PLEDGE AND SECURITY AGREEMENT
Exhibit
10.4
MADE
BY
INSITE
VISION INCORPORATED
TO
U.S.
BANK NATIONAL ASSOCIATION, AS TRUSTEE
DATED
AS OF FEBRUARY 21, 2008
Table
of
Contents
Page
|
||
ARTICLE
I
RULES
OF CONSTRUCTION AND DEFINED TERMS
|
||
Section
1.1
|
Rules
of Construction and Defined Terms
|
1
|
ARTICLE
II
PLEDGE
|
||
Section
2.1
|
Pledge
|
2
|
ARTICLE
III
DELIVERY
OF ISSUER PLEDGED COLLATERAL
|
||
Section
3.1
|
Delivery
of Issuer Pledged Collateral
|
2
|
Section
3.2
|
Recording
of Lien
|
3
|
Section
3.3
|
Capital
Securities
|
3
|
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES
|
||
Section
4.1
|
Representations
and Warranties
|
3
|
ARTICLE
V
SUPPLEMENTS;
FURTHER ASSURANCES
|
||
Section
5.1
|
Supplements
|
5
|
Section
5.2
|
Further
Assurances
|
5
|
ARTICLE
VI
COVENANTS
|
||
Section
6.1
|
No
Liens
|
6
|
Section
6.2
|
Notices
|
6
|
Section
6.3
|
Voting
Rights
|
6
|
Section
6.4
|
Dividends
and Distributions
|
7
|
Section
6.5
|
Capital
Securities
|
7
|
Section
6.6
|
Legal
Existence
|
7
|
Section
6.7
|
Compliance
with Laws
|
7
|
Section
6.8
|
Taxes
|
7
|
Section
6.9
|
Modifications
|
8
|
Section
6.10
|
No
Liquidation
|
8
|
Section
6.11
|
Monies
Held in Trust
|
8
|
i
Section
6.12
|
No
Claims
|
8
|
ARTICLE
VII
TRUSTEE
APPOINTED ATTORNEY-IN-FACT
|
||
Section
7.1
|
Trustee
Appointed Attorney-In-Fact
|
8
|
ARTICLE
VIII
REASONABLE
CARE
|
||
Section
8.1
|
Reasonable
Care
|
9
|
ARTICLE
IX
NO
LIABILITY
|
||
Section
9.1
|
No
Liability
|
9
|
ARTICLE
X
REMEDIES
UPON EVENT OF DEFAULT
|
||
Section
10.1
|
Remedies
Upon Event of Default
|
9
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ARTICLE
XI
PURCHASE
OF THE ISSUER PLEDGED COLLATERAL
|
||
Section
11.1
|
Purchase
of the Issuer Pledged Collateral
|
12
|
ARTICLE
XII
EXPENSES
|
||
Section
12.1
|
Expenses
|
12
|
ARTICLE
XIII
NO
WAIVER; REMEDIES
|
||
Section
13.1
|
No
Waiver; Remedies
|
12
|
ARTICLE
XIV
AMENDMENTS
|
||
Section
14.1
|
Amendments
|
13
|
ARTICLE
XV
RELEASE;
TERMINATION
|
||
Section
15.1
|
Release;
Termination
|
13
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ARTICLE
XVI
NOTICES
|
||
Section
16.1
|
Notices
|
13
|
ARTICLE
XVII
CONTINUING
SECURITY INTEREST
|
||
Section
17.1
|
Continuing
Security Interest
|
14
|
ii
Article
XVIII
SECURITY
INTEREST ABSOLUTE
|
||
Section
18.1
|
Security
Interest Absolute
|
14
|
Article
XIX
INDEMNITY
|
||
Section
19.1
|
Indemnity
|
15
|
Article
XX
OBLIGATIONS
SECURED BY ISSUER PLEDGED COLLATERAL
|
||
Section
20.1
|
Obligations
Secured by Issuer Pledged Collateral
|
15
|
Article
XXI
SEVERABILITY
|
||
Section
21.1
|
Severability
|
15
|
Article
XXII
COUNTERPARTS;
EFFECTIVENESS
|
||
Section
22.1
|
Counterparts;
Effectiveness
|
16
|
Article
XXIII
REINSTATEMENT
|
||
Section
23.1
|
Reinstatement
|
16
|
Article
XXIV
SUBMISSION
TO JURISDICTION; WAIVER OF JURY TRIAL
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||
Section
24.1
|
SUBMISSION
TO JURISDICTION.
|
16
|
Article
XXV
GOVERNING
LAW
|
||
Section
25.1
|
GOVERNING
LAW
|
17
|
Article
XXVI
TABLE
OF CONTENTS AND HEADINGS
|
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Section
26.1
|
Table
of Contents and Headings
|
17
|
Annex
A
|
Rules
of Construction and Defined Terms
|
iii
This
PLEDGE AND SECURITY AGREEMENT, dated as of February 21, 2008, is made by
INSITE
VISION INCORPORATED, a Delaware corporation, in favor of U.S. Bank National
Association, a national banking association, as the Trustee under the Indenture,
as grantee hereunder.
WITNESSETH:
WHEREAS,
pursuant to the Purchase and Sale Agreement, contemporaneous with the execution
and delivery of this Pledge and Security Agreement, the Parent has sold,
transferred, conveyed, assigned, contributed and granted all of the Purchased
Assets to the Issuer, in consideration of the payment by the Issuer to the
Parent of the Cash Purchase Price and the issuance by the Issuer to the Parent
of all of the Capital Securities of the Issuer owned by the Parent;
WHEREAS,
in order to secure the repayment of the Original Class A Notes issued by the
Issuer pursuant to the Indenture, the Issuer shall grant a security interest
in
certain of its property and rights to the Trustee for the benefit of the
Noteholders, including Royalty Payments actually made by Inspire under the
Inspire License Agreement (but not the rights thereunder to receive such
payments) and the Replacement Royalty Payments, if any, its rights under the
Purchase and Sale Agreement, any Accounts and certain other collateral in
accordance with the terms and conditions thereof;
WHEREAS,
in addition to the grant of security interest by the Issuer to the Trustee
as
set forth in the immediately preceding recital, in order to further secure
repayment of the Original Class A Notes, the Trustee desires that the Parent
pledge all of the Capital Securities of the Issuer owned by the Parent to the
Trustee for the benefit of the Noteholders; and
WHEREAS,
the Parent and the Trustee hereby agree that the Parent shall execute and
deliver this Pledge and Security Agreement and make the pledge contemplated
hereby to the Trustee for its benefit;
NOW,
THEREFORE, in consideration of the foregoing premises and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, and in order to induce the Noteholders to purchase the Original
Class A Notes issued pursuant to the Indenture, the Parent agrees, for the
benefit of the Trustee on behalf of each Noteholder, as follows:
ARTICLE
I
RULES
OF CONSTRUCTION AND DEFINED TERMS
Section
1.1 Rules
of Construction and Defined Terms.
