Document:

Unassociated Document

    
      

      

    

    

    AMENDED
      AND RESTATED TRUST AGREEMENT

    

    among

    

    NORTHSTAR
      REALTY FINANCE LIMITED PARTNERSHIP,

    as
      Depositor

    

    

    NORTHSTAR
      REALTY FINANCE CORP.,

    as
      Guarantor

    

    

    WILMINGTON
      TRUST COMPANY

    as
      Property Trustee

    

    

    WILMINGTON
      TRUST COMPANY

    as
      Delaware Trustee

    

    

    and

    

    

    THE
      ADMINISTRATIVE TRUSTEES NAMED HEREIN

    as
      Administrative Trustees

    

    ________________

    

    

    Dated
      as
      of March 30, 2007

    

    

    NORTHSTAR
      REALTY FINANCE TRUST VII

    

    

    
      

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    TABLE
      OF CONTENTS

     

    
      
        	 	 	 	
                Page

              
	 	 	 	 
	
                ARTICLE
                  I. 

              	 	
                Defined
                  Terms

              	
                1

              
	
                SECTION
                  1.1.

              	 	
                Definitions.

              	
                1

              
	 	 	 	 
	
                ARTICLE
                  II. 

              	 	
                The
                  Trust

              	
                10

              
	
                SECTION
                  2.1.

              	 	
                Name.

              	
                10

              
	
                SECTION
                  2.2.

              	 	
                Office
                  of the Delaware Trustee; Principal Place of Business.

              	
                10

              
	
                SECTION
                  2.3.

              	 	
                Initial
                  Contribution of Trust Property; Fees, Costs and Expenses.

              	
                10

              
	
                SECTION
                  2.4.

              	 	
                Purposes
                  of Trust.

              	
                11

              
	
                SECTION
                  2.5.

              	 	
                Authorization
                  to Enter into Certain Transactions.

              	
                11

              
	
                SECTION
                  2.6.

              	 	
                Assets
                  of Trust.

              	
                14

              
	
                SECTION
                  2.7.

              	 	
                Title
                  to Trust Property.

              	
                14

              
	 	 	 	 
	
                ARTICLE
                  III. 

              	 	
                Payment
                  Account; Paying Agents

              	
                14

              
	
                SECTION
                  3.1.

              	 	
                Payment
                  Account.

              	
                14

              
	
                SECTION
                  3.2.

              	 	
                Appointment
                  of Paying Agents.

              	
                15

              
	 	 	 	 
	
                ARTICLE
                  IV. 

              	 	
                Distributions;
                  Redemption

              	
                15

              
	
                SECTION
                  4.1.

              	 	
                Distributions.

              	
                15

              
	
                SECTION
                  4.2.

              	 	
                Redemption.

              	
                16

              
	
                SECTION
                  4.3.

              	 	
                Subordination
                  of Common Securities.

              	
                19

              
	
                SECTION
                  4.4.

              	 	
                Payment
                  Procedures.

              	
                20

              
	
                SECTION
                  4.5.

              	 	
                Withholding
                  Tax.

              	
                20

              
	
                SECTION
                  4.6.

              	 	
                Tax
                  Returns and Other Reports.

              	
                20

              
	
                SECTION
                  4.7.

              	 	
                Payment
                  of Taxes, Duties, Etc. of the Trust.

              	
                21

              
	
                SECTION
                  4.8.

              	 	
                Payments
                  under Indenture or Pursuant to Direct Actions.

              	
                21

              
	
                SECTION
                  4.9.

              	 	
                Exchanges.

              	
                21

              
	
                SECTION
                  4.10.

              	 	
                Calculation
                  Agent.

              	
                22

              
	
                SECTION
                  4.11.

              	 	
                Certain
                  Accounting Matters.

              	
                22

              
	 	 	 	 
	
                ARTICLE
                  V. 

              	 	
                Securities

              	
                23

              
	
                SECTION
                  5.1.

              	 	
                Initial
                  Ownership.

              	
                23

              
	
                SECTION
                  5.2.

              	 	
                Authorized
                  Trust Securities.

              	
                23

              
	
                SECTION
                  5.3.

              	 	
                Issuance
                  of the Common Securities; Subscription and Purchase of
                  Notes.

              	
                23

              
	
                SECTION
                  5.4.

              	 	
                The
                  Securities Certificates.

              	
                24

              
	
                SECTION
                  5.5.

              	 	
                Rights
                  of Holders.

              	
                25

              
	
                SECTION
                  5.6.

              	 	
                Book-Entry
                  Preferred Securities.

              	
                25

              
	
                SECTION
                  5.7.

              	 	
                Registration
                  of Transfer and Exchange of Preferred Securities
                  Certificates.

              	
                27

              
	
                SECTION
                  5.8.

              	 	
                Mutilated,
                  Destroyed, Lost or Stolen Securities Certificates.

              	
                28

              
	
                SECTION
                  5.9.

              	 	
                Persons
                  Deemed Holders.

              	
                29

              
	
                SECTION
                  5.10.

              	 	
                Cancellation.

              	
                29

              
	
                SECTION
                  5.11.

              	 	
                Ownership
                  of Common Securities by Depositor.

              	
                29

              
	
                SECTION
                  5.12.

              	 	
                Restricted
                  Legends.

              	
                30

              
	
                SECTION
                  5.13.

              	 	
                Form
                  of Certificate of Authentication.

              	
                32

              

      

       

      
        
          
          

        

        
          i

          
            

          

        

        
          
          

        

      

       

      
        	 	 	 	
                Page

              
	 	 	 	 
	
                ARTICLE
                  VI. 

              	 	
                Meetings;
                  Voting; Acts of Holders

              	
                33

              
	
                SECTION
                  6.1.

              	 	
                Notice
                  of Meetings.

              	
                33

              
	
                SECTION
                  6.2.

              	 	
                Meetings
                  of Holders of the Preferred Securities.

              	
                33

              
	
                SECTION
                  6.3.

              	 	
                Voting
                  Rights.

              	
                33

              
	
                SECTION
                  6.4.

              	 	
                Proxies,
                  Etc.

              	
                34

              
	
                SECTION
                  6.5.

              	 	
                Holder
                  Action by Written Consent.

              	
                34

              
	
                SECTION
                  6.6.

              	 	
                Record
                  Date for Voting and Other Purposes.

              	
                34

              
	
                SECTION
                  6.7.

              	 	
                Acts
                  of Holders.

              	
                34

              
	
                SECTION
                  6.8.

              	 	
                Inspection
                  of Records.

              	
                35

              
	
                SECTION
                  6.9.

              	 	
                Limitations
                  on Voting Rights.

              	
                35

              
	
                SECTION
                  6.10.

              	 	
                Acceleration
                  of Maturity; Rescission of Annulment; Waivers of Past
                  Defaults.

              	
                36

              
	 	 	 	 
	
                ARTICLE
                  VII. 

              	 	
                Representations
                  and Warranties

              	
                39

              
	
                SECTION
                  7.1.

              	 	
                Representations
                  and Warranties of the Property Trustee and the Delaware
                  Trustee.

              	
                39

              
	
                SECTION
                  7.2.

              	 	
                Representations
                  and Warranties of Depositor.

              	
                40

              
	 	 	 	 
	
                ARTICLE
                  VIII. 

              	 	
                The
                  Trustees

              	
                41

              
	
                SECTION
                  8.1.

              	 	
                Number
                  of Trustees.

              	
                41

              
	
                SECTION
                  8.2.

              	 	
                Property
                  Trustee Required.

              	
                41

              
	
                SECTION
                  8.3.

              	 	
                Delaware
                  Trustee Required.

              	
                41

              
	
                SECTION
                  8.4.

              	 	
                Appointment
                  of Administrative Trustees.

              	
                42

              
	
                SECTION
                  8.5.

              	 	
                Duties
                  and Responsibilities of the Trustees.

              	
                42

              
	
                SECTION
                  8.6.

              	 	
                Notices
                  of Defaults and Extensions.

              	
                44

              
	
                SECTION
                  8.7.

              	 	
                Certain
                  Rights of Property Trustee.

              	
                44

              
	
                SECTION
                  8.8.

              	 	
                Delegation
                  of Power.

              	
                46

              
	
                SECTION
                  8.9.

              	 	
                May
                  Hold Securities.

              	
                47

              
	
                SECTION
                  8.10.

              	 	
                Compensation;
                  Reimbursement; Indemnity.

              	
                47

              
	
                SECTION
                  8.11.

              	 	
                Resignation
                  and Removal; Appointment of Successor.

              	
                48

              
	
                SECTION
                  8.12.

              	 	
                Acceptance
                  of Appointment by Successor.

              	
                49

              
	
                SECTION
                  8.13.

              	 	
                Merger,
                  Conversion, Consolidation or Succession to Business.

              	
                49

              
	
                SECTION
                  8.14.

              	 	
                Not
                  Responsible for Recitals or Issuance of Securities.

              	
                50

              
	
                SECTION
                  8.15.

              	 	
                Property
                  Trustee May File Proofs of Claim.

              	
                50

              
	
                SECTION
                  8.16.

              	 	
                Reports
                  to and from the Property Trustee.

              	
                51

              
	 	 	 	 
	
                ARTICLE
                  IX. 

              	 	
                Termination,
                  Liquidation and Merger

              	
                51

              
	
                SECTION
                  9.1.

              	 	
                Dissolution
                  Upon Expiration Date.

              	
                51

              
	
                SECTION
                  9.2.

              	 	
                Early
                  Termination.

              	
                51

              
	
                SECTION
                  9.3.

              	 	
                Termination.

              	
                52

              
	
                SECTION
                  9.4.

              	 	
                Liquidation.

              	
                52

              
	
                SECTION
                  9.5.

              	 	
                Mergers,
                  Consolidations, Amalgamations or Replacements of Trust.

              	
                53

              
	 	 	 	 
	
                ARTICLE
                  X.

              	 	
                Information
                  to Purchaser

              	
                55

              
	
                SECTION
                  10.1.

              	 	
                Depositor
                  Obligations to Purchaser.

              	
                55

              
	
                SECTION
                  10.2.

              	 	
                Property
                  Trustee’s Obligations to Purchaser.

              	
                55

              
	 	 	 	 
	
                ARTICLE
                  XI. 

              	 	
                Miscellaneous
                  Provisions

              	
                55

              
	
                SECTION
                  11.1.

              	 	
                Limitation
                  of Rights of Holders.

              	
                55

              
	
                SECTION
                  11.2.

              	 	
                Agreed
                  Tax Treatment of Trust and Trust Securities.

              	
                55

              
	
                SECTION
                  11.3.

              	 	
                Amendment.

              	
                56

              
	
                SECTION
                  11.4.

              	 	
                Separability.

              	
                57

              

      

       

      
        
          
          

        

        
          ii

          
            

          

        

        
          
          

        

      

       

      
        	 	 	 	
                Page

              
	 	 	 	 
	
                SECTION
                  11.5.

              	 	
                Governing
                  Law.

              	
                57

              
	
                SECTION
                  11.6.

              	 	
                Successors.

              	
                57

              
	
                SECTION
                  11.7.

              	 	
                Headings.

              	
                58

              
	
                SECTION
                  11.8.

              	 	
                Reports,
                  Notices and Demands.

              	
                58

              
	
                SECTION
                  11.9.

              	 	
                Agreement
                  Not to Petition.

              	
                58

              
	 	 	 	 
	
                Exhibit
                  A

              	 	
                Certificate
                  of Trust of NorthStar Realty Finance Trust VII

              	 
	
                Exhibit
                  B

              	 	
                Form
                  of Common Securities Certificate

              	 
	
                Exhibit
                  C

              	 	
                Form
                  of Preferred Securities Certificate

              	 
	
                Exhibit
                  D

              	 	
                Junior
                  Subordinated Indenture

              	 
	
                Exhibit
                  E

              	 	
                Form
                  of Transferee Certificate to be Executed by Transferees other than
                  QIBs

              	 
	
                Exhibit
                  F

              	 	
                Form
                  of Transferor Certificate to be Executed by QIBs

              	 
	
                Exhibit
                  G

              	 	
                Form
                  of Officer’s Financial Certificate

              	 
	
                Exhibit
                  H

              	 	
                Form
                  of Officer’s Certificate pursuant to Section 8.16(a)

              	 
	 	 	 	 
	
                Schedule
                  A

              	 	
                Calculation
                  of LIBOR

              	 

      

       

    

    
      
        
        

      

      
        iii

        
          

        

      

      
        
        

      

    

    AMENDED
      AND RESTATED TRUST AGREEMENT, dated as of March 30, 2007, among (i) NorthStar
      Realty Finance Limited Partnership, a Delaware limited partnership (including
      any successors or permitted assigns, the “Depositor”), (ii) NorthStar Realty
      Finance Corp., a Maryland corporation (including any successors or permitted
      assigns, the “Guarantor”), (iii) Wilmington Trust Company, a Delaware banking
      corporation, as property trustee (in such capacity, the “Property Trustee”),
      (iv) Wilmington Trust Company, a Delaware banking corporation, as Delaware
      trustee (in such capacity, the “Delaware Trustee”), (v) David T. Hamamoto, an
      individual, Richard J. McCready, an individual, and Andrew C. Richardson, an
      individual, each of whose address is c/o NorthStar Realty Finance Limited
      Partnership, c/o NorthStar Realty Finance Corp., 399 Park Avenue, 18th
      Floor,
      New York, NY 10022, as administrative trustees (in such capacities, each an
      “Administrative Trustee” and, collectively, the “Administrative Trustees” and,
      together with the Property Trustee and the Delaware Trustee, the “Trustees”) and
      (vi) the several Holders, as hereinafter defined.

     

    Witnesseth

     

    Whereas,
      the
      Depositor, the Property Trustee and the Delaware Trustee have heretofore created
      a Delaware statutory trust pursuant to the Delaware Statutory Trust Act by
      entering into a Trust Agreement, dated as of March 26, 2007 (the “Original Trust
      Agreement”), and by executing and filing with the Secretary of State of the
      State of Delaware the Certificate of Trust, substantially in the form attached
      as Exhibit
      A;
      and

     

    Whereas,
      the
Depositor
      and the Trustees desire to amend and restate the Original Trust Agreement in
      its
      entirety as set forth herein to provide for, among other things, (i) the
      issuance of the Common Securities by the Trust to the Depositor, (ii) the
      issuance and sale of the Preferred Securities by the Trust pursuant to the
      Purchase Agreement and (iii) the acquisition by the Trust from the Depositor
      of
      all of the right, title and interest in and to the Notes;

     

    Now,
      Therefore,
      in
      consideration of the agreements and obligations set forth herein and for other
      good and valuable consideration, the receipt and sufficiency of which are hereby
      acknowledged, each party, for the benefit of the other parties and for the
      benefit of the Holders, hereby amends and restates the Original Trust Agreement
      in its entirety and agrees as follows:

     

    ARTICLE
      I.

     

    Defined
      Terms

     

    SECTION
      1.1.  Definitions.

     

    For
      all
      purposes of this Trust Agreement, except as otherwise expressly provided or
      unless the context otherwise requires:

     

    (a) the
      terms
      defined in this Article
      I
      have the
      meanings assigned to them in this Article
      I;

     

    (b) the
      words
“include”, “includes” and “including” shall be deemed to be followed by the
      phrase “without limitation”;

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (c) all
      accounting terms used but not defined herein have the meanings assigned to
      them
      in accordance with United States generally accepted accounting
      principles;

     

    (d) unless
      the context otherwise requires, any reference to an “Article”, a “Section”, a
“Schedule” or an “Exhibit” refers to an Article, a Section, a Schedule or an
      Exhibit, as the case may be, of or to this Trust Agreement;

     

    (e) the
      words
“hereby”, “herein”, “hereof” and “hereunder” and other words of similar import
      refer to this Trust Agreement as a whole and not to any particular Article,
      Section or other subdivision;

     

    (f) a
      reference to the singular includes the plural and vice versa; and

     

    (g) the
      masculine, feminine or neuter genders used herein shall include the masculine,
      feminine and neuter genders.

     

    “Act”
has
      the meaning specified in Section
      6.7.

     

    “Additional
      Interest” has the meaning specified in Section
      1.1
      of the
      Indenture.

     

    “Additional
      Interest Amount” means, with respect to Trust Securities of a given Liquidation
      Amount and/or a given period, the amount of Additional Interest paid by the
      Depositor on a Like Amount of Notes for such period.

     

    “Additional
      Taxes” has the meaning specified in Section
      1.1
      of the
      Indenture.

     

    “Additional
      Tax Sums” has the meaning specified in Section
      10.5
      of the
      Indenture.

     

    “Administrative
      Trustee” means each of the Persons identified as an “Administrative Trustee” in
      the preamble to this Trust Agreement, solely in each such Person’s capacity as
      Administrative Trustee of the Trust and not in such Person’s individual
      capacity, or any successor Administrative Trustee appointed as herein
      provided.

     

    “Affiliate”
      of any specified Person means any other Person directly or indirectly
      controlling or controlled by or under direct or indirect common control with
      such specified Person. For the purposes of this definition, “control” when used
      with respect to any specified Person means the power to direct the management
      and policies of such Person, directly or indirectly, whether through the
      ownership of voting securities, by contract or otherwise; and the terms
“controlling” and “controlled” have meanings correlative to the
      foregoing.

     

    “Applicable
      Depositary Procedures” means, with respect to any transfer or transaction
      involving a Book-Entry Preferred Security, the rules and procedures of the
      Depositary for such Book-Entry Preferred Security, in each case to the extent
      applicable to such transaction and as in effect from time to time.

     

    “Bankruptcy
      Event” means, with respect to any Person:

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (a)
      the
      entry of a decree or order by a court having jurisdiction in the premises (i)
      judging such Person a bankrupt or insolvent, (ii) approving as properly filed
      a
      petition seeking reorganization, arrangement, adjudication or composition of
      or
      in respect of such Person under any applicable Federal or state bankruptcy,
      insolvency, reorganization or other similar law, (iii) appointing a custodian,
      receiver, liquidator, assignee, trustee, sequestrator or other similar official
      of such Person or of any substantial part of its property or (iv) ordering
      the
      winding up or liquidation of its affairs, and the continuance of any such decree
      or order unstayed and in effect for a period of sixty (60) consecutive days;
      or

     

    (b)
      the
      institution by such Person of proceedings to be adjudicated a bankrupt or
      insolvent, or the consent by it to the institution of bankruptcy or insolvency
      proceedings against it, or the filing by it of a petition or answer or consent
      seeking reorganization or relief under any applicable Bankruptcy Law, or the
      consent by it to the filing of any such petition or to the appointment of a
      custodian, receiver, liquidator, assignee, trustee, sequestrator or similar
      official of such Person or of any substantial part of its property, or the
      making by it of an assignment for the benefit of creditors, or the admission
      by
      it in writing of its inability to pay its debts generally as they become due
      and
      its willingness to be adjudicated a bankrupt or insolvent, or the taking of
      corporate action by such Person in furtherance of any such action.

     

    “Bankruptcy
      Law” means all Federal and state bankruptcy, insolvency, reorganization and
      other similar laws, including the United States Bankruptcy Code.

     

    “Book-Entry
      Preferred Security” means a Preferred Security, the ownership and transfers of
      which shall be made through book entries by a Depositary.

     

    “Business
      Day” means a day other than (a) a Saturday or Sunday, (b) a day on which banking
      institutions in the City of New York are authorized or required by law or
      executive order to remain closed or (c) a day on which the Corporate Trust
      Office is closed for business.

     

    “Calculation
      Agent” has the meaning specified in Section
      4.10.

     

    “Change
      of Control” has the meaning specified in the Indenture. 

     

    “Closing
      Date” has the meaning specified in the Purchase Agreement.

     

    “Code”
      means the United States Internal Revenue Code of 1986, as amended.

     

    “Commission”
      means the Securities and Exchange Commission, as from time to time constituted,
      created under the Exchange Act or, if at any time after the execution of this
      Trust Agreement such Commission is not existing and performing the duties
      assigned to it, then the body performing such duties at such time.

     

    “Common
      Securities Certificate” means a certificate evidencing ownership of Common
      Securities, substantially in the form attached as Exhibit
      B.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    “Common
      Security” means a common security of the Trust, denominated as such and
      representing an undivided beneficial interest in the assets of the Trust, having
      a Liquidation Amount of $1,000 and having the terms provided therefor in this
      Trust Agreement.

     

    “Corporate
      Trust Office” means the principal office of the Property Trustee at which any
      particular time its corporate trust business shall be administered, which office
      at the date of this Trust Agreement is located at Rodney Square North, 1100
      North Market Street, Wilmington, Delaware 19890-0001, Attention: Corporate
      Capital Markets.

     

    “Definitive
      Preferred Securities Certificates” means Preferred Securities issued in
      certificated, fully registered form that are not Global Preferred
      Securities.

     

    “Delaware
      Statutory Trust Act” means Chapter 38 of Title 12 of the Delaware Code, 12 Del.
      Code § 3801 et seq., or any successor statute thereto, in each case as amended
      from time to time.

     

    “Delaware
      Trustee” means the Person identified as the “Delaware Trustee” in the preamble
      to this Trust Agreement, solely in its capacity as Delaware Trustee of the
      Trust
      and not in its individual capacity, or its successor in interest in such
      capacity, or any successor Delaware Trustee appointed as herein
      provided.

     

    “Depositary”
      means an organization registered as a clearing agency under the Exchange Act
      that is designated as Depositary by the Depositor or any successor thereto.
      DTC
      will be the initial Depositary.

     

    “Depositary
      Participant” means a broker, dealer, bank, other financial institution or other
      Person for whom from time to time the Depositary effects book-entry transfers
      and pledges of securities deposited with the Depositary.

     

    “Depositor”
      has the meaning specified in the preamble to this Trust Agreement and any
      successors and permitted assigns.

     

    “Depositor
      Affiliate” has the meaning specified in Section
      4.9.

     

    “Distribution
      Date” has the meaning specified in Section
      4.1(a)(i).

     

    “Distributions”
      means amounts payable in respect of the Trust Securities as provided in
Section
      4.1.

     

    “DTC”
      means The Depository Trust Company or any successor thereto.

     

    “Early
      Termination Event” has the meaning specified in Section
      9.2.

     

    “Event
      of
      Default” means any one of the following events (whatever the reason for such
      event and whether it shall be voluntary or involuntary or be effected by
      operation of law or pursuant to any judgment, decree or order of any court
      or
      any order, rule or regulation of any administrative or governmental
      body):

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

       

    

    (a)
      the
      occurrence of a Note Event of Default; or

     

    (b)
      default by the Trust in the payment of any Distribution when it becomes due
      and
      payable, and continuation of such default for a period of thirty (30) days;
      or

     

    (c)
      default by the Trust in the payment of any Redemption Price of any Trust
      Security when it becomes due and payable; or

     

    (d)
      default in the performance, or breach, in any material respect of any covenant
      or warranty of the Trustees in this Trust Agreement (other than those specified
      in clause (b) or (c) above) and continuation of such default or breach for
      a
      period of thirty (30) days after there has been given, by registered or
      certified mail, to the Trustees and to the Depositor by the Holders of at least
      twenty-five percent (25%) in aggregate Liquidation Amount of the Outstanding
      Preferred Securities a written notice specifying such default or breach and
      requiring it to be remedied and stating that such notice is a “Notice of
      Default” hereunder; or

     

    (e)
      the
      occurrence of a Bankruptcy Event with respect to the Property Trustee if a
      successor Property Trustee has not been appointed within ninety (90) days
      thereof.

     

    “Exchange
      Act” means the Securities Exchange Act of 1934, and any successor statute
      thereto, in each case as amended from time to time.

     

    “Expiration
      Date” has the meaning specified in Section
      9.1.

     

    “Fiscal
      Year” shall be the fiscal year of the Trust, which shall be the calendar year,
      or such other period as is required by the Code.

     

    “Global
      Preferred Security” means a Preferred Securities Certificate evidencing
      ownership of Book-Entry Preferred Securities.

     

    “Guarantor”
      has the meaning specified in the preamble to this Trust Agreement and any
      successors and permitted assigns.

     

    “Holder”
      means a Person in whose name a Trust Security or Trust Securities are registered
      in the Securities Register; any such Person shall be a beneficial owner within
      the meaning of the Delaware Statutory Trust Act.

     

    “Indemnified
      Person” has the meaning specified in Section
      8.10(c).

     

    “Indenture”
      means the Junior Subordinated Indenture executed and delivered by the Depositor,
      the Guarantor and the Note Trustee contemporaneously with the execution and
      delivery of this Trust Agreement, for the benefit of the holders of the Notes,
      a
      copy of which is attached hereto as Exhibit
      D,
      as
      amended or supplemented from time to time.

     

    “Indenture
      Redemption Price” has the meaning specified in Section
      4.2(c).

     

    “Interest
      Payment Date” has the meaning specified in Section
      1.1
      of the
      Indenture.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    “Investment
      Company Act” means the Investment Company Act of 1940, or any successor statute
      thereto, in each case as amended from time to time.

     

    “Investment
      Company Event” has the meaning specified in Section
      1.1
      of the
      Indenture.

     

    “LIBOR”
      has the meaning specified in Schedule
      A.

     

    “LIBOR
      Business Day” has the meaning specified in Schedule
      A.

     

    “LIBOR
      Determination Date” has the meaning specified in Schedule
      A.
      

     

    “Lien”
      means any lien, pledge, charge, encumbrance, mortgage, deed of trust, adverse
      ownership interest, hypothecation, assignment, security interest or preference,
      priority or other security agreement or preferential arrangement of any kind
      or
      nature whatsoever.

     

    “Like
      Amount” means (a) with respect to a redemption of any Trust Securities, Trust
      Securities having a Liquidation Amount equal to the principal amount of Notes
      to
      be contemporaneously redeemed or paid at maturity in accordance with the
      Indenture, the proceeds of which will be used to pay the Redemption Price of
      such Trust Securities, (b) with respect to a distribution of Notes to Holders
      of
      Trust Securities in connection with a dissolution of the Trust, Notes having
      a
      principal amount equal to the Liquidation Amount of the Trust Securities of
      the
      Holder to whom such Notes are distributed and (c) with respect to any
      distribution of Additional Interest Amounts to Holders of Trust Securities,
      Notes having a principal amount equal to the Liquidation Amount of the Trust
      Securities in respect of which such distribution is made.

     

    “Liquidation
      Amount” means the stated amount of $1,000 per Trust Security.

     

    “Liquidation
      Date” means the date on which assets are to be distributed to Holders in
      accordance with Section
      9.4(a)
      hereunder following dissolution of the Trust.

     

    “Liquidation
      Distribution” has the meaning specified in Section
      9.4(d).

     

    “Majority
      in Liquidation Amount of the Preferred Securities” means Preferred Securities
      representing more than fifty percent (50%) of the aggregate Liquidation Amount
      of all (or a specified group of) then Outstanding Preferred
      Securities.

     

    “Note
      Event of Default” means any “Event of Default” specified in Section
      5.1
      of the
      Indenture.

     

    “Note
      Redemption Date” means, with respect to any Notes to be redeemed under the
      Indenture, the date fixed for redemption of such Notes under the
      Indenture.

     

    “Note
      Trustee” means the Person identified as the “Trustee” in the Indenture, solely
      in its capacity as Trustee pursuant to the Indenture and not in its individual
      capacity, or its successor in interest in such capacity, or any successor
      Trustee appointed as provided in the Indenture.

     

    “Notes”
      means the Depositor’s Junior Subordinated Notes issued pursuant to the
      Indenture.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    “Officer’s
      Certificate” means a certificate signed by the Chief Executive Officer, the
      President, an Executive Vice President, the Chief Financial Officer, the
      Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary,
      of the Depositor or the Guarantor, as applicable, and delivered to the Trustees.
      Any Officer’s Certificate delivered with respect to compliance with a condition
      or covenant provided for in this Trust Agreement (other than the certificate
      provided pursuant to Section
      8.16(a))
      shall
      include:

     

    (a)
      a
      statement by each officer signing the Officer’s Certificate that such officer
      has read the covenant or condition and the definitions relating
      thereto;

     

    (b)
      a
      brief statement of the nature and scope of the examination or investigation
      undertaken by such officer in rendering the Officer’s Certificate;

     

    (c)
      a
      statement that such officer has made such examination or investigation as,
      in
      such officer’s opinion, is necessary to enable such officer 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 such officer, such condition or
      covenant has been complied with.

     

    “Operative
      Documents” means the Purchase Agreement, the Indenture, the Trust Agreement, the
      Notes and the Trust Securities.

     

    “Opinion
      of Counsel” means a written opinion of counsel, who may be counsel for, or an
      employee of, the Depositor or the Guarantor or any Affiliate of the Depositor
      or
      the Guarantor.

     

    “Original
      Issue Date” means the date of original issuance of the Trust
      Securities.

     

    “Original
      Trust Agreement” has the meaning specified in the recitals to this Trust
      Agreement.

     

    “Outstanding,”
      when used with respect to any Trust Securities, means, as of the date of
      determination, all Trust Securities theretofore executed and delivered under
      this Trust Agreement, except:

     

    (a)
      Trust
      Securities theretofore canceled by the Property Trustee or delivered to the
      Property Trustee for cancellation;

     

    (b)
      Trust
      Securities for which payment or redemption money in the necessary amount has
      been theretofore deposited with the Property Trustee or any Paying Agent in
      trust for the Holders of such Trust Securities; provided, that if such Trust
      Securities are to be redeemed, notice of such redemption has been duly given
      pursuant to this Trust Agreement; and

     

    (c)
      Trust
      Securities that have been paid or in exchange for or in lieu of which other
      Trust Securities have been executed and delivered pursuant to the provisions
      of
      this Trust Agreement, unless proof satisfactory to the Property Trustee is
      presented that any such Trust Securities are held by Holders in whose hands
      such
      Trust Securities are valid, legal and binding obligations of the
      Trust;

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    provided,
      that in determining whether the Holders of the requisite Liquidation Amount
      of
      the Outstanding Preferred Securities have given any request, demand,
      authorization, direction, notice, consent or waiver hereunder, Preferred
      Securities owned by the Depositor, the Guarantor, any Trustee or any Affiliate
      of the Depositor, the Guarantor or of any Trustee shall be disregarded and
      deemed not to be Outstanding, except that (i) in determining whether any Trustee
      shall be protected in relying upon any such request, demand, authorization,
      direction, notice, consent or waiver, only Preferred Securities that such
      Trustee knows to be so owned shall be so disregarded and (ii) the foregoing
      shall not apply at any time when all of the Outstanding Preferred Securities
      are
      owned by the Depositor, the Guarantor, one or more of the Trustees and/or any
      such Affiliate. Preferred Securities so owned that have been pledged in good
      faith may be regarded as Outstanding if the pledgee establishes to the
      satisfaction of the Administrative Trustees the pledgee’s right so to act with
      respect to such Preferred Securities and that the pledgee is not the Depositor,
      the Guarantor, any Trustee or any Affiliate of the Depositor, the Guarantor
      or
      of any Trustee.

     

    “Owner”
      means each Person who is the beneficial owner of Book-Entry Preferred Securities
      as reflected in the records of the Depositary or, if a Depositary Participant
      is
      not the beneficial owner, then the beneficial owner as reflected in the records
      of the Depositary Participant.

     

    “Paying
      Agent” means any Person authorized by the Administrative Trustees to pay
      Distributions or other amounts in respect of any Trust Securities on behalf
      of
      the Trust.

     

    “Payment
      Account” means a segregated non-interest-bearing corporate trust account
      maintained by the Property Trustee for the benefit of the Holders in which
      all
      amounts paid in respect of the Notes will be held and from which the Property
      Trustee, through the Paying Agent, shall make payments to the Holders in
      accordance with Sections
      3.1,
      4.1
      and
4.2.

     

    “Person”
      means a legal person, including any individual, corporation, estate,
      partnership, joint venture, association, joint stock company, company, limited
      liability company, trust, unincorporated association or government, or any
      agency or political subdivision thereof, or any other entity of whatever
      nature.

     

    “Preferred
      Security” means a preferred security of the Trust, denominated as such and
      representing an undivided beneficial interest in the assets of the Trust, having
      a Liquidation Amount of $1,000 and having the terms provided therefor in this
      Trust Agreement.

     

    “Preferred
      Securities Certificate” means a certificate evidencing ownership of Preferred
      Securities, substantially in the form attached as Exhibit
      C.

     

    “Property
      Trustee” means the Person identified as the “Property Trustee” in the preamble
      to this Trust Agreement, solely in its capacity as Property Trustee of the
      Trust
      and not in its individual capacity, or its successor in interest in such
      capacity, or any successor Property Trustee appointed as herein
      provided.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    “Purchase
      Agreement” means the Purchase Agreement, dated as of March 30, 2007, executed
      and delivered by the Trust, the Depositor, the Guarantor, and the
      Purchaser.

     

    “Purchaser”
      means UBS Securities LLC, whose address is 1285 Avenue of the Americas, 11th
      Floor, New York, NY 10019, Attention: CDO Group, as purchaser of the Preferred
      Securities pursuant to the Purchase Agreement.

     

    “QIB”
      means a “qualified institutional buyer” as defined in Rule 144A under the
      Securities Act.

     

    “Redemption
      Date” means, with respect to any Trust Security to be redeemed, the date fixed
      for such redemption by or pursuant to this Trust Agreement; provided, that
      each
      Note Redemption Date and the stated maturity (or any date of principal repayment
      upon early maturity) of the Notes shall be a Redemption Date for a Like Amount
      of Trust Securities.

     

    “Redemption
      Price” means, with respect to any Trust Security, the Liquidation Amount of such
      Trust Security, plus accumulated and unpaid Distributions to the Redemption
      Date, plus the related amount of the premium, if any, paid by the Depositor
      upon
      the concurrent redemption or payment at maturity of a Like Amount of
      Notes.

     

    “Reference
      Banks” has the meaning specified in Schedule
      A.

     

    “Responsible
      Officer” means, with respect to the Property Trustee, any Senior Vice President,
      any Vice President, any Assistant Vice President, the Secretary, any Assistant
      Secretary, the Treasurer, any Assistant Treasurer, any Trust Officer or
      Assistant Trust Officer or any other officer in the Corporate Trust Office
      of
      the Property Trustee with direct responsibility for the administration of this
      Trust Agreement and also means, with respect to a particular corporate trust
      matter, any other officer of the Property Trustee to whom such matter is
      referred because of that officer’s knowledge of and familiarity with the
      particular subject.

     

    “Securities
      Act” means the Securities Act of 1933, and any successor statute thereto, in
      each case as amended from time to time.

     

    “Securities
      Certificate” means any one of the Common Securities Certificates or the
      Preferred Securities Certificates.

     

    “Securities
      Register” and “Securities Registrar” have the respective meanings specified in
Section
      5.7.

     

    “Special
      Event Redemption Price” has the meaning specified in Section
      11.2
      of the
      Indenture.

     

    “Successor
      Securities” has the meaning specified in Section
      9.5(a).

     

    “Tax
      Event” has the meaning specified in Section
      1.1
      of the
      Indenture.

     

    “Trust”
      means the Delaware statutory trust known as “NorthStar Realty Finance Trust
      VII,” which was created on March 26, 2007, under the Delaware Statutory Trust
      Act pursuant to the Original Trust Agreement and the filing of the Certificate
      of Trust, and continued pursuant to this Trust Agreement.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    “Trust
      Agreement” means this Amended and Restated Trust Agreement, including all
      Schedules and Exhibits (other than Exhibit D), as the same may be modified,
      amended or supplemented from time to time in accordance with the applicable
      provisions hereof.

     

    “Trustees”
      means the Administrative Trustees, the Property Trustee and the Delaware
      Trustee, each as defined in this Article
      I.

     

    “Trust
      Property” means (a) the Notes, (b) any cash on deposit in, or owing to, the
      Payment Account and (c) all proceeds and rights in respect of the foregoing
      and
      any other property and assets for the time being held or deemed to be held
      by
      the Property Trustee pursuant to the trusts of this Trust
      Agreement.

     

    “Trust
      Security” means any one of the Common Securities or the Preferred
      Securities.

     

    ARTICLE
      II.

     

    The
      Trust

     

    SECTION
      2.1.  Name.

     

    The
      trust
      continued hereby shall be known as “NorthStar Realty Finance Trust VII,” as such
      name may be modified from time to time by the Administrative Trustees following
      written notice to the Holders of Trust Securities and the other Trustees, in
      which name the Trustees may conduct the business of the Trust, make and execute
      contracts and other instruments on behalf of the Trust and sue and be
      sued.

     

    SECTION
      2.2.  Office
      of
      the Delaware Trustee; Principal Place of Business.

     

    The
      address of the Delaware Trustee in the State of Delaware is Rodney Square North,
      1100 North Market Street, Wilmington, Delaware 19890-0001, Attention: Corporate
      Capital Markets, or such other address in the State of Delaware as the Delaware
      Trustee may designate by written notice to the Holders, the Depositor, the
      Guarantor, the Property Trustee and the Administrative Trustees. The principal
      executive office of the Trust is c/o NorthStar Realty Finance Corp., 399 Park
      Avenue, 18th
      Floor,
      New York, NY 10022, Attention: Chief Financial Officer, as such address may
      be
      changed from time to time by the Administrative Trustees following written
      notice to the Holders and the other Trustees.

     

    SECTION
      2.3.  Initial
      Contribution of Trust Property; Fees, Costs and Expenses.

     

    The
      Property Trustee acknowledges receipt from the Depositor in connection with
      the
      Original Trust Agreement of the sum of ten dollars ($10), which constituted
      the
      initial Trust Property. The Depositor shall pay all fees, costs and expenses
      of
      the Trust (except with respect to the Trust Securities) as they arise or shall,
      upon request of any Trustee, promptly reimburse such Trustee for any such fees,
      costs and expenses paid by such Trustee. The Depositor shall make no claim
      upon
      the Trust Property for the payment of such fees, costs or expenses.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    SECTION
      2.4.  Purposes
      of Trust.

     

    (a)  The
      exclusive purposes and functions of the Trust are to (i) issue and sell Trust
      Securities and use the proceeds from such sale to acquire the Notes and (ii)
      engage in only those activities necessary or incidental thereto. The Delaware
      Trustee, the Property Trustee and the Administrative Trustees are trustees
      of
      the Trust, and have all the rights, powers and duties to the extent set forth
      herein. The Trustees hereby acknowledge that they are trustees of the
      Trust.

     

    (b)  So
      long
      as this Trust Agreement remains in effect, the Trust (or the Trustees acting
      on
      behalf of the Trust) shall not undertake any business, activities or transaction
      except as expressly provided herein or contemplated hereby. In particular,
      the
      Trust (or the Trustees acting on behalf of the Trust) shall not (i) acquire
      any
      investments or engage in any activities not authorized by this Trust Agreement,
      (ii) sell, assign, transfer, exchange, mortgage, pledge, set-off or otherwise
      dispose of any of the Trust Property or interests therein, including to Holders,
      except as expressly provided herein, (iii) incur any indebtedness for borrowed
      money or issue any other debt, (iv) take or consent to any action that would
      result in the placement of a Lien on any of the Trust Property, (v) take or
      consent to any action that would reasonably be expected to cause (or, in the
      case of the Property Trustee, to the actual knowledge of a Responsible Officer
      would cause) the Trust to become taxable as a corporation or classified as
      other
      than a grantor trust for United States federal income tax purposes, (vi) take
      or
      consent to any action that would cause (or, in the case of the Property Trustee,
      to the actual knowledge of a Responsible Officer would cause) the Notes to
      be
      treated as other than indebtedness of the Depositor for United States federal
      income tax purposes or (vii) take or consent to any action that would cause
      (or,
      in the case of the Property Trustee, to the actual knowledge of a Responsible
      Officer would cause) the Trust to be deemed to be an “investment company”
required to be registered under the Investment Company Act.

     

    SECTION
      2.5.  Authorization
      to Enter into Certain Transactions.

     

    (a)  The
      Trustees shall conduct the affairs of the Trust in accordance with and subject
      to the terms of this Trust Agreement. In accordance with the following
      provisions (i) and (ii), the Trustees shall have the authority to enter into
      all
      transactions and agreements determined by the Trustees to be appropriate in
      exercising the authority, express or implied, otherwise granted to the Trustees,
      under this Trust Agreement, and to perform all acts in furtherance thereof,
      including the following:

     

    (i)  As
      among
      the Trustees, each Administrative Trustee shall severally have the power,
      authority and authorization to act on behalf of the Trust with respect to the
      following matters:

     

    (A)  the
      issuance and sale of the Trust Securities;

     

    (B)  to
      cause
      the Trust to enter into, and to execute, deliver and perform on behalf of the
      Trust, such agreements, documents, instruments, certificates and other writings
      as may be necessary or desirable in connection with the purposes and function
      of
      the Trust, including, without limitation, a common securities subscription
      agreement and a junior subordinated note subscription agreement and to cause
      the
      Trust to perform under the Purchase Agreement;

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    (C)  assisting
      in the sale of the Preferred Securities in one or more transactions exempt
      from
      registration under the Securities Act, and in compliance with applicable state
      securities or blue sky laws;

     

    (D)  assisting
      in the sending of notices (other than notices of default) and other information
      regarding the Trust Securities and the Notes to the Holders in accordance with
      this Trust Agreement;

     

    (E)  the
      appointment of a successor Paying Agent and Calculation Agent in accordance
      with
      this Trust Agreement;

     

    (F)  execution
      and delivery of the Trust Securities on behalf of the Trust in accordance with
      this Trust Agreement;

     

    (G)  execution
      and delivery of closing certificates, if any, pursuant to the Purchase
      Agreement;

     

    (H)  preparation
      and filing of all applicable tax returns and tax information reports that are
      required to be filed on behalf of the Trust;

     

    (I)  establishing
      a record date with respect to all actions to be taken hereunder that require
      a
      record date to be established, except as provided in Section
      6.10(a);

     

    (J)  unless
      otherwise required by the Delaware Statutory Trust Act, to execute on behalf
      of
      the Trust (either acting alone or together with the other Administrative
      Trustees) any documents and other writings that such Administrative Trustee
      has
      the power to execute pursuant to this Trust Agreement; and

     

    (K)  the
      taking of any action incidental to the foregoing as such Administrative Trustee
      may from time to time determine is necessary or advisable to give effect to
      the
      terms of this Trust Agreement.

     

    (ii)  As
      among
      the Trustees, the Property Trustee shall have the power, authority and
      authorization to act on behalf of the Trust with respect to the following
      matters:

     

    (A)  the
      receipt and holding of legal title of the Notes;

     

    (B)  the
      establishment of the Payment Account;

     

    (C)  the
      receipt of interest, principal and any other payments made in respect of the
      Notes and the holding of such amounts in the Payment Account;

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    (D)  the
      distribution through the Paying Agent of amounts distributable to the Holders
      in
      respect of the Trust Securities;

     

    (E)  the
      exercise of all of the rights, powers and privileges of a holder of the Notes
      in
      accordance with the terms of this Trust Agreement;

     

    (F)  the
      sending of notices of default and other information regarding the Trust
      Securities and the Notes to the Holders in accordance with this Trust
      Agreement;

     

    (G)  the
      distribution of the Trust Property in accordance with the terms of this Trust
      Agreement;

     

    (H)  to
      the
      extent provided in this Trust Agreement, the winding up of the affairs of and
      liquidation of the Trust and the preparation, execution and filing of the
      certificate of cancellation of the Trust with the Secretary of State of the
      State of Delaware; 

     

    (I)  application
      for a taxpayer identification number for the Trust;

     

    (J)  the
      authentication of the Preferred Securities as provided in this Trust Agreement;
      and

     

    (K)  the
      taking of any action incidental to the foregoing as the Property Trustee may
      from time to time determine is necessary or advisable to give effect to the
      terms of this Trust Agreement and protect and conserve the Trust Property for
      the benefit of the Holders (without consideration of the effect of any such
      action on any particular Holder).

     

    (b)  In
      connection with the issue and sale of the Preferred Securities, the Depositor
      shall have the right and responsibility to assist the Trust with respect to,
      or
      effect on behalf of the Trust, the following (and any actions taken by the
      Depositor in furtherance of the following prior to the date of this Trust
      Agreement are hereby ratified and confirmed in all respects):

     

    (i)  the
      negotiation of the terms of, and the execution and delivery of, the Purchase
      Agreement providing for the sale of the Preferred Securities in one or more
      transactions exempt from registration under the Securities Act, and in
      compliance with applicable state securities or blue sky laws; and

     

    (ii)  the
      taking of any other actions necessary or desirable to carry out any of the
      foregoing activities.

     

    (c)  Notwithstanding
      anything herein to the contrary, the Administrative Trustees are authorized
      and
      directed to conduct the affairs of the Trust and to operate the Trust so that
      the Trust will not be taxable as a corporation or classified as other than
      a
      grantor trust for United States federal income tax purposes, so that the Notes
      will be treated as indebtedness of the Depositor for United States federal
      income tax purposes and so that the Trust will not be deemed to be an
“investment company” required to be registered under the Investment Company Act.
      In this connection, each Administrative Trustee is authorized to take any
      action, not inconsistent with applicable law, the Certificate of Trust or this
      Trust Agreement, that such Administrative Trustee determines in his or her
      discretion to be necessary or desirable for such purposes, as long as such
      action does not adversely affect in any material respect the interests of the
      Holders of the Outstanding Preferred Securities. In no event shall the
      Administrative Trustees be liable to the Trust or the Holders for any failure
      to
      comply with this Section
      2.5
      to the
      extent that such failure results solely from a change in law or regulation
      or in
      the interpretation thereof.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    (d)  Any
      action taken by a Trustee in accordance with its powers shall constitute the
      act
      of and serve to bind the Trust. In dealing with any Trustee acting on behalf
      of
      the Trust, no Person shall be required to inquire into the authority of such
      Trustee to bind the Trust. Persons dealing with the Trust are entitled to rely
      conclusively on the power and authority of any Trustee as set forth in this
      Trust Agreement.

     

    SECTION
      2.6.  Assets
      of
      Trust.

     

    The
      assets of the Trust shall consist of the Trust Property.

     

    SECTION
      2.7.  Title
      to
      Trust Property.

     

    (a)  Legal
      title to all Trust Property shall be vested at all times in the Property Trustee
      and shall be held and administered by the Property Trustee in trust for the
      benefit of the Trust and the Holders in accordance with this Trust
      Agreement.

     

    (b)  The
      Holders shall not have any right or title to the Trust Property other than
      the
      undivided beneficial interest in the assets of the Trust conferred by their
      Trust Securities and they shall have no right to call for any partition or
      division of property, profits or rights of the Trust except as described below.
      The Trust Securities shall be personal property giving only the rights
      specifically set forth therein and in this Trust Agreement.

     

    ARTICLE
      III.

     

    Payment
      Account; Paying Agents

     

    SECTION
      3.1.  Payment
      Account.

