Exhibit 10.2

PLEDGE AND SECURITY AGREEMENT

dated as of May 1, 2019

among

EACH OF THE GRANTORS PARTY HERETO

and

TOP IV SPV GP, LLC

as Administrative Agent

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TABLE OF CONTENTS

 

Section 1. DEFINITIONS; GRANT OF SECURITY.

     1  

1.1      General Definitions

     1  

1.2      Definitions; Interpretation

     9  

Section 2. GRANT OF SECURITY.

     10  

2.1      Grant of Security

     10  

2.2      Certain Limited Exclusions

     11  

Section 3. SECURITY FOR OBLIGATIONS; GRANTORS REMAIN LIABLE.

     12  

3.1      Security for Obligations

     12  

3.2      Continuing Liability Under Collateral

     12  

Section 4. REPRESENTATIONS AND WARRANTIES AND COVENANTS.

     13  

4.1      Generally

     13  

4.2      Receivables

     15  

4.3      Investment Related Property

     17  

4.4      Material Contracts

     24  

4.5      Intellectual Property

     26  

4.6      Commercial Tort Claims

     29  

4.7      Regulatory Documentation.

     29  

Section 5. SUPPLEMENTS TO SCHEDULES; FURTHER ASSURANCES; ADDITIONAL GRANTORS.

     30  

5.1      Supplements to Schedules

     30  

5.2      Further Assurances

     30  

5.3      Additional Grantors

     32  

Section 6. ADMINISTRATIVE AGENT APPOINTED ATTORNEY-IN-FACT.

     32  

6.1      Power of Attorney

     32  

6.2      No Duty on the Part of Administrative Agent or Secured Parties

     33  

Section 7. REMEDIES.

     33  

7.1      Generally

     33  

7.2      Application of Proceeds

     35  

7.3      Sales on Credit

     36  

7.4      Deposit Accounts

     36  

7.5      Investment Related Property

     36  

7.6      Intellectual Property

     37  

 

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7.7      Cash Proceeds

     39  

Section 8. [RESERVED].

     40  

Section 9. CONTINUING SECURITY INTEREST; TRANSFER OF COMMITMENTS.

     40  

Section 10. STANDARD OF CARE; ADMINISTRATIVE AGENT MAY PERFORM.

     40  

Section 11. MISCELLANEOUS.

     41  

11.1    Notices

     41  

11.2    No Waiver; Cumulative Remedies

     41  

11.3    Severability

     41  

11.4    Benefit of Agreement

     41  

11.5    Entire Agreement

     41  

11.6    Counterparts

     41  

11.7    Incorporation by Reference

     41  

Schedules

Exhibits

 

EXHIBIT A

 

—

  PLEDGE SUPPLEMENT

EXHIBIT B

 

—

  TRADEMARK SECURITY AGREEMENT

EXHIBIT C

 

—

  COPYRIGHT SECURITY AGREEMENT

EXHIBIT D

 

—

  PATENT SECURITY AGREEMENT

EXHIBIT E

 

—

  TRANSFEROR LETTER

 

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This PLEDGE AND SECURITY AGREEMENT, dated as of May 1, 2019 (this “Agreement”),
among EACH OF THE UNDERSIGNED, whether as an original signatory hereto or as an
Additional Grantor (as herein defined) (each, a “Grantor”), and TOP IV SPV GP,
LLC, as administrative agent for the Secured Parties (as herein defined) (in
such capacity as administrative agent, the “Administrative Agent”).

RECITALS:

WHEREAS, reference is made to that certain Financing Agreement, dated as of the
date hereof (as it may be amended, restated, amended and restated, refinanced,
replaced, extended, supplemented or otherwise modified from time to time, the
“Financing Agreement”), by and among CLOVIS ONCOLOGY, INC., a Delaware
corporation (“Company”), and certain Subsidiaries of Company, as Guarantors, the
Lenders from time to time party thereto and the Administrative Agent;

WHEREAS, in consideration of the extensions of credit and other accommodations
of Lenders as set forth in the Financing Agreement, each Grantor has agreed to
secure such Grantor’s obligations under the Loan Documents as set forth herein;
and

NOW, THEREFORE, in consideration of the premises and the agreements, provisions
and covenants herein contained, each Grantor and the Administrative Agent agree
as follows:

SECTION 1. DEFINITIONS; GRANT OF SECURITY.

1.1    General Definitions. In this Agreement, the following terms shall have
the following meanings:

“Account Debtor“ shall mean each Person (or any successor or assign of such
Person) which is obligated with respect to a Receivable or any Supporting
Obligation related thereto.

“Accounts” shall mean all “accounts” as defined in Article 9 of the UCC, which
arise from any clinical trial for the Product administered by or on behalf of
the Company (including the ATHENA Trial), the development, sale, use,
manufacture, licensure, packaging, processing, delivery or Commercialization of
the Product, or any services provided in connection with the Product.

“Additional Grantors” shall have the meaning assigned in Section 5.3.

“Agreement” shall have the meaning set forth in the preamble.

“Cash Proceeds” shall have the meaning assigned in Section 7.7.

“Chattel Paper” shall mean all “chattel paper” as defined in Article 9 of the
UCC, including, without limitation, “electronic chattel paper” or “tangible
chattel paper”, as each term is defined in Article 9 of the UCC, which arise
from any clinical trial for the Product administered by or on behalf of the
Company (including the ATHENA Trial) or the development, sale, use, manufacture,
licensure, packaging, processing, delivery or Commercialization of the Product,
or any services provided in connection with the Product.

 

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“Collateral” shall have the meaning assigned in Section 2.1.

“Collateral Records” shall mean books, records, ledger cards, files,
correspondence, customer lists, blueprints, technical specifications, manuals,
computer software, computer printouts, tapes, disks and related data processing
software and any other similar items that at any time evidence or contain
information relating to any of the Collateral, the Product, any clinical trial
for the Product administered by or on behalf of the Company (including the
ATHENA Trial), the sale, use, manufacture, licensure, packaging, processing,
delivery or Commercialization of the Product, or any services provided in
connection with the Product, or are otherwise necessary or helpful in the
collection of the Collateral or realization thereupon.

“Collateral Support” shall mean all property (real or personal) assigned,
hypothecated or otherwise securing any Collateral and shall include any security
agreement or other agreement granting a lien or security interest in such real
or personal property.

“Commercial Tort Claims” shall mean all “commercial tort claims” as defined in
Article 9 of the UCC, which relate to the Product (including any claims for any
infringement of Intellectual Property Rights), Collateral, any clinical trial
for the Product administered by or on behalf of the Company (including the
ATHENA Trial) or the sale, use, manufacture, licensure, packaging, processing,
delivery or Commercialization of the Product, or any services provided in
connection with the Product.

“Commodities Accounts” shall mean all “commodity accounts” as defined in Article
9 of the UCC, which hold commodities related to the Product, any clinical trial
for the Product administered by or on behalf of the Company (including the
ATHENA Trial) or the sale, use, manufacture, licensure, packaging, processing,
delivery or Commercialization of the Product, or any services provided in
connection with the Product.

“Company” shall have the meaning set forth in the recitals.

“Copyrights” shall mean all United States, and foreign copyrights (including
community designs), including but not limited to copyrights in software and
databases, and all Mask Works (as defined under 17 U.S.C. 901 of the U.S.
Copyright Act), whether registered or unregistered and, with respect to any and
all of the foregoing: (i) all registrations and applications therefor, (ii) all
extensions and renewals thereof, (iii) all rights corresponding thereto
throughout the world, (iv) all rights to sue for past, present and future
infringements thereof, and (v) all Proceeds of the foregoing, including, without
limitation, licenses, royalties, income, payments, claims, damages and proceeds
of suit.

“Debtor Relief Laws” means the Bankruptcy Code of the U.S., and all other
liquidation, conservatorship, bankruptcy, general assignment for the benefit of
creditors, moratorium, rearrangement, receivership, insolvency, reorganization
or similar debtor relief laws of the U.S. or other applicable jurisdictions from
time to time in effect and affecting the rights of creditors generally.

 

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“Documents” shall mean all “documents” as defined in Article 9 of the UCC which
arise from any clinical trial for the Product administered by or on behalf of
the Company (including the ATHENA Trial) or the development, use, manufacture,
licensure, packaging, processing, delivery or Commercialization of the Product,
or any services provided in connection with the Product.

“Equipment” shall mean: (i) all “equipment” as defined in Article 9 of the UCC,
(ii) all machinery, manufacturing equipment, data processing equipment,
computers, office equipment, furnishings, furniture, appliances, fixtures and
tools (in each case, regardless of whether characterized as equipment under the
UCC) and (iii) all accessions or additions thereto, all parts thereof, whether
or not at any time of determination incorporated or installed therein or
attached thereto, and all replacements therefor, wherever located, now or
hereafter existing, including any fixtures, and which, in the case of clauses
(i) through (iii), are used in any clinical trial for the Product administered
by or on behalf of the Company (including the ATHENA Trial) or the development,
use, manufacture, licensure, packaging, processing, delivery or
Commercialization of the Product, or any services provided in connection with
the Product.

“Financing Agreement” shall have the meaning set forth in the recitals.

“General Intangibles” shall mean all “general intangibles” as defined in Article
9 of the UCC (including “payment intangibles” also as defined in Article 9 of
the UCC) or other contractual rights, which arise from any clinical trial for
the Product administered by or on behalf of the Company (including the ATHENA
Trial), or the sale, use, manufacture, licensure, packaging, processing,
delivery or Commercialization of the Product, or any services provided in
connection with the Product, including all of the Grantors’ rights with respect
to all Material Contracts, Product Intellectual Property Rights, licenses,
permits, concessions, Regulatory Documentation, Regulatory Approvals and
authorizations (in each case, regardless of whether characterized as general
intangibles under the UCC).

“Goods” shall mean all “goods” as defined in Article 9 of the UCC, which arise
from any clinical trial for the Product administered by or on behalf of the
Company (including the ATHENA Trial) or the development, use, manufacture,
licensure, packaging, processing, delivery or Commercialization of the Product,
or any services provided in connection with the Product, including, without
limitation, all Inventory and Equipment (in each case, regardless of whether
characterized as goods under the UCC).

“Grantors” shall have the meaning set forth in the preamble.

“House Marks” shall have the meaning assigned in Section 7.6(c).

“Instruments” shall mean all “instruments” as defined in Article 9 of the UCC,
which are entered into in connection with the Product, any clinical trial for
the Product administered by or on behalf of the Company (including the ATHENA
Trial) or the sale, use, manufacture, licensure, packaging, processing, delivery
or Commercialization of the Product, or any services provided in connection with
the Product.

“Insurance” shall mean all insurance policies covering any or all of the
Collateral (regardless of whether the Administrative Agent is the loss payee
thereof).

 

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“Intellectual Property Security Agreements” means the short-form Trademark
Security Agreement, short-form Copyright Security Agreement, and short-form
Patent Security Agreement, each substantially in the form attached hereto as
Exhibits B, C and D, respectively.

“Inventory” shall mean (i) all “inventory” as defined in Article 9 of the UCC,
(ii) all goods held for sale or lease or to be furnished under contracts of
service or so leased or furnished, all raw materials, work in process, finished
goods, and materials used or consumed in the manufacture, storage, packing,
shipping, advertising, selling, leasing, furnishing or production of such
inventory or otherwise used or consumed in any Grantor’s business, (iii) all
goods in which any Grantor has an interest in mass or a joint or other interest
or right of any kind and (iv) all goods which are returned to or repossessed by
any Grantor, (v) all computer programs embedded in any such goods, and (vi) all
accessions thereto and products thereof, and which, in the case of clauses (i) –
(vi) constitutes or relates to the Product, any clinical trial for the Product
administered by or on behalf of the Company (including the ATHENA Trial) or the
research, development, use, manufacture, licensure, packaging, processing,
delivery or Commercialization of the Product, or any services provided in
connection with the Product.

“Investment Related Property” shall mean: (i) all “investment property” (as such
term is defined in Article 9 of the UCC) and (ii) all of the following: all
Pledged Equity Interests, including all debt owed from, and all investments in
any Subsidiaries (whether or not Grantors) or other entities which are engaged
in the research, development, use, manufacture, licensure, packaging,
processing, delivery or Commercialization of the Product, or any services
provided in connection with the Product, or which hold any Regulatory Approvals,
Regulatory Documentation or Product Intellectual Property Licenses or other
assets related thereto and which, in the case of each of clauses (i) and (ii),
relate to the Product, any clinical trial for the Product administered by or on
behalf of the Company (including the ATHENA Trial) or the research, development,
use, manufacture, licensure, packaging, processing, delivery or
Commercialization of the Product, or any services provided in connection with
the Product.

“Material Contracts” shall mean all Material Contracts (as defined in the
Financing Agreement) to which any Grantor is a party as of the date hereof, or
to which any Grantor becomes a party after the date hereof, including, for the
avoidance of doubt, all Product Intellectual Property Licenses.

“Money” shall mean “money” as defined in the UCC.

“Non-Assignable Contract” shall mean any agreement, contract or license to which
any Grantor is a party that by its terms purports to restrict or prevent the
assignment or granting of a security interest therein (either by its terms or by
any federal or state statutory prohibition or otherwise irrespective of whether
such prohibition or restriction is enforceable under Section 9-406 through 409
of the UCC), and which is entered into in connection with the Product, any
clinical trial for the Product administered by or on behalf of the Company
(including the ATHENA Trial) or the development, sale, use, manufacture,
licensure, packaging, processing, delivery or Commercialization of the Product,
or any services provided in connection with the Product.

 

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“Owned Intellectual Property Rights” shall mean the Product Patents, Product
Copyrights, Product Trademarks, Product Trade Secrets, and all other Product
Intellectual Property Rights, in each case, that are owned by any Grantor.

“Pledge Supplement” shall mean any supplement to this agreement in substantially
the form of Exhibit A.

