Exhibit 10.3
 
INDENTURE
 
dated as of February 21, 2008
 
by and between
 
AZITHROMYCIN ROYALTY SUB LLC,
a Delaware limited liability company,
as issuer of the Notes described herein,
 
and
 
U.S. BANK NATIONAL ASSOCIATION,
as initial trustee of the Notes described herein
 

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Table of Contents
 

     
Page
 
GRANTING CLAUSE
1
 
HABENDUM CLAUSE
2
     
ARTICLE I
 
GENERAL
         
Section 1.1
Rules of Construction and Defined Terms
3
 
Section 1.2
Compliance Certificates and Opinions
3
 
Section 1.3
Acts of Noteholders.
4
     
ARTICLE II
 
THE NOTES
         
Section 2.1
Amount of Notes; Terms; Form; Execution and Delivery.
5
 
Section 2.2
Restrictive Legends
8
 
Section 2.3
Registrar and Paying Agent.
12
 
Section 2.4
Paying Agent to Hold Money in Trust
13
 
Section 2.5
Method of Payment.
14
 
Section 2.6
Minimum Denominations
16
 
Section 2.7
Transfer and Exchange; Cancellation
16
 
Section 2.8
Mutilated, Destroyed, Lost or Stolen Notes
17
 
Section 2.9
Payments of Transfer Taxes
17
 
Section 2.10
Book-Entry Provisions.
18
 
Section 2.11
Special Transfer Provisions.
19
 
Section 2.12
Temporary Definitive Notes
24
 
Section 2.13
Statements to Noteholders.
24
 
Section 2.14
CUSIP, CINS, ISIN and Private Placement Numbers
25
 
Section 2.15
Refinancing Notes.
26
 
Section 2.16
Class B Notes.
27
 
Section 2.17
Limitation on Number of Holders of Notes
29
     
ARTICLE III
 
ACCOUNTS; PRIORITY OF PAYMENTS
         
Section 3.1
Establishment of Accounts.
29
 
Section 3.2
Investments of Cash
32
 
Section 3.3
Closing Date Deposits; Withdrawals and Transfers.
32
 
Section 3.4
Capital Contributions
33
 
Section 3.5
Calculation Date Calculations.
33
 
Section 3.6
Payment Date First Step Transfers
35
 
Section 3.7
Payment Date Second Step Withdrawals.
35

 
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Section 3.8
Interest Reserve Account and Capital Account; Shortfalls
37
 
Section 3.9
Parent Shortfall
37
 
Section 3.10
Redemptions.
37
 
Section 3.11
Procedure for Redemptions.
38
     
ARTICLE IV
 
DEFAULT AND REMEDIES
         
Section 4.1
Events of Default
40
 
Section 4.2
Acceleration, Rescission and Annulment.
41
 
Section 4.3
Other Remedies
42
 
Section 4.4
Limitation on Suits
43
 
Section 4.5
Waiver of Existing Defaults.
44
 
Section 4.6
Restoration of Rights and Remedies
44
 
Section 4.7
Remedies Cumulative
44
 
Section 4.8
Rights of Noteholders to Receive Payment
45
 
Section 4.9
Trustee May File Proofs of Claim
45
 
Section 4.10
Undertaking for Costs
45
 
Section 4.11
Control by Noteholders
45
 
Section 4.12
Senior Trustee
45
 
Section 4.13
Application of Proceeds
46
 
Section 4.14
Waivers of Rights Inhibiting Enforcement
46
 
Section 4.15
Security Interest Absolute
46
     
ARTICLE V
 
REPRESENTATIONS, WARRANTIES AND COVENANTS
         
Section 5.1
Representations and Warranties
47
 
Section 5.2
Covenants
50
 
Section 5.3
Reports and Other Deliverables by the Issuer.
55
     
ARTICLE VI
 
THE TRUSTEE
         
Section 6.1
Acceptance of Trusts and Duties
56
 
Section 6.2
Copies of Documents and Other Notices.
56
 
Section 6.3
Representations and Warranties
57
 
Section 6.4
Reliance; Agents; Advice of Counsel
58
 
Section 6.5
Not Acting in Individual Capacity
60
 
Section 6.6
Compensation of Trustee
60
 
Section 6.7
Notice of Defaults
60
 
Section 6.8
May Hold Notes
60
 
Section 6.9
Corporate Trustee Required; Eligibility
60
 
Section 6.10
Reports by the Trustee
61
 
Section 6.11
Calculation Agent
61
 
Section 6.12
Pledge and Security Agreement and Other Transaction Documents
61
 
Section 6.13
Custody of the Collateral
61
 
Section 6.14
Preservation and Disclosure of Noteholder Lists
62

 
Section 6.15
Audit Rights
62

 
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Section 6.16
Compliance with Applicable Anti-Terrorism and Anti-Money Laundering Regulations
62
 
Section 6.17
Jurisdiction of Trustee
62
     
ARTICLE VII
 
SUCCESSOR TRUSTEES
         
Section 7.1
Resignation and Removal of Trustee
63
 
Section 7.2
Appointment of Successor.
63
     
ARTICLE VIII
 
INDEMNITY
         
Section 8.1
Indemnity
64
 
Section 8.2
Noteholders’ Indemnity
64
 
Section 8.3
Survival
65
     
ARTICLE IX
 
MODIFICATION
         
Section 9.1
Modification with Consent of Noteholders
65
 
Section 9.2
Modification Without Consent of Noteholders
66
 
Section 9.3
Subordination; Priority of Payments
67
 
Section 9.4
Execution of Amendments by Trustee
67
 
Section 9.5
Conformity with Trust Indenture Act
67
     
ARTICLE X
 
SUBORDINATION
         
Section 10.1
Subordination of the Notes.
67
     
ARTICLE XI
 
DISCHARGE OF INDENTURE
         
Section 11.1
Discharge of Indenture.
69
     
ARTICLE XII
 
MISCELLANEOUS
         
Section 12.1
Right of Trustee to Perform
69
 
Section 12.2
Waiver
70
 
Section 12.3
Severability
70
 
Section 12.4
Restrictions on Exercise of Certain Rights
70
 
Section 12.5
Notices
70
 
Section 12.6
Assignments
71
 
Section 12.7
Application to Court
72
 
Section 12.8
GOVERNING LAW
72
 
Section 12.9
Jurisdiction.
72
 
Section 12.10
Counterparts
73
 
Section 12.11
Table of Contents and Headings
73
 
Section 12.12
Trust Indenture Act
74

 
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Section 12.13
Confidential Information
74
 
Section 12.14
Limited Recourse
75
 
Section 12.15
Tax Characterization; No Gross Up; Withholding
75
       

Annex A
 
Rules of Construction and Defined Terms
 
Exhibit A
 
Form of Original Class A Notes
 
Exhibit B
 
Form of Resale Confidentiality Agreement
 
Exhibit C
 
Agents for Service of Process
 
Exhibit D
 
Coverage of Distribution Report
 
Exhibit E
 
UCC Financing Statements
 
Exhibit F
 
Form of Certificate of Euroclear or Clearstream for Permanent Regulation S
Global Note
 
Exhibit G
 
Form of Certification of Beneficial Owner of Temporary Regulation S Global Note
 
Exhibit H
 
Form of Certification of Euroclear or Clearstream for Payments
 
Exhibit I
 
Form of Certificate of Proposed Transferor
 
Exhibit J
 
Form of Certificate of Certain Proposed Institutional Accredited Investor
Transferees
 

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INDENTURE
 
This INDENTURE, dated as of February 21, 2008, is by and between AZITHROMYCIN
ROYALTY SUB LLC, a Delaware limited liability company, as issuer of the Notes
described herein, and U.S. BANK NATIONAL ASSOCIATION, a national banking
association, as initial trustee of the Notes described herein.
 
GRANTING CLAUSE
 
THIS INDENTURE WITNESSETH, that, in consideration of the premises and the
acceptance by the Trustee of the trusts hereby created and of the purchase and
acceptance of the Notes by the Noteholders, and for other good and valuable
consideration, the receipt of which is hereby acknowledged, in order to secure
(i) the prompt payment of the principal of, Premium (if any) and interest on,
and all other amounts due with respect to, the Notes from time to time
Outstanding hereunder, (ii) the payment of any fees, expenses or other amounts
that the Issuer is obligated to pay under or in respect of the Notes, this
Indenture or any other Transaction Document to which the Issuer is a party,
(iii) the payment and performance of all the obligations of the Issuer in
respect of any amendment, modification, extension, renewal or refinancing of the
Notes and (iv) the performance and observance by the Issuer of all the
agreements, covenants and provisions expressed or implied herein and in the
Notes for the benefit of the Noteholders (collectively, the “Secured
Obligations”) and for the uses and purposes and subject to the terms and
provisions hereof, the Issuer does hereby grant, bargain, sell, assign,
transfer, convey, mortgage, pledge and confirm unto the Trustee, its successors
and assigns, for the security and benefit of the Noteholders from time to time
of the Notes, a first priority security interest in all right, title and
interest of the Issuer in, to and under the following described property, rights
and privileges (each property, including all other property hereafter
specifically subjected to the lien of this Indenture or any indenture
supplemental hereto, being the “Collateral” and, collectively, including all
other property hereafter specifically subjected to the lien of this Indenture or
any indenture supplemental hereto, are included within and defined as the
“Indenture Estate”), to wit:
 
(1) Royalty Payments actually made by Inspire under the Inspire License
Agreement (but not the rights thereunder to receive such payments) and the
Replacement Royalty Payments, if any;
 
(2) the Purchase and Sale Agreement, the Residual License Agreement, the
Servicing Agreement and all other Transaction Documents, Principal Documents and
other agreements to which the Issuer is a party, including those relating to the
rights of the Issuer in respect of the sale, transfer, conveyance, assignment,
contribution, grant and servicing of the Purchased Assets;
 
(3) (A) all Accounts established under this Indenture at any time, (B) all
amounts from time to time credited to such Accounts, (C) all cash, financial
assets and other investment property, instruments, documents, chattel paper,
general intangibles, accounts and other property from time to time credited to
such Accounts or representing investments and reinvestments of amounts credited
to such Accounts and (D) all interest, principal payments, dividends and other
distributions payable on or with respect to, and all proceeds of, (i) all
property so credited or representing such investments and reinvestments and (ii)
such Accounts;
 
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(4) all of the Issuer’s rents, issues, profits, revenues and other income of the
property subjected or required to be subjected to the lien of this Indenture;
 
(5) all other property and assets of the Issuer with respect to which a security
interest can be created under Article 9 of the UCC, including all goods, deposit
accounts, investment property, financial assets, letter-of-credit rights,
supporting obligations, commercial tort claims, accounts, contract rights,
general intangibles and all other cash (except (i) to the extent permitted to be
distributed by the Issuer to the Parent pursuant to Section 3.7(c) and (ii)
proceeds from any Notes issued in accordance with and pursuant to this Indenture
in excess of amounts applicable to any Redemption of the Notes);
 
(6) all rights of the Issuer (contractual and otherwise) constituting, arising
under, connected with or in any way related to any or all of the foregoing
property;
 
(7) all books, records, files, correspondence, computer programs, tapes, disks
and related data (owned by the Issuer) that at any time evidence or contain
information relating to any of the foregoing property or are otherwise necessary
or helpful in the collection thereof or realization thereupon;
 
(8) all documents of title, policies and certificates of insurance, securities,
chattel paper and other documents or instruments evidencing or pertaining to any
of the foregoing property of the Issuer; and
 
(9) all proceeds and products of any and all of the foregoing property;
 
BUT SUBJECT TO all of the terms and conditions of this Indenture.
 
HABENDUM CLAUSE
 
TO HAVE AND TO HOLD all and singular the aforesaid property unto the Trustee,
its successors and assigns, in trust for the benefit and security of the
Noteholders from time to time of each class of the Notes, without any priority
of any one class of Notes over any other class of Notes by reason of difference
in time of issuance or otherwise, except as expressly provided herein, and for
the uses and purposes and subject to the terms and provisions set forth in this
Indenture.
 
PROVIDED, HOWEVER, that, notwithstanding any of the foregoing provisions or
anything to the contrary herein, so long as no Event of Default shall have
occurred and be continuing, the Issuer shall have the right, to the exclusion of
the Trustee and the Noteholders, to exercise in the Issuer’s name all rights and
powers of the Issuer under the Purchase and Sale Agreement, the Residual License
Agreement, the Servicing Agreement and any other agreement to which the Issuer
is or may be a party or third party beneficiary (including Principal Documents),
except as otherwise set forth in any such agreement, and SUBJECT TO all of the
terms and conditions of this Indenture.
 
It is hereby further agreed that any and all property described or referred to
in the Granting Clause that is hereafter acquired by the Issuer shall ipso
facto, and without any other conveyance, assignment or act on the part of the
Issuer or the Trustee, become and be subject to the Security Interest herein
granted as fully and completely as though specifically described herein, but
nothing contained in this paragraph shall be deemed to modify or change the
obligations of the Issuer contained in the foregoing paragraphs.
 
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The Issuer does hereby ratify and confirm this Indenture and the other
Transaction Documents to which it is a party and, subject to the other terms of
this Indenture, does hereby agree that it will not take or omit to take any
action, the taking or omission of which might result in an alteration or
impairment of the assignment hereunder or of any of the rights created by any
thereof.
 
It is expressly agreed that anything herein contained to the contrary
notwithstanding, the Issuer shall remain liable under the Transaction Documents
and any other contracts and agreements included in the Collateral to the extent
set forth therein and shall remain obligated to perform all of the duties and
obligations of the Issuer thereunder to the same extent as if this Indenture had
not been executed in accordance with and pursuant to the terms and provisions
thereof, the exercise by the Trustee of any of its rights hereunder shall not
release the Issuer from any of its duties or obligations under any such
Transaction Documents or other contracts or agreements included in the
Collateral, and, prior to the foreclosure of the lien of this Indenture under
Section 4.3, the Trustee and the Noteholders shall have no obligation or
liability under any thereof by reason of or arising out of this Indenture or the
assignment hereunder, nor shall the Trustee or the Noteholders be required or
obligated in any manner to perform or fulfill any obligations or duties of the
Issuer under or pursuant to any Transaction Document or any other contract or
agreement included in the Collateral or, except as herein expressly provided, to
make any payment, make any inquiry as to the nature or sufficiency of any
payment received by it, present or file any claim or take any action to collect
or enforce any claim for payment assigned hereunder or the payment of any
amounts that may have been assigned to it or to which it may be entitled at any
time or times; provided, however, that, in exercising any right of the Issuer
under any Transaction Document or any other contract or agreement included in
the Collateral, the Trustee and the Noteholders shall be bound by, and shall
comply with, the provisions thereof applicable to the Issuer in respect of the
exercise of such right and the confidentiality provisions set forth therein.
 
IT IS HEREBY COVENANTED AND AGREED by and between the parties hereto as follows:
 
ARTICLE I
GENERAL
 
Section 1.1 Rules of Construction and Defined Terms. The rules of construction
set forth in Annex A shall apply to this Indenture and are hereby incorporated
by reference into this Indenture as if set forth fully in this Indenture.
Capitalized terms used but not otherwise defined in this Indenture shall have
the respective meanings given to such terms in Annex A, which is hereby
incorporated by reference into this Indenture as if set forth fully in this
Indenture. Not all terms defined in Annex A are used in this Indenture.
 
Section 1.2 Compliance Certificates and Opinions. Upon any application or
request by the Issuer to the Trustee to take any action under any provision of
this Indenture, the Issuer shall furnish to the Trustee an Officer’s Certificate
stating that, in the opinion of the signer thereof in his or her capacity as
such, all conditions precedent, if any, provided for in this Indenture relating
to the proposed action have been complied with, and an Opinion of Counsel
stating that, in the opinion of such counsel, all such conditions precedent, if
any, have been complied with, except that, in the case of any such application
or request as to which the furnishing of such documents is specifically required
by any provision of this Indenture relating to such particular application or
request, no additional certificate or opinion need be furnished.
 
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Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than a certificate provided
pursuant to Section 5.3) or any indenture supplemental hereto shall include:
 
(a) a statement that each individual signing such certificate or opinion has
read such covenant or condition and the definitions in this Indenture relating
thereto;
 
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
 
(c) a statement that, in the opinion of each such individual in his or her
capacity as such, he or she has made such examination or investigation as is
necessary to enable him or her to express an informed opinion as to whether or
not such covenant or condition has been complied with; and
 
(d) a statement as to whether, in the opinion of each such individual, such
condition or covenant has been complied with.
 
Section 1.3 Acts of Noteholders.
 
(a) Any direction, consent, waiver or other action provided by this Indenture in
respect of the Notes of any class to be given or taken by Noteholders may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Noteholders in person or by an agent or proxy duly
appointed in writing, and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee or to the Issuer. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
“Act” of the Noteholders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose under this Indenture and conclusive in favor of
the Trustee or the Issuer, if made in the manner provided in this Section
1.3(a).
 
(b) The fact and date of the execution by any Person of any such instrument or
writing may be proved by the certificate of any notary public or other officer
of any jurisdiction authorized to take acknowledgments of deeds or administer
oaths that the Person executing such instrument acknowledged to him or her the
execution thereof, or by an affidavit of a witness to such execution sworn to
before any such notary or such other officer and, where such execution is by an
officer of a corporation or association, trustee of a trust or member of a
partnership, on behalf of such corporation, association, trust or partnership,
such certificate or affidavit shall also constitute sufficient proof of his or
her authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other reasonable manner that the Trustee deems sufficient.
 
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(c) In determining whether the Noteholders have given any direction, consent,
request, demand, authorization, notice, waiver or other Act (a “Direction”)
under this Indenture, Notes owned by the Issuer, the Parent or any Affiliate of
any such Person shall be disregarded and deemed not to be Outstanding for
purposes of any such determination. In determining whether the Trustee shall be
protected in relying upon any such Direction, only Notes that a Responsible
Officer of the Trustee actually knows to be so owned shall be so disregarded.
Notwithstanding the foregoing, (i) if any such Person owns 100% of the Notes of
any class Outstanding, such Notes shall not be so disregarded as aforesaid, and
(ii) if any amount of Notes of such class so owned by any such Person have been
pledged in good faith, such Notes shall not be disregarded as aforesaid if the
pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to
act with respect to such Notes and that the pledgee is not the Issuer, the
Parent or an Affiliate of any such Person.
 
(d) The Issuer may, at its option, by delivery of Officer’s Certificate(s) to
the Trustee, set a record date other than the Record Date to determine the
Noteholders in respect of the Notes of any class entitled to give any Direction
in respect of such Notes. Such record date shall be the record date specified in
such Officer’s Certificate, which shall be a date not more than 30 days prior to
the first solicitation of Noteholders in connection therewith. If such a record
date is fixed, such Direction may be given before or after such record date, but
only the Noteholders of the applicable class at the close of business on such
record date shall be deemed to be Noteholders for the purposes of determining
whether Noteholders of the requisite proportion of Outstanding Notes of such
class have authorized, agreed or consented to such Direction, and for that
purpose the Outstanding Notes of such class shall be computed as of such record
date; provided, that no such Direction by the Noteholders on such record date
shall be deemed effective unless it shall become effective pursuant to the
provisions of this Indenture not later than one year after the record date.
 
(e) Any Direction or other action by the Noteholder of any Note shall bind the
Noteholder of every Note issued upon the transfer thereof, in exchange therefor
or in lieu thereof, whether or not notation of such action is made upon such
Note, and any Direction or other action by the Beneficial Holder of any
Beneficial Interest in any Note shall bind any transferee of such Beneficial
Interest.
 
ARTICLE II
THE NOTES
 
Section 2.1 Amount of Notes; Terms; Form; Execution and Delivery.
 
(a) The Outstanding Principal Balance of any class of Notes that may be
authenticated and delivered from time to time under this Indenture shall not
exceed, with respect to the Original Class A Notes, the initial Outstanding
Principal Balance for the Original Class A Notes set forth in the definition
thereof or, with respect to any Class B Notes or any class of Refinancing Notes,
the Outstanding Principal Balance authorized in the Manager Resolution or
indenture supplemental hereto establishing such Class B Notes or Refinancing
Notes; provided, that (i) any Refinancing Notes shall be issued in accordance
with Section 2.15 and (ii) any Class B Notes shall be issued in accordance with
Section 2.16.
 
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(b) There shall be issued, authenticated and delivered on the Closing Date and
on the date of issuance of any Class B Notes or any Refinancing Notes to each of
the Noteholders Notes in the principal amounts and maturities and bearing the
interest rates, in each case in registered form and, in the case of the Original
Class A Notes, substantially in the form set forth in Exhibit A or, in the case
of any Class B Notes or any Refinancing Notes, substantially in the form set
forth in the indenture supplemental hereto pursuant to which such Class B Notes
or Refinancing Notes are issued, with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture, and may have such letters, numbers or other marks of identification
and such legends or endorsements typewritten, printed, lithographed or engraved
thereon, as may, consistently herewith, be prescribed by the Trustee. The
Trustee shall authenticate Notes and make Notes available for delivery only upon
the written order of the Issuer signed by a Responsible Officer of the Issuer.
Such order shall specify the aggregate principal amount of Notes to be
authenticated, the date of issue, whether they are to be issued as Global Notes
or Definitive Notes and delivery instructions.
 
Definitive Notes of each class shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods, as determined by the
Trustee. Any Notes offered and sold to Institutional Accredited Investors that
are not QIBs that are not offered and sold in offshore transactions in reliance
on Regulation S shall be issued initially in the form of Definitive Notes.
 
Any Notes offered and sold in reliance on Rule 144A shall be issued initially in
the form of one or more permanent Global Notes in registered form, substantially
in the form set forth in the applicable Exhibit to this Indenture or in any
indenture supplemental hereto (each, a “144A Global Note”), registered in the
name of the nominee of DTC, deposited with the Trustee, as custodian for DTC,
duly executed by the Issuer and authenticated by the Trustee as hereinafter
provided. The aggregate principal amount of each 144A Global Note may from time
to time be increased or decreased by adjustments made on the books and records
of the Registrar, as hereinafter provided.
 
Any Notes offered and sold to Institutional Accredited Investors in offshore
transactions in reliance on Regulation S shall be issued initially in the form
of one or more temporary global Notes in registered form substantially in the
form set forth in the applicable Exhibit to this Indenture or in any indenture
supplemental hereto (each, a “Temporary Regulation S Global Note”), registered
in the name of the nominee of DTC, deposited with the Trustee, as custodian for
DTC, duly executed by the Issuer and authenticated by the Trustee as hereinafter
provided. At any time following the applicable Regulation S Global Note Exchange
Date, upon receipt by the Trustee and the Issuer of a certificate substantially
in the form of Exhibit F, executed by Euroclear or Clearstream, as the case may
be, together with copies of certificates from Euroclear or Clearstream, as the
case may be, certifying that it has received certification of non-U.S.
beneficial ownership of a Temporary Regulation S Global Note (or portion
thereof) with respect to any Notes to be exchanged, one or more permanent Global
Notes for such Notes in registered form substantially in the form set forth in
the applicable Exhibit to this Indenture or in any indenture supplemental hereto
(each, a “Permanent Regulation S Global Note” and, together with each Temporary
Regulation S Global Note, the “Regulation S Global Notes”) duly executed by the
Issuer and authenticated by the Trustee as hereinafter provided shall be
deposited with the Trustee, as custodian for DTC, and the Registrar shall
reflect on its books and records the date and a decrease in the principal amount
of the Temporary Regulation S Global Note of such class in an amount equal to
the principal amount of such Temporary Regulation S Global Note exchanged. Until
the Regulation S Global Note Exchange Date with respect to any Temporary
Regulation S Global Note, Beneficial Interests in such Temporary Regulation S
Global Note may be held only through Agent Members acting for and on behalf of
Euroclear and Clearstream.
 
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Notes, if so provided herein or in any indenture supplemental hereto, shall be
issued in the form of permanent certificated Notes in registered form in
substantially the form set forth in this Section 2.1(b) (collectively with any
definitive, fully registered Notes issued pursuant to Section 2.10(b), the
“Definitive Notes”).
 
(c) Interest shall accrue on any class of Fixed Rate Notes from the date of
issuance of such Fixed Rate Notes and shall be computed for each Interest
Accrual Period on the basis of a 360-day year consisting of twelve 30-day months
on the Outstanding Principal Balance of such Notes. Interest shall accrue on any
class of Floating Rate Notes from the date of issuance of such Floating Rate
Notes and shall be computed for each Interest Accrual Period on the basis of a
360-day year and the actual number of days elapsed in such Interest Accrual
Period on the Outstanding Principal Balance of such Notes. If any interest
payment is not made when due on a Payment Date, the unpaid portion of such
interest payment will accrue interest at the rate then applicable to the Notes,
compounded quarterly, until paid in full.
 
(d) On the date of any Refinancing, the Issuer shall issue and deliver, as
provided in Section 2.15, an aggregate principal amount of Refinancing Notes
having the maturities and bearing the interest rates and such other terms
authorized by one or more Manager Resolutions or in any indenture supplemental
hereto providing for the issuance of such Refinancing Notes or specified in the
form of such Refinancing Notes, in each case in accordance with Section 2.15.
 
(e) On the date of any Class B Issuance, the Issuer shall issue and deliver, as
provided in Section 2.16, an aggregate principal amount of Class B Notes having
the maturities and bearing the interest rates and such other terms authorized by
one or more Manager Resolutions or in any indenture supplemental hereto
providing for the issuance of such Class B Notes or specified in the form of
such Class B Notes, in each case in accordance with Section 2.16.
 
(f) The Notes shall be executed on behalf of the Issuer by the manual or
facsimile signature of any individual who at the time such Note was executed was
authorized to execute such Note by the Manager.
 
(g) Each Note bearing the manual or facsimile signature of any individual who at
the time such Note was executed was authorized to execute such Note by the
Manager shall bind the Issuer, notwithstanding that any such individual has
ceased to hold such authority thereafter but prior to the authentication and
delivery of such Notes or any payment thereon.
 
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(h) At any time and from time to time after the execution of any Notes, the
Issuer may deliver such Notes to the Trustee for authentication and, subject to
the provisions of Section 2.1(i), the Trustee shall authenticate such Notes by
manual or facsimile signature upon receipt by it of a written order of the
Issuer. The Notes shall be authenticated on behalf of the Trustee by any
Responsible Officer of the Trustee.
 
(i) No Note shall be entitled to any benefit under this Indenture or be valid or
obligatory for any purpose, unless it shall have been executed on behalf of the
Issuer as provided in Section 2.1(f) and authenticated by or on behalf of the
Trustee as provided in Section 2.1(h). Such signatures shall be conclusive
evidence that such Note has been duly executed and authenticated under this
Indenture. Each Note shall be dated the date of its authentication.
 
Section 2.2 Restrictive Legends. Each Note (and all Notes issued in exchange
therefor or upon registration of transfer or substitution thereof) shall bear
the following legend on the face thereof (the “Private Placement Legend”):
 
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THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), THE SECURITIES LAWS OF ANY STATE OR THE SECURITIES LAWS
OF ANY OTHER JURISDICTION, NOR IS SUCH REGISTRATION CONTEMPLATED. NEITHER THIS
NOTE NOR ANY INTEREST HEREIN MAY BE ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED,
SOLD OR OFFERED FOR SALE OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION UNDER THE SECURITIES ACT OR AN EXEMPTION FROM SUCH REGISTRATION
THEREUNDER AND ANY OTHER APPLICABLE SECURITIES LAW REGISTRATION REQUIREMENTS.
EACH PERSON WHO ACQUIRES OR ACCEPTS THIS NOTE OR AN INTEREST HEREIN BY SUCH
ACQUISITION OR ACCEPTANCE (1) REPRESENTS THAT (A) IT IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) AND IS
PURCHASING THIS NOTE IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A
UNDER THE SECURITIES ACT, (B) IT IS AN INSTITUTIONAL ACCREDITED INVESTOR AS
DEFINED IN SUBPARAGRAPH (a) (1), (2), (3) OR (7) OF RULE 501 UNDER THE
SECURITIES ACT (AN “INSTITUTIONAL ACCREDITED INVESTOR”), HAS SUFFICIENT
KNOWLEDGE AND EXPERIENCE IN FINANCIAL AND BUSINESS MATTERS TO BE CAPABLE OF
EVALUATING THE MERITS AND RISKS OF THE PURCHASE OF THIS NOTE AND IS ABLE AND
PREPARED TO BEAR THE ECONOMIC RISK OF INVESTING IN AND HOLDING THIS NOTE, (C) IT
IS AN INSTITUTIONAL ACCREDITED INVESTOR THAT IS NOT A U.S. PERSON AND IS
ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 903 OR
904 OF REGULATION S UNDER THE SECURITIES ACT OR (D) IT IS AN INSTITUTIONAL
ACCREDITED INVESTOR ACQUIRING THIS NOTE AFTER THE RESALE RESTRICTION TERMINATION
DATE (AS DEFINED BELOW), (2) AGREES THAT IT WILL NOT OFFER, SELL OR OTHERWISE
TRANSFER THIS NOTE OR AN INTEREST HEREIN, EXCEPT (A) TO THE ISSUER OR A
SUBSIDIARY THEREOF, (B) FOR SO LONG AS THIS NOTE IS ELIGIBLE FOR RESALE PURSUANT
TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER, TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A UNDER THE SECURITIES ACT, (C) TO
AN INSTITUTIONAL ACCREDITED INVESTOR THAT IS PURCHASING THIS NOTE OR AN INTEREST
HEREIN, AS THE CASE MAY BE, FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN
INSTITUTIONAL ACCREDITED INVESTOR FOR INVESTMENT PURPOSES AND NOT WITH A VIEW
TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF
THE SECURITIES ACT OR (D) TO AN INSTITUTIONAL ACCREDITED INVESTOR OUTSIDE THE
UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 903 OR 904 OF
REGULATION S UNDER THE SECURITIES ACT (IF AVAILABLE), IN EACH CASE UNLESS
CONSENTED TO BY THE ISSUER IN ITS SOLE DISCRETION AND SUCH OFFER, SALE OR OTHER
TRANSFER OCCURS FOLLOWING (X) THE DATE THAT IS ONE YEAR (OR SUCH SHORTER PERIOD
OF TIME AS PERMITTED BY RULE 144 UNDER THE SECURITIES ACT OR ANY SUCCESSOR
PROVISION THEREUNDER) AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF (OR ANY
PREDECESSOR OF THIS NOTE) AND (Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY
APPLICABLE LAW (THE “RESALE RESTRICTION TERMINATION DATE”) AND (3) AGREES THAT
IT WILL GIVE TO EACH PERSON TO WHOM THIS NOTE OR AN INTEREST HEREIN IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND; PROVIDED, THAT
THE ISSUER AND THE TRUSTEE SHALL HAVE THE RIGHT PRIOR TO ANY SUCH OFFER, SALE OR
TRANSFER PURSUANT TO CLAUSE (2)(C) OR (D) OF THIS PARAGRAPH TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM TO THE EFFECT THAT THE RELEVANT FOREGOING
CONDITIONS ARE MET. THE TERMS “OFFSHORE TRANSACTION,” “UNITED STATES” AND “U.S.
PERSON” HAVE THE RESPECTIVE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE
SECURITIES ACT. THE INDENTURE REFERRED TO HEREINAFTER CONTAINS A PROVISION
REQUIRING THE REGISTRAR APPOINTED THEREUNDER TO REFUSE TO REGISTER ANY TRANSFER
OF THIS NOTE IN VIOLATION OF THE FOREGOING RESTRICTIONS.
 
