Document:

Exhibit 10.1

 

SALE AND CONTRIBUTION AGREEMENT

 

dated as of February 28, 2020

 

among

 

THERAVANCE BIOPHARMA R&D, INC.,
as the Transferor,

 

TRIPLE ROYALTY SUB II LLC, as the Transferee,

 

and

 

solely with respect to Articles V and
IX and Sections 6.7, 6.9, 8.2, 8.3 and 8.4,

 

THERAVANCE BIOPHARMA, INC.

 

 

      

     

    

 

Table of Contents

 

Page

 

	ARTICLE I 

DEFINED TERMS AND RULES OF CONSTRUCTION
	 
	Section 1.1	Defined Terms and Rules of Construction	2
	 	 	 
	ARTICLE II

 SALE AND CONTRIBUTION OF THE TRANSFERRED ASSETS
	 
	Section 2.1	Sale and Contribution of the Transferred Assets	3
	Section 2.2	Purchase Price	4
	 	 	 
	ARTICLE III

 REPRESENTATIONS AND WARRANTIES OF THE TRANSFEROR
	 
	Section 3.1	Organization	4
	Section 3.2	No Conflicts	5
	Section 3.3	Authorization	5
	Section 3.4	Ownership	5
	Section 3.5 	Governmental and Third Party Authorizations	6
	Section 3.6	Investment Company Status	6
	Section 3.7	No Litigation	6
	Section 3.8	Solvency	6
	Section 3.9 	Tax Matters	6
	Section 3.10	No Brokers’ Fees	7
	Section 3.11	TRC LLC Agreement	7
	Section 3.12	UCC Matters	7
	Section 3.13	Margin Stock	7
	Section 3.14	Foreign Corrupt Practices	7
	Section 3.15	Money Laundering Laws	8
	Section 3.16	Sanctions	8
	Section 3.17	No Implied Representations by the Transferee	8
	 	 	 
	ARTICLE IV 

REPRESENTATIONS AND WARRANTIES OF THE TRANSFEREE
	 
	Section 4.1	Organization	9
	Section 4.2	No Conflicts	10
	Section 4.3	Authorization	10
	Section 4.4	Governmental and Third Party Authorizations	10
	Section 4.5	No Litigation	10
	Section 4.6	Not a Restricted Party	10
	Section 4.7	No Implied Representations by the Transferor or Theravance Biopharma	11

 

    	 	i	 

     

    

 

	ARTICLE V 

REPRESENTATIONS AND WARRANTIES OF THERAVANCE BIOPHARMA
	 
	Section 5.1	Organization	12
	Section 5.2	No Conflicts	12
	Section 5.3	Authorization	13
	Section 5.4	Governmental and Third Party Authorizations	13
	Section 5.5	No Litigation	13
	 	 	 
	ARTICLE VI 

COVENANTS
	 
	Section 6.1	Notices	14
	Section 6.2	Confidentiality	14
	Section 6.3	Further Assurances	15
	Section 6.4	Payments on Account of the Transferred Assets	16
	Section 6.5	Existence	16
	Section 6.6	Payment of Expenses; Commingling of Assets	16
	Section 6.7 	The Master Agreement and the Extension Agreement With Respect to Theravance Biopharma	17
	Section 6.8	The Master Agreement and the TRC LLC Agreement With Respect to the Transferor	18
	Section 6.9	Risk Retention Requirement	18
	Section 6.10	Treatment of Notes as Debt	19
	Section 6.11	Tax Matters	19
	Section 6.12	Foreign Corrupt Practices	19
	Section 6.13	Money Laundering Laws	19
	Section 6.14	Sanctions	19
	Section 6.15	Refinancing	19
	 	 	 
	ARTICLE VII 

THE CLOSING
	 
	Section 7.1	Closing	20
	Section 7.2 	Closing Deliverables of the Transferor	20
	Section 7.3	Closing Deliverables of the Transferee	20
	 	 	 
	ARTICLE VIII

 INDEMNIFICATION
	 
	Section 8.1	Indemnification by the Transferor	21
	Section 8.2	Indemnification by Theravance Biopharma	21
	Section 8.3	Procedures	22
	Section 8.4	Exclusive Remedy	22

 

    	 	ii	 

     

    

 

	ARTICLE IX 

MISCELLANEOUS
	 
	Section 9.1	Survival	23
	Section 9.2	Specific Performance	23
	Section 9.3	Notices	23
	Section 9.4	Successors and Assigns	25
	Section 9.5	Independent Nature of Relationship	26
	Section 9.6	Entire Agreement	26
	Section 9.7	Governing Law; Submission to Jurisdiction; Service of Process	26
	Section 9.8	Waiver of Jury Trial	27
	Section 9.9 	Severability	27
	Section 9.10	Counterparts	27
	Section 9.11	Amendments; No Waivers	28
	Section 9.12	Limited Recourse	28
	Section 9.13	Cumulative Remedies for the Transferor	29
	Section 9.14	Table of Contents and Headings	29
	Section 9.15	Acknowledgment and Agreement	29
	Section 9.16 	Currency Exchange	29
	Section 9.17	Judgment Currency	29
	Section 9.18	Waiver of Immunity	30
	Exhibit A	Form of Innoviva Instruction	 
	Annex A	Rules of Construction and Defined
Terms	 

 

    	 	iii	 

     

    

 

SALE AND CONTRIBUTION AGREEMENT

 

This SALE AND CONTRIBUTION
AGREEMENT, dated as of February 28, 2020 (this “Sale and Contribution Agreement”), is entered into among Theravance
Biopharma R&D, Inc., a Cayman Islands exempted company (the “Transferor”), Triple Royalty Sub II LLC, a
Delaware limited liability company (the “Transferee”), and solely with
respect to Articles V and IX and Sections 6.7, 6.9, 8.2, 8.3 and 8.4, Theravance Biopharma, Inc., a Cayman Islands exempted company
(“Theravance Biopharma”).