The
rules of construction set forth in Annex
A
shall
apply to this Pledge and Security Agreement and are hereby incorporated by
reference into this Pledge and Security Agreement as if set forth fully in
this
Pledge and Security Agreement. Capitalized terms used but not otherwise defined
in this Pledge and Security Agreement shall have the respective meanings given
to such terms in Annex
A,
which
is hereby incorporated by reference into this Pledge and Security Agreement
as
if set forth fully in this Pledge and Security Agreement. Not all terms defined
in Annex
A
are used
in this Pledge and Security Agreement.
1
ARTICLE
II
PLEDGE
Section
2.1 Pledge.
As
security for the payment and performance of the Secured Obligations and subject
to and in accordance with the provisions of this Pledge and Security Agreement,
the Parent hereby pledges, grants, assigns, hypothecates, transfers and delivers
(subject to Section 3.1) to the Trustee, its successors and assigns, for the
security and benefit of the Noteholders, a continuing first priority security
interest in all of the Parent’s right, title and interest in, to and under the
following property, whether now owned or hereafter acquired (the “Issuer
Pledged Collateral”):
(a) all
of
the Parent’s Capital Securities in the Issuer, whether now owned or acquired in
the future, and all certificates, agreements or other instruments, if any,
representing such Capital Securities (the “Issuer
Pledged Equity”);
(b) subject
to Section 6.4, the right to receive all monies and property representing a
distribution in respect of the Issuer Pledged Equity (except for proceeds of
the
Notes to the extent not applicable to any Redemption of the Notes), whether
by
way of dividend, redemption, liquidation payments, repurchase or otherwise;
and
(c) subject
to Section 6.4, all proceeds, products and accessions of and to the Issuer
Pledged Equity and any of the foregoing, including all shares, securities,
rights, monies or other property accruing, offered or issued at any time by
way
of redemption, conversion, exchange, substitution, preference, option or
otherwise in respect of the Issuer Pledged Equity;
TO
HAVE
AND TO HOLD the Issuer Pledged Collateral, together with all right, title,
interest, powers, privileges and preferences pertaining or incidental thereto,
unto the Trustee, its successors and assigns, forever, subject to the terms
and
conditions set forth herein.
ARTICLE
III
DELIVERY
OF ISSUER PLEDGED COLLATERAL
Section
3.1 Delivery
of Issuer Pledged Collateral.
Contemporaneously with the execution of this Pledge and Security Agreement,
the
Parent shall deliver or cause to be delivered to the Trustee, to the extent
not
previously delivered, (a) any and all certificates and other instruments
evidencing the Issuer Pledged Equity then held in the form of certificates
or
other instruments by the Parent, together with undated stock powers or
assignments of such certificates duly executed and signed in blank, (b) any
and
all certificates or other instruments or documents representing any of the
Issuer Pledged Collateral then held by the Parent and (c) all other property
comprising part of the Issuer Pledged Collateral then held in the form of
certificates or other instruments by the Parent with proper instruments of
assignment or transfer duly executed and such other instruments or documents
as
the Trustee may reasonably request to effect the purposes contemplated
hereby.
2
Section
3.2 Recording
of Lien.
The
Parent shall record the Lien of the Trustee on its records at its principal
office within ten Business Days after the date hereof and provide to the Trustee
written confirmation that such Lien has been so recorded and that there are
no
other Liens on its records with respect to the Issuer Pledged
Equity.
Section
3.3 Capital
Securities.
If the
Parent shall become entitled to receive or shall receive, in respect of the
Issuer Pledged Equity, any Capital Securities, options, warrants, rights or
other similar property, including any certificate representing any distribution
in connection with any recapitalization, reclassification or increase or
reduction of capital (whether as an addition to, in substitution of or in
exchange for such Issuer Pledged Equity or otherwise), the Parent
agrees:
(a) to
accept
the same as the agent of the Trustee;
(b) to
hold
the same in trust on behalf of and for the benefit of the Trustee and separate
and apart from its other property; and
(c) to
deliver any and all certificates or instruments evidencing the same to the
Trustee on or before the close of business on the fifth Business Day following
the receipt thereof by the Parent, in the exact form received, with the
endorsement or assignment in blank of the Parent when necessary and with
appropriate undated irrevocable proxies duly executed in blank (with signatures
properly guaranteed), to be held by the Trustee, subject to the terms of this
Pledge and Security Agreement, as additional Issuer Pledged
Collateral.
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES
Section
4.1 Representations
and Warranties.
As
of the
date hereof, the Parent represents and warrants as follows:
(a) The
Parent has been duly organized, is validly existing and is in good standing
under the laws of its jurisdiction of organization and has all licenses,
permits, franchises and governmental authorizations necessary to carry on its
business as now being conducted and shall appoint and employ agents or attorneys
in each jurisdiction where it shall be necessary to take action under this
Pledge and Security Agreement. The Parent is duly licensed or qualified to
do
business in good standing in each jurisdiction in which such qualification
is
required by law, except where such failure to qualify would not reasonably
be
likely to result in a Material Adverse Effect. The Parent has the full power
and
authority to own the property it purports to own and to carry on its business
as
presently conducted and as proposed to be conducted.
(b) The
Parent is the sole legal and beneficial owner of the Issuer Pledged Collateral
free and clear of any Lien other than the Lien created pursuant to this Pledge
and Security Agreement and the Indenture or other Permitted Liens. No security
agreement, financing statement or other public notice with respect to all or
any
part of the Issuer Pledged Collateral is on file or of record in any public
office, except such as may have been filed in favor of the Trustee pursuant
to
this Pledge and Security Agreement and the Indenture.