     

    (a)  On
      or
      prior to the Closing Date, the Property Trustee shall establish the Payment
      Account. The Property Trustee and the Paying Agent shall have exclusive control
      and sole right of withdrawal with respect to the Payment Account for the purpose
      of making deposits in and withdrawals from the Payment Account in accordance
      with this Trust Agreement. All monies and other property deposited or held
      from
      time to time in the Payment Account shall be held by the Property Trustee in
      the
      Payment Account for the exclusive benefit of the Holders and for Distribution
      as
      herein provided.

     

    (b)  The
      Property Trustee shall deposit in the Payment Account, promptly upon receipt,
      all payments of principal of or interest on, and any other payments with respect
      to, the Notes. Amounts held in the Payment Account shall not be invested by
      the
      Property Trustee pending distribution thereof.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    SECTION
      3.2.  Appointment
      of Paying Agents.

     

    The
      Property Trustee is appointed as the initial Paying Agent and hereby accepts
      such appointment. The Paying Agent shall make Distributions to Holders from
      the
      Payment Account and shall report the amounts of such Distributions to the
      Property Trustee and the Administrative Trustees. Any Paying Agent shall have
      the revocable power to withdraw funds from the Payment Account solely for the
      purpose of making the Distributions referred to above. The Administrative
      Trustees may revoke such power and remove the Paying Agent in their sole
      discretion. Any Person acting as Paying Agent shall be permitted to resign
      as
      Paying Agent upon thirty (30) days’ written notice to the Administrative
      Trustees and the Property Trustee. If the Property Trustee shall no longer
      be
      the Paying Agent or a successor Paying Agent shall resign or its authority
      to
      act be revoked, the Administrative Trustees shall appoint a successor (which
      shall be a bank or trust company) to act as Paying Agent. Such successor Paying
      Agent appointed by the Administrative Trustees shall execute and deliver to
      the
      Trustees an instrument in which such successor Paying Agent shall agree with
      the
      Trustees that as Paying Agent, such successor Paying Agent will hold all sums,
      if any, held by it for payment to the Holders in trust for the benefit of the
      Holders entitled thereto until such sums shall be paid to such Holders. The
      Paying Agent shall return all unclaimed funds to the Property Trustee and upon
      removal of a Paying Agent such Paying Agent shall also return all funds in
      its
      possession to the Property Trustee. The provisions of Article
      VIII
      shall
      apply to the Property Trustee also in its role as Paying Agent, for so long
      as
      the Property Trustee shall act as Paying Agent and, to the extent applicable,
      to
      any other Paying Agent appointed hereunder. Any reference in this Trust
      Agreement to the Paying Agent shall include any co-paying agent unless the
      context requires otherwise.

     

    ARTICLE
      IV.

     

    Distributions;
      Redemption

     

    SECTION
      4.1.  Distributions.

     

    (a)  The
      Trust
      Securities represent undivided beneficial interests in the Trust Property,
      and
      Distributions (including any Additional Interest Amounts) will be made on the
      Trust Securities at the rate and on the dates that payments of interest
      (including any Additional Interest) are made on the Notes.
      Accordingly:

     

    (i)  Distributions
      on the Trust Securities shall be cumulative, and shall accumulate whether or
      not
      there are funds of the Trust available for the payment of Distributions.
      Distributions shall accumulate from March 30, 2007, and, except as provided
      in
      clause (ii) below, shall be payable quarterly in arrears on January
      30th,
      April
      30th,
      July
      30th
      and
      October 30th
      of each
      year, commencing on July 30, 2007. If any date on which a Distribution is
      otherwise payable on the Trust Securities is not a Business Day, then the
      payment of such Distribution shall be made on the next succeeding Business
      Day
      (and no interest shall accrue in respect of the amounts whose payment is so
      delayed for the period from and after each such date until the next succeeding
      Business Day), except that, if such Business Day falls in the next succeeding
      calendar year, such payment shall be made on the immediately preceding Business
      Day, in each case, with the same force and effect as if made on such date (each
      date on which Distributions are payable in accordance with this Section
      4.1(a)(i), a “Distribution Date”);

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    (ii)  Distributions
      shall accumulate in respect of the Trust Securities at a variable rate per
      annum, reset quarterly, equal to LIBOR plus the Margin (as defined in the
      Indenture) of the Liquidation Amount of the Trust Securities, such rate being
      the rate of interest payable on the Notes. LIBOR shall be determined by the
      Calculation Agent in accordance with Schedule
      A.
      The
      amount of Distributions payable for any Distribution period shall be computed
      and paid on the basis of a 360-day year and the actual number of days elapsed
      in
      the relevant Distribution period. The amount of Distributions payable for any
      period shall include any Additional Interest Amounts in respect of such period;
      and

     

    (iii)  Distributions
      on the Trust Securities shall be made by the Paying Agent from the Payment
      Account and shall be payable on each Distribution Date only to the extent that
      the Trust has funds then on hand and available in the Payment Account for the
      payment of such Distributions.

     

    (b)  Distributions
      on the Trust Securities with respect to a Distribution Date shall be payable
      to
      the Holders thereof as they appear on the Securities Register for the Trust
      Securities at the close of business on the relevant record date, which shall
      be
      at the close of business on the fifteenth day (whether or not a Business Day)
      preceding the relevant Distribution Date. Distributions payable on any Trust
      Securities that are not punctually paid on any Distribution Date as a result
      of
      the Depositor having failed to make an interest payment under the Notes will
      cease to be payable to the Person in whose name such Trust Securities are
      registered on the relevant record date, and such defaulted Distributions and
      any
      Additional Interest Amounts will instead be payable to the Person in whose
      name
      such Trust Securities are registered on the special record date, or other
      specified date for determining Holders entitled to such defaulted Distribution
      and Additional Interest Amount, established in the same manner, and on the
      same
      date, as such is established with respect to the Notes under the
      Indenture.

     

    (c)  As
      a
      condition to the payment of any principal of or interest on the Trust Securities
      without the imposition of withholding tax, the Administrative Trustees shall
      require the previous delivery of properly completed and signed applicable U.S.
      federal income tax certifications (generally, an Internal Revenue Service Form
      W-9 (or applicable successor form) in the case of a person that is a “United
      States person” within the meaning of Section 7701(a)(30) of the Code or an
      Internal Revenue Service Form W-8 (or applicable successor form) in the case
      of
      a person that is not a “United States person” within the meaning of Section
      7701(a)(30) of the Code) and any other certification acceptable to it to enable
      the Paying Agent to determine its duties and liabilities with respect to any
      taxes or other charges that it may be required to pay, deduct or withhold in
      respect of such Trust Securities.

     

    SECTION
      4.2.  Redemption.

     

    (a)  On
      each
      Note Redemption Date and on the stated maturity (or any date of principal
      repayment upon early maturity) of the Notes and on each other date on (or in
      respect of) which any principal on the Notes is repaid, the Trust will be
      required to redeem a Like Amount of Trust Securities at the Redemption
      Price.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    (b)  Notice
      of
      redemption shall be given by the Property Trustee by first-class mail, postage
      prepaid, mailed not less than thirty (30) nor more than sixty (60) days prior
      to
      the Redemption Date to each Holder of Trust Securities to be redeemed, at such
      Holder’s address appearing in the Securities Register. All notices of redemption
      shall state:

     

    (i)  the
      Redemption Date;

     

    (ii)  the
      Redemption Price or, if the Redemption Price cannot be calculated prior to
      the
      time the notice is required to be sent, the estimate of the Redemption Price
      provided pursuant to the Indenture, as calculated by the Depositor, together
      with a statement that it is an estimate and that the actual Redemption Price
      will be calculated by the Calculation Agent on the fifth Business Day prior
      to
      the Redemption Date (and if an estimate is provided, a further notice shall
      be
      sent of the actual Redemption Price on the date that such Redemption Price
      is
      calculated);

     

    (iii)  if
      less
      than all the Outstanding Trust Securities are to be redeemed, the identification
      (and, in the case of partial redemption, the respective Liquidation Amounts)
      and
      Liquidation Amounts of the particular Trust Securities to be
      redeemed;

     

    (iv)  that
      on
      the Redemption Date, the Redemption Price will become due and payable upon
      each
      such Trust Security, or portion thereof, to be redeemed and that Distributions
      thereon will cease to accumulate on such Trust Security or such portion, as
      the
      case may be, on and after said date, except as provided in Section
      4.2(d);

     

    (v)  the
      place
      or places where the Trust Securities are to be surrendered for the payment
      of
      the Redemption Price; and

     

    (vi)  such
      other provisions as the Property Trustee deems relevant.

     

    (c)  The
      Trust
      Securities (or portion thereof) redeemed on each Redemption Date shall be
      redeemed at the Redemption Price with the proceeds from the contemporaneous
      redemption or payment at maturity of Notes. Redemptions of the Trust Securities
      (or portion thereof) shall be made and the Redemption Price shall be payable
      on
      each Redemption Date only to the extent that the Trust has funds then on hand
      and available in the Payment Account for the payment of such Redemption Price.
      Under the Indenture, the Notes may be redeemed by the Depositor on any Interest
      Payment Date, at the Depositor’s option, on or after the earlier to occur of (i)
      a Change of Control Event (as defined in the Indenture) or (ii) April 30, 2012,
      in whole or in part, from time to time at a redemption price equal to one
      hundred percent (100%) of the principal amount thereof, together, in the case
      of
      any such redemption, with accrued interest, including any Additional Interest,
      to but excluding the date fixed for redemption (the “Indenture Redemption
      Price”). The Notes may also be redeemed by the Depositor, at its option, in
      whole but not in part, upon the occurrence of an Investment Company Event or
      a
      Tax Event at the Special Event Redemption Price (as set forth in the
      Indenture).

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    (d)  If
      the
      Property Trustee gives a notice of redemption in respect of any Preferred
      Securities, then by 10:00 A.M., New York City time, on the Redemption Date,
      the
      Depositor shall deposit sufficient funds with the Property Trustee to pay the
      Redemption Price. If such deposit has been made by such time, then by 12:00
      noon, New York City time, on the Redemption Date, the Property Trustee will,
      with respect to Book-Entry Preferred Securities, irrevocably deposit with the
      Depositary for such Book-Entry Preferred Securities, to the extent available
      therefor, funds sufficient to pay the applicable Redemption Price and will
      give
      such Depositary irrevocable instructions and authority to pay the Redemption
      Price to the Holders of the Preferred Securities. With respect to Preferred
      Securities that are not Book-Entry Preferred Securities, the Property Trustee
      will irrevocably deposit with the Paying Agent, to the extent available
      therefor, funds sufficient to pay the applicable Redemption Price and will
      give
      the Paying Agent irrevocable instructions and authority to pay the Redemption
      Price to the Holders of the Preferred Securities upon surrender of their
      Preferred Securities Certificates. Notwithstanding the foregoing, Distributions
      payable on or prior to the Redemption Date for any Trust Securities (or portion
      thereof) called for redemption shall be payable to the Holders of such Trust
      Securities as they appear on the Securities Register on the relevant record
      dates for the related Distribution Dates. If notice of redemption shall have
      been given and funds deposited as required, then upon the date of such deposit,
      all rights of Holders holding Trust Securities (or portion thereof) so called
      for redemption will cease, except the right of such Holders to receive the
      Redemption Price and any Distribution payable in respect of the Trust Securities
      on or prior to the Redemption Date, but without interest, and, in the case
      of a
      partial redemption, the right of such Holders to receive a new Trust Security
      or
      Securities of authorized denominations, in aggregate Liquidation Amount equal
      to
      the unredeemed portion of such Trust Security or Securities, and such Securities
      (or portion thereof) called for redemption will cease to be Outstanding. In
      the
      event that any date on which any Redemption Price is payable is not a Business
      Day, then payment of the Redemption Price payable on such date will be made
      on
      the next succeeding Business Day (and no interest shall accrue in respect of
      the
      amounts whose payment is so delayed for the period from and after each such
      date
      until the next succeeding Business Day), except that, if such Business Day
      falls
      in the next succeeding calendar year, such payment shall be made on the
      immediately preceding Business Day, in each case, with the same force and effect
      as if made on such date. In the event that payment of the Redemption Price
      in
      respect of any Trust Securities (or portion thereof) called for redemption
      is
      improperly withheld or refused and not paid either by the Trust or by the
      Depositor or the Guarantor pursuant to the Indenture, Distributions on such
      Trust Securities (or portion thereof) will continue to accumulate, as set forth
      in Section
      4.1,
      from
      the Redemption Date originally established by the Trust for such Trust
      Securities(or portion thereof) to the date such Redemption Price is actually
      paid, in which case the actual payment date will be the date fixed for
      redemption for purposes of calculating the Redemption Price.

     

    (e)  Subject
      to Section
      4.3(a),
      if
      less than all the Outstanding Trust Securities are to be redeemed on a
      Redemption Date, then the aggregate Liquidation Amount of Trust Securities
      to be
      redeemed shall be allocated pro rata to the Common Securities and the Preferred
      Securities based upon the relative aggregate Liquidation Amounts of the Common
      Securities and the Preferred Securities. The Preferred Securities to be redeemed
      shall be selected on a pro rata basis based upon their respective Liquidation
      Amounts not more than sixty (60) days prior to the Redemption Date by the
      Property Trustee from the Outstanding Preferred Securities not previously called
      for redemption; provided, however, that with respect to Holders that would
      be
      required to hold less than one hundred (100) but more than zero (0) Trust
      Securities as a result of such redemption, the Trust shall redeem Trust
      Securities of each such Holder so that after such redemption such Holder shall
      hold either one hundred (100) Trust Securities or such Holder no longer holds
      any Trust Securities, and shall use such method (including, without limitation,
      by lot) as the Trust shall deem fair and appropriate; and provided, further,
      that so long as the Preferred Securities are Book-Entry Preferred Securities,
      such selection shall be made in accordance with the Applicable Depositary
      Procedures for the Preferred Securities by such Depositary. The Property Trustee
      shall promptly notify the Securities Registrar in writing of the Preferred
      Securities (or portion thereof) selected for redemption and, in the case of
      any
      Preferred Securities selected for partial redemption, the Liquidation Amount
      thereof to be redeemed. For all purposes of this Trust Agreement, unless the
      context otherwise requires, all provisions relating to the redemption of
      Preferred Securities shall relate, in the case of any Preferred Securities
      redeemed or to be redeemed only in part, to the portion of the aggregate
      Liquidation Amount of Preferred Securities that has been or is to be
      redeemed.

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    (f)  The
      Trust
      in issuing the Trust Securities may use “CUSIP” numbers (if then generally in
      use), and, if so, the Property Trustee shall indicate the “CUSIP” numbers of the
      Trust Securities in notices of redemption and related materials as a convenience
      to Holders; provided, that any such notice may state that no representation
      is
      made as to the correctness of such numbers either as printed on the Trust
      Securities or as contained in any notice of redemption and related
      materials.

     

    SECTION
      4.3.  Subordination
      of Common Securities.

     

    (a)  Payment
      of Distributions (including any Additional Interest Amounts) on, the Redemption
      Price of and the Liquidation Distribution in respect of, the Trust Securities,
      as applicable, shall be made, pro rata among the Common Securities and the
      Preferred Securities based on the Liquidation Amount of the respective Trust
      Securities; provided, that if on any Distribution Date, Redemption Date or
      Liquidation Date an Event of Default shall have occurred and be continuing,
      no
      payment of any Distribution (including any Additional Interest Amounts) on,
      Redemption Price of or Liquidation Distribution in respect of, any Common
      Security, and no other payment on account of the redemption, liquidation or
      other acquisition of Common Securities, shall be made unless payment in full
      in
      cash of all accumulated and unpaid Distributions (including any Additional
      Interest Amounts) on all Outstanding Preferred Securities for all Distribution
      periods terminating on or prior thereto, or in the case of payment of the
      Redemption Price the full amount of such Redemption Price on all Outstanding
      Preferred Securities then called for redemption, or in the case of payment
      of
      the Liquidation Distribution the full amount of such Liquidation Distribution
      on
      all Outstanding Preferred Securities, shall have been made or provided for,
      and
      all funds immediately available to the Property Trustee shall first be applied
      to the payment in full in cash of all Distributions (including any Additional
      Interest Amounts) on, or the Redemption Price of or the Liquidation Distribution
      in respect of, the Preferred Securities then due and payable.

     

    (b)  In
      the
      case of the occurrence of any Event of Default, the Holders of the Common
      Securities shall have no right to act with respect to any such Event of Default
      under this Trust Agreement until all such Events of Default with respect to
      the
      Preferred Securities have been cured, waived or otherwise eliminated. Until
      all
      such Events of Default under this Trust Agreement with respect to the Preferred
      Securities have been so cured, waived or otherwise eliminated, the Property
      Trustee shall act solely on behalf of the Holders of the Preferred Securities
      and not on behalf of the Holders of the Common Securities, and only the Holders
      of all the Preferred Securities will have the right to direct the Property
      Trustee to act on their behalf.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    SECTION
      4.4.  Payment
      Procedures.

     

    Payments
      of Distributions (including any Additional Interest Amounts), the Redemption
      Price, Liquidation Amount or any other amounts in respect of the Preferred
      Securities shall be made by wire transfer at such place and to such account
      at a
      banking institution in the United States as may be designated in writing at
      least ten (10) Business Days prior to the date for payment by the Person
      entitled thereto unless proper written transfer instructions have not been
      received by the relevant record date, in which case such payments shall be
      made
      by check mailed to the address of such Person as such address shall appear
      in
      the Securities Register. If any Preferred Securities are held by a Depositary,
      such Distributions thereon shall be made to the Depositary in immediately
      available funds. Payments in respect of the Common Securities shall be made
      in
      such manner as shall be mutually agreed between the Property Trustee and the
      Holder of all the Common Securities.

     

    SECTION
      4.5.  Withholding
      Tax.

     

    The
      Trust
      and the Administrative Trustees shall comply with all withholding and backup
      withholding tax requirements under United States federal, state and local law.
      The Administrative Trustees on behalf of the Trust shall request, and the
      Holders shall provide to the Trust, such forms or certificates as are necessary
      to establish an exemption from withholding and backup withholding tax with
      respect to each Holder and any representations and forms as shall reasonably
      be
      requested by the Administrative Trustees on behalf of the Trust to assist it
      in
      determining the extent of, and in fulfilling, its withholding and backup
      withholding tax obligations. The Administrative Trustees shall file required
      forms with applicable jurisdictions and, unless an exemption from withholding
      and backup withholding tax is properly established by a Holder, shall remit
      amounts withheld with respect to the Holder to applicable jurisdictions. To
      the
      extent that the Trust is required to withhold and pay over any amounts to any
      jurisdiction with respect to Distributions or allocations to any Holder, the
      amount withheld shall be deemed to be a Distribution in the amount of the
      withholding to the Holder. In the event of any claimed overwithholding, Holders
      shall be limited to an action against the applicable jurisdiction. If the amount
      required to be withheld was not withheld from actual Distributions made, the
      Administrative Trustees on behalf of the Trust may reduce subsequent
      Distributions by the amount of such required withholding.

     

    SECTION
      4.6.  Tax
      Returns and Other Reports.

     

    (a)  The
      Administrative Trustees shall prepare (or cause to be prepared) at the principal
      office of the Trust in the United States, as defined for purposes of Treasury
      regulations section 301.7701-7, at the Depositor’s expense, and file, all United
      States federal, state and local tax and information returns and reports required
      to be filed by or in respect of the Trust. The Administrative Trustees shall
      prepare at the principal office of the Trust in the United States, as defined
      for purposes of Treasury regulations section 301.7701-7, and furnish (or cause
      to be prepared and furnished), by January 31 in each taxable year of the Trust
      to each Holder all Internal Revenue Service forms and returns required to be
      provided by the Trust. The Administrative Trustees shall provide the Depositor
      and the Property Trustee with a copy of all such returns and reports promptly
      after such filing or furnishing.

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    SECTION
      4.7.  Payment
      of Taxes, Duties, Etc. of the Trust.

     

    Upon
      receipt under the Notes of Additional Tax Sums and upon the written direction
      of
      the Administrative Trustees, the Property Trustee shall promptly pay, solely
      out
      of monies on deposit pursuant to this Trust Agreement, any Additional Taxes
      imposed on the Trust by the United States or any other taxing
      authority.

     

    SECTION
      4.8.  Payments
      under Indenture or Pursuant to Direct Actions.

     

    Any
      amount payable hereunder to any Holder of Preferred Securities shall be reduced
      by the amount of any corresponding payment such Holder (or any Owner with
      respect thereto) has directly received pursuant to Section
      5.8
      of the
      Indenture or Section
      6.10(b)
      of this
      Trust Agreement.

     

    SECTION
      4.9.  Exchanges.

     

    (a)  If
      at any
      time the Depositor or any of its Affiliates (in either case, a “Depositor
      Affiliate”) is the Owner or Holder of any Preferred Securities, such Depositor
      Affiliate shall have the right to deliver to the Property Trustee all or such
      portion of its Preferred Securities as it elects and, subject to compliance
      with
      Sections 2.2 and 3.5 of the Indenture, receive, in exchange therefor, a Like
      Amount of Notes. Such election (i) shall be exercisable effective on any
      Distribution Date by such Depositor Affiliate delivering to the Property Trustee
      a written notice of such election specifying the Liquidation Amount of Preferred
      Securities with respect to which such election is being made and the
      Distribution Date on which such exchange shall occur, which Distribution Date
      shall be not less than ten (10) Business Days after the date of receipt by
      the
      Property Trustee of such election notice and (ii) shall be conditioned upon
      such
      Depositor Affiliate having delivered or caused to be delivered to the Property
      Trustee or its designee the Preferred Securities that are the subject of such
      election by 10:00 A.M. New York time, on the Distribution Date on which such
      exchange is to occur. After the exchange, such Preferred Securities will be
      canceled and will no longer be deemed to be Outstanding and all rights of the
      Depositor Affiliate with respect to such Preferred Securities will
      cease.

     

    (b)  In
      the
      case of an exchange described in Section
      4.9(a),
      the
      Property Trustee on behalf of the Trust will, on the date of such exchange,
      exchange Notes having a principal amount equal to a proportional amount of
      the
      aggregate Liquidation Amount of the Outstanding Common Securities, based on
      the
      ratio of the aggregate Liquidation Amount of the Preferred Securities exchanged
      pursuant to Section
      4.9(a)
      divided
      by the aggregate Liquidation Amount of the Preferred Securities Outstanding
      immediately prior to such exchange, for such proportional amount of Common
      Securities held by the Depositor (which contemporaneously shall be canceled
      and
      no longer be deemed to be Outstanding); provided, that the Depositor delivers
      or
      causes to be delivered to the Property Trustee or its designee the required
      amount of Common Securities to be exchanged by 10:00 A.M. New York time, on
      the
      Distribution Date on which such exchange is to occur.

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    SECTION
      4.10.  Calculation
      Agent.

     

    (a)  The
      Property Trustee shall initially, and, subject to the immediately following
      sentence, for so long as it holds any of the Notes, be the Calculation Agent
      for
      purposes of determining LIBOR for each Distribution Date. The Calculation Agent
      may be removed by the Administrative Trustees at any time. If the Calculation
      Agent is unable or unwilling to act as such or is removed by the Administrative
      Trustees, the Administrative Trustees will promptly appoint as a replacement
      Calculation Agent the London office of a leading bank which is engaged in
      transactions in three-month U.S. dollar deposits in Europe and which does not
      control or is not controlled by or under common control with the Administrative
      Trustees or their Affiliates. The Calculation Agent may not resign its duties
      without a successor having been duly appointed.

     

    (b)  The
      Calculation Agent shall be required to agree that, as soon as possible after
      11:00 a.m. (London time) on each LIBOR Determination Date, but in no event
      later
      than 11:00 a.m. (London time) on the Business Day immediately following each
      LIBOR Determination Date, the Calculation Agent will calculate the interest
      rate
      and dollar amount (rounded to the nearest cent, with half a cent being rounded
      upwards) for the related Distribution Date, and will communicate such rate
      and
      amount to the Depositor, the Property Trustee, each Paying Agent and the
      Depositary. The Calculation Agent will also specify to the Administrative
      Trustees the quotations upon which the foregoing rates and amounts are based
      and, in any event, the Calculation Agent shall notify the Administrative
      Trustees before 5:00 p.m. (London time) on each LIBOR Determination Date that
      either: (i) it has determined or is in the process of determining the foregoing
      rates and amounts or (ii) it has not determined and is not in the process of
      determining the foregoing rates and amounts, together with its reasons therefor.
      The Calculation Agent’s determination of the foregoing rates and amounts for any
      Distribution Date will (in the absence of manifest error) be final and binding
      upon all parties. For the sole purpose of calculating the interest rate for
      the
      Trust Securities, “Business Day” shall be defined as any day on which dealings
      in deposits in Dollars are transacted in the London interbank
      market.

     

    SECTION
      4.11.  Certain
      Accounting Matters.

     

    (a)  At
      all
      times during the existence of the Trust, the Administrative Trustees shall
      keep,
      or cause to be kept at the principal office of the Trust in the United States,
      as defined for purposes of Treasury Regulations section 301.7701-7, full books
      of account, records and supporting documents, which shall reflect in reasonable
      detail each transaction of the Trust. The books of account shall be maintained
      on the accrual method of accounting, in accordance with generally accepted
      accounting principles, consistently applied.

     

    (b)  The
      Administrative Trustees shall either (i) if the Depositor is then subject to
      such reporting requirements, cause each Form 10-K and Form 10-Q prepared by
      the
      Depositor and filed with the Commission in accordance with the Exchange Act
      to
      be delivered to each Holder, with a copy to the Property Trustee, within thirty
      (30) days after the filing thereof or (ii) cause to be prepared at the principal
      office of the Trust in the United States, as defined for purposes of Treasury
      Regulations section 301.7701-7, and delivered to each of the Holders, with
      a
      copy to the Property Trustee, within ninety (90) days after the end of each
      Fiscal Year, annual financial statements of the Trust, including a balance
      sheet
      of the Trust as of the end of such Fiscal Year, and the related statements
      of
      income or loss.

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    (c)  The
      Trust
      shall maintain one or more bank accounts in the United States, as defined for
      purposes of Treasury Regulations section 301.7701-7, in the name and for the
      sole benefit of the Trust; provided,
      however,
      that
      all payments of funds in respect of the Notes held by the Property Trustee
      shall
      be made directly to the Payment Account and no other funds of the Trust shall
      be
      deposited in the Payment Account. The sole signatories for such accounts
      (including the Payment Account) shall be designated by the Property
      Trustee.

     

    ARTICLE
      V.

     

    Securities

     

    SECTION
      5.1.  Initial
      Ownership.

     

    Upon
      the
      creation of the Trust and the contribution by the Depositor referred to in
      Section
      2.3
      and
      until the issuance of the Trust Securities, and at any time during which no
      Trust Securities are Outstanding, the Depositor shall be the sole beneficial
      owner of the Trust.

     

    SECTION
      5.2.  Authorized
      Trust Securities.

     

    The
      Trust
      shall be authorized to issue one series of Preferred Securities having an
      aggregate Liquidation Amount of thirty-seven million five hundred thousand
      dollars ($37,500,000) and one series of Common Securities having an aggregate
      Liquidation Amount of one hundred thousand dollars ($100,000).

     

    SECTION
      5.3.  Issuance
      of the Common Securities; Subscription and Purchase of Notes.

     

    On
      the
      Closing Date, an Administrative Trustee, on behalf of the Trust, shall execute
      and deliver to the Depositor Common Securities Certificates, registered in
      the
      name of the Depositor, evidencing an aggregate of 100 Common Securities having
      an aggregate Liquidation Amount of one hundred thousand dollars ($100,000),
      against receipt by the Trust of the aggregate purchase price of such Common
      Securities of one hundred thousand dollars ($100,000). Contemporaneously
      therewith and with the sale by the Trust to the Holders of an aggregate of
      thirty-seven thousand five hundred (37,500) Preferred Securities having an
      aggregate Liquidation Amount of thirty-seven million five hundred thousand
      dollars ($37,500,000), an Administrative Trustee, on behalf of the Trust, shall
      subscribe for and purchase from the Depositor Notes, to be registered in the
      name of the Property Trustee on behalf of the Trust and having an aggregate
      principal amount equal to thirty-seven million six hundred thousand dollars
      ($37,600,000), and, in satisfaction of the purchase price for such Notes, the
      Property Trustee, on behalf of the Trust, shall deliver to the Depositor the
      sum
      of thirty-seven million six hundred thousand dollars ($37,600,000) (being the
      aggregate amount paid by the Holders for the Preferred Securities and the amount
      paid by the Depositor for the Common Securities).

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    SECTION
      5.4.  The
      Securities Certificates.

     

    (a)  The
      Preferred Securities Certificates shall be issued in minimum denominations
      of
      one hundred thousand dollars ($100,000) Liquidation Amount and integral
      multiples of one thousand dollars ($1,000) in excess thereof, and the Common
      Securities Certificates shall be issued in minimum denominations of ten thousand
      dollars ($10,000) Liquidation Amount and integral multiples of one thousand
      dollars ($1,000) in excess thereof. The Securities Certificates shall be
      executed on behalf of the Trust by manual or facsimile signature of at least
      one
      Administrative Trustee. Securities Certificates bearing the signatures of
      individuals who were, at the time when such signatures shall have been affixed,
      authorized to sign such Securities Certificates on behalf of the Trust shall
      be
      validly issued and entitled to the benefits of this Trust Agreement,
      notwithstanding that such individuals or any of them shall have ceased to be
      so
      authorized prior to the delivery of such Securities Certificates or did not
      have
      such authority at the date of delivery of such Securities
      Certificates.

     

    (b)  On
      the
      Closing Date, upon the written order of an authorized officer of the Depositor,
      the Administrative Trustees shall cause Securities Certificates to be executed
      on behalf of the Trust and delivered, without further corporate action by the
      Depositor, in authorized denominations.

     

    (c)  Preferred
      Securities issued on the Closing Date to QIBs shall be issued as directed by
      the
      Purchaser on or prior to the Closing Date, either (i) in the form of one or
      more
      Global Preferred Securities Certificates or (ii) in the form of one or more
      Definitive Preferred Securities Certificates. Global Preferred Securities shall
      be, except as provided in Section 5.6,
      Book-Entry Preferred Securities issued in the form of one or more Global
      Preferred Securities registered in the name of the Depositary, or its nominee
      and deposited with the Depositary or the Property Trustee as custodian for
      the
      Depositary for credit by the Depositary to the respective accounts of the
      Depositary Participants thereof (or such other accounts as they may direct).
      The
      Preferred Securities issued to a Person other than a QIB shall be issued in
      the
      form of Definitive Preferred Securities Certificates.

     

    (d)  A
      Preferred Security shall not be valid until authenticated by the manual
      signature of a Responsible Officer of the Property Trustee. Such signature
      shall
      be conclusive evidence that the Preferred Security has been authenticated under
      this Trust Agreement. Upon written order of the Trust signed by one
      Administrative Trustee, the Property Trustee shall authenticate and deliver
      one
      or more Preferred Security Certificates evidencing the Preferred Securities
      for
      original issue. The Property Trustee may appoint an authenticating agent that
      is
      a U.S. Person acceptable to the Trust to authenticate the Preferred Securities.
      A Common Security need not be so authenticated and shall be valid upon execution
      by one or more Administrative Trustees. The form of this certificate of
      authentication can be found in Section 5.13.

     

    (e)  Upon
      issuance of the Trust Securities as provided in this Trust Agreement, the Trust
      Securities so issued shall be deemed to be validly issued, fully paid and
      nonassessable, and each Holder thereof shall be entitled to the benefits
      provided by this Trust Agreement.

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

    SECTION
      5.5.  Rights
      of
      Holders.

     

    The
      Trust
      Securities shall have no, and the issuance of the Trust Securities is not
      subject to, preemptive or similar rights and when issued and delivered to
      Holders against payment of the purchase price therefor will be fully paid and
      non-assessable by the Trust. Except as provided in Section
      5.11(b),
      the
      Holders of the Trust Securities, in their capacities as such, shall be entitled
      to the same limitation of personal liability extended to stockholders of private
      corporations for profit organized under the General Corporation Law of the
      State
      of Delaware.

     

    SECTION
      5.6.  Book-Entry
      Preferred Securities.

     

    (a)  A
      Global
      Preferred Security may be exchanged, in whole or in part, for Definitive
      Preferred Securities Certificates registered in the names of the Owners only
      if
      such exchange complies with Section
      5.7
      and (i)
      the Depositary advises the Administrative Trustees and the Property Trustee
      in
      writing that the Depositary is no longer willing or able properly to discharge
      its responsibilities with respect to the Global Preferred Security, and no
      qualified successor is appointed by the Administrative Trustees within ninety
      (90) days of receipt of such notice, (ii) the Depositary ceases to be a clearing
      agency registered under the Exchange Act and the Administrative Trustees fail
      to
      appoint a qualified successor within ninety (90) days of obtaining knowledge
      of
      such event, (iii) the Administrative Trustees at their option advise the
      Property Trustee in writing that the Trust elects to terminate the book-entry
      system through the Depositary or (iv) a Note Event of Default has occurred
      and
      is continuing. Upon the occurrence of any event specified in clause (i), (ii),
      (iii) or (iv) above, the Administrative Trustees shall notify the Depositary
      and
      instruct the Depositary to notify all Owners of Book-Entry Preferred Securities,
      the Delaware Trustee and the Property Trustee of the occurrence of such event
      and of the availability of the Definitive Preferred Securities Certificates
      to
      Owners of the Preferred Securities requesting the same. Upon the issuance of
      Definitive Preferred Securities Certificates, the Trustees shall recognize
      the
      Holders of the Definitive Preferred Securities Certificates as Holders.
      Notwithstanding the foregoing, if an Owner of a beneficial interest in a Global
      Preferred Security wishes at any time to transfer an interest in such Global
      Preferred Security to a Person other than a QIB, such transfer shall be
      effected, subject to the Applicable Depositary Procedures, in accordance with
      the provisions of this Section
      5.6
      and
Section
      5.7,
      and the
      transferee shall receive a Definitive Preferred Securities Certificate in
      connection with such transfer. A holder of a Definitive Preferred Securities
      Certificate that is a QIB may, upon request, and in accordance with the
      provisions of this Section
      5.6
      and
Section
      5.7,
      exchange such Definitive Preferred Securities Certificate for a beneficial
      interest in a Global Preferred Security.

     

    (b)  If
      any
      Global Preferred Security is to be exchanged for Definitive Preferred Securities
      Certificates or canceled in part, or if any Definitive Preferred Securities
      Certificate is to be exchanged in whole or in part for any Global Preferred
      Security, then either (i) such Global Preferred Security shall be so surrendered
      for exchange or cancellation as provided in this Article V
      or (ii)
      the aggregate Liquidation Amount represented by such Global Preferred Security
      shall be reduced, subject to Section
      5.4,
      or
      increased by an amount equal to the Liquidation Amount represented by that
      portion of the Global Preferred Security to be so exchanged or canceled, or
      equal to the Liquidation Amount represented by such Definitive Preferred
      Securities Certificates to be so exchanged for any Global Preferred Security,
      as
      the case may be, by means of an appropriate adjustment made on the records
      of
      the Securities Registrar, whereupon the Property Trustee, in accordance with
      the
      Applicable Depositary Procedures, shall instruct the Depositary or its
      authorized representative to make a corresponding adjustment to its records.
      Upon any such surrender to the Administrative Trustees or the Securities
      Registrar of any Global Preferred Security or Securities by the Depositary,
      accompanied by registration instructions, the Administrative Trustees, or any
      one of them, shall execute the Definitive Preferred Securities Certificates
      in
      accordance with the instructions of the Depositary, and the Property Trustee,
      upon receipt thereof, shall authenticate and deliver such Definitive Preferred
      Securities Certificates. None of the Securities Registrar or the Trustees 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
      instructions.

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

     

    (c)  Every
      Securities Certificate executed and delivered upon registration of transfer
      of,
      or in exchange for or in lieu of, a Global Preferred Security or any portion
      thereof shall be executed and delivered in the form of, and shall be, a Global
      Preferred Security, unless such Securities Certificate is registered in the
      name
      of a Person other than the Depositary for such Global Preferred Security or
      a
      nominee thereof.

     

    (d)  The
      Depositary or its nominee, as registered owner of a Global Preferred Security,
      shall be the Holder of such Global Preferred Security for all purposes under
      this Trust Agreement and the Global Preferred Security, and Owners with respect
      to a Global Preferred Security shall hold such interests pursuant to the
      Applicable Depositary Procedures. The Securities Registrar and the Trustees
      shall be entitled to deal with the Depositary for all purposes of this Trust
      Agreement relating to the Global Preferred Securities (including the payment
      of
      the Liquidation Amount of and Distributions on the Book-Entry Preferred
      Securities represented thereby and the giving of instructions or directions
      by
      Owners of Book-Entry Preferred Securities represented thereby and the giving
      of
      notices) as the sole Holder of the Book-Entry Preferred Securities represented
      thereby and shall have no obligations to the Owners thereof. None of the
      Trustees nor the Securities Registrar shall have any liability in respect of
      any
      transfers effected by the Depositary.

     

    (e)  The
      rights of the Owners of the Book-Entry Preferred Securities shall be exercised
      only through the Depositary and shall be limited to those established by law,
      the Applicable Depositary Procedures and agreements between such Owners and
      the
      Depositary and/or the Depositary Participants; provided, that, solely for the
      purpose of determining whether the Holders of the requisite amount of Preferred
      Securities have voted on any matter provided for in this Trust Agreement, to
      the
      extent that Preferred Securities are represented by a Global Preferred Security,
      the Trustees may conclusively rely on, and shall be fully protected in relying
      on, any written instrument (including a proxy) delivered to the Property Trustee
      by the Depositary setting forth the Owners’ votes or assigning the right to vote
      on any matter to any other Persons either in whole or in part. To the extent
      that Preferred Securities are represented by a Global Preferred Security, the
      Depositary will make book-entry transfers among the Depositary Participants
      and
      receive and transmit payments on the Preferred Securities that are represented
      by a Global Preferred Security to such Depositary Participants, and none of
      the
      Depositor or the Trustees shall have any responsibility or obligation with
      respect thereto.

     

    (f)  To
      the
      extent that a notice or other communication to the Holders is required under
      this Trust Agreement, for so long as Preferred Securities are represented by
      a
      Global Preferred Security, the Trustees shall give all such notices and
      communications to the Depositary, and shall have no obligations to the
      Owners.

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

    SECTION
      5.7.  Registration
      of Transfer and Exchange of Preferred Securities Certificates.

     

    (a)  The
      Property Trustee shall keep or cause to be kept, at the Corporate Trust Office,
      a register or registers (the “Securities Register”) in which the registrar and
      transfer agent with respect to the Trust Securities (the “Securities
      Registrar”), subject to such reasonable regulations as it may prescribe, shall
      provide for the registration of Preferred Securities Certificates and Common
      Securities Certificates and registration of transfers and exchanges of Preferred
      Securities Certificates as herein provided. The Property Trustee shall at all
      times also be the Securities Registrar. The provisions of Article
      VIII
      shall
      apply to the Property Trustee in its role as Securities Registrar.

     

    (b)  Subject
      to Section 5.7(d), upon surrender for registration of transfer of any Preferred
      Securities Certificate at the office or agency maintained pursuant to
Section
      5.7(f),
      the
      Administrative Trustees or any one of them shall execute by manual or facsimile
      signature and deliver to the Property Trustee, and upon receipt thereof the
      Property Trustee shall authenticate and deliver, in the name of the designated
      transferee or transferees, one or more new Preferred Securities Certificates
      in
      authorized denominations of a like aggregate Liquidation Amount as may be
      required by this Trust Agreement dated the date of execution by such
      Administrative Trustee or Trustees. At the option of a Holder, Preferred
      Securities Certificates may be exchanged for other Preferred Securities
      Certificates in authorized denominations and of a like aggregate Liquidation
      Amount upon surrender of the Preferred Securities Certificate to be exchanged
      at
      the office or agency maintained pursuant to Section 5.7(f).
      Whenever any Preferred Securities Certificates are so surrendered for exchange,
      the Administrative Trustees or any one of them shall execute by manual or
      facsimile signature and deliver to the Property Trustee, and upon receipt
      thereof the Property Trustee shall authenticate and deliver, the Preferred
      Securities Certificates that the Holder making the exchange is entitled to
      receive.

     

    (c)  The
      Securities Registrar shall not be required, (i) to issue, register the transfer
      of or exchange any Preferred Security during a period beginning at the opening
      of business fifteen (15) days before the day of selection for redemption of
      such
      Preferred Securities pursuant to Article
      IV
      and
      ending at the close of business on the day of mailing of the notice of
      redemption or (ii) to register the transfer of or exchange any Preferred
      Security so selected for redemption in whole or in part, except, in the case
      of
      any such Preferred Security to be redeemed in part, any portion thereof not
      to
      be redeemed.

     

    (d)  Every
      Preferred Securities Certificate presented or surrendered for registration
      of
      transfer or exchange shall be duly endorsed, or be accompanied by a written
      instrument of transfer in form satisfactory to the Securities Registrar duly
      executed by the Holder or such Holder’s attorney duly authorized in writing and
      (i) if such Preferred Securities Certificate is being transferred otherwise
      than
      to a QIB, accompanied by a certificate of the transferee substantially in the
      form set forth as Exhibit
      E
      hereto
      or (ii) if such Preferred Securities Certificate is being transferred to a
      QIB,
      accompanied by a certificate of the transferor substantially in the form set
      forth as Exhibit
      F
      hereto.

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

     

    (e)  No
      service charge shall be made for any registration of transfer or exchange of
      Preferred Securities Certificates, but the Property Trustee on behalf of the
      Trust may require payment of a sum sufficient to cover any tax or governmental
      charge that may be imposed in connection with any transfer or exchange of
      Preferred Securities Certificates.

     

    (f)  The
      Administrative Trustees shall designate an office or offices or agency or
      agencies where Preferred Securities Certificates may be surrendered for
      registration of transfer or exchange, and initially designate the Corporate
      Trust Office as its office and agency for such purposes. The Administrative
      Trustees shall give prompt written notice to the Depositor, the Property Trustee
      and to the Holders of any change in the location of any such office or
      agency.

     

    SECTION
      5.8.  Mutilated,
      Destroyed, Lost or Stolen Securities Certificates.

     

    (a)  If
      any
      mutilated Securities Certificate shall be surrendered to the Securities
      Registrar together with such security or indemnity as may be required by the
      Securities Registrar and the Administrative Trustees to save each of them
      harmless, the Administrative Trustees, or any one of them, on behalf of the
      Trust, shall execute and make available for delivery and, with respect to
      Preferred Securities, the Property Trustee shall authenticate, in exchange
      therefor a new Securities Certificate of like class, tenor and
      denomination.

     

    (b)  If
      the
      Securities Registrar shall receive evidence to its satisfaction of the
      destruction, loss or theft of any Securities Certificate and there shall be
      delivered to the Securities Registrar and the Administrative Trustees such
      security or indemnity as may be required by them to save each of them harmless,
      then in the absence of notice that such Securities Certificate shall have been
      acquired by a protected purchaser, the Administrative Trustees, or any one
      of
      them, on behalf of the Trust, shall execute and make available for delivery,
      and, with respect to Preferred Securities, the Property Trustee shall
      authenticate, in exchange for or in lieu of any such destroyed, lost or stolen
      Securities Certificate, a new Securities Certificate of like class, tenor and
      denomination.

     

    (c)  In
      connection with the issuance of any new Securities Certificate under this
Section
      5.8,
      the
      Administrative Trustees or the Securities Registrar may require the payment
      of a
      sum sufficient to cover any tax or other governmental charge that may be imposed
      in connection therewith.

     

    (d)  Any
      duplicate Securities Certificate issued pursuant to this Section
      5.8
      shall
      constitute conclusive evidence of an undivided beneficial interest in the assets
      of the Trust corresponding to that evidenced by the mutilated, lost, stolen
      or
      destroyed Securities Certificate, as if originally issued, whether or not the
      lost, stolen or destroyed Securities Certificate shall be found at any
      time.

     

    (e)  If
      any
      such mutilated, destroyed, lost or stolen Securities Certificate has become
      or
      is about to become due and payable, the Depositor in its discretion may, instead
      of issuing a new Trust Security, pay such Trust Security.

     

    (f)  The
      provisions of this Section
      5.8
      are
      exclusive and shall preclude (to the extent lawful) all other rights and
      remedies with respect to the replacement of mutilated, destroyed, lost or stolen
      Securities Certificates.

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

     

    (g)  With
      respect to Preferred Securities issued to QIBs in the form of one or more
      Definitive Preferred Securities Certificates as provided in Section 5.4(c),
      and
      any subsequent transfers thereof, the Depositor and the Trust shall use all
      commercially reasonable efforts to make such Preferred Securities eligible
      for
      clearance and settlement as Book-Entry Preferred Securities through the
      facilities of the Depositary and listed for trading through the PORTAL Market,
      and will execute, deliver and comply with all representations made to, and
      agreements with, the Depositary and the PORTAL Market in connection
      therewith.

     

    SECTION
      5.9.  Persons
      Deemed Holders.

     

    The
      Trustees and the Securities Registrar shall each treat the Person in whose
      name
      any Securities Certificate shall be registered in the Securities Register as
      the
      owner of the Trust Securities evidenced by such Securities Certificate for
      the
      purpose of receiving Distributions and for all other purposes whatsoever, and
      none of the Trustees and the Securities Registrar shall be bound by any notice
      to the contrary.

     

    SECTION
      5.10.  Cancellation.

     

    All
      Preferred Securities Certificates surrendered for registration of transfer
      or
      exchange or for payment shall, if surrendered to any Person other than the
      Property Trustee, be delivered to the Property Trustee, and any such Preferred
      Securities Certificates and Preferred Securities Certificates surrendered
      directly to the Property Trustee for any such purpose shall be promptly canceled
      by it. The Administrative Trustees may at any time deliver to the Property
      Trustee for cancellation any Preferred Securities Certificates previously
      delivered hereunder that the Administrative Trustees may have acquired in any
      manner whatsoever, and all Preferred Securities Certificates so delivered shall
      be promptly canceled by the Property Trustee. No Preferred Securities
      Certificates shall be executed and delivered in lieu of or in exchange for
      any
      Preferred Securities Certificates canceled as provided in this Section
      5.10,
      except
      as expressly permitted by this Trust Agreement. All canceled Preferred
      Securities Certificates shall be disposed of by the Property Trustee in
      accordance with its customary practices and the Property Trustee shall deliver
      to the Administrative Trustees a certificate of such disposition.

     

    SECTION
      5.11.  Ownership
      of Common Securities by Depositor.