 

W I T N E S S E T H

 

WHEREAS, the Transferor
is a direct, wholly owned subsidiary of Theravance Biopharma;

 

WHEREAS, prior to the
Spin-Off in May 2014 from Innoviva, Innoviva assigned to TRC LLC the Strategic Alliance Agreement and all of its rights and obligations
under the Collaboration Agreement with GSK, other than with respect to RELVAR® ELLIPTA®/BREO®
ELLIPTA®, ANORO® ELLIPTA® and VI Monotherapy (the Strategic Alliance Agreement and
the portion of the Collaboration Agreement assigned to TRC LLC, the “GSK Agreements”);

 

WHEREAS, on May 31,
2014, Theravance Biopharma and Innoviva entered into the TRC LLC Agreement, pursuant to which TRC LLC issued to Theravance Biopharma
2,125 Class B Units and 6,375 Class C Units, entitling Theravance Biopharma to an 85% economic interest in future payments relating
to the Products that may be made by GSK pursuant to the GSK Agreements (net of the cash, if any, expected to be used in TRC LLC
pursuant to the TRC LLC Agreement over the next four fiscal quarters);

 

WHEREAS, pursuant to
the Assignment and Assumption Agreement, dated as of June 1, 2014, by and among Theravance Biopharma, as the assignor, the Transferor,
as the assignee, and Innoviva, as the manager of TRC LLC and as a member of TRC LLC, Theravance Biopharma assigned all of its equity
interest in TRC LLC (as represented by 2,125 Class B Units and 6,375 Class C Units) to the Transferor;

 

WHEREAS, pursuant to
the Sale and Contribution Agreement, dated as of November 30, 2018, by and between the Transferor and Triple Royalty Sub LLC, a
Delaware limited liability company and wholly-owned subsidiary of the Transferor (the “2018 Transferee”), the
Transferor sold, contributed, assigned, transferred, conveyed and granted its equity interest in the 6,375 Class C Units in TRC
LLC to the 2018 Transferee;

 

WHEREAS, pursuant to
a Sale Agreement, dated as of the date hereof, the 2018 Transferee intends to convey its interest in the 6,375 Class C Units in
TRC LLC to the Transferor in exchange for cash in an amount sufficient to allow the 2018 Transferee to redeem and cancel its outstanding
notes and pay all of its accrued and unpaid fees and expenses; and

 

WHEREAS, the Transferor
desires to sell, contribute, assign, transfer, convey and grant to the Transferee, and the Transferee desires to purchase, acquire
and accept from the Transferor, the Transferred Assets described herein, upon and subject to the terms and conditions set forth
in this Sale and Contribution Agreement.

 

    	 	1	 

     

    

 

NOW, THEREFORE, in
consideration of the premises and the mutual agreements, representations and warranties set forth herein and of other good and
valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto covenant and agree as follows:

 

ARTICLE
I

DEFINED TERMS AND RULES OF CONSTRUCTION

 

Section 1.1           Defined
Terms and Rules of Construction. Capitalized terms used but not otherwise defined in this Sale and Contribution Agreement
shall have the respective meanings given to such terms in Annex A attached hereto, which is hereby incorporated by reference herein.
The rules of construction set forth in Annex A attached hereto shall apply to this Sale and Contribution Agreement and are hereby
incorporated by reference herein. Not all terms defined in Annex A are used in this Sale and Contribution Agreement.

 

The following terms
as used herein shall have the respective meanings referenced below:

 

“Cash Purchase
Price” shall have the meaning set forth in Section 2.2.

 

“Closing”
shall have the meaning set forth in Section 7.1.

 

“Purchase
Price” shall have the meaning set forth in Section 2.2.

 

“Recharacterization
Event” shall have the meaning set forth in Section 2.1(d).

 

“Risk Retention
Period” shall have the meaning set forth in Section 6.9.

 

“Transferee
Indemnified Party” shall have the meaning set forth in Section 8.1.

 

“Transferor
Account” shall have the meaning set forth in Section 6.4(c).

 

“Transferor
Secured Amount” shall have the meaning set forth in Section 2.1(d).

 

“Transferred
Assets” shall have the meaning set forth in Section 2.1(a).

 

“U.S. Credit
Risk Retention Rules” shall mean the final rules that mandate risk retention for securitizations as approved by the Office
of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation,
the Securities and Exchange Commission, the Federal Housing Finance Agency and the Department of Housing and Urban Development.

 

    	 	2	 

     

    

 

ARTICLE
II

SALE AND CONTRIBUTION OF THE TRANSFERRED ASSETS

 

Section 2.1           Sale
and Contribution of the Transferred Assets.

 

(a)          Subject
to the terms and conditions of this Sale and Contribution Agreement, on the Closing Date, the Transferor hereby sells, contributes,
assigns, transfers, conveys and grants to the Transferee, and the Transferee hereby purchases, acquires and accepts from the Transferor,
all of the Transferor’s right, title and interest as a holder of the Issuer Class C Units, including the Issuer Class C
Units and any and all of the economic rights and governance, voting and other consensual rights that may arise as holder of the
Issuer Class C Units under the TRC LLC Agreement, free and clear of any and all Liens, other than those Liens created in favor
of the Transferee by the Transaction Documents; provided, however, that the distribution of net cash payments to
the Transferee from TRC LLC will commence with the payment related to the payment of royalties by GSK to TRC LLC in the first
fiscal quarter of 2020 (collectively, the “Transferred Assets”). For
avoidance of doubt, the Transferee shall have no right, title or interest in any payment related to the payment of royalties by
GSK to TRC LLC prior to the first fiscal quarter of 2020.