3
(c) The
consummation of the transactions contemplated hereby has been duly and validly
authorized by the Parent. The Parent has full power to execute and deliver
this
Pledge and Security Agreement and to perform its obligations hereunder and
to
pledge all the Issuer Pledged Collateral pursuant to this Pledge and Security
Agreement. This Pledge and Security Agreement has been duly authorized, executed
and delivered by the Parent. This Pledge and Security Agreement constitutes
a
legal, valid and binding obligation of the Parent enforceable against the Parent
in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, moratorium or other similar laws affecting
creditors’ rights generally and except as enforceability may be limited by
general principles of equity (whether considered in a suit at law or in equity).
All requisite action has been taken by the Parent to make this Pledge and
Security Agreement valid and binding upon the Parent.
(d) No
consent of any other party (including directors, officers, members, managers
or
creditors of the Parent) and no government approval is required that has not
been obtained (i) for the execution, delivery and performance by the Parent
of
this Pledge and Security Agreement and each other Transaction Document to which
it is a party, (ii) for the pledge by the Parent of the Issuer Pledged
Collateral pursuant to this Pledge and Security Agreement or (iii) for the
exercise by the Trustee of the rights provided for in this Pledge and Security
Agreement or the remedies in respect of the Issuer Pledged Collateral pursuant
to this Pledge and Security Agreement (except as may be required (x) in
connection with any disposition of all or any part of the Issuer Pledged
Collateral under any laws affecting the offering and sale of securities
generally, (y) under applicable federal and state laws, rules and regulations
and applicable interpretations thereof providing for the supervision or
regulation of the banking or trust businesses generally and applicable to the
Trustee and (z) with respect to the Trustee as a result of any relationship
that
the Trustee may have with Persons not parties to, or any activity or business
the Trustee may conduct other than pursuant to, any of the Transaction
Documents).
(e) The
execution and delivery of this Pledge and Security Agreement concurrently with
the delivery to the Trustee of the certificates and other items contemplated
by
Section 3.1 and the taking of the actions described in Section 3.3 constitute
“control” of the Issuer Pledged Equity described in Section 8-106(b) of the UCC
and create a valid security interest in the Issuer Pledged Collateral securing
the Secured Obligations, and the Parent has done such other acts, if any,
reasonably requested by the Trustee to perfect the security interest in the
Issuer Pledged Collateral granted hereunder (including permitting the Trustee
to
file any appropriate UCC financing statement against the Parent).
(f) The
execution, delivery and performance of this Pledge and Security Agreement and
the consummation of the transactions contemplated by this Pledge and Security
Agreement do not (i) violate the provisions of the Parent Organizational
Documents, (ii) violate the provisions of any Applicable Law (including any
usury law), regulation or order of any Governmental Authority applicable to
the
Parent except where such violation would not have or would not be reasonably
expected to have a Material Adverse Effect, (iii) result in a breach of, or
constitute a default under, any material agreement relating to the management
or
affairs of the Parent, or any indenture, credit agreement or loan agreement
or
any other similar material agreement, lease or instrument to which the Parent
is
a party or by which the Parent or any of its material properties may be bound
(which default or breach has not been permanently waived by the other party
to
such document) or (iv) result in or create any Lien (other than Permitted Liens)
under, or require any consent that has not been obtained under, any indenture,
credit agreement or loan agreement or any other material agreement, instrument
or document to which the Parent is a party or the provisions of any order,
writ,
judgment, injunction, decree, determination or award of any Governmental
Authority, binding upon the Parent, the Issuer Pledged Collateral or any
material properties of the Parent.
4
(g) There
are
no proceedings and there is no action, suit or proceeding at law or in equity
or
by or before any Governmental Authority now pending against the Parent or,
to
the best knowledge of the Parent, threatened against the Parent that questions
the validity or legality of this Pledge and Security Agreement or that seeks
to
prevent the consummation of any of the transactions contemplated by this Pledge
and Security Agreement.
(h) All
of
the Issuer Pledged Equity has been duly authorized and validly issued by the
Issuer and is fully paid and non-assessable.
ARTICLE
V
SUPPLEMENTS;
FURTHER ASSURANCES
Section
5.1 Supplements.
The
Parent agrees that, at any time and from time to time, at the Parent’s expense
and upon the Trustee’s reasonable request, the Parent will promptly execute and
deliver all further instruments and documents, and take all further action,
that
may be necessary in the reasonable discretion of the Trustee, in order to
perfect the security interest of the Trustee in the Issuer Pledged Collateral
and to carry out the provisions of this Pledge and Security Agreement or to
enable the Trustee to exercise and enforce its rights and remedies hereunder
with respect to any Issuer Pledged Collateral.
The
Parent also agrees that, at any time and from time to time, at the Parent’s
expense and upon the request of the Trustee at the Direction of Noteholders
of a
majority of the Outstanding Principal Balance of the Notes, the Parent will
file
(or cause to be filed) such UCC financing statements or continuation statements,
or amendments thereto, and such other instruments or notices as may be necessary
or that the Trustee may reasonably request at the Direction of Noteholders
of a
majority of the Outstanding Principal Balance of the Notes in order to perfect
and preserve the security interests and other rights granted or purported to
be
granted to the Trustee hereby. With respect to the foregoing and the grant
of
the security interest hereunder, the Parent hereby authorizes the Trustee to
file one or more UCC financing statements or continuation statements, and
amendments thereto, relative to all or any part of the Issuer Pledged Collateral
without the signature of the Parent where permitted by law. The Parent agrees
that a carbon, photographic or other reproduction of this Pledge and Security
Agreement or any UCC financing statement covering the Issuer Pledged Collateral
or any part thereof shall be sufficient as a UCC financing statement where
permitted by law.
Section
5.2 Further
Assurances
.
If the
Parent fails to perform any agreement contained herein after receipt of a
written request to do so from the Trustee (it being understood that no such
request need be given after the occurrence and during the continuance of an
Event of Default), the Trustee may itself perform, or cause performance of,
such
agreement, in which case the reasonable expenses of the Trustee, including
the
fees and expenses of its counsel, incurred in connection therewith shall be
payable by the Parent under Section 12.1.
5
ARTICLE
VI
COVENANTS
Section
6.1 No
Liens.
