UNDER, ANY PROVISION OF THE
CERTIFICATE OF INCORPORATION, BYLAWS OR OTHER FORMATION DOCUMENTS OF THE DEBTOR,
ANY MATERIAL AGREEMENT OR INSTRUMENT BINDING ON THE DEBTOR OR ANY LEGAL
REQUIREMENT APPLICABLE TO THE DEBTOR, EXCEPT FOR SUCH PROHIBITIONS, LIMITATIONS,
DEFAULTS OR LEGAL REQUIREMENTS AS WOULD NOT PREVENT OR IMPAIR CONSUMMATION BY
THE DEBTOR OF THE TRANSACTIONS CONTEMPLATED HEREBY, THE PERFORMANCE BY THE
DEBTOR OF ITS OBLIGATIONS HEREUNDER OR THE EXERCISE OF THE SECURED PARTIES OF
THEIR RIGHTS HEREUNDER.
THE EXECUTION, DELIVERY AND PERFORMANCE OF THIS
AGREEMENT BY THE DEBTOR, THE DEBTOR'S COMPLIANCE WITH THE TERMS AND PROVISIONS
HEREOF AND THE SECURED PARTIES' EXERCISE OF ANY OF THEIR RIGHTS HEREUNDER, DO
NOT AND WILL NOT CONFLICT WITH OR RESULT IN A BREACH OF ANY OF THE TERMS AND
PROVISIONS OF OR CONSTITUTE A DEFAULT OR CREATE A TERMINATION RIGHT UNDER, WITH
OR WITHOUT THE PASSAGE OF TIME AND THE GIVING OF NOTICE, ANY MATERIAL CONTRACT
OR OTHER INSTRUMENT OR OBLIGATION BINDING OR AFFECTING THE DEBTOR, THE ROYALTY
PRODUCTS OR THE COLLATERAL INCLUDING, WITHOUT LIMITATION, THAT CERTAIN AGREEMENT
DATED DECEMBER 28, 2000 BETWEEN TANABE SEIYAKU CO., LTD. AND THE DEBTOR (THE
"TANABE AGREEMENT"), EXCEPT AS SET FORTH IN THAT CERTAIN DISCLOSURE LETTER OF
EVEN DATE HEREWITH DELIVERED BY THE DEBTOR TO ED PURSUANT TO SECTION 7 OF THE
ROYALTY AGREEMENT.
3.5
NO RESTRICTIONS.
THERE ARE NO STATUTORY OR
REGULATORY RESTRICTIONS, PROHIBITIONS OR LIMITATIONS ON THE DEBTOR'S ABILITY TO
GRANT TO THE SECURED PARTIES A LIEN UPON AND SECURITY INTEREST IN THE COLLATERAL
PURSUANT TO THIS AGREEMENT OR (EXCEPT FOR THE PROVISIONS OF THE FEDERAL
ANTI-ASSIGNMENT ACT (41 U.S.C. 15), AS AMENDED AND THE ANTI-CLAIMS ACT (31
U.S.C. 3727), AS AMENDED) ON THE EXERCISE BY THE SECURED PARTIES OF THEIR RIGHTS
AND REMEDIES HEREUNDER (INCLUDING ANY FORECLOSURE UPON OR COLLECTION OF THE
COLLATERAL), AND THERE ARE NO CONTRACTUAL RESTRICTIONS ON THE DEBTOR'S ABILITY
TO GRANT SUCH LIEN AND SECURITY INTEREST.
3.6
ACCOUNTS.
EACH COLLATERAL ACCOUNT IS, OR AT
THE TIME IT ARISES WILL BE, (I) A BONA FIDE, VALID AND LEGALLY ENFORCEABLE
INDEBTEDNESS OF THE ACCOUNT DEBTOR ACCORDING TO ITS TERMS, ARISING OUT OF OR IN
CONNECTION WITH THE SALE, LEASE OR PERFORMANCE OF GOODS OR SERVICES BY THE
DEBTOR OR ANY OF THEM, (II) SUBJECT TO NO OFFSETS, DISCOUNTS, COUNTERCLAIMS,
CONTRA ACCOUNTS OR ANY OTHER DEFENSE OF ANY KIND AND CHARACTER, OTHER THAN
WARRANTIES AND DISCOUNTS CUSTOMARILY GIVEN BY THE DEBTOR IN THE ORDINARY COURSE
OF BUSINESS AND WARRANTIES PROVIDED BY APPLICABLE LAW,
6
(III) TO THE EXTENT LISTED ON ANY SCHEDULE OF COLLATERAL ACCOUNTS AT ANY TIME
FURNISHED TO THE SECURED PARTIES, A TRUE AND CORRECT STATEMENT OF THE AMOUNT
ACTUALLY AND UNCONDITIONALLY OWING THEREUNDER, MATURING AS STATED IN SUCH
SCHEDULE AND IN THE INVOICE COVERING THE TRANSACTION CREATING SUCH COLLATERAL
ACCOUNT, AND (IV) NOT EVIDENCED BY ANY OTHER INSTRUMENT; OR IF SO, SUCH OTHER
INSTRUMENT (OTHER THAN INVOICES AND RELATED CORRESPONDENCE AND SUPPORTING
DOCUMENTATION) SHALL PROMPTLY BE DULY ENDORSED TO THE ORDER OF THE SECURED
PARTIES AND DELIVERED TO THE