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Each Note shall also bear the following legend on the face thereof:
 
BY ITS PURCHASE AND ACCEPTANCE OF THIS NOTE, EACH PURCHASER WILL BE DEEMED TO
HAVE REPRESENTED AND WARRANTED (A) THAT EITHER (I) NO PLAN ASSETS HAVE BEEN USED
TO PURCHASE THIS NOTE OR (II) TO THE EXTENT THAT PLAN ASSETS ARE USED TO
PURCHASE THIS NOTE ONE OR MORE STATUTORY OR ADMINISTRATIVE EXEMPTIONS APPLIES
SUCH THAT THE USE OF PLAN ASSETS TO PURCHASE AND HOLD THIS NOTE WILL NOT
CONSTITUTE A NON-EXEMPT PROHIBITED TRANSACTION, AND (B) THAT EITHER (X) NO
ASSETS OF A GOVERNMENTAL, CHURCH OR FOREIGN PLAN HAVE BEEN USED TO PURCHASE SUCH
NOTES OR (Y) TO THE EXTENT SUCH ASSETS ARE USED, NEITHER THE PURCHASE NOR
HOLDING OF THE NOTES WILL CONSTITUTE OR RESULT IN A VIOLATION OF ANY APPLICABLE
FEDERAL, STATE, LOCAL OR NON-U.S. LAW THAT IS SIMILAR TO THE PROHIBITED
TRANSACTION PROVISIONS OF SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE.
“PLAN ASSETS” HAS THE MEANING GIVEN TO IT BY SECTION 3(42) OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”) AND REGULATIONS OF
THE U.S. DEPARTMENT OF LABOR.
 
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THIS NOTE MAY NOT BE RESOLD OR TRANSFERRED EXCEPT AS SET FORTH IN THE INDENTURE
REFERRED TO HEREINAFTER, AND, IN ADDITION, EACH PERSON WHO ACQUIRES OR ACCEPTS
THIS NOTE OR AN INTEREST HEREIN BY SUCH ACQUISITION OR ACCEPTANCE AGREES THAT IT
SHALL CAUSE ANY PROPOSED TRANSFEREE TO EXECUTE A RESALE CONFIDENTIALITY
AGREEMENT IN THE FORM ATTACHED AS EXHIBIT B TO SUCH INDENTURE AND DELIVER SUCH
RESALE CONFIDENTIALITY AGREEMENT TO THE REGISTRAR (AS DEFINED IN SUCH INDENTURE)
AND FURTHER AGREES TO OTHERWISE COMPLY WITH THE TRANSFER RESTRICTIONS SET FORTH
IN SUCH INDENTURE, INCLUDING SECTION 2.11 THEREOF, AND FURTHER ACKNOWLEDGES AND
AGREES TO THE PROVISIONS SET FORTH IN SECTION 2.5 OF SUCH INDENTURE.
 
Each Note shall also bear the following legend on the face thereof:
 
BY ITS ACQUISITION HEREOF, THE HOLDER ACKNOWLEDGES THAT THIS NOTE (OR ANY
BENEFICIAL INTEREST THEREIN) MAY NOT BE EXCHANGED OR TRANSFERRED IF, IMMEDIATELY
AFTER SUCH EXCHANGE OR TRANSFER, THERE WOULD BE MORE THAN 95 NOTEHOLDERS (IN THE
CASE OF NOTES THAT ARE DEFINITIVE NOTES) OR BENEFICIAL HOLDERS (IN THE CASE OF
NOTES THAT ARE GLOBAL NOTES) OF NOTES, AND ANY SUCH PURPORTED EXCHANGE OR
TRANSFER SHALL BE VOID AB INITIO.
 
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Each Global Note shall also bear the following legend on the face thereof:
 
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.
 
TRANSFERS OF THIS NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART,
TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE
AND TRANSFERS OF PORTIONS OF THIS NOTE SHALL BE LIMITED TO TRANSFERS MADE IN
ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTION 2.11 OF THE INDENTURE
REFERRED TO HEREINAFTER.
 
Each Temporary Regulation S Global Note shall also bear the following legend on
the face thereof:
 
THIS NOTE IS A TEMPORARY REGULATION S GLOBAL NOTE WITHIN THE MEANING OF THE
INDENTURE REFERRED TO HEREINAFTER AND IS SUBJECT TO RESTRICTIONS ON THE TRANSFER
AND EXCHANGE THEREOF AND ON THE PAYMENT OF INTEREST THEREON AS SPECIFIED IN THE
INDENTURE REFERRED TO HEREINAFTER.
 
Section 2.3 Registrar and Paying Agent.
 
(a) With respect to each class of Notes, there shall at all times be maintained
an office or agency in the location set forth in Section 12.5 where the Notes of
such class may be presented or surrendered for registration of transfer or for
exchange (including any additional registrar, each, a “Registrar”) and for
payment thereof (including any additional paying agent, each, a “Paying Agent”)
and where notices and demands to or upon the Issuer in respect of such Notes may
be served. The Trustee shall be the initial Paying Agent and Registrar, and the
Issuer shall not be permitted to act as a Paying Agent or a Registrar. The
Issuer shall cause each Registrar to keep a register of such class of Notes for
which it is acting as Registrar and of their transfer and exchange (the
“Register”). Written notice of the location of each such other office or agency
and of any change of location thereof shall be given by the Trustee to the
Issuer and the Noteholders of such class of Notes. In the event that no such
office or agency shall be maintained or no such notice of location or of change
of location shall be given, presentations and demands may be made and notices
may be served at the Corporate Trust Office.
 
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(b) Each Authorized Agent in the location set forth in Section 12.5 shall be a
bank, trust company or corporation organized and doing business under the laws
of the U.S., any state or territory thereof or of the District of Columbia, with
a combined capital and surplus of at least $75,000,000 (or having a combined
capital and surplus in excess of $5,000,000 and the obligations of which,
whether now in existence or hereafter incurred, are fully and unconditionally
Guaranteed by a bank, trust company or corporation organized and doing business
under the laws of the U.S., any state or territory thereof or of the District of
Columbia and having a combined capital and surplus of at least $75,000,000) and
shall be authorized under the laws of the U.S., any state or territory thereof
or the District of Columbia to exercise corporate trust powers, subject to
supervision by federal or state authorities (such requirements, the “Eligibility
Requirements”). Each Registrar other than the Trustee shall furnish to the
Trustee, at least five Business Days prior to each Payment Date, and at such
other times as the Trustee may request in writing, a copy of the Register
maintained by such Registrar.
 
(c) Any Person into which any Authorized Agent may be merged or converted or
with which it may be consolidated, or any Person resulting from any merger,
consolidation or conversion to which any Authorized Agent shall be a party, or
any Person succeeding to all or substantially all of the corporate trust
business of any Authorized Agent (including the administration of the fiduciary
relationship contemplated by this Indenture), shall be the successor of such
Authorized Agent hereunder, if such successor corporation is otherwise eligible
under this Section 2.3, without the execution or filing of any paper or any
further act on the part of the parties hereto or such Authorized Agent or such
successor Person.
 
(d) Any Authorized Agent may at any time resign by giving written notice of
resignation to the Trustee and the Issuer. The Issuer may, and at the request of
the Trustee shall, at any time terminate the agency of any Authorized Agent by
giving written notice of termination to such Authorized Agent and to the
Trustee. Upon the resignation or termination of an Authorized Agent or if at any
time any such Authorized Agent shall cease to be eligible under this Section 2.3
(when, in either case, no other Authorized Agent performing the functions of
such Authorized Agent shall have been appointed by the Trustee), the Issuer
shall promptly appoint one or more qualified successor Authorized Agents,
reasonably satisfactory to the Trustee, to perform the functions of the
Authorized Agent that has resigned or whose agency has been terminated or who
shall have ceased to be eligible under this Section 2.3. The Issuer shall give
written notice of any such appointment made by it to the Trustee, and in each
case the Trustee shall mail notice of such appointment to all Noteholders of the
related class of Notes as their names and addresses appear on the Register for
such class of Notes.
 
(e) The Issuer agrees to pay, or cause to be paid, from time to time to each
Authorized Agent reasonable compensation for its services and to reimburse it
for its reasonable expenses to be agreed to pursuant to separate agreements with
each such Authorized Agent.
 
Section 2.4 Paying Agent to Hold Money in Trust. The Trustee shall require each
Paying Agent other than the Trustee to agree in writing that all moneys
deposited with any Paying Agent for the purpose of any payment on the Notes
shall be deposited and held in trust for the benefit of the Noteholders entitled
to such payment, subject to the provisions of this Section 2.4. Moneys so
deposited and held in trust shall constitute a separate trust fund for the
benefit of the Noteholders with respect to which such money was deposited.
 
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The Trustee may at any time, for the purpose of obtaining the satisfaction and
discharge of this Indenture or for any other purpose, direct any Paying Agent to
pay to the Trustee all sums held in trust by such Paying Agent, and, upon such
payment by any Paying Agent to the Trustee, such Paying Agent shall be released
from all further liability with respect to such money.
 
Section 2.5 Method of Payment.
 
(a) On each Payment Date, the Trustee shall, or shall instruct a Paying Agent
to, pay, to the extent of the Available Collections Amount for such Payment Date
and any funds withdrawn from the Interest Reserve Account or the Capital Account
by the Trustee pursuant to Section 3.8, to the Noteholders all interest,
principal and Premium, if any, on each class of Notes in the amounts determined
by the Calculation Agent pursuant to Section 3.5; provided, that payment on a
Temporary Regulation S Global Note shall be made to the Noteholder thereof only
in conformity with Section 2.5(c) and payment on any Note may be deferred as
provided in Section 2.5(d). Each payment on any Payment Date other than the
final payment with respect to any class of Notes shall be made by the Trustee or
Paying Agent to the Noteholders as of the Record Date for such Payment Date. The
final payment with respect to any class of Notes, however, shall be made only
upon presentation and surrender of such Note by the Noteholder or its agent at
an office or agency of the Trustee or Paying Agent in New York City.
 
(b) At such time, if any, as the Notes of any class are issued in the form of
Definitive Notes, payments on a Payment Date shall be made by check mailed to
each Noteholder of a Definitive Note on the applicable Record Date at its
address appearing on the Register maintained with respect to such class of
Notes. Alternatively, upon application in writing to the Trustee, not later than
the applicable Record Date, by a Noteholder, subject to Section 2.5(d), any such
payments shall be made by wire transfer to an account designated by such
Noteholder at a financial institution in New York City; provided, that the final
payment for any class of Notes shall be made only upon presentation and
surrender of the Definitive Notes of such class by the Noteholder or its agent
at an office or agency of the Trustee or Paying Agent in New York City. Payments
in respect of the Notes represented by a Global Note (including principal,
Premium, if any, and interest) shall be made by wire transfer of immediately
available funds to the account specified by DTC at a financial institution in
New York City.
 
(c) The beneficial owner of a Temporary Regulation S Global Note may arrange to
receive payments through Euroclear or Clearstream on such Temporary Regulation S
Global Note only after delivery by such beneficial owner to Euroclear or
Clearstream, as the case may be, of a written certification substantially in the
form of Exhibit G and upon delivery by Euroclear or Clearstream, as the case may
be, to the Paying Agent of a certification or certifications substantially in
the form of Exhibit H. No interest shall be paid to any beneficial owner and no
interest shall be paid to Euroclear or Clearstream on such beneficial owner’s
interest in a Temporary Regulation S Global Note unless Euroclear or
Clearstream, as the case may be, has provided such a certification to the Paying
Agent with respect to such interest.
 
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(d) Not later than five Business Days prior to each Payment Date or any other
date on which a Distribution Report is to be distributed to Noteholders and
Beneficial Holders pursuant to Section 2.13(a), the Registrar shall use
commercially reasonable efforts to (i) prepare a list (the “Approved Holder
List”) of each Noteholder and Beneficial Holder as of the related Record Date
that has executed and delivered to the Registrar a Confidentiality Agreement,
(ii) obtain from DTC a list (the “DTC List”) of the Agent Members holding
Beneficial Interests in the Notes as of such Record Date, (iii) obtain from each
such Agent Member as of such Record Date the corresponding Beneficial Holders of
the Beneficial Interests held by each such Agent Member set forth on the DTC
List as of such Record Date and prepare a list thereof and of the Beneficial
Interests owned by each such Beneficial Holder (the “Actual Beneficial Holder
List”), (iv) prepare a list (the “Escrow List”), if necessary, that identifies
any differences between (x) the Noteholders and Beneficial Holders listed on the
Approved Holder List and (y)(A) the Noteholders of Definitive Notes set forth in
the Register and (B) the Beneficial Holders listed on the Actual Beneficial
Holder List (or those Beneficial Holders that the Registrar actually knows have
not executed and delivered to the Registrar Confidentiality Agreements), in each
case as of such Record Date, and (v) provide the Approved Holder List, the DTC
List, the Actual Beneficial Holder List and any Escrow List to the Issuer, the
Servicer and the Trustee. Each Noteholder, Agent Member and Beneficial Holder
hereby agrees, acknowledges and consents that (I) with respect to a Noteholder
of any Notes (other than DTC or its nominee) that as of such Record Date has not
executed and delivered to the Registrar a Confidentiality Agreement and,
therefore, is listed on the Escrow List, the Trustee promptly (but in no event
less than three Business Days prior to the applicable Payment Date) shall use
commercially reasonable efforts to notify such Noteholder of such failure and,
on the applicable Payment Date, cause any payment of principal, Premium, if any,
or interest on such Notes to be paid directly to the Escrow Account and (II)
with respect to a Beneficial Holder of any Beneficial Interest in a Note that as
of such Record Date has not executed and delivered to the Registrar a
Confidentiality Agreement and, therefore, is listed on the Escrow List, the
Trustee promptly (but in no event less than three Business Days prior to the
applicable Payment Date) shall use commercially reasonable efforts to cause the
Beneficial Interest of such Beneficial Holder to be transferred into the name of
the Trustee (including the Trustee acting as an Agent Member with respect to
such Beneficial Interests) and shall use commercially reasonable efforts to
cause any payment of principal, Premium, if any, or interest on such Notes or
Beneficial Interests received on such Payment Date to be deposited into the
Escrow Account upon receipt thereof; provided, that the Record Date for purposes
of receiving such payments only and with respect only to such Beneficial Holder
shall be changed to the Business Day immediately prior to the related Payment
Date. Upon receipt by the Trustee and the Issuer of written notice from the
Registrar that the applicable Noteholder or Beneficial Holder has executed and
delivered to the Registrar a Confidentiality Agreement, the Trustee will
distribute such amounts, without interest, from the Escrow Account to the
Trustee for distribution to each such Noteholder or Beneficial Holder, but prior
to the receipt thereof the Trustee shall be authorized to treat such purported
Noteholder or Beneficial Holder as not being a Noteholder or Beneficial Holder,
as the case may be, for purposes of this Indenture.
 
(e) Subject to the application of Section 3.7(b) in respect of the next Payment
Date, to the extent that the full amount of any interest due on the Class A
Notes is not paid in full on any Payment Date and funds are deposited into the
Collection Account following such Payment Date but prior to the third Business
Day prior to the immediately succeeding Calculation Date, notwithstanding
anything to the contrary in this Indenture, the Trustee shall use such funds to
pay to the Noteholders of record the overdue interest together with Additional
Interest on such overdue interest on or before the third Business Day after such
funds are deposited; provided, that all Expenses with respect to such preceding
Payment Date contemplated by Section 3.7(a)(i) shall have been paid. With each
such payment the Trustee shall furnish a brief statement to Noteholders eligible
to receive Distribution Reports in accordance with this Indenture indicating the
aggregate amount of funds received and the balance of overdue interest (and
interest thereon) to which the payment is being applied. Subject to Section
2.5(d), any such payment shall be made to the Noteholders of record as of the
third Business Day preceding the date of each such payment. Any funds that are
deposited on or after the third Business Day prior to the immediately succeeding
Calculation Date shall be held in the Collection Account and applied in
accordance with this Indenture on the next succeeding Payment Date.
 
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Section 2.6 Minimum Denominations. Each class of Notes shall be issued in
minimum denominations of $1,000,000 or integral multiples of $1,000 in excess
thereof.
 
Section 2.7 Transfer and Exchange; Cancellation. The Notes are issuable only in
fully registered form without coupons. A Noteholder or a Beneficial Holder may
transfer a Note or a Beneficial Interest therein only by written application to
the Registrar stating the name of the proposed transferee and otherwise
complying with the terms of this Indenture, including the requirement for the
execution and delivery of a Confidentiality Agreement by such proposed
transferee to the Registrar relating to such transfer as set forth in Section
2.11(j). No such transfer shall be effected until, and such proposed transferee
shall succeed to the rights of a Noteholder or a Beneficial Holder only upon,
final acceptance and registration of the transfer by the Registrar and
confirmation by the Registrar pursuant to Section 2.11(j) that such Noteholder
or such Beneficial Holder has executed and delivered an appropriate
Confidentiality Agreement to the Registrar.
 
Prior to the due presentment for registration of transfer of a Note and
satisfaction of the requirements specified in the last sentence of the preceding
paragraph, the Issuer and the Trustee may deem and treat the applicable
registered Noteholder as the absolute owner and holder of such Note for the
purpose of receiving payment of all amounts payable with respect to such Note
and for all other purposes and shall not be affected by any notice to the
contrary. The Registrar (if different from the Trustee) shall promptly notify
the Trustee in writing and the Trustee shall promptly notify the Issuer of each
request for a registration of transfer of a Note by furnishing the Issuer a copy
of such request.
 
Furthermore, any Noteholder of a Global Note shall, by acceptance of such Global
Note, agree that, subject to Section 2.10(b) and Section 2.11, transfers of
Beneficial Interests in such Global Note may be effected only through a
book-entry system maintained by the Noteholder of such Global Note (or its
agent) and that ownership of a Beneficial Interest in such Global Note shall be
required to be reflected in a book-entry system. When Notes are presented to the
Registrar with a request to register the transfer or to exchange them for an
equal principal amount of Notes of other authorized denominations, the Registrar
shall register the transfer or make the exchange as requested if its
requirements for such transactions are met (including, in the case of a
transfer, that such Notes are duly endorsed or accompanied by a written
instrument of transfer in form satisfactory to the Trustee and Registrar duly
executed by the Noteholder thereof or by an attorney who is authorized in
writing to act on behalf of the Noteholder). To permit registrations of
transfers and exchanges, the Issuer shall execute and the Trustee shall
authenticate Notes at the Registrar’s request. Except as set forth in Section
2.8 and Section 2.9, no service charge shall be made for any registration of
transfer or exchange or redemption of the Notes.
 
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The Registrar shall not be required to exchange or register the transfer of any
Notes as above provided during the 15-day period preceding the Final Legal
Maturity Date of any such Notes or during a 15-day period preceding the first
mailing of any notice of Redemption or Refinancing of Notes to be redeemed or
refinanced. The Registrar shall not be required to exchange or register the
transfer of any Notes that have been selected, called or are being called for
Redemption or Refinancing except, in the case of any Notes where written notice
has been given that such Notes are to be redeemed in part, the portion thereof
not so to be redeemed.
 
The Issuer at any time may deliver Notes to the Trustee for cancellation. The
Trustee and no one else shall cancel and destroy in accordance with its
customary practices in effect from time to time (subject to the record retention
requirements of the Exchange Act) any such Notes, together with any other Notes
surrendered to it for registration of transfer, exchange or payment. The Issuer
may not issue new Notes (other than Refinancing Notes issued in connection with
any Refinancing) to replace Notes it has redeemed, paid or delivered to the
Trustee for cancellation.
 
Section 2.8 Mutilated, Destroyed, Lost or Stolen Notes. If any Note shall become
mutilated, destroyed, lost or stolen, the Issuer shall, upon the written request
of the Noteholder thereof and presentation of the Note or satisfactory evidence
of destruction, loss or theft thereof to the Trustee or Registrar and a
confirmation by the Registrar to the Trustee that such Noteholder (or Beneficial
Holder of the Beneficial Interest therein) has executed and delivered to the
Registrar a Confidentiality Agreement, issue, and the Trustee shall authenticate
and the Trustee or Registrar shall deliver in exchange therefor or in
replacement thereof, a new Note, payable to such Noteholder in the same
principal amount, of the same maturity, with the same payment schedule, bearing
the same interest rate and dated the date of its authentication. If the Note
being replaced has become mutilated, such Note shall be surrendered to the
Trustee or the Registrar and forwarded to the Issuer by the Trustee or such
Registrar. If the Note being replaced has been destroyed, lost or stolen, the
Noteholder thereof shall furnish to the Issuer, the Trustee and the Registrar
(a) such security or indemnity as may be required by the Issuer, the Trustee and
the Registrar to save each of them harmless (an unsecured indemnity from any QIB
being satisfactory security or indemnity) and (b) evidence satisfactory to the
Issuer, the Trustee and the Registrar of the destruction, loss or theft of such
Note and of the ownership thereof (an affidavit from any QIB being satisfactory
evidence). The Noteholders will be required to pay any Tax or other governmental
charge imposed in connection with such exchange or replacement and any other
expenses (including the fees and expenses of the Trustee and the Registrar)
connected therewith.
 
Section 2.9 Payments of Transfer Taxes. Upon the transfer of any Note or Notes
pursuant to Section 2.7, the Issuer or the Trustee may require from the party
requesting such new Note or Notes payment of a sum to reimburse the Issuer or
the Trustee for, or to provide funds for the payment of, any transfer Tax or
similar governmental charge payable in connection therewith.
 
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Section 2.10 Book-Entry Provisions.
 
(a) Global Notes shall (i) be registered in the name of DTC or a nominee of DTC,
(ii) be delivered to the Trustee as custodian for DTC and (iii) bear the Private
Placement Legend. In accordance with the requirements of DTC, the Issuer will
cause the Trustee to authenticate an additional Global Note or additional Global
Notes in the appropriate principal amount such that no Global Note may exceed an
aggregate principal amount of $500,000,000 at any time.
 
Members of, or participants in, DTC (“Agent Members”) shall have no rights under
this Indenture with respect to any Global Note held on their behalf by DTC, or
the Trustee as its custodian, or under such Global Note, and DTC may be treated
by the Issuer, the Trustee and any agent of the Issuer or the Trustee as the
absolute owner of such Global Note for all purposes whatsoever.
 
Whenever notice or other communication to the Noteholders of any class of Global
Notes is required under this Indenture, unless and until Definitive Notes shall
have been issued pursuant to Section 2.10(b), the Trustee shall give all such
notices and communications specified herein to be given to Noteholders of such
class of Global Notes to DTC and/or the Agent Members, and shall make available
additional copies as requested by such Agent Members, subject to the limitations
on distribution contained in Section 2.13.
 
Notwithstanding the foregoing, nothing herein shall prevent the Issuer, the
Trustee or any agent of the Issuer or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by DTC or impair,
as between DTC and its Agent Members, the operation of customary practices
governing the exercise of the rights of a Noteholder under any Global Note.
Neither the Issuer nor the Trustee shall be liable for any delay by DTC in
identifying the Agent Members in respect of the Global Notes, and the Issuer and
the Trustee may conclusively rely on, and shall be fully protected in relying
on, instructions from DTC for all purposes (including with respect to the
registration and delivery, and the respective principal amounts, of any Global
Notes to be issued).
 
(b) Transfers of a Global Note shall be limited to transfers of such Global Note
in whole, but not in part, to DTC, its successors or their respective nominees.
Interests of Agent Members in a Global Note may be transferred in accordance
with the rules and procedures of DTC and the provisions of Section 2.11. Except
as set forth in Section 2.11(a), Definitive Notes shall be issued to the
individual Agent Members or Beneficial Holders or their nominees in exchange for
their Beneficial Interests in a Global Note with respect to any class of Notes
only if (i) the Issuer advises the Trustee in writing that DTC is no longer
willing or able to properly discharge its responsibilities as depositary with
respect to such class of Notes and the Trustee or the Issuer is unable to
appoint a qualified successor within 90 days of such notice, (ii) the Issuer, at
its option, elects to terminate the book-entry system through DTC or (iii)
during the occurrence of an Event of Default with respect to such class of
Notes, Noteholders of a majority of the Outstanding Principal Balance of such
class of Notes advise the Issuer, the Trustee and DTC through the Agent Members
in writing that the continuation of a book-entry system through DTC (or a
successor thereto) is no longer in the best interests of the Noteholders of such
class. Upon the occurrence of any event described in the immediately preceding
sentence, the Trustee shall notify all affected Noteholders of such class,
through DTC, of the occurrence of such event and of the availability of
Definitive Notes of such class; provided, however, that in no event shall the
Temporary Regulation S Global Note be exchanged for Definitive Notes prior to
the later of (x) the Regulation S Global Note Exchange Date and (y) the date of
receipt by the Issuer of any certificates determined by it to be required
pursuant to Rule 903 or 904 under the Securities Act. Upon surrender to the
Trustee of the Global Notes of such class held by DTC, accompanied by
registration instructions from DTC for registration of Definitive Notes, the
Issuer shall issue and the Trustee shall authenticate and deliver the Definitive
Notes of such class to the Agent Members and Beneficial Holders of such class or
their nominees in accordance with the instructions of DTC.
 
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None of the Issuer, the Registrar, the Paying Agent or the Trustee shall be
liable for any delay in delivery of such instructions and may conclusively rely
on, and shall be fully protected in relying on, such registration instructions.
Upon the issuance of Definitive Notes of such class, the Trustee shall recognize
the Persons in whose name the Definitive Notes are registered in the Register as
Noteholders hereunder. Neither the Issuer nor the Trustee shall be liable if the
Trustee or the Issuer is unable to locate a qualified successor to DTC.
 
Definitive Notes of any class will be freely transferable and exchangeable for
Definitive Notes of the same class at the office of the Trustee or the office of
the Registrar upon compliance with the requirements set forth herein. In the
case of a transfer of only part of a holding of Definitive Notes, a new
Definitive Note shall be issued to the transferee in respect of the part
transferred and a new Definitive Note in respect of the balance of the holding
not transferred shall be issued to the transferor and may be obtained at the
office of the applicable Registrar.
 
(c) Any Beneficial Interest in one of the Global Notes as to any class that is
transferred to a Person who takes delivery in the form of an interest in another
Global Note will, upon transfer, cease to be an interest in such Global Note and
become an interest in such other Global Note and, accordingly, will thereafter
be subject to all transfer restrictions, if any, and other procedures applicable
to Beneficial Interests in such other Global Note for as long as it remains such
an interest.
 
(d) Any Definitive Note delivered in exchange for an interest in a Global Note
pursuant to Section 2.10(b) shall bear the Private Placement Legend applicable
to a Global Note.
 
Section 2.11 Special Transfer Provisions.
 
(a) The following provisions shall apply with respect to any proposed transfer
of a Beneficial Interest in a 144A Global Note, a Permanent Regulation S Global
Note or a Definitive Note to any Institutional Accredited Investor that is not a
QIB (excluding Non-U.S. Persons) prior to the Resale Restriction Termination
Date:
 
(i) The Registrar shall register the transfer of any Definitive Note if the
proposed transferee has delivered to the Registrar (A) a certificate
substantially in the form of Exhibit J (such certificate also to be delivered to
the Issuer), (B) an Opinion of Counsel acceptable to the Issuer that such
transfer is in compliance with the Securities Act and (C) a Confidentiality
Agreement duly executed by such transferee.
 
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(ii) If the proposed transferor is an Agent Member holding a Beneficial Interest
in a 144A Global Note or a Permanent Regulation S Global Note, upon receipt by
the Registrar of (A) the documents required by Section 2.11(a)(i), including the
Confidentiality Agreement, and (B) instructions given in accordance with DTC’s
and the Registrar’s procedures, the Registrar shall reflect on its books and
records the date and a decrease in the principal amount of the 144A Global Note
or the Permanent Regulation S Global Note, as the case may be, in an amount
equal to the principal amount of the Beneficial Interest in the Global Note to
be transferred, and the Issuer shall execute, and the Trustee shall authenticate
and deliver, one or more Definitive Notes of like tenor and amount.
 
(b) The following provisions shall apply with respect to any proposed transfer
of a Beneficial Interest in a 144A Global Note, a Permanent Regulation S Global
Note or a Definitive Note to a QIB (excluding Non-U.S. Persons) prior to the
Resale Restriction Termination Date:
 
(i) If the Note to be transferred consists of (A) Definitive Notes, the
Registrar shall reflect the transfer on its books and records if such transfer
is being made by a proposed transferor who has delivered such Note and checked
the box provided for on the form of Note stating, or has otherwise advised the
Issuer and the Registrar in writing, that the sale has been made in compliance
with the provisions of Rule 144A to a transferee who has signed the
certification provided for on the form of Note stating, or has otherwise advised
the Issuer and the Registrar in writing, that (w) it is purchasing the Note for
its own account or an account with respect to which it exercises sole investment
discretion and that it and any such account are QIBs within the meaning of Rule
144A, (x) it is or such QIBs are aware that the sale to it or them is being made
in reliance on Rule 144A and acknowledge that it has or they have received such
information regarding the Issuer as it has or they have requested pursuant to
Rule 144A or has or have determined not to request such information, (y) it is
or such QIBs are aware that the transferor is relying upon the foregoing
representations in order to claim the exemption from registration provided by
Rule 144A and (z) it has and all such QIBs have duly executed and delivered to
the Registrar a Confidentiality Agreement or (B) a Beneficial Interest in a 144A
Global Note, the transfer of such Beneficial Interest may be effected only
through the book-entry system maintained by DTC and to the extent provided in
the agreement with DTC, and, in each case, each transferee has delivered to the
Registrar a Confidentiality Agreement duly executed by such transferee.
 
(ii) If the proposed transferee is an Agent Member, and the Note to be
transferred is a Definitive Note, upon receipt by the Registrar of the documents
referred to in Section 2.11(b)(i), including the Confidentiality Agreement, and
instructions given in accordance with DTC’s and the Registrar’s procedures, the
Registrar shall reflect on its books and records the date and an increase in the
principal amount at maturity of the 144A Global Note in an amount equal to the
principal amount at maturity of the Definitive Note to be transferred, and the
Trustee shall cancel the Definitive Note so transferred (upon written direction
from the Registrar if different from the Trustee).
 
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(iii) If the proposed transferee is an Agent Member, and the Note to be
transferred is represented by a Beneficial Interest in a Permanent Regulation S
Global Note, upon receipt by the Registrar of the documents referred to in
Section 2.11(b)(i), including the Confidentiality Agreement, and instructions
given in accordance with DTC’s and the Registrar’s procedures, the Registrar
shall reflect on its books and records the date and a decrease in the principal
amount of the Permanent Regulation S Global Note in an amount equal to the
principal amount of the Beneficial Interest in the Permanent Regulation S Global
Note to be transferred, and the Registrar shall reflect on its books and records
an increase in the principal amount of the 144A Global Note in an amount equal
to such transferred amount.
 
(c) With respect to any proposed transfer of a Beneficial Interest in a
Temporary Regulation S Global Note to an Institutional Accredited Investor prior
to the Resale Restriction Termination Date, the Registrar shall reflect on its
books and records the transfer of such Beneficial Interest (A) if the proposed
transferee is a Non-U.S. Person, the proposed transferor has delivered to the
Registrar a certificate substantially in the form of Exhibit I (such certificate
also to be delivered to the Issuer) and the proposed transferee has duly
executed and delivered to the Registrar a Confidentiality Agreement (in which
case the transferee will receive a corresponding Beneficial Interest in the
Temporary Regulation S Global Note) or (B) if the proposed transferee is a QIB
and the proposed transferor has checked the box provided for on the form of Note
stating, or has otherwise advised the Issuer and the Registrar in writing, that
the sale has been made in compliance with the provisions of Rule 144A to a
transferee who has signed the certification provided for on the form of Note
stating, or has otherwise advised the Issuer and the Registrar in writing, that
(w) it is purchasing the Note (or the Beneficial Interest therein) for its own
account or an account with respect to which it exercises sole investment
discretion and that it and any such account are QIBs within the meaning of Rule
144A, (x) it is or such QIBs are aware that the sale to it or them is being made
in reliance on Rule 144A and acknowledge that it has or they have received such
information regarding the Issuer as it has or they have requested pursuant to
Rule 144A or has or have determined not to request such information, (y) it is
or such QIBs are aware that the transferor is relying upon the foregoing
representations in order to claim the exemption from registration provided by
Rule 144A and (z) it has and all such QIBs have duly executed and delivered to
the Registrar a Confidentiality Agreement (in which case the Registrar shall
reflect on its books and records the date and an increase in the principal
amount of the 144A Global Note of the relevant class, in an amount equal to the
principal amount of the Temporary Regulation S Global Note (or the Beneficial
Interest therein) of such class to be transferred, and the Trustee shall
decrease the amount of the Temporary Regulation S Global Note of such class
(upon written direction from the Registrar if different from the Trustee)).
 
