Exhibit 10.2
PLEDGE AND SECURITY AGREEMENT
MADE BY
EACH UNDERSIGNED EQUITYHOLDER
TO
U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE
Dated as of March 9, 2011

 

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Table of Contents

              Page   ARTICLE I
RULES OF CONSTRUCTION AND DEFINED TERMS          
Section 1.1 Rules of Construction and Defined Terms
    1     ARTICLE II
PLEDGE          
Section 2.1 Pledge
    2     ARTICLE III
DELIVERY OF ISSUER PLEDGED COLLATERAL          
Section 3.1 Delivery of Issuer Pledged Collateral
    2  
Section 3.2 Capital Securities
    3     ARTICLE IV
REPRESENTATIONS AND WARRANTIES          
Section 4.1 Representations and Warranties
    3     ARTICLE V
SUPPLEMENTS; FURTHER ASSURANCES          
Section 5.1 Supplements
    5  
Section 5.2 Further Assurances
    5     ARTICLE VI
COVENANTS          
Section 6.1 No Sale and No Liens
    6  
Section 6.2 Notices
    6  
Section 6.3 Voting Rights
    6  
Section 6.4 Dividends and Distributions
    7  
Section 6.5 Capital Securities
    7  
Section 6.6 Legal Existence
    7  
Section 6.7 Compliance with Laws
    7  
Section 6.8 Modifications
    7  
Section 6.9 No Liquidation or Dissolution
    8  
Section 6.10 Monies Held in Trust
    8  
Section 6.11 No Claims
    8  

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              Page  
Section 6.12 Notice to Trustee
    8  
Section 6.13 Other Covenants
    8     ARTICLE VII
TRUSTEE APPOINTED ATTORNEY-IN-FACT          
Section 7.1 Trustee Appointed Attorney-In-Fact
    9     ARTICLE VIII
REASONABLE CARE          
Section 8.1 Reasonable Care
    9     ARTICLE IX
NO LIABILITY          
Section 9.1 No Liability
    10     ARTICLE X
REMEDIES UPON EVENT OF DEFAULT          
Section 10.1 Remedies Upon Event of Default
    10     ARTICLE XI
PURCHASE OF THE ISSUER PLEDGED COLLATERAL          
Section 11.1 Purchase of the Issuer Pledged Collateral
    12     ARTICLE XII
EXPENSES          
Section 12.1 Expenses
    12     ARTICLE XIII
NO WAIVER; REMEDIES          
Section 13.1 No Waiver; Remedies
    13     ARTICLE XIV
AMENDMENTS          
Section 14.1 Amendments
    13     ARTICLE XV
RELEASE; TERMINATION          
Section 15.1 Release; Termination
    13     ARTICLE XVI
NOTICES          
Section 16.1 Notices
    14  

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              Page   ARTICLE XVII
CONTINUING SECURITY INTEREST          
Section 17.1 Continuing Security Interest
    14     ARTICLE XVIII
SECURITY INTEREST ABSOLUTE          
Section 18.1 Security Interest Absolute
    14  
Section 18.2 Obligations of Equityholders Several and Not Joint
    15     ARTICLE XIX
INDEMNITY          
Section 19.1 Indemnity
    15     ARTICLE XX
OBLIGATIONS SECURED BY ISSUER PLEDGED COLLATERAL          
Section 20.1 Obligations Secured by Issuer Pledged Collateral
    16     ARTICLE XXI
SEVERABILITY          
Section 21.1 Severability
    16     ARTICLE XXII
COUNTERPARTS; EFFECTIVENESS          
Section 22.1 Counterparts; Effectiveness
    16     ARTICLE XXIII
REINSTATEMENT          
Section 23.1 Reinstatement
    17     ARTICLE XXIV
SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL          
Section 24.1 SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL
    17     ARTICLE XXV
GOVERNING LAW          
Section 25.1 GOVERNING LAW
    18     ARTICLE XXVI
TABLE OF CONTENTS AND HEADINGS          
Section 26.1 Table of Contents and Headings
    18  

Annex A            Rules of Construction and Defined Terms

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PLEDGE AND SECURITY AGREEMENT
     This PLEDGE AND SECURITY AGREEMENT, dated as of March 9, 2011, is made by
each undersigned Equityholder in favor of U.S. BANK NATIONAL ASSOCIATION, a
national banking association, as the Trustee under the Indenture, as grantee
hereunder.
WITNESSETH :
     WHEREAS, contemporaneously with the execution and delivery of this Pledge
and Security Agreement, pursuant to the Purchase and Sale Agreement, the Seller
has sold, transferred, conveyed, assigned, contributed and granted all of the
Purchased Assets to the Issuer, in consideration of the payment by the Issuer to
the Seller of the Purchase Price and the issuance by the Issuer to the Seller of
all of the Capital Securities of the Issuer owned by the Seller;
     WHEREAS, contemporaneously with the execution and delivery of this Pledge
and Security Agreement, pursuant to the Indenture, the Issuer has issued its
Original Class A Notes to the Noteholders;
     WHEREAS, in order to secure the repayment of such Original Class A Notes,
the Issuer shall, except as otherwise expressly provided in the Indenture, grant
a security interest in all of its property and rights to the Trustee for the
benefit of the Noteholders, including the Purchased Assets, its rights under the
Purchase and Sale Agreement, any Accounts and certain other collateral in
accordance with the terms and conditions thereof; and
     WHEREAS, in addition to the grant of security interest by the Issuer to the
Trustee as set forth in the immediately preceding recital, in order to further
secure repayment of the Original Class A Notes, the Trustee desires that each
Equityholder pledge all of the Capital Securities of the Issuer owned by such
Equityholder to the Trustee for the benefit of the Noteholders;
     NOW, THEREFORE, in consideration of the foregoing premises and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, and in order to induce the Noteholders to purchase the Original
Class A Notes issued pursuant to the Indenture, each Equityholder agrees,
severally but not jointly, for the benefit of the Trustee on behalf of each
Noteholder, as follows:
ARTICLE I
RULES OF CONSTRUCTION AND DEFINED TERMS
     Section 1.1 Rules of Construction and Defined Terms. The rules of
construction set forth in Annex A shall apply to this Pledge and Security
Agreement and are hereby incorporated by reference into this Pledge and Security
Agreement as if set forth fully in this Pledge and Security Agreement.
Capitalized terms used but not otherwise defined in this Pledge and Security
Agreement shall have the respective meanings given to such terms in Annex A,
which is hereby incorporated by reference into this Pledge and Security
Agreement as if set forth fully in this Pledge and Security Agreement. Not all
terms defined in Annex A are used in this Pledge and Security Agreement.

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Article II
PLEDGE
     Section 2.1 Pledge. As security for the payment and performance of the
Secured Obligations and subject to and in accordance with the provisions of this
Pledge and Security Agreement, each Equityholder hereby pledges, grants,
assigns, hypothecates, transfers and delivers (subject to Section 3.1) to the
Trustee, its successors and assigns, for the security and benefit of the
Noteholders, a continuing security interest in all of such Equityholder’s right,
title and interest in, to and under the following property, whether now owned or
hereafter acquired (the “Issuer Pledged Collateral”):
          (a) all of such Equityholder’s Capital Securities in the Issuer,
whether now owned or acquired in the future, and all certificates, agreements or
other instruments, if any, representing such Capital Securities (the “Issuer
Pledged Equity”);
          (b) subject to Section 6.4, the right to receive all monies and
property representing a distribution in respect of the Issuer Pledged Equity of
such Equityholder (except for proceeds of the Notes to the extent not applicable
to any Redemption of the Notes), whether by way of dividend, redemption,
liquidation payments, repurchase or otherwise; and
          (c) subject to Section 6.4, all proceeds of the Issuer Pledged Equity
of such Equityholder and any of the foregoing, including all shares, securities,
rights, monies or other property accruing, offered or issued at any time by way
of redemption, conversion, exchange, substitution, preference, option or
otherwise in respect of the Issuer Pledged Equity of such Equityholder;
provided, however, that all of the proceeds received or unbilled but to be
received by such Equityholder in respect of any sale, transfer or other
disposition of such Issuer Pledged Equity shall be excluded (x) to the extent
such Issuer Pledged Equity remains or concurrently therewith becomes subject to
this Pledge and Security Agreement and (y) such sale, transfer or other
disposition is permitted pursuant to Sections 6.1 and 17.1;
TO HAVE AND TO HOLD the Issuer Pledged Collateral of such Equityholder, together
with all right, title, interest, powers, privileges and preferences pertaining
or incidental thereto, unto the Trustee, its successors and assigns, subject to
the terms and conditions set forth herein.
ARTICLE III
DELIVERY OF ISSUER PLEDGED COLLATERAL
     Section 3.1 Delivery of Issuer Pledged Collateral. Contemporaneously with
the execution of this Pledge and Security Agreement, each Equityholder shall
deliver or cause to be delivered to the Trustee, to the extent not previously
delivered, (a) any and all certificates and other instruments evidencing the
Issuer Pledged Equity then held in the form of certificates or other instruments
by such Equityholder, together with undated stock powers or assignments of such
certificates duly executed and signed in blank, (b) any and all certificates or
other instruments or documents representing any of the Issuer Pledged Collateral
then held by such Equityholder and (c) all other property comprising part of the
Issuer Pledged Collateral then held in the form of certificates or other
instruments by such Equityholder with proper instruments of

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assignment or transfer duly executed and such other instruments or documents as
the Trustee may reasonably request to effect the purposes contemplated hereby.
     Section 3.2 Capital Securities. If any Equityholder shall become entitled
to receive or shall receive, in respect of the Issuer Pledged Equity, any
Capital Securities, options, warrants, rights or other similar property,
including any certificate representing any distribution in connection with any
recapitalization, reclassification or increase or reduction of capital (whether
as an addition to, in substitution of or in exchange for such Issuer Pledged
Equity or otherwise), such Equityholder agrees:
          (a) to accept the same as the agent of the Trustee;
          (b) to hold the same in trust on behalf of and for the benefit of the
Trustee and separate and apart from its other property; and
          (c) to deliver any and all certificates or instruments evidencing the
same to the Trustee on or before the close of business on the fifth Business Day
following the receipt thereof by such Equityholder, in the exact form received,
with the endorsement or assignment in blank of such Equityholder when necessary
and with appropriate undated irrevocable proxies duly executed in blank (with
signatures properly guaranteed), to be held by the Trustee, subject to the terms
of this Pledge and Security Agreement, as additional Issuer Pledged Collateral.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
     Section 4.1 Representations and Warranties. Each Equityholder represents
and warrants to the Trustee, as of the date such Equityholder becomes a party to
this Pledge and Security Agreement, severally but not jointly, as follows:
          (a) If such Equityholder is not a natural person, such Equityholder
has been duly organized, is validly existing and is in good standing under the
laws of its jurisdiction of organization and, except where the failure to do so
would be a Material Adverse Change, has all licenses, permits, franchises and
governmental authorizations necessary to carry on its business as now being
conducted and shall appoint and employ agents or attorneys in each jurisdiction
where it shall be necessary to take action under this Pledge and Security
Agreement. Such Equityholder is duly licensed or qualified to do business in
good standing in each jurisdiction in which such qualification is required by
law, except where the failure to do so would be a Material Adverse Change. Such
Equityholder has the full power and authority to own the property it purports to
own and to carry on its business as presently conducted and as proposed to be
conducted. The jurisdiction of organization and principal place of business of
such Equityholder as of the date hereof is set forth under such Equityholder’s
signature hereto.
          (b) Such Equityholder is the sole legal and beneficial owner of the
Issuer Pledged Collateral of such Equityholder, free and clear of any Lien other
than the Lien created pursuant to this Pledge and Security Agreement and the
Indenture or other Permitted Liens. No security agreement, financing statement
or other public notice with respect to all or any part of the Issuer Pledged
Collateral of such Equityholder is on file or of record in any public office,

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except such as may have been filed in favor of the Trustee pursuant to this
Pledge and Security Agreement and the Indenture.
          (c) The consummation of the transactions contemplated hereby has been
duly and validly authorized by such Equityholder. Such Equityholder has full
power to execute and deliver this Pledge and Security Agreement and to perform
its obligations hereunder and to pledge all the Issuer Pledged Collateral of
such Equityholder pursuant to this Pledge and Security Agreement. This Pledge
and Security Agreement has been duly authorized, executed and delivered by such
Equityholder. This Pledge and Security Agreement constitutes a legal, valid and
binding obligation of such Equityholder enforceable against such Equityholder in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, moratorium or other similar laws affecting creditors’
rights generally and except as enforceability may be limited by general
principles of equity (whether considered in a suit at law or in equity). All
requisite action has been taken by such Equityholder to make this Pledge and
Security Agreement valid and binding upon such Equityholder.
          (d) All necessary governmental approvals and consents of other parties
(including directors, officers, partners, members, managers or creditors of such
Equityholder) have been obtained that are required (i) for the execution,
delivery and performance by such Equityholder of this Pledge and Security
Agreement or (ii) for the pledge by such Equityholder of the Issuer Pledged
Collateral of such Equityholder pursuant to this Pledge and Security Agreement
(except as may be required (w) in connection with filings of any UCC financing
statements, (x) in connection with any disposition of all or any part of the
Issuer Pledged Collateral of such Equityholder under any laws affecting the
offering and sale of securities generally, (y) under applicable federal and
state laws, rules and regulations and applicable interpretations thereof
providing for the supervision or regulation of the banking or trust businesses
generally and applicable to the Trustee and (z) with respect to the Trustee as a
result of any relationship that the Trustee may have with Persons not parties
to, or any activity or business the Trustee may conduct other than pursuant to,
any of the Deal Documents).
          (e) This Pledge and Security Agreement creates a valid security
interest in the Issuer Pledged Collateral of such Equityholder securing the
Secured Obligations, and such Equityholder has done such other acts, if any,
reasonably requested by the Trustee to perfect the security interest in the
Issuer Pledged Collateral of such Equityholder granted hereunder (including
permitting the Trustee to file any appropriate UCC financing statement against
such Equityholder).
          (f) The execution, delivery and performance by such Equityholder of
this Pledge and Security Agreement and the consummation of the transactions
contemplated by this Pledge and Security Agreement with respect to such
Equityholder do not (i) violate the provisions of the organizational documents
of such Equityholder, (ii) violate the provisions of any Applicable Law
(including any usury law), regulation or order of any Governmental Authority
applicable to such Equityholder except where such violation would not reasonably
be expected to be a Material Adverse Change, (iii) result in a breach of, or
constitute a default under, any material agreement relating to the management or
affairs of such Equityholder, or any indenture, credit agreement or loan
agreement or any other similar material agreement, lease or instrument to which
such Equityholder is a party or by which such Equityholder or any of its
material properties may be