The
Parent agrees that, without the consent of the Trustee pursuant to Section
9.1
or Section 9.2 of the Indenture, as applicable, it will not (a) sell or
otherwise dispose of the Issuer Pledged Collateral or any interest therein
or
(b) except for Permitted Liens, create or permit to exist any Lien upon or
with
respect to any of the Issuer Pledged Collateral or any interest therein;
provided,
however,
that,
so long as no Default or Event of Default is continuing, the Parent will be
entitled to sell, transfer, assign, convey, contribute or grant the Issuer
Pledged Equity subject to the lien of this Pledge and Security Agreement and
satisfaction of the other conditions set forth in the exception provided in
Section 6.2(a) of the Purchase and Sale Agreement.
Section
6.2 Notices.
The
Parent shall promptly provide the Trustee with copies of all notices and other
communications received by the Parent with respect to any Issuer Pledged
Collateral registered in the name of the Parent.
Section
6.3 Voting
Rights.
So long
as the Parent is the owner of the Issuer Pledged Collateral, notwithstanding
anything to the contrary in this Pledge and Security Agreement or any other
Transaction Document, if no Event of Default has occurred and is continuing,
the
Parent may exercise any and all voting and consensual powers pertaining to
the
Issuer Pledged Collateral or any part thereof. If an Event of Default has
occurred and is continuing, the Parent shall not be entitled to exercise any
of
the powers described in the preceding sentence, which shall be exercised
exclusively by the Trustee. Notwithstanding the foregoing, upon the occurrence
and during the continuance of an Event of Default comprised of any breach by
the
Parent of its covenant in Section 6.2(c) of the Purchase and Sale Agreement
as
to which the Trustee exercises remedies at law or equity available to it
pursuant to or in relation to this Pledge and Security Agreement in respect
of
the Issuer Pledged Equity, the Trustee will have the right to instruct the
Independent Member to exercise the powers and authority granted to the
Independent Member pursuant to Section 2.13 of the limited liability company
agreement of the Issuer to exercise any and all rights and options of the Issuer
in relation to the Principal Documents to enforce performance by the other
parties thereto of their obligations thereunder. If the Independent Member
elects not to exercise such rights and options notwithstanding the provision
by
the Noteholders of reasonable indemnity thereto, then the Trustee will have
the
right to terminate the Independent Member and to appoint a successor Independent
Member of the Issuer to exercise such rights and options. The Parent agrees
to
cooperate with the Trustee to cause such successor Independent Member to succeed
the terminated Independent Member as the Class B Member of the Issuer, to be
admitted as a member of the Issuer, and to obtain and enjoy to the exclusion
of
the terminated Independent Member all interests, powers, rights and authority
previously owned, possessed or enjoyed by the terminated Independent Member
pursuant to the limited liability company agreement of the Issuer. The Trustee
will not be required to deliver any such instruction to the Independent Member
or to terminate the Independent Member or appoint any successor Independent
Member unless instructed to do so by Direction of Noteholders of a majority
of
the Outstanding Principal Balance of the Notes, will only do so as specified
in
such Direction, and will be entitled to be indemnified in full and held harmless
by the Noteholders in connection with its delivery of any such instruction
or
any such termination or appointment.
6
Section
6.4 Dividends
and Distributions.
So long
as no Event of Default has occurred and is continuing, the Parent may receive
and retain any dividends and other distributions on the Issuer Pledged Equity
to
the extent permitted under the Indenture. If an Event of Default has occurred
and is continuing, the Parent shall not be entitled to receive any subsequent
dividends or other distributions on the Issuer Pledged Equity and, unless
otherwise agreed by the Trustee at the Direction of Noteholders of a majority
of
the Outstanding Principal Balance of the Notes, all such subsequent dividends
and other distributions shall constitute Issuer Pledged Collateral.
Section
6.5 Capital
Securities.
The
Parent agrees that it will not accept any Capital Securities or other equity
ownership interests, any rights or options to acquire any Capital Securities
or
other equity ownership interests or other securities, each in addition to or
in
substitution for the Issuer Pledged Collateral, without prior written consent
from the Trustee pursuant to Section 9.1 or Section 9.2 of the Indenture, as
applicable, unless the foregoing are pledged to the Trustee pursuant
hereto.
Section
6.6 Legal
Existence.
The
Parent shall preserve and maintain (a) its legal existence as a corporation
in
good standing under the laws of the State of Delaware and (b) its qualification
to do business in every jurisdiction where the ownership of its properties
and
the nature of its business require it to be so qualified and where the failure
to be so qualified would have a material adverse effect on the security interest
created by this Pledge and Security Agreement; provided,
that
this Section 6.6 shall not prohibit the Parent (or any parent entity of the
Parent) from entering into any transaction of merger, consolidation or
amalgamation with or, in the case of clause (i)(B) below, a sale of all or
substantially all of the assets of the Parent (or any parent entity of the
Parent) to, any other Person (i)(A) if the Parent (or such parent entity) is
the
continuing or surviving corporation or (B) if the Parent (or such parent entity)
is not the continuing or surviving entity unless the continuing or surviving
entity shall have assumed all of the obligations of the Parent under this Pledge
and Security Agreement and the other Transaction Documents to which the Parent
is a party immediately prior to such transaction and (ii) if the same is
otherwise permitted by the terms of the Purchase and Sale Agreement without
causing a violation of any of the covenants therein.
Section
6.7 Compliance
with Laws.
The
Parent shall comply with all laws, and obtain, maintain and comply with all
government approvals as shall now or hereafter be necessary under Applicable
Law, in each case in connection with the making and performance by the Parent
of
any material provision of this Pledge and Security Agreement.
Section
6.8 Taxes.
The
Parent shall pay and discharge all material taxes, assessments and governmental
charges or levies imposed on it or on its income or profits or on any of its
properties by a taxing authority, in each case, prior to the date on which
penalties attach thereto, and all lawful claims that, if unpaid, could
reasonably be expected to become a Lien (other than a Permitted Lien) upon
the
Issuer Pledged Collateral, unless such matters are being challenged by the
Parent in good faith by appropriate proceedings promptly instituted and
diligently conducted, so long as (a) appropriate reserves shall have been made
therefor and (b) in the case of a charge or claim that has become a Lien (other
than a Permitted Lien), such proceedings conclusively operate to stay such
charge or claim. The Parent will promptly pay or cause to be paid any valid,
final judgment enforcing any such tax, assessment, charge, levy or claim and
cause the same to be satisfied of record.