     

    (a)  On
      the
      Closing Date, the Depositor shall acquire, and thereafter shall retain,
      beneficial and record ownership of the Common Securities. Neither the Depositor
      nor any successor Holder of the Common Securities may transfer less than all
      the
      Common Securities, and the Depositor or any such successor Holder may transfer
      the Common Securities only (i) in connection with a consolidation or merger
      of
      the Depositor into another Person, or any conveyance, transfer or lease by
      the
      Depositor of its properties and assets substantially as an entirety to any
      Person (in which event such Common Securities will be transferred to such
      surviving entity, transferee or lessee, as the case may be), pursuant to
Section
      8.1
      of the
      Indenture or (ii) to the Depositor or an Affiliate of the Depositor, in each
      such case in compliance with applicable law (including the Securities Act,
      and
      applicable state securities and blue sky laws). To the fullest extent permitted
      by law, any attempted transfer of the Common Securities other than as set forth
      in the immediately preceding sentence shall be void. The Administrative Trustees
      shall cause each Common Securities Certificate issued to the Depositor to
      contain a legend stating substantially “THIS CERTIFICATE IS NOT TRANSFERABLE
      EXCEPT IN COMPLIANCE WITH APPLICABLE LAW AND SECTION 5.11 OF THE TRUST
      AGREEMENT.”

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

     

    (b)  Any
      Holder of the Common Securities shall be liable for the debts and obligations
      of
      the Trust in the manner and to the extent set forth herein with respect to
      the
      Depositor and agrees that it shall be subject to all liabilities to which the
      Depositor may be subject and, prior to becoming such a Holder, shall deliver
      to
      the Administrative Trustees an instrument of assumption satisfactory to such
      Trustees.

     

    SECTION
      5.12.  Restricted
      Legends.

     

    (a)  Each
      Preferred Security Certificate shall bear a legend in substantially the
      following form:

     

    “[IF
      THIS SECURITY IS A GLOBAL SECURITY INSERT:
      THIS
      PREFERRED SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE TRUST
      AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
      DEPOSITORY TRUST COMPANY (“DTC”) OR A NOMINEE OF DTC. THIS PREFERRED SECURITY IS
      EXCHANGEABLE FOR PREFERRED SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER
      THAN DTC OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
      TRUST
      AGREEMENT, AND NO TRANSFER OF THIS PREFERRED SECURITY (OTHER THAN A TRANSFER
      OF
      THIS PREFERRED SECURITY AS A WHOLE BY DTC TO A NOMINEE OF DTC OR BY A NOMINEE
      OF
      DTC TO DTC OR ANOTHER NOMINEE OF DTC) MAY BE REGISTERED EXCEPT IN LIMITED
      CIRCUMSTANCES.

     

    UNLESS
      THIS PREFERRED SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
      TO
      NORTHSTAR REALTY FINANCE TRUST VII
      OR ITS
      AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY PREFERRED
      SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
      NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON
      IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
      AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
      FOR
      VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
      OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]

     

    THE
      PREFERRED SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED
      IN A
      TRANSACTION EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
      AMENDED (THE “SECURITIES ACT”), AND SUCH PREFERRED SECURITIES OR ANY INTEREST
      THEREIN, MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF
      SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF ANY
      PREFERRED SECURITIES IS HEREBY NOTIFIED THAT THE SELLER OF THE PREFERRED
      SECURITIES MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5
      OF
      THE SECURITIES ACT PROVIDED BY RULE 144A UNDER THE SECURITIES ACT.

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

     

    THE
      HOLDER OF THE PREFERRED SECURITIES REPRESENTED BY THIS CERTIFICATE AGREES FOR
      THE BENEFIT OF THE TRUST AND THE DEPOSITOR THAT (A) SUCH PREFERRED SECURITIES
      MAY BE OFFERED, RESOLD OR OTHERWISE TRANSFERRED ONLY (I) TO THE TRUST, (II)
      TO A
      PERSON WHOM THE SELLER REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER”
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING
      THE
      REQUIREMENTS OF RULE 144A, OR (III) TO AN INSTITUTIONAL “ACCREDITED INVESTOR”
WITHIN THE MEANING OF SUBPARAGRAPH (a) (1), (2), (3) OR (7) OF RULE 501 UNDER
      THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR
      THE ACCOUNT OF AN “ACCREDITED INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (a)
      (1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT, 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, IN EACH CASE IN ACCORDANCE
      WITH
      ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
      APPLICABLE JURISDICTION AND, IN THE CASE OF (III), SUBJECT TO THE RIGHT OF
      THE
      TRUST AND THE DEPOSITOR TO REQUIRE AN OPINION OF COUNSEL ADDRESSING COMPLIANCE
      WITH THE U.S. SECURITIES LAWS, AND OTHER INFORMATION SATISFACTORY TO EACH OF
      THEM AND (B) THE HOLDER WILL NOTIFY ANY PURCHASER OF ANY PREFERRED SECURITIES
      FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.

     

    THE
      PREFERRED SECURITIES WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS HAVING
      AN AGGREGATE LIQUIDATION AMOUNT OF NOT LESS THAN $100,000. TO THE FULLEST EXTENT
      PERMITTED BY LAW, ANY ATTEMPTED TRANSFER OF PREFERRED SECURITIES, OR ANY
      INTEREST THEREIN, IN A BLOCK HAVING AN AGGREGATE LIQUIDATION AMOUNT OF LESS
      THAN
      $100,000 AND MULTIPLES OF $1,000 IN EXCESS THEREOF SHALL BE DEEMED TO BE VOID
      AND OF NO LEGAL EFFECT WHATSOEVER. TO THE FULLEST EXTENT PERMITTED BY LAW,
      ANY
      SUCH PURPORTED TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF SUCH PREFERRED
      SECURITIES FOR ANY PURPOSE, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF
      LIQUIDATION AMOUNT OF OR DISTRIBUTIONS ON SUCH PREFERRED SECURITIES, OR ANY
      INTEREST THEREIN, AND SUCH PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO
      INTEREST WHATSOEVER IN SUCH PREFERRED SECURITIES.

     

    THE
      HOLDER OF THIS SECURITY, OR ANY INTEREST THEREIN, BY ITS ACCEPTANCE HEREOF
      OR
      THEREOF ALSO AGREES, REPRESENTS AND WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT
      PLAN, INDIVIDUAL RETIREMENT ACCOUNT OR OTHER PLAN OR ARRANGEMENT SUBJECT TO
      TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
      (“ERISA”), OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
“CODE”) (EACH A “PLAN”), OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE “PLAN
      ASSETS” BY REASON OF ANY PLAN’S INVESTMENT IN THE ENTITY, AND NO PERSON
      INVESTING “PLAN ASSETS” OF ANY PLAN MAY ACQUIRE OR HOLD THIS PREFERRED SECURITY
      OR ANY INTEREST THEREIN, UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE
      EXEMPTIVE RELIEF AVAILABLE UNDER SECTION 408(b)(17) OF ERISA, U.S. DEPARTMENT
      OF
      LABOR PROHIBITED TRANSACTION CLASS EXEMPTION 96-23, 95-60, 91-38, 90-1 OR 84-14
      OR ANOTHER APPLICABLE EXEMPTION OR ITS PURCHASE AND HOLDING OF THIS SECURITY,
      OR
      ANY INTEREST THEREIN, ARE NOT PROHIBITED BY SECTION 406 OF ERISA OR SECTION
      4975
      OF THE CODE WITH RESPECT TO SUCH PURCHASE AND HOLDING. ANY PURCHASER OR HOLDER
      OF THE PREFERRED SECURITIES OR ANY INTEREST THEREIN WILL BE DEEMED TO HAVE
      REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF THAT EITHER (i) IT IS NOT AN
      EMPLOYEE BENEFIT PLAN OR OTHER PLAN TO WHICH TITLE I OF ERISA OR SECTION 4975
      OF
      THE CODE IS APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING ON BEHALF OF ANY SUCH
      EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY USING THE “PLAN
      ASSETS” OF ANY SUCH EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE, OR
      (ii) SUCH PURCHASE OR HOLDING WILL NOT RESULT IN A PROHIBITED TRANSACTION UNDER
      SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE FOR WHICH FULL EXEMPTIVE RELIEF
      IS NOT AVAILABLE UNDER AN APPLICABLE STATUTORY OR ADMINISTRATIVE
      EXEMPTION.

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

     

    (b)  The
      above
      legend shall not be removed from any of the Preferred Securities Certificates
      unless there is delivered to the Property Trustee and the Depositor satisfactory
      evidence, which may include an Opinion of Counsel, as may be reasonably required
      to ensure that any future transfers thereof may be made without restriction
      under or violation of the provisions of the Securities Act and other applicable
      law. Upon provision of such satisfactory evidence, one or more of the
      Administrative Trustees on behalf of the Trust shall execute and deliver to
      the
      Property Trustee, and the Property Trustee shall authenticate and deliver,
      at
      the written direction of the Administrative Trustees and the Depositor,
      Preferred Securities Certificates that do not bear the legend.

     

    SECTION
      5.13.  Form
      of
      Certificate of Authentication.

     

    The
      Property Trustee’s certificate of authentication shall be in substantially the
      following form:

     

    This
      represents Preferred Securities referred to in the within-mentioned Trust
      Agreement.

     

    
      	
              Dated:

            	
              WILMINGTON
                TRUST COMPANY,
                not in its individual capacity, but solely as Property
                Trustee

               

               

              By: ________________________________

              Authorized
                officer

               

            

    

     

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      VI.

     

    Meetings;
      Voting; Acts of Holders

     

    SECTION
      6.1.  Notice
      of
      Meetings.

     

    Notice
      of
      all meetings of the Holders of the Preferred Securities, stating the time,
      place
      and purpose of the meeting, shall be given by the Property Trustee pursuant
      to
Section
      11.8
      to each
      Holder of Preferred Securities, at such Holder’s registered address, at least
      fifteen (15) days and not more than ninety (90) days before the meeting. At
      any
      such meeting, any business properly before the meeting may be so considered
      whether or not stated in the notice of the meeting. Any adjourned meeting may
      be
      held as adjourned without further notice.

     

    SECTION
      6.2.  Meetings
      of Holders of the Preferred Securities.

     

    (a)  No
      annual
      meeting of Holders is required to be held. The Property Trustee, however, shall
      call a meeting of the Holders of the Preferred Securities to vote on any matter
      upon the written request of the Holders of at least twenty-five percent (25%)
      in
      aggregate Liquidation Amount of the Outstanding Preferred Securities and the
      Administrative Trustees or the Property Trustee may, at any time in their
      discretion, call a meeting of the Holders of the Preferred Securities to vote
      on
      any matters as to which such Holders are entitled to vote.

     

    (b)  The
      Holders of at least a Majority in Liquidation Amount of the Preferred
      Securities, present in person or by proxy, shall constitute a quorum at any
      meeting of the Holders of the Preferred Securities.

     

    (c)  If
      a
      quorum is present at a meeting, an affirmative vote by the Holders present,
      in
      person or by proxy, holding Preferred Securities representing at least a
      Majority in Liquidation Amount of the Preferred Securities held by the Holders
      present, either in person or by proxy, at such meeting shall constitute the
      action of the Holders of the Preferred Securities, unless this Trust Agreement
      requires a lesser or greater number of affirmative votes.

     

    SECTION
      6.3.  Voting
      Rights.

     

    Holders
      shall be entitled to one vote for each $10,000 of Liquidation Amount represented
      by their Outstanding Trust Securities in respect of any matter as to which
      such
      Holders are entitled to vote.

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

     

    SECTION
      6.4.  Proxies,
      Etc.

     

    At
      any
      meeting of Holders, any Holder entitled to vote thereat may vote by proxy,
      provided, that no proxy shall be voted at any meeting unless it shall have
      been
      placed on file with the Administrative Trustees, or with such other officer
      or
      agent of the Trust as the Administrative Trustees may direct, for verification
      prior to the time at which such vote shall be taken. Pursuant to a resolution
      of
      the Property Trustee, proxies may be solicited in the name of the Property
      Trustee or one or more officers of the Property Trustee. Only Holders of record
      shall be entitled to vote. When Trust Securities are held jointly by several
      Persons, any one of them may vote at any meeting in person or by proxy in
      respect of such Trust Securities, but if more than one of them shall be present
      at such meeting in person or by proxy, and such joint owners or their proxies
      so
      present disagree as to any vote to be cast, such vote shall not be received
      in
      respect of such Trust Securities. A proxy purporting to be executed by or on
      behalf of a Holder shall be deemed valid unless challenged at or prior to its
      exercise, and the burden of proving invalidity shall rest on the challenger.
      No
      proxy shall be valid more than three years after its date of
      execution.

     

    SECTION
      6.5.  Holder
      Action by Written Consent.

     

    Any
      action that may be taken by Holders at a meeting may be taken without a meeting
      and without prior notice if Holders holding at least a Majority in Liquidation
      Amount of all Preferred Securities entitled to vote in respect of such action
      (or such lesser or greater proportion thereof as shall be required by any other
      provision of this Trust Agreement) shall consent to the action in writing;
      provided, that notice of such action is promptly provided to the Holders of
      Preferred Securities that did not consent to such action. Any action that may
      be
      taken by the Holders of all the Common Securities may be taken without a meeting
      and without prior notice if such Holders shall consent to the action in
      writing.

     

    SECTION
      6.6.  Record
      Date for Voting and Other Purposes.

     

    Except
      as
      provided in Section
      6.10(a),
      for the
      purposes of determining the Holders who are entitled to notice of and to vote
      at
      any meeting or to act by written consent, or to participate in any distribution
      on the Trust Securities in respect of which a record date is not otherwise
      provided for in this Trust Agreement, or for the purpose of any other action,
      the Administrative Trustees may from time to time fix a date, not more than
      ninety (90) days prior to the date of any meeting of Holders or the payment
      of a
      Distribution or other action, as the case may be, as a record date for the
      determination of the identity of the Holders of record for such
      purposes.

     

    SECTION
      6.7.  Acts
      of
      Holders.

     

    (a)  Any
      request, demand, authorization, direction, notice, consent, waiver or other
      action provided or permitted by this Trust Agreement to be given, made or taken
      by Holders may be embodied in and evidenced by one or more instruments of
      substantially similar tenor signed by such Holders in person or by an agent
      thereof duly appointed in writing; and, except as otherwise expressly provided
      herein, such action shall become effective when such instrument or instruments
      are delivered to an Administrative Trustee. Such instrument or instruments
      (and
      the action embodied therein and evidenced thereby) are herein sometimes referred
      to as the “Act” of the Holders 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 of this Trust Agreement and conclusive in favor
      of
      the Trustees, if made in the manner provided in this Section
      6.7.

     

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

     

    (b)  The
      fact
      and date of the execution by any Person of any such instrument or writing may
      be
      proved by the affidavit of a witness of such execution or by a certificate
      of a
      notary public or other officer authorized by law to take acknowledgments of
      deeds, certifying that the individual signing such instrument or writing
      acknowledged to him the execution thereof. Where such execution is by a signer
      acting in a capacity other than such signer’s individual capacity, such
      certificate or affidavit shall also constitute sufficient proof of such signer’s
      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 manner that any Trustee receiving the same deems sufficient.

     

    (c)  The
      ownership of Trust Securities shall be proved by the Securities
      Register.

     

    (d)  Any
      request, demand, authorization, direction, notice, consent, waiver or other
      Act
      of the Holder of any Trust Security shall bind every future Holder of the same
      Trust Security and the Holder of every Trust Security issued upon the
      registration of transfer thereof or in exchange therefor or in lieu thereof
      in
      respect of anything done, omitted or suffered to be done by the Trustees, the
      Administrative Trustees or the Trust in reliance thereon, whether or not
      notation of such action is made upon such Trust Security.

     

    (e)  Without
      limiting the foregoing, a Holder entitled hereunder to take any action hereunder
      with regard to any particular Trust Security may do so with regard to all or
      any
      part of the Liquidation Amount of such Trust Security or by one or more duly
      appointed agents each of which may do so pursuant to such appointment with
      regard to all or any part of such Liquidation Amount.

     

    (f)  If
      any
      dispute shall arise among the Holders or the Trustees with respect to the
      authenticity, validity or binding nature of any request, demand, authorization,
      direction, notice, consent, waiver or other Act of such Holder or Trustee under
      this Article
      VI,
      then
      the determination of such matter by the Property Trustee shall be conclusive
      with respect to such matter.

     

    SECTION
      6.8.  Inspection
      of Records.

     

    Upon
      reasonable written notice to the Administrative Trustees and the Property
      Trustee, the records of the Trust shall be open to inspection by any Holder
      during normal business hours for any purpose reasonably related to such Holder’s
      interest as a Holder.

     

    SECTION
      6.9.  Limitations
      on Voting Rights.

     

    (a)  Except
      as
      expressly provided in this Trust Agreement and in the Indenture and as otherwise
      required by law, no Holder of Preferred Securities shall have any right to
      vote
      or in any manner otherwise control the administration, operation and management
      of the Trust or the obligations of the parties hereto, nor shall anything herein
      set forth, or contained in the terms of the Securities Certificates, be
      construed so as to constitute the Holders from time to time as partners or
      members of an association.

     

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

     

    (b)  So
      long
      as any Notes are held by the Property Trustee on behalf of the Trust, the
      Property Trustee shall not (i) direct the time, method and place of conducting
      any proceeding for any remedy available to the Note Trustee, or exercise any
      trust or power conferred on the Property Trustee with respect to the Notes,
      (ii)
      waive any past default that may be waived under Section
      5.13
      of the
      Indenture, (iii) exercise any right to rescind or annul a declaration that
      the
      principal of all the Notes shall be due and payable or (iv) consent to any
      amendment, modification or termination of the Indenture or the Notes, where
      such
      consent shall be required, without, in each case, obtaining the prior approval
      of the Holders of at least a Majority in Liquidation Amount of the Preferred
      Securities; provided, that where a consent under the Indenture would require
      the
      consent of each holder of Notes (or each Holder of Preferred Securities)
      affected thereby, no such consent shall be given by the Property Trustee without
      the prior written consent of each Holder of Preferred Securities. The Property
      Trustee shall not revoke any action previously authorized or approved by a
      vote
      of the Holders of the Preferred Securities, except by a subsequent vote of
      the
      Holders of the Preferred Securities. In addition to obtaining the foregoing
      approvals of the Holders of the Preferred Securities, prior to taking any of
      the
      foregoing actions, the Property Trustee shall, at the expense of the Depositor,
      obtain an Opinion of Counsel experienced in such matters to the effect that
      such
      action shall not cause the Trust to be taxable as a corporation or classified
      as
      other than a grantor trust for United States federal income tax
      purposes.

     

    (c)  If
      any
      proposed amendment to the Trust Agreement provides for, or the Trustees
      otherwise propose to effect, (i) any action that would adversely affect in
      any
      material respect the powers, preferences or special rights of the Preferred
      Securities, whether by way of amendment to the Trust Agreement or otherwise
      or
      (ii) the dissolution, winding-up or termination of the Trust, other than
      pursuant to the terms of this Trust Agreement, then the Holders of Outstanding
      Preferred Securities as a class will be entitled to vote on such amendment
      or
      proposal and such amendment or proposal shall not be effective except with
      the
      approval of the Holders of at least a Majority in Liquidation Amount of the
      Preferred Securities. Notwithstanding any other provision of this Trust
      Agreement, no amendment to this Trust Agreement may be made if, as a result
      of
      such amendment, it would cause the Trust to be taxable as a corporation or
      classified as other than a grantor trust for United States federal income tax
      purposes.

     

    SECTION
      6.10.  Acceleration
      of Maturity; Rescission of Annulment; Waivers of Past Defaults.

     

    (a)  For
      so
      long as any Preferred Securities remain Outstanding, if, upon a Note Event
      of
      Default, the Note Trustee fails or the holders of not less than twenty-five
      percent (25%) in principal amount of the outstanding Notes fail to declare
      the
      principal of all of the Notes to be immediately due and payable, the Holders
      of
      at least twenty-five percent (25%) in Liquidation Amount of the Preferred
      Securities then Outstanding shall have the right to make such declaration by
      a
      notice in writing to the Property Trustee, the Depositor and the Note Trustee.
      At any time after a declaration of acceleration with respect to the Notes has
      been made and before a judgment or decree for payment of the money due has
      been
      obtained by the Note Trustee as provided in the Indenture, the Holders of at
      least a Majority in Liquidation Amount of the Preferred Securities, by written
      notice to the Property Trustee, the Depositor and the Note Trustee, may rescind
      and annul such declaration and its consequences if:

     

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

     

    (i)  the
      Depositor has paid or deposited with the Note Trustee a sum sufficient to
      pay:

     

    (A)  all

      overdue installments of interest on all of the Notes;

     

    (B)  any
      accrued Additional Interest on all of the Notes;

     

    (C)  the
      principal of and premium, if any, on any Notes that have become due otherwise
      than by such declaration of acceleration and interest and Additional Interest
      thereon at the rate borne by the Notes; and

     

    (D)  all
      sums
      paid or advanced by the Note Trustee under the Indenture and the reasonable
      compensation, expenses, disbursements and advances of the Note Trustee, the
      Property Trustee and their agents and counsel; and

     

    (ii)  all
      Note
      Events of Default, other than the non-payment of the principal of the Notes
      that
      has become due solely by such acceleration, have been cured or waived as
      provided in Section
      5.13
      of the
      Indenture.

     

    Upon
      receipt by the Property Trustee of written notice requesting such an
      acceleration, or rescission and annulment thereof, by Holders of any part of
      the
      Preferred Securities, a record date shall be established for determining Holders
      of Outstanding Preferred Securities entitled to join in such notice, which
      record date shall be at the close of business on the day the Property Trustee
      receives such notice. The Holders on such record date, or their duly designated
      proxies, and only such Persons, shall be entitled to join in such notice,
      whether or not such Holders remain Holders after such record date; provided,
      that, unless such declaration of acceleration, or rescission and annulment,
      as
      the case may be, shall have become effective by virtue of the requisite
      percentage having joined in such notice prior to the day that is ninety (90)
      days after such record date, such notice of declaration of acceleration, or
      rescission and annulment, as the case may be, shall automatically and without
      further action by any Holder be canceled and of no further effect. Nothing
      in
      this paragraph shall prevent a Holder, or a proxy of a Holder, from giving,
      after expiration of such ninety (90)-day period, a new written notice of
      declaration of acceleration, or rescission and annulment thereof, as the case
      may be, that is identical to a written notice that has been canceled pursuant
      to
      the proviso to the preceding sentence, in which event a new record date shall
      be
      established pursuant to the provisions of this Section
      6.10(a).

     

    (b)  For
      so
      long as any Preferred Securities remain Outstanding, to the fullest extent
      permitted by law and subject to the terms of this Trust Agreement and the
      Indenture, upon a Note Event of Default specified in paragraph (a) or (b) of
      Section
      5.1
      of the
      Indenture, any Holder of Preferred Securities shall have the right to institute
      a proceeding directly against the Depositor or the Guarantor, pursuant to
Section
      5.8
      of the
      Indenture, for enforcement of payment to such Holder of any amounts payable
      in
      respect of Notes having an aggregate principal amount equal to the aggregate
      Liquidation Amount of the Preferred Securities of such Holder. Except as set
      forth in Section 6.10(a)
      and this
Section
      6.10(b),
      the
      Holders of Preferred Securities shall have no right to exercise directly any
      right or remedy available to the holders of, or in respect of, the
      Notes.

     

    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

    

     

    (c)  Notwithstanding
      paragraphs (a) and (b) of this Section
      6.10,
      the
      Holders of at least a Majority in Liquidation Amount of the Preferred Securities
      may, on behalf of the Holders of all the Preferred Securities, waive any Note
      Event of Default, except any Note Event of Default arising from the failure
      to
      pay any principal of or premium, if any, or interest on (including any
      Additional Interest) the Notes (unless such Note Event of Default has been
      cured
      and a sum sufficient to pay all matured installments of interest and all
      principal and premium, if any, on all Notes due otherwise than by acceleration
      has been deposited with the Note Trustee) or a Note Event of Default in respect
      of a covenant or provision that under the Indenture cannot be modified or
      amended without the consent of the holder of each outstanding Note. Upon any
      such waiver, such Note Event of Default shall cease to exist and any Note Event
      of Default arising therefrom shall be deemed to have been cured for every
      purpose of the Indenture; but no such waiver shall affect any subsequent Note
      Event of Default or impair any right consequent thereon.

     

    (d)  Notwithstanding
      paragraphs (a) and (b) of this Section
      6.10
      and
      subject to paragraph (c), the Holders of at least a Majority in Liquidation
      Amount of the Preferred Securities may, on behalf of the Holders of all the
      Preferred Securities, waive any Event of Default and its consequences. Upon
      such
      waiver, any such Event of Default shall cease to exist, and any Event of Default
      arising therefrom shall be deemed to have been cured, for every purpose of
      this
      Trust Agreement, but no such waiver shall extend to any subsequent or other
      Event of Default or impair any right consequent thereon.

     

    (e)  The
      Holders of a Majority in Liquidation Amount of the Preferred Securities shall
      have the right to direct the time, method and place of conducting any proceeding
      for any remedy available to the Property Trustee in respect of this Trust
      Agreement or the Notes or exercising any trust or power conferred upon the
      Property Trustee under this Trust Agreement; provided, that, subject to
Sections
      8.5
      and
8.7,
      the
      Property Trustee shall have the right to decline to follow any such direction
      if
      the Property Trustee being advised by counsel determines that the action so
      directed may not lawfully be taken, or if the Property Trustee in good faith
      shall, by an officer or officers of the Property Trustee, determine that the
      proceedings so directed would be illegal or involve it in personal liability
      or
      be unduly prejudicial to the rights of Holders not party to such direction,
      and
      provided, further, that nothing in this Trust Agreement shall impair the right
      of the Property Trustee to take any action deemed proper by the Property Trustee
      and which is not inconsistent with such direction.

     

    
      
        
        

      

      
        38

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      VII.

     

    Representations
      and Warranties

     

    SECTION
      7.1.  Representations
      and Warranties of the Property Trustee and the Delaware Trustee.

     

    The
      Property Trustee and the Delaware Trustee, each severally on behalf of and
      as to
      itself, hereby represents and warrants for the benefit of the Depositor, the
      Guarantor and the Holders that:

     

    (a)  the
      Property Trustee is a Delaware banking corporation with trust powers, duly
      organized, validly existing and in good standing under the laws of the State
      of
      Delaware;

     

    (b)  the
      Property Trustee has full corporate power, authority and legal right to execute,
      deliver and perform its obligations under this Trust Agreement and has taken
      all
      necessary action to authorize the execution, delivery and performance by it
      of
      this Trust Agreement;

     

    (c)  the
      Delaware Trustee is a Delaware banking corporation, duly organized with trust
      powers, validly existing and in good standing under the laws of the State of
      Delaware and with its principal place of business in the State of
      Delaware;

     

    (d)  the
      Delaware Trustee has full corporate power, authority and legal right to execute,
      deliver and perform its obligations under this Trust Agreement and has taken
      all
      necessary action to authorize the execution, delivery and performance by it
      of
      this Trust Agreement;

     

    (e)  this
      Trust Agreement has been duly authorized, executed and delivered by the Property
      Trustee and the Delaware Trustee and constitutes the legal, valid and binding
      agreement of each of the Property Trustee and the Delaware Trustee enforceable
      against each of them in accordance with its terms, subject to applicable
      bankruptcy, insolvency and similar laws affecting creditors’ rights generally
      and to general principles of equity and the discretion of the court (regardless
      of whether considered in a proceeding in equity or at law);

     

    (f)  the
      execution, delivery and performance of this Trust Agreement have been duly
      authorized by all necessary corporate or other action on the part of the
      Property Trustee and the Delaware Trustee and do not require any approval of
      stockholders of the Property Trustee and the Delaware Trustee and such
      execution, delivery and performance will not (i) violate the Charter or By-laws
      of the Property Trustee or the Delaware Trustee or (ii) violate any applicable
      law, governmental rule or regulation of the United States or the State of
      Delaware, as the case may be, governing the banking and trust powers of the
      Property Trustee or the Delaware Trustee or any order, judgment or decree
      applicable to the Property Trustee or the Delaware Trustee;

     

    (g)  neither
      the authorization, execution or delivery by the Property Trustee or the Delaware
      Trustee of this Trust Agreement nor the consummation of any of the transactions
      by the Property Trustee or the Delaware Trustee contemplated herein requires
      the
      consent or approval of, the giving of notice to, the registration with or the
      taking of any other action with respect to any governmental authority or agency
      under any existing law of the United States or the State of Delaware governing
      the banking and trust powers of the Property Trustee or the Delaware Trustee,
      as
      the case may be; and

     

    
      
        
        

      

      
        39

        
          

        

      

      
        
        

      

    

     

    (h)  to
      the
      best of each of the Property Trustee’s and the Delaware Trustee’s knowledge,
      there are no proceedings pending or threatened against or affecting the Property
      Trustee or the Delaware Trustee in any court or before any governmental
      authority, agency or arbitration board or tribunal that, individually or in
      the
      aggregate, would materially and adversely affect the Trust or would question
      the
      right, power and authority of the Property Trustee or the Delaware Trustee,
      as
      the case may be, to enter into or perform its obligations as one of the Trustees
      under this Trust Agreement.

     

    SECTION
      7.2.  Representations
      and Warranties of Depositor.

     

    The
      Depositor hereby represents and warrants for the benefit of the Holders
      that:

     

    (a)  the
      Depositor is a limited partnership duly organized, validly existing and in
      good
      standing under the laws of its state of organization;

     

    (b)  the
      Depositor has full power, authority and legal right to execute, deliver and
      perform its obligations under this Trust Agreement and has taken all necessary
      action to authorize the execution, delivery and performance by it of this Trust
      Agreement;

     

    (c)  this
      Trust Agreement has been duly authorized, executed and delivered by the
      Depositor and constitutes the legal, valid and binding agreement of the
      Depositor enforceable against the Depositor in accordance with its terms,
      subject to applicable bankruptcy, insolvency and similar laws affecting
      creditors’ rights generally and to general principles of equity;

     

    (d)  the
      Securities Certificates issued at the Closing Date on behalf of the Trust have
      been duly authorized and will have been duly and validly executed, issued and
      delivered by the applicable Trustees pursuant to the terms and provisions of,
      and in accordance with the requirements of, this Trust Agreement and the Holders
      will be, as of such date, entitled to the benefits of this Trust
      Agreement;

     

    (e)  the
      execution, delivery and performance of this Trust Agreement have been duly
      authorized by all necessary action on the part of the Depositor and do not
      require any approval of equity owners of the Depositor and such execution,
      delivery and performance will not (i) violate the organizational documents
      of
      the Depositor or (ii) violate any applicable law, governmental rule or
      regulation governing the Depositor or any material portion of its property
      or
      any order, judgment or decree applicable to the Depositor or any material
      portion of its property;

     

    (f)  neither
      the authorization, execution or delivery by the Depositor of this Trust
      Agreement nor the consummation of any of the transactions by the Depositor
      contemplated herein requires the consent or approval of, the giving of notice
      to, the registration with or the taking of any other action with respect to
      any
      governmental authority or agency under any existing law governing the Depositor
      or any material portion of its property; and

     

    (g)  there
      are
      no proceedings pending or, to the best of the Depositor’s knowledge, threatened
      against or affecting the Depositor or any material portion of its property
      in
      any court or before any governmental authority, agency or arbitration board
      or
      tribunal that, individually or in the aggregate, would materially and adversely
      affect the Trust or would question the right, power and authority of the
      Depositor, as the case may be, to enter into or perform its obligations under
      this Trust Agreement.

     

    
      
        
        

      

      
        40

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      VIII.

     

    The
      Trustees

     

    SECTION
      8.1.  Number
      of
      Trustees.

     

    The
      number of Trustees shall be five (5), provided, that the Property Trustee and
      the Delaware Trustee may be the same Person, in which case the number of
      Trustees shall be four (4). The number of Trustees may be increased or decreased
      by Act of the Holder of the Common Securities subject to Sections
      8.2,
      8.3,
      and
8.4.
      The
      death, resignation, retirement, removal, bankruptcy, incompetence or incapacity
      to perform the duties of a Trustee shall not operate to annul, dissolve or
      terminate the Trust.

     

    SECTION
      8.2.  Property
      Trustee Required.

     

    There
      shall at all times be a Property Trustee hereunder with respect to the Trust
      Securities. The Property Trustee shall be a corporation organized and doing
      business under the laws of the United States or of any state thereof, authorized
      to exercise corporate trust powers, having a combined capital and surplus of
      at
      least fifty million dollars ($50,000,000), subject to supervision or examination
      by federal or state authority and having an office within the United States.
      If
      any such Person publishes reports of condition at least annually pursuant to
      law
      or to the requirements of its supervising or examining authority, then for
      the
      purposes of this Section 8.2,
      the
      combined capital and surplus of such Person shall be deemed to be its combined
      capital and surplus as set forth in its most recent report of condition so
      published. If at any time the Property Trustee shall cease to be eligible in
      accordance with the provisions of this Section 8.2,
      it
      shall resign immediately in the manner and with the effect hereinafter specified
      in this Article
      VIII.

     

    SECTION
      8.3.  Delaware
      Trustee Required.

     

    (a)  If
      required by the Delaware Statutory Trust Act, there shall at all times be a
      Delaware Trustee with respect to the Trust Securities. The Delaware Trustee
      shall either be (i) a natural person who is at least 21 years of age and a
      resident of the State of Delaware or (ii) a legal entity that has its principal
      place of business in the State of Delaware, otherwise meets the requirements
      of
      applicable Delaware law and shall act through one or more persons authorized
      to
      bind such entity. If at any time the Delaware Trustee shall cease to be eligible
      in accordance with the provisions of this Section
      8.3,
      it
      shall resign immediately in the manner and with the effect hereinafter specified
      in this Article
      VIII.

     

    (b)  The
      Delaware Trustee shall not be entitled to exercise any powers, nor shall the
      Delaware Trustee have any of the duties and responsibilities, of the Property
      Trustee or the Administrative Trustees set forth herein. The Delaware Trustee
      shall be one of the trustees of the Trust for the sole and limited purpose
      of
      fulfilling the requirements of Section 3807 of the Delaware Statutory Trust
      Act
      and for taking such actions as are required to be taken by a Delaware trustee
      under the Delaware Statutory Trust Act. The duties (including fiduciary duties),
      liabilities and obligations of the Delaware Trustee shall be limited to (a)
      accepting legal process served on the Trust in the State of Delaware and (b)
      the
      execution of any certificates required to be filed with the Secretary of State
      of the State of Delaware that the Delaware Trustee is required to execute under
      Section 3811 of the Delaware Statutory Trust Act and there shall be no other
      duties (including fiduciary duties) or obligations, express or implied, at
      law
      or in equity, of the Delaware Trustee.

     

    
      
        
        

      

      
        41

        
          

        

      

      
        
        

      

    

     

    SECTION
      8.4.  Appointment
      of Administrative Trustees.

     

    (a)  There
      shall at all times be one or more Administrative Trustees hereunder with respect
      to the Trust Securities. Each Administrative Trustee shall be either a natural
      person who is at least 21 years of age or a legal entity that shall act through
      one or more persons authorized to bind that entity. Each of the individuals
      identified as an “Administrative Trustee” in the preamble of this Trust
      Agreement hereby accepts his or her appointment as such.

     

    (b)  Except
      where a requirement for action by a specific number of Administrative Trustees
      is expressly set forth in this Trust Agreement, any act required or permitted
      to
      be taken by, and any power of the Administrative Trustees may be exercised
      by,
      or with the consent of, any one such Administrative Trustee. Whenever a vacancy
      in the number of Administrative Trustees shall occur, until such vacancy is
      filled by the appointment of an Administrative Trustee in accordance with
Section
      8.11,
      the
      Administrative Trustees in office, regardless of their number (and
      notwithstanding any other provision of this Trust Agreement), shall have all
      the
      powers granted to the Administrative Trustees and shall discharge all the duties
      imposed upon the Administrative Trustees by this Trust Agreement.

     

    SECTION
      8.5.  Duties
      and Responsibilities of the Trustees.

     

    (a)  The
      rights, immunities, duties and responsibilities of the Trustees shall be as
      provided by this Trust Agreement and there shall be no other duties (including
      fiduciary duties) or obligations, express or implied, at law or in equity,
      of
      the Trustees; provided, however, that if an Event of Default known to the
      Property Trustee has occurred and is continuing, the Property Trustee shall,
      prior to the receipt of directions, if any, from the Holders of at least a
      Majority in Liquidation Amount of the Preferred Securities, exercise such of
      the
      rights and powers vested in it by this Trust Agreement, and use the same degree
      of care and skill in its exercise, as a prudent person would exercise or use
      under the circumstances in the conduct of such person’s own affairs.
      Notwithstanding the foregoing, no provision of this Trust Agreement shall
      require any of the Trustees to expend or risk its own funds or otherwise incur
      any financial liability in the performance of any of its duties hereunder,
      or in
      the exercise of any of its or their rights or powers, if it or they shall have
      reasonable grounds for believing that repayment of such funds or adequate
      indemnity against such risk or liability is not reasonably assured to it.
      Whether or not herein expressly so provided, every provision of this Trust
      Agreement relating to the conduct or affecting the liability of or affording
      protection to the Trustees shall be subject to the provisions of this
Section
      8.5.
      To the
      extent that, at law or in equity, a Trustee has duties (including fiduciary
      duties) to the Trust or to the Holders, such Trustee’s duties may be restricted
      or eliminated by the provisions in this Trust Agreement, except that this Trust
      Agreement may not eliminate the implied contractual covenant of good faith
      and
      fair dealing. A Trustee shall not be liable to the Trust or a Holder or another
      Person that is party to or is otherwise bound by this Trust Agreement for breach
      of fiduciary duty if the Trustee has relied in good faith on the provisions
      of
      this Trust Agreement. The provisions of this Trust Agreement, to the extent
      that
      they limit or eliminate the liabilities of the Trustees otherwise existing
      at
      law or in equity, are agreed by the Depositor and the Holders to replace such
      other liabilities of the Trustees, except that no provision of this Trust
      Agreement may limit or eliminate liability for any act or omission that
      constitutes a bad faith violation of the implied contractual covenant of good
      faith and fair dealing.

     

    
      
        
        

      

      
        42

        
          

        

      

      
        
        

      

    

     

    (b)  All
      payments made by the Property Trustee or a Paying Agent in respect of the Trust
      Securities shall be made only from the revenue and proceeds from the Trust
      Property and only to the extent that there shall be sufficient revenue or
      proceeds from the Trust Property to enable the Property Trustee or a Paying
      Agent to make payments in accordance with the terms hereof. Each Holder, by
      its
      acceptance of a Trust Security, agrees that it will look solely to the revenue
      and proceeds from the Trust Property to the extent legally available for
      distribution to it as herein provided and that the Trustees are not personally
      liable to it for any amount distributable in respect of any Trust Security
      or
      for any other liability in respect of any Trust Security. This Section
      8.5(b)
      does not
      limit the liability of the Trustees expressly set forth elsewhere in this Trust
      Agreement.

     

    (c)  No
      provisions of this Trust Agreement shall be construed to relieve the Property
      Trustee from liability with respect to matters that are within the authority
      of
      the Property Trustee under this Trust Agreement for its own negligent action,
      negligent failure to act or willful misconduct, except that:

     

    (i)  the
      Property Trustee shall not be liable for any error or judgment made in good
      faith by an authorized officer of the Property Trustee, unless it shall be
      proved that the Property Trustee was negligent in ascertaining the pertinent
      facts;

     

    (ii)  the
      Property Trustee shall not be liable with respect to any action taken or omitted
      to be taken by it in good faith in accordance with the direction of the Holders
      of at least a Majority in Liquidation Amount of the Preferred Securities
      relating to the time, method and place of conducting any proceeding for any
      remedy available to the Property Trustee hereunder or under the Indenture,
      or
      exercising any trust or power conferred upon the Property Trustee under this
      Trust Agreement;

     

    (iii)  the
      Property Trustee’s sole duty with respect to the custody, safe keeping and
      physical preservation of the Notes and the Payment Account shall be to deal
      with
      such Property in a similar manner as the Property Trustee deals with similar
      property for its own account, subject to the protections and limitations on
      liability afforded to the Property Trustee under this Trust
      Agreement;

     

    (iv)  the
      Property Trustee shall not be liable for any interest on any money received
      by
      it; and money held by the Property Trustee need not be segregated from other
      funds held by it except in relation to the Payment Account maintained by the
      Property Trustee pursuant to Section 3.1 and except to the extent otherwise
      required by law; and

     

    
      
        
        

      

      
        43

        
          

        

      

      
        
        

      

    

     

    (v)  the
      Property Trustee shall not be responsible for monitoring the compliance by
      the
      Administrative Trustees, the Guarantor or the Depositor with their respective
      duties under this Trust Agreement, nor shall the Property Trustee be liable
      for
      the default or misconduct of any other Trustee, the Guarantor or the
      Depositor.

     

    SECTION
      8.6.  Notices
      of Defaults and Extensions.

     

    (a)  Within
      ninety (90) days after the occurrence of a default actually known to the
      Property Trustee, the Property Trustee shall transmit notice of such default
      to
      the Holders, the Administrative Trustees, the Guarantor and the Depositor,
      unless such default shall have been cured or waived; provided, that, except
      in
      the case of a default in the payment of the principal of or any premium or
      interest (including any Additional Interest) on any Trust Security, the Property
      Trustee shall be fully protected in withholding such notice if and so long
      as
      the board of directors, the executive committee or a trust committee of
      directors and/or Responsible Officers of the Property Trustee in good faith
      determines that the withholding of such notice is in the interests of the
      Holders of the Trust Securities. For the purpose of this Section
      8.6,
      the
      term “default” means any event that is, or after notice or lapse of time or both
      would become, an Event of Default.

     

    (b)  RESERVED.
      

     

    (c)  The
      Property Trustee shall not be deemed to have knowledge of any default or Event
      of Default unless the Property Trustee shall have received written notice
      thereof from the Depositor, the Guarantor, any Administrative Trustee or any
      Holder or unless a Responsible Officer of the Property Trustee shall have
      obtained actual knowledge of such default or Event of Default.

     

    (d)  The
      Property Trustee shall notify all Holders of the Preferred Securities of any
      notice of default received with respect to the Notes.

     

    SECTION
      8.7.  Certain
      Rights of Property Trustee.

     

    Subject
      to the provisions of Section
      8.5:

     

    (a)  the
      Property Trustee may conclusively rely and shall be protected in acting or
      refraining from acting in good faith and in accordance with the terms hereof
      upon any resolution, Opinion of Counsel, certificate, written representation
      of
      a Holder or transferee, certificate of auditors or any other resolution,
      certificate, statement, instrument, opinion, report, notice, request, direction,
      consent, order, appraisal, bond, debenture, note, other evidence of indebtedness
      or other paper or document believed by it to be genuine and to have been signed
      or presented by the proper party or parties;

     

    (b)  if
      (i) in
      performing its duties under this Trust Agreement the Property Trustee is
      required to decide between alternative courses of action, (ii) in construing
      any
      of the provisions of this Trust Agreement the Property Trustee finds a provision
      ambiguous or inconsistent with any other provisions contained herein or (iii)
      the Property Trustee is unsure of the application of any provision of this
      Trust
      Agreement, then, except as to any matter as to which the Holders of the
      Preferred Securities are entitled to vote under the terms of this Trust
      Agreement, the Property Trustee shall deliver a notice to the Depositor
      requesting the Depositor’s written instruction as to the course of action to be
      taken and the Property Trustee shall take such action, or refrain from taking
      such action, as the Property Trustee shall be instructed in writing to take,
      or
      to refrain from taking, by the Depositor; provided, that if the Property Trustee
      does not receive such instructions of the Depositor within ten (10) Business
      Days after it has delivered such notice or such reasonably shorter period of
      time set forth in such notice, the Property Trustee may, but shall be under
      no
      duty to, take such action, or refrain from taking such action, as the Property
      Trustee shall deem advisable and in the best interests of the Holders, in which
      event the Property Trustee shall have no liability except for its own
      negligence, bad faith or willful misconduct;

     

    
      
        
        

      

      
        44

        
          

        

      

      
        
        

      

    

     

    (c)  any
      direction or act of the Depositor or the Guarantor contemplated by this Trust
      Agreement shall be sufficiently evidenced by an Officer’s Certificate unless
      otherwise expressly provided herein;

     

    (d)  any
      direction or act of an Administrative Trustee contemplated by this Trust
      Agreement shall be sufficiently evidenced by a certificate executed by such
      Administrative Trustee and setting forth such direction or act;

     

    (e)  the
      Property Trustee shall have no duty to see to any recording, filing or
      registration of any instrument (including any financing or continuation
      statement or any filing under tax or securities laws) or any re-recording,
      re-filing or re-registration thereof;

     

    (f)  the
      Property Trustee may consult with counsel (which counsel may be counsel to
      the
      Property Trustee, the Depositor or the Guarantor or any of the Depositor’s or
      the Guarantor’s Affiliates, and may include any of its employees) and the advice
      of such counsel shall be full and complete authorization and protection in
      respect of any action taken, suffered or omitted by it hereunder in good faith
      and in reliance thereon and in accordance with such advice; the Property Trustee
      shall have the right at any time to seek instructions concerning the
      administration of this Trust Agreement from any court of competent
      jurisdiction;

     

    (g)  the
      Property Trustee shall be under no obligation to exercise any of the rights
      or
      powers vested in it by this Trust Agreement at the request or direction of
      any
      of the Holders pursuant to this Trust Agreement, unless such Holders shall
      have
      offered to the Property Trustee reasonable security or indemnity against the
      costs, expenses (including reasonable attorneys’ fees and expenses) and
      liabilities that might be incurred by it in compliance with such request or
      direction, including reasonable advances as may be requested by the Property
      Trustee;

     

    (h)  the
      Property Trustee shall not be bound to make any investigation into the facts
      or
      matters stated in any resolution, certificate, statement, instrument, opinion,
      report, notice, request, direction, consent, order, approval, bond, debenture,
      note or other evidence of indebtedness or other paper or document, unless
      requested in writing to do so by one or more Holders, but the Property Trustee
      may make such further inquiry or investigation into such facts or matters as
      it
      may see fit, and, if the Property Trustee shall determine to make such inquiry
      or investigation, it shall be entitled to examine the books, records and
      premises of the Depositor, personally or by agent or attorney;

     

    
      
        
        

      

      
        45

        
          

        

      

      
        
        

      

    

     

    (i)  the
      Property Trustee may execute any of the trusts or powers hereunder or perform
      any duties hereunder either directly or by or through its agents, attorneys,
      custodians or nominees and the Property Trustee shall not be responsible for
      any
      negligence or misconduct on the part of any such agent, attorney, custodian
      or
      nominee appointed with due care by it hereunder;

     

    (j)  whenever
      in the administration of this Trust Agreement the Property Trustee shall deem
      it
      desirable to receive instructions with respect to enforcing any remedy or right
      hereunder, the Property Trustee (i) may request instructions from the Holders
      (which instructions may only be given by the Holders of the same proportion
      in
      Liquidation Amount of the Trust Securities as would be entitled to direct the
      Property Trustee under this Trust Agreement in respect of such remedy, right
      or
      action), (ii) may refrain from enforcing such remedy or right or taking such
      other action until such instructions are received and (iii) shall be protected
      in acting in accordance with such instructions;

     

    (k)  except
      as
      otherwise expressly provided by this Trust Agreement, the Property Trustee
      shall
      not be under any obligation to take any action that is discretionary under
      the
      provisions of this Trust Agreement;

     

    (l)  without
      prejudice to any other rights available to the Property Trustee under applicable
      law, when the Property Trustee incurs expenses or renders services in connection
      with a Bankruptcy Event, such expenses (including legal fees and expenses of
      its
      agents and 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; and

     

    (m)  whenever
      in the administration of this Trust Agreement the Property Trustee shall deem
      it
      desirable that a matter be proved or established prior to taking, suffering
      or
      omitting any action hereunder, the Property Trustee (unless other evidence
      be
      herein specifically prescribed) may, in the absence of bad faith on its part,
      request and rely on an Officer’s Certificate which, upon receipt of such
      request, shall be promptly delivered by the Depositor.