“Pledged Debt” shall mean all Indebtedness owed to such Grantor and incurred in
connection with the Product, any clinical trial for the Product administered by
or on behalf of the Company (including the ATHENA Trial) or the research,
development, use, manufacture, licensure, packaging, processing, delivery or
Commercialization of the Product, or any services provided in connection with
the Product, including the funding of operating expenses or working capital of a
Subsidiary of any Grantor (or other entity) which is engaged in activities
related to such activities, including, without limitation, all Indebtedness
described on Schedule 4.3(A) under the heading “Pledged Debt” (as such schedule
may be amended or supplemented from time to time pursuant to Section 5.1), the
instruments evidencing such Indebtedness, and all interest, cash, instruments
and other property or proceeds from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such
Indebtedness.

“Pledged Equity Interests” shall mean all Pledged Stock, Pledged LLC Interests,
Pledged Partnership Interests and Pledged Trust Interests.

“Pledged Investment Accounts” shall mean (a) the Administrative Agent’s Account
and (b) all Securities Accounts, Commodities Accounts and Deposit Accounts in
which, in each case, assets constituting Collateral are maintained or deposited.

“Pledged LLC Interests” shall mean all interests held (directly or indirectly)
by any Grantor in any limited liability company (whether or not a Grantor) which
is involved with the Product, any clinical trial for the Product administered by
or on behalf of the Company (including the ATHENA Trial) or the research,
development, use, manufacture, licensure, packaging, processing, delivery or
Commercialization of the Product, or any services provided in connection with
the Product, or which holds, owns or has any rights in any Regulatory Approvals,
Regulatory Documentation or Product Intellectual Property Rights, including,
without limitation, all limited liability company interests listed on Schedule
4.3(A) under the heading “Pledged LLC Interests” (as such schedule may be
amended or supplemented from time to time pursuant to Section 5.1) and the
certificates, if any, representing such limited liability company interests and
any interest of such Grantor on the books and records of such limited liability
company or on the books and records of any securities intermediary pertaining to
such interest and all dividends, distributions, cash, warrants, rights, options,
instruments, securities and other property or proceeds from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all of such limited liability company interests.

“Pledged Partnership Interests” shall mean all interests held (directly or
indirectly) by any Grantor in any general partnership, limited partnership,
limited liability partnership or other partnership (whether or not a Grantor)
which is involved with the Product, any clinical trial for the Product
administered by or on behalf of the Company (including the ATHENA Trial) or the
sale, use, manufacture, licensure, packaging, processing, delivery or

 

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Commercialization of the Product, or any services provided in connection with
the Product, or which holds, owns or has any rights in any Regulatory Approvals,
Regulatory Documentation or Product Intellectual Property Rights, including,
without limitation, all partnership interests listed on Schedule 4.3(A) under
the heading “Pledged Partnership Interests” (as such schedule may be amended or
supplemented from time to time pursuant to Section 5.1) and the certificates, if
any, representing such partnership interests and any interest of such Grantor on
the books and records of such partnership or on the books and records of any
securities intermediary pertaining to such interest and all dividends,
distributions, cash, warrants, rights, options, instruments, securities and
other property or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such partnership
interests.

“Pledged Stock” shall mean all shares of capital stock owned by any Grantor, or
in which any Grantor has an interest (directly or indirectly) with respect to
any entity (whether or not a Grantor) which is involved in with the Product, any
clinical trial for the Product administered by or on behalf of the Company
(including the ATHENA Trial) or the sale, use, manufacture, licensure,
packaging, processing, delivery or Commercialization of the Product, or any
services provided in connection with the Product, or which holds, owns or has
any rights in any Regulatory Approvals, Regulatory Documentation or Product
Intellectual Property Rights, including, without limitation, all shares of
capital stock described on Schedule 4.3(A) under the heading “Pledged Stock” (as
such schedule may be amended or supplemented from time to time pursuant to
Section 5.1), and the certificates, if any, representing such shares and any
interest of such Grantor in the entries on the books of the issuer of such
shares or on the books of any securities intermediary pertaining to such shares,
and all dividends, distributions, cash, warrants, rights, options, instruments,
securities and other property or proceeds from time to time received, receivable
or otherwise distributed in respect of or in exchange for any or all of such
shares.

“Pledged Trust Interests” shall mean all direct or indirect interests of a
Grantor in a Delaware business trust or other trust (whether or not a Grantor)
which is involved in with the Product, any clinical trial for the Product
administered by or on behalf of the Company (including the ATHENA Trial) or the
research, development, use, manufacture, licensure, packaging, processing,
delivery or Commercialization of the Product, or any services provided in
connection with the Product, or which holds, owns or has any rights in any
Regulatory Approvals, Regulatory Documentation or Product Intellectual Property
Rights, including, without limitation, all trust interests listed on Schedule
4.3(A) under the heading “Pledged Trust Interests” (as such schedule may be
amended or supplemented from time to time pursuant to Section 5.1) and the
certificates, if any, representing such trust interests and any interest of such
Grantor on the books and records of such trust or on the books and records of
any securities intermediary pertaining to such interest and all dividends,
distributions, cash, warrants, rights, options, instruments, securities and
other property or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such trust interests.

“Proceeds” shall mean: (i) all “proceeds” as defined in Article 9 of the UCC of
any Collateral, (ii) payments or distributions made with respect to any
Investment Related Property and (iii) whatever is receivable or received when
Collateral or proceeds are sold, exchanged, collected, licensed, enforced or
otherwise disposed of, whether such disposition is voluntary or involuntary.

 

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“Product Copyrights” shall mean all Copyrights that relate to the Product, any
clinical trial for the Product administered by or on behalf of the Company
(including the ATHENA Trial) or the research, development, use, manufacture,
licensure, packaging, processing, delivery or Commercialization of the Product,
or any services provided in connection with the Product, including, but not
limited to the registrations and applications referred to in Schedule 4.5(A) (as
such schedule may be amended or supplemented from time to time pursuant to
Section 5.1).

“Product Intellectual Property Licenses” shall mean any written agreement or
understanding containing any Contractual Obligation (i) under which the Company
or any of its Subsidiaries uses, holds for use, licenses or sublicenses any
Product Intellectual Property Rights that any other Person owns, licenses, or
sublicenses, or under which the Company or any of its Subsidiaries owes any
royalties or other payment obligations to any Person for the use of any Product
Intellectual Property Rights, (ii) under which the Company or its Subsidiaries
have granted any Person any right, license, sublicense or other interest in any
Product Intellectual Property Rights, or (iii) that otherwise directly relates
to the Company or its Subsidiaries’ use of or rights in the Product Intellectual
Property Rights (including co-existence agreements and covenants not to sue),
including but not limited to those agreements and understandings listed on
Schedule 4.5(B) hereof (as such schedule may be amended or supplemented from
time to time pursuant to Section 5.1).

“Product Intellectual Property Rights” shall mean all Product Intellectual
Property Rights (as defined in the Financing Agreement), and all other Product
Copyrights, Product Patents, Product Trademarks and Product Trade Secrets.

“Product Patents” shall mean all Patents that relate to the Product, any
clinical trial for the Product administered by or on behalf of the Company
(including the ATHENA Trial) or the research, development, use, manufacture,
licensure, packaging, processing, delivery or Commercialization of the Product,
or any services provided in connection with the Product, including, but not
limited to (i) each patent and patent application referred to in Schedule 4.5(A)
hereto (as such schedule may be amended or supplemented from time to time
pursuant to Section 5.1), (ii) all licenses, claims, damages, and proceeds of
suit arising therefrom, and (iii) all Proceeds of the foregoing, including,
without limitation, licenses, royalties, income, payments, claims, damages, and
proceeds of suit.

“Product Trademarks” shall mean all Trademarks that relate to the Product, any
clinical trial for the Product administered by or on behalf of the Company
(including the ATHENA Trial) or the research, development, use, manufacture,
licensure, packaging, processing, delivery or Commercialization of the Product,
or any services provided in connection with the Product, including, but not
limited to the registrations and applications referred to in Schedule 4.5(A) (as
such schedule may be amended or supplemented from time to time pursuant to
Section 5.1).

“Product Trade Secrets” shall mean all trade secrets and all other confidential
or proprietary information and know-how, deriving economic value from not being
generally known or otherwise readily ascertainable, related to the Product, any
clinical trial for the Product administered by or on behalf of the Company
(including the ATHENA Trial) or the research, development, use, manufacture,
licensure, packaging, processing, delivery or Commercialization of the Product,
or any services provided in connection with the Product, in each case, whether
or

 

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not such trade secret has been reduced to a writing or other tangible form,
including all documents and things embodying or disclosing such trade secret,
including but not limited to: (i) the right to sue for past, present and future
misappropriation or other violation of any trade secret, and (ii) all Proceeds
of the foregoing, including, without limitation, licenses, royalties, income,
payments, claims, damages, and proceeds of suit.

“Receivables” shall mean all Accounts and any other rights of any Grantor to any
payment, whether or not earned by performance, with respect to (i) Goods or
other property sold, leased, licensed, assigned or otherwise disposed of, or is
otherwise related to the Product, any clinical trial for the Product
administered by or on behalf of the Company (including the ATHENA Trial) or the
research, development, use, manufacture, licensure, packaging, processing,
delivery or Commercialization of the Product, (ii) services rendered or to be
rendered in relation to the Product, any clinical trial for the Product
administered by or on behalf of the Company (including the ATHENA Trial) or the
research, development, use, manufacture, licensure, packaging, processing,
delivery or Commercialization of the Product, and (iii) the research,
development, use or Commercialization of the Product, including any milestone
payments or royalties, in each case, including, without limitation, all such
rights constituting or evidenced by any Account, Chattel Paper, Instrument,
General Intangible or Investment Related Property, together with all of
Grantor’s rights, if any, in any goods or other property giving rise to such
right to payment and all Collateral Support and Supporting Obligations related
thereto and all Receivables Records.

“Receivables Records” shall mean originals or, if originals no longer exist,
copies of (i) all documents, instruments or other writings or electronic records
or other Records evidencing the Receivables, (ii) all books, correspondence,
credit or other files, Records, ledger sheets or cards, invoices, and other
papers relating to Receivables, including, without limitation, all tapes, cards,
computer tapes, computer discs, computer runs, record keeping systems and other
papers and documents relating to the Receivables, whether in the possession or
under the control of Grantor or any computer bureau or agent from time to time
acting for Grantor or otherwise, (iii) all evidences of the filing of financing
statements and the registration of other instruments in connection therewith,
and amendments, supplements or other modifications thereto, notices to other
creditors or secured parties, and certificates, acknowledgments, or other
writings, including, without limitation, lien search reports, from filing or
other registration officers, (iv) all credit information, reports and memoranda
relating thereto and (v) all other written or nonwritten forms of information
related to the foregoing or any Receivable.

“Record” shall have the meaning specified in Article 9 of the UCC.

“Regulatory Documentation” shall mean any and all regulatory filings, reports,
applications, notifications and documentation in the United States or in any
other country, including all submissions to Governmental Authorities, all
investigational new drug applications (“INDs”) and amendments thereto, all
research ethics committee submissions and authorizations, all Regulatory
Approvals, including all Product NDAs and all supplemental applications or
amendments thereto, all related drug master files, as well as all correspondence
with any Governmental Authorities with respect thereto, in each case, directly
or otherwise reasonably relating to the Product, any clinical trial for the
Product administered by or on behalf of the Company (including the ATHENA Trial)
or the research, development, use, manufacture, licensure, packaging,
processing, delivery or Commercialization of the Product, or any services
provided directly or otherwise reasonably in connection with the Product.

 

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“Secured Obligations” shall have the meaning assigned in Section 3.1.

“Secured Parties” shall mean, collectively, each of the Administrative Agent,
the Lenders and each co-agent or sub-agent appointed by the Administrative Agent
from time to time pursuant to Section 9.7, and shall include, without
limitation, any former Administrative Agent or Lender to the extent that any
Obligations owing to such Person were incurred while such Person was an
Administrative Agent or Lender and such Obligations have not been paid or
satisfied in full.

“Specified Product IP Rights” shall mean all Specified Product IP Rights (as
defined in the Financing Agreement).

“Supporting Obligation” shall mean all “supporting obligations” as defined in
Article 9 of the UCC.

“Trademarks” shall mean all United States and foreign trademarks, trade names,
corporate names, company names, business names, fictitious business names,
service marks, certification marks, collective marks, logos, other source or
business identifiers, designs and general intangibles of a like nature, all
registrations and applications for any of the foregoing, including, but not
limited to: (i) all extensions or renewals of any of the foregoing, (ii) all of
the goodwill of the business connected with the use of and symbolized by the
foregoing, (iii) the right to sue for past, present and future infringement or
dilution of any of the foregoing or for any injury to goodwill, and (iv) all
Proceeds of the foregoing, including, without limitation, licenses, royalties,
income, payments, claims, damages, and proceeds of suit.

“UCC” shall mean the Uniform Commercial Code as in effect from time to time in
the State of New York or, when the context implies, the Uniform Commercial Code
as in effect from time to time in any other applicable jurisdiction.

“United States” shall mean the United States of America.