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bound (which default or breach has not been permanently waived by the other
party to such document) except where such breach or default would not be a
Material Adverse Change or (iv) result in or create any Lien (other than
Permitted Liens) under, or require any consent that has not been obtained under,
any indenture (including the Indenture), credit agreement or loan agreement or
any other material agreement, instrument or document or the provisions of any
order, writ, judgment, injunction, decree, determination or award of any
Governmental Authority, binding upon the Issuer Pledged Collateral of such
Equityholder.
          (g) There are no proceedings and there is no action, suit or
proceeding at law or in equity or by or before any Governmental Authority now
pending against such Equityholder or, to the best knowledge of such
Equityholder, threatened against such Equityholder that questions the validity
or legality of or seeks damages in connection with this Pledge and Security
Agreement or that seeks to prevent the consummation of any of the transactions
contemplated by this Pledge and Security Agreement.
          (h) The percentage of limited liability company interests of Issuer
Pledged Equity held by such Equityholder is set forth under such Equityholder’s
signature hereto.
ARTICLE V
SUPPLEMENTS; FURTHER ASSURANCES
     Section 5.1 Supplements. Each Equityholder agrees that, at any time and
from time to time, at such Equityholder’s expense and upon the Trustee’s
reasonable request and without assuming any obligation for which it is not
otherwise liable, such Equityholder will promptly execute and deliver all
further instruments and documents, and take all further action, that may be
necessary, in order to perfect the security interest of the Trustee in the
Issuer Pledged Collateral of such Equityholder and to carry out the provisions
of this Pledge and Security Agreement or to enable the Trustee to exercise and
enforce its rights and remedies hereunder with respect to any Issuer Pledged
Collateral of such Equityholder. Each Equityholder hereby authorizes the Trustee
to file (or cause to be filed) such UCC financing statements or continuation
statements, or amendments thereto, and such other instruments or notices as may
be necessary to perfect and preserve the security interests and other rights
granted or purported to be granted to the Trustee hereby in respect of the
Issuer Pledged Collateral of such Equityholder. With respect to the foregoing
and the grant of the security interest hereunder, each Equityholder hereby
authorizes the Trustee to file one or more financing or continuation statements,
and amendments thereto, relative to all or any part of the Issuer Pledged
Collateral of such Equityholder.
     Section 5.2 Further Assurances. If any Equityholder fails to perform any
agreement contained herein on its part after receipt of a written request to do
so from the Trustee (it being understood that no such request need be given
after the occurrence and during the continuance of an Event of Default), the
Trustee may itself perform, or cause performance of, such agreement, in which
case the reasonable expenses of the Trustee, including the reasonable fees and
expenses of its counsel, incurred in connection therewith shall be payable by
such Equityholder under Section 12.1 to the extent such Equityholder would have
otherwise been responsible therefor under this Pledge and Security Agreement.

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ARTICLE VI
COVENANTS
     Section 6.1 No Sale and No Liens. Each Equityholder agrees that, without
the consent of the Trustee pursuant to Section 9.1 or Section 9.2 of the
Indenture, as applicable, it will not (a) sell or otherwise dispose of the
Issuer Pledged Collateral of such Equityholder or any interest therein or
(b) except for Permitted Liens, create or permit to exist any Lien upon or with
respect to any of the Issuer Pledged Collateral of such Equityholder or any
interest therein; provided, however, that, so long as no Event of Default has
occurred and is continuing in respect of which such Equityholder has received
written notice from the Trustee or otherwise has actual knowledge thereof, each
Equityholder will be entitled to sell, transfer, assign, convey, contribute or
grant the Issuer Pledged Equity of such Equityholder (x) subject to the lien of
this Pledge and Security Agreement and (y) so long as (i) such Issuer Pledged
Equity in the hands of each transferee remains subject to the pledge under this
Pledge and Security Agreement, (ii) the Trustee shall have been provided with an
Opinion of Counsel as to the continuing validity of such pledge and perfection
of the security interest of the Trustee therein and a written acknowledgement
from the transferee that it is acquiring such Issuer Pledged Equity subject to
such pledge and security interest and making representations and warranties to
the effect set forth in Article IV, (iii) the Trustee shall have been provided
with an Opinion of Counsel from a law firm with a nationally recognized tax
practice that such sale, transfer, assignment, conveyance, contribution or
granting should not cause a “significant modification” of the Notes for U.S.
federal income tax purposes; provided, however, that, notwithstanding the
foregoing, the Trustee shall not be required to be provided with such an Opinion
of Counsel if there has been a Change in Law and counsel to such Equityholder
determines in good faith that it is unable to render such an Opinion of Counsel
(whereas it would have been able to render such an Opinion of Counsel had the
Change in Law not occurred), (iv) the transferee agrees in writing for the
benefit of the Trustee to be bound by the provisions of this Pledge and Security
Agreement and (v) the transferee is not subject to Japanese withholding tax in
respect of the Royalties.
     Section 6.2 Notices. Each Equityholder shall promptly provide the Trustee
with copies of all notices and other communications received by such
Equityholder with respect to any Issuer Pledged Collateral registered in the
name of such Equityholder that could adversely affect in any material respect
the validity, perfection or priority of the pledge of the Issuer Pledged
Collateral owned by it pursuant to this Pledge and Security Agreement.
     Section 6.3 Voting Rights. So long as any Equityholder is the owner of the
Issuer Pledged Collateral of such Equityholder, notwithstanding anything to the
contrary in this Pledge and Security Agreement or any other Deal Document,
unless an Event of Default has occurred and is continuing in respect of which
such Equityholder has received written notice from the Trustee or otherwise has
actual knowledge thereof, such Equityholder may exercise any and all voting and
consensual powers pertaining to the Issuer Pledged Collateral of such
Equityholder or any part thereof. If an Event of Default has occurred and is
continuing in respect of which such Equityholder has received written notice
from the Trustee, and the Trustee shall have notified such Equityholder that the
Trustee shall thereafter exercise all voting and consensual powers pertaining to
the Issuer Pledged Collateral of such Equityholder or any specified part
thereof, such Equityholder shall thereafter not be entitled to exercise any of
the powers described in the preceding sentence as to the Issuer Pledged
Collateral of such Equityholder or the specified part

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thereof, which powers shall be exercised exclusively by the Trustee, until
further notice to the contrary from the Trustee.
     Section 6.4 Dividends and Distributions. So long as no Event of Default has
occurred and is continuing in respect of which such Equityholder has received
written notice from the Trustee or otherwise has actual knowledge thereof, each
Equityholder may receive and retain any dividends and other distributions on the
Issuer Pledged Equity of such Equityholder. If an Event of Default has occurred
and is continuing in respect of which such Equityholder has received written
notice from the Trustee or otherwise has actual knowledge thereof, such
Equityholder shall not be entitled to receive any subsequent dividends or other
distributions on the Issuer Pledged Equity of such Equityholder and, unless
otherwise agreed by the Senior Trustee at the Direction of Noteholders of a
majority of the Outstanding Principal Balance of the Senior Class of Notes, all
such subsequent dividends and other distributions otherwise payable or
distributable thereafter in respect of such Equityholder’s Issuer Pledged
Collateral shall constitute Issuer Pledged Collateral of such Equityholder.
     Section 6.5 Capital Securities. Each Equityholder agrees that it will not
accept any Capital Securities of the Issuer or any rights or options to acquire
any such Capital Securities, each in addition to or in substitution for the
Issuer Pledged Collateral of such Equityholder, without prior written consent
from the Trustee pursuant to Section 9.1 or Section 9.2 of the Indenture, as
applicable, unless the foregoing are pledged to the Trustee pursuant hereto.
     Section 6.6 Legal Existence. Each Equityholder shall preserve and maintain
(a) its legal existence as an entity in good standing under the laws of its
jurisdiction of organization and (b) its qualification to do business in every
jurisdiction where the ownership of its properties and the nature of its
business require it to be so qualified and where the failure to be so qualified
would have a material adverse effect on the security interest created by this
Pledge and Security Agreement in respect of the Issuer Pledged Collateral owned
by it; provided, however, that a Change of Control shall not be deemed a
violation of this Section 6.6.
     Section 6.7 Compliance with Laws. Each Equityholder shall use commercially
reasonable efforts to comply with all laws, and obtain, maintain and comply with
all government approvals as shall now or hereafter be necessary under Applicable
Law, in each case in connection with the making and performance by such
Equityholder of any material provision of this Pledge and Security Agreement in
respect of the Issuer Pledged Collateral owned by it.
     Section 6.8 Modifications. No Equityholder shall agree to or permit (a) the
amendment, supplement, modification, cancellation or termination of, or waiver
with respect to, any of the organizational documents of the Issuer, except upon
the expiration of the stated term thereof (but in no event prior to the Final
Legal Maturity Date), or (b) any amendment, supplement or modification of, or
waiver with respect to, any of the provisions of any of such organizational
documents, if any such amendment, supplement, modification or waiver would
result in a material adverse change in respect of the validity, perfection or
priority of the pledge of the Issuer Pledged Collateral owned by it pursuant to
this Pledge and Security Agreement or the exercise of the rights by the Trustee
of the rights granted to it hereunder in respect thereof.

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     Section 6.9 No Liquidation or Dissolution. Without the prior written
direction by the Trustee pursuant to Section 9.1 or Section 9.2 of the
Indenture, as applicable, no Equityholder shall take any action to liquidate,
dissolve or terminate the Issuer, or to authorize or cause any such liquidation,
dissolution or termination, until all of the Secured Obligations are paid in
full.
     Section 6.10 Monies Held in Trust. Subject to Section 2.1(c) and
Section 6.4, each Equityholder shall hold all monies received by it that
constitute Issuer Pledged Collateral of such Equityholder (including any payment
or other benefit in breach of this Section 6.10 or Section 6.11) in trust for
the Trustee.
     Section 6.11 No Claims. Subject to Section 6.4, no Equityholder shall claim
payment, whether directly or by set-off, lien, counterclaim or otherwise, of any
amount that may be or has become due to such Equityholder from the Issuer (other
than Expenses in accordance with Section 3.7(a) of the Indenture, net proceeds
from any Subordinated Note Issuance and proceeds of the issuance of the Original
Class A Notes) until all of the Secured Obligations have been paid in full,
other than if any amount received in respect thereof becomes Issuer Pledged
Collateral or is entitled to become Issuer Pledged Collateral or to prevent a
claim from becoming time-barred.
     Section 6.12 Notice to Trustee. Upon any sale, transfer, assignment,
conveyance, contribution or granting of any Issuer Pledged Equity by an
Equityholder, such Equityholder shall cause the transferee (and, if any Issuer
Pledged Equity is retained by such Equityholder, the Equityholder) to provide
the Trustee with executed signature pages to this Pledge and Security Agreement,
which shall set forth the percentage of limited liability company interests of
Issuer Pledged Equity held by the transferee and, if applicable, such
Equityholder.
     Section 6.13 Other Covenants. Each Equityholder shall:
          (a) file all tax returns and reports required by law to be filed by it
and pay all taxes required to be paid by it, except any such taxes that are
being diligently contested in good faith by appropriate proceedings and for
which adequate reserves in accordance with GAAP have been set aside on its
books, and it shall not file any tax return or report under any name other than
its exact legal name;
          (b) maintain, and shall cause the Issuer to maintain, the status of
the Issuer as an entity that is not classified as a corporation or publicly
traded partnership taxable as a corporation for U.S. federal income tax
purposes;
          (c) cause the Issuer to use commercially reasonable efforts to file
any form (or comply with any other administrative formalities) required for an
exemption from or a reduction of any withholding tax for which the Issuer is
eligible;
          (d) treat the Notes as debt for U.S. federal income tax purposes;
          (e) maintain in place all policies and procedures, and take and
continue to take all actions, described in the assumptions as to facts relating
to the separateness of the Issuer and the Seller set forth in, and forming the
basis of, the true sale and non-consolidation opinion delivered pursuant to
Section 6.1 of the Purchase Agreements, and comply with the provisions of
Section 5.2(o) of the Indenture (as to the Issuer);

