EXHIBIT 10.28
(WITH CERTAIN CONFIDENTIAL INFORMATION DELETED AND MARKED WITH BRACKETED
ASTERISKS)
CREDIT AGREEMENT
BETWEEN
VERTEX PHARMACEUTICALS INCORPORATED
AND
FLEET NATIONAL BANK
DATED AS OF DECEMBER 21, 1999
TABLE OF CONTENTS
ARTICLE 1. - DEFINITIONS
1.1 Defined Terms
1.2 Accounting Terms
ARTICLE 2. - LOANS
2.1 Term Loan Commitment
2.2 Term Loan Borrowing Request
2.3 Term Loan Prepayment
2.4 Term Note and Records
2.5 Term Loan Proceeds
2.6 Reduction or Termination of Term Loan Commitment
2.7 Facility Fee.
2.8 Debit of Accounts.
ARTICLE 3. - REPRESENTATIONS AND WARRANTIES
3.1 Financial Condition
3.2 Organization, Existence, Good Standing
3.3 Subsidiaries; Capitalization
3.4 Power and Authority
3.5 Legal, Valid, Binding Obligation
3.6 Consents
3.7 No Legal Bar
3.8 No Litigation
3.9 No Default
3.10 Assets, No Liens;
3.11 No Burdensome Restrictions
3.12 Taxes
3.13 Regulation U, Etc.
3.14 ERISA
3.15 Investment Company Act, Etc.
3.16 Indebtedness
3.17 Contingent Liabilities
3.18 Chief Place of Business; Locations of Books and Records; Locations
of Assets
3.19 Laws Including Environmental and Safety Matters
3.20 Intellectual Property
3.21 Negative Pledges
3.22 Full Disclosure
ARTICLE 4. - AFFIRMATIVE COVENANTS
4.1 Financial Statements and Other Documents
4.2 Existence; Compliance with Laws; Etc.
4.3 Maintain Property
4.4 Insurance
4.5 Notice of Material Events
4.6 Deposit Accounts
ARTICLE 5. - NEGATIVE COVENANTS
5.1 Indebtedness
5.2 Contingent Liabilities
5.3 Limitation on Liens
5.4 Mergers; Dissolution; Disposals or Acquisitions
5.5 Investments and Loans
5.6 Dividends
5.7 Transactions with Affiliates
5.8 Negative Pledge
5.9 Minimum Liquidity Ratio
5.10 Minimum Tangible Capital Base Ratio
5.11 Minimum Debt Service Test/Minimum Cash and Cash Equivalents
5.12 Lines of Business
ARTICLE 6. - CONDITIONS PRECEDENT
6.1 Conditions of Initial Extension of Credit
6.2 Conditions of All Loans
ARTICLE 7. - EVENTS OF DEFAULT
7.1 Events of Default
7.2 Lender's Remedies
7.3 Cross Default
7.4 Setoff
ARTICLE 8. - MISCELLANEOUS
8.1 Notices
8.2 No Waiver of Rights
8.3 Obligations Absolute; Cumulative Remedies
8.4 Successors
8.5 Participants
8.6 Governing Law
8.7 Submission to Jurisdiction; Waiver of Trial by Jury.
8.8 Complete Agreement, Amendments
8.9 Expenses
8.10 Indemnification
8.11 Survival of Agreements
8.12 Severability
8.13 Descriptive Headings
8.14 Counterparts
8.15 Pledge to Federal Reserve
8.16 Lost Note
SCHEDULES AND EXHIBITS
Schedule 1 (Definitions)
Schedule 3.1 (Financial Statements of Borrower)
Schedule 3.3 (Subsidiaries and Investments/ +5% Shareholders)
Schedule 3.6 (Consents and Approvals)
Schedule 3.8 (Litigation)
Schedule 3.11 (Burdensome Restrictions)
Schedule 3.18 (Location of Assets)
Schedule 3.20 (Intellectual Property Disclosure)
Schedule 3.21 (Existing Negative pledges)
Schedule 5.1 (Disclosed Indebtedness)
Schedule 5.2 (Disclosed Contingent Liabilities)
Schedule 5.3 (Disclosed Liens)
Schedule 5.5 (Investment policy)
Exhibit A - TERM NOTE
Exhibit B - Compliance Certificate
EXHIBIT C - PLEDGE AGREEMENT
CREDIT AGREEMENT
CREDIT AGREEMENT dated as of December 21, 1999 between VERTEX
PHARMACEUTICALS INCORPORATED, a Massachusetts corporation ("Borrower"), and
FLEET NATIONAL BANK, a national banking association ("Lender").
WHEREAS, Borrower has requested that Lender provide it with a term loan
facility;
WHEREAS, Lender is willing, on the terms and subject to the conditions
in this Agreement, to make such a credit facility available to Borrower;
NOW, THEREFORE, in consideration of the mutual promises contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are acknowledged, Lender and Borrower agree as follows:
ARTICLE 1. - DEFINITIONS
1.1 DEFINED TERMS. Unless otherwise defined herein, the capitalized
terms, as used in this Agreement, shall have the meanings as set forth on
SCHEDULE 1 hereto.
1.2 ACCOUNTING TERMS. All accounting terms not specifically defined
herein shall be interpreted and all financial statements and reports as to
financial matters required to be delivered to Lender hereunder shall be prepared
in accordance with GAAP consistently applied with those used in the preparation
of the audited and quarterly financial statements furnished to Lender in
connection with the initial Loans issued on the Initial Borrowing Date.
ARTICLE 2. - TERM LOANS
2.1 TERM LOAN COMMITMENT. Subject to the terms and conditions hereof,
Lender agrees to make the Term Loans to the Borrower from time to time during
the Term Loan Commitment Period, provided, however, that, except as provided in
the Term Note, each Term Loan request shall be in a minimum amount of $250,000
and shall not exceed the Purchased Equipment Cost. Not more than one such Term
Loan request shall be made in each calendar quarter (except for any Term Loan
request that equals or exceeds $500,000), and the aggregate principal amount of
all Term Loans shall not exceed the Term Loan Limit.
2.2 TERM LOAN BORROWING REQUEST. Subject to the terms and conditions
hereof and the Term Note, Borrower may borrow under the Term Loan Commitment
during the Term Loan Commitment Period on any Business Day. Borrower may request
Term Loans from time to time by submitting irrevocable Loan requests in such
form and manner as Lender may require or permit signed by an Authorized
Representative of Borrower, specifying the amount to be borrowed, the requested
Borrowing Date and, if such Term Loan is to be made after the Initial Borrowing
Date, together with a completed Notice of Selection (as defined in the Term
Note), and copies of invoices and such information Lender may reasonably request
concerning the Purchased Equipment or Build-Out Fees, as the case may be, for
which invoices are being submitted for reimbursement with the proceeds of such
Term Loan. Except as otherwise agreed
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by Lender, the proceeds of all Term Loans will be made available to Borrower by
Lender by crediting Borrower's deposit account(s) with Lender.
2.3 TERM LOAN PREPAYMENT. Amounts borrowed as Term Loans which are paid
or prepaid by the Borrower may not be reborrowed. Term Loans may be prepaid to
the extent and in the manner permitted under the Term Note.
2.4 TERM NOTE AND RECORDS. The Term Loans shall be evidenced by the
Term Note and shall bear interest and be payable as set forth therein. Lender
shall maintain records of each (i) Term Loan and (ii) payments of principal
balance of Term Loans. The Lender's records shall constitute PRIMA FACIE
evidence of the accuracy of the information recorded therein and in the event
that Borrower fails to object, within thirty (30) days of receipt of Lender's
periodic reports to Borrower with respect to Term Loans, the information in such
reports shall be conclusive and binding as against Borrower; PROVIDED, HOWEVER,
that any failure by Lender to maintain such records or furnish such reports
shall not affect the obligations of Borrower under the Note or this Agreement.
2.5 TERM LOAN PROCEEDS. Borrower shall use the proceeds of the Term
Loans to acquire Purchased Equipment and to pay Build-Out Fees (in each case, in
compliance with all applicable legal and regulatory requirements, including,
without limitation, Regulations U and X and the Securities Act of 1933 and the
Securities Exchange Act of 1934); PROVIDED that Lender shall have no
responsibility as to the use of any of such proceeds.
2.6 REDUCTION OR TERMINATION OF TERM LOAN COMMITMENT.
(a) The Borrower may permanently reduce, from time to time, the Term
Loan Limit by giving Lender not less than ten (10) Business Days prior notice
and prior to the reduction date prepay the Term Loans to the extent the
outstanding amount of the Term Loans exceed the reduced Term Loan Limit,
provided, however, that, (i) each such reduction shall be an amount that is at
least $500,000 or any greater multiple thereof, and (ii) no reduction shall be
effective if the amount of the Term Loans as of the proposed reduction date
exceeds the amount of the proposed reduced Term Loan Limit.
(b) To terminate the Term Loan Commitment, Borrower shall give Lender
not less than ten (10) Business Days prior notice and on the termination date
prepay in full all Term Loans together with accrued interest, fees, and charges
thereon to the date of prepayment, including, without limitation, any loss, cost
or expense including yield maintenance fees (as defined in the Note) due
hereunder or under the Note. As set forth in Article 7, the Term Loan Commitment
may be terminated by Lender or shall terminate automatically as set forth
therein.
2.7 FACILITY FEE. Borrower shall pay to Lender a Term Loan facility fee
as provided in the facility fee letter between Borrower and Lender dated as of
December 21, 1999, which facility fee shall be fully earned and paid on the date
hereof.
2.8 DEBIT OF ACCOUNTS. Lender may, at its election, without any
obligation on the part of the Lender, effect payment of all amounts due, or any
portion thereof, from Borrower under
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this Agreement, the Note or the other Loan Documents, by debiting from time to
time any of the Borrower's deposit or other accounts maintained at the Lender.
ARTICLE 3. - REPRESENTATIONS AND WARRANTIES
In order to induce Lender to enter into this Agreement and to make the
Loans, Borrower represents and warrants to Lender, except as otherwise set forth
in a schedule attached hereto and made a part hereof, that:
3.1 FINANCIAL CONDITION. The financial statements previously delivered
to Lender and listed on SCHEDULE 3.1 present fairly the Consolidated financial
position of Borrower and its Subsidiaries as of the dates thereof and its and
their results of operations, shareholders' equity and cash flows for the periods
then ended. All such financial statements and information, including any related
schedules and notes, and any other financial information or statements furnished
in accordance herewith, have been prepared in accordance with GAAP, subject only
in the case of unaudited interim financial statements to normal year-end audit
adjustments and the absence of footnotes. In the case of each Loan, the
representations and warranties in this Section shall be deemed to have been made
in respect of the then most recent financial statements of Borrower furnished to
Lender pursuant to Section 4.1.
3.2 ORGANIZATION, EXISTENCE, GOOD STANDING. Each of Borrower and VSC:
(i) is duly organized, validly existing and in good standing as a corporation
under the laws of the Commonwealth of Massachusetts (ii) has obtained all
licenses, permits, approvals and consents and has filed all registrations
necessary for the lawful operation of its business, (iii) has the corporate
power and authority and the legal right to own, lease and operate its property
and to conduct the business in which it is currently engaged, and (iv) is duly
qualified to do business and is licensed and in good standing as a foreign
corporation under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such
qualification, except where the failure to be so qualified would not have a
Material Adverse Effect.
3.3 SUBSIDIARIES; CAPITALIZATION. Except as set forth on SCHEDULE 3.3,
Borrower has no Subsidiaries, Investments or Joint Ventures in or with any other
Person. As of the date hereof, except as set forth on SCHEDULE 3.3, no other
Person owns beneficially or of record more than fifty percent (50%) of the
issued and outstanding voting common stock of the Borrower and, to Borrower's
knowledge, no other Person owns beneficially or of record more than five percent
(5%) of the issued and outstanding voting common stock of the Borrower. Borrower
owns all of the issued and outstanding shares of capital stock or other equity
securities of VSC.
3.4 POWER AND AUTHORITY. Borrower has (i) full corporate power,
authority and legal right to execute, deliver and perform its obligations under
the Loan Documents to which it is a party and to borrow hereunder, (ii) taken
all necessary actions to authorize the execution, delivery and performance by it
of each Loan Document to which it is a party and to authorize its borrowings
hereunder, and (iii) caused to be duly executed and delivered on behalf of the
Borrower each of the Loan Documents to which Borrower is a party.
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3.5 LEGAL, VALID, BINDING OBLIGATION. Each of the Loan Documents and
each agreement, certificate, document, instrument or other paper delivered
pursuant thereto, to which Borrower is a party, constitutes the legal, valid,
and binding obligation of Borrower enforceable against Borrower in accordance
with its terms.
3.6 CONSENTS. No consent, permit, license, approval, authorization or
other action of, or registration, declaration or filing with or notice to, any
governmental authority, bureau or agency or any other Person is required in
connection with the execution, delivery or performance by Borrower, or the
validity or enforceability against Borrower, of any Loan Document to which it is
a party, except for the consents and approvals set forth on SCHEDULE 3.6, all of
which have been obtained.
3.7 NO LEGAL BAR. The execution, delivery and performance by Borrower
of the Loan Documents, and each agreement, certificate, document, instrument or
other paper delivered pursuant thereto, to which Borrower is a party, does not
and will not conflict with or cause a breach of any provision of any existing
law, rule or regulation, order, judgment, award or decree of any court,
arbitrator or governmental authority, bureau or agency, or of the Articles of
Organization or Bylaws of, or any security issued by, Borrower or VSC, as the
case may be, or of any material mortgage, deed of trust, indenture, lease,
contract or other agreement or undertaking to which Borrower or VSC, as the case
may be, is a party or by which any of the properties or VSC, as the case may be,
may be bound, and will not result in the creation or imposition of any Lien on
any of its revenues or properties, except in favor of Lender.
3.8 NO LITIGATION. Except as set forth on SCHEDULE 3.8, no litigation,
investigation or other proceeding of or before any court, arbitrator or
governmental authority is currently pending nor, to the knowledge of Borrower,
threatened against Borrower, any of its Subsidiaries or its properties which, if
adversely determined, could reasonably be expected to have a Material Adverse
Effect.
3.9 NO DEFAULT. Neither Borrower nor any of its Subsidiaries is in
default in any respect in the payment or performance of any of its obligations
for monies borrowed or under any material mortgage, deed of trust, indenture,
lease, contract or other agreement or undertaking to which it is a party or by
which it or any of its property may be bound or affected and no Default or Event
of Default has occurred and is continuing. Neither Borrower nor any of its
Subsidiaries is in default under any order, award or decree of any court,
arbitrator or governmental authority binding upon or affecting it or by which
any of its property may be bound or affected, and no such order, award or decree
has or could reasonably be expected to have a Material Adverse Effect.
3.10 ASSETS, NO LIENS. Borrower and each of its Subsidiaries has good
and marketable title to, or valid leasehold interest in, all of its real
property and good title to all its personal property, including assets carried
on its books and reflected in the financial statements furnished to Lender
herewith, subject to no Liens except for (i) Liens permitted under Section 5.3
hereof, or (ii) inventory sold or otherwise disposed of in the ordinary course
of its business.
3.11 NO BURDENSOME RESTRICTIONS. Except as set forth in SCHEDULE 3.11,
neither
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Borrower nor any of its Subsidiaries is a party to or bound by any contract,
agreement or instrument or subject to any corporate restriction (including any
restriction set forth in its charter or Bylaws) or subject to any legal
requirement or restriction that would have a Material Adverse Effect.
3.12 TAXES. All federal, state, local and other tax reports and returns
which are required to be filed by Borrower and its Subsidiaries have been filed,
except where extensions have been properly obtained, and Borrower and its
Subsidiaries have paid or made adequate provision for all taxes, interest and
penalties shown to be due and payable on such returns or on any assessments made
against it or any of its property and all other taxes, fees or other charges
imposed on it or any of its property by any governmental authority, including,
without limitation, all payroll withholding taxes, have been paid and no tax
liens have been filed and no claims are being asserted with respect to any such
taxes, fees or other charges.
3.13 REGULATION U, ETC. Neither Borrower nor any of its Subsidiaries is
engaged or will engage, principally or as one of its important activities, in
the business of extending credit for the purpose of "purchasing" or "carrying"
any "margin stock" (within the respective meanings of each of the quoted terms
under Regulations U, T, or X of the Board of Governors of the Federal Reserve
System and any successors thereto as now and from time to time hereafter in
effect), and the proceeds of any Loan hereunder shall not be used for
"purchasing" or "carrying" any "margin stock" as so defined, or for any purpose
which violates, or which would be inconsistent with, the provisions of
Regulation U of the Federal Reserve Board.
3.14 ERISA. The Borrower, all Commonly Controlled Entities, and all
their Plans are and have been in substantial compliance with the provisions of,
to the extent applicable, ERISA, the qualification requirements of IRC Section
401(a), and the published interpretations thereunder. No notice of intent to
terminate any such Plan has been filed under Section 4041 of ERISA, nor has any
such Plan been terminated under Section 4041(e) of ERISA which resulted in
substantial liability to Borrower or any of its Commonly Controlled Entities.
The PBGC has not instituted proceedings to terminate, or appoint a trustee to
administer, any such Plan and no event has occurred or condition exists which
might constitute grounds under Section 4042 of ERISA for the termination of, or
the appointment of a trustee to administer any such Plan. Neither Borrower nor
any Commonly Controlled Entities would be liable for any amount pursuant to
Sections 4063 or 4064 of ERISA if all such Plans terminated as of the most
recent valuation dates of such Plans. Neither Borrower nor any Commonly
Controlled Entities have: withdrawn from a Multiemployer Plan during a plan year
for which it was a substantial employer, as defined in Section 4001(a)(2) of
ERISA; or failed to make a payment to a Plan required under Section 302(f)(1) of
ERISA such that security would have to be provided pursuant to Section 307 of
ERISA. No lien upon the assets of Borrower or any of its Subsidiaries has arisen
with respect to any such Plan. To the best knowledge of Borrower, no Prohibited
Transaction or Reportable Event has occurred with respect to any such Plan.
Borrower and each Commonly Controlled Entity has each made all contributions
required to be made by them to any such Plan or Multiemployer Plan when due.
There is no accumulated funding deficiency in any such Plan, whether or not
waived.
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3.15 INVESTMENT COMPANY ACT, ETC. Neither Borrower nor any of its
Subsidiaries is an "investment company" registered or required to be registered
under the Investment Company Act of 1940, or a company "controlled" (within the
meaning of such Investment Company Act) by such an "investment company". Neither
Borrower nor any of its Subsidiaries is subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act, the Interstate
Commerce Act or to any other federal or state statute or regulation limiting its
ability to incur indebtedness for money borrowed.
3.16 INDEBTEDNESS. Neither Borrower nor any of its Subsidiaries has any
Indebtedness of any type except Indebtedness incurred under this Agreement and
that which is permitted under Section 5.1 of this Agreement. All credit and loan
agreements, indentures, commitments, notes and other agreements, instruments and
documents pursuant to which Borrower or any of it Subsidiaries, as the case may
be, has incurred or has the right to borrow or incur Indebtedness are set forth
on SCHEDULE 5.1.
3.17 CONTINGENT LIABILITIES. Except as set forth in SCHEDULE 5.2,
neither Borrower nor any of its Subsidiaries has any material Contingent
Liabilities.
3.18 CHIEF PLACE OF BUSINESS; LOCATIONS OF BOOKS AND RECORDS; LOCATIONS
OF ASSETS. The chief executive office of Borrower is located at 000 Xxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000, all books and records of Borrower are
located at that address, and the Borrower and its Subsidiaries have no property
located at any other location, except as set forth on SCHEDULE 3.18.
3.19 LAWS INCLUDING ENVIRONMENTAL AND SAFETY MATTERS. Borrower and each
of its Subsidiaries is in compliance in all material respects with all laws,
statutes, rules, regulations ordinances, orders of court or other governmental
authorities, and other valid requirements of governmental authorities applicable
to it including, without limitation, all environmental, health and safety
statutes and regulations and specifically the Federal Resource Conservation and
Recovery Act, the Federal Comprehensive Environmental Response, Compensation and
Liability Act, the Federal Clean Water Act, the Clean Air Act, the requirements
and regulations of the Nuclear Regulatory Commission, the Federal Occupational
Safety and Health Act and the Federal Food, Drug and Cosmetic Act, and the
regulations promulgated thereunder. Neither Borrower nor any of its Subsidiaries
is subject to any judicial or administrative proceedings alleging the violation
of any applicable law or regulation which could reasonably be expected to have a
Material Adverse Effect. Neither Borrower nor any of its Subsidiaries is the
subject of any federal, state or local investigation regarding, among other
matters, the release of any Hazardous Material into the environment, the results
of which could reasonably be expected to have a Material Adverse Effect. Neither
Borrower nor any of its Subsidiaries has filed any notice under any applicable
law indicating past or present treatment, storage, disposal, generation,
transportation or reporting a spill or release into the environment of any
Hazardous Material which could reasonably be expected to have a Material Adverse
Effect. Neither Borrower nor any of its Subsidiaries has placed or disposed of,
used, generated or transported any Hazardous Material in violation of any
applicable law or regulation, upon or over any real property owned or leased by
Borrower and any of its Subsidiaries and neither Borrower nor any of its
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Subsidiaries has knowledge of such Hazardous Material on such real property.
