EX-10.45






EXHIBIT 10.45




BORROWER SECURITY AND PLEDGE AGREEMENT




          In consideration of loans, advances, overdrafts, letters of credit, acceptances, swaps,
securities transactions, forward contracts, foreign currency transactions and all other credit
transactions and financial accommodations to be given and to be continued from time to time to
BioMimetic Therapeutics, Inc., a Delaware corporation (“Debtor”), by Deutsche Bank AG, Cayman
Islands Branch, or any of its affiliates (collectively, “Lender”), Debtor hereby agrees with Lender
as follows:




     1. As collateral security for the punctual payment and performance of all present and future
liabilities and obligations, liquidated or contingent, of Debtor under the Time Promissory Note
dated on or about the date hereof made by the Debtor to the Lender (as it may be extended, amended,
restated or otherwise modified and any replacement thereof or substitution therefor, the “Time
Note”) and the Securities Account Control Agreement dated on or about the date hereof among the
Debtor, the Lender and Deutsche Bank Securities Inc., as it may be amended from time to time (the
“SACA”) (the Time Note and the SACA, individually and collectively “Associated Agreements”), or
under this Agreement, whether at stated maturity, by acceleration or otherwise, whether now
existing or hereafter incurred, whether now or hereafter due, whether for principal, interest
(including but not limited to interest accruing after the commencement of any bankruptcy or
insolvency proceeding, whether or not allowed or allowable thereunder), fees, costs, attorneys’
fees, court costs, taxes, damages, expenses, indemnities, or otherwise, and howsoever evidenced
(collectively, the “Obligations”), but only to the extent such Obligations are set forth in the
Associated Agreements or herein, Debtor hereby assigns, pledges and grants to Lender a continuing
first priority security interest in and lien upon all right, title and interest of Debtor in and to
the account described in Schedule A hereto and all subaccounts thereof (individually and
collectively, the “Collateral Account”) and all items now or hereafter deposited therein, credited
thereto or payable thereto from time to time, including some or all of the securities listed on
Schedule B hereto (subject to the terms of Section 18 hereof), including (A) all cash, securities,
shares, certificates, notes, instruments, rights, promissory notes, payment intangibles, general
intangibles, accounts, receivables, letter of credit rights and all other property and financial
assets now or hereafter received or receivable in connection with any sale, exchange, redemption or
other disposition of any of the foregoing, (B) all dividends, interest and other distributions,
whether in cash, securities, promissory notes, payment intangibles, general intangibles, accounts
or other property on or in respect of any of the foregoing, (C) all additions to and substitutions
for any of the foregoing, (D) all present and future rights, claims, remedies and privileges of
Debtor pertaining to any of the foregoing (exclusive of any rights, claims, or remedies against
Lender), (E) all general intangibles, payment intangibles, and contract rights of Debtor relating
to any of the foregoing (exclusive of any rights, claims or remedies against Lender), and (F) all
proceeds, products and profits of
any of the foregoing (including proceeds of proceeds, proceeds of insurance policies and claims
against third parties), in each case whether now existing or hereafter arising or acquired
(collectively, the “Collateral”).