7
Section
6.9 Modifications.
The
Parent shall not, without the prior written consent of the Trustee pursuant
to
Section 9.1 or Section 9.2 of the Indenture, as applicable, agree to or permit
(a) the cancellation or termination of any of the Parent Organizational
Documents, except upon the expiration of the stated term thereof or in
connection with a merger, consolidation, asset sale or other similar transaction
as contemplated by Section 6.6, or (b) any amendment, supplement or modification
of, or waiver with respect to, any of the provisions of any of the Parent
Organizational Documents, if any such amendment, supplement, modification or
waiver would result in a material adverse change in the value of the Issuer
Pledged Collateral or the rights of the Trustee.
Section
6.10 No
Liquidation.
Without
the prior written direction by the Trustee pursuant to Section 9.1 or Section
9.2 of the Indenture, as applicable, the Parent shall not take any action to
liquidate or wind up the Issuer until all of the Secured Obligations are paid
in
full.
Section
6.11 Monies
Held in Trust.
Subject
to Section 6.4, the Parent shall hold all monies received by it that constitute
Issuer Pledged Collateral (including any payment or other benefit in breach
of
this Section 6.11 or Section 6.12) in trust for the Trustee, in order to satisfy
the Secured Obligations pursuant to the direction of the Trustee.
Section
6.12 No
Claims.
Subject
to Section 6.4, the Parent shall not claim payment, whether directly or by
set-off, lien, counterclaim or otherwise, of any amount that may be or has
become due to the Parent from the Issuer (other than Expenses and Servicing
Fees
in accordance with Section 3.7(a) of the Indenture and all royalties payable
to
the Parent to be held in trust or escrow for Pfizer and other third parties
pursuant to Section 3.7(b) of the Indenture) until all of the Secured
Obligations have been paid in full.
ARTICLE
VII
TRUSTEE
APPOINTED ATTORNEY-IN-FACT
Section
7.1 Trustee
Appointed Attorney-In-Fact.
The
Parent hereby appoints the Trustee, or any Person (including any officer or
agent) whom the Trustee may designate, as the Parent’s true and lawful
attorney-in-fact, with full irrevocable power and authority in the place and
stead of the Parent and in the name of the Parent or in its own name, at the
Parent’s cost and expense, from time to time in the Trustee’s reasonable
discretion to take any action and to execute any instrument that the Trustee
may
reasonably deem necessary or advisable to enforce its rights under this Pledge
and Security Agreement, including authority to receive, endorse and collect
all
instruments made payable to the Parent representing any distribution, interest
payment or other payment in respect of the Issuer Pledged Collateral or any
part
thereof and to give full discharge for the same and to sign, complete and
deliver all transfers, proxies and letters of resignation; provided,
however,
that
the Trustee will not exercise its powers under this Section 7.1 unless an Event
of Default has occurred and is continuing and unless so instructed by the
Noteholders pursuant to the Indenture.
8
ARTICLE
VIII
REASONABLE
CARE
Section
8.1 Reasonable
Care.
The
Trustee shall be deemed to have exercised reasonable care in the custody and
preservation of the Issuer Pledged Collateral in its possession if the Issuer
Pledged Collateral is accorded treatment substantially equivalent to that which
the Trustee accords its own property of the type of which the Issuer Pledged
Collateral consists, it being understood that the Trustee shall have no
responsibility for (a) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative to any
Issuer Pledged Collateral, whether or not the Trustee has or is deemed to have
knowledge of such matters, or (b) taking any necessary steps to preserve rights
against any parties with respect to any Issuer Pledged Collateral absent its
gross negligence or willful misconduct.
ARTICLE
IX
NO
LIABILITY
Section
9.1 No
Liability.
Neither
the Trustee nor any of its directors, officers, employees or agents shall be
deemed to have assumed any of the liabilities or obligations of the Parent
as a
result of the pledge and security interest granted under or pursuant to this
Pledge and Security Agreement. In the absence of gross negligence or willful
misconduct, the Trustee or any of its directors, officers, employees or agents
shall not be liable for any failure to collect or realize upon the Secured
Obligations or any collateral security or guarantee therefor, or any part
thereof, or for any delay in so doing nor shall it be under any obligation
to
take any action whatsoever with regard thereto.
ARTICLE
X
REMEDIES
UPON EVENT OF DEFAULT
Section
10.1 Remedies
Upon Event of Default.
If
an
Event of Default shall have occurred and be continuing, and subject to Section
4.3 of the Indenture:
(a) The
Trustee may exercise the power of attorney described in Section 7.1 with respect
to any of the certificates or other instruments delivered pursuant to Section
3.1 with respect to the Issuer Pledged Collateral, and may sign, complete and
deliver all transfers, proxies and letters of resignation and do all acts and
things that the Trustee may in its absolute discretion specify to enable or
assist the Trustee to perfect or improve its security over the Capital
Securities, to vest ownership of the Capital Securities in the Trustee or its
nominee, to provide that the Trustee is registered as the holder of the Capital
Securities, to exercise any rights or powers attaching to the Capital
Securities, to sell the Capital Securities or otherwise to enforce any of the
rights of the Trustee under this Pledge and Security Agreement.
9
(b) The
Trustee may exercise in respect of the Issuer Pledged 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 on default under the UCC, to the
extent permitted by Applicable Law or the UCC as then in effect in any
applicable jurisdiction, and the Trustee may also in its sole discretion,
without notice except as specified below or except as required by mandatory
provisions of the UCC and other Applicable Law, sell the Issuer Pledged
Collateral or any part thereof in one or more parcels at public or private
sale
or at any of the Trustee’s offices or elsewhere, for cash, on credit or for
future delivery, and at such price or prices and upon such other terms as the
Trustee may deem commercially reasonable, irrespective of the impact of any
such
sales on the market price of the Issuer Pledged Collateral at any such sale.
Each purchaser at any such sale shall hold the property, sold absolutely, free
from any claim or right on the part of the Parent, and the Parent hereby waives
(to the extent permitted by law) all rights of redemption, stay and/or appraisal
that it now has or may at any time in the future have under any rule of law
or
statute now existing or hereafter enacted. The Parent agrees that, to the extent
notice of sale shall be required by law, at least ten days’ notice to the Parent
of the time and place of any public or private sale shall constitute reasonable
notification. The Trustee shall not be obligated to make any sale of Issuer
Pledged Collateral regardless of notice of sale having been given. The Trustee
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. The Trustee shall
incur
no liability as a result of the sale of the Issuer Pledged Collateral, or any
part thereof, at any public or private sale. The Parent hereby waives any claims
against the Trustee arising by reason of the fact that the price at which any
Issuer Pledged Collateral may have been sold at such a private sale was less
than the price that might have been obtained at a public sale.
