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Exhibit
10.2
EXECUTION
COPY
SECURITY
AGREEMENT
SECURITY AGREEMENT
(this “ Agreement ”), dated as of
February 13, 2008, among ALEXION PHARMACEUTICALS, INC.
, a Delaware corporation (the “ Company ”), each
other party as shall from time to time become a party hereto (each
such other party and the Company being hereinafter referred to from
time to time, individually, as a “ Grantor ”
and, collectively, as the “ Grantors ”), and
BANK OF AMERICA, N.A. , as administrative agent
(hereinafter, in such capacity, the “ Administrative
Agent ”) for itself and the other lending institutions
(hereinafter, collectively, the “ Lenders ”)
which are or may become parties to that certain Credit Agreement,
dated as of February 13, 2008 (as amended and in effect from
time to time, the “ Credit Agreement ”), among
the Company, the Lenders and the Administrative Agent.
WHEREAS , it is a
condition precedent to the Lenders’ making any loans or
otherwise extending credit to and the L/C Issuer issuing, extending
or renewing letters of credit for the benefit of the Company under
the Credit Agreement that the Grantors execute and deliver to the
Administrative Agent, for the benefit of the Secured Parties (as
defined in the Credit Agreement), a security agreement in
substantially the form hereof; and
WHEREAS , each Grantor
wishes to grant a security interest in favor of the Administrative
Agent, for the benefit of the Secured Parties, as herein
provided;
NOW, THEREFORE , in
consideration of the promises contained herein and for other good
and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as
follows:
1. Definitions
. All capitalized terms used herein without definitions shall have
the respective meanings provided therefor in the Credit Agreement.
The term “State”, as used herein, means the
Commonwealth of Massachusetts. All terms defined in the Uniform
Commercial Code of the State and used herein shall have the same
definitions herein as specified therein. However, if a term is
defined in Article 9 of the Uniform Commercial Code of the State
differently than in another Article of the Uniform Commercial Code
of the State, the term has the meaning specified in Article 9. The
term “electronic document” applies in the event that
the 2003 revisions to Article 7, with amendments to Article 9, of
the Uniform Commercial Code, in substantially the form approved by
the American Law Institute and the National Conference of
Commissioners on Uniform State Laws, are now or hereafter adopted
and become effective in the State or in any other relevant
jurisdiction.
2. Grant of Security
Interest .
2.1. Grant; Collateral
Description . Each Grantor hereby grants to the
Administrative Agent, for the benefit of the Secured Parties, to
secure the payment and performance in full of all of the
Obligations, a security interest in and pledges and assigns to the
Administrative Agent, for the benefit of the Secured Parties, the
following properties, assets and rights of such Grantor, wherever
located, whether now owned or hereafter acquired or arising, and
all proceeds and products thereof (all of the same being
hereinafter called the “ Collateral ”): all
personal and fixture property of every kind and nature including
all goods
(including inventory,
equipment and any accessions thereto), instruments (including
promissory notes), documents (including, if applicable, electronic
documents), accounts (including health-care-insurance receivables),
chattel paper (whether tangible or electronic), deposit accounts,
letter-of-credit rights (whether or not the letter of credit is
evidenced by a writing), commercial tort claims, securities and all
other investment property, supporting obligations, any other
contract rights or rights to the payment of money, insurance claims
and proceeds, and all general intangibles (including all payment
intangibles). The Administrative Agent acknowledges that the
attachment of its security interest in any commercial tort claim of
any Grantor as original collateral is subject to such
Grantor’s compliance with § 4.6 .
2.2. Excluded
Collateral . The grant of the security interest contained
in § 2.1 shall not extend to, and the term
“Collateral” shall not include, (a) any
trademarks, service marks, trade names, copyrights, patents, patent
applications, patent rights, licenses and other intellectual
property rights, (b) contracts (other than any contracts
between Grantors or any Grantor and any Subsidiary of a Grantor)
and governmental permits and licenses (and rights and property
acquired thereunder) that by their terms or the terms of any
applicable law effectively prohibit the creation of a lien on such
contracts, permits or licenses (or rights and property acquired
thereunder), (c) more than sixty-six percent (66%) of the
voting stock of any Foreign Subsidiary, (d) any margin stock
(within the meaning of Regulation U of the FRB), and (e) any
Equity Interests in Alexion Manufacturing (collectively, “
Excluded Collateral ”). Notwithstanding the foregoing,
the grant of the security interest contained in § 2.1
shall extend to, and the term “Collateral” shall
specifically include, any and all proceeds of such Excluded
Collateral.