     2. Debtor represents and warrants to Lender that: (a) the information regarding Debtor set
forth opposite Debtor’s signature below (“Debtor Information”) is true, correct and complete on the
date hereof, (b) Debtor is duly organized and validly existing in good standing under the laws of
its jurisdiction of formation, and is duly qualified and in good standing in all such foreign
jurisdictions where its business or property so requires, (c) Debtor has all necessary right, power
and authority to own Debtor’s property and assets, to transact the business in which Debtor is
engaged and to grant to Lender a security interest in the Collateral, and has taken all necessary
action to authorize Debtor’s execution, delivery and performance of this Agreement, including all
necessary actions by members or managers, as the case may be, and all filings and recordations, (d)
the execution, delivery and performance by Debtor of this Agreement do not violate, breach or
conflict with (i) Debtor’s constituent documents, (ii) any agreement, contract or instrument to
which Debtor is a party or by which Debtor or its properties are bound, or (iii) any applicable
law, regulation, decree, order or the like, (e) as a result of entering into this Agreement and
after giving effect to the transactions contemplated by this Agreement, Debtor is not, and will not
be rendered, insolvent, (f) this Agreement is the legal, valid and binding obligation of Debtor,
enforceable against Debtor in accordance with its terms, (g) the financial statements of Debtor
previously delivered to Lender in connection with the Obligations are true, correct and complete
and fairly present the financial condition of Debtor as of the date thereof and there has been no
material adverse change in the financial condition of Debtor between the date of the last financial
statement of Debtor delivered to Lender and the date hereof (other than as a result of any change
in the financial condition of Borrower resulting from a change in the treatment or value of the
Collateral), (h) Debtor is and at all times will continue to be the legal and beneficial owner of
the Collateral (subject to the terms of Section 18 hereof), (i) except for the security interest
granted to Lender hereunder, and except as otherwise set forth on Schedule C hereto, Debtor owns
the Collateral free and clear of any Lien (as defined in Schedule C hereto) and all Collateral has
been validly pledged hereunder, (j) there are no filings or recordations against the Collateral
which grant or purport to grant a Lien in any Collateral to any other




 









 







person, (k) all Collateral which consists of equity interests has been validly acquired and
validly issued, and is fully paid and non-assessable and no Collateral is evidenced or represented
by any certificate, note or chattel paper other than such as has been delivered to Lender together
with appropriate stock powers or other instruments of transfer therefor, (1) except for
governmental regulatory proceedings relating to the use and/or marketing approval of products
manufactured by the Debtor, there are no actions or proceedings pending or threatened before any
court or governmental authority, against or affecting Debtor, that (i) purports to affect the
legality, validity or enforceability of this Agreement or the consummation of the transactions
contemplated hereby or (ii) could reasonably be expected to have a material adverse effect on the
financial condition, operations, business, assets, and prospects of Debtor, (m) Debtor is not (i)
an “investment company” or a company “controlled” by an “investment company,” within the meaning
of the Investment Company Act of 1940, as amended or (ii) subject to any other law or regulation
which purports to restrict or regulate Debtor’s ability to borrow money, and (n) Debtor is a
corporation and those parties or party set forth in Debtor’s Information are authorized to act on
behalf of the corporation.




