EX-10.36 17 a2129500zex-10_36.txt EXHIBIT 10.36 Exhibit 10.36 CREDIT AGREEMENT AMONG GENZYME CORPORATION, THE SUBSIDIARY GUARANTORS PARTY HERETO, THE LENDERS PARTY HERETO, AND FLEET NATIONAL BANK, AS ADMINISTRATIVE AGENT, ABN AMRO BANK N.V., AS SYNDICATION AGENT AND THE BANK OF NOVA SCOTIA, CITIZENS BANK OF MASSACHUSETTS AND WACHOVIA BANK, NATIONAL ASSOCIATION, AS CO-DOCUMENTATION AGENTS DATED: DECEMBER 10, 2003 TABLE OF CONTENTS SECTION 1. DEFINITIONS AND ACCOUNTING MATTERS--------------------------------------------------------------2 1.1 Certain Defined Terms--------------------------------------------------------------------------------2 1.2 Accounting Terms and Determinations-----------------------------------------------------------------19 1.3 Types of Loans--------------------------------------------------------------------------------------19 SECTION 2. COMMITMENTS, LOANS, NOTES AND PREPAYMENTS------------------------------------------------------19 2.1 Revolving Credit Loans------------------------------------------------------------------------------19 2.2 Borrowings of Revolving Credit Loans----------------------------------------------------------------20 2.3 Changes of Commitments------------------------------------------------------------------------------20 2.4 Facility Fee----------------------------------------------------------------------------------------21 2.5 Lending Offices-------------------------------------------------------------------------------------21 2.6 Several Obligations; Remedies Independent-----------------------------------------------------------21 2.7 Notes-----------------------------------------------------------------------------------------------21 2.8 Optional Prepayments and Conversions or Continuations of Loans--------------------------------------22 SECTION 3. PAYMENTS OF PRINCIPAL AND INTEREST-------------------------------------------------------------22 3.1 Repayment of Loans----------------------------------------------------------------------------------22 3.2 Interest--------------------------------------------------------------------------------------------22 SECTION 4. PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS; ETC.-----------------------------------------------23 4.1 Payments--------------------------------------------------------------------------------------------23 4.2 Pro Rata Treatment----------------------------------------------------------------------------------25 4.3 Computations----------------------------------------------------------------------------------------25 4.4 Minimum Amounts-------------------------------------------------------------------------------------25 4.5 Certain Notices-------------------------------------------------------------------------------------26 4.6 Non-Receipt of Funds by the Administrative Agent; Delinquent Lenders--------------------------------27 4.7 Sharing of Payments, Etc.---------------------------------------------------------------------------28 SECTION 5. YIELD PROTECTION, ETC.-------------------------------------------------------------------------30 5.1 Additional Costs------------------------------------------------------------------------------------30 5.2 Limitation on Types of Loans------------------------------------------------------------------------32 5.3 Illegality------------------------------------------------------------------------------------------33 5.4 Treatment of Affected Loans-------------------------------------------------------------------------33 5.5 Compensation----------------------------------------------------------------------------------------33 5.6 Rate Selection--------------------------------------------------------------------------------------34 SECTION 6. GUARANTEE--------------------------------------------------------------------------------------35 6.1 Guarantee-------------------------------------------------------------------------------------------35 6.2 Obligations Unconditional---------------------------------------------------------------------------35 6.3 Reinstatement---------------------------------------------------------------------------------------36 6.4 Subrogation-----------------------------------------------------------------------------------------36 6.5 Remedies--------------------------------------------------------------------------------------------37 6.6 Continuing Guarantee--------------------------------------------------------------------------------37 6.7 Rights of Contribution------------------------------------------------------------------------------37 6.8 Limitation on Guarantee Obligations-----------------------------------------------------------------37 SECTION 7. CONDITIONS PRECEDENT---------------------------------------------------------------------------38 7.1 Initial Loan----------------------------------------------------------------------------------------38 7.2 Initial and Subsequent Extensions of Credit---------------------------------------------------------40 SECTION 8. REPRESENTATIONS AND WARRANTIES-----------------------------------------------------------------40 8.1 Existence-------------------------------------------------------------------------------------------41 8.2 Financial Condition---------------------------------------------------------------------------------41 8.3 Litigation------------------------------------------------------------------------------------------41 8.4 No Breach-------------------------------------------------------------------------------------------42 8.5 Action----------------------------------------------------------------------------------------------42 8.6 Approvals------------~------------------------------------------------------------------------------42 8.7 Use of Credit---------------------------------------------------------------------------------------42 8.8 ERISA-----------------------------------------------------------------------------------------------42 8.9 Taxes-----------------------------------------------------------------------------------------------43 8.10 Investment Company Act------------------------------------------------------------------------------43 8.11 Public Utility Holding Company Act------------------------------------------------------------------43 8.12 Borrowing Agreements and Liens----------------------------------------------------------------------43 8.13 Compliance with Laws Including Environmental and Safety Matters-------------------------------------44 8.14 Subsidiaries, Etc.----------------------------------------------------------------------------------44 8.15 Title to Assets; Etc.-------------------------------------------------------------------------------44 8.16 Intellectual Property Rights------------------------------------------------------------------------45 8.17 True and Complete Disclosure------------------------------------------------------------------------45 SECTION 9. COVENANTS OF THE COMPANY-----------------------------------------------------------------------45 9.1 Financial Statements Etc.---------------------------------------------------------------------------45 9.2 Litigation------------------------------------------------------------------------------------------48 9.3 Existence, Etc.-------------------------------------------------------------------------------------48 9.4 Insurance-------------------------------------------------------------------------------------------49 9.5 Prohibition of Fundamental Changes------------------------------------------------------------------49 9.6 Limitation on Liens---------------------------------------------------------------------------------51 9.7 Indebtedness----------------------------------------------------------------------------------------52 9.8 Investments-----------------------------------------------------------------------------------------54 9.9 Financial Covenants---------------------------------------------------------------------------------54 9.10 Lines of Business-----------------------------------------------------------------------------------54 9.11 Use of Proceeds-------------------------------------------------------------------------------------55 9.12 Certain Obligations Respecting Company and Subsidiaries---------------------------------------------55 9.13 Additional Subsidiary Guarantors--------------------------------------------------------------------56 9.14 Subordinated Debt-----------------------------------------------------------------------------------56 SECTION 10. EVENTS OF DEFAULT------------------------------------------------------------------------------56 SECTION 11. THE AGENTS-------------------------------------------------------------------------------------60 11.1 Appointment, Powers and Immunities.-----------------------------------------------------------------60 11.2 Reliance by Agents----------------------------------------------------------------------------------61 11.3 Defaults--------------------------------------------------------------------------------------------61 11.4 Rights as a Lender----------------------------------------------------------------------------------61 11.5 Indemnification-------------------------------------------------------------------------------------62 11.6 Non-Reliance on Agents and Other Lenders------------------------------------------------------------62 11.7 Failure to Act--------------------------------------------------------------------------------------63 11.8 Resignation or Removal of Agents--------------------------------------------------------------------63 11.9 Consents under Other Loan Documents-----------------------------------------------------------------63 SECTION 12. MISCELLANEOUS----------------------------------------------------------------------------------63 12.1 Waiver----------------------------------------------------------------------------------------------64 12.2 Notices---------------------------------------------------------------------------------------------64 12.3 Expenses, Etc.--------------------------------------------------------------------------------------64 12.4 Indemnification-------------------------------------------------------------------------------------65 12.5 Amendments, Etc.------------------------------------------------------------------------------------65 12.6 Successors and Assigns------------------------------------------------------------------------------66 12.7 Assignments and Participations----------------------------------------------------------------------66 12.8 Survival--------------------------------------------------------------------------------------------68 12.9 Captions--------------------------------------------------------------------------------------------68 12.10 Counterparts--------------------------------------------------------------------------------------68 12.11 Governing Law; Submission to Jurisdiction---------------------------------------------------------68 12.12 Waiver of Jury Trial------------------------------------------------------------------------------69 12.13 Confidentiality-----------------------------------------------------------------------------------69 12.14 Compliance with Usury Laws------------------------------------------------------------------------70 12.15 Replacement Note----------------------------------------------------------------------------------71 Schedules: Schedule 8.3 Litigation Schedule 8.12A Credit Agreements, Indentures, Guarantees, Letters of Credit, Etc. Schedule 8.12B Liens Securing Indebtedness Schedule 8.14 Subsidiaries Schedule 9.7(b) Excluded Indebtedness Exhibits: Exhibit A Form of Revolving Credit Note Exhibit B Form of Legal Opinion Exhibit C Form of Compliance Certificate Exhibit D Form of Joinder Agreement Exhibit E Form of Notice of Assignment Exhibit F Form of Pledge Agreement Exhibit G Form of Notice of Borrowing Exhibit H Form of Notice of Conversion/Continuation Exhibit I Form of Notice of Prepayment CREDIT AGREEMENT CREDIT AGREEMENT ("Agreement" or "Credit Agreement") dated as of December 10, 2003 among and between: GENZYME CORPORATION, a corporation duly organized and validly existing under the laws of The Commonwealth of Massachusetts (together with its permitted successors and assigns, the "Company"); Each of the Subsidiaries of the Company identified under the caption "SUBSIDIARY GUARANTORS" on the signature pages hereto or that may hereafter become a "Subsidiary Guarantor" pursuant to Section 9.13 hereof (together with its permitted successors and assigns, individually, a "SUBSIDIARY GUARANTOR" and, collectively, the "SUBSIDIARY GUARANTORS" and, together with the Company, the "OBLIGORS"); Each of the lenders identified under the caption "LENDERS" on the signature pages hereto or that may hereafter become a "Lender" pursuant to Section 12.7(b) hereof (together with its successors and permitted assigns, individually, a "LENDER" and, collectively, the "Lenders"); and FLEET NATIONAL BANK ("FLEET") as administrative agent for the Lenders (in such capacity, together with the successors in such capacity, the "ADMINISTRATIVE AGENT"); ABN AMRO Bank N.V. ("ABN AMRO") as syndication agent for the Lenders (in such capacity, together with the successors in such capacity, the "Syndication Agent"); and THE BANK OF NOVA SCOTIA ("NOVA SCOTIA"), CITIZENS BANK OF MASSACHUSETTS ("CITIZENS") and WACHOVIA BANK, NATIONAL ASSOCIATION ("WACHOVIA") as co-documentation agents for the Lenders (in such capacity, together with the successors in such capacity, the "Co-Documentation Agents" and together with the Administrative Agent and the Syndication Agent, the "AGENT" or "AGENTS"). The Company has requested that the Lenders extend credit to the Company in an aggregate principal or stated amount not exceeding $350,000,000.00; and To induce the Lenders to extend such credit, the Obligors, the Lenders and the Agents propose to enter into this Agreement pursuant to which, INTER ALIA, (1) the Lenders will make loans to the Company and (2) each Subsidiary Guarantor will guarantee the credit so extended to the Company. Each of the Obligors expects to derive benefit, directly or indirectly, from the credit so extended to the Company, both in its separate capacity and as a member of the integrated group, since the successful operation of each of the Obligors is dependent on the continued successful performance of the functions of the integrated group as a whole. Accordingly, the parties hereto agree as follows: - 1 - Section 1. DEFINITIONS AND ACCOUNTING MATTERS. 