 

(b)          The
Transferor and the Transferee intend and agree that the sale, contribution, assignment, transfer, conveyance and granting of the
Transferred Assets under this Sale and Contribution Agreement shall be, and are, a true, complete, absolute and irrevocable contribution
and sale by the Transferor to the Transferee of the Transferred Assets and that such contribution and sale shall provide the Transferee
with the full benefits of ownership of the Transferred Assets. The Transferor hereby relinquishes all title and control over the
Transferred Assets upon the transfer of the Transferred Assets hereunder. Neither the Transferor nor the Transferee intends the
transactions contemplated hereby to be, or for any purpose characterized as, a loan from the Transferee to the Transferor or a
pledge or assignment or a security agreement. The Transferor waives any right to contest or otherwise assert that this Sale and
Contribution Agreement does not constitute a true, complete, absolute and irrevocable sale and contribution by the Transferor
to the Transferee of the Transferred Assets under Applicable Law, which waiver shall be enforceable against the Transferor in
any Bankruptcy Event in respect of the Transferor. The sale, contribution, assignment, transfer, conveyance and granting of the
Transferred Assets shall be reflected on the Transferor’s financial statements and other records as a sale and contribution
of assets to the Transferee (except to the extent GAAP or the rules of the SEC require otherwise with respect to the Transferor’s
consolidated financial statements).

 

(c)          The
Transferor hereby authorizes the Transferee or its designee to execute, record and file, and consents to the Transferee or its
designee executing, recording and filing, at the Transferee’s sole cost and expense, financing statements in the appropriate
filing offices under the UCC (and continuation statements with respect to such financing statements when applicable), and amendments
thereto or assignments thereof, in such manner and in such jurisdictions as are necessary or appropriate to evidence or perfect
the sale, contribution, assignment, transfer, conveyance and grant by the Transferor to the Transferee, and the purchase, acquisition
and acceptance by the Transferee from the Transferor, of the Transferred Assets and to perfect the security interest in the Transferred
Assets granted by the Transferor to the Transferee pursuant to Section 2.1(d), in each case, subject to the confidentiality provisions
under the GSK Agreements.

 

(d)          If, notwithstanding Section 2.1(a) and Section 2.1(b), the transfer of the Transferred Assets pursuant to this Sale and
Contribution Agreement is characterized as a collateral transfer for security or as a financing transaction (a “Recharacterization
Event”), the Transferor intends that the Transferee have a perfected security interest in, and Lien on, the Transferred
Assets to secure an obligation of the Transferor to pay to the Transferee an amount equal to the value of the Transferred Assets
(the “Transferor Secured Amount”). Accordingly, if a Recharacterization
Event occurs, the Transferor does hereby grant to the Transferee a security interest in, to and under the Transferred Assets and
all proceeds thereof, whether now owned or existing or hereafter acquired, in each case to secure the obligation of the Transferor
set forth in Section 2.1(e).

 

    	 	3	 

     

    

 

(e)          If a Recharacterization Event has occurred, the Transferor agrees to pay or cause to be paid to the Transferee all amounts
that would have been required to be paid to the Transferee in respect of the Transferred Assets if the Recharacterization Event
had not occurred; such payments to be made when, as and if received by the Transferor. The maximum amount payable by the Transferor
to the Transferee pursuant to this Section 2.1(e) shall be the Transferor Secured Amount. If the Transferor fails to pay to the
Transferee any such amounts, (i) the Transferee may exercise all rights and remedies of a secured party under the relevant UCC
(including the rights of a secured party obtaining a Lien under Section 9-608 of the relevant UCC) and (ii) the Transferor may
exercise all of the rights of a debtor granting a Lien under the relevant UCC (including the rights of a debtor granting a Lien
under Section 9-623 of the relevant UCC).

 

Section 2.2           Purchase
Price. In full consideration for the sale, contribution, assignment, transfer, conveyance and granting of the Transferred
Assets, and subject to the terms and conditions set forth herein, on the Closing Date, the fair market value of the Transferred
Assets, as agreed at arm’s length by the Transferor and the Transferee, shall be paid as follows:

 

(i)           the Transferee shall pay (or cause to be paid) to the Transferor, or the Transferor’s designee, the sum of $119,190,311.86,
in immediately available funds, by wire transfer to the Transferor Account (the “Cash Purchase
Price”); and

 

(ii)          the Transferee shall issue to the Transferor the Retained Notes in the aggregate principal amount of $20,000,000 (together
with the Cash Purchase Price, the “Purchase Price”);

 

it being understood
that any excess portion of the consideration for the Transferred Assets, where the total consideration for the Transferred Assets
is equal to the fair market value of the Transferred Assets as agreed at arm’s length by the Transferor and the Transferee,
shall be a capital contribution by the Transferor to the Transferee in an amount equal to such excess portion. The Transferee shall
mark its books and records to reflect the amount of such contribution.

 

ARTICLE
III

REPRESENTATIONS AND WARRANTIES OF THE TRANSFEROR

 

The Transferor hereby
represents and warrants to the Transferee as of the date hereof as follows:

 

Section 3.1           Organization.
The Transferor has been duly incorporated with limited liability and is validly existing under the laws of the Cayman Islands
and has all power and authority, and all licenses, permits, franchises, authorizations, consents and approvals of all Governmental
Authorities, required to own its property and conduct its business as now conducted and to exercise its rights and to perform
its obligations under this Sale and Contribution Agreement and the TRC LLC Agreement. The Transferor is duly qualified to transact
business and is in good standing in every jurisdiction in which such qualification or good standing is required by Applicable
Law (except where the failure to be so qualified or in good standing would not have a Material Adverse Effect).

