Name

  	
   

  	
  Title

  	
   

  	
  Signature

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

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

 

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

 

 

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

 

(vi)          no Default or Event of Default exists
under the Agreement,  and  all representations and warranties of the
Company in the Debt Documents are true and correct in all respects on and as of
the date hereof, except to the extent such representations and warranties
expressly relate to an earlier date, in which case such representations and
warranties were true and correct in all respects on and as of such earlier
date.

 

[Signature Page Follows]

 

 

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

 

	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
  [Assistant] Secretary

  

 

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

 

	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

 

EXHIBIT B TO SECRETARY’S CERTIFICATE OF AUTHORITY

 

FORM OF RESOLUTIONS

 

BOARD RESOLUTIONS

 

               
     , 200   

 

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

 

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

 

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

 

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

 

NOW,
THEREFORE, be it

 

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

 

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

 

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

 

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

 

 

RESOLVED, that the
Proper Officers be, and each of them hereby is, authorized and directed to
execute and deliver any and all other agreements, certificates, security
agreements, financing statements, indemnification agreements, instruments and
documents (together with the Loan and Security Agreement, the Notes and the
Ancillary Documents, the “Debt Documents”) and take any and all other
further action, in each case, as may be required or which they may deem
appropriate, on behalf of [Borrower] [Company],
in connection with the Credit Facility and carrying into effect the foregoing
resolutions, transactions and matters contemplated thereby; and further

 

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

 

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

 

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

 

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

 

 

EXHIBIT C-1

 

FORM OF
LANDLORD CONSENT

 

[Landlord]

 

[Address]

 

[                  ,
          ]

 

Ladies and Gentlemen:

 

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

 

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

 

 

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

 

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

 

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

 

 

We
appreciate your cooperation in this matter of mutual interest.

 

	
   

  	
  GENERAL
  ELECTRIC CAPITAL CORPORATION, as Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  General
  Electric Capital Corporation

  
	
   

  	
  c/o
  GE Healthcare Financial Services, Inc.

  
	
   

  	
  Two
  Bethesda Metro Center, Suite 600

  
	
   

  	
  Bethesda,
  Maryland 20814

  
	
   

  	
  Attention:
  Senior Vice President of Risk — Life Science Finance

  
	
   

  	
  Phone:
  (301) 961-1640

  
	
   

  	
  Facsimile:
  (301) 664-9891

  
	
   

  	
   

  
	
   

  	
  With
  a copy to:

  
	
   

  	
   

  
	
   

  	
  General
  Electric Capital Corporation

  
	
   

  	
  c/o
  GE Healthcare Financial Services, Inc.

  
	
   

  	
  Two
  Bethesda Metro Center, Suite 600

  
	
   

  	
  Bethesda,
  Maryland 20814

  
	
   

  	
  Attention:
  General Counsel

  
	
   

  	
  Phone:
  (301) 961-1640

  
	
   

  	
  Facsimile: (301) 664-9866

  

 

	
  AGREED TO AND ACCEPTED BY:

  	
   

  
	
   

  	
   

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

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
  Address:

  	
   

  
	
   

  	
   

  
	
  AGREED TO AND ACCEPTED BY:

  	
   

  
	
   

  	
   

  
	
  [NAME OF LOAN PARTY]

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  

                

Interest in the Premises
(check applicable box)

o            Owner

o            Mortgagee

o            Landlord

o            Realty Manager

 

Address:

 

 

EXHIBIT C-2

 

FORM OF BAILEE CONSENT

 

[Letterhead of GE Capital]

 

            ,
200  

 

[NAME
OF BAILEE]

 

Dear
Sirs:

 

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

 

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

 

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

 

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

 

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

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

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

 

 

	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
  GENERAL
  ELECTRIC CAPITAL CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:
  Duly Authorized Signatory

  
	
   

  	
   

  
	
   

  	
  General
  Electric Capital Corporation

  
	
   

  	
  c/o
  GE Healthcare Financial Services, Inc.

  
	
   

  	
  Two
  Bethesda Metro Center, Suite 600

  
	
   

  	
  Bethesda,
  Maryland 20814

  
	
   

  	
  Attention:
  Senior Vice President of Risk — Life Science Finance

  
	
   

  	
  Phone:
  (301) 961-1640

  
	
   

  	
  Facsimile:
  (301) 664-9891

  
	
   

  	
   

  
	
   

  	
  With
  a copy to:

  
	
   

  	
   

  
	
   

  	
  General
  Electric Capital Corporation

  
	
   

  	
  c/o
  GE Healthcare Financial Services, Inc.