(c) The
Parent recognizes that the Trustee may elect in its sole discretion to sell
all
or a part of the Issuer Pledged Collateral to one or more purchasers in
privately negotiated transactions in which the purchasers will be obligated
to
agree, among other things, to acquire the Issuer Pledged Collateral for their
own account, for investment and not with a view to the distribution or resale
thereof. The Parent acknowledges that any such private sales may be at prices
and on terms less favorable than those obtainable through a public sale
(including a public offering made pursuant to a registration statement under
the
Securities Act), and the Parent and the Trustee agree that the mere fact that
such private sales were private sales individually negotiated, does not mean
that such private sales were not made in a commercially reasonable manner,
and
that the Trustee has no obligation to engage in public sales or to delay sale
of
any Issuer Pledged Collateral to permit the Issuer to register the Issuer
Pledged Collateral for a form of public sale thereof requiring registration
under the Securities Act.
(d) Any
cash
held by the Trustee as Issuer Pledged Collateral, and all cash proceeds received
by the Trustee in respect of any sale of, collection from or other realization
upon all or any part of the Issuer Pledged Collateral, shall, as soon as
reasonably practicable, be applied by the Trustee first
to the
payment of the costs and expenses (including pursuant to Section 12.1) of such
sale, collection or other realization, if any, including reasonable
out-of-pocket costs and expenses of the Trustee (including the reasonable fees
and out-of-pocket expenses of its counsel), and all reasonable expenses,
liabilities and advances made or incurred by the Trustee in connection therewith
to the extent not paid by the Parent pursuant to Section 12.1, second
to the
payment of the Secured Obligations in accordance with the terms of the Indenture
and third
all
remaining amounts shall promptly be paid to the Parent or its successors or
assigns.
10
(e) The
Trustee may by writing without notice to the Parent appoint one or more persons
as the Trustee deems fit to be a receiver in relation to the Issuer Pledged
Collateral. Where the Trustee appoints two or more persons as such receiver,
such receivers may act jointly or independently. With respect to the enforcement
of this Pledge and Security Agreement, such receiver may sell, charge or
otherwise dispose of the Issuer Pledged Collateral, exercise any powers,
discretion, voting or other rights or entitlements in relation to the Issuer
Pledged Collateral and generally carry out any other action that such receiver
may in such receiver’s sole discretion deem necessary in relation to the
enforcement of this Pledge and Security Agreement. Such receiver shall have,
in
addition to the other powers set forth in this Section 10.1(e), the power
to:
(i) take
possession of, collect and get in the Issuer Pledged Collateral and, for that
purpose, take such proceedings as may seem to such receiver to be
expedient;
(ii) raise
or
borrow money and grant security therefor over the Issuer Pledged
Collateral;
(iii) appoint
an attorney or accountant or other professionally qualified person to assist
such receiver in the performance of such receiver’s functions;
(iv) bring
or
defend any action or other legal proceeding in the name of and on behalf of
the
Parent in respect of the Issuer Pledged Collateral;
(v) do
all
acts and execute in the name and on behalf of the Parent any document or deed
in
respect of the Issuer Pledged Collateral;
(vi) make
any
payment that is necessary or incidental to the performance of such receiver’s
functions;
(vii) make
any
arrangement or compromise on behalf of the Parent in respect of the Issuer
Pledged Collateral;
(viii) rank
and
claim in the insolvency or liquidation of the Issuer and receive dividends
and
accede to agreements for the creditors of the Issuer;
(ix) present
or defend a petition for the winding up of the Issuer; and
(x) do
all
other things incidental to the exercise of the foregoing powers.
(f) The
Parent agrees that:
(i) in
any
sale of any of the Issuer Pledged Collateral whenever an Event of Default shall
have occurred and be continuing, the Trustee is hereby authorized to comply
with
any limitation or restriction in connection with such sale as it may be advised
by counsel is necessary in order to:
(A) avoid
any
violation of Applicable Law (including compliance with such procedures as may
restrict the number of prospective bidders and purchasers, require that such
prospective bidders and purchasers have certain qualifications and restrict
such
prospective bidders and purchasers to Persons who will represent and agree
that
they are purchasing for their own account for investment and not with a view
to
the distribution or resale of such Issuer Pledged Collateral);
or
11
(B) obtain
any required approval of the sale or of the purchaser by any Governmental
Authority or official; and
(ii) such
compliance shall not result in such sale being considered or deemed not to
have
been made in a commercially reasonable manner, nor shall the Trustee be liable
or accountable to the Parent for any discount allowed by the reason of the
fact
that such Issuer Pledged Collateral is sold in compliance with any such
limitation or restriction.
ARTICLE
XI
PURCHASE
OF THE ISSUER PLEDGED COLLATERAL
Section
11.1 Purchase
of the Issuer Pledged Collateral.
The
Parent may, but shall not be required to, bid on and be a purchaser of the
Issuer Pledged Collateral or any part thereof or any right or interest therein
at any sale thereof, whether pursuant to foreclosure, power of sale or otherwise
hereunder and the Trustee may apply the purchase price to the payment of the
Secured Obligations secured hereby. Any purchaser of all or any part of the
Issuer Pledged Collateral shall, upon any such purchase, acquire good title
to
the Issuer Pledged Collateral so purchased, free of the security interests
created by this Pledge and Security Agreement.
ARTICLE
XII
EXPENSES
Section
12.1 Expenses.
The
Parent will upon demand pay to the Trustee the amount of any and all reasonable
expenses, including the reasonable fees and expenses of its counsel and of
any
experts and the Trustee, and any transfer taxes, in each case payable upon
sale
of the Issuer Pledged Collateral, which the Trustee may incur in connection
with
(a) the custody or preservation of, or the sale of, collection from or other
realization upon, any of the Issuer Pledged Collateral, (b) the exercise or
enforcement of any of the rights of the Trustee hereunder, (c) the failure
by
the Parent to perform or observe any of the provisions hereof or (d) the
administration of this Pledge and Security Agreement. Any amount payable by
the
Parent pursuant to this Section 12.1 shall be payable upon demand and shall
constitute Secured Obligations secured hereby.