     3. Debtor covenants and agrees with Lender that: (a) Lender’s sole duty with respect to the
Collateral is to use such care as it uses for similar property for its own account, and Lender
shall not be obligated to preserve rights in the Collateral against prior parties, (b) Debtor will
(i) be solely responsible for all matters relating to the Collateral, including ascertaining
maturities, calls, conversions, exchanges and tenders, (ii) not, and will not purport to, grant or
suffer Liens against, or sell, transfer or dispose of any Collateral (subject to the terms of
Section 18 hereof), (iii) from time to time take all actions (including entering into any control
agreement requested by Lender and otherwise cooperate with Lender in maintaining control with
respect to that Collateral in which a security interest may be perfected by control pursuant to the
UCC, as hereinbelow defined or other applicable law) and make all filings, registrations and
recordations requested by Lender in connection with Lender’s security interest in the Collateral,
(iv) promptly notify Lender of the occurrence of any default hereunder or otherwise in respect of
the Obligations, and (v) hold in trust for, and forthwith pay over to, Lender in the form received
(except for any necessary endorsements) all property, proceeds or distributions received by Debtor
on account of any Collateral (subject to the terms of Paragraph 18 hereof), (c) upon and during the
continuance of an Event of Default (as hereinafter defined), Lender may transfer all or any part of
the Collateral to Lender’s name or that of its nominee, and exercise all rights as if the absolute
owner thereof, and file a proof of claim for, receive payments or distributions on, and exchange or
release Collateral, (d) Lender is authorized to file financing statements and/or a copy of this
Agreement and give notice to third parties regarding the Collateral without Debtor’s signature to
the extent permitted by applicable law, (e) Debtor will notify Lender of any change
to the Debtor Information, (f) Lender may rely upon any written (including fax), telephonic or oral
communication in good faith believed by Lender to have been authorized by Debtor; provided,
however, that if any such communication is oral or telephonic, it shall be promptly confirmed in
writing (including by fax) (but the lack of such confirmation or any conflict between such
confirmation and the relevant telephonic or oral communications shall not affect any action taken
by Lender in reliance on such telephonic or oral communications prior to receipt of such
confirmation), (g) once per fiscal quarter Debtor shall deliver to Lender its quarterly financial
statements (or with respect to a fiscal quarter ending on December 31, its annual financial
statements) prepared in accordance with sound accounting principles and consistent with the
financial statements of Debtor previously delivered to Lender, certified to Lender by Debtor as
true, correct and complete and accurately reflecting the financial condition of Debtor as of the
date thereof, (h) Debtor shall not sell, transfer, pledge or encumber or permit the sale, transfer,
pledge or encumbrance of any interest in Debtor, directly or indirectly, that would or might cause
a “Change in Control” of Debtor without the either (i) prior full repayment of the Obligations, or
(ii) prior written consent of Lender, which shall not be unreasonably withheld, conditioned or
delayed and (i) notwithstanding anything in this Agreement or the Time Note to the contrary, if
Lender may sell or redeem any Collateral consisting of auction rate preferred securities at “Par
Value” for cash, it may, but shall not be obligated, to do so on behalf of Debtor, whether or not
an Event of Default is then continuing and the net proceeds thereof shall be treated as a payment
by the Debtor pursuant to Section 6.2 of the Time Note and Debtor shall cooperate with Lender in
effecting any such transaction. For the purposes of Section 3(h), “Change in Control” means the
occurrence of any of the following events: (i) any sale, exchange or other transfer to a party not
affiliated with Debtor of all, or substantially all, of the business and/or assets of Debtor; (ii)
a merger or consolidation of Debtor with respect to which Debtor is not the surviving entity; or
(iii) a merger, consolidation, or tender offer involving Debtor if the equity holders of Debtor
immediately before such merger, consolidation, or tender offer do not own, directly or indirectly,
immediately following such merger, consolidation, or tender offer, more than fifty percent (50%) of
the combined voting power of the outstanding voting securities of Debtor resulting from such
merger, consolidation, or tender offer.



     4. Debtor further covenants and agrees to comply with the Collateral Maintenance Requirements
set forth in Schedule D hereto. If Debtor fails to comply with the Collateral Maintenance
Requirements (subject to the grace period set forth on Schedule D), Lender shall have all the
rights and remedies of a secured party under the New York Uniform Commercial Code as then in effect
(the “UCC”) or other applicable law, and may, in addition to any other right or remedy available to
Lender hereunder or under applicable law, without consent by Debtor, sell, liquidate or redeem so
much of the Collateral as is necessary to reduce the




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Obligations so as to comply with the Collateral Maintenance Requirements then in effect.



Debtor hereby agrees that upon and during the continuance of an Event of Default, the Lender shall
determine the value of the Collateral in its sole and absolute discretion and such determination
shall be binding on the Debtor so long as Lender acts in a commercially reasonable manner and
otherwise in accordance with the UCC. For the avoidance of doubt, any valuations of the Collateral
reflected on account statements for the Collateral Account shall not be binding upon the Lender.