(d) Except as set forth in Section 2.11(c), prior to the Resale Restriction
Termination Date, the following provisions shall apply with respect to any
transfer of a Note (or a Beneficial Interest therein) to a Non-U.S. Person:
 
(i) Except as set forth in Section 2.11(c), prior to the applicable Regulation S
Global Note Exchange Date, the Registrar shall not register or reflect on its
books and records any proposed transfer of a Note (or a Beneficial Interest
therein) to a Non-U.S. Person.
 
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(ii) The Registrar shall register or reflect on its books and records, as the
case may be, any proposed transfer of a Note (or a Beneficial Interest therein)
to any Non-U.S. Person that is an Institutional Accredited Investor if the Note
to be transferred is a Definitive Note or a Beneficial Interest in a 144A Global
Note, upon receipt of a certificate substantially in the form of Exhibit I from
the proposed transferor and a Confidentiality Agreement duly executed and
delivered to the Registrar by such Non-U.S. Person that is an Institutional
Accredited Investor.
 
(iii) (A) If the proposed transferor is an Agent Member holding a Beneficial
Interest in a 144A Global Note, upon receipt by the Registrar of (x) the
documents, if any, required by Section 2.11(d)(ii) and (y) instructions in
accordance with DTC’s and the Registrar’s procedures, the Registrar shall
reflect on its books and records the date and a decrease in the principal amount
of the 144A Global Note in an amount equal to the principal amount of the
Beneficial Interest in such 144A Global Note to be transferred, and (B) if the
proposed transferee is an Agent Member, upon receipt by the Registrar of
instructions given in accordance with DTC’s and the Registrar’s procedures, the
Registrar shall reflect on its books and records the date and an increase in the
principal amount of the Permanent Regulation S Global Note of the relevant class
in an amount equal to the principal amount of the Beneficial Interest in such
144A Global Note or any Definitive Notes issued in exchange for such Beneficial
Interest in such 144A Global Note to be transferred, and the Trustee shall
cancel the Definitive Note, if any, so transferred or decrease the amount of the
144A Global Note (upon written direction from the Registrar if different from
the Trustee).
 
(e) With respect to any proposed transfer of any Note (or a Beneficial Interest
therein) after the Resale Restriction Termination Date, the Registrar shall
reflect the transfer of such Note or Beneficial Interest on its books and
records (along with any appropriate increase or decrease in the principal amount
at maturity of any Global Note upon receipt by the Registrar of instructions
given in accordance with DTC’s and the Registrar’s procedures) if the proposed
transferee has duly executed and delivered to the Registrar a Confidentiality
Agreement.
 
(f) Upon the transfer, exchange or replacement of Notes bearing the Private
Placement Legend, the Registrar shall deliver only Notes that bear the Private
Placement Legend.
 
(g) By its acceptance of any Note bearing the Private Placement Legend, each
Noteholder of such Note acknowledges the restrictions on transfer of such Note
set forth in this Indenture and in the Private Placement Legend and agrees that
it will transfer such Note (or the Beneficial Interest therein) only as provided
in this Indenture and in accordance with the Private Placement Legend. The
Registrar shall not register or reflect on its books and records a transfer of
any Note (or any Beneficial Interest therein) unless such transfer complies with
the restrictions on transfer of such Note set forth in this Indenture and in
accordance with the Private Placement Legend. In connection with any transfer of
Notes (or Beneficial Interests therein), each Noteholder (or Beneficial Holder)
agrees by its acceptance of the Notes (or Beneficial Interests therein) to
furnish the Trustee the certifications and legal opinions described herein to
confirm that such transfer is being made pursuant to an exemption from, or a
transaction not subject to, the registration requirements of the Securities Act;
provided, that the Trustee shall not be required to determine (but may rely on a
determination made by the Issuer with respect to) the sufficiency of any such
legal opinions.
 
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(h) The Notes shall be issued pursuant to an exemption from registration under
the Securities Act. The Issuer agrees that it will not at any time (i) apply to
list, list or list upon notice of issuance, (ii) consent to or authorize an
application for the listing or the listing of, or (iii) enable or authorize the
trading of, the Notes on an established securities market, including (w) a
national securities exchange registered under the Exchange Act or exempted from
registration because of the limited volume of transactions, (x) a foreign
securities exchange that, under the law of the jurisdiction where it is
organized, satisfies regulatory requirements that are analogous to the
regulatory requirements under the Exchange Act applicable to exchanges described
in Section 2.11(h)(w), (y) a regional or local exchange or (z) an
over-the-counter market, as the term “established securities market” and the
terms in this Section 2.11(h) are defined for purposes of Section 7704 of the
Code.
 
(i) The Trustee shall retain copies of all letters, notices and other written
communications received pursuant to Section 2.10 or this Section 2.11. The
Issuer shall have the right to inspect and make copies of all such letters,
notices, Confidentiality Agreements or other written communications at any
reasonable time upon the giving of reasonable written notice to the Trustee.
 
(j) Each Noteholder, Agent Member and Beneficial Holder agrees, by acceptance of
any Note or any Beneficial Interest therein, that it will not take any action to
transfer any Note (or any Beneficial Interest therein) to a proposed transferee
without causing such proposed transferee to execute and deliver to the Registrar
an appropriate Confidentiality Agreement relating to such transfer as set forth
in this Section 2.11. After the Closing Date with respect to the Original Class
A Notes (or the date of issuance with respect to any Class B Notes or any
Refinancing Notes), forms of Confidentiality Agreements will be available to
Noteholders, Agent Members and Beneficial Holders and proposed transferees of
the Notes (or the Beneficial Interests therein) from the Registrar, initially at
the Corporate Trust Office. Each such Confidentiality Agreement shall be
delivered to the Registrar promptly upon execution by the parties thereto and
the Registrar shall record the receipt of such Confidentiality Agreement. The
Registrar shall promptly, but in any event no later than two Business Days after
receipt of any such executed Confidentiality Agreement, furnish a copy of such
executed Confidentiality Agreement to the Trustee, the Issuer and the Servicer
and shall maintain a list of proposed transferees (including Noteholders and
Beneficial Holders) who have furnished such executed Confidentiality Agreements,
whether or not such proposed transferees purchase any Notes (or any Beneficial
Interests therein), and make such list available for inspection at the request
of the Trustee, the Issuer or the Servicer.
 
(k) Notwithstanding any other provision contained in this Indenture to the
contrary, any Noteholder or Beneficial Holder may assign a security interest in,
or pledge, all or any portion of the Notes (or any interest therein) held by it
to a trustee (or other similar representative) under any indenture, loan
agreement or similar agreement to which such Noteholder or Beneficial Holder is
party in support of any obligations of such Noteholder or Beneficial Holder to a
holder or holders of securities or other obligations issued by such Noteholder
or Beneficial Holder; provided, that no such assignment or pledge shall release
the assigning or pledging Noteholder or Beneficial Holder from its obligations
hereunder.
 
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Section 2.12 Temporary Definitive Notes. Pending the preparation of Definitive
Notes of any class, the Issuer may execute and the Trustee may authenticate and
deliver temporary Definitive Notes of such class that are printed, lithographed,
typewritten or otherwise produced, in any denomination, containing substantially
the same terms and provisions as are set forth in the applicable Exhibit or in
any indenture supplemental hereto, except for such appropriate insertions,
omissions, substitutions and other variations relating to their temporary nature
as the Manager executing such temporary Definitive Notes may determine, as
evidenced by his or her execution of such temporary Definitive Notes.
 
If temporary Definitive Notes of any class are issued, the Issuer shall cause
such Definitive Notes of such class to be prepared without unreasonable delay.
After the preparation of Definitive Notes of such class, the temporary
Definitive Notes shall be exchangeable for Definitive Notes upon surrender of
such temporary Definitive Notes at the Corporate Trust Office, without charge to
the Noteholder thereof. Upon surrender for cancellation of any one or more
temporary Definitive Notes of any class, the Issuer shall execute and the
Trustee shall authenticate and deliver in exchange therefor Definitive Notes of
like class, in authorized denominations and in the same aggregate principal
amounts. Until so exchanged, such temporary Definitive Notes shall in all
respects be entitled to the same benefits under this Indenture as Definitive
Notes.
 
Section 2.13 Statements to Noteholders.
 
(a) On each Payment Date and any other date for distribution of any payments
with respect to any class of Notes then Outstanding, the Trustee shall deliver a
report, covering the information set forth in Exhibit D and prepared by the
Servicer, giving effect to such payments (each, a “Distribution Report”), to (i)
each Noteholder and Beneficial Holder included on the Approved Holder List (and
not to any Noteholder or Beneficial Holder not included on the Approved Holder
List), (ii) the Issuer, (iii) the Calculation Agent and (iv) the Parent, and to
no other Person. Each Noteholder and Beneficial Holder shall be entitled to
receive the Distribution Report only if such Noteholder or Beneficial Holder has
executed and delivered to the Registrar a Confidentiality Agreement.
 
(b) Each Distribution Report provided to each Noteholder and Beneficial Holder
by the Trustee for each Payment Date pursuant to Section 2.13(a), commencing May
15, 2008, shall be accompanied by (i) a statement prepared by the Servicer
setting forth an analysis of the Collection Account activity for the period
commencing on the day next following the preceding Calculation Date and ending
on the Calculation Date relating to such Payment Date, which shall set forth,
among other things, the aggregate amount payable to Pfizer and certain other
third parties entitled to royalties in respect of Subject Products set forth in
the report contemplated by Section 4.1(c)(xi) of the Servicing Agreement, (ii)
such information, if any, that the Parent shall have provided to the Trustee
pursuant to Section 6.3 of the Purchase and Sale Agreement during the Interest
Accrual Period then ended and (iii) the information, if any, that the Issuer
shall have provided to the Trustee pursuant to Section 5.3 (or the Servicer
shall have provided to the Trustee pursuant to Section 4.1 of the Servicing
Agreement) during the Interest Accrual Period then ended.
 
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(c) After the end of each calendar year but not later than the latest date
permitted by law, the Trustee shall (or shall instruct any Paying Agent to)
furnish to each Person who at any time during such calendar year was a
Noteholder of any class of Notes a statement (for example, a Form 1099 or any
other means required by law) prepared by the Trustee containing the sum of the
amounts determined pursuant to the information covered by Exhibit D with respect
to the class of Notes for such calendar year or, in the event such Person was a
Noteholder of any class of Notes during only a portion of such calendar year,
for the applicable portion of such calendar year, and such other items as are
readily available to the Trustee and that a Noteholder shall reasonably request
as necessary for the purpose of such Noteholder’s preparation of its U.S.
federal income or other tax returns. So long as any of the Notes are registered
in the name of DTC or its nominee, such report and such other items will be
prepared on the basis of such information supplied to the Trustee by DTC and the
Agent Members and will be delivered by the Trustee to DTC and by DTC to the
applicable Beneficial Holders in the manner described above. In the event that
any such information has been provided by any Paying Agent directly to such
Person through other tax-related reports or otherwise, the Trustee in its
capacity as Paying Agent shall not be obligated to comply with such request for
information.
 
(d) At such time, if any, as the Notes of any class are issued in the form of
Definitive Notes, the Trustee shall prepare and deliver the information
described in Section 2.13(c) to each Noteholder of a Definitive Note of such
class for the relevant period of registered ownership of such Definitive Note as
appears on the books and records of the Trustee, subject to confirmation that
each such Noteholder has executed and delivered to the Registrar a
Confidentiality Agreement.
 
(e) The Trustee shall be at liberty to sanction any method of giving notice to
the Noteholders of any class if, in its opinion, such method is reasonable,
having regard to the number and identity of the Noteholders of such class and/or
to market practice then prevailing, is in the best interests of the Noteholders
of such class, and any such notice shall be deemed to have been given on such
date as the Trustee may approve; provided, that notice of such method is given
to the Noteholders of such class in such manner as the Trustee shall require.
 
Section 2.14 CUSIP, CINS, ISIN and Private Placement Numbers. The Issuer in
issuing the Notes may use CUSIP, CINS, ISIN, private placement or other
identification numbers (if then generally in use), and, if so, the Trustee shall
use such CUSIP, CINS, ISIN, private placement or other identification numbers,
as the case may be, in notices of redemption or exchange as a convenience to
Noteholders; provided, that any such notice shall state that no representation
is made as to the correctness of such numbers either as printed on the Notes or
as contained in any notice of redemption or exchange and that reliance may be
placed only on the other identification numbers printed on the Notes; provided,
further, that failure to use CUSIP, CINS, ISIN, private placement or other
identification numbers in any notice of redemption or exchange shall not affect
the validity or sufficiency of such notice.
 
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Section 2.15 Refinancing Notes.
 
(a) Subject to Section 2.15(b), Section 2.15(c) and Section 2.15(d), the Issuer
may issue Refinancing Notes pursuant to this Indenture for the purpose of
refinancing all of the Outstanding Principal Balance of any class of Notes
(including a refinancing of Refinancing Notes). Each refinancing of any class of
Notes with the proceeds of an offering of Refinancing Notes (a “Refinancing”)
shall be authorized pursuant to one or more Manager Resolutions. Each
Refinancing Note shall be designated generally as a Note for all purposes under
this Indenture, with such further designations added or incorporated in such
title as specified in the related Manager Resolution or in any indenture
supplemental hereto providing for the issuance of such Notes or specified in the
form of such Notes, as the case may be. The Refinancing Notes shall be issued on
the Payment Date on which the Redemption in whole of the class of Notes being
refinanced is to occur as provided in Section 3.11.
 
(b) A Refinancing of any class of Notes shall be effected as a Redemption
pursuant to Section 3.10, provided that a Refinancing of the Original Class A
Notes shall be effected as an Optional Redemption pursuant to Section 3.10(b).
On the date of any Refinancing, the Issuer shall issue and sell an aggregate
principal amount of Refinancing Notes (when added to the Available Collections
Amount and any funds in the Interest Reserve Account, the Redemption Account or
the Capital Account used or to be used in connection with such Refinancing) not
less than the amount sufficient to pay in full the applicable Redemption Price
of the Notes being refinanced in whole thereby plus the Refinancing Expenses
relating thereto. The proceeds of each sale of Refinancing Notes shall be used
to the extent necessary to make the deposit required by Section 3.11 and to pay
such Refinancing Expenses. Subject to Section 3.11(b), once a notice of a
Redemption in respect of any Refinancing is published in accordance with Section
3.11(a), each class of Notes to which such notice applies shall become due and
payable on the Refinancing Date stated in such notice at their Redemption Price.
 
(c) Each Refinancing Note shall contain such terms as may be established in or
pursuant to the related Manager Resolution (subject to Section 2.1) or in any
indenture supplemental hereto providing for the issuance of such Notes or
specified in the form of such Notes to the extent permitted below. Prior to the
issuance of any Refinancing Notes, any or all of the following, as applicable,
with respect to the related issue of Refinancing Notes shall have been
determined by the Issuer and set forth in such Manager Resolution and in any
indenture supplemental hereto providing for the issuance of such Notes or
specified in the form of such Notes, as the case may be:
 
(i) the class of Notes to be refinanced by such Refinancing Notes;
 
(ii) the aggregate principal amount of each class of Refinancing Notes that may
be issued in respect of such Refinancing;
 
(iii) the proposed date of such Refinancing;
 
(iv) the Final Legal Maturity Date of each class of such Refinancing Notes;
 
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(v) the rate at which such Refinancing Notes shall bear interest or the method
by which such rate shall be determined;
 
(vi) the denomination or denominations in which any class of such Refinancing
Notes shall be issuable;
 
(vii) whether any such Refinancing Notes are to be issuable initially in
temporary or permanent global form and, if so, whether beneficial owners of
interests in any such permanent global Refinancing Note may exchange such
interests for Refinancing Notes of such class and of like tenor of any
authorized form and denomination and the circumstances under which any such
exchanges may occur, if other than in the manner provided in Section 2.7, and
the circumstances under which and the place or places where any such exchanges
may be made and the identity of any initial depositary therefor; and
 
(viii) any other terms, conditions, rights and preferences (or limitations on
such rights and preferences) relating to the class of Refinancing Notes (which
terms shall comply with Applicable Law and not violate any restrictions of this
Indenture).
 
(d) If any of the terms of any issue of Refinancing Notes are established by
action taken pursuant to one or more Manager Resolutions, such Manager
Resolutions shall be delivered to the Trustee setting forth the terms of such
Refinancing Notes.
 
Section 2.16 Class B Notes.
 
(a) Subject to Section 2.16(b), Section 2.16(c) and Section 2.16(d), the Issuer
may issue Class B Notes pursuant to this Indenture (a “Class B Issuance”) for
any purpose, including, at the option of the Issuer, for the purpose of funding
a redemption of the Class A Notes, in whole or in part. Each Class B Issuance
shall be authorized pursuant to one or more Manager Resolutions. Each Class B
Note shall be designated generally as a Note for all purposes under this
Indenture. Each Class B Note shall have such further designations added or
incorporated in such title as specified in the related Manager Resolution or in
any indenture supplemental hereto providing for the issuance of such Notes or
specified in the form of such Notes, as the case may be. There are no
limitations on the use of proceeds from the issuance of such Class B Notes. If
the proceeds of the Class B Notes are being used to redeem the Class A Notes, in
whole or in part, the Class B Notes shall be issued on the Payment Date on which
the Optional Redemption of the Class A Notes being refinanced is to occur as
provided in Section 3.11.
 
(b) If the proceeds of the Class B Notes are being used to redeem any Class A
Notes, such redemption shall be effected as an Optional Redemption pursuant to
Section 3.10. On the date of any such Optional Redemption, the Issuer shall
issue and sell an aggregate principal amount of Class B Notes in an amount not
less than the amount sufficient to pay in full the applicable Redemption Price
of the Notes being redeemed thereby plus the Transaction Expenses relating
thereto. The proceeds of each sale of Class B Notes shall be used to make the
deposit required by Section 3.11, to the extent applicable, to pay such
Transaction Expenses and/or for such other purposes, if any, as shall be
specified in the Manager Resolution authorizing the issuance of such Class B
Notes. Subject to Section 3.11(b), once a notice of Redemption in respect of any
Class B Issuance is published in accordance with Section 3.11(a), each class of
Notes to which such notice applies shall become due and payable on the
Redemption Date stated in such notice at their Redemption Price.
 
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(c) Each Class B Note shall contain such terms as may be established in or
pursuant to the related Manager Resolution (subject to Section 2.1) or in any
indenture supplemental hereto providing for the issuance of such Notes or
specified in the form of such Notes to the extent permitted herein, and shall be
subordinate to the Class A Notes to the extent provided in this Indenture. Prior
to the issuance of the Class B Notes, any or all of the following, as
applicable, with respect to the related Class B Issuance shall have been
determined by the Issuer and set forth in such Manager Resolution and in any
indenture supplemental hereto or specified in the form of such Class B Notes, as
the case may be, with respect to the Class B Notes to be issued:
 
(i) the aggregate principal amount of any such Class B Notes that may be issued;
 
(ii) the proposed date of such Class B Issuance;
 
(iii) the Final Legal Maturity Date of any such Class B Notes;
 
(iv) whether any such Class B Notes are to have the benefit of any reserve
account and, if so, the amount and terms thereof;
 
(v) the rate at which such Class B Notes shall bear interest or the method by
which such rate shall be determined;
 
(vi) the denomination or denominations in which such Class B Notes shall be
issuable;
 
(vii) whether any such Class B Notes are to be issuable initially in temporary
or permanent global form and, if so, whether beneficial owners of interests in
any such permanent global Class B Note may exchange such interests for Class B
Notes of like tenor and of any authorized form and denomination and the
circumstances under which any such exchanges may occur, if other than in the
manner provided in Section 2.7, and the circumstances under which and the place
or places where any such exchanges may be made and the identity of any initial
depositary therefor; and
 
(viii) any other terms, conditions, rights and preferences (or limitations on
such rights and preferences) relating to Class B Notes (which terms shall comply
with Applicable Law and not violate any restrictions of this Indenture).
 
(d) If any of the terms of any issue of Class B Notes are established by action
taken pursuant to one or more Manager Resolutions, such Manager Resolutions
shall be delivered to the Trustee setting forth the terms of such Class B Notes.
 
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Section 2.17 Limitation on Number of Holders of Notes. The Issuer shall not
issue, and the Registrar shall not issue, and exchange or register the transfer
of, any Note, if, immediately after such issuance, exchange or transfer, there
would be more than 95 Noteholders (for purposes of Notes that are Definitive
Notes) and Beneficial Holders (for purposes of Notes that are Global Notes),
taken together in the aggregate, and any purported exchange or transfer in
violation of this Section 2.17 shall be void ab initio and result in the
purported Noteholder or Beneficial Holder not being treated as a Noteholder or
Beneficial Holder, as the case may be, for purposes of this Indenture.
 
ARTICLE III
ACCOUNTS; PRIORITY OF PAYMENTS
 
Section 3.1 Establishment of Accounts.
 
(a) Pursuant to the terms of the Servicing Agreement, the Issuer will cause the
Servicer, acting on behalf of the Issuer, to establish and maintain with the
Operating Bank on its books and records in the name of the Issuer, subject to
the Liens established under this Indenture, (i) a collection account (the
“Collection Account”), (ii) if applicable, a redemption account (the “Redemption
Account”), (iii) a capital contribution account (the “Capital Account”), (iv) if
applicable, an escrow account (the “Escrow Account”), (v) an interest reserve
account (the “Interest Reserve Account”) and (vi) any additional accounts the
establishment of which is set forth in a Manager Resolution delivered by the
Issuer to the Servicer and the Trustee, in each case at such time as is set
forth in this Section 3.1 or in such Manager Resolution.
 
(b) Pursuant to the terms and conditions of this Indenture, the Issuer has
granted to the Trustee a security interest in the Collection Account, the
Redemption Account, the Capital Account, the Escrow Account and the Interest
Reserve Account (collectively, the “Controlled Accounts”) and all payments
deposited in the Controlled Accounts.
 
(c) The Operating Bank acknowledges that (i) the Issuer has granted a security
interest in all of the Issuer’s right, title and interest in and to any funds
from time to time on deposit in, and all funds credited to, the Controlled
Accounts, (ii) prior to the satisfaction of the Secured Obligations, the Trustee
shall have sole dominion and control over the Controlled Accounts (including,
among other things, the sole power to direct withdrawals or transfers from the
Controlled Accounts and to direct the investment and reinvestment of funds in
the Accounts, subject to Section 3.2) and (iii) the Operating Bank shall
transfer funds from the Controlled Accounts in accordance with the Trustee’s
instructions until the satisfaction of the Secured Obligations.
 
(d) The Trustee shall make withdrawals and transfers from the Accounts in
accordance with the terms of this Indenture based on the Relevant Information
and as calculated by it pursuant to this Indenture. Each of the Issuer and the
Trustee acknowledges and agrees that each of the Controlled Accounts is a
“deposit account” within the meaning of Section 9-102 of the UCC, that the
Operating Bank is acting as a “bank” within the meaning of Section 9-102 of the
UCC and that the Trustee has “control”, for purposes of Section 9-314 of the
UCC, of the Controlled Accounts that are maintained with the Operating Bank. The
Operating Bank agrees that the State of New York shall be deemed to be the
“bank’s jurisdiction” within the meaning of Section 9-304 of the UCC.
 
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(e) The Issuer agrees that, if any Controlled Account is established or
maintained with any Operating Bank other than the Trustee, the Issuer shall
cause (or direct the Servicer to cause) such Operating Bank to enter into an
agreement with the Trustee, the Issuer and the Servicer pursuant to which such
Operating Bank agrees to comply with any and all instructions of the Trustee
directing the disposition, investment and reinvestment of funds in all
Controlled Accounts maintained with such Operating Bank without the further
consent of the Issuer or the Servicer, and the Issuer shall take such other
actions as are reasonably required by the Trustee to establish its “control”,
for purposes of Section 9-314 of the UCC, over any such Accounts.
 
(f) If, at any time, any Controlled Account ceases to be an Eligible Account,
the Issuer will cause the Servicer or an agent thereof, within ten Business
Days, to establish a new Controlled Account meeting the conditions set forth in
this Section 3.1 in respect of such Controlled Account and transfer any cash or
investments in the existing Controlled Account to such new Controlled Account,
and, from the date such new Controlled Account is established, it shall have the
same designation as the existing Controlled Account. If the Operating Bank
should change at any time, then the Issuer will cause the Servicer, acting on
behalf of the Issuer, to thereupon promptly establish replacement Controlled
Accounts as necessary at the successor Operating Bank and transfer the balance
of funds in each Controlled Account then maintained at the former Operating Bank
pursuant to the terms of the Servicing Agreement to such successor Operating
Bank.
 
(g) The Issuer will cause the Servicer to establish and maintain the Collection
Account at the Operating Bank not later than the Closing Date, and the
Collection Account shall bear a designation clearly indicating that the funds or
other assets deposited therein are held for the benefit of the Trustee. Except
as expressly provided herein, all Collections shall be deposited in the
Collection Account and transferred therefrom in accordance with the terms of
this Indenture. No funds shall be deposited in the Collection Account that do
not constitute Collections except as expressly provided in this Indenture
without the prior written consent of the Trustee.
 
(h) Upon receipt of written notice of a Redemption of any class of Notes, the
Issuer will cause the Servicer to establish and maintain a Redemption Account at
the Operating Bank that shall bear a description clearly indicating that the
funds or other assets deposited therein are held for the benefit of the Trustee,
who shall hold such amounts for the benefit of the Noteholders of Notes that are
the subject of such Redemption. All amounts received for the purpose of any such
Redemption shall be deposited in such Redemption Account and shall be held in
such Account until such amounts are applied to pay the Redemption Price of such
Notes (together with related Expenses) and such Notes are cancelled by the
Trustee.
 
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(i) The Issuer will cause the Servicer to establish and maintain the Capital
Account at the Operating Bank not later than the Closing Date, and the Capital
Account shall bear a designation clearly indicating that the funds or other
assets deposited therein are held for the benefit of the Trustee into which the
Parent shall deposit any capital contributions made to the Issuer. All such
capital contributions shall be held in such Account and transferred (i) to the
Collection Account only to the extent permitted by Section 3.7, (ii) to the
Redemption Account only to the extent specifically provided for in any written
notice of an Optional Redemption delivered to the Trustee pursuant to Section
3.10(b) and (iii) to the Parent only to the extent permitted by Section 3.8.
 
(j) Upon notice by the Trustee to the Servicer that any Noteholder, Agent Member
or Beneficial Holder has not delivered a Confidentiality Agreement to the
Registrar, the Issuer will cause the Servicer to establish and maintain an
Escrow Account at the Operating Bank in the name of the Trustee that shall bear
a designation clearly indicating that the funds or other assets deposited
therein are held for the benefit of any such Noteholder, Agent Member or
Beneficial Holder. All amounts withheld from such Noteholder, Agent Member or
Beneficial Holder pursuant to Section 2.5(d) shall be deposited in such Escrow
Account and shall be held in such Escrow Account until such amounts are
distributed as provided in Section 2.5(d).
 
(k) The Issuer will cause the Servicer to establish and maintain the Interest
Reserve Account at the Operating Bank not later than the Closing Date, and the
Interest Reserve Account shall bear a designation clearly indicating that the
funds deposited therein are held for the benefit of the Trustee. Amounts shall
be deposited into the Interest Reserve Account only pursuant to Section
3.3(a)(iii). All such amounts shall be held in such Interest Reserve Account and
transferred to the Collection Account only pursuant to Section 3.8.
 
(l) The Operating Bank, in its capacity as securities intermediary (the
“Securities Intermediary”), hereby confirms that it has established in the name
of the Issuer a securities account identified with account number 121030005
(such account, the “Securities Account”). The Securities Intermediary hereby
agrees and confirms that (i) the Securities Intermediary is a bank or broker
that in the ordinary course of its business maintains securities accounts for
others and is acting in that capacity in maintaining the Securities Account,
(ii) the Issuer will be entitled to exercise the rights that comprise each
Financial Asset credited to the Securities Account and (iii) its books and
records will contain appropriate entries to reflect the status of the Issuer as
the Person having a security entitlement against the securities intermediary
with respect to each Financial Asset credited to the Securities Account by the
Securities Intermediary.
 
(m) The Securities Intermediary acknowledges that (i) the Issuer has granted a
security interest in all of the Issuer’s right, title and interest in and to any
Financial Assets from time to time credited to the Securities Account and (ii)
prior to the satisfaction of the Secured Obligations, it will comply with any
entitlement orders originated by the Trustee (including entitlement orders
directing the Securities Intermediary to transfer or redeem any Financial
Assets) with respect to the Securities Account without further consent from the
Issuer.
 
(n) The Securities Intermediary hereby agrees that any property credited to the
Securities Account (whether “investment property”, “financial asset” or
“security” (each as defined in the UCC) or cash, and the proceeds thereof) shall
be treated as “financial assets” within the meaning of Section 8-102(a)(9) of
the UCC.
 
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Section 3.2 Investments of Cash. The Issuer or the Servicer, on its behalf,
shall direct the Trustee in writing to invest and reinvest the funds on deposit
in the Accounts in Eligible Investments, to the extent such Eligible Investments
are available to the relevant Operating Bank; provided, however, that, so long
as an Event of Default has occurred and is continuing, the Trustee shall direct
each Operating Bank to invest such amount in Eligible Investments described in
clause (d) of the definition thereof from the time of receipt thereof until such
time as such amounts are required to be distributed pursuant to the terms of
this Indenture. In the absence of written direction delivered to the Trustee
from the Issuer or the Servicer, the Trustee shall direct each Operating Bank to
invest any funds in Eligible Investments described in clause (d) of the
definition thereof. The Trustee shall direct each Operating Bank to make such
investments and reinvestments in accordance with the terms of the following
provisions:
 
(a) the Eligible Investments shall have maturities and other terms such that
sufficient funds shall be available to make required payments pursuant to this
Indenture on the Business Day immediately preceding the next occurring Payment
Date after such investment is made;
 
(b) if any funds to be invested are received in the Accounts after 1:00 p.m.,
New York City time, on any Business Day, such funds shall, if possible, be
invested in overnight Eligible Investments;
 
(c) all interest and earnings on Eligible Investments held in the Accounts shall
be invested in Eligible Investments on an overnight basis and credited to the
appropriate Account until the next Payment Date; and
 
(d) the Issuer acknowledges that regulations of the U.S. Comptroller of the
Currency grant the Issuer the right to receive confirmations of security
transactions as they occur. The Issuer specifically waives receipt of such
confirmations to the extent permitted by Applicable Law and acknowledges that
the Operating Bank will instead furnish periodic cash transaction statements
that will detail all investment transactions as set forth in this Indenture.
 
Section 3.3 Closing Date Deposits; Withdrawals and Transfers.
 