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          (f) not take any action to cause the Issuer (except as required by
law) to become subject to any Voluntary Bankruptcy or Involuntary Bankruptcy;
          (g) not institute against the Issuer, or join any Person in
instituting against the Issuer, any Voluntary Bankruptcy or Involuntary
Bankruptcy until one year and one day after the date on which the Notes have
been paid in full;
          (h) not cause the Issuer to petition for a Voluntary Bankruptcy or an
Involuntary Bankruptcy before one year and one day have elapsed since the Notes
have been paid in full or, if longer, the applicable preference period then in
effect; and
          (i) not pass a resolution to cause the Issuer to be liquidated before
one year and two days have elapsed since the Notes have been paid in full.
ARTICLE VII
TRUSTEE APPOINTED ATTORNEY-IN-FACT
     Section 7.1 Trustee Appointed Attorney-In-Fact. Each Equityholder hereby
appoints the Trustee, or any Person (including any officer or agent) whom the
Trustee may designate, as such Equityholder’s true and lawful attorney-in-fact,
with full irrevocable power and authority in the place and stead of such
Equityholder and in the name of such Equityholder or in its own name, at such
Equityholder’s cost and expense, from time to time in the Trustee’s reasonable
discretion to take any action and to execute any instrument that the Trustee may
reasonably deem necessary or advisable to enforce its rights under this Pledge
and Security Agreement, including authority to receive, endorse and collect all
instruments made payable to such Equityholder representing any distribution,
interest payment or other payment in respect of the Issuer Pledged Collateral of
such Equityholder or any part thereof and to give full discharge for the same
and to sign, complete and deliver all transfers, proxies and letters of
resignation; provided, however, that the Trustee will not exercise its powers
under this Section 7.1 unless so instructed by the Noteholders pursuant to and
in accordance with the Indenture; provided, further, that if there is more than
one Equityholder, the Trustee will enforce its rights and exercise its remedies
against all Equityholders ratably and shall not enforce its rights or exercise
its remedies against one Equityholder without similarly enforcing its rights and
exercising its remedies against all Equityholders in the same manner.
ARTICLE VIII
REASONABLE CARE
     Section 8.1 Reasonable Care. The Trustee shall be deemed to have exercised
reasonable care in the custody and preservation of the Issuer Pledged Collateral
in its possession if the Issuer Pledged Collateral is accorded treatment
substantially equivalent to that which the Trustee accords its own property of
the type of which the Issuer Pledged Collateral consists, it being understood
that the Trustee shall have no responsibility for (a) ascertaining or taking
action with respect to calls, conversions, exchanges, maturities, tenders or
other matters relative to any Issuer Pledged Collateral, whether or not the
Trustee has or is deemed to have knowledge of such matters, or (b) taking any
necessary steps to preserve rights against any parties with respect to any
Issuer Pledged Collateral absent its bad faith, gross negligence or willful
misconduct.

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ARTICLE IX
NO LIABILITY
     Section 9.1 No Liability. Neither the Trustee nor any of its directors,
officers, employees or agents shall be deemed to have assumed any of the
liabilities or obligations of any Equityholder as a result of the pledge and
security interest granted under or pursuant to this Pledge and Security
Agreement. In the absence of bad faith, gross negligence or willful misconduct,
the Trustee or any of its directors, officers, employees or agents shall not be
liable for any failure to collect or realize upon the Secured Obligations or any
collateral security or guarantee therefor, or any part thereof, or for any delay
in so doing nor shall it be under any obligation to take any action whatsoever
with regard thereto.
ARTICLE X
REMEDIES UPON EVENT OF DEFAULT
     Section 10.1 Remedies Upon Event of Default. Subject to Section 4.3 of the
Indenture and to the extent permitted by Applicable Law, if an Event of Default
shall have occurred and be continuing and the Trustee shall have given written
notice of such Event of Default to the Equityholders:
          (a) The Trustee may exercise the power of attorney described in
Section 7.1 with respect to any of the certificates or other instruments
delivered pursuant to Section 3.1 with respect to the Issuer Pledged Collateral
and may sign, complete and deliver all transfers, proxies and letters of
resignation and do all acts and things that the Trustee may in its absolute
discretion specify to enable or assist the Trustee to perfect or improve its
security over the Capital Securities, to vest ownership of the Capital
Securities in the Trustee or its nominee, to provide that the Trustee is
registered as the holder of the Capital Securities, to exercise any rights or
powers attaching to the Capital Securities, to sell the Capital Securities or
otherwise to enforce any of the rights of the Trustee under this Pledge and
Security Agreement.
          (b) The Trustee may exercise in respect of the Issuer Pledged
Collateral, in addition to other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a secured party on
default under the UCC, to the extent permitted by Applicable Law or the UCC as
then in effect in any applicable jurisdiction, and the Trustee may also in its
sole discretion, without notice except as specified below or except as required
by mandatory provisions of the UCC and other Applicable Law, sell, subject to
Section 11.1, the Issuer Pledged Collateral or any part thereof in one or more
parcels at public or private sale or at any of the Trustee’s offices or
elsewhere, for cash, on credit or for future delivery, and at such price or
prices and upon such other terms as the Trustee may deem commercially
reasonable, irrespective of the impact of any such sales on the market price of
the Issuer Pledged Collateral at any such sale. Each purchaser at any such sale
shall hold the property, sold absolutely, free from any claim or right on the
part of any Equityholder, and each Equityholder hereby waives (to the extent
permitted by law) all rights of redemption, stay and/or appraisal that it now
has or may at any time in the future have under any rule of law or statute now
existing or hereafter enacted. Each Equityholder agrees that, to the extent
notice of sale shall be required by law, at least ten days’ notice to such
Equityholder 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
Trustee shall not be

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obligated to make any sale of Issuer Pledged Collateral regardless of notice of
sale having been given. The Trustee may adjourn any public or private sale from
time to time by announcement at the time and place fixed therefor, and such sale
may, without further notice, be made at the time and place to which it was so
adjourned. The Trustee shall incur no liability as a result of the sale of the
Issuer Pledged Collateral, or any part thereof, at any public or private sale,
absent bad faith, gross negligence or willful misconduct.
          (c) Each Equityholder recognizes that the Trustee may elect in its
sole discretion to sell all or a part of the Issuer Pledged Collateral to one or
more purchasers in privately negotiated transactions in which the purchasers
will be obligated to agree, among other things, to acquire the Issuer Pledged
Collateral for their own account, for investment and not with a view to the
distribution or resale thereof. Each Equityholder acknowledges that any such
private sales may be at prices and on terms less favorable than those obtainable
through a public sale (including a public offering made pursuant to a
registration statement under the Securities Act), and the Equityholders and the
Trustee agree that such private sales shall be deemed to have been made in a
commercially reasonable manner and that the Trustee has no obligation to engage
in public sales or to delay sale of any Issuer Pledged Collateral to permit the
Issuer to register the Issuer Pledged Collateral for a form of public sale
thereof requiring registration under the Securities Act.
          (d) Any cash held by the Trustee as Issuer Pledged Collateral and all
cash proceeds received by the Trustee in respect of any sale of, collection from
or other realization upon all or any part of the Issuer Pledged Collateral
shall, as soon as reasonably practicable, be applied (after payment of any
amounts payable to the Trustee pursuant to Section 12.1) by the Trustee first to
the payment of the costs and expenses of such sale, collection or other
realization, if any, including reasonable out-of-pocket costs and expenses of
the Trustee (including the reasonable fees and out-of-pocket expenses of its
counsel), and all reasonable expenses, liabilities and advances made or incurred
by the Trustee in connection therewith, second to the payment of the Secured
Obligations in accordance with the terms of the Indenture and third to each
Equityholder or its successors or assigns in respect to its respective Issuer
Pledged Collateral as indicated in the signature page hereto (or pursuant to
Section 6.12) and in respect to its respective portion of the proceeds from any
sale of, collection from or other realization upon all or any part of the Issuer
Pledged Collateral.
          (e) Each Equityholder agrees that:
          (i) in any sale of any of the Issuer Pledged Collateral, whenever an
Event of Default shall have occurred and be continuing, the Trustee is hereby
authorized to comply with any limitation or restriction in connection with such
sale as it may be advised by counsel is necessary in order to:
                    (A) avoid any violation of Applicable Law (including
compliance with such procedures as may restrict the number of prospective
bidders and purchasers, require that such prospective bidders and purchasers
have certain qualifications and restrict such prospective bidders and purchasers
to Persons who will represent and agree that they are purchasing for their own
account for investment and not with a view to the distribution or resale of such
Issuer Pledged Collateral); or

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                         (B) obtain any required approval of the sale or of the
purchaser by any Governmental Authority or official; and
          (ii) such compliance shall not result in such sale being considered or
deemed not to have been made in a commercially reasonable manner, nor shall the
Trustee be liable or accountable to any Equityholder for any discount allowed by
the reason of the fact that such Issuer Pledged Collateral is sold in compliance
with any such limitation or restriction.
ARTICLE XI
PURCHASE OF THE ISSUER PLEDGED COLLATERAL
     Section 11.1 Purchase of the Issuer Pledged Collateral. In connection with
the potential foreclosure or sale of any Issuer Pledged Collateral upon the
occurrence and continuation of an Event of Default, the Seller (as long as it
holds any of the Capital Securities of the Issuer) shall have the right, but not
the obligation, to match any offer to purchase all or any portion of such Issuer
Pledged Collateral from a third party. In the event that the Seller does not
offer to purchase any Issuer Pledged Collateral within 10 Business Days of such
offer, the Trustee may sell any remaining Issuer Pledged Collateral to third
parties; provided, that such third parties shall have first executed a
confidentiality agreement substantially similar to the Confidentiality Agreement
and delivered such confidentiality agreement to the Trustee and the Seller.
Subject to the immediately preceding sentence, any Equityholder may, but shall
not be required to, bid on and be a purchaser of the Issuer Pledged Collateral
or any part thereof (including any Issuer Pledged Collateral of such
Equityholder) or any right or interest therein at any sale thereof, whether
pursuant to foreclosure, power of sale or otherwise. In connection with any such
sale of any Issuer Pledged Collateral by the Trustee pursuant to this
Section 11.1, the Trustee may apply the purchase price to the payment of the
Secured Obligations secured hereby. Any purchaser of all or any part of the
Issuer Pledged Collateral shall, upon any such purchase, acquire good title to
the Issuer Pledged Collateral so purchased, free of the security interests
created by this Pledge and Security Agreement.
ARTICLE XII
EXPENSES
     Section 12.1 Expenses. Each Equityholder will upon demand pay to the
Trustee the amount of any and all reasonable expenses, including the reasonable
fees and expenses of its counsel and of any experts and the Trustee, and any
transfer taxes, in each case payable upon sale of the Issuer Pledged Collateral
of such Equityholder, which the Trustee may incur solely in connection with (a)
the custody or preservation of, or the sale of, collection from or other
realization upon, any of the Issuer Pledged Collateral of such Equityholder,
(b) the exercise or enforcement of any of the rights of the Trustee hereunder
against such Equityholder or the Issuer Pledged Collateral of such Equityholder,
(c) the failure by such Equityholder to perform or observe any of the provisions
hereof or (d) the administration of this Pledge and Security Agreement in
respect of such Equityholder. Any amount payable by an Equityholder pursuant to
this Section 12.1 shall constitute Secured Obligations secured hereby; provided,
however, that in

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no event shall the Issuer Pledged Collateral of one Equityholder be used to
satisfy the failure by another Equityholder to make any such payment.
ARTICLE XIII
NO WAIVER; REMEDIES
     Section 13.1 No Waiver; Remedies. No failure or delay on the part of the
Trustee to exercise, and no course of dealing with respect to, and no delay in
exercising, any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise by the Trustee of any right,
power or remedy preclude any additional exercise by the Trustee of such right,
power or remedy. The remedies herein provided are to the fullest extent
permitted by law cumulative and are not exclusive of any remedies provided by
law. No notice to or demand on any Equityholder in any case shall entitle such
Equityholder to any other or further notice or demand in similar or other
circumstances.
ARTICLE XIV
AMENDMENTS
     Section 14.1 Amendments.
          (a) No waiver, amendment, modification or termination of any provision
of this Pledge and Security Agreement, or consent to any departure by any
Equityholder therefrom, shall in any event be effective without the written
concurrence of the Trustee pursuant to Section 9.1 or Section 9.2 of the
Indenture, as applicable, and (except as otherwise provided in Section 15.1)
none of the Issuer Pledged Collateral shall be released without the written
consent of the Trustee pursuant to Section 9.1 or Section 9.2 of the Indenture,
as applicable. Any such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
          (b) As long as the Seller is the holder of any Capital Securities of
the Issuer, no amendment, modification or termination of any provision of this
Pledge and Security Agreement shall be effective without the written concurrence
of the Seller.
ARTICLE XV
RELEASE; TERMINATION
     Section 15.1 Release; Termination. Upon payment and performance in full of
the Secured Obligations or discharge of the Indenture pursuant to Section 11.1
of the Indenture, this Pledge and Security Agreement shall terminate
automatically, and the Trustee (a) upon written request by any Equityholder
shall promptly deliver to such Equityholder any remaining Issuer Pledged
Collateral of such Equityholder and money received in respect thereof in its
possession, and all documents, agreements or instruments representing the Issuer
Pledged Collateral of such Equityholder held by the Trustee prior to such
termination, and (b) upon written request by any Equityholder, shall promptly
execute and deliver to such Equityholder and, if necessary, file or record, at
such Equityholder’s expense, all such documentation (including UCC termination
statements) necessary to release, and evidence the release of, the liens on the
Issuer Pledged