     5. Except as otherwise provided below in this
Section 5, Debtor hereby irrevocably, unconditionally and
expressly waives, to the fullest extent permitted by
applicable law, all defenses, counterclaims, rights of setoff,
any requirement that Lender first proceed against any
guarantor or any other security, all requirements for notice
of any kind (except as otherwise expressly agreed), demand,
presentment, notice of 

non-payment, default or dishonor of
any Obligation, notice of acceptance hereof, marshalling of
assets or the like, including without limitation, any right to
notice or judicial hearing in connection with Lender’s taking
possession of or disposition of any Collateral, any notice of
any sale, transfer or other disposition by Lender of any
Obligation, any requirement that Lender first proceed
against Debtor, any collateral or any other person liable for
any of the Obligations, and all damages occasioned by any
of the foregoing (except as finally determined by a
competent court to have been the direct result of Lender’s
gross negligence or willful misconduct). No invalidity,
irregularity or unenforceability of any Obligations shall
affect, impair or be a defense to any of Debtor’s obligations
or agreements or any of Lender’s rights or remedies
hereunder. Lender may from time to time, without the
consent by Debtor, and without affecting or impairing
Debtor’s obligations or agreements or Lender’s rights and
remedies hereunder upon and during the continuance of an
Event of Default, (i) sell, release, exchange, settle,
compromise or otherwise dispose of or deal with the
Collateral, and (ii) exercise (in such order as Lender may
choose), or refrain from exercising, any rights against any
person liable for any of the Obligations. Notwithstanding
the any provision contained here to the contrary, the waiver
and limitations set forth in this and the Associated
Agreements shall not apply to any of Debtor’s defenses,
counterclaims, rights, claims, or causes of action that existed
prior to the execution hereof; provided, however, that Debtor
hereby agrees not to assert or otherwise raise or interpose
any defense, counterclaim or right of setoff based thereon or
arising therefrom in any action or proceeding by the Lender
to enforce or otherwise assert any of its rights, claims or
causes of action hereunder or under any of the Associated
Agreements.



     6. Upon the occurrence of any of the following
(each an “Event of Default”) with respect to Debtor: (i) an
“Event of Default” under the Time Note, or (ii) if at any time
Lender, as pledgee of the Collateral, is unable, or may become unable, to sell the Collateral free
of any Liens not disclosed on Schedule C hereto;


then and in any such event: (a) Lender may declare all of the Obligations to be
immediately due and payable, whereupon same shall become immediately due and payable without
demand, provided, that if an event set forth in Section 10(vii) of the Time Note occurs,
the Obligations shall automatically become due and payable without declaration by Lender; (b)
Lender’s obligation, if any, to give or continue credit facilities to Debtor shall automatically
terminate; (c) Lender shall have the right from time to time to take possession of, and sell,
redeem, assign, liquidate, transfer and deliver all or any part of the Collateral, at any brokers’
board or exchange, or at public or private sale or otherwise, at the option of Lender, for cash or
on credit for future delivery, in such parcel or parcels and at such times and places, and upon
such terms and conditions as Lender may in good faith deem proper, and in connection therewith may
grant options and impose reasonable conditions, all without (except as same are required by
applicable law and cannot be waived) advertisement or demand upon or notice to Debtor or any other
person entitled to notice or right of stay, extension, moratorium, appraisal or redemption of
Debtor, all of which are hereby expressly waived to the fullest extent permitted by applicable
law; (d) upon each such sale, Lender, to the extent permitted by law, may purchase all or any of
the Collateral, free and clear of all rights of redemption of Debtor; and (e) Lender shall have
all of the rights and remedies of a secured party under the UCC and any other applicable law.




     7. To the extent required by applicable law which cannot be waived, Lender will give Debtor
notice of the time and place of any public sale or of the time after which any private sale or
other disposition of Collateral is to be made, by sending notice at least 5 business days before
the time of sale or disposition, which Debtor agrees is reasonable. Lender need not give such
notice if not required by the UCC or other applicable law. Debtor agrees that at any private sale
Collateral may be sold at a price that is less than the price which might have been obtained at a
public sale or that is less than the aggregate outstanding amount of the Obligations but in making
such agreement, Debtor is not releasing any rights or claims it may have against Lender. Lender may
accept the first offer received and need not offer such Collateral to more than one offeree. Lender
shall comply with any applicable state or federal law requirements in connection with a disposition
of the Collateral and such compliance will not be considered adversely to affect the commercial
reasonableness of any sale of the Collateral. Lender may convert any proceeds in foreign currency
to U.S. dollars at the average of the buying spot rates of exchange for freely transferable U.S.
dollars in effect at the lending office selected by Lender as at the close of business on the date
of payment of the sales price for such Collateral. After deducting its costs and expenses from the
proceeds of sale, Lender may apply any residue to pay the Obligations in