(a) On the Closing Date, the Trustee shall, subject to the receipt of written
direction from the Issuer upon receipt of the proceeds from the sale by the
Issuer of the Notes, make the following payments from such proceeds in the
amounts so directed by the Issuer:
 
(i) to such Persons as shall be specified by the Issuer, such Transaction
Expenses as shall be due and payable in connection with the issuance and sale of
the Notes;
 
(ii) to the Parent, in accordance with the Purchase and Sale Agreement, an
amount equal to the Cash Purchase Price; and
 
(iii) to the Interest Reserve Account, $5,000,000.
 
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(b) On the date of issuance of any Class B Notes or any Refinancing Notes, the
Trustee shall, subject to the receipt of written direction from the Issuer upon
receipt of the proceeds of the sale by the Issuer of such Notes, make such
payments and transfers as shall be specified in this Indenture, the related
Manager Resolution or any indenture supplemental hereto in respect of such
Notes, copies of which Manager Resolution and indenture supplemental hereto
shall be attached to such written direction.
 
(c) The Trustee shall hold all funds received on or prior to the Closing Date
from the Note Purchasers in trust for the Note Purchasers pending completion of
the closing of the transactions contemplated by the Note Purchase Agreements.
Upon receipt by the Trustee of the aggregate Purchase Price from all Note
Purchasers, the Trustee shall disburse the Purchase Price in accordance with
this Section 3.3. If the aggregate Purchase Price shall not have been received
by the Trustee by 3:30 p.m. (New York City time) on the Closing Date, or if the
closing of the transactions contemplated by the Note Purchase Agreements shall
not otherwise be capable of being consummated by 3:30 p.m. (New York City time)
on the Closing Date, then each Note Purchaser who has paid its respective
portion of the Purchase Price shall have the right to instruct the Trustee at or
after 3:30 p.m. (New York City time) on the Closing Date to return such portion
of the Purchase Price to such Note Purchaser prior to the close of business on
the Closing Date or as soon thereafter as reasonably practicable.
 
Section 3.4 Capital Contributions. The Issuer will immediately forward any
capital contributions received by it from the Parent for deposit in the Capital
Account.
 
Section 3.5 Calculation Date Calculations.
 
(a) As soon as reasonably practicable after each Calculation Date (a “Relevant
Calculation Date”), but in no event later than 12:00 noon (New York City time)
on the second Business Day prior to the immediately succeeding Payment Date, the
Calculation Agent shall, based on the Servicer Information received by the
Calculation Agent, and based on information known to it or Relevant Information
provided to it, make the following determinations and calculations (and each of
the Trustee and the Issuer (for itself and on behalf of the Servicer) agrees to
provide any Relevant Information reasonably requested by the Calculation Agent
for the purpose of making such determinations and calculations):
 
(i) the Available Collections Amount for such Payment Date;
 
(ii) (x) the amount of Collections received during the period commencing on the
day immediately following the Calculation Date that immediately preceded such
Relevant Calculation Date and ending on such Relevant Calculation Date and (y)
the amount, if any, to be transferred from the Interest Reserve Account as of
the Relevant Calculation Date to the Collection Account on such Payment Date in
accordance with Section 3.8;
 
(iii) the balance of funds on deposit in each Account other than the Collection
Account on such Relevant Calculation Date and the amount of interest and
earnings (net of losses and investment expenses), if any, on investments of
funds on deposit therein from the day immediately following the Calculation Date
that immediately preceded such Relevant Calculation Date and ending on such
Relevant Calculation Date;
 
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(iv) the balance of funds on deposit in the Collection Account on such Relevant
Calculation Date and the amount of interest and earnings (net of losses and
investment expenses), if any, on investments of funds on deposit therein from
the day immediately following the Calculation Date that immediately preceded
such Relevant Calculation Date and ending on such Relevant Calculation Date;
 
(v) all fees, costs and expenses (including reasonable attorneys’ fees and legal
expenses) of the Noteholders under this Indenture not previously reimbursed;
 
(vi) all other Expenses not previously reimbursed, with the amounts shown on all
invoices attached to the Servicer Information received by the Calculation Agent
for the reimbursement or payment of Expenses or Servicing Fees not previously
paid or reimbursed;
 
(vii) the applicable interest rate on each class of Floating Rate Notes
determined on the Reference Date for the Interest Accrual Period beginning on
such Payment Date and the Interest Amount (including any Additional Interest) on
each class of Floating Rate Notes and Fixed Rate Notes for such Payment Date;
 
(viii) if such Payment Date is a Redemption Date on which a Redemption of Notes
is scheduled to occur, the amount necessary to pay the Redemption Price of the
Notes to be repaid on such Redemption Date and the Redemption Premium, if any,
to be paid as part of such Redemption Price;
 
(ix) the amount of the Parent Shortfall Payment, if any, to be made on such
Payment Date, provided such payment is being made in accordance with Section
3.9;
 
(x) the difference, if any, between the Interest Amount due to the Noteholders
of Class A Notes pursuant to Section 3.7(a)(iii) on such Payment Date and the
portion of the Available Collections Amount available to pay such Interest
Amount for such Payment Date (a “Shortfall”), taking into account any Parent
Shortfall Payment determined pursuant to Section 3.5(a)(ix) and the payment of
expenses described in Section 3.5(a)(v) and Section 3.5(a)(vi) payable on such
Payment Date and, with respect to each Shortfall, the amount to be withdrawn
from the Interest Reserve Account and/or the Capital Account, if any, determined
as provided in Section 3.8;
 
(xi) the Outstanding Principal Balance of each class of Notes on such Payment
Date immediately prior to any principal payment on such date and the amount of
any principal payment to be made in respect of each class of Notes on such
Payment Date, taking into account the other payments to be made on such Payment
Date entitled to priority pursuant to Section 3.7;
 
(xii) the amounts, if any, distributable to the Issuer on such Payment Date
pursuant to Section 3.7(a)(viii); and
 
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(xiii) any other information, determinations and calculations reasonably
required in order to give effect to the terms of this Indenture and the other
Transaction Documents.
 
(b) Following the calculations and determinations by the Calculation Agent
described in Section 3.5(a), and not later than 1:00 p.m., New York City time,
on the second Business Day prior to the immediately succeeding Payment Date, the
Calculation Agent shall provide to each of the Servicer, the Issuer and the
Trustee a calculation report (a “Calculation Report”) listing such
determinations and calculations and the amount of the Available Collections
Amount to be applied on such Payment Date to make each of the payments and
transfers contemplated by Section 3.7(a) or Section 3.10(a), and any Parent
Shortfall Payment due and payable on such date, as applicable, setting forth the
payments to be made in respect of the Notes. The calculations set forth in each
Calculation Report shall be conclusive and binding on each of the Issuer, the
Servicer, the Trustee and each Noteholder, absent manifest error.
 
Section 3.6 Payment Date First Step Transfers. On each Payment Date, the Trustee
shall transfer from any Account (other than the Collection Account and the
Capital Account) to the Collection Account the amount of interest and earnings
(net of losses and investment expenses), if any, earned as a result of
investments of funds on deposit therein from the day immediately following the
Calculation Date that immediately preceded the Relevant Calculation Date and
ending on the Relevant Calculation Date.
 
Section 3.7 Payment Date Second Step Withdrawals.
 
(a) On each Payment Date, after the applicable transfers provided for in Section
3.6 have been made and after the making of any Parent Shortfall Payment pursuant
to Section 3.9, the Trustee shall distribute from the Collection Account the
amounts set forth below in the order of priority set forth below but, in each
case, only to the extent that all amounts then required to be paid ranking prior
thereto have been paid in full:
 
(i) first, to the payment of all Expenses due and payable on such Payment Date,
with the amounts shown on all invoices attached to the Servicer Information
received by the Trustee for the reimbursement or payment of Expenses not
previously paid or reimbursed;
 
(ii) second, to the payment of the Servicing Fee for such Payment Date and any
unpaid Servicing Fee in respect of prior Payment Dates;
 
(iii) third, to the Trustee for distribution to the Noteholders of the Class A
Notes to the ratable payment of the Interest Amount then due and payable on the
Class A Notes, taking into account any amounts paid pursuant to Section 3.8 on
such Payment Date, provided such Noteholder has executed and delivered a
Confidentiality Agreement;
 
(iv) fourth, to the Trustee for distribution to the Noteholders of the Class A
Notes, principal payments on the Class A Notes (without premium or penalty),
allocated pro rata in proportion to the Outstanding Principal Balance of such
Class A Notes held by such Noteholders, until the Outstanding Principal Balance
of such Class A Notes has been paid in full, provided such Noteholder has
executed and delivered a Confidentiality Agreement;
 
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(v) fifth, after the Class A Notes have been paid in full, to the Trustee for
distribution to the Noteholders of the Class B Notes, if any, the Interest
Amount on the Class B Notes in accordance with their terms;
 
(vi) sixth, after the Class A Notes have been paid in full, to the Trustee for
distribution to the Noteholders of the Class B Notes, if any, payment of the
principal amount of the Class B Notes in accordance with their terms until the
Class B Notes have been paid in full;
 
(vii) seventh, after the Notes have been paid in full, to the ratable payment of
all other obligations under this Indenture until all such amounts are paid in
full; and
 
(viii) eighth, after the Notes have been paid in full, to the Issuer, all
remaining amounts.
 
(b) Prior to the Trustee making any distributions pursuant to Section 3.7(a),
the Trustee shall pay to the Parent from the Available Collections Amount, to be
held in trust or escrow for Pfizer and other third parties entitled to royalties
from the Parent in respect of Subject Products in one or more segregated
accounts of the Parent, within 30 days of the end of each calendar quarter, the
royalties due to such Persons in respect of Subject Products as set forth in the
report to be prepared by the Servicer and delivered by the Servicer to the
Trustee pursuant to Section 4.1(c)(xi) of the Servicing Agreement, but in no
event shall such royalties exceed, in the aggregate, 3.5% of Net Sales (as
defined in the Inspire License Agreement) for such calendar quarter.
 
(c) To the extent the Issuer receives amounts from the Trustee from the
Collection Account pursuant to Section 3.7(a)(viii), such amounts may be
distributed by the Issuer to the Parent (or as otherwise directed by the Parent
or any Person designated by the Parent to give such directions) in its sole
discretion.
 
(d) To the extent that any monies are deposited in the Collection Account to
reimburse prior distributions in respect of a Parent Shortfall, such monies
shall be paid to the Trustee on behalf of the Noteholders before making any
other distributions pursuant to Section 3.7(a) to the extent that such monies
otherwise would have been paid to such Noteholders on the prior respective
Payment Date in accordance with this Section 3.7 in the absence of such Parent
Shortfall.
 
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Section 3.8 Interest Reserve Account and Capital Account; Shortfalls. The
Available Collections Amount does not include the aggregate amount of funds on
deposit in the Interest Reserve Account or the Capital Account; provided, that,
if the Calculation Agent has determined that a Shortfall exists pursuant to the
Calculation Report with respect to any Payment Date and there is a positive
balance in the Interest Reserve Account on the Relevant Calculation Date
immediately preceding such Payment Date, then on such Payment Date the Trustee
shall withdraw from the Interest Reserve Account an amount equal to the lesser
of the Shortfall and the balance in the Interest Reserve Account and distribute
it to the Noteholders of the Class A Notes in payment of the Interest Amount;
provided, further, that, if the amount available in the Interest Reserve Account
(if any) is less than the amount of such Shortfall and there is a positive
balance in the Capital Account on the Relevant Calculation Date immediately
preceding such Payment Date, then on such Payment Date the Trustee shall
withdraw from the Capital Account an amount equal to the lesser of (i) the
amount by which the Shortfall exceeds the amount, if any, withdrawn from the
Interest Reserve Account and (ii) the balance in the Capital Account and
distribute it to the Noteholders of the Class A Notes in payment of the Interest
Amount; provided, further, that the Trustee shall (x) make such a withdrawal
from the Capital Account on not more than six Payment Dates in total prior to
the Final Legal Maturity Date and on not more than any three consecutive Payment
Dates and (y) distribute any funds remaining in the Capital Account to the
Parent in the event that withdrawals from the Capital Account have been made on
six Payment Dates.
 
On February 15, 2010, any funds remaining in the Interest Reserve Account (after
any application of the prior paragraph on the February 15, 2010 Payment Date)
shall be transferred to the Collection Account and included in the Available
Collections Amount and applied as provided under Section 3.7.
 
Section 3.9 Parent Shortfall. If, no later than ten Business Days prior to any
Calculation Date, the Trustee receives written notice of the existence of a
Parent Shortfall, the Trustee shall promptly (but in no event later than the
next succeeding Business Day following receipt of such written notice) notify
the Servicer, the Parent and the Issuer of such existence of a Parent Shortfall.
Upon the Issuer or the Parent receiving notification of the same, or upon the
Issuer or the Parent otherwise becoming aware of a Parent Shortfall, the Issuer
shall cause the Servicer, no later than such Calculation Date, to confirm the
amount of any such Parent Shortfall in writing to the Trustee, with a copy to
the Issuer and the Parent. Unless the Trustee shall have received prior to the
related Payment Date (i) written notification from the Parent or the Servicer
certifying that any such Parent Shortfall has been cured in full or (ii) written
notice from the Trustee that at least two-thirds of the Outstanding Principal
Balance of the Senior Class of Notes has indicated that such payment shall not
be made on such Payment Date, then prior to making any other distributions
pursuant to Section 3.7 or Section 3.8, the Trustee shall make a Parent
Shortfall Payment to the relevant counterparty on such Payment Date in the
amount of such Parent Shortfall from the Collection Account; provided, that if
the relevant counterparty shall refuse to accept such payment, then such funds
shall be returned to the Collection Account for distribution in accordance with
this Indenture.
 
Section 3.10 Redemptions.
 
(a) On any Payment Date on which any class of Notes is to be the subject of a
Redemption, in whole or in part, the Trustee shall distribute the amounts in the
applicable Redemption Account as provided herein and in the applicable Manager
Resolution, including:
 
(i) paying to such Persons as shall be specified by the Issuer such Transaction
Expenses as shall be due and payable in connection with the issuance and sale of
the applicable Class B Notes or Refinancing Notes;
 
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(ii) after application of Section 3.7 and Section 3.8, remitting to the
Noteholders of such class of Notes, in accordance with the Manager Resolution
authorizing such Redemption, an amount equal to the Redemption Price plus
Premium, if any, allocated, in the event of a Redemption of such Notes in part,
pro rata in proportion to the Outstanding Principal Balance of such Notes held
by such Noteholders; and
 
(iii) making such other distributions and payments as shall be authorized and
directed by the Manager Resolution and indentures supplemental hereto executed
in connection with such Redemption.
 
(b) Subject to the provisions of Section 3.11, on any Payment Date, to the
extent that any class of Notes will remain outstanding on such Payment Date
after application of Section 3.7 and Section 3.8, the Issuer may elect to redeem
such class of Notes, in whole, but not in part, out of the proceeds of the
Refinancing Notes and any funds in the Interest Reserve Account or the Capital
Account in the case of a Refinancing of such class of Notes, or, in whole or in
part, out of amounts available in the Redemption Account for such purpose, if
any, including the proceeds of any Class B Notes (but excluding in the case of a
Redemption in part any funds in the Interest Reserve Account or the Capital
Account), in each case, at the Redemption Price (any such redemption, an
“Optional Redemption”). The Issuer shall give written notice of any such
Optional Redemption to the Trustee and the Servicer not later than five Business
Days prior to the date on which notice is to be given to Noteholders in
accordance with Section 3.11(a) (unless the Trustee and the Servicer agree to
waive or limit the requirement for such notice). Such written notice to the
Trustee shall include a copy of the Manager Resolution authorizing such Optional
Redemption and shall set forth the relevant information regarding such Optional
Redemption, including the information to be included in the notice given
pursuant to Section 3.11(a).
 
(c) An indenture supplemental hereto providing for the issuance of any Class B
Notes or Refinancing Notes may authorize one or more redemptions, in whole or in
part, of such Notes, on such terms and subject to such conditions as shall be
specified in such indenture supplemental hereto.
 
Section 3.11 Procedure for Redemptions.
 
(a) The Trustee (or the Servicer acting as its agent (or any authorized agent of
the Servicer)) shall give written notice in respect of any Redemption of any
class of Notes under Section 3.10 to each Noteholder of such Notes at least 30
days but not more than 60 days before such Redemption Date. Each notice in
respect of a Redemption given pursuant to this Section 3.11(a) shall state (A)
the expected applicable Redemption Date, (B) the arrangements for making
payments in respect of such Redemption, (C) the projected Redemption Price of
the Notes to be redeemed, (D) in the case of a Redemption of the Notes of any
class in part, the portion of the Outstanding Principal Balance of the Notes
that is expected to be redeemed, (E) that Notes to be redeemed in a Redemption
in whole must be surrendered (which action may be taken by any Noteholder or its
authorized agent) to the Trustee to collect the Redemption Price on such Notes
and (F) that, unless the Issuer fails to pay the Redemption Price, interest on
Notes called for Redemption in whole shall cease to accrue on and after the
Redemption Date. If mailed in the manner herein provided, the notice shall be
conclusively presumed to have been given whether or not the Noteholder receives
such notice. Failure to give notice or any defect in the notice shall not affect
the validity of the notice.
 
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(b) If, at the time of the mailing of any notice in respect of a Redemption, the
Issuer shall not have irrevocably directed the Trustee to apply funds then on
deposit with the Trustee or held by the Issuer and available to be used for such
Redemption to redeem all of the Notes called for Redemption, such notice, at the
election of the Issuer, may state that it is conditional and subject to the
receipt of the redemption moneys in an amount sufficient to pay the principal
and premium, if any, and interest on Notes being redeemed by the Trustee on or
before the Redemption Date and that such notice shall be of no force and effect
unless such moneys are so received on or before such Redemption Date.
 
(c) If notice in respect of a Redemption for any Notes shall have been given as
provided in Section 3.11(a) and such notice shall not contain the language
permitted at the Issuer’s option under Section 3.11(b), such Notes shall become
due and payable on the Redemption Date at the Corporate Trust Office at the
applicable Redemption Price, interest on such Notes shall cease to accrue and
such Notes shall be deemed not to be entitled to any benefit under this
Indenture, except to receive payment of the Redemption Price. Upon presentation
and surrender of such Notes at the Corporate Trust Office, such Notes shall be
paid and redeemed at the applicable Redemption Price. On or before any
Redemption Date in respect of such a Redemption, the Issuer shall, to the extent
an amount equal to the Redemption Price of such Notes (and any Refinancing
Expenses relating thereto as of the Redemption Date) is not then held by the
Issuer or on deposit in the Redemption Account, deposit or cause to be deposited
in the Redemption Account an amount in immediately available funds equal to such
amount.
 
(d) If notice in respect of a Redemption for any Notes shall have been given as
provided in Section 3.11(a) and such notice shall contain the language permitted
at the Issuer’s option under Section 3.11(b), such Notes shall become due and
payable on the Redemption Date at the Corporate Trust Office at the applicable
Redemption Price, interest on such Notes shall cease to accrue and such Notes
shall be deemed not to be entitled to any benefit under this Indenture, except
to receive payment of the Redemption Price; provided, that, in each case, the
Issuer shall have deposited with the Trustee or a Paying Agent on or prior to
11:00 a.m. (New York City time) on the Redemption Date an amount sufficient to
pay the Redemption Price. Upon the Issuer making such deposit and presentation
and surrender of such Notes at the Corporate Trust Office, such Notes shall be
paid and redeemed at the applicable Redemption Price. If the Issuer shall not
make such deposit on or prior to 11:00 a.m. (New York City time) on the
Redemption Date, the notice in respect of Redemption shall be of no force and
effect, and the principal on such Notes or specified portions thereof shall
continue to bear interest as if such notice in respect of Redemption had not
been given.
 
(e) All Notes that are redeemed will be surrendered to the Trustee for
cancellation and may not be reissued or resold.
 
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ARTICLE IV
DEFAULT AND REMEDIES
 
Section 4.1 Events of Default. Each of the following events or occurrences shall
constitute an “Event of Default” hereunder with respect to any class of Notes
(except for clauses (a), (b), (c) and (d) below in which the potential events or
occurrences that would constitute an Event of Default are specific to certain
classes of Notes, in which case such Event of Default shall be constituted only
with respect to such classes of Notes (and not all classes of Notes)), and each
such Event of Default shall be deemed to exist and continue so long as, but only
so long as, it shall not have been waived or remedied, as applicable:
 
(a) failure to pay interest on the Class A Notes due on any Payment Date (other
than the Final Legal Maturity Date or any Redemption Date) within five days of
such Payment Date, but only to the extent of the Available Collections Amount
available for interest payments pursuant to the priority of payments in Section
3.7, any funds in the Interest Reserve Account and any capital contributed to
the Issuer by the Parent as described in Section 3.1(i);
 
(b) (i) failure to pay interest on the Class A Notes due on any Payment Date
(other than the Final Legal Maturity Date, any Redemption Date or as set forth
in Section 4.1(a)) in full by the next succeeding Payment Date, together with
Additional Interest on any interest not paid on the Payment Date on which it was
originally due, and (ii) in the case of any class of Notes other than the Class
A Notes, except as provided in the related Manager Resolution or any indenture
supplemental hereto providing for the issuance of such Notes pursuant to Section
2.15 or Section 2.16, failure to pay interest on any Notes of such class on the
Payment Date that such interest is due;
 
(c) (i) failure to pay principal and Premium, if any, and accrued and unpaid
interest on any Notes of such class on the applicable Final Legal Maturity Date
or (ii) subject to Section 3.11(b), failure to pay the Redemption Price when due
on any Redemption Date for such class;
 
(d) failure to pay any other amount when due and payable in connection with such
class of Notes and the continuance of such default for a period of 30 or more
days after written notice thereof is given to the Issuer by the Trustee;
 
(e) (i) failure by the Issuer to comply in any material respect with any of the
covenants set forth in Section 5.2 (other than Section 5.2(h), Section 5.2(k),
Section 5.2(l), Section 5.2(m), Section 5.2(p) and Section 5.2(v)), Section
5.3(a), Section 5.3(b) or Section 5.3(c), and written notice thereof being given
to the Issuer by the Trustee at the Direction of Noteholders of a majority of
the Outstanding Principal Balance of the Notes; or (ii) failure by the Issuer to
comply in any material respect with any of the other covenants, obligations,
conditions or provisions binding on it under this Indenture or the Notes (other
than a payment default for which provision is made in Section 4.1(a), Section
4.1(b), Section 4.1(c) or Section 4.1(d)) if (in the case of this Section
4.1(e)(ii) only) such failure continues for a period of 30 days or more after
written notice thereof has been given to the Issuer by the Trustee at the
Direction of Noteholders of a majority of the Outstanding Principal Balance of
the Notes;
 
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(f) the Issuer becomes subject to a Voluntary Bankruptcy or an Involuntary
Bankruptcy;
 
(g) any judgment or order for the payment of money in excess of $1,000,000 shall
be rendered against the Issuer and either (i) enforcement proceedings have been
commenced by any creditor upon such judgment or order or (ii) there is any
period of ten consecutive days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise, shall not be in
effect;
 
(h) the Issuer becomes an investment company required to be registered under the
Investment Company Act of 1940, as amended;
 
(i) the Parent shall have failed to perform in any material respect any of its
covenants under Article VI of the Purchase and Sale Agreement or Article VI of
the Pledge and Security Agreement;
 
(j) the Pfizer License Agreement shall be terminated or shall otherwise fail to
be in full force and effect and such failure continues for a period of 30 days
or more;
 
(k) the Interim Sublicense (as defined in the Residual License Agreement) has
terminated pursuant to the Residual License Agreement; or
 
(l) any withdrawal or revocation by the U.S. Food and Drug Administration of
approvals to sell AzaSite in the United States for efficacy or safety reasons
which has, or would reasonably be expected to have, a material adverse effect on
repayment of the Class A Notes.
 
Section 4.2 Acceleration, Rescission and Annulment.
 
(a) If an Event of Default with respect to the Notes (other than an Acceleration
Default) occurs and is continuing, the Trustee may, and, upon the Direction of
Noteholders of a majority of the Outstanding Principal Balance of the Senior
Class of Notes, shall, give an Acceleration Notice to the Issuer. Upon delivery
of such an Acceleration Notice (and so long as such Acceleration Notice has not
been rescinded and annulled pursuant to this Indenture), such Outstanding
Principal Balance and all accrued and unpaid interest thereon shall be
immediately due and payable. At any time after the Trustee or the Noteholders
have so declared the Outstanding Principal Balance of the Notes to be
immediately due and payable, and prior to the exercise of any other remedies
pursuant to this Article IV, the Trustee, upon the Direction of Noteholders of a
majority of the Outstanding Principal Balance of the Senior Class of Notes,
shall, subject to Section 4.5(a), by written notice to the Issuer, rescind and
annul such declaration and thereby annul its consequences if (i) there has been
paid to or deposited with the Trustee an amount sufficient to pay all overdue
installments of interest on the Notes, and the principal of, and Premium, if
any, on the Notes that would have become due otherwise than by such declaration
of acceleration, (ii) the rescission would not conflict with any judgment or
decree and (iii) all other Defaults and Events of Default, other than
non-payment of interest on and principal and Premium, if any, of the Notes that
have become due solely because of such declaration of acceleration, have been
cured or waived. If an Acceleration Default occurs, the Outstanding Principal
Balance of the Notes and all accrued and unpaid interest thereon shall
automatically become immediately due and payable without any further action by
any party.
 
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(b) Notwithstanding this Section 4.2, Section 4.3 and Section 4.11, after the
occurrence and during the continuation of an Event of Default, no Noteholders of
any class of Notes other than the Senior Class of Notes shall be permitted to
give or direct the giving of an Acceleration Notice, or to exercise any remedy
in respect of such Event of Default, and no Person other than the Senior
Trustee, at the Direction of a majority of the Outstanding Principal Balance of
the Senior Class of Notes, may give an Acceleration Notice or exercise any such
remedy.
 
(c) Within 30 days after the occurrence of an Event of Default in respect of any
class of Notes, the Trustee shall give to the Noteholders of such class of Notes
notice, transmitted by mail, of all uncured or unwaived Defaults known to it on
such date; provided, that the Trustee may withhold such notice with respect to a
Default (other than a payment default with respect to interest, principal or
Premium, if any) if it determines in good faith that withholding such notice is
in the interest of the affected Noteholders.
 
Section 4.3 Other Remedies. Subject to the provisions of this Indenture, if an
Event of Default shall have occurred and be continuing, then the Senior Trustee
may, but only at the Direction of Noteholders of a majority of the Outstanding
Principal Balance of the Senior Class of Notes, pursue any available remedy by
proceeding at law or in equity to collect the payment of principal of, Premium,
if any, or interest on the Notes or to enforce the performance of any provision
of the Notes, this Indenture, the Servicing Agreement or the Pledge and Security
Agreement, including any of the following, to the fullest extent permitted by
law, subject to the receipt of such Direction:
 
(a) The Senior Trustee may obtain the appointment of a Receiver of the Indenture
Estate as provided in Section 12.7 and the Issuer consents to any such
appointment.
 
(b) The Senior Trustee may, without notice to the Issuer and at such time as the
Senior Trustee in its sole discretion may determine, exercise any or all of the
Issuer’s rights in, to and under or in any way connected with or related to any
or all of the Indenture Estate, including (i) demanding and enforcing payment
and performance of, and exercising any or all of the Issuer’s rights and
remedies with respect to the collection, enforcement or prosecution of, any or
all of the Indenture Estate, in each case by legal proceedings or otherwise,
(ii) settling, adjusting, compromising, extending, renewing, discharging and
releasing any or all of, and any legal proceedings brought to collect or enforce
any or all of, the Royalty Payments actually made by Inspire under the Inspire
License Agreement (but not the rights thereunder to receive such payments) and
the Replacement Royalty Payments, if any, and otherwise under the Transaction
Documents and (iii) preparing, filing and signing the name of the Issuer on (A)
any proof of claim or similar document to be filed in any bankruptcy or similar
proceeding involving the Indenture Estate and (B) any notice of lien, assignment
or satisfaction of lien, or similar document in connection with the Indenture
Estate.
 
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(c) The Senior Trustee may, without notice except as specified herein, sell or
cause the sale of all or any part of the Indenture Estate in one or more parcels
at public or private sale, at any of the Senior Trustee’s offices or elsewhere,
for cash, on credit or for future delivery, and upon such other terms as the
Senior Trustee may deem commercially reasonable, provided, that, so long as the
Principal Documents remain in force, the Senior Trustee shall make any such sale
only to a Person that is a Permitted Holder. The Issuer agrees that, to the
extent notice of sale shall be required by law, at least ten days’ notice to the
Issuer 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 Senior
Trustee shall not be obligated to make any sale of all or any part of the
Indenture Estate regardless of notice of sale having been given. The Senior
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.
 
(d) The Senior Trustee may, instead of exercising the power of sale conferred
upon it by Section 4.3(c) and Applicable Law, proceed by a suit or suits at law
or in equity to foreclose the Security Interest and sell all or any portion of
the Indenture Estate under a judgment or a decree of a court or courts of
competent jurisdiction, provided, that, so long as the Principal Documents
remain in force, the Senior Trustee shall make any such foreclosure sale only to
a Person that is a Permitted Holder.
 
(e) The Senior Trustee may require the Issuer to, and the Issuer hereby agrees
that it shall at its expense and upon request of the Senior Trustee, forthwith
assemble all or part of the Indenture Estate as directed by the Senior Trustee
and make it available to the Senior Trustee at a place to be designated by the
Senior Trustee that is reasonably convenient to both parties.
 
(f) In addition to the rights and remedies provided for in this Indenture, the
Senior Trustee may exercise in respect of the Indenture Estate all the rights
and remedies of a secured party upon default under the UCC (whether or not the
UCC applies to the affected property included in the Indenture Estate) and under
all other Applicable Law; provided, that, so long as the Principal Documents
remain in force, the Senior Trustee shall cause any sale of the Collateral to be
made only to a Person that is a Permitted Holder.
 
(g) The Senior Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding.
 
Section 4.4 Limitation on Suits. Without limiting the provisions of Section 4.8
and the final sentence of Section 12.4, no Noteholder shall have any right to
institute any proceeding, judicial or otherwise, with respect to this Indenture,
the Pledge and Security Agreement or the Notes, for the appointment of a
receiver or trustee or for any other remedy hereunder, unless:
 
(a) such Noteholder is a holder of the Senior Class of Notes and has previously
given written notice to the Senior Trustee of a continuing Event of Default;
 
(b) the Noteholders of a majority of the Outstanding Principal Balance of the
Senior Class of Notes make a written request to the Senior Trustee to pursue a
remedy hereunder;
 
(c) such Noteholder or Noteholders offer to the Senior Trustee an indemnity
reasonably satisfactory to the Senior Trustee against any costs, expenses and
liabilities to be incurred in complying with such request;
 
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(d) the Senior Trustee does not comply with such request within 60 days after
receipt of the request and the offer of indemnity; and
 
(e) during such 60-day period, Noteholders of a majority of the Outstanding
Principal Balance of the Senior Class of Notes do not give the Senior Trustee a
Direction inconsistent with such request.
 
No one or more Noteholders may use this Indenture to affect, disturb or
prejudice the rights of another Noteholder or to obtain or seek to obtain any
preference or priority not otherwise created by this Indenture and the terms of
the Notes over any other Noteholder or to enforce any right under this
Indenture, except in the manner herein provided.
 
Section 4.5 Waiver of Existing Defaults.
 