1.1. CERTAIN DEFINED TERMS. As used herein, the following terms shall have the following meanings (all terms defined in this Section 1.1 or in other provisions of this Agreement in the singular to have the same meanings when used in the plural and VICE VERSA). "ACCOUNTS RECEIVABLE" shall mean, on any date, the net amount of accounts receivable of Company and its Consolidated Subsidiaries, excluding any such accounts which are more than 120 days old, after deducting all returns, discounts and allowances thereon and reserves relating thereto, determined in accordance with GAAP. "ADJUSTED LIBO RATE" shall mean, for any LIBOR Loan, a rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) determined by the Administrative Agent to be equal to the rate of interest specified in the definition of "LIBO Rate" in this Section 1.1 for the Interest Period for such Loan divided by 1 minus the Reserve Requirement (if any) for such Loan for such Interest Period. "ADMINISTRATIVE AGENT" shall have the meaning given such term in the preamble hereto, as it may be amended, modified, or changed from time to time. "AFFILIATE" shall mean any Person that directly or indirectly controls, or is under common control with, or is controlled by a designated Person and, if such designated Person is an individual, any member of the immediate family (including parents, spouse, children and siblings) of such individual and any trust whose principal beneficiary is such individual or one or more members of such immediate family and any Person who is controlled by any such member or trust. As used in this definition, "CONTROL" (including, with its correlative meanings, "CONTROLLED BY" and "UNDER COMMON CONTROL WITH") shall mean possession, directly or indirectly, of power to direct or cause the direction of management or policies (whether through ownership of securities or partnership or other ownership interests, by contract or otherwise), or that, in any event, any Person that owns directly or indirectly securities having 33% or more of the voting power for the election of directors or other governing body of a corporation or 33% or more of the partnership or other ownership interests of any other Person will be deemed to control such corporation, partnership or other Person. Notwithstanding the foregoing, (a) the Company and its Subsidiaries shall not be Affiliates of each other and (b) neither any Agent nor any Lender shall be an Affiliate of the Company or any of its Subsidiaries. "AGENTS" shall have the meaning given in the preamble hereto, as it may be amended, modified or changed from time to time. "APPLICABLE FACILITY FEE RATE" shall mean, for any period during which the Company has a Debt Rating as set forth below, the percentage set forth below opposite the applicable Debt Rating as set forth below under the caption "APPLICABLE FACILITY FEE RATE", and "APPLICABLE MARGIN" shall mean, for any period set forth below for either Type of Loan set forth below, the percentage set forth below opposite such period under the caption "APPLICABLE MARGIN" and under the caption for such Type of Loan: - 2 -

Applicable Margin Debt Rating (by Standard ------------------------------------------ &Poor's and Moody's Investors Prime Rate Applicable Facility Service, respectively) Loans LIBOR Loans Fee Rate -------------------------------------------------------------------------------------------------------------- Level I: if equal to or greater 0.000% 0.375% 0.125%, than either A- or A3 Level II: if less than both A- and A3, 0.000% 0.475% 0.150% but equal to or greater than either BBB+ or Baa1 Level III: if less than both BBB+ 0.000% 0.550% 0.200% and Baa1, but equal to or greater than either BBB or Baa2 Level IV: if less than both BBB and 0.000% 0.750% 0.250% Baa2, but equal to or greater than either BBB- or Baa3 Level V: if less than both BBB- and 0.000% 1.000% 0.375% Baa3, but equal to or greater than either BB+ or Ba1 Level VI: if less than both BB+ and 0.000% 1.500% 0.500% Ba1

PROVIDED, HOWEVER, that: (a) (i) in the event of a split rating by Standard & Poor's and Moody's Investors Service with respect to the same Long Term Senior Debt where such ratings differ only by one level, the higher rating shall determine the Applicable Margin and the Applicable Facility Fee Rate; (ii) in the event of a split rating by the two rating agencies with respect to the same Long Term Senior Debt where such ratings differ by more than one level, the rating level that is one level above the lower level shall determine the Applicable Margin and the Applicable Facility Fee Rate; (iii) in the event that only one of the two rating agencies issues a Debt Rating, such rating shall determine the Applicable Margin and the Applicable Facility Fee Rate; - 3 - (iv) in the event that different types or series of Long Term Senior Debt have different Debt Ratings, the Long Term Senior Debt with the highest Debt Ratings will be used to determine the Applicable Margin and the Applicable Facility Fee Rate; (v) determinations of the Applicable Margin and the Applicable Facility Fee Rate, and any resulting adjustment of the effective interest rate with respect to Prime Rate Loans and LIBOR Loans and the facility fee described in Section 2.4 hereof, shall be made on the same Business Day as any such change in the Debt Rating (the "ADJUSTMENT DATE") and shall remain in effect until the next Adjustment Date, and all adjustments shall take effect on the applicable Adjustment Date; and (vi) in the event that Standard & Poor's and Moody's Investors Service and any Successor Rating Agency cease to issue Debt Ratings, the Administrative Agent, the Lenders and the Company shall commence negotiations in good faith to agree on a new methodology for determining the Applicable Margin and the Applicable Facility Fee Rate and until such new methodology has been agreed to in writing by the Company and the Lenders, the Applicable Margin and the Applicable Facility Fee Rate shall be at the highest level set forth above; and PROVIDED, FURTHER, in the event that there is a Successor Rating Agency or there is a change in rating terminology by Standard & Poor's or Moody's Investor Service, each of the Company and the Required Lenders shall agree as to the amendment of the table set forth above taking into account the explanation of such new rating terminology by Standard & Poor's, Moody's Investors Service or such Successor Rating Agency, as the case may be, and its comparability to the Debt Ratings set forth in the table above; (b) at all times prior to and including the first Adjustment Date (other than any period when an Event of Default shall have occurred and be continuing) Level III shall apply; (c) (i) at all times after the Closing Date that outstanding Loans exceed 50% of the aggregate amount of the Commitments AND as to which Levels I, II or III apply, the Applicable Margin for LIBOR Loans shall equal the sum of the percentage set forth above opposite such period under the caption "LIBOR Loans," PLUS 0.125%; (ii) at all times after the Closing Date that outstanding Loans exceed 50% of the aggregate amount of the Commitments AND as to which Level IV or Level V applies, the Applicable Margin for LIBOR Loans shall equal the sum of the percentage set forth above opposite such period under the caption "LIBOR Loans," PLUS 0.250%; and - 4 - (iii) at all times after the Closing Date that outstanding Loans exceed 50% of the aggregate amount of the Commitments AND as to which Level VI applies, the Applicable Margin for LIBOR Loans shall equal the sum of the percentage set forth above opposite such period under the caption "LIBOR Loans," PLUS 0.500%. "APPLICABLE LENDING OFFICE" shall mean, for each Lender and for each Type of Loan, the "Lending Office" of such Lender (or of an affiliate of such Lender) designated for such Type of Loan on the signature pages hereof or such other office of such Lender (or of an affiliate of such Lender) as such Lender may from time to time specify to the Administrative Agent and the Company as the office by which its Loans of such Type are to be made and maintained. "BANKRUPTCY CODE" shall mean the Federal Bankruptcy Code of 1978, as amended from time to time. "BASIC ACCORD" shall mean the proposals for risk-based capital framework described by the Basle Committee on Banking Regulations and Supervisory Practices in its paper entitled "International Convergence of Capital Measurement and Capital Standards" dated July 1988, as amended, modified and supplemented and in effect from time to time or any replacement thereof. "BUSINESS DAY" shall mean (a) any day on which commercial banks are not authorized or required to close in Boston, Massachusetts and (b) if such day relates to the giving of notices or quotes in connection with a borrowing of, a payment or prepayment of principal of or interest on, a Conversion of or into, or an Interest Period for, a LIBOR Loan or a notice by the Company with respect to any such borrowing, payment, prepayment, Conversion or Interest Period, then any day referred to in clause (a) that is also a day on which dealings in Dollar deposits are carried out in the London interbank market. "CAPITAL EXPENDITURES" shall mean, for any period, expenditures (including, without limitation, the aggregate amount of Capital Lease Obligations incurred during such period) made by the Company or any of its Subsidiaries to acquire or construct fixed assets, plant and equipment (including renewals, improvements and replacements, but excluding repairs) during such period computed in accordance with GAAP. "CAPITAL LEASE OBLIGATIONS" shall mean, for any Person, all obligations of such Person to pay rent or other amounts under a lease of (or other agreement conveying the right to use) property to the extent such obligations are required to be classified and accounted for as a capital lease on a balance sheet of such Person under GAAP, and, for purposes of this Agreement, the amount of such obligations shall be the capitalized amount thereof, determined in accordance with GAAP. "CAPITAL STOCK" shall mean capital stock of the Company that does not rank prior, as to the payment of dividends or as to the distribution of assets upon any voluntary or involuntary liquidation, dissolution or winding up of the Company, to shares of capital stock of any other class of the Company. - 5 - "CASH EQUIVALENTS" shall mean any interest bearing investment of Company and its Wholly Owned Subsidiaries which meets the definition of a "cash equivalent" under GAAP (i.e., purchased with a remaining maturity of 90 days or less). Such investments shall be at least investment grade (A1/P1 for commercial paper, BBB or better for bonds and similar investments). "CLOSING DATE" the date upon which the initial Loans hereunder are made. "CODE" shall mean the Internal Revenue Code of 1986, as amended from time to time. "COMMITMENTS" shall mean the Revolving Credit Commitments. "COMPANY" shall have the meaning given in the preamble, and its successors and permitted assigns hereunder. "COMPLIANCE CERTIFICATE" shall mean the compliance certificate provided for under Section 9.1(c)(ii) in substantially the form of EXHIBIT C. "CONSOLIDATED" shall mean, when used with reference to any term, that term (or the term "combined" in the case of partnerships, joint ventures and Affiliates of the Company that are not Subsidiaries) as applied to the accounts of Company (or any other specified Person) and all of its Subsidiaries (or other specified Persons) or such of its Subsidiaries as may be specified, consolidated (or combined) in accordance with GAAP and with appropriate deductions for minority interests in Subsidiaries, if required by GAAP. "CONSOLIDATED FUNDED DEBT" shall mean, at any time, the outstanding balance of all Indebtedness in respect of borrowed money, Capital Lease Obligations, Synthetic Lease Obligations, letters of credit and trade acceptances for the Company and its Consolidated Subsidiaries. "CONSOLIDATED INTEREST COVERAGE RATIO" shall mean, for any period, the ratio of (a) EBITDA for such period to (b) all Interest Expense for such period. "CONSOLIDATED NET INCOME" shall mean, for any period, net income (or loss) for the Company and its Consolidated Subsidiaries (determined in accordance with GAAP), PROVIDED, HOWEVER, that Consolidated Net Income shall not include amounts included in computing net income (or loss) in respect of extraordinary and non-recurring gains or losses. "CONSOLIDATED QUICK RATIO" shall mean, at any date, the ratio, for the Company and its Consolidated Subsidiaries, of (a) the sum of (i) Unrestricted Cash on such date PLUS (ii) Marketable Investments on such date PLUS (iii) Accounts Receivable on such date to (b) the sum of (i) Current Liabilities on such date, PLUS (ii) current Synthetic Lease Obligations. "CONSOLIDATED TANGIBLE ASSETS" shall mean, at any date, all assets of the Borrower and its Consolidated Subsidiaries other than Intangible Assets. - 6 - "CONTINUE", "CONTINUATION" and "CONTINUED" shall refer to the continuation pursuant to Section 2.8 hereof of a LIBOR Loan from one Interest Period to the next Interest Period. "CONVERT", "CONVERSION" and "CONVERTED" shall refer to a conversion pursuant to Section 2.8 hereof of one Type of Loans into another Type of Loans, which may be accompanied by the transfer by a Lender (at its sole discretion, but subject to Section 5.l(d) hereof) of a Loan from one Applicable Lending Office to another. "CURRENT LIABILITIES" shall mean any liability that in