3









 







such order as it elects. All foreign exchange losses incurred in connection with the conversion of
any Collateral denominated in a foreign currency to U.S. dollars shall be borne by Debtor. If
Lender shall be subject to any volume limitations in the sale of Collateral, Debtor shall not at
any such time sell, or permit any party controlled by Debtor to sell, any securities if the sale
thereof would adversely affect Lender’s ability to sell the Collateral. If Lender sells any of the
Collateral upon credit, Debtor will be credited only with payments actually made by the purchaser,
received by Lender and applied to the indebtedness of the purchaser. In the event the purchaser
fails to pay for the Collateral, Lender may resell the Collateral and Debtor shall be credited
with the proceeds of the sale.




     8. Debtor hereby irrevocably designates and
appoints each of Lender and any designee or agent (each an
“Attorney”) as attorney-in-fact of Debtor, with full power of
substitution, each with authority acting alone after the
occurrence and during the continuance of any Event of
Default to do all acts and things necessary to carry out and
enforce Lender’s rights under this Agreement, including the
authority to re-direct, receive and dispose of Debtor’s mail,
sign or endorse Debtor’s name on notes, acceptances, checks,
drafts, instruments, certificates, powers, assignments and
other documents, execute proofs of claim and loss, releases,
endorsements, assignments and other instruments of
conveyance. All acts of each Attorney that are consistent
with the authority granted hereunder are hereby ratified and
approved and no Attorney shall be liable for any acts of
commission or omission or for errors of judgment or mistake
of fact or law. This power of attorney is irrevocable and
coupled with an interest.



     9. In the event and to the extent that any provision
of this Agreement shall be invalid, illegal or unenforceable
in any jurisdiction, the validity, legality and enforceability of
the remaining provisions, or of such provision in any other
jurisdiction, shall not in any way be affected or impaired
thereby.



     10. No failure or delay by either party in exercising
any right or remedy and no course of dealing between
Lender and Debtor shall operate as a waiver thereof, nor
shall any single or partial exercise of any right preclude any
other or future exercise thereof. All rights and remedies of
either party shall be cumulative and may be exercised singly
or concurrently. No notice to or demand on Debtor shall
entitle Debtor to any other or further notice or demand, or
constitute a waiver of Lender’s rights.



     11. This Agreement may not be modified, changed,
waived or discharged orally, except by a writing signed by
the parties hereto. Any waiver of any provision of this
Agreement or any consent to any departure by a party
therefrom shall be effective only in the specific instance and
for the specific purpose for which given. This Agreement
shall be and remain the independent obligation of Debtor,
shall inure to the benefit of and be enforceable by Lender
and its successors, transferees and assigns, and shall be binding upon Debtor and Debtor’s heirs,
executors, successors and assigns, provided that Debtor may not transfer, assign or
delegate any of Debtor’s rights or obligations hereunder, and, at Lender’s option, any such
purported transfer, assignment or delegation shall be void, except in connection with a merger or
acquisition of Debtor. This Agreement shall terminate upon final payment in full to Lender of all
of the Obligations and termination of any obligation of Lender to make advances, and shall
continue to be effective or shall be reinstated, as the case may be, if at any time payment of or
on account of any of the Obligations is rescinded or must otherwise be restored or returned by
Lender upon the insolvency, bankruptcy or reorganization of Debtor or any other person or
otherwise, all as though such payment had not been made.



     12. Lender is authorized to debit the Collateral
Account for the Interest that is due and payable on the
outstanding credit facilities.