(a) The Senior Trustee or the Noteholders of a majority of the Outstanding
Principal Balance of the Senior Class of Notes by written notice to the Senior
Trustee may waive any existing Default (or Event of Default) hereunder and its
consequences, except a Default (or Event of Default) (i) in the payment of the
interest on, principal of, and Premium, if any, on any Note or (ii) in respect
of a covenant or provision hereof that under Article IX cannot be modified or
amended without the consent of the Noteholder of each Note affected thereby.
Upon any such waiver, such Default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured for every purpose
of this Indenture, but no such waiver shall extend to any subsequent or other
Default (or Event of Default) or impair any right consequent thereon.
 
(b) Any written waiver of a Default or an Event of Default given by Noteholders
to the Senior Trustee and the Issuer in accordance with the terms of this
Indenture shall be binding upon the Senior Trustee and the other parties hereto.
Unless such writing expressly provides to the contrary, any waiver so granted
shall extend only to the specific event or occurrence that gave rise to the
Default or Event of Default so waived and not to any other similar event or
occurrence that occurs subsequent to the date of such waiver.
 
Section 4.6 Restoration of Rights and Remedies. If the Senior Trustee or any
Noteholder of the Senior Class of Notes has instituted any proceeding to enforce
any right or remedy under this Indenture, and such proceeding has been
discontinued or abandoned for any reason or has been determined adversely to the
Senior Trustee or such Noteholder, then in every such case the Issuer, the
Senior Trustee and the Noteholders shall, subject to any determination in such
proceeding, be restored severally and respectively to their former positions
hereunder, and thereafter all rights and remedies of the Senior Trustee and the
Noteholders shall continue as though no such proceeding has been instituted.
 
Section 4.7 Remedies Cumulative. Each and every right, power and remedy herein
given to the Trustee specifically or otherwise in this Indenture shall be
cumulative and shall, to the extent permitted by law, be in addition to every
other right, power and remedy herein specifically given or now or hereafter
existing at law, in equity or by statute, and each and every right, power and
remedy whether specifically herein given or otherwise existing may be exercised
from time to time and as often and in such order as may be deemed expedient by
the Trustee, and the exercise or the beginning of the exercise of any power or
remedy shall not be construed to be a waiver of the right to exercise at the
same time or thereafter any other right, power or remedy. No delay or omission
by the Trustee in the exercise of any right, remedy or power or in the pursuance
of any remedy shall impair any such right, power or remedy or be construed to be
a waiver of any Default on the part of the Issuer or to be an acquiescence.
 
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Section 4.8 Rights of Noteholders to Receive Payment. Notwithstanding any other
provision of this Indenture, the right of any Noteholder to receive payment of
interest on, principal of, or Premium, if any, on any Note on or after the
respective due dates therefor expressed in such Note, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Noteholder.
 
Section 4.9 Trustee May File Proofs of Claim. The Trustee may file such proofs
of claim and other papers or documents as may be necessary or advisable in order
to have the claims of the Trustee and of any Noteholder allowed in any judicial
proceedings relating to any obligor on the Notes, its creditors or its property.
 
Section 4.10 Undertaking for Costs. All parties to this Indenture agree, and
each Noteholder by its acceptance hereof shall be deemed to have agreed, that,
in any suit for the enforcement of any right or remedy under this Indenture or
in any suit against the Trustee for any action taken or omitted by it as
Trustee, a court in its discretion may require the filing by any party litigant
in such suit of an undertaking to pay the costs of such suit, and the court in
its discretion may assess reasonable costs, including reasonable attorneys’
fees, against any party litigant in such suit, having due regard to the merits
and good faith of the claims or defense made by the party litigant. This Section
4.10 does not apply to a suit instituted by the Trustee, a suit instituted by
any Noteholder for the enforcement of the payment of interest, principal, or
Premium, if any, on any Note on or after the respective due dates expressed in
such Note or a suit by a Noteholder or Noteholders of at least 10% of the
Outstanding Principal Balance of the Notes.
 
Section 4.11 Control by Noteholders. Subject to Section 4.2 and Section 4.4 and
to the rights of the Trustee hereunder, Noteholders of a majority of the
Outstanding Principal Balance of the Notes shall have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee or exercising any trust, right or power conferred on the Trustee
under any Transaction Document; provided, that:
 
(a) such Direction shall not be in conflict with any rule of law or with this
Indenture and would not involve the Trustee in personal liability or expense;
 
(b) the Trustee shall not determine that the action so directed would be
unjustly prejudicial to the Noteholders of such class not taking part in such
Direction; and
 
(c) the Trustee may take any other action deemed proper by the Trustee that is
not inconsistent with such Direction.
 
Section 4.12 Senior Trustee. The Trustee irrevocably agrees (and the Noteholders
(other than the Noteholders represented by the Senior Trustee) shall be deemed
to agree by virtue of their purchase of the Notes) that the Senior Trustee shall
have all of the rights granted to it under this Indenture, including the right
to direct the Trustee to take certain action as provided for in this Indenture,
and the Trustee hereby agrees to act in accordance with each such authorized
direction of the Senior Trustee.
 
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Section 4.13 Application of Proceeds. All cash proceeds received by the Senior
Trustee in respect of any sale of, collection from or other realization upon all
or any part of the Indenture Estate shall be deposited in the Collection Account
and distributed as provided in Article III. Any surplus of such cash proceeds
held and remaining after payment in full of all Secured Obligations shall be
paid over to the Issuer or whomsoever may be lawfully entitled to receive such
surplus as provided in Section 3.7. Any amount received for any sale or sales
conducted in accordance with the terms of Section 4.3 shall to the extent
permitted by Applicable Law be deemed conclusive and binding on the Issuer and
the Noteholders.
 
Section 4.14 Waivers of Rights Inhibiting Enforcement. The Issuer waives (a) any
claim that, as to any part of the Indenture Estate, should the Senior Trustee
elect to proceed with a private sale thereof, the mere fact that such a sale is
a private sale does not, in and of itself, mean that such sale is not a
commercially reasonable method of sale for such part of the Indenture Estate,
(b) the right to assert in any action or proceeding between it and the Senior
Trustee offsets or counterclaims that it may have, (c) all rights of redemption,
appraisement, valuation, stay and extension or moratorium and (d) except as
otherwise provided in any of the Transaction Documents, all other rights the
exercise of which would, directly or indirectly, prevent, delay or inhibit the
enforcement of any of the rights or remedies under this Indenture or the
absolute sale of the Indenture Estate, now or hereafter in force under any
Applicable Law, and the Issuer, for itself and all who may claim under it,
insofar as it or they now or hereafter lawfully may, hereby waives the benefit
of all such laws and rights.
 
Section 4.15 Security Interest Absolute. All rights of the Trustee and security
interests hereunder, and all obligations of the Issuer hereunder, shall be
absolute and unconditional irrespective of, and the Issuer hereby irrevocably
waives any defenses it may now have or may hereafter acquire in any way relating
to, any or all of the following:
 
(a) any lack of validity or enforceability of any of the Transaction Documents
or any other agreement or instrument relating thereto (other than against the
Trustee);
 
(b) any change in the time, manner or place of payment of, or in any other term
of, all or any of the Secured Obligations, or any other amendment or waiver of
or any consent to any departure from the Transaction Documents or any other
agreement or instrument relating thereto;
 
(c) any taking, exchange, surrender, release or non-perfection of any Collateral
or any other collateral, 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 Collateral or any other collateral, or
proceeds thereof, to all or any of the Secured Obligations, or any manner of
sale or other disposition of any Collateral or any other collateral for all or
any of the Secured Obligations or any other obligations of the Issuer under or
in respect of the Transaction Documents or any other assets of the Issuer;
 
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(e) any change, restructuring or termination of the limited liability company
structure or existence of the Issuer;
 
(f) the failure of any other Person to execute this Indenture or any other
agreement or the release or reduction of liability of the Issuer or other
grantor 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 by the Trustee that might
otherwise constitute a defense available to, or a discharge of, the Issuer.
 
ARTICLE V
REPRESENTATIONS, WARRANTIES AND COVENANTS
 
Section 5.1 Representations and Warranties. The Issuer represents and warrants
to the Trustee as follows as of the Closing Date:
 
(a) The Issuer is a limited liability company created under the laws of the
State of Delaware, is duly qualified to do business and is in good standing in
each jurisdiction where such qualification is required and has full power and
authority to conduct its business, and the Issuer is not in liquidation or
bankruptcy and has not become subject to a Voluntary Bankruptcy or an
Involuntary Bankruptcy.
 
(b) The Issuer has not engaged in any activities since its organization (other
than those incidental to its organization and permitted by the Issuer
Organizational Documents, the execution and performance of the Transaction
Documents to which it is a party and the activities referred to in or
contemplated by such agreements), and the Issuer has not paid any dividends or
made any similar distributions since its organization.
 
(c) The creation of the Notes and the issuance, execution and delivery, and the
compliance by the Issuer with the terms, of the Notes and each of the other
Transaction Documents to which it is a party:
 
(i) do not at the Closing Date conflict with, result in a breach of any of the
terms or provisions of or constitute a default under the Issuer Organizational
Documents or with any judgment, order or decree of any Governmental Authority
having jurisdiction over the Issuer, its assets or properties or, except where
it would not have or would not be reasonably likely to have a Material Adverse
Effect, with any Applicable Law; and
 
(ii) do not at the Closing Date violate, or constitute a default under, any
deed, indenture, agreement or other instrument or obligation to which the Issuer
is a party or by which it or any part of its assets, property or revenues are
bound.
 
(d) The creation, execution and issuance of the Notes, the execution and
delivery by the Issuer of the Transaction Documents executed by it and the
performance by the Issuer of its obligations hereunder and thereunder and the
arrangements contemplated hereby and thereby to be performed by it have been
duly authorized, executed and delivered by the Issuer.
 
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(e) This Indenture constitutes, and the other Transaction Documents to which it
is a party, when executed and delivered and, in the case of the Notes, when
issued and authenticated, will constitute, valid, legally binding and (subject
to general equitable principles, and laws relating to insolvency, liquidation,
reorganization and other laws of general application relating to creditors’
rights or claims or to laws of prescription or the concepts of materiality,
reasonableness, good faith and fair dealing) enforceable obligations of the
Issuer.
 
(f) On the Closing Date, there exists no Event of Default nor any event that,
had the Notes already been issued, would constitute a Default or an Event of
Default.
 
(g) On the Closing Date, subject to the Liens created in favor of the Trustee
and except for any other Permitted Liens, there exists no Lien over the assets
of the Issuer.
 
(h) All consents, approvals, authorizations or other orders of all Governmental
Authorities required (excluding any required by the other parties to the
Transaction Documents) for or in connection with the execution, delivery and
performance of the Transaction Documents by the Issuer and the issuance and
performance of the Notes and the offering of the Notes by the Issuer have been
obtained and are in full force and effect and are not contingent upon
fulfillment of any condition. No consent of any Governmental Authority or any
other party (including directors, officers, members, managers or creditors of
the Issuer) is required that has not been obtained for the pledge by the Issuer
of the Collateral pursuant to this Indenture.
 
(i) The Issuer is not required to register as an “investment company” within the
meaning of the Investment Company Act of 1940, as amended.
 
(j) There is no action, suit, investigation or proceeding pending or, to the
knowledge of the Issuer, threatened against the Issuer before any Governmental
Authority that in any manner challenges or seeks to prevent, enjoin, alter or
materially delay the transactions contemplated by this Indenture and the other
Transaction Documents to which the Issuer is a party.
 
(k) The Issuer has no Subsidiaries.
 
(l) The Issuer is the sole legal and beneficial owner of the assets and
properties constituting the Collateral and the other Purchased Assets, free and
clear of any Liens other than Permitted Liens.
 
(m) Under the laws of the State of Delaware, the laws of the State of New York
and U.S. federal law in force at the Closing Date, it is not necessary that this
Indenture or any other Transaction Document (other than evidences and perfection
of the Liens) be filed, recorded or enrolled by the Issuer with any court or
other Governmental Authority in any such jurisdictions or that any stamp,
registration or similar Tax be paid by the Issuer on or in relation to this
Indenture or any of the other Transaction Documents (other than filings of
Uniform Commercial Code financing statements set forth in Exhibit E and the
various consents and agreements, if any, pursuant hereto).
 
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(n) The filings of financing statements under the UCC and other recordings, if
any, in the appropriate offices therefor and any other actions required to
perfect a security interest in favor of the Trustee in the Collateral, including
the Royalty Payments actually made by Inspire under the Inspire License
Agreement (but not the rights thereunder to receive such payments) and the
Replacement Royalty Payments, if any, in each case sold, transferred, conveyed,
assigned, contributed and granted on the Closing Date pursuant to the Purchase
and Sale Agreement, have been or shall have been duly made by the Closing Date,
and, subject to the terms and provisions of this Indenture, the Issuer has or
shall have the same rights as the Parent has with respect to the Purchased
Assets (if the Parent were still the owner of such Purchased Assets) against
Inspire. No other security agreement, financing statement or other public notice
with respect to all or any part of the Collateral (other than any of the
foregoing that is referenced in Exhibit B to the Purchase and Sale Agreement or
Exhibit E to this Indenture or otherwise names the Trustee as secured party) is
on file or of record in any public office that perfects a valid security
interest therein. This Indenture creates a valid security interest in the
Collateral securing the payment of the Secured Obligations.
 
(o) The Issuer has determined, and by virtue of its entering into the
transactions contemplated hereby and its authorization, execution and delivery
of this Indenture and the other Transaction Documents to which it is party, that
the issuance of the Notes and the consummation of the transactions contemplated
hereby and thereby, and its incurrence of Indebtedness and other liability
hereunder or thereunder or contemplated hereby or thereby (i) is in its own best
interests, (ii) does not leave it unable to pay its debts as they become due in
the ordinary course of business, (iii) will not leave it with debts that cannot
be paid from the present saleable value of its property and (iv) will not render
it insolvent within the meaning of Section 101(32) of the United States
Bankruptcy Code or Section 271 of the New York Debtor and Creditor Law or leave
it with unreasonably small capital.
 
(p) No material adverse change in the business, condition (financial or
otherwise), performance or properties of the Issuer has occurred since its date
of formation.
 
(q) The Issuer has never filed any tax return or report under any name other
than its exact legal name. The Issuer is an entity that is disregarded as
separate from the Parent for U.S. federal income tax purposes.
 
(r) No step has been taken or is intended by the Issuer or, so far as it is
aware, any other Person for the winding-up, liquidation, dissolution,
administration, merger or consolidation or for the appointment of a receiver or
administrator of the Issuer or all or any of its assets.
 
(s) The Issuer has not assigned or pledged any of its right, title or interest
in the Collateral to anyone other than the Trustee.
 
(t) The representations and warranties made by the Issuer in any of the other
Transaction Documents to which it is a party are true and accurate as of the
date made.
 
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Section 5.2 Covenants. The Issuer covenants with the Trustee that, so long as
any Notes are Outstanding, it will perform and comply with each of the following
covenants and not engage in any activity prohibited by this Indenture without
the prior written consent of the Trustee pursuant to Section 9.1 or Section 9.2,
as applicable, authorizing the Issuer not to perform any such covenants or to
engage in any such activity prohibited by this Indenture, in each case on such
terms and conditions, if any, as shall be specified in such prior written
consent:
 
(a) Except as expressly permitted by any Transaction Document or Principal
Document, the Issuer shall not take any action, whether orally or in writing,
that would amend, waive, modify, supplement, restate, cancel or terminate, or
discharge or prejudice the validity or effectiveness of, this Indenture, the
Notes, the Pledge and Security Agreement, the Purchase and Sale Agreement, the
Residual License Agreement or the Servicing Agreement, or permit any party to
any such document to be released from such obligations.
 
(b) The Issuer shall not, directly or indirectly, (i) declare or pay any
dividend or make any distribution on its Capital Securities, whether in cash,
property, securities or a combination thereof, to the Parent or any other owner
of a beneficial interest in the Issuer or otherwise with respect to any
ownership of its Capital Securities, except that the Issuer may distribute to
the Parent (x) all or any portion of any amounts transferred to the Issuer
pursuant to Section 3.7(a)(viii) or (y) any proceeds from an issuance of Notes
in accordance with this Indenture, (ii) purchase, redeem, retire or otherwise
acquire for value any issued Capital Securities of the Issuer or any of its
Affiliates, (iii) make any payment of principal, interest or Premium, if any, on
the Notes or make any voluntary or optional redemption, repurchase, defeasance
or other acquisition or retirement for value of, or make any deposit (including
the payment of amounts into a sinking fund or other similar fund) with respect
to, Indebtedness of the Issuer other than in accordance with the Notes and this
Indenture or (iv) make any loan or advance to a Person, any purchase or other
acquisition of any beneficial interest, Capital Securities, warrants, rights,
options, obligations or other securities of such Person, any capital
contribution to such Person or any other investment in such Person (other than
Eligible Investments and investments permitted under Section 5.2(f) or otherwise
in accordance with the Notes and this Indenture).
 
(c) The Issuer shall not (and shall not consent to the Parent taking any action
that would) incur or suffer to exist any Lien over or with respect to any of the
Issuer’s assets, other than (i) any Permitted Lien or (ii) any security interest
created or required to be created hereunder, including in connection with the
issuance of any Class B Notes and any Refinancing Notes.
 
(d) The Issuer shall not incur, create, issue, assume, Guarantee or otherwise
become liable for or with respect to, or become responsible for, the payment or
performance of, contingently or otherwise, whether present or future (in any
such case, to “Incur”), Indebtedness; provided, however, that the Issuer may
Incur Indebtedness in respect of the Original Class A Notes, any Class B Notes
and any Refinancing Notes issued in accordance with this Indenture.
 
(e) The Issuer shall not liquidate or dissolve, consolidate with, merge with or
into, or sell, convey, transfer, lease or otherwise dispose of the Purchased
Assets or all or any material portion of its other property and assets to, or
purchase or otherwise acquire all or substantially all of the assets of, any
other Person, or permit any other Person to merge with or into, or consolidate
or otherwise combine with, the Issuer.
 
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(f) The Issuer shall not, directly or indirectly, issue, deliver or sell, or
consent to issue, deliver or sell, any actual, contingent, future or executory
membership interests, limited liability company interests, beneficial interests
or other equity or ownership interests (however designated, whether voting or
non-voting), except for any additional Capital Securities of the Issuer issued
to the Parent, provided that such additional Capital Securities are pledged to
the Trustee pursuant to the Pledge and Security Agreement, and except for any
membership interests issued to the Independent Member pursuant to the Issuer
Organizational Documents, and provided further that the Issuer shall not accept
any capital contributions from the Parent after the Closing Date except for
contributions of funds deposited into the Capital Account, which may be used
only as provided in Section 3.1(i).
 
(g) Except as otherwise provided in the Issuer Organizational Documents, the
Issuer shall not engage in any business or activity other than purchasing and
holding the Purchased Assets and the license granted by the Residual License
Agreement, pledging the Collateral, collecting the Royalty Payments and the
Replacement Royalty Payments, if any, issuing the Notes, exercising its rights
under the Residual License Agreement and remaining a party to the Transaction
Documents and Principal Documents.
 
(h) The Issuer shall not, directly or indirectly, enter into, renew or extend
any transaction (including the purchase, sale, lease or exchange of property or
assets, or the rendering of any service) with any Affiliate of the Issuer,
except for the Transaction Documents and Principal Documents as in effect on the
Closing Date.
 
(i) The Issuer shall not take any action to become subject to a Voluntary
Bankruptcy or an Involuntary Bankruptcy. The Issuer shall provide promptly the
Trustee with written notice of the institution of any proceeding by or against
the Issuer seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding-up, reorganization, arrangement, adjustment, protection,
relief or composition of its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry of an
order for relief or the appointment of a receiver, trustee or other similar
official for it or for any substantial part of its property. The Issuer shall
not, without an affirmative written resolution adopted by all of the Members,
take any action to waive, repeal, amend, vary, supplement or otherwise modify
any provision of any of the Issuer Organizational Documents that requires
unanimous written consent of the Members. The Issuer shall comply with, and
cause compliance with, the Issuer Organizational Documents.
 
(j) The Issuer shall not take any action to waive, repeal, amend, vary,
supplement or otherwise modify the Issuer Organizational Documents in a manner
that would adversely affect (x) the rights, remedies, privileges or preferences
of any Noteholder or (y) the Collateral, any other Purchased Assets or the
Issuer Pledged Collateral.
 
(k) The Issuer shall duly and punctually pay the principal, Premium, if any, and
interest on the Notes in accordance with the terms of this Indenture and the
Notes; provided, that the Issuer shall be in compliance with this covenant with
respect to any Payment Date (other than the Final Legal Maturity Date or any
Redemption Date subject to 3.11(b)) if any such interest in excess of the
portion of the Available Collections Amount available to pay such interest on
the relevant Payment Date and funds in the Interest Reserve Account and the
Capital Account are paid in full not later than the immediately succeeding
Payment Date (together with Additional Interest thereon).
 
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(l) The Issuer shall not employ any employees other than as required by any
provisions of local law; provided, that the Members, the Manager and Service
Providers shall not be deemed to be employees for purposes of this Section
5.2(l).
 
(m) During any period in which the Issuer is not subject to Section 13 or 15(d)
of the Exchange Act, the Issuer shall make available to any Noteholder or
Beneficial Holder in connection with any sale of any or all of its Notes and any
prospective purchaser of such Notes from such Noteholder or Beneficial Holder
the information required by Rule 144A(d)(4) under the Securities Act.
 
(n) The Issuer shall not assign, amend, modify, supplement or restate any
Principal Document, breach any of the provisions of any Principal Document,
enter into any new agreement in respect of the Purchased Assets or the Subject
Products (in respect of the Territory in the Field) or exercise or waive any
right or option, fail to exercise any right or option or grant any consent in
respect of the Purchased Assets, the Subject Products (in respect of the
Territory in the Field) or the Principal Documents in any manner that would, in
each case, materially adversely affect the Issuer, the Issuer’s rights under the
Purchase and Sale Agreement or the Residual License Agreement or the rights and
interests of the Trustee and the Noteholders with respect thereto or conflict
with or cause an event of default under, or breach of, this Indenture, any other
Transaction Document or any Principal Document; provided, however, that the
Issuer shall not be required to take any action unless the Issuer has determined
in good faith that such action is not illegal or unlawful and will not subject
the Issuer to any risk of personal liability from any third party unless such
liability is a result of the Issuer’s gross negligence or willful misconduct
(except that the foregoing shall not relieve the Issuer from any breach of its
obligations under this Indenture).
 
(o) The Issuer shall not terminate (or consent to any termination of) any
Principal Document in whole or in part.
 
(p) The Issuer shall at all times enforce its rights and remedies under the
Purchase and Sale Agreement, the Residual License Agreement, the Servicing
Agreement and the Inspire License Agreement in a timely and commercially
reasonable manner; provided, that, following the occurrence and continuation of
an Event of Default, the Issuer shall give notice to the Trustee on behalf of
the Noteholders of any contemplated enforcement of such rights and remedies and
will follow any commercially reasonable direction of the Trustee at the
Direction of Noteholders of a majority of the Outstanding Principal Balance of
the Notes.
 
(q) The Issuer shall maintain its existence separate and distinct from any other
Person in all material respects, including taking the following actions, as
appropriate:
 
(i) maintaining in full effect its existence, rights and franchises as a
Delaware limited liability company and obtaining and preserving its
qualification to do business in each jurisdiction in which such qualification is
or will be necessary to protect the validity and enforceability of this
Indenture and each other instrument or agreement necessary or appropriate to
properly administer this Indenture and permit and effectuate the transactions
contemplated hereby and thereby;
 
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(ii) maintaining its own deposit accounts, separate from those of the Parent,
any of its directors or officers and their respective Affiliates;
 
(iii) conducting no material transactions between the Issuer and any of its
Affiliates, other than entering into and performing the Transaction Documents to
which it is party;
 
(iv) allocating fairly and reasonably the cost of any shared overhead expenses,
including office space, with the Parent, any of its directors or officers or any
of their respective Affiliates;
 
(v) conducting its affairs separately from those of the Parent, any of its
directors or officers or any of their respective Affiliates and maintaining
accurate and separate books, records and accounts and financial statements,
including in connection with the purchase of the Purchased Assets from the
Parent; it being agreed that performance under the Transaction Documents will
not result in the Issuer’s contravening this Section 5.2(q)(v);
 
(vi) acting solely in its own name and not that of any other Person, including
the Parent, any of its directors or officers or any of their respective
Affiliates, and at all times using its own stationery, invoices and checks
separate from those of the Parent, any of its directors or officers or any of
their respective Affiliates;
 
(vii) not holding itself out as having agreed to pay or guarantee, or as
otherwise being liable for, the obligations of the Parent, any of its directors
or officers or any of their respective Affiliates;
 
(viii) insuring that any financial reports prepared by the Issuer disclose the
effects of the sale of the Purchased Assets from the Parent and any of its
Affiliates in compliance with GAAP;
 
(ix) maintaining all of its assets in its own name and not commingling its
assets with those of any other Person except as required under the Transaction
Documents;
 
(x) paying its own operating expenses and other liabilities out of its own
funds;
 
(xi) paying (or causing to be paid) all of its Taxes owed by it except to the
extent being challenged in good faith;
 
(xii) observing all formalities required by the Issuer Organizational Documents;
 
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(xiii) maintaining adequate capital for the normal obligations reasonably
foreseeable in light of its contemplated business operations;
 
(xiv) not acquiring obligations of the Parent, any of its directors or officers
or any of their respective Affiliates except as required under the Transaction
Documents;
 
(xv) holding itself out to the public as a legal entity separate and distinct
from any other Person, including the Parent or any Affiliate of the Parent;
 
(xvi) correcting any known misunderstanding regarding its separate identity;
 
(xvii) not forming, acquiring or holding any subsidiaries; and
 
(xviii) not sharing any common logo with or identifying itself as a department
or division of the Parent, any of its directors or officers or any of their
respective Affiliates.
 
(r) The Issuer will not enter into any agreement prohibiting the ability of the
Trustee or any Noteholder to amend or otherwise modify any Transaction Document;
provided, that the foregoing prohibition shall not apply to restrictions
contained in any Transaction Document.
 
(s) The Issuer will not change, amend or alter its exact legal name at any time
except following 30 days’ notice given by the Issuer to the Trustee.
 
(t) The Issuer will not assign or pledge, so long as the assignment hereunder
shall remain in effect and has not been terminated pursuant to Section 11.1, any
of its right, title or interest in the Collateral hereby assigned to anyone
other than the Trustee.
 
(u) The Issuer agrees that, at any time and from time to time, at the Issuer’s
expense and upon the Trustee’s written request, the Issuer will promptly and
duly execute and deliver or cause to be duly executed and delivered any and all
such further instruments and documents, and take all further action, that may be
necessary in the reasonable discretion of the Trustee, in order to perfect the
security interest in the Collateral and to carry out the provisions of this
Indenture or to enable the Trustee to exercise and enforce its rights and
remedies hereunder with respect to any Collateral. The Issuer also agrees that,
at any time and from time to time, at the Issuer’s expense, the Issuer will file
(or cause to be filed) such UCC continuation statements and such other
instruments or notices as may be necessary, including UCC financing statements
or amendments thereto, that the Trustee may reasonably request in order to
perfect and preserve the security interests and other rights granted or
purported to be granted to the Trustee hereby. With respect to the foregoing and
the grant of the security interest hereunder, the Issuer hereby authorizes the
Trustee to file one or more financing or continuation statements, and amendments
thereto, relative to all or any part of the Collateral without the signature of
the Issuer where permitted by Applicable Law. The Issuer agrees that a carbon,
photographic or other reproduction of any financing statement covering the
Collateral or any part thereof shall be sufficient as a financing statement
where permitted by Applicable Law.
 
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(v) The Issuer will maintain in the Borough of Manhattan, The City of New York,
an office or agency of the Trustee, Registrar and Paying Agent where Notes may
be presented or surrendered for payment, where Notes may be surrendered for
registration of transfer, exchange or purchase and where notices and demands to
or upon the Issuer in respect of the Notes and this Indenture may be served.
Each of the Corporate Trust Office and each office or agency of the Trustee in
the Borough of Manhattan, The City of New York shall initially be one such
office or agency for all of the aforesaid purposes. The Issuer shall give prompt
written notice to the Trustee of the location, and of any change in the
location, of any such office or agency (other than a change in the location of
the office of the Trustee). If at any time the Issuer shall fail to maintain any
such required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be made
or served at the address of the Trustee set forth in Section 12.5. The Issuer
may also from time to time designate one or more other offices or agencies where
the Notes may be presented or surrendered for any or all such purposes and may
from time to time rescind such designations; provided, however, that no such
designation or rescission shall in any manner relieve the Issuer of its
obligation to maintain an office or agency in the Borough of Manhattan, The City
of New York, for such purposes.
 
(w) The Issuer shall maintain its status as an entity that is disregarded as
separate from the Parent for U.S. federal income tax purposes.
 
Section 5.3 Reports and Other Deliverables by the Issuer.
 
(a) The Issuer shall furnish to the Trustee, within 120 days after the end of
each fiscal year commencing with the fiscal year ending December 31, 2008, a
certificate from a Responsible Officer of the Issuer as to his or her knowledge
of the Issuer’s compliance with all of its obligations under this Indenture (it
being understood that, for purposes of this Section 5.3, such compliance shall
be determined without regard to any period of grace or requirement of notice
provided under this Indenture but shall reflect any interest paid on the
Original Class A Notes by the next succeeding Payment Date as contemplated by
the proviso to Section 5.2(k) as have been timely paid).
 
(b) The Issuer shall deliver written notice to the Trustee of the occurrence of
(i) any Default or Event of Default under this Indenture and (ii) any of the
events described in Section 6.3(d) of the Purchase and Sale Agreement promptly
and in any event within five Business Days of a Responsible Officer or manager
having actual knowledge of such Default, Event of Default, event or situation.
 
(c) The Issuer shall promptly (and in any event within five Business Days of
receipt thereof) provide to the Servicer and the Trustee copies of all materials
that the Issuer receives from the Parent pursuant to Section 6.3 of the Purchase
and Sale Agreement or otherwise in respect of the Principal Documents.
 
(d) Within 120 days after the beginning of each fiscal year commencing with the
fiscal year beginning January 1, 2009, the Issuer shall furnish to the Trustee
an opinion of its legal counsel, which opinion shall state whether there are any
actions to be taken, including any financing statements to be filed in any
office, within the period of 12 full consecutive calendar months following the
date of such opinion in order to continue the perfection of the security
interests granted under the Transaction Documents or to continue the
effectiveness of any financing statements filed in connection with the Principal
Documents as of the date hereof.
 
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ARTICLE VI
THE TRUSTEE
 
Section 6.1 Acceptance of Trusts and Duties. Except during the continuance of an
Event of Default, the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture, and no implied covenants
or obligations shall be read into this Indenture against the Trustee; provided,
that, to the extent those duties are qualified, limited or otherwise affected by
the provisions of any other Transaction Document, the Trustee shall be required
to perform those duties only as so qualified, limited or otherwise affected. The
duties and responsibilities of the Trustee shall be as provided by the Trust
Indenture Act (as if the Trust Indenture Act applied to this Indenture) and as
set forth herein. The Trustee accepts the trusts hereby created and applicable
to it and agrees to perform the same but only upon the terms of this Indenture
and the Trust Indenture Act (as if the Trust Indenture Act applied to this
Indenture) and agrees to receive and disburse all moneys received by it in
accordance with the terms hereof. The Trustee in its individual capacity shall
not be answerable or accountable under any circumstances except for its own
willful misconduct or negligence or breach of any of its representations or
warranties set forth herein, and the Trustee shall not be liable for any action
or inaction of the Issuer or any other parties to any of the Transaction
Documents. Any amounts received by or due to the Trustee under this Indenture,
including the fees, out-of-pocket expenses and indemnities of the Trustee, shall
be Expenses of the Issuer.
 