 

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Section 3.2           No
Conflicts.

 

(a)          None
of the execution and delivery by the Transferor of any of the Transaction Documents to which the Transferor is party, the performance
by the Transferor of the obligations contemplated hereby or thereby or the consummation of the transactions contemplated hereby
or thereby will: (i) contravene, conflict with, result in a breach, violation, cancellation or termination of, constitute a default
(with or without notice or lapse of time, or both) under, require prepayment under, give any Person the right to exercise any
remedy or obtain any additional rights under, or accelerate the maturity or performance of or payment under, in any respect, (A)
any Applicable Law or any judgment, order, writ, decree, permit or license of any Governmental Authority to or by which the Transferor
or any of its assets or properties may be subject or bound, except where such violation would not have a Material Adverse Effect,
(B) any contract, agreement, indenture, lease, license, deed, binding obligation or instrument to which the Transferor is a party
or by which the Transferor or any of its assets or properties is bound (including the TRC LLC Agreement), except where such violation
would not have a Material Adverse Effect or (C) the memorandum and articles of association of the Transferor or (ii) give rise
to any additional right of termination, cancellation or acceleration of any right or obligation of the Transferor, except where
such additional right of termination, cancellation or acceleration would not have a Material Adverse Effect.

 

(b)          Except as permitted under the Indenture, the Transferor has not granted any Lien on the Transaction Documents.

 

Section 3.3           Authorization.
The Transferor has all power and authority to execute and deliver, and perform its obligations under, the Transaction Documents
to which it is party and to consummate the transactions contemplated hereby and thereby. The execution and delivery of each of
the Transaction Documents to which the Transferor is party and the performance by the Transferor of its obligations hereunder
and thereunder have been duly authorized by the Transferor. Each of the Transaction Documents to which the Transferor is party
has been duly executed and delivered by the Transferor. Each of the Transaction Documents to which the Transferor is party constitutes
the legal, valid and binding obligation of the Transferor, enforceable against the Transferor in accordance with its respective
terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or similar Applicable Laws affecting creditors’
rights generally, general equitable principles and principles of public policy.

 

Section 3.4          Ownership.
The Transferor is the exclusive owner of the entire right, title (legal and equitable) and interest in, to and under the Transferred
Assets and has good and valid title thereto, free and clear of all Liens. None of the patents covering the Products under the
Collaboration Agreement are owned by or assigned to the Transferor. When the Transferred Assets will have been sold, contributed,
assigned, transferred, conveyed and granted to the Transferee on the Closing Date, such Transferred Assets will not be pledged,
sold, contributed, assigned, transferred, conveyed or granted by the Transferor to any other Person. The Transferor has full right
to sell, contribute, assign, transfer, convey and grant the Transferred Assets to the Transferee. Upon the sale, contribution,
assignment, transfer, conveyance and granting by the Transferor of the Transferred Assets to the Transferee, the Transferee shall
acquire full legal and equitable title to the Transferred Assets free and clear of all Liens, other than Liens in favor of the
Trustee and Liens permitted under the Indenture, and shall be the exclusive owner of the Transferred Assets. The Transferee shall
have the same rights as the Transferor would have with respect to the Transferred Assets (if the Transferor were still the owner
of such Transferred Assets) against any other Person.

 

    	 	5	 

     

    

 

Section 3.5           Governmental
and Third Party Authorizations. The execution and delivery by the Transferor of the Transaction Documents to which the Transferor
is party, the performance by the Transferor of its obligations hereunder and thereunder and the consummation of any of the transactions
contemplated hereunder and thereunder (including the sale, contribution, assignment, transfer, conveyance and granting of the
Transferred Assets to the Transferee) do not require any consent, approval, license, order, authorization or declaration from,
notice to, action or registration by or filing with any Governmental Authority or any other Person, except for the filing of a
Current Report on Form 8-K with the SEC, the filing of UCC financing statements, the notice to Innoviva, as manager of TRC LLC,
in the form of Exhibit A attached hereto, and the amendment of Exhibit A to the TRC LLC Agreement to reflect the transfer of the
Issuer Class C Units contemplated by the Transaction Documents and those previously obtained.

 

Section 3.6           Investment Company Status. Assuming the accuracy of the representations and warranties of the initial purchasers
of the Original Notes in the Note Purchase Agreements and compliance by the initial purchasers of the Original Notes and any subsequent
purchaser of the Original Notes with the requirements set forth in the Indenture, the Transferor is not, and, after giving effect
to the use of proceeds of the offering as contemplated by the Transaction Documents, would not be, required to register as an investment
company under the Investment Company Act.

 

Section 3.7           No
Litigation. There is no action, suit, arbitration proceeding, claim, demand, citation, summons, subpoena, other proceeding
or, to the knowledge of the Transferor, investigation pending or, to the knowledge of the Transferor, threatened against the Transferor
that would be a Material Adverse Change or that challenges or seeks to prevent or delay the consummation of the transactions contemplated
by the Transaction Documents to which the Transferor is party.

 

Section 3.8           Solvency.
The Transferor is, and after giving effect to the sale and contribution of the Transferred Assets to the Transferee pursuant to
this Sale and Contribution Agreement will be, solvent and able to pay its debts as they come due, and has and will have adequate
capital to carry out its business as now conducted or proposed to be conducted.

 

Section 3.9           Tax
Matters. No deduction or withholding for or on account of any Tax has been made from any payment to the Transferor or the
2018 Transferee in respect of the Issuer Class C Units and, following the Closing Date, if any such deduction or withholding is
required with respect to payments made to TRC LLC under the Collaboration Agreement, then, under the Collaboration Agreement,
GSK would be required to gross-up and indemnify TRC LLC for any withholding taxes in excess of 5%. The Transferor has filed (or
caused to be filed) all material tax returns and reports required by Applicable Law to have been filed by it and has paid all
material taxes required to be paid by it, except any such taxes that are being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP from time to time have been set aside on its books.