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Collateral of such Equityholder, such documentation to be prepared by such
Equityholder and delivered to the Trustee. If the Trustee fails to promptly
deliver or file or record the UCC termination statements referred to in, and in
accordance with, clause (b) in the immediately preceding sentence, then such
Equityholder may file or record such UCC termination statements.
ARTICLE XVI
NOTICES
     Section 16.1 Notices. All Notices shall be in writing and shall be
effective (a) upon receipt when sent through the mails, registered or certified
mail, return receipt requested, postage prepaid, with such receipt to be
effective the date of delivery indicated on the return receipt, (b) upon receipt
when sent by an overnight courier, (c) on the date personally delivered to an
authorized officer of the party to which sent, (d) on the date transmitted by
legible telecopier transmission with a confirmation of receipt or (e) in the
case of any report that is of a routine nature, on the date sent by first class
mail or overnight courier or transmitted by legible telecopier transmission, in
all cases, with a copy emailed to the recipient at the applicable address,
addressed to an Equityholder as set forth under such Equityholder’s signature
hereto and to the Trustee in accordance with Section 12.5 of the Indenture. Each
party hereto may, by notice given in accordance herewith to each other party
hereto, designate any further or different address to which subsequent Notices
shall be sent.
ARTICLE XVII
CONTINUING SECURITY INTEREST
     Section 17.1 Continuing Security Interest. Subject to the provisions of
Section 6.1, this Pledge and Security Agreement shall create a continuing Lien
in the Issuer Pledged Collateral and remain in full force and effect until the
release thereof pursuant to Section 15.1 or the sale thereof pursuant to
Section 11.1, shall be binding upon each Equityholder and its respective
successors, transferees and assigns and shall inure to the benefit of and be
enforceable by the Trustee and its successors, transferees and assigns;
provided, however, that no Equityholder may (unless otherwise permitted
hereunder) assign any of its obligations hereunder without the prior written
consent of the Noteholders or the Trustee pursuant to the Indenture. The Trustee
and the Noteholders may assign or otherwise transfer any indebtedness held by
any of them secured by this Pledge and Security Agreement to any other Person in
accordance with the Indenture, and such other Person shall thereupon become
vested with all the benefits in respect thereof granted to the Trustee herein or
otherwise.
ARTICLE XVIII
SECURITY INTEREST ABSOLUTE
     Section 18.1 Security Interest Absolute. All rights of the Trustee and
security interests hereunder, and all obligations of each Equityholder
hereunder, shall be absolute and unconditional irrespective of, and each
Equityholder hereby irrevocably waives vis-à-vis the Trustee any defenses it may
now have or may hereafter acquire in any way relating to, any or all of the
following:

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          (a) any lack of validity or enforceability of any of the Deal
Documents or any other agreement or instrument relating thereto (other than
against the Trustee);
          (b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Secured Obligations, or any other amendment or
waiver of or any consent to any departure from the Deal Documents or any other
agreement or instrument relating thereto, including any increase in the Secured
Obligations resulting from the extension of additional credit;
          (c) any taking, exchange, surrender, release or non-perfection of any
Issuer Pledged Collateral or any other collateral securing the Secured
Obligations, or any release or amendment or waiver of or consent to any
departure from any guaranty, for all or any of the Secured Obligations;
          (d) any manner of application of any other collateral, or proceeds
thereof, to all or any of the Secured Obligations, or any manner of sale or
other disposition of any other collateral securing all or any of the Secured
Obligations or any other obligations of the Issuer under or in respect of the
Deal Documents or of any other assets of the Issuer;
          (e) any change, restructuring or termination of the limited liability
company structure or existence of the Issuer;
          (f) the release or reduction of liability of any guarantor or surety
with respect to the Secured Obligations; or
          (g) any other circumstance (including any statute of limitations) or
any existence of or reliance on any representation to the Trustee that might
otherwise constitute a defense available to, or a discharge of, the obligations
of any Equityholder.
     Section 18.2 Obligations of Equityholders Several and Not Joint.
Notwithstanding any other provision of this Pledge and Security Agreement, the
obligations of each Equityholder hereunder shall be several and not joint and in
no event shall the Issuer Pledged Collateral of one Equityholder be used to
satisfy the failure by any other Equityholder to perform any obligation
hereunder.
ARTICLE XIX
INDEMNITY
     Section 19.1 Indemnity. Each Equityholder agrees, severally and not
jointly, to indemnify, reimburse, defend and save and hold the Trustee and its
officers, directors, employees, trustees, agents, advisors and affiliates (each,
an “Indemnitee” and, collectively, the “Indemnitees”) harmless from and against,
and shall pay on demand, any and all liabilities, losses, obligations, damages,
injuries, penalties, claims, demands, actions, suits, judgments and any and all
costs and expenses (including attorneys’ fees and disbursements) of whatsoever
kind and nature imposed on, asserted against or incurred by any of the
Indemnitees solely (a) in connection with the custody or preservation of, or the
sale of, collection from or other realization upon, any of the Issuer Pledged
Collateral of such Equityholder pursuant to the exercise or

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enforcement of any of the rights of the Trustee hereunder, (b) in connection
with the failure by such Equityholder to perform or observe any of the
provisions hereof to be performed by it or (c) arising out of or in connection
with or resulting from this Pledge and Security Agreement and the transactions
contemplated hereby in respect of such Equityholder, excluding those arising out
of the bad faith, gross negligence or willful misconduct of any Indemnitee. Each
Indemnitee agrees to use its best efforts to promptly notify the indemnitor(s)
of any assertion of any such liability, damage, injury, penalty, claim, demand,
action, judgment or suit of which such Indemnitee has knowledge.
     The obligations of each Equityholder in this Section 19.1 shall survive the
termination of this Pledge and Security Agreement.
ARTICLE XX
OBLIGATIONS SECURED BY ISSUER PLEDGED COLLATERAL
     Section 20.1 Obligations Secured by Issuer Pledged Collateral. Any amounts
paid by any Indemnitee as to which such Indemnitee has the right to
indemnification, and any amounts paid by the Trustee in preservation of any of
its rights or interest in the Issuer Pledged Collateral, shall constitute
Secured Obligations secured by the Issuer Pledged Collateral.
ARTICLE XXI
SEVERABILITY
     Section 21.1 Severability. Any provision of this Pledge and Security
Agreement that is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without, to the extent permitted by Applicable Law,
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not, to the extent permitted by
Applicable Law, invalidate or render unenforceable such provision in any other
jurisdiction. Where provisions of any law or regulation resulting in such
prohibition or unenforceability may be waived, they are hereby waived by the
parties hereto to the full extent permitted by law so that this Pledge and
Security Agreement shall be deemed a valid, binding agreement in accordance with
its terms, to the extent permitted by Applicable Law.
ARTICLE XXII
COUNTERPARTS; EFFECTIVENESS
     Section 22.1 Counterparts; Effectiveness . This Pledge and Security
Agreement and any amendments, waivers, consents or supplements may be executed
in counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument. This Pledge and Security Agreement shall become effective upon
the execution and delivery of a counterpart hereof by each of the original
parties hereto and, with respect to any Person becoming a party hereto after the
date hereof, upon the execution and delivery hereof by such Person.

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ARTICLE XXIII
REINSTATEMENT
     Section 23.1 Reinstatement. This Pledge and Security Agreement shall
continue to be effective or be reinstated, as the case may be, with respect to
any Equityholder if at any time any amount received by the Trustee hereunder or
pursuant hereto is rescinded or must otherwise be restored or returned by the
Trustee, as the case may be, upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of such Equityholder or upon the appointment of
any intervenor or conservator of, or trustee or similar official for, such
Equityholder or any substantial part of its assets, or upon the entry of an
order by a bankruptcy court avoiding the payment of such amount, or otherwise,
all as though such payments had not been made.
ARTICLE XXIV
SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL
     Section 24.1 SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL.
          (a) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS PLEDGE AND
SECURITY AGREEMENT OR ANY DOCUMENT RELATED HERETO MAY BE BROUGHT IN THE COURTS
OF THE STATE OF NEW YORK LOCATED IN THE BOROUGH OF MANHATTAN, THE CITY OF NEW
YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND EACH
EQUITYHOLDER HEREBY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS RESPECTIVE
PROPERTY, GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE
AFORESAID COURTS. EACH EQUITYHOLDER AND THE TRUSTEE HEREBY IRREVOCABLY WAIVE
TRIAL BY JURY, AND EACH EQUITYHOLDER HEREBY IRREVOCABLY WAIVES ANY OBJECTION,
INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM
NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH
ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS.
          (b) EACH EQUITYHOLDER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS
OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE
SENDING OF COPIES THEREOF BY FEDERAL EXPRESS OR OTHER OVERNIGHT COURIER COMPANY,
TO SUCH EQUITYHOLDER AT ITS ADDRESS SPECIFIED BY SECTION 16.1, SUCH SERVICE TO
BECOME EFFECTIVE UPON DELIVERY THEREOF TO SUCH EQUITYHOLDER.
          (c) NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE TRUSTEE TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR
OTHERWISE PROCEED AGAINST ANY EQUITYHOLDER IN ANY OTHER JURISDICTION.

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ARTICLE XXV
GOVERNING LAW
     Section 25.1 GOVERNING LAW. THIS PLEDGE AND SECURITY AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL SUBSTANTIVE LAWS OF
THE STATE OF NEW YORK WITHOUT REFERENCE TO THE RULES THEREOF RELATING TO
CONFLICTS OF LAW OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE
STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS, EXCEPT TO THE EXTENT
THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR THE REMEDIES
HEREUNDER, ARE GOVERNED BY THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF
NEW YORK.
ARTICLE XXVI
TABLE OF CONTENTS AND HEADINGS
     Section 26.1 Table of Contents and Headings. The Table of Contents and
headings of the Articles and Sections of this Pledge and Security Agreement have
been inserted for convenience of reference only, are not to be considered a part
hereof and shall in no way modify or restrict any of the terms or provisions
hereof.
[SIGNATURE PAGE FOLLOWS]

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     IN WITNESS WHEREOF, the parties hereto have executed this Pledge and
Security Agreement as of the day and year first written above.

            U.S. BANK NATIONAL ASSOCIATION,
not in its individual capacity but solely as Trustee
   

                  By:   /s/ Alison D.B. Nadeau         Name:   Alison D.B.
Nadeau        Title:   Vice President   

 

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            BIOCRYST PHARMACEUTICALS, INC.
   

            By:   /s/ Stuart Grant         Name:   Stuart Grant        Title:  
Chief Financial Officer         Percentage of Limited Liability Company
Interests
   of Issuer Pledged Equity as of the date hereof: 100%
Notice Information pursuant to Section 16.1:
Address: 4505 Emperor Boulevard, Suite 200
               Durham, North Carolina 27703

Attention: General Counsel
Telephone: 919-859-1302
Facsimile: 919-851-1416
Email: abarnes@biocryst.com
Jurisdiction of Organization as of
     the date hereof: Delaware   

 

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ANNEX A
RULES OF CONSTRUCTION AND DEFINED TERMS
Unless the context otherwise requires, in this Annex A and each Transaction
Document (or other document) to which this Annex A is attached:

(a)   A term has the meaning assigned to it and an accounting term not otherwise
defined has the meaning assigned to it in accordance with GAAP.   (b)   Unless
otherwise defined, all terms used herein or therein that are defined in the UCC
shall have the meanings stated in the UCC.   (c)   Words of the masculine,
feminine or neuter gender shall mean and include the correlative words of other
genders, and words in the singular shall include the plural, and vice versa.  
(d)   The terms “include”, “including” and similar terms shall be construed as
if followed by the phrase “without limitation”.   (e)   References to an
agreement or other document include references to such agreement or document as
amended, restated, reformed, supplemented or otherwise modified in accordance
with the terms thereof and include any Annexes, Exhibits and Schedules attached
thereto, and the provisions thereof apply to successive events and transactions.
  (f)   References to any statute or other legislative provision shall include
any statutory or legislative modification or re-enactment thereof, or any
substitution therefor.   (g)   References to any Person shall be construed to
include such Person’s successors and permitted assigns.   (h)   The word “will”
shall be construed to have the same meaning and effect as the word “shall”.  
(i)   The words “hereof”, “herein”, “hereunder” and similar terms when used in
this Annex A or any Transaction Document (or other document) shall refer to this
Annex A or such Transaction Document (or other document) as a whole and not to
any particular provision hereof or thereof, and Article, Section, Annex,
Schedule and Exhibit references herein and therein are references to Articles
and Sections of, and Annexes, Schedules and Exhibits to, the relevant
Transaction Document (or other document) unless otherwise specified.   (j)   In
the computation of a period of time from a specified date to a later specified
date, the word “from“ means “from and including“ and each of the words “to“ and
“until“ means “to but excluding”.   (k)   References to a class of Notes shall
be to the Original Class A Notes, to a class of Subordinated Notes or to a class
of Refinancing Notes, as applicable.