The Issuer does hereby constitute and appoint the Trustee the true and lawful
attorney of the Issuer, irrevocably, granted for good and valuable consideration
and coupled with an interest and with full power of substitution, and with full
power (in the name of the Issuer or otherwise), to ask, require, demand,
receive, compound and give acquittance for any and all monies and claims for
monies (in each case including insurance and requisition proceeds) due and to
become due under or arising out of any Transaction Document and all other
property that now or hereafter constitutes part of the Indenture Estate, to
endorse any checks or other instruments or orders in connection therewith and to
file any claims or take any action or institute any proceedings that the Trustee
may deem to be necessary or advisable in the premises; provided, that the
Trustee shall not exercise any such rights except upon the occurrence and during
the continuance of an Event of Default hereunder in accordance with Section 4.3.
 
Section 6.2 Copies of Documents and Other Notices.
 
(a) The Trustee, upon written request, shall furnish to each requesting
Noteholder or Beneficial Holder included on the Approved Holder List and the
Servicer, promptly upon receipt thereof, duplicates or copies of all reports,
Notices, requests, demands, certificates, financial statements and other
instruments furnished thereafter to the Trustee under or in connection with this
Indenture.
 
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(b) The Trustee shall furnish to Noteholders and Beneficial Holders included on
the Approved Holder List and the Servicer promptly after receipt thereof any
reports or notices received from any of the Issuer, the Parent, Inspire or
Pfizer, including (i) the report of any audit contemplated by Section 4.1(b) or
4.1(c) of the Servicing Agreement and (ii) notice of any dispute between the
Parent and any other party to any of the Principal Documents in respect of any
Principal Document as contemplated by Section 6.1(h) of the Purchase and Sale
Agreement.
 
Section 6.3 Representations and Warranties. The Trustee does not make and shall
not be deemed to have made any representation or warranty as to the validity,
legality or enforceability of this Indenture, the Notes or any other document or
instrument or as to the correctness of any statement contained in any thereof,
except that the Trustee in its individual capacity hereby represents and
warrants as follows:
 
(a) The Trustee is a national banking association and is validly existing and in
good standing under the laws of the United States, and is duly authorized and
licensed under applicable law to conduct its business as presently conducted.
 
(b) The Trustee has all requisite right, power and authority to execute and
deliver this Indenture and its related documents and to perform all of its
duties as Trustee hereunder and thereunder.
 
(c) The execution and delivery by the Trustee of this Indenture and the other
Transaction Documents to which it is a party, and the performance by the Trustee
of its duties hereunder and thereunder, have been duly authorized by all
necessary corporate proceedings, and no further approvals or filings, including
any governmental approvals, are required for the valid execution and delivery by
the Trustee, or the performance by the Trustee, of this Indenture and such other
Transaction Documents to which it is a party.
 
(d) The execution, delivery and performance by the Trustee of this Indenture and
the other Transaction Documents to which it is a party (i) to the best of the
Trustee’s knowledge and without independent inquiry or investigation into the
facts thereto, do not violate any provision of any Applicable Law and (ii) do
not violate any provision of its corporate charter or by-laws.
 
(e) The execution, delivery and performance by the Trustee of this Indenture and
the other Transaction Documents to which it is a party, to the best of the
Trustee’s knowledge and without independent inquiry or investigation into the
facts thereto, do not require the authorization, consent or approval of, the
giving of notice to, the filing or registration with, or the taking of any
action in respect of, any Governmental Authority.
 
(f) The Trustee has duly executed and delivered this Indenture and each other
Transaction Document to which it is a party, and each of this Indenture and each
such other Transaction Document constitutes the legal, valid and binding
obligation of the Trustee in accordance with its terms, except as (i) such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium and similar laws relating to or affecting the enforcement of
creditors’ rights generally and (ii) the availability of equitable remedies may
be limited by equitable principles of general applicability.
 
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Section 6.4 Reliance; Agents; Advice of Counsel. The Trustee shall incur no
liability to anyone acting upon any signature, instrument, notice, resolution,
request, consent, order, certificate, report, opinion, bond or other document or
paper believed by it to be genuine and believed by it to be signed by the proper
party or parties. The Trustee may accept a copy of a resolution of, in the case
of the Issuer, the Manager and, in the case of any other party to any
Transaction Document, the governing body of such Person, certified in an
accompanying Officer’s Certificate as duly adopted and in full force and effect,
as conclusive evidence that such resolution has been duly adopted and that the
same is in full force and effect. As to any fact or matter the manner of
ascertainment of which is not specifically described herein, the Trustee shall
be entitled to receive and may for all purposes hereof conclusively rely on a
certificate, signed by an officer of any duly authorized Person, as to such fact
or matter, and such certificate shall constitute full protection to the Trustee
for any action taken or omitted to be taken by it in good faith in reliance
thereon. To the extent not otherwise specifically provided herein, the Trustee
shall assume, and shall be fully protected in assuming, that the Issuer is
authorized by its constitutional documents to enter into this Indenture and to
take all action permitted to be taken by it pursuant to the provisions hereof
and shall not be required to inquire into the authorization of the Issuer with
respect thereto. To the extent not otherwise specifically provided herein, the
Trustee shall furnish to the Servicer upon written request such information and
copies of such documents as the Trustee may have and as are necessary for the
Servicer to perform its duties under Article II and Article III or otherwise.
 
The Trustee shall not be liable for any action it takes or omits to take in good
faith that it believes to be authorized or within its rights or powers or for
any action it takes or omits to take in accordance with the Direction of the
Noteholders in accordance with Section 4.11 relating to the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust, right or power conferred upon the Trustee, under any
Transaction Document.
 
The Trustee may execute any of the trusts or powers hereunder or perform any
duties hereunder or under any other Transaction Document either directly or by
or through agents or attorneys or a custodian or nominee, and the Trustee shall
not be responsible for any misconduct or negligence on the part of, or for the
supervision of, any such agent, attorney, custodian or nominee appointed with
due care by it hereunder.
 
The Trustee may consult with counsel as to any matter relating to this Indenture
or any other Transaction Document and any Opinion of Counsel or any advice of
such counsel shall be full and complete authorization and protection in respect
of any action taken or suffered or omitted by it hereunder in good faith and in
accordance with such advice or Opinion of Counsel.
 
The Trustee shall be under no obligation to exercise any of the rights or powers
vested in it by this Indenture or any other Transaction Document, or to
institute, conduct or defend any litigation hereunder or in relation hereto, at
the request, order or Direction of any of the Noteholders, pursuant to the
provisions of this Indenture or any other Transaction Document, unless such
Noteholders shall have offered to the Trustee security or indemnity reasonably
satisfactory to it against the costs, expenses and liabilities that may be
incurred therein or thereby.
 
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The Trustee shall not be required to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties hereunder
or under any other Transaction Document, or in the exercise of any of its rights
or powers, if there is reasonable ground for believing that the repayment of
such funds or indemnity satisfactory to it against such risk or liability is not
reasonably assured to it, and none of the provisions contained in this Indenture
or any other Transaction Document shall in any event require the Trustee to
perform, or be responsible or liable for the manner of performance of, any
obligations of the Issuer or the Servicer under this Indenture or any of the
other Transaction Documents.
 
The Trustee shall not be liable for any Losses or Taxes (except for Taxes
relating to any compensation, fees or commissions of any entity acting in its
capacity as Trustee hereunder) or in connection with the selection of Eligible
Investments or for any investment losses resulting from Eligible Investments.
 
When the Trustee incurs expenses or renders services in connection with an
Acceleration Default, such expenses (including the fees and expenses of its
counsel) and the compensation for such services are intended to constitute
expenses of administration under any bankruptcy law or law relating to
creditors’ rights generally.
 
The Trustee shall not be charged with knowledge of an Event of Default unless a
Responsible Officer of the Trustee obtains actual knowledge of such event or has
received written notice of such event at its Corporate Trust Office from the
Issuer, the Servicer or Noteholders of not less than 10% of the Outstanding
Principal Balance of the Notes.
 
The Trustee shall have no duty to monitor the performance of the Issuer, the
Servicer or any other party to the Transaction Documents, nor shall it have any
liability in connection with the malfeasance or nonfeasance by such parties.
 
Whenever in the administration of the provisions of this Indenture the Trustee
shall deem it necessary or desirable that a matter be proved or established
prior to taking or suffering any action to be taken hereunder or under any other
Transaction Document, such matter (unless other evidence in respect thereof be
herein specifically prescribed) may, in the absence of gross negligence or bad
faith on the part of the Trustee, be deemed to be conclusively proved and
established by a certificate signed by a Responsible Officer of the Issuer and
delivered to the Trustee, and such certificate, in the absence of gross
negligence or bad faith on the part of the Trustee, shall be full warrant to the
Trustee for any action taken, suffered or omitted by it under the provisions of
this Indenture or any other Transaction Document upon the faith thereof.
 
Except as provided expressly hereunder, the Trustee shall have no obligation to
invest and reinvest any cash held in the Accounts in the absence of timely and
specific written investment direction by or on behalf of the Issuer. In no event
shall the Trustee be liable for the selection of investments or for investment
losses incurred thereon. The Trustee shall have no liability in respect of
losses incurred as a result of the liquidation of any investment prior to its
stated maturity or the failure of the Issuer to provide timely written
investment direction.
 
When the Trustee incurs expenses after the occurrence of a Default specified in
Section 4.1 with respect to the Issuer, if the surviving entity has failed to
honor such obligation, the expenses are intended to constitute expenses of
administration under any insolvency law or under the Bankruptcy Code.
 
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Section 6.5 Not Acting in Individual Capacity. The Trustee acts hereunder solely
as trustee unless otherwise expressly provided, and all Persons, other than the
Noteholders to the extent expressly provided in this Indenture, having any claim
against the Trustee by reason of the transactions contemplated hereby shall
look, subject to the lien and priorities of payment as provided herein or in any
other Transaction Document, only to the property of the Issuer for payment or
satisfaction thereof.
 
Section 6.6 Compensation of Trustee. The Trustee agrees that it shall have no
right against the Noteholders or, except as provided in Section 3.7(a), the
property of the Issuer, for any fee as compensation for its services hereunder.
The Issuer shall pay to the Trustee from time to time such compensation as has
been agreed between the two parties on or prior to the date hereof. The
compensation shall be paid to the Trustee as provided in Section 3.5(a) and
Section 3.7(a).
 
Section 6.7 Notice of Defaults. As promptly as practicable after, and in any
event within 30 days after, the occurrence of any Default hereunder, the Trustee
shall transmit by mail to the Issuer, the Servicer and the Noteholders of the
related class, in accordance with Section 313(c) of the Trust Indenture Act (as
if the Trust Indenture Act applied to this Indenture), notice of such Default
hereunder actually known to a Responsible Officer of the Trustee, unless such
Default shall have been cured or waived; provided, however, that, except in the
case of a Default on the payment of the interest, principal or Premium, if any,
on any Note, the Trustee shall be fully protected in withholding such notice if
and so long as a trust committee of Responsible Officers of the Trustee in good
faith determines that the withholding of such notice is in the interests of the
Noteholders of the related class.
 
Section 6.8 May Hold Notes. The Trustee, any Paying Agent, the Registrar or any
of their Affiliates or any other agent in their respective individual or any
other capacity may become the owner or pledgee of the Notes and, subject to
Sections 310(b) and 311 of the Trust Indenture Act (as if the Trust Indenture
Act applied to this Indenture), may otherwise deal with the Issuer with the same
rights it would have if it were not the Trustee, Paying Agent, Registrar or such
other agent.
 
Section 6.9 Corporate Trustee Required; Eligibility. There shall at all times be
a Trustee that shall be eligible to act as a trustee under Section 310(a) of the
Trust Indenture Act (as if the Trust Indenture Act applied to this Indenture)
and shall meet the Eligibility Requirements. If such corporation publishes
reports of conditions at least annually, pursuant to law or to the requirements
of any federal, state, foreign, territorial or District of Columbia supervising
or examining authority, then, for the purposes of this Section 6.9, the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of conditions so
published.
 
In case at any time the Trustee shall cease to be eligible in accordance with
the provisions of this Section 6.9 to act as Trustee, the Trustee shall resign
immediately as Trustee in the manner and with the effect specified in Section
7.1.
 
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Section 6.10 Reports by the Trustee. Within 60 days after May 15 of each year
commencing with the first full calendar year following the issuance of any class
of Notes, the Trustee shall, if required by Section 313(a) of the Trust
Indenture Act (as if the Trust Indenture Act applied to this Indenture),
transmit to the Noteholders of each class, as provided in Section 313(c) of the
Trust Indenture Act (as if the Trust Indenture Act applied to this Indenture), a
brief report describing, among other things, any changes in eligibility and
qualifications of the Trustee and of any Class B Issuance.
 
Section 6.11 Calculation Agent. The Trustee shall act as the Calculation Agent
hereunder. Subject to the approval of the Issuer and Noteholders of a majority
of the Outstanding Principal Balance of the Notes, another Person may become the
Calculation Agent on such terms as shall be approved by them. To the extent not
otherwise specifically provided herein, the Trustee shall furnish to the
Calculation Agent, and the Calculation Agent shall furnish to the Trustee, upon
written request such information and copies of such documents as the Trustee or
the Calculation Agent may have and as are necessary for the Calculation Agent
and the Trustee to perform their respective duties under Article III or
otherwise.
 
Section 6.12 Pledge and Security Agreement and Other Transaction Documents. The
Trustee shall enter into the Pledge and Security Agreement with the Parent on
the Closing Date and shall hold the collateral pledged thereunder as part of the
Collateral and the Indenture Estate for purposes of this Indenture. The
provisions of this Article VI shall apply to the Trustee’s exercise of rights
and remedies under the Pledge and Security Agreement, mutatis mutandis. In
addition, the Trustee shall enter into such other Transaction Documents on the
Closing Date to which it is party.
 
Section 6.13 Custody of the Collateral. The Trustee shall hold such of the
Indenture Estate as consists of instruments, deposit accounts, negotiable
documents, money, goods, letters of credit and advices of credit in the State of
New York. The Trustee shall hold such of the Indenture Estate as constitutes
investment property through a securities intermediary, which securities
intermediary shall agree with the Trustee that (a) such investment property
shall at all times be credited to a securities account of the Trustee, (b) such
securities intermediary shall treat the Trustee as entitled to exercise the
rights that comprise each financial asset credited to such securities account,
(c) all property credited to such securities account shall be treated as a
financial asset, (d) such securities intermediary shall comply with entitlement
orders originated by the Trustee without the further consent of any other
Person, (e) such securities intermediary will not agree with any Person other
than the Trustee to comply with entitlement orders originated by such other
Person, (f) such securities account and the property credited thereto shall not
be subject to any lien, security interest or right of set-off in favor of such
securities intermediary or anyone claiming through it (other than the Trustee)
and (g) such agreement shall be governed by the laws of the State of New York.
Except as permitted by this Section 6.13 or as otherwise permitted by any
Transaction Document, the Trustee shall not hold any part of the Indenture
Estate through an agent or a nominee.
 
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Section 6.14 Preservation and Disclosure of Noteholder Lists. The Registrar
shall preserve, in as current a form as is reasonably practicable, all
information as to the names and addresses of the Noteholders received by it,
including the Approved Holder List. At any time when a default or an Event of
Default has occurred and is continuing, in case either (a) three or more
Noteholders that have executed and delivered to the Registrar a Confidentiality
Agreement or (b) one or more Noteholders of at least 25% of the Outstanding
Principal Balance of the Senior Class of Notes that have executed and delivered
to the Registrar a Confidentiality Agreement (in each case, “Applicants”) apply
in writing to the Registrar and furnish to the Registrar reasonable proof that
each such Applicant has owned a Note for a period of at least three months
preceding the date of such application, and such application states that the
Applicants desire to communicate with other Noteholders with respect to their
rights under this Indenture or under the Notes and such application is
accompanied by a copy of the form of proxy or other communication that such
Applicants propose to transmit, then the Registrar shall, within five Business
Days after the receipt of such application, inform such Applicants as to the
approximate number of Noteholders whose names and addresses appear in such
information and as to the approximate cost of mailing to such Noteholders the
form of proxy or other communication, if any, specified in such application. The
Registrar shall, upon the written request of such Applicants, mail to each
Noteholder whose name and address appears in such information a copy of the form
of proxy or other communication that is specified in such request, with
reasonable promptness after a tender to the Registrar of the material to be
mailed and of payment, or provision for the payment, of the reasonable expenses
of mailing. Each and every Noteholder, by receiving and holding the same, agrees
with the Issuer and the Registrar that neither the Registrar nor any agent of
the Issuer or the Registrar shall be held accountable by reason of mailing any
material pursuant to a request made under this Section 6.14.
 
Section 6.15 Audit Rights. At the Direction of Noteholders of at least 25% of
the Outstanding Principal Balance of the Senior Class of Notes, but subject to
limitations on frequency and scope as set forth in the Inspire License
Agreement, the Senior Trustee shall instruct the Servicer on behalf of the
Issuer to exercise its rights (if currently exercisable) pursuant to Section 5.7
of the Inspire License Agreement to have the books and records of Inspire
audited by a certified public accountant or other Person permitted by the
Inspire License Agreement.
 
Section 6.16 Compliance with Applicable Anti-Terrorism and Anti-Money Laundering
Regulations. In order to comply with Applicable Laws in effect from time to time
applicable to banking institutions, including those relating to the funding of
terrorist activities and money laundering, the Trustee is required to obtain,
verify and record certain information relating to Persons that maintain a
business relationship with the Trustee. Accordingly, the Issuer agrees to
provide to the Trustee upon its request from time to time such identifying
information and documentation as may be available for the Issuer in order to
enable the Trustee to comply with such Applicable Laws.
 
Section 6.17 Jurisdiction of Trustee. Each of the Issuer and the Trustee agrees
that the State of New York shall be the Trustee’s jurisdiction for purposes of
Sections 8-110, 9-304 and 9-305 of the UCC.
 
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ARTICLE VII
SUCCESSOR TRUSTEES
 
Section 7.1 Resignation and Removal of Trustee. The Trustee may resign as to all
or any of the classes of Notes at any time without cause by giving at least 30
days’ prior written notice to the Issuer, the Servicer and the Noteholders.
Noteholders of a majority of the Outstanding Principal Balance of any class of
Notes may at any time remove the Trustee as to such class without cause, with
the consent of the Issuer (such consent not to be unreasonably withheld) if no
Event of Default shall have occurred and be continuing, by an instrument in
writing delivered to the Issuer, the Servicer and the Trustee being removed. In
addition, the Issuer may remove the Trustee as to any class of Notes if (a) such
Trustee fails to comply with Section 310 of the Trust Indenture Act (as if the
Trust Indenture Act applied to this Indenture) after written request therefor by
the Issuer or the Noteholders of the related class who have been bona fide
Noteholders for at least six months, (b) such Trustee fails to comply with
Section 7.2(d) or any other provision hereof, (c) such Trustee is adjudged a
bankrupt or an insolvent, (d) a receiver or public officer takes charge of such
Trustee or its property or (e) such Trustee becomes incapable of acting.
References to the Trustee in this Indenture include any successor Trustee as to
all or any of the classes of Notes appointed in accordance with this Article
VII. Any resignation or removal of the Trustee pursuant to this Section 7.1
shall not be effective until a successor Trustee shall have been duly appointed
and vested as Trustee pursuant to Section 7.2.
 
Section 7.2 Appointment of Successor.
 
(a) In the case of the resignation or removal of the Trustee as to any class of
Notes under Section 7.1, the Issuer shall promptly appoint a successor Trustee
as to such class; provided, that the Noteholders of a majority of the
Outstanding Principal Balance of such class of Notes may appoint, within one
year after such resignation or removal, a successor Trustee as to such class
that may be other than the successor Trustee appointed by the Issuer, and such
successor Trustee appointed by the Issuer shall be superseded by the successor
Trustee so appointed by the Noteholders. If a successor Trustee as to any class
of Notes shall not have been appointed and accepted its appointment hereunder
within 60 days after the Trustee gives notice of resignation as to such class,
the retiring Trustee, the Issuer, the Servicer or a majority of the Outstanding
Principal Balance of such class of Notes may petition any court of competent
jurisdiction for the appointment of a successor Trustee as to such class. Any
successor Trustee so appointed by such court shall immediately and without
further act be superseded by any successor Trustee appointed as provided in the
first sentence of this paragraph within one year from the date of the
appointment by such court.
 
(b) Any successor Trustee as to any class of Notes, however appointed, shall
execute and deliver to the Issuer, the Servicer and the predecessor Trustee as
to such class an instrument accepting such appointment, and thereupon such
successor Trustee, without further act, shall become vested with all the
estates, properties, rights, powers, duties and trusts of such predecessor
Trustee hereunder in the trusts hereunder applicable to it with like effect as
if originally named the Trustee as to such class herein; provided, that, upon
the written request of such successor Trustee, such predecessor Trustee shall,
upon payment of all amounts due and owing to it, execute and deliver an
instrument transferring to such successor Trustee, upon the trusts herein
expressed applicable to it, all the estates, properties, rights, powers and
trusts of such predecessor Trustee, and such predecessor Trustee shall duly
assign, transfer, deliver and pay over to such successor Trustee all moneys or
other property then held by such predecessor Trustee hereunder solely for the
benefit of such class of Notes.
 
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(c) If a successor Trustee is appointed with respect to one or more (but not
all) classes of the Notes, the Issuer, the predecessor Trustee and each
successor Trustee with respect to each class of Notes shall execute and deliver
an indenture supplemental hereto that shall contain such provisions as shall be
deemed necessary or desirable to confirm that all the rights, powers, trusts and
duties of the predecessor Trustee with respect to the classes of Notes as to
which the predecessor Trustee is not retiring shall continue to be vested in the
predecessor Trustee, and shall add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the administration
of the Notes hereunder by more than one Trustee.
 
(d) Each Trustee shall be an Eligible Institution and shall meet the Eligibility
Requirements, if there be such an institution willing, able and legally
qualified to perform the duties of a Trustee hereunder.
 
(e) Any Person into which the Trustee may be merged or converted or with which
it may be consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any Person to which all
or substantially all of the corporate trust business of the Trustee (including
the administration of the trust created by this Indenture) may be transferred,
shall, subject to the terms of Section 7.2(c), be the Trustee under this
Indenture without the execution or filing of any paper with any party hereto or
any further act on the part of any party hereto, except where an instrument of
transfer or assignment is required by law to effect such succession, anything
herein to the contrary notwithstanding.
 
 
ARTICLE VIII
INDEMNITY
 
Section 8.1 Indemnity. The Issuer shall indemnify and defend the Trustee (and
its officers, directors, managers, employees and agents) for, and hold it
harmless from and against, and reimburse the Trustee for, any loss, liability or
expense incurred by it without bad faith, gross negligence or willful misconduct
on its part in connection with the acceptance or administration of this
Indenture and its performance of its duties under this Indenture and the Notes
or any other Transaction Document to which the Trustee is party, including the
reasonable costs and expenses of defending itself against any claim or liability
and of complying with any process served upon it or any of its officers in
connection with the exercise or performance of any of its powers or duties, and
hold it harmless against any loss, liability or reasonable expense incurred
without bad faith, gross negligence or willful misconduct on its part, arising
out of or in connection with actions taken or omitted to be taken in reliance on
any Officer’s Certificate furnished hereunder, or the failure to furnish any
such Officer’s Certificate required to be furnished hereunder. The Trustee shall
notify the Issuer promptly of any claim asserted against the Trustee for which
it may seek indemnity; provided, however, that failure to provide such notice
shall not invalidate any right to indemnity hereunder. The Issuer shall defend
any such claim and the Trustee shall cooperate in the defense thereof. The
Trustee may have separate counsel and the Issuer shall pay the reasonable fees
and expenses of one separate outside counsel for the Trustee, in which case the
Issuer does not have to defend such claim. The Issuer need not pay for any
settlements made without its consent; provided, that such consent shall not be
unreasonably withheld or delayed. The Issuer need not reimburse any expense or
provide any indemnity against any loss, liability or expense incurred by the
Trustee through bad faith, gross negligence or willful misconduct.
 
Section 8.2 Noteholders’ Indemnity. The Trustee shall be entitled, subject to
such Trustee’s duty during a Default to act with the standard of care required
under this Indenture, to be indemnified by the Noteholders of any class of Notes
before proceeding to exercise any right or power under this Indenture or any
other Transaction Document at the request or Direction of such Noteholders.
 
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Section 8.3 Survival. The provisions of Section 8.1 and Section 8.2 shall
survive the termination of this Indenture or the earlier resignation or removal
of the Trustee.
 
ARTICLE IX
MODIFICATION
 
Section 9.1 Modification with Consent of Noteholders. With the consent of
Noteholders of a majority of the Outstanding Principal Balance of the Notes
(voting or acting as a single class), the Trustee may amend or modify this
Indenture, the Notes, the Pledge and Security Agreement, the Purchase and Sale
Agreement, the Bill of Sale, the Residual License Agreement or the Servicing
Agreement to the extent the Trustee is a party or to consent to the amendment or
modification of the Pledge and Security Agreement, the Purchase and Sale
Agreement, the Bill of Sale, the Residual License Agreement or the Servicing
Agreement (or the waiver of any provision thereof). However, no such amendment,
modification, consent or waiver may, without the consent of Noteholders of 100%
of the Outstanding Principal Balance of the class of Notes affected thereby:
 
(a) reduce the percentage of Noteholders of any such class of Notes required to
take or approve any action hereunder or thereunder;
 
(b) reduce the amount or change the time of payment of any amount owing or
payable with respect to any such class of Notes or change the rate of interest
or change the manner of calculation of interest payable with respect to any such
class of Notes;
 
(c) alter or modify in any respect the provisions of this Indenture with respect
to the Collateral or the Issuer Pledged Collateral for the Notes, the provisions
of the Pledge and Security Agreement with respect to the Issuer Pledged
Collateral for the Notes or the manner of payment or the order of priorities in
which payments or distributions hereunder will be made as between the
Noteholders of such Notes and the Issuer or as among the Noteholders; or
 
(d) consent to any assignment of the Issuer’s rights to a party other than the
Trustee for the benefit of the Noteholders;
 
provided, that the Noteholders of a majority of the Outstanding Principal
Balance of the Senior Class of Notes, by written notice to the Trustee, may
waive any Default or Event of Default pursuant to Section 4.5.
 
It shall not be necessary for the consent of the Noteholders under this Section
9.1 to approve the particular form of any proposed amendment or waiver, but it
shall be sufficient if such consent approves the substance thereof. Any such
modification approved by the required Noteholders of any class of Notes will be
binding on the Noteholders of the relevant class of Notes and each party to this
Indenture.
 
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After an amendment under this Section 9.1 becomes effective, the Issuer or, at
the direction of the Issuer, the Trustee shall mail to the Noteholders a notice
briefly describing such amendment. Any failure of the Issuer or the Trustee to
mail such notice, or any defect therein, shall not, however, in any way impair
or affect the validity of any such amendment.
 
After an amendment under this Section 9.1 becomes effective, it shall bind every
Noteholder, whether or not notation thereof is made on any Note held by such
Noteholder.
 
Section 9.2 Modification Without Consent of Noteholders. The Trustee may agree,
without the consent of any Noteholder, to amend or modify this Indenture, the
Notes, the Pledge and Security Agreement, the Purchase and Sale Agreement, the
Bill of Sale, the Residual License Agreement or the Servicing Agreement to the
extent the Trustee is a party or to consent to the amendment or modification of
the Pledge and Security Agreement, the Purchase and Sale Agreement, the Bill of
Sale, the Residual License Agreement or the Servicing Agreement (or the waiver
of any provision thereof) to:
 
(a) establish the terms of any Refinancing Notes or Class B Notes pursuant to
Section 2.15 and Section 2.16, respectively;
 
(b) evidence the succession of a successor to the Trustee, the removal of the
Trustee or the appointment of any separate or additional trustee or trustees and
to define the rights, powers, duties and obligations conferred upon any such
separate trustee or trustees or co-trustees;
 
(c) correct, confirm or amplify the description of any property at any time
subject to the lien of this Indenture or to convey, transfer, assign, mortgage
or pledge any property to or with the Trustee;
 
(d) cure any ambiguity in or correct or supplement any defective or inconsistent
provision of this Indenture, the Notes, the Pledge and Security Agreement, the
Purchase and Sale Agreement, the Bill of Sale, the Residual License Agreement or
the Servicing Agreement, in any manner that will not adversely affect the
interests of the Noteholders in any material respect as confirmed in an
Officer’s Certificate of the Issuer;
 
(e) grant or confer upon the Trustee for the benefit of the Noteholders any
additional rights, remedies, powers, authority or security that may be lawfully
granted or conferred and that are not contrary or inconsistent with this
Indenture;
 
(f) add to the covenants or agreements to be observed by the Issuer, which are
not contrary to this Indenture, or to add Events of Default for the benefit of
the Noteholders;
 
(g) comply with the requirements of the SEC or any regulatory body or any
Applicable Law; or
 
(h) effect any indenture supplemental hereto or any other amendment,
modification, supplement, waiver or consent with respect to this Indenture, the
Notes, the Pledge and Security Agreement, the Purchase and Sale Agreement, the
Bill of Sale, the Residual License Agreement or the Servicing Agreement;
provided, that such indenture supplemental hereto, amendment, modification,
supplement, waiver or consent will not adversely affect the interests of the
Noteholders in any material respect as confirmed in an Officer’s Certificate of
the Issuer.
 
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After an amendment under this Section 9.2 becomes effective, the Issuer or, at
the direction of the Issuer, the Trustee shall mail to the Noteholders a notice
briefly describing such amendment. Any failure of the Issuer or the Trustee to
mail such notice, or any defect therein, shall not, however, in any way impair
or affect the validity of any such amendment.
 
After an amendment under this Section 9.2 becomes effective, it shall bind every
Noteholder, whether or not notation thereof is made on any Note held by such
Noteholder.
 
Section 9.3 Subordination; Priority of Payments. The subordination provisions
contained in Article X may not be amended or modified without the consent of
Noteholders of 100% of the Outstanding Principal Balance of the class of Notes
affected thereby. In no event shall the provisions set forth in Section 3.7
relating to the priority of payment of Expenses be amended or modified. In no
event shall the provisions of Section 3.7(b) (or this sentence of Section 9.3)
be amended or modified without the prior written consent of the Parent (the
Parent shall be deemed to be a third party beneficiary of this Indenture in
respect of the last sentence of this Section 9.3).
 
Section 9.4 Execution of Amendments by Trustee. In executing, or accepting the
additional trusts created by, any amendment or modification to this Indenture
permitted by this Article IX or the modifications thereby of the trusts created
by this Indenture, the Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Officer’s Certificate and an Opinion of Counsel
stating that the execution of such amendment is authorized or permitted by this
Indenture. The Trustee may, but shall not be obligated to, enter into any such
amendment that affects the Trustee’s own rights, duties or immunities under this
Indenture or otherwise.
 
Section 9.5 Conformity with Trust Indenture Act. Every indenture supplemental
hereto pursuant to this Article IX shall conform to the requirements of the
Trust Indenture Act as then in effect (as if the Trust Indenture Act applied to
this Indenture).
 
ARTICLE X
SUBORDINATION
 
Section 10.1 Subordination of the Notes.
 