3. Authorization to
File Financing Statements . Each Grantor hereby irrevocably
authorizes the Administrative Agent at any time and from time to
time to file in any filing office in any Uniform Commercial Code
jurisdiction any initial financing statements and amendments
thereto that (a) indicate the Collateral (i) as all
assets (other than items set forth in § 2.2(a) above)
of such Grantor or words of similar effect, regardless of whether
any particular asset comprised in the Collateral falls within the
scope of Article 9 of the Uniform Commercial Code of the State or
such jurisdiction, or (ii) as being of an equal or lesser
scope or with greater detail, and (b) provide any other
information required by part 5 of Article 9 of the Uniform
Commercial Code of the State or such other jurisdiction for the
sufficiency or filing office acceptance of any financing statement
or amendment, including (i) whether such Grantor is an
organization, the type of organization and any organizational
identification number issued to such Grantor and, (ii) in the
case of a financing statement filed as a fixture filing or
indicating Collateral as as-extracted collateral or timber to be
cut, a sufficient description of real property to which the
Collateral relates. Each Grantor agrees to furnish any such
information to the Administrative Agent promptly upon the
Administrative Agent’s request. Each Grantor also ratifies
its authorization for the Administrative Agent to have filed in any
Uniform Commercial Code jurisdiction any like initial financing
statements or amendments thereto if filed prior to the date
hereof.
4. Other
Actions . Further to insure the attachment, perfection and
first priority of, and the ability of the Administrative Agent to
enforce, the Administrative Agent’s security interest in the
Collateral, each Grantor agrees, in each case at such
Grantor’s expense, to take the following actions with respect
to the following Collateral and without limitation on such
Grantor’s other obligations contained in this
Agreement:
4.1. Promissory Notes
and Tangible Chattel Paper . If any Grantor shall, now or
at any time hereafter, hold or acquire any promissory notes or
tangible chattel paper (collectively, “ Pledged Debt
”), such Grantor shall forthwith endorse, assign and deliver
the same to the Administrative Agent, accompanied by such
instruments of transfer or assignment duly executed in blank as the
Administrative Agent may from time to time specify provided
, however , so long as no Event of Default shall be
continuing or would result therefrom, the Grantors shall not be
required to take any of the foregoing actions to the extent Pledged
Debt for all Grantors, for which the foregoing actions have not
been taken, is less than $100,000 in the aggregate.
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4.2. Control
Accounts . For each deposit account that is a Control
Account that any Grantor, now or at any time hereafter, opens or
maintains, such Grantor shall, at the Administrative Agent’s
request and option, pursuant to an agreement in form and substance
reasonably satisfactory to the Administrative Agent, either
(a) cause the depositary bank to agree to comply without
further consent of such Grantor, at any time with instructions from
the Administrative Agent to such depositary bank directing the
disposition of funds from time to time credited to such deposit
account, or (b) arrange for the Administrative Agent to become
the customer of the depositary bank with respect to such Control
Account, with such Grantor being permitted, only with the consent
of the Administrative Agent, to exercise rights to withdraw funds
from such deposit account. The Administrative Agent agrees with
each Grantor that the Administrative Agent shall not give any
instructions or withhold any withdrawal rights from such Grantor,
unless an Event of Default has occurred and is continuing, or, if
effect were given to any withdrawal not otherwise permitted by the
Loan Documents, would occur.
4.3. Investment
Property . If any Grantor shall, now or at any time
hereafter, hold or acquire Collateral evidenced by any certificated
securities, such Grantor shall forthwith endorse, assign and
deliver the same to the Administrative Agent, accompanied by such
instruments of transfer or assignment duly executed in blank as the
Administrative Agent may from time to time specify. If any
securities constituting Collateral now or hereafter acquired by any
Grantor are uncertificated and are issued to such Grantor or its
nominee directly by the issuer thereof, such Grantor shall
immediately notify the Administrative Agent thereof and, at the
Administrative Agent’s request and option, pursuant to an
agreement in form and substance reasonably satisfactory to the
Administrative Agent, either (a) cause the issuer to agree to
comply, without further consent of such Grantor or such nominee, at
any time with instructions from the Administrative Agent as to such
securities, or (b) arrange for the Administrative Agent to
become the registered owner of the securities. If any securities
constituting Collateral, whether certificated or uncertificated, or
other investment property now or hereafter acquired by any Grantor
are held by such Grantor or its nominee through a securities
intermediary or commodity intermediary, such Grantor shall
immediately notify the Administrative Agent thereof and, at the
Administrative Agent’s request and option, pursuant to an
agreement in form and substance reasonably satisfactory to the
Administrative Agent, either (i) cause such securities
intermediary or (as the case may
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be) commodity intermediary to
agree to comply, in each case without further consent of such
Grantor or such nominee, at any time with entitlement orders or
other instructions from the Administrative Agent to such securities
intermediary as to such securities or other investment property, or
(as the case may be) to apply any value distributed on account of
any commodity contract as directed by the Administrative Agent to
such commodity intermediary, or (ii) in the case of financial
assets or other investment property held through a securities
intermediary, arrange for the Administrative Agent to become the
entitlement holder with respect to such investment property, with
such Grantor being permitted, only with the consent of the
Administrative Agent, to exercise rights to withdraw or otherwise
deal with such investment property. The Administrative Agent agrees
with each Grantor that the Administrative Agent shall not give any
such entitlement orders or instructions or directions to any such
issuer, securities intermediary or commodity intermediary, and
shall not withhold its consent to the exercise of any withdrawal or
dealing rights by such Grantor, unless an Event of Default has
occurred and is continuing, or, after giving effect to any such
investment and withdrawal rights not otherwise permitted by the
Loan Documents, would occur.