1.2    Definitions; Interpretation. All capitalized terms used herein (including
the preamble and recitals hereto) and not otherwise defined herein shall have
the meanings ascribed thereto in the Financing Agreement or, if not defined
therein, in the UCC (and if defined in more than one article of the UCC, the
terms shall have the meaning specified in Article 9 thereof). References to
“Sections,” “Exhibits” and “Schedules” shall be to Sections, Exhibits and
Schedules, as the case may be, of this Agreement unless otherwise specifically
provided. Section headings in this Agreement are included herein for convenience
of reference only and shall not constitute a part of this Agreement for any
other purpose or be given any substantive effect. Any of the terms defined
herein may, unless the context otherwise requires, be used in the singular or
the plural, depending on the reference. Except as otherwise specified, when used
herein, “or” shall have the non-exclusive meaning of “and/or.” The use herein of
the word “include” or “including”, when following any general statement, term or
matter, shall not be construed to limit such statement, term or matter to the
specific items or matters set forth immediately following such word or to
similar items or matters, whether or not non-limiting language (such as “without
limitation” or

 

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“but not limited to” or words of similar import) is used with reference thereto,
but rather shall be deemed to refer to all other items or matters that fall
within the broadest possible scope of such general statement, term or matter. If
any conflict or inconsistency exists between this Agreement and the Financing
Agreement, the Financing Agreement shall govern. All references herein to
provisions of the UCC shall include all successor provisions under any
subsequent version or amendment to any Article of the UCC.

SECTION 2. GRANT OF SECURITY.

2.1    Grant of Security. Each Grantor hereby pledges, assigns and grants to the
Administrative Agent, on behalf of and for the benefit of the Secured Parties,
and to secure the prompt and complete payment and performance of all
Obligations, a security interest in and continuing Lien on all of such Grantor’s
right, title and interest in, to and under the following property and assets of
such Grantor, in each case whether now owned or existing or hereafter acquired
or arising and wherever located (all of which being hereinafter collectively
referred to as the “Collateral”):

(a)    Accounts;

(b)    Chattel Paper;

(c)    Documents;

(d)    General Intangibles (including, for the avoidance of doubt, Material
Product Agreements and other Material Contracts and Regulatory Documentation);

(e)    Goods;

(f)    Instruments;

(g)    Insurance;

(h)    Owned Intellectual Property Rights;

(i)    Pledged Investment Accounts;

(j)    Investment Related Property;

(k)    (i) Money in the Administrative Agent’s Account, (ii) Money generated
from sales or other Commercialization of the Product received on or after the
Closing Date, (iii) Money which constitutes proceeds from any Quarterly Funding
Amount, (iv) Money constituting proceeds of Collateral, (v) any amounts in any
Pledged Investment Account and (vi) Money received from any Person in respect
of, and to the extent attributable to, any claim that the making, using,
selling, offering for sale, import, export, use or other exploitation of any
product infringes or misappropriates any of the Product Intellectual Property
Rights, whether pursuant to a court order, settlement agreement or otherwise);

(l)    Receivables and Receivable Records;

 

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(m)    Regulatory Approvals related to the Product;

(n)    Commercial Tort Claims described on Schedule 4.6 and as supplemented by
any written notification given by a Grantor to the Administrative Agent pursuant
to Section 4.6;

(o)    to the extent not otherwise included above, all Collateral Records,
Collateral Support and Supporting Obligations, in each case, relating to any of
the foregoing;

(p)    to the extent not covered by the preceding clauses of this Section 2.1,
all other tangible and intangible personal property of such Grantor (whether or
not subject to the UCC) which relates to the Product, any clinical trial for the
Product administered by or on behalf of the Company (including the ATHENA Trial)
or the research, development, use, manufacture, licensure, packaging,
processing, delivery or Commercialization of the Product, and any services
provided in connection with the Product, including, without limitation, all
proceeds, products, offspring, accessions, rents, profits, income, benefits,
substitutions and replacements of and to any of the property of such Grantor
described in the preceding clauses of this Section 2.1 hereof (including,
without limitation, any proceeds of insurance thereon and all causes of action,
claims and warranties now or hereafter held by such Grantor in respect of any of
the items listed above), and all books, correspondence, files and other Records,
including, without limitation, all tapes, disks, cards, software, data and
computer programs in the possession or under the control of such Grantor or any
other Person from time to time acting for such Grantor that at any time evidence
or contain information relating to any of the property described in the
preceding clauses of this Section 2 hereof or are otherwise necessary or helpful
in the collection or realization thereof; and

(q)    to the extent not otherwise included above, all Proceeds, products,
accessions, rents and profits of or in respect of any of the foregoing.

Without limiting the foregoing, and notwithstanding any limiting language in any
related definition, the Collateral shall include all of such Grantor’s property
and assets that constitute, arise from or exist in connection with the Product,
any clinical trial for the Product administered by or on behalf of the Company
(including the ATHENA Trial) or the research, development, use, manufacture,
licensure, packaging, processing, delivery or Commercialization of the Product,
or any services provided in connection with the Product.

2.2    Certain Limited Exclusions. Notwithstanding anything herein to the
contrary, in no event shall the Collateral include or the security interest
granted under Section 2.1 hereof attach to (a) any of such Grantor’s right,
title or interest in any license, contract, permit, lease or agreement (other
than the Pfizer Agreement and the AZ Agreement, neither of which shall be
subject to any such exclusion) to which such Grantor is a party or any of its
right, title or interest thereunder to the extent, but only to the extent, that
such a grant (i) would be prohibited or restricted under Requirements of Law or
(ii) would, under the express terms of such license, contract, permit, lease or
agreement, result in a breach of the terms of, or constitute a default under,
such license, contract, permit, lease or agreement, or require the consent of
any party thereto, which has not been obtained (in each case, other than to the
extent that any such term (A) has been waived or (B) would be rendered
ineffective pursuant to Sections 9-406, 9-408, 9-409 of the UCC or other
applicable provisions of the UCC of any relevant jurisdiction or any other
applicable law

 

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(including the Bankruptcy Code) or principles of equity); provided, that, in the
case of clause (ii), such requirement existed on the Closing Date; provided,
further, that (x) immediately upon the ineffectiveness, lapse, termination or
waiver of any such provision, the Collateral shall include, and such Grantor
shall be deemed to have granted a security interest in, all such right, title
and interest as if such provision had never been in effect and (y) the foregoing
exclusion shall in no way be construed so as to limit, impair or otherwise
affect the Administrative Agent’s unconditional continuing security interest in
and liens upon any rights or interests of a Grantor in or to (1) monies due or
to become due under or in connection with any such license, contract, permit,
lease or agreement, or (2) any proceeds from the sale, license, lease, or other
dispositions of any such license, contract, permit, lease or agreement); (b) any
intent-to-use United States trademark applications for which an amendment to
allege use or statement of use has not been filed under 15 U.S.C. § 1051(c) or
15 U.S.C. §1051(d), respectively, or if filed, has not been deemed in
conformance with 15 U.S.C. §1051(a) or examined and accepted, respectively, by
the United States Patent and Trademark Office; provided that upon such filing
and acceptance, such intent-to-use applications shall be included in the
definition of Collateral; and (c) those assets as to which the Administrative
Agent determines that the costs of obtaining such security interests in such
assets or perfection thereof are excessive in relation to the benefit to the
Administrative Agent and the Lenders of the security to be afforded thereby (the
Collateral referred to in this Section 2.2 being collectively referred to as
“Excluded Assets”).

SECTION 3. SECURITY FOR OBLIGATIONS; GRANTORS REMAIN LIABLE.

3.1    Security for Obligations. This Agreement secures, and the Collateral is
collateral security for, the prompt and complete payment or performance in full
when due, whether at stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise (including the payment of amounts that would
become due but for the operation of the automatic stay under Section 362(a) of
the Bankruptcy Code, 11 U.S.C. §362(a) (and any successor provision thereof)),
of all Obligations with respect to every Grantor (the “Secured Obligations”).

3.2    Continuing Liability Under Collateral. Notwithstanding anything herein to
the contrary, (a) each Grantor shall remain liable for all obligations under the
Collateral and nothing contained herein is intended or shall be a delegation of
duties to the Administrative Agent or any Secured Party, (b) each Grantor shall
remain liable under each of the agreements included in the Collateral,
including, without limitation, any agreements relating to Pledged Equity
Interests, to perform all of the obligations undertaken by it thereunder all in
accordance with and pursuant to the terms and provisions thereof and neither the
Administrative Agent nor any Secured Party shall have any obligation or
liability under any of such agreements by reason of or arising out of this
Agreement or any other document related thereto nor shall the Administrative
Agent nor any Secured Party have any obligation to make any inquiry as to the
nature or sufficiency of any payment received by it or have any obligation to
take any action to collect or enforce any rights under any agreement included in
the Collateral, including, without limitation, any agreements relating to
Pledged Equity Interests and ( c) the exercise by the Administrative Agent of
any of its rights hereunder shall not release any Grantor from any of its duties
or obligations under the contracts and agreements included in the Collateral.

 

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SECTION 4. REPRESENTATIONS AND WARRANTIES AND COVENANTS.

4.1    Generally.

(a)    Representations and Warranties. Each Grantor hereby represents and
warrants that:

(i)    it owns the Collateral purported to be owned by it or otherwise has the
rights it purports to have in each item of Collateral and, as to all Collateral
whether now existing or hereafter acquired, will continue to own or have such
rights in each item of the Collateral, in each case free and clear of any and
all Liens, rights or claims of all other Persons (other than Permitted Liens).
It has full power and authority to grant to the Administrative Agent the
security interest in such Collateral pursuant hereto. This Agreement creates in
favor of the Administrative Agent, for the benefit of the Secured Parties, a
valid security interest in the Collateral granted by each Grantor.

(ii)    it has indicated on Schedule 4.1(A) (as such schedule may be amended or
supplemented from time to time pursuant to Section 5.1): (w) the type of
organization of such Grantor, (x) the jurisdiction of organization of such
Grantor, (y) its organizational identification number, if any, and (z) the
jurisdiction where the chief executive office or its sole place of business is,
and for the five-year period preceding the date hereof has been located;

(iii)    the full legal name of such Grantor is as set forth on Schedule 4.1(A)
and it has not done in the last five (5) years, and does not do, business under
any other name (including any trade-name or fictitious business name) except for
those names set forth on Schedule 4.1 (B) (as such schedule may be amended or
supplemented from time to time pursuant to Section 5.1);

(iv)    except as provided on Schedule 4.1(C), it has not changed its name,
jurisdiction of organization, chief executive office or sole place of business
or its corporate structure in any way (e.g., by merger, consolidation, change in
corporate form or otherwise) within the past five (5) years;

(v)    it has not within the last five (5) years become bound (whether as a
result of merger or otherwise) as debtor under a security agreement entered into
by another Person, which has not heretofore been terminated;

(vi)     (u) upon the filing of all UCC financing statements naming each Grantor
as “debtor” and the Administrative Agent as “secured party” and describing the
Collateral in the filing offices set forth opposite such Grantor’s name on
Schedule 4.1(D) hereof (as such schedule may be amended or supplemented from
time to time pursuant to Section 5.1) and other filings delivered by each
Grantor, (v) upon delivery of all Instruments, Chattel Paper, certificated
Pledged Equity Interests and Pledged Debt, (w) upon sufficient identification of
Commercial Tort Claims, (x) upon execution of a control agreement establishing
the Administrative Agent’s “control” (within the meaning of Section 8-106, 9-106
or 9-104 of the UCC,

 

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as applicable) with respect to each Pledged Investment Account, and (y) to the
extent not subject to Article 9 of the UCC, upon recordation of the security
interests granted hereunder in Product Patents, Product Trademarks and Product
Copyrights by the filing of the Intellectual Property Security Agreements set
forth in Exhibits B, C and D hereto in the applicable intellectual property
registries, including but not limited to the United States Patent and Trademark
Office and the United States Copyright Office (or any foreign equivalent
thereof), the security interests granted to the Administrative Agent hereunder
constitute valid and perfected first priority Liens on all of the Collateral, in
which a Lien can be perfected by taking such actions;

(vii)    all actions and consents, including all filings, notices, registrations
and recordings necessary for the exercise by the Administrative Agent of the
voting or other rights provided for in this Agreement or the exercise of
remedies in respect of the Collateral have been made or obtained;

(viii)    other than the financing statements filed (i) in favor of the
Administrative Agent or (ii) in connection with Permitted Liens, no effective
UCC financing statement, fixture filing or other instrument similar in effect
under any applicable law covering all or any part of the Collateral is on file
in any filing or recording office, including, without limitation, the United
States Patent and Trademark Office and the United States Copyright Office and
similar offices in foreign countries;

(ix)    no authorization, approval or other action by, and no notice to or
filing with, any Governmental Authority or regulatory body is required for
either (i) the pledge or grant by any Grantor of the Liens purported to be
created in favor of the Administrative Agent hereunder or (ii) the exercise by
the Administrative Agent of any rights or remedies in respect of any Collateral
(whether specifically granted or created hereunder or created or provided for by
applicable law), except (A) for the filings contemplated by clause (vi) above ,
(B) as may be required, in connection with the disposition of any Investment
Related Property, by laws generally affecting the offering and sale of Capital
Stock and (C) with respect to clause (ii) above, those that have been obtained
or those which, if not obtained, would not adversely affect the rights, remedies
and benefits available to, or conferred upon, Administrative Agent and any
Lender or any other Secured Party under any Loan Document in any material
respect;

(x)     such Grantor has been duly organized as an entity of the type as set
forth opposite such Grantor’s name on Schedule 4.1(A) solely under the laws of
the jurisdiction as set forth opposite such Grantor’s name on Schedule 4.1(A)
and remains duly existing as such. Such Grantor has not filed any certificates
of domestication, transfer or continuance in any other jurisdiction.

 

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(b)    Covenants and Agreements. Each Grantor hereby covenants and agrees that:

(i)    such Grantor shall defend the Collateral against all Persons (other than
the Administrative Agent and the Secured Parties) at any time claiming any Lien
thereon (other than a Permitted Lien); and

(ii)    it shall not produce, use or permit any Collateral to be used unlawfully
or in violation of (i) any provision of this Agreement or (ii) any applicable
statute, regulation or ordinance or any policy of insurance covering the
Collateral, with respect to clause (ii), to the extent that such actions would
result in a loss or other impairment of insurance with respect to any material
portion of the Collateral.

