CREDIT AGREEMENT

9 Months Ended

Sep. 30, 2020

Line of Credit Facility [Abstract]

CREDIT AGREEMENT

CREDIT AGREEMENTOn April 10, 2020, we entered into a credit agreement, or Credit Agreement, among us, certain of our subsidiaries (such subsidiaries, together with us, the Loan Parties), funds or accounts managed or advised by GSO Capital Partners LP and certain other affiliates of The Blackstone Group Inc., and the other lenders from time to time parties thereto, collectively, the Lenders, and Wilmington Trust, National Association, as the administrative agent for the Lenders. The Credit Agreement provides for a

senior secured delayed draw term loan facility of up to $700.0 million to be funded in three tranches, collectively referred to as the Term Loans, as follows:

Tranche	Requested No Later Than	Aggregate Principal Amount, up to (in thousands)
Tranche 1 Loan	December 31, 2020	$	200,000
Tranche 2 Loan	June 30, 2021	250,000
Tranche 3 Loan	December 31, 2021	250,000
Total		$	700,000

In addition, we may (a) at any time following April 10, 2021, request an increase in respect of the unfunded commitments in an amount not to exceed $50.0 million on terms to be agreed and subject to the consent of the Lenders providing such increase and/or (b) at any time prior to April 10, 2021, cancel the unfunded commitments or reallocate the unfunded commitments in respect of the Tranche 2 Loan or Tranche 3 Loan to the Tranche 1 Loan and/or the Tranche 2 Loan in an amount not to exceed $100.0 million in the aggregate for all such cancellations or reallocations.

The Tranche 1 Loan will be requested no later than December 31, 2020, the Tranche 2 Loan will be requested no later than June 30, 2021 and the Tranche 3 Loan will be requested no later than December 31, 2021, in each case, subject to customary terms and conditions, including, in the case of the Tranche 2 Loan and Tranche 3 Loan, either (a) the first sale of inclisiran in the U.S. for end use or consumption after FDA regulatory approval thereof or (b) revenue attributable to ONPATTRO and GIVLAARI equal to or greater than $300.0 million as of the last day of the most recently ended twelve month period, referred to as the Subsequent Borrowing Conditions. In the event the Subsequent Borrowing Conditions are not satisfied as of the dates set forth in the table above, the Tranche 2 Loan and Tranche 3 Loan will be funded if such Subsequent Borrowing Conditions are satisfied on or prior to December 31, 2022. The Term Loans mature seven years from the date the Tranche 1 Loan is funded, referred to as the Tranche 1 Funding Date. We can elect an interest rate of either LIBOR plus 7%, subject to a floor of 1%, or a base rate plus 6%, subject to a floor of 2%. We may, at our option, pay interest in kind on interest due within a three-year period beginning on the Tranche 1 Funding Date at a rate that is 1% higher than the interest rate otherwise applicable to such Term Loan. On the date any Tranche 1 Loan, Tranche 2 Loan or Tranche 3 Loan is funded, we will pay a funding fee equal to 2.5% of the principal amount of the Term Loans funded on such date. In addition, we will pay an exit fee equal to 1% of the commitments in respect of the Term Loans, payable upon any repayment of the Term Loans or termination of the unfunded Term Loan commitments.

We are obligated to pay interest due on the Term Loans for a two-year period beginning on the Tranche 1 Funding Date which will be calculated without regard to the Term Loans being prepaid or an unfunded tranche being terminated during this period (in whole or in part). Any prepayments of Term Loans or terminations of unfunded tranches that occur between 2 to 5 years from the Tranche 1 Funding Date are subject to a fee of up to 5% of the loan principal that is prepaid or the amount of the unfunded tranche that is terminated.

All obligations under the Credit Agreement are secured, subject to certain exceptions, by security interests in the following assets: (1) intellectual property owned by us relating to ONPATTRO, GIVLAARI and vutrisiran, (2) the equity interests held by the Loan Parties in their subsidiaries, (3) all of our ownership of the inclisiran royalty remaining after the royalty purchase under the Purchase Agreement, and (4) material real property, and certain personal property, including, without limitation, cash held in certain deposit accounts of the Loan Parties and equipment.

The Credit Agreement contains negative covenants that, among other things and subject to certain exceptions, could restrict our ability to, incur additional liens, incur additional indebtedness, make investments, including acquisitions, engage in fundamental changes, sell or dispose of assets that constitute collateral, including certain intellectual property, pay dividends or make any distribution or payment on or redeem, retire or purchase any equity interests, amend, modify or waive certain material agreements or organizational documents and make payments of certain subordinated indebtedness. Additionally, the Credit Agreement contains certain customary representations and warranties, affirmative covenants and provisions relating to events of default, including nonpayment of principal, interest and other amounts; failure to comply with covenants; the rendering of judgments or orders or default by us in respect of other material indebtedness; and certain insolvency and ERISA events. The Credit Agreement also requires us to have consolidated liquidity of at least $100.0 million as of the last day of each fiscal quarter. As of September 30, 2020, we were in compliance with the applicable terms and conditions of the covenants under the Credit Agreement. No later than December 31, 2020, we will draw the Tranche 1 Loan based on the terms of the Credit Agreement. As of September 30, 2020, we had not yet drawn down on the Term Loans.