     13. Debtor will indemnify and hold Lender
harmless for, and pay in U.S. dollars all liabilities, losses,
damages, claims, taxes, penalties, costs, fees and expenses of
any kind, including attorneys’ fees, imposed upon, incurred
by or asserted against Lender in connection with this
Agreement, the custody, care, preservation, sale or
disposition of any Collateral, provide that such actions are
consistent with the terms of this Agreement, and the
enforcement of Lender’s rights hereunder. Notwithstanding
the foregoing, Debtor shall not be obligated for any amounts
resulting from Lender’s gross negligence or willful
misconduct. All payments hereunder shall be made without
setoff or counterclaim, and free and clear of, and without
deduction for or on account of, any present or future income,
stamp or other taxes, levies, imposts, duties, charges, fees,
deductions or withholdings, and all interest, penalties and
other liabilities with respect thereto (collectively, “Taxes”),
now or hereafter imposed, levied, collected, withheld or
assessed by any jurisdiction, or any department, agency,
state, political subdivision or taxing authority thereof or
therein. If any Taxes are so levied or imposed, Debtor
agrees to pay the full amount thereof, and such additional
amounts as may be necessary so that each net payment
received by Lender will not be less than the amount
provided for herein. Debtor will furnish to Lender within 30
days after each payment of Taxes is due, originals or
certified copies of tax receipts evidencing such payment.
The provisions of this Paragraph shall survive repayment of
the Obligations and termination of this Agreement.
Notwithstanding the foregoing, Debtor shall not be obligated
for any Taxes arising solely as a result of any assignment by
Lender of its rights under the Note to an affiliate.



     14. Any notice to Lender or Debtor shall be
effective: if sent by mail, 5 days after deposit in the mails,
postage prepaid; if sent by facsimile, when sent with a
confirmation received; if delivered by hand or courier, when
delivered against a receipt therefor; if sent by overnight



4









 




courier, on the next business day; in each case to the address below. Each party may change its
address for notices by written notice to the other.





     15. DEBTOR AND LENDER EACH HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT TO A JURY TRIAL IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. In any action or proceeding arising out of
or relating to this Agreement, Debtor hereby accepts, for both Debtor and Debtor’s property, the
exclusive jurisdiction of the courts of the State of New York, and the federal courts in New York
City, and agrees that effective service of process may be made on Debtor by mailing same to
Debtor’s address set forth below. Lender may proceed against Debtor in any other applicable
jurisdiction, and may serve process in any other manner permitted by applicable law. Debtor hereby
irrevocably waives any objection Debtor may now or hereafter have to the laying of venue in the
aforesaid courts, and any claim that any of the aforesaid courts is an inconvenient forum. To the
extent that Debtor or Debtor’s property may have or hereafter acquire immunity, on the grounds of
sovereignty or otherwise, from any judicial process in connection with this Agreement, Debtor
hereby irrevocably waives, to the fullest extent permitted by law, any such immunity and agrees not
to claim same. Debtor agrees that a final judgment in any such action or proceeding shall be
conclusive, and may be enforced in any other jurisdiction by suit on the judgment or in any other
permitted manner. Debtor further agrees that any action or proceeding by Debtor against Lender in
respect to any matters arising out of, or in any way relating to, this Agreement or the Obligations
shall be brought only in the State and County of New York.




     16. If this Agreement is signed by two or more
parties as Debtor, they shall be jointly and severally liable
hereunder, and the term “Debtor” as used herein shall mean
the debtor parties hereto, and each of them. This Agreement
may be signed in any number of counterparts, each of which
shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument. Delivery
of an executed counterpart of a signature page of this
Agreement by telecopy shall be as effective as delivery of an
original executed counterpart.



     17. THIS AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAW OF THE STATE OF NEW
YORK (WITHOUT GIVING EFFECT TO THE
PRINCIPLES THEREOF RELATING TO CONFLICT
OF LAWS)THE PARTIES AGREE THAT THE STATE
OF NEW YORK IS LENDER’S JURISDICTION FOR PURPOSES OF ARTICLES 8 AND 9 OF THE UCC.