4.2    Receivables.

(a)    Representations and Warranties. Each Grantor represents and warrants
that:

(i)    each Receivable (a) to the knowledge of such Grantor, is the legal, valid
and binding obligation of the Account Debtor in respect thereof, representing an
unsatisfied obligation of such Account Debtor, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or limiting creditors’ rights generally or by equitable principles relating to
enforceability, (b) to the knowledge of such Grantor, is enforceable in
accordance with its terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting creditors’
rights generally or by equitable principles relating to enforceability, (c) is
not subject to any setoffs, defenses, taxes, counterclaims and (d) is in
compliance in all material respects with all applicable laws, whether federal,
state, local or foreign;

(ii)    none of the Account Debtors in respect of any Receivable is the
government of the United States, any agency or instrumentality thereof, any
state or municipality or any foreign sovereign; and no Receivable requires the
consent of the Account Debtor in respect thereof in connection with the pledge
hereunder, except any consent which has been obtained or the requirement to
obtain such consent is rendered ineffective pursuant to Section 2.2(B); and

(iii)    no Receivable is evidenced by, or constitutes, an Instrument or Chattel
Paper which has not been delivered to, or otherwise subjected to the control of,
the Administrative Agent to the extent required by, and in accordance with
Section 4.2(c).

(b)    Covenants and Agreements: Each Grantor hereby covenants and agrees that:

(i)    it shall keep and maintain at its own cost and expense accurate and
complete records of the Receivables in all material respects, including, but not
limited to, the originals of all documentation with respect to all Receivables,
to the extent reasonably required for enforcement by the Administrative Agent,
and records of all payments received and all credits granted on the Receivables,
all merchandise returned and all other dealings therewith;

 

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(ii)    at the Administrative Agent’s request, it shall mark conspicuously, in
form and manner reasonably satisfactory to the Administrative Agent, all Chattel
Paper, Instruments and other evidence of Receivables (other than any delivered
to the Administrative Agent as provided herein), as well as the Receivables
Records with an appropriate reference to the fact that the Administrative Agent
has a security interest therein;

(iii)    except as would not have a Material Adverse Effect, it shall perform in
all respects all of its obligations with respect to the Receivables, any
Supporting Obligations and any Collateral Support;

(iv)    If an Event of Default has occurred and is continuing, other than in the
ordinary course of business as generally conducted by it on and prior to the
date hereof, and except as otherwise provided in subsection (v) below, such
Grantor shall not (w) grant any extension or renewal of the time of payment of
any Receivable, (x) compromise or settle any dispute, claim or legal proceeding
with respect to any Receivable for less than the total unpaid balance thereof,
(y) release, wholly or partially, any Person liable for the payment thereof, or
(z) allow any credit or discount thereon; and

(v)    except as otherwise provided in this subsection, each Grantor shall
continue to collect all amounts due or to become due to such Grantor under the
Receivables and any Supporting Obligation and, to the extent deemed prudent in
such Grantor’s good faith business judgment or in the ordinary course of
business as generally conducted by it, diligently exercise each material right
it may have under any Receivable, any Supporting Obligation or Collateral
Support, in each case, at its own expense, and in connection with such
collections and exercise, such Grantor shall take such action as such Grantor
may deem necessary or advisable in such Grantor’s good faith business judgment
or in the ordinary course of business as generally conducted by it.
Notwithstanding the foregoing, upon the occurrence and during the continuance of
an Event of Default, the Administrative Agent shall have the right at any time
to notify, or require any Grantor to notify, any Account Debtor of the
Administrative Agent’s security interest in the Receivables and any Supporting
Obligation and, in addition, at any time following the occurrence and during the
continuation of an Event of Default, the Administrative Agent may: (1) direct
the Account Debtors under any Receivables to make payment of all amounts due or
to become due to such Grantor thereunder directly to the Administrative Agent;
(2) notify, or require any Grantor to notify, each Person maintaining a lockbox
or similar arrangement to which Account Debtors under any Receivables have been
directed to make payment to remit all amounts representing collections on checks
and other payment items from time to time sent to or deposited in such lockbox
or other arrangement directly to the Administrative Agent; and (3) enforce, at
the expense of such Grantor, collection of any such Receivables and to adjust,
settle or compromise the amount or payment thereof, in the same manner and to
the same extent as such Grantor might have done. If the Administrative Agent
notifies any Grantor that it has elected to collect the Receivables in
accordance with the immediately preceding sentence, any payments of Receivables
received by such

 

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Grantor shall be forthwith (and in any event within two (2) Business Days)
deposited by such Grantor in the exact form received, duly indorsed by such
Grantor to the Administrative Agent if required, in the Administrative Agent’s
Account maintained under the sole dominion and control (within the meaning of
the common law) or “control” (within the meaning of Section 9-104 of the UCC) of
the Administrative Agent, and until so turned over, all amounts and proceeds
(including checks and other instruments) received by such Grantor in respect of
the Receivables, any Supporting Obligation or Collateral Support shall be
received in trust for the benefit of the Administrative Agent hereunder and
shall be segregated from other funds of such Grantor and such Grantor shall not
adjust, settle or compromise the amount or payment of any Receivable, or release
wholly or partly any Account Debtor or obligor thereof, or allow any credit or
discount thereon.

(c)    Delivery and Control of Receivables. With respect to any Receivable in
excess of $50,000 singly or $100,000 in the aggregate that is evidenced by, or
constitutes, Chattel Paper or Instruments, each Grantor shall cause each
originally executed copy thereof to be delivered to the Administrative Agent (or
its agent or designee) appropriately indorsed to the Administrative Agent or
indorsed in blank: (i) with respect to any such Receivables in existence on the
date hereof, on or prior to the date hereof and (ii) with respect to any such
Receivables hereafter arising, within ten (10) days of such Grantor acquiring
rights therein. With respect to any Receivable in excess of $50,000 singly or
$100,000 in the aggregate that would constitute “electronic chattel paper” under
Article 9 of the UCC, each Grantor shall take all steps necessary to give the
Administrative Agent control over such Receivables (within the meaning of
Section 9-105 of the UCC): (i) with respect to any such Receivables in existence
on the date hereof, on or prior to the date hereof and (ii) with respect to any
such Receivables hereafter arising, within thirty (30) days after the end of the
month in which such Grantor acquired rights therein.

4.3    Investment Related Property.

4.3.1    Investment Related Property Generally

(a)    Covenants and Agreements. Each Grantor hereby covenants and agrees that:

(i)    in the event it acquires rights in any Investment Related Property (to
the extent not issued by a Grantor or Subsidiary thereof, with a value in excess
of $50,000 singly or $100,000 in the aggregate) after the date hereof, it shall
deliver to the Administrative Agent a completed Pledge Supplement, substantially
in the form of Exhibit A attached hereto, together with all supplements to
Schedules thereto, reflecting such new Investment Related Property and all other
Investment Related Property; notwithstanding the foregoing, it is understood and
agreed that the security interest of the Administrative Agent shall attach to
all Investment Related Property promptly upon any Grantor’s acquisition of
rights therein and shall not be affected by the failure of any Grantor to
deliver a supplement to Schedule 4.3 as required hereby;

(ii)    except as provided in the next sentence, in the event such Grantor
receives any dividends, interest or distributions on any Investment Related
Property,

 

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or any securities or other property upon the merger, consolidation, liquidation
or dissolution of any issuer of any Investment Related Property, then (a) such
dividends, interest or distributions and securities or other property shall be
included in the definition of Collateral without further action and (b) such
Grantor shall promptly take all steps, if any, necessary or advisable to ensure
the validity, perfection, priority and, if applicable, control of the
Administrative Agent over such Investment Related Property (including, without
limitation, delivery thereof to the Administrative Agent to the extent required
by Section 4.3.1(a)(i)) and pending any such action such Grantor shall be deemed
to hold such dividends, interest, distributions, securities or other property in
trust for the benefit of the Administrative Agent and shall segregate such
dividends, distributions, Capital Stock or other property from all other
property of such Grantor. Notwithstanding the foregoing, so long as no Event of
Default shall have occurred and be continuing, each Grantor is authorized to
retain all ordinary cash dividends and distributions paid in the normal course
of the business of an issuer and all payments of interest and principal; and

(iii)    each Grantor consents to the grant by each other Grantor of a Security
Interest in all Investment Related Property to the Administrative Agent.

(b)    Delivery and Control.

(i)    Each Grantor agrees that with respect to any Investment Related Property
in which it currently has rights it shall comply with the provisions of this
Section 4.3.1(b) on or before the Closing Date and with respect to any
Investment Related Property hereafter acquired by such Grantor it shall comply
with the provisions of this Section 4.3.1(b) promptly upon acquiring rights
therein, in each case in form and substance reasonably satisfactory to the
Administrative Agent.

(ii)    With respect to any Investment Related Property referred to in
Section 4.3.1(b)(i) that is represented by a certificate or that is an
“instrument” (other than any Investment Related Property credited to a
Securities Account) it shall cause such certificate or instrument to be
delivered to the Administrative Agent, indorsed in blank by an “effective
indorsement” (as defined in Section 8-107 of the UCC), regardless of whether
such certificate constitutes a “certificated security” for purposes of the UCC.
With respect to any Investment Related Property referred to in
Section 4.3.1(b)(i) that is an ‘uncertificated security” for purposes of the UCC
(other than any “uncertificated securities” credited to a Securities Account),
it shall cause the issuer of such uncertificated security to either (i) register
the Administrative Agent as the registered owner thereof on the books and
records of the issuer or (ii) execute an agreement in form and substance
reasonably satisfactory to the Administrative Agent, pursuant to which such
issuer agrees to comply with the Administrative Agent’s instructions with
respect to such uncertificated security without further consent by such Grantor;
provided that no such agreement shall be required by any issuer that is a
Grantor and each such issuer that is a Grantor hereby agrees to comply with the
Administrative Agent’s instructions with respect to such uncertificated security
without further consent by the applicable Grantor.

 

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In addition to the foregoing, if any issuer of any Investment Related Property
referred to in Section 4.3.1(b)(i) is located in a jurisdiction outside of the
United States, upon the request of the Administrative Agent, each Grantor shall
take such additional actions, including, without limitation, causing the issuer
to register the pledge on its books and records or making such filings or
recordings, in each case as may be necessary or advisable, under the laws of
such issuer’s jurisdiction to insure the validity, perfection and priority of
the security interest of the Administrative Agent. If an Event of Default has
occurred and is continuing, the Administrative Agent shall have the right,
without notice to any Grantor, to transfer all or any portion of the Investment
Related Property to its name or the name of its nominee or agent. In addition,
the Administrative Agent shall have the right at any time, without notice to any
Grantor, to exchange any certificates or instruments representing any Investment
Related Property for certificates or instruments of smaller or larger
denominations.

(c)    Voting and Distributions.

(i)    So long as no Event of Default shall have occurred and be continuing:

 

  (1)

except as otherwise provided under the covenants and agreements relating to
Investment Related Property in this Agreement or in the Financing Agreement,
each Grantor shall be entitled to exercise or refrain from exercising any and
all voting and other consensual rights pertaining to the Investment Related
Property or any part thereof so long as no Default or Event of Default under any
Loan Documents would result therefrom; provided, such Grantor shall give the
Administrative Agent at least five (5) Business Days prior written notice of the
manner in which it intends to exercise, or the reasons for refraining from
exercising, any such right; and provided, further, no Grantor shall exercise or
refrain from exercising any such right if the Administrative Agent shall have
notified such Grantor that, in the Administrative Agent’s sole discretion, such
action would have a Material Adverse Effect on the value of the Investment
Related Property or any part thereof; and

 

  (2)

the Administrative Agent shall promptly execute and deliver (or cause to be
executed and delivered) to each Grantor all proxies, and other instruments as
such Grantor may from time to time reasonably request for the purpose of
enabling such Grantor to exercise the voting and other consensual rights when
and to the extent which it is entitled to exercise pursuant to clause (1) above;

 

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  (3)

Upon the occurrence and during the continuation of an Event of Default:

 

  (A)

all rights of each Grantor to exercise or refrain from exercising the voting and
other consensual rights with respect to Investment Related Property which it
would otherwise be entitled to exercise pursuant hereto shall cease and all such
rights shall thereupon become vested in the Administrative Agent who shall
thereupon have the sole right to exercise such voting and other consensual
rights except as otherwise expressly consented to by the Administrative Agent;
and

 

  (B)

in order to permit the Administrative Agent to exercise the voting and other
consensual rights which it may be entitled to exercise pursuant hereto and to
receive all dividends and other distributions which it may be entitled to
receive hereunder: (1) each Grantor shall promptly execute and deliver (or cause
to be executed and delivered) to the Administrative Agent all proxies, dividend
payment orders and other instruments as the Administrative Agent may from time
to time reasonably request and (2) each Grantor acknowledges that the
Administrative Agent may utilize the power of attorney set forth in Section 6.1.

4.3.2    Pledged Equity Interests

(a)    Representations and Warranties. Each Grantor hereby represents and
warrants, that:

(i)    Schedule 4.3(A) (as such schedule may be amended or supplemented from
time to time pursuant to Section 5.1) sets forth under the headings “Pledged
Stock,” “Pledged LLC Interests,” “Pledged Partnership Interests” and “Pledged
Trust Interests,” respectively, all of the Pledged Stock, Pledged LLC Interests,
Pledged Partnership Interests and Pledged Trust Interests owned by any Grantor;
such Pledged Equity Interests constitute the percentage of issued and
outstanding shares of stock, percentage of membership interests, percentage of
partnership interests or percentage of beneficial interest of the respective
issuers thereof indicated on such Schedule and such certificated Pledged Equity
Interests have been delivered to the Administrative Agent;

(ii)    except as set forth on Schedule 4.3(B), it has not acquired any equity
interests of another entity or substantially all the assets of another entity
within the past five (5) years;

(iii)    it is the record and beneficial owner of the Pledged Equity Interests
free of all Liens, rights or claims of other Persons and there are no
outstanding warrants, options or other rights to purchase, or shareholder,
voting trust or similar agreements outstanding with respect to, or property that
is convertible into, or that requires the issuance or sale of, any Pledged
Equity Interests;

 

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(iv)    without limiting the generality of Section 4.1(a)(v), no consent of any
Person including any other general or limited partner, any other member of a
limited liability company, any other shareholder or any other trust beneficiary
is required in connection with the creation, perfection or first priority status
of the security interest of the Administrative Agent in any Pledged Equity
Interests or the exercise by the Administrative Agent of the voting or other
rights provided for in this Agreement or the exercise of remedies in respect
thereof that has not been obtained;

(v)    none of the Pledged LLC Interests nor Pledged Partnership Interests are
or represent interests in issuers that: (a) are registered as investment
companies or (b) are dealt in or traded on securities exchanges or markets; and

(vi)    except as otherwise set forth on Schedule 4.3(C), none of the Pledged
LLC Interests and Pledged Partnership Interests are or represent interests in
issuers that have opted to treat such interests as securities under the UCC.