 

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Section 3.10         No Brokers’ Fees. The Transferor has not taken any action that would entitle any Person other than Cowen and
Company, LLC to any commission or broker’s fee in connection with the transactions contemplated by this Sale and Contribution
Agreement.

 

Section 3.11         TRC
LLC Agreement.

 

(a)          Other
than the Transaction Documents, the Master Agreement, the GSK Agreements and the TRC LLC Agreement, there is no written contract
to which the Transferor is a party or by which any of its assets or properties is bound or committed that relates to the Transferred
Assets for which breach, nonperformance, cancellation or failure to renew would have a Material Adverse Effect. For the avoidance
of doubt, the Transferor is not a party to the Master Agreement or the GSK Agreements.

 

(b)          The TRC LLC Agreement is in full force and effect and is the legal, valid and binding obligation of the Transferor and,
to the knowledge of the Transferor, Innoviva, enforceable against the Transferor and, to the knowledge of the Transferor, Innoviva
in accordance with its terms, subject, as to enforcement of remedies, to bankruptcy, insolvency, reorganization, moratorium or
similar Applicable Laws affecting creditors’ rights generally, general equitable principles and principles of public policy.
The Transferor is not in breach or violation of or in default under the TRC LLC Agreement.

 

Section 3.12         UCC Matters. The Transferor’s exact legal name is, and since its incorporation has been, “Theravance
Biopharma R&D, Inc.” The Transferor’s jurisdiction of incorporation is, and since its formation has been, the Cayman
Islands. The Transferor’s registered office is, and since its incorporation has been, located at PO Box 309, Ugland House,
Grand Cayman, KY1-1104, Cayman Islands. Since its incorporation, the Transferor has not been the subject of any merger or other
corporate or other reorganization in which its identity or status was materially changed, except in each case when it was the surviving
or resulting Person.

 

Section 3.13         Margin Stock. The Transferor is not engaged in the business of extending credit for the purpose of buying or carrying
margin stock, and no portion of the Purchase Price shall be used by the Transferor for a purpose that violates Regulation T, U
or X promulgated by the Board of Governors of the Federal Reserve System from time to time.

 

Section 3.14         Foreign Corrupt Practices. For the last five years, except as would not be expected to have a Material Adverse Effect,
none of the Transferor, any of its Subsidiaries or, to the knowledge of the Transferor, any director, officer, agent, employee,
Affiliate or other Person acting on behalf and for the benefit of the Transferor or any of its Subsidiaries is aware of or has
taken any action, directly or indirectly, that would result in a violation by such Persons, with respect to the business of the
Transferor or any of its Subsidiaries, of either (a) the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations
thereunder, including making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of
an offer, payment, promise to pay or authorization of the payment of any money or other property, gift, promise to give or authorization
of the giving of anything of value to any “foreign official” (as such term is defined in the Foreign Corrupt Practices
Act of 1977, as amended, and the rules and regulations thereunder) or any foreign political party or official thereof or any candidate
for foreign political office in contravention of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations
thereunder or (b) the U.K. Bribery Act 2010, and the Transferor, its Subsidiaries and, to the knowledge of the Transferor, its
other Affiliates have conducted their businesses in compliance with the Foreign Corrupt Practices Act of 1977, as amended, and
the rules and regulations thereunder and the U.K. Bribery Act 2010 and have instituted and maintain policies and procedures reasonably
designed to ensure, and that are reasonably expected to continue to ensure, continued compliance therewith.

 

    	 	7	 

     

    

 

Section 3.15        Money Laundering Laws. The operations of the Transferor and its Subsidiaries are and have been conducted at all times
in compliance in all material respects with applicable financial recordkeeping and reporting requirements of the Currency and Foreign
Transactions Reporting Act of 1970, as amended, the applicable money laundering statutes of all relevant jurisdictions and the
applicable rules and regulations thereunder. No action, suit or proceeding by or before any Governmental Authority involving the
Transferor or any of its Subsidiaries with respect to the Currency and Foreign Transactions Reporting Act of 1970, as amended,
the money laundering statutes of all relevant jurisdictions, the rules and regulations thereunder is pending or, to the knowledge
of the Transferor, threatened.

 

Section 3.16         Sanctions. None of the Transferor, any of its Subsidiaries or, to the knowledge of the Transferor, any director,
officer, agent or employee is (a) a Person currently the target of any sanctions administered or enforced by (i) the United States
government, including the U.S. Department of the Treasury’s Office of Foreign Assets Control, (ii) the United Nations Security
Council, (iii) the European Union, or (iv) Her Majesty’s Treasury or (b) located, organized or resident in a country or territory
that is the target of any comprehensive sanctions of the type described in clause (a) above.

 

Section 3.17         No Implied Representations by the Transferee. The Transferor acknowledges and agrees that: (i) other than the representations
and warranties of the Transferee specifically contained in Article IV, there are no representations or warranties of the Transferee
for the benefit of the Transferor, and the Transferee hereby disclaims all other representations and warranties for the benefit
of the Transferor, whether express, statutory or implied, in connection with this Sale and Contribution Agreement or the other
Transaction Documents, and (ii) the Transferor does not rely on, and the Transferee shall have no liability in respect of, any
representation or warranty not specifically set forth in Article IV. Without limiting the foregoing, the Transferor acknowledges
and agrees that, except as expressly set forth in any representation or warranty in Article IV, the Transferee shall have no liability
to the Transferor for losses or damages pursuant to this Sale and Contribution Agreement (or otherwise) with respect to any information,
documents or materials furnished or made available to the Transferor in any presentation, interview or in any other form or manner
relating to this Sale and Contribution Agreement or the other Transaction Documents.