3.20 INTELLECTUAL PROPERTY; FRANCHISES; PERMITS. Except as set forth on
SCHEDULE 3.20 hereto, (a) the Borrower and its Subsidiaries own or license all
material Intellectual Property necessary for the conduct of their business as
presently conducted; (b) all material agreements pursuant to which the Borrower
and its Subsidiaries license the manufacture, marketing or sale of products
employing its Intellectual Property, and all non-governmental permits and
franchises material to the proper conduct of their business, are in full force
and effect; (c) no claims, demands, suits, or proceedings are pending or, to the
knowledge of the Borrower and its Subsidiaries, threatened which might impair
their rights in any material Intellectual Property used in the conduct of their
business or any material agreement relating thereto; and (d) the Borrower and
its Subsidiaries have not infringed (without any license therefor) any
Intellectual Property of any other Person, and the present conduct of the
Borrower's and its Subsidiaries' business does not infringe any such rights in
any way which would have a Material Adverse Effect.
3.21 NEGATIVE PLEDGES. Neither Borrower nor any of its Subsidiaries is
a party to or bound by any agreement, indenture, or other instrument which
prohibits the creation, incurrence or allowance to exist of any mortgage, deed
of trust, pledge, lien, security interest or other encumbrance or conveyance
upon Borrower's or any Subsidiary's properties, except as disclosed on SCHEDULE
3.21 hereto or in favor of the Lender.
3.22 YEAR 2000 COMPLIANCE. The Borrower has taken all necessary action
to access and evaluate all of the hardware, software, embedded microchips and
other processing capabilities it uses and which is used in the products it
sells, directly or indirectly, and has made inquiry of the Borrower's and its
Subsidiaries' material suppliers and vendors, to be able to ensure that the
Borrower and its Subsidiaries and each product they sell will be able to
function accurately and without interruption using date information before,
during and after January 1, 2000. Any reprogramming of any computer systems or
equipment required to permit the proper functioning of the Borrower and its
Subsidiaries and its business and each product it sells following January 1,
2000 and any testing of such systems and equipment and each product it sells was
completed by September 30, 1999, and the cost of such reprogramming and testing
has not and will not result in a material adverse change in the operations,
business, financial condition or prospects of the Borrower and its Subsidiaries.
3.23 FULL DISCLOSURE. The financial statements referred to in Section
3.1, the Schedules hereto, the Loan Documents and any list, certificate, written
statement, instrument, paper or other information furnished by Borrower to
Lender in connection with the Loan Documents do not contain any untrue statement
of a material fact or omit to state any material fact necessary to make the
statements contained therein and herein, in light of the circumstances in which
they are made, not misleading.
ARTICLE 4. - AFFIRMATIVE COVENANTS
Borrower covenants and agrees that so long as any Commitment remains in
effect, any Note remains outstanding and unpaid, in whole or in part, or any
other amount is owing to
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Lender hereunder:
4.1 FINANCIAL STATEMENTS AND OTHER DOCUMENTS. Borrower shall furnish or
cause to be furnished to Lender:
(a) QUARTERLY FINANCIAL STATEMENTS. As soon as available and in any
event within 45 days after the end of each of the first three quarterly fiscal
periods of the Borrower, Consolidated statements of earnings, shareholders'
equity, and cash flows of the Borrower and its Subsidiaries for such period and
for the period from the beginning of the respective fiscal year to the end of
such period, and the related Consolidated balance sheets of the Borrower and its
Subsidiaries as at the end of such period, setting forth in each case in
comparative form, the corresponding Consolidated figures for the corresponding
periods in the preceding fiscal year accompanied by a certificate of the chief
financial officer of the Borrower, which certificate shall state that said
Consolidated financial statements present fairly in all material respects the
Consolidated financial position and results of operations of the Borrower and
its Subsidiaries, in accordance with GAAP, as at the end of, and for, such
period (subject to normal year-end audit adjustments);
(b) ANNUAL FINANCIAL STATEMENTS. As soon as available and in any event
within 90 days after the end of each fiscal year of the Borrower, Consolidated
statements of earnings, shareholders' equity and cash flows of the Borrower and
its Subsidiaries for such fiscal year and the related Consolidated balance
sheets of the Borrower and its Subsidiaries as at the end of such fiscal year,
setting forth in each case in comparative form, to the extent such figures
appear therein, the corresponding Consolidated figures for the preceding fiscal
year, and accompanied by a report thereon of independent certified public
accountants satisfactory to the Lender, which report shall state that said
Consolidated financial statements present fairly in all material respects the
Consolidated financial position and results of operations of the Borrower and
its Subsidiaries as at the end of, and for, such fiscal year in accordance with
GAAP, consistently applied;
(c) PERIODIC SEC REPORTS; COMPLIANCE CERTIFICATE. Simultaneously with
the delivery of the financial statements required under Section 4.1(a) and (b)
above, (i) a copy of the Borrower's Form 10-Q or 10-K filing made for the
periods covered by such financial statements, together with (ii) a properly
completed Compliance Certificate as of the date of such financial statements, in
the form attached as EXHIBIT B hereto;
(d) OTHER SEC REPORTS. Promptly upon their becoming available, copies
of all (i) regular, periodic and special reports that the Borrower shall have
filed with the Securities and Exchange Commission (or any governmental agency
substituted therefor) pursuant to the Securities Exchange Act of 1934, as
amended, (ii) financial statements, reports, notices or proxy or other
statements sent to shareholders of the Borrower, and (iii) press releases and
other statements generally made available by the Borrower to the public
concerning material developments in the business of the Borrower;
(e) ERISA NOTICES. As soon as possible and in any event within five (5)
days after any officer of Borrower obtains knowledge thereof: (i) notice of
Borrower's failure to make any required payment to any Plan in sufficient amount
to comply with ERISA and the Code on or before the due date for such payment;
(ii) notice of the occurrence or expected occurrence of any
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"Reportable Event" under ERISA, "Prohibited Transaction" or "Accumulated Funding
Deficiency" with respect to any Plan; and (iii) notice of receipt by Borrower of
any notice (A) from a Multiemployer Plan regarding the imposition of withdrawal
liability; or (B) of the institution, or expectancy of the institution, of any
proceeding or any other action which may result in the termination of any Plan,
or Borrower's withdrawal or partial withdrawal from any Plan;
(f) NOTICE OF DEFAULT. Promptly after the Borrower knows that any
Default has occurred, a notice of such Default describing the same in reasonable
detail and, together with such notice or as soon thereafter as possible, a
description of the action that the Borrower has taken or proposes to take with
respect thereto (a "Notice of Default");
(g) PROJECTIONS; MANAGEMENT LETTER. (a) With the delivery of the
Borrower's 10-K annual report, the Borrower's quarterly projections (income
statements and balance sheets) for the then current fiscal year of the Borrower,
as approved by the Board of Directors of the Borrower and (b) as soon as
available, but in any event within 120 days after the end of each fiscal year of
the Borrower, a copy of any letter from the Borrower's auditors to Borrower's
management prepared in connection with the audited financial statements of the
Borrower; and
(h) OTHER INFORMATION. From time to time such other information
regarding the property, operations, business, financial condition or prospects
of the Borrower or any of its Subsidiaries as the Lender may reasonably request.
4.2 EXISTENCE; COMPLIANCE WITH LAWS; ETC.. Borrower shall and shall
cause each Subsidiary to:
(a) CORPORATE EXISTENCE. Preserve and keep in full force and effect its
corporate existence and all franchises, licenses and permits issued by
governmental agencies material to the proper conduct of its business;
(b) COMPLIANCE WITH APPLICABLE LAWS. Comply with and duly observe all
applicable laws, statutes, regulations, rules, ordinances, orders of court or
governmental authorities, and requirements of governmental authorities the
breach of which could reasonably be expected to have a Material Adverse Effect,
except when contested with due diligence, in good faith and in proper
proceedings. Borrower shall also pay and cause all of its Subsidiaries to pay
all of their other Indebtedness and obligations promptly and in accordance with
normal terms and trade practices.
(c) PAYMENT OF TAXES. File or cause to be filed all tax returns and
reports which are required by law to be filed by it, and pay and discharge all
taxes, assessments and governmental charges or levies imposed on it or on its
income or profits or on any of its property prior to the date on which penalties
attached thereto, except for any such tax, assessment, charge or levy the
payment of which is being contested in good faith and by proper proceedings and
against which adequate reserves are being maintained in accordance with GAAP.
(d) RECORDS. Keep adequate records and books of account, in which
complete entries
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will be made in accordance with GAAP; and
(e) ACCESS. Permit representatives of Lender, upon reasonable advance
notice to the Borrower and during normal business hours, to examine, copy and
make extracts from its books and records, to inspect any of its properties,
including, without limitation, any Purchased Equipment, and to discuss its
business and affairs with its officers, all to the extent reasonably requested
by Lender.
4.3 MAINTAIN PROPERTY. Borrower shall, and Borrower shall cause each of
its Subsidiaries to, keep and maintain all property useful and necessary in its
business in good operating condition and repair, ordinary wear and tear
excepted.
4.4 INSURANCE. Borrower shall keep adequately insured by financially
sound and responsible insurers (a) all property owned or leased by it and its
Subsidiaries and all property of an insurable nature, such insurance to be in at
least such amounts and covering loss or damage from at least such risks and
hazards (including, without limitation, business interruption insurance and use
and occupancy insurance) as are usually insured against in the same geographic
areas by companies engaged in similar businesses, and (b) all liabilities of
Borrower and its Subsidiaries for damage to property, death or bodily injury,
including without limitation insurance required under all applicable workmen's
compensation laws, and insurance for such liabilities resulting from, caused by
or arising out of any product sold by any predecessor of Borrower or by Borrower
or any Subsidiary, all such insurance to be in at least such amounts as are
usually insured against by companies engaged in the same or similar businesses.
4.5 NOTICE OF MATERIAL EVENTS. Borrower will, promptly upon any officer
of Borrower obtaining knowledge thereof, give notice to Lender of (i) any
material casualty, loss or depreciation to any inventory or other property of
Borrower or any Subsidiary or any litigation, investigation or other proceeding
against or involving Borrower or any Subsidiary the result of any of which might
have a Material Adverse Effect; (ii) any litigation, investigation (other than
in the ordinary course of business), other proceeding or dispute affecting
Borrower (A) which relates, in whole or in part, to any of the transactions
contemplated by any of the Loan Documents, (B) which involves an amount in
excess of $1,000,000, or (C) which may exist between Borrower or any Subsidiary
and any governmental body; or (iii) any release of any Hazardous Materials at
any location owned or leased by Borrower or any Subsidiary or any investigation
or proceeding by any governmental body alleging or relating to the violation by
Borrower or any Subsidiary of any law or regulation. Borrower will furnish to
Lender from time to time all information which Lender shall reasonably request
with respect to the status of any litigation, investigation, other proceeding or
dispute to which Borrower is a party.
4.6 DEPOSIT ACCOUNTS. Borrower shall maintain with Lender bank accounts
to be used as its principal depository and operating account(s).
ARTICLE 5. - NEGATIVE COVENANTS
Borrower covenants and agrees that, so long as any Commitment is in
effect, any Note remains outstanding and unpaid, in whole or in part, or any
other amount is owing to Lender
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hereunder, Borrower will not, directly or indirectly, and Borrower will not
permit any of its Subsidiaries to:
5.1 INDEBTEDNESS. Create, incur, assume or allow to exist any
Indebtedness, except:
(a) LOAN DOCUMENT INDEBTEDNESS. Indebtedness evidenced by the Note and
any other Indebtedness owing to or held by Lender arising under any of the Loan
Documents;
(b) DISCLOSED INDEBTEDNESS. Indebtedness of Borrower existing on the
Initial Borrowing Date and disclosed in SCHEDULE 5.1 (including, without
limitation, all Capital Lease Obligations and purchase money financings existing
on the Initial Borrowing Date); PROVIDED, HOWEVER, that, without the prior
written consent of Lender, none of such Indebtedness shall be renewed, extended
or otherwise modified in any material respect and may be extended by Borrower
only on substantially the same terms and conditions as in effect on the date
hereof;
(c) UNSECURED CURRENT LIABILITIES. Unsecured current liabilities (not
the result of borrowing) incurred in the ordinary course of business which are
not evidenced by notes or instruments and which are not more than sixty (60)
days overdue from the original due dates thereof (unless and to the extent only
that any such liability is contested by Borrower in good faith by appropriate
proceedings and adequate reserves have been set aside with respect thereto in
accordance with GAAP);
(d) ADDITIONAL CAPITAL LEASES AND PURCHASE MONEY FINANCINGS. Capital
Leases and purchase money financings incurred in the ordinary course of business
by Borrower for the lease or purchase of Capital Equipment provided that the
aggregate outstanding amount of all Capital Leases and purchase money financings
existing on the Initial Borrowing Date plus all additional Capital Leases and
purchase money financings incurred after the Initial Borrowing Date shall not
exceed $20,000,000, the amount of each such Capital Lease or purchase money
financing does not exceed 100% of the lesser of the cost or fair market value of
such Capital Equipment (and Borrower agrees to furnish copies of the
documentation for its outstanding Capital Leases and purchase money financings
to Lender from time to time upon request);
(e) INDEBTEDNESS AMONG SUBSIDIARIES. Indebtedness existing as of the
date hereof and disclosed on Schedule 5.1 of (i) Subsidiaries of the Borrower to
the Borrower, (ii) the Borrower to any of its Subsidiaries, or (iii)
Subsidiaries to Subsidiaries, provided that any such Indebtedness of the
Borrower to its Subsidiaries is subordinated as to payment of the Obligations in
a manner satisfactory to Lender; and
(f) APPROVED INDEBTEDNESS. Indebtedness for borrowed money incurred
after the Initial Borrowing Date with prior notice to and the written consent of
Lender.
5.2 CONTINGENT LIABILITIES. Except for Contingent Liabilities existing
on the Initial Borrowing Date and disclosed on SCHEDULE 5.2, create, incur,
assume or allow to exist any Contingent Liabilities in excess of $500,000, in
the aggregate, except for Contingent Liabilities arising out of the endorsement
of instruments for deposit or collection in the ordinary course of business.
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5.3 LIMITATION ON LIENS. Create, incur, assume or allow to exist, any
Lien upon any of its property, income or profits, whether now owned or held or
hereafter acquired, including attachment, levy, garnishment or other judicial
process relating to such property, except:
(a) Liens in existence on the date hereof and listed on SCHEDULE 5.3
hereof;
(b) Liens imposed by any governmental authority for taxes, assessments
or charges not yet due or that are being contested in good faith and by
appropriate proceedings if adequate reserves with respect thereto are maintained
on the books of the Borrower, in accordance with GAAP;
(c) carriers', warehousemen's, mechanics', materialmen's, repairmen's
or other like Liens arising in the ordinary course of business that are not
overdue or that are being contested in good faith and by appropriate proceedings
if adequate reserves with respect thereto are maintained or the books of the
Borrower, in accordance with GAAP;
(d) pledges or deposits under worker's compensation, unemployment
insurance and other social security legislation;
(e) deposits to secure the performance of bids, trade contracts (other
than for Indebtedness), leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred in the
ordinary course of business;
(f) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business and encumbrances
consisting of zoning restrictions, easements, licenses, restrictions on the use
of property or imperfections in title thereto that, in the aggregate, are not
material in amount, and that do not in any case materially detract from the
value of the property subject thereto or interfere with the ordinary conduct of
the business of the Borrower or any of its Subsidiaries;
(g) Liens upon Capital Equipment to secure purchase money Indebtedness
or Capital Lease of the Borrower or a Subsidiary permitted under Section 5.1(a);
PROVIDED, THAT, (i) such Lien does not extend to or cover any other property of
the Borrower or such Subsidiary and (ii) such Lien does not secure any
Indebtedness other than the Indebtedness so incurred;
(h) Liens arising from or upon any judgment or award, provided that
such judgment or award does not exceed $50,000 and is being contested in good
faith by proper appeal proceedings, such judgment or award is not secured by any
Lien which is not discharged within thirty (30) days, and only so long as
execution thereon shall be stayed; and
(i) Liens now or hereafter granted to the Lender under the Loan
Documents.
5.4 MERGERS; DISSOLUTION; DISPOSALS; OR ACQUISITIONS. (a) Enter into
any transaction of merger or consolidation or amalgamation; (b) liquidate,
wind-up or dissolve itself; (c) convey, sell, issue, exchange, lease, assign,
transfer or otherwise dispose of all or any material portion of its business or
property or the business, property or stock of any Subsidiary (other than sales
of
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inventory in the ordinary course of business and obsolete equipment or equipment
no longer used or useful in the business of Borrower); or (d) without the prior
written consent of the Lender, make any Investment in or purchase, lease or
otherwise acquire all or any material portion of the business or property of any
other Person or enter into any Joint Venture or any exclusive licensing
agreement for any of its material Intellectual Property; PROVIDED, HOWEVER, that
notwithstanding the foregoing so long as no Default or Event of Default exists,
the Borrower may enter into agreements, including licensing agreements, relating
to the research, development, marketing and sale of its products and
Intellectual Property in the ordinary course of its business and on reasonable
and appropriate terms and conditions including the payment of fair and
reasonable compensation to the Borrower.
5.5 INVESTMENTS AND LOANS. Except as permitted by Section 5.1(e) make
any Investment in or make any loan or other advances of money to any Person,
including, without limitation, any Subsidiary, except for loans and advances to
employees for salary, travel advances, advances against commissions and similar
advances in the ordinary course of BUSINESS or pursuant to the investment policy
attached hereto as SCHEDULE 5.5.
5.6 DIVIDENDS. Pay or set aside any amount to pay any Dividends.
5.7 TRANSACTIONS WITH AFFILIATES. Enter into or be a party to any
agreement or transaction with any Affiliate, except in the ordinary course of
Borrower's business and pursuant to reasonable requirements of Borrower's
business and upon fair and reasonable terms and conditions which are fully
disclosed to Lender and are no less favorable to Borrower than would obtain in a
comparable arm's length transaction with a person not an Affiliate of Borrower.
5.8 NEGATIVE PLEDGE. Directly or indirectly, enter into any agreement,
indenture, or other instrument which prohibits the creation, incurrence or
allowance to exist of any mortgage, deed of trust, pledge, lien, security
interest or other encumbrance or conveyance upon any of Borrower's or its
Subsidiaries' property, except for negative pledges in connection with
Indebtedness incurred under Capital Leases and purchase money financings
permitted under Section 5.1(d) hereof, provided that such negative pledges apply
only to the Capital Equipment purchased or leased pursuant thereto and not to
any other property.
5.9 MINIMUM LIQUIDITY RATIO. Permit the Borrower's Liquidity Ratio, on
a Consolidated basis, to be less than [***] to 1.0 at any time.
5.10 MINIMUM TANGIBLE CAPITAL BASE. Permit the Borrower's Tangible
Capital Base, on a Consolidated Basis, to be less than [*******] at any time.
5.11 MINIMUM DEBT SERVICE TEST/MINIMUM CASH AND CASH EQUIVALENTS.
Permit, for any fiscal quarter, the Borrower's Debt Service Coverage Ratio, on a
Consolidated basis, to be less than [***] to 1.0, for the period of the four
consecutive fiscal quarters ending with such fiscal quarter; UNLESS the sum of
the Borrower's Unrestricted Cash on a Consolidated basis, is not less than the
GREATER of: (x) the sum of (1) the product of the net loss, as determined in
accordance with GAAP excluding all extraordinary and nonrecurring gains and
losses (the "Net Loss") for such fiscal quarter, MULTIPLIED BY four, PLUS (2)
Funded Indebtedness; or (y) the sum of
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(1) the Net Loss for the period of the four consecutive fiscal quarters ending
with such fiscal quarter, PLUS (2) Funded Indebtedness.
5.12 LINES OF BUSINESS. Engage to any significant extent, or permit any
Subsidiary to engage to any significant extent, in any line or lines of business
activity other than the biotechnology or pharmaceutical businesses.