 

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(l)   References to the Notes include the terms and conditions in the relevant
Transaction Document (or other document) applicable to the Notes, and any
reference to any amount of money due or payable by reference to the Notes shall
include any sum covenanted to be paid by the Issuer under the relevant
Transaction Document (or other document) in respect of the Notes.   (m)  
References to any action, remedy or method of judicial proceeding for the
enforcement of the rights of creditors or of security shall be deemed to
include, in respect of any jurisdiction other than the State of New York,
references to such action, remedy or method of judicial proceeding for the
enforcement of the rights of creditors or of security available or appropriate
in such jurisdiction as shall most nearly approximate such action, remedy or
method of judicial proceeding described or referred to in the relevant
Transaction Document (or other document).   (n)   Where any payment is to be
made, any funds are to be applied or any calculation is to be made under any
Transaction Document (or other document) on a day that is not a Business Day,
unless any Transaction Document (or other document) otherwise provides, such
payment shall be made, such funds shall be applied and such calculation shall be
made on the next succeeding Business Day, and payments shall be adjusted
accordingly, including interest unless otherwise specified; provided, however,
that no interest shall accrue in respect of any payments made on Fixed Rate
Notes on that next succeeding Business Day.   (o)   References to any
Calculation Date or Relevant Calculation Date, in each case that would be prior
to the first Calculation Date that follows the Closing Date, shall be deemed to
refer to the Closing Date.   (p)   Any reference herein to a term that is
defined by reference to its meaning in the Counterparty License Agreement or the
UAB Agreement shall refer to such term’s meaning in the Counterparty License
Agreement or the UAB Agreement, as the case may be, as in existence on the date
of the relevant Transaction Document (or other document) to which this Annex A
is attached (and not to any new, substituted or amended version thereof).

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     “144A Global Note” has the meaning set forth in Section 2.1(b) of the
Indenture.
     “Acceleration Default” means any Event of Default of the type described in
Section 4.1(f) of the Indenture.
     “Acceleration Notice” means a written notice given after the occurrence and
continuation of an Event of Default to the Issuer by the Senior Trustee pursuant
to Section 4.2 of the Indenture declaring all Outstanding principal of and
accrued and unpaid interest on the Notes to be immediately due and payable.
     “Accounts” means the Collection Account, the Redemption Account, the Escrow
Account, the Capital Account, the Interest Reserve Account and any other account
established pursuant to Section 3.1 of the Indenture.
     “Act” has the meaning set forth in Section 1.3(a) of the Indenture.
     “Actual Beneficial Holder List” has the meaning set forth in Section 2.5(d)
of the Indenture.
     “Additional Interest” means, with respect to the Notes, interest accrued on
the amount of any interest and Premium, if any, in respect of such Notes that is
not paid when due at the Stated Rate of Interest of such Notes for each Interest
Accrual Period until any such unpaid interest or Premium is paid in full,
compounded annually on each Payment Date, to the fullest extent permitted by
Applicable Law.
     “Affiliate” means, with respect to any Person, any other Person that,
directly or indirectly, controls, is controlled by or is under common control
with such Person or is a director, officer or manager of such Person. For
purposes of this definition, “control” of a Person means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of Voting
Securities, by contract or otherwise, and the terms “controlled” and
“controlling” have meanings correlative to the foregoing.
     “Agent Members” has the meaning set forth in Section 2.10(a) of the
Indenture.
     “Applicable Law” means, with respect to any Person, all laws, rules,
regulations and orders of Governmental Authorities applicable to such Person or
any of its properties or assets.
     “Applicants” has the meaning set forth in Section 6.13 of the Indenture.
     “Approved Holder List” has the meaning set forth in Section 2.5(d) of the
Indenture.
     “Audit Expenses” has the meaning set forth in Section 6.14(b) of the
Indenture.
     “Authorized Agent” means, with respect to the Notes, any authorized
Calculation Agent, Paying Agent or Registrar acting as such for the Notes.

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     “Available Collections Amount” means, for any Payment Date, the sum of
(a) the amount of U.S. dollars on deposit in the Collection Account as of the
Calculation Date immediately preceding such Payment Date and (b) the amount of
any net investment income on amounts on deposit in the Accounts (other than the
Capital Account) as of such Calculation Date.
     “Bankruptcy Code” means Title 11 of the United States Code, as amended.
     “Beneficial Holder” means any Person that holds a Beneficial Interest in
any Global Note through an Agent Member.
     “Beneficial Interest” means any beneficial interest in any Global Note,
whether held directly by an Agent Member or held indirectly through an Agent
Member’s beneficial interest in such Global Note.
     “Bill of Sale” means that certain bill of sale dated as of the Closing Date
executed by the Seller and the Issuer.
     “Business Day” means (a) any day that is not a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or required by
Applicable Law to remain closed or a day on which the Corporate Trust Office is
closed for business and (b) for purposes of calculating any amounts at the
London interbank offered rate and related calculations relative to the making,
continuing, prepaying or repaying of Indebtedness in respect thereof, any day
that is a Business Day described in clause (a) that is also a day on which
dealings in dollars are carried on in the London interbank market.
     “Calculation Agent” means U.S. Bank National Association, a national
banking association, as Calculation Agent under the Indenture, and any successor
appointed pursuant to Section 2.3 of the Indenture.
     “Calculation Date” means, for any Payment Date, the fifth Business Day
preceding such Payment Date.
     “Calculation Date Information” means, with respect to any Calculation Date,
the information provided by the Servicer under Section 3.1(c) of the Servicing
Agreement with respect to such Calculation Date.
     “Calculation Report” has the meaning set forth in Section 3.5(b) of the
Indenture.
     “Capital Account” has the meaning set forth in Section 3.1(a) of the
Indenture.
     “Capital Securities” means, with respect to any Person, all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person’s capital, whether now outstanding or
issued after the Closing Date, including common shares, ordinary shares,
preferred shares, membership interests or share capital in a limited liability
company or other Person, limited or general partnership interests in a
partnership, beneficial interests in trusts or any other equivalent of such
ownership interest or any options, warrants and other rights to acquire such
shares or interests, including rights to allocations and distributions,

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dividends, redemption payments and liquidation payments, but in any event
excluding any membership interest in the Issuer held by the Independent Member.
     “Change in Law” means the occurrence, after the date of the Memorandum, of
any of the following: (a) the adoption or taking effect of any law, rule,
statute, ordinance, regulation or treaty; (b) any change in any law, rule,
statute, ordinance, regulation or treaty or in the administration,
interpretation or application thereof by any Governmental Authority whether or
not such change can be relied on as precedent; or (c) the making or issuance of
any guideline, directive, private ruling or administrative guidance (whether or
not having the force of law) by any Governmental Authority (including any IRS
private letter ruling or field service advisory).
     “Change of Control” means, with respect to an Equityholder (or any parent
entity of an Equityholder), any merger, consolidation or amalgamation (or any
transaction substantially similar to any of the foregoing) with, or, in the case
of clause (a) below, a sale of all or substantially all of the assets of such
Equityholder (or such parent entity) to, any other Person if such Equityholder
(or such parent entity) (a) is not the continuing or surviving entity but the
continuing or surviving entity shall have assumed all of the obligations of such
Equityholder under the Deal Documents to which such Equityholder is a party
immediately prior to such transaction (including such Equityholder’s obligations
under the Pledge and Security Agreement in accordance with Sections 6.1 and 17.1
of the Pledge and Security Agreement) or (b) is the continuing or surviving
entity.
     “Class A Notes” means the Original Class A Notes and any Refinancing Notes
issued to refinance the foregoing.
     “Clearstream” means Clearstream Banking, a French société anonyme.
     “Closing Date” means March 9, 2011.
     “Closing Day Accounts” has the meaning set forth in Section 3.1(b) of the
Indenture.
     “Code” means the Internal Revenue Code of 1986, as amended, and the
regulations thereunder.
     “Collateral” has the meaning set forth in the Granting Clause of the
Indenture.
     “Collection Account” has the meaning set forth in Section 3.1(a) of the
Indenture.
     “Collections” means, without duplication, (a) the Royalties, (b) the
Currency Hedge Payments, (c) any net investment income on amounts on deposit in
the Accounts (other than the Capital Account) and (d) any other amounts received
by the Issuer (other than the proceeds of any Notes and capital contributions
from the Equityholders), including any amounts payable to the Issuer pursuant to
Section 4.5(c) of the Purchase and Sale Agreement or Article VI of the Purchase
and Sale Agreement in respect of the Royalties.
     “Compound” has the meaning set forth in Section 1.1(m) of the Counterparty
License Agreement.

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     “Confidential Information” means, as it relates to the Seller and its
Affiliates, the Licensed Products and the Intellectual Property Rights, all
information (whether written or oral, or in electronic or other form) furnished
after the Closing Date involving or relating in any way, directly or indirectly,
to the Purchased Assets or the Royalties, including (a) any license, sublicense,
assignment, product development, royalty, sale, supply or other agreements
(including the Counterparty License Agreement, the UAB Agreement and the
Currency Hedge Agreement) involving or relating in any way, directly or
indirectly, to the Purchased Assets, the Royalties or the intellectual property,
compounds or products giving rise to the Purchased Assets, and including all
terms and conditions thereof and the identities of the parties thereto, (b) any
reports, data, materials or other documents of any kind concerning or relating
in any way, directly or indirectly, to the Seller, the Purchased Assets, the
Royalties or the intellectual property, compounds or products giving rise to the
Purchased Assets, and including reports, data, materials or other documents of
any kind delivered pursuant to or under any of the agreements referred to in
clause (a) above, and (c) any inventions, devices, improvements, formulations,
discoveries, compositions, ingredients, patents, patent applications, know-how,
processes, trial results, research, developments or any other intellectual
property, trade secrets or information involving or relating in any way,
directly or indirectly, to the Purchased Assets or the compounds or products
giving rise to the Purchased Assets.
     “Confidentiality Agreement” means, with respect to Noteholders or
Beneficial Holders at the Closing Date with respect to the Original Class A
Notes (or, with respect to Noteholders or Beneficial Holders with respect to any
Subordinated Notes or any Refinancing Notes), a confidentiality agreement for
the benefit of the Issuer provided to the Registrar on or prior to the Closing
Date (or on or prior to the date of issuance of any such Subordinated Notes or
Refinancing Notes), and otherwise means a confidentiality agreement for the
benefit of the Issuer substantially in the form of Exhibit B to the Indenture or
substantially in the form of any confidentiality agreement referenced in
Schedule 1 to an applicable Purchase Agreement.
     “Confidential Parties” has the meaning set forth in Section 12.13 of the
Indenture.
     “Corporate Trust Office” means the office of the Trustee in the city at
which at any particular time the Trustee’s duties under the Transaction
Documents shall be principally administered and, on the Closing Date, shall be
U.S. Bank National Association, One Federal Street, 3rd Floor, Boston,
Massachusetts 02110, Attention: Corporate Trust Services (JPR Royalty Sub LLC /
BioCryst).
     “Counterparty” means Shionogi & Co., Ltd., a Japanese corporation.
     “Counterparty Instruction” has the meaning set forth in Section 1.1 of the
Purchase and Sale Agreement.
     “Counterparty License Agreement” means that certain License, Development
and Commercialization Agreement dated as of February 28, 2007, as amended by
that certain First Amendment to License, Development and Commercialization
Agreement dated as of September 30, 2008, that certain letter agreement dated
May 10, 2010 and that certain Consent Agreement dated as of November 2, 2010,
between the Seller and Counterparty.

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     “Currency Hedge Agreement” means that certain Confirmation (including the
related letter agreement) dated as of March 9, 2011 and the ISDA Master
Agreement (including the schedule and credit support annex included therein)
(solely insofar as such ISDA Master Agreement relates to such Confirmation and
not to any other “Transaction” as such term is defined in such ISDA Master
Agreement) dated as of March 7, 2011, in each case between the Seller and the
Currency Hedge Provider (and any replacement foreign currency hedge arrangement
entered into by the Seller as permitted by Section 4.11(e)(i) of the Purchase
and Sale Agreement) and, with respect to such letter agreement, among the
Seller, the Currency Hedge Provider, the Issuer and the Trustee.
     “Currency Hedge Payments” means the amounts required to be paid to the
Seller by the Currency Hedge Provider pursuant to the Currency Hedge Agreement
(subject to all of the Currency Hedge Provider’s rights under the Currency Hedge
Agreement (including, to the extent provided in the Currency Hedge Agreement,
liquidation, netting and setoff rights, specified conditions precedent to the
Currency Hedge Provider’s required payments and performance and rights to
realize on margin or other collateral)) except any amount required to be paid to
the Seller by the Currency Hedge Provider pursuant to the Currency Hedge
Agreement as a result of a termination of the Currency Hedge Agreement by the
Seller permitted by Section 4.11(e) of the Purchase and Sale Agreement.
     “Currency Hedge Provider” means Morgan Stanley Capital Services Inc.
     “Deal Documents” means the Transaction Documents, the Purchase and Sale
Agreement, the Bill of Sale and the Counterparty Instruction.
     “Default” means a condition, event or act that, with the giving of notice
or the lapse of time or both, would constitute an Event of Default.
     “Definitive Notes” has the meaning set forth in Section 2.1(b) of the
Indenture.
     “Direction” has the meaning set forth in Section 1.3(c) of the Indenture.
     “Distribution Report” has the meaning set forth in Section 2.13(a) of the
Indenture.
     “Dollar” or the sign “$” means United States dollars.
     “DTC” means The Depository Trust Company, its nominees and their respective
successors.
     “DTC List” has the meaning set forth in Section 2.5(d) of the Indenture.
     “Eligibility Requirements” has the meaning set forth in Section 2.3(c) of
the Indenture.
     “Eligible Account” means a trust account maintained on the books and
records of an Eligible Institution in the name of the Issuer.
     “Eligible Institution” means any bank organized under the laws of the U.S.
or any state thereof or the District of Columbia (or any domestic branch of a
foreign bank), which at all times