accordance with GAAP would be classified as such. "DEBT RATING" shall mean at all relevant times of reference thereto, the rating issued from time to time (whether on a preliminary basis or otherwise) by Standard & Poor's or Moody's Investors Service or such other rating service or services as the Company may designate from time to time with the consent of the Required Lenders (each a "Successor Rating Agency") with respect to unsecured Indebtedness of the Company not maturing within twelve (12) months, the repayment obligations of the Company thereunder are not supported or otherwise enhanced by any other Person (including, without limitation, supported by any letter of credit or other instrument, agreement or document issue by any other Person) and not subordinated by its terms in right of payment to other unsecured Indebtedness of the Company (such Indebtedness, the "Long Term Senior Debt"). "DEFAULT" shall mean an Event of Default or an event that with notice or lapse of time or both would become an Event of Default. "DIVIDEND PAYMENT" shall mean dividends (in cash, Property or obligations) on, or other payments or distributions on account of, or the setting apart of money for a sinking or other analogous fund for, or the purchase, redemption, retirement or other acquisition of, any shares of any class of stock of, or any partnership or other equity interest issued by, the Company or of any warrants, options or other rights to acquire the same (or to make any payments to any Person, such as "phantom stock" payments, where the amount thereof is calculated with reference to the fair market or equity value of the Company or any of its Subsidiaries), but excluding dividends payable solely in shares of common stock of the Company. "DOLLARS" and "$" shall mean lawful money of the United States of America. "EBITDA" shall mean Consolidated Net Income plus Interest Expense, plus Taxes, plus depreciation, plus amortization, plus non-cash non-recurring charges for acquired research and development (to the extent deducted in calculating Consolidated Net Income), plus non-cash non-recurring charges for asset impairments (to the extent deducted in calculating Consolidated Net Income), each as calculated in accordance with GAAP. "ENVIRONMENTAL CLAIM" shall mean, with respect to any Person, any written or oral notice, claim, demand or other communication (collectively, a "claim") by any other Person alleging or asserting such Person's liability for investigatory costs, cleanup costs, governmental response costs, damages to natural resources or other Property, personal injuries, fines or penalties arising - 7 - out of, based on or resulting from (a) the presence, or Release into the environment, of any Hazardous Material at any location, whether or not owned by such Person, or (b) circumstances forming the basis of any violation, or alleged violation, of any Environmental Law. The term "Environmental Claim" shall include, without limitation, any claim by any governmental authority for enforcement, cleanup, removal, response, remedial or other actions or damages pursuant to any applicable Environmental Law, and any claim by any third party seeking damages, contribution, indemnification, cost recovery, compensation or injunctive relief resulting from the presence of Hazardous Materials or arising from alleged injury or threat of injury to the environment. "ENVIRONMENTAL LAWS" shall mean any and all present and future Federal, state, local and foreign laws, rules or regulations, and any orders or decrees, in each case as now or hereafter in effect, relating to the regulation or protection of the environment or to emissions, discharges, releases or threatened releases of pollutants, contaminants or toxic or hazardous substances or wastes into the indoor or outdoor environment, including, without limitation, ambient air, soil, surface water, ground water, wetlands, land or subsurface strata, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of pollutants, contaminants or toxic or hazardous substances or wastes. "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time. "ERISA AFFILIATE" shall mean any corporation or trade or business that is a member of any group of organizations (a) described in Section 414(b) or (c) of the Code of which the Company is a member and (b) solely for purposes of potential liability under Section 302(c)(11) of ERISA and Section 412(c)(l1) of the Code and the lien created under Section 302(f) of ER1SA and Section 412(n) of the Code, described in Section 4l4(m) or (o) of the Code of which the Company is a member. "EVENT OF DEFAULT" shall have the meaning assigned to such term in Section 10 hereof. "FEDERAL FUNDS RATE" shall mean, for any day, the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day, PROVIDED that (a) if the day for which such rate is to be determined is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day and (b) if such rate is not so published for any Business Day, the Federal Funds Rate for such Business Day shall be the average rate charged to the Administrative Agent on such Business Day on such transactions as determined by the Administrative Agent. "FUNDAMENTAL CHANGE" shall mean any of the following; (i) a "person" or "group" (within the meaning of Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the - 8 - "Exchange Act")), becoming the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act) of Voting Shares of the Company entitled to exercise more than 50% of the total voting power of all outstanding Voting Shares of the Company (including any right to acquire Voting Shares that are not then outstanding of which such person or group is deemed the beneficial owner); or (ii) a change in the Board of Directors in which the individuals who constituted the Board of Directors at the beginning of the two-year period immediately preceding such change (together with any other director whose election by the Board of Directors or whose nomination for election by the shareholders of the Company was approved by a vote of at least two-thirds of the directors then 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 to constitute a majority of the directors then in office; or (iii) any consolidation of the Company with, or merger of the Company into, any other Person, any merger of another Person into the Company, or any sale or transfer of all or substantially all of the assets of the Company to another Person (other than (w) a merger which does not result in any reclassification, conversion, exchange or cancellation of outstanding shares of Capital Stock, (x) a merger which is effected solely to change the jurisdiction of incorporation of the Company, (y) any consolidation with or merger of the Company into a Wholly Owned Subsidiary of the Company, or any sale or transfer by the Company of all or substantially all of its assets to one or more of its Wholly Owned Subsidiaries, in any one transaction or a series of transactions, provided, in any such case, that the resulting corporation or each such Wholly Owned Subsidiary assumes the Obligations under the Loan Documents; or (z) a merger or consolidation in which the holders of the Company's Voting Shares immediately prior to such event continue to hold more than 50% of the Voting Shares outstanding immediately after such event). "GAAP" shall mean generally accepted accounting principles applied on a basis consistent with those that, in accordance with the last sentence of Section 1.2(a) hereof, are to be used in making the calculations for purposes of determining compliance with this Agreement. "GUARANTEE" shall mean a guarantee, an endorsement, a contingent agreement to purchase or to furnish funds for the payment or maintenance of, or otherwise to be or become contingently liable under or with respect to, the Indebtedness, other obligations, net worth, working capital or earnings of any Person, or a guarantee of the payment of dividends or other distributions upon the stock or equity interests of any Person, or an agreement to purchase, sell or lease (as lessee or lessor) Property, products, materials, supplies or services primarily for the purpose of enabling a debtor to make payment of such debtor's obligations or an agreement to assure a creditor against loss, and including, without limitation, causing a bank or other financial institution to issue a letter of credit or other similar instrument for the benefit of another Person, but excluding - 9 - endorsements for collection or deposit in the ordinary course of business. The terms "Guarantee" and "Guaranteed" used as a verb shall have a correlative meaning. "GUARANTEED OBLIGATIONS" shall have the meaning assigned to such term in Section 6.1 hereof. "HAZARDOUS MATERIAL" shall mean, collectively, (a) any petroleum or petroleum products, explosives, radioactive materials, asbestos, urea formaldehyde foam insulation, and transformers or other equipment that contain polychlorinated biphenyls ("PCB's") in concentrations that are regulated under the Toxic Substances Control Act, as amended, or any other Environmental Law, (b) any chemicals or other materials or substances that are now or hereafter become defined as or included in the definition of "hazardous substances", "hazardous wastes", "hazardous materials", "extremely hazardous wastes", "restricted hazardous wastes", "toxic substances", "toxic pollutants", "contaminants", "pollutants" or words of similar import under any Environmental Law and (c) any other chemical or other material or substance, exposure to which is now or hereafter prohibited, limited or regulated under any Environmental Law. "INDEBTEDNESS" shall mean, for the Company and its Consolidated Subsidiaries: (a) obligations created, issued or incurred by such Person for borrowed money (whether by loan, the issuance and sale of debt securities or the sale of Property to another Person subject to an understanding or agreement, contingent or otherwise, to repurchase such Property from such Person); (b) obligations of such Person to pay the deferred purchase or acquisition price of Property or services, other than trade accounts payable (other than for borrowed money) arising, and accrued expenses incurred, in the ordinary course of business so long as such trade accounts payable are payable within 120 days of the date the respective goods or services are delivered or rendered; (c) Indebtedness of others secured by a Lien on the Property of such Person, whether or not the respective Indebtedness so secured has been assumed by such Person; (d) obligations of such Person, contingent or otherwise, in respect of letters of credit, bankers' acceptances or similar instruments issued or accepted by banks and other financial institutions for account of such person; (c) Capital Lease Obligations of such Person; (f) Synthetic Lease Obligations of such Person; and (g) Guarantees by such Person of Indebtedness of others. "INDEMNIFIED LIABILITY" shall have the meaning assigned such term in Section 11.5 hereof. "INDEMNIFIED PARTY" shall have the meaning assigned such term in Section 12.4 hereof. "INFORMATION" shall have the meaning assigned such term in Section 12.13(b) hereof. "INTANGIBLE ASSETS" shall mean intangible assets, as determined in accordance with GAAP, including, without limitation, all deferred assets, patents, copyrights, trademarks, non-compete agreements and similar intangibles, goodwill, unamortized debt discount and expenses, and all investments other than Marketable Investments. "INTELLECTUAL PROPERTY" shall mean "Intellectual Property," as defined in Section 101(60) of the Bankruptcy Code, now or hereafter owned by Company or any of its Subsidiaries, together with all of the following property now or hereafter owned by Company or any of its Subsidiaries; - 10 - all domestic and foreign patents and patent applications; inventions, discoveries and improvements, whether or not patentable; trademarks, trademark applications and registrations; service marks, service mark applications and registrations; copyrights, copyright applications and registrations; all licenses therefor; trade secrets and all other proprietary information. "INTEREST EXPENSE" shall mean, for any period, the sum, for the Company and its Consolidated Subsidiaries, of the following: (a) all interest in respect of Indebtedness (including, without limitation, the interest component of any payments in respect of Capital Lease Obligations) accrued or capitalized during such period (whether or not actually paid during such period); and (b) all other amounts that would be accrued or capitalized during such period as "interest expense" in accordance with GAAP. "INTEREST PERIOD" shall mean: with respect to any LIBOR Loan, each period commencing on the date such LIBOR Loan is made or Converted from a Loan of another Type or the day after the last day of the next preceding Interest Period for such Loan and ending on the numerically corresponding day in the first, second, third, sixth, or ninth calendar month thereafter, as the Company may select as provided in Section 4.5 hereof, except that each Interest Period that commences on the last Business Day of a calendar month (or on any day for which there is no numerically corresponding day in the appropriate subsequent calendar month) shall end on the last Business Day of the appropriate subsequent calendar month; PROVIDED, THAT, notwithstanding the foregoing: (i) if any Interest Period for any Revolving Credit Loan would otherwise end after the Revolving Credit Commitment Termination Date, such Interest Period shall not be available hereunder; (ii) each Interest Period that would otherwise end on a day that is not a Business Day shall end on the next succeeding Business Day (or, if such next succeeding Business Day falls in the next succeeding calendar month, on the next preceding Business Day); and (iii) notwithstanding clauses (i) and (ii) above, no Interest Period for any LIBOR Loan shall have a duration of less than one month and, if the Interest Period for any LIBOR Loan would otherwise be a shorter period, such