4.4. Collateral in the
Possession of a Bailee . If any Collateral of any Grantor
with an aggregate fair market value in excess of $100,000 is, now
or at any time hereafter, in the possession of a bailee, such
Grantor shall promptly notify the Administrative Agent thereof and,
at the Administrative Agent’s request and option, shall
promptly obtain an acknowledgement from the bailee, in form and
substance reasonably satisfactory to the Administrative Agent, that
the bailee holds such Collateral for the benefit of the
Administrative Agent and such bailee’s agreement to comply,
without further consent of such Grantor, at any time with
instructions of the Administrative Agent as to such Collateral. The
Administrative Agent agrees with each Grantor that the
Administrative Agent shall not give any such instructions unless an
Event of Default has occurred and is continuing or would occur
after taking into account any action by such Grantor with respect
to the bailee.
4.5. Electronic Chattel
Paper, Electronic Documents and Transferable Records . If
any Grantor, now or at any time hereafter, holds or acquires an
interest in any electronic chattel paper, any electronic document
or any “transferable record,” as that term is defined
in Section 201 of the federal Electronic Signatures in Global
and National Commerce Act, or in §16 of the Uniform Electronic
Transactions Act as in effect in any relevant jurisdiction, such
Grantor shall promptly notify the Administrative Agent thereof and,
at the request and option of the Administrative Agent, shall take
such action as the Administrative Agent may reasonably request to
vest in the Administrative Agent control, under §9-105 of the
Uniform Commercial Code of the State or any other relevant
jurisdiction, of such electronic chattel paper, control, under
§7-106 of the Uniform Commercial Code of the State or any
other relevant jurisdiction, of such electronic document or
control, under Section 201 of the federal Electronic
Signatures in Global and National Commerce Act or, as the case may
be, §16 of the Uniform Electronic Transactions Act, as so in
effect in such jurisdiction, of such transferable record;
provided , however , so long as no Event of Default
shall be continuing or would result therefrom, none of the Grantors
shall be required to take any of the
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foregoing actions to the
extent electronic chattel paper, electronic documents and
transferable records for all Grantors, for which the foregoing
actions have not been taken, have an original face value of less
than $100,000 in the aggregate. The Administrative Agent agrees
with each Grantor that the Administrative Agent will arrange,
pursuant to procedures reasonably satisfactory to the
Administrative Agent and so long as such procedures will not result
in the Administrative Agent’s loss of control, for such
Grantor to make alterations to the electronic chattel paper,
electronic document or transferable record permitted under UCC
§9-105, UCC §7-106, or, as the case may be,
Section 201 of the federal Electronic Signatures in Global and
National Commerce Act or §16 of the Uniform Electronic
Transactions Act for a party in control to make without loss of
control, unless an Event of Default has occurred and is continuing
or would occur after taking into account any action by the Company
with respect to such electronic chattel paper, electronic document
or transferable record. The provisions of this §4.5 relating
to electronic documents and “control” under UCC
§7-106 apply in the event that the 2003 revisions to Article
7, with amendments to Article 9, of the Uniform Commercial Code, in
substantially the form approved by the American Law Institute and
the National Conference of Commissioners on Uniform State Laws, are
now or hereafter adopted and become effective in the State or in
any other relevant jurisdiction.
4.6. Letter-of-credit
Rights . If any Grantor is, now or at any time hereafter, a
beneficiary under a letter of credit, such Grantor shall promptly
notify the Administrative Agent thereof and, at the request and
option of the Administrative Agent, such Grantor shall, pursuant to
an agreement in form and substance reasonably satisfactory to the
Administrative Agent, either (a) arrange for the issuer and
any confirmer of such letter of credit to consent to an assignment
to the Administrative Agent of the proceeds of the letter of credit
or (b) arrange for the Administrative Agent to become the
transferee beneficiary of the letter of credit, with the
Administrative Agent agreeing, in each case, that the proceeds of
the letter of credit are to be applied to the Obligations as
provided in the Credit Agreement.