(a) Each of the Issuer and the Trustee (on behalf of the Noteholders) covenants
and agrees, and each Noteholder, by its acceptance of a Note, covenants and
agrees, that the Notes of each class will be issued subject to the provisions of
this Article X. Each Noteholder, by its acceptance of a Note, further agrees
that all amounts payable on any Note will, to the extent and in the manner set
forth in this Article X and Section 3.7, be subordinated in right of payment to
the prior payment in full of all Expenses payable to the Service Providers
pursuant to this Indenture and the other Transaction Documents. Each Noteholder
of a Class B Note, by its acceptance of a Class B Note, further agrees that all
amounts payable on any Class B Note will, to the extent and in the manner set
forth in this Article X and Section 3.7, be subordinated in right of payment to
the payment in full of the Class A Notes. Any claim to payment so stated to be
subordinated is referred to as a “Subordinated Claim”; each claim to payment to
which another claim to payment is a Subordinated Claim is referred to as a
“Senior Claim” with respect to such Subordinated Claim.
 
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(b) If, prior to the payment in full of all Senior Claims then due and payable,
the Trustee or any Noteholder of a Subordinated Claim shall have received any
payment or distribution in respect of such Subordinated Claim in excess of the
amount to which such Noteholder was then entitled under Section 3.7, then such
payment or distribution shall be received and held in trust by such Person and
paid over or delivered to the Trustee for application as provided in Section
3.7.
 
(c) If any Service Provider, the Trustee or any Noteholder of any Senior Claim
receives any payment in respect of any Senior Claim that is subsequently
invalidated, declared preferential, set aside and/or required to be repaid to a
trustee, receiver or other party, then, to the extent such payment is so
invalidated, declared preferential, set aside and/or required to be repaid, such
Senior Claim shall be revived and continue in full force and effect and shall be
entitled to the benefits of this Article X, all as if such payment had not been
received.
 
(d) The Trustee (on its own behalf and on behalf of the Noteholders) and the
Issuer each confirm that the payment priorities specified in Section 3.7 shall
apply in all circumstances.
 
(e) Each Noteholder, by its acceptance of a Note, authorizes and expressly
directs the Trustee on its behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article X, and
appoints the Trustee its attorney-in-fact for such purposes, including, in the
event of any dissolution, winding-up, liquidation or reorganization of the
Issuer (whether in bankruptcy, insolvency, receivership, reorganization or
similar proceedings or upon an assignment for the benefit of creditors or
otherwise), any actions tending towards liquidation of the property and assets
of the Issuer or the filing of a claim for the unpaid balance of its Notes in
the form required in those proceedings.
 
(f) If payment on the Notes is accelerated as a result of an Event of Default,
the Issuer shall promptly notify the holders of the Senior Claims of such
acceleration.
 
(g) After all Senior Claims are paid in full and until the Subordinated Claims
are paid in full, and to the extent that such Senior Claims shall have been paid
with funds that would, but for the subordination pursuant to this Article X,
have been paid to and retained by such holders of Subordinated Claims, the
holders of Subordinated Claims shall be subrogated to the rights of holders of
Senior Claims to receive payments applicable to Senior Claims. A payment made
under this Article X to holders of Senior Claims that otherwise would have been
made to the holders of Subordinated Claims is not, as between the Issuer and the
holders of Subordinated Claims, a payment by the Issuer.
 
(h) No right of any holder of any Senior Claim to enforce the subordination of
any Subordinated Claim shall be impaired by an act or failure to act by the
Issuer or the Trustee or by any failure by either the Issuer or the Trustee to
comply with this Indenture.
 
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(i) Each Noteholder by accepting a Note acknowledges and agrees that the
foregoing subordination provisions are, and are intended to be, an inducement
and a consideration to each holder of any Senior Claim, whether such Senior
Claim was created or acquired before or after the issuance of such Noteholder’s
claim, to acquire and continue to hold such Senior Claim, and such holder of any
Senior Claim shall be deemed conclusively to have relied on such subordination
provisions in acquiring and continuing to hold such Senior Claim. Each holder of
a Subordinated Claim agrees to comply with the provisions of Article IV.
 
ARTICLE XI
DISCHARGE OF INDENTURE
 
Section 11.1 Discharge of Indenture.
 
(a) When (i) all outstanding Secured Obligations have been satisfied and the
Issuer delivers to the Trustee all Outstanding Notes (other than Notes replaced
pursuant to Section 2.8) for cancellation or (ii) all Outstanding Notes have
become due and payable, whether at maturity or as a result of the mailing of a
notice of an Optional Redemption pursuant to Section 3.10(b) or any other
Redemption pursuant to Section 3.10(c), in each case that is subject to Section
3.11(c), and the Issuer irrevocably deposits in the Redemption Account funds
sufficient to pay all remaining Expenses accrued and payable through such date
and to pay all principal and interest and premium (if any) on outstanding Notes
at maturity or upon redemption all Outstanding Notes, including interest and any
Premium thereon to maturity or the Redemption Date (other than Notes replaced
pursuant to Section 2.8), and if in either case the Issuer pays all other sums
payable hereunder by the Issuer, then this Indenture shall, subject to Section
11.1(b), cease to be of further effect and the security interest granted to the
Trustee hereunder in the Collateral and the Indenture Estate shall terminate.
The Trustee shall acknowledge satisfaction and discharge of this Indenture, and
file all UCC termination statements and similar documents prepared by the
Issuer, on demand of the Issuer accompanied by an Officer’s Certificate and an
Opinion of Counsel, at the cost and expense of the Issuer, to the effect that
any conditions precedent to a discharge of this Indenture have been met.
 
(b) Notwithstanding Section 11.1(a), the Issuer’s obligations in Section 8.1 and
the Trustee’s obligations in Section 12.13 shall survive the satisfaction and
discharge of this Indenture.
 
 
ARTICLE XII
MISCELLANEOUS
 
Section 12.1 Right of Trustee to Perform. If the Issuer for any reason fails to
observe or punctually to perform any of its obligations to the Trustee, whether
under this Indenture, under any of the other Transaction Documents or otherwise,
the Trustee shall have the power (but shall have no obligation), on behalf of or
in the name of the Issuer or otherwise, to perform such obligations or cause
performance of such obligations and to take any steps that the Trustee may, in
its absolute discretion, consider appropriate with a view to remedying, or
mitigating the consequences of, such failure by the Issuer, in which case the
reasonable expenses of the Trustee, including the fees and expenses of its
counsel, incurred in connection therewith shall be payable by the Issuer under
Section 8.1; provided, that no exercise or failure to exercise this power by the
Trustee shall in any way prejudice the Trustee’s other rights under this
Indenture or any of the other Transaction Documents.
 
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Section 12.2 Waiver. Any waiver by any party of any provision of this Indenture
or any right, remedy or option hereunder shall only prevent and estop such party
from thereafter enforcing such provision, right, remedy or option if such waiver
is given in writing and only as to the specific instance and for the specific
purpose for which such waiver was given. The failure or refusal of any party
hereto to insist in any one or more instances, or in a course of dealing, upon
the strict performance of any of the terms or provisions of this Indenture by
any party hereto or the partial exercise of any right, remedy or option
hereunder shall not be construed as a waiver or relinquishment of any such term
or provision, but the same shall continue in full force and effect. No failure
on the part of the Trustee to exercise, and no delay on its part in exercising,
any right or remedy under this Indenture will operate as a waiver thereof, nor
will any single or partial exercise of any right or remedy preclude any other or
further exercise thereof or the exercise of any other right or remedy. The
rights and remedies provided in this Indenture are cumulative and not exclusive
of any rights or remedies provided by law.
 
Section 12.3 Severability. In the event that any provision of this Indenture or
the application thereof to any party hereto or to any circumstance or in any
jurisdiction governing this Indenture shall, to any extent, be invalid or
unenforceable under any applicable statute, regulation or rule of law, then such
provision shall be deemed inoperative to the extent that it is invalid or
unenforceable, and the remainder of this Indenture, and the application of any
such invalid or unenforceable provision to the parties, jurisdictions or
circumstances other than to whom or to which it is held invalid or
unenforceable, shall not be affected thereby nor shall the same affect the
validity or enforceability of this Indenture. The parties hereto further agree
that the holding by any court of competent jurisdiction that any remedy pursued
by the Trustee hereunder is unavailable or unenforceable shall not affect in any
way the ability of the Trustee to pursue any other remedy available to it.
 
Section 12.4 Restrictions on Exercise of Certain Rights. The Trustee and, during
the continuance of a payment Default with respect to the Senior Class of Notes,
the Senior Trustee, except as otherwise provided in Section 4.4, may sue for
recovery or take any other steps for the purpose of recovering any of the
obligations hereunder or any other debts or liabilities whatsoever owing to it
by the Issuer. Each of the Noteholders shall at all times be deemed to have
agreed by virtue of the acceptance of the Notes that only the Trustee and,
during the continuance of a payment Default with respect to the Senior Class of
Notes, the Senior Trustee, except as provided in Section 4.4, may take any steps
for the purpose of procuring the appointment of an administrative receiver,
examiner, receiver or similar officer or the making of an administration order
or for instituting any bankruptcy, reorganization, arrangement, insolvency,
winding-up, liquidation, composition, examination or any like proceedings under
Applicable Law.
 
Section 12.5 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 reports under
Article III and any other report that is of a routine nature, on the date sent
by first class mail or overnight courier or transmitted by legible telecopier
transmission, in all cases, with a copy emailed to the recipient at the
applicable address, addressed to the recipient as follows:
 
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if to the Issuer, to:
 
Azithromycin Royalty Sub LLC
c/o InSite Vision Incorporated
965 Atlantic Avenue
Alameda, California 94501
Attention: Louis Drapeau
Telephone: 510-747-1241
Facsimile: 510-865-5700
Email: ldrapeau@insite.com
 
if to the Parent or the Servicer, to:
 
InSite Vision Incorporated
965 Atlantic Avenue
Alameda, California 94501
Attention: Louis Drapeau
Telephone: 510-747-1241
Facsimile: 510-865-5700
Email: ldrapeau@insite.com
 
if to the Trustee, the Registrar, the Paying Agent or the Calculation Agent, to:
 
U.S. Bank National Association
One Federal Street, 3rd Floor
Boston, Massachusetts 02110
Attention: Corporate Trust Services (Azithromycin Royalty Sub LLC)
Telephone: 617-603-6553
Facsimile: 617-603-6683
 
A copy of each notice given hereunder to any party hereto shall also be given to
each of the other parties hereto. Each party hereto may, by notice given in
accordance herewith to each of the other parties hereto, designate any further
or different address to which subsequent Notices shall be sent; provided,
however, in the case of Inspire or Pfizer, such notice may be given by the
Servicer.
 
Section 12.6 Assignments. This Indenture shall be a continuing obligation of the
Issuer and shall (a) be binding upon the Issuer and its successors and assigns
and (b) inure to the benefit of and be enforceable by the Trustee and by its
successors, transferees and assigns. The Issuer may not assign any of its
obligations under this Indenture or delegate any of its duties hereunder.
 
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Section 12.7 Application to Court. The Trustee may at any time after the service
of an Acceleration Notice apply to any court of competent jurisdiction for an
order that the terms of this Indenture be carried into execution under the
direction of such court and for the appointment of a Receiver of the Collateral
or any part thereof and for any other order in relation to the administration of
this Indenture as the Trustee shall deem fit, and it may assent to or approve
any application to any court of competent jurisdiction made at the instigation
of any of the Noteholders and shall be indemnified by the Issuer against all
costs, charges and expenses incurred by it in relation to any such application
or proceedings.
 
Section 12.8 GOVERNING LAW. THIS INDENTURE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL SUBSTANTIVE LAWS OF THE STATE OF NEW YORK WITHOUT
REFERENCE TO THE RULES THEREOF RELATING TO CONFLICTS OF LAW OTHER THAN SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE
WITH SUCH LAWS.
 
Section 12.9 Jurisdiction.
 
(a) Each of the parties hereto agrees that the U.S. federal and State of New
York courts located in the Borough of Manhattan, The City of New York shall have
jurisdiction to hear and determine any suit, action or proceeding, and to settle
any disputes, which may arise out of or in connection with this Indenture and,
for such purposes, submits to the jurisdiction of such courts. Each of the
parties hereto waives any objection that it might now or hereafter have to the
U.S. federal or State of New York courts located in the Borough of Manhattan,
The City of New York being nominated as the forum to hear and determine any
suit, action or proceeding, and to settle any disputes, which may arise out of
or in connection with this Indenture and agrees not to claim that any such court
is not a convenient or appropriate forum. Each of the parties hereto has
irrevocably designated, appointed and empowered the respective Persons named in
Exhibit C as its designee, appointee and agent to receive, accept and
acknowledge for and on its behalf, and its properties, assets and revenues,
service of any and all legal process, summons, notices and documents that may be
served in any suit, action or proceeding brought against such party in any
United States or state court arising out of or relating to this Indenture or the
Notes. If for any reason any such designee, appointee and agent hereunder shall
cease to be available to act as such, such party agrees to designate a new
designee, appointee and agent in the Borough of Manhattan, The City of New York
on the terms and for the purposes of this Section 12.9 satisfactory to such
other party. Each party further hereby irrevocably consents and agrees to the
service of any and all legal process, summons, notices and documents in any
suit, action or proceeding against such party by serving a copy thereof upon the
relevant agent for service of process referred to in this Section 12.9 (whether
or not the appointment of such agent shall for any reason prove to be
ineffective or such agent shall accept or acknowledge such service) or by
mailing copies thereof by registered or certified mail, postage prepaid, to such
party at its address specified in or designated pursuant to this Indenture. Each
party agrees that the failure of any such designee, appointee and agent to give
any notice of such service to it shall not impair or affect in any way the
validity of such service or any judgment rendered in any action or proceeding
based thereon. Nothing herein shall in any way be deemed to limit the ability of
the Issuer or the Trustee and the Noteholders, as the case may be, to serve any
such legal process, summons, notices and documents in any other manner permitted
by Applicable Law or to obtain jurisdiction over such party or bring suits,
actions or proceedings against such party in such other jurisdictions, and in
such manner, as may be permitted by Applicable Law.
 
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(b) The submission to the jurisdiction of the courts referred to in Section
12.9(a) shall not (and shall not be construed so as to) limit the right of the
Trustee to take proceedings against the Issuer in any other court of competent
jurisdiction, nor shall the taking of proceedings in any one or more
jurisdictions preclude the taking of proceedings in any other jurisdiction,
whether concurrently or not.
 
(c) If, for the purpose of obtaining a judgment or order in any court, it is
necessary to convert a sum due hereunder to any Noteholder from U.S. dollars
into another currency, the Issuer has agreed, and each Noteholder by holding a
Note will be deemed to have agreed, to the fullest extent that they may
effectively do so, that the rate of exchange used shall be that at which, in
accordance with normal banking procedures, such Noteholder could purchase U.S.
dollars with such other currency in the Borough of Manhattan, The City of New
York on the Business Day preceding the day on which final judgment is given.
 
(d) The obligation of the Issuer in respect of any sum payable by it to a
Noteholder shall, notwithstanding any judgment or order in a currency other than
U.S. dollars (the “Judgment Currency”), be discharged only to the extent that,
on the Business Day following receipt by such Noteholder of such security of any
sum adjudged to be so due in the Judgment Currency, such Noteholder may in
accordance with normal banking procedures purchase U.S. dollars with the
Judgment Currency. If the amount of U.S. dollars so purchased is less than the
sum originally due to such Noteholder in the Judgment Currency (determined in
the manner set forth in Section 12.9(c)), the Issuer agrees, as a separate
obligation and notwithstanding any such judgment, to indemnify such Noteholder
against such loss, and, if the amount of the U.S. dollars so purchased exceeds
the sum originally due to such Noteholder, such Noteholder agrees to remit to
the Issuer such excess, provided that such Noteholder shall have no obligation
to remit any such excess as long as the Issuer shall have failed to pay such
Noteholder any obligations due and payable under the Notes of such Noteholder,
in which case such excess may be applied to such obligations of the Issuer under
such Notes in accordance with the terms thereof. The foregoing indemnity shall
constitute a separate and independent obligation of the Issuer and shall
continue in full force and effect notwithstanding any such judgment or order as
aforesaid.
 
(e) EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ALL RIGHT OF TRIAL BY JURY IN
ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN CONNECTION WITH THIS
INDENTURE OR ANY MATTER ARISING HEREUNDER.
 
Section 12.10 Counterparts. This Indenture may be executed in one or more
counterparts by the parties hereto, and each such counterpart shall be
considered an original and all such counterparts shall constitute one and the
same instrument.
 
Section 12.11 Table of Contents and Headings. The Table of Contents and headings
of the Articles and Sections of this Indenture 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.
 
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Section 12.12 Trust Indenture Act. This Indenture shall not be qualified under
the Trust Indenture Act and shall not be subject to the provisions of the Trust
Indenture Act, although it shall incorporate such provisions for ease of
reference.
 
Section 12.13 Confidential Information. The Trustee, in its individual capacity
and as Trustee, agrees and acknowledges that all information (including
Confidential Information) provided to the Trustee by the Parent may be
considered to be proprietary and confidential information of Inspire. The
Trustee agrees to take all reasonable precautions necessary to keep such
information confidential, which precautions shall be no less stringent than
those that the Trustee employs to protect its own confidential information. The
Trustee shall not disclose to any third party other than as set forth herein,
and shall not use for any purpose other than the exercise of the Trustee’s
rights and the performance of its obligations under this Indenture, any such
information without the prior written consent of Inspire. In addition, the
Trustee agrees to be bound by the provisions of Article 8 of the Inspire License
Agreement to the extent it receives confidential information of Inspire pursuant
to Section 5.3 of this Indenture or Section 4.1 of the Servicing Agreement. The
Trustee shall limit access to such information received hereunder to (a) its
directors, officers, managers and employees and (b) its legal advisors, to each
of whom disclosure of such information is necessary for the purposes described
above; provided, however, that in each case such party has expressly agreed to
maintain such information in confidence under terms and conditions substantially
identical to the terms of this Section 12.13.
 
The Trustee agrees that Inspire does not have any responsibility whatsoever for
any reliance on such information by the Trustee or by any Person to whom such
information is disclosed in connection with this Indenture, whether related to
the purposes described above or otherwise. Without limiting the generality of
the foregoing, the Trustee agrees that Inspire makes no representation or
warranty whatsoever to it with respect to such information or its suitability
for such purposes. The Trustee further agrees that it shall not acquire any
rights against Inspire or any employee, officer, director, manager,
representative or agent of Inspire (together with Inspire, “Confidential
Parties”) as a result of the disclosure of such information to the Trustee or to
any Noteholder or Beneficial Holder and that no Confidential Party has any duty,
responsibility, liability or obligation to any Person as a result of any such
disclosure.
 
In the event the Trustee is required to disclose any such information received
hereunder in order to comply with any laws, regulations or court orders, it may
disclose such information only to the extent necessary for such compliance;
provided, however, that it shall give Inspire and the Issuer reasonable advance
written notice of any such court proceeding in which such disclosure may be
required pursuant to a court order so as to afford Inspire a full and fair
opportunity to oppose the issuance of such order and to appeal therefrom and
shall cooperate reasonably with Inspire in opposing such order and in securing
confidential treatment of any such information to be disclosed and/or obtaining
a protective order narrowing the scope of such disclosure.
 
The Trustee agrees that Inspire is an express third-party beneficiary of the
provisions of this Section 12.13 and Article III.
 
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Each of the Calculation Agent, the Paying Agent and the Registrar agrees to be
bound by this Section 12.13 to the same extent as the Trustee.
 
Section 12.14 Limited Recourse. Each of the parties hereto accepts that the
enforceability against the Issuer of the obligations of the Issuer hereunder and
under the Notes shall be limited to the assets of the Issuer, whether tangible
or intangible, real or personal (including the Collateral) and the proceeds
thereof. Once all such assets have been realized upon and such assets (and
proceeds thereof) have been applied in accordance with Article III, any
outstanding obligations of the Issuer shall be extinguished. Each of the parties
hereto further agrees that it shall take no action against any employee,
director, officer or administrator of the Issuer or the Trustee in relation to
this Indenture; provided, that nothing herein shall limit the Issuer (or its
permitted successors or assigns, including any party hereto that becomes such a
successor or assign) from pursuing claims, if any, against any such person. The
provisions of this Section 12.14 shall survive termination of this Indenture;
provided, further, that the foregoing shall not in any way limit, impair or
otherwise affect any rights of the Trustee or the Noteholders to proceed against
any such Person (a) for intentional and willful fraud or intentional and willful
misrepresentations on the part of or by such Person or (b) for the receipt of
any distributions or payments to which the Issuer or any successor in interest
is entitled, other than distributions expressly permitted pursuant to this
Indenture and the other Transaction Documents.
 
Section 12.15 Tax Characterization; No Gross Up; Withholding.
 
(a) The Issuer has entered into this Indenture, and the Notes will be issued,
with the intention that, for federal, state and local income, single business
and franchise Tax purposes, the Notes will qualify as indebtedness. The Issuer,
by entering into this Indenture, and each Noteholder or Beneficial Holder, agree
to treat the Notes for federal, state and local income, single business and
franchise Tax purposes as indebtedness.
 
(b) The Issuer shall not be obligated to pay any additional amounts to the
Noteholders or Beneficial Holders as a result of any withholding or deduction
for, or on account of, any present or future Taxes imposed on payments in
respect of the Notes.
 
(c) If any withholding Tax is imposed on the Issuer’s payment (or allocations of
income) under the Notes to any Noteholder, such Tax shall reduce the amount
otherwise distributable to such Noteholder. The Trustee is hereby authorized and
directed to retain from amounts otherwise distributable to any Noteholder
sufficient funds for the payment of any withholding Tax that is legally owed by
the Issuer (but such authorization shall not prevent the Trustee from contesting
any such withholding Tax in appropriate proceedings and withholding payment of
such Tax, if permitted by Applicable Law, pending the outcome of such
proceedings). The amount of any withholding Tax imposed with respect to any
Noteholder shall be treated as cash distributed to such Noteholder at the time
it is withheld by the Trustee and remitted to the appropriate taxing authority.
If there is a possibility that withholding Tax is payable with respect to a
payment under the Notes, the Trustee may in its sole discretion withhold such
amounts in accordance with this Section 12.15. If any Noteholder wishes to apply
for a refund of any such withholding Tax, the Trustee shall reasonably cooperate
with such Noteholder in making such claim so long as such Noteholder agrees to
reimburse the Trustee for any out-of-pocket expenses incurred. Nothing herein
shall impose an obligation on the part of the Trustee to determine the amount of
any Tax or withholding obligation on the part of the Issuer or in respect of the
Notes.
 
[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the parties hereto have executed this Indenture to be duly
executed, all as of the date first written above.
 
AZITHROMYCIN ROYALTY SUB LLC,
as Issuer
 
By:
InSite Vision Incorporated, its Manager
   
By:
   
Name:
 
Title:
   
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
 
By:
   
Name:
 
Title:

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EXHIBIT A
 
FORM OF ORIGINAL CLASS A NOTE
 
[INSERT THE APPLICABLE LEGEND(S) SET FORTH IN SECTION 2.2]
 
AZITHROMYCIN ROYALTY SUB LLC
 
Azithromycin PhaRMASM Secured 16% Notes Due 2019
 
Class A
 
No. __________
CUSIP: __________

U.S.$60,000,000
 
AZITHROMYCIN ROYALTY SUB LLC, a limited liability company organized under the
laws of the State of Delaware (herein referred to as the “Issuer”), for value
received, hereby promises to pay to CEDE & CO., or registered assigns, the
principal amount set forth on Schedule I hereto on or before May 15, 2019 (the
“Final Legal Maturity Date”) and to pay interest quarterly in arrears on the
Outstanding Principal Balance hereof at a rate per annum equal to 16% (the
“Stated Rate of Interest”), from the date hereof until the Outstanding Principal
Balance hereof is paid or duly provided for, which interest shall be due and
payable on each Payment Date; provided, that, with respect to any Payment Date
(other than the Final Legal Maturity Date or any Redemption Date), any such
interest in excess of the portion of the Available Collections Amount available
to pay such interest on such Payment Date and funds in the Interest Reserve
Account and the Capital Account shall be payable in full not later than the
immediately succeeding Payment Date (together with Additional Interest on the
amount of unpaid interest from the Payment Date on which it was due until the
date on which it is paid, compounded quarterly on each Payment Date). Interest
on this Note in each Interest Accrual Period shall be calculated on the basis of
a 360-day year consisting of twelve 30-day months. If this Note is issued in the
form of a Global Note, in accordance with the requirements of DTC, the Issuer
will cause the Trustee to authenticate an additional Note or additional Notes in
the appropriate principal amount such that neither this Note nor any other such
Note may exceed an aggregate principal amount of U.S.$500,000,000 at any time.
 
This Note is a duly authorized issue of Notes of the Issuer, designated as its
“Azithromycin PhaRMASM Secured 16% Notes Due 2019”, issued under the Indenture
dated as of February 21, 2008 (as amended, restated, supplemented or otherwise
modified from time to time in accordance with the terms thereof, the
“Indenture”), between the Issuer and U.S. Bank National Association, as trustee
(including any successor appointed in accordance with the terms of the
Indenture, the “Trustee”). The Indenture also provides for the issuance of
Refinancing Notes and Class B Notes. All capitalized terms used in this Note and
not defined herein shall have the respective meanings assigned to such terms in
the Indenture. Reference is made to the Indenture and all indentures
supplemental thereto for a statement of the respective rights and obligations
thereunder of the Issuer, the Trustee and the Noteholders. This Note is subject
to all terms of the Indenture.
 
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The Issuer will pay the Outstanding Principal Balance of this Note on or prior
to the Final Legal Maturity Date on the Payment Dates specified in the
Indenture, subject to the availability of the Available Collections Amount
therefor after making payments entitled to priority under Section 3.7 of the
Indenture.
 
The indebtedness evidenced by the Original Class A Notes is, to the extent and
in the manner provided in the Indenture, senior in right of payment to the right
of payment of the Class B Notes, and this Note is issued subject to such
provisions. The maturity of this Note is subject to acceleration upon the
occurrence and during the continuance of the Events of Default specified in the
Indenture.
 
The Issuer may redeem all or part of the Outstanding Principal Balance of this
Note prior to the Final Legal Maturity Date on the Payment Dates, in the amounts
and under the circumstances specified in the Indenture.
 
Any amount of Premium or interest on this Note that is not paid when due shall,
to the fullest extent permitted by Applicable Law, bear interest (“Additional
Interest”) at an interest rate per annum equal to the Stated Rate of Interest
from the date when due until such amount is paid or duly provided for,
compounded quarterly and payable on the next succeeding Payment Date, subject to
the availability of the Available Collections Amount therefor after making
payments entitled to priority under Section 3.7 of the Indenture.
 
This Note is and will be secured by the Collateral pledged as security therefor
as provided in the Indenture.
 
Subject to and in accordance with the terms of the Indenture, there will be
distributed quarterly from the Collection Account on each Payment Date
commencing on May 15, 2008, to the Person in whose name this Note is registered
at the close of business on the Record Date with respect to such Payment Date,
in the manner specified in Section 3.7 of the Indenture, such Person’s pro rata
share (based on the aggregate percentage of the Outstanding Principal Balance of
the Original Class A Notes held by such Person) of the aggregate amount
distributable to all Noteholders of Original Class A Notes on such Payment Date.
 
All amounts payable in respect of this Note shall be payable in U.S. dollars in
the manner provided in the Indenture to the Noteholder hereof on the Record Date
relating to such payment. The final payment with respect to this Note, however,
shall be made only upon presentation and surrender of this Note by the
Noteholder or its agent at an office or agency of the Trustee or Paying Agent in
New York City. At such time, if any, as this Note is issued in the form of one
or more Definitive Notes, payments on a Payment Date shall be made by check
mailed to each Noteholder of such a Definitive Note on the applicable Record
Date at its address appearing on the Register maintained with respect to the
Original Class A Notes. Alternatively, upon application in writing to the
Trustee or other Paying Agent, not later than the applicable Record Date, by a
Noteholder, any such payments shall be made by wire transfer to an account
designated by such Noteholder at a financial institution in New York City. The
final payment with respect to any such Definitive Note, however, shall be made
only upon presentation and surrender of such Definitive Note by the Noteholder
or its agent at an office or agency of the Trustee or Paying Agent in New York
City. Notwithstanding the foregoing, payments in respect of this Note issued in
the form of a Global Note (including principal, Premium, if any, and interest)
shall be made by wire transfer of immediately available funds to the account
specified by DTC. Any reduction in the Outstanding Principal Balance of this
Note (or any one or more predecessor Original Class A Notes) effected by any
payments made on any Payment Date shall be binding upon all future Noteholders
of this Note and of any Original Class A Note issued upon the registration of
transfer of, in exchange or in lieu of or upon the refinancing of this Note,
whether or not noted hereon.
 
A-2

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The Noteholder of this Note agrees, by acceptance hereof, to pay over to the
Trustee any money (including principal, Premium, if any, and interest) paid to
it in respect of this Note in the event that the Trustee, acting in good faith,
determines subsequently that such monies were not paid in accordance with the
priority of payment provisions of the Indenture or as a result of any other
mistake of fact or law on the part of the Trustee in making such payment.
 
This Note is issuable only in registered form. A Noteholder or Beneficial Holder
may transfer this Note or a Beneficial Interest herein only by delivery of a
written application to the Registrar stating the name of the proposed
transferee, a Confidentiality Agreement duly executed and delivered to the
Registrar by such transferee and otherwise complying with the terms of the
Indenture. No such transfer shall be effected until, and such transferee shall
succeed to the rights of a Noteholder only upon, final acceptance and
registration of the transfer by the Registrar in the Register. When this Note is
presented to the Registrar with a request to register the transfer or to
exchange it for an equal principal amount of Original Class A Notes of other
authorized denominations, the Registrar shall register the transfer or make the
exchange as requested if its requirements for such transactions are met
(including, in the case of a transfer, that such Note is duly endorsed or
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and Registrar duly executed by the Noteholder thereof or by an attorney
who is authorized in writing to act on behalf of the Noteholder and that the
transferee has executed and delivered to the Registrar a Confidentiality
Agreement). No service charge shall be made for any registration of transfer or
exchange of this Note, but the party requesting such new Original Class A Note
or Original Class A Notes may be required to pay a sum sufficient to cover any
transfer Tax or similar governmental charge payable in connection therewith.
 
Prior to the registration of transfer of this Note, the Issuer and the Trustee
may deem and treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the absolute owner and Noteholder hereof for the purpose of
receiving payment of all amounts payable with respect to this Note and for all
other purposes, and neither the Issuer nor the Trustee shall be affected by
notice to the contrary.
 
The Indenture permits the amendment or modification of the Indenture and the
Original Class A Notes by the Issuer with the consent of the Noteholders of a
majority of the Outstanding Principal Balance of all Notes (voting or acting as
a single class). However, no amendment or modification of the Indenture or the
Original Class A Notes may, without the consent of Noteholders of 100% of the
Outstanding Principal Balance of the class of Notes affected thereby, (i) reduce
the percentage of Noteholders of any such class of Notes required to take or
approve any action under the Indenture, (ii) reduce the amount or change the
time of payment of any amount owing or payable with respect to any such class of
Notes or change the rate of interest or change the manner of calculation of
interest payable with respect to any such class of Notes, (iii) alter or modify
the provisions with respect to the Collateral for the Notes or the manner of
payment or the order of priorities in which payments or distributions under the
Indenture will be made as between the Noteholders of such Notes and the Issuer
or as among the Noteholders or (iv) consent to any assignment of the Issuer’s
rights to a party other than the Trustee for the benefit of the Noteholders. Any
such amendment or modification shall be binding on every Noteholder hereof,
whether or not notation thereof is made upon this Note.
 
A-3

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The subordination provisions contained in Article X of the Indenture may not be
amended or modified without the consent of Noteholders of 100% of the
Outstanding Principal Balance of the class of Notes affected thereby.
 