ARTICLE
XIII
NO
WAIVER;
REMEDIES
Section
13.1 No
Waiver;
Remedies.
No
failure or delay on the part of the Trustee to exercise, and no course of
dealing with respect to, and no delay in exercising, any right, power or remedy
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise by the Trustee of any right, power or remedy preclude any additional
exercise by the Trustee of such right, power or remedy. The remedies herein
provided are to the fullest extent permitted by law cumulative and are not
exclusive of any remedies provided by law. No notice to or demand on the Parent
in any case shall entitle the Parent to any other or further notice or demand
in
similar or other circumstances.
12
ARTICLE
XIV
AMENDMENTS
Section
14.1 Amendments.
No
waiver, amendment, modification or termination of any provision of this Pledge
and Security Agreement, or consent to any departure by the Parent therefrom,
shall in any event be effective without the written concurrence of the Trustee
pursuant to Section 9.1 or Section 9.2 of the Indenture, as applicable, and
(except as otherwise provided in Section 15.1) none of the Issuer Pledged
Collateral shall be released without the written consent of the Trustee pursuant
to Section 9.1 or Section 9.2 of the Indenture, as applicable. Any such waiver
or consent shall be effective only in the specific instance and for the specific
purpose for which given.
ARTICLE
XV
RELEASE;
TERMINATION
Section
15.1 Release;
Termination.
Upon
payment and performance in full of the Secured Obligations or discharge of
the
Indenture pursuant to Section 11.1 of the Indenture, this Pledge and Security
Agreement shall terminate automatically, and the Trustee (a) upon written
request by the Parent shall promptly deliver to the Parent any remaining Issuer
Pledged Collateral and money received in respect thereof in its possession,
and
all documents, agreements or instruments representing the Issuer Pledged
Collateral held by the Trustee prior to such termination, and (b) upon written
request by the Parent, shall promptly execute and deliver to the Parent and,
if
necessary, file or record, at the Parent’s expense, all such documentation
(including UCC termination statements) necessary to release, and evidence the
release of, the liens on the Issuer Pledged Collateral, such documentation
to be
prepared by the Parent and delivered to the Trustee. If the Trustee fails to
promptly deliver or file or record the UCC termination statements referred
to
in, and in accordance with, clause (b) in the immediately preceding sentence,
then the Parent may file or record such UCC termination statements.
ARTICLE
XVI
NOTICES
Section
16.1 Notices.
All
Notices shall be in writing and shall be effective (a) upon receipt when sent
through the mails, registered or certified mail, return receipt requested,
postage prepaid, with such receipt to be effective the date of delivery
indicated on the return receipt, (b) upon receipt when sent by an overnight
courier, (c) on the date personally delivered to an authorized officer of the
party to which sent, (d) on the date transmitted by legible telecopier
transmission with a confirmation of receipt or (e) in the case of any report
that is of a routine nature, on the date sent by first class mail or overnight
courier or transmitted by legible telecopier transmission, in all cases, with
a
copy emailed to the recipient at the applicable address, addressed to the
recipient in accordance with Section 12.5 of the Indenture. Each party hereto
may, by notice given in accordance herewith to each of the other parties hereto,
designate any further or different address to which subsequent Notices shall
be
sent.
13
ARTICLE
XVII
CONTINUING
SECURITY INTEREST
Section
17.1 Continuing
Security Interest.
This
Pledge and Security Agreement shall create a continuing Lien in the Issuer
Pledged Collateral and remain in full force and effect until the release thereof
pursuant to Section 15.1 or the sale thereof pursuant to Section 11.1, shall
be
binding upon the Parent and its successors, transferees and assigns and shall
inure to the benefit of and be enforceable by the Trustee and its successors,
transferees and assigns; provided,
however,
that
the Parent may not (unless otherwise permitted under the terms of the Indenture)
assign any of its obligations hereunder without the prior written consent of
the
Trustee. The Trustee and the Noteholders may assign or otherwise transfer any
indebtedness held by any of them secured by this Pledge and Security Agreement
to any other Person in accordance with the Indenture, and such transfer will
not
diminish the rights and benefits granted to the Trustee herein or
otherwise.
ARTICLE
XVIII
SECURITY
INTEREST ABSOLUTE
Section
18.1 Security
Interest Absolute.
All
rights of the Trustee and security interests hereunder, and all obligations
of
the Parent hereunder, shall be absolute and unconditional irrespective of,
and
the Parent hereby irrevocably waives any defenses it may now have or may
hereafter acquire in any way relating to, any or all of the
following:
(a) any
lack
of validity or enforceability of any of the Transaction Documents or any other
agreement or instrument relating thereto (other than against the
Trustee);
(b) any
change in the time, manner or place of payment of, or in any other term of,
all
or any of the Secured Obligations, or any other amendment or waiver of or any
consent to any departure from the Transaction Documents or any other agreement
or instrument relating thereto, including any increase in the Secured
Obligations resulting from the extension of additional credit;
(c) any
taking, exchange, surrender, release or non-perfection of any Issuer Pledged
Collateral or any other collateral securing the Secured Obligations, or any
release or amendment or waiver of or consent to any departure from any guaranty,
for all or any of the Secured Obligations;
(d) any
manner of application of any other collateral, or proceeds thereof, to all
or
any of the Secured Obligations, or any manner of sale or other disposition
of
any other collateral securing all or any of the Secured Obligations or any
other
obligations of the Issuer under or in respect of the Transaction
Documents;
(e) any
change, restructuring or termination of the limited liability company structure
or existence of the Issuer;
(f) the
release or reduction of liability of any guarantor or surety with respect to
the
Secured Obligations; or
14
(g) any
other
circumstance (including any statute of limitations) or any existence of or
reliance on any representation to the Trustee that might otherwise constitute
a
defense available to, or a discharge of, the obligations of the
Parent.