(b)    Covenants and Agreements. Each Grantor hereby covenants and agrees that:

(i)    without the prior written consent of the Administrative Agent, it shall
not vote to enable or take any other action to: (a) amend or terminate any
partnership agreement, limited liability company agreement, certificate of
incorporation, by-laws or other organizational documents in any way that
materially changes the rights of such Grantor with respect to any Investment
Related Property or adversely affects the validity, perfection or priority of
the Administrative Agent’s security interest, (b) waive any default under or
breach of any terms of organizational document relating to the issuer of any
Pledged Equity Interest or the terms of any Pledged Debt, or (c) cause any
issuer of any Pledged Partnership Interests or Pledged LLC Interests which are
not securities (for purposes of the UCC) on the date hereof to elect or
otherwise take any action to cause such Pledged Partnership Interests or Pledged
LLC Interests to be treated as securities for purposes of the UCC; provided,
however, notwithstanding the foregoing, if any issuer of any Pledged Partnership
Interests or Pledged LLC Interests takes any such action in violation of the
foregoing in this clause (b)(i), such Grantor shall promptly notify the
Administrative Agent in writing of any such election or action and, in such
event, shall take all steps necessary or advisable to establish the
Administrative Agent’s “control” thereof;

(ii)    it shall comply with all of its obligations under any partnership
agreement or limited liability company agreement relating to Pledged Partnership
Interests or Pledged LLC Interests and shall enforce all of its rights with
respect to any Investment Related Property, except, in each case, to the extent
failure to do so would not adversely affect the enforceability or validity,
perfection or priority of the Administrative Agent’s security interest;

(iii)    without the prior written consent of the Administrative Agent, it shall
not permit any issuer of any Pledged Equity Interest to merge or consolidate

 

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unless (i) such issuer creates a security interest that is perfected by a filed
financing statement (that is not effective solely under section 9-508 of the
UCC) in collateral in which such new debtor has or acquires rights, and (ii) all
the outstanding capital stock or other equity interests of the surviving or
resulting corporation, limited liability company, partnership or other entity
is, upon such merger or consolidation, pledged hereunder and no cash, securities
or other property is distributed in respect of the outstanding equity interests
of any other constituent Grantor;

(iv)    each Grantor consents to the grant by each other Grantor of a security
interest in all Investment Related Property to the Administrative Agent and,
without limiting the foregoing, consents to the transfer of any Pledged
Partnership Interest and any Pledged LLC Interest to the Administrative Agent or
its nominee if an Event of Default has occurred and is continuing and to the
substitution of Administrative Agent or its nominee as a partner in any
partnership or as a member in any limited liability company with all the rights
and powers related thereto; and

(v)    it shall promptly deliver to the Administrative Agent certificated
Pledged Equity Interests acquired, received or obtained after the Closing Date.

4.3.3    Pledged Debt

(a)    Representations and Warranties. Each Grantor hereby represents and
warrants that:

(i)    Schedule 4.3 (as such schedule may be amended or supplemented from time
to time pursuant to Section 5.1) sets forth under the heading “Pledged Debt” all
of the Pledged Debt owned by any Grantor and all of such Pledged Debt has been
duly authorized, authenticated or issued, and delivered and is the legal, valid
and binding obligation of the issuers thereof, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or limiting creditors’ rights generally or by equitable principles relating to
enforceability, and is not in default and constitutes all of the issued and
outstanding inter-company Indebtedness;

(b)    Covenants and Agreements. Each Grantor hereby covenants and agrees that:

(i)    it shall notify the Administrative Agent of any default under any Pledged
Debt that has caused, either in any individual case or in the aggregate, a
Material Adverse Effect; and

(ii)    it shall promptly deliver to the Administrative Agent instruments
evidencing Pledged Debt acquired, received or obtained after the Closing Date.

 

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4.3.4    Pledged Investment Accounts

(a)    Representations and Warranties. Each Grantor hereby represents and
warrants that:

(i)    Schedule 4.3 hereto (as such schedule may be amended or supplemented from
time to time pursuant to Section 5.1) sets forth under the headings “Securities
Accounts” and “Commodities Accounts,” respectively, all of the Securities
Accounts and Commodities Accounts in which each Grantor has an interest that
constitutes Pledged Investment Accounts. Each Grantor is the sole entitlement
holder of each such Securities Account and Commodity Account constituting a
Pledged Investment Account, and such Grantor has not consented to, and no other
Person (other than the Administrative Agent pursuant hereto) has “control”
(within the meanings of Sections 8-106 and 9-106 of the UCC) over, or (other
than the interest of the relevant securities intermediary) any other interest
in, any such Securities Account or Commodity Account constituting a Pledged
Investment Account or financial asset or other property credited thereto;

(ii)    Schedule 4.3 hereto (as such schedule may be amended or supplemented
from time to time pursuant to Section 5.1) sets forth under the headings
“Deposit Accounts” all of the Deposit Accounts in which each Grantor has an
interest that constitutes a Pledged Investment Account. Each Grantor is the sole
account holder of each such Deposit Account that constitutes a Pledged
Investment Account and such Grantor has not consented to, and no other Person
(other than the Administrative Agent pursuant hereto) has dominion and control
(within the meaning of common law) or “control” (within the meanings of
Section 9-104 of the UCC) over, or (other than the interest of the relevant
depositary bank) any other interest in, any such Deposit Account that
constitutes a Pledged Investment Account or any money or other property
deposited therein; and

(iii)    Each Grantor has taken all actions necessary, including those specified
in Section 4.3.4(c), to: (a) establish the Administrative Agent’s “control”
(within the meanings of Sections 8-106 and 9-106 of the UCC) over any portion of
the Investment Related Property referred to in Section 4.3.1(b)(i) constituting
Certificated Securities, Uncertificated Securities, Securities Accounts,
Securities Entitlements or Commodities Accounts (each as defined in the UCC);
(b) establish the Administrative Agent’s “control” (within the meaning of
Section 9-104 of the UCC) over all Deposit Accounts constituting Pledged
Investment Accounts and (c) deliver each Instrument with a value in excess of
$50,000 singly or $100,000 in the aggregate to the Administrative Agent.

(b)    Covenant and Agreement. Each Grantor hereby covenants and agrees with the
Administrative Agent and each other Secured Party that it shall not close or
terminate any Pledged Investment Account unless the funds or other assets
therein have been transferred to another Pledged Investment Account or a
successor or replacement account has been established with respect to which
successor or replacement account a control agreement has been entered into by
the appropriate Grantor, the Administrative Agent and the securities issuer,
intermediary or depository institution at which such successor or replacement
account is to be maintained in accordance with the provisions of
Section 4.3.4(c).

 

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(c)    Delivery and Control

(i)    With respect to any Investment Related Property consisting of Securities
Accounts or Securities Entitlements, it shall cause the securities intermediary
maintaining such Securities Account or Securities Entitlement to enter into an
agreement, in form and substance reasonably satisfactory to the Administrative
Agent, pursuant to which it shall agree to comply with the Administrative
Agent’s “entitlement orders” without further consent by such Grantor. With
respect to any Investment Related Property that is a “Deposit Account,” it shall
cause the depositary institution maintaining such account to enter into an
agreement, in form and substance reasonably satisfactory to the Administrative
Agent, pursuant to which the Administrative Agent shall have both sole dominion
and control over such Deposit Account (within the meaning of the common law) and
“control” (within the meaning of Section 9-104 of the UCC) over such Deposit
Account. The Grantors shall deposit or cause to be deposited promptly, and in
any event no later than the next Business Day after the date of receipt thereof,
all proceeds in respect of any Collateral, all collections (of a nature
susceptible to a deposit in a bank account) constituting Collateral or the
proceeds of Collateral and all other amounts constituting Collateral or the
proceeds of Collateral received by any Grantor into such Deposit Accounts. So
long as no Event of Default has occurred and is continuing, the Grantors shall
have full access to the cash on deposit in such Deposit Accounts, and the
Administrative Agent agrees not to deliver a control notice or take any other
action to control such Deposit Accounts unless and until an Event of Default has
occurred and is continuing. If an Event of Default has occurred and is
continuing, with respect to any Deposit Account constituting a Pledged
Investment Account, the Administrative Agent may give instructions and
directions to the relevant bank or depositary institution to wire all amounts on
deposit in such Deposit Account each Business Day to the Administrative Agent’s
Account. All amounts received or deposited into the Administrative Agent’s
Account after the occurrence of an Event of Default shall be applied to the
payment of the outstanding Obligations in accordance with the Financing
Agreement. Each Grantor shall have entered into such control agreement or
agreements with respect to: (i) any Securities Accounts, Securities Entitlements
or Deposit Accounts that exist on the Closing Date, as or prior to the Closing
Date, and (ii) any Securities Accounts, Securities Entitlements or Deposit
Accounts that are created or acquired after the Closing Date, as of or prior to
the deposit or transfer of any such Securities Entitlements or funds
constituting Collateral, whether constituting moneys or investments, into such
Securities Accounts or Deposit Accounts.

4.4    Material Contracts.

(a)    Representations and Warranties. Each Grantor hereby represents and
warrants that:

(i)    Schedule 4.4 (as such schedule may be amended or supplemented from time
to time pursuant to Section 5.1) sets forth all of the Material Contracts to
which such Grantor has rights, excluding Material Contracts that are (A) not

 

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material and (B) entered into in the ordinary course of business (which, for the
avoidance of doubt, includes investigator-initiated study agreements and
material transfer agreements related to research, in both cases entered into in
the ordinary course of business), and true and complete copies of all such
Material Contracts (including any amendments or supplements thereof) have been
furnished to the Administrative Agent. Notwithstanding the foregoing, the
listing of Material Contracts in Schedule 4.4 shall in no way limit any
representation or warranty set forth in this Section or constitute a disclosure
against any such representation or warranty;

(ii)    each Material Contract has been duly authorized, executed and delivered
by the applicable Grantor and, to the knowledge of such Grantor, all other
parties thereto, are valid and in full force and effect and are binding upon and
enforceable against such Grantor and, to the knowledge of such Grantor, all
other parties thereto in accordance with their respective terms, except as may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors’ rights generally or by equitable principles
relating to enforceability. Except as would not be reasonably expected to have a
Material Adverse Effect or otherwise give rise to a termination right of any
party to a Material Contract, there exists no default under any Material
Contract by any party thereto and, to the knowledge of such Grantor, no
circumstances likely to give rise to any such default. To the knowledge of such
Grantor, no other Person party thereto has any defenses, counterclaims or right
of set-off with respect to any Material Contract; and

(iii)    no Material Contract prohibits the pledge of the Grantors’ rights under
such Material Contract to the Administrative Agent, except for such restrictions
as have been waived or, in the determination of the Administrative Agent, are
rendered ineffective as described in Section 2.2(B).

(b)    Covenants and Agreements. Each Grantor hereby covenants and agrees that:

(i)    in addition to any rights under the Section of this Agreement relating to
Receivables, upon the occurrence and during the continuance of an Event of
Default, the Administrative Agent may at any time notify, or require any Grantor
to so notify, the counterparty on any Material Contract of the security interest
of the Administrative Agent therein. In addition, after the occurrence and
during the continuance of an Event of Default, the Administrative Agent may upon
written notice to the applicable Grantor, notify, or require any Grantor to
notify, the counterparty to make all payments or transfer other rights that
inure to the benefit of the applicable Grantor under the Material Contracts
directly to the Administrative Agent; and

(ii)    each Grantor shall, within thirty (30) days of the date hereof with
respect to any Non-Assignable Contract in effect on the date hereof and within
thirty (30) days after entering into any Non-Assignable Contract after the
Closing Date, request in writing the consent of the counterparty or
counterparties to the Non-Assignable Contract pursuant to the terms of such
Non-Assignable Contract or applicable law to the assignment or granting of a
security interest in such Non-Assignable Contract to Secured Party and use its
commercially reasonable efforts to obtain such consent as soon as practicable
thereafter.

 

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4.5    Intellectual Property.

(a)    Representations and Warranties. Except as disclosed in Schedule 4.5(C)
(as such schedule may be amended or supplemented from time to time pursuant to
Section 5.1), each Grantor hereby represents and warrants that:

(i)    Schedule 4.5(A) (as such schedule may be amended or supplemented from
time to time pursuant to Section 5.1) sets forth a true, correct and complete
listing, including the applicable owner(s) of record and registration or
application number, of all U.S. (federal or state) and foreign (i) Product
Patents, (ii) applications and registrations for Product Trademarks,
(iii) registered or applied-for Product Copyrights, and (iv) Internet domain
names, in the case of each of clauses (i) through iv), constituting Owned
Intellectual Property Rights. Except as identified in Schedule 4.5(A) (as such
schedule may be amended or supplemented from time to time pursuant to
Section 5.1), (a) the Grantor listed on Schedule 4.5(A) is the exclusive owner
of, and, except for non-exclusive licenses granted in the ordinary course of
business, has exclusive rights to use, the entire right, title, and interest in
and to each of the Product Intellectual Property Rights listed; (b) to each
Grantor’s knowledge, such registrations are valid, subsisting, and enforceable,
in whole or in part; (c) none of the registrations or applications have lapsed
or been abandoned, cancelled or expired; and (d) Grantor has performed all
commercially reasonable acts and paid all renewal, maintenance, and other fees
and taxes required to maintain each registration or application in full force
and effect, including by timely filing fees and responses.