     

    No
      provision of this Trust Agreement shall be deemed to impose any duty or
      obligation on any Trustee to perform any act or acts or exercise any right,
      power, duty or obligation conferred or imposed on it, in any jurisdiction in
      which it shall be illegal, or in which such Person shall be unqualified or
      incompetent in accordance with applicable law, to perform any such act or acts,
      or to exercise any such right, power, duty or obligation.

     

    SECTION
      8.8.  Delegation
      of Power.

     

    Any
      Trustee may, by power of attorney or otherwise, delegate to any other Person
      its, his or her power for the purpose of executing any documents contemplated
      in
Section
      2.5.
      The
      Trustees shall have power to delegate from time to time to such of their number
      or to the Depositor the doing of such things and the execution of such
      instruments either in the name of the Trust or the names of the Trustees or
      otherwise as the Trustees may deem expedient, to the extent such delegation
      is
      not prohibited by applicable law or contrary to the provisions of this Trust
      Agreement.

     

    
      
        
        

      

      
        46

        
          

        

      

      
        
        

      

    

     

    SECTION
      8.9.  May
      Hold
      Securities.

     

    Any
      Trustee or any other agent of any Trustee or the Trust, in its individual or
      any
      other capacity, may become the owner or pledgee of Trust Securities and except
      as provided in the definition of the term “Outstanding” in Article
      I,
      may
      otherwise deal with the Trust with the same rights it would have if it were
      not
      a Trustee or such other agent.

     

    SECTION
      8.10.  Compensation;
      Reimbursement; Indemnity.

     

    The
      Depositor agrees:

     

    (a)  to
      pay to
      the Trustees from time to time such reasonable compensation for all services
      rendered by them hereunder as may be agreed by the Depositor and the Trustees
      from time to time (which compensation shall not be limited by any provision
      of
      law in regard to the compensation of a trustee of an express
      trust);

     

    (b)  to
      reimburse the Trustees upon request for all reasonable expenses, disbursements
      and advances incurred or made by the Trustees in accordance with any provision
      of this Trust Agreement (including the reasonable compensation and the expenses
      and disbursements of their agents and counsel), except any such expense,
      disbursement or advance as may be attributable to their gross negligence, bad
      faith or willful misconduct; and

     

    (c)  to
      the
      fullest extent permitted by applicable law, to indemnify and hold harmless
      (i)
      each Trustee (including in its individual capacity), (ii) any Affiliate of
      any
      Trustee, (iii) any officer, director, shareholder, employee, representative
      or
      agent of any Trustee or any Affiliate of any Trustee and (iv) any employee
      or
      agent of the Trust (referred to herein as an “Indemnified Person”) from and
      against any loss, damage, liability, tax (other than income, franchise or other
      taxes imposed on amounts paid pursuant to Section
      8.10(a)
      or
(b)
      hereof),
      penalty, expense or claim of any kind or nature whatsoever incurred without
      negligence, bad faith or willful misconduct on its part, arising out of or
      in
      connection with the acceptance or administration of the Trust hereunder,
      including the advancement of funds to cover the reasonable costs and expenses
      of
      defending itself against any claim or liability in connection with the exercise
      or performance of any of its powers or duties hereunder.

     

    The
      Trust
      shall have no payment, reimbursement or indemnity obligations to the Trustees
      under this Section
      8.10.
      The
      provisions of this Section
      8.10
      shall
      survive the termination of this Trust Agreement and the earlier removal or
      resignation of any Trustee.

     

    No
      Trustee may claim any Lien on any Trust Property whether before or after
      termination of the Trust as a result of any amount due pursuant to this
Section
      8.10.

     

    To
      the
      fullest extent permitted by law, in no event shall the Property Trustee and
      the
      Delaware Trustee be liable for any indirect, special, punitive or consequential
      loss or damage of any kind whatsoever, including, but not limited to, lost
      profits, even if the Trustee has been advised of the likelihood of such loss
      or
      damage and regardless of the form of action. 

     

    In
      no
      event shall the Property Trustee and the Delaware Trustee be liable for any
      failure or delay in the performance of its obligations hereunder because of
      circumstances beyond its control, including, but not limited to, acts of God,
      flood, war (whether declared or undeclared), terrorism, fire, riot, embargo,
      government action, including any laws, ordinances, regulations, governmental
      action or the like which delay, restrict or prohibit the providing of the
      services contemplated by this Trust Agreement. 

     

    
      
        
        

      

      
        47

        
          

        

      

      
        
        

      

    

     

    SECTION
      8.11.  Resignation
      and Removal; Appointment of Successor.

     

    (a)  No
      resignation or removal of any Trustee and no appointment of a successor Trustee
      pursuant to this Article
      VIII
      shall
      become effective until the acceptance of appointment by the successor Trustee
      in
      accordance with the applicable requirements of Section
      8.12.

     

    (b)  A
      Trustee
      may resign at any time by giving written notice thereof to the Depositor and,
      in
      the case of the Property Trustee and the Delaware Trustee, to the
      Holders.

     

    (c)  Unless
      an
      Event of Default shall have occurred and be continuing, the Property Trustee
      or
      the Delaware Trustee, or both of them, may be removed (with or without cause)
      at
      any time by Act of the Holder of Common Securities. If an Event of Default
      shall
      have occurred and be continuing, the Property Trustee or the Delaware Trustee,
      or both of them, may be removed (with or without cause) at such time by Act
      of
      the Holders of at least a Majority in Liquidation Amount of the Preferred
      Securities, delivered to the removed Trustee (in its individual capacity and
      on
      behalf of the Trust). An Administrative Trustee may be removed (with or without
      cause) only by Act of the Holder of the Common Securities at any
      time.

     

    (d)  If
      any
      Trustee shall resign, be removed or become incapable of acting as Trustee,
      or if
      a vacancy shall occur in the office of any Trustee for any reason, at a time
      when no Event of Default shall have occurred and be continuing, the Holder
      of
      the Common Securities, by Act of the Holder of the Common Securities, shall
      promptly appoint a successor Trustee or Trustees, and such successor Trustee
      and
      the retiring Trustee shall comply with the applicable requirements of
Section
      8.12.
      If the
      Property Trustee or the Delaware Trustee shall resign, be removed or become
      incapable of continuing to act as the Property Trustee or the Delaware Trustee,
      as the case may be, at a time when an Event of Default shall have occurred
      and
      be continuing, the Holders of the Preferred Securities, by Act of the Holders
      of
      a Majority in Liquidation Amount of the Preferred Securities, shall promptly
      appoint a successor Property Trustee or Delaware Trustee, and such successor
      Property Trustee or Delaware Trustee and the retiring Property Trustee or
      Delaware Trustee shall comply with the applicable requirements of Section
      8.12.
      If an
      Administrative Trustee shall resign, be removed or become incapable of acting
      as
      Administrative Trustee, at a time when an Event of Default shall have occurred
      and be continuing, the Holder of the Common Securities by Act of the Holder
      of
      Common Securities shall promptly appoint a successor Administrative Trustee
      and
      such successor Administrative Trustee and the retiring Administrative Trustee
      shall comply with the applicable requirements of Section
      8.12.
      If no
      successor Trustee shall have been so appointed by the Holder of the Common
      Securities or Holders of the Preferred Securities, as the case may be, and
      accepted appointment in the manner required by Section
      8.12
      within
      thirty (30) days after the giving of a notice of resignation by a Trustee,
      the
      removal of a Trustee, or a Trustee becoming incapable of acting as such Trustee,
      any Holder who has been a Holder of Preferred Securities for at least six (6)
      months may, on behalf of himself and all others similarly situated, and any
      resigning Trustee may, in each case, at the expense of the Depositor, petition
      any court of competent jurisdiction for the appointment of a successor Trustee.
      

     

    
      
        
        

      

      
        48

        
          

        

      

      
        
        

      

    

     

    (e)  The
      Depositor shall give notice of each resignation and each removal of the Property
      Trustee or the Delaware Trustee and each appointment of a successor Property
      Trustee or Delaware Trustee to all Holders in the manner provided in
Section
      10.8.
      Each
      notice shall include the name of the successor Property Trustee or Delaware
      Trustee and the address of its Corporate Trust Office if it is the Property
      Trustee.

     

    (f)  Notwithstanding
      the foregoing or any other provision of this Trust Agreement, in the event
      any
      Administrative Trustee or a Delaware Trustee who is a natural person dies or
      becomes, in the opinion of the Holder of Common Securities, incompetent or
      incapacitated, the vacancy created by such death, incompetence or incapacity
      may
      be filled by (i) the unanimous act of the remaining Administrative Trustees
      if
      there are at least two of them or (ii) otherwise by the Holder of the Common
      Securities (with the successor in each case being a Person who satisfies the
      eligibility requirement for Administrative Trustees or Delaware Trustee, as
      the
      case may be, set forth in Sections
      8.3
      and
8.4).

     

    (g)  Upon
      the
      appointment of a successor Delaware Trustee, such successor Delaware Trustee
      shall file a Certificate of Amendment to the Certificate of Trust in accordance
      with Section 3810 of the Delaware Statutory Trust Act.

     

    SECTION
      8.12.  Acceptance
      of Appointment by Successor.

     

    (a)  In
      case
      of the appointment hereunder of a successor Trustee, each successor Trustee
      shall execute and deliver to the Depositor and to the retiring Trustee an
      instrument accepting such appointment, and thereupon the resignation or removal
      of the retiring Trustee shall become effective and each such successor Trustee,
      without any further act, deed or conveyance, shall become vested with all the
      rights, powers, trusts and duties of the retiring Trustee; but, on request
      of
      the Trust or any successor Trustee such retiring Trustee shall, upon payment
      of
      its charges, duly assign, transfer and deliver to such successor Trustee all
      Trust Property, all proceeds thereof and money held by such retiring Trustee
      hereunder with respect to the Trust Securities and the Trust.

     

    (b)  Upon
      request of any such successor Trustee, the Trust (or the retiring Trustee if
      requested by the Depositor) shall execute any and all instruments for more
      fully
      and certainly vesting in and confirming to such successor Trustee all such
      rights, powers and trusts referred to in the preceding paragraph.

     

    (c)  No
      successor Trustee shall accept its appointment unless at the time of such
      acceptance such successor Trustee shall be qualified and eligible under this
      Article
      VIII.

     

    SECTION
      8.13.  Merger,
      Conversion, Consolidation or Succession to Business.

     

    Any
      Person into which the Property Trustee or the Delaware 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 such Trustee shall be a party,
      or
      any Person succeeding to all or substantially all the corporate trust business
      of such Trustee, shall be the successor of such Trustee hereunder, without
      the
      execution or filing of any paper or any further act on the part of any of the
      parties hereto, provided, that such Person shall be otherwise qualified and
      eligible under this Article
      VIII.

     

    
      
        
        

      

      
        49

        
          

        

      

      
        
        

      

    

     

    SECTION
      8.14.  Not
      Responsible for Recitals or Issuance of Securities.

     

    The
      recitals contained herein and in the Securities Certificates shall be taken
      as
      the statements of the Trust and the Depositor, and the Trustees do not assume
      any responsibility for their correctness. The Trustees make no representations
      as to the title to, or value or condition of, the property of the Trust or
      any
      part thereof, nor as to the validity or sufficiency of this Trust Agreement,
      the
      Notes or the Trust Securities. The Trustees shall not be accountable for the
      use
      or application by the Depositor of the proceeds of the Notes.

     

    SECTION
      8.15.  Property
      Trustee May File Proofs of Claim.

     

    (a)  In
      case
      of any Bankruptcy Event (or event that with the passage of time would become
      a
      Bankruptcy Event) relative to the Trust or any other obligor upon the Trust
      Securities or the property of the Trust or of such other obligor or their
      creditors, the Property Trustee (irrespective of whether any Distributions
      on
      the Trust Securities shall then be due and payable and irrespective of whether
      the Property Trustee shall have made any demand on the Trust for the payment
      of
      any past due Distributions) shall be entitled and empowered, to the fullest
      extent permitted by law, by intervention in such proceeding or
      otherwise:

     

    (i)  to
      file
      and prove a claim for the whole amount of any Distributions owing and unpaid
      in
      respect of the Trust Securities and to file such other papers or documents
      as
      may be necessary or advisable in order to have the claims of the Property
      Trustee (including any claim for the reasonable compensation, expenses,
      disbursements and advances of the Property Trustee, its agents and counsel)
      and
      of the Holders allowed in such judicial proceeding; and

     

    (ii)  to
      collect and receive any monies or other property payable or deliverable on
      any
      such claims and to distribute the same;

     

    and
      any
      custodian, receiver, assignee, trustee, liquidator, sequestrator or other
      similar official in any such proceeding is hereby authorized by each Holder
      to
      make such payments to the Property Trustee and, in the event the Property
      Trustee shall consent to the making of such payments directly to the Holders,
      to
      pay to the Property Trustee first any amount due it for the reasonable
      compensation, expenses, disbursements and advances of the Property Trustee,
      its
      agents and counsel, and any other amounts due the Property Trustee.

     

    (b)  Nothing
      herein contained shall be deemed to authorize the Property Trustee to authorize
      or consent to or accept or adopt on behalf of any Holder any plan of
      reorganization, arrangement, adjustment or compensation affecting the Trust
      Securities or the rights of any Holder thereof or to authorize the Property
      Trustee to vote in respect of the claim of any Holder in any such
      proceeding.

     

    
      
        
        

      

      
        50

        
          

        

      

      
        
        

      

    

     

    SECTION
      8.16.  Reports
      to and from the Property Trustee.

     

    (a)  The
      Depositor, the Guarantor and the Administrative Trustees shall deliver to the
      Property Trustee, not later than forty five (45) days after the end of each
      of
      the first three fiscal quarters of the Depositor and the Guarantor and not
      later
      than ninety (90) days after the end of each fiscal year of the Depositor and
      the
      Guarantor ending after the date of this Trust Agreement, an Officer’s
      Certificate (substantially in the form attached hereto as Exhibit
      H)
      covering the preceding fiscal period, stating whether or not to the knowledge
      of
      the signers thereof the Depositor, the Guarantor, the Administrative Trustees
      or
      the Trust are in default in the performance or observance of any of the terms,
      provisions and conditions of this Trust Agreement (without regard to any period
      of grace or requirement of notice provided hereunder) and, if the Depositor,
      the
      Guarantor, the Administrative Trustees or the Trust shall be in default,
      specifying all such defaults and the nature and status thereof of which they
      have knowledge.

     

    (b)  The
      Depositor and the Guarantor shall furnish to (i) the Property Trustee, (ii)
      the
      Purchaser, (iii) any Owner of the Preferred Securities reasonably identified
      to
      the Depositor, the Guarantor or the Trust (which identification may be made
      either by such Owner or by the Purchaser) and (iv) any designee of (i), (ii)
      or
      (iii) above, a duly completed and executed certificate in the form attached
      hereto as Exhibit G, including the financial statements referenced in such
      Exhibit, which certificate and financial statements shall be so furnished by
      the
      Depositor and the Guarantor not later than forty five (45) days after the end
      of
      each of the first three fiscal quarters of each fiscal year of the Depositor
      and
      the Guarantor and not later than ninety (90) days after the end of each fiscal
      year of the Depositor and the Guarantor.

     

    (c)  The
      Property Trustee shall receive all reports, certificates and information, which
      it is entitled to obtain under each of the Operative Documents, and deliver
      to
      (i) the Purchaser, or a designee thereof, as identified in writing to the
      Property Trustee, copies of all such reports, certificates or information
      promptly upon receipt thereof.

     

    ARTICLE
      IX.

     

    Termination,
      Liquidation and Merger

     

    SECTION
      9.1.  Dissolution
      Upon Expiration Date.

     

    Unless
      earlier dissolved, the Trust shall automatically dissolve on April 30, 2042
      (the
“Expiration Date”), and the Trust Property shall be liquidated in accordance
      with Section
      9.4.

     

    SECTION
      9.2.  Early
      Termination.

     

    The
      first
      to occur of any of the following events is an “Early Termination Event”, upon
      the occurrence of which the Trust shall be dissolved:

     

    (a)  the
      occurrence of a Bankruptcy Event in respect of, or the dissolution or
      liquidation of, the Depositor, in its capacity as the Holder of the Common
      Securities, unless the Depositor shall have transferred the Common Securities
      as
      provided by Section
      5.11,
      in
      which case this provision shall refer instead to any such successor Holder
      of
      the Common Securities;

     

    
      
        
        

      

      
        51

        
          

        

      

      
        
        

      

    

     

    (b)  the
      written direction to the Property Trustee from the Holder of the Common
      Securities at any time to dissolve the Trust and, after satisfaction of any
      liabilities of the Trust as required by applicable law, to distribute the Notes
      to Holders in exchange for the Preferred Securities (which direction is optional
      and wholly within the discretion of the Holder of the Common
      Securities).

     

    (c)  the
      redemption of all of the Preferred Securities in connection with the payment
      at
      maturity or redemption of all the Notes; and

     

    (d)  the
      entry
      of an order for dissolution of the Trust by a court of competent
      jurisdiction.

     

    SECTION
      9.3.  Termination.

     

    The
      respective obligations and responsibilities of the Trustees and the Trust shall
      terminate upon the latest to occur of the following: (a) the distribution by
      the
      Property Trustee to Holders of all amounts required to be distributed hereunder
      upon the liquidation of the Trust pursuant to Section
      9.4,
      or upon
      the redemption of all of the Trust Securities pursuant to Section 4.2;
      (b) the
      satisfaction of any expenses owed by the Trust; and (c) the discharge of all
      administrative duties of the Administrative Trustees, including the performance
      of any tax reporting obligations with respect to the Trust or the
      Holders.

     

    SECTION
      9.4.  Liquidation.

     

    (a)  If
      an
      Early Termination Event specified in Section
      9.2(a),
      (b)
      or
(d)
      occurs
      or upon the Expiration Date, the Trust shall be liquidated by the Property
      Trustee as expeditiously as the Property Trustee shall determine to be possible
      by distributing, after satisfaction of liabilities to creditors of the Trust
      as
      provided by applicable law, to each Holder a Like Amount of Notes, subject
      to
Section
      9.4(d).
      Notice
      of liquidation shall be given by the Property Trustee not less than thirty
      (30)
      nor more than sixty (60) days prior to the Liquidation Date to each Holder
      of
      Trust Securities at such Holder’s address appearing in the Securities Register.
      All such notices of liquidation shall:

     

    (i)  state
      the
      Liquidation Date;

     

    (ii)  state
      that from and after the Liquidation Date, the Trust Securities will no longer
      be
      deemed to be Outstanding and (subject to Section
      9.4(d))
      any
      Securities Certificates not surrendered for exchange will be deemed to represent
      a Like Amount of Notes; and

     

    (iii)  provide
      such information with respect to the mechanics by which Holders may exchange
      Securities Certificates for Notes, or if Section
      9.4(d)
      applies,
      receive a Liquidation Distribution, as the Property Trustee shall deem
      appropriate.

     

    (b)  Except
      where Section
      9.2(c)
      or
9.4(d)
      applies,
      in order to effect the liquidation of the Trust and distribution of the Notes
      to
      Holders, the Property Trustee, either itself acting as exchange agent or through
      the appointment of a separate exchange agent, shall establish a record date
      for
      such distribution (which shall not be more than forty-five (45) days prior
      to
      the Liquidation Date nor prior to the date on which notice of such liquidation
      is given to the Holders) and establish such procedures as it shall deem
      appropriate to effect the distribution of Notes in exchange for the Outstanding
      Securities Certificates.

     

    
      
        
        

      

      
        52

        
          

        

      

      
        
        

      

    

     

    (c)  Except
      where Section
      9.2(c)
      or
9.4(d)
      applies,
      after the Liquidation Date, (i) the Trust Securities will no longer be deemed
      to
      be Outstanding, (ii) certificates representing a Like Amount of Notes will
      be
      issued to Holders of Securities Certificates, upon surrender of such
      Certificates to the exchange agent for exchange, (iii) the Depositor shall
      use
      its best efforts to have the Notes listed on the New York Stock Exchange or
      on
      such other exchange, interdealer quotation system or self-regulatory
      organization on which the Preferred Securities are then listed, if any, (iv)
      Securities Certificates not so surrendered for exchange will be deemed to
      represent a Like Amount of Notes bearing accrued and unpaid interest in an
      amount equal to the accumulated and unpaid Distributions on such Securities
      Certificates until such certificates are so surrendered (and until such
      certificates are so surrendered, no payments of interest or principal will
      be
      made to Holders of Securities Certificates with respect to such Notes) and
      (v)
      all rights of Holders holding Trust Securities will cease, except the right
      of
      such Holders to receive Notes upon surrender of Securities
      Certificates.

     

    (d)  Notwithstanding
      the other provisions of this Section
      9.4,
      if
      distribution of the Notes in the manner provided herein is determined by the
      Property Trustee not to be permitted or practical, the Trust Property shall
      be
      liquidated, and the Trust shall be wound up by the Property Trustee in such
      manner as the Property Trustee determines. In such event, Holders will be
      entitled to receive out of the assets of the Trust available for distribution
      to
      Holders, after satisfaction of liabilities to creditors of the Trust as provided
      by applicable law, an amount equal to the Liquidation Amount per Trust Security
      plus accumulated and unpaid Distributions thereon to the date of payment (such
      amount being the “Liquidation Distribution”). If, upon any such winding up the
      Liquidation Distribution can be paid only in part because the Trust has
      insufficient assets available to pay in full the aggregate Liquidation
      Distribution, then, subject to the next succeeding sentence, the amounts payable
      by the Trust on the Trust Securities shall be paid on a pro rata basis (based
      upon Liquidation Amounts). The Holder of the Common Securities will be entitled
      to receive Liquidation Distributions upon any such winding up pro rata (based
      upon Liquidation Amounts) with Holders of all Trust Securities, except that,
      if
      an Event of Default has occurred and is continuing, the Preferred Securities
      shall have a priority over the Common Securities as provided in Section
      4.3.

     

    SECTION
      9.5.  Mergers,
      Consolidations, Amalgamations or Replacements of Trust.

     

    The
      Trust
      may not merge with or into, consolidate, amalgamate, or be replaced by, or
      convey, transfer or lease its properties and assets substantially as an entirety
      to, any Person except pursuant to this Article
      IX.
      At the
      request of the Holders of the Common Securities, without the consent of the
      Holders of the Preferred Securities, the Trust may merge with or into,
      consolidate, amalgamate, or be replaced by or convey, transfer or lease its
      properties and assets substantially as an entirety to a trust organized as
      such
      under the laws of any State; provided, that:

     

    (a)  such
      successor entity either (i) expressly assumes all of the obligations of the
      Trust under this Trust Agreement with respect to the Preferred Securities or
      (ii) substitutes for the Preferred Securities other securities having
      substantially the same terms as the Preferred Securities (such other Securities,
      the “Successor Securities”) so long as the Successor Securities have the same
      priority as the Preferred Securities with respect to distributions and payments
      upon liquidation, redemption and otherwise;

     

    
      
        
        

      

      
        53

        
          

        

      

      
        
        

      

    

     

    (b)  a
      trustee
      of such successor entity possessing substantially the same powers and duties
      as
      the Property Trustee is appointed to hold the Notes;

     

    (c)  if
      the
      Preferred Securities or the Notes are rated, such merger, consolidation,
      amalgamation, replacement, conveyance, transfer or lease does not cause the
      Preferred Securities or the Notes (including any Successor Securities) to be
      downgraded by any nationally recognized statistical rating organization that
      then assigns a rating to the Preferred Securities or the Notes;

     

    (d)  the
      Preferred Securities are listed, or any Successor Securities will be listed
      upon
      notice of issuance, on any national securities exchange or interdealer quotation
      system on which the Preferred Securities are then listed, if any;

     

    (e)  such
      merger, consolidation, amalgamation, replacement, conveyance, transfer or lease
      does not adversely affect the rights, preferences and privileges of the Holders
      of the Preferred Securities (including any Successor Securities) in any material
      respect;

     

    (f)  such
      successor entity has a purpose substantially identical to that of the
      Trust;

     

    (g)  prior
      to
      such merger, consolidation, amalgamation, replacement, conveyance, transfer
      or
      lease, the Depositor has received an Opinion of Counsel to the effect that
      (i)
      such merger, consolidation, amalgamation, replacement, conveyance, transfer
      or
      lease does not adversely affect the rights, preferences and privileges of the
      Holders of the Preferred Securities (including any Successor Securities) in
      any
      material respect; (ii) following such merger, consolidation, amalgamation,
      replacement, conveyance, transfer or lease, neither the Trust nor such successor
      entity will be required to register as an “investment company” under the
      Investment Company Act and (iii) following such merger, consolidation,
      amalgamation, replacement, conveyance, transfer or lease, the Trust (or the
      successor entity) will continue to be classified as a grantor trust for U.S.
      federal income tax purposes; and

     

    (h)  the
      Depositor or its permitted transferee owns all of the common securities of
      such
      successor entity and guarantees the obligations of such successor entity under
      the Successor Securities at least to the extent provided by the
      Indenture.

     

    Notwithstanding
      the foregoing, the Trust shall not, except with the consent of Holders of all
      of
      the Preferred Securities, consolidate, amalgamate, merge with or into, or be
      replaced by or convey, transfer or lease its properties and assets substantially
      as an entirety to any other Person or permit any other entity to consolidate,
      amalgamate, merge with or into, or replace, the Trust if such consolidation,
      amalgamation, merger, replacement, conveyance, transfer or lease would cause
      the
      Trust or the successor entity to be taxable as a corporation or classified
      as
      other than a grantor trust for United States federal income tax purposes or
      cause the Notes to be treated as other than indebtedness of the Depositor for
      United States federal income tax purposes.

     

    
      
        
        

      

      
        54

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      X.

     

    Information
      to Purchaser

     

    SECTION
      10.1.  Depositor
      Obligations to Purchaser.

     

    Notwithstanding
      any other provision herein, the Depositor and the Guarantor shall furnish to
      (a)
      the Purchaser, (b) any Owner of the Preferred Securities reasonably identified
      to the Depositor, the Guarantor, or the Trust (which identification may be
      made
      either by such Owner or by the Purchaser) and (c) any designee of (a) or (b)
      above, copies of all correspondence, notices, forms, filings, reports and other
      documents required to be provided by the Depositor or the Guarantor, whether
      acting through an Administrative Trustee or otherwise, to the Property Trustee
      or Delaware Trustee under this Trust Agreement.

     

    SECTION
      10.2.  Property
      Trustee’s Obligations to Purchaser.

     

    Notwithstanding
      any other provision herein, the Property Trustee shall furnish to the Purchaser,
      and any a designee thereof as identified in writing to the Property Trustee,
      copies of all (i) correspondence, notices, forms, filings, reports and other
      documents received by the Property Trustee or Delaware Trustee from the
      Depositor, whether acting through an Administrative Trustee or otherwise, under
      this Trust Agreement, and (ii) all correspondence, notices, forms, filings,
      reports and other documents required to be provided to the Depositor or a Holder
      by the Property Trustee or Delaware Trustee under this Trust
      Agreement.

     

     

    ARTICLE
      XI.

     

    Miscellaneous
      Provisions

     

    SECTION
      11.1.  Limitation
      of Rights of Holders.

     

    Except
      as
      set forth in Section
      9.2,
      the
      death, bankruptcy, termination, dissolution or incapacity of any Person having
      an interest, beneficial or otherwise, in Trust Securities shall not operate
      to
      terminate this Trust Agreement, nor annul, dissolve or terminate the Trust
      nor
      entitle the legal representatives or heirs of such Person or any Holder for
      such
      Person, to claim an accounting, take any action or bring any proceeding in
      any
      court for a partition or winding up of the arrangements contemplated hereby,
      nor
      otherwise affect the rights, obligations and liabilities of the parties hereto
      or any of them.

     

    SECTION
      11.2.  Agreed
      Tax Treatment of Trust and Trust Securities.

     

    The
      parties hereto and, by its acceptance or acquisition of a Trust Security or
      a
      beneficial interest therein, the Holder of, and any Person that acquires a
      beneficial interest in, such Trust Security intend and agree to treat the Trust
      as a grantor trust for United States federal, state and local tax purposes,
      and
      to treat the Trust Securities (including all payments and proceeds with respect
      to such Trust Securities) as undivided beneficial ownership interests in the
      Trust Property (and payments and proceeds therefrom, respectively) for United
      States federal, state and local tax purposes and to treat the Notes as
      indebtedness of the Depositor for United States federal, state and local tax
      purposes. The provisions of this Trust Agreement shall be interpreted to further
      this intention and agreement of the parties.

     

    
      
        
        

      

      
        55

        
          

        

      

      
        
        

      

    

     

    SECTION
      11.3.  Amendment.

     

    (a)  This
      Trust Agreement may be amended from time to time by the Property Trustee, the
      Administrative Trustees and the Holder of all the Common Securities, without
      the
      consent of any Holder of the Preferred Securities, (i) to cure any ambiguity,
      correct or supplement any provision herein that may be defective or inconsistent
      with any other provision herein, or to make or amend any other provisions with
      respect to matters or questions arising under this Trust Agreement, which shall
      not be inconsistent with the other provisions of this Trust Agreement, (ii)
      to
      modify, eliminate or add to any provisions of this Trust Agreement to such
      extent as shall be necessary to ensure that the Trust will neither be taxable
      as
      a corporation nor be classified as other than a grantor trust for United States
      federal income tax purposes at all times that any Trust Securities are
      Outstanding or to ensure that the Notes are treated as indebtedness of the
      Depositor for United States federal income tax purposes, or to ensure that
      the
      Trust will not be required to register as an “investment company” under the
      Investment Company Act or (iii) to add to the covenants, restrictions or
      obligations of the Depositor; provided, that in the case of clauses (i), (ii)
      or
      (iii), such action shall not adversely affect in any material respect the
      interests of any Holder.

     

    (b)  Except
      as
      provided in Section
      11.3(c),
      any
      provision of this Trust Agreement may be amended by the Property Trustee, the
      Administrative Trustees and the Holder of all of the Common Securities and
      with
      (i) the consent of Holders of at least a Majority in Liquidation Amount of
      the
      Preferred Securities and (ii) receipt by the Trustees of an Opinion of Counsel
      to the effect that such amendment or the exercise of any power granted to the
      Trustees in accordance with such amendment will not cause the Trust to be
      taxable as a corporation or classified as other than a grantor trust for United
      States federal income tax purposes or affect the treatment of the Notes as
      indebtedness of the Depositor for United States federal income tax purposes
      or
      affect the Trust’s exemption from status (or from any requirement to register)
      as an “investment company” under the Investment Company Act.

     

    (c)  Notwithstanding
      any other provision of this Trust Agreement, without the consent of each Holder,
      this Trust Agreement may not be amended to (i) change the accrual rate, amount,
      currency or timing of any Distribution on or the redemption price of the Trust
      Securities or otherwise adversely affect the amount of any Distribution or
      other
      payment required to be made in respect of the Trust Securities as of a specified
      date, (ii) restrict or impair the right of a Holder to institute suit for the
      enforcement of any such payment on or after such date, (iii) reduce the
      percentage of aggregate Liquidation Amount of Outstanding Preferred Securities,
      the consent of whose Holders is required for any such amendment, or the consent
      of whose Holders is required for any waiver of compliance with any provision
      of
      this Trust Agreement or of defaults hereunder and their consequences provided
      for in this Trust Agreement; (iv) impair or adversely affect the rights and
      interests of the Holders in the Trust Property, or permit the creation of any
      Lien on any portion of the Trust Property; or (v) modify the definition of
      “Outstanding,” this Section
      11.3(c),
      Sections
      4.1,
      4.2,
      4.3,
      6.10(e)
      or
Article
      IX.

     

    
      
        
        

      

      
        56

        
          

        

      

      
        
        

      

    

     

    (d)  Notwithstanding
      any other provision of this Trust Agreement, no Trustee shall enter into or
      consent to any amendment to this Trust Agreement that would cause the Trust
      to
      be taxable as a corporation or to be classified as other than a grantor trust
      for United States federal income tax purposes or that would cause the Notes
      to
      fail or cease to be treated as indebtedness of the Depositor for United States
      federal income tax purposes or that would cause the Trust to fail or cease
      to
      qualify for the exemption from status (or from any requirement to register)
      as
      an “investment company” under the Investment Company Act.

     

    (e)  If
      any
      amendment to this Trust Agreement is made, the Administrative Trustees or the
      Property Trustee shall promptly provide to the Depositor and the Note Trustee
      a
      copy of such amendment.

     

    (f)  No
      Trustee shall be required to enter into any amendment to this Trust Agreement
      that affects its own rights, duties or immunities under this Trust Agreement.
      The Trustees shall be entitled to receive an Opinion of Counsel and an Officer’s
      Certificate stating that any amendment to this Trust Agreement is in compliance
      with this Trust Agreement and all conditions precedent herein provided for
      relating to such action have been met.

     

    (g)  No
      amendment or modification to this Trust Agreement that adversely affects in
      any
      material respect the rights, duties, liabilities, indemnities or immunities
      of
      the Delaware Trustee hereunder shall be permitted without the prior written
      consent of the Delaware Trustee.

     

    SECTION
      11.4.  Separability.

     

    If
      any
      provision in this Trust Agreement or in the Securities Certificates shall be
      invalid, illegal or unenforceable, the validity, legality and enforceability
      of
      the remaining provisions shall not in any way be affected or impaired thereby,
      and there shall be deemed substituted for the provision at issue a valid, legal
      and enforceable provision as similar as possible to the provision at
      issue.

     

    SECTION
      11.5.  Governing
      Law.

     

    THIS
      TRUST AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF EACH OF THE HOLDERS, THE
      TRUST, THE DEPOSITOR, THE GUARANTOR AND THE TRUSTEES WITH RESPECT TO THIS TRUST
      AGREEMENT AND THE TRUST SECURITIES SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
      WITH AND GOVERNED BY THE LAWS OF THE STATE OF DELAWARE WITHOUT REFERENCE TO
      ITS
      CONFLICTS OF LAWS PROVISIONS.

     

    SECTION
      11.6.  Successors.

     

    This
      Trust Agreement shall be binding upon and shall inure to the benefit of any
      successor to the Depositor, the Guarantor, the Trust and any Trustee, including
      any successor by operation of law. Except in connection with a transaction
      involving the Depositor that is permitted under Article
      VIII
      of the
      Indenture and pursuant to which the assignee agrees in writing to perform the
      Depositor’s obligations hereunder, the Depositor shall not assign its
      obligations hereunder.

     

    
      
        
        

      

      
        57

        
          

        

      

      
        
        

      

    

     

    SECTION
      11.7.  Headings.

     

    The
      Article and Section headings are for convenience only and shall not affect
      the
      construction of this Trust Agreement.

     

    SECTION
      11.8.  Reports,
      Notices and Demands.

     

    (a)  Any
      report, notice, demand or other communication that by any provision of this
      Trust Agreement is required or permitted to be given or served to or upon any
      Holder, the Depositor or the Guarantor may be given or served in writing
      delivered in person, or by reputable, overnight courier, by telecopy or by
      deposit thereof, first-class postage prepaid, in the United States mail,
      addressed, (a) in the case of a Holder of Preferred Securities, to such Holder
      as such Holder’s name and address may appear on the Securities Register; (b) in
      the case of the Holder of all the Common Securities or the Depositor, to
      NorthStar Realty Finance Limited Partnership c/o NorthStar Realty Finance Corp.,
      399 Park Avenue, 18th
      Floor,
      New York, NY 10022, Attention: Chief Financial Officer, or to such other address
      as may be specified in a written notice by the Holder of all the Common
      Securities or the Depositor, as the case may be, to the Property Trustee; and
      (c) in the case of the Guarantor, to NorthStar Realty Finance Corp., 399 Park
      Avenue, 18th
      Floor,
      New York, NY 10022, Attention: Chief Financial Officer, or to such other address
      as may be specified in a written notice by the Guarantor to the Property
      Trustee. Such report, notice, demand or other communication to or upon a Holder,
      the Depositor or the Guarantor shall be deemed to have been given when received
      in person, within one (1) Business Day following delivery by overnight courier,
      when telecopied with receipt confirmed, or within three (3) Business Days
      following delivery by mail, except that if a notice or other document is refused
      delivery or cannot be delivered because of a changed address of which no notice
      was given, such notice or other document shall be deemed to have been delivered
      on the date of such refusal or inability to deliver.

     

    (b)  Any
      notice, demand or other communication that by any provision of this Trust
      Agreement is required or permitted to be given or served to or upon the Property
      Trustee, the Delaware Trustee, the Administrative Trustees or the Trust shall
      be
      given in writing by deposit thereof, first-class postage prepaid, in the U.S.
      mail, personal delivery or facsimile transmission, addressed to such Person
      as
      follows: (a) with respect to the Property Trustee and the Delaware Trustee
      to
      Wilmington Trust Company, Rodney Square North, 1100 North Market Street,
      Wilmington, Delaware 19890-0001, Attention: Corporate Capital Markets, facsimile
      no. (302) 636-4140; (b) with respect to the Administrative Trustees, to them
      at
      the address above for notices to the Depositor, marked “Attention:
      Administrative Trustees of NorthStar Realty Finance Trust VII,” and (c) with
      respect to the Trust, to its principal executive office specified in
Section
      2.2,
      with a
      copy to the Property Trustee. Such notice, demand or other communication to
      or
      upon the Trust, the Property Trustee or the Administrative Trustees shall be
      deemed to have been sufficiently given or made only upon actual receipt of
      the
      writing by the Trust, the Property Trustee or the Administrative
      Trustees.

     

    SECTION
      11.9.  Agreement
      Not to Petition.

     

    Each
      of
      the Trustees and the Depositor agree for the benefit of the Holders that, until
      at least one year and one day after the Trust has been terminated in accordance
      with Article
      IX,
      they
      shall not file, or join in the filing of, a petition against the Trust under
      any
      Bankruptcy Law or otherwise join in the commencement of any proceeding against
      the Trust under any Bankruptcy Law. If the Depositor takes action in violation
      of this Section
      11.9,
      the
      Property Trustee agrees, for the benefit of Holders, that at the expense of
      the
      Depositor, it shall file an answer with the applicable bankruptcy court or
      otherwise properly contest the filing of such petition by the Depositor against
      the Trust or the commencement of such action and raise the defense that the
      Depositor has agreed in writing not to take such action and should be estopped
      and precluded therefrom and such other defenses, if any, as counsel for the
      Property Trustee or the Trust may assert.

     

    
      
        
        

      

      
        58

        
          

        

      

      
        
        

      

    

     

    This
      instrument may be executed in any number of counterparts, each of which so
      executed shall be deemed to be an original, but all such counterparts shall
      together constitute but one and the same instrument. Delivery of an executed
      signature page of this instrument by facsimile transmission shall be effective
      as delivery of a manually executed counterpart hereof.

     

    [REMAINDER
      OF THIS PAGE INTENTIONALLY LEFT BLANK]

     

    

    
      
        
        

      

      
        59

        
          

        

      

      
        
        

      

    

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

    

      
        	 	 	
                NorthStar
                  Realty Finance Limited Partnership,

                as
                  Depositor

              
	 	 	 
	 	 	
                By:

              	
                NorthStar
                  Realty Finance Corp., its 

                General
                  Partner

              
	 	 	 	 
	 	 	
                By:

              	
                /s/
                  Albert Tylis

                Albert
                  Tylis

                Executive
                  Vice President, General Counsel and Assistant Secretary

              
	 	 	 
	 	 	 
	 	 	
                By:

              	
                NorthStar
                  Realty Finance Corp.,

                as
                  Guarantor

              
	 	 	 	 
	 	 	
                By:

              	
                /s/
                  Albert Tylis

                Albert
                  Tylis

                Executive
                  Vice President, General Counsel and Assistant Secretary

              
	 	 	 	 
	 	 	 	 
	Wilmington
                Trust Company,
                as Delaware Trustee	 	
                NorthStar
                  Realty Finance Trust VII

              
	 	 	 	 
	 	 	 	 
	
                By:

              	
                /s/
                  W. Thomas Morris, II

                Name:
                  W. Thomas Morris, II

                Title:
                  Assistant Vice President

              	 	
                /s/
                  David T. Hamamoto

                Administrative
                  Trustee

              
	 	 	 	 
	Wilmington
                Trust Company,
                as Property Trustee	 	
                /s/
                  Richard J. McCready

                Richard
                  J. McCready

                Administrative
                  Trustee

              
	 	 	 	 
	
                By:

              	
                /s/
                  W. Thomas Morris, II

                Name:
                  W. Thomas Morris, II

                Title:
                  Assistant Vice President

              	 	
                /s/
                  Andrew C. Richardson

                Andrew
                  C. Richardson

                Administrative
                  TrusteeUnassociated Document

    EXECUTION
      VERSION

    

     

    

    
      

      

    

     

    LICENSE
      AGREEMENT

    

     

    by
      and between

    

     

    INSPIRE
      PHARMACEUTICALS, INC.

     

     

    and

     

     

    INSITE
      VISION INCORPORATED

    

     

    Dated
      as of February 15, 2007

     

     

     

    
      

      

    

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

      TABLE
        OF CONTENTS

    

    

      
        	
                ARTICLE
                  1 DEFINITIONS

              	
                1

              
	
                ARTICLE
                  2 LICENSES AND EXCLUSIVITY

              	
                12

              
	
                2.1

              	
                Licenses

              	
                12

              
	
                2.2

              	
                Sublicenses

              	
                13

              
	
                2.3

              	
                InSite
                  Trademarks and Domain Names

              	
                14

              
	
                2.4

              	
                Use
                  of Affiliates and Third Party Contractors

              	
                15

              
	
                2.5

              	
                Reserved
                  Interests

              	
                15

              
	
                2.6

              	
                No
                  Implied Grants

              	
                15

              
	
                2.7

              	
                Registration
                  of License

              	
                15

              
	
                2.8

              	
                Supply
                  of API

              	
                15

              
	
                2.9

              	
                Supply
                  of Finished Product

              	
                16

              
	
                2.10

              	
                Option
                  for Option Product License

              	
                16

              
	
                2.11

              	
                Inspire
                  Blocking Patent Rights

              	
                17

              
	
                ARTICLE
                  3 DEVELOPMENT AND COMMERCIALIZATION

              	
                17

              
	
                3.1

              	
                Data
                  and Materials Transfer and Right of Reference

              	
                17

              
	
                3.2

              	
                Current
                  Product Development

              	
                18

              
	
                3.3

              	
                Regulatory
                  Matters; InSite Assistance.

              	
                19

              
	
                3.4

              	
                Commercialization

              	
                21

              
	
                3.5

              	
                Reports

              	
                22

              
	
                3.6

              	
                Adverse
                  Event Reporting

              	
                22

              
	
                3.7

              	
                Coordination
                  Committee

              	
                23

              
	
                3.8

              	
                Future
                  Development

              	
                24

              
	
                ARTICLE
                  4 INITIAL PAYMENT AND MILESTONE PAYMENT

              	
                25

              
	
                4.1

              	
                Initial
                  Payment

              	
                25

              
	
                4.2

              	
                Milestone
                  Payment upon Regulatory Approval

              	
                25

              
	
                4.3

              	
                Payment

              	
                25

              
	
                
                  ARTICLE
                    5 ROYALTIES

                

              	
                26

              
	
                5.1

              	
                Royalty
                  Rates

              	
                26

              
	
                5.2

              	
                Royalty
                  Term

              	
                26

              
	
                5.3

              	
                Minimum
                  Royalty

              	
                26

              
	
                5.4

              	
                Reports
                  and Payments

              	
                28

              
	
                5.5

              	
                Taxes
                  and Withholding

              	
                29

              
	
                5.6

              	
                Currency
                  Exchange; Manner and Place of Payment

              	
                29

              
	
                5.7

              	
                Maintenance
                  of Records; Audit

              	
                29

              
	
                5.8

              	
                Reductions

              	
                30

              
	
                ARTICLE
                  6 TRADEMARKS

              	
                33

              
	
                6.1

              	
                Registrations

              	
                33

              
	
                6.2

              	
                Inspire
                  Trademarks

              	
                33

              
	
                ARTICLE
                  7 REPRESENTATIONS, WARRANTIES AND COVENANTS

              	
                33

              
	
                7.1

              	
                Mutual
                  Representations and Warranties

              	
                33

              
	
                7.2

              	
                Additional
                  InSite Representations and Warranties

              	
                34

              
	
                7.3

              	
                Additional
                  Inspire Representations and Warranties

              	
                38

              
	
                7.4

              	
                No
                  Implied Warranties

              	
                38

              
	
                7.5

              	
                Certain
                  Additional Covenants.