  
	
   

  	
  Two
  Bethesda Metro Center, Suite 600

  
	
   

  	
  Bethesda,
  Maryland 20814

  
	
   

  	
  Attention:
  General Counsel

  
	
   

  	
  Phone:
  (301) 961-1640

  
	
   

  	
  Facsimile:
  (301) 664-9866

  

 

Agreed
to:

 

[NAME
OF LOAN PARTY]

 

	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  

 

[NAME
OF BAILEE]

 

	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  

 

 

 

EXHIBIT D

 

COMPLIANCE CERTIFICATE

 

[DATE]

 

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

 

I, [                                             ], do hereby certify that:

 

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

 

(ii)           attached hereto as Exhibit A are [the monthly financial
statements]/[annual audited financial
statements]/[quarterly financial
statements] as
required under Section 6.3 of the Agreement and that (1) in the case
of quarterly and annual financial statements, such financial statements are
prepared in accordance with GAAP and are consistently applied from one period
to the next except as explained in an accompanying letter or footnotes and (2) in
the case of monthly financial statements, such financial statements are
prepared in accordance with the form previously provided to Agent (with such
changes as Agent may approve);

 

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

 

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

 

(v)           with respect to any real property described in Section 6.6
where the Loan Parties have not obtained an Access Agreement, no default or
event of default exists under any lease applicable to such real property.

 

 

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

 

	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

 

EXHIBIT E

 

o

 

	
  EPS Setup
  Form

  	
  Submit Via Fax:

  ATTN: EPS Facilitator

  (203)
  205-2193

  	
   

  	
  GE Healthcare Financial
  Services

  Phone: (800) 426-6346

  Fax: Fax: (203) 205-2193

  
	
  1.  Sender Information:

  	
  Instructions To Enroll In EPS
  Plan:

  
	
  Sender
  Name:

  	
   

  	
  A. 

  	
  Complete sections 1 - 7

  (signature and all other information is required)

  
	
  Sender
  Phone Number:

  	
   

  	
  B. 

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

  
	
   

  	
   

  	
  C. 

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

  
						

 

2.  Authorization Agreement for Pre-Arranged
Payment Plan:

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

 

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

 

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

 

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

 

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

 

 

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

	
  Account:

  	
  Account:

  	
  Account:

  	
  Account:

  
	
  Account:

  	
  Account:

  	
  Account:

  	
  Account:

  

 

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

  	
  First
  Payment:

  

 

5.  Complete ALL Bank and Borrower Information:

	
  BANK

  	
  Name of
  Bank or Financial Institution:

  	
  Bank
  Account Number:

  	
  ABA
  Routing Number

  (9-digit number)

  
	
  INFO

  	
  Address
  of Bank or Financial Institution:

  	
  City:

  	
  State:     Zip Code:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Signatures

  	
   

  	
  Company

  	
   

  	
  Contact

  
	
   

  	
  Signature
  of Authorized Signer: Date: 

  	
   

  	
  Company
  Name: 

  	
   

  	
  Contact
  Name: 

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BORROWER

  	
  Name of
  Joint Account Holder: (Please Print)

  	
   

  	
  Company Address: 

  	
   

  	
  Contact
  Phone Number: 

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  INFO

  	
  Signature
  of Joint Account Holder: Date: 

  	
   

  	
  City: 

  	
   

  	
  Contact
  Fax Number: 

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name of
  Authorized Signer: (Please Print) 

  	
   

  	
  State:     Zip Code:  

  	
   

  	
  Contact
  email address:  

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

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

Check (X): 
YES: o            NO: o

 

7.  Would you like to receive a complimentary
invoice?  

Check (X): 
YES: o            NO: o

 

 

EXHIBIT F

 

 

[SEE
ATTACHED]

 

 

NONDISTURBANCE AND ATTORNMENT AGREEMENT

 

THIS
NONDISTURBANCE AND ATTORNMENT AGREEMENT (this “Agreement”) is entered
into as of               
    , 20    , by and among General
Electric Capital Corporation, a Delaware corporation, as Agent for certain
lenders described below (together with its successors and assigns, the “Agent”), [name of
Licensee], a                           
(the “Licensee”), and                                 ,
a                       
(the “Company”).