(ii)    Schedule 4.5(B) (as such schedule may be amended or supplemented from
time to time pursuant to Section 5.1) sets forth a true, correct and complete
listing of all Product Intellectual Property Licenses to which each Grantor or
its Subsidiaries is a party, under separate headings for each agreement or
understanding under clauses (i)-(iii) of the definition of Product Intellectual
Property Licenses;

(iii)    Except for the Grantors and non-exclusive licenses granted in the
ordinary course of business, no other Subsidiary or Affiliate has any rights,
title or interest in any Product Intellectual Property Rights;

(iv)    Each Grantor has taken reasonable steps to maintain the confidentiality
of and otherwise protect and enforce its rights in all Product Trade Secrets
owned by such Grantor that are reasonable necessary in the business of such
Grantor; and

(v)    There is no effective financing statement or other document or instrument
now executed, or on file or recorded in any public office, granting a Lien in or
otherwise encumbering any part of the Owned Intellectual Property Rights
(including relating to or affecting royalties on, or proceed from, sales of the
Product), other than in favor of the Administrative Agent.

 

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(b)    Covenants and Agreements. Each Grantor hereby covenants and agrees as
follows:

(i)    except to the extent deemed prudent in its reasonable business judgment
as determined by such Grantor in good faith and in the ordinary course of
business as generally conducted by it, it shall not do any act or omit to do any
act whereby any of the Specified Product IP Rights may lapse, or become
abandoned, dedicated to the public, or unenforceable, or which would adversely
affect the validity, grant, or enforceability of the security interest granted
therein;

(ii)    except to the extent deemed prudent in its reasonable business judgment
as determined by such Grantor in good faith and in the ordinary course of
business as generally conducted by it, it shall not, with respect to any Product
Trademarks owned or in-licensed by the Grantor, cease the use of any of such
Product Trademarks or fail to maintain the level of the quality of products sold
and services rendered under any of such Product Trademark at a level at least
substantially consistent with the quality of such products and services as of
the date hereof, and each Grantor shall take all steps necessary to insure that
licensees of such Product Trademarks use such consistent standards of quality;

(iii)    except for the abandonment of applications that occurs in the ordinary
course of prosecution, it shall, on a quarterly basis, after any Grantor obtains
knowledge thereof and in any case prior to any abandonment or dedication to the
public or placement in the public domain occurring) notify the Administrative
Agent if it knows that any of the Specified Product IP Rights that constitutes
Collateral may become (a) abandoned or dedicated to the public or placed in the
public domain or (b) invalid or unenforceable;

(iv)    except for the abandonment of applications that occurs in the ordinary
course of prosecution, it shall take all reasonable steps in the United States
Patent and Trademark Office, the United States Copyright Office, any state
registry or any foreign counterpart of the foregoing, to pursue any application
and maintain any registration of each Product Trademark, Product Patent and
Product Copyright owned by any Grantor and any Specified Product IP Rights
including, but not limited to, those items on Schedule 4.5(A) and (B) (as each
may be amended or supplemented from time to time pursuant to Section 5.1);

(v)    in the event that Grantor becomes aware that any Specified Product IP
Rights are infringed, misappropriated, or diluted by a third party, to the
extent deemed prudent in its reasonable business judgment as determined by such
Grantor in good faith or in the ordinary course of business as generally
conducted by it, such Grantor shall promptly take all actions to stop such
infringement, misappropriation, or dilution and protect its rights in such
Specified Product IP Rights, including, but not limited to, the initiation of a
suit for injunctive relief and to recover damages;

 

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(vi)    it shall, on a quarterly basis, report to the Administrative Agent
(i) the filing of any application to register any Product Intellectual Property
Rights with the United States Patent and Trademark Office, the United States
Copyright Office, or any state registry or foreign counterpart of the foregoing
(whether such application is filed by such Grantor or through any agent,
employee, licensee (excluding a Generic Licensee), or designee thereof by or on
behalf of the Grantor) and (ii) the registration of any Product Intellectual
Property Rights by any such office by or on behalf of the Grantor, in each case
by executing and delivering to the Administrative Agent a completed Pledge
Supplement, substantially in the form of Exhibit A attached hereto, together
with all supplements to Schedules thereto and shall execute and deliver to the
Administrative Agent with respect to any such Product Intellectual Property
Rights a Patent Security Agreement, Trademark Security Agreement or Copyright
Security Agreement, as applicable, in each case in the forms attached hereto as
Exhibits B, C and D;

(vii)    it shall, promptly upon the request of the Administrative Agent,
execute and deliver to the Administrative Agent any document required to
acknowledge, confirm, register, record, or perfect the Administrative Agent’s
interest in any part of the Owned Intellectual Property Rights, whether now
owned or hereafter acquired;

(viii)    except with the prior written consent of the Administrative Agent or
as permitted under the Financing Agreement, each Grantor shall not execute,
shall not file and shall not consent to the filing of any financing statement or
other document or instruments in any public office, except financing statements
or other documents or instruments filed or to be filed in favor of the
Administrative Agent;

(ix)    it shall hereafter use commercially reasonable efforts so as not to
permit the inclusion in any contract to which it hereafter becomes a party of
any provision that could reasonably be expected to materially impair or prevent
the creation of a security interest in, or the assignment of, such Grantor’s
rights and interests in any property included within the definitions of any
Product Intellectual Property Rights acquired under such contracts;

(x)    to the extent deemed prudent in its reasonable business judgment as
determined by such Grantor in good faith or in the ordinary course of business
as generally conducted by it, it shall take reasonable steps to maintain the
confidentiality of, and otherwise protect and enforce its rights in, non-public
Product Intellectual Property Rights, including, as applicable (A) protecting
the secrecy and confidentiality of its confidential information and Product
Trade Secrets by having and enforcing a policy requiring all current employees,
consultants, licensees, vendors and contractors with access to such information
to execute appropriate confidentiality agreements and (B) taking actions
reasonably necessary to ensure that no Product Trade Secret owned or in-licensed
by the Grantor falls into the public domain;

 

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(xi)    it shall not enter, and shall prohibit any of its Subsidiaries from
entering, into any agreement to receive any license or rights in any
Intellectual Property Rights of any other Person which relate to the Product,
any clinical trial for the Product administered by or on behalf of the Company
(including the ATHENA Trial) or the research, development, use, manufacture,
licensure, packaging, processing, delivery or Commercialization of the Product,
or any services provided in connection with the Product, unless such Grantor has
used commercially reasonable efforts to permit the assignment or grant of a
security interest in such agreement (and all rights of Grantor thereunder) to
the Administrative Agent (and any transferees of the Administrative Agent); and

(xii)    notwithstanding the foregoing, the Administrative Agent shall have the
right at any time, upon the occurrence and during the continuance of an Event of
Default, to notify, or require any Grantor to notify, any obligors with respect
to any such amounts of the existence of the security interest created hereby.

4.6    Commercial Tort Claims

(a)    Representations and Warranties. Each Grantor hereby represents and
warrants that Schedule 4.6 (as such schedule may be amended or supplemented from
time to time pursuant to Section 5.1) sets forth all Commercial Tort Claims in
excess of $50,000 or $100,000 in the aggregate of each Grantor; and

(b)    Covenants and Agreements. Each Grantor hereby covenants and agrees that
with respect to any Commercial Tort Claim in excess of $50,000 or $100,000 in
the aggregate hereafter arising it shall deliver to the Administrative Agent a
completed Pledge Supplement, substantially in the form of Exhibit A attached
hereto, together with all supplements to Schedules thereto, identifying such new
Commercial Tort Claims.

4.7    Regulatory Documentation.

(a)    Representations and Warranties. Each Grantor hereby represents and
warrants that:

(i)    Schedule 4.7 sets forth a complete and correct list of all Regulatory
Approvals and all clinical trials of the Product for which Company or its
Subsidiaries have submitted or received any Regulatory Documentation, and, in
each case, the applicable jurisdictions of such Regulatory Approvals and
Regulatory Documentation;

(ii)    it is the sole owner of all Regulatory Documentation, including each
Product NDA, and it has all necessary power, authority and rights to deliver the
Regulatory Documentation as required hereunder; and

(iii)    except for the Grantors, no Subsidiary or Affiliate of Company (and no
other Third Party) has any right, title, or interest (including but not limited
to any right of reference) in any Regulatory Documentation.

 

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(b)    Covenants and Agreements. Each Grantor hereby covenants and agrees as
follows:

(i)    except with the prior written consent of the Administrative Agent or as
permitted under the Financing Agreement, such Grantor shall not execute, and
there will not be on file in any public office, any financing statement or other
document or instruments, except financing statements or other documents or
instruments filed or to be filed in favor of the Administrative Agent; and

(ii)    it shall, promptly upon the request of the Administrative Agent, execute
and deliver to the Administrative Agent any document required or advisable to
acknowledge, confirm, register, record, or perfect the Administrative Agent’s
interest in any part of the Regulatory Documentation, whether now owned or
hereafter acquired; provided, however, that the Grantor that is the holder of
the applicable Product NDA shall execute and deliver to the Administrative Agent
following any Event of Default (a) a complete executed Transferor Letter in the
form attached hereto as Exhibit E for NDA 0209115 and (b) any further versions
of such Transferor Letter together with any foreign equivalents of such
Transferor Letter as requested by the Administrative Agent, and shall file any
and all such Transferor Letters and related documentation with the appropriate
Governmental Authorities upon the request of the Administrative Agent following
an Event of Default.

SECTION 5. SUPPLEMENTS TO SCHEDULES; FURTHER ASSURANCES; ADDITIONAL GRANTORS.

5.1    Supplements to Schedules. Each Grantor shall deliver to the
Administrative Agent written supplements to Schedule 4.1, Schedule 4.3, Schedule
4.4, Schedule 4.6, Schedule 4.5, Schedule 4.6 and Schedule 4.7 on a quarterly
basis within forty-five (45) days after the end of each Fiscal Quarter, and any
such supplement delivered pursuant to this Section 5.1 shall, after receipt
thereof by the Administrative Agent, become part of such schedule for all
purposes hereunder other than in respect of representations and warranties made
prior to the date of such receipt.

5.2    Further Assurances.

(a)    Each Grantor agrees that from time to time, at the expense of such
Grantor, that it shall promptly execute and deliver all further agreements,
instruments, certificates, powers of attorney, endorsements and any other
documents, and take all further action, that may be necessary, or that the
Administrative Agent may reasonably request, in order to create and/or maintain
the validity, perfection or priority of and protect any security interest
granted hereby or to enable the Administrative Agent to exercise and enforce its
rights and remedies hereunder with respect to any Collateral. Without limiting
the generality of the foregoing, each Grantor shall:

(i)    file such financing or continuation statements, or amendments thereto,
and execute and deliver such other agreements, instruments, endorsements, powers
of attorney or notices, as may be necessary, or as the Administrative Agent may
reasonably request, in order to perfect and preserve the security interests
granted or purported to be granted hereby;

 

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(ii)    take all actions necessary or as Administrative Agent may reasonably
request to ensure the recordation of appropriate evidence of the Liens and
security interest granted hereunder in the Owned Intellectual Property Rights
and Product Intellectual Property Licenses, including by the filing of the
Intellectual Property Security Agreements set forth in Exhibits B, C and D
hereto (including, for the avoidance of doubt, filing any additional
Intellectual Property Security Agreements or amendments or addenda thereto as a
result of Trademarks, Patents or Copyrights, as applicable, that are included in
the Collateral not being listed on Schedule A of each Intellectual Property
Security Agreement) or foreign counterparts thereof, with any intellectual
property registry in which said Owned Intellectual Property Rights are
registered or in which an application for registration is pending and any other
office in which such recordation is required in order to perfect a first
priority security interest therein, including, without limitation, the United
States Patent and Trademark Office, the United States Copyright Office, the
various Secretaries of State, and the foreign counterparts of any of the
foregoing;

(iii)    subject to the limitations on and requirements of inspections set forth
in Section 5.3 of the Financing Agreement, at any reasonable time, upon request
by the Administrative Agent, assemble the Collateral and allow inspection of the
Collateral by the Administrative Agent, or persons designated by the
Administrative Agent; and

(iv)    to the extent deemed prudent in the reasonable business judgment as
determined by the Grantor in good faith or in the ordinary course of business as
generally conducted by it, appear in and defend any action or proceeding that
may affect such Grantor’s title to or the Administrative Agent’s security
interest in all or any part of the Collateral.

(b)    Each Grantor hereby authorizes the Administrative Agent to file, at the
Grantor’s sole expense, a Record or Records, including, without limitation,
financing or continuation statements, and amendments thereto, in any
jurisdictions and with any filing offices as the Administrative Agent may
determine, in its sole discretion, are necessary or advisable to perfect and
continue, without interruption or lapse, the perfection and priority of the
security interest granted to the Administrative Agent herein. Such financing
statements may describe the Collateral in the same manner as described herein or
may contain an indication or description of collateral that describes such
property in any other manner as the Administrative Agent may determine, in its
sole discretion, is necessary, advisable or prudent to ensure the continued
perfection and priority of the security interest in the Collateral granted to
the Administrative Agent herein, including, without limitation, describing such
property as “all assets” or “all personal property, whether now owned or
hereafter acquired.” Each Grantor shall furnish to the Administrative Agent from
time to time statements and schedules further identifying and describing the
Collateral and such other reports in connection with the Collateral as the
Administrative Agent may reasonably request, all in reasonable detail.