              	
                38

              

      

       

      
        
          
          

        

        
          i

          
            

          

        

        
          
          

        

      

      

        TABLE
          OF CONTENTS

        (continued)

      

       

      
        	
                ARTICLE
                  8 CONFIDENTIALITY, PUBLICATION AND PUBLIC
                  ANNOUNCEMENTS

              	
                41

              
	
                8.1

              	
                Confidentiality

              	
                41

              
	
                8.2

              	
                Authorized
                  Disclosure

              	
                41

              
	
                8.3

              	
                Scientific
                  Publications

              	
                41

              
	
                8.4

              	
                Disclosure
                  of Agreement

              	
                42

              
	
                8.5

              	
                Unauthorized
                  Use

              	
                43

              
	
                8.6

              	
                Return
                  of Confidential Information

              	
                43

              
	
                ARTICLE
                  9 INDEMNIFICATION

              	
                43

              
	
                9.1

              	
                Inspire

              	
                43

              
	
                9.2

              	
                InSite

              	
                43

              
	
                9.3

              	
                Indemnification
                  Procedures

              	
                43

              
	
                9.4

              	
                Insurance
                  Proceeds

              	
                45

              
	
                9.5

              	
                Insurance

              	
                45

              
	
                ARTICLE
                  10 TERM AND TERMINATION

              	
                45

              
	
                10.1

              	
                Term

              	
                45

              
	
                10.2

              	
                Voluntary
                  Termination by Inspire

              	
                45

              
	
                10.3

              	
                Material
                  Breach

              	
                46

              
	
                10.4

              	
                Bankruptcy
                  or Insolvency

              	
                46

              
	
                10.5

              	
                Continuing
                  Rights of Sublicensees

              	
                46

              
	
                10.6

              	
                Effect
                  of Expiration or Termination of Agreement

              	
                47

              
	
                10.7

              	
                Effect
                  of Partial Termination of Agreement

              	
                48

              
	
                10.8

              	
                Inspire
                  Remedy for Uncured Breach

              	
                48

              
	
                10.9

              	
                Rights
                  in Bankruptcy

              	
                49

              
	
                ARTICLE
                  11 INTELLECTUAL PROPERTY

              	
                49

              
	
                11.1

              	
                Prosecution
                  of InSite Licensed Patents

              	
                49

              
	
                11.2

              	
                Right
                  to Consult

              	
                49

              
	
                11.3

              	
                Abandonment
                  of Prosecution by InSite

              	
                50

              
	
                11.4

              	
                Patent
                  Term Extensions

              	
                50

              
	
                11.5

              	
                Third
                  Party Infringement

              	
                50

              
	
                11.6

              	
                Infringement
                  of Third Party Rights

              	
                52

              
	
                ARTICLE
                  12 MISCELLANEOUS

              	
                53

              
	
                12.1

              	
                Consideration

              	
                53

              
	
                12.2

              	
                Assignment

              	
                53

              
	
                12.3

              	
                Further
                  Actions

              	
                53

              
	
                12.4

              	
                Notices

              	
                53

              
	
                12.5

              	
                Amendment

              	
                54

              
	
                12.6

              	
                Waiver

              	
                54

              
	
                12.7

              	
                Counterparts;
                  Facsimile Signatures

              	
                54

              
	
                12.8

              	
                Descriptive
                  Headings

              	
                55

              
	
                12.9

              	
                Governing
                  Law; Dispute Resolution

              	
                55

              
	
                12.10

              	
                Severability

              	
                55

              
	
                12.11

              	
                Entire
                  Agreement of the Parties

              	
                55

              
	
                12.12

              	
                Independent
                  Parties

              	
                55

              
	
                12.13

              	
                Accrued
                  Rights; Surviving Obligations

              	
                55

              

      

       

      
        
          
          

        

        
          ii

          
            

          

        

        
          
          

        

      

      
        	
                12.14

              	
                Certain
                  Remedies

              	
                56

              
	
                12.15

              	
                Expenses

              	
                56

              
	
                12.16

              	
                No
                  Third Party Beneficiaries

              	
                56

              
	
                12.17

              	
                No
                  Strict Construction

              	
                56

              

      

    

     

    
      
        
        

      

      
        iii

        
          

        

      

      
        
        

      

    

    

      LICENSE
        AGREEMENT

       

      This
        LICENSE AGREEMENT (this “Agreement”),
        dated
        as of February 15, 2007 (the “Effective
        Date”),
        is
        made by and between Inspire Pharmaceuticals, Inc., a Delaware corporation
        having
        its principal office at 4222 Emperor Blvd., Suite 200, Durham, NC 27703
        (“Inspire”),
        and
        InSite Vision Incorporated, a Delaware corporation having its principal office
        at 965 Atlantic Ave., Alameda, CA 94501 (“InSite”).
        Inspire and InSite are each sometimes referred to individually as a
“Party”
and
        together as the “Parties.”

       

      RECITALS

       

      WHEREAS,
        InSite is engaged in the research, development and commercialization of
        proprietary pharmaceutical products for the treatment of ophthalmic indications
        and owns certain patents, know-how and regulatory filings relating to certain
        products;

       

      WHEREAS,
        Inspire is engaged in the research, development and commercialization of
        proprietary pharmaceutical products for the treatment of ophthalmic indications;
        and

       

      WHEREAS,
        Inspire desires to obtain from InSite, and InSite desires to grant to Inspire,
        the exclusive rights in the Territory to certain patents, know-how and
        regulatory filings for the commercialization of Subject Products (each as
        defined below).

       

      NOW,
        THEREFORE, in consideration of the foregoing premises and the mutual
        representations, covenants and agreements contained herein, Inspire and InSite,
        intending to be legally bound, hereby agree as follows:

       

      ARTICLE
        1

      DEFINITIONS

       

      When
        used
        in this Agreement, whether in the singular or plural, each of the following
        capitalized terms shall have the meanings set forth in this Article
        1.

       

      1.1  “2006
        Senior Notes”
has
        the
        meaning set forth in Section 7.1(e).

       

      1.2  “Acceptable
        Label”
means,
        for a Subject Product in the United States, FDA-approved labeling for the
        treatment of bacterial conjunctivitis, where such label: (a) indicates dosing
        of
        such Subject Product of not more than two (2) times daily for seven (7) days,
        (b) permits expiration dating of such Subject Product of no less than eighteen
        (18) months, and (c) has a comparable side effect profile to ocular antibiotics
        being marketed as of the Effective Date. 

       

      1.3  “Affiliate”
means
        a
        corporation or non-corporate business entity that, directly or indirectly,
        controls, is controlled by, or is under common control with the Person
        specified. An entity will be regarded as in control of another entity if:
        (a) it
        owns, directly or indirectly, at least 50% of the voting securities or capital
        stock of such entity, or has other comparable ownership interest with respect
        to
        any entity other than a corporation; or (b) it possesses, directly or
        indirectly, the power to direct or cause the direction of the management
        and
        policies of the corporation or non-corporate business entity, as applicable,
        whether through the ownership or control of voting securities, by contract
        or
        otherwise. 

       

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

       

      1.4  “AzaSite
        Patent Rights”
means,
        collectively, (a) (i) all Patent Rights related to any Subject Product or
        its
        manufacture or use that are Controlled by InSite or an Affiliate of InSite
        as of
        the Effective Date, including without limitation all patents and patent
        applications listed as “AzaSite Patent Rights” in Schedule
        1,
        as may
        be amended by the Parties from time to time, and (ii) all Patent Rights with
        priority based on such patents or patent applications or on any application
        on
        which the priority of such patents or patent applications is based, (b)
all
        Patent Rights, other than those set forth in the foregoing clause (a), that
        are
        Controlled by InSite or an Affiliate of InSite as of the Effective Date or
        at
        any time thereafter during the Term and are
        necessary to make, have made, use, sell, offer for sale or import any Subject
        Product in the Field in the Territory,
        and (c)
        all Patent Rights related to any InSite Developments that are Controlled
        by
        InSite or an Affiliate of InSite. Notwithstanding the foregoing, the term
        “AzaSite Patent Rights” shall not include the Container Patent Rights, the
        DuraSite Patent Rights, the Columbia Patent Rights or the Pfizer Patent
        Rights. 

       

      1.5  “AzaSite
        Trademark”
means
        the trademark AzaSiteTM.

       

      1.6  “Breach
        Notice”
has
        the
        meaning set forth in Section 10.3.

       

      1.7  “Breaching
        Party”
has
        the
        meaning set forth in Section 10.3.

       

      1.8  “Business
        Day”
means
        any day, except Saturday and Sunday, on which commercial banking institutions
        in
        New York are open for business. Any reference in this Agreement to “day” whether
        or not capitalized shall refer to a calendar day, not a Business
        Day.

       

      1.9  “Cardinal”
means
        Cardinal Health PTS, LLC.

       

      1.10  “Cardinal
        Agreement”
means
        the Manufacturing Services Agreement entered into by InSite and Cardinal
        on
        September 12, 2005.

       

      1.11  “Columbia”
means
        Columbia Laboratories, Inc.

       

      1.12  “Columbia
        Agreement”
means
        the letter agreement entered into by and between InSite and Columbia on February
        27, 1992. 

       

      1.13  “Columbia
        Patent Rights”
means
        all Patent Rights licensed to InSite under the Columbia Agreement related
        to any
        Subject Product or its manufacture or use, including without limitation all
        patents listed as “Columbia Patent Rights” in Schedule 1,
        in each
        case to the extent Controlled by InSite or an Affiliate of InSite as of the
        Effective Date and any time thereafter during the Term.

       

      1.14  “Commercially
        Reasonable Efforts”
means,
        with respect to the efforts of a particular Party to complete specific tasks
        or
        obligations under this Agreement, the efforts and resources that would be
        used,
        consistent with prevailing pharmaceutical industry standards, by a company
        of
        similar size and scope to such Party with respect to a product or potential
        product at a similar stage in its development or product life and of similar
        market potential, taking into account efficacy, safety, the anticipated
        Regulatory Authority approved labeling, the competitiveness of alternative
        products in the marketplace or under development, the profitability of the
        product including the royalties payable to Third Party licensors, the patent
        and
        other proprietary position of the product, the likelihood of Regulatory
        Approval, the commercial value of the product and other relevant factors.
        Commercially Reasonable Efforts shall be determined on a country-by-country
        basis for a particular product or potential product, and it is anticipated
        that
        the level of effort will change over time, reflecting changes in the status
        of
        the product or potential product and the market involved. 

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      1.15  “Confidential
        Information”
of
        a
        Party means all secret, confidential or proprietary information or data,
        whether
        provided in written, oral, graphic, video, computer or other form, provided
        by
        such Party (the “Disclosing
        Party”)
        to the
        other Party (the “Receiving
        Party”)
        pursuant to this Agreement (including information generated by or on behalf
        of
        such Party pursuant to this Agreement and disclosed to the other Party),
        which
        may include without limitation information relating to the Disclosing Party’s
        existing or proposed research, development efforts, sales and supply forecasts,
        financial projections, other sales and marketing information, patent
        applications, business or products and any other materials that have not
        been
        made available by the Disclosing Party to the general public. The terms of
        this
        Agreement shall also be deemed Confidential Information of each Party, except
        to
        the extent disclosed pursuant to Section 8.4
        herein.
        Notwithstanding the foregoing sentences, the term “Confidential Information”
shall not include any information or materials that the Receiving Party can
        demonstrate:

       

      (a)  were
        already known to the Receiving Party (other than under an obligation of
        confidentiality), at the time of disclosure by the Disclosing Party to the
        extent such Receiving Party has documentary evidence to that
        effect;

       

      (b)  were
        generally available to the public or otherwise part of the public domain
        at the
        time of its disclosure to the Receiving Party;

       

      (c)  became
        generally available to the public or otherwise part of the public domain
        after
        its disclosure or development, as the case may be, and other than through
        any
        act or omission of the Receiving Party in breach of its confidentiality
        obligations under this Agreement;

       

      (d)  were
        subsequently lawfully disclosed to the Receiving Party by a Third Party who
        had
        no obligation to the Disclosing Party not to disclose such information to
        others;

       

      (e)  were
        independently discovered or developed by or on behalf of the Receiving Party
        without the use of the Confidential Information belonging to the other Party
        and
        the Receiving Party has documentary evidence to that effect; or

       

      (f)  is
        approved for release by the Disclosing Party in writing.

       

      1.16  “Container
        Patent Rights
        means,
        collectively, (a) (i) all patents and patent applications listed as “Container
        Patent Rights” in Schedule
        1,
        as may
        be amended by the Parties from time to time, and (ii) all Patent Rights with
        priority based on such patents or patent applications or on any application
        on
        which the priority of such patents or patent applications is based, and (b)
        all
        Patent Rights, other than those set forth in the foregoing clause (a), that
        are
        Controlled by InSite or an Affiliate of InSite as of the Effective Date or
        at
        any time thereafter during the Term and are necessary to make, have made,
        use,
        sell, offer for sale or import any Subject Product in the Field in the
        Territory.

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      1.17  “Control,”
        “Controls,”
or
        “Controlled”
means,
        with respect to specific materials, Know-How or Patent Rights, that the
        applicable Party owns or has a license under such materials, Know-How or
        Patent
        Rights and has the ability to grant to the other Party licenses or sublicenses
        thereto as contemplated under this Agreement without violating the terms
        of any
        agreement or other arrangement with, or the rights of, any Third Party existing
        as of the date on which such license or sublicense is granted.

       

      1.18  “Coordination
        Committee”
has
        the
        meaning set forth in Section 3.7.

       

      1.19  “Course
        of Action”
has
        the
        meaning set forth in Section 11.6(a).

       

      1.20  “Current
        Indication”
means
        bacterial conjunctivitis. 

       

      1.21  “Current
        Product”
means
        the Subject Product with the composition and formulation described in the
        IND
        with the number 62,873 or NDA with the number 50-810, as each may be
        amended, for the Current Indication.

       

      1.22  “[***]
        Agreement”
means
        the letter agreement entered into by InSite and [***].

       

      1.23  “Disclosing
        Party”
has
        the
        meaning set forth in Section 1.15.

       

      1.24  “Domain
        Names”
means
        the internet domain names set forth in Schedule 1.24,
        such
        domain names being owned and registered by InSite.

       

      1.25  “Drug
        Master File”
means
        a
        Drug Master File, as defined in the U.S. Federal Food, Drug, and Cosmetic
        Act,
        pursuant to 21 C.F.R. § 314.420 as amended, and the regulations promulgated
        thereunder (or the equivalent thereto as specified in any succeeding
        legislation), or any foreign equivalent thereto, with respect to the manufacture
        of any Subject Product or an Inspire Licensed Product.

       

      1.26  “DuraSite
        Patent Rights”
means,
        collectively, (a) (i) all patents and patent applications listed as “DuraSite
        Patent Rights” in Schedule
        1,
        as may
        be amended by the Parties from time to time, and (ii) all Patent Rights with
        priority based on such patents or patent applications or on any application
        on
        which the priority of such patents or patent applications is based, and (b)
        all
        Patent Rights, other than those set forth in the foregoing clause (a), that
        are
        Controlled by InSite or an Affiliate of InSite as of the Effective Date or
        at
        any time thereafter during the Term and are necessary to make, have made,
        use,
        sell, offer for sale or import any Subject Product in the Field in the
        Territory.

       

      
        	
                *Indicates
                  that certain information contained herein has been omitted and
                  filed
                  separately with the Securities and Exchange Commission. Confidential
                  treatment has been requested with respect to the omitted
                  portions.

              

      

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      1.27  “FDA”
means
        the United States Food and Drug Administration, or any successor agency
        thereof.

       

      1.28  “Field”
means
        the treatment, prevention or palliation of any human ocular or ophthalmic
        disease or condition. 

       

      1.29  “First
        Commercial Sale”
means,
        with regard to a particular Inspire Licensed Product in a country in the
        Territory, the first commercial sale by Inspire or its Affiliate or sublicensee
        of such Inspire Licensed Product to a Third Party for end use or consumption
        in
        such country after Inspire’s (or its Affiliate’s or sublicensee’s) receipt of
        Regulatory Approval for such Inspire Licensed Product in such country. Use
        of
        Inspire Licensed Products for promotional, sampling or compassionate use
        purposes that are customary in the prevailing pharmaceutical industry shall
        not
        be considered a commercial sale hereunder.

       

      1.30  “Future
        Development”
means
        any and all Know-How, developments, inventions or discoveries in the Field
        conceived, reduced to practice, made or developed by or on behalf of InSite
        or
        any of its Affiliates (whether or not patentable) during the Term, and any
        Patent Rights related thereto not otherwise licensed to Inspire under Section
        2.1 of this Agreement, in each case that are: (i) Controlled by InSite or
        its
        Affiliate, (ii) used by or on behalf of InSite or its Affiliate in the context
        of a phase I clinical trial, and (iii) necessary or useful to develop,
        manufacture or commercialize any Subject Product in the Field in the Territory.
        Notwithstanding the foregoing, the term “Future Development” shall not include
        any InSite Developments or the Option Product. 

       

      1.31  “Future
        Development Option Notice”
has
        the
        meaning set forth in Section 3.8.

       

      1.32  “Future
        Development Option Term”
has
        the
        meaning set forth in Section 3.8.

       

      1.33  “GAAP”
means
        United States generally accepted accounting principles as interpreted and
        accepted by the Financial Accounting Standards Board and the Securities and
        Exchange Commission.

       

      1.34  “Generic
        Competition”
means
        that one or more Third Parties are marketing, for use in human beings, a
        Generic
        Equivalent in a country within the Territory.

       

      1.35  “Generic
        Equivalent”
means
        a
[***].
         

       

      1.36  “IND”
means
        an Investigational New Drug Application, as defined in the U.S. Federal Food,
        Drug, and Cosmetic Act, pursuant to 21 C.F.R. § 312.3 as amended, and the
        regulations promulgated thereunder, or the equivalent thereto as specified
        in
        any succeeding legislation.

       

      1.37  “Indemnitee”
has
        the
        meaning set forth in Section 9.3(a).

       

      1.38  “Indemnitor”
has
        the
        meaning set forth in Section 9.3(a).

      
         

        
          	
                  *Indicates
                    that certain information contained herein has been omitted and
                    filed
                    separately with the Securities and Exchange Commission. Confidential
                    treatment has been requested with respect to the omitted
                    portions.

                

        

      

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

      

      1.39  “Independent
        Sublicensee”
has
        the
        meaning set forth in Section 10.5.

       

      1.40  “Infringement
        Notice”
has
        the
        meaning set forth in Section 11.5(a).

       

      1.41  “Initial
        Payment”
has
        the
        meaning set forth in Section 4.1.

       

      1.42  “Initial
        Royalty Period”
has
        the
        meaning set forth in Section 5.1(a).

       

      1.43  “InSite
        Developments”
means
        any and all Know-How, developments, inventions or discoveries conceived,
        reduced
        to practice, made or developed by or on behalf of InSite or any of its
        Affiliates (whether or not patentable) at any time from the Effective Date
        up to
        and including the Transfer Date, and any Patent Rights related thereto, in
        each
        case that are Controlled by InSite or its Affiliate and are necessary or
        useful
        to develop, manufacture or commercialize any Subject Product for the Current
        Indication in the Field in the Territory.

       

      1.44  “InSite
        Formulation Know-How”
means
        the formulation of polycarbophil, sodium chloride EDTA, disodium and sterile
        water for irrigation, and any Know-How specifically related thereto, in each
        case Controlled by InSite or its Affiliate as of the Effective
        Date.

       

      1.45  “InSite
        Indemnitees”
has
        the
        meaning set forth in Section 9.1.

       

      1.46  “InSite
        Intellectual Property”
means,
        collectively, the InSite Owned Patents, the InSite Know-How, the InSite
        Formulation Know-How, the InSite Trademarks and the Domain Names.

       

      1.47  “InSite
        Know-How”
means,
        collectively, (a) all Know-How related to any Subject Product that is Controlled
        by InSite or any of its Affiliates as of the Effective Date, and (b) all
        Know-How related to any InSite Developments that is Controlled by InSite
        or any
        of its Affiliates at any time from the Effective Date up to and including
        the
        Transfer Date. Notwithstanding the foregoing, the term “InSite Know-How” shall
        not include the InSite Formulation Know-How. 

       

      1.48  “InSite
        License Fee”
has
        the
        meaning set forth in Section 4.1(b).

       

      1.49  “InSite
        Licensed Patents”
means,
        collectively, the DuraSite Patent Rights, the Columbia Patent Rights, the
        AzaSite Patent Rights, the Container Patent Rights and the Pfizer Patent
        Rights. 

       

      1.50  “InSite
        Owned Patents”
means,
        collectively, the DuraSite Patent Rights, the AzaSite Patent Rights and the
        Container Patent Rights. 

       

      1.51  “InSite
        Trademarks”
means
        the trademarks set forth in Schedule
        1.24,
        such
        marks being owned and registered by InSite. 

       

      1.52  “Inspire
        Blocking Patent Rights”
means
        all Patent Rights that are Controlled by Inspire or an Affiliate of Inspire
        at
        any time during the Term and are necessary to make, have made, use, sell,
        offer
        for sale or import Subject Products in the Field outside the
        Territory. 

       

      1.53  “Inspire
        Indemnitees”
has
        the
        meaning set forth in Section 9.2.

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

      1.54  “Inspire
        Improvement”
has
        the
        meaning set forth in Section 3.8(a).

       

      1.55  “Inspire
        Licensed Product”
means
        any Subject Product of Inspire or its Affiliate or sublicensee (a) whose
        manufacture, use, sale, distribution or importation by Inspire would, absent
        the
        licenses granted by InSite to Inspire herein, infringe any Valid Claim included
        in the InSite Licensed Patents, determined on a country-by-country basis,
        and/or
        (b) materially uses or incorporates the InSite Know-How or the InSite
        Formulation Know-How.

       

      1.56  “Inspire
        Royalties”
has
        the
        meaning set forth in Section 5.1.

       

      1.57  “Inspire
        Royalty Term”
has
        the
        meaning set forth in Section 5.2.

       

      1.58  “Inspire
        Trademarks”
has
        the
        meaning set forth in Section 6.2.

       

      1.59  “IP
        Communication”
has
        the
        meaning set forth in Section 7.5(h).

       

      1.60  “Know-How”
means
        all non-public information, results and data of any type whatsoever, in any
        tangible or intangible form whatsoever, whether or not patentable, including
        databases, practices, methods, techniques, specifications, formulations,
        formulae, knowledge, skill, experience, data (including pharmacological,
        medicinal chemistry, biological, chemical, biochemical, toxicological and
        clinical study data), analytical and quality control data, stability data,
        studies and procedures, and manufacturing process and development information,
        results and data (other than such Know-How which is or becomes the subject
        of a
        Patent Right).

       

      1.61  “Knowledge”
means,
        with respect to a particular fact or matter, the applicable Party or its
        Affiliate is actually aware of that fact or matter as of the Effective Date
        following a reasonable internal review and discussion with such Party’s or
        Affiliate’s officers and employees who could reasonably be expected to be aware
        of such fact or matter. 

       

      1.62  “Lien”
means
        (a) any interest in property (whether real, personal or mixed and whether
        tangible or intangible) which secures an obligation owed to, or a claim by,
        a
        Person other than the owner of such property, whether such interest is based
        on
        the common law, statute or contract, including, without limitation, any such
        interest arising from a lease, license, mortgage, charge, pledge, hypothecation,
        security agreement, conditional sale, trust receipt or deposit in trust,
        or
        arising from a consignment of bailment given for security purposes (other
        than a
        trust receipt or deposit given in the ordinary course of business which does
        not
        secure any obligation for borrowed money), (b) any encumbrance upon such
        property which does not secure such an obligation, (c) any exception to or
        defect in the title to or ownership interest in such property, including,
        without limitation, reservations, rights of entry, possibilities of reverter,
        encroachments, easements, rights of way, restrictive covenants and licenses,
        and
        (d) any other claim, charge or commitment. For the avoidance of doubt, “Lien”
shall not include any of the Material Agreements or any other license under
        the
        InSite Intellectual Property, or other agreements not related to the Subject
        Products or the InSite Intellectual Property, that InSite enters into in
        its
        ordinary course of business after the Effective Date. 

      
         

         

        
          
            
            

          

          
            7

            
              

            

          

          
            
            

          

        

      

       

      1.63  “Losses”
has
        the
        meaning set forth in Section 9.1.

       

      1.64  “Material
        Agreements”
means,
        collectively, the Pfizer Agreement, the Columbia Agreement, the Cardinal
        Agreement and the [***] Agreement.

       

      1.65  “Milestone
        Payment”
has
        the
        meaning set forth in Section 4.2.

       

      1.66  “Minimum
        Royalty”
has
        the
        meaning set forth in Section 5.3.

       

      1.67  “Minimum
        Royalty Date”
means
        the first
        Quarter Start Date that is at least one year (365 days) after the date of
        the
        First Commercial Sale of an Inspire Licensed Product in the United
        States. 

       

      1.68  “Minimum
        Royalty Period”
means
        the one-year period commencing on the Minimum Royalty Date or any yearly
        anniversary thereof, as applicable.

       

      1.69  “NDA”
means
        a
        New Drug Application pursuant to 21 U.S.C. § 505(b)(1) or § 505(b)(2) submitted
        to the FDA or any successor application or procedure required for Regulatory
        Approval to commence sale of a Subject Product. 

       

      1.70  “Net
        Sales”
means
        the gross amounts invoiced by Inspire, any of its Affiliates or any of its
        sublicensees for sales of Inspire Licensed Products to Third Parties, less
        the
        total of the following deductions to the extent customary in the prevailing
        pharmaceutical industry and actually allowed or incurred in connection with
        such
        sales: 

       

      (a)  trade,
        cash and quantity discounts;

       

      (b)  excise,
        sales and other consumption taxes and custom duties to the extent included
        in
        the invoice price;

       

      (c)  freight,
        handling, insurance and other transportation or distribution charges and
        fees to
        the extent included in the invoice price;

       

      (d)  amounts
        repaid, credited or accrued by reason of returns, rejections, defects or
        recalls
        or because of chargebacks, allowances, adjustments, retroactive price
        reductions, refunds or billing errors;

       

      (e)  payments
        and rebates related to the sale of such Inspire Licensed Products accrued,
        paid
        or deducted pursuant to agreements (including, but not limited to, managed
        care
        agreements) with Third Parties or governmental regulations; 

       

      (f)  any
        amounts actually written off or specifically identified as uncollectible,
        in
        accordance with GAAP consistently applied; and

      
         

        
          	
                  *Indicates
                    that certain information contained herein has been omitted and
                    filed
                    separately with the Securities and Exchange Commission. Confidential
                    treatment has been requested with respect to the omitted
                    portions.

                

        

         

        
          
            
            

          

          
            8

            
              

            

          

          
            
            

          

        

      

       

      (g)  any
        other
        similar and customary deductions taken in accordance with GAAP consistently
        applied.

       

      Use
        of
        Inspire Licensed Products for promotional, sampling or compassionate use
        purposes shall not be considered in determining Net Sales. In the case of
        any
        sale of an Inspire Licensed Product between Inspire and its Affiliates or
        sublicensees for resale, Net Sales shall be calculated as above only on the
        first arm’s length sale thereafter to a Third Party.

       

      1.71  “New
        Indication”
means
        any indication for any Subject Product other than for bacterial
        conjunctivitis.

       

      1.72  “Non-Breaching
        Party”
has
        the
        meaning set forth in Section 10.3.

       

      1.73  “Option
        Notice”
has
        the
        meaning set forth in Section 2.10.

       

      1.74  “Option
        Product”
means
        the topical anti-infective product for human ophthalmic indications, as
        formulated with the InSite Formulation Know-How and described
        in the IND with the number 76,074, as such IND may be amended,
        containing only the following active ingredients in addition to other
        ingredients as described in such IND: (a) the chemical compound known as
        azithromycin or any salts, esters or hydrates thereof, and (b) the chemical
        compound known as dexamethasone or any salts, esters or hydrates
        thereof.

       

      1.75  “Option
        Product Phase I Clinical Trial”
means
        a
        clinical trial, having the study number C-06-502-001, to determine the safety
        of
        the Option Product (as formulated with the InSite Formulation Know-How and
        described in the IND with the number 76,074, as such IND may be amended)
        in
        humans, as more fully described in 21 C.F.R. § 312.21(a).

       

      1.76  “Option
        Term”
has
        the
        meaning set forth in Section 2.10.

       

      1.77  “Patent
        Rights”
means
        the rights and interests in and to all issued patents and pending patent
        applications, including without limitation, all provisional applications,
        substitutions, continuations, continuations-in-part, divisions, and renewals,
        all letters patent granted thereon, and all patents-of-addition, reissues,
        reexaminations and extensions or restorations by existing or future extension
        or
        restoration mechanisms (including regulatory extensions), and all supplementary
        protection certificates, together with any foreign counterparts thereof anywhere
        in the Territory.

       

      1.78  “Person”
or
        “person”
means
        any individual, firm, corporation, partnership, limited liability company,
        trust, unincorporated organization or other entity or a government agency
        or
        political subdivision thereto, and shall include any successor (by merger
        or
        otherwise) of such Person.

       

      1.79  “Pfizer”
means
        Pfizer Inc.

       

      1.80  “Pfizer
        Agreement”
means
        the Exclusive License Agreement entered into by InSite and Pfizer on February
        15, 2007, relating to the
        Pfizer Patent Rights, as in effect from time to time.

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      1.81  “Pfizer
        Patent Rights”
means
        all Patent Rights licensed to InSite under the Pfizer Agreement related to
        any
        Subject Product or its manufacture or use, including without limitation all
        patents and patent applications listed as “Pfizer Patent Rights” in Schedule
        1,
        in each
        case to the extent Controlled by InSite or an Affiliate of InSite as of the
        Effective Date and any time thereafter during the Term.

       

      1.82  “Prosecution”
or
        “Prosecute”
means
        the preparation, filing, prosecution, issuance and maintenance (including,
        without limitation, interference, opposition and similar third party proceedings
        before the relevant patent office) of any patent applications or
        patents.

       

      1.83  “PTO”
means
        the United States Patent and Trademark Office.

       

      1.84  “Publishing
        Party”
has
        the
        meaning set forth in Section 8.3.

       

      1.85  “Quarter
        Start Date”
means
        January 1, April 1, July 1, and October 1 of any applicable year.

       

      1.86  “Receiving
        Party”
has
        the
        meaning set forth in Section 1.15.

       

      1.87  “Redemption
        Amount”
has
        the
        meaning set forth in Section 4.1(a).

       

      1.88  “Regulatory
        Approval”
means
        the issuance by the applicable Regulatory Authority of an action letter
        indicating that an NDA or foreign equivalent, as applicable, is approved.
        For
        avoidance of doubt, Regulatory Approval does not mean that the Regulatory
        Authority issues an action letter indicating that an NDA or foreign equivalent
        is approvable.

       

      1.89  “Regulatory
        Authority”
means
        any national (e.g., the FDA), state, provincial or local regulatory agency,
        department, bureau, commission, council or other governmental entity involved
        in
        or responsible for regulation of medicinal products intended for human use
        in
        any country. 

       

      1.90  “Regulatory
        Dossier”
means
        the technical, medical and scientific registrations, authorizations and
        approvals (including, without limitation, approvals of NDAs or foreign
        equivalents, supplements and amendments, pre- and post- approvals, pricing
        and
        third party reimbursement approvals, and labeling approvals) of any Regulatory
        Authority necessary for the development (including the conduct of clinical
        trials), manufacture, distribution, marketing, promotion, offer for sale,
        use,
        import, reimbursement, export or sale of a Subject Product in the Field in
        a
        regulatory jurisdiction in the Territory, together with all related
        correspondence to or from any Regulatory Authority and all documents referenced
        in the complete regulatory chronology for each NDA or foreign equivalent,
        including the IND, NDA and supplemental new drug applications (sNDAs), or
        foreign equivalents in the Territory. 

       

      1.91  “Reserved
        Interests”
has
        the
        meaning set forth in Section 2.5.

       

      1.92  “Reviewing
        Party”
has
        the
        meaning set forth in Section 8.3.

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

      1.93  “[***]”
means
        [***].

       

      1.94  “[***]
        Agreement”
means
        the Commercial Supply/Purchase Agreement entered into by InSite and [***]
        on
        April 1, 2005. 

       

      1.95  “Scientific
        Publication”
has
        the
        meaning set forth in Section 8.3.

       

      1.96  “SEC”
has
        the
        meaning set forth in Section 8.2.

       

      1.97  “Security
        Agreement”
has
        the
        meaning set forth in Section 7.1(e).

       

      1.98  “Senior
        Secured Notes”
has
        the
        meaning set forth in Section 7.1(e).

       

      1.99  “Serious
        Adverse Drug Experience”
means
        any of an “adverse drug experience,” a “life-threatening adverse drug
        experience,” a “serious adverse drug experience,” or an “unexpected adverse drug
        experience,” as those terms are defined at either 21 C.F.R. § 312.32 or 21
        C.F.R. § 314.80 or relevant foreign regulation within the
        Territory.

       

      1.100  “Subject
        Product”
means
        any topical anti-infective product for human ocular or ophthalmic indications,
        in any dosage strength or size, for any mode of ocular or ophthalmic
        administration, containing as the sole active ingredient the chemical compound
        known as azithromycin or any salts, esters or hydrates thereof.

       

      1.101  “Term”
has
        the
        meaning set forth in Section 10.1.

       

      1.102  “Territory”
means
        the United States and Canada and their respective territories and
        possessions.

       

      1.103  “Third
        Party(ies)”
means
        any Person other than InSite, Inspire and their respective
        Affiliates.

       

      1.104  “Third
        Party Claim”
has
        the
        meaning set forth in Section 9.1.

       

      1.105  “Third
        Party Manufacturers”
means
        Third Parties who have been engaged by InSite to perform services or supply
        facilities or goods (including, without limitation, any Subject Product)
        in
        connection with the manufacture, testing or packaging of any Subject Product
        by
        InSite.

       

      1.106  “Title
        11”
has
        the
        meaning set forth in Section 10.9.

       

      1.107  “Transfer
        Date”
has
        the
        meaning set forth in Section 3.3(a).

      
         

        
          	
                  *Indicates
                    that certain information contained herein has been omitted and
                    filed
                    separately with the Securities and Exchange Commission. Confidential
                    treatment has been requested with respect to the omitted
                    portions.

                

        

         

        
          
            
            

          

          
            11

            
              

            

          

          
            
            

          

        

      

       

      1.108  “Valid
        Claim”
means
        a
        claim of an issued and unexpired patent, or a claim of a pending patent
        application, within the InSite Licensed Patents, which claim has not been
        held
        invalid, unpatentable or unenforceable by a court or other government agency
        of
        competent jurisdiction from which no appeal can be further taken, and has
        not
        been held or admitted to be invalid, unpatentable or unenforceable through
        abandonment, re-examination or disclaimer, opposition procedure, nullity
        suit or
        otherwise, which claim, but for the licenses granted herein, would be infringed
        by the manufacture, sale or importation of an Inspire Licensed Product;
        provided, however, that if a claim of a pending patent application shall
        not
        have issued within three (3) years after the filing date from which such
        claim
        takes priority, such claim shall not constitute a Valid Claim for the purposes
        of this Agreement unless and until such claim shall issue in a
        patent.

       

      1.109  “Wind-Down
        Period”
has
        the
        meaning set forth in Section 10.6(c).

       

      1.110  “Withholding
        Taxes”
has
        the
        meaning set forth in Section 5.5.

       

      ARTICLE
        2

      LICENSES
        AND EXCLUSIVITY

       

      2.1  Licenses. 

       

      (a)  Subject
        to the terms and conditions of this Agreement, InSite hereby grants to Inspire
        a
        royalty-bearing, exclusive (even as to InSite and its Affiliates, except
        as
        provided in Section 2.1(d))
        right
        and license, with the right to grant sublicenses, under the AzaSite Patent
        Rights and the InSite Know-How: (i) to develop, have developed, make, have
        made,
        use, have used, market, have marketed, commercialize, have commercialized,
        offer
        for sale, sell, have sold, import and have imported Subject Products in the
        Field in the Territory, and (ii) to develop, have developed, make, have made,
        use and have used Subject Products anywhere in the world for the purpose
        of
        marketing, commercialization or sale of Subject Products in the Field in
        the
        Territory.

       

      (b)  Subject
        to the terms and conditions of this Agreement, InSite hereby grants to Inspire
        a
        royalty-bearing, non-exclusive right and license, with the right to grant
        sublicenses, under the DuraSite Patent Rights, the Container Patent Rights,
        the
        Columbia Patent Rights and the InSite Formulation Know-How: (i) to develop,
        have
        developed, make, have made, use, have used, market, have marketed,
        commercialize, have commercialized, offer for sale, sell, have sold, import
        and
        have imported Subject Products in the Field in the Territory, and (ii) to
        develop, have developed, make, have made, use and have used Subject Products
        anywhere in the world for the purpose of marketing, commercialization or
        sale of
        Subject Products in the Field in the Territory. Notwithstanding the
        non-exclusive nature of the foregoing grant (but subject to Section 2.1(d)),
        InSite
        hereby expressly covenants that it shall not, and shall cause its Affiliates
        and
        licensees not to, directly or indirectly: (x) practice the DuraSite Patent
        Rights, the Container Patent Rights or the Columbia Patent Rights or use
        the
        InSite Formulation Know-How (1) to develop, have developed, make, have made,
        use, have used, market, have marketed, commercialize, have commercialized,
        offer
        for sale, sell, have sold, import or have imported any Subject Products in
        the
        Field in the Territory, or (2) to develop, have developed, make, have made,
        use
        or have used any Subject Products anywhere in the world for the purpose of
        marketing, commercialization or sale of any Subject Products in the Field
        in the
        Territory; or (y) grant to any Third Party any right or license under the
        DuraSite Patent Rights, the Container Patent Rights, the Columbia Patent
        Rights
        or the InSite Formulation Know-How to conduct any of the activities set forth
        in
        the foregoing clause (x).

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

       

      (c)  Subject
        to the terms and conditions of this Agreement, InSite hereby grants to Inspire
        a
        royalty-bearing, exclusive (even as to InSite and its Affiliates, except
        as
        provided in Section 2.1(d))
        right
        and sublicense, with the right to grant further sublicenses, under the Pfizer
        Patent Rights, in each case to the extent not greater than the rights and
        licenses granted to InSite under the Pfizer Agreement: (i) to develop, have
        developed, make, have made, use, have used, market, have marketed,
        commercialize, have commercialized, offer for sale, sell, have sold, import
        and
        have imported Subject Products in the Field in the Territory, and (ii) to
        develop, have developed, make, have made, use and have used Subject Products
        anywhere in the world for the purpose of marketing, commercialization or
        sale of
        Subject Products in the Field in the Territory. 

       

      (d)  For
        the
        avoidance of doubt, (i) the licenses and rights granted to Inspire under
        this
        Agreement shall not include a right to offer for sale, sell or have sold
        Subject
        Products, and Inspire expressly covenants that it shall not sell any Subject
        Products, in the Territory in circumstances in which Inspire knows or reasonably
        should know such Subject Products will be distributed or sold outside the
        Territory, (ii) InSite shall retain the rights under the InSite Intellectual
        Property and Pfizer Patent Rights to develop, have developed, make, have
        made,
        use and have used Subject Products in the Field in the Territory solely for
        the
        purposes of distribution, sale or other commercial pursuit of Subject Products
        outside the Territory, (iii) InSite shall be permitted to carry out and perform
        its tasks and responsibilities under this Agreement, (iv) InSite shall retain
        the exclusive rights to develop, have developed, make, have made, use, have
        used, market, have marketed, commercialize, have commercialized, offer for
        sale,
        sell, have sold, import and have imported Subject Products outside the Field
        and/or outside the Territory, and (v) InSite retains all rights to pursue
        any of its Reserved Interests.

       

      (e)  With
        respect to each Subject Product, on a country-by-country basis, upon the
        expiration of the Inspire Royalty Term applicable to such Subject Product
        in a
        specific country, the rights and licenses granted to Inspire under paragraphs
        (a),
        (b)
        and
(c)
        above
        shall become fully paid up, royalty-free, perpetual and irrevocable with
        regards
        to such Subject Product in such country.

       

      (f)  To
        the
        extent required by and in conformance with any applicable laws, Inspire shall
        mark Inspire Licensed Products with the numbers of the applicable InSite
        Licensed Patents.

       

      2.2  Sublicenses.
        All
        sublicenses granted hereunder must be in writing and must contain provisions
        that are not inconsistent with the terms and conditions of this
        Agreement.

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

       

      2.3  InSite
        Trademarks and Domain Names. 

       

      (a)  The
        Parties are entering into a trademark license agreement contemporaneously
        with
        this Agreement under which InSite is granting to Inspire rights and licenses
        to
        use the InSite Trademarks and the Domain Names in connection with the marketing,
        commercialization and sale of Subject Products in the Field in the Territory
        (the “Trademark
        License Agreement”).
        

       

      (b)  If
        Inspire and InSite enter into a definitive license agreement with respect
        to the
        Option Product pursuant to the terms of Section 2.10
        (or
        otherwise mutually agree to enter into such an agreement despite Inspire’s
        failure to exercise its option under Section 2.10 or the Parties’ failure to
        come to an agreement within the time period for negotiation set forth therein),
        or if InSite makes any public announcement that it is no longer pursuing
        development of the Option Product, then: 

       

      (i)  within
        ten (10) days after the execution of such agreement or the making of such
        announcement, as applicable, InSite shall assign to Inspire all of InSite’s
        right, title, and interest in and to the AzaSite Trademark in the Territory,
        including without limitation in the registration therefor, together with
        the
        good will of the business associated therewith and which is symbolized
        thereby,
        and
        shall execute the AzaSite Trademark Assignment Agreement attached hereto
        as
Schedule
        2.3(b)
        to give
        effect to such assignment in the United States and a comparable agreement
        to
        give effect to such assignment in Canada. InSite
        agrees promptly to execute and deliver such further and other documents and
        to
        perform such actions as may be necessary to give effect to the foregoing
        assignment. From
        and
        after the effective date of such assignment, the term “InSite Trademarks” shall
        not include the AzaSite Trademark for any purpose under this Agreement; and
        

       

      (ii)  effective
        upon the execution of such agreement or the making of such public announcement,
        as applicable, InSite hereby transfers and assigns to Inspire all of InSite’s
        right, title and interest in and to the Domain Names. InSite acknowledges
        and
        agrees that Inspire is not assuming any liabilities, obligations or indebtedness
        of InSite related to the Domain Names accrued by InSite prior to the
        effectiveness of such transfer, whether arising as a result of the transactions
        contemplated by this Agreement or otherwise related to InSite’s business in any
        manner, all of which will remain solely InSite’s responsibility. Inspire shall
        be solely responsible for any liabilities related to the use of the Domain
        Names
        accrued by Inspire. InSite
        agrees promptly to execute and deliver such further and other documents and
        to
        perform such actions as may be necessary to give effect to the foregoing
        assignment and transfer.

       

      (c)  In
        addition, if Inspire and InSite enter into a definitive license agreement
        with
        respect to the Option Product pursuant to the terms of Section 2.10
        (or
        otherwise mutually agree to enter into such an agreement despite Inspire’s
        failure to exercise its option under Section 2.10 or the Parties’ failure to
        come to an agreement within the time period for negotiation set forth therein),
        then InSite shall assign to Inspire all of InSite’s
        right, title, and interest in and to the trademark AzaSite PlusTM
        in the
        Territory, including without limitation in the registration therefor, together
        with the good will of the business associated therewith and which is symbolized
        thereby. In such event, the Parties shall include the trademark AzaSite
        PlusTM
        as a
        trademark assigned under the
        AzaSite
        Trademark Assignment Agreement (for the United States) and the comparable
        assignment agreement (for Canada) that are executed pursuant to paragraph
        (b)
        above in order to give effect to such assignment. 

       

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

       

      2.4  Use
        of
        Affiliates and Third Party Contractors.
        The
        licenses granted under Section 2.1
        include
        the right of Inspire to engage its Affiliates and Third Party contractors
        in
        exercising such rights and in carrying out its activities and obligations
        under
        this Agreement, provided that (i) all such agreements with Third Party
        contractors must be in writing and must contain provisions that are not
        inconsistent with the terms and conditions of this Agreement and
        (ii) Inspire remains responsible for the compliance with this Agreement by
        such Affiliates or Third Party contractors. 

       

      2.5  Reserved
        Interests.
        Notwithstanding anything to the contrary herein, Inspire acknowledges and
        agrees
        that this Agreement shall not restrict or limit InSite or its Affiliates,
        at any
        time, with respect to (i) any activity, licensing or otherwise, related to
        any
        product other than the Subject Products (other than the Option Product as
        provided under Section 2.10
        or any
        Future Development as provided in Section 3.8); or (ii) any activity,
        licensing or otherwise, related to the Option Product other than as expressly
        provided under Section 2.10
        or
        related to any Future Development other than as expressly provided under
        Section 3.8. Inspire also acknowledges and agrees that any such activities
        described in clauses (i) and (ii) above, as well as all rights and interests
        not
        expressly granted to Inspire are reserved by InSite (the “Reserved
        Interests”). 

       

      2.6  No
        Implied Grants.
        Except
        as expressly licensed hereunder, neither Party grants any rights to the other
        Party under this Agreement, by implication or estoppel, under any of its
        intellectual property rights.

       

      2.7  Registration
        of License.
        Notwithstanding anything to the contrary in Article 8, Inspire, at its expense,
        may register the licenses granted under this Agreement in any country of
        the
        Territory. Upon request by Inspire, InSite agrees promptly to execute any
“short
        form” licenses consistent with the terms and conditions of this Agreement
        submitted to it by Inspire reasonably necessary to effect the foregoing
        registration in such country. 

       

      2.8  Supply
        of API.
        The
        Parties are entering into a supply agreement contemporaneously with this
        Agreement under which InSite will supply bulk azithromycin [***] (as API),
        obtained from [***] under the [***] Agreement, to Inspire for Inspire’s use in
        manufacturing and commercializing Subject Products in final form.

      
         

        
          	
                  *Indicates
                    that certain information contained herein has been omitted and
                    filed
                    separately with the Securities and Exchange Commission. Confidential
                    treatment has been requested with respect to the omitted
                    portions.

                

        

         

        
          
            
            

          

          
            15

            
              

            

          

          
            
            

          

        

      

       

      2.9  Supply
        of Finished Product.
        Upon
        Inspire’s election within ninety (90) days after Regulatory Approval of the
        Current Product in the United States, InSite promptly will modify the Cardinal
        Agreement so that the Cardinal Agreement would only be for the purpose of
        commercialization outside the Territory and assist Inspire in executing a
        new
        agreement with Cardinal with identical terms to the current Cardinal Agreement,
        except with respect to commercialization inside the Territory, in order to
        transition to Inspire all rights with respect to manufacture of Subject Products
        in finished form for commercialization inside the Territory. During the period
        commencing on the First Commercial Sale of any Subject Product in the United
        States and continuing until the first (1st)
        anniversary of such date, Inspire shall, at no cost to Inspire, be permitted
        to
        use, or have used for Inspire’s benefit, the equipment owned or controlled by
        InSite and used by Cardinal with respect to Subject Products in connection
        with
        the Cardinal Agreement. If, after the expiration of such one (1) year period,
        Inspire elects to continue to use or have used such equipment, Inspire shall
        be
        permitted to do so at a reasonable market rate that the Parties shall negotiate
        in good faith. 

       

      2.10  Option
        for Option Product License.
        During
        the period commencing on the Effective Date and continuing until the date
        that
        is the later of (a) [***], and (b) [***] days after the date on which InSite
        provides to Inspire data from the completed Option Product Phase I Clinical
        Trial [***] (the “Option
        Term”),
        Inspire will have the exclusive option, but not the obligation, to enter
        into a
        license agreement with InSite for the Option Product upon terms and conditions
        to be separately discussed and negotiated by the Parties. At the request
        of
        Inspire, InSite promptly shall afford Inspire a reasonable opportunity to
        review
        the scientific and clinical information relevant to the Option Product that
        are
        available to InSite (including during negotiations between the Parties as
        provided below). Inspire may exercise its option under this
        Section 2.10
        by
        providing written notice (the “Option
        Notice”)
        to
        InSite on or before the expiration of the Option Term. If Inspire timely
        provides the Option Notice, the Parties shall negotiate in good faith and
        exclusively, using their respective best efforts, for a period of up to [***]
        days from the date of the Option Notice to enter into a definitive license
        agreement with respect to the Option Product prior to the expiration of such
        [***] day negotiating period; provided, however, that (x) if at the end of
        such
        [***] day negotiation period the Parties are actively negotiating the terms
        of
        such agreement, then such negotiation period may be extended, if mutually
        agreed
        to so extend by the Parties at such time, to a mutually acceptable time by
        the
        Parties in writing, and (y) if at the end of such [***] day negotiation period
        the FDA has not yet granted Regulatory Approval of the Current Product, then
        such negotiation period shall be extended until [***] days after the date
        on
        which the FDA grants such Regulatory Approval. If Inspire does not exercise
        its
        option under this Section 2.10
        on or
        before the expiration of the Option Term, or if the Parties cannot come to
        an
        agreement despite such efforts after such [***] day period (or any extension
        thereof in accordance with this provision), then InSite shall be free to
        pursue
        any and all other opportunities with respect to the Option Product with no
        further obligations to Inspire. InSite represents, warrants and covenants
        that
        neither it nor its Affiliates have granted prior to the Effective Date, nor
        will
        grant during the Term, to any Third Party any license, option, first refusal,
        or
        other right or interest in or to any Patent Rights, Know-How, trademarks
        or
        internet domain names related to the Option Product that is inconsistent
        with
        this Agreement, including without limitation this Section 2.10.