 

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Notwithstanding anything
in this Sale and Contribution Agreement to the contrary, (i) other than the representations and warranties of the Transferor specifically
contained in this Article III, there are no representations or warranties of the Transferor for the benefit of the Transferee,
and the Transferor hereby disclaims all other representations and warranties for the benefit of the Transferee, whether express,
statutory or implied, in connection with this Sale and Contribution Agreement or the other Transaction Documents, including with
respect to the royalty payments made by GSK pursuant to the GSK Agreements, the Transferred Assets, the GSK Agreements, the Products
and data relating to the Products including patents and patent applications and other intellectual property associated with the
Products, and (ii) the Transferee does not rely on, and the Transferor shall have no liability in respect of, any representation
or warranty not specifically set forth in this Article III. Without limiting the foregoing, the Transferee acknowledges and agrees
that (a)(i) the GSK Agreements, the TRC LLC Agreement and the Master Agreement generally impose confidentiality obligations on
information relating to or generated in connection with those agreements and performance thereunder, and, accordingly, the Transferee
has made its own investigation and assessment of the royalty payments made by GSK pursuant to the GSK Agreements, the Transferred
Assets, the Products and data relating to the Products including patents and patent applications and other intellectual property
associated with the Products, and (ii) except as expressly set forth in any representation or warranty in this Article III, the
Transferee is not relying on, and shall have no remedies in respect of, any implied warranties whatsoever, including as to the
future payment or potential payment that may be made by GSK to TRC LLC pursuant to the GSK Agreements, the future distributions
or potential distributions that may be made by TRC LLC to the Transferee pursuant to the TRC LLC Agreement, the creditworthiness
of GSK or TRC LLC or any of their respective Affiliates or any other matter, and (b) except as expressly set forth in any representation
or warranty in Article III, the Transferor shall have no liability to the Transferee for losses or damages pursuant to this Sale
and Contribution Agreement (or otherwise) with respect to any information, documents or materials furnished or made available to
the Transferee or any of its Affiliates in any presentation, interview or in any other form or manner relating to this Sale and
Contribution Agreement, the other Transaction Documents or the TRC LLC Agreement.

 

ARTICLE
IV

REPRESENTATIONS AND WARRANTIES OF THE TRANSFEREE

 

The Transferee hereby
represents and warrants to the Transferor as of the date hereof as follows:

 

Section 4.1           Organization.
The Transferee is a limited liability company duly formed, validly existing and in good standing under the laws of the State of
Delaware and has all power and authority, and all licenses, permits, franchises, authorizations, consents and approvals of all
Governmental Authorities, required to own its property and conduct its business as now conducted and to exercise its rights and
to perform its obligations under this Sale and Contribution Agreement and the TRC LLC Agreement. The Transferee is duly qualified
to transact business and is in good standing in every jurisdiction in which such qualification or good standing is required by
Applicable Law (except where the failure to be so qualified or in good standing would not have a Material Adverse Effect).

 

    	 	9	 

     

    

 

Section 4.2           No Conflicts.

 

(a)          None
of the execution and delivery by the Transferee of any of the Transaction Documents to which the Transferee is party, the performance
by the Transferee of the obligations contemplated hereby or thereby or the consummation of the transactions contemplated hereby
or thereby will (i) contravene, conflict with, result in a breach, violation, cancellation or termination of, constitute a default
(with or without notice or lapse of time, or both) under, require prepayment under, give any Person the right to exercise any
remedy or obtain any additional rights under, or accelerate the maturity or performance of or payment under, in any respect, (A)
any Applicable Law or any judgment, order, writ, decree, permit or license of any Governmental Authority to or by which the Transferee
or any of its assets or properties may be subject or bound, except where such violation would not have a Material Adverse Effect,
(B) any contract, agreement, indenture, lease, license, deed, binding obligation or instrument to which the Transferee is a party
or by which the Transferee or any of its assets or properties is bound, except where such violation would not have a Material
Adverse Effect or (C) any of the organizational documents of the Transferee; or (ii) give rise to any additional right of termination,
cancellation or acceleration of any right or obligation of the Transferee, except where such additional right of termination,
cancellation or acceleration would not have a Material Adverse Effect.

 

(b)          The
Transferee has not granted any Lien on the Transaction Documents except as provided herein or in any other Transaction Document.

 

Section 4.3           Authorization.
The Transferee has all power and authority to execute and deliver, and perform its obligations under, the Transaction Documents
to which the Transferee is party and to consummate the transactions contemplated hereby and thereby. The execution and delivery
of each of the Transaction Documents to which the Transferee is party and the performance by the Transferee of its obligations
hereunder and thereunder have been duly authorized by the Transferee. Each of the Transaction Documents to which the Transferee
is party has been duly executed and delivered by the Transferee. Each of the Transaction Documents to which the Transferee is
party constitutes the legal, valid and binding obligation of the Transferee, enforceable against the Transferee in accordance
with its respective terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or similar Applicable Laws
affecting creditors’ rights generally, general equitable principles and principles of public policy.

 

Section 4.4           Governmental
and Third Party Authorizations. The execution and delivery by the Transferee of the Transaction Documents to which the Transferee
is party, the performance by the Transferee of its obligations hereunder and thereunder and the consummation of any of the transactions
contemplated hereunder and thereunder do not require any consent, approval, license, order, authorization or declaration from,
notice to, action or registration by or filing with any Governmental Authority or any other Person, except for the filing of a
Current Report on Form 8-K with the SEC, the filing of UCC financing statements, the notice to Innoviva, as manager of TRC LLC,
in the form of Exhibit A attached hereto, and the amendment of Exhibit A to the TRC LLC Agreement to reflect the transfer of the
Issuer Class C Units contemplated by the Transaction Documents and those previously obtained.