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has either (a) a long-term unsecured debt rating of at least A2 by Moody’s and A
by S&P or (b) a certificate of deposit rating of at least P-1 by Moody’s and A-1
by S&P.
     “Eligible Investments” means, in each case, book-entry securities,
negotiable instruments or securities represented by instruments in bearer or
registered form that evidence:
     (a) direct obligations of, and obligations fully Guaranteed as to timely
payment of principal and interest by, the U.S. or any agency or instrumentality
thereof the obligations of which are backed by the full faith and credit of the
U.S. (having original maturities of no more than 365 days or such lesser time as
is required for the distribution of funds); or
     (b) demand deposits, time deposits or certificates of deposit of the
Operating Bank or of depositary institutions or trust companies organized under
the laws of the U.S. or any state thereof or the District of Columbia (or any
domestic branch of a foreign bank) with capital and surplus of not less than
$500,000,000 (i) having original maturities of no more than 365 days or such
lesser time as is required for the distribution of funds; provided, that, at the
time of investment or contractual commitment to invest therein, the short-term
debt rating of such depositary institution or trust company shall be at least
P-1 by Moody’s and A-1 by S&P or (ii) having maturities of more than 365 days
and, at the time of the investment or contractual commitment to invest therein,
a rating of at least A2 by Moody’s and A by S&P;
provided, however, that no investment shall be made in any obligations of any
depositary institution or trust company that is identified in a written notice
to the Trustee from the Issuer or the Servicer as having a contractual right to
set off and apply any deposits held, or other indebtedness owing, by the Issuer
to or for the credit or the account of such depositary institution or trust
company, unless such contractual right by its terms expressly excludes all
Eligible Investments.
     “Equityholder” means a holder of Capital Securities of the Issuer. The only
Equityholder as of the Closing Date is the Seller.
     “ERISA” means the U.S. Employee Retirement Income Security Act of 1974, as
amended.
     “ERISA Affiliate” means any trade or business that is treated as a single
employer with the Issuer or the Seller under Section 414 of the Code.
     “Escrow Account” has the meaning set forth in Section 3.1(a) of the
Indenture.
     “Escrow List” has the meaning set forth in Section 2.5(d) of the Indenture.
     “Euroclear” means Euroclear Bank S.A./N.V., as operator of the Euroclear
system.
     “Event of Default” has the meaning set forth in Section 4.1 of the
Indenture.
     “Excess Holder Event” has the meaning set forth in Section 2.17 of the
Indenture.

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     “Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.
     “Expenses” means any and all reasonable out-of-pocket fees, costs and
expenses of the Issuer, including the reasonable fees, expenses and indemnities
of the Service Providers (provided, that, with respect to the Servicer, such
expenses shall only be the Servicing Fee and reasonable out-of-pocket expenses),
reasonable and customary directors and officers liability insurance for any
directors and officers of the Issuer, the fees and out-of-pocket expenses of
counsel to the Independent Member, the Trustee and the Issuer incurred after the
Closing Date in connection with the transactions contemplated by the Deal
Documents, any Audit Expenses, the fees and expenses of any nationally
recognized independent public accounting firm engaged as auditors of the Issuer
(including any fees incurred by any accounting firm in connection with auditing
the records of Counterparty), any expenses incurred in connection with the
exercise of audit rights at the direction of the Issuer or at the direction of
the Noteholders pursuant to Section 6.14(a) of the Indenture and any payments by
the Issuer to third parties in respect of obligations for which indemnification
payments have been received from the Seller; provided, however, that, except as
expressly provided in the Indenture, Expenses shall not include any Transaction
Expenses, any amounts related to any indemnification or contribution obligations
of the Issuer set forth in the Issuer Organizational Documents, any Servicing
Fee to the extent greater than $20,000 per year, any amounts payable on the
Notes pursuant to Section 3.7(a)(i), 3.7(a)(iii), 3.7(a)(iv) and 3.7(a)(v) of
the Indenture, any fees, costs or expenses relating to the Subordinated Notes or
any other amounts ranking pari passu with or junior to interest payable on the
Class A Notes in the priority of payments set forth under Section 3.7 of the
Indenture.
     “Field” has the meaning set forth in Section 1.1(u) of the Counterparty
License Agreement.
     “Final Legal Maturity Date” means, with respect to (a) the Original Class A
Notes, December 1, 2020, and (b) with respect to any Subordinated Notes or
Refinancing Notes, the date specified in the indenture supplemental to the
Indenture providing for their issuance; provided, that the Final Legal Maturity
Date with respect to any Subordinated Notes where the proceeds thereof are not
used to redeem or refinance all of the Outstanding Class A Notes shall be no
earlier than December 1, 2020.
     “Fixed Rate Notes” means (a) the Original Class A Notes and (b) any
Subordinated Notes or Refinancing Notes issued with a fixed rate of interest.
     “Floating Rate Notes” means any Subordinated Notes or Refinancing Notes
issued with a floating or variable rate of interest.
     “GAAP” means generally accepted accounting principles in effect in the
United States from time to time.
     “Global Notes” means any 144A Global Note and Regulation S Global Note.
     “Governmental Authority” means the government of the United States, any
other nation or any political subdivision thereof, whether state or local, and
any agency, authority (including supranational authority), commission,
instrumentality, regulatory body, court, central bank or

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other Person exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.
     “Guarantee” means any obligation, contingent or otherwise, of any Person
directly or indirectly guaranteeing any Indebtedness or other obligation of any
other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (a) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation of such other Person or (b) entered into for
purposes of assuring in any other manner the obligee of such Indebtedness or
other obligation of the payment thereof or to protect such obligee against loss
in respect thereof (in whole or in part); provided, that the term “Guarantee”
shall not include endorsements for collection or deposit in the ordinary course
of business. The term “Guarantee” when used as a verb has a corresponding
meaning.
     “Holder Lists” has the meaning set forth in Section 2.17 of the Indenture.
     “Incur” has the meaning set forth in Section 5.2(d) of the Indenture.
     “Indebtedness” means, with respect to any Person at any date of
determination (without duplication), (a) all indebtedness of such Person for
borrowed money or other similar monetary obligations, (b) all obligations of
such Person evidenced by bonds, debentures, notes or other similar instruments,
(c) all obligations of such Person as an account party in respect of letters of
credit or other similar instruments (including reimbursement obligations with
respect thereto), (d) all the obligations of such Person to pay the deferred and
unpaid purchase price of property or services (other than obligations to trade
creditors incurred in the ordinary course of business in connection with the
obtaining of goods, materials or services), which purchase price is due more
than 90 days after the date of purchasing such property or service or taking
delivery and title thereto or the completion of such services, and payment
deferrals arranged primarily as a method of raising funds to acquire such
property or service, (e) all monetary obligations of such Person and its
Subsidiaries under any leasing or similar arrangement that have been (or, in
accordance with GAAP, should be) classified as capitalized leases, (f) all
Guarantees of such Person in respect of any of the foregoing, (g) all monetary
obligations of such Person with respect to any interest rate hedge, cap, floor,
swap, option or other interest rate hedge agreement, (h) all Indebtedness (as
defined in clauses (a) through (g) of this definition) of other Persons secured
by a lien on any asset of such Person, whether or not such Indebtedness is
assumed by such Person, and (i) all Indebtedness (as defined in clauses
(a) through (g) of this definition) of other Persons Guaranteed by such Person.
Notwithstanding the foregoing, “Indebtedness” shall not include any surety or
performance bonds required to be obtained in connection with the performance or
enforcement by the Issuer of any Deal Document or the Counterparty License
Agreement or the Issuer’s defense of any action, suit or proceeding.
     “Indemnitee” has the meaning set forth in Section 19.1 of the Pledge and
Security Agreement.
     “Indemnitees” has the meaning set forth in Section 19.1 of the Pledge and
Security Agreement.

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     “Indenture” means that certain indenture, dated as of the Closing Date, by
and between the Issuer and the Trustee.
     “Indenture Estate” has the meaning set forth in the Granting Clause of the
Indenture.
     “Independent Member” means a Member (i) who is not at the time of such
Person’s admission to the Issuer, (ii) who is not and (iii) who has not been at
any time during the preceding five years: (a) a director, manager, officer or
employee of the Issuer or an Equityholder (other than in the capacity of
Independent Member) or any Affiliate of the Issuer or an Equityholder (other
than in the capacity of Independent Member); (b) a Person related to any
officer, director, manager or employee of the Issuer or an Equityholder (other
than in the capacity of Independent Member) or any Affiliate of the Issuer or an
Equityholder (other than in the capacity of Independent Member); (c) a holder
(directly or indirectly) of any Voting Securities of the Issuer or an
Equityholder or any Affiliate of the Issuer or an Equityholder (other than in
the capacity of Independent Member); (d) a Person related to a holder (directly
or indirectly) of any Voting Securities of the Issuer or an Equityholder or any
Affiliate of the Issuer or an Equityholder (other than in the capacity of
Independent Member); (e) a creditor, supplier, contractor, purchaser, customer
or any other Person who derives any of his, her or its revenues from
interactions with the Issuer or an Equityholder or any Affiliate of the Issuer
or an Equityholder or a family member of such creditor, supplier, contractor,
purchaser, customer or other Person; (f) a trustee in bankruptcy or other
insolvency proceeding for, or a reorganization of, an Equityholder or any
Affiliate of an Equityholder; or (g) a Person who controls (directly or
indirectly) the Issuer or an Equityholder or any Affiliate of the Issuer or an
Equityholder or any creditor, supplier, employee, officer, director, manager or
contractor of the Issuer or an Equityholder or any Affiliate of the Issuer or an
Equityholder.
     “Initial Interest Reserve Amount” means $3,000,000.
     “Institutional Accredited Investor” means a Person that is an accredited
investor as that term is defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act.
     “Intellectual Property Rights” has the meaning set forth in Section 1.1 of
the Purchase and Sale Agreement.
     “Interest Accrual Period” means the period beginning on (and including) the
Closing Date (or, with respect to any Subordinated Notes or any Refinancing
Notes, the date of issuance of such Subordinated Notes or Refinancing Notes) and
ending on (and including) September 1, 2011 and each successive period beginning
on (and including) September 2 of each year and ending on (and including)
September 1 of the succeeding year; provided, however, that the final Interest
Accrual Period shall end on but exclude the final Payment Date (or, if earlier,
with respect to any class of Notes repaid in full, the date such class of Notes
is repaid in full).
     “Interest Amount” means, with respect to the Outstanding Principal Balance
of any class of Notes, on any Payment Date, the amount of accrued and unpaid
interest at the Stated Rate of Interest with respect to the Outstanding
Principal Balance of such class of Notes on such Payment Date (including any
Additional Interest, if any), determined in accordance with the

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terms thereof (including interest accruing after the commencement of a
proceeding in bankruptcy, insolvency or similar law, whether or not permitted as
a claim under such law).
     “Interest Reserve Account” has the meaning set forth in Section 3.1(a) of
the Indenture.
     “Interest Shortfall” has the meaning set forth in Section 3.5(a)(x) of the
Indenture.
     “Involuntary Bankruptcy” means, without the consent or acquiescence of the
Issuer, the entering of an order for relief or approving a petition for relief
or reorganization or any other petition seeking any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or other similar relief
under any present or future bankruptcy, insolvency or similar statute, law or
regulation, or the filing of any such petition against the Issuer, or, without
the consent or acquiescence of the Issuer, the entering of an order appointing a
trustee, custodian, receiver or liquidator of the Issuer or of all or any
substantial part of the property of the Issuer, in each case where such petition
or order shall remain unstayed or shall not have been stayed or dismissed within
90 days from entry thereof.
     “IRS” means the U.S. Internal Revenue Service.
     “Issuer” means JPR Royalty Sub LLC, a Delaware limited liability company,
as issuer of the Notes pursuant to the Indenture.
     “Issuer Organizational Documents” means the certificate of formation of the
Issuer dated January 14, 2011 and effective January 20, 2011 and the limited
liability company agreement of the Issuer dated as of the Closing Date.
     “Issuer Pledged Collateral” has the meaning set forth in Section 2.1 of the
Pledge and Security Agreement.
     “Issuer Pledged Equity” has the meaning set forth in Section 2.1(a) of the
Pledge and Security Agreement.
     “Judgment Currency” has the meaning set forth in Section 12.9(e) of the
Indenture.
     “Legend” has the meaning set forth in Section 2.2 of the Indenture.
     “Licensed Product” has the meaning set forth in Section 1.1(jj) of the
Counterparty License Agreement.
     “Lien” means any security interest, mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or otherwise),
charge against or interest in property or other priority or preferential
arrangement of any kind or nature whatsoever, including any conditional sale,
any sale with recourse or any agreement to give any security interest.
     “Loss” means any loss, set-off, off-set, rescission, counterclaim,
reduction, deduction, defense, cost, charge, expense, interest, fee, payment,
demand, liability, claim, action, proceeding, penalty, fine, damages, judgment,
order or other sanction.