      
         

        
          	
                  *Indicates
                    that certain information contained herein has been omitted and
                    filed
                    separately with the Securities and Exchange Commission. Confidential
                    treatment has been requested with respect to the omitted
                    portions.

                

        

         

        
          
            
            

          

          
            16

            
              

            

          

          
            
            

          

        

      

       

      2.11  Inspire
        Blocking Patent Rights.
        If and
        when Inspire first files or Controls any Inspire Blocking Patent Rights outside
        the Territory, Inspire shall notify InSite within a reasonable time after
        such
        filing. Upon InSite’s election in writing within [***] days of such notice, the
        Parties shall negotiate in good faith for a period of up to [***] days from
        the
        date of such election to determine a commercially reasonable royalty rate
        to
        apply to InSite’s practice under any Inspire Blocking Patent Rights in the Field
        outside the Territory, together with such other terms as are reasonable and
        customary to effectuate the license granted below, including without limitation
        reporting and payment obligations and audit rights (collectively, the
“Additional
        Terms”).
        Effective upon the Parties’ agreement in writing to the Additional Terms: (i)
        the Additional Terms shall be incorporated by reference into this Agreement
        as
        if set forth in full herein, and (ii) subject to the Additional Terms and
        the
        terms and conditions of this Agreement, Inspire hereby grants to InSite a
        royalty-bearing, non-exclusive right and license, without any right to grant
        sublicenses, under the Inspire Blocking Patent Rights to make, have made,
        use,
        sell, offer to sell and import Subject Products in the Field outside the
        Territory.
        Notwithstanding anything to the contrary in this Agreement, InSite acknowledges
        and agrees that this Section 2.11 shall not affect, restrict or limit: (i)
        any
        right of Inspire or its Affiliates or sublicensees under this Agreement with
        respect to any Subject Products, including without limitation the rights
        and
        licenses granted to Inspire in Section 2.1, or (ii) any obligation of or
        restriction upon InSite or its Affiliates under this Agreement with respect
        to
        Subject Products, including without limitation the exclusive nature of the
        grants in Section 2.1.

       

      ARTICLE
        3

      DEVELOPMENT
        AND COMMERCIALIZATION

       

      3.1  Data
        and Materials Transfer and Right of Reference. 

       

      (a)  In
        furtherance of the licenses granted by InSite to Inspire under this Agreement
        and the activities contemplated by this Article 3, InSite shall, or shall
        cause
        its Affiliates or Third Party contractors to, transfer promptly (but in all
        events within thirty (30) days following the Effective Date) to Inspire (i)
        an
        instance of any physical embodiments, to the extent necessary or useful and
        available, of the InSite Know-How and the InSite Formulation Know-How, and
        (ii)
        a copy of the entire Regulatory Dossier for any Subject Products for the
        Territory in existence as of the Effective Date. Without limiting the foregoing,
        InSite shall provide to Inspire copies of all final audited study reports,
        prepared in accordance with applicable FDA guidelines, for all studies relating
        to the Current Product, including without limitation those listed on
Schedule
        3.1(a).
        

      
         

        
          	
                  *Indicates
                    that certain information contained herein has been omitted and
                    filed
                    separately with the Securities and Exchange Commission. Confidential
                    treatment has been requested with respect to the omitted
                    portions.

                

        

         

        
          
            
            

          

          
            17

            
              

            

          

          
            
            

          

        

      

       

      (b)  InSite
        shall make reasonably available to Inspire at no cost to Inspire during the
        period commencing on the Effective Date and continuing until the expiration
        of
        the twelve (12) month period following Regulatory Approval of the Current
        Product by the FDA, for up to [***] man hours, InSite’s key employees (including
        but not limited to key manufacturing and development personnel) for purposes
        of
        reasonable consulting with Inspire regarding the development, testing and
        manufacturing of the Current Product, and to enable Inspire to use the InSite
        Know-How and InSite Formulation Know-How in connection with the Current Product.
        Any support beyond such will be subject to InSite’s agreement at reasonable
        market rates. 

       

      (c)  InSite,
        to the extent it has the right to do so, hereby grants to Inspire a “Right of
        Reference or Use” as that term is defined in 21 C.F.R. § 314.3(b), and any
        foreign equivalents, to any and all regulatory filings, data and information
        relating to the Current Product, or to any other Subject Products developed,
        manufactured or commercialized by Inspire, in the Field in the Territory,
        including without limitation that related to pharmacology, toxicology,
        preclinical testing, clinical testing, chemistry, manufacturing and controls
        data, batch records, trials and studies, safety and efficacy, manufacturing
        information, analytical and quality control, including without limitation
        the
        data and information listed on Schedule
        3.1(c),
        and
        agrees to sign, and cause its Affiliates to sign, any instruments reasonably
        requested by Inspire in order to effect such grant. In addition, InSite will
        use
        commercially reasonable efforts to obtain, on Inspire’s behalf, a writing from
        applicable Drug Master File holders for the Current Product granting Inspire
        the
        right to reference such Drug Master Files. In the event that InSite is not
        able
        to obtain any such writing, InSite promptly shall establish alternative
        arrangements reasonably acceptable to Inspire whereby Inspire’s access to supply
        of the Current Product in commercially reasonable amounts for launch and
        marketing thereof is not impaired by the lack of such writing. In addition,
        upon
        Inspire’s request, InSite shall provide reasonable assistance to Inspire in any
        efforts by Inspire to obtain a writing from applicable Drug Master File holders
        for any other Subjects Products developed, manufactured or commercialized
        by
        Inspire granting Inspire the right to reference such Drug Master Files.

       

      3.2  Current
        Product Development.
        InSite
        will be responsible for, and will bear all costs and expenses associated
        with,
        obtaining Regulatory Approval for the Current Product in each country in
        the
        Territory. InSite will not be responsible for any other development or
        Regulatory Approval for any other product or indication except as otherwise
        agreed to under the terms of Section 3.8. Subject to and without limiting
        the foregoing, InSite shall, using its Commercially Reasonable
        Efforts:

       

      (a)  Progress
        NDA number 50-810 for the Current Product to Regulatory Approval of the Current
        Product by the FDA, including without limitation conducting all clinical
        trials
        required for the Current Product, as deemed necessary by the FDA in order
        to
        grant Regulatory Approval of the Current Product;

      
        
           

          
            	
                    *Indicates
                      that certain information contained herein has been omitted
                      and filed
                      separately with the Securities and Exchange Commission. Confidential
                      treatment has been requested with respect to the omitted
                      portions.

                  

          

           

          
            
              
              

            

            
              18

              
                

              

            

            
              
              

            

          

        

      

       

      (b)  Address
        any material concerns (i.e., without resolution of which, Regulatory Approval
        of
        the Current Product cannot be obtained) raised by the FDA with regard to
        the
        Current Product, whether in an action letter indicating that the NDA for
        the
        Current Product is approvable or otherwise;

       

      (c)  Prepare
        and file an application for Regulatory Approval in Canada for the Current
        Product and progress such application to Regulatory Approval of the Current
        Product by the applicable Regulatory Authority in Canada, including without
        limitation conducting all clinical trials required for the Current Product,
        as
        deemed necessary by such Regulatory Authority in order to grant Regulatory
        Approval of the Current Product in Canada;

       

      (d)  Address
        any material concerns (i.e., without resolution of which, Regulatory Approval
        of
        the Current Product cannot be obtained) raised by the applicable Regulatory
        Authority in Canada with regard to the Current Product;

       

      (e)  Prior
        to
        Regulatory Approval of the Current Product in each country in the Territory,
        keep Inspire fully and promptly informed of: (i) the preparation of all
        documents submitted to Regulatory Authorities and the filing of all submissions
        relating to Regulatory Approval of any Subject Product in the Territory;
        and
        (ii) all regulatory actions, communications and meetings with any Regulatory
        Authority with respect to any Subject Product in the Territory; including
        in
        each case, without limitation, with respect to labeling matters. InSite shall
        collaborate in good faith with Inspire in connection with all of the foregoing,
        and Inspire shall be permitted to attend any meeting described in clause
        (ii) of
        the preceding sentence upon Inspire’s request;
        and

       

      (f)  Facilitate
        discussions between InSite’s Third Party Manufacturers and Inspire in order to
        assist Inspire in obtaining its requirements of pre-clinical, clinical and
        commercial supplies of the Current Product.

       

      3.3  Regulatory
        Matters; InSite Assistance. 

       

      (a)  Within
        twenty-five (25) days after Regulatory Approval of the Current Product in
        any
        country of the Territory, InSite shall: 

       

      (i)  submit
        to
        the FDA or equivalent foreign Regulatory Authority to transfer to Inspire
        ownership of, and Inspire shall own in Inspire’s name, the entire Regulatory
        Dossier for the Current Product (and, to the extent in existence at the time
        of
        such transfer, any other Subject Products) in such country, including without
        limitation NDA number 50-810 and IND number 62,873 or any foreign equivalents
        thereto (as applicable) in the Territory, all at no additional charge to
        Inspire. InSite shall execute and deliver to the applicable Regulatory Authority
        such documents as are required to notify such Regulatory Authority of the
        transfer of such NDA and IND, or foreign equivalents thereto, to Inspire.
        In
        addition, InSite promptly shall execute any and all other instruments, forms
        of
        assignment or other documents and take such further actions as Inspire may
        reasonably request in order to give effect to or evidence the foregoing
        assignments. The date on which all such assignments have been given effect
        in
        both the United States and Canada shall be deemed the “Transfer
        Date”
under
        this Agreement; and

       

      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

       

      (ii)  use
        commercially reasonable efforts to obtain, on Inspire’s behalf, a writing from
        [***] granting Inspire the right to reference the Drug Master File held by
        [***]
        for the Current Product. In the event that InSite is not able to obtain such
        writing, InSite promptly shall establish alternative arrangements reasonably
        acceptable to Inspire whereby Inspire’s access to supply of the Current Product
        in commercially reasonable amounts for launch and marketing thereof is not
        impaired by the lack of such writing. 

       

      (b)  InSite
        shall retain the right to use any and all information in the Regulatory Dossier
        assigned to Inspire as described above, and the right of reference to all
        such
        regulatory documents, solely for purposes relating to InSite’s exercise of
        rights retained by it under Section 2.1(d)
        or
        otherwise not granted to Inspire under this Agreement. 

       

      (c)  From
        and
        after the transfer of the Regulatory Dossier in any country in the Territory
        as
        provided above in paragraph (a)
        above:

       

      (i)  Inspire
        shall have exclusive control over, and authority and responsibility for,
        the
        regulatory strategies relating to the further development and commercialization
        of Subject Products in such country in the Field, including, without limitation:
        (A) the preparation of all documents submitted to Regulatory Authorities
        and the
        filing of all submissions relating to Regulatory Approval of Subject Products
        in
        such country; and (B) all regulatory actions, communications and meetings
        with
        any Regulatory Authority with respect to Subject Products in such country.
        Upon
        the request of Inspire, InSite shall provide to Inspire on a timely basis
        such
        information in its possession relating to Subject Products as may be required
        for the foregoing regulatory activities, and otherwise provide reasonable
        assistance to Inspire, at Inspire’s expense, in complying with all regulatory
        obligations in such country relating to Subject Products, including without
        limitation, safety updates, amendments, annual reports, pharmacovigilance
        filings, investigator notifications, manufacturing facility inspections and
        certifications and product approvals. 

      
         

        
          	
                  *Indicates
                    that certain information contained herein has been omitted and
                    filed
                    separately with the Securities and Exchange Commission. Confidential
                    treatment has been requested with respect to the omitted
                    portions.

                

        

         

        
          
            
            

          

          
            20

            
              

            

          

          
            
            

          

           

        

      

      (ii)  Inspire
        shall be responsible for interfacing, corresponding and meeting with all
        Regulatory Authorities in such country with respect to Subject Products in
        the
        Field. Except as required by applicable law or as permitted under
        paragraph (b)
        above,
        InSite shall not communicate directly with any Regulatory Authority in such
        country relating to Subject Products in the Field without the prior written
        consent of Inspire. In furtherance thereof, InSite shall refer all Regulatory
        Authority communications relating to Subject Products in the Field in such
        country to Inspire. 

       

      (iii)  InSite
        shall cooperate with Inspire, at Inspire’s expense, to provide all reasonable
        assistance and take all actions reasonably requested by Inspire that are
        necessary to comply with any law applicable to Subject Products, including,
        but
        not limited to, reporting of adverse drug experience reports (and Serious
        Adverse Drug Experiences) to Regulatory Authorities in such country.

       

      (iv)  Inspire
        shall make available to InSite on a reasonable basis any documents in the
        Regulatory Dossier, and amendments thereto, for the Subject Products in such
        country that InSite is required by applicable law to reference in connection
        with seeking Regulatory Approval of Subject Products outside the Territory,
        provided that InSite requests such access in writing and identifies such
        applicable law in such request. In addition, Inspire shall consider in good
        faith any other reasonable request by InSite for access to information in
        the
        Regulatory Dossier for the Subject Products in such country.

       

      3.4  Commercialization. 

       

      (a)  Except
        as
        otherwise set forth in this Agreement, Inspire shall be solely responsible
        for
        commercialization of Inspire Licensed Products in the Field in the Territory,
        including without limitation with respect to:

       

      (i)  sales
        and
        marketing; 

       

      (ii)  advertising,
        marketing and promotional materials;

       

      (iii)  sales
        representatives and sales force matters;

       

      (iv)  distribution;

       

      (v)  regulatory
        compliance and communications and regulatory fees (e.g., adverse event reporting
        programs, establishment and product fees under the Prescription Drug User
        Fee
        Act), in each case to the extent such responsibilities or fees arise following
        Regulatory Approval of the Current Product and transfer of the Regulatory
        Dossier for the Current Product in the applicable country of the Territory
        as
        provided above in Section 3.3(a);
        and

       

      (vi)  product
        inquiries and complaints.

       

      
        
          
          

        

        
          21

          
            

          

        

        
          
          

        

         

      

      (b)  Inspire
        shall use Commercially Reasonable Efforts to commercialize an Inspire Licensed
        Product in the Field in the Territory, promptly after (i) Regulatory Approval
        for such Inspire Licensed Product in the Territory has been obtained, (ii)
        such
        other approvals (including without limitation reimbursement approvals) as
        are
        necessary for the marketing of such Inspire Licensed Product in the Territory
        have been obtained, and (iii) the transitions as provided under Sections
        2.9
        (provided Inspire has made the election set forth therein) and 3.3(a)
        (as
        applicable) have been given effect (collectively, “Launch
        Approval”).
        

       

      (c)  Without
        limiting the foregoing, Inspire agrees that it shall effect a First Commercial
        Sale of the Current Product in the United States no later than [***] calendar
        days after Launch Approval for the Current Product is obtained in the United
        States; provided, however, that such obligation shall be suspended during
        any
        period in which [***].

       

      (d)  Inspire
        shall not include in promotional kits any Subject Products intended for sale
        without InSite’s consent, such consent not to be unreasonably withheld;
        provided, however, that the foregoing limitation shall not affect or restrict
        any sampling practices of Inspire.  

       

      3.5  Reports.
        Every
        twelve (12) months following the Effective Date, Inspire shall provide InSite
        a
        written report summarizing the efforts and accomplishments of Inspire, its
        Affiliates and its sublicensees during the preceding twelve (12) month period
        in
        commercializing Inspire Licensed Products. 

       

      3.6  Adverse
        Event Reporting. 

       

      (a)  Each
        Party shall, and shall require its respective Affiliates to:

       

      (i)  to
        the
        extent permissible under time constraints and reporting requirements, provide
        to
        the other Party in advance of initial or periodic submission to Regulatory
        Authorities any and all adverse event reports and Serious Adverse Drug
        Experience reports from clinical trials and commercial experiences with respect
        to Subject Products or any Inspire Licensed Products;

       

      (ii)  provide
        such adverse event reports and Serious Adverse Drug Experience reports to
        the
        other Party contemporaneously with the provision of such reports to the
        applicable Regulatory Authority; and

       

      (iii)  adhere
        to
        all requirements of applicable laws, rules and regulations that relate to
        the
        reporting and investigation of adverse events and Serious Adverse Drug
        Experiences and keep the other Party informed of such events.

      
         

        
          	
                  *Indicates
                    that certain information contained herein has been omitted and
                    filed
                    separately with the Securities and Exchange Commission. Confidential
                    treatment has been requested with respect to the omitted
                    portions.

                

        

         

        
          
            
            

          

          
            22

            
              

            

          

          
            
            

          

        

      

       

      (b)  If
        a
        Party contracts with a Third Party for research to be performed by such Third
        Party on any Subject Products or any of the Inspire Licensed Products, that
        Party shall require such Third Party to report to the contracting Party the
        information set forth above.

       

      3.7  Coordination
        Committee. 

       

      (a)  Within
        thirty (30) days after the Effective Date, the Parties will establish a
        committee to (i) discuss further development efforts related to Subject Products
        in the Field in the Territory following Regulatory Approval of the Current
        Product in each country in the Territory, (ii) manage and facilitate in an
        orderly manner the transition as provided above in Section 2.9
        and the
        transition of the Regulatory Dossier in each country of the Territory as
        provided above in Section 3.3(a),
        (iii)
        manage and facilitate InSite’s access to the Regulatory Dossier in the United
        States, after the assignment thereof pursuant to Section 3.3(a), as reasonably
        necessary to facilitate InSite’s obtaining Regulatory Approval for the Current
        Product in Canada, and (iv) manage and facilitate (A) in connection with
        the
        launch of Subject Products by Inspire, Inspire’s access to Subject Products
        manufactured by Cardinal and (B) Inspire’s access to bottle molds and trade
        dress used by InSite in connection with Subject Products (the “Coordination
        Committee”).
        The
        Coordination Committee will be comprised of equal numbers of representatives
        of
        each Party, with each Party appointing two (2) representatives as members
        of the
        Coordination Committee. The Coordination Committee may change its size from
        time
        to time by mutual consent of its members. Each Party may replace its
        Coordination Committee representatives at any time upon written notice to
        the
        other Party. 

       

      (b)  The
        Coordination Committee will meet in person (or by having certain representatives
        of the Parties participate by telephone where necessary) no less frequently
        than
        once every six (6) months, unless otherwise agreed by the Parties. The members
        of the Coordination Committee may also convene or be consulted from time
        to time
        by means of telecommunications, videoconferences, electronic mail or
        correspondence, as deemed necessary or appropriate. Meetings of the Coordination
        Committee that are held in person will alternate between the offices of the
        Parties, or such other place as the Parties may agree. The first meeting
        of the
        Coordination Committee will take place at the offices of one of the Parties
        within ninety (90) days after the Effective Date. 

       

      (c)  The
        Coordination Committee will strive to reach consensus on any determinations
        with
        respect to further development efforts related to Subject Products in the
        Field
        in the Territory following Regulatory Approval of the Current Product in
        each
        country in the Territory; provided, however, that Inspire shall have final
        decision-making authority with respect to the development of Subject Products
        in
        the Field in the Territory.

       

      (d)  The
        Coordination Committee will have only such purposes as are specifically stated
        in this Agreement, and will have no power to amend or interpret this Agreement
        or waive a Party’s rights or obligations under this Agreement.

       

      
        
          
          

        

        
          23

          
            

          

        

        
          
          

        

      

       

      3.8  Future
        Development. 

       

      (a)  Subsequent
        to the Transfer Date, Inspire has exclusive control with respect to any further
        development of any Subject Product, including without limitation any New
        Indication, in the Field in the Territory (each such improvement an
“Inspire
        Improvement”).
        Inspire may, at its discretion, pursue any such Inspire Improvement
        independently or through the Coordination Committee. Any such Inspire
        Improvement will be deemed a Subject Product under this Agreement and, if
        and to
        the extent such Inspire Improvement also constitutes an Inspire Licensed
        Product, such Inspire Improvement will be subject to Inspire Royalties payable
        under Article
        5.
        No
        additional milestone payments will be due for any such Inspire Improvement
        under
        any circumstances. If Inspire, at its discretion, requests InSite’s assistance
        in developing any Inspire Improvement and InSite, at its discretion, agrees
        to
        provide such assistance, Inspire shall reimburse InSite for any such development
        efforts in the manner agreed by the Parties.

       

      (b)  InSite
        promptly shall provide Inspire written notice of any Future Development together
        with the data from a completed phase I clinical trial (to determine the safety
        of such Future Development in humans as more fully described in 21 C.F.R.
        §312.21(a)) in a form suitable for submission to the FDA or equivalent
        Regulatory Authority (“Future
        Development Option Notice”).
        During the period of [***] days following the date of the Future Development
        Option Notice (“Future
        Development Option Term”),
        Inspire will have the exclusive option, but not the obligation, to enter
        into a
        license agreement with InSite for the Future Development described in the
        Future
        Development Option Notice for commercialization within the Territory upon
        terms
        and conditions to be separately discussed and negotiated by the Parties.
        At the
        request of Inspire, InSite shall promptly afford Inspire a reasonable
        opportunity to review the scientific and clinical information relevant to
        such
        Future Development that are available to InSite (including during negotiations
        between the Parties as provided below). Inspire may exercise its option under
        this Section 3.8 by providing written notice (the “Future
        Development Option Exercise Notice”)
        to
        InSite on or before the expiration of the Future Development Option Term.
        If
        Inspire timely provides the Future Development Option Exercise Notice, the
        Parties shall negotiate in good faith and exclusively, using their respective
        best efforts, for a period of up to [***] days from the date of the Future
        Development Option Exercise Notice to enter into a definitive license agreement
        with respect to the applicable Future Development prior to the expiration
        of
        such [***] day negotiating period; provided, however, that if at the end
        of such
        [***] day negotiation period the Parties are actively negotiating the terms
        of
        such agreement, then such negotiation period may be extended, if mutually
        agreed
        to so extend by the Parties at such time, to a mutually acceptable time by
        the
        Parties in writing. If Inspire does not exercise its option under this
        Section 3.8 on or before the expiration of the applicable Future
        Development Option Term, or if the Parties cannot come to an agreement despite
        such efforts after such [***] day period (or such extension as mutually agreed
        by the Parties in accordance with this provision), then InSite shall have
        no
        further obligation to negotiate with Inspire with respect to such Future
        Development. InSite represents, warrants and covenants that neither it nor
        its
        Affiliates have granted prior to the Effective Date, nor will grant during
        the
        Term, to any Third Party any license, option, first refusal, or other right
        or
        interest in or to any Patent Rights, Know-How, trademarks or internet domain
        names related to any Future Development that is inconsistent with this
        Agreement, including without limitation this Section 3.8.
        Notwithstanding anything to the contrary in this Agreement, InSite acknowledges
        and agrees that this Section 3.8 shall not affect, restrict or limit: (i)
        any
        right of Inspire or its Affiliates or sublicensees under this Agreement with
        respect to any Subject Products or InSite Developments, including without
        limitation the rights and licenses granted to Inspire in Section 2.1, or
        (ii)
        any obligation of or restriction upon InSite or its Affiliates under this
        Agreement with respect to Subject Products or InSite Developments, including
        without limitation the exclusive nature of the grants in
        Section 2.1.

      
         

        
          	
                  *Indicates
                    that certain information contained herein has been omitted and
                    filed
                    separately with the Securities and Exchange Commission. Confidential
                    treatment has been requested with respect to the omitted
                    portions.

                

        

      

      

      
        
          
          

        

        
          24

          
            

          

        

        
          
          

        

      

       

       

       

      ARTICLE
        4

      INITIAL
        PAYMENT AND MILESTONE PAYMENT

       

      4.1  Initial
        Payment.
        On
        the
        Effective Date, Inspire shall pay InSite Thirteen Million U.S. Dollars
        ($13,000,000) (the “Initial
        Payment”)
        as
        follows:

       

      (a)  Seven
        Million Three Hundred Fifty-Two Thousand Six Hundred Sixty-Five Dollars and
        Sixty-Two Cents ($7,352,665.62) to The Bank of New York, N.A. to redeem the
        Senior Secured Notes (the “Redemption
        Amount”)
        on
        behalf of InSite and in the manner set forth in Section 4.3;
        and 

       

      (b)  Five
        Million Six Hundred Forty-Seven Thousand Three Hundred Thirty-Four Dollars
        and
        Thirty-Eight Cents ($5,647,334.38) to InSite in the manner set forth in
        Section 4.3
        (the
“InSite
        License Fee”). 

       

      The
        Parties acknowledge and agree that this Agreement shall become effective
        on the
        Effective Date immediately upon receipt of the Redemption Amount by The Bank
        of
        New York, N.A. as specified in the foregoing clause (a). InSite agrees that
        Inspire’s payment of the foregoing amounts in the manner specified shall
        constitute full and complete satisfaction of Inspire’s payment obligations under
        this Section 4.1.

       

      4.2  Milestone
        Payment upon Regulatory Approval.
        Within
        fifteen (15) calendar days following
        receipt by InSite of Regulatory Approval in the United States of any Subject
        Product with an Acceptable Label, Inspire shall pay InSite Nineteen Million
        U.S.
        Dollars ($19,000,000) (the “Milestone
        Payment”)
        in the
        manner set forth in Section 4.3.
        For
        purposes of clarification, the Milestone Payment shall be made only once
        and
        upon the first occurrence of the indicated event, regardless of the number
        of
        Subject Products or occurrences of Regulatory Approval for Subject
        Products. 

       

      4.3  Payment.
        The
        Initial Payment and the Milestone Payment shall each be non-refundable and
        shall
        be made by Inspire in U.S. Dollars by wire transfer in immediately available
        funds. Inspire shall transfer the Redemption Amount to the Bank of New York,
        N.A., as Collateral Agent for the holders of the Senior Secured Notes, by
        wire
        transfer to the credit of such bank account as is designated in Schedule
        4.3.
        The
        InSite License Fee and the Milestone Payment shall be paid to InSite by wire
        transfer to the credit of such bank account of InSite as is designated in
        Schedule
        5.5. 

       

      
        
          
          

        

        
          25

          
            

          

        

        
          
          

        

      

       

      ARTICLE
        5

      ROYALTIES

       

      5.1  Royalty
        Rates.
        Inspire
        shall pay to InSite the following non-refundable royalties in accordance
        with
        this Article 5 (“Inspire
        Royalties”)
        based
        on the cumulative volume of Net Sales of Inspire Licensed Products in the
        Territory:

       

      (a)  For
        Net
        Sales of Inspire Licensed Products occurring during the period commencing
        on the
        Effective Date and continuing until the second (2nd) anniversary of the First
        Commercial Sale of an Inspire Licensed Product in the United States (such
        period, the “Initial
        Royalty Period”),
        twenty percent (20%) of such Net Sales; and

       

      (b)  For
        Net
        Sales of Inspire Licensed Products occurring after the expiration of the
        Initial
        Royalty Period, twenty-five percent (25%) of such Net Sales.

       

      The
        obligation to pay Inspire Royalties under this Article 5 shall be imposed
        only
        once (i) with respect to any sale of the same unit of any Inspire Licensed
        Product, and (ii) with respect to a single unit of any Inspire Licensed Product.
        

       

      5.2  Royalty
        Term.
        The
        Inspire Royalties set forth in Section 5.1
        shall be
        payable as to each particular Inspire Licensed Product sold in a particular
        country, on an Inspire Licensed Product-by-Inspire Licensed Product basis
        and a
        country-by-country basis, for the longer of: (a) eleven (11) years
        following the First Commercial Sale by Inspire, any of its Affiliates or
        any of
        its sublicensees of such Inspire Licensed Product in a particular country
        of
        sale, or (b) for so long as there exists in the particular country of sale
        a
        Valid Claim within the InSite Licensed Patents covering such Inspire Licensed
        Product (such period, the “Inspire
        Royalty Term”
as
        to
        the particular Inspire Licensed Product sold in the particular country);
        provided, however, that the applicable royalty rate under Section 5.1
        shall be
        reduced by [***] in any country for any period during which the manufacture,
        sale or importation of such Inspire Licensed Product in such country is not
        covered by any Valid Claim within the InSite Licensed Patents. For the avoidance
        of doubt, Inspire shall have no obligation to pay any Inspire Royalties for
        a
        particular Inspire Licensed Product in a particular country under Section
        5.1
        above
        upon the expiration of the Inspire Royalty Term applicable to such Inspire
        Licensed Product in such country. 

       

      5.3  Minimum
        Royalty.

       

      (a)  For
        each
        of five (5) one-year Minimum Royalty Periods, which Minimum Royalty Periods
        shall commence on the Minimum Royalty Date and run consecutively for
five
        (5)
        years thereafter, Inspire shall pay to InSite the
        annual minimum royalty payment for the applicable year as specified in
Schedule 5.3(a)
        (each a
“Minimum
        Royalty”),
        subject
        to any applicable reductions or offsets permitted under this Agreement. On
        the
        date that is forty-five (45)
        days
        after the end of a particular Minimum Royalty Period, Inspire shall determine
        the total amounts of Inspire Royalties accrued and payable for such Minimum
        Royalty Period under Section 5.1. If such total amount of Inspire Royalties
        accrued is less than the Minimum Royalty amount owed for such Minimum Royalty
        Period as set forth in Schedule
        5.3(a),
        then,
        in addition to the payment of Inspire Royalties that Inspire made for the
        calendar quarter that just ended at the end of such Minimum Royalty Period,
        Inspire shall also pay InSite an amount equal to the difference between the
        Minimum Royalty amount owed and such total amount of Inspire Royalties accrued
        for such Minimum Royalty Period. 

      
         

        
          	
                  *Indicates
                    that certain information contained herein has been omitted and
                    filed
                    separately with the Securities and Exchange Commission. Confidential
                    treatment has been requested with respect to the omitted
                    portions.

                

        

         

        
          
            
            

          

          
            26

            
              

            

          

          
            
            

          

        

      

       

       

       

      (b)  Promptly
        after completion of a particular calendar year in which a Minimum Royalty
        Period
        ended, Inspire may conduct and complete an internal financial audit with
        respect
        to the total
        amounts of Inspire Royalties accrued and payable under
        Section 5.1 for
        such
Minimum
        Royalty Period. If such audit (combined with the applicable portions of an
        audit
        performed for the prior calendar year) shows that the total amount of Inspire
        Royalties actually owed and paid to InSite, under Section 5.1, for such Minimum
        Royalty Period is different from the amount used in Section 5.3(a) above
        in
        calculating the amount (if any) that must be paid to InSite to meet the Minimum
        Royalty amount owed for such Minimum Royalty Period, then Inspire may provide
        to
        InSite written notice of such difference, and the consequential difference
        (if
        any) in the amount of the payment (if any) that Inspire should have made
        under
        Section 5.3(a) above for such Minimum Royalty Period in order to meet the
        Minimum Royalty amount owed for such Minimum Royalty Period (such difference,
        the “Reconciliation
        Amount”).
        If
        such audit demonstrates that there is a Reconciliation Amount that must be
        paid
        by one Party to the other, in order to make the payment made under Section
        5.3(a) for the applicable Minimum Royalty Period accurate, then the applicable
        Party shall pay to the other Party such Reconciliation Amount shown to be
        owing
        by the audit, within thirty (30) days of Inspire providing such written notice
        to InSite. 

       

      (c)  Notwithstanding
        anything to the contrary in this Agreement:

       

      (i)  Inspire’s
        obligation to pay Minimum Royalties under this Section 5.3 shall be suspended
        during any period in which (A) [***], or (B) Inspire is unable, despite use
        of
        Commercially Reasonable Efforts, [***]; 

       

      (ii)  Inspire
        shall have no further obligation to pay Minimum Royalties under this Section
        5.3
        as of the date on which: 

       

      (A)  there
        no
        longer exists any [***]; 

      
         

        
          	
                  *Indicates
                    that certain information contained herein has been omitted and
                    filed
                    separately with the Securities and Exchange Commission. Confidential
                    treatment has been requested with respect to the omitted
                    portions.

                

        

         

        
          
            
            

          

          
            27

            
              

            

          

          
            
            

          

        

      

       

      (B)  sales
        of
        a Generic Equivalent, as to any Inspire Licensed Product, during any calendar
        quarter, are equal to or greater than either [***],
        expressed in local currency; or

       

      (C)  InSite
        has not cured a material failure to perform any of its obligations under
        this
        Agreement within [***] days of receiving notice thereof from Inspire;

       

      (iii)  If
        Inspire’s obligation to pay Minimum Royalties under this Section 5.3 is
        suspended pursuant to subsection (i) above during any particular Minimum
        Royalty
        Period(s), then the Minimum Royalty amount owed for such Minimum Royalty
        Period(s) shall be based on a pro-rated amount (using a straight-line pro
        ration
        based on the number of days in such Minimum Royalty Period(s) during which
        Inspire’s obligation to pay Minimum Royalties were not suspended) of the
        required Minimum Royalties owed for such Minimum Royalty Period(s) under
        Schedule
        5.3(a);
        and

       

      (iv)  If
        Inspire’s obligation to pay Minimum Royalties under this Section 5.3 expires
        pursuant to subsection (ii) above, or if this Agreement expires or is
        terminated, during any particular Minimum Royalty Period, then the Minimum
        Royalty amount owed for such Minimum Royalty Period shall be based on a
        pro-rated amount (using a straight-line pro ration based on the number of
        days
        in such Minimum Royalty Period through the date of such expiration or applicable
        notice of termination) of the required Minimum Royalties owed for such Minimum
        Royalty Period under Schedule
        5.3(a).

       

      (d)  During
        any suspension and after any expiration of Inspire’s obligation to pay Minimum
        Royalties under this Section 5.3, other than as a result of expiration or
        termination of this Agreement, Inspire shall continue to be obligated to
        use
        Commercially Reasonable Efforts to commercialize Inspire Licensed Products
        in
        the Field in the Territory pursuant to Section 3.4. 

       

      5.4  Reports
        and Payments.
        Inspire
        shall deliver to InSite, within twenty-five (25) days
        after the end of each calendar quarter, a report setting forth for such calendar
        quarter the following information for each Inspire Licensed Product: (i)
        Net
        Sales of such Inspire Licensed Product by Inspire, any of its Affiliates
        or any
        of its sublicensees on a country-by-country basis; (ii) the Inspire Royalties
        due to InSite in respect of such Net Sales; and (iii) the exchange rates
        used in
        calculating any of the foregoing. The total Inspire Royalties due in respect
        of
        Net Sales of Inspire Licensed Products during such calendar quarter shall
        be
        remitted at the time such report is made. 

      
         

        
          	
                  *Indicates
                    that certain information contained herein has been omitted and
                    filed
                    separately with the Securities and Exchange Commission. Confidential
                    treatment has been requested with respect to the omitted
                    portions.

                

        

         

        
          
            
            

          

          
            28

            
              

            

          

          
            
            

          

        

      

       

      5.5  Taxes
        and Withholding.
        Any
        payments made by Inspire to InSite under this Agreement may be reduced by
        the
        amount required to be paid or withheld pursuant to any applicable law,
        including, but not limited to, United States federal, state or local tax
        law
        (“Withholding
        Taxes”).
        Any
        such Withholding Taxes required by law to be paid or withheld shall be an
        expense of, and borne solely by, InSite. Inspire shall pay all applicable
        Withholding Taxes from payments payable hereunder to the appropriate government
        authority on behalf of InSite, as required by applicable law. Inspire shall
        submit to InSite reasonable proof of payment of the Withholding Taxes, together
        with an accounting of the calculations of such taxes, within thirty (30)
        days
        after such Withholding Taxes are remitted to the proper authority. The Parties
        will cooperate reasonably in completing and filing documents required under
        the
        provisions of any applicable tax laws or under any other applicable law in
        connection with the making of any required tax payment or withholding payment,
        or in connection with any claim to a refund of or credit for any such
        payment.  

       

      5.6  Currency
        Exchange; Manner and Place of Payment.
        All
        payments hereunder shall be payable in U.S. Dollars. Inspire Royalties shall
        be
        calculated based on Net Sales in each country’s currency in which Net Sales have
        occurred, and shall be converted (as applicable) to U.S. Dollars as follows.
        With respect to each calendar quarter, whenever conversion of payments from
        any
        foreign currency shall be required, such conversion shall be made using the
        same
        exchange rate Inspire uses to record such sales. All payments shall be made
        by
        wire transfer to the credit of such bank account of InSite as is designated
        in
Schedule
        5.5
        or as
        may otherwise be designated at least ten (10) Business Days in advance by
        InSite
        in writing to Inspire. 

       

      5.7  Maintenance
        of Records; Audit.
        For a
        period of two (2) years from the end of the calendar quarter in which the
        particular sale occurred, Inspire shall maintain, and shall require its
        Affiliates and sublicensees to maintain, complete and accurate books and
        records
        in connection with the sale of Inspire Licensed Products hereunder, as necessary
        to allow the accurate calculation consistent with GAAP of the Inspire Royalties
        due to InSite, including any records required to calculate any royalty
        adjustments hereunder. Once per calendar year, InSite shall have the right
        to
        engage an independent accounting firm reasonably acceptable to Inspire, which
        shall have the right to examine in confidence the relevant records of Inspire
        as
        may be reasonably necessary to determine or verify the amount of royalty
        payments due hereunder. Such examination shall be conducted, and Inspire
        shall
        make its records available, during normal business hours, after at least
        fifteen
        (15) Business Days prior written notice to Inspire, and shall take place
        at the
        facility(ies) where such records are maintained. Each such examination shall
        be
        limited to pertinent books and records for any year ending not more than
        twenty-four (24) months prior to the date of request; provided, however,
        that
        InSite shall not be permitted to audit the same period of time more than
        once.
        Before permitting such independent accounting firm to have access to such
        books
        and records, Inspire may require such independent accounting firm and its
        personnel involved in such audit to sign a confidentiality agreement (in
        form
        and substance reasonably acceptable to Inspire) as to any confidential
        information which is to be provided to such accounting firm, or to which
        such
        accounting firm will have access, while conducting the audit under this
        paragraph. The independent accounting firm will prepare and provide to each
        Party a written report stating whether the royalty reports submitted and
        royalties paid are correct or incorrect and the details concerning any
        discrepancies. Such accounting firm may not reveal to InSite any information
        learned in the course of such audit other than the amount of any such
        discrepancies. InSite agrees to hold in strict confidence all information
        disclosed to it, except to the extent necessary for InSite to enforce its
        rights
        under this Agreement or to the extent disclosure is required by law. In the
        event there was an underpayment by Inspire of amounts owed under this Agreement,
        Inspire shall promptly (but in no event later than thirty (30) days after
        Inspire’s receipt of the independent auditor’s report so correctly concluding)
        make payment to InSite of any shortfall. In the event that there was an
        overpayment by Inspire hereunder, InSite shall promptly (but in no event
        later
        than thirty (30) days after InSite’s receipt of the independent auditor’s report
        so correctly concluding) refund to Inspire or credit to future royalties,
        at
        Inspire’s election, the excess amount. InSite shall bear the full cost of such
        audit unless such audit discloses an underreporting by Inspire of more than
        ten
        percent (10%) of the aggregate amount of royalties in any twelve (12) month
        period, in which case, Inspire shall bear the full cost of such audit. Upon
        the
        expiration of twenty four (24) months following the end of any Inspire fiscal
        year, the calculation of royalties payable with respect to such year will
        be
        binding and conclusive upon InSite except with respect to any audit then
        underway, and except for fraud or misrepresentation, Inspire and its Affiliates
        will be released from any liability or accountability with respect to royalties
        for such fiscal year. In
        addition, Inspire shall maintain and permit Pfizer to audit books and records
        in
        connection with sales of Inspire Licensed Products in the same manner and
        to the
        same extent that InSite is required to maintain and permit audits of InSite’s
        books and records with respect to such sales under Section 4(c) of the Pfizer
        Agreement.

       

      
        
          
          

        

        
          29

          
            

          

        

        
          
          

        

      

       

      5.8  Reductions. 

       

      (a)  [***]
        Third Party Patent Rights, Know-How or other technology rights in any country
        in
        the Territory are necessary for the development of, having developed, making
        of,
        having made, using of, having used, marketing of, having marketed,
        commercializing of, having commercialized, offering for sale of, sale of,
        having
        sold, importing of or having imported a particular Inspire Licensed Product
        in
        the Field and if Inspire then enters into a written license agreement with
        any
        such Third Party, Inspire may: 

       

      (i)  reduce
        the Inspire Royalties and Minimum Royalties payable with respect to such
        Inspire
        Licensed Product in such country pursuant to this Article 5 by [***] of the
        sum
        of the royalties paid to all Third Parties by Inspire pursuant to all such
        Third
        Party licenses combined; provided, however, that in no event shall the Inspire
        Royalties or Minimum Royalties payable by Inspire to InSite hereunder be
        reduced
        by more than [***] as a result of application of this Section 5.8(a)(i);
        and

       

      
         

        
          	
                  *Indicates
                    that certain information contained herein has been omitted and
                    filed
                    separately with the Securities and Exchange Commission. Confidential
                    treatment has been requested with respect to the omitted
                    portions.

                

        

         

        
          
            
            

          

          
            30

            
              

            

          

          
            
            

          

        

      

       

      (ii)  offset
        [***] of any license issue fees (including but not limited to any initial
        or
        upfront fees) and milestone payments paid to all Third Parties by Inspire
        pursuant to all such Third Party licenses against any Inspire Royalties or
        Minimum Royalties due under this Agreement. Offsets for such payments to
        Third
        Parties may be applied in any single calendar quarter or several calendar
        quarters until the application of such payments in their entirety; provided,
        however, that in no event shall the aggregate of offsets under this
        Section 5.8(a)(ii) exceed in any particular calendar quarter [***] of the
        sum of any Inspire Royalties or Minimum Royalties due hereunder in such
        quarter.

       

      (b)  [***]
        to
        obtain rights in any country in the Territory from any Third Party, other
        than
        the situation described in paragraph (a) above, for Patent Rights, Know-How
        or
        other technology to develop, have developed, make, have made, use, have used,
        market, have marketed, commercialize, have commercialized, offer for sale,
        sell,
        have sold, import or have imported a particular Inspire Licensed Product
        in the
        Field, then Inspire may notify InSite of its intent to enter into, and may
        enter
        into, a license with any such Third Party at its discretion. Within thirty
        (30)
        days of receipt of such notice, InSite shall notify Inspire of its concurrence
        or lack of concurrence to such Third Party license (which concurrence shall
        not
        be unreasonably withheld, conditioned or delayed). If InSite so notifies
        Inspire
        of its lack of concurrence, the following royalty reductions shall not apply.
        Any lack of notice shall not be deemed as concurrence. If InSite has notified
        Inspire of its concurrence to such Third Party license, and if Inspire then
        enters into a written license agreement with such Third Party, Inspire may:
        

       

      (i)  reduce
        the Inspire Royalties and Minimum Royalties payable with respect to such
        Inspire
        Licensed Product in such country pursuant to this Article 5 by [***] of the
        sum
        of the royalties paid to all Third Parties by Inspire pursuant to all such
        Third
        Party licenses combined; provided, however, that in no event shall the Inspire
        Royalties or Minimum Royalties payable by Inspire to InSite hereunder be
        reduced
        by more than [***] as a result of application of this Section 5.8(b)(i);
        and

       

      (ii)  offset
        [***] of any license issue fees (including but not limited to any initial
        or
        upfront fees) and milestone payments paid to all Third Parties by Inspire
        pursuant to all such Third Party licenses against any Inspire Royalties or
        Minimum Royalties due under this Agreement. Offsets for such payments to
        Third
        Parties may be applied in any single calendar quarter or several calendar
        quarters until the application of such payments in their entirety; provided,
        however, that in no event shall the aggregate of offsets under this
        Section 5.8(b)(ii) exceed in any particular calendar [***] of the sum of
        any Inspire Royalties or Minimum Royalties due hereunder in such quarter.
        

      
         

        
          	
                  *Indicates
                    that certain information contained herein has been omitted and
                    filed
                    separately with the Securities and Exchange Commission. Confidential
                    treatment has been requested with respect to the omitted
                    portions.

                

        

         

        
          
            
            

          

          
            31

            
              

            

          

          
            
            

          

        

      

       

      (c)  The
        Inspire Royalties payable by Inspire with respect to any Inspire Licensed
        Product in any country in the Territory pursuant to this Article 5 shall
        be
        reduced by the following percentages effective during and after the calendar
        quarter when Generic Competition occurs at the following sales levels with
        respect to such Inspire Licensed Product in such country. Where the sales
        of a
        Generic Equivalent, as to such Inspire Licensed Product, during a calendar
        quarter are equal to or greater than either [***] of total sales of such
        Inspire Licensed Product sold in such country, expressed in units, or
        (v) [***] of the total sales of such Inspire Licensed Product sold in such
        country, expressed in local currency, the Inspire Royalties with respect
        to such
        Inspire Licensed Product shall be reduced, subject to Section 5.8(d), by
        [***]
        of
        the amounts otherwise owed in
        such
        country. Where the sales of a Generic Equivalent, as to such Inspire Licensed
        Product, during a calendar quarter are equal to or greater than either
        (w) [***] of total sales of such Inspire Licensed Product sold in such
        country, expressed in units, or (x) [***] of the total sales of such
        Inspire Licensed Product sold in such country, expressed in local currency,
        the
        Inspire Royalties with respect to such Inspire Licensed Product shall be
        reduced, subject to Section 5.8(d), by [***] of the amounts otherwise owed
        in
        such country. Where the sales of a Generic Equivalent, as to such Inspire
        Licensed Product, during a calendar quarter are equal to or greater than
        either
        (y) [***] of total sales of such Inspire Licensed Product sold in such
        country, expressed in units, or (z) [***] of the total sales of such
        Inspire Licensed Product sold in such country, expressed in local currency,
        the
        Inspire Royalties with respect to such Inspire Licensed Product shall be
        reduced
        to an amount that is equal to [***] of applicable Net Sales of such Inspire
        Licensed Product. If such Generic Competition ceases to exist at such sales
        levels, then, beginning with the first calendar quarter after such Generic
        Competition does not exist at such sales levels, the reduction of Inspire
        Royalties with respect to such Inspire Licensed Product in this Section 5.8(c)
        shall be reduced to the reduction applicable to such lower sales levels,
        if any,
        in such country until such time as Generic Competition may again exist at
        such
        sales levels with respect to such Inspire Licensed Product in such country.
        