 

RECITALS

 

WHEREAS,
the Company has entered into that certain Loan and Security Agreement, dated as
of                   
    , 20     (as amended, restated,
supplemented, replaced, increased or otherwise modified from time to time, the “Loan Agreement”), by and between
the Company, the other credit parties signatory thereto, the lenders signatory
thereto (the “Lenders”) and the Agent, as agent for such lender, pursuant to
which the Lenders have made and may make certain loans from time to time to the
Company on the terms and conditions set forth therein.  To secure the payment in full of all of the
Company’s obligations to Agent and Lenders under the Loan Agreement and the
other Debt Documents (as such term is defined in the Loan Agreement), the
Company has granted to Agent a security interest in substantially all of the
assets of the Company, including, without limitation, the patents and patent
applications subject to the license referred to below, as described in Exhibit “A”
hereto (the “Intellectual Property Rights”);

 

WHEREAS,
the Licensee and the Company propose to enter into a Licensing Agreement in the
form attached hereto as Exhibit B pursuant to which the Licensee
will license the Intellectual Property Rights from the Company on the terms and
conditions thereof (the “License”); and

 

WHEREAS,
Agent, Licensee and the Company desire to enter into this Agreement to set
forth the respective rights of the Agent and the Licensee with respect to the
Intellectual Property Rights and the License;

 

NOW,
THEREFORE, IT IS AGREED THAT:

 

1.             Consents.  Subject to the terms and conditions of this
Agreement, (a) Licensee hereby acknowledges and consents to the security
interest granted to the Agent in the Intellectual Property Rights, in
accordance with the terms and conditions of the Loan Agreement and other Debt
Documents, (b) Licensee hereby consents and agrees that (i) the
Company may sell or otherwise transfer the Intellectual Property Rights to a
third party and (ii) Agent may, in accordance with the terms and
conditions of the Loan Agreement and other Debt Documents, sell or otherwise
transfer the Intellectual Property Rights in connection with the enforcement of
its security interest in the Intellectual Property Rights (such action by
Agent, an “Enforcement Action”), (c) Licensee hereby consents and
agrees to direct all payments under the License exclusively to the deposit
account identified in the following wire transfer instructions, or to such
other account approved by Agent in writing from time to time:

 

 

Bank Name: Deutsche Bank

Bank
Address: XXXXXXXXXX

ABA#:
XXXXXXXXXX

Account
#: XXXXXXXXXX

Account
Name: GECC/HFS Wire Transfer Receipts

Ref:
[Company Name]

 

and
(d) Agent hereby acknowledges and consents to the License.

 

2.             Nondisturbance.  If the Company sells or otherwise transfers
the Intellectual Property Rights in a transaction consented to by Agent, or if
Agent sells or otherwise transfers the Intellectual Property Rights in
connection with an Enforcement Action, the Company and Agent each agree that
such transfer of the Intellectual Property Rights shall be made subject to all
rights of the Licensee under the License, and none of the Licensee’s rights
under the License shall be discharged, waived, modified, impaired or terminated
solely as a result of such transfer of the Intellectual Property Rights.

 

3.             Attornment.  If the Company’s interest in any of the
Intellectual Property Rights is transferred in connection with a sale by the
Company that is consented to by Agent, or the exercise by Agent of any
Enforcement Action, then, subject to the provisions of this Agreement, the
License shall nevertheless continue in full force and effect and the Licensee
shall attorn to the transferee of such Intellectual Property Rights (the “Transferee”)
and recognize the Transferee as the licensor of the Intellectual Property
Rights for the remainder of the unexpired term of the License.  In order to confirm such attornment, upon the
written request of Agent and the Transferee after such transfer, the Licensee
shall execute and deliver to Agent either (i) an agreement of attornment
in form and content reasonably satisfactory to Agent whereby the Licensee
confirms the provisions of the immediately preceding sentence and agrees to
perform all the terms, covenants and conditions of the License on the Licensee’s
part to be performed for the benefit of the Transferee with the same force and
effect as if the Transferee were the originally named licensor of such
Intellectual Property Rights in the License, or (ii) a new license with
respect to the transferred Intellectual Property Rights with the Transferee, as
licensor, for the remaining term of the License with respect to the transferred
Intellectual Property Rights and otherwise on the same terms and conditions and
with the same options, if any, then remaining under the License.  No provision of this Agreement shall be
construed to obligate Agent to cure any default by the Company under the
License, and no provision of this Agreement shall be construed to obligate any
Transferee to cure any default by the Company under the License occurring prior
to the date on which the Transferee succeeds to the Company’s rights, it being
expressly agreed that under no circumstances shall Agent or the Transferee be
obligated to remedy any such default except, in the case of the Transferee, to
the extent that such default continues after the Transferee takes title to the
transferred Intellectual Property Rights.