5.13 TANGIBLE CAPITAL BASE. Permit, at any time, (a) the sum of the
Tangible Capital Base of Borrower alone and VSC alone (in each case, exclusive
of any investment in Subsidiaries and any Indebtedness owed by any Subsidiary to
the Borrower) to be less than 90% of the Tangible Capital Base of the Borrower
and its Subsidiaries.
ARTICLE 6. - CONDITIONS PRECEDENT
6.1 CONDITIONS OF INITIAL EXTENSION OF CREDIT. The obligation of Lender
to make a Term Loan on the Initial Borrowing Date is subject to the satisfaction
of the condition precedent that Lender shall have received on or before such
date, the following items in form and substance satisfactory to Lender and its
counsel executed where appropriate by a duly authorized officer of Borrower:
LOAN DOCUMENTS
(a) CREDIT AGREEMENT. This Agreement;
(a) TERM NOTE. The Term Note; and
(b) PLEDGE AGREEMENT. The Pledge Agreement, together with
originals of all share certificates of capital stock
of VSC, accompanied by an executed, undated stock
power with respect to such shares.
CORPORATE DOCUMENTS:
(d) CORPORATE RESOLUTIONS. Copies of resolutions of the Board
of Directors (and, if necessary, the Stockholders) of Borrower, authorizing the
execution, delivery and performance of the Loan Documents to which Borrower is a
party, and the transactions contemplated thereby, certified as of the Initial
Borrowing Date by the Secretary/Clerk or Assistant Secretary/Clerk of Borrower
(which certificate shall state that such resolutions have not been amended,
modified, revoked or rescinded as of such date);
(e) CORPORATE INCUMBENCY CERTIFICATE. Certificate of the
Secretary/Clerk or Assistant Secretary/Clerk of Borrower, dated as of the
Initial Borrowing Date, certifying the names and titles of the officers
authorized to execute the Loan Documents to which Borrower is a party and any
other documents related to any thereof, together with specimen signatures of
such officers;
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(f) CHARTER DOCUMENTS. Copies of (i) the charter documents and
all amendments thereto of Borrower and VSC, currently certified by the Office of
the Secretary of State for the Commonwealth of Massachusetts, and (ii) the
By-Laws of Borrower and VSC certified as of the Initial Borrowing Date by the
Secretary/Clerk or Assistant Secretary/Clerk of the Borrower;
(g) LEGAL GOOD STANDING CERTIFICATES. For each of Borrower and
VSC, a certificate of legal existence and good standing issued by the Office of
the Secretary of State for the Commonwealth of Massachusetts and a certificate
of foreign qualification and good standing issued by the Secretary of State of
each state of foreign qualification or authorization, all of which shall be
dated currently;
(h) TAX GOOD STANDING CERTIFICATES. For each of Borrower and
VSC, a certificate of tax good standing currently dated from each jurisdiction
in which such party is obliged to file tax returns and pay taxes (or, to the
extent any such certificates are unobtainable, because it is not the practice of
the taxing authority to issue such certificate, or because of time delays in the
issuance of such certificate attributable to such taxing authority, a letter
from Borrower's or VSC's, as the case may be, chief financial officer setting
forth the nature of the tax obligation and the relevant jurisdiction, and
certifying that all required returns have been duly filed and all required taxes
shown thereon paid);
MISCELLANEOUS DOCUMENTS:
(i) UCC AND OTHER SEARCHES. Copies of UCC, tax lien, judgment,
bankruptcy and other searches reasonably requested by Lender of all appropriate
filing offices relating to the Borrower and its Subsidiaries;
(j) TERMINATIONS AND DISCHARGES. Termination Statements,
mortgage discharges and other discharges of all Liens other than those permitted
under Section 5.3 hereof;
(k) LEGAL OPINIONS. Written opinions of counsel for Borrower
and VSC in form and content satisfactory to Lender, dated the Initial Borrowing
Date, addressed to Lender and covering such matters related to the Borrower and
VSC and the transactions contemplated hereby as Lender may request;
(l) CONSENTS. Copies of all consents or approvals of any
Person that may be required in connection with the transactions contemplated by
the Loan Documents;
(m) FEES. Execution of the facility fee letter referenced
under Section 2.7 hereof, and payment of the facility fee set forth therein,
together with the estimated fees and disbursements of Lender's counsel in
connection with the Loan Documents and the transactions contemplated hereby; and
(n) ADDITIONAL CLOSING AGENDA ITEMS. Fulfillment, to Lender's
satisfaction, of each of the additional items set forth on the closing agenda
for this transaction.
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6.2 CONDITIONS OF ALL LOANS. The Lender's obligation to make any Loan
is subject to the fulfillment of the following additional conditions precedent:
(a) REPRESENTATIONS. The representations and warranties made
by any party to any Loan Document (other than Lender) in any Loan Document or in
any certificate, document or financial or other statement furnished at any time
under or in connection therewith shall be true and correct on and as of the
Borrowing Date for such Loan as if made on and as of such date, provided that,
if any such representation or warranty is expressly required herein or therein
to be made only as of a specific date, such representation or warranty shall be
true or correct as of such date;
(b) NO DEFAULT. No Default or Event of Default shall have
occurred and be continuing on the Borrowing Date for such Loan either before or
after giving effect to the Loan made on such date; and
(c) NO MATERIAL ADVERSE EFFECT. There shall have occurred no
event or change in circumstances having a Material Adverse Effect since the date
of the most recent financial statements delivered by Borrower to Lender.
Each request for a Loan by Borrower hereunder shall constitute a
representation and warranty by Borrower as of the date of such request or
application that the conditions contained in paragraphs (a) through (c) of this
Section 6.2 have been satisfied.
ARTICLE 7. - EVENTS OF DEFAULT
7.1 EVENTS OF DEFAULT. The occurrence of any of the following shall
constitute an Event of Default:
(a) FAILURE OF PAYMENT. If Borrower fails to pay any
principal, interest or other amount due, under this Agreement or with respect to
any Loan on the date due (whether on a scheduled payment date or otherwise) and
in the manner provided herein;
(b) MISSTATEMENTS. If any representation, warranty or other
statement made herein or in any other Loan Document or otherwise in writing by
or on behalf of Borrower or any Subsidiary in connection herewith proves to be
or to have been incorrect or misleading in any material respect as of the date
at which it is made or deemed to be made;
(c) PERFORMANCE OF OTHER COVENANTS. If Borrower defaults in
the due performance or observance of:
(i) any covenant contained in Sections 4.1, 4.2(a) or 4.4
or Article 5 or
(ii) any other covenant, condition or provision to be
performed or observed by it hereunder or under any of
the Loan Documents (other than a payment or covenant
default the performance or observance of which is dealt
with specifically elsewhere in this Section 7.1) and
the breach of
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such other provision is not cured to Lender's
satisfaction within thirty (30) days after the sooner
to occur of Borrower's receipt of notice of such
breach from Lender or the date on which such failure
or neglect first becomes known to any officer of
Borrower.
(d) OTHER INDEBTEDNESS. If Borrower or any Subsidiary
defaults, which default continues after any applicable grace or cure period, in
any payment of principal of or interest on any Indebtedness for borrowed money
in excess of $1,000,000, including, without limitation, on any Capital Lease or
any other default occurs with respect to any Indebtedness for borrowed money in
excess of $1,000,000 giving the holder thereof the right to accelerate the
payment thereof or require such Indebtedness to be paid before its stated
maturity or before any regularly scheduled date of prepayment;
(e) MATERIAL CONTRACTS. Any default occurs under any material
contract of Borrower or any Subsidiary which default gives any other party to
such contract the right to terminate such contract or exercise remedies and such
termination or remedies are reasonably likely to have a Material Adverse Effect;
(f) JUDGMENTS. If Borrower or any Subsidiary permits any
judgment against it in excess of $1,000,000 to remain undischarged for a period
of more than thirty (30) days unless (i) during such period such judgment is
effectively stayed or bonded, on appeal or otherwise; or (ii) such judgment is
insured, subject only to the Borrower's or Subsidiary's regular deductible
amount, without exception;
(g) LEVY, ATTACHMENTS. If any levy, seizure, attachment,
execution or similar process shall be issued on any of the Borrower's or its
Subsidiaries' cash, accounts or any material property and, with respect to
attachments only, such attachment is not voided or removed within 10 days of
such issuance;
(h) VOLUNTARY BANKRUPTCY. If Borrower or any Subsidiary (i)
commences a voluntary case under the Bankruptcy Code (as now or hereafter in
effect); or (ii) files a petition or commences any case, proceeding, or action
in bankruptcy or seeking reorganization, liquidation, dissolution, winding-up,
arrangement, composition, readjustment of its debts or any other relief under
any other bankruptcy, insolvency, reorganization, liquidation, dissolution,
arrangement, composition, readjustment of debt or similar act or law of any
jurisdiction, now or hereafter existing; or (iii) takes any action indicating
its consent to, approval of, or acquiescence in, any such case, proceeding or
other action; or (iv) applies for a receiver, trustee or custodian of it or for
all or a substantial part of its property; or (v) makes an assignment for the
benefit of creditors; or (vi) is unable to pay its debts as they mature or
admits in writing such inability; or (vii) is adjudicated insolvent or bankrupt;
(i) INVOLUNTARY BANKRUPTCY. (i) If there is commenced against
Borrower or any Subsidiary (1) an involuntary case under the Bankruptcy Code (as
now or hereafter in effect); or (2) any case or proceeding or any other action
in bankruptcy or seeking reorganization, liquidation, dissolution, winding-up,
arrangement, composition, readjustment of its debts or any other relief under
any other bankruptcy, insolvency, reorganization, liquidation, dissolution,
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arrangement, composition, readjustment of debt or similar act or law of any
jurisdiction, now or hereafter existing, or seeking appointment of a receiver,
trustee or custodian of Borrower or any Subsidiary or for all or a substantial
part of the property of either of them, and any of the foregoing cases,
proceedings, or actions is not dismissed within sixty (60) days; or (ii) if an
order, judgment or decree approving any of the foregoing is entered or a warrant
of attachment, execution or similar process against any substantial part of the
property of Borrower or any Subsidiary is issued, and such order, judgment,
decree, warrant, execution or similar process is not vacated or stayed within
sixty (60) days; or (iii) if an order for relief under the Bankruptcy Code (as
now or hereafter in effect) is entered against Borrower or any Subsidiary;
(j) CHANGE IN CONTROL OF BORROWER. A Change in Control shall
occur; or
(k) MATERIAL ADVERSE EFFECT. Any event or change in
circumstances having a Material Adverse Effect.
7.2 LENDER'S REMEDIES. Upon the occurrence of any such Event of
Default, Lender may, at Lender's option, immediately exercise one or more of the
following rights: (a) declare all obligations of Lender to Borrower, including,
without limitation, the Commitments to be terminated, whereupon such obligations
shall immediately terminate; (b) declare all obligations of Borrower to Lender,
including, without limitation, the Loans and all other amounts owing under this
Agreement and the Note to be immediately due and payable, whereupon they shall
immediately become due and payable without presentment, demand, protest or
notice of any kind, all of which are hereby expressly waived; and (c) exercise
any and all rights and remedies of the Lender under Section 11 of the Pledge
Agreement; PROVIDED, however, that upon the occurrence of any such Event of
Default specified in Sections 7.1(h) or 7.1(i), the Commitments shall
immediately terminate and all obligations of Borrower to Lender, including,
without limitation, Loans and all other amounts owing under this Agreement and
the Note shall immediately become due and payable without presentment, further
demand, protest or notice of any kind, all of which are hereby expressly waived.
7.3 CROSS DEFAULT It is agreed by Borrower that any Event of Default
under this Agreement will constitute an event of default under all Loans and all
of the Loan Documents and all other agreements and evidences of Indebtedness
between Borrower and Lender, whether now existing or hereafter executed and
whether or not such is an event of default therein.
7.4 SETOFF. Borrower hereby grants to Lender a lien, security interest
and right of set off as security for all liabilities and obligations to Lender,
whether now existing or hereafter arising, upon and against all deposits,
credits, collateral and property, now or hereafter in the possession, custody,
safekeeping or control of Lender or any entity under the control of Fleet
Financial Group, Inc., or in transit to any of them. At any time, without demand
or notice, Lender may set off the same or any part thereof and apply the same to
any liability or obligation of Borrower even though unmatured and regardless of
the adequacy of any other collateral securing the Loans. ANY AND ALL RIGHTS TO
REQUIRE LENDER TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER
COLLATERAL WHICH SECURES THE LOANS, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH
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RESPECT TO SUCH DEPOSITS, CREDIT OR OTHER PROPERTY OF THE BORROWER ARE HEREBY
KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.
ARTICLE 8. - MISCELLANEOUS
8.1 NOTICES. Except as otherwise specified herein, all notices to or
upon the parties hereto shall be in writing (including teletransmissions), shall
be given or made to the party to which such notice is required or permitted to
be given or made under this Agreement at the address or telex or telecopier
number set forth below or at such other address or telex or telecopier number as
any party hereto may hereafter specify to the others in writing, and (unless
otherwise specified herein) shall be deemed delivered on receipt, if
teletransmitted or delivered by hand, or three (3) Business Days after mailing,
and all mailed notices shall be by registered or certified mail, postage
prepaid:
If to Borrower to:
Vertex Pharmaceuticals Incorporated
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxxxx, Xx., Vice President of
Finance
Fax No. (000) 000-0000
With a copy to:
Vertex Pharmaceuticals Incorporated
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxx, Esquire, Corporate Counsel
Fax No. (000) 000-0000
If to Lender to:
Fleet National Bank
High Technology Division
Xxx Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxxxx, Senior Vice President
Fax No. 000-000-0000
With a copy to:
Brown, Rudnick, Freed & Gesmer, P.C.
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, Esquire
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Facsimile No. (000) 000-0000
8.2 NO WAIVER OF RIGHTS. No failure to exercise nor any delay in
exercising, on the part of Lender, any right, remedy, power or privilege under
the Loan Documents shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power, or privilege operate as a waiver
of any further or complete exercise thereof. No waiver shall be effective unless
in writing. No waiver or condonation of any breach on one occasion shall be
deemed a waiver or condonation on any other occasion.
8.3 OBLIGATIONS ABSOLUTE; CUMULATIVE REMEDIES. All payments to be made
by the Borrower hereunder and under the Note and other Loan Documents shall be
made in immediately available funds and shall be absolute and unconditional and
shall not be subject to set off, recoupment or counterclaim of any kind. Each of
the Loan Documents and the obligations of Borrower thereunder are in addition to
and not in substitution for any other obligations or security interests now or
hereafter held by Lender and shall not operate as a merger of any contract or
debt or suspend the fulfillment of or affect the rights, remedies, powers, or
privileges of Lender in respect of any obligation or other security interest
held by it for the fulfillment thereof. The rights and remedies provided in the
Loan Documents are cumulative and not exclusive of any other rights or remedies
provided by law.
8.4 SUCCESSORS. This Agreement shall be binding upon and inure to the
benefit of Borrower, Lender and all future holders of the Note, and their
respective successors and assigns, except that Borrower may not assign or
transfer its rights or obligations hereunder without the prior written consent
of Lender. Lender shall have the unrestricted right at any time or from time to
time, and without Borrower's consent, to assign all or any portion of its rights
and obligations hereunder to one or more banks or other financial institutions
(each, an "Assignee"), and Borrower agrees that it shall execute, or cause to be
executed, such documents, including without limitation, amendments to this
Agreement and to any other documents, instruments and agreements executed in
connection herewith as Lender shall deem necessary to effect the foregoing. In
addition, at the request of Lender and any such Assignee, Borrower shall issue
one or more new promissory notes, as applicable, to any such Assignee and, if
Lender has retained any of its rights and obligations hereunder following such
assignment, to Lender, which new promissory notes shall be issued in replacement
of, but not in discharge of, the liability evidenced by the Note held by Lender
prior to such assignment and shall reflect the amount of the respective
Commitments and Loans held by such Assignee and Lender after giving effect to
such assignment. Upon the execution and delivery of appropriate assignment
documentation, amendments and any other documentation required by Lender in
connection with such assignment, and the payment by Assignee of the purchase
price agreed to by Lender, and such Assignee, such Assignee shall be a party to
this Agreement and shall have all of the rights and obligations of Lender
hereunder (and under any and all other guaranties, documents, instruments and
agreements executed in connection herewith) to the extent that such rights and
obligations have been assigned by Lender pursuant to the assignment
documentation between Lender and such Assignee, and Lender shall be released
from its obligations hereunder and thereunder to a corresponding extent. Lender
may furnish any information concerning Borrower in its possession from time to
time to prospective Assignees, provided that Lender shall require any
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such prospective Assignee to agree in writing to maintain the confidentiality of
such information.
8.5 PARTICIPANTS.
(a) LENDER'S RIGHTS. Lender shall have the unrestricted right
at any time and from time to time, and without the consent of or notice
to Borrower or any guarantor, to grant to one or more banks or other
financial institutions (each, a "Participant") participating interests
in Lender's obligation to lend under the Loan Documents and/or any or
all of the loans held by Lender hereunder. In the event of any such
grant by Lender of a participating interest to a Participant, whether
or not upon notice to Borrower, Lender shall remain responsible for the
performance of its obligations under the Loan Documents and Borrower
shall continue to deal solely and directly with Lender in connection
with Lender's rights and obligations hereunder and thereunder. Lender
may furnish any information concerning Borrower in its possession from
time to time to prospective participants, provided that Lender shall
require any such prospective participant to agree in writing to
maintain the confidentiality of such information.
(b) QUALIFYING PARTICIPATION EVENT. A "Qualifying
Participation Event" shall be deemed to have occurred upon the
occurrence of all of the following on or before December 31, 2000: (i)
a Participant who is a non-affiliate of the Lender and who is
satisfactory in all respects to the Lender in its discretion purchasing
a participation interest in Lender's obligation to lend under the Loan
Documents and/or any or all of the loans held by Lender hereunder in
the amount of not less than $5,000,000; (ii) the execution and delivery
of such a Participant's written agreement that the Amortization Number
(as defined in the Term Note) may be increased to forty (40); and (iii)
the execution and delivery by such a Participant of any and all
documents evidencing such purchase in form and substance satisfactory
to the Lender. The Borrower agrees that: (i) the Lender has no
obligation to solicit potential Participants; and (ii) the Lender has
no obligation to require or persuade potential Participants to agree to
increase the Amortization Number to forty (40) as a pre-condition to
becoming a Participant.
8.6 GOVERNING LAW. This Agreement, the Note and other Loan Documents
shall be governed by, and construed and interpreted in accordance with, the laws
of the Commonwealth of Massachusetts.
8.7 SUBMISSION TO JURISDICTION; WAIVER OF TRIAL BY JURY.
(a) For purposes of any action or proceeding involving the
Loan Documents or any other agreement or document referred to therein, Borrower
hereby submits to the jurisdiction of all federal and state courts located in
the Commonwealth of Massachusetts and consents that any order, process, notice
of motion or other application to or by any of said courts or a judge thereof
may be served within or without such court's jurisdiction by registered mail or
by personal service, PROVIDED a reasonable time for appearance is allowed (but
not less than the time otherwise afforded by any law or rule).
(b) THE BORROWER AND LENDER MUTUALLY HEREBY KNOWINGLY,
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VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF
ANY CLAIM BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENTS CONTEMPLATED TO BE EXECUTED IN CONNECTION
HEREWITH OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER
VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY. THIS WAIVER CONSTITUTES A MATERIAL
INDUCEMENT FOR LENDER TO ACCEPT THIS AGREEMENT AND MAKE THE LOANS.
8.8 COMPLETE AGREEMENT, AMENDMENTS. This Agreement, together with the
Note and other Loan Documents contains the entire agreement between the parties
with respect to the transactions contemplated hereby, and supersedes all
negotiations, presentations, warranties, commitments, offers, contracts and
writings prior to the date hereof relating to the subject matter. This Agreement
may only be amended, modified, waived, discharged or terminated by a writing
signed by the party to be charged with such amendment, modification, waiver,
discharge or termination.
8.9 EXPENSES. The Borrower shall pay on demand, regardless of whether
any Default or Event of Default has occurred or whether any proceeding to
enforce any Loan Document has been commenced, all out-of-pocket expenses
(including, without limitation, the reasonable fees and disbursements of counsel
to Lender) incurred by Lender in connection with (a) the negotiation,
preparation, filing or recording of the Loan Documents, and any future requests
for amendments or waivers of the Loan Documents (whether or not the transactions
contemplated thereby shall be consummated), (b) the collection of the Loans and
any and all other obligations of Borrower to Lender whether now existing or
hereafter arising, or with the preservation, exercise or enforcement of Lender's
rights and remedies under or in connection with the Loan Documents, including,
without limitation, any and all expenses incurred by Lender in or in connection
with any case commenced by or against Borrower under the Bankruptcy Code, and
(c) any claim or liability for any stamp, excise or other similar taxes and any
penalties or interest with respect thereto that may be levied, collected,
withheld or assessed by any jurisdiction in connection with the execution and
delivery of the Loan Documents or any modification thereof. This covenant shall
survive payment of the Loans and termination of this Agreement. Borrower hereby
authorizes Lender to debit Borrower's deposit accounts if Borrower fails to pay
such amount promptly after demand.