Loan shall not be available as a LIBOR Loan hereunder for such period. "INVESTMENT" shall mean, for any Person: (a) the acquisition (whether for cash, Property, services or securities or otherwise) of capital stock, bonds, notes, debentures, partnership or other ownership interests or other securities of any other Person or any agreement to make any such acquisition (including, without limitation, any "short sale" or any sale of any securities at a time when such securities are not owned by the Person entering into such sale); (b) the making of any deposit with, or advance, loan or other extension of credit to, any other Person (including the purchase of Property from another Person subject to an understanding or agreement, contingent or otherwise, to resell such Property to such Person), but excluding any such advance, loan or extension of credit arising in connection with the sale of inventory or supplies by such Person in the ordinary course of business so long as such advance, loan or extension of credit is made on - 11 - terms (including as to maturity) consistent with those terms offered by the Company on the date hereof; and (c) the entering into of any Guarantee of, or other contingent obligation with respect to, Indebtedness or other liability of any other Person and (without duplication) any amount committed to be advanced, lent or extended to such Person. "LIBO RATE" shall mean, with respect to any LIBOR Loan for any Interest Period therefor, the simple average (rounded upwards, if necessary, to the nearest 1/100 of 1%), as determined by the Administrative Agent, of the rates per annum which appear on the Dow Jones Markets page 3750 as of 11:00 a.m. London time on the day that is two Business Days prior to the first day of such Interest Period (provided, that if the rate described above does not appear on the Dow Jones Markets on any applicable interest determination date, then at the rates per annum quoted to the Administrative Agent at approximately 11:00 a.m. London time (or as soon thereafter as practicable) on the date two Business Days prior to the first day of such Interest Period for the offering by leading banks in the London interbank market) of Dollar deposits having a term comparable to such Interest Period and in an amount comparable to the principal amount of the LIBOR Loan to be made by the Lenders for such Interest Period. "LIBOR LOANS" shall mean loans bearing interest at the rate determined under Section 3.2(b). "LIEN" shall mean, with respect to any Property, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such property. For purposes of this Agreement and the other Loan Documents, a Person shall be deemed to own subject to a Lien any Property that it has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, capital lease or other title retention agreement (other than an operating lease) relating to such Property. "LIQUIDITY" shall mean, at any time, the sum of (a) Unrestricted Cash; (b) Marketable Investments; and (c) the unused amount of the Revolving Credit Commitment that is available to be borrowed by the Company, at such time. "LOAN DOCUMENTS" shall mean this Agreement, the Notes, the Pledge Agreement and all other agreements, instruments and documents entered into pursuant hereto or thereto as such may be amended, modified or changed from time to time. "LOANS" shall mean Prime Rate Loans and LIBOR Loans. "LONG TERM SENIOR DEBT" shall have the meaning set forth in the definition of "Debt Rating" herein. "MARGIN STOCK" shall mean "margin stock" within the meaning of Regulations U and X. "MARKETABLE INVESTMENTS" shall mean any interest-bearing debt obligations owned by Company and its Wholly-Owned Subsidiaries (excluding directors' qualifying shares and items included as Cash Equivalents) which meet the definition of marketable securities under GAAP. Such amounts shall exclude common or preferred stock. Such securities shall include obligations issued by the U.S. Treasury and other agencies of the U.S. government, corporate - 12 - bonds, bank notes, mortgage and asset backed securities, finance company securities and auction rate preferred stocks. Such securities shall be rated investment grade (BBB or better for bonds or similar securities, A1/P1 for commercial paper and notes) and shall otherwise be reasonably liquid investments. "MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on (a) the business, operations or financial condition or material Property of the Company and its Subsidiaries, taken as a whole, (b) the validity or enforceability of any of the Loan Documents or the rights and remedies of the Lenders and the Agents thereunder or (c) the ability of the Obligors to perform their obligations hereunder including the timely payment of the principal of or interest on the Loans or other amounts in connection therewith. "MATERIAL SUBSIDIARY" shall mean any Subsidiary of the Company, the total assets of which equal or exceed five percent (5%) of the Consolidated total assets of the Company and its Subsidiaries taken as a whole, and each as reported in the books and records of the Company and its Subsidiaries and as calculated in accordance with GAAP, and, for the purposes of Sections 6 and 9.13 hereof means such a Subsidiary of the Company that is organized under the laws of the United States, provided that Genzyme Securities Corporation shall not be deemed to be a Material Subsidiary for purposes of Sections 6 and 9.13 hereof. "MULTIEMPLOYER PLAN" shall mean a multiemployer plan defined as such in Section 3(37) of ERISA to which contributions have been made by the Company or any ERISA Affiliate and that is covered by Title IV of ERISA. "NOTES" shall mean the Revolving Credit Notes. "OBLIGATIONS" shall mean any and all of the Revolving Credit Loans, including any principal, interest, charges, fees, costs and expenses (including interest arising after the filing of any bankruptcy petition and notwithstanding any law to the contrary) and all other obligations liabilities and indebtedness of the Company or any Obligor of any kind, nature or description arising under this Agreement, the Notes or any other Loan Documents. "OBLIGOR" shall have the meaning given such term in the Preamble hereof. "PBGC" shall mean the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA. "PERSON" shall mean any individual, corporation, company, voluntary association, partnership, joint venture, trust, unincorporated organization or government (or any agency, instrumentality or political subdivision thereof) and shall include any syndicate or group which would be deemed to be a "person" under Section 13(d)(3) of the Exchange Act. "PLAN" shall mean an employee benefit or other plan established or maintained by the Company or any ERISA Affiliate and that is covered by Title IV of ERISA, other than a Multiemployer Plan. - 13 - "PLEDGE AGREEMENT" shall mean the Pledge Agreement provided under Section 7.1 (f) as the same such shall be modified, amended and supplemented from time to time. "POST-DEFAULT RATE" shall mean a rate per annum equal to 2% plus the interest rate for a Loan as provided in one of the lettered paragraphs of Section 3.2, with the applicable Applicable Margin being that opposite the Level VI designation. "PRIME RATE" shall mean for any day the rate equal to the higher from time to time of (A) the rate of interest announced by the Administrative Agent at the Principal Office from time to time as its prime rate; and (B) a rate equal to 1/2 of 1% per annum above the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as determined on any day by the Administrative Agent. "PRIME RATE LOANS" shall mean loans bearing interest at the rate determined under Section 3.2(a). "PRINCIPAL OFFICE" shall mean the principal office of Fleet, located on the date hereof at 100 Federal Street, Boston, Massachusetts 02110, or such other principal office of the Administrative Agent, after written notice by the Administrative Agent. "PROPERTY" shall mean any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible. "PURCHASE MONEY INDEBTEDNESS" shall mean Indebtedness incurred by a Person to purchase machinery, equipment and other fixed assets, but only (i) if the amount of such Indebtedness is not greater than 100% of the invoice amount of such purchased machinery, equipment and other fixed assets, and (ii) such Indebtedness, if secured, is secured by a security interest in only the purchased machinery, equipment and other fixed assets and such Person has not granted a lien or security interest to secure such Indebtedness on any other property of such Person other than such purchased fixed assets; and (iii) such purchased fixed assets do not constitute all or substantially all of the fixed assets of any Person or any division of any Person. "QUARTERLY DATES" shall mean the last Business Day of March, June, September and December of each year, the first of which shall be the first such day after the date hereof. "PUT OPTION" shall mean the obligation of the Company to purchase, at the option of the holders of the Company's 3% Convertible Subordinated Debentures due May 15, 2021, all or any portion of those securities issued under the Indenture between the Company and State Street Bank and Trust Company, as Trustee, dated May 8, 2001. "REGULATIONS A, D, U AND X" shall mean, respectively, Regulations A, D, U and X of the Board of Governors of the Federal Reserve System (or any successor), as the same may be modified and supplemented and in effect from time to time. "REGULATORY CHANGE" shall mean, with respect to any Lender, any change after the date hereof in Federal, state or foreign law or regulations (including, without limitation, Regulation D) or the adoption or making after such date of any interpretation, directive or request applying - 14 - to a class of banks including such Lender of or under any Federal, state or foreign law or regulations (whether or not having the force of law and whether or not failure to comply therewith would be unlawful) by any court or governmental or monetary authority charged with the interpretation or administration thereof. "RELEASE" shall mean any release, spill, emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal, leaching or migration into the indoor or outdoor environment, including, without limitation, the movement of Hazardous Materials through ambient air, soil, surface water, ground water, wetlands, land or subsurface strata. "REQUIRED LENDERS" shall mean Lenders having at least 51% of the aggregate amount of the Commitments or, if the Commitments shall have terminated, Lenders holding at least 51% of the aggregate unpaid principal amount of the Loans. "RESERVE REQUIREMENT" shall mean, for any Interest Period for a LIBOR Loan, the average maximum rate at which reserves (including, without limitation, any marginal, supplemental or emergency reserves) are required to be maintained during such Interest Period under Regulation D by member banks of the Federal Reserve System in New York City with deposits exceeding one billion Dollars against "Eurocurrency liabilities" (as such term is used in Regulation D). Without limiting the effect of the foregoing, the Reserve Requirement shall include any other reserves required to be maintained by such member banks by reason of any Regulatory Change with respect to (i) any category of liabilities that includes deposits by reference to which the LIBOR Loan is to be determined or (ii) any category of extensions of credit or other assets that includes LIBOR Loans. "REVOLVING CREDIT COMMITMENT" shall mean, for each Revolving Credit Lender, the obligation of such Lender to make Revolving Credit Loans in an aggregate principal amount at any one time outstanding up to but not exceeding (a) in the case of any such Lender originally party hereto, the sum of (i) the amount set opposite the name of such Lender on the signature pages hereto, plus (ii) the aggregate amount of Revolving Credit Commitments acquired by such Lender from other Lenders pursuant to Section 12.7(b) hereof minus (iii) the aggregate amount of Revolving Credit Commitments transferred by such Lender to one or more other Lenders pursuant to Section 12.7(b) hereof and (b) in the case of any such Lender that was not originally party hereto, (i) the aggregate amount of Revolving Credit Commitments acquired by such Lender from other Lenders pursuant to Section 12.7(b) hereof minus (ii) the aggregate amount of Revolving Credit Commitments transferred by such Lender to one or more other Lenders pursuant to Section 12.7(b) hereof, in each case, as such obligation may be reduced from time to time pursuant to Section 2.3 hereof. "REVOLVING CREDIT COMMITMENT PERCENTAGE" shall mean, with respect to any Revolving Credit Lender, the ratio of (a) the amount of the Revolving Credit Commitment of such Lender to (b) the aggregate amount of the Revolving Credit Commitments of all of the Lenders. "REVOLVING CREDIT COMMITMENT TERMINATION DATE" shall be either: - 15 - (A) December 10, 2006, if on or before March 15, 2006 the Company delivers to the Administrative Agent and each of the Lenders a certificate accompanied by evidence sufficient to establish to the satisfaction of the Administrative Agent that either: (a) either: (i) the requisite holders of the Company's 3% Convertible Subordinated Debentures due May 15, 2021 (the "3% Debentures") have agreed with the Company and the trustee thereunder that the first date on which the Put Option may be exercised shall not be earlier than January 26, 2007; or (ii) the Put Option has been eliminated in a manner satisfactory to the Administrative Agent in its sole discretion; or (b) the Company has maintained Liquidity of at least $975,000,000 as of March 15, 2006 and on each of the ten (10) consecutive Business Days prior to March 15, 2006; or (B) otherwise, March 31, 2006. "REVOLVING CREDIT LENDERS" shall mean the Lenders from time to time holding Revolving Credit Loans and/or Revolving Credit Commitments. "REVOLVING CREDIT LOANS" shall mean the loans provided for in Section 2.1 hereof, which may be