       

      (d)  Notwithstanding
        the provisions of Sections [***] permitting Inspire to reduce Inspire Royalties
        under certain circumstances, in no event shall Inspire Royalties payable
        by
        Inspire to InSite pursuant to this Article 5 with respect to a particular
        Inspire Licensed Product in a particular country of the Territory in any
        single
        calendar quarter be reduced, as a result of the application of such provisions,
        to an amount that is below [***] of applicable Net Sales of such Inspire
        Licensed Product in such country in such quarter. Subject to the foregoing,
        Inspire shall be permitted to apply any reduction or offset to which it is
        entitled under Section 5.8(a) or Section 5.8(b) in any single calendar quarter
        or several calendar quarters until the application of such amounts in their
        entirety. For the avoidance of doubt, this Section 5.8(d) shall not limit
        the
        application of any other reduction or offset to which Inspire is or may be
        entitled under this Agreement, and shall not preclude Inspire’s exercise of any
        other applicable rights or remedies from time to time. 

      
         

        
          	
                  *Indicates
                    that certain information contained herein has been omitted and
                    filed
                    separately with the Securities and Exchange Commission. Confidential
                    treatment has been requested with respect to the omitted
                    portions.

                

        

         

        
          
            
            

          

          
            32

            
              

            

          

          
            
            

          

        

      

       

      (e)  In
        the
        event that Inspire becomes a direct licensee of Pfizer under the Pfizer Patent
        Rights, Inspire shall be entitled to offset, against any Inspire Royalties
        or
        Minimum Royalties due under this Agreement, any payment made by Inspire to
        Pfizer in connection with such license.

       

      ARTICLE
        6

      TRADEMARKS

       

      6.1  Registrations.
        InSite
        shall, at InSite’s expense, use its commercially reasonable efforts to secure
        and thereafter to maintain registrations for all of the InSite Trademarks
        in
        each jurisdiction in the Territory.
        Inspire
        agrees to provide reasonable cooperation in connection with InSite’s preparation
        and filing of any applications, renewals or other documentation necessary
        or
        useful to protect InSite’s intellectual property rights in the InSite Trademarks
        and Domain Names.

       

      6.2  Inspire
        Trademarks.
        Subject
        to Section 3.2 of the Trademark License Agreement, Inspire shall own any
        trademarks created by or on behalf of Inspire that Inspire elects, in its
        sole
        discretion, to use in connection with the Inspire Licensed Products (the
        “Inspire
        Trademarks”).
        InSite acknowledges that the Inspire Trademarks and any domain names
        incorporating such trademarks will be selected by Inspire and will be registered
        in Inspire’s or its Affiliate’s name and will be the sole property of Inspire,
        and InSite agrees that it will not have, assert or acquire any right, title
        or
        interest therein or thereto or any good will associated therewith, except
        as
        provided in Section 3.2 of the Trademark License Agreement. Subject to
        Section 3.2 of the Trademark License Agreement, any trade names, brand
        names, slogans, logos, designs, trade dress, copyrights and good will used
        on or
        in connection with the Inspire Licensed Products may be selected by Inspire
        in
        its sole discretion and shall be the sole and exclusive property of Inspire.
        Neither InSite nor its Affiliates shall have the right or license to use
        the
        Inspire Trademarks at any time before, during, or after the Term of this
        Agreement; provided, however, that InSite shall be permitted to mention the
        Inspire Trademarks to the extent necessary in making any permitted disclosures
        under Article 8. 

       

      ARTICLE
        7

      REPRESENTATIONS,
        WARRANTIES AND COVENANTS

       

      7.1  Mutual
        Representations and Warranties.
        Each
        Party hereby represents and warrants to the other Party as of the Effective
        Date
        that:

       

      (a)  such
        Party is a corporation or entity duly organized, validly existing and in
        good
        standing under the laws of the jurisdiction of its incorporation and has
        full
        corporate power and authority to execute and deliver this Agreement and the
        Trademark License Agreement and to carry out the provisions hereof and
        thereof;

       

      (b)  such
        Party is duly authorized, by all requisite corporate action, to execute and
        deliver this Agreement and the Trademark License Agreement and to carry out
        the
        provisions hereof and thereof, and the Person executing this Agreement and
        the
        Trademark License Agreement on behalf of such Party is duly authorized to
        do so
        by all requisite corporate action;

       

      
        
          
          

        

        
          33

          
            

          

        

        
          
          

        

      

      (c)  no
        consent, approval, order or authorization of, or registration, qualification,
        designation, declaration or filing with, any federal, state or local
        governmental authority is required on the part of such Party in connection
        with
        the valid execution, delivery and performance of this Agreement and the
        Trademark License Agreement, except where the failure to obtain any of the
        foregoing could not, individually or in the aggregate, reasonably be expected
        to
        materially adversely affect such Party’s ability to consummate the transactions
        contemplated herein or therein or perform its obligations hereunder or
        thereunder; 

       

      (d)  this
        Agreement and the Trademark License Agreement are legal and valid obligations
        binding upon such Party and enforceable in accordance with their respective
        terms, except as such enforceability may be limited by bankruptcy, insolvency,
        reorganization, moratorium and similar laws; and

       

      (e)  the
        execution, delivery and performance by it of this Agreement and the Trademark
        License Agreement and its compliance with the terms and provisions of this
        Agreement and the Trademark License Agreement does not and will not (i) conflict
        with or result in a violation or breach of any of the terms, conditions or
        provisions of its certificate or articles of incorporation or by-laws (or
        other
        comparable corporate charter documents); (ii) conflict with or result in
        a
        violation or breach of any term or provision of any law or order applicable
        to
        it; or (iii) (A) conflict with or result in a violation or breach of, (B)
        constitute (with or without notice or lapse of time or both) a default under,
        (C) require it to obtain any consent, approval or action of, make any filing
        with or give any notice to any Person as a result or under the terms of,
        or (D)
        result in the creation or imposition of any Lien upon it or any of the InSite
        Intellectual Property under, any contract, instrument or license to which
        it is
        a party or by which any of its assets and properties is bound; except, in
        the
        case of (i), (ii) and (iii) above, which could not, individually or in the
        aggregate, reasonably be expected to materially adversely affect its ability
        to
        consummate the transactions contemplated herein or perform its obligations
        hereunder, and except, in the case of (iii)(A), (B) and (D) above, with respect
        to (x) that certain Amended and Restated Security Agreement, dated as of
        December 30, 2005, by and between InSite and The Bank of New York (the
“Security
        Agreement”)
        and
        (y) the 2003 Senior Notes, the 2005 Senior Notes (each as defined in the
        Security Agreement), as amended on December 22, 2006, and those senior
        secured promissory notes issued by InSite on January 11, 2006, as amended
        on
        December 22, 2006 (the “2006
        Senior Notes,”
and
        together with the 2003 Senior Notes and the amended 2005 Senior Notes, the
        “Senior
        Secured Notes”). 

       

      7.2  Additional
        InSite Representations and Warranties.
        InSite
        additionally represents and warrants to Inspire as of the Effective Date
        that:

       

      (a)  InSite
        has the full right, power and authority to grant, and is not prohibited by
        the
        terms of any agreement to which it is a party from granting, the licenses
        granted to Inspire under Article 2 hereof and under Article 2 of the Trademark
        License Agreement. InSite has not previously granted any rights inconsistent
        with the rights and licenses granted to Inspire under this Agreement or the
        Trademark License Agreement;

       

      
        
          
          

        

        
          34

          
            

          

        

        
          
          

        

         

      

      (b)  InSite
        is
        the exclusive owner of all right, title and interest in the InSite Owned
        Patents
        as set forth in Schedule
        1,
        except
        with respect to the Container Patent Rights which are jointly owned with
        R.P.
        Scherer Technologies, Inc. Schedule
        1
        contains
        a complete and accurate description of all Patent Rights owned by, or otherwise
        Controlled by, InSite or any of its Affiliates as of the Effective Date that
        are
        necessary or useful to develop, manufacture or commercialize Subject Products
        in
        the Field in the Territory. InSite’s rights and interests in the InSite Owned
        Patents are through assignment, without reservation, from the designated
        inventors; except that it is expressly acknowledged that InSite derives no
        rights from Patrick Poisson, a co-inventor named in the Container Patent
        Rights,
        and that R.P. Scherer Technologies, Inc., not InSite, is the assignee of
        Patrick
        Poisson; 

       

      (c)  all
        InSite Intellectual Property is, and immediately after the Effective Date
        will
        be, free and clear of all Liens other than the Liens imposed under the terms
        of
        the Security Agreement and the Senior Secured Notes, which Liens shall be
        automatically released upon full payment of the Redemption Amount by Inspire
        on
        behalf of InSite in the manner set forth in Section 4.3.
        InSite
        has obtained the assignment or exclusive licenses of all material interests
        and
        all material rights from its employees and independent contractors and any
        other
        Third Party contractors with respect to the InSite Know-How and the InSite
        Formulation Know-How. InSite has taken reasonable security measures to protect
        the secrecy, confidentiality and value as of the Effective Date of the InSite
        Know-How and the InSite Formulation Know-How that it regards as material
        and in
        need of confidential treatment; 

       

      (d)  the
        patent applications included in the InSite Owned Patents have been duly filed;
        

       

      (e)  there
        are
        no actions, claims, demands, suits, citations, summons, subpoenas, inquiries
        or
        investigations of any nature, civil, criminal, regulatory or otherwise, in
        law
        or in equity, or arbitral proceedings or any proceedings by or before any
        governmental authority (including any Regulatory Authority), pending or,
        to
        InSite’s Knowledge, threatened against, relating to or affecting InSite or the
        Current Product or any of the InSite Intellectual Property (with the exception
        of normal Prosecution at the United States Patent and Trademark Office and
        equivalent foreign patent offices or customary actions with the relevant
        Regulatory Authorities) which (A) could reasonably be expected to result in
        the issuance of an order restraining, enjoining or otherwise prohibiting
        or
        making illegal the consummation of any of the transactions contemplated by
        this
        Agreement and the Trademark License Agreement or otherwise result in a
        diminution of the benefits contemplated by this Agreement or the Trademark
        License Agreement to Inspire; or (B) if determined adversely to it, could
        reasonably be expected to result in any injunction or other equitable relief
        against it that would interfere in any material respect with its ability
        to
        perform its duties and obligations under this Agreement and the Trademark
        License Agreement; 

       

      (f)  to
        InSite’s Knowledge, neither the manufacture, use or sale of the Current Product
        nor the use of the InSite Know-How, the InSite Formulation Know-How or the
        InSite Trademarks by Inspire as contemplated by this Agreement and the Trademark
        License Agreement will infringe upon any Third Party’s patents or will
        constitute a misappropriation of a Third Party’s trade secrets or other
        intellectual property rights existing as of the Effective Date; neither InSite
        nor its Affiliates and, to InSite’s Knowledge, its Third Party contractors, have
        received any notice in writing, or otherwise have Knowledge of any facts,
        which
        have, or reasonably should have, led InSite to believe that the manufacture,
        use
        or sale of the Current Product or the use of the InSite Know-How, the InSite
        Formulation Know-How or the InSite Trademarks by Inspire as contemplated
        by this
        Agreement and the Trademark License Agreement will infringe any rights of
        a
        Third Party existing as of the Effective Date;

       

      
        
          
          

        

        
          35

          
            

          

        

        
          
          

        

      

       

      (g)  to
        InSite’s Knowledge, there is no Third Party using or infringing any of the
        InSite Owned Patents or InSite Trademarks or misappropriating or using InSite
        Know-How or InSite Formulation Know-How in derogation of the rights granted
        to
        Inspire in this Agreement and the Trademark License Agreement;

       

      (h)  the
        development, testing, manufacture, labeling, storage and distribution of
        the
        Current Product have been conducted by InSite and its Affiliates and, to
        InSite’s Knowledge, its Third Party contractors, in compliance in all material
        respects with all applicable laws, rules and regulations, including with
        respect
        to investigational use, good clinical practices, good laboratory practices,
        good
        manufacturing practices, record keeping, security and filing of reports;
        neither
        InSite nor its Affiliates, and to InSite’s Knowledge, its Third Party
        contractors, have received any notice in writing, or otherwise have knowledge
        of
        any facts, which have, or reasonably should have, led InSite to believe that
        any
        of the regulatory submissions relating to the Current Product are not currently
        in good standing with the FDA;

       

      (i)  InSite
        has provided to Inspire all material information, available to InSite or
        its
        Affiliates, with respect to the safety and/or efficacy of the Current Product,
        including without limitation, all material information related to clinical
        and
        non-clinical studies, and, to InSite’s Knowledge, there is no issue that would
        prevent InSite from obtaining Regulatory Approval in each country in the
        Territory for the Current Product and there are no material adverse effects
        that
        would preclude Inspire or Inspire’s Affiliates from exercising any rights
        granted hereunder or prohibiting the transactions contemplated by this Agreement
        and the Trademark License Agreement; 

       

      (j)  InSite
        is
        the exclusive owner of all right, title and interest in the InSite Trademarks.
        The InSite Trademarks and registrations thereof are in full force and effect
        and
        will be maintained by InSite in the Territory during the Term in the ordinary
        course. There is no action, suit or proceeding pending or, to InSite’s
        Knowledge, that has been threatened in writing by any Third Party which,
        if
        adversely determined, would have a material adverse effect upon the ability
        of
        Inspire to use the InSite Trademarks in connection with the Subject Products
        in
        the Territory under the terms of this Agreement or the Trademark License
        Agreement; 

       

      (k)  the
        Domain Names are duly registered, the registrations thereof are in full force
        and effect and will be maintained by InSite during the Term in the ordinary
        course, and all applicable fees have been paid. InSite is the exclusive
        registrant of the Domain Names and has the unencumbered right to transfer
        the
        Domain Names to Inspire. The Domain Names are, and immediately after the
        Effective Date will be, free and clear of all Liens. There is no action,
        suit or
        proceeding pending or, to InSite’s Knowledge, that has been threatened in
        writing by any Third Party which, if adversely determined, would have a material
        adverse effect upon the ability of Inspire to use the Domain Names in connection
        with the Subject Products in the Territory under the terms of this Agreement
        or
        the Trademark License Agreement; 

       

      
        
          
          

        

        
          36

          
            

          

        

        
          
          

        

      

      (l)  each
        of
        the Material Agreements is a legal and valid obligation binding upon InSite
        and,
        as applicable, Pfizer, Columbia, Cardinal or [***], is in full force and
        effect,
        and is enforceable in accordance with its terms, except as such enforceability
        may be limited by bankruptcy, insolvency, reorganization, moratorium and
        similar
        laws. Neither InSite nor, to the Knowledge of InSite, Pfizer, Columbia, Cardinal
        or [***] is in default or breach of any of its respective obligations under
        any
        of the Material Agreements. Neither InSite nor, to the Knowledge of InSite,
        Pfizer, Columbia, Cardinal or [***] has waived any rights or defaults or
        breaches under any of the Material Agreements that would adversely affect
        the
        ability of Inspire or Inspire’s Affiliates to exercise any rights granted under
        this Agreement or that would prohibit the transactions contemplated by this
        Agreement. To InSite’s Knowledge, no event has occurred which, after the giving
        of notice or the lapse of time or both, would constitute a default or breach
        under any of the Material Agreements by InSite, Pfizer, Columbia, Cardinal
        or
        [***]. True, correct and complete copies of the Material Agreements, including
        all amendments thereto, have been provided by InSite to Inspire. InSite has
        not
        received any notice orally or in writing that any of the Material Agreements
        has
        been, will be, or is threatened to be, terminated (in whole or in part) or
        that
        InSite is in default or breach of its obligations under any of the Material
        Agreements. InSite has no intention of terminating any of the Material
        Agreements (in whole or in part) and is not aware of any events, circumstances
        or grounds upon which any of the Material Agreements may be terminated (in
        whole
        or in part) by a party thereto for default or breach; 

       

      (m)  a
        true,
        correct and complete copy of the [***]Agreement, including all amendments
        thereto, has been provided by InSite to Inspire. [***] has no right, title
        or
        interest in, to or under the InSite Intellectual Property except as expressly
        set forth in such agreement; and

       

      (n)  all
        written statements and other writings furnished by InSite pursuant hereto
        or in
        connection with this Agreement or the Trademark License Agreement or the
        transactions contemplated hereby or thereby, are complete and accurate in
        all
        material respects to the best of InSite’s Knowledge. No representation or
        warranty by InSite in this Agreement contains any untrue statement of a material
        fact or omits to state any material fact necessary in order to make any
        statement contained herein not misleading. There is no fact, event or condition
        known to InSite that materially adversely affects the Current Product that
        has
        not been set forth in this Agreement or disclosed by InSite to Inspire in
        writing.

      
         

        
          	
                  *Indicates
                    that certain information contained herein has been omitted and
                    filed
                    separately with the Securities and Exchange Commission. Confidential
                    treatment has been requested with respect to the omitted
                    portions.

                

        

         

        
          
            
            

          

          
            37

            
              

            

          

          
            
            

          

        

      

       

      7.3  Additional
        Inspire Representations and Warranties.
        Inspire
        additionally represents and warrants to InSite as of the Effective Date that
        there is no action, claim, demand, suit, proceeding, arbitration, grievance,
        citation, summons, subpoena, inquiry or investigation of any nature, civil,
        criminal, regulatory or otherwise, in law or in equity, pending or, to Inspire’s
        Knowledge, relating to or threatened against Inspire in connection with or
        relating to the transactions contemplated by this Agreement.

       

      7.4  No
        Implied Warranties.
        Except
        as
        expressly set forth in this Agreement, neither Party makes any representation
        or
        warranty, express or implied, with respect to the subject matter hereof or
        the
        transactions contemplated hereby. 

       

      7.5  Certain
        Additional Covenants. 

       

      (a)  Each
        Party shall comply in all material respects with all laws, rules and regulations
        applicable to its performance under this Agreement and the Trademark License
        Agreement. Without limiting the foregoing, Inspire shall conduct its marketing
        and sales activities under this Agreement in compliance with applicable laws,
        rules and regulations and prevailing pharmaceutical industry standards. Inspire
        shall use Commercially Reasonable Efforts to maintain an adequate sales force
        to
        market and sell the Inspired Licensed Products as contemplated by this
        Agreement.

       

      (b)  InSite
        shall not grant to any Third Party any rights inconsistent with the rights
        and
        licenses granted to Inspire under this Agreement and the Trademark License
        Agreement.

       

      (c)  InSite
        shall promptly notify Inspire in writing upon becoming aware: 

       

      (i)  of
        any
        actual or threatened claim, judgment or settlement against or owed by InSite
        with respect to any of the InSite Intellectual Property, or of any threatened
        claims or litigation seeking to invalidate the InSite Licensed
        Patents;

       

      (ii)  of
        any
        actual or threatened investigation, inquiry, action or proceeding by any
        Regulatory Authority or other government agency with respect to any Subject
        Product; 

       

      (iii)  of
        any
        actual or threatened action, suit or proceeding by any Third Party which,
        if
        adversely determined, would have a material adverse effect upon the ability
        of
        Inspire to use the InSite Intellectual Property as licensed hereunder or
        under
        the Trademark License Agreement in connection with the Subject Products in
        the
        Field in the Territory; or

       

      (iv)  that
        the
        manufacture, use or sale of any Subject Product or the use of the InSite
        Know-How, the InSite Formulation Know-How or InSite Trademarks may infringe
        any
        Patent Rights or other intellectual property rights of a Third Party.

       

      (d)  InSite
        will promptly disclose to Inspire all InSite Developments that arise, if
        any.
        Information provided by InSite to Inspire with respect to such InSite
        Developments will be in reasonable detail but in no circumstance less than
        would
        be sufficient to permit an understanding of the nature of the InSite
        Developments by a practitioner reasonably skilled in the relevant technical
        or
        scientific area.

       

      
        
          
          

        

        
          38

          
            

          

        

        
          
          

        

      

      (e)  Except
        in
        connection with an assignment or transfer of this Agreement as permitted
        under
        Section 12.2,
        InSite
        shall not sell, assign or transfer any of the Material Agreements without
        Inspire’s prior written consent (such consent not to be unreasonably withheld).
        InSite shall deploy and conduct itself under each of the Material Agreements
        in
        a manner that will enable Inspire to perform its obligations and exercise
        its
        rights with regard to Subject Products and Inspire Licensed Products under
        this
        Agreement. In this regard, and without limiting the foregoing, InSite shall:
        

       

      (i)  comply
        in
        all material respects with and perform all of its duties and obligations
        under
        each of the Material Agreements; 

       

      (ii)  not
        intentionally take or fail to take any action within InSite’s reasonable control
        under any of the Material Agreements that could have a materially adverse
        effect
        on Inspire’s rights under this Agreement, including but not limited to any
        action or inaction that would empower Pfizer, Columbia, Cardinal or [***]
        to
        terminate any of the Material Agreements or otherwise limit or reduce InSite’s
        rights thereunder in any material respect; 

       

      (iii)  enforce
        the material provisions of each of the Material Agreements against Pfizer,
        Columbia, Cardinal, or [***], as applicable, if failure to do so could have
        a
        materially adverse effect on Inspire’s rights with respect to Subject Products
        or Inspire Licensed Products under this Agreement; and 

       

      (iv)  not
        modify, amend or terminate any of the Material Agreements without the prior
        written consent of Inspire. 

       

      (f)  InSite
        shall promptly (but no later than within five (5) Business Days) notify Inspire
        in writing of any actual or threatened (or InSite’s receipt of notice of any
        actual or threatened) default (including failure to pay royalties when due,
        if
        applicable), breach, suspension of compliance or performance, or termination
        (in
        whole or in part) under or of any of the Material Agreements. InSite shall
        promptly (but no later than within five (5) Business Days) notify Inspire
        in
        writing of the actual or threatened commencement of (or receipt of notice
        of the
        actual or threatened commencement of) any dispute, claim, suit, litigation
        or
        arbitration proceeding related to any of the Material Agreements, including
        without limitation those disputes, claims, suits, litigations or arbitration
        proceedings alleging a Third Party’s infringement or misappropriation of any of
        the Patent Rights licensed or sublicensed under the Pfizer Agreement or the
        Columbia Agreement. Each such notification shall contain a summary of the
        event
        described therein. At the request of Inspire, InSite shall promptly provide
        to
        Inspire full particulars, of which it is aware, in writing of the applicable
        matter. InSite shall keep Inspire reasonably informed as to the status and
        proposed resolution of each such matter.

      
         

        
          	
                  *Indicates
                    that certain information contained herein has been omitted and
                    filed
                    separately with the Securities and Exchange Commission. Confidential
                    treatment has been requested with respect to the omitted
                    portions.

                

        

         

        
          
            
            

          

          
            39

            
              

            

          

          
            
            

          

        

      

       

      (g)  In
        the
        event that InSite receives notice of any default (including failure to pay
        royalties when due) or breach under any of the Material Agreements and has
        not
        cured such breach or default within ten (10) days of receiving such notice,
        Inspire shall be entitled, but not obligated, to undertake payment or
        performance of the applicable underlying obligation on behalf of InSite as
        necessary to cure such default or breach and to offset, against amounts payable
        to InSite under this Agreement, any reasonable costs and expenses incurred
        by
        Inspire in the course thereof.

       

      (h)  InSite
        shall notify Inspire in writing promptly after receipt by InSite of any notice
        from Pfizer or Columbia relating to the status, validity, or change thereto,
        of
        any of the Patent Rights licensed or sublicensed under the Pfizer Agreement
        or
        the Columbia Agreement (including maintenance, filings, extensions,
        abandonments, surrenders, patent office proceedings, Third Party interference
        or
        other challenges to, or Third Party potential infringement or misappropriation
        of such Patent Rights) (each, an “IP
        Communication”).
        InSite shall inform Inspire of the receipt and substance of each IP
        Communication and if in writing shall furnish Inspire with a copy of such
        IP
        Communication. InSite shall promptly inform Inspire in writing if InSite
        receives, or becomes aware of, any certification filed under the U.S. “Drug
        Price Competition and Patent Term Restoration Act of 1984” claiming that any
        patent licensed or sublicensed under the Pfizer Agreement or the Columbia
        Agreement is invalid or that infringement thereof will not arise from the
        manufacture, use, import, offer for sale or sale of any product by a Third
        Party.

       

      (i)  InSite
        shall be responsible for and comply in all material respects with and materially
        perform all of its duties and obligations under the [***] Agreement and under
        any other agreement by or through which any Third Party has any right, title
        or
        interest in or to any of the InSite Intellectual Property.

       

      (j)  InSite
        shall not create, incur, or allow any Lien on any of the InSite Intellectual
        Property, unless the Person that is to hold such Lien shall have first entered
        into a mutually acceptable non-disturbance agreement with Inspire providing
        to
        the effect that, in the event such Person exercises its rights with respect
        to
        the InSite Intellectual Property under such Lien, such Person agrees to
        recognize the existence and validity of, and Inspire’s rights with respect to
        the InSite Intellectual Property under, this Agreement or any agreement
        supplementary hereto.

       

      (k)  Inspire
        and its Affiliates shall not directly or indirectly challenge or induce any
        Third Party to challenge the validity or enforceability of the Pfizer Patent
        Rights, or any patent claim(s) therein, or initiate or participate in any
        re-examination or other proceeding related to the validity, enforceability
        or
        patentability of any claim of the Pfizer Patent Rights before any tribunal
        or
        patent office. This section shall not prohibit Inspire and its Affiliates
        from
        responding to a subpoena, process, or discovery requests in any litigation
        or
        administrative proceeding provided that Inspire gives prompt notice to Pfizer
        of
        the receipt of said subpoena, process or discovery requests.

       

      (l)  The
        Parties acknowledge the provisions of Section 4(b) of the Pfizer Agreement
        regarding estimated monthly net sales and the Parties agree to cooperate
        reasonably to facilitate compliance with such provisions. The Parties further
        acknowledge that to the extent Inspire delivers information regarding such
        estimated monthly net sales to InSite for further delivery by InSite to Pfizer
        then such further delivery shall not constitute a breach of Section 8.1 of
        this
        Agreement, provided that InSite shall advise Pfizer that such disclosure
        is
        Confidential Information under the Pfizer Agreement and subject to the
        obligations of non-disclosure and non-use in Section 11(a) of the Pfizer
        Agreement. 

       

      
        
          
          

        

        
          40

          
            

          

        

        
          
          

        

      

      ARTICLE
        8

      CONFIDENTIALITY,
        PUBLICATION AND PUBLIC ANNOUNCEMENTS

       

      8.1  Confidentiality.
        The
        Parties agree that during the Term, and for a period of five (5) years after
        this Agreement expires or terminates, a Party receiving Confidential Information
        of the other Party shall (i) maintain in confidence such Confidential
        Information to the same extent such Party maintains its own proprietary
        information of similar kind and value (but at a minimum each Party shall
        use
        commercially reasonable efforts to maintain Confidential Information in
        confidence); (ii) not disclose such Confidential Information to any Third
        Party
        without prior written consent of the Disclosing Party, except for disclosures
        to
        its sublicensees and commercial partners for Subject Products who agree to
        be
        bound by obligations of non-disclosure and non-use at least as stringent
        as
        those contained in this Article 8; and (iii) not use such Confidential
        Information for any purpose except those purposes permitted by this Agreement.
        InSite acknowledges that notwithstanding any other provision of this Agreement,
        it shall be an uncurable material breach of this Agreement if InSite breaches
        this Section 8.1 with respect to any Confidential Information of Inspire
        regarding actual or projected financial, sales or supply information or
        forecasts, including without limitation disclosing such Confidential Information
        or any portion thereof to investors, analysts or any other Third Party or
        providing opinions or financial projections to any Third Party based on such
        Confidential Information. InSite shall in no event be restricted from providing
        its own financial projections, so long as Inspire’s confidential projections are
        not disclosed and InSite’s projections are not in any way attributed to Inspire
        by InSite. For the avoidance of doubt, any financial information of Inspire
        that
        is made generally available to the public by Inspire shall not be considered
        Confidential Information of Inspire. 

       

      8.2  Authorized
        Disclosure.
        Notwithstanding any other provision of this Agreement, the Receiving Party
        may
        disclose Confidential Information of the Disclosing Party to a Third Party:
        (i)
        to the extent and to the Persons as required by an applicable law, rule,
        regulation, legal process or court order, or an applicable disclosure
        requirement of any Regulatory Authority, the U.S. Securities and Exchange
        Commission (“SEC”),
        the
        Nasdaq market or any other securities exchange or market; or (ii) to the
        extent
        necessary to exercise the rights granted to or retained by the Receiving
        Party
        under this Agreement in filing or prosecuting patent applications, prosecuting
        or defending litigation or otherwise establishing rights or enforcing
        obligations under this Agreement; provided, however, that the Receiving Party
        shall provide prior notice of such intended disclosure to the Disclosing
        Party
        if possible under the circumstances and shall disclose only such Confidential
        Information of the Disclosing Party as is reasonably required to be
        disclosed. 

       

      8.3  Scientific
        Publications.
        Subject
        to existing obligations of each Party to any Third Party and excluding any
        publications currently being pursued, each as described in Schedule
        8.3,
        prior
        to making any formal scientific publication relating to any Inspire Licensed
        Product or Subject Product in the Field (a “Scientific
        Publication”),
        each
        Party (the “Publishing
        Party”)
        agrees
        to provide the other Party (the “Reviewing
        Party”)
        the
        opportunity to review: (a) any proposed Scientific Publication comprising
        a
        formal scientific paper for publication in any peer reviewed journal at least
        thirty (30) days prior to its intended publication, and (b) any proposed
        Scientific Publication comprising a formal scientific abstract or poster
        at
        least ten (10) days prior to its intended publication. The Reviewing Party
        shall
        have the right (i) to request in good faith a delay in the Scientific
        Publication in order to protect patentable information; and (ii) to require
        the
        Publishing Party to remove from the Scientific Publication the Reviewing
        Party’s
        Confidential Information. If the Reviewing Party requests a delay pursuant
        to
        clause (i) of the preceding sentence, the Publishing Party shall delay the
        Scientific Publication for a period of sixty (60) days from such request
        to
        enable patent applications to be filed protecting each Party’s rights in such
        information. Upon the expiration of the applicable period specified above
        in
        this Section 8.3,
        the
        Publishing Party shall be free to proceed with the Scientific Publication
        as
        transmitted to the Reviewing Party, except to the extent that the Reviewing
        Party has exercised its rights under clause (i) or (ii) of the second preceding
        sentence. 

      
        
          
          

        

        
          41

          
            

          

        

        
          
          

        

      

       

       

       

      8.4  Disclosure
        of Agreement.
        The
        Parties agree that the material terms of this Agreement shall be considered
        Confidential Information of both Parties, subject to the special authorized
        disclosure provisions set forth below in this Section 8.4
        (in lieu
        of the authorized disclosure provisions set forth in Section 8.2,
        to the
        extent of any conflict) and without limiting the generality of the definition
        of
        Confidential Information set forth in Section 1.15.
        The
        Parties will mutually agree the text of a press release announcing the execution
        of this Agreement. Thereafter, if either Party desires to make a public
        announcement concerning the terms of this Agreement, such Party shall give
        reasonable prior advance notice of the proposed text of such announcement
        to the
        other Party for its prior review and approval, such approval not to be
        unreasonably withheld. A Party shall not be required to seek the permission
        of
        the other Party to repeat or disclose any information as to the terms of
        this
        Agreement that has already been publicly disclosed by such Party in accordance
        with the foregoing or by the other Party, or any similar or comparable
        information. Either Party may disclose the terms of this Agreement to such
        Party’s existing investors, lenders, directors and professional advisors and to
        potential investors, lenders, acquirors or merger partners and their
        professional advisors who are bound by written or professional obligations
        of
        non-disclosure and non-use that are at least as stringent as those contained
        in
        this Article 8 or are customary for such purpose. InSite also may disclose
        this
        Agreement to Pfizer as required under Section 2(c) of the Pfizer Agreement,
        provided that InSite shall advise Pfizer that such disclosure is Confidential
        Information under the Pfizer Agreement and subject to the obligations of
        non-disclosure and non-use in Section 11(a) of the Pfizer Agreement. Inspire
        also may disclose the relevant terms of this Agreement to potential sublicensees
        who agree to be bound by obligations of non-disclosure and non-use at least
        as
        stringent as those contained in this Article 8. Each Party acknowledges that
        the
        other Party may be obligated to file a copy of this Agreement with the SEC
        with
        its next quarterly report on Form 10-Q, annual report on Form 10-K or current
        report on Form 8-K or with any registration statement filed with the SEC
        pursuant to the Securities Act of 1933, as amended, and each Party shall
        be
        entitled to make such filings, provided, however, that the filing Party requests
        (to the extent legally permitted) confidential treatment of the terms hereof
        for
        which confidential treatment is customarily sought, to the extent such
        confidential treatment is reasonably available to such Party under the
        circumstances then prevailing. In the event of any such filing, the filing
        Party
        will provide the other Party with a copy of the Agreement marked to show
        provisions for which the filing Party intends to seek confidential treatment
        and
        shall reasonably consider the other Party’s timely comments
        thereon.

       

      
        
          
          

        

        
          42

          
            

          

        

        
          
          

        

      

      8.5  Unauthorized
        Use.
        If
        either Party becomes aware or has knowledge of any unauthorized use or
        disclosure of the other Party’s Confidential Information, it shall promptly
        notify the other Party of such unauthorized use or disclosure.

       

      8.6  Return
        of Confidential Information.
        Upon
        termination of this Agreement, the Receiving Party shall promptly return
        all of
        the Disclosing Party’s Confidential Information, including all reproductions and
        copies thereof in any medium (except that the Receiving Party may retain
        one
        copy for its legal files) except as otherwise reasonably necessary to exercise
        the Receiving Party’s surviving rights under this Agreement.

       

      ARTICLE
        9

      INDEMNIFICATION

       

      9.1  Inspire.
        Inspire
        shall indemnify, defend and hold harmless InSite and its Affiliates and their
        respective directors, officers, employees and agents (the “InSite
        Indemnitees”)
        from
        and against any and all losses, costs, damages, liabilities fees or expenses
        (including reasonable attorney’s fees and expenses) (“Losses”)
        incurred in connection with or arising out of any Third Party claim, suit,
        action or proceeding (a “Third
        Party Claim”)
        against any InSite Indemnitees to the extent resulting from (i) the breach
        by
        Inspire of any of its representations, warranties, covenants or obligations
        under this Agreement or the Trademark License Agreement, (ii) any gross
        negligence or willful misconduct of Inspire in the exercise of any rights
        granted by InSite or the performance of any of Inspire’s obligations under this
        Agreement or the Trademark License Agreement, or (iii) the development,
        manufacture, sale or use of any Subject Product by Inspire or its Affiliates
        and
        sublicensees. 

       

      9.2  InSite.
        InSite
        shall indemnify, defend and hold harmless Inspire and its Affiliates and
        their
        respective directors, officers, employees and agents (the “Inspire
        Indemnitees”)
        from
        and against any and all Losses incurred in connection with or arising out
        of any
        Third Party Claim against any Inspire Indemnitees to the extent resulting
        from
        (i) the breach by InSite of any of its representations, warranties, covenants
        or
        obligations under this Agreement or the Trademark License Agreement, (ii)
        any
        gross negligence or willful misconduct of InSite in the exercise of any of
        its
        rights or the performance of any of its obligations under this Agreement
        or the
        Trademark License Agreement, (iii) the development or manufacture of any
        Subject
        Product by InSite or its Affiliates, or (iv) the sale or use of any Subject
        Product by InSite or its Affiliates. 

       

      9.3  Indemnification
        Procedures. 

       

      (a)  In
        the
        case of a Third Party Claim made by any Person who is not a Party to this
        Agreement (or an Affiliate thereof) as to which a Party (the “Indemnitor”)
        may be
        obligated to provide indemnification pursuant to this Agreement, such Party
        seeking indemnification hereunder (the “Indemnitee”)
        will
        notify the Indemnitor in writing of the Third Party Claim (and specifying
        in
        reasonable detail the factual basis for the Third Party Claim and, to the
        extent
        known, the amount of the Third Party Claim) reasonably promptly after becoming
        aware of such Third Party Claim; provided, however, that failure to give
        such
        notification will not affect the indemnification provided hereunder except
        to
        the extent the Indemnitor shall have been actually prejudiced as a result
        of
        such failure.

       

      
        
          
          

        

        
          43

          
            

          

        

        
          
          

        

      

      (b)  If
        a
        Third Party Claim is made against an Indemnitee and the Indemnitor acknowledges
        in writing its obligation to indemnify the Indemnitee therefor, the Indemnitor
        will be entitled, within one hundred twenty (120) days after receipt of written
        notice from the Indemnitee of the commencement or assertion of any such Third
        Party Claim, to assume the defense thereof (at the expense of the Indemnitor)
        with counsel selected by the Indemnitor and reasonably satisfactory to the
        Indemnitee, for so long as the Indemnitor is conducting a good faith and
        diligent defense. Should the Indemnitor so elect to assume the defense of
        a
        Third Party Claim, the Indemnitor will not be liable to the Indemnitee for
        any
        legal or other expenses subsequently incurred by the Indemnitee in connection
        with the defense thereof; provided, however, that if under applicable standards
        of professional conduct a conflict of interest exists between the Indemnitor
        and
        the Indemnitee in respect of such claim, such Indemnitee shall have the right
        to
        employ separate counsel (which shall be reasonably satisfactory to the
        Indemnitor) to represent such Indemnitee with respect to the matters as to
        which
        a conflict of interest exists and in that event the reasonable fees and expenses
        of such separate counsel shall be paid by such Indemnitor; provided, further,
        that the Indemnitor shall only be responsible for the reasonable fees and
        expenses of one separate counsel for such Indemnitee. If the Indemnitor assumes
        the defense of any Third Party Claim, the Indemnitee shall have the right
        to
        participate in the defense thereof and to employ counsel, at its own expense,
        separate from the counsel employed by the Indemnitor. If the Indemnitor assumes
        the defense of any Third Party Claim, the Indemnitor will promptly supply
        to the
        Indemnitee copies of all correspondence and documents relating to or in
        connection with such Third Party Claim and keep the Indemnitee informed of
        developments relating to or in connection with such Third Party Claim, as
        may be
        reasonably requested by the Indemnitee (including, without limitation, providing
        to the Indemnitee on reasonable request updates and summaries as to the status
        thereof). If the Indemnitor chooses to defend a Third Party Claim, all
        Indemnitees shall reasonably cooperate with the Indemnitor in the defense
        thereof (such cooperation to be at the expense, including reasonable legal
        fees
        and expenses, of the Indemnitor). If the Indemnitor does not elect to assume
        control of the defense of any Third Party Claim within the one hundred twenty
        (120) day period set forth above, or if such good faith and diligent defense
        is
        not being or ceases to be conducted by the Indemnitor, the Indemnitee shall
        have
        the right, at the expense of the Indemnitor, after three (3) Business Days
        notice to the Indemnitor of its intent to do so, to undertake the defense
        of the
        Third Party Claim for the account of the Indemnitor (with counsel selected
        by
        the Indemnitee), and to compromise or settle such Third Party Claim, exercising
        reasonable business judgment; provided, however, that the Indemnitee shall
        not
        compromise or settle such Third Party Claim without the Indemnitor’s prior
        written consent (which consent shall not be unreasonably withheld) if such
        compromise or settlement would result in an admission or liability or loss
        of
        right by the Indemnitor or payment by the Indemnitor. The Indemnitor agrees
        to
        reasonably cooperate with the Indemnitee in such defense, at the Indemnitor’s
        expense, including being joined as a necessary party.

       

      
        
          
          

        

        
          44

          
            

          

        

        
          
          

        

      

      (c)  If
        the
        Indemnitor acknowledges in writing its obligation to indemnify the Indemnitee
        for a Third Party Claim, the Indemnitee will agree to any settlement, compromise
        or discharge of such Third Party Claim that the Indemnitor may recommend
        that by
        its terms obligates the Indemnitor to pay the full amount of Losses (whether
        through settlement or otherwise) in connection with such Third Party Claim
        and
        unconditionally and irrevocably releases the Indemnitee completely from all
        liability in connection with such Third Party Claim; provided, however, that,
        without the Indemnitee’s prior written consent, the Indemnitor shall not consent
        to any settlement, compromise or discharge (including the consent to entry
        of
        any judgment), and the Indemnitee may refuse in good faith to agree to any
        such
        settlement, compromise or discharge, that provides for injunctive or other
        non-monetary relief affecting the Indemnitee. If the Indemnitor acknowledges
        in
        writing its obligation to indemnify the Indemnitee for a Third Party Claim,
        the
        Indemnitee shall not (unless required by law) admit any liability with respect
        to, or settle, compromise or discharge, such Third Party Claim without the
        Indemnitor’s prior written consent (which consent shall not be unreasonably
        withheld).

       

      9.4  Insurance
        Proceeds.
        Any
        indemnification hereunder shall be made net of any insurance proceeds recovered
        by the Indemnitee (it being understood that an Indemnitee may simultaneously
        pursue an insurance claim and a claim for indemnification hereunder); provided,
        however, that if, following the payment to the Indemnitee of any amount under
        this Article 9, such Indemnitee recovers any insurance proceeds in respect
        of
        the claim for which such indemnification payment was made, the Indemnitee
        shall
        promptly pay an amount equal to the amount of such proceeds (but not exceeding
        the amount of such indemnification payment) to the indemnifying
        Party.

       

      9.5  Insurance.
        Each
        Party agrees to obtain and maintain commercial general liability insurance,
        including clinical trials and products liability insurance, with reputable
        and
        financially secure insurance carriers, in such amounts and subject to such
        deductibles as are reasonable and customary in the pharmaceutical industry
        for
        companies of comparable size and activities. Each Party shall maintain such
        insurance for so long as Subject Products in the Territory continue to be
        developed, manufactured or sold and thereafter for so long as is necessary
        to
        cover any and all Third Party Claims which may arise from the development,
        manufacture or sale of Subject Products in the Territory. Upon reasonable
        request by a Party, the other Party shall produce evidence that such insurance
        policies are valid, kept up to date and in full force and effect.

       

      ARTICLE
        10

      TERM
        AND TERMINATION

       

      10.1  Term.
        Except
        as set forth in Section 12.13,
        unless
        earlier terminated by mutual agreement of the Parties in writing or pursuant
        to
        the provisions of this Article 10, this Agreement will become effective as
        of
        the Effective Date and continue in full force and effect until the expiration
        of
        the Inspire Royalty Term with respect to all Inspire Licensed Products
        throughout the Territory (the “Term”). 

       

      10.2  Voluntary
        Termination by Inspire.
        Notwithstanding
        any other provision herein, Inspire may terminate this Agreement in its entirety
        or on a country-by-country basis for its convenience at any time after the
        earlier of (i) the regulatory approval of the Current Product in the United
        States or (ii) April 27, 2008, subject to the following. If Inspire so
        terminates prior to the First Commercial Sale of an Inspire Licensed Product,
        Inspire shall provide InSite no less than ninety (90) days advance written
        notice of such intent to terminate. If Inspire so terminates after such First
        Commercial Sale, Inspire shall provide InSite no less than one hundred eighty
        (180) days advance written notice of such intent to terminate. During such
        one
        hundred eighty (180) day notice period (if applicable), Inspire’s obligations
        under this Agreement shall continue, subject to all terms and conditions
        of this
        Agreement.

       

      
        
          
          

        

        
          45

          
            

          

        

        
          
          

        

      

       

      10.3  Material
        Breach.
        Upon
        a
        material breach of this Agreement by a particular Party (in such capacity,
        the
“Breaching
        Party”),
        the
        other Party (in such capacity, the “Non-Breaching
        Party”)
        may
        provide written notice (a “Breach
        Notice”)
        to the
        Breaching Party specifying the material breach. If the Breaching Party fails
        to
        cure such material breach during the [***] day period following the date
        on
        which the Breach Notice is provided (or, if applicable, such longer period,
        but
        not to exceed [***] days, as would be reasonably necessary for a diligent
        party
        to cure such material breach, provided the Breaching Party has commenced
        and
        continues its diligent efforts to cure during the initial [***] day period
        following the date on which the Breach Notice is provided) (such failure,
        an
“Uncured
        Breach”),
        then
        the Non-Breaching Party may terminate this Agreement on a country-by-country
        basis with respect to the particular country that was at issue in the Uncured
        Breach. Notwithstanding the foregoing, the cure period for any failure by
        Inspire to make the Milestone Payment or to make royalty payments due hereunder
        shall be [***] days; provided, however, that the failure by Inspire to make
        any
        such payment shall not be considered a breach to the extent that such payment
        is
        the subject of a good faith dispute by Inspire. 

       

      10.4  Bankruptcy
        or Insolvency.
        Either
        Party may, subject to the provisions set forth herein, terminate this Agreement
        by giving the other Party written termination notice if, at any time, the
        other
        Party shall: (a) file in any court pursuant to any statute a petition for
        bankruptcy or insolvency, or for reorganization in bankruptcy, or for an
        arrangement or for the appointment of a receiver, trustee or administrator
        of
        such Party or of its assets; (b) be served with an involuntary petition against
        it, filed in any insolvency proceeding, and such petition shall not be dismissed
        within sixty (60) days after the filing thereof; (c) propose or be a party
        to
        any dissolution; or (d) make an assignment for the benefit of its
        creditors. 

       

      10.5  Continuing
        Rights of Sublicensees.
        Upon
        any termination of any license rights granted to Inspire under this Agreement,
        each sublicense previously granted by Inspire or any of its Affiliates under
        such license rights to any Person that is not an Affiliate of Inspire (each,
        an
“Independent
        Sublicensee”)
        shall
        remain in effect and shall become a direct license or sublicense, as the
        case
        may be, of such rights by InSite to such Independent Sublicensee, subject
        to (i)
        the Independent Sublicensee agreeing in writing to assume Inspire’s terms,
        conditions and obligations to InSite under this Agreement as they pertain
        to the
        sublicensed rights, and (ii) Inspire remaining liable for any liability to
        the
        Independent Sublicensee incurred by Inspire prior to such
        termination.

      
         

        
          	
                  *Indicates
                    that certain information contained herein has been omitted and
                    filed
                    separately with the Securities and Exchange Commission. Confidential
                    treatment has been requested with respect to the omitted
                    portions.

                

        

         

        
          
            
            

          

          
            46

            
              

            

          

          
            
            

          

        

      

       

      10.6  Effect
        of Expiration or Termination of Agreement. 

       

      (a)  Expiration
        or termination of this Agreement in its entirety pursuant to this Article
        10
        shall not (i) relieve a Party hereto of any obligation accruing to such Party
        prior to such termination, or (ii) result in the waiver of any right or remedy
        by a Party hereto accruing to such Party prior to such termination. Without
        limiting the foregoing, upon expiration or termination of this Agreement
        in its
        entirety pursuant to this Article
        10,
        Inspire
        shall pay InSite all outstanding accrued payments under this Agreement in
        the
        manner required by this Agreement.