 

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5.3    Additional Grantors. From time to time subsequent to the date hereof,
additional Persons may become parties hereto as additional Grantors (each, an
“Additional Grantor”), by executing a counterpart agreement. Upon delivery of
any such counterpart agreement to the Administrative Agent, notice of which is
hereby waived by Grantors, each Additional Grantor shall be a Grantor and shall
be as fully a party hereto as if Additional Grantor were an original signatory
hereto. Each Grantor expressly agrees that its obligations arising hereunder
shall not be affected or diminished by the addition or release of any other
Grantor hereunder, nor by any waiver or election of the Administrative Agent or
the Required Lenders of any requirement under the Financing Agreement to cause
any Subsidiary of Borrower to become an Additional Grantor hereunder. This
Agreement shall be fully effective as to any Grantor that is or becomes a party
hereto regardless of whether any other Person becomes or fails to become or
ceases to be a Grantor hereunder.

SECTION 6. ADMINISTRATIVE AGENT APPOINTED ATTORNEY-IN-FACT.

6.1    Power of Attorney. Each Grantor hereby irrevocably appoints the
Administrative Agent (such appointment being coupled with an interest) as such
Grantor’s attorney-in-fact, with full authority in the place and stead of such
Grantor and in the name of such Grantor, the Administrative Agent or otherwise,
from time to time in the Administrative Agent’s discretion to take any action
and to execute any instrument that the Administrative Agent may deem reasonably
necessary or advisable to accomplish the purposes of this Agreement, including,
without limitation, the following:

(a)    upon the occurrence and during the continuance of any Event of Default,
to obtain and adjust insurance required to be maintained by such Grantor or paid
to the Administrative Agent pursuant to the Financing Agreement;

(b)    upon the occurrence and during the continuance of any Event of Default,
to ask for, demand, collect, sue for, recover, compound, receive and give
acquittance and receipts for moneys due and to become due under or in respect of
any of the Collateral;

(c)    upon the occurrence and during the continuance of any Event of Default,
to receive, endorse and collect any drafts or other instruments, documents and
chattel paper in connection with clause (b) above;

(d)    upon the occurrence and during the continuance of any Event of Default,
to file any claims or take any action or institute any proceedings that the
Administrative Agent may deem necessary, advisable or desirable for the
collection of any of the Collateral or otherwise to enforce the rights of the
Administrative Agent with respect to any of the Collateral;

(e)    to prepare and file any UCC financing statements against such Grantor as
debtor;

(f)    to prepare, sign, and file for recordation in any intellectual property
registry, appropriate evidence of the lien and security interest granted herein
in the Product Intellectual Property Rights and Product Intellectual Property
Licenses in the name of such Grantor as debtor;

 

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(g)    to take or cause to be taken all actions necessary to perform or comply
or cause performance or compliance with the terms of this Agreement, including,
without limitation, access to pay or discharge taxes or Liens levied or placed
upon or threatened against the Collateral, the legality or validity thereof and
the amounts necessary to discharge the same to be determined by the
Administrative Agent in its sole discretion, any such payments made by the
Administrative Agent to become obligations of such Grantor to the Administrative
Agent, due and payable immediately without demand; and

(h)    generally to sell, transfer, pledge, make any agreement with respect to
or otherwise deal with any of the Collateral as fully and completely as though
the Administrative Agent were the absolute owner thereof for all purposes, and
to do, at the Administrative Agent’s option and such Grantor’s sole expense, at
any time or from time to time, all acts and things that the Administrative Agent
deems reasonably necessary to protect, preserve or realize upon the Collateral
and the Administrative Agent’s security interest therein in order to effect the
intent of this Agreement, all as fully and effectively as such Grantor might do.

6.2    No Duty on the Part of Administrative Agent or Secured Parties. The
powers conferred on the Administrative Agent hereunder are solely to protect the
interests of the Secured Parties in the Collateral and shall not impose any duty
upon the Administrative Agent or any Secured Party to exercise any such powers.
The Administrative Agent and the Secured Parties shall be accountable only for
amounts that they actually receive as a result of the exercise of such powers,
and neither they nor any of their officers, directors, employees or agents shall
be responsible to any Grantor for any act or failure to act hereunder, except
for their own gross negligence or willful misconduct.

SECTION 7. REMEDIES.

7.1    Generally.

(a)    If any Event of Default shall have occurred and be continuing, the
Administrative Agent may exercise in respect of the Collateral, in addition to
all other rights and remedies provided for herein or otherwise available to it
at law or in equity, all the rights and remedies of the Administrative Agent
upon a default under the UCC (whether or not the UCC applies to the affected
Collateral) to collect, enforce or satisfy any Secured Obligations then owing,
whether by acceleration or otherwise, and also may pursue any of the following
separately, successively or simultaneously:

(i)    require any Grantor to, and each Grantor hereby agrees that it shall at
its expense and promptly upon request of the Administrative Agent forthwith,
assemble all or part of the Collateral as directed by the Administrative Agent
and make it available to the Administrative Agent at a place to be designated by
the Administrative Agent that is reasonably convenient to both parties;

(ii)    enter onto the property where any Collateral is located and take
possession thereof with or without judicial process;

 

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(iii)    prior to the disposition of the Collateral, store, process, repair or
recondition the Collateral or otherwise prepare the Collateral for disposition
in any manner to the extent the Administrative Agent deems appropriate;

(iv)    give notice of sole control or any other instruction under any control
or similar agreement and take any action provided therein with respect to the
applicable Collateral;

(v)    exercise those rights and remedies available to a secured party under the
UCC (whether or not the UCC applies to the affected Collateral) or under any
other applicable law (including, without limitation, any law governing the
exercise of a bank’s right of setoff or bankers’ Lien) when a debtor is in
default under a security agreement;

(vi)    transfer and register in its name or in the name of its nominee the
whole or any part of the Pledged Equity Interests, to exchange certificates or
instruments representing or evidencing Pledged Equity Interests for certificates
or instruments of smaller or larger denominations, to exercise the voting and
all other rights as a holder with respect thereto, to collect and receive all
cash dividends, interest, principal and other distributions made thereon and to
otherwise act with respect to the Pledged Equity Interests as though the
Administrative Agent was the outright owner thereof; and

(vii)    without notice except as specified below or under the UCC, sell,
assign, lease, license (on an exclusive or nonexclusive basis) or otherwise
dispose of the Collateral or any part thereof in one or more parcels at public
or private sale, at any of the Administrative Agent’s offices or elsewhere, for
cash, on credit or for future delivery, at such time or times and at such price
or prices and upon such other terms as the Administrative Agent may deem
commercially reasonable.

(viii)    transfer, assign or register in its name or in the name of its nominee
or assignee the whole or any part of the Product Intellectual Property Rights,
Product Intellectual Property Licenses, Regulatory Documentation or Regulatory
Approvals, to exercise the power, authority and all other rights as an
applicant, holder or party thereto with respect thereto and to otherwise act
with respect to the Product Intellectual Property Rights, Product Intellectual
Property Licenses, Regulatory Documentation or Regulatory Approvals as though
the Administrative Agent was the outright applicant, holder or party thereto.

(b)    The Administrative Agent or any Secured Party may be the purchaser of any
or all of the Collateral at any public or private (to the extent to the portion
of the Collateral being privately sold is of a kind that is customarily sold on
a recognized market or the subject of widely distributed standard price
quotations) sale in accordance with the UCC and the Administrative Agent, as
Administrative Agent for and representative of the Secured Parties, shall be
entitled, for the purpose of bidding and making settlement or payment of the
purchase price for all or any portion of the Collateral sold at any such sale
made in accordance with the UCC, to use and apply any of the Secured Obligations
as a credit on account of the purchase price for any

 

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Collateral payable by the Administrative Agent at such sale. Each purchaser at
any such sale shall hold the property sold absolutely free from any claim or
right on the part of any Grantor, and each Grantor hereby waives (to the extent
permitted by applicable law) all rights of redemption, stay and/or appraisal
which it now has or may at any time in the future have under any rule of law or
statute now existing or hereafter enacted. Each Grantor agrees that, to the
extent notice of sale shall be required by law, at least ten (10) days’ notice
to such Grantor 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
Administrative Agent shall not be obligated to make any sale of Collateral
regardless of notice of sale having been given. The Administrative Agent 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. Each Grantor agrees that it
would not be commercially unreasonable for the Administrative Agent to dispose
of the Collateral or any portion thereof by using Internet sites that provide
for the auction of assets of the types included in the Collateral or that have
the reasonable capability of doing so, or that match buyers and sellers of
assets. Each Grantor hereby waives any claims against the Administrative Agent
arising by reason of the fact that the price at which any Collateral may have
been sold at such a private sale was less than the price which might have been
obtained at a public sale, even if the Administrative Agent accepts the first
offer received and does not offer such Collateral to more than one offeree. If
the proceeds of any sale or other disposition of the Collateral are insufficient
to pay all the Secured Obligations, Grantors shall be liable for the deficiency
and the fees of any attorneys employed by the Administrative Agent to collect
such deficiency. Each Grantor further agrees that a breach of any of the
covenants contained in this Section will cause irreparable injury to the
Administrative Agent, that the Administrative Agent has no adequate remedy at
law in respect of such breach and, as a consequence, that each and every
covenant contained in this Section shall be specifically enforceable against
such Grantor, and such Grantor hereby waives and agrees not to assert any
defenses against an action for specific performance of such covenants except for
a defense that no default has occurred giving rise to the Secured Obligations
becoming due and payable prior to their stated maturities. Nothing in this
Section shall in any way alter the rights of the Administrative Agent hereunder.

(c)    The Administrative Agent may sell the Collateral without giving any
warranties as to the Collateral. The Administrative Agent may specifically
disclaim or modify any warranties of title or the like. This procedure will not
be considered to adversely affect the commercial reasonableness of any sale of
the Collateral.

(d)    The Administrative Agent shall have no obligation to marshal any of the
Collateral.

7.2    Application of Proceeds. Except as expressly provided elsewhere in this
Agreement, if any Event of Default shall have occurred and be continuing, all
payments or proceeds received by the Administrative Agent under the Financing
Agreement or hereunder or under any other Collateral Document in respect of any
of the Secured Obligations, including, but not limited to all proceeds received
by the Administrative Agent in respect of any sale, any collection from, or
other realization upon all or any part of the Collateral, shall be applied in
full or in part as follows:

(a)    first, ratably to pay the Secured Obligations in respect of any fees,
expense reimbursements, indemnities and other amounts then due and payable to
the Administrative Agent until paid in full;

 

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(b)    second, ratably to pay the Secured Obligations in respect of any fees,
expense reimbursements, indemnities and other amounts then due and payable to
the Lenders until paid in full;

(c)    third, ratably to pay any amounts then due and payable under Section 2.7
of the Financing Agreement until such amounts are paid in full or, following any
acceleration of the Secured Obligations pursuant to Section 8.2 of the Financing
Agreement, to pay the Discharge Amount until such amount is paid in full; and

(d)    fourth, to the ratable payment of all other Secured Obligations then due
and payable until paid in full.

7.3    Sales on Credit. If the Administrative Agent sells any of the Collateral
upon credit, Grantor will be credited only with payments actually made by
purchaser and received by the Administrative Agent and applied to indebtedness
of the purchaser. In the event the purchaser fails to pay for the Collateral,
the Administrative Agent may resell the Collateral and Grantor shall be credited
with proceeds of the sale.

7.4    Deposit Accounts. If any Event of Default shall have occurred and be
continuing, the Administrative Agent may apply the balance from any Deposit
Account or instruct the bank at which any Deposit Account is maintained to pay
the balance of any Deposit Account to or for the benefit of the Administrative
Agent.

7.5    Investment Related Property. Each Grantor recognizes that, by reason of
certain prohibitions contained in the Securities Act and applicable state
securities laws, the Administrative Agent may be compelled, with respect to any
sale of all or any part of the Investment Related Property conducted without
prior registration or qualification of such Investment Related Property under
the Securities Act and/or such state securities laws, to limit purchasers to
those who will agree, among other things, to acquire the Investment Related
Property for their own account, for investment and not with a view to the
distribution or resale thereof. Each Grantor acknowledges that any such private
sale may be at prices and on terms less favorable than those obtainable through
a public sale without such restrictions (including a public offering made
pursuant to a registration statement under the Securities Act) and,
notwithstanding such circumstances, each Grantor agrees that any such private
sale shall be deemed to have been made in a commercially reasonable manner and
that the Administrative Agent shall have no obligation to engage in public sales
and no obligation to delay the sale of any Investment Related Property for the
period of time necessary to permit the issuer thereof to register it for a form
of public sale requiring registration under the Securities Act or under
applicable state securities laws, even if such issuer would, or should, agree to
so register it. If the Administrative Agent determines to exercise its right to
sell any or all of the Investment Related Property, upon written request, each
Grantor shall and shall cause each issuer of any Pledged Stock to be sold
hereunder, each partnership and each limited liability company from time to time
to furnish to the Administrative Agent all such information as the
Administrative Agent may request in order to determine the number and nature of
interest,

 

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shares or other instruments included in the Investment Related Property which
may be sold by the Administrative Agent in exempt transactions under the
Securities Act and the rules and regulations of the Capital Stock and Securities
and Exchange Commission thereunder, as the same are from time to time in effect.