Prime Rate Loans and/or LIBOR Loans. "REVOLVING CREDIT NOTES" shall mean the promissory notes provided for by Section 2.7(a) hereof and all promissory notes delivered in substitution or exchange for any thereof, in each case as the same shall be modified and supplemented and in effect from time to time. "SENIOR UNSECURED DEBT RATING" shall mean, for any date, the senior unsecured debt rating, as rated by Standard & Poor's or Moody's Investor Service as of such date. "SUBORDINATED DEBT" means (1) the Company's Convertible Notes, issued May, 2001, in the original aggregate principal amount of $575 million, (2) unsecured Indebtedness of the Company or a Subsidiary of the Company which, by its terms, is explicitly subordinated to the prior payment in full of the Obligations to at least the following extent: (a) no payments of principal of (or premium, if any) or interest on (or otherwise due in respect of) such Indebtedness may be permitted for so long as any Default or Event of Default in the payment of principal (or premium, if any) or interest on the Loans exists; (b) in the event that any other Default or Event of Default exists, upon notice by the Required Lenders, the Administrative Agent shall have the right to give notice to the Company and the holders of such Indebtedness (or agents therefor) of a payment blockage, and thereafter no payments of principal of (or premium, if any) or interest on (or otherwise due in respect of) such Indebtedness may be made for a period of 179 days from the date of such notice unless, prior to such time, such Default or Event of Default is cured or waived; PROVIDED, HOWEVER, that only one such notice of a payment blockage shall be effective - 16 - during any 365 consecutive day period and PROVIDED, FURTHER, that no such other Default or Event of Default that existed upon first delivery of such a notice shall be the basis for a subsequent notice of payment blockage unless such Default or Event of Default shall have been cured or waived for a period of 180 consecutive days; (c) such Indebtedness may not (i) provide for payments of principal of such Indebtedness at the stated maturity thereof or by way of a sinking fund applicable thereto or by way of any mandatory redemption, defeasance, retirement or repurchase thereof by the Company or any Subsidiary (including any redemption, retirement or repurchase which is contingent upon events or circumstances but not including any exchange, conversion or payment with equity or other Subordinated Debt), in each case prior to the Revolving Credit Commitment Termination Date or (ii) permit redemption or other retirement (including pursuant to an offer to purchase made by the Company or any Subsidiary) of such other Indebtedness at the option of the holder thereof prior to the Revolving Credit Commitment Termination Date other than by conversion to Capital Stock or other equity of the Company or other Subordinated Debt; PROVIDED, HOWEVER, in the case of either (i) or (ii), such Indebtedness may provide for payment prior to the stated maturity of such Indebtedness if any event which causes, or (with the giving of any notice or the lapse of time or both) permits the holder or holders of such Indebtedness (or a trustee or agent on behalf of such holder or holders) to cause such Indebtedness to become due, or to be prepaid (whether by redemption, purchase, offer to purchase or otherwise), prior to its stated maturity would also cause a Default or an Event of Default (subject, however, to the limitations of clauses (a), (b), (d) and (e) hereof); (d) the terms of such Indebtedness shall provide, to the extent not prohibited in the Trust Indenture Act of 1939, as amended, that no action to enforce the payment thereof or to exercise any remedy with respect thereto shall occur unless the holders of such Indebtedness (or agents therefor) give the Administrative Agent notice of such default and thereafter no such enforcement action or exercise of remedies shall occur until 180 days shall have elapsed from the date of such notice without the cure or waiver of such default, provided that such standstill period shall continue for as long as a Default or an Event of Default under clause (a) above exists; provided, further, however, that the restrictions described in this clause (d) shall not apply if the event which gives rise to the right to enforce such payment or exercise such remedy triggers a Default or an Event of Default (subject, however, to the limitations of clauses (a), (b), (c), and (e); and (e) such Indebtedness shall further provide that, upon any bankruptcy, insolvency, liquidation or similar case or proceeding relative to the Company or any of its Subsidiaries, or upon the realization of any amounts by the holders of the Indebtedness (or the agents therefor) resulting from an action under clause (d) above, the Obligations shall first be paid in full to the Administrative Agent or such payment shall have been provided for to the satisfaction of the Required Lenders before any payment or distribution is made to or retained by the holders of the Indebtedness (or the agents therefor), (3) any other Indebtedness of the Company or its Subsidiaries, incurred after the date hereof, containing subordination terms, which are specifically consented to in writing by the Required Lenders and (4) any refinancing of Subordinated Debt incurred pursuant to subsections (1), (2) or (3), in which (x) the principal amount of Subordinated Debt resulting from such refinancing does not exceed the sum of (i) the principal amount of the Subordinated Debt so refinanced plus (ii) customary fees and expenses incurred in connection with such refinancing and (y) the Indebtedness resulting from such refinancing satisfies the criteria for Subordinated Debt hereunder. - 17 - "SUBSIDIARY" shall mean, with respect to any Person, any corporation, partnership or other entity of which at least a majority of the securities or other ownership interests having by the terms thereof ordinary voting power to elect a majority of the board of directors or other persons performing similar functions of such corporation, partnership or other entity (irrespective of whether or not at the time securities or other ownership interests of any other class or classes of such corporation, partnership or other entity shall have or might have voting power by reason of the happening of any contingency), or of which at least a majority of the limited partnership interests or other similar ownership interests issued by any limited partnership or other similar entity, is at the time directly or indirectly owned or controlled by such Person or one or more Subsidiaries of such Person or by such Person and one or more Subsidiaries of such Person. "SUBSIDIARY GUARANTOR" shall have the meaning given such term in the preamble hereof. "SUCCESSOR RATING AGENCY" shall have the meaning set forth in the definition of "Debt Rating" herein. "SYNTHETIC LEASE OBLIGATIONS" shall mean, for any Person, all obligations of such Person to pay rent or other amounts under or in connection with any so-called "synthetic lease" (i.e., a lease (or other agreement conveying the right to use) of property that constitutes a lease in accordance with GAAP but that does not constitute a lease for Federal income tax purposes), including, without limitation, obligations under: (i) the Agency Agreement, dated as of October 21, 1998 (the "Agency Agreement") between the Company, as successor-by-merger to GelTex Pharmaceuticals, Inc. and First Security Bank, N.A., not in its individual capacity except as expressly set forth in the Agency Agreement, but solely as Trustee under the Owner Trust Agreement dated as of October 21, 1998 (the "Owner Trust Agreement") between Fleet Real Estate, Inc. and First Security Bank, N.A., not in its individual capacity except as expressly set forth in the Agency Agreement, but solely as Trustee under the Owner Trust Agreement; and (ii) a Lease Agreement, dated as of October 21, 1998 (the "Lease Agreement"), between the Company, as successor-by-merger to GelTex Pharmaceuticals, Inc. and First Security Bank, N.A., not in its individual capacity except as expressly set forth in the Lease Agreement, but solely as Trustee under the Owner Trust Agreement. "TAXES" shall mean any present tax (including, without limitation, any income, documentary, sales, stamp, registration, property or excise tax), assessment or other charge, levy, impost, fee, compulsory loan, charge or withholding. "TYPE" shall have the meaning given such term in Section 1.3 hereof. "UNRESTRICTED CASH" shall mean cash and Cash Equivalents of the Company and its Wholly Owned Subsidiaries that are readily available to Company and not subject to any limitation or restriction on their use by the Company. "U.S. PERSON" shall mean a citizen or resident of the United States of America, a corporation, partnership or other entity created or organized in or under any laws of the United States of America or any State thereof, or any estate or trust that is subject to Federal income taxation regardless of the source of its income. - 18 - "VOTING SHARES" shall mean all outstanding shares of any class or series (however designated) of Capital Stock entitled to vote generally in the election of members of the Board of Directors of the Company. "WHOLLY OWNED SUBSIDIARY" shall mean, with respect to any Person, any corporation, partnership or other entity to which all of the equity securities or other ownership interests (other than, in the case of a corporation, directors' qualifying shares or, in the case of a limited partnership, not more than 1% of the aggregate partnership interests issued by such limited partnership) are directly or indirectly owned or controlled by such Person or one or more Wholly Owned Subsidiaries of such Person or by such Person and one or more Wholly Owned Subsidiaries of such Person. 1.2. ACCOUNTING TERMS AND DETERMINATIONS. (a) Except as otherwise expressly provided herein, all accounting terms used herein shall be interpreted, and all financial statements and certificates and reports as to financial matters required to be delivered to the Lenders hereunder shall (unless otherwise disclosed to the Lenders in writing at the time of delivery thereof in the manner described in subsection (b) below) be prepared, in accordance with GAAP applied on a basis consistent with those used in the preparation of the latest annual or quarterly financial statements furnished to the Lenders hereunder (which, prior to the delivery of the first annual or quarterly financial statements under Section 9.1 hereof, shall mean the audited financial statements as at December 31, 2002 referred to in Section 8.2 hereof). (b) To enable the ready and consistent determination of compliance with the covenants set forth in Section 9 hereof, the Company will not change its fiscal year. 1.3. TYPES OF LOANS. Loans hereunder are distinguished by "Type". The "Type" of a Loan refers to whether such Loan is a Prime Rate Loan or a LIBOR Loan. Section 2. COMMITMENTS, LOANS, NOTES AND PREPAYMENTS. 2.1. REVOLVING CREDIT LOANS. (a) REVOLVING CREDIT FACILITY. Each Lender severally agrees, on the terms and conditions of this Agreement, to make loans to the Company in Dollars during the period from and including the Closing Date to but not including the Revolving Credit Commitment Termination Date in an aggregate principal amount at any one time outstanding up to but not exceeding the amount of the Revolving Credit Commitment of such Lender as in effect from time to time (such Loans being herein called "REVOLVING CREDIT LOANS"); PROVIDED THAT in no event shall the Revolving - 19 - Credit Loans at any time outstanding exceed the aggregate amount of the Revolving Credit Commitments as in effect from time to time. Subject to the terms and conditions of this Agreement, during such period the Company may borrow, repay and reborrow the amount of the Revolving Credit Commitments by means of Prime Rate Loans and LIBOR Loans and may Convert Revolving Credit Loans of one Type into Revolving Credit Loans of another Type (as provided in Section 2.8 hereof) or Continue Revolving Credit Loans of one Type as Revolving Credit Loans of the same Type (as provided in Section 2.8 hereof). (b) INTEREST PERIODS. No more than five separate Interest Periods in respect of LIBOR Loans may be outstanding at any one time. 2.2. BORROWINGS OF REVOLVING CREDIT LOANS. The Company shall give the Administrative Agent notice of each borrowing hereunder as provided in Section 4.5 hereof, and the Administrative Agent shall promptly give each Lender notice thereof. Not later than 1:00 p.m. Boston, Massachusetts time on the date specified for each borrowing of Revolving Credit Loans hereunder, each Lender shall make available the amount of the Loan or Loans to be made by it on such date to the Administrative Agent, at account number 1510351 maintained by the Administrative Agent with Fleet at the Principal Office, or, after written notice by the Administrative Agent to the Lenders, at such other account maintained by the Administrative Agent, in immediately available funds, for the account of the Company. The amount so received by the Administrative Agent shall, subject to the terms and conditions of this Agreement, be made available to the Company by depositing the same, in immediately available funds, in an account of the Company maintained with Fleet at the Principal Office designated for the Company, or at such other account designated in writing by the Administrative Agent. 2.3. CHANGES OF COMMITMENTS. (a) The aggregate amount of the Revolving Credit Commitments shall be automatically reduced to zero on the Revolving Credit Commitment Termination Date. (b) The Company shall have the right at any time or from time to time to reduce the aggregate unused amount of the Revolving Credit Commitments (for which purpose the Revolving Credit Commitments shall be deemed to be utilized by the amount of the Revolving Credit Loans); PROVIDED that (x) the Company shall give notice of each such termination or reduction as provided in Section 4.5 hereof, , and (y) each partial reduction to the aggregate Revolving Credit Commitments shall be in an aggregate amount at least equal to $5,000,000 (or any integral multiple of $1,000,000 in excess thereof) or such lesser amount required to reduce the remaining Revolving Credit Commitments to zero ($0.00), as applicable. - 20 - (c) The Commitments once terminated or reduced may not be reinstated. 