 

4.             Notices.  All notices and other communications
hereunder shall be sent by certified or registered mail (postage prepaid,
return receipt requested) to the respective parties hereto at the address
indicated on the signature pages hereof, or to such other address or
person as may be specified in a notice sent in accordance with the provisions
of this section.

 

 

5.             Binding Effect.  This Agreement shall apply to, bind and inure
to the benefit of the parties hereto and their respective successors and
assigns, including any Transferee or other party acquiring any right, title or
interest in any of the Intellectual Property Rights.  As used herein, the term Licensee shall mean
and include the present Licensee under the License, any sublicensee permitted
under the License, any assignee of the Licensee permitted under the License and
any successor of any of them.  The term
Agent as used herein shall include the successors and assigns of Agent, and any
party that shall succeed to Agent’s rights and obligations under the Loan
Agreement.

 

6.             WAIVER OF JURY TRIAL.  EACH OF THE PARTIES HERETO
HEREBY WAIVES ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT. EACH OF THE PARTIES HERETO
ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS
RELATIONSHIP, THAT EACH HAS RELIED ON THE WAIVER IN ENTERING INTO THIS
AGREEMENT, AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED
FUTURE DEALINGS. EACH OF THE PARTIES HERETO WARRANTS AND REPRESENTS THAT EACH
HAS HAD THE OPPORTUNITY OF REVIEWING THIS JURY WAIVER WITH LEGAL COUNSEL, AND
THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS.

 

7.             Miscellaneous Provisions.  This Agreement shall be governed by and
construed in accordance with the internal laws of the state of New York,
without giving effect to conflicts of law principles.  This Agreement constitutes the parties’
entire agreement relating to the subject matter hereof.  Any prior agreements, promises, negotiations,
or representations not expressly set forth in this Agreement are of no force
and effect.  Any amendment to or waiver
or termination of this Agreement shall be of no force and effect unless it is
in writing and signed by all the parties hereto.  If, in any action before any court or agency
legally empowered to enforce any term, such term is found to be unenforceable,
then it shall be deemed modified to the extent necessary to make it enforceable
by such court or agency.  If any term is
not so curable, its unenforceability shall not affect the other provisions
hereof but this Agreement shall be construed as if such unenforceable term had never
been contained herein.  No provision
hereof shall be interpreted to provide or create any rights of any kind in any
third party unless specifically provided otherwise herein, and, except as so
provided, all provisions hereof shall be personal solely to the parties hereto.  This Agreement may be executed in any number
of counterparts, and by each party in separate counterparts, each of which
shall be an original, but all of which shall together constitute one and the
same agreement.  Delivery of an executed
counterpart of a signature page to this Agreement by facsimile or
electronic transmission shall be effective as delivery of a manually executed
counterpart of a signature page to this Agreement.  Captions and headings used herein are for
convenience only and are not a part of this Agreement and shall not be used in
construing it.

 

[remainder of this page intentionally left blank]

 

 

IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.

 

	
   

  	
  GENERAL
  ELECTRIC CAPITAL CORPORATION, as Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  Address
  for notices:

  
	
   

  	
   

  
	
   

  	
  General
  Electric Capital Corporation

  
	
   

  	
  c/o
  GE Healthcare Financial Services, Inc.

  
	
   

  	
  Two
  Bethesda Metro Center, Suite 600

  
	
   

  	
  Bethesda,
  Maryland 20814

  
	
   

  	
  Attention:
  General Counsel

  
	
   

  	
  Telephone:
  (301) 961-1640

  
	
   

  	
  Facsimile:
  (301) 664-9866

  
	
   

  	
   

  
	
   

  	
  [Name
  of Licensee], as Licensee

  
	
   

  	
   

  
	
   

  	
  Address
  for notices:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [                              ], as the
  Company

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  Address
  for notices:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  

 

 

EXHIBIT A

 

Description of Intellectual
Property Rights

 

 

EXHIBIT B

 

Licensing Agreement

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