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     “Manager” means the manager of the Issuer.
     “Material Adverse Change” means any event, circumstance or change resulting
in a material adverse effect on (a) the legality, validity or enforceability of
any of the Deal Documents, the Counterparty License Agreement or the back-up
security interest granted pursuant to Section 2.1(d) of the Purchase and Sale
Agreement, (b) the right or ability of the Seller (or any permitted assignee),
the Issuer or the Servicer, as the case may be, to perform its obligations under
any of the Deal Documents or the Counterparty License Agreement, in each case to
which it is a party, or to consummate the transactions contemplated under any of
the Transaction Documents or the Counterparty License Agreement, (c) the rights
or remedies of the Issuer under any of the Deal Documents or the Counterparty
License Agreement, (d) the timing, amount or duration of the Royalties or any
Currency Hedge Payments, (e) the Purchased Assets, (f) the Intellectual Property
Rights or (g) the ability of the Trustee to realize the practical benefit of the
Pledge and Security Agreement (including any failure to have a perfected Lien on
any of the Issuer Pledged Collateral as required by the Indenture).
     “Member” means a member of the Issuer.
     “Memorandum” means the private placement memorandum of the Issuer for the
Original Class A Notes dated March 1, 2011.
     “Moody’s” means Moody’s Investors Service, Inc. and any successor thereto
or, if such corporation or its successor shall for any reason no longer perform
the functions of a rating agency, “Moody’s” shall be deemed to refer to any
other nationally recognized statistical rating organization (within the meaning
ascribed thereto by the Exchange Act) designated by the Issuer.
     “Non-U.S. Person” means a person who is not a U.S. person within the
meaning of Regulation S.
     “Noteholder” means any Person in whose name a Note is registered from time
to time in the Register for such Note.
     “Note Purchase Price” has the meaning set forth in Section 3.1 of the
Purchase Agreements.
     “Note Purchasers” has the meaning set forth in Section 1.1 of the Purchase
Agreements.
     “Notes” means the Original Class A Notes, any Subordinated Notes and any
Refinancing Notes.
     “Notices” means notices, demands, certificates, requests, directions,
instructions and communications.
     “Officer’s Certificate” means a certificate signed by, with respect to the
Issuer, a Responsible Officer of the Issuer and, with respect to any other
Person, any officer, director, manager, partner, trustee or equivalent
representative of such Person.

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     “Operating Bank” means U.S. Bank National Association or any other Eligible
Institution at which the Accounts are held; provided, that (a) upon the
resignation or removal and the replacement of the Trustee pursuant to the terms
of the Indenture, the successor trustee appointed thereunder shall be the
Operating Bank, and (b) if at any time the Operating Bank ceases to be an
Eligible Institution, a successor shall be appointed by the Issuer (or the
Servicer) on behalf of the Trustee and all Accounts shall thereafter be
transferred to and be maintained at such successor in the name of the Trustee
and such successor shall thereafter be the “Operating Bank”.
     “Opinion of Counsel” means a written opinion signed by legal counsel, who
may be an employee of or counsel to the Issuer or the Seller, that meets the
requirements of Section 1.2 of the Indenture.
     “Option” means a foreign currency exchange option set forth in the Currency
Hedge Agreement.
     “Options” means, collectively, the foreign currency exchange options set
forth in the Currency Hedge Agreement.
     “Optional Redemption” has the meaning set forth in Section 3.9(b) of the
Indenture.
     “Original Class A Notes” means the JPR PhaRMASM Senior Secured 14% Notes
due 2020 of the Issuer in the initial Outstanding Principal Balance of
$30,000,000, substantially in the form of Exhibit A to the Indenture.
     “Other Agreements” has the meaning set forth in Section 3.1 of the Purchase
Agreements.
     “Other Note Purchasers” has the meaning set forth in Section 3.1 of the
Purchase Agreements.
     “Other Prices” has the meaning set forth in Section 3.1 of the Purchase
Agreements.
     “Outstanding” means (a) with respect to the Notes of any class at any time,
all Notes of such class theretofore authenticated and delivered by the Trustee
except (i) any such Notes cancelled by, or delivered for cancellation to, the
Trustee, (ii) any such Notes, or portions thereof, for the payment of principal
of and accrued and unpaid interest on which moneys have been distributed to
Noteholders by the Trustee and any such Notes, or portions thereof, for the
payment or redemption of which moneys in the necessary amount have been
deposited in the Redemption Account for such Notes; provided, that, if such
Notes are to be redeemed prior to the maturity thereof in accordance with the
requirements of Section 3.9 of the Indenture, written notice of such Redemption
shall have been given and not rescinded as provided in Section 3.10 of the
Indenture, or provision satisfactory to the Trustee shall have been made for
giving such written notice, and, if Redemption does not occur, then this clause
(ii) ceases to apply as of the Payment Date that was supposed to be the date of
Redemption, and (iii) any such Notes in exchange or substitution for which other
Notes, as the case may be, have been authenticated and delivered, or which have
been paid pursuant to the terms of the Indenture (unless proof satisfactory to
the Trustee is presented that any of such Notes is held by a Person in whose
hands such Note is a legal, valid and binding obligation of the Issuer), and
(b) when used with respect

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to any other evidence of Indebtedness, at any time, any principal amount thereof
then unpaid and outstanding (whether or not due or payable).
     “Outstanding Principal Balance” means, with respect to any Note or other
evidence of Indebtedness Outstanding, the total principal amount of such Note or
other evidence of Indebtedness unpaid and Outstanding at any time, as determined
in the case of the Notes in the Calculation Report to be provided to the Issuer
(or the Servicer) and the Trustee by the Calculation Agent pursuant to
Section 3.5 of the Indenture.
     “Paying Agent” has the meaning set forth in Section 2.3(a) of the
Indenture.
     “Payment Date” means each September 1, commencing on September 1, 2011, and
the Final Legal Maturity Date; provided, that, if any such date would otherwise
fall on a day that is not a Business Day, the Payment Date falling on such date
shall be the first following day that is a Business Day; provided, further,
however, that, if any such date on or after September 1, 2016 would otherwise
fall on a day that is not a Business Day, the Payment Date falling on such date
shall be the first preceding day that is a Business Day (in which case the full
interest payment for the related Interest Accrual Period shall nonetheless be
payable on such first preceding Business Day).
     “Permanent Regulation S Global Note” has the meaning set forth in
Section 2.1(b) of the Indenture.
     “Permitted Holder” means (a) the Seller, (b) the Issuer and (c) any Person
(including the Noteholders) that has executed a Confidentiality Agreement and
delivered such Confidentiality Agreement to the Registrar in accordance with the
terms of the Indenture.
     “Permitted Lien” means (a) any lien for Taxes, assessments and governmental
charges or levies not yet due and payable or that are being diligently contested
in good faith by appropriate proceedings and for which adequate reserves in
accordance with GAAP have been set aside on the books of the relevant Person,
(b) any Lien created in favor of the Trustee and (c) any other Lien expressly
permitted under the Deal Documents (including any security interest created or
required to be created under the Indenture, including in connection with the
issuance of any Subordinated Notes and any Refinancing Notes).
     “Person” means any natural person, firm, corporation, limited liability
company, partnership, joint venture, association, joint-stock company, trust,
unincorporated organization, Governmental Authority or any other legal entity,
including public bodies, whether acting in an individual, fiduciary or other
capacity.
     “Placement Agent” means Morgan Stanley & Co. Incorporated.
     “Plan” means, with respect to any Person, any employee benefit plan (within
the meaning of Section 3(3) of ERISA), whether or not subject to ERISA, in each
case that is (or within the preceding six years has been) maintained, or to
which contributions are (or within the preceding six years have been) required
to be made by such Person or an ERISA Affiliate or with respect to which such
Person may have any liability.

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     “Plan Assets” has the meaning given to such term by Section 3(42) of ERISA
and regulations issued by the U.S. Department of Labor, but also includes assets
of an employee benefit plan (within the meaning of Section 3(3) of ERISA)
subject to Similar Laws.
     “Pledge and Security Agreement” means that certain pledge and security
agreement dated as of the Closing Date made by the Equityholders to the Trustee.
     “Premium” means, with respect to any Note on any Redemption Date, any
Redemption Premium, if applicable, or, with respect to any Redemption Date, the
portion of the Redemption Price of the Notes being redeemed in excess of the
Outstanding Principal Balance of the Notes being redeemed.
     “Price” has the meaning set forth in Section 3.1 of the Purchase
Agreements.
     “Purchase Agreement” means that certain note purchase agreement dated the
Closing Date among the Issuer, the Seller and the Purchaser party thereto.
     “Purchase Agreements” means, collectively, each Purchase Agreement and the
Other Agreements.
     “Purchase and Sale Agreement” means that certain purchase and sale
agreement dated as of the Closing Date between the Seller and the Issuer.
     “Purchased Assets” has the meaning set forth in Section 1.1 of the Purchase
and Sale Agreement.
     “Purchase Price” has the meaning set forth in Section 2.3 of the Purchase
and Sale Agreement.
     “Purchaser” has the meaning set forth in Section 1.1 of the Purchase
Agreements.
     “Purchaser Indemnified Party” has the meaning set forth in Section 6.1 of
the Purchase and Sale Agreement.
     “QIB” means a qualified institutional buyer within the meaning of
Rule 144A.
     “RAPIACTA” means (i) the brand name for peramivir in Japan and (ii) the
equivalent product sold by Counterparty or its Affiliates in Taiwan under such
brand name or another brand name.
     “Receiver” means any Person or Persons appointed as (and any additional
Person or Persons appointed or substituted as) administrative receiver,
receiver, manager or receiver and manager.
     “Record Date” means, with respect to each Payment Date, the close of
business on the fifteenth day preceding such Payment Date and, with respect to
the date on which any Direction is to be given by the Noteholders, the close of
business on the last Business Day prior to the solicitation of such Direction.

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     “Redemption” means any Optional Redemption and any other redemption of
Notes described in Section 3.9(c) of the Indenture.
     “Redemption Account” has the meaning set forth in Section 3.1(a) of the
Indenture.
     “Redemption Date” means the date, which may be any Business Day on or after
March 9, 2012, on which Notes are redeemed pursuant to a Redemption.
     “Redemption Premium” means, in the case of any Subordinated Notes or
Refinancing Notes, the amount, if any, specified in the Resolution and set forth
in any indenture supplemental to the Indenture to be paid in the event of a
Redemption of such Subordinated Notes or Refinancing Notes separately from the
Redemption Price.
     “Redemption Price” means (a) in respect of an Optional Redemption of the
Original Class A Notes, an amount equal to the product of (x) the applicable
Class A Redemption Percentage as set forth below and (y) the Outstanding
Principal Balance of the Original Class A Notes that are being redeemed on such
Business Day, plus the accrued and unpaid interest to the Redemption Date on the
Original Class A Notes that are being redeemed:

          Business Day   Class A Redemption Percentage  
From and including March 9, 2012 to and including March 8, 2013
    107.00 %
From and including March 9, 2013 to and including March 8, 2014
    103.50 %
From and including March 9, 2014 and thereafter
    100.00 %

and (b) in respect of any Subordinated Notes or Refinancing Notes, the
redemption price, if any, plus the accrued and unpaid interest to the Redemption
Date on the Subordinated Notes or Refinancing Notes, as the case may be,
established by or pursuant to a Resolution and set forth in any indenture
supplemental to the Indenture providing for the issuance of such Notes or
designated as such in the form of such Notes (any such Redemption Price in
respect of any Subordinated Notes or Refinancing Notes may include a Redemption
Premium, and such Resolution and indenture supplemental to the Indenture may
specify a separate Redemption Premium).
     “Reference Date” means, with respect to each Interest Accrual Period, the
day that is two Business Days prior to the Payment Date on which such Interest
Accrual Period commences; provided, however, that the Reference Date with
respect to the initial Interest Accrual Period means the date that is two
Business Days prior to the Closing Date (or, with respect to any Subordinated
Notes or any Refinancing Notes, the date that is two Business Days prior to the
date of issuance of such Subordinated Notes or Refinancing Notes).
     “Refinancing” has the meaning set forth in Section 2.15(a) of the
Indenture.
     “Refinancing Expenses” means all Transaction Expenses incurred in
connection with an offering and issuance of Refinancing Notes.