 

Section 4.5           No
Litigation. There is no action, suit, arbitration proceeding, claim, demand, citation, summons, subpoena, other proceeding
or, to the knowledge of the Transferee, investigation pending or, to the knowledge of the Transferee, threatened against the Transferee
that challenges or seeks to prevent or delay the consummation of the transactions contemplated by the Transaction Documents to
which the Transferee is party.

 

Section 4.6           Not
a Restricted Party. The Transferee is not a Restricted Party.

 

    	 	10	 

     

    

 

Section 4.7           No
Implied Representations by the Transferor or Theravance Biopharma.

 

(a)          The
Transferee acknowledges and agrees that: (i) other than the representations and warranties of the Transferor specifically contained
in Article III, there are no representations or warranties of the Transferor for the benefit of the Transferee, and the Transferor
hereby disclaims all other representations and warranties for the benefit of the Transferee, whether express, statutory or implied,
in connection with this Sale and Contribution Agreement or the other Transaction Documents, including with respect to the royalty
payments made by GSK pursuant to the GSK Agreements, the Transferred Assets, the GSK Agreements, the Products and data relating
to the Products including patents and patent applications and other intellectual property associated with the Products, and (ii)
the Transferee does not rely on, and the Transferor shall have no liability in respect of, any representation or warranty not
specifically set forth in Article III.

 

(b)          The
Transferee acknowledges and agrees that: (i) other than the representations and warranties of Theravance Biopharma specifically
contained in Article V, there are no representations or warranties of Theravance Biopharma for the benefit of the Transferee,
and Theravance Biopharma hereby disclaims all other representations and warranties for the benefit of the Transferee, whether
express, statutory or implied, in connection with this Sale and Contribution Agreement or the other Transaction Documents, including
with respect to the royalty payments made by GSK pursuant to the GSK Agreements, the Transferred Assets, the GSK Agreements, the
Products and data relating to the Products including patents and patent applications and other intellectual property associated
with the Products and (ii) the Transferee does not rely on, and Theravance Biopharma shall have no liability in respect of, any
representation or warranty not specifically set forth in Article V.

 

(c)          Without
limiting the foregoing, the Transferee acknowledges and agrees that (a)(i) the GSK Agreements, the TRC LLC Agreement and the Master
Agreement generally impose confidentiality obligations on information relating to or generated in connection with those agreements
and performance thereunder, and, accordingly, the Transferee has made its own investigation and assessment of the royalty payments
made by GSK pursuant to the GSK Agreements, the Transferred Assets, the Products and data relating to the Products including patents
and patent applications and other intellectual property associated with the Products, and (ii) except as expressly set forth in
any representation or warranty in Article III, the Transferee is not relying on, and shall have no remedies in respect of, any
implied warranties whatsoever, including as to the future payment or potential payment that may be made by GSK to TRC LLC pursuant
to the GSK Agreements, the future distributions or potential distributions that may be made by TRC LLC to the Transferee pursuant
to the TRC LLC Agreement, the creditworthiness of GSK or TRC LLC or any of their respective Affiliates or any other matter, and
(b) except as expressly set forth in any representation or warranty in Article III (with respect to the Transferor) and in Article
V (with respect to Theravance Biopharma), neither the Transferor nor Theravance Biopharma shall have any liability to the Transferee
for losses or damages pursuant to this Sale and Contribution Agreement (or otherwise) with respect to any information, documents
or materials furnished or made available to the Transferee or any of its Affiliates in any presentation, interview or in any other
form or manner relating to this Sale and Contribution Agreement, the other Transaction Documents or the TRC LLC Agreement.

 

    	 	11	 

     

    

 

Notwithstanding anything
in this Sale and Contribution Agreement to the contrary, (i) other than the representations and warranties of the Transferee specifically
contained in this Article IV, there are no representations or warranties of the Transferee for the benefit of the Transferor, and
the Transferee hereby disclaims all other representations and warranties for the benefit of the Transferor, whether express, statutory
or implied, in connection with this Sale and Contribution Agreement or the other Transaction Documents, and the Transferor does
not rely on, and (ii) the Transferee shall have no liability in respect of, any representation or warranty not specifically set
forth in Article IV. Without limiting the foregoing, the Transferor acknowledges and agrees that, except as expressly set forth
in any representation or warranty in this Article IV, the Transferee shall have no liability to the Transferor for losses or damages
pursuant to this Sale and Contribution Agreement (or otherwise) with respect to any information, documents or materials furnished
or made available to the Transferor in any presentation, interview or in any other form or manner relating to this Sale and Contribution
Agreement or the other Transaction Documents.

 

ARTICLE
V

REPRESENTATIONS AND WARRANTIES OF THERAVANCE BIOPHARMA

 

Theravance Biopharma
hereby represents and warrants to the Transferee as of the date hereof as follows:

 

Section 5.1           Organization. Theravance Biopharma has been duly incorporated with limited liability and is validly existing under
the laws of the Cayman Islands and has all power and authority, and all licenses, permits, franchises, authorizations, consents
and approvals of all Governmental Authorities, required to own its property and conduct its business as now conducted and to exercise
its rights and to perform its obligations under this Sale and Contribution Agreement. Theravance Biopharma is duly qualified to
transact business and is in good standing in every jurisdiction in which such qualification or good standing is required by Applicable
Law (except where the failure to be so qualified or in good standing would not have a Material Adverse Effect).

 

Section 5.2           No
Conflicts.