2.4. FACILITY FEE. The Company shall pay to the Administrative Agent for the account of each Lender a facility fee on the entire amount of such Lender's Commitment (without regard to whether the Borrower is permitted by the terms hereof to borrow the entire amount of such Commitment), for the period from and including the date hereof to but not including the date such Commitment is terminated or expires, at a rate per annum equal to the Applicable Facility Fee Rate. Accrued facility fees shall be payable in arrears on each Quarterly Date and on the date the respective Revolving Credit Commitments are terminated or expire. 2.5. LENDING OFFICES. The Loans of each Type made by each Lender shall be made and maintained at such Lender's Applicable Lending Office for Loans of such Type. 2.6. SEVERAL OBLIGATIONS; REMEDIES INDEPENDENT. The failure of any Lender to make any Loan to be made by it on the date specified therefor shall not relieve any other Lender of its obligation to make its Loan on such date, but neither any Lender nor any Agent shall be responsible for the failure of any other Lender to make a Loan to be made by such other Lender, and (except as otherwise provided in Section 4.6 hereof) no Lender shall have any obligation to any Agent or any other Lender for the failure by such Lender to make any Loan required to be made by such Lender. The amounts payable by the Company at any time hereunder and under the Note to each Lender shall be a separate and independent debt and each Lender shall be entitled to protect and enforce its rights arising out of this Agreement and the Notes, and it shall not be necessary for any other Lender or any Agent to consent to, or be joined as an additional party in, any proceedings for such purposes. 2.7. NOTES. (a) The Revolving Credit Loans made by each Lender shall be evidenced by a single promissory note of the Company substantially in the form of EXHIBIT A hereto, dated the date hereof, payable to such Lender in a principal amount equal to the amount of its Revolving Credit Commitment as originally in effect and otherwise duly completed. (b) The date, amount, Type, interest rate and duration of Interest Period (if applicable) of each Loan made by each Lender to the Company, and each payment made on account of the principal thereof, shall be recorded by such Lender on its books and, prior to any transfer of any Note evidencing the Loans held by it, endorsed by such Lender on the schedule attached to such Note or any continuation thereof, PROVIDED that the failure of such Lender to make any such recordation or endorsement shall not affect the obligations of the Company to make a payment when due of any amount owing hereunder or under such Note in respect of such Loans. - 21 - (c) No Lender shall be entitled to have its Note substituted or exchanged for any reason, or subdivided for promissory notes of lesser denominations, except in connection with a permitted assignment of all or any portion of such Lender's relevant Commitment, Loans and Note pursuant to Section 12.7 hereof (and, if requested by any Lender, the Company agrees to so exchange any Note). 2.8. OPTIONAL PREPAYMENTS AND CONVERSIONS OR CONTINUATIONS OF LOANS. Subject to Section 4.4 hereof, the Company shall have the right to prepay Loans or to Convert Loans of one Type into Loans of another Type or Continue Loans of one Type as Loans of the same Type, at any time or from time to time, PROVIDED that: (a) the Company shall give the Administrative Agent notice of each such prepayment, Conversion or Continuation as provided in Section 4.5 hereof (and, upon the date specified in any such notice of prepayment, the amount to be prepaid shall become due and payable hereunder); and (b) any prepayment or Conversion of LIBOR Loans on any day other than the last day of an Interest Period for such Loans shall be subject to the payment of any compensation payable pursuant to Section 5.5 hereof. Notwithstanding the foregoing, and without limiting the rights and remedies of the Lenders under Section 10 hereof, in the event that any Event of Default shall have occurred and be continuing, the Administrative Agent may (and at the request of the Required Lenders shall) suspend the right of the Company to Convert any Loan into a LIBOR Loan, or to make or Continue any Loan as a LIBOR Loan, in which event all Loans shall be Converted (on the last day(s) of the respective Interest Periods therefor) or made or Continued, as the case may be, as Prime Rate Loans. Section 3. PAYMENTS OF PRINCIPAL AND INTEREST. 3.1. REPAYMENT OF LOANS. The Company hereby promises to pay to the Administrative Agent for account of each Lender the entire outstanding principal amount of such Lender's Revolving Credit Loans, and each Revolving Credit Loan shall mature, on the Revolving Credit Commitment Termination Date. 3.2. INTEREST. The Company hereby promises to pay to the Administrative Agent for account of each Lender interest on the unpaid principal amount of each Revolving Credit Loan made by such Lender for the period from and including the date of such Loan to but excluding the date such Revolving Credit Loan shall he paid in full, at the following rates per annum: - 22 - (a) if such Loan is outstanding as a Prime Rate Loan, the Prime Rate (as in effect from time to time) PLUS the Applicable Margin; and (b) if such Loan is outstanding as a LIBOR Loan, for each Interest Period relating thereto, the Adjusted LIBO Rate for such Loan for such Interest Period PLUS the Applicable Margin. During any period when an Event of Default shall have occurred and be continuing and upon notice from the Administrative Agent (provided either in its discretion or at the request of the Required Lenders) of an election to charge interest at the applicable Post-Default Rate, the Company hereby promises to pay to the Administrative Agent for account of each Lender interest at the applicable Post-Default Rate on (i) each Loan and (ii) any amount owing hereunder (other than overdue principal of a Loan) that is not paid when due (whether at stated maturity, by acceleration, by mandatory or voluntary prepayment or otherwise). Accrued interest on each Loan shall be payable in arrears (i) in the case of a Prime Rate Loan, quarterly on the Quarterly Dates, (ii) in the case of a LIBOR Loan, on the last day of each Interest Period therefor and, if such Interest Period is longer than three months, at three-month intervals following the first day of such Interest Period, and (iii) in the case of any Loan, upon the payment or prepayment thereof or the Conversion of such Loan to a Loan of another Type (but only on the principal amount so paid, prepaid or Converted), except that interest payable at the Post-Default Rate shall be payable from time to time on demand. Promptly after the determination of any interest rate provided for herein or any change therein, the Administrative Agent shall give notice thereof to the Lenders to which such interest is payable and to the Company. Section 4. PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS; ETC. 4.1. PAYMENTS. (a) Except to the extent otherwise provided in this Agreement, all payments of principal, interest, and other amounts to be made by the Company under this Agreement and the Notes, and, except to the extent otherwise provided therein, all payments to be made by the Obligors under any other Loan Document, shall be made in Dollars, in immediately available funds, without deduction, set-off or counterclaim, to the Administrative Agent at account number 58386988 maintained by the Company with the Administrative Agent, or at any other account designated in writing by the Administrative Agent, at the Principal Office, not later than 1:00 p.m. Boston, Massachusetts time on the date on which such payment shall become due (each such payment made after such time on such due date to be deemed to have been made on the next succeeding Business Day). The Obligors authorize the Administrative Agent to debit such account for all such payments. - 23 - (b) If any such payment owing to any Lender is not made when due (beyond any applicable grace period), such Lender may (but shall not be obligated to) debit the amount of any such payment to any ordinary deposit account of the Company with such Lender (with notice to the Company and the Administrative Agent). (c) The Company shall, at the time of making each payment under this Agreement or any Note for account of any Lender, subject to Section 4.2 specify to the Administrative Agent (which shall so notify the intended recipient(s) thereof) the amount payable on the Loans, or other amounts payable by the Company hereunder to which such payment is to be applied (and in the event that the Company fails to so specify, or if an Event of Default has occurred and is continuing, the Administrative Agent may distribute such payment to the Lenders for application in such manner as it, subject to Section 4.2 hereof, may determine to be appropriate). (d) Each payment received by the Administrative Agent under this Agreement or any Note for account of any Lender shall be paid by the Administrative Agent promptly to such Lender, in immediately available funds, for account of such Lender's Applicable Lending Office for the Loan or other obligation in respect of which such payment is made. (e) If the due date of any payment under this Agreement or any Note would otherwise fall on a day that is not a Business Day, such date shall be extended to the next succeeding Business Day, and interest shall be payable for any principal so extended for the period of such extension. (f) Any payment of principal or interest on the Loans not paid within ten (10) days after the date such payment is due shall be subject to a late charge equal to five percent (5%) of the amount overdue. (g) All payments by the Company hereunder and under any of the other Loan Documents shall be made without recoupment, setoff or counterclaim and free and clear of and without deduction for any taxes, levies, imposts, duties, charges, fees, deductions, withholdings, compulsory loans, restrictions or conditions of any nature now or hereafter imposed or levied by any jurisdiction or any political subdivision thereof or taxing or other authority therein unless the Company is compelled by law to make such deduction or withholding. If any such obligation is imposed upon the Company with respect to any amount payable by it hereunder or under any of the other Loan Documents, the Company will pay to the Administrative Agent, for the account of the Lenders or (as the case may be) the Administrative Agent, on the date on which such amount is due and payable hereunder or under such other Loan Document, such additional amount in Dollars as shall be necessary to enable the Lenders or - 24 - the Administrative Agent to receive the same net amount which the Lenders or the Administrative Agent would have received on such due date had no such obligation been imposed upon the Company. The Company will deliver promptly to the Administrative Agent certificates or other valid vouchers for all taxes or other charges deducted from or paid with respect to payments made by the Company hereunder or under such other Loan Document. 4.2. PRO RATA TREATMENT. Except to the extent otherwise provided herein: (a) each borrowing of Loans from the Lenders under Section 2.1 hereof shall be made from the Lenders, each payment of facility fee under Section 2.4 hereof in respect of Commitments shall be made for account of the Lenders, and each termination or reduction of the amount of the Commitments under Section 2.3 hereof shall be applied to the respective Commitments of the Lenders, pro rata according to the amounts of their respective Commitments; (b) except as otherwise provided in Section 5.4 hereof, LIBOR Loans having the same Interest Period shall be allocated pro rata among the Lenders according to the amounts of their respective Revolving Credit Commitments (in the case of the making of Loans) or their respective Revolving Credit Loans (in the case of Conversions and Continuations of Loans); (c) each payment or prepayment of principal of Revolving Credit Loans by the Company shall be made for account of the Lenders pro rata in accordance with the respective unpaid principal amounts of the Loans held by them; and (d) each payment of interest on Revolving Credit Loans by the Company shall be made for account of the Lenders pro rata in accordance with the amounts of interest on such Loans then due and payable to the respective Lenders. 4.3. COMPUTATIONS. Interest on Loans and facility fees shall be computed on the basis of a year of 360 days and actual days elapsed, including the first day but excluding the last day occurring in the period for which payable. 4.4. MINIMUM AMOUNTS. Except for Conversions or prepayments made pursuant to Section 5.4 hereof, each borrowing, Conversion and partial prepayment of principal of Loans shall be in an aggregate amount equal to $5,000,000 or an integral multiple of $1,000,000 in excess thereof (borrowings, Conversions or prepayments of or into Loans of different Types or, in the case of LIBOR Loans, having different Interest Periods at the same time hereunder to be - 25 - deemed separate borrowings, Conversions and prepayments for purposes of the foregoing, one for each Type or Interest Period). 4.5. CERTAIN NOTICES. Notices by the Company to the Administrative Agent of terminations or reductions of the Commitments, of borrowings, Conversions, Continuations and optional prepayments of Loans, and of Types of Loans and of the duration of Interest Periods shall be irrevocable and shall be effective only if received by the Administrative Agent not later than 10:00 a.m. Boston, Massachusetts time (or, in respect of borrowings to be made on the Closing Date, not later than 4:00 p.m. Boston, Massachusetts time) on the number of Business Days prior to the date of the relevant termination, reduction, borrowing, Conversion, Continuation or prepayment or the first day of such Interest Period specified below:

Number of Business Notice Days Prior ------ ---------- Termination or reduction of Commitments 3 Borrowing or prepayment of, or Conversion into, Prime Rate Loans 1 Borrowing or prepayment of, Conversions into, Continuations as, or duration of Interest Period for, LIBOR Loans 3

A notice of borrowing, Conversion, or Continuation may be given at any time when the sum of the aggregate outstanding Loans and the aggregate requested Loans exceeds the lesser of the aggregate availabilities or the aggregate Commitments; PROVIDED, HOWEVER, that Loans outstanding shall never exceed the lesser of the aggregate availability or the aggregate Commitments. Each such notice of termination or reduction shall specify the amount of the Commitments to be terminated or reduced. Each such notice of borrowing, Conversion, Continuation or optional prepayment shall specify the amount to be borrowed, Converted, Continued or prepaid (subject to Section 4.4 hereof) and Type of each Loan to be borrowed, Converted, Continued or prepaid and the date of borrowing, Conversion, Continuation or optional prepayment (which shall be a Business Day), and shall be in the form, as applicable, of either EXHIBIT G hereto (for each notice of borrowing), EXHIBIT H hereto (for each notice of Conversion or Continuation), or EXHIBIT I hereto (for each notice of prepayment). Each such notice of the duration of an Interest Period shall specify the Loans to which such Interest Period is to relate. The Administrative Agent shall promptly notify the Lenders of the contents of each such notice. In the event that the Company fails to select a Type of Loan, or the duration of any Interest Period for any LIBOR Loan, within the time period and otherwise as provided in this - 26 - Section 4.5, such Loan: (i) if then outstanding as a LIBOR Loan, will be automatically Converted into a Prime Rate Loan; or (ii) if not then outstanding, will be made as, a Prime Rate Loan. 4.6. NON-RECEIPT OF FUNDS BY THE ADMINISTRATIVE AGENT; DELINQUENT LENDERS. (a) Unless the Administrative Agent shall have been notified by a Lender or the Company (the "PAYOR") prior to the date on which the Payor is to make payment to the Administrative Agent of (in the case of a Lender) the proceeds of a Loan to be made by such Lender hereunder or (in the case of the Company) a payment to the Administrative Agent for account of one or more of the Lenders hereunder (such payment being herein called the "REQUIRED PAYMENT"), which notice shall be effective upon receipt, that the Payor does not intend to make the Required Payment to the Administrative Agent, the Administrative Agent may assume that the Required Payment has been made and may, in reliance upon such assumption (but shall not he required to), make the amount thereof available to the intended recipient(s) on such date; and, if the Payor has not in fact made the Required Payment to the Administrative Agent and the Administrative Agent has made the payment to the recipient(s), the recipient(s) of such payment shall, on demand, repay to the Administrative Agent the amount so made available together with interest thereon in respect of each day during the period commencing on the date (the "ADVANCE DATE") such amount was so made available by the Administrative Agent until the date the Administrative Agent recovers such amount at a rate per annum equal to the Federal Funds Rate for such day and, if such recipient(s) shall fail promptly to make such payment, the Administrative Agent shall be entitled to recover such amount, on demand, from the Payor, together with interest as aforesaid, PROVIDED that if neither the recipient(s) nor the Payor shall return the Required Payment to the Administrative Agent within three Business Days of the date of the notice from the Administrative Agent, then the Payor and the recipient(s) shall each be obligated to pay interest on the Required Payment as follows: (i) if the Required Payment shall represent a payment to be made by the Company to the Lenders, the Company and the recipient(s) shall each be obligated retroactively to the Advance Date to pay interest in respect of the Required Payment at the Post-Default Rate (without duplication of the obligation of the Company under Section 3.2 hereof to pay interest on the Required Payment at the Post-Default Rate), it being understood that the return by the recipient(s) of the Required Payment to the Administrative Agent shall not limit such obligation of the Company under said Section 3.2 to pay interest at the Post-Default Rate in respect of the Required Payment; and (ii) if the Required Payment shall represent proceeds of a Loan to be made by the Lenders to the Company, the Payor and the Company shall each he obligated retroactively to the Advance Date to pay interest in respect of the - 27 - Required Payment pursuant to Section 3.2 hereof (without duplication of the obligation of the Company under Section 3.2 hereof to pay interest on the Required Payment), it being understood that the return by the Company of the Required Payment to the Administrative Agent shall not limit any claim the Company may have against the Payor in respect of such Required Payment. (b) If for any reason any Lender shall fail or refuse to abide by its obligations under this Loan Agreement, including, without limitation, its obligation to make available to Administrative Agent its share of any Revolving Credit Loans, expenses, or setoff (a "Delinquent Lender"), any non-delinquent Lender shall have the right, but not the obligation, in its respective, sole and absolute discretion, to acquire (x) for no cash consideration (PRO RATA, based on the respective Commitments of those Lenders electing to exercise such right) the Delinquent Lender's Commitment to fund future Revolving Credit Loans; and (y) for consideration equal to the amount of the outstanding Revolving Credit Loans from such Lender (PRO RATA, based on the respective Commitments of those Lenders electing to exercise such right) the Delinquent Lender's rights with respect to outstanding Revolving Credit Loans (the rights purchased under clauses (x) and (y), the "Purchased Rights"), but only if, in the aggregate, all of the Delinquent Lender's rights with respect to outstanding Revolving Credit Loans and Commitments are acquired hereunder by one or more non-delinquent Lender(s). Upon any such purchase of the PRO RATA share of any Delinquent Lender's Purchased Rights, the Delinquent Lender's rights with respect to outstanding Revolving Credit Loans, Commitment, share in future Revolving Credit Loans, and rights under the Loan Documents with respect thereto shall terminate on the day of purchase (other than indemnification rights that survive termination of the Commitments under Section 12.8 hereof and rights to receive accrued but unpaid interest and fees through the date of purchase), and the Delinquent Lender shall promptly execute all documents reasonably requested to surrender and transfer such interests (other than indemnification rights that survive termination of the Commitments under Section 12.8 hereof and rights to receive accrued but unpaid interest and fees through the date of purchase), including, if so requested, a Notice of Assignment (provided that the assignment fee in connection with such Notice of Assignment shall not be charged). 4.7. SHARING OF PAYMENTS, ETC. (a) Each Obligor agrees that, in addition to (and without limitation of) any right of set-off, banker's lien or counterclaim a Lender may otherwise have, each Lender shall be entitled, at its option (to the fullest extent permitted by law), to set off and apply any deposit (general or special, time or demand, provisional or final), or other indebtedness, held by it for the credit or account of such Obligor at any of its offices, in - 28 - Dollars or in any other currency, against any principal of or interest on any of such Lender's Loans, or any other amount payable to such Lender hereunder, that is not paid when due (regardless of whether such deposit or other indebtedness are then due to such Obligor and of the existence or adequacy of any security therefor), in which case it shall promptly notify such Obligor and the Administrative Agent thereof, PROVIDED that such Lender's failure to give such notice shall not affect the validity thereof. (b) If any Lender shall obtain from any Obligor payment of any principal of or interest on any Loan owing to it or payment of any other amount under this Agreement or any other Loan Document through the exercise any right of set-off, banker's lien or counterclaim or similar right or otherwise (other than from the Administrative Agent as provided herein), and, as a result of such payment, such Lender shall have received a greater percentage of the principal of or interest on the Loans or such other amounts then due hereunder or thereunder by such Obligor to such Lender than the percentage received by any other Lender, it shall promptly purchase from such other Lenders participations in (or, if and to the extent specified by such Lender, direct interests in) the Loans or such other amounts, respectively, owing to such other Lenders (or in interest due thereon, as the case may be) in such amounts, and make such other adjustments from time to time as shall be equitable, to the end that all the Lenders shall share the benefit of such excess payment (net of any expenses that may be incurred by such Lender in obtaining or preserving such excess payment) pro rata in accordance with the unpaid principal of and/or interest on the Loans or such other amounts, respectively, owing to each of the Lenders. To such end all the Lenders shall make appropriate adjustments among themselves (by the resale of participations sold or otherwise) if such payment is rescinded or must otherwise be restored. (c) The Company agrees that any Lender so purchasing such a participation (or direct interest) may exercise all rights of set-off, banker's lien, counterclaim or similar rights with respect to such participation as fully as if such Lender were a direct holder of Loans or other amounts (as the case may be) owing to such Lender in the amount of such participation. (d) Nothing contained herein shall require any Lender to exercise any such right or shall affect the right of any Lender to exercise, and retain the benefits of exercising, any such right with respect to any other indebtedness or obligation of any Obligor. If, under any applicable bankruptcy, insolvency or other similar law, any Lender receives a secured claim in lieu of a set-off to which this Section 4.7 applies, such Lender shall, to the extent practicable, exercise its rights in respect of such secured claim in a manner consistent with the rights of the Lenders entitled under - 29 - this Section 4.7 to share in the benefits of any recovery on such secured claim. Section 5. YIELD PROTECTION, ETC. 5.1. ADDITIONAL COSTS. (a) The Company shall pay directly to each Lender from time to time such amounts as such Lender may determine to be necessary to compensate such Lender for any costs that such Lender determines are attributable to its making or maintaining of any LIBOR Loans or its obligation to make any LIBOR Loans hereunder, or any reduction in any amount receivable by such Lender hereunder in respect of any of such Loans or such obligation (such increases in costs and reductions in amounts receivable being herein called "ADDITIONAL COSTS"), resulting from any Regulatory Change that: (i) shall subject any Lender (or its Applicable Lending Office for any of such Loans) to any tax, duty or other charge in respect of such Loans or its Note or changes the basis of taxation of any amounts payable to such Lender under this Agreement or its Note in respect of any of such Loans (excluding any Taxes based on net income or in lieu of net income imposed on such Lender by the jurisdiction in which such Lender has its principal office or its Applicable Lending Office); or (ii) imposes or modifies any reserve, special deposit or similar requirements (other than any thereof, including, without limitation, the Reserve Requirement, utilized in the determination of the Adjusted LIBO Rate or LIBO Rate for such Loan) relating to any extensions of credit or other assets of, or any deposits with or other liabilities of, such Lender (including, without limitation, any of such Loans or any deposits referred to in the definition of "LIBO Rate" in Section 1.1 hereof), or any commitment of such Lender (including, without limitation, the Commitments of such Lender hereunder); or (iii) imposes any other condition affecting this Agreement or its Note (or any of such extensions of credit or liabilities) or its Commitment. If any Lender requests compensation from the Company under this Section 5.1 (a), the Company may, by notice to such Lender (with a copy to the Administrative Agent), suspend the obligation of such Lender thereafter to make or Continue LIBOR Loans, or to Convert Prime Rate Loans into LIBOR Loans, until the Regulatory Change giving rise to such request ceases to be in effect (in which case the provisions of Section 5.4 hereof shall be applicable), PROVIDED that such suspension shall not affect the right of such Lender to receive the compensation so requested. - 30 - (b) Without limiting the effect of the provisions of paragraph (a) of this Section 5.1, in the event that, by reason of any Regulatory Change, any Lender either (i) incurs Additional Costs based on or measured by the excess above a specified level of the amount of a category of deposits or other liabilities of such Lender that includes deposits by reference to which the interest rate on LIBOR Loans is determined as provided in this Agreement or a category of extensions of credit or other assets of such Lender that includes LIBOR Loans or (ii) becomes subject to restrictions on the amount of such a category of liabilities or assets that it may hold, then, if such Lender so elects by notice to the Company (with a copy to the Administrative Agent), the obligation of such Lender to make or Continue, or to Convert Prime Rate Loans into, LIBOR Loans hereunder shall be suspended until such Regulatory Change ceases to be in effect (in which case the provisions of Section 5.4 hereof shall be applicable). (c) Without limiting the effect of the foregoing provisions of this Section 5.1 (but without duplication), the Company shall pay directly to each Lender from time to time on request such amounts as such Lender may determine to be necessary to compensate such Lender (or, without duplication, the bank holding company of which such Lender is a subsidiary) for any costs that it determines are attributable to the maintenance by such Lender (or any Applicable Lending Office or such bank holding company), pursuant to any law or regulation or any interpretation, directive or request (whether or not having the force of law and whether or not failure to comply therewith would be unlawful) of any court or governmental or monetary authority (i) following any Regulatory Change or (ii) implementing any risk-based capital guideline or other requirement (whether or not having the force of law and whether or not the failure to comply therewith would be unlawful) hereafter issued by any government or governmental or supervisory authority implementing at the national level the Basle Accord, of capital in respect of its Commitments or Loans (such compensation to include, without limitation, an amount equal to any reduction of the rate of return on assets or equity of such Lender (or any Applicable Lending Office or such bank holding company) to a level below that which such Lender (or any Applicable Lending Office or such bank holding company) could have achieved but for such law, regulation, interpretation, directive or request). (d) Each Lender shall notify the Company of any event occurring after the date hereof entitling such Lender to compensation under paragraph (a) or (c) of this Section 5.1 as promptly as practicable, but in any event within 45 days, after such Lender obtains actual knowledge thereof; PROVIDED that if (i) any Lender fails to give such notice within 45 days after it obtains actual knowledge of such an event, such Lender shall, with respect to compensation payable pursuant to this - 31 - Section 5.1 in respect of any costs resulting from such event, only be entitled to payment under this Section 5.1 for costs incurred from and after the date 45 days prior to the date that such Lender does give such notice and (ii) each Lender will designate a different Applicable Lending Office for the Loans of such Lender affected by such event if such designation will avoid the need for, or reduce the amount of, such compensation and will not, in the reasonable opinion of such Lender, be disadvantageous to such Lender (including, without limitation, by reason of any economic, legal or regulatory cost or disadvantage that such Lender may bear or suffer by reason of such designation). Each Lender will furnish to the Company a certificate setting forth in reasonable detail the basis and amount of each request by such Lender for compensation under paragraph (a) or (c) of this Section 5.1. Determinations and allocations by any Lender for purposes of this Section 5.1 of the effect of any Regulatory Change pursuant to paragraph (a) or (b) of this Section 5.1, or of the effect of capital maintained pursuant to paragraph (c) of this Section 5.1, on its costs or rate of return of maintaining Loans or its obligation to make Loans, or on amounts receivable by it in respect of Loans, and of the amounts required to compensate such Lender under this Section 5.1, shall be conclusive, PROVIDED that such determinations and allocations are made on a reasonable basis. 5.2. LIMITATION ON TYPES OF LOANS. Anything herein to the contrary notwithstanding, if, on or prior to the determination of any LIBO Rate for any Interest Period: (a) the Administrative Agent determines, which determination shall be conclusive, that quotations of interest rates for the relevant deposits referred to in the definition of "LIBO Rate" in Section 1.1 hereof are not being provided in the relevant amounts or for the relevant maturities for purposes of determining rates of interest for LIBOR Loans as provided herein; or (b) the Required Lenders determine which determination shall be conclusive, and notify (or notifies, as the case may be) the Administrative Agent that the relevant rates of interest referred to in the definition of "LIBO Rate" in Section 1.1 hereof upon the basis of which the rate of interest for LIBOR Loans for such Interest Period is to be determined do not adequately and fairly reflect the cost to such Lenders of making or maintaining LIBOR Loans for such Interest Period; then the Administrative Agent shall give the Company and each Lender prompt notice thereof and, so long as such condition remains in effect, the Lenders shall be under no obligation to make additional LIBOR Loans, to Continue LIBOR Loans or to Convert Prime Rate Loans into LIBOR Loans, and the Company shall, on the last day(s) of the then current Interest Period(s) for the outstanding LIBOR Loans, either prepay such Loans or Convert such Loans into Prime Rate Loans in accordance with Section 2.8 hereof. - 32 - 5.3. ILLEGALITY. Notwithstanding any other provision of this Agreement, in the event that it becomes unlawful for any Lender or its Applicable Lending Office to honor its obligation to make or maintain LIBOR Loans hereunder (and, in the sole opinion of such Lender, the designation of a different Applicable Lending Office would either not avoid such unlawfulness or would be disadvantageous to such Lender), then such Lender shall promptly notify the Company thereof (with a copy to the Administrative Agent) and such Lender's obligation to make or Continue, or to Convert Loans of any other Type into, LIBOR Loans shall be suspended until such time as such Lender may again make and maintain LIBOR Loans (in which case the provisions of Section 5.4 hereof shall be applicable). 5.4. TREATMENT OF AFFECTED LOANS. If the obligation of any Lender to make LIBOR Loans or to Continue, or to Convert Prime Rate Loans into, LIBOR Loans shall be suspended pursuant to Section 5.1 or 5.3 hereof, such Lender's LIBOR Loans shall be automatically Converted into Prime Rate Loans on the last day(s) of the then current Interest Period(s) for LIBOR Loans (or, in the case of a Conversion required by Section 5.1 (b) or 5.3 hereof, on such earlier date as is required pursuant to applicable law or regulation and as such Lender may specify to the Company with a copy to the Administrative Agent) and, unless and until such Lender gives notice as provided below that the circumstances specified in Section 5.1 or 5.3 hereof that gave rise to such Conversion no longer exist: (a) to the extent that such Lender's LIBOR Loans have been so Converted, all payments and prepayments of principal that would otherwise be applied to such Lender's LIBOR Loans shall be applied instead to its Prime Rate Loans; and (b) all Loans that would otherwise be made or Continued by such Lender as LIBOR Loans shall be made or Continued instead as Prime Rate Loans, and all Prime Rate Loans of such Lender that would otherwise be Converted into LIBOR Loans shall remain as Prime Rate Loans. If such Lender gives notice to the Company with a copy to the Administrative Agent that the circumstances specified in Section 5.1 or 5.3 hereof that gave rise to the Conversion of such Lender's LIBOR Loans pursuant to this Section 5.4 no longer exist (which such Lender agrees to do promptly upon such circumstances ceasing to exist) at a time when LIBOR Loans made by other Lenders are outstanding, such Lender's Prime Rate Loans shall be automatically Converted, on the first day(s) of the next succeeding Interest Period(s) for such outstanding LIBOR Loans, to the extent necessary so that, after giving effect thereto, all Loans held by the Lenders holding LIBOR Loans and by such Lender are held pro rata (as to principal amounts, Types and Interest Periods) in accordance with their respective Commitments. 5.5. COMPENSATION. The Company shall pay to the Administrative Agent for account of each Lender, upon the request of such Lender through the Administrative Agent, such amount or amounts as shall be sufficient (in the reasonable opinion of such Lender) to compensate it for any loss, cost or expense that such Lender determines is attributable to: - 33 - (a) any payment, mandatory or optional prepayment or Conversion of a LIBOR Loan made by such Lender for any reason (including, without limitation, the acceleration of the Loans pursuant to Section 10 hereof) on a date other than the last day of the Interest Period for such Loan; or (b) any failure by the Company for any reason (including, without limitation, the failure of any of the conditions precedent specified in Section 7 hereof to be satisfied) to borrow, Continue or Convert a LIBOR Loan from such Lender on the date for such borrowing, Continuation or Conversion specified in the relevant notice given pursuant to Sections 2.2 and 4.5 hereof. Without limiting the effect of the preceding sentence, such compensation shall, if so requested, include an amount equal to the product of: (a) the amount so paid, prepaid, Converted or not borrowed times (b) the excess of (i) the rate of interest that otherwise would have accrued on the principal amount so paid, prepaid, Converted or not borrowed for the period from the date of such payment, prepayment, Conversion or failure to borrow to the last day of the then current Interest Period for such Loan (or, in the case of a failure to borrow, the Interest Period for such Loan that would have commenced on the date specified for such borrowing) at the applicable rate of interest for such Loan provided for herein (excluding, however, any Applicable Margin included therein) less (ii) the rate of interest that otherwise would have accrued on such principal amount at a rate per annum equal to the interest component of the amount such Lender would have bid in the London interbank market (for Dollar deposits of leading banks in amounts comparable to such principal amount and with maturities comparable to such period (as reasonably determined by such Lender), which product shall be multiplied by a fraction the numerator of which is the number of days from the date of such occurrence to the last day of the applicable Interest Period and the denominator of which is 360 days. 5.6. RATE SELECTION. If the Company has provided a notice of borrowing under Section 4.5 hereof and any Lender determines (which determination shall be conclusive and binding on the Company) that: (a) deposits of the necessary amount for the selected Interest Period are not available to such Lender in either the London interbank market or the market for Federal funds transactions or, by reason of circumstances affecting such markets, adequate and reasonable means do not exist for ascertaining the LIBO Rate or the Federal Funds Rate for such Interest Period; or (b) the LIBO Rate or the Federal Funds Rate, as applicable, will not adequately and fairly reflect the cost to such Lender of making or funding a Loan for such Interest Period; or (c) the making or funding of Loans has become impracticable as a result of any event occurring after the date of this - 34 - Agreement which, in the opinion of such Lender, materially and adversely affects such Loans or the London interbank market or the market for Federal funds transactions; then such Lender shall notify the Company of this condition and of the rate that the Lender has selected to apply to such Loan pursuant to the following sentence, provided, however, that the Company shall have the opportunity to withdraw such notice of borrowing prior to the making of the Loan on the date specified in the notice. If, after such notice from the Lender, the Company does not withdraw such notice of borrowing prior to the making of the Loan, then any notice of borrowing shall be deemed to be a notice to request a borrowing of such Loan at such higher rate per annum, if any, which in such Lender's opinion will adequately fairly compensate such Lender for the cost to such Lender of making or funding such Loan plus the Applicable Margin under this Agreement; or if such Lender determines that no such rate exists, then such Lender shall promptly notify the Agent and shall not be obligated to fund the Loan. Section 6. GUARANTEE. 6.1. GUARANTEE. The Subsidiary Guarantors hereby jointly and severally guarantee to each Lender and each Agent and their respective successors and assigns the prompt payment in full when due (whether at stated maturity, by acceleration or otherwise) of the principal of and interest on the Loans made by the Lenders to, and the Notes held by each Lender of, the Company and all other amounts from time to time owing to the Lenders or any Agent by the Company under this Agreement and under the Notes and by any Obligor under any of the other Loan Documents, in each case strictly in accordance with the terms thereof (such obligations being herein collectively called the "GUARANTEED OBLIGATIONS"). The Subsidiary Guarantors hereby further jointly and severally agree that if the Company shall fail to pay in full when due (whether at stated maturity, by acceleration or otherwise) any of the Guaranteed Obligations, the Subsidiary Guarantors will promptly pay the same, without any demand or notice whatsoever, and that in the case of any extension of time of payment or renewal of any of the Guaranteed Obligations, the same will be promptly paid in full when due (whether at extended maturity, by acceleration or otherw