7.6    Intellectual Property.

(a)    Anything contained herein to the contrary notwithstanding, upon the
occurrence and during the continuation of an Event of Default:

(i)    the Administrative Agent shall have the right (but not the obligation) to
bring suit or otherwise commence any action or proceeding in the name of any
Grantor, the Administrative Agent or otherwise, in the Administrative Agent’s
sole discretion, to enforce any Owned Intellectual Property Rights and Product
Intellectual Property Licenses (including enforcement of any Specified Product
IP Rights licensed thereunder), in which event such Grantor shall, at the
request of the Administrative Agent, do any and all lawful acts and execute any
and all documents required by the Administrative Agent in aid of such
enforcement, and, to the extent that the Administrative Agent shall elect not to
bring suit to enforce any Owned Intellectual Property Rights or Product
Intellectual Property Licenses (including enforcement of any Specified Product
IP Rights licensed thereunder) as provided in this Section, each Grantor agrees
to the extent deemed prudent in its reasonable business judgment as determined
by such Grantor in good faith or in the ordinary course of business as generally
conducted by it, to use commercially reasonable efforts, whether by action,
suit, proceeding or otherwise, to prevent the infringement or other violation of
any of such Grantor’s rights in the Owned Intellectual Property Rights and
Product Intellectual Property Licenses (including the right to enforce any
Specified Product IP Rights licensed thereunder) by others and for that purpose
agrees, to the extent deemed prudent in its reasonable business judgment as
determined by such Grantor in good faith or in the ordinary course of business
as generally conducted by it, to diligently maintain any action, suit or
proceeding against any Person so infringing as shall be necessary to prevent
such infringement or violation;

(ii)    upon written demand from the Administrative Agent, each Grantor shall
grant, assign, convey or otherwise transfer to the Administrative Agent or such
Administrative Agent’s designee all of such Grantor’s right, title and interest
in and to the Owned Intellectual Property Rights or Product Intellectual
Property Licenses and shall execute and deliver to the Administrative Agent such
documents as are necessary, advisable or appropriate to carry out the intent and
purposes of this Agreement;

(iii)    each Grantor agrees that such an assignment and/or recording shall be
applied to reduce the Secured Obligations outstanding only to the extent that
the Administrative Agent (or any Secured Party) receives cash proceeds in
respect of the sale of, or other realization upon, the Product Intellectual
Property Rights;

 

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(iv)    within five (5) Business Days after written notice from the
Administrative Agent, each Grantor shall make available to the Administrative
Agent, to the extent within such Grantor’s power and authority, such personnel
in such Grantor’s employ on the date of such Event of Default as the
Administrative Agent may reasonably designate, by name, title or job
responsibility, to permit such Administrative Agent to continue, directly or
indirectly, to produce (or finish production of work-in-progress), use,
manufacture, license or sublicense, package, process, deliver and/or
Commercialize the Product and the Product Intellectual Property Rights, Product
Intellectual Property Licenses, the Regulatory Approvals and the Regulatory
Documentation, or provide any services related to the Product, such persons to
be available to perform their prior functions on the Administrative Agent’s
behalf and to be compensated by the Administrative Agent at such Grantor’s
expense on a per diem, pro-rata basis consistent with the salary and benefit
structure applicable to each as of the date of such Event of Default; and

(v)    the Administrative Agent shall have the right to notify, or require each
Grantor to notify, any obligors with respect to amounts due or to become due to
such Grantor in respect of the Product Intellectual Property Rights or any
Product Intellectual Property Licenses, of the existence of the security
interest created herein, to direct such obligors to make payment of all such
amounts directly to the Administrative Agent, and, upon such notification and at
the expense of such Grantor, to enforce collection of any such amounts and to
adjust, settle or compromise the amount or payment thereof, in the same manner
and to the same extent as such Grantor might have done;

 

  (1)

all amounts and proceeds (including checks and other instruments) received by
Grantor in respect of amounts due to such Grantor in respect of the Collateral
or any portion thereof shall be received in trust for the benefit of the
Administrative Agent hereunder, shall be segregated from other funds of such
Grantor and shall be forthwith paid over or delivered to the Administrative
Agent in the same form as so received (with any necessary endorsement) to be
held as cash Collateral and applied as provided by Section 7.7 hereof; and

 

  (2)

Grantor shall not adjust, settle or compromise the amount or payment of any such
amount or release wholly or partly any obligor with respect thereto or allow any
credit or discount thereon without the Administrative Agent’s prior written
consent.

(b)    If (i) an Event of Default shall have occurred and, by reason of cure,
waiver, modification, amendment or otherwise, no longer be continuing, (ii) no
other Event of Default shall have occurred and be continuing, (iii) an
assignment or other transfer to the Administrative Agent of any rights, title
and interests in and to the Owned Intellectual Property Rights or the Product
Intellectual Property Licenses shall have been previously made and shall have
become absolute and effective, and (iv) the Secured Obligations shall not have
become immediately due and payable, upon the written request of any Grantor, the
Administrative Agent shall promptly execute and deliver to such Grantor, at such
Grantor’s sole cost and expense, such assignments or

 

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other transfer as may be necessary to reassign to such Grantor any such rights,
title and interests as may have been assigned to the Administrative Agent as
aforesaid, subject to any disposition thereof that may have been made by the
Administrative Agent; provided that after giving effect to such reassignment,
the Administrative Agent’s security interest granted pursuant hereto, as well as
all other rights and remedies of the Administrative Agent granted hereunder,
shall continue to be in full force and effect or, if necessary, reinstituted;
and provided further, the rights, title and interests so reassigned shall be
free and clear of any other Liens granted by or on behalf of the Administrative
Agent and the Secured Parties.

(c)    Solely for the purpose of enabling the Administrative Agent to exercise
rights and remedies under this Section 7 and at such time as the Administrative
Agent shall be lawfully entitled to exercise such rights and remedies, each
Grantor hereby grants to the Administrative Agent, to the extent it has the
right to do so, (i) an irrevocable, nonexclusive license (exercisable without
payment of royalty or other compensation to such Grantor), subject, in the case
of Product Trademarks, to sufficient rights to quality control and inspection in
favor of such Grantor to avoid the risk of invalidation of said Product
Trademarks, to research, develop, use, manufacture, operate under, license or
sublicense, package, process, deliver or Commercialize the Product or the
Product Intellectual Property Rights, or provide any services related to the
Product or any Product Intellectual Property Rights, now owned or hereafter
acquired by such Grantor, and wherever the same may be located; and (ii) an
exclusive license to use the Company’s Trademarks for CLOVIS or CLOVIS ONCOLOGY
(“House Marks”) solely to Commercialize the Product during an Event of Default;
notwithstanding the foregoing, the Company retains the right to use House Marks
for other products and services during an Event of Default.

7.7    Cash Proceeds. If an Event of Default shall have occurred and be
continuing, the rights of the Administrative Agent specified in Section 4.2 with
respect to payments of Receivables and all other proceeds of any Collateral
received by any Grantor consisting of cash, checks, instruments, financial
assets, or other non-cash items (“Cash Proceeds”) shall be held by such Grantor
in trust for the Administrative Agent, segregated from other funds and assets of
such Grantor, and shall, forthwith upon receipt by such Grantor (and, in any
event, within two (2) Business Days of receipt thereof), be turned over to the
Administrative Agent in the exact form received by such Grantor (duly indorsed
by such Grantor to the Administrative Agent, if required) and deposited into the
Administrative Agent’s Account; and any such Cash Proceeds received by the
Administrative Agent (whether from a Grantor or otherwise) shall be applied by
the Administrative Agent against the Secured Obligations in accordance with
Section 7.2 hereof. Subject to Section 4.2, any Cash Proceeds received by the
Administrative Agent (whether from a Grantor or otherwise): (i) if no Event of
Default shall have occurred and be continuing, shall be held by the
Administrative Agent for the ratable benefit of the Secured Parties, as
collateral security for the Secured Obligations (whether matured or unmatured)
and (ii) if an Event of Default shall have occurred and be continuing, may, in
the sole discretion of the Administrative Agent, (A) be held by the
Administrative Agent for the ratable benefit of the Secured Parties, as
collateral security for the Secured Obligations (whether matured or unmatured)
and/or (B) then or at any time thereafter may be applied by the Administrative
Agent against the Secured Obligations then due and owing.

 

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SECTION 8. [RESERVED].

SECTION 9. CONTINUING SECURITY INTEREST; TRANSFER OF COMMITMENTS.

This Agreement shall create a continuing security interest in the Collateral and
shall remain in full force and effect until the payment in full of all Secured
Obligations, the cancellation or termination of the Financing Agreement, be
binding upon each Grantor, its successors and assigns, and inure, together with
the rights and remedies of the Administrative Agent hereunder, to the benefit of
the Administrative Agent and its successors, transferees and assigns. Without
limiting the generality of the foregoing, but subject to the terms of the
Financing Agreement, any Lender may assign or otherwise transfer its Commitments
or Obligations held by it to any other Person, and such other Person shall
thereupon become vested with all the benefits in respect thereof granted to
Lenders herein or otherwise. Upon the payment in full of all Secured Obligations
and the cancellation or termination of the Financing Agreement, the security
interest granted hereby shall automatically terminate hereunder and of record
and all rights to the Collateral shall revert to Grantors. Upon any such
termination, the Administrative Agent shall, at Grantors’ expense, execute and
deliver to Grantors or otherwise authorize the filing of such documents as
Grantors shall reasonably request, including financing statement terminations to
evidence such termination. Upon any disposition of property permitted by the
Financing Agreement, the Liens granted herein shall be deemed to be
automatically released with no further action on the part of any Person, with
the Liens granted herein to attach to the proceeds thereof if, and to the
extent, provided in the Financing Agreement. The Administrative Agent shall, at
Grantor’s sole expense, execute and deliver or otherwise authorize the filing of
such documents as Grantors shall reasonably request, in form and substance
reasonably satisfactory to the Administrative Agent, including financing
statement amendments to evidence such release.

SECTION 10. STANDARD OF CARE; ADMINISTRATIVE AGENT MAY PERFORM.

The powers conferred on the Administrative Agent hereunder are solely to protect
its interest in the Collateral and shall not impose any duty upon it to exercise
any such powers. Except for the exercise of reasonable care in the custody of
any Collateral in its possession and the accounting for moneys actually received
by it hereunder, the Administrative Agent shall have no duty as to any
Collateral or as to the taking of any necessary steps to preserve rights against
prior parties or any other rights pertaining to any Collateral. The
Administrative Agent shall be deemed to have exercised reasonable care in the
custody and preservation of Collateral in its possession if such Collateral is
accorded treatment substantially equal to that which the Administrative Agent
accords its own property. Neither the Administrative Agent nor any of its
directors, officers, employees or agents shall be liable for failure to demand,
collect or realize upon all or any part of the Collateral or for any delay in
doing so or shall be under any obligation to sell or otherwise dispose of any
Collateral upon the request of any Grantor or otherwise. If any Grantor fails to
perform any agreement contained herein, the Administrative Agent may itself
perform, or cause performance of, such agreement, and the expenses of the
Administrative Agent incurred in connection therewith shall be payable by each
Grantor under Section 10.2 of the Financing Agreement.

 

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SECTION 11. MISCELLANEOUS.

11.1    Notices. Any notice required or permitted to be given under this
Agreement shall be given in accordance with Section 10.1 of the Financing
Agreement.

11.2    No Waiver; Cumulative Remedies. No failure or delay on the part of the
Administrative Agent or any Secured Party in the exercise of any power, right or
privilege hereunder or under any other Loan Document shall impair such power,
right or privilege or be construed to be a waiver of any default or acquiescence
therein, nor shall any single or partial exercise of any such power, right or
privilege preclude other or further exercise thereof or of any other power,
right or privilege. All rights and remedies existing under this Agreement and
the other Loan Documents are cumulative to, and not exclusive of, any rights or
remedies otherwise available.

11.3    Severability. In case any provision in or obligation under this
Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby. All covenants hereunder shall be
given independent effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that it would be permitted by an
exception to, or would otherwise be within the limitations of, another covenant
shall not avoid the occurrence of a Default or an Event of Default if such
action is taken or condition exists.

11.4    Benefit of Agreement. This Agreement shall be binding upon and inure to
the benefit of the Administrative Agent, the Secured Parties and Grantors and
their respective successors and assigns. No Grantor shall, without the prior
written consent of the Administrative Agent given in accordance with the
Financing Agreement, assign any right, duty or obligation hereunder.

11.5    Entire Agreement. This Agreement and the other Loan Documents embody the
entire agreement and understanding between Grantors and the Administrative Agent
and supersede all prior agreements and understandings between such parties
relating to the subject matter hereof and thereof. Accordingly, the Loan
Documents may not be contradicted by evidence of prior, contemporaneous or
subsequent oral agreements of the parties. There are no unwritten oral
agreements between the parties.

11.6    Counterparts. This Agreement may be executed in one or more counterparts
and by different parties hereto in separate 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; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document. Delivery of an executed counterpart of this Agreement by facsimile or
electronic mail shall be equally effective as delivery of an original executed
counterpart.

11.7    Incorporation by Reference. SECTIONS 10.14 (APPLICABLE LAW), 10.15
(CONSENT TO JURISDICTION) and 10.16 (WAIVER OF JURY TRIAL) OF THE FINANCING
AGREEMENT ARE HEREBY INCORPORATED BY REFERENCE, MUTATIS MUTANDIS.

 

41

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IN WITNESS WHEREOF, each Grantor and the Administrative Agent have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.

 

CLOVIS ONCOLOGY, INC., as a Grantor By:   /s/ Daniel W. Muehl     Name: Daniel
W. Muehl     Title:   Executive Vice President

 

CLOVIS ONCOLOGY UK LIMITED, as a Grantor By:   /s/ Daniel W. Muehl     Name:
Daniel W. Muehl     Title:   Director

 

CLOVIS ONCOLOGY IRELAND LTD., as a Grantor By:   /s/ Daniel W. Muehl     Name:
Daniel W. Muehl     Title:   Director By:   /s/ Paul Gross Name:   Paul Gross
Title:   Director

[Signature Page to Pledge and Security Agreement]

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TOP IV SPV GP, LLC, as Administrative Agent By:   /s/ Joshua Peck     Name:
Joshua Peck     Title:   Vice President and Secretary

[Signature Page to Pledge and Security Agreement]