 

(a)          None
of the execution and delivery by Theravance Biopharma of this Sale and Contribution Agreement, the performance by Theravance Biopharma
of its obligations contemplated hereby or the consummation of the transactions by Theravance Biopharma contemplated hereby will
(i) contravene, conflict with, result in a breach, violation, cancellation or termination of, constitute a default (with or without
notice or lapse of time, or both) under, require prepayment under, give any Person the right to exercise any remedy or obtain
any additional rights under, or accelerate the maturity or performance of or payment under, in any respect, (A) any Applicable
Law or any judgment, order, writ, decree, permit or license of any Governmental Authority to or by which Theravance Biopharma
or any of its assets or properties may be subject or bound, except where such violation would not have a Material Adverse Effect,
(B) any contract, agreement, indenture, lease, license, deed, binding obligation or instrument to which Theravance Biopharma is
a party or by which Theravance Biopharma or any of its assets or properties is bound, except where such violation would not have
a Material Adverse Effect or (C) any of the organizational documents of Theravance Biopharma; or (ii) give rise to any additional
right of termination, cancellation or acceleration of any right or obligation of Theravance Biopharma, except where such additional
right of termination, cancellation or acceleration would not have a Material Adverse Effect.

 

    	 	12	 

     

    

 

(b)          Theravance
Biopharma has not granted any Lien on this Sale and Contribution Agreement and the other Transaction Documents.

 

Section 5.3           Authorization.
Theravance Biopharma has all power and authority to execute and deliver, and perform its obligations under, this Sale and Contribution
Agreement, and to consummate the transactions contemplated hereby. The execution and delivery of this Sale and Contribution Agreement
and the performance by Theravance Biopharma of its obligations hereunder have been duly authorized by Theravance Biopharma. This
Sale and Contribution Agreement has been duly executed and delivered by Theravance Biopharma. This Sale and Contribution Agreement
constitutes the legal, valid and binding obligation of Theravance Biopharma, enforceable against Theravance Biopharma in accordance
with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or similar Applicable Laws affecting
creditors’ rights generally, general equitable principles and principles of public policy.

 

Section 5.4           Governmental
and Third Party Authorizations. The execution and delivery by Theravance Biopharma of this Sale and Contribution Agreement,
the performance by Theravance Biopharma of its obligations hereunder and the consummation of any of the transactions by Theravance
Biopharma contemplated hereunder do not require any consent, approval, license, order, authorization or declaration from, notice
to, action or registration by or filing with any Governmental Authority or any other Person, except for the filing of a Current
Report on Form 8-K with the SEC, the filing of UCC financing statements, the notice to Innoviva, as manager of TRC LLC, in the
form of Exhibit A attached hereto, and the amendment of Exhibit A to the TRC LLC Agreement to reflect the transfer of the Issuer
Class C Units contemplated by the Transaction Documents and those previously obtained.

 

Section 5.5           No Litigation. There is no action, suit, arbitration proceeding, claim, demand, citation, summons, subpoena, other
proceeding or, to the knowledge of Theravance Biopharma, investigation pending or, to the knowledge of Theravance Biopharma, threatened
against Theravance Biopharma that would be a Material Adverse Change or that challenges or seeks to prevent or delay the consummation
of the transactions contemplated by this Sale and Contribution Agreement.

 

The Transferee acknowledges
and agrees that: notwithstanding anything in this Sale and Contribution Agreement to the contrary, (i) other than the representations
and warranties of Theravance Biopharma specifically contained in this Article V, there are no representations or warranties of
Theravance Biopharma for the benefit of the Transferee, and Theravance Biopharma hereby disclaims all other representations and
warranties for the benefit of the Transferee, whether express, statutory or implied, in connection with this Sale and Contribution
Agreement or the other Transaction Documents and (ii) the Transferee does not rely on, and Theravance Biopharma shall have no liability
in respect of, any representation or warranty not specifically set forth in this Article V.

 

    	 	13	 

     

    

 

ARTICLE
VI

COVENANTS

 

Until the Notes have
been repaid, redeemed, repurchased or defeased and the Indenture has been satisfied or discharged:

 

Section 6.1           Notices.

 

(a)          Subject
to applicable confidentiality restrictions and Applicable Laws relating to securities matters or other confidential matters, the
Transferor shall provide the Transferee with written notice as promptly as practicable (and in any event within five Business
Days) after becoming aware of any of the following: (i) any breach or default by the Transferor of or under any covenant, agreement
or other provision of any Transaction Document to which it is party; (ii) any representation or warranty made by the Transferor
in any of the Transaction Documents or in any certificate delivered to the Transferee pursuant to this Sale and Contribution Agreement
shall prove to be untrue or inaccurate in any material respect on the date as of which made; (iii) any change, effect, event,
occurrence, state of facts, development or condition that would have a Material Adverse Effect; or (iv) any Bankruptcy Event in
respect of the Transferor.

 

(b)          The
Transferor shall notify the Transferee in writing not less than 30 days prior to any change in, or amendment or alteration of,
the Transferor’s (i) legal name, (ii) form or type of organizational structure or (iii) jurisdiction of organization, unless
such change, amendment or alteration is in connection with the Restructuring. The Transferor shall notify the Transferee in writing
at least two Business Days prior to the Restructuring.

 

(c)          Subject
to applicable confidentiality restrictions and Applicable Laws relating to securities matters or other confidential matters, the
Transferor shall make available such other information as the Transferee may, from time to time, reasonably request with respect
to the Transferred Assets.

 

Section 6.2           Confidentiality.

 

Except as otherwise required
by Applicable Law, by the rules and regulations of any securities exchange or trading system or by the FDA or any other Governmental
Authority with similar regulatory authority and except as otherwise