The Indenture also contains provisions permitting the Noteholders of a majority
of the Outstanding Principal Balance of the Senior Class of Notes, on behalf of
the Noteholders of all of the Original Class A Notes, to waive compliance by the
Issuer with certain provisions of the Indenture and certain past defaults under
the Indenture and their consequences. Any such consent or waiver shall be
conclusive and binding upon all present and future Noteholders of this Note and
of any Original Class A Note issued upon the registration of transfer of, in
exchange or in lieu of or upon the refinancing of this Note, whether or not
notation of such consent or waiver is made upon this Note.
 
The Original Class A Notes are issuable only in registered form in denominations
as provided in the Indenture, subject to certain limitations therein set forth.
 
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL
SUBSTANTIVE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO THE RULES THEREOF
RELATING TO CONFLICTS OF LAW OTHER THAN SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
 
Unless the certificate of authentication hereon has been executed by the Trustee
whose name appears below by manual or facsimile signature, this Note shall not
be entitled to any benefit under the Indenture, or be valid or obligatory for
any purpose.

A-4

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IN WITNESS WHEREOF, the Issuer has caused this Note to be signed manually or by
facsimile by its duly authorized Manager.
 
Date: February 21, 2008
 
AZITHROMYCIN ROYALTY SUB LLC
           
By:
InSite Vision Incorporated, its Manager
           
By:
       
Name:
     
Title:

 
TRUSTEE’S CERTIFICATE OF AUTHENTICATION
 
This Note is one of the Azithromycin PhaRMASM Secured 16% Notes Due 2019
designated above and referred to in the within-mentioned indenture.
 
Date: February 21, 2008
   
U.S. BANK NATIONAL ASSOCIATION,
     
as Trustee
           
By:
       
Authorized Signatory

A-5

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FORM OF TRANSFER NOTICE
 
FOR VALUE RECEIVED the undersigned registered holder hereby sell(s), assign(s)
and transfer(s) unto
 
Insert Taxpayer Identification No. _____________________
 

--------------------------------------------------------------------------------

(Please print or typewrite name and address including zip code of assignee)
 
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing _________________________________________ attorney to transfer said
Note on the books of the Issuer with full power of substitution in the premises.
 

     
Date
 
Signature of Transferor

NOTE: The signature to this assignment must correspond with the name as written
upon the face of the within-mentioned instrument in every particular, without
alteration or any change whatsoever.
 
[THE FOLLOWING PROVISIONS TO BE INCLUDED ON ALL NOTES]
 
In connection with any transfer of the within-mentioned Note, the undersigned
confirms without utilizing any general solicitation or general advertising that:
 
[Check One]
 
__(a) the within-mentioned Note is being transferred in compliance with the
exemption from registration under the Securities Act provided by Rule 144A
thereunder
 
__(b) the within-mentioned Note is being transferred other than in accordance
with clause (a) above and documents are being furnished that comply with the
conditions of transfer set forth in the within-mentioned Note and the Indenture
 
If neither of the foregoing boxes is checked, the Trustee or other Registrar
shall not be obligated to register the within-mentioned Note in the name of any
Person other than the Noteholder hereof unless and until the conditions to any
such transfer of registration set forth herein and in Section 2.11 of the
Indenture shall have been satisfied.
 

     
Date
 
 
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within-mentioned instrument in every particular,
without alteration or any change whatsoever.
 

 
A-6

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TO BE COMPLETED BY PURCHASER IF CLAUSE (a) ABOVE IS CHECKED.
 
The undersigned represents and warrants that it is purchasing the
within-mentioned Note for its own account or an account with respect to which it
exercises sole investment discretion and that each of it and any such account is
a “qualified institutional buyer” within the meaning of Rule 144A and is aware
that the sale to it is being made in reliance on Rule 144A and acknowledges that
it has received such information regarding the Issuer as the undersigned has
requested pursuant to Rule 144A or has determined not to request such
information and that it is aware that the transferor is relying upon the
undersigned’s foregoing representations in order to claim the exemption from
registration provided by Rule 144A and has executed and delivered to the
Registrar a Confidentiality Agreement.
 
Dated: __________

 
Executive Officer

A-7

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SCHEDULE I
 
AZITHROMYCIN ROYALTY SUB LLC
Azithromycin PhaRMASM Secured 16% Notes Due 2019
 
No. ____
 
Date
 
Principal Amount
 
Notation Explaining
Principal Amount
Recorded
 
Authorized Signature
of Trustee or
Custodian
             

A-8

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EXHIBIT B
 
FORM OF RESALE CONFIDENTIALITY AGREEMENT
 
No. ____
 
AZITHROMYCIN ROYALTY SUB LLC
c/o InSite Vision Incorporated
965 Atlantic Avenue
Alameda, California 94501
__________, 20__
 
RESALE CONFIDENTIALITY AGREEMENT
 
In connection with our possible interest in the purchase of the Azithromycin
PhaRMASM Secured 16% Notes due 2019 (the “Notes”) issued by Azithromycin Royalty
Sub LLC, a Delaware limited liability company (the “Company”) (the
“Transaction”), we have requested a copy of the Private Placement Memorandum,
dated February 15, 2008, relating to the Notes (the “Private Placement
Memorandum”). In addition to receiving the Private Placement Memorandum, we may
also request that you or your directors, officers, managers, members, partners,
employees, affiliates, assigns, representatives (including, without limitation,
financial advisors, attorneys and accountants), investors, agents or similar
persons (collectively, “Your Representatives”) furnish us or our directors,
officers, managers, members, partners, employees, affiliates, assigns,
representatives (including, without limitation, financial advisors, attorneys
and accountants), investors, agents or similar persons (collectively, “Our
Representatives”) with certain information relating to the Company, the
Transaction (including notices, reports or other documents delivered to us in
respect of the Notes or the Indenture (as defined herein)) and the rights
acquired by the Company from InSite Vision Incorporated, a Delaware corporation
(the “Parent”). All such information (whether written or oral, and whether
tangible or electronic) furnished on or after the date hereof by you or Your
Representatives to us or Our Representatives, including, without limitation, the
Private Placement Memorandum, and any materials containing, based on or derived
from any such information (including any financial models or other analyses,
compilations, forecasts, studies or other documents based thereon) prepared by
us or Our Representatives in connection with our or Our Representatives’ review
of, or our interest in, the Transaction, is hereinafter referred to as the
“Information”. The term Information will not, however, include information that
(i) is already legally known by us without an obligation of confidentiality to a
third party at the time such information is disclosed unless such information
was disclosed to us under a confidentiality agreement with you that was entered
into in connection with our earlier consideration of the Notes, (ii) is or
thereafter becomes available in the public domain, other than by breach by us or
Our Representatives of our obligations hereunder, (iii) is obtainable by us from
another source without breach of such source’s obligations of confidentiality to
you or (iv) is independently developed by our Representatives who have not had
access to such information.
 
As a condition to receiving the Information, we hereby agree as follows:
 
B-1

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1. We and Our Representatives hereby agree (i) to keep the Information
confidential, (ii) that the Information will be used solely for the purpose of
evaluating or entering into the Transaction and, if the Transaction is entered
into, monitoring or enforcing the Transaction and (iii) not to, without your
prior written consent, disclose any Information in any manner whatsoever;
provided, however, that we may reveal the Information to (a) Our Representatives
who need to know the Information for the purpose of evaluating or entering into
the Transaction and, if the Transaction is entered into, monitoring or enforcing
the Transaction or (b) third parties in order to comply with any applicable law,
rule, regulation or legal process or pursuant to requests of governmental
authorities or regulatory agencies having oversight over us or Our
Representatives, and only after compliance with paragraph 3 below, provided,
that all of Our Representatives to which we disclosed Information shall agree to
keep such information confidential, and only to use such information, on
reasonable and customary terms that are substantially the same as the terms we
are subject to, and, provided, further, that we shall be wholly responsible for
the full compliance of this Resale Confidentiality Agreement by Our
Representatives to which we disclosed Information. Notwithstanding and without
limitation of the foregoing, we and Our Representatives agree not to reveal
Information to advisors who are principally engaged in the business of
investment banking, capital markets or securitization of financial assets
without prior written notice to you.
 
2. We and Our Representatives agree, whether or not the Transaction is
consummated, not to (except as required by applicable law, rule, regulation or
legal process or pursuant to requests of governmental authorities or regulatory
agencies having oversight over us or Our Representatives, and only after
compliance with paragraph 3 below), without your prior written consent, disclose
to any person the fact that the Information or the Transaction exists or has
been made available, that we are considering the Transaction, or that
discussions or negotiations are taking or have taken place concerning the
Transaction or any term, condition or other fact relating to the Transaction or
such discussions or negotiations, including, without limitation, the status
thereof.
 
3. In the event that we or any of Our Representatives are required by applicable
law, rule, regulation or legal process or pursuant to requests of governmental
authorities or regulatory agencies having oversight over us or Our
Representatives to disclose any of the Information, we agree to use commercially
reasonable efforts to notify you promptly (unless such notice is not permitted
by applicable law, rule or regulation) so that you may seek, at your own
expense, a protective order or other appropriate remedy or, in your sole
discretion, waive compliance with the terms of this Resale Confidentiality
Agreement. In the event that no such protective order or other remedy is
obtained, or that you do not waive compliance with the terms of this Resale
Confidentiality Agreement, we agree to furnish only that portion of the
Information that we are advised by counsel (which may be internal counsel) is
legally required and will exercise all commercially reasonable efforts to obtain
reliable assurance that confidential treatment will be accorded the Information.
 
B-2

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4. If we determine not to proceed with the Transaction or we cease to have an
interest arising from the Transaction, we will promptly inform you of that
decision or event and, in that case, and at any time upon your request or the
request of any of Your Representatives, we and Our Representatives agree to (i)
promptly deliver to you all copies of the Information in our possession (except
as described in the following proviso), (ii) promptly destroy all copies of any
written Information (whether in tangible or electronic form, or otherwise) that
we and Our Representatives have created, including, without limitation, any
notes we have taken on any discussions with you or Your Representatives, and
upon your request such destruction shall be certified in writing (including via
email) to you by an authorized officer supervising such destruction (provided in
each case that an appropriate person within our organization may retain one copy
of the Information, subject to the provisions of this Resale Confidentiality
Agreement, if required to comply with internal record retention policies or
regulatory considerations, in which case, regardless of paragraph 17 below, the
confidentiality provisions of this Resale Confidentiality Agreement will
continue to apply to such Information for so long as it is retained by such
person or any other of Our Representatives) and (iii) certify that clauses (i)
and (ii) above have been complied with. Any oral Information will continue to be
subject to the terms of this Resale Confidentiality Agreement.
 
5. We acknowledge that you have not updated, and have no obligation to update,
the Private Placement Memorandum in any respect for events, developments or
circumstances (including, without limitation, the level of royalty payments for
AzaSite or the sales of AzaSite compared to the sales forecasts contained in the
Independent Consultant’s Report included as Appendix A to the Private Placement
Memorandum). We further acknowledge that neither you nor any of Your
Representatives, nor any of your or their respective officers, directors,
managers, members, partners, employees, agents or controlling persons within the
meaning of Section 20 of the Securities Exchange Act of 1934, as amended, makes
any express or implied representation or warranty as to the accuracy or
completeness of the Information, and we agree that no such person will have any
liability relating to the Information or for any errors therein or omissions
therefrom. We further agree that we are not entitled to rely on the accuracy or
completeness of the Information.
 
6. We acknowledge that we are aware of the restrictions imposed by the United
States securities laws on the purchase or sale of securities of an issuer or an
affiliate or controlling person of the issuer by any person who has received
material, non-public information from the issuer or an affiliate or controlling
person of the issuer or from a person owing a duty to any of the foregoing, and
on the communication of such information to any other person when it is
reasonably foreseeable that such other person is likely to purchase or sell such
securities in reliance upon such information.
 
7. We represent that we maintain effective internal procedures with respect to
maintaining the confidentiality and use of the Information.
 
8. We further represent and warrant that we are a qualified institutional buyer
(as defined in Rule 144A under the Securities Act of 1933, as amended) or an
institutional accredited investor (as defined in subparagraph (a) (1), (2), (3)
or (7) of Rule 501 under the Securities Act of 1933, as amended).
 
9. We represent and warrant: (A) that either (i) no Plan Assets (as defined by
Section 3(42) of the U.S. Employee Retirement Income Security Act of 1974, as
amended (“ERISA”), and regulations issued by the U.S. Department of Labor) will
be used to purchase a Note or (ii) to the extent that Plan Assets are used to
purchase a Note, one or more statutory or administrative exemptions applies such
that the use of such Plan Assets to purchase and hold such Notes will not
constitute a non-exempt prohibited transaction within the meaning of Section 406
of ERISA or Section 4975 of the Internal Revenue Code of 1986, as amended (the
“Code”); and (B) that either (i) assets of a governmental, church or foreign
plan have been used to purchase a Note or (ii) to the extent such assets are
used, neither the purchase nor holding of the Notes will constitute or result in
a violation of any law that is similar to the prohibited transaction provisions
of Section 406 of ERISA or Section 4975 of the Code.
 
B-3

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10. We represent and warrant that either (i) we are not, and will not become, a
partnership, Subchapter S corporation or grantor trust for U.S. federal income
tax purposes or (ii) we are a partnership, Subchapter S corporation or grantor
trust for U.S. federal income tax purposes but (A) none of the direct or
indirect beneficial owners of any of our interests have allowed or caused, or
will allow or cause, 50% or more of the value of such interests to be
attributable to such ownership of Notes or (B) our partnership, Subchapter S
corporation or grantor trust was not formed with a principal purpose of
permitting the Company to satisfy the 100-partner limitation in Treasury
Regulation Section 1.7704-1(h)(1)(ii) (assuming for this purpose that the Notes
were classified as equity, and not debt, for U.S. federal income tax purposes),
and we will not participate or transfer an interest in any Note to any person or
entity who is of a type described in clause (i) above but is not of a type
described in clause (ii) above.
 
11. We acknowledge that remedies at law may be inadequate to protect you against
any actual or threatened breach of this Resale Confidentiality Agreement by us
or Our Representatives, and, without prejudice to any other rights and remedies
otherwise available to you, we agree to permit you to seek the granting of
injunctive relief in your favor without proof of actual damages.
 
12. We acknowledge and agree that each of the Parent and Inspire
Pharmaceuticals, Inc. is a third party beneficiary of this Resale
Confidentiality Agreement and shall have the right to enforce any provision of
this Resale Confidentiality Agreement.
 
13. We agree that no failure or delay by you in exercising any right, power or
privilege hereunder will operate as a waiver thereof, nor will any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any right, power or privilege hereunder.
 
14. This Resale Confidentiality Agreement shall be governed by, and construed,
interpreted and enforced in accordance with, the laws of the State of New York,
without giving effect to the principles of conflicts of law thereof (other than
the provisions of Section 5-1401 of the General Obligations Law of the State of
New York).
 
15. This Resale Confidentiality Agreement contains the entire agreement between
you and us concerning the confidentiality of the Information, and no
modifications of this Resale Confidentiality Agreement or waiver of the terms
and conditions hereof will be binding upon you or us, unless approved in writing
by each of you and us.
 
16. Neither this Resale Confidentiality Agreement nor any right granted
hereunder shall be assignable or otherwise transferable by us by operation of
law or otherwise without the Company’s prior written consent. This Resale
Confidentiality Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.
 
B-4

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17. This Resale Confidentiality Agreement will terminate (i) if we do not
proceed with the Transaction, 24 months after the date hereof, and (ii) if we do
proceed with the Transaction, 24 months from the date we cease to have an
interest arising from the Transaction, whether through a sale of our interest,
the maturity or repayment of our interest or otherwise.
 
18. If we propose to purchase, transfer, sell or otherwise dispose of any of our
interest at any time, we agree to (i) abide by any transfer restrictions
described in the Private Placement Memorandum, (ii) inform any proposed
transferee of such interest of any such transfer restrictions, including any
requirement that such proposed transferee enter into a resale confidentiality
agreement with the Company, and (iii) not furnish any Information to such
proposed transferee. We acknowledge that the servicer for the Transaction shall
be responsible for the delivery of all Information to any such prospective
transferee following execution by such prospective transferee of an appropriate
resale confidentiality agreement with the Company.
 
19. This Resale Confidentiality Agreement may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all of such counterparts shall together constitute but one and the same
instrument. Any counterpart may be executed by facsimile signature and such
facsimile signature shall be deemed an original.

B-5

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Please confirm your agreement with the foregoing by signing and returning to the
undersigned the duplicate copy of this Resale Confidentiality Agreement enclosed
herewith. In accordance with Section 2.11(j) of the Indenture dated as of
February 21, 2008 (the “Indenture”), made by and between you and U.S. Bank
National Association, as trustee, we will provide a fully executed copy of this
Resale Confidentiality Agreement to the Registrar (as defined in the Indenture)
promptly after receipt thereof from you.
 
Very truly yours,
   
[Please insert prospective purchaser’s name]
   
By:
   
Name:
 
Title:
 
Address:

Accepted and agreed as of the date first written above:
   
AZITHROMYCIN ROYALTY SUB LLC
   
By:
InSite Vision Incorporated, its Manager
   
By:
   
Name:
 
Title:

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EXHIBIT C
 
AGENTS FOR SERVICE OF PROCESS
 
Party
 
Jurisdiction
 
Appointed Agent
Azithromycin Royalty Sub LLC
 
Delaware
 
Corporation Service Company
Azithromycin Royalty Sub LLC
 
New York
 
Corporation Service Company

C-1

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EXHIBIT D
 
COVERAGE OF DISTRIBUTION REPORT
 

(i)
With respect to the current Payment Date, (A) the balances on deposit in the
Collection Account and any other Account established under the Indenture on the
Calculation Date immediately preceding the prior Payment Date (or, with respect
to the first Payment Date, on the Closing Date) (the “Preceding Calculation
Date”), (B) the aggregate amounts of deposits into and withdrawals from the
Collection Account and any other Account established under the Indenture from
but excluding the Preceding Calculation Date to and including the Calculation
Date immediately preceding the Payment Date (the “Current Calculation Date”) and
(C) the balances on deposit in the Collection Account and any other Account
established under the Indenture on the Current Calculation Date.

 

(ii)
Analysis of Collection Account activity from the Preceding Calculation Date to
the Current Calculation Date

 
Balance on the Preceding Calculation Date
Collections from but excluding the Preceding Calculation Date to and including
the Current Calculation Date (“Current Collections”)
Aggregate Note payments from but excluding the Preceding Calculation Date to and
including the Current Calculation Date, including pursuant to Section 2.5(e)
Amount, if any, paid to Pfizer and certain other third parties entitled to
royalties in respect of Subject Products between the prior Payment Date and the
current Payment Date
Expense payments payable on the Current Calculation Date (“Current Expenses”)
Balance on the Current Calculation Date
 

(iii)
Amount, if any, to be transferred from the Interest Reserve Account to the
Collection Account on the current Payment Date

 

(iv)
Payments on the current Payment Date

 
Current Expenses
Servicing Fee
Interest Amount
Additional Interest, if any
Principal payments, if any
 

(v)
Outstanding Principal Balance

 
Opening Outstanding Principal Balance
Principal payments, if any, made on the current Payment Date
Closing Outstanding Principal Balance
 

(vi)
Amount distributed to the Issuer from the Collection Account, if any, with
respect to the current Payment Date

 
D-1

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(vii)
A withholding obligation may be included

 

(viii)
Appropriate modifications will be made to contemplate any Refinancing Notes
and/or Class B Notes

D-2

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EXHIBIT E
 
UCC FINANCING STATEMENTS
 

 
1.
A Form UCC-1 Financing Statement will be filed with the Secretary of State of
the State of Delaware naming the Issuer as debtor and the Trustee as secured
party.

E-1

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EXHIBIT F
 
FORM OF CERTIFICATE OF EUROCLEAR OR CLEARSTREAM FOR
PERMANENT REGULATION S GLOBAL NOTE
 
__________, 20__
 
U.S. Bank National Association,
as Trustee
One Federal Street, 3rd Floor
Boston, Massachusetts 02110
Attention: Corporate Trust Services (Azithromycin Royalty Sub LLC)
 
Azithromycin Royalty Sub LLC
c/o InSite Vision Incorporated
965 Atlantic Avenue
Alameda, California 94501
Attention: Louis Drapeau
 

 
Re:
Azithromycin Royalty Sub LLC (the “Issuer”)

Ladies and Gentlemen:
 
This letter relates to U.S.$__________ principal amount of Azithromycin PhaRMASM
Secured 16% Notes Due 2019 of the Issuer (the “Notes”) represented by a Note
that bears a legend (the “Legended Note”) outlining restrictions upon transfer
of such Legended Note. Pursuant to Section 2.1 of the Indenture dated as of
February 21, 2008 (the “Indenture”) relating to the Notes and certain other
classes of notes of the Issuer, we hereby certify that we are (or we will hold
such securities on behalf of) an Institutional Accredited Investor (as defined
in the Indenture) outside the United States to whom the Notes may be transferred
in accordance with Rule 904 of Regulation S promulgated under the U.S.
Securities Act of 1933, as amended (“Regulation S”). Accordingly, you are hereby
requested to exchange the Legended Note for a Permanent Regulation S Global Note
(as defined in the Indenture) representing an identical principal amount of
Notes, all in the manner provided for in the Indenture.
 
Each of you is entitled to rely upon this letter and is irrevocably authorized
to produce this letter or a copy hereof to any interested party in any
administrative or legal proceeding or official inquiry with respect to the
matters covered hereby. Certain terms used in this certificate have the meanings
set forth in Regulation S.
 
Very truly yours,
   
[Euroclear Bank S.A./N.V.][Clearstream Banking]
 
By:
 
 
Authorized Signatory 

F-1

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EXHIBIT G
 
FORM OF CERTIFICATE OF BENEFICIAL OWNER OF TEMPORARY
REGULATION S GLOBAL NOTE
 
Euroclear Bank S.A./N.V.
[Address]
 
AND/OR
 
Clearstream Banking
[Address]
 
Re:        Azithromycin Royalty Sub LLC (the “Issuer”)
 
Reference is hereby made to the Indenture, dated as of February 21, 2008 (the
“Indenture”), made by and between the Issuer and U.S. Bank National Association,
as trustee (the “Trustee”). Capitalized terms used but not defined herein shall
have the meanings given to them in the Indenture.
 
This letter relates to U.S.$__________ principal amount of Azithromycin PhaRMASM
Secured 16% Notes Due 2019 that are held in the form of a Beneficial Interest in
the Temporary Regulation S Global Note (CUSIP No. __________) through DTC by the
undersigned (the “Holder”) in the name of __________. The Holder of such
Temporary Regulation S Global Note hereby requests the receipt of payments due
and payable [on the applicable Payment Date] pursuant to Section 2.5 of the
Indenture.
 
The Holder hereby represents and warrants that it (i) is an Institutional
Accredited Investor, (ii) is not a U.S. Person, (iii) does not hold the
above-referenced Temporary Regulation S Global Note for the account or benefit
of a U.S. Person (other than a distributor) and (iv) has executed and delivered
to the Registrar a Confidentiality Agreement. Certain terms in this certificate
not otherwise defined in the Indenture have the meanings given to them in
Regulation S.
 
This certificate and the statements contained herein are made for your benefit
and the benefit of the Paying Agent.
 
[Name of Holder]
 
By:
   
Name:
 
Title:

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EXHIBIT H
 
FORM OF CERTIFICATE OF EUROCLEAR OR CLEARSTREAM FOR PAYMENTS
 
U.S. Bank National Association,
as Paying Agent
One Federal Street, 3rd Floor
Boston, Massachusetts 02110
Attention: Corporate Trust Services (Azithromycin Royalty Sub LLC)
 
Re:        Azithromycin Royalty Sub LLC (the “Issuer”)
 
Reference is hereby made to the Indenture, dated as of February 21, 2008 (the
“Indenture”), made by and between the Issuer and U.S. Bank National Association,
as trustee (the “Trustee”). Capitalized terms used but not defined herein shall
have the meanings given to them in the Indenture.
 
This letter relates to U.S.$__________ principal amount of Azithromycin PhaRMASM
Secured 16% Notes Due 2019 that are held in the form of a Beneficial Interest in
the Temporary Regulation S Global Note (CUSIP No. __________) through DTC by the
undersigned (the “Holder”) in the name of __________. Certain Holders of the
Beneficial Interests in such Temporary Regulation S Global Note have requested
the receipt of payments due and payable [on the applicable Payment Date]
pursuant to Section 2.5 of the Indenture.
 
We have received from such Holders certifications to the effect that they (i)
are Institutional Accredited Investors, (ii) are not U.S. Persons, (iii) do not
hold the above-referenced Temporary Regulation S Global Note for the account or
benefit of U.S. Persons (other than distributors) and (iv) have executed and
delivered to the Registrar a Confidentiality Agreement. Certain terms in this
certificate not otherwise defined in the Indenture have the meanings given to
them in Regulation S.
 
Accordingly, the Holders of the Beneficial Interests in the Temporary Regulation
S Global Note are entitled to receive interest, principal and premium, if any,
in accordance with the terms of the Indenture in the amount of U.S.$__________.
 
[Clearstream Banking][Euroclear Bank S.A./N.V.]
 
By:
   
Name:
 
Title:

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EXHIBIT I
 
FORM OF CERTIFICATE OF PROPOSED TRANSFEROR
 
__________, 20__
 
U.S. Bank National Association,
as Registrar
One Federal Street, 3rd Floor
Boston, Massachusetts 02110
Attention: Corporate Trust Services (Azithromycin Royalty Sub LLC)
 
Azithromycin Royalty Sub LLC
c/o InSite Vision Incorporated
965 Atlantic Avenue
Alameda, California 94501
Attention: Louis Drapeau
 
Re: Azithromycin Royalty Sub LLC (the “Issuer”)
 
Ladies and Gentlemen:
 
In connection with our proposed sale of U.S.$ __________ aggregate principal
amount of Azithromycin PhaRMASM Secured 16% Notes Due 2019 of the Issuer (the
“Notes”), we confirm that such sale has been effected pursuant to and in
accordance with Regulation S under the U.S. Securities Act of 1933, as amended
(“Regulation S”) and, accordingly, we represent that:
 
(1) the offer of the Notes was not made to a person in the U.S.;
 
(2) at the time the buy order was originated, the transferee was an
institutional accredited investor (as defined in subparagraph (a) (1), (2), (3)
or (7) of Rule 501 under the U.S. Securities Act of 1933, as amended) outside
the U.S. or we and any person acting on our behalf reasonably believed that the
transferee was an institutional accredited investor outside the U.S.;
 
(3) no directed selling efforts have been made by us in the U.S. in
contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S,
as applicable;
 
(4) the transaction is not part of a plan or scheme to evade the registration
requirements of the U.S. Securities Act of 1933; and
 
(5) the transferee has entered into the confidentiality agreement required in
connection with the purchase of the Notes.
 
Each of you is entitled to rely upon this letter and is irrevocably authorized
to produce this letter or a copy hereof to any interested party in any
administrative or legal proceeding or official inquiry with respect to the
matters covered hereby. Certain terms used in this certificate have the meanings
set forth in Regulation S.
 
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Very truly yours,
   
[Name of Transferor]
 
By:
   
Authorized Signatory

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EXHIBIT J
 
FORM OF CERTIFICATE OF CERTAIN PROPOSED INSTITUTIONAL
ACCREDITED INVESTOR TRANSFEREES
 
__________, 20__
 
U.S. Bank National Association,
as Registrar
One Federal Street, 3rd Floor
Boston, Massachusetts 02110
Attention: Corporate Trust Services (Azithromycin Royalty Sub LLC)
 
Azithromycin Royalty Sub LLC
c/o InSite Vision Incorporated
965 Atlantic Avenue
Alameda, California 94501Attention: Louis Drapeau
 
Ladies and Gentlemen:
 
In connection with our proposed purchase of Notes (the “Notes”) of Azithromycin
Royalty Sub LLC (the “Issuer”), we confirm that:
 
1. We have duly executed and delivered to the Registrar (as defined in that
certain Indenture dated as of February 21, 2008 (the “Indenture”) between the
Issuer and U.S. Bank National Association, as trustee, as amended, restated,
supplemented or otherwise modified from time to time in accordance with the
terms thereof) a Resale Confidentiality Agreement and have subsequently received
a copy of the Private Placement Memorandum dated February 15, 2008 (the “Private
Placement Memorandum”) relating to the Notes and such other information as we
deem necessary in order to make our investment decision. We acknowledge that we
have read and agreed to the matters stated in the section entitled “Transfer
Restrictions” of such Private Placement Memorandum and the restrictions on
duplication and circulation of such Private Placement Memorandum.
 
2. We understand that any subsequent transfer of the Notes is subject to certain
restrictions and conditions set forth in the Private Placement Memorandum under
“Transfer Restrictions” and the undersigned agrees to be bound by, and not to
resell, pledge or otherwise transfer the Notes except in compliance with, such
restrictions and conditions and the U.S. Securities Act of 1933, as amended (the
“Securities Act”).
 
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3. We understand that the offer and sale of the Notes have not been registered
under the Securities Act, that the Notes will only be in the form of definitive
physical certificates and that the Notes may not be offered or sold except as
permitted in the following sentence. We agree, on our own behalf and on behalf
of any accounts for which we are acting as hereinafter stated, that, if we
should sell any Notes in the future, we will do so only (1) (A) to the Issuer or
any subsidiary thereof, (B) in accordance with Rule 144A under the Securities
Act to a qualified institutional buyer (as defined therein), (C) to an
institutional accredited investor (as defined in Rule 501(a)(1), (2), (3) or (7)
of Regulation D under the Securities Act) (“Institutional Accredited Investor”)
that, prior to such transfer, furnishes to the Trustee (as defined in the
Indenture) a signed letter containing certain representations and agreements
relating to the restrictions on transfer of the Notes (the form of which letter
can be obtained from the Trustee) and an opinion of counsel acceptable to the
Issuer that such transfer is in compliance with the Securities Act, (D) to an
Institutional Accredited Investor in an offshore transaction in compliance with
Rule 904 of Regulation S under the Securities Act or (E) to an Institutional
Accredited Investor after the relevant time period referred to in Rule 144 under
the Securities Act expires, and we further agree to provide to any entity
purchasing any of the Notes from us a notice advising such purchaser that
resales of the Notes are restricted as stated herein and (2) in each case, in
accordance with any applicable securities laws of any state in the U.S. or any
other applicable jurisdiction and in accordance with the legend to be set forth
in the Notes, which will reflect the substance of this paragraph.
 
4. We understand that, on any proposed resale of any Notes, we will be required
to furnish to the Issuer and the Trustee such certifications, legal opinions and
other information as the Issuer and the Trustee may reasonably require to
confirm that the proposed sale complies with the foregoing restrictions. We
further understand that a resale confidentiality agreement is required under the
Indenture to be executed and delivered by any proposed transferee to whom we
wish to sell any Notes.
 
5. We are an Institutional Accredited Investor and have such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of our investment in the Notes, and we and any accounts for
which we are acting are able to bear the economic risks of our or their
investment.
 
6. We are acquiring the Notes purchased by us for our own account or for one or
more accounts (each of which is an Institutional Accredited Investor) as to each
of which we exercise sole investment discretion.
 
7. We are not acquiring the Notes with a view to distribution thereof or with
any present intention of offering or selling the Notes, except as permitted
above, provided that the disposition of our property and property of any
accounts for which we are acting as fiduciary shall remain at all times within
our control.
 
You, the Issuer and the Trustee are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceeding or official inquiry with respect
to the matters covered hereby.
 
Very truly yours,
 
By:
   
Name:
 
Title

 
 
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Annex A

See Annex A to the Purchase and Sale Agreement by and between Azithromycin
Royalty Sub LLC and the Company dated February 21, 2008, attached as Exhibit
10.1 to this Quarterly Report on Form 10-Q".