     18. The parties hereto agree that Debtor shall be
entitled upon written notice to Lender to withdraw cash or
securities from the Collateral Account free and clear of the
lien arising hereunder and to hold or dispose of the same in
its discretion, provided that (x) no Event of Default is then
continuing (and no event has occurred and is continuing
which with notice or passage of time or both would be an
Event of Default) and (y) after giving effect to any such
withdrawal, Debtor is in compliance with the Collateral
Maintenance Requirements set forth on Schedule D hereto.



(Signature page to follow)





5









 








IN WITNESS WHEREOF, Debtor has executed and delivered this Agreement as of the 27 day of October,
2008




	 	 	 	 	 	 	 	 	 
	Debtor Information:
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Address for Notices:	 	Debtor:	 	BioMimetic Therapeutics, Inc.	 	 
	389-A Nichol Mill Lane
	 	 	 	 	 	 	 	 
	Franklin, TN

Attention: Larry Bullock, CFO

Telephone No.: 615-236-4402
	 	 	 	By:
	 	/s/ Samuel E. Lynch
 

Name: Samuel E. Lynch

Title: President  &  CEO
	 	 
	Facsimile No.: 615-236-4452

	 	 	 		 		 	 






Type of Organization:




Corporation




The following must be completed if UCCs are being filed.




Chief Executive Office:




389-A Nichol Mill Lane

Franklin, TN

Attention: Larry Bullock, CFO




Sole Jurisdiction of Organization: 




Delaware




Taxpayer Id No.:




Organization Id. No.:



 
 

6









 






	 	 	 	 	 	 	 
	Address:
	 	 	 	 	 	 
	60 Wall Street
	 	 	 	 	 	 
	New York, NY 10005
	 	 	 	 	 	 
	c/o Private Wealth Management
	 	 	 	 	 	 
	280 Park Avenue	 	Deutsche Bank Ag, Cayman Islands Branch	 	 
	NYC 03-0434
	 	 	 	 	 	 
	New York, NY 10017
	 	By:


	 	/s/ Ned Kane
 


	 	 
	Attention: Lending/ Edward F. Kane,
Managing Director
	 	 	 	Ned Kane	 	 
	Telephone No.: 212-454-2533

Facsimile No.: 212-454-4740

	 	Title:

	 	
Managing Director
	 	 
	

	 	By:
	 	/s/ William M. Crane
 

 	 	 
	 
	 		 	William M. Crane
	 	 
	 

	 	Title:
	 	Director	 	 
	 

	 		 		 	 






7









 





Schedule A




Collateral Account




	 	 	 
	Account Number

	 	Name of Collateral holder and office at which Collateral Account is held
	 
	 	 
	5XR 209589

	 	Deutsche Bank Securities, Inc.






Schedule B

Listed Federally Guaranteed Auction Rate Securities and Other Property




	 	 	 	 	 	 	 
	CUSIP	 	Description	 	Par Value (Notional)
	10623PDB3

	 	BRAZOS, TX HIGHER
	 	 	4,000,000	 
	49130NAY5

	 	KENTUCKY HIGHER ED
	 	 	1,600,000	 
	10620NBV9

	 	BRAZOS, TX HIGHER ED 7 DAY
	 	 	2,000,000	 
	709163DK2

	 	PA STATE HIGHER
	 	 	4,000,000	 
	196777Z0

	 	CO STUDENT OBLIGATION
	 	 	4,000,000	 
	679110CL8

	 	OK STATE STUDENT
	 	 	4,500,000	 
	207784AL3

	 	CT STUDENT LOAN
	 	 	6,000,000	 
	917546GJ6

	 	UTAH STATE
	 	 	2,000,000	 
	196777 KF2

	 	CO STUDENT OBLIGATION
	 	 	2,000,000	 
	041150CU5

	 	ARKANSAS STATE
	 	 	4,300,000	 
	606072HG4

	 	MISSOURI HIGHER ED
	 	 	2,000,000	 
	28148 NAT0

	 	ED FDG SOUTH
	 	 	6,000,000	 
	917546FK4

	 	UTAH STATE
	 	 	2,000,000	 
	598497AA3

	 	MIDWESTERN UNIV FDTN
	 	 	6,000,000	 
	709163EY1

	 	PA STATE HIGHER ED
	 	 	2,000,000	 
	606072GD2

	 	MISSOURI HIGHER ED
	 	 	3,500,000	 
	 

	 	Total
	 	 	55,900,000	 







 