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     “Refinancing Notes” means any class (or sub-class) of Notes issued by the
Issuer under the Indenture at any time and from time to time after the Closing
Date pursuant to Section 2.15 of the Indenture, the proceeds of which are used
to repay all of the Outstanding Principal Balance of a class of Notes.
     “Register” has the meaning set forth in Section 2.3(a) of the Indenture.
     “Registrar” has the meaning set forth in Section 2.3(a) of the Indenture.
     “Regulation S” means Regulation S under the Securities Act.
     “Regulation S Global Note Exchange Date” means the date of exchange of any
Temporary Regulation S Global Note for any Permanent Regulation S Global Note,
which date shall be 40 days after the Closing Date (or, with respect to any
Subordinated Notes or any Refinancing Notes, 40 days after the date of issuance
of such Subordinated Notes or Refinancing Notes).
     “Regulation S Global Notes” has the meaning set forth in Section 2.1(b) of
the Indenture.
     “Relevant Calculation Date” has the meaning set forth in Section 3.5(a) of
the Indenture.
     “Relevant Information” means any information provided to the Trustee, the
Calculation Agent or the Paying Agent in writing by any Service Provider
retained from time to time by the Issuer pursuant to the Deal Documents.
     “Resolution” means a copy of a resolution certified by a Responsible
Officer of the Issuer as having been duly adopted by the Issuer and being in
full force and effect on the date of such certification.
     “Responsible Officer” means (a) with respect to the Trustee, any officer
within the Corporate Trust Office, including any principal, vice president,
managing director, director, manager, associate or other officer of the Trustee
customarily performing functions similar to those performed by any of the
above-designated officers and also, with respect to a particular matter, any
other officer to whom such matter is referred because of such officer’s
knowledge and familiarity with the particular subject, (b) with respect to the
Seller, any officer of the Seller, and (c) with respect to the Issuer, any
officer of the Manager or person designated by the governing body of the Manager
as a Responsible Officer for purposes of the Deal Documents.
     “Royalties” has the meaning set forth in Section 1.1 of the Purchase and
Sale Agreement.
     “Rule 144A” means Rule 144A under the Securities Act.
     “S&P” means Standard & Poor’s Ratings Services, a division of The
McGraw-Hill Companies, Inc., and any successor thereto or, if such division or
its successor shall for any reason no longer perform the functions of a rating
agency, “S&P” shall be deemed to refer to any other nationally recognized
statistical rating organization (within the meaning ascribed thereto by the
Exchange Act) designated by the Issuer.

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     “SEC” means the U.S. Securities and Exchange Commission.
     “Secured Obligations” has the meaning set forth in the Granting Clause of
the Indenture.
     “Securities Act” means the U.S. Securities Act of 1933, as amended.
     “Security Interest” means the security interest granted or expressed to be
granted in the Collateral pursuant to the Granting Clause of the Indenture and
in the Issuer Pledged Collateral pursuant to the Pledge and Security Agreement.
     “Seller” means BioCryst Pharmaceuticals, Inc., a Delaware corporation.
     “Seller Payments” has the meaning set forth in Section 3.4 of the
Indenture.
     “Seller Shortfall” means the amount, if any, payable by the Seller to
Counterparty under the Counterparty License Agreement or to the Currency Hedge
Provider under the Currency Hedge Agreement that is due and payable but that has
not been paid by the Seller.
     “Seller Shortfall Payment” means any payment made by the Trustee in respect
of any Seller Shortfall.
     “Senior Claim” has the meaning set forth in Section 10.1(a) of the
Indenture.
     “Senior Class of Notes” means (a) so long as any Class A Notes are
Outstanding, the Class A Notes, or (b) if no Class A Notes are Outstanding, the
class or classes (or sub-class or sub-classes) of Subordinated Notes defined as
such pursuant to the Resolution(s) and/or indenture(s) supplemental to the
Indenture providing for the issuance of such Subordinated Notes.
     “Senior Trustee” means the Trustee, acting in its capacity as the trustee
of the Senior Class of Notes.
     “Service Providers” means the Servicer, the Trustee, the Independent
Member, the Calculation Agent, the Paying Agent, the Registrar, the Operating
Bank, any outside law firm or accounting firm providing services to the Issuer
and any Person that becomes a Servicer, the Trustee, the Independent Member, the
Calculation Agent, the Paying Agent, the Registrar or the Operating Bank in
accordance with the terms of the applicable agreement and, subject to the
written approval of the Noteholders of a majority of the Outstanding Principal
Balance of the Senior Class of Notes, any other Person designated as a Service
Provider by the Issuer.
     “Servicer” means the Seller, acting in its capacity as servicer pursuant to
the Servicing Agreement (or any other Person appointed to succeed the Seller as
such or any successor thereto pursuant to the Servicing Agreement).
     “Servicer Termination Event” means any one of the following events:
     (a) the Seller shall resign as Servicer in accordance with the terms of the
Servicing Agreement;

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     (b) the Servicer shall fail to pay any amount when due under the Servicing
Agreement and such failure shall continue unremedied for five Business Days;
     (c) the Servicer shall fail to deliver the Distribution Report and the
other required accompanying materials with respect to any Payment Date in
accordance with the provisions of the Servicing Agreement within five Business
Days of the date such Distribution Report and the other required accompanying
materials are required to be delivered under the Servicing Agreement; provided,
however, that the Servicer shall have received in a timely manner any
Calculation Report (unless the failure to receive such Calculation Report was
due to the breach by the Servicer of Section 3.1(c)(vi) of the Servicing
Agreement);
     (d) the Servicer shall fail to carry out its obligations under
Section 3.1(c)(ii) of the Servicing Agreement that shall have or reasonably be
expected to have a material adverse effect on the Noteholders;
     (e) the Servicer shall fail to carry out its obligations under
Section 3.1(c)(v), Section 3.1(c)(viii) or Section 3.1(c)(ix) of the Servicing
Agreement;
     (f) the Servicer shall fail to observe or perform in any material respect
any of the covenants or agreements on the part of the Servicer contained in the
Servicing Agreement (other than for which provision is made in clauses
(a) through (e) above) and such failure shall continue unremedied for a period
of 30 days after the date on which written notice of such failure requiring the
same to be remedied shall have been given to the Servicer by the Trustee, and
such failure continues to materially adversely affect the Noteholders for such
period;
     (g) a court having jurisdiction in the premises enters a decree or order
for (i) relief in respect of the Servicer under any Applicable Law relating to
bankruptcy, insolvency, receivership, winding-up, liquidation, reorganization,
examination, relief of debtors or other similar law in effect now or after the
Closing Date, (ii) appointment of a receiver, liquidator, examiner, assignee,
custodian, trustee, sequestrator or similar official of the Servicer or
(iii) the winding-up or liquidation of the affairs of the Servicer and, in each
case, such decree or order shall remain unstayed or such writ or other process
shall not have been stayed or dismissed within 90 days from entry thereof;
     (h) the Servicer (i) commences a voluntary case under any Applicable Law
relating to bankruptcy, insolvency, receivership, winding-up, liquidation,
reorganization, examination, relief of debtors or other similar law in effect
now or after the Closing Date, or consents to the entry of an order for relief
in any involuntary case under any such law, (ii) consents to the appointment of
or taking possession by a receiver, liquidator, examiner, assignee, custodian,
trustee, sequestrator or similar official of the Servicer or for all or
substantially all of the property and assets of the Servicer or (iii) effects
any general assignment for the benefit of creditors;
     (i) the Servicer’s business activities are terminated by any Governmental
Authority;

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     (j) a material adverse change occurs in the financial condition or
operations of the Servicer that is a Material Adverse Change;
     (k) an Event of Default shall have occurred, other than an Event of Default
solely caused by the Trustee, the Calculation Agent, the Paying Agent or the
Registrar failing to perform any of its respective obligations under the
Indenture or any other Transaction Document; or
     (l) so long as the Seller is the Servicer, the Seller sells, transfers,
conveys, assigns, contributes or grants a majority of the Capital Securities of
the Issuer to another Person or Persons.
     “Servicing Agreement” means that certain servicing agreement dated as of
the Closing Date between the Issuer and the Seller.
     “Servicing Fee” has the meaning set forth in Section 2.1 of the Servicing
Agreement.
     “Similar Laws” means, with respect to a Plan that is not subject to
Section 406 of ERISA or Section 4975 of the Code, all Applicable Laws that may
affect the Plan’s investment in the Notes and that is substantially similar to
Section 406 of ERISA or Section 4975 of the Code.
     “Stated Rate of Interest” means, with respect to any class of the Notes for
any Interest Accrual Period, the interest rate set forth in such class of Notes
for such Interest Accrual Period.
     “Subordinated Claim” has the meaning set forth in Section 10.1(a) of the
Indenture.
     “Subordinated Note Issuance” has the meaning set forth in Section 2.16(a)
of the Indenture.
     “Subordinated Notes” means any class (or sub-class) of Notes issued in such
form as shall be authorized by a Resolution and set forth in any indenture
supplemental to the Indenture in respect thereof pursuant to Section 2.16 of the
Indenture and any Refinancing Notes issued to refinance the foregoing.
     “Subsidiary” means, with respect to any Person, any other Person of which
more than 50% of the outstanding Voting Securities of such other Person
(irrespective of whether at the time Capital Securities of any other class or
classes of such other Person shall or might have voting power upon the
occurrence of any contingency) is at the time directly or indirectly owned or
controlled by such Person, by such Person and one or more other Subsidiaries of
such Person or by one or more other Subsidiaries of such Person.
     “Taxes” means (a) any and all taxes, fees, levies, duties, tariffs, imposts
and other charges of any kind (together with any and all interest, penalties,
loss, damage, liability, expense, additions to tax and additional amounts or
costs incurred or imposed with respect thereto) now or hereafter imposed,
levied, collected, withheld or otherwise assessed by the U.S. or by any state,
local, foreign or other Governmental Authority (or any subdivision or agency
thereof) or other taxing authority, including taxes or other charges on or with
respect to income, franchise, windfall or other profits, gross receipts,
property, sales, use, capital stock, payroll, employment,

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social security, workers’ compensation, unemployment compensation or net worth
and similar charges and taxes or other charges in the nature of excise,
deduction, withholding, ad valorem, stamp, transfer, value added, taxes on goods
and services, escheat, gains taxes, license, registration and documentation
fees, customs duties, tariffs and similar charges, (b) liability for such a tax
that is imposed by reason of United States Treasury Regulation Section 1.1502-6
or similar provision of law and (c) liability for the payment of any amounts as
a result of any express or implied obligation to indemnify any other Person with
respect to the payment of any amounts described in clause (a) or clause (b).
     “Temporary Regulation S Global Note” has the meaning set forth in
Section 2.1(b) of the Indenture.
     “Territory” means Japan and Taiwan.
     “Transaction Documents” means the Indenture, the Notes, the Servicing
Agreement, the Pledge and Security Agreement, the Purchase Agreements and the
Currency Hedge Agreement, and each other agreement pursuant to which the Trustee
(or its agent) is granted a Lien to secure the obligations under the Indenture
or the Notes.
     “Transaction Expenses” means the out-of-pocket expenses payable by the
Issuer in connection with (a) the issuance of the Original Class A Notes,
including placement fees, any initial fees payable to Service Providers and the
documented fees and expenses of Pillsbury Winthrop Shaw Pittman LLP, counsel to
the Noteholders in connection with the offering and issuance of the Original
Class A Notes, as set forth in the Purchase Agreements, and (b) the offering and
issuance of any Subordinated Notes or any Refinancing Notes, to the extent
specified in the Resolution authorizing such offering and issuance.
     “Trustee” means U.S. Bank National Association, a national banking
association, as initial trustee of the Notes under the Indenture, and any
successor appointed in accordance with the terms of the Indenture; provided,
that, for purposes of Section 3.1(b) of the Indenture, “Trustee” means U.S. Bank
National Association, a national banking association, as the Operating Bank
and/or initial trustee of the Notes under the Indenture, as the context may
require.
     “Trustee Closing Account” means the account of the Issuer maintained with
the Trustee at U.S. Bank National Association, ABA No. 091000022, Account
No. 173103321092, Ref. JPR Royalty, Attention: Josh Tripi.
     “Trust Indenture Act” means the U.S. Trust Indenture Act of 1939, as
amended.
     “UAB” means The UAB Research Foundation, a non-profit corporation.
     “UAB Agreement” means that certain Joint Research and License Agreement
dated as of November 23, 1994 between the Seller and UAB, as amended by that
certain letter agreement dated October 9, 1996 and by that certain Agreement
dated as of December 16, 2010 between the Seller and UAB.

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     “UCC” means the Uniform Commercial Code as in effect from time to time in
the State of New York; provided, that, if, with respect to any financing
statement or by reason of any provisions of law, the perfection or the effect of
perfection or non-perfection of the Liens granted to the Trustee pursuant to the
applicable Transaction Document is governed by the Uniform Commercial Code as in
effect in a jurisdiction of the United States other than the State of New York,
then “UCC” means the Uniform Commercial Code as in effect from time to time in
such other jurisdiction for purposes of the provisions of each Transaction
Document and any financing statement relating to such perfection or effect of
perfection or non-perfection.
     “United States Treasury” means the U.S. Department of the Treasury.
     “U.S.” or “United States” means the United States of America, its 50
states, each territory thereof and the District of Columbia.
     “U.S. Person” means a U.S. person within the meaning of Regulation S.
     “Voluntary Bankruptcy” means (a) an admission in writing by the Issuer of
its inability to pay its debts generally or a general assignment by the Issuer
for the benefit of creditors, (b) the filing of any petition or answer by the
Issuer seeking to adjudicate itself as bankrupt or insolvent, or seeking for
itself any liquidation, winding-up, reorganization, arrangement, adjustment,
protection, relief or composition of the Issuer or its debts under any law
relating to bankruptcy, insolvency, receivership, winding-up, liquidation,
reorganization, examination, relief of debtors or other similar law now or
hereafter in effect, or seeking, consenting to or acquiescing in the entry of an
order for relief in any case under any such law, or the appointment of or taking
possession by a receiver, trustee, custodian, liquidator, examiner, assignee,
sequestrator or other similar official for the Issuer or for any substantial
part of its property, or (c) limited liability company action taken by the
Issuer to authorize any of the actions set forth in clause (a) or clause
(b) above.
     “Voting Securities” means, with respect to any Person, Capital Securities
of any class or kind ordinarily having the power to vote for the election of
directors, managers or other voting members of the governing body of such
Person.
     “Yen” or the sign “¥” means Japanese yen.

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