8.10 INDEMNIFICATION. Borrower agrees to indemnify and hold Lender
harmless from and against any and all loss, liability, obligations, damages,
penalties, judgments, actions, investigations, claims, costs and expenses
(including, without limitation, reasonable attorneys' fees and disbursements)
now or in the future incurred by or asserted against Lender by any Person
arising out of or in connection with any past, present, or future action or
inaction by Lender or Borrower in connection with any Loan Document, or any
transaction contemplated thereby, except any action or inaction arising out of
Lender's gross negligence or willful misconduct as determined by a court of
competent jurisdiction in an order binding on Lender and not subject to appeal.
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8.11 SURVIVAL OF AGREEMENTS. All covenants, agreements, representations
and warranties made herein and in the certificates delivered pursuant hereto
shall survive the making of Loans and the execution and delivery to Lender of
the Note and shall continue in full force and effect so long as any Note is
outstanding and unpaid or this Agreement remains in effect. All agreements,
obligations and liabilities of Borrower under this Agreement concerning the
payment of money to Lender, other than the obligation to pay principal of and
interest on Loans, shall survive the payment in full of Loans and termination of
this Agreement.
8.12 SEVERABILITY. Any provision hereof that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
8.13 DESCRIPTIVE HEADINGS. The Table of Contents and the captions in
this Agreement are for convenience of reference only and shall not define or
limit the provisions hereof.
8.14 COUNTERPARTS. This Agreement may be executed by one or more of the
parties on any number of separate counterparts, and all of said counterparts
taken together shall be deemed to constitute one and the same instrument.
8.15 PLEDGE TO FEDERAL RESERVE. Lender may at any time pledge all or
any portion of its rights under the Loan Documents including any portion of the
Note to any of the twelve (12) Federal Reserve Banks organized under Section 4
of the Federal Reserve Act, 12 U.S.C. Section 341. No such pledge or enforcement
thereof shall release Lender from its obligations under any of the Loan
Documents.
8.16 LOST NOTE. Upon receipt of an affidavit of an officer of Lender as
to the loss, theft, destruction or mutilation of the Note or any other Loan
Documents which is not of public record, and, in the case of any such loss,
theft, destruction or mutilation, upon receipt of an affidavit of surrender and
cancellation of such Note or other Loan Document, Borrower will issue, in lieu
thereof, a replacement Note or other Loan Document in the same principal amount
thereof and otherwise of like tenor.
[REMAINDER OF PAGE INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as an instrument under seal by their respective duly authorized officers as of
the date first written above.
WITNESS: VERTEX PHARMACEUTICALS INCORPORATED
___________________________ By: _________________________________________
Name: Xxxxxx X. Xxxxxxxxxxx, Xx.
Title: Vice President, Finance
FLEET NATIONAL BANK
___________________________ By: _________________________________________
Name: Xxxxxxxx X. Xxxxxxx
Title: Senior Vice President
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SCHEDULE 1
DEFINITIONS
"ACCUMULATED FUNDING DEFICIENCY" - the amount referred to by such term
as defined in Section 302(a)(2) of ERISA.
"AFFILIATE" - as to any Person (a) any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control with
such Person, or (b) any other Person who is an officer or director of such
Person, or (c) any Person described in clause (a) above (other than any
Subsidiary all of the capital stock of which is owned by Borrower).
"AUTHORIZED REPRESENTATIVE" - any person holding the position of
President, Treasurer or Vice President of Finance of the Borrower at any time.
"BANKRUPTCY CODE" - The Bankruptcy Reform Act of 1978, as heretofore
and hereafter amended, and codified as 11 U.S.C. Sections 101, et seq.
"BORROWING DATE" - the Business Day on which any Loan is made.
"BUILD-OUT FEES" - the fees earned and reimbursable expenses incurred
by architects, contractors, and engineers for their services in connection with
the build-out of the Borrower's premises at 000 Xxxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxxxxxxx.
"BUSINESS DAY" - any day other than a Saturday, Sunday or day on which
shall be in the Commonwealth of Massachusetts a legal holiday or a day on which
banking institutions in Boston, Massachusetts are required or authorized to
close.
"CAPITAL EQUIPMENT" - equipment that in accordance with GAAP is
required or permitted to be depreciated or amortized on Borrower's balance
sheet.
"CAPITAL EXPENDITURES" - for any period, the sum of (i) all
expenditures that, in accordance with GAAP, are required to be included in land,
property, plant or equipment or similar fixed asset account (whether involving
real or personal property) and (ii) Capital Lease Obligations incurred during
such period (excluding renewals of Capital Leases).
"CAPITAL LEASE" - any capital lease, conditional sales contract or
other title retention agreement relating to the acquisition of Capital
Equipment.
"CAPITAL LEASE OBLIGATIONS" - the aggregate capitalized amount of the
obligations of Borrower under all Capital Leases.
"CASH EQUIVALENTS" - (a) securities with maturities of 180 days or less
from the date of acquisition issued or fully guaranteed or insured as to payment
of principal and interest by the United States or any agency thereof, (b)
certificates of deposit with maturities of 365 days or less
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from the date of acquisition issued by Lender or any domestic commercial bank
having capital and surplus reasonably acceptable to Lender and (c) commercial
paper of a domestic issuer rated at least either A-1 by Standard & Poor's or B-1
by Xxxxx'x Investors Service with maturities of 180 days or less from the date
of acquisition.
"CHANGE IN CONTROL" - at any time that any Person, together with the
affiliates and associates of such Person within the meaning of Rule 12b-2 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), shall acquire
beneficial ownership within the meaning of Rule 13d of the Exchange Act of fifty
(50%) percent or more of the voting stock or total equity of the Borrower, or if
a change in the Board of Directors of Borrower in which the individuals who
constituted the Board of Directors at the beginning of the two (2) year period
immediately preceding such change (together with any other director whose
election by the Board of Directors was approved by at least two-thirds of the
directors then in office at the beginning of such period) cease for any reason
to constitute a majority of the directors of the Borrower then in office.
"COMMITMENTS" - the Term Loan Commitment.
"COMMONLY CONTROLLED ENTITY" - an entity, whether or not incorporated,
which is under common control with Borrower within the meaning of Section 414(b)
or (c) of the IRC.
"CONSOLIDATED" - when used with reference to any term, that term as
applied to the accounts of the Borrower and all of its Subsidiaries,
consolidated in accordance with GAAP.
"CONTINGENT LIABILITY" - any obligation of Borrower guaranteeing or in
effect guaranteeing any Indebtedness, leases, dividends or other obligations
("primary obligations") of any other Person (the "primary obligor") in any
manner, whether directly or indirectly.
"DEBT SERVICE COVERAGE RATIO" - for any period, the quotient of: (i)
the sum of (a) net earnings (loss) as determined in accordance with GAAP
excluding all extraordinary and nonrecurring gains, PLUS (b) the sum of
interest, taxes, depreciation, and amortization (to the extent that any of the
foregoing were deducted in calculating net earnings (loss)); DIVIDED BY (ii) the
sum of (a) current maturities of long-term Indebtedness, PLUS (ii) interest
expense, PLUS (iii) non-financed Capital Expenditures.
"DEFAULT" - any event specified in Article 7, whether or not any
requirement for the giving of notice or lapse of time or any other condition has
been satisfied.
"DIVIDENDS" means, for any applicable period, the aggregate of all
amounts paid or payable (without duplication) as dividends (exclusive of
dividends payable solely in capital stock of Borrower), distributions or owner
withdrawals with respect to Borrower's shares of capital stock, whether now or
hereafter outstanding and includes any purchase, redemption or other retirement
of any shares of the Borrower's stock, directly or indirectly.
"DOLLARS" and "$" - lawful money of the United States. Any reference to
payment means payment in lawful money of the United States in immediately
available funds.
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"ELIGIBLE ACCOUNTS" - shall mean accounts receivable of the Borrower
arising from the sale of inventory or provision of services in the ordinary
course of business, that are unpaid less than 90 days from the invoice date,
that are not subject to counterclaim, setoff or other claim of any kind, and
that are otherwise reasonably acceptable to Lender.
"ERISA" - the Employee Retirement Income Security Act of 1974, as
amended from time to time, including all regulations promulgated under such Act.
"EVENT OF DEFAULT" - any event specified in Article 7, PROVIDED that
any requirement for the giving of notice or lapse of time or any other condition
has been satisfied.
"FUNDED INDEBTEDNESS" - shall mean all obligations of the Borrower for
borrowed money including, without limitation, all Capital Lease Obligations and
all obligations in respect of advances made or to be made under letters of
credit issued for such Person's account and in respect of acceptance of drafts
drawn by such Person.
"GAAP" - those generally accepted accounting principles set forth in
Statements of the Financial Accounting Standards Board and in Opinions of the
Accounting Principles Board of the American Institute of Certified Public
Accountants or which have other substantial authoritative support in the United
States and are applicable in the circumstances, as applied on a consistent
basis. As used in the preceding sentence "consistent basis" shall mean that the
accounting principles observed in the current period are comparable in all
material respects to those applied in the preceding period.
"HAZARDOUS MATERIAL" - any hazardous waste, toxic substance hazardous
chemical, radioactive material, hazardous material, oil or gasoline, under any
applicable federal or state statute, county or municipal law or ordinance,
including (without limitation) any substance defined as a "hazardous substance"
or "toxic substance" (or comparable term) in the Comprehensive Environmental
Response, Compensation and Liability Act, as amended (42 U.S.C. 9601, ET SEQ.),
the Hazardous Materials Transportation Act (49 U.S.C. 1802), or the Resource
Conservation and Recovery Act (42 U.S.C. 6901, ET SEQ.).
"INDEBTEDNESS" - with respect to any Person, any item that would
properly be included as a liability on the liability side of a balance sheet of
such Person as of any date as of which Indebtedness is to be determined and
includes (but is not limited to) (a) all obligations for borrowed money
including all Loans, (b) all obligations evidenced by bonds, debentures, notes
or other similar instruments, (c) all obligations to pay the deferred purchase
price of property or services, (d) all Capital Lease Obligations, (e) all
Contingent Liabilities, and (e) all obligations in respect of advances made or
to be made under letters of credit issued for such Person's account and in
respect of acceptances of drafts drawn by such Person.
"INITIAL BORROWING DATE" - the date of this Agreement.
"INTANGIBLE ASSETS" - all intangible assets of the Borrower including,
without limitation, all deferred assets, patents, copyrights, trademarks,
non-compete agreements and similar intangibles, good will, unamortized debt
discount and expenses, and all investments other than
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Marketable Investments.
"INTELLECTUAL PROPERTY" - shall mean "Intellectual Property," as
defined in Section 101(35A) of the Bankruptcy Code, now or hereafter owned by
Borrower or any of its Subsidiaries, together with all of the following property
now or hereafter owned by Borrower or any of its Subsidiaries: all domestic and
foreign patents and patent applications; inventions, discoveries and
improvements, whether or not patentable; trademarks, trademark applications and
registrations; service marks, service xxxx applications and registrations;
copyrights, copyright applications and registrations; all licenses therefor;
trade secrets and all other proprietary information.
"INVESTMENT" - any transfers of property to, contribution to capital
of, acquisition of stock, other securities or evidences of indebtedness of,
acquisition of businesses of, or acquisition of property of, any Person, other
than in the ordinary course of business.
"IRC" - the Internal Revenue Code of 1986, as amended from time to time
and including all regulations promulgated thereunder.
"JOINT VENTURE" - a single-purpose corporation, partnership, limited
liability company, joint venture or other similar legal arrangement (whether
created by contract or conducted through a separate legal entity) now or
hereafter formed by Borrower or any of its Subsidiaries with another Person in
order to conduct a common venture or enterprise with such Person.
"LIEN" - any mortgage, deed of trust, pledge, hypothecation,
assignment, deposit arrangement, encumbrance (including, without limitation, any
easement, right-of-way, zoning or similar restriction or title defect), lien
(statutory or other) or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing and the filing of any financing statement under the UCC or comparable
law of any jurisdiction).
"LIQUIDITY RATIO" - at any date, the quotient of: (a) the sum of
Unrestricted Cash, PLUS Marketable Investments, PLUS Eligible Accounts; DIVIDED
BY (b) all Indebtedness of the Borrower.
"LOAN" or "LOANS" - any Term Loan.
"LOAN DOCUMENTS" - this Agreement, the Term Note, and all other
instruments and documents executed in connection with the Indebtedness covered
hereby and thereby.
"MARKETABLE INVESTMENTS" - any interest-bearing debt obligations owned
by Borrower (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 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
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paper and notes) and shall otherwise be liquid investments as reasonably
determined by Lender.
"MATERIAL ADVERSE EFFECT" - means a material adverse effect, as
reasonably determined by the Lender, on (a) the property, business, operations,
financial condition, liabilities or capitalization of Borrower or of Borrower
and its Subsidiaries taken as a whole; or (b) the validity or enforceability of
any of the Loan Documents.
"MULTIEMPLOYER PLAN" - a Plan which is a multiemployer plan as defined
in Section 3(37)(A) of ERISA or Section 414(f) of the IRC.
"NOTE" - the Term Note.
"OBLIGATIONS" means all loans, advances, interest, fees, debts,
guaranties, liabilities, obligations (including without limitation the Loans and
contingent obligations under guarantees), agreements, undertakings, covenants
and duties owing or to be performed or observed by Borrower to or in favor of
Lender, of every kind and description (whether or not evidenced by any note or
other instrument; for the payment of money; arising out of the Loans, this
Agreement or any other agreement between Lender and Borrower or any other
instrument of Borrower in favor of Lender; arising out of or relating or similar
to transactions described herein; or contemplated as of the Initial Borrowing
Date), direct or indirect, absolute or contingent, due or to become due, now
existing or hereafter arising, including without limitation all interest, fees,
charges, and amounts chargeable to Borrower under this Agreement.
"PBGC" - the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA.
"PERSON" - an individual, partnership, corporation, business trust,
joint stock company, trust, unincorporated association, joint venture,
governmental authority or other entity of whatever nature.
"PLAN" - any pension plan, as defined in Section 3(2) of ERISA and any
welfare plan, as defined in Section 3(1) of ERISA, which is sponsored,
maintained or contributed to by Borrower or any Commonly Controlled Entity, or
in respect of which Borrower or a Commonly Controlled Entity is an "employer" as
defined in Section 3(5) of ERISA.
"PLEDGE AGREEMENT" - the Pledge Agreement in the form of EXHIBIT C
hereto, as it may be amended, supplemented or otherwise modified, from time to
time.
"PROHIBITED TRANSACTION" - any of the transactions set forth in Section
406 of ERISA to the extent not exempt under Section 408 of ERISA.
"PURCHASED EQUIPMENT" - the equipment and fixtures at 000 Xxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000 purchased by Borrower.
"PURCHASED EQUIPMENT COST" - the amount paid by Borrower to purchase
the Purchased
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Equipment or to pay Build-Out Fees.
"QUALIFYING PARTICIPATION EVENT" - has the meaning set forth in Section
8.5 hereof.
"REPORTABLE EVENT" - any of the events set forth in Section 4043(b) of
ERISA.
"SUBORDINATED DEBT" - Indebtedness of Borrower and its Subsidiaries
that by its terms is fully subordinated to the payment and enforcement of the
Loans in a manner satisfactory to the Lender.
"SUBSIDIARY" - with respect to any Person, any corporation,
partnership, trust or other organization, whether or not incorporated, the
majority of the voting stock or voting rights of which is owned or controlled,
directly or indirectly, by such Person.
"TANGIBLE CAPITAL BASE" - the sum of shareholders' equity, PLUS
Subordinated Debt, LESS Intangible Assets.
"TERM LOAN" - any loan made pursuant to Section 2.1.
"TERM LOAN COMMITMENT" - the commitment by the Lender to make Term
Loans pursuant to Section 2.1.
"TERM LOAN COMMITMENT PERIOD" - the period from and including the
Initial Borrowing Date to and including December 31, 2000.
"TERM LOAN LIMIT" - $20,000,000, less the aggregate principal amount of
all Term Loans made to Borrower.
"TERM NOTE" - a promissory note of Borrower made to evidence the Term
Loans in the form of EXHIBIT A, as it may be amended, supplemented or otherwise
modified, from time to time.
"TERMINATION DATE" - the earlier of (a) December 30, 2005, and (b) the
date the Lender's commitment to make Loans is terminated pursuant to Section 7.2
of Article 7.
"UNRESTRICTED CASH" - cash and Cash Equivalents of the Borrower or VSC
that are readily available to Borrower or VSC, as the case may be, and not
subject to any lien or limitation or restriction on their use by the Borrower or
VSC, as the case may be.
"VSC" - Vertex Securities Corp., a Massachusetts corporation.
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SCHEDULE 3.1
FINANCIAL STATEMENTS OF BORROWER PROVIDED
Year 2000 Forecasted Statement of Operations:
- Summary Income Statement
- Major Expense Groupings
- Forecasted Balance Sheets
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SCHEDULE 3.3
SUBSIDIARIES, INVESTMENTS AND +5% SHAREHOLDERS
SUBSIDIARIES:
Vertex Securities Corp. (incorporated in Massachusetts) (wholly-owned)
Vertex Pharmaceuticals (Europe) Limited (incorporated in England) (wholly-owned)
INVESTMENTS:
Altus Biologics Inc. (incorporated in Massachusetts). At December 31, 1998,
Vertex owned approximately 70% of the capital stock of Altus. On February 5,
1999, Vertex restructured its investment in Altus. As part of the transaction,
Vertex provided Altus $3,000,000 of cash in exchange for preferred stock and
warrants. The preferred stock provides Vertex with a minority ownership position
in Altus, and the warrants become exercisable upon certain events. As a result
of the transaction, Altus now operates independently from Vertex. In addition,
Vertex has retained a non-exclusive royalty-free right to use Altus' technology
for discovering, developing and manufacturing small molecule drugs. Vertex
records its percentage of Altus' net income and losses using the equity method
of accounting.
Versal Technologies Inc. (incorporated in Massachusetts). Vertex owns less than
20% of total Versal shares outstanding.
PRINCIPAL SHAREHOLDERS
As of 12/17/99, based solely upon information filed by shareholders with the
S.E.C.:
Shares Percentage
------ ----------
Name Beneficially Owned of Total
---- ------------------ --------
Wellington Management Company LLP .................... 2,704,200 10.7%
Trimark Financial Corporation ........................ 2,102,000 8.3%
Bluewater Fund ....................................... 1,370,000 5.4%
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SCHEDULE 3.6
CONSENTS AND APPROVALS REQUIRED
None
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SCHEDULE 3.8
LITIGATION
Chiron Corporation ("Chiron") filed suit on July 30, 1998 against the
Company and Xxx Xxxxx and Company in the United States District Court for the
Northern District of California, alleging infringement by the defendants of
various U.S. patents issued to Chiron. The infringement action relates to
research activities by the defendants in the hepatitis C viral protease field
and the alleged use of inventions claimed by Chiron in connection with that
research and development. Chiron has requested damages in an unspecified amount,
as well as an order permanently enjoining the defendants from unlicensed use of
Chiron inventions. While the final outcome of these actions cannot be
determined, the Company believes that the plaintiff's claims are without merit
and intends to defend the actions vigorously.
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SCHEDULE 3.11
BURDENSOME RESTRICTIONS
None
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SCHEDULE 3.18
LOCATION OF ASSETS
000 Xxxxxxx Xxxxxx, Xxxxxxxxx, XX, XXX (includes buildings located at 00 Xxxxxxx
Xxxxxx, 228 and 000 Xxxxxx Xxxxxx, 00 Xxxxxxxx Street, and 000 Xxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxxxxxxx)
00 Xxxxxx Xxxx, Xxxxxxxx, Xxxx XX00 0XX, U.K.
Items in storage in leased premises at 000 Xxxxxx Xxxxxx and 00 Xxxx Xxxxxx,
Xxxxxxxxx, XX, and in contracted warehouse storage at 134 Mass. Ave.
(Metropolitan Storage), Cambridge, and 00 Xxxxxxxx Xxx in Woburn (Xxxxx'x
Storage Warehouse).