ARTICLE
XIX
INDEMNITY
Section
19.1 Indemnity.
The
Parent agrees to indemnify, reimburse, defend and save and hold the Trustee
and
its officers, directors, employees, agents, advisors and affiliates (each,
an
“Indemnitee”
and,
collectively, the “Indemnitees”)
harmless from and against, and shall pay on demand, any and all liabilities,
losses, obligations, damages, injuries, penalties, claims, demands, actions,
suits, judgments and any and all costs and expenses (including attorneys’ fees
and disbursements) of whatsoever kind and nature imposed on, asserted against
or
incurred by any of the Indemnitees (a) in connection with the custody or
preservation of, or the sale of, collection from or other realization upon,
any
of the Issuer Pledged Collateral pursuant to the exercise or enforcement of
any
of the rights of the Trustee hereunder, (b) in connection with the failure
by
the Parent to perform or observe any of the provisions hereof or (c) arising
out
of or in connection with or resulting from this Pledge and Security Agreement
and the transactions contemplated hereby, excluding those arising out of the
bad
faith, gross negligence or willful misconduct of any Indemnitee. Each Indemnitee
agrees to use its best efforts to promptly notify the Parent of any assertion
of
any such liability, damage, injury, penalty, claim, demand, action, judgment
or
suit of which such Indemnitee has knowledge.
The
obligations of the Parent in this Section 19.1 shall survive the termination
of
this Pledge and Security Agreement.
ARTICLE
XX
OBLIGATIONS
SECURED BY ISSUER PLEDGED COLLATERAL
Section
20.1 Obligations
Secured by Issuer Pledged Collateral.
Any
amounts paid by any Indemnitee as to which such Indemnitee has the right to
indemnification, and any amounts paid by the Trustee in preservation of any
of
its rights or interest in the Issuer Pledged Collateral, shall constitute
Secured Obligations secured by the Issuer Pledged Collateral.
ARTICLE
XXI
SEVERABILITY
Section
21.1 Severability.
Any
provision of this Pledge and Security Agreement 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. Where provisions of any law or regulation resulting in
such
prohibition or unenforceability may be waived, they are hereby waived by the
parties hereto to the full extent permitted by law so that this Pledge and
Security Agreement shall be deemed a valid, binding agreement in accordance
with
its terms.
15
ARTICLE
XXII
COUNTERPARTS;
EFFECTIVENESS
Section
22.1 Counterparts;
Effectiveness.
This
Pledge and Security Agreement and any amendments, waivers, consents or
supplements may be executed in counterparts, each of which when so executed
and
delivered shall be deemed an original, but all such counterparts together shall
constitute but one and the same instrument. This Pledge and Security Agreement
shall become effective upon the execution and delivery of a counterpart hereof
by each of the parties hereto.
ARTICLE
XXIII
REINSTATEMENT
Section
23.1 Reinstatement.
This
Pledge and Security Agreement shall continue to be effective or be reinstated,
as the case may be, if at any time any amount received by the Trustee hereunder
or pursuant hereto is rescinded or must otherwise be restored or returned by
the
Trustee, as the case may be, upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of the Parent or upon the appointment of any
intervenor or conservator of, or trustee or similar official for, the Parent
or
any substantial part of its assets, or upon the entry of an order by a
bankruptcy court avoiding the payment of such amount, or otherwise, all as
though such payments had not been made.
ARTICLE
XXIV
SUBMISSION
TO JURISDICTION; WAIVER OF JURY TRIAL
Section
24.1 SUBMISSION
TO JURISDICTION.
(a) ANY
LEGAL
ACTION OR PROCEEDING WITH RESPECT TO THIS PLEDGE AND SECURITY AGREEMENT MAY
BE
BROUGHT IN XXX XXXXXX XX XXX XXXXX XX XXX XXXX LOCATED IN THE BOROUGH OF
MANHATTAN, THE CITY OF NEW YORK OR OF THE UNITED STATES FEDERAL COURT SITTING
IN
THE BOROUGH OF MANHATTAN, THE CITY OF NEW YORK, AND, BY EXECUTION AND DELIVERY
OF THIS PLEDGE AND SECURITY AGREEMENT, EACH PARTY HERETO CONSENTS, FOR ITSELF
AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE
COURTS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE
MANNER PROVIDED FOR NOTICES IN SECTION 16.1. NOTHING IN THIS PLEDGE AND SECURITY
AGREEMENT SHALL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW. EACH PARTY HERETO IRREVOCABLY WAIVES, TO THE
MAXIMUM EXTENT PERMITTED BY LAW, ANY OBJECTION, INCLUDING ANY OBJECTION TO
THE
LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, THAT IT MAY
NOW
OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH
JURISDICTION IN RESPECT OF THIS PLEDGE AND SECURITY AGREEMENT OR ANY DOCUMENT
RELATED HERETO. EACH PARTY HERETO WAIVES PERSONAL SERVICE OF ANY SUMMONS,
COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED
BY
NEW YORK LAW.
16
(b) THE
PARENT IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE SENDING OF COPIES
THEREOF BY FEDERAL EXPRESS OR OTHER OVERNIGHT COURIER COMPANY, TO THE PARENT
AT
ITS ADDRESS SPECIFIED BY SECTION 16.1.
ARTICLE
XXV
GOVERNING
LAW
Section
25.1 GOVERNING
LAW.
THIS
PLEDGE AND SECURITY AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE INTERNAL SUBSTANTIVE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE
TO
THE RULES THEREOF RELATING TO CONFLICTS OF LAW OTHER THAN SECTION 5-1401 OF
THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS
AND REMEDIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS, EXCEPT
TO THE EXTENT THE VALIDITY OR PERFECTION OF THE
SECURITY INTEREST HEREUNDER, OR THE REMEDIES HEREUNDER, ARE GOVERNED BY THE
LAWS
OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK.
ARTICLE
XXVI
TABLE
OF CONTENTS AND HEADINGS
Section
26.1 Table
of Contents and Headings.
The
Table of Contents and headings of the Articles and Sections of this Pledge
and
Security Agreement have been inserted for convenience of reference only, are
not
to be considered a part hereof and shall in no way modify or restrict any of
the
terms or provisions hereof.
[SIGNATURE
PAGE FOLLOWS]
17
IN
WITNESS WHEREOF, each of the parties hereto has caused this Pledge and Security
Agreement to be duly executed and delivered as of the date first above
written.
By:
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Name:
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Title:
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U.S.
BANK NATIONAL ASSOCIATION,
not
in its individual capacity but solely as Trustee
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By:
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Name:
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Title:
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Annex
A
See
Annex
A to the Purchase and Sale Agreement by and between Azithromycin Royalty
Sub LLC
and the Company dated February 21, 2008, attached as Exhibit 10.1 to this
Quarterly Report on Form 10-Q".