       

      (b)  Upon
        termination of this Agreement in its entirety by Inspire pursuant to
        Section 10.2
        or by
        InSite pursuant to Sections 10.3
        or
10.4:
        (i) all
        licenses granted to Inspire by InSite under this Agreement will terminate,
        and
        all rights therein will revert to InSite; and (ii) Inspire promptly shall
        assign
        and surrender to InSite (A) the Regulatory Dossier in the Territory for all
        Subject Products and (B) all Third Party agreements that relate solely to
        the
        Subject Products and are necessary for the development, manufacture or
        commercialization of Subject Products in the Territory, provided that Inspire
        has the right to assign such agreements. Inspire promptly shall cease, and
        cause
        its Affiliates and sublicensees (subject to Section 10.5)
        promptly to cease, any sale of any Subject Product in the Territory. In
        addition, Inspire promptly shall execute any and all other instruments, forms
        of
        assignment or other documents and take such further actions as InSite may
        reasonably request in order to give effect to or evidence the foregoing
        assignments. 

       

      (c)  Upon
        termination of this Agreement in its entirety by Inspire pursuant to
        Sections 10.3
        or
10.4,
        Inspire
        shall have a period of [***] months to continue to sell any Inspire Licensed
        Products in its or its Affiliate’s or sublicensee’s inventory (the “Wind-Down
        Period”),
        subject to the payment of royalties and other terms of this Agreement. After
        the
        Wind-Down Period, (i) all licenses granted to Inspire by InSite under this
        Agreement will terminate, and all rights therein will revert to InSite; and
        (ii)
        Inspire promptly shall assign and surrender to InSite (A) the Regulatory
        Dossier
        in the Territory for all Subject Products and (B) all Third Party agreements
        that relate solely to the Subject Products and are necessary for the
        development, manufacture or commercialization of Subject Products in the
        Territory, provided that Inspire has the right to assign such agreements.
        After
        the Wind-Down Period, Inspire shall promptly cease, and cause its Affiliates
        and
        sublicensees (subject to Section 10.5)
        promptly to cease, any sale of any Subject Product in the Territory. In
        addition, Inspire promptly shall execute any and all other instruments, forms
        of
        assignment or other documents and take such further actions as InSite may
        reasonably request in order to give effect to or evidence the foregoing
        assignments. 

      
         

        
          	
                  *Indicates
                    that certain information contained herein has been omitted and
                    filed
                    separately with the Securities and Exchange Commission. Confidential
                    treatment has been requested with respect to the omitted
                    portions.

                

        

         

        
          
            
            

          

          
            47

            
              

            

          

          
            
            

          

        

      

       

      10.7  Effect
        of Partial Termination of Agreement. 

       

      (a)  Termination
        of this Agreement with respect to a particular country pursuant to this Article
        10 shall not (i) relieve a Party hereto of any obligation accruing to such
        Party
        prior to such termination, (ii) result in the waiver of any right or remedy
        by a
        Party hereto accruing to such Party prior to such termination, or (iii) result
        in the termination or modification of any rights or obligations of a Party
        under
        the Agreement not involved in such termination. 

       

      (b)  Upon
        termination of this Agreement with respect to a particular country by Inspire
        pursuant to Section 10.2
        or by
        InSite pursuant to Section 10.3:
        (i) the
        licenses granted to Inspire by InSite under this Agreement solely with respect
        to such country will terminate, and all such rights will revert to InSite;
        and
        (ii) Inspire promptly shall assign and surrender to InSite (A) the Regulatory
        Dossier in such country for all Subject Products and (B) all Third Party
        agreements that relate solely to the Subject Products in such country and
        are
        necessary for the development, manufacture or commercialization of Subject
        Products in such country, provided that Inspire has the right to assign such
        agreements. Inspire promptly shall cease, and cause its Affiliates and
        sublicensees (subject to Section 10.5)
        promptly to cease, any sale of any Subject Product in such country. In addition,
        Inspire promptly shall execute any and all other instruments, forms of
        assignment or other documents and take such further actions as InSite may
        reasonably request in order to give effect to or evidence the foregoing
        assignments. 

       

      (c)  Upon
        termination of this Agreement with respect to a particular country by Inspire
        pursuant to Section 10.3,
        Inspire
        shall have a period of twelve (12) months to continue to sell Inspire Licensed
        Products in such country, subject to the payment of royalties and other terms
        of
        this Agreement. After such period, (i) the licenses granted to Inspire by
        InSite
        under this Agreement solely with respect to such country will terminate,
        and all
        such rights will revert to InSite; and (ii) Inspire promptly shall assign
        and
        surrender to InSite (A) the Regulatory Dossier in such country for all Subject
        Products and (B) all Third Party agreements that relate solely to the Subject
        Products in such country and are necessary for the development, manufacture
        or
        commercialization of Subject Products in such country, provided that Inspire
        has
        the right to assign such agreements. After such period, Inspire shall promptly
        cease, and cause its Affiliates and sublicensees (subject to
        Section 10.5)
        promptly to cease, any sale of any Subject Product in such country. In addition,
        Inspire promptly shall execute any and all other instruments, forms of
        assignment or other documents and take such further actions as InSite may
        reasonably request in order to give effect to or evidence the foregoing
        assignments.

       

       

      
         

        
          	
                  *Indicates
                    that certain information contained herein has been omitted and
                    filed
                    separately with the Securities and Exchange Commission. Confidential
                    treatment has been requested with respect to the omitted
                    portions.

                

        

         

        
          
            
            

          

          
            48

            
              

            

          

          
            
            

          

        

      

       

      10.8  Inspire
        Remedy for Uncured Breach.
        In the
        event of an Uncured Breach by InSite, the Inspire Royalties with respect
        to all
        Inspire Licensed Products immediately shall be reduced by [***] of the amounts
        otherwise owed by Inspire under this Agreement until such time as InSite
        has cured such Uncured Breach. For the avoidance of doubt, only one
        such
        reduction shall be in effect at any particular time during the Term. For
        the
        further avoidance of doubt, such reduction shall be cumulative with, and
        shall
        not limit the application of, any other reduction or offset to which Inspire
        is
        or may be entitled under this Agreement. In addition, the enumeration of
        the
        remedy set forth in this Section 10.8 is not intended to be to the exclusion
        of
        other applicable remedies, and it shall not preclude Inspire’s exercise of any
        other applicable rights or remedies under the Agreement or that may now or
        hereafter exist at law or in equity.

       

      10.9  Rights
        in Bankruptcy.
        All
        rights and licenses granted under or pursuant to this Agreement by InSite
        to
        Inspire are, for all purposes of Section 365(n) of Title 11 of the U.S. Code
        (“Title
        11”),
        licenses of rights to intellectual property as defined in Title 11. InSite
        agrees during the Term of this Agreement to maintain and preserve any current
        copies of all such intellectual property that are in existence and in its
        possession as of the commencement of a case under Title 11 by or against
        InSite.
        If a case is commenced by or against InSite under Title 11, then, unless
        and
        until this Agreement is rejected as provided in Title 11, InSite (in any
        capacity, including debtor-in-possession) and its successors and assigns
        (including, without limitation, a Title 11 Trustee) shall, as Inspire may
        elect
        in a written request, immediately upon such request (a)(i) perform all of
        the
        obligations provided in this Agreement to be performed by InSite, or (ii)
        provide to Inspire copies of all such intellectual property (including all
        embodiments thereof) held by InSite and such successors and assigns as of
        the
        commencement of a case under Title 11 by or against InSite and from time
        to time
        thereafter, and (b) not interfere with the rights of Inspire as provided
        in this
        Agreement, or any agreement supplementary hereto, to such intellectual property
        (including all such embodiments thereof), including any right of Inspire
        to
        obtain such intellectual property (or such embodiment) from any other
        entity.

       

      ARTICLE
        11

      INTELLECTUAL
        PROPERTY

       

      11.1  Prosecution
        of InSite Licensed Patents.
        InSite
        shall have the obligation to diligently Prosecute the InSite Owned Patents,
        and,
        if and to the extent InSite is permitted to do so under the Pfizer Agreement,
        to
        diligently Prosecute the Pfizer Patent Rights (the Pfizer Patent Rights with
        respect to which InSite has such rights, if any, the “Pfizer
        Prosecution Patents”),
        in
        the Territory at no cost to Inspire. InSite and Inspire shall reasonably
        consult
        and cooperate with each other regarding the Prosecution of the AzaSite Patent
        Rights and the Pfizer Prosecution Patents with regard to matters affecting
        Subject Products. 

       

      11.2  Right
        to Consult.
        During
        the Term, InSite shall copy Inspire, or have Inspire copied, on all substantive
        documents relating to the AzaSite Patent Rights and the Pfizer Prosecution
        Patents received from or to be filed in any patent office in the Territory,
        within fifteen (15) days of receipt from the patent office and at least fifteen
        (15) days prior to filing with the patent office, respectively, including
        without limitation copies of each patent application, official action, response
        to official action, declaration, information disclosure statement, request
        for
        terminal disclaimer, request for patent term extension, and request for
        reexamination. Inspire may comment on the Prosecution of the AzaSite Patent
        Rights and the Pfizer Prosecution Patents with regard to matters affecting
        Subject Products and provide such comments to InSite’s patent counsel, and
        InSite shall cause its patent counsel to consider in good faith such comments
        from Inspire. 

       

      
        
          
          

        

        
          49

          
            

          

        

        
          
          

        

      

       

      11.3  Abandonment
        of Prosecution by InSite.
        InSite
        shall notify Inspire in the event it for any reason elects to abandon the
        Prosecution of a particular patent application or maintenance of an issued
        patent within the AzaSite Patent Rights or the Pfizer Prosecution Patents
        in the
        Territory (other than in favor of a continuing application based on such
        parent
        application). Such notification shall specify the application to be abandoned
        or
        patent that will not longer be maintained by InSite and shall be given within
        a
        reasonable period (i.e., with sufficient time for Inspire to take action
        as may
        be necessary or desired) prior to the date on which such patent application(s)
        or patent(s) will lapse or go abandoned. With respect to any such patent
        application(s) or patent(s) that relate to Subject Products, Inspire shall
        then
        have the option with respect to the AzaSite Patent Rights, exercisable upon
        written notification to InSite, and InSite shall not interfere with any rights
        Inspire may have with respect to the Pfizer Prosecution Patents, to assume
        full
        responsibility, at Inspire’s discretion and at Inspire’s cost and expense, for
        Prosecution of the affected patent application(s) or maintenance of any of
        the
        affected patent(s) in such country or countries in the Territory; provided,
        however, that Inspire may offset any such costs and expenses against the
        Milestone Payment or Inspire Royalties or Minimum Royalties due to
        InSite. 

       

      11.4  Patent
        Term Extensions.
        Inspire
        shall have the right to request that InSite file all applications and take
        actions necessary to obtain patent extension pursuant to 35 U.S.C. § 156 or
        similar foreign statutes for the AzaSite Patent Rights in the Territory (to
        the
        extent affecting Subject Products), which extensions shall be owned by InSite.
        If InSite declines to pursue such patent extensions, then Inspire shall have
        the
        right (at Inspire’s cost and expense) on behalf of InSite to file all such
        applications and take all such actions necessary to obtain such patent
        extensions. InSite agrees to sign such further document and take such further
        actions (at Inspire’s cost and expense) as may be requested by Inspire in this
        regard. Inspire
        may offset any costs and expenses incurred by it under this Section 11.4
        against
        the Milestone Payment or Inspire Royalties or Minimum Royalties due to
        InSite.

       

      11.5  Third
        Party Infringement. 

       

      (a)  Suits
        for Infringement of the InSite Licensed Patents or InSite
        Trademarks.
        If
        InSite or Inspire becomes aware of infringement of any patent included in
        the
        InSite Licensed Patents by a Third Party in the Territory, or any material
        instance of an actual or potential infringement of, or unfair competition
        by a
        Third Party affecting, any InSite Trademark used in connection with Inspire
        Licensed Products in the Territory, such Party shall promptly notify the
        other
        Party in writing to that effect and provide a summary of the relevant facts
        and
        circumstances known to such Party relating to such infringement (“Infringement
        Notice”).
        Promptly after receipt of an Infringement Notice, the Parties shall discuss
        in
        good faith the infringement or unfair competition and appropriate actions
        that
        could be taken to cause it to cease. Upon Inspire’s request, InSite shall submit
        to Pfizer a writing approved by Inspire evidencing any infringement of the
        Pfizer Patent Rights and shall request that Pfizer assert the Pfizer Patent
        Rights to restrain such infringement. InSite shall keep Inspire informed
        with
        respect to any such proceeding as may be instituted by Pfizer. InSite shall
        have
        the right, but not be obligated, at its sole discretion, on its own behalf,
        to
        institute, prosecute and control any action or proceeding to restrain
        infringement of any InSite Owned Patents or to abate infringement or unfair
        competition with respect to any InSite Trademarks. In addition, if and to
        the
        extent InSite is permitted to do so under the Pfizer Agreement, InSite shall,
        upon Inspire’s request, institute and diligently prosecute an action or
        proceeding to restrain infringement of any Pfizer Patent Rights. Inspire
        shall
        provide all reasonable cooperation required to prosecute such litigation.
        InSite
        shall have sole control of any such suit and all negotiations for its settlement
        or compromise; provided, however, that (i) InSite shall keep Inspire
        informed and consult with Inspire with respect to any such proceeding and
        (ii) InSite shall not settle or compromise any such suit or enter into any
        agreement or consent order for the settlement or compromise thereof without
        the
        prior written consent of Inspire, which consent shall not be unreasonably
        withheld.

       

      
        
          
          

        

        
          50

          
            

          

        

        
          
          

        

      

      (b)  Step-in
        Right for Inspire.
        If,
        prior to the expiration of three (3) months from said Infringement Notice,
        (i)
        (A) InSite has not obtained a discontinuance of an alleged infringement of
        the InSite Owned Patents or an alleged infringement or unfair competition
        with
        respect to any InSite Trademarks by a Third Party or brought an infringement
        action or proceeding or otherwise taken appropriate action to abate such
        infringement or unfair competition, or (B) if InSite shall notify Inspire
        at any
        time prior thereto of its intention not to bring suit against an alleged
        infringer and (ii) such infringement or unfair competition is not
de
        minimis
        and is
        adverse to an Inspire Licensed Product in the Field in the Territory, then
        Inspire shall have the right, but not be obligated, to institute, prosecute
        and
        control any action or proceeding to restrain such infringement or unfair
        competition. In addition, if InSite is permitted to institute and prosecute
        an
        action or proceeding to restrain infringement of any Pfizer Patent Rights,
        and
        InSite does not diligently do so within ten (10) days of Inspire’s request
        therefor, then Inspire shall, subject to any rights of Pfizer with respect
        to
        the Pfizer Patent Rights, have the right, but not be obligated, to institute,
        prosecute and control any action or proceeding to restrain such infringement.
        InSite agrees to be joined as a party plaintiff if necessary to prosecute
        any
        such action or proceeding and shall provide all reasonable cooperation,
        including any necessary use of its name, required to prosecute any such
        litigation. InSite shall have the right to join any such action, using counsel
        of its own choosing and at its own expense. Inspire shall have sole control
        of
        any such suit and all negotiations for its settlement or compromise; provided,
        however, that (i) Inspire shall keep InSite informed and consult with
        InSite with respect to any such proceeding and (ii) Inspire shall not
        settle or compromise any such suit or enter into any agreement or consent
        order
        for the settlement or compromise thereof without the prior written consent
        of
        InSite, which consent shall not be unreasonably withheld.

       

      (c)  Costs
        and Recoveries from Infringement Action.
        Each
        Party shall assume and pay all of its own out-of-pocket costs incurred in
        connection with any litigation or proceedings described in this
        Section 11.5
        including, without limitation, the fees and expenses of that Party’s counsel.
        Any recovery obtained by any Party as a result of any proceeding described
        in
        this Section 11.5,
        by
        settlement or otherwise, shall be applied in the following order of priority:
        (i) first, to reimburse each Party for all litigation costs in connection
        with
        such proceeding paid by that Party and not otherwise recovered (on a pro
        rata
        basis based on each Party’s respective litigation costs, to the extent the
        recovery was less than all such litigation costs); and (ii) second, the
        remainder of the recovery shall be shared equally.

       

      
        
          
          

        

        
          51

          
            

          

        

        
          
          

        

      

       

      (d)  Declaratory
        Actions and Counterclaims Against Inspire or InSite.
        In the
        event that an action alleging invalidity or non-infringement of any of the
        InSite Owned Patents shall be brought against InSite or Inspire, InSite,
        at its
        sole discretion, shall have the right, but not be obligated, within thirty
        (30)
        days after the commencement of such action, to take or regain control of
        the
        action at its own expense. If InSite shall determine not to exercise this
        right,
        Inspire may take over or remain as lead counsel for the action at Inspire’s sole
        discretion. Any recovery obtained from such litigation, proceeding or settlement
        shall be shared in accordance with Section 11.5(c). 

       

      11.6  Infringement
        of Third Party Rights. 

       

      (a)  Infringement
        Claims.
        With
        respect to any and all claims instituted by Third Parties for patent
        infringement involving the manufacture, use, offer for sale or sale of an
        Inspire Licensed Product in the Field in the Territory during the Term, Inspire
        shall promptly notify InSite of such claim and the Parties shall discuss
        in good
        faith such infringement and determine the best course of action. If the Parties
        cannot agree on the best course of action after such good faith discussions
        and
        Inspire in good faith believes that the claim is significant and adverse
        to the
        manufacture, use, offer for sale or sale of an Inspire Licensed Product in
        the
        Field in the Territory during the Term, then Inspire may proceed with what
        it
        deems to be the best course of action in its good faith judgment under the
        terms
        of this provision (either this course of action or the agreed upon course
        of
        action will be referred to herein as “Course
        of Action”).
        Except for any such claims for which InSite is obligated to indemnify Inspire
        under Section 9.2,
        Inspire
        shall have the right, but not be obligated, at its sole discretion, on its
        own
        behalf, to pursue any Course of Action. InSite agrees to be joined as a party
        if
        necessary to pursue any Course of Action and shall provide all reasonable
        cooperation, including any necessary use of its name, required for such Course
        of Action. Inspire shall have sole control of any such Course of Action,
        including without limitation any associated settlement or compromise; provided,
        however, that (i) Inspire shall keep InSite informed and consult with
        InSite with respect to any such Course of Action and (ii) Inspire shall not
        settle or compromise any such action or proceeding or enter into any agreement
        or consent order for the settlement or compromise thereof without the prior
        written consent of InSite, which consent shall not be unreasonably
        withheld.

       

      (b)  Step-in
        Right for InSite.
        If,
        prior to the expiration of three (3) months from said claim being brought,
        or
        such sooner period as may be necessary to appropriately respond to said claim,
        Inspire has not elected to pursue any Course of Action, or if Inspire shall
        notify InSite at any time prior thereto of its intention not to pursue any
        Course of Action, then InSite shall have the right, but not be obligated,
        to
        defend and control such action or proceeding. Inspire shall provide all
        reasonable cooperation required to defend such claim, including any necessary
        use of its name. InSite shall have sole control of any such defense and all
        negotiations for its settlement or compromise; provided, however, that (i)
        InSite shall keep Inspire informed and consult with Inspire with respect
        to any
        such Course of Action and (ii) InSite shall not settle or compromise any
        such suit or enter into any agreement or consent order for the settlement
        or
        compromise thereof without the prior written consent of Inspire, which consent
        shall not be unreasonably withheld.

       

      
        
          
          

        

        
          52

          
            

          

        

        
          
          

        

      

      (c)  Costs
        and Expenses from Defending an Infringement Action.
        Inspire
        may offset its out-of-pocket costs, losses and expenses incurred in connection
        with any Course of Action described in this Section 11.6, including without
        limitation, the fees and expenses of counsel, against any Inspire Royalties
        or
        Minimum Royalties or the Milestone Payment due under this Agreement. Offsets
        for
        such costs and expenses may be applied in any calendar quarter or several
        calendar quarters until the application of such costs and expenses in their
        entirety.

       

      ARTICLE
        12

      MISCELLANEOUS

       

      12.1  Consideration.
        The
        Parties acknowledge that each of the licenses and rights granted by InSite
        in
Article
        2
        and each
        of the provisions of this Agreement for efforts or assistance by InSite and
        access to InSite Intellectual Property and Pfizer Patent Rights, individually
        and collectively, constitute good, valuable, and sufficient consideration
        for
        each and all of the fees and payments called for hereunder and for each and
        all
        of the other obligations of Inspire and its Affiliates and sublicensees;
        and the
        Parties further acknowledge that the individual and collective rights under
        and
        access to InSite Licensed Patents, InSite Trademarks, InSite Know-How, and
        InSite Formulation Know-How renders the way in which those fees and payments
        hereunder are determined, and their duration, appropriate and desirable as
        a
        matter of convenience.

       

      12.2  Assignment.
        This
        Agreement may not be assigned or otherwise transferred (in whole or in part,
        whether voluntarily, by operation of law or otherwise) by either Party without
        the prior written consent of the other Party (which consent shall not be
        unreasonably withheld); provided, however, that such consent shall not be
        required in connection with (a) assignment or transfer to an Affiliate of
        the
        Party; (b) a merger, consolidation or reorganization of the Party, (c) a
        sale or
        transfer of all or substantially all of the voting stock, or all or
        substantially all of the assets, of the Party, or (d) a sale or transfer
        by the
        Party of all or substantially all of the assets of the Party with respect
        to its
        program related to Subject Products. Notwithstanding the foregoing, any such
        assignment or transfer to an Affiliate shall not relieve the assigning Party
        of
        its responsibilities for performance of its obligations under this Agreement.
        The rights and obligations of the Parties under this Agreement shall be binding
        upon and inure to the benefit of the successors and permitted assigns of
        the
        Parties. Any attempted assignment not in accordance with this Agreement shall
        be
        void.

       

      12.3  Further
        Actions.
        Each
        Party agrees to execute, acknowledge and deliver such further instruments,
        and
        to do all such other acts, as may be necessary or appropriate in order to
        carry
        out the purposes and intent of this Agreement.

       

      12.4  Notices.
        Notices
        to InSite shall be addressed to:

       

      InSite
        Vision Incorporated

      965
        Atlantic Avenue 

      Alameda,
        California 94501

      Attention:
        Chief Executive Officer

      Facsimile
        No.: 510-865-5700

      

      
        
          
          

        

        
          53

          
            

          

        

        
          
          

        

      

       

      

        
          	
                  With
                    a copy to:

                	
                  O’Melveny
                    & Myers LLP

                
	 	
                  2765
                    Sand Hill Road

                
	 	
                  Menlo
                    Park, California 94025

                
	 	
                  Attention:
                    Tim Curry, Esq.

                
	 	
                  Facsimile
                    No.: 650-473-2601

                
	 	 
	
                   

                	 
	
                  Notices
                    to Inspire shall be addressed to:

                
	
                   

                	 
	 	
                  Inspire
                    Pharmaceuticals, Inc.

                
	 	
                  4222
                    Emperor Boulevard, Suite 200

                
	 	
                  Durham,
                    North Carolina 27703

                
	 	
                  Attention:
                    General Counsel

                
	 	
                  Facsimile
                    No.: 919-941-9797

                
	 	 
	
                  With
                    a copy to:

                	
                  Smith,
                    Anderson, Blount, 

                
	 	
                  Dorsett,
                    Mitchell & Jernigan, L.L.P.

                
	 	
                  2500
                    Wachovia Capitol Center

                
	 	
                  Raleigh,
                    North Carolina 27601

                
	 	
                  Attention:
                    Christopher Capel

                
	 	
                  Facsimile
                    No.: 919-821-6800

                

        

      

       

      Either
        Party may change the address to which notices shall be sent by giving notice
        to
        the other Party in the manner herein provided. Any notice required or provided
        for by the terms of this Agreement shall be in writing and shall be (i) sent
        via
        a reputable overnight courier service, or (ii) sent by facsimile transmission,
        in each case properly addressed in accordance with the paragraphs above.
        The
        effective date of any notice shall be the actual date of receipt by the Party
        receiving the same.

       

      12.5  Amendment.
        No
        amendment, modification or supplement of any provision of this Agreement
        shall
        be valid or effective unless made in writing and signed by a duly authorized
        representative of each Party.

       

      12.6  Waiver.
        No
        provision of this Agreement shall be waived by any act, omission or knowledge
        of
        a Party or its agents or employees except by an instrument in writing expressly
        waiving such provision and signed by a duly authorized officer of the waiving
        Party.

       

      12.7  Counterparts;
        Facsimile Signatures.
        This
        Agreement may be executed in counterparts and such counterparts taken together
        shall constitute one and the same agreement. This Agreement may be executed
        by
        facsimile signatures, which signatures shall have the same force and effect
        as
        original signatures.

       

      
        
          
          

        

        
          54

          
            

          

        

        
          
          

        

      

       

      12.8  Descriptive
        Headings.
        The
        descriptive headings of this Agreement are for convenience only, and shall
        be of
        no force or effect in construing or interpreting any of the provisions of
        this
        Agreement.

       

      12.9  Governing
        Law; Dispute Resolution.
        This
        Agreement shall be governed and construed in accordance with the laws of
        the
        State of New York, without giving effect to any choice of law provisions
        thereof. Prior to bringing a legal action against the other Party, such dispute
        shall be separately negotiated by the Parties hereto in good faith and all
        reasonable efforts undertaken to settle amicably such matters before resorting
        to further legal recourse, as follows: upon the occurrence of a dispute between
        the Parties, including, without limitation, any breach of this Agreement
        or any
        obligation relating thereto, or any dispute with respect to whether a product
        is
        an Inspire Licensed Product, the matter shall be referred first to the officers
        of InSite and Inspire having responsibility for the subject matter of the
        dispute, or their designees. The officers, or their designees, as the case
        may
        be, shall negotiate in good faith to resolve such dispute in a mutually
        satisfactory manner for up to thirty (30) days. If such efforts do not result
        in
        mutually satisfactory resolution of the dispute, the matter shall be referred
        to
        the chief executive officers of InSite and Inspire, or their designees. The
        chief executive officers, or their designees, as the case may be, shall
        negotiate in good faith to resolve such dispute in a mutually satisfactory
        manner for up to thirty additional (30) days, or such longer period of time
        to
        which the chief executive officers may agree. 

       

      12.10  Severability.
        If any
        provision hereof should be held invalid, illegal or unenforceable in any
        respect
        in any jurisdiction, the Parties hereto shall use reasonable efforts to
        substitute, by mutual written consent, valid provisions for such invalid,
        illegal or unenforceable provisions which valid provisions in their economic
        effect are sufficiently similar to the invalid, illegal or unenforceable
        provisions that it can be reasonably assumed that the Parties would have
        entered
        into this Agreement with such valid provisions. In case such valid provisions
        cannot be agreed upon, the invalid, illegal or unenforceable provisions of
        this
        Agreement shall not affect the validity of this Agreement as a whole, unless
        the
        invalid, illegal or unenforceable provisions are of such essential importance
        to
        this Agreement that it is to be reasonably assumed that the Parties would
        not
        have entered into this Agreement without the invalid, illegal or unenforceable
        provisions.

       

      12.11  Entire
        Agreement of the Parties.
        This
        Agreement hereby, together with the Trademark License Agreement and the
        Schedules and Exhibits hereto and thereto, constitutes and contains the
        complete, final and exclusive understanding and agreement of the Parties
        and
        cancels and supersedes any and all prior negotiations, correspondence,
        understandings and agreements whether oral or written, between the Parties
        respecting the subject matter hereof and thereof. 

       

      12.12  Independent
        Parties.
        The
        relationship between the Parties created by this Agreement is one of independent
        contractors and is not a joint venture, partnership or any similar arrangement.
        Neither Party shall have the power or authority to bind or obligate the other
        except as expressly set forth in this Agreement.

       

      12.13  Accrued
        Rights; Surviving Obligations.
        Unless
        explicitly provided otherwise in this Agreement, termination, relinquishment
        or
        expiration of this Agreement for any reason shall be without prejudice to
        any
        rights that shall have accrued to the benefit to any Party prior to such
        termination, relinquishment or expiration, including damages arising from
        any
        breach hereunder. Such termination, relinquishment or expiration shall not
        relieve any Party from obligations which are expressly indicated to survive
        termination or expiration of the Agreement. Without limiting the foregoing,
        the
        obligations and rights set forth in Sections 2.1(e),
        5.7,
        6.2, 10.5, 10.6, and Articles 1 (to the extent required to enforce other
        surviving rights or obligations), 8, 9 and 12 hereof shall
        survive the termination or expiration of this Agreement.

       

      
        
          
          

        

        
          55

          
            

          

        

        
          
          

        

      

      12.14  Certain
        Remedies.
        Each
        Party acknowledges and agrees that the other Party would be irreparably damaged
        if any of the provisions of this Agreement (other than provisions involving
        the
        payment of money) are not performed by a Party in accordance with their specific
        terms, and that any breach of, or failure to perform or comply with, this
        Agreement by a Party could not be adequately compensated in all cases by
        monetary damages alone. Accordingly, in addition to any other right or remedy
        to
        which a Party may be entitled at law or in equity, it shall be entitled to
        enforce any provision of this Agreement (other than provisions involving
        the
        payment of money) by a decree of specific performance and to temporary,
        preliminary and permanent injunctive relief to prevent breaches or threatened
        breaches of any of the provisions of this Agreement, without posting any
        bond or
        other undertaking.

       

      12.15  Expenses.
        Unless
        otherwise provided herein, all costs and expenses incurred in connection
        with
        this Agreement and the transactions contemplated hereby shall be paid by
        the
        Party that shall have incurred the same and the other Party shall have no
        liability relating thereto.

       

      12.16  No
        Third Party Beneficiaries.
        No
        person or entity other than the Parties hereto and their respective Affiliates,
        successors and permitted assigns shall be deemed an intended beneficiary
        hereunder or have any right to enforce any obligation of this
        Agreement.

       

      12.17  No
        Strict Construction.
        This
        Agreement has been prepared jointly and shall not be strictly construed against
        either Party.

       

      [Signature
        Page Immediately Follows]

       

      
        
          
          

        

        
          56

          
            

          

        

        
          
          

        

      

      IN
        WITNESS WHEREOF, duly authorized representatives of the Parties have duly
        executed this Agreement as of the Effective Date.

       

      
        	 	
                 

              	
                 

              	
                 

              
	 	
                INSITE
                  VISION INCORPORATED

              
	 	
                 

              	
                 

              
	 	
                By:

              	
                 

              	
                _______________________________

              
	 	
                Name:

              	
                 

              	 
	 	
                Title:

              	
                 

              	 
	 	
                 

              
	 	
                INSPIRE
                  PHARMACEUTICALS, INC.

              
	 	
                 

              	
                 

              
	 	
                By:

              	
                 

              	
                _______________________________

              
	 	
                Name:

              	
                 

              	 
	 	
                Title:

              	
                 

              	 

      

       

      SIGNATURE
        PAGE TO LICENSE AGREEMENT

       

       

      
        
          
          

        

        
          57

          
            

          

        

        
          
          

        

      

      Schedule
        1

       

      InSite
        Licensed Patents

       

      DuraSite
        Patent Rights:

      [***] 

      

      

      AzaSite
        Patent Rights:

      U.S.
        Patent Nos. 6,239,113; 6,569,443, 7056,893

      [***]

      

      Columbia
        Patent Rights:

      [***]

       

      Container
        Patent
        Rights:
[***]

       

      Pfizer
        Patent Rights:

      U.S.
        Patent No. 6,861,411

      [***]

      

      
         

        
          	
                  *Indicates
                    that certain information contained herein has been omitted and
                    filed
                    separately with the Securities and Exchange Commission. Confidential
                    treatment has been requested with respect to the omitted
                    portions.

                

        

         

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Schedule
        1.24

       

      InSite
        Trademarks

       

      Trademarks

       

      U.S.:

      

      DuraSite

      DuraSite®
        US
        Trademark Number: 1769077

      

      AzaSite

      AzaSiteTM
        US Trademark Application Number: 78/426,374

      

      Canada:

      

      DuraSite

      DuraSite®
        Canadian
        Registration Number 432299

      

      AzaSite

      AzaSiteTM
        Canadian Trademark Application Number 1325128

      

      

      Domain
        Name

       

      www.AzaSite.com

       

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Schedule
        2.3(b)

       

      AzaSite
        Trademark Assignment Agreement

       

      

       

      (See
        attached document)

       

      

       

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      ASSIGNMENT
        OF TRADEMARKS

      

      

      This
        ASSIGNMENT OF TRADEMARKS (this “Assignment”) is dated and made as of _____ __,
        2007, by and between InSite Vision Incorporated, a Delaware corporation
        (“Assignor”), and Inspire Pharmaceuticals, Inc., a Delaware corporation
        ("Assignee").

      

      RECITAL

      

      Assignee
        and Assignor are parties to a License Agreement dated as of February 15,
        2007.
        In accordance therewith, Assignor desires to transfer and assign to Assignee,
        and Assignee desires to accept the transfer and assignment of, all of Assignor’s
        right, title and interest in, to and under Assignor’s registered and
        unregistered trademarks with respect to AzaSite [AzaSite
        Plus to be added as applicable]
        in the
        United States of America, and the territories and possessions thereof, and
        all
        registrations and registration applications associated therewith, including
        without limitation any and all of the foregoing listed on Schedule A annexed
        hereto and incorporated herein by reference (all of the foregoing being referred
        to herein as the "Marks").

      

      NOW,
        THEREFORE, for good and valuable consideration, the receipt and sufficiency
        of
        which are hereby acknowledged, Assignor does hereby irrevocably and
        unconditionally transfer and assign to Assignee, and Assignee does hereby
        accept
        such transfer and assignment, all of Assignor’s right, title and interest in,
        to, and under (i) the Marks, together with the goodwill associated therewith
        and
        which is symbolized thereby, and any and all renewals and extensions thereof
        that may hereafter be secured, now or hereafter in effect, and (ii) all claims
        and causes of action for damages and other relief by Assignor by reason of
        all
        past and future infringements, dilutions, and other violations of any and
        all
        rights under such Marks along with Assignor’s right to sue under such claims and
        to collect and enjoy damages, benefits, and other remedies resulting therefrom,
        all the foregoing to be held and enjoyed by Assignee, its successors and
        assigns
        from and after the date hereof as fully and entirely as the same would have
        been
        held and enjoyed by Assignor had this Assignment not been made.

       

      Assignor
        agrees to assist Assignee by executing such other instruments and taking
        such
        other actions as requested by Assignee to vest sole and exclusive ownership
        of
        the Marks in Assignee’s name and to otherwise give full effect to the rights
        granted to Assignee hereunder. 

       

      Assignor
        hereby authorizes and requests the Director of the U.S. Patent and Trademark
        Office, and the similar authorities in all trademark, intellectual property,
        or
        other offices where any of the registration applications included in the
        Marks
        have been or may be filed, to issue any registrations arising from said
        applications to Assignee for its sole use and advantage; and for the use
        and
        advantage of its legal representatives and assigns, to the full end of the
        term,
        and any extensions thereof, for which such registrations may be granted,
        as
        fully and entirely as the same would have been held by Assignor had this
        Assignment not been made.

       

      Assignor
        hereby authorizes Assignee to file this Assignment and any other documents
        relating thereto with the U.S. Patent and Trademark Office and the trademark,
        intellectual property, or other offices where any registrations or registration
        applications for Marks have been or may be filed or issued for purposes of
        having the Assignment recorded therein and to place sole and exclusive right,
        title, and interest in and to such Marks in the name of Assignee.

       

      This
        Assignment is effective as of ____ __, 2007.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Except
        to
        the extent that federal law preempts state law with respect to the matters
        covered hereby, this Assignment shall be governed and construed in accordance
        with the laws of the State of New York, without giving effect to any choice
        of
        law provisions thereof.

      

      IN
        WITNESS WHEREOF, each party has caused its duly authorized officer to execute
        this Assignment as of the date set forth below.

       

      InSite
        Vision Incorporated

       

       

      By:
        ___________________

       

      Name:

       

      Title:

      

       

      Inspire
        Pharmaceuticals, Inc.

       

      By:
        ______________________

       

      Name:

       

      Title:

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      SCHEDULE
        A

      

      AzaSite

      

      AzaSiteTM
        US Trademark Application Number: 78/426,374

       

      [AzaSite
        Plus to be added as applicable]

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Schedule
        3.1(a)

       

      Final
        Audited Study Reports 

       

      

       

      [***]

       

      

       

      

       

      

       

      
         

        
          	
                  *Indicates
                    that certain information contained herein has been omitted and
                    filed
                    separately with the Securities and Exchange Commission. Confidential
                    treatment has been requested with respect to the omitted
                    portions.

                

        

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

      Schedule
        3.1(c)

       

      Data
        and Information Related to AzaSite 

       

      All
        data
        supplied in NDA-50-810 and Amendments to 50-810 which has been supplied to
        Inspire

       

      

       

      

       

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Schedule
        4.3

       

      Wire
        Transfer Instructions for Redemption Amount

       

      

      

      
        	
                Bank:

              	
                [***]

              
	
                ABA
                  #:

              	
                [***]

              
	
                Credit
                  Account #:

              	
                [***]

              
	
                Acct
                  Name:

              	
                [***]

              
	
                Reference:

              	
                [***]

              
	
                Attn:

              	
                [***]

              

      

      

       

      

       

      

      
         

        
          	
                  *Indicates
                    that certain information contained herein has been omitted and
                    filed
                    separately with the Securities and Exchange Commission. Confidential
                    treatment has been requested with respect to the omitted
                    portions.

                

        

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

      Schedule
        5.3(a)

       

      Minimum
        Royalties

       

      

      
        	
                Minimum
                  Royalty Period

              	
                Required
                  Minimum Royalty for Period (US$)

              
	
                First
                  Minimum Royalty Period:

              	
                [***]

              
	
                Second
                  Minimum Royalty Period:

              	
                [***]

              
	
                Third
                  Minimum Royalty Period:

              	
                [***]

              
	
                Fourth
                  Minimum Royalty Period:

              	
                [***]

              
	
                Fifth
                  Minimum Royalty Period:

              	
                [***]

              

      

      

       

      

       

      

       

      
         

        
          	
                  *Indicates
                    that certain information contained herein has been omitted and
                    filed
                    separately with the Securities and Exchange Commission. Confidential
                    treatment has been requested with respect to the omitted
                    portions.

                

        

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

           

        

      

      Schedule
        5.5

       

      Wire
        Transfer Instructions

       

      

       

      
        	
                Bank:

              	
                [***]

              
	
                ABA
                  #:

              	
                [***]

              
	
                Credit
                  Account #:

              	
                [***]

              
	
                Acct
                  Name:

              	
                [***]

              
	
                Attn:

              	
                [***]

              

      

      

      

      
         

        
          	
                  *Indicates
                    that certain information contained herein has been omitted and
                    filed
                    separately with the Securities and Exchange Commission. Confidential
                    treatment has been requested with respect to the omitted
                    portions.

                

        

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

           

        

      

      Schedule
        8.3

       

      Scientific
        Publications

       

      Abstracts
        and Articles:

       

      
        	1.  	
                Ocular
                  Bioavailability and Systemic Levels of an Ophthalmic Formulation
                  of
                  Azithromycin, ISV-401. E.C. Si, L.M. Bowman, S.D. Roy. Invest
                  Ophthalmol Vis Sci.
                  2003.  E
                  -
                  Abstract 1461. Presented
                  at: The Association for Research in Vision and Ophthalmology, Monday,
                  May
                  5, 2003.

              

      

       

      
        	2.  	
                A
                  Randomized Trial Assessing Microbial Eradication and Clinical Efficacy
                  of
                  1% Azithromycin Ophthalmic Solution vs. Tobramycin in Pediatric
                  and Adult
                  Subjects with Bacterial Conjunctivitis. M. B. Abelson, E. E. Protzko,
                  A.
                  M. Shapiro, AzaSite Clinical Study Group. Invest
                  Ophthalmol Vis Sci.
                  2006.  E
                  -
                  Abstract 3589. Presented
                  at: The Association for Research in Vision and Ophthalmology, Wednesday,
                  May 3, 2006.

              

      

       

      
        	3.  	
                A
                  Randomized Trial Assessing Safety and Tolerability of 1% Azithromycin
                  Ophthalmic Solution vs. Tobramycin in Pediatric and Adult Subjects
                  with
                  Bacterial Conjunctivitis. E. E. Protzko, M.B. Abelson, A.M. Shapiro,
                  AzaSite Clinical Study Group. Invest
                  Ophthalmol Vis Sci.
                  2006.  E
                  -
                  Abstract 4958 Presented
                  at: The Association for Research in Vision and Ophthalmology, Thursday,
                  May 4, 2006.

              

      

       

      
        	4.  	
                Safety
                  and Tolerability of Azithromycin 1% Eye Drops as Anti-infective
                  Therapy
                  for Bacterial Conjunctivitis. W. Heller, M.B. Abelson, A.M. Shapiro,
                  The
                  AzaSite Clinical Study Group. Presented
                  at: The Annual Meeting of the American Academy of Ophthalmology,
                  November
                  11-14, 2006.

              

      

       

      
        	5.  	
                Efficacy
                  of Azithromycin 1% Eye Drops vs. Vehicle as First-Line Therapy
                  for
                  Bacterial Conjunctivitis. M.B. Abelson, A.M. Shapiro, W. Heller,
                  The
                  AzaSite Clinical Study Group. Presented
                  at: The Annual Meeting of the American Academy of Ophthalmology,
                  November
                  11-14, 2006.

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	6.  	
                DuraSite
                  as a Drug Delivery Platform. M.H. Friedlaender, L. Bowman, E.
                  Si
                  Presented at: The Annual Meeting of the Association for Ocular
                  Pharmacology and Therapeutics 8th
                  Scientific Meeting, February 9-11,
                  2007.

              

      

       

      
        	7.  	
                Frequent
                  Dosing with Topical 1% Azithromycin is Effective in Reducing
                  Azithromycin-Resistant Pseudomonas
                  aeruginosa Colony
                  Counts in a NZW Rabbit Model. K.A.
                  Yates, E.G. Romanowski, R.P. Kowalski, F.S. Mah, Y.J. Gordon. Accepted
                  at:
                  The
                  Association for Research in Vision and Ophthalmology
                  2007.

              

      

       

      
        	8.  	
                Development
                  of a Commercial Eye Drop Formulation of Azithromycin. L.M. Bowman,
                  E. Si,
                  J. Pang, M. Friedlaender Accepted at: The
                  Association for Research in Vision and Ophthalmology
                  2007.

              

      

       

      
        	9.  	
                Phase
                  3 Safety Comparisons for 1.0% Azithromycin in a Polymeric Mucoadhesive
                  Eyedrop vs. 0.3% Tobramycin Eyedrops for Bacterial Conjunctivitis.
                  Protzko
                  E., Bowman L., Shapiro A., Abelson M.B. and AzaSite Study Group.
                  Invest
                  Ophthalmol Vis Sci.
                  in
                  press.

              

      

       

      
        	10.  	
                “Study
                  results promising: Antibiotic product treats bacterial conjunctivitis
                  effectively” Ophthalmology
                  Times,
                  Nov 2002: Advanstar Communications. Article
                  Link

              

      

       

      
        	11.  
	
                Groves
                  N, Abelson MB “Antibiotic combats acute bacterial conjunctivitis”
                  Ophthalmology
                  Times
                  April 2003: Advanstar Communications. Article
                  Link

              

      

       

      
        	12.  	
                “Patent
                  covers all azalide use for ocular infections” Ophthalmology
                  Times,
                  May 2003: Advanstar Communications. Article
                  Link

              

      

       

      
        	13.  	
                Abelson
                  M.B. Chapin M., Plumer A. “Ophthalmic drugs: What’s in the pipeline?”
                  Ophthalmology
                  Times,
                  May 2005: Advanstar Communications. Article
                  Link

              

      

       

      
        	14.  	
                Lines
                  L., Abelson M.B. “The Ophthalmic Pharmaceutical Pipeline Expands”
                  Ophthalmology
                  Times,
                  Jul 2006: Advanstar Communications. Article
                  Link

              

      

       

      
        	15.  	
                Guttman
                  C. “Long-acting azithromycin safe, effective in treating bacterial
                  conjunctivitis.” Ophthalmology
                  Times,
                  Jul 2006: M.B. Abelson (editor) Advanstar Communications. Article
                  Link

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	16.  	
                Donnenfeld
                  E. “Azithromycin with DuraSite offers stability, increased corneal
                  contact.” Ocular
                  Surgery News,
                  November 2006: vol. 24 issue 22. Slack Incorporated.
                  

              

      

       

      
        	17.  	
                Abelson
                  M.B. “Pearls from ARVO—allergies, AMD and therapeutics” Eye
                  World
                  August 2006: Lisa Lines (Editor). ASCRS
                  Ophthalmic Services Corp. Article
                  Link

              

      

       

      
        	18.  	
                Realini
                  T. “New Topical Broad Spectrum Antibiotic on the Horizon: Phase 3 Trial
                  of
                  Azithromycin Yields Promising Results.” Eye
                  World,
                  February 2007: Vol. 12;2:20-21 A. Shapiro and W.H. Heller (editors)
                  :
                  ASCRS
                  Ophthalmic Services Corp. Current
                  Issue Main Page

              

      

       

      Submitted
        Chapters and Manuscripts:

       

      
        	19.  	
                Donnenfeld
                  E., Friedlaender M.H. “Azithromycin in Ophthalmology: A New Therapy” in
                  Clinical
                  Applications of Antibiotics and Antiinflammatory Drugs in
                  Ophthalmology
                  A.
                  Garg, E. Donnenfeld, J. Shepard, M. Friedlaender (Editors). M/S
                  Jaypee
                  Brothers Medical Publisher Pvt. Ltd, New Delhi, Publishers.
                  2007

              

      

       

      
        	20.  	
                Friedlaender
                  M.H., Protzko E. 1%
                  Azithromycin in DuraSite: Clinical Development of Topical
                  Azalide Anti-Infective for Ocular Surface Therapy. Clinical
                  Ophthalmology.
                  2007.

              

      

       

      
        	21.  	
                A
                  Randomized Trial Assessing the Clinical Efficacy and Microbial
                  Eradication
                  of 1% Azithromycin Ophthalmic Solution vs. Tobramycin in Adult
                  and
                  Pediatric Subjects with Bacterial Conjunctivitis Abelson M.B.,
                  Bowman L.,
                  Shapiro A., Protzko E. and AzaSite Study Group. Clinical
                  Ophthalmology

              

      

       

      Manuscripts
        in Progress

       

      
        	22.  	
                Abelson
                  M.B., Bowman L., Shapiro A., Heller W.H. and AzaSite Study Group
“Efficacy
                  and Safety of Topical 1% Azithromycin in DuraSite vs. Vehicle for
                  Bacterial Conjunctivitis”

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00123-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00123-of-00352.parquet"}]]