 








Schedule C

Liens



“Lien” shall mean any mortgage, pledge, lien, charge, encumbrance, claim, adverse interest,
security interest on or in respect of the Collateral or any shareholder’s agreement, pooling
agreement, option agreement, right of first refusal, voting trust, anti-assignability agreement or
any other agreement, provision or restriction (under the securities laws or otherwise) that could
impair the free assignment, sale or other transfer of the Collateral or otherwise impair the value
of the Collateral.



Debtor owns the Collateral free and clear of any Lien other than Liens to Lender and;





	 	þ	 	No other Lien
	 
	 	o	 	Lien arising because Debtor is an “affiliate” (as defined
in the securities laws) of the issuer of all or
certain of the Collateral. Debtor represents that Debtor has been the beneficial owner of such
Collateral for more than                      months.
	 
	 	o	 	Lien arising because Debtor is an “affiliate” (as defined in the
securities laws) of a company
acquired by the issuer of all or certain of the Collateral. Debtor represents
that Debtor has been the
beneficial owner of such Collateral for more than                      months.
	 
	 	o	 	Lien arising because all or certain of the Collateral has not been registered under the
securities laws.
Debtor represents that Debtor has been the beneficial owner of such Collateral for more than                    
months.






Lien arising due to:




	 	o	 	Shareholders agreement [specify ]      
               
              
  
              
              
        
              
             
	 
	 	o	 	Pooling agreement [specify]       
               
              
              
               
              
         
               
    
	 
	 	o	 	Option agreement [specify]       
               
              
               
                
       
             
    
      
            
	 
	 	o	 	Other [specify]        
              
             
                              
                                                      
            
	 
	 	 







 









 








Schedule D

COLLATERAL MAINTENANCE REQUIREMENTS



If at any time the principal and interest of the Obligations are greater than (x) the par value
of the Collateral in the Collateral Account, multiplied by (y) the percentage valuation set forth
below as the Maximum Advance Rate, Debtor, within three (3) business days after oral or written
notice from Lender, will repay the Obligations, such that the Obligations are less than the par
value of the Collateral multiplied by the Maximum Advance Rate set forth below:




	 	 	 	 	 
	 

	 	Maximum Advance Rate

	 
	 	 	 	 
	Federally guaranteed auction rate 
securities listed on Schedule B and
held in the Collateral Account

	 	 	70	%





Notwithstanding the foregoing, such Maximum Advance Rate shall automatically increase if a higher
maximum advance rate is offered by Lender or an affiliate as part of: (a) a lending program wherein
the loans are offered to all or substantially all institutional clients which are either (i)
secured by illiquid auction rate securities purchased through Lender or an affiliate, or (ii)
designed to provide customers of Lender or its affiliates with liquidity for illiquid auction rate
securities purchased through Lender or an affiliate; or (b) a settlement with a state Attorney
General, or any regulatory body, including state, federal, or industry regulators such as the SEC,
the North American Securities Administrators Association, or the Financial Industry Regulatory
Authority (including any arbitration awards or settlements with third parties thereunder) which
requires the Lender to offer such maximum advance rate to institutional customers who purchased
illiquid auction rate securities from the Lender or its affiliates. In such event, the Maximum
Advance Rate shall automatically adjust to the maximum advance rate offered under any such program
or settlement.




	 	 	 	 	 
	Debtor:

	 	/s/ Samuel E. Lynch
 

	 	 
	 

	 	Signature