4.7. Commercial Tort
Claims . If any Grantor shall, now or at any time
hereafter, hold or acquire a commercial tort claim, such Grantor
shall immediately notify the Administrative Agent in a writing
signed by such Grantor of the particulars thereof and grant to the
Administrative Agent, for the benefit of the Secured Parties, in
such writing a security interest therein and in the proceeds
thereof, all upon the terms of this Agreement, with such writing to
be in form and substance reasonably satisfactory to the
Administrative Agent.
4.8. Other Actions as
to any and all Collateral . Each Grantor further agrees,
upon the request of the Administrative Agent and at the
Administrative Agent’s option, to take any and all other
actions as the Administrative Agent may reasonably determine to be
necessary for the attachment, perfection and first priority of, and
the ability of the Administrative Agent to enforce, the
Administrative Agent’s security interest in any and all of
the Collateral, including (a) executing, delivering and, where
appropriate, filing financing statements and amendments relating
thereto under the Uniform Commercial Code of any
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relevant jurisdiction, to the
extent, if any, that such Grantor’s signature thereon is
required therefor, (b) causing the Administrative
Agent’s name to be noted as secured party on any certificate
of title for a titled good if such notation is a condition to
attachment, perfection or priority of, or ability of the
Administrative Agent to enforce, the Administrative Agent’s
security interest in such Collateral, (c) complying with any
provision of any statute, regulation or treaty of the United States
as to any Collateral if compliance with such provision is a
condition to attachment, perfection or priority of, or ability of
the Administrative Agent to enforce, the Administrative
Agent’s security interest in such Collateral,
(d) obtaining governmental and other third party waivers,
consents and approvals, in form and substance reasonably
satisfactory to the Administrative Agent, including any consent of
any licensor, lessor or other person obligated on Collateral and
any party or parties whose consent is required for the security
interest of the Administrative Agent to attach under §
2 , (e) obtaining waivers from mortgagees and landlords
in form and substance reasonably satisfactory to the Administrative
Agent and (f) taking all actions under any earlier versions of
the Uniform Commercial Code or under any other law, as reasonably
determined by the Administrative Agent to be applicable in any
relevant Uniform Commercial Code or other jurisdiction, including
any foreign jurisdiction.
5. Relation to Other
Security Documents . The provisions of this Agreement
supplement the provisions of any real estate mortgage or deed of
trust granted by any Grantor to the Administrative Agent, for the
benefit of the Secured Parties, and which secures the payment or
performance of any of the Obligations. Nothing contained in any
such real estate mortgage or deed of trust shall derogate from any
of the rights or remedies of the Administrative Agent or any of the
other Secured Parties hereunder. In addition, to the provisions of
this Agreement being so read and construed with any such real
estate mortgage or deed of trust, the provisions of this Agreement
shall be read and construed with the other Collateral Documents
referred to below in the manner so indicated.
5.1. Securities Pledge
Agreement . Concurrently herewith the Company and each
other Grantor is executing and delivering to the Administrative
Agent, for the benefit of the Secured Parties, that certain
Securities Pledge Agreement pursuant to which each Grantor is
pledging to the Administrative Agent all of the Equity Interests of
its Subsidiaries (other than any CFC or a Subsidiary that is held
directly or indirectly by a CFC). Such pledge shall be governed by
the terms of such Securities Pledge Agreement and not by the terms
of this Agreement.
6. Representations and
Warranties Concerning Grantor’s Legal Status . Each
Grantor has previously delivered to the Administrative Agent a
certificate signed by such Grantor and entitled “Perfection
Certificate” (each, a “ Perfection
Certificate ”). Each Grantor represents and warrants
to the Administrative Agent and the other Secured Parties as
follows: (a) such Grantor’s exact legal name is that
indicated on its Perfection Certificate and on the signature page
hereof, (b) each Grantor is an organization of the type, and
is organized in the jurisdiction, set forth in its Perfection
Certificate, (c) the Perfection Certificate of the applicable
Grantor accurately sets forth such Grantor’s organizational
identification number or accurately states that such Grantor has
none, (d) the Perfection Certificate of the applicable Grantor
accurately sets forth such Grantor’s place of business or, if
more than one, its chief
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executive office as well as such
Grantor’s mailing address, if different, (e) all other
information set forth on the Perfection Certificate of the
applicable Grantor pertaining to such Grantor is accurate and
complete, and (f) there has been no change in any of such
information since the date on which the Perfection Certificate of
the applicable Grantor was signed by such Grantor.
7. Covenants Concerning
Grantor’s Legal Status . Each Grantor covenants with
the Administrative Agent and the other Secured Parties as follows:
(a) without providing at least thirty (30) days prior
written notice to the Administrative Agent, such Grantor will not
change its name, its chief executive office, or its mail
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