Office equipment and related property maintained by medical liaison field staff
based in 12 locations in the U.S., Germany, France and Italy (1 employee in each
location)
In addition, from time to time Vertex compounds and other research and
development materials are sent to contract testing laboratories and process
development contractors for testing, scale-up and manufacture. Some clinical
trial materials may be located in off-site storage facilities.
The Purchased Equipment will be located at 000 Xxxxxx Xxxxxx, Xxxxxxxxx, XX.
-67-
SCHEDULE 3.20
INTELLECTUAL PROPERTY DISCLOSURE
See Schedule 3.8
In addition, an opposition to one of Vertex's patents in the EPO has been filed
by another pharmaceutical company.
-68-
SCHEDULE 3.21
NEGATIVE PLEDGES
None
-69-
SCHEDULE 5.1
INDEBTEDNESS
Capital Leases
--------------
- BankBoston Balance at 11/30/99 = $1,848,807
- GE Capital Balance at 11/30/99 = $4,447,321
- Lasalle Balance at 11/30/99=$886,717
- Apple Comm Credit Balance at 11/30/99 = $87,926
Operating Leases
----------------
- Fort Washington Realty Trust lease expires 1/1/01
- Fort Washington Limited Partnershipleases expire12/31/09 & 12/31/05
- Fort Washington Limited Partnership (new building) lease expires 5/1/10
- Hybridon lease expires 10/01/00
- Xxxxxx Street Enterprises lease expires 12/1/00
- C. Xxxxxxx Xxxxx lease expires 12/31/03
- Xxxxxx Xxxx Limited (UK) lease expires 12/31/09
Purchase Commitments
--------------------
- Silicon Graphics - Supercomputer lease through 2001
- Various Software - approx. $350,000 per year for 2000 & 2001
-70-
SCHEDULE 5.2
CONTINGENT LIABILITIES
None
-71-
SCHEDULE 5.3
DISCLOSED LIENS
PRECISION CORPORATE SERVICES, INC.
October 12, 1999
SUBJECT: VERTEX PHARMACEUTICALS INCORPORATED
SEARCH REQUEST: UCC - CAMBRIDGE CITY CLERK, MA
THROUGH DATE: OCTOBER 4, 1999 Page 1 of 5
-----File Date---------File Number -----------------Type--------------Description---------------
Mar. 23, 1992 #055544 SNET Credit Inc.
Xxxxx Xxxxx, XX 00000
Assignment Filed 07-16-93
Assignment Filed 08-09-95
Continuation Filed 10-02-96
Apr. 13, 1992 #055593 SNET Credit, Inc.
Xxxxx Xxxxx, XX 00000
Assignment Filed 07-16-93
Assignment Filed 08-09-95
Continuation Filed 10-15-96
Jun. 05, 1992 #055728 SNET Credit, Inc.
Xxxxx Xxxxx, XX 00000
Assignment Filed 07-16-93
Assignment Filed 08-09-95
Continuation Filed 12-10-96
Aug. 26, 1992 #055976 SNET Credit, Inc.
Xxxxx Xxxxx, XX 00000
Assignment Filed 08-09-95
Continuation Filed 01-02-97
Oct. 14, 1992 #056113 General Electric Capital
Corporation
Xxxx Valley, MD
#056113 Continuation Filed 04-24-97
Precision Corporate Services cannot be held liable as to the accuracy of the
information contained herein. This information is derived from public records
which are maintained by government officials.
X.X. Xxx 0000, XxXxxxxxx Xxxxxxx, Xxxxxx, XX 00000 (617) 227-2276
-72-
PRECISION CORPORATE SERVICES, INC.
October 12, 1999
SUBJECT: VERTEX PHARMACEUTICALS INCORPORATED
SEARCH REQUEST: UCC - CAMBRIDGE CITY CLERK, MA
THROUGH DATE: OCTOBER 4, 1999 Page 2 of 5
-----File Date---------File Number -----------------Type--------------Description---------------
Jan. 21, 1993 #056399 General Electric Capital
Corporation
Xxxx Valley, MD
Continuation Filed 07-23-97
Oct. 07, 1993 #057220 General Electric Capital
Corporation
Xxxx Xxxxxx, XX 00000
Continuation Filed 04-16-98
Jan. 13, 1994 #057551 General Electric Capital
Corporation
Xxxx Xxxxxx, XX 00000
Continuation Filed 07-24-98
Jan. 20, 1995 #058888 BayBank Boston, N.A.
Xxxxxx, XX 00000
Assignment Filed 08-28-97
Amendment Filed 09-26-97
Apr. 27, 1995 #059248 BayBank Boston, N.A.
Xxxxxx, XX 00000
Assignment Filed 09-26-97
Amendment Filed 09-26-97
Jun. 28, 1995 #059459 BayBank Boston, N.A.
Precision Corporate Services cannot be held liable as to the accuracy of the
information contained herein. This information is derived from public records
which are maintained by government officials.
X.X. Xxx 0000, XxXxxxxxx Xxxxxxx, Xxxxxx, XX 00000 (617) 227-2276
-73-
PRECISION CORPORATE SERVICES, INC.
October 12, 1999
SUBJECT: VERTEX PHARMACEUTICALS INCORPORATED
SEARCH REQUEST: UCC - CAMBRIDGE CITY CLERK, MA
THROUGH DATE: OCTOBER 4, 1999 Page 3 of 5
-----File Date---------File Number -----------------Type--------------Description---------------
Xxxxxx, XX 00000
Assignment Filed 09-26-97
Amendment Filed 09-26-97
Sep. 20, 1995 #059731 BayBank Boston, N.A.
Xxxxxx, XX 00000
Assignment Filed 09-26-97
Amendment Filed 09-26-97
Dec. 29, 1995 #060100 BayBank , N.A.
Xxxxxx, XX 00000
Assignment Filed 09-26-97
Amendment Filed 09-26-97
Apr. 30, 1996 #060550 BayBank, N.A.
Xxxxxxxxxx, XX 00000
Assignment Filed 09-26-97
Amendment Filed 09-26-97
Assignment Filed 10-09-97
Jul. 02, 1996 #060862 BayBank, N.A.
Xxxxxxxxxx, XX 00000
Assignment Filed 09-26-97
Amendment Filed 09-26-97
Precision Corporate Services cannot be held liable as to the accuracy of the
information contained herein. This information is derived from public records
which are maintained by government officials.
X.X. Xxx 0000, XxXxxxxxx Xxxxxxx, Xxxxxx, XX 00000 (617) 227-2276
-74-
PRECISION CORPORATE SERVICES, INC.
October 12, 1999
SUBJECT: VERTEX PHARMACEUTICALS INCORPORATED
SEARCH REQUEST: UCC - CAMBRIDGE CITY CLERK, MA
THROUGH DATE: OCTOBER 4, 1999 Page 4 of 5
-----File Date---------File Number -----------------Type--------------Description---------------
Assignment Filed 10-09-97
Oct. 15, 1996 #061251 BayBank, N.A.
Xxxxxxxxxx, XX 00000
Assignment Filed 09-26-97
Amendment Filed 09-26-97
Assignment Filed 10-09-97
Jan. 15, 1997 #061671 BayBank
Xxxxxxxxxx, XX 00000
Assignment Filed 09-26-97
Amendment Filed 09-26-97
Feb. 11, 1997 #061786 BayBank, N.A.
Xxxxxxxxxx, XX 00000
Assignment Filed 09-26-97
Amendment Filed 09-26-97
Assignment Filed 10-09-97
May 08, 1997 #062107 BayBank, N.A.
Burlington, MA
Assignment Filed 09-26-97
Amendment Filed 09-26-97
Assignment Filed 10-09-97
Aug. 05, 1997 #062498 BancBoston Leasing Inc.
Xxxxxxxxxx, XX 00000
Precision Corporate Services cannot be held liable as to the accuracy of the
information contained herein. This information is derived from public records
which are maintained by government officials.
X.X. Xxx 0000, XxXxxxxxx Xxxxxxx, Xxxxxx, XX 00000 (617) 227-2276
-75-
PRECISION CORPORATE SERVICES, INC.
October 12, 1999
SUBJECT: VERTEX PHARMACEUTICALS INCORPORATED
SEARCH REQUEST: UCC - CAMBRIDGE CITY CLERK, MA
THROUGH DATE: OCTOBER 4, 1999 Page 5 of 5
-----File Date---------File Number -----------------Type--------------Description---------------
Amendment Filed 09-26-97
Oct. 03, 1997 #062753 General Electric Capital
Corporation
Xxxx Valley, MD
Amendment Filed 06-18-98
Nov. 13, 1997 #062933 Silicon Graphics, Inc.
Mountain View, CA
Jan. 05, 1998 #063181 General Electric Capital
Corporation
Xxxx Valley, MD
Apr. 09, 1998 #063544 General Electric Capital
Corporation
Xxxx Xxxxxx, XX 00000
Jul. 10, 1998 #063965 General Electric Capital
Corporation
Xxxx Xxxxxx, XX 00000
Nov. 03, 1998 #064537 General Electric Capital
Corporation
Xxxx Xxxxxx, XX 00000
Precision Corporate Services cannot be held liable as to the accuracy of the
information contained herein. This information is derived from public records
which are maintained by government officials.
X.X. Xxx 0000, XxXxxxxxx Xxxxxxx, Xxxxxx, XX 00000 (617) 227-2276
-76-
PRECISION CORPORATE SERVICES, INC.
October 6, 1999
SUBJECT: VERTEX PHARMACEUTICALS INCORPORATED
SEARCH REQUEST: UCC - MASSACHUSETTS SECRETARY OF STATE
THROUGH DATE: OCTOBER 01, 1999 Page 1 of 6
-----File Date---------File Number -----------------Type--------------Description---------------
Mar. 25, 1992 #081823 SNET Credit, Inc.
Xxxxx Xxxxx, XX 00000
#176429 Assignment Filed 07-28-93
#330976 Assignment Filed 08-09-95
#420394 Continuation Filed 10-02-96
Apr. 13, 1992 #085553 SNET Credit, Inc.
Xxxxx Xxxxx, XX 00000
#174092 Assignment Filed 07-16-93
#330975 Assignment Filed 08-09-95
#423008 Continuation Filed 10-15-96
Jun. 05, 1992 #096063 SNET Credit, Inc.
Xxxxx Xxxxx, XX 00000
#174067 Assignment Filed 07-16-93
#330974 Assignment Filed 08-09-95
#434738 Continuation Filed 12-10-96
June. 26, 1992 #100038 SNET Credit, Inc.
Xxxxx Xxxxx, XX 00000
#174069 Assignment Filed 07-16-93
#330978 Assignment Filed 08-09-95
#439923 Continuation Filed 01-02-97
Sep. 08, 1993 #112691 SNET Credit, Inc.
Xxxxx Xxxxx, XX 00000
#174070 Assignment Filed 07-16-93
Precision Corporate Services cannot be held liable as to the accuracy of the
information contained herein. This information is derived from public records
which are maintained by government officials.
X.X. Xxx 0000, XxXxxxxxx Xxxxxxx, Xxxxxx, XX 00000 (617) 227-2276
-77-
PRECISION CORPORATE SERVICES, INC.
October 6, 1999
SUBJECT: VERTEX PHARMACEUTICALS INCORPORATED
SEARCH REQUEST: UCC - MASSACHUSETTS SECRETARY OF STATE
THROUGH DATE: OCTOBER 01, 1999 Page 2 of 6
-----File Date---------File Number -----------------Type--------------Description---------------
#330979 Assignment Filed 08-09-95
#455902 Continuation Filed 03-20-97
Oct. 02, 1992 #117565 SNET Credit, Inc.
Xxxxx Xxxxx, XX 00000
#175873 Assignment Filed 07-26-93
#330980 Assignment Filed 08-09-95
#460297 Continuation Filed 04-10-97
Oct. 15, 1992 #119868 General Electric Capital
Corporation
Xxxx Valley, MD
#463703 Continuation Filed 04-24-97
Jan. 20, 1993 #138847 General Electric Capital
Corporation
Xxxx Valley, MD
#485092 Continuation Filed 07-23-97
Oct. 07, 1993 #190096 General Electric Capital
Corporation
Xxxx Xxxxxx, XX 00000
#542955 Continuation Filed 04-15-98
Jan. 24, 1994 #211595 General Electric Capital
Corporation
Xxxx Xxxxxx, XX 00000
Precision Corporate Services cannot be held liable as to the accuracy of the
information contained herein. This information is derived from public records
which are maintained by government officials.
X.X. Xxx 0000, XxXxxxxxx Xxxxxxx, Xxxxxx, XX 00000 (617) 227-2276
-78-
PRECISION CORPORATE SERVICES, INC.
October 6, 1999
SUBJECT: VERTEX PHARMACEUTICALS INCORPORATED
SEARCH REQUEST: UCC - MASSACHUSETTS SECRETARY OF STATE
THROUGH DATE: OCTOBER 01, 1999 Page 3 of 6
-----File Date---------File Number -----------------Type--------------Description---------------
#567708 Continuation Filed 07-29-98
Jan. 13, 1995 #286425 BayBank Boston, N.A.
Xxxxxx, XX 00000
#493006 Assignment Filed 08-27-97
#499617 Amendment Filed 09-25-97
Apr. 24, 1995 #308152 BayBank Boston, N.A.
Xxxxxx, XX 00000
#499605 Assignment Filed 09-25-97
#499628 Amendment Filed 09-25-97
May 15, 1995 #312413 Xerox Corporation
Xxxxxxxx, XX, 00000
Jun. 28, 1995 #322275 BayBank Boston, N.A.
Xxxxxx, XX 00000
#499606 Assignment Filed 09-25-97
#499627 Amendment Filed 09-25-97
Sep. 29, 1995 #341260 BayBank Boston, N.A.
Xxxxxx, XX 00000
#499607 Assignment Filed 09-25-97
#499626 Amendment Filed 09-25-97
Dec. 28, 1995 #360219 BayBank , N.A.
Xxxxxx, XX 00000
Precision Corporate Services cannot be held liable as to the accuracy of the
information contained herein. This information is derived from public records
which are maintained by government officials.
X.X. Xxx 0000, XxXxxxxxx Xxxxxxx, Xxxxxx, XX 00000 (617) 227-2276
-79-
PRECISION CORPORATE SERVICES, INC.
October 6, 1999
SUBJECT: VERTEX PHARMACEUTICALS INCORPORATED
SEARCH REQUEST: UCC - MASSACHUSETTS SECRETARY OF STATE
THROUGH DATE: OCTOBER 01, 1999 Page 4 of 6
-----File Date---------File Number -----------------Type--------------Description---------------
#499608 Assignment Filed 09-25-97
#499625 Amendment Filed 09-25-97
Apr. 24, 1996 #384660 BayBank, N.A.
Xxxxxxxxxx, XX 00000
#499624 Amendment Filed 09-25-97
#499909 Assignment Filed 09-26-97
#502436 Assignment Filed 10-08-97
Jul. 01, 1996 #400581 BayBank, N.A.
Xxxxxxxxxx, XX 00000
#499609 Assignment Filed 09-25-97
#499623 Amendment Filed 09-25-97
#502435 Assignment Filed 10-08-97
Oct. 07, 1996 #421439 BayBank, N.A.
Xxxxxxxxxx, XX 00000
#499610 Assignment Filed 09-25-97
#499622 Amendment Filed 09-25-97
#502434 Assignment Filed 10-08-97
Jan. 10, 1997 #441294 BayBank, N.A.
Burlington, Ma
#499611 Assignment Filed 09-25-97
#499621 Amendment Filed 09-25-97
Jan. 13, 1997 #442078 LINC Quantum Anayltics
Inc.
Xxxxxx Xxxx, XX 00000
Precision Corporate Services cannot be held liable as to the accuracy of the
information contained herein. This information is derived from public records
which are maintained by government officials.
X.X. Xxx 0000, XxXxxxxxx Xxxxxxx, Xxxxxx, XX 00000 (617) 227-2276
-80-
PRECISION CORPORATE SERVICES, INC.
October 6, 1999
SUBJECT: VERTEX PHARMACEUTICALS INCORPORATED
SEARCH REQUEST: UCC - MASSACHUSETTS SECRETARY OF STATE
THROUGH DATE: OCTOBER 01, 1999 Page 5 of 6
-----File Date---------File Number -----------------Type--------------Description---------------
Feb. 05, 1997 #446572 BayBank, N.A.
Xxxxxxxxxx, XX 00000
#499612 Assignment Filed 09-25-97
#499620 Amendment Filed 09-25-97
#502432 Assignment Filed 10-08-97
May 06, 1997 #466394 BayBank, N.A.
Burlington, Ma
#499613 Assignment Filed 09-25-97
#499619 Amendment Filed 09-25-97
#502433 Assignment Filed 10-08-97
Aug. 14, 1997 #490197 BancBoston Leasing Inc.
Xxxxxxxxxx, XX 00000
#499618 Amendment Filed 09-25-97
Oct. 03, 1997 #501217 General Electric Capital
Corporation
Xxxx Valley, MD
#558209 Amendment Filed 07-18-98
Nov. 13, 1997 #510374 Silicon Graphics Inc.
Mountain View, CA
Jan. 05, 1998 #521048 General Electric Capital
Corporation
Xxxx Valley, MD
Precision Corporate Services cannot be held liable as to the accuracy of the
information contained herein. This information is derived from public records
which are maintained by government officials.
X.X. Xxx 0000, XxXxxxxxx Xxxxxxx, Xxxxxx, XX 00000 (617) 227-2276
-81-
PRECISION CORPORATE SERVICES, INC.
October 6, 1999
SUBJECT: VERTEX PHARMACEUTICALS INCORPORATED
SEARCH REQUEST: UCC - MASSACHUSETTS SECRETARY OF STATE
THROUGH DATE: OCTOBER 01, 1999 Page 6 of 6
-----File Date---------File Number -----------------Type--------------Description---------------
Jan. 09, 1998 #522144 Silicon Graphics, Inc.
Xx. Xxxx, XX 00000
Apr. 08, 1998 #541304 General Electric Capital
Corporation
Xxxx Xxxxxx, XX 00000
Jul. 09, 1998 #563183 General Electric Capital
Corporation
Xxxx Valley, MD
Oct. 30, 1998 #587614 General Electric Capital
Corporation
Xxxx Xxxxxx, XX 00000
Precision Corporate Services cannot be held liable as to the accuracy of the
information contained herein. This information is derived from public records
which are maintained by government officials.
X.X. Xxx 0000, XxXxxxxxx Xxxxxxx, Xxxxxx, XX 00000 (617) 227-2276
-82-
SCHEDULE 5.5
INVESTMENT POLICIES
VERTEX PHARMACEUTICALS INCORPORATED
INVESTMENT POLICY GUIDELINES
XXXXXX, XXXXXXX, TREES AND XXXXX, INC.
I. PURPOSE
To establish policy and guidelines for investment of corporate surplus
cash. "Surplus cash" is cash in corporate accounts not immediately
required for debt repayment, working capital, capital investment, or
other outstanding near-term financial obligations.
II. OBJECTIVES
The investment portfolio will be managed to:
A. Maximize returns versus the industry averages.
B. Diversify investments to minimize the risk and inappropriate
concentrations of investments with any one entity.
Securities in the portfolio may be actively traded before maturation.
Gains and losses may be realized on certain trades in order to more
effectively reposition the portfolio for performance within specified
parameters. Total net realized losses (realized losses net of realized
gains) are not to exceed $175,000 per fiscal quarter.
III. INVESTMENT RESTRICTIONS
Investments shall be made in the context of the following investment
guide lines:
The current benchmark for duration and performance of the portfolio:
25% in the Merrill 3 month treasury index
75% in the Merrill 1-3 year treasury index
Periodic liquidity in the portfolio will be required for use in funding
the operations of the Company. Notification of a draw-down will be
given with a reasonable amount of time as to avoid any unneccesary
trading losses.
Eligible Investments:
1. Direct obligations of the U.S. Treasury including bills,
notes, and bonds.
-83-
2. Obligations issued or guaranteed by agencies or instruments of
the U.S. government.
3. Bank obligations, including certificates of deposit, bank
notes and bankers acceptances. Investments in these securities
is limited to banks whose long term debt is rated "A" or
higher by Moody's or Standard & Poor's and short term
obligations are rated "P-l " or higher by Moody's or "A-l " or
higher by Standard & Poor's.
4. Corporateobligations, including intermediate term notes rated
"A" or higher by Moody's or Standard & Poors and Commercial
Paper rated "P-l" or higher by Moody's, or "A-l" or higher by
Standard & Poor's.
5. At the discretion of the Treasurer, a maximum 20% of the
portfolio, at the time of purchase, may be invested in
corporate obligations with a short term rating of A2/P2 and
long term ratings of Baa1/BBB+, with a maturity not to exceed
six months.
6. Repurchase agreements collateralized at a minimum of 102% with
U.S. Treasury securities or other securities rated "AAA/Aaa"
or equivalent.
7. Internal money market funds may be utilized for excess cash in
the portfolio. Outside money market funds over $1 billion in
assets consisting of acceptable securities are appropriate for
investing, as long as the fund's manager has been in business
over five years, has name recognition, ant that performance
that is easily tracked.
8. U.S. and dollar denominated International corporate debt of
all types is acceptable as long as the issuer meets credit
rating and marketability guidelines.
9. Asset backed and mortgage backed securities (including CMOs)
with AAA/Aaa credit rating or equivalent are acceptable
investments. Expected maturity should be no longer than four
years.
10. Xxxxxx Xxx, Xxxxxxx Mac, and Xxxxxx Mae securities are
acceptable investments.
11. Treasury futures, including Eurodollar futures, on allowable
securities otherwise eligible for purchase into the portfolio
may be used to manage the duration of the portfolio though
their exercise dates must be within + (-) six months of the
duration of the portfolio.
IV. MATURITIES, DURATION, VOLATILITY
The maximum maturity of individual securities or the maximum average
life of a security in the portfolio may not exceed 4 years.
-84-
The effective duration of the portfolio may not exceed 2 years.
For securities which have put dates, reset dates, or are traded based
on their average maturity, the put date, reset date, or average
maturity will be used, instead of the final maturity date, for maturity
guideline purposes.
The overall volatility of the entire portfolio will be 2% or less at
all times.
V. CONCENTRATION LIMITS/RESTRICTIONS
There is no minimum or maximum limit to the percentage of the portfolio
invested in securities issued by the U.S. Treasury or by its agencies
and instrumentalities.
No one issuer or group of issuers from the same holding company, is to
exceed 10% of the portfolio at time of purchase, with the exception of
US Government securities.
Excess concentrations is any one sector or any one type of security
(i.e. corporates, mortgage-backed, asset backed, repos) should be
avoided and no one sector or class should represent more than 50% of
the portfolio with the exception of US Government securities.
VI. INVESTMENT PERFORMANCE
The company shall review the performance of it's investment managers on
at least an annual basis. A quarterly meeting will be held in person or
by telephone with the Treasurer to review performance figures and any
updated liquidity needs and to discuss portfolio strategy.
VII. CREDIT QUALITY
Should any investment held in Vertex's portfolio be down-graded below
the minimum prescribed rating, immediate notification must be made to
Vertex.
VIII. MARKETABILITY
All securities are to be purchased through investment banking and
brokerage firms of high quality and reputation, with a history of
making markets for the securities in which we invest. All holdings will
be of sufficient size and held in issues traded actively enough to
facilitate minimum transaction costs and accurate market valuations.
IX. TRADING GUIDELINES
Normal investing practice is to actively manage the account and
reinvest funds to take advantage of changing market conditions or
reinvest on the day a security matures to maximize interest. A daily
transaction log is to be maintained and available for review at
-85-
any time. All trading firms must generate a hard copy document for each
transaction which is mailed to Vertex on a timely basis, and then
matched to the transaction log.
X. SAFEKEEPING
Assets are to be held in a segregated bank custody account at State
Street Bank with separate fiduciary account documents executed by and
between State Street and Vertex. Assets shall not be held by any
investment manager or securities dealer.
Xl. FIDUCIARY DISCRETION
The manager has full discretion to invest capital subject with strict
adherence to these guidelines. These guidelines are to be reviewed
periodically by the Treasurer and revisions made consistent with
objectives set forth herein.
APPROVED BY: DATE: 11/17/97
-----------------------------------------------------
Xxxxxx X. Xxxxxxxxxxx, Treasurer
-86-
VERTEX PHARMACEUTICALS INCORPORATED
INVESTMENT POLICY GUIDELINES
XXXXXXX XXXXX
I. PURPOSE
To establish policy and guidelines for investment of corporate surplus
cash. "Surplus cash" is cash in corporate accounts not immediately
required for debt repayment, working capital, capital investment, or
other outstanding near-term financial obligations.
II. OBJECTIVES
The investment portfolio will be managed to:
A. Maximize returns versus the industry averages.
B. Diversify investments to minimize the risk and inappropriate
concentrations of investments with any one entity.
Securities in the portfolio may be actively traded before maturation.
Gains and losses may be realized on certain trades in order to more
effectively reposition the portfolio for performance within specified
parameters. Total net realized losses (realized losses net of realized
gains) are not to exceed $175,000 per fiscal quarter.
III. INVESTMENT RESTRICTIONS
Investments shall be made in the context of the following investment
guide lines:
The current BENCHMARK for duration and performance of the portfolio:
25% in the Merrill 3 month treasury index
75% in the Merrill 1-3 year treasury index
Periodic liquidity in the portfolio will be required for use in funding
the operations of the Company. Notification of a draw-down will be
given with a reasonable amount of time as to avoid any unnecessary
trading losses.
Eligible Investments:
1. Direct obligations of the U.S. Treasury including bills,
notes, and bonds.
2. Obligations issued or guaranteed by agencies or instruments of
the U.S. government.
3. Bank obligations, including certificates of deposit, bank
notes and bankers
-87-
acceptances. Investments in these securities is limited to
banks whose long term debt is rated "A" or higher by Moody's
or Standard & Poor's and short term obligations are rated "P-l
" or higher by Moody's or "A-l " or higher by Standard &
Poor's.
4. Corporate obligations, including intermediate term notes rated
"A" or higher by Moody's or Standard & Poors and Commercial
Paper rated "P-l" or higher by Moody's, or "A-l" or higher by
Standard & Poor's.
5. At the discretion of the Treasurer, a maximum 20% of the
portfolio, at the time of purchase, may be invested in
corporate obligations with a short term rating of A2/P2 and
long term ratings of Baa1/BBB+, with a maturity not to exceed
six months.
6. Repurchase agreements collateralized at a minimum of 102% with
U.S.. Treasury securities or other securities rated "AAA/Aaa"
or equivalent.
7. Internal money market funds may be utilized for excess cash in
the portfolio. Outside money market funds over $1 billion in
assets consisting of acceptable securities are appropriate for
investing, as long as the fund's manager has been in business
over five years, has name recognition, ant that performance
that is easily tracked.
8. U.S. and dollar denominated International corporate debt of
all types is acceptable as long as the issuer meets credit
rating and marketability guidelines.
9. Asset backed and mortgage backed securities (including CMOs)
with AAA/Aaa credit rating or equivalent are acceptable
investments. Expected maturity should be no longer than four
years.
10. Xxxxxx Mae, Xxxxxxx Mac, and Xxxxxx Mae securities are
acceptable investments.
IV. MATURITIES, DURATION, VOLATILITY
The maximum maturity of individual securities or the maximum average
life of a security in the portfolio may not exceed 4 years.
The effective duration of the portfolio may not exceed 2 years.
For securities which have put dates, reset dates, or are traded based
on their average maturity, the put date, reset date, or average
maturity will be used, instead of the final maturity date, for maturity
guideline purposes.
The overall volatility of the entire portfolio will be 2% or less at
all times.
-88-
V. CONCENTRATION LIMITS/RESTRICTIONS
There is no minimum or maximum limit to the percentage of the portfolio
invested in securities issued by the U.S. Treasury or by its agencies
and instrumentalities.
No one issuer or group of issuers from the same holding company, is to
exceed 10% of the portfolio at time of purchase, with the exception of
US Government securities.
Excess concentrations is any one sector or any one type of security
(i.e. corporates, mortgage-backed, asset backed, repos) should be
avoided and no one sector or class should represent more than 50% of
the portfolio with the exception of US Government securities.
VI. INVESTMENT PERFORMANCE
The company shall review the performance of it's investment managers on
at least an annual basis. A quarterly meeting will be held in person or
by telephone with the Treasurer to review performance figures and any
updated liquidity needs and to discuss portfolio strategy.
VII. CREDIT QUALITY
Should any investment held in Vertex's portfolio be down-graded below
the minimum prescribed rating, immediate notification must be made to
Vertex.
VIII. MARKETABILITY
All securities are to be purchased through investment banking and
brokerage firms of high quality and reputation, with a history of
making markets for the securities in which we invest. All holdings will
be of sufficient size and held in issues traded actively enough to
facilitate minimum transaction costs and accurate market valuations.
IX. TRADING GUIDELINES
Normal investing practice is to actively manage the account and
reinvest funds to take advantage of changing market conditions or
reinvest on the day a security matures to maximize interest. A daily
transaction log is to be maintained and available for review at any
time. All trading firms must generate a hard copy document for each
transaction which is mailed to Vertex on a timely basis, and then
matched to the transaction log.
X. SAFEKEEPING
Assets are to be held in a segregated bank custody account at State
Street Bank with separate fiduciary account documents executed by and
between State Street and Vertex. Assets shall not be held by any
investment manager or securities dealer.
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Xl. FIDUCIARY DISCRETION
The manager has full discretion to invest capital subject to strict
adherence to these guidelines. These guidelines are to be reviewed
periodically by the Treasurer and revisions made consistent with
objectives set forth herein.
APPROVED BY: DATE: 11/17/97
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Xxxxxx X. Xxxxxxxxxxx, Treasurer
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VERTEX PHARMACEUTICALS INC.
INVESTMENT POLICY GUIDELINES FOR:
CAPITAL ADVISORS
I. PURPOSE
To establish policy and guidelines for investment of corporate surplus
cash. "Surplus cash" is cash in corporate accounts not immediately
required for debt repayment, working capital, capital investment, or
other outstanding near-term financial obligation-.
OBJECTIVES
Conservation of capital and maintenance of liquidity until funds can be
used in business operations.
A Preserve capital.
B. Anticipate liquidity requirements.
C. Maximize returns versus the industry averages.
D. Diversify investments to minimize the risk and inappropriate
concentrations of investments with any one entity.
E. Provide fiduciary control of cash and investments by
individuals approved by the Board.
II. LIQUIDITY GUIDELINES
Excess cash is invested with liquidity in mind, and without any loss of
principal. Daily liquidity is essential, restriction on liquidity are:
At least $1,000,000 must be available each business day until 2:30 p.m.
Eastern time with no loss of principal.
At least $2,500,000 must be available within 30 days with no loss of
principal.
The remainder of the funds are to be invested, consistent with
anticipated cash needs, in securities with maturities no longer than 4
years. Repositioning of these securities before their maturity,
generating small gains or losses, is permitted for managing liquidity
requirements only. Any repositioning of securities causing a gain or
loss must be pre-approved by the V.P. Finance and Treasurer for
fiduciary control
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purposes.
III. INVESTMENT RESTRICTIONS
Investments shall be made in the context of the following investment guide
lines:
ELIGIBLE INVESTMENTS
1. Direct obligations of the U.S. Treasury including bills, notes, and
bonds.
2. Obligations issued or guaranteed by agencies or instruments of the U.S.
government.
3. Bank obligations, including certificates of deposit, bank notes and
bankers acceptances. Investments in these securities is limited to
banks whose long term debt is rated "A" or higher by Moody's or
Standard & Poor's and short term obligations are rated "P-l " or higher
by Moody's or "A-l " or higher by Standard & Poor's.
4. Corporate obligations, including intermediate term notes rated "A" or
higher by Moody's or Standard & Poors and Commercial Paper rated "P-l"
or higher by Moody's, or "A-l" or higher by Standard & Poor's.
5. At the discretion of the Senior Director of Finance, a maximum 20% of
the portfolio, at the time of purchase, may be invested in corporate
obligations with a short term rating of A2/P2 and long term ratings of
Baa1/BBB+, with a maturity not to exceed six months.
6. Repurchase agreements collateralized at a minimum of 102% with U.S..
Treasury securities or other securities rated "AAA/Aaa" or equivalent.
7. Money market funds over $1 billion in assets consisting of acceptable
securities are appropriate for investing, as long as the fund's manager
has been in business over five years, has name recognition, ant that
performance that is easily tracked.
8. U.S. and dollar denominated International corporate debt of all types
is acceptable as long as the issuer meets credit rating and
marketability guidelines. Pre-approval of Senior Director of Finance
shall be obtained.
9. Floating rate note securities are acceptable with maturities greater
than 18 months only if they have a readjustment period of 6 months or
less, are government issued (AAA Credit Rating) and are to reset off a
common short term index (3 month treasury index). Terms of reset
mechanisms including caps, floors and spreads shall be reviewed and
approved by the
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Senior Director of Finance.
IV. MATURITIES
The maximum maturity of individual securities in the portfolio may not
exceed 4 years.
The average maturity of the portfolio may not exceed 2 years.
For securities which have put dates, reset dates, or are traded based
on their average maturity, the put date, reset date, or average
maturity will be used, instead of the final maturity date, for maturity
guideline purposes. Notification to the Treasurer is needed prior to
purchase of any maturity greater than 1 year.
V. CONCENTRATION LIMITS/RESTRICTIONS
There is no limit to be percentages of the portfolio which may be
maintained in securities issued by the U.S. Treasury or by its agencies
and instrumentalities.
No one issuer or group of issuers from the same holding company, is to
exceed 15% of the portfolio at time of purchase, with the exception of
Government securities.
U.S. bank and insurance company securities (CDs, commercial paper, BAs,
etc..), must not in total exceed 60% of the portfolio. Holdings of one
issuer cannot exceed 10% of the total portfolio at the time of
purchase.
VI. INVESTMENT PERFORMANCE
The company shall review the performance of it's investment managers on
at least an annual basis. A quarterly meeting will be held with the
individual appointed by the board for fiduciary controls, to review
performance figures and any updated liquidity needs and to discuss
portfolio strategy.
VII. CREDIT QUALITY
Trends for a given company or industry must be reviewed periodically by
the Treasurer and adjustments in percentage positions made accordingly.
Should any investment held in Vertex's portfolio fall short of
prescribed guidelines, immediate notification must be made to the
individual appointed by the board to oversee fiduciary controls.
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VIII. MARKETABILITY
All securities are to be purchased through investment banking and
brokerage firms of high quality and reputation, with a history of
making markets for the securities in which we invest. In the unlikely
event that securities must be sold before their maturity, the
securities must be easily remarketed. To accomplish this, the
securities must be conventional "products" with strong name
recognition.
IX. TRADING GUIDELINES
Normal investing practice is to reinvest the funds on the day a
security matures, to maximize interest. A daily transaction log is to
be maintained and available for review at any time. All trading firms
must generate a hard copy document for each transaction which is mailed
to us on a timely basis, and then matched to the transaction log.
Quarterly summaries of our investment holdings and cash usage are to be
made available for board review.
X. SAFEKEEPING
Assets are to be held in a segregated bank custody account with
separate fiduciary account documents executed by the bank. Assets shall
not be held by any investment manager or securities dealer.
Xl. FIDUCIARY DISCRETION
The Treasurer and his/her authorized employees are responsible for
securing and managing investments and cash for operations. These
individuals have full discretion to invest any excess capital subject
to strict adherence to these guidelines. These guidelines are to be
reviewed periodically with the Chief Business Officer and revisions
made consistent with objectives set forth herein.
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EXHIBIT A TO CREDIT AGREEMENT
TERM NOTE
$20,000,000.00 Boston, Massachusetts
December 21, 1999
1. PROMISE TO PAY.
FOR VALUE RECEIVED, VERTEX PHARMACEUTICALS INCORPORATED, a Massachusetts
corporation, having an address at 000 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx
00000, ("Borrower") promises to pay to the order of FLEET NATIONAL BANK, a
national banking association, having an address at Xxx Xxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000 ("Lender"), the principal sum of TWENTY MILLION DOLLARS
($20,000,000.00), or so much thereof as may be advanced as Term Loans from time
to time under the Credit Agreement, defined below, with interest thereon, or on
the amount thereof from time to time outstanding, to be computed, as hereinafter
provided, on each advance from the date of its disbursement until such principal
sum shall be fully paid. Interest and principal shall be payable as set forth in
Section 4 below. The total principal sum, or the amount thereof outstanding,
together with any accrued but unpaid interest, shall be due and payable in full
on December 30, 2005 ("Maturity Date"), or earlier, as provided under Section 7
hereof. All payments shall be in lawful money of the United States in
immediately available funds.
2. CREDIT AGREEMENT.
This Note is issued pursuant to the terms, provisions and conditions of a
certain Credit Agreement between Borrower and Lender dated as of the date hereof
(the "Credit Agreement"), as amended from time to time, and evidences the Term
Loans made pursuant thereto. Capitalized terms used herein which are
specifically defined herein shall have the meanings assigned to such terms
herein, and Capitalized Terms which are not otherwise specifically defined shall
have the same meaning herein as in the Credit Agreement.
3. INTEREST RATES.
3.1 BORROWER'S OPTIONS. Principal amounts outstanding hereunder shall
bear interest at the following rates, at Borrower's selection, subject to the
conditions and limitations provided for in this Note: (i) Variable Rate or (ii)
Libo Rate.
3.1.1. SELECTION TO BE MADE. Borrower shall select, and
thereafter may change the selection of, the applicable interest rate, from the
alternatives otherwise provided for in this Note, by giving Lender a Notice of
Rate Selection: (i) prior to the end of each Interest Period applicable to a
Libor Advance, or (iii) on any Business Day on which Borrower desires to convert
an outstanding Variable Rate Advance to a Libor Advance.
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3.1.2. NOTICE OF RATE SELECTION. A "Notice of Rate Selection"
shall be a written notice, given by cable, tested telex, telecopier (with
authorized signature), or by telephone if immediately confirmed by such a
written notice, from an Authorized Representative of Borrower which: (i) is
irrevocable with respect to the interest rate, amount, and Interest Period
selected; (ii) is received by Lender not later than 10:00 o'clock A.M. Eastern
Time: (a) if a Libo Rate is selected, at least three (3) Business Days prior to
the first day of the Interest Period to which such selection is to apply, (b) if
a Variable Rate is selected, on the first day to which it applies; and (iii) as
to each selected interest rate option, sets forth the aggregate principal
amount(s) to which such interest rate option(s) shall apply and the Interest
Period(s) applicable to each Libor Advance.
3.1.3. IF NO NOTICE. If Borrower submits a borrowing request
without a Notice of Rate Selection, the Borrower authorizes the Lender in its
discretion to (a) refuse to make the requested Term Loans, or (b) make such Term
Loans as Variable Rate Advances. At the end of each applicable Interest Period,
the applicable Libor Advance shall be converted to a Variable Rate Advance
unless Borrower selects another option in accordance with the provisions of this
Note.
3.2. TELEPHONIC NOTICE. Without in any way limiting Borrower's
obligation to confirm in writing any telephonic notice, Lender may act without
liability upon the basis of telephonic notice believed by Lender in good faith
to be from Borrower prior to receipt of written confirmation. In each case
Borrower hereby waives the right to dispute Lender's record of the terms of such
telephonic Notice of Rate Selection in the absence of manifest error.
3.3 LIMITS ON OPTIONS. Each Libor Advance shall be in a minimum amount
of $1,000,000 or an integral multiple of $100,000 in excess thereof. At no time
shall there be outstanding a total of more than six (6) Libor Advances.
4. PAYMENT OF INTEREST AND PRINCIPAL.
4.1 PAYMENT AND CALCULATION OF INTEREST. All interest shall be payable
in arrears (i) on the last Business Day of each month (with respect to Variable
Rate Advances) or (ii) on the last day of each Interest Period and, if such
Interest Period is longer than three months, at three-month intervals following
the first day of such Interest Period (with respect to Libor Advances) until the
principal together with all interest and other charges payable with respect to
the Loan Advances shall be fully paid. All computations of interest under this
Note shall be made on the basis of a three hundred sixty (360) day year and the
actual number of days elapsed. Each change in the Prime Rate shall
simultaneously change the Variable Rate payable under this Note, without notice
or demand. Interest at the Libo Rate shall be computed from and including the
first day of the applicable Interest Period to, but excluding, the last day
thereof.
4.2 PRINCIPAL. Term Loans shall be paid in twenty (20) quarterly
installments, as follows: (x) the first nineteen (19) of which shall be payable
on the last Business Day of each calendar quarter commencing on March 31, 2001
and in an amount equal to the quotient of (i) the aggregate principal amount of
such Term Loans at the close of business on December 31,
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2000 divided by (ii) the Amortization Number (as defined below); and (y) the
twentieth (20th) installment shall be payable on December 30, 2005 and shall be
in the then outstanding amount of such Term Loans. The "Amortization Number"
shall be equal to: (a) forty (40), with respect to the first installment that is
payable after a Qualifying Participation Event and with respect to all
subsequent quarterly installments; and (b) twenty-eight (28), at all other
times.
4.3 BUSINESS DAYS; LATE FEE. If the entire amount of any required
principal and/or interest is not paid in full within ten (10) days after the
same is due, Borrower shall pay the Lender a late fee equal to five percent (5%)
of the required payment.
4.4 PREPAYMENT. The Loan Advances or any portion thereof may be prepaid
in full or in part at any time without premium or penalty with respect to
Variable Rate Advances and, with respect to Libor Advances subject to a
make-whole provision, as set forth in Section 4.7, and upon payment of the yield
maintenance fee (as defined herein). Any partial prepayment of principal shall
first be applied to any installment of principal then due and then be applied to
the principal due in the reverse order of maturity, and no such partial
prepayment shall relieve Borrower of the obligation to pay each subsequent
installment of principal when due.
4.5 MATURITY. At maturity all accrued interest, principal and other
charges due with respect to the Loan Advances shall be due and payable in full
and the principal balance and such other charges, but not unpaid interest, shall
continue to bear interest at the Default Rate until so paid.
4.6 DEFAULT RATE. Upon and during the continuance of an Event of
Default or after judgment has been rendered on this Note, the unpaid principal
of all Loan Advances shall, at the option of the Lender, bear interest at a rate
which is four (4) percentage points per annum greater than that which would
otherwise be applicable (the "Default Rate").
4.7 MAKE WHOLE PROVISION. Borrower may prepay a Libor Advance only upon
at least three (3) Business Days prior written notice to Lender (which notice
shall be irrevocable), and any such prepayment shall occur only on the last day
of the Interest Period for such Libor Advance. Borrower shall pay Lender, upon
request of Lender, such amount or amounts as shall be sufficient (in the
reasonable opinion of Lender) to compensate it for any loss, cost, or expense
incurred as a result of: (i) any payment of a Libor Advance on a date other than
the last day of the Interest Period for such Libor Advance; (ii) any failure by
Borrower to borrow a Libor Advance on the date specified by Borrower's written
notice; (iii) any failure by Borrower to pay a Libor Advance on the date for
payment specified in Borrower's written notice. Upon the occurrence of any of
the events set forth in items (i), (ii), or (iii) of the foregoing sentence, and
without limiting the foregoing, Borrower shall pay to Lender a "yield
maintenance fee" in an amount computed as follows: The current rate for United
States Treasury securities (bills on a discounted basis shall be converted to a
bond equivalent) (the "United States Treasury Security Rate") with a maturity
date closest to the maturity date of the term chosen pursuant to the Libor
Election (as defined below) as to which the prepayment is made, shall be
subtracted from the Libo Rate in effect at the time of prepayment. If the result
is zero or a negative number, there shall be no yield maintenance fee. If the
result is a positive number, then the resulting percentage shall be
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multiplied by the amount of the principal balance being prepaid. The resulting
amount shall be divided by 360 and multiplied by the number of days remaining in
the term chosen pursuant to the Libor Election as to which the prepayment is
made. Said amount shall be reduced to present value calculated by using the
number of days remaining in the designated term and using the above-referenced
United States Treasury Security Rate and the number of days remaining in the
term chosen pursuant to the Libor Election as to which the prepayment is made.
The resulting amount shall be the yield maintenance fee due to Lender upon
prepayment of any Libor Advance. Each reference in this paragraph to "Libor
Election" shall mean the election by the Borrower to apply the Libo Rate to the
Loan, pursuant to a Notice of Rate Selection. If by reason of an Event of
Default, Lender elects to declare the Obligations to be immediately due and
payable, then any yield maintenance fee with respect to the Loan shall become
due and payable in the same manner as though Borrower had exercised such right
of prepayment.
5. CERTAIN DEFINITIONS AND PROVISIONS RELATING TO INTEREST RATE.
5.1 ADJUSTED LIBO RATE. The term "Adjusted Libo Rate" means for each
Interest Period the rate per annum obtained by dividing (i) the Applicable Libo
Rate for such Interest Period, by (ii) a percentage equal to one hundred percent
(100%) minus the maximum reserve percentage applicable during such Interest
Period under regulations issued from time to time by the Board of Governors of
the Federal Reserve System for determining the maximum reserve requirements
(including, without limitation, any basic, supplemental, marginal and emergency
reserve requirements) for Lender (or of any subsequent holder of this Note which
is subject to such reserve requirements) in respect of liabilities or assets
consisting of or including Eurocurrency liabilities (as such term is defined in
Regulation D of the Board of Governors of the Federal Reserve System) having a
term equal to the Interest Period.
5.2 APPLICABLE LIBO RATE. "Applicable Libo Rate" shall mean, as
applicable to any Libor Advance, the rate per annum (rounded upward, if
necessary, to the nearest 1/32 of one percent) as determined on the basis of the
offered rates for deposits in U.S. dollars, for a period of time comparable to
such Libor Advance which appears on the Telerate page 3750 as of 11:00 a.m.
London time on the day that is two London Banking days preceding the first day
of such Libor Advance; provided, however, if the rate described above does not
appear on the Telerate system on any applicable interest determination date, the
Applicable Libo Rate shall be the rate (rounded upwards as described above, if
necessary) for deposits in dollars for a period of time substantially equal to
the interest period on the Reuters Page "LIBO" (or such other page as may
replace the LIBO Page on that service for the purpose of displaying such rates),
as of 11:00 a.m. (London Time), on the day that is two (2) London Banking Days
prior to the beginning of such interest period.
If both the Telerate and Reuters system are unavailable, then
the rate for that date will be determined on the basis of the
offered rates for deposits in U.S. dollars for a period of
time comparable to such Libor Advance which are offered by
four major banks in the London interbank market at
approximately 11:00 a.m. London time, on the day that is two
(2) London Banking Days preceding the first day of such Libor
Advance as selected by the Lender. The principal London office
of
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each of the four major London banks will be requested to
provide a quotation of its U.S. dollar deposit offered rate.
If at least two such quotations are provided, the rate for
that date will be the arithmetic mean of the quotations. If
fewer than two quotations are provided as requested, the rate
for that date will be determined on the basis of the rates
quoted for loans in U.S. dollars to leading European banks for
a period of time comparable to such Libor Advance offered by
major banks in New York City at approximately 11:00 a.m. New
York City time, on the date that is two London Banking Days
preceding the first day of such Libor Advance. In the event
that Lender is unable to obtain any such quotation as provided
above, it will be deemed that the Applicable Libo Rate
pursuant to a Libor Advance cannot be determined. In the event
that the Board of Governors of the Federal Reserve System
shall impose a Reserve Percentage with respect to Lender then
for any period during which such Reserve Percentage shall
apply, the Applicable Libo Rate shall be equal to the amount
determined above divided by an amount equal to 1 minus the
Reserve Percentage. "Reserve Percentage" means the maximum
aggregate reserve requirement (including all basic,
supplemental, marginal and other reserves) which is imposed on
member banks of the Federal Reserve System against
"Euro-currency Liabilities" as defined in Regulation D.
5.3 APPLICABLE MARGIN. The "Applicable Margin" shall be determined
based upon the financial position and results of the Borrower based upon the
financial statements and Compliance Certificates furnished by the Borrower
pursuant to the Credit Agreement. The term "Applicable Margin" means, for any
period set forth below the percentage set forth below opposite such period:
PERIOD APPLICABLE MARGIN
Level I Period [****]
Level II Period [****]
5.4 BUSINESS DAY; SAME CALENDAR MONTH. If any day on which a payment is
due is not a Business Day, then the payment shall be due on the next day
following which is a Business Day, unless, with respect to Libor Advances, the
effect would be to make the payment due in the next calendar month, in which
event such payment shall be due on the next preceding day which is a Business
Day. Further, if there is no corresponding day for a payment in the given
calendar month (i.e., there is no "February 30th"), the payment shall be due on
the last Business Day of the calendar month.
5.5 DOLLARS. The term "Dollars" or "$" means lawful money of the United
States.
5.6 INTEREST PERIOD.
5.6.1. The term "Interest Period" means with respect to each
Libor Advance: a period of an integral multiple of one month, but no Interest
Period shall be greater than three (3) months, subject to availability, as
selected, or deemed selected, by Borrower at least three (3)
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Business Days prior to the end of the current Interest Period or the
commencement of the next Interest Period. Each such Interest Period shall
commence on the Business Day so selected, or deemed selected, by Borrower and
shall end on the numerically corresponding day in the month in which the
Interest Period ends; PROVIDED, HOWEVER: (i) if there is no such numerically
corresponding day, such Interest Period shall end on the last Business Day of
the applicable month, (ii) if the last day of such an Interest Period would
otherwise occur on a day which is not a Business Day, such Interest Period shall
be extended to the next succeeding Business Day; but (iii) if such extension
would otherwise cause such last day to occur in a new calendar month, then such
last day shall occur on the next preceding Business Day.
5.6.2. No Interest Period may be selected which would end
beyond the Maturity Date.
5.7 LEVEL I PERIOD. The term "Level I Period" means any period (a) from
and including the Business Day immediately following the Business Day on which a
senior financial officer of the Borrower shall have delivered to the Lender a
Compliance Certificate, together with the related financial statements referred
to in Section 4.1 of the Credit Agreement, demonstrating in reasonable detail
that the Debt Service Coverage Ratio, as of the last day of the fiscal quarter
of the Borrower most recently ended, is greater than or equal to 1.5 to 1.0, to,
but excluding, the next succeeding Reporting Date; and (b) during which no Event
of Default shall have occurred and be continuing.
5.8 LEVEL II PERIOD. The term "Level II Period" means any period, other
than a Level I Period.
5.9 LIBOR ADVANCE. The term "Libor Advance" means any principal
outstanding under this Note which pursuant to this Note bears interest at the
Libo Rate.
5.10 LIBO RATE. The term "Libo Rate" means the per annum rate equal to
the Adjusted Libo Rate plus the Applicable Margin.
5.11 LOAN ADVANCE. The term "Loan Advance" means any portion of
principal outstanding under this Note.
5.12 LONDON BANKING DAY. The term "London Banking Day" means a day on
which commercial banks settle payments in London.
5.13 MATURITY. The term "Maturity" means the Termination Date.
5.14 PRIME RATE. The term "Prime Rate" means the variable per annum
rate of interest so designated from time to time by Lender as its prime rate.
The Prime Rate is a reference rate and does not necessarily represent the lowest
or best rate being charged to any customer. Changes in the rate of interest
resulting from changes in the Prime Rate shall take place immediately without
notice or demand of any kind.
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5.15 REPORTING DATE. The term "Reporting Date" means the first to occur
of (i) the Business Day following the Business Day that the Lender receives a
Compliance Certificate providing the information required to determine whether a
period is a Level I Period or a Level II Period and (ii) the first Business Day
after (a) with respect to the first three quarterly fiscal periods of the
Borrower's fiscal year, the date on which the quarterly financial statement and
Compliance Certificate is required to be delivered to the Lender pursuant to
Section 4.1(c) of the Credit Agreement; and (b) with respect to the fourth
quarterly fiscal period of the Borrower's fiscal year, 45 days after the end of
such fiscal period.
5.16 TREASURY RATE. The term "Treasury Rate" means, as of the date of
any calculation or determination, the latest published rate for United States
Treasury Notes or Bills (but the rate on Bills issued on a discounted basis
shall be converted to a bond equivalent) as published weekly in the Federal
Reserve Statistical Release H.15(519) of Selected Interest Rates in an amount
which approximates (as reasonably determined by Lender) the amount (i)
approximately comparable to the portion of the Loan Advance to which the
Treasury Rate applies for the Interest Period, or (ii) in the case of a
prepayment, the amount prepaid and with a maturity closest to the original
maturity of the installment which is prepaid in whole or in part.
5.17 VARIABLE RATE. The term "Variable Rate" means a per annum rate
equal at all times to the Prime Rate, with changes therein to be effective
simultaneously with any change in the Prime Rate, without notice or demand.
5.18 VARIABLE RATE ADVANCE. The term "Variable Rate Advance" means any
principal amount outstanding under this Note which pursuant to this Note bears
interest at the Variable Rate.
6. ADDITIONAL PROVISIONS RELATED TO INTEREST RATE SELECTION.
6.1 INCREASED COSTS. If, due to any one or more of: (i) the
introduction of any applicable law or regulation or any change (other than any
change by way of imposition or increase of reserve requirements already referred
to in the definition of Libo Rate) in the interpretation or application by any
authority charged with the interpretation or application thereof of any law or
regulation; or (ii) the compliance with any guideline or request from any
governmental central bank or other governmental authority (whether or not having
the force of law), there shall be an increase in the cost to Lender of agreeing
to make or making, funding or maintaining Libor Advances, including without
limitation changes which affect or would affect the amount of capital or
reserves required or expected to be maintained by Lender, with respect to all or
any portion of the Loan Advances, or any corporation controlling Lender, on
account thereof, then Borrower from time to time shall, upon written demand by
Lender made within ninety (90) days of such increase in cost, pay Lender
additional amounts sufficient to indemnify Lender against the increased cost. A
certificate as to the amount of the increased cost and the reason therefor
submitted to Borrower by Lender, in the absence of manifest error, shall be
conclusive and binding for all purposes.
6.2 ILLEGALITY. Notwithstanding any other provision of this Note, if
the introduction of
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or change in or in the interpretation of any law, treaty, statute, regulation or
interpretation thereof shall make it unlawful, or any central bank or government
authority shall assert by directive, guideline or otherwise, that it is
unlawful, for Lender to make or maintain Libor Advances or to continue to fund
or maintain Libor Advances then, on written notice thereof and demand by Lender
to Borrower, (a) the obligation of Lender to make Libor Advances and to convert
or continue any Loan Advances as Libor Advances shall terminate and (b) Borrower
shall convert all principal outstanding under this Note into Variable Rate
Advances.
6.3 ADDITIONAL LIBOR CONDITIONS. The selection by Borrower of a Libo
Rate and the maintenance of Loan Advances at such rate shall be subject to the
following additional terms and conditions:
6.3.1. AVAILABILITY. If, before or after Borrower has selected
to take or maintain a Libor Advance, Lender notifies Borrower that:
6.3.1.1. dollar deposits in the amount and for the
maturity requested are not available to
Lender in the London interbank market at
the rate specified in the definition of
Libo Rate set forth above, or
6.3.1.2. reasonable means do not exist for Lender
to determine the Libo Rate for the amounts
and maturity requested,
then the principal which would have been a Libor
Advance shall be a Variable Rate Advance.
6.3.2. PAYMENTS NET OF TAXES. All payments and prepayments of
principal and interest under this Note shall be made net of any taxes and costs
resulting from having principal outstanding at or computed with reference to a
Libo Rate. Without limiting the generality of the preceding obligation,
illustrations of such taxes and costs are taxes, or the withholding of amounts
for taxes, of any nature whatsoever including income, excise, interest
equalization taxes (other than United States or state income taxes) as well as
all levies, imposts, duties or fees whether now in existence or as the result of
a change in or promulgation of any treaty, statute, regulation, or
interpretation thereof or any directive guideline or otherwise by a central bank
or fiscal authority (whether or not having the force of law) or a change in the
basis of, or the time of payment of, such taxes and other amounts resulting
therefrom.
6.4. VARIABLE RATE ADVANCES. Each Variable Rate Advance shall continue
as a Variable Rate Advance until the Maturity Date, unless sooner converted or
prepaid, in whole or in part, to a Libor Rate Advance, subject to the
limitations and conditions set forth in this Note.
7. ACCELERATION; EVENT OF DEFAULT.
Upon the occurrence of any Event of Default, Lender may, at Lender's
option,
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immediately exercise one or more of the following rights: (a) declare all
obligations of Lender to Borrower, including, without limitation, the
Commitments to be terminated, whereupon such obligations shall immediately
terminate; and (b) declare all obligations of Borrower to Lender, including,
without limitation, the Loans and all other amounts owing under the Credit
Agreement and this Note to be immediately due and payable, whereupon they shall
immediately become due and payable without presentment, demand, protest or
notice of any kind, all of which are hereby expressly waived; PROVIDED, however,
that upon the occurrence of any such Event of Default specified in Sections
7.1(h) or 7.1(i) of the Credit Agreement, the Commitments shall immediately
terminate and all obligations of Borrower to Lender, including, without
limitation, Loans and all other amounts owing under the Credit Agreement and
this Note shall immediately become due and payable without presentment, further
demand, protest or notice of any kind, all of which are hereby expressly waived.
8. CERTAIN WAIVERS, CONSENTS AND AGREEMENTS.
Each and every party liable hereon or for the indebtedness evidenced hereby
whether as maker, endorser, guarantor, surety or otherwise hereby: (a) waives
presentment, demand, protest, suretyship defenses and defenses in the nature
thereof; (b) waives any defenses based upon and specifically assents to any and
all extensions and postponements of the time for payment, changes in terms and
conditions and all other indulgences and forbearances which may be granted by
the holder to any party now or hereafter liable hereunder or for the
indebtedness evidenced hereby; (c) agrees to any substitution, exchange,
release, surrender or other delivery of any security or collateral now or
hereafter held hereunder or in connection with the Credit Agreement, or any of
the other Loan Documents, and to the addition or release of any other party or
person primarily or secondarily liable; (d) agrees that if any security or
collateral given to secure this Note or the indebtedness evidenced hereby or to
secure any of the obligations set forth or referred to in the Credit Agreement,
or any of the other Loan Documents, shall be found to be unenforceable in full
or to any extent, or if Lender or any other party shall fail to duly perfect or
protect such collateral, the same shall not relieve or release any party liable
hereon or thereon nor vitiate any other security or collateral given for any
obligations evidenced hereby or thereby; (e) subject to the terms of the Credit
Agreement, agrees to pay all costs and expenses incurred by Lender or any other
holder of this Note in connection with the indebtedness evidenced hereby,
including, without limitation, all reasonable attorneys' fees and costs, for the
implementation of the Term Loans evidenced hereby, the collection of the
indebtedness evidenced hereby and the enforcement of rights and remedies
hereunder or under the other Loan Documents, whether or not suit is instituted;
and (f) consents to all of the terms and conditions contained in this Note, the
Credit Agreement, and all other instruments now or hereafter executed evidencing
or governing all or any portion of the security or collateral for this Note and
for such Credit Agreement, or any one or more of the other Loan Documents.
9. DELAY NOT A BAR.
No delay or omission on the part of the holder in exercising any right hereunder
or any right under any instrument or agreement now or hereafter executed in
connection herewith, or any
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agreement or instrument which is given or may be given to secure the
indebtedness evidenced hereby or by the Credit Agreement, or any other agreement
now or hereafter executed in connection herewith or therewith shall operate as a
waiver of any such right or of any other right of such holder, nor shall any
delay, omission or waiver on any one occasion be deemed to be a bar to or waiver
of the same or of any other right on any future occasion.
10. PARTIAL INVALIDITY.
The invalidity or unenforceability of any provision hereof, of the Credit
Agreement, of the other Loan Documents, or of any other instrument, agreement or
document now or hereafter executed in connection with the Credit Agreement made
pursuant hereto and thereto shall not impair or vitiate any other provision of
any of such instruments, agreements and documents, all of which provisions shall
be enforceable to the fullest extent now or hereafter permitted by law.
11. COMPLIANCE WITH USURY LAWS.
All agreements between Borrower and Lender are hereby expressly limited so that
in no contingency or event whatsoever, whether by reason of acceleration of
maturity of the indebtedness evidenced hereby or otherwise, shall the amount
paid or agreed to be paid to Lender for the use or the forbearance of the
indebtedness evidenced hereby exceed the maximum permissible under applicable
law. As used herein, the term "applicable law" shall mean the law in effect as
of the date hereof, PROVIDED, HOWEVER, that in the event there is a change in
the law which results in a higher permissible rate of interest, then this Note
shall be governed by such new law as of its effective date. In this regard, it
is expressly agreed that it is the intent of Borrower and Lender in the
execution, delivery and acceptance of this Note to contract in strict compliance
with the laws of the Commonwealth of Massachusetts from time to time in effect.
If, under or from any circumstances whatsoever, fulfillment of any provision
hereof or of any of the Loan Documents at the time performance of such provision
shall be due, shall involve transcending the limit of validity prescribed by
applicable law, then the obligation to be fulfilled shall automatically be
reduced to the limit of such validity, and if under or from any circumstances
whatsoever Lender should ever receive as interest an amount which would exceed
the highest lawful rate, such amount which would be excessive interest shall be
applied to the reduction of the principal balance evidenced hereby and not to
the payment of interest. This provision shall control every other provision of
all agreements between Borrower and Lender.
12. WAIVER OF JURY TRIAL.
BORROWER AND LENDER MUTUALLY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON,
ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE OR ANY OTHER LOAN
DOCUMENTS CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH, OR ANY COURSE OF
CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS
OF ANY PARTY. THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR LENDER TO ACCEPT
THIS NOTE AND MAKE THE LOANS.
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13. NO ORAL CHANGE.
This Note and the other Loan Documents may only be amended, terminated, extended
or otherwise modified by a writing signed by the party against which enforcement
is sought. In no event shall any oral agreements, promises, actions, inactions,
knowledge, course of conduct, course of dealing, or the like be effective to
amend, terminate, extend or otherwise modify this Note or any of the other Loan
Documents.
14. RIGHTS OF THE HOLDER.
This Note and the rights and remedies provided for herein may be enforced by
Lender or any subsequent holder hereof. Wherever the context permits each
reference to the term "holder" herein shall mean and refer to Lender or the then
subsequent holder of this Note.
15. SETOFF.
Borrower hereby grants to Lender a lien, security interest and right of set off
as security for all liabilities and obligations to Lender, whether now existing
or hereafter arising, upon and against all deposits, credits, collateral and
property, now or hereafter in the possession, custody, safekeeping or control of
Lender or any entity under the control of Fleet Financial Group, Inc., or in
transit to any of them. At any time, without demand or notice, Lender may set
off the same or any part thereof and apply the same to any liability or
obligation of Borrower even though unmatured and regardless of the adequacy of
any other collateral securing the Loans. ANY AND ALL RIGHTS TO REQUIRE LENDER TO
EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH
SECURES THE LOANS, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH
DEPOSITS, CREDIT OR OTHER PROPERTY OF THE BORROWER ARE HEREBY KNOWINGLY,
VOLUNTARILY AND IRREVOCABLY WAIVED.
IN WITNESS WHEREOF, Borrower has caused this Note to be duly executed as of the
date set forth above as a sealed instrument.
Witness: VERTEX PHARMACEUTICALS INCORPORATED
By:
--------------------------------
Name: Xxxxxx X. Xxxxxxxxxxx, Xx.
Title: Vice President of Finance
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EXHIBIT B TO CREDIT AGREEMENT
COMPLIANCE CERTIFICATE
To be delivered by the Bank
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EXHIBIT C TO CREDIT AGREEMENT
PLEDGE AGREEMENT
PLEDGE AGREEMENT (this "AGREEMENT"), dated as of December 21, 1999, by VERTEX
PHARMACEUTICALS INCORPORATED ("BORROWER"), a Massachusetts corporation, to FLEET
NATIONAL BANK, a national banking association ("LENDER").
W I T N E S S E T H :
WHEREAS, the Borrower and the Lender are parties to a Credit Agreement of even
date (as amended, supplemented or otherwise modified from time to time, the
"CREDIT AGREEMENT"; capitalized terms used but not otherwise defined shall have
the meanings ascribed to such terms in the Credit Agreement), pursuant to which
the Lender has agreed to make up to $20,000,000 in Term Loans to the Borrower on
the terms and subject to the conditions set forth therein;
WHEREAS, to induce to the Lender to enter into the Credit Agreement and make the
Term Loans thereunder, the Borrower has agreed to enter into this Pledge
Agreement and pledge all of the capital stock of Vertex Securities Corp. (the
"Subsidiary") a Massachusetts corporation, to the Lender;
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Borrower and the the Lender hereby agree as follows:
1. PLEDGE. The Borrower hereby grants, assigns and pledges to the Lender,
a valid lien on and security interest in, all of the Borrower's right,
title and interest in and to the following, whether now owned or at any
time hereafter acquired (collectively, the "Collateral"):
(a) All of the issued and outstanding capital stock of the Borrower in the
Subsidiary as set forth on SCHEDULE 1 (the "Pledged Shares") and the
certificates representing the Pledged Shares, and all dividends,
distributions, cash, instruments, investment property and other
property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the Pledged
Shares, and all additional capital stock in Subsidiary from time to
time acquired in any manner by the Borrower, and the certificates
representing such additional capital stock, and all dividends,
distributions, cash, instruments, investment property and other
property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such capital
stock; and
(b) all proceeds of any of the foregoing (including, without limitation,
proceeds constituting any property of the types described above).
2. ALL OBLIGATIONS SECURED. This Agreement secures the prompt and complete
payment and
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performance when due (whether at the stated maturity, by acceleration
or otherwise) of all of the Obligations.
3. REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants as
follows:
(a) Borrower has the requisite corporate power and authority to execute,
deliver and perform this Agreement and all corporate action necessary
for the execution, delivery and performance of this Agreement has been
taken.
(b) The execution, delivery and performance of this Agreement by Borrower
does not, and will not, contravene (i) the Articles of Organization and
By-Laws of Borrower, (ii) any legal requirement or (iii) any franchise,
license, permit, indenture, contract, lease, agreement, instrument or
other commitment to which it is a party or by which it or any of its
properties are bound, and will not, except as contemplated herein,
result in the imposition of any liens or security interests upon any of
its properties.
(c) This Agreement is the legal, valid and binding obligation of Borrower,
enforceable in accordance with its terms.
(d) Borrower is the legal and beneficial owner of record of the Pledged
Shares set forth in SCHEDULE 1, free and clear of any lien other than
liens created pursuant to this Agreement. On the date hereof, no
effective financing statement or other instrument similar in effect
covering all or any part of the Collateral will be on file in any
recording office.
(e) The pledge of the Collateral and granting of the liens hereunder,
together with the delivery of the stock certificates pledged hereunder
and appropriate filings of Uniform Commercial Code financing
statements, create a valid and perfected first priority lien on the
Collateral, securing the payment and performance of the Obligations,
and all filings and other actions necessary or desirable to perfect and
protect such lien have been duly made or taken.
(f) No authorization, approval, or other action by, and no notice to or
filing with, any Person or governmental authority is required for (i)
the pledge by Borrower of the Collateral pursuant to this Agreement,
the grant by Borrower of the liens granted hereby or the execution,
delivery or performance of this Agreement by Borrower, (ii) the
perfection of the liens granted pursuant to this Agreement, except for
the delivery to the Lender of the stock certificates representing the
Pledged Shares in Subsidiary and appropriate filings of Uniform
Commercial Code financing statements, or (iii) the exercise by the
Lender of the rights or remedies provided for in this Agreement.
(g) The Pledged Shares represented by the certificates identified in
SCHEDULE 1 are, and all other Pledged Shares in which Borrower shall
hereafter obtain an interest will be duly authorized, fully paid and
nonassessable and none of such Pledged Shares is or will be subject to
any contractual restriction upon the transfer of such Pledged Shares.
(h) The Pledged Shares represented by the certificates identified in
SCHEDULE 1 constitute all of the issued and outstanding shares of
capital stock or other equity securities of any class in the
Subsidiary, and SCHEDULE 1 correctly identifies, as at the date hereof,
the respective class of the shares comprising such Pledged Shares and
the respective number of shares represented by each such certificate.
4. FURTHER ASSURANCES; COVENANTS; REPLACEMENT COLLATERAL.
(a) Borrower covenants and agrees that at any time and from time to time,
at the expense of Borrower, Borrower will promptly execute and deliver
all further instruments and
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documents, and take all further action, that may be necessary or
desirable, or that the Lender may request, to perfect and protect any
security interest granted or purported to be granted hereby or to
enable the Lender to exercise and enforce its rights and remedies
hereunder with respect to any Collateral. Without limiting the
generality of the foregoing, Borrower will execute and file such
financing or continuation statements, or amendments thereto, and such
other instruments or notices, as may be necessary or desirable, or as
the Lender may request, to perfect and preserve the liens granted or
purported to be granted hereby, and cause third parties to acknowledge
and to register the pledge of securities hereunder on their books and
to deliver statements of account upon the Lender's request therefor.
(b) Borrower covenants and agrees that, without the prior written consent
of the Lender, Borrower will not (i) sell, assign (by operation of law
or otherwise) or otherwise dispose of, or grant any option with respect
to, any of the Collateral, (ii) create or suffer to exist any lien upon
or with respect to any of the Collateral, except for the liens under
this Agreement, (iii) vote to enable, or take any other action to
permit, Subsidiary to issue any capital stock or other equity
securities of any nature or to issue any other securities convertible
into, exchangeable for or granting the right to purchase any capital
stock or other equity securities of any nature of Subsidiary or to
convey, exchange, lease, assign, transfer, sell or otherwise dispose of
any material assets of the Subsidiary, (iv) enter into any agreement or
undertaking restricting the right or ability of the Lender to sell,
assign or transfer any of the Collateral or (v) permit Subsidiary to
issue any shares of capital stock or other equity securities of any
nature or to issue any securities convertible into or granting the
right to purchase or otherwise acquire any shares of capital stock or
equity securities of Subsidiary or to convey, exchange, lease, assign,
transfer, sell or otherwise dispose of any material assets of the
Subsidiary.
(c) If Borrower acquires any additional capital stock in Subsidiary,
Borrower shall hold the same in trust for the Lender and promptly
deliver to the Lender the stock certificates evidencing such capital
stock, together with undated stock powers related thereto duly executed
in blank by Borrower.
5. RIGHTS OF THE BORROWER; VOTING; ETC.
(a) So long as no Event of Default shall have occurred and be continuing,
Borrower shall be entitled to exercise any and all voting and other
consensual rights pertaining to the Collateral or any part thereof for
any purpose not inconsistent with the terms of this Agreement and the
other Loan Documents and in a manner which does not impair any of the
Collateral and to receive and retain any and all cash dividends and
distributions paid in respect of the Pledged Shares.
(b) Upon the occurrence and during the continuance of an Event of Default:
(i) All rights of Borrower to receive the cash dividends and distributions
that Borrower would otherwise be authorized to receive and retain
pursuant to Section 5(a) hereof shall cease, and all such rights shall
thereupon become vested in the Lender who shall thereupon have the sole
right to receive and hold as Collateral such dividends, distributions
and payments.
(ii) Any and all other dividends and distributions payable to Borrower in
respect of the Collateral shall be received by Borrower in trust for
the benefit of the Lender, shall be
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segregated from other funds of Borrower and shall be forthwith paid
over to the Lender as Collateral in the same form as so received (with
any necessary endorsement).
6. PRINCIPAL PLACE OF BUSINESS; RECORDS. Borrower shall keep its principal
place of business and the place where it keeps its records concerning
the Collateral at the address of the Borrower specified in the Credit
Agreement. The Borrower will hold and preserve such records and, upon
reasonable notice from the Lender, will permit representatives of the
Lender at any time during normal business hours to inspect and make
abstracts from such records.
7. TRANSFER OR LIENS. Borrower agrees that it will not sell, transfer or
convey any interest in, grant any option with respect to, or suffer or
permit any lien to be created upon or with respect to, any of the
Pledged Shares during the term of this Agreement, except to or in favor
of the Lender.
8. LENDER APPOINTED ATTORNEY-IN-FACT; IRREVOCABLE AUTHORIZATION AND
INSTRUCTION TO THE SUBSIDIARIES. Borrower hereby appoints the Lender as
Borrower's attorney-in-fact, with full authority in the place and stead
of the Borrower and in the name of the Borrower or otherwise, from time
to time in the Lender's discretion, to, upon the occurrence and during
the continuance of an Event of Default, take any action and to execute
any instrument which the Lender may deem necessary or advisable to
accomplish the purposes of this Agreement, including, without
limitation, to exercise the voting and other consensual rights which
Borrower would otherwise be entitled to exercise pursuant to Section
5(a) (and all right of Borrower to exercise such rights shall cease)
and to receive, endorse and collect all instruments made payable to the
Borrower representing any distribution in respect of the Collateral or
any part thereof and to give full discharge for the same. Borrower
hereby authorizes and instructs Subsidiary to comply with any
instruction received by it from the Lender in writing that (i) states
that an Event of Default has occurred and is continuing and (ii) is
otherwise in accordance with the terms of this Agreement, without any
other or further instructions from Borrower, and Borrower agrees that
Subsidiary shall be fully protected in so complying. Borrower hereby
ratifies all that such attorney shall lawfully do or cause to be done
by virtue hereof. This power of attorney is coupled with an interest
and is irrevocable.
9. REASONABLE CARE; RETURN OF COLLATERAL.
(a) Prior to the exercise of its remedies hereunder, the Lender shall be
deemed to have exercised reasonable care in the custody and
preservation of the Collateral in its possession if the Collateral is
accorded treatment substantially equal to that which the Lender accords
its own similar property, it being understood that the Lender shall not
have the responsibility under this Agreement for taking any necessary
steps to preserve rights against any parties with respect to any
Collateral except as set forth in subsection (b) below.
(b) Upon the indefeasible payment in full in cash of all the Obligations
and the termination of the Credit Agreement, Borrower shall be entitled
to the return of all of the Collateral pledged by Borrower hereunder.
10. LENDER MAY PERFORM. If Borrower fails to perform any agreement
contained herein, the Lender may itself perform, or cause performance
of, such agreement, and the expenses of
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the Lender incurred in connection therewith shall be payable by
Borrower.
11. REMEDIES UPON DEFAULT. If any Event of Default shall have occurred and
be continuing, the Lender may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party under
the Uniform Commercial Code (the "CODE") and the Lender may also,
without notice except as specified below, transfer the Collateral into
its name or that of its nominee, sell the Collateral or any part
thereof in one or more parcels at public or private sale, at any
exchange, broker's board or at any of the Lender's offices or
elsewhere, for cash, on credit or for future delivery, and upon such
other terms as the Lender may deem commercially reasonable. Borrower
agrees that, to the extent notice of sale shall be required by law, at
least ten days' notice to Borrower of the time and place of any public
sale or the time after which any private sale is to be made shall
constitute reasonable notification. The Lender shall not be obligated
to make any sale of Collateral regardless of notice of sale having been
given. The Lender may adjourn any public or private sale from time to
time by announcement at the time and place fixed therefor, and such
sale may, without further notice, be made at the time and place to
which it was so adjourned.
12. INDEMNITY AND EXPENSES.
(a) Borrower agrees to and hereby indemnifies the Lender from and against
any and all claims, damages, losses, liabilities and expenses arising
out of, or in connection with, or resulting from, this Agreement
(including, without limitation, enforcement of this Agreement) other
than such as arise from the Lender's gross negligence or willful
misconduct.
(b) Borrower will, upon demand, pay to the Lender the amount of any and all
expenses, including the reasonable fees and expenses of its counsel and
of any experts and agents, that the Lender may incur in connection with
(i) the administration of this Agreement, (ii) the custody or
preservation of, or the sale of, collection from, or other realization
upon, any of the Collateral, (iii) the exercise or enforcement of any
of the rights of the Lender hereunder, (iv) the failure of Borrower to
perform or observe any of the provisions hereof, or (v) any action
taken by the Lender pursuant to this Agreement.
13. SECURITY INTEREST ABSOLUTE. All rights of the Lender and security
interests hereunder, and all obligations of Borrower hereunder, shall
be absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of the Credit Agreement, the
Note or any other Loan Document;
(b) any change in the time, manner or place of payment of, or in any other
term of, all or any of the Obligations, or any other amendment or
waiver of or any consent to departure from any of the Loan Documents;
(c) any taking and holding of collateral or any guaranty for all or any of
the Obligations, or any amendment, alteration, exchange, substitution,
transfer, enforcement, waiver, subordination, termination or release of
any collateral or such guaranty, or any non-perfection of any
collateral, or any consent to departure from any such guaranty;
(d) any manner of application of collateral, or proceeds thereof, to all or
any of the Obligations, or the manner of sale of any collateral;
(e) any consent by Lender to the restructure of the Obligations, or any
other restructure or
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refinancing of the Obligations or any portion thereof;
(f) any modification, compromise, settlement or release by Lender, by
operation of law or otherwise, collection or other liquidation of the
Obligations or the liability of any guarantor, or of any collateral, in
whole or in part, and any refusal of payment by the Lender, in whole or
in part, from any obligor or guarantor in connection with any of the
Obligations, whether or not with notice to, or further assent by, or
any reservation of rights against, any Borrower; or
(g) any other circumstance (including, without limitation, any statute of
limitations) which might otherwise constitute a defense available to,
or a discharge of, any third party pledgor or guarantor.
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14. AMENDMENTS; WAIVERS; PARTIAL EXERCISE. No amendment or waiver of any
provision of this Agreement or consent to any departure by the Borrower
here from shall be effective unless in writing and signed by Borrower
and the Lender, and any such amendment, waiver or consent shall be
effective only to the extent set forth therein. No failure to exercise
or any delay in exercising on the part of the Lender any right, power
or privilege under this Agreement shall operate as a waiver thereof. No
single or partial exercise of any right, power or privilege under this
Agreement shall preclude any other or further exercise thereof or the
exercise of any other right, power or privilege.
15. ADDRESSES FOR NOTICES. All notices and correspondence hereunder shall
be provided in the manner, to the Persons and to the addresses set
forth in the Credit Agreement.
16. CONTINUING SECURITY INTEREST; ASSIGNMENTS OF SECURED DEBT. This
Agreement shall create a continuing security interest in and lien on
the Collateral and shall (i) remain in full force and effect until
released in accordance with the terms hereof, (ii) be binding upon
Borrower, its successors and assigns, and (iii) inure, together with
the rights and remedies of the Lender hereunder, to the benefit of
their respective successors and assigns. Without limiting the
generality of the foregoing clause (iii), the Lender, in accordance
with the terms of the Credit Agreement, may assign or otherwise
transfer all or any portion of their rights and obligations under this
Agreement to any other Person, and such other Person shall thereupon
become vested with all the benefits in respect hereof granted herein.
17. GOVERNING LAW; DEFINED TERMS. This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of
Massachusetts without giving effect to principles of conflicts of law.
Unless otherwise defined herein or in the Credit Agreement, terms used
in Articles 8 and 9 of the Code are used herein as therein defined.
This Agreement shall be deemed for all purposes to be a Loan Document
under the Credit Agreement.
18. MARSHALLING. Borrower hereby waives any right to require the Lender to
marshal any security or Collateral or otherwise compel the Lender
recourse against or satisfaction of the Obligations from one source
before seeking recourse or satisfaction from another source.
19. EXECUTION IN COUNTERPARTS; TELECOPIED SIGNATURES. This Agreement may be
executed in counterparts, each of which shall constitute an original,
but all of which taken together shall constitute one and the same
instrument. This Agreement, and any notices to be given pursuant to
this Agreement, may be executed and delivered by telecopier or other
facsimile transmission all with the same force and effect as if the
same was a fully executed and delivered original counterpart.
20. SUBMISSION TO JURISDICTION. ALL DISPUTES AMONG THE BORROWER AND THE
LENDER, WHETHER SOUNDING IN CONTRACT, TORT, EQUITY OR OTHERWISE, SHALL
BE RESOLVED ONLY BY STATE AND FEDERAL COURTS LOCATED IN BOSTON,
MASSACHUSETTS, AND THE COURTS TO WHICH AN APPEAL THEREFROM MAY BE
TAKEN; PROVIDED, HOWEVER, THAT THE LENDER SHALL HAVE THE RIGHT, TO THE
EXTENT PERMITTED BY APPLICABLE LAW, TO PROCEED AGAINST THE BORROWER OR
ITS PROPERTY IN ANY LOCATION REASONABLY SELECTED BY THE LENDER IN GOOD
FAITH TO ENABLE THE LENDER TO REALIZE ON SUCH PROPERTY, OR TO ENFORCE A
JUDGMENT OR
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OTHER COURT ORDER IN FAVOR OF THE LENDER. THE BORROWER AGREES THAT IT
WILL NOT ASSERT ANY PERMISSIVE COUNTERCLAIMS, SETOFFS OR CROSS-CLAIMS
IN ANY PROCEEDING BROUGHT BY THE LENDER. THE BORROWER WAIVES ANY
OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH THE
LENDER HAS COMMENCED A PROCEEDING, INCLUDING, WITHOUT LIMITATION, ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON FORUM NON CONVENIENS.
21. JURY TRIAL. THE BORROWER AND, BY ITS ACCEPTANCE HEREOF, THE LENDER EACH
HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY.
IN WITNESS WHEREOF, the Borrower has caused this Agreement to be executed by its
proper and duly authorized officer as of the day and year first above written.
VERTEX PHARMACEUTICALS INCORPORATED
By:
-------------------------------
Name:
Title:
Accepted:
FLEET NATIONAL BANK
By:
-----------------------------
Name:
Title:
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Schedule 1
Pledge Agreement between
Vertex Pharmaceuticals Incorporated and Fleet National Bank
Pledged Shares
Issuer: Vertex Securities Corp.
Class of Shares: Common
Number of Pledged Shares: one hundred (100)
Date of Issuance: December 22, 1993
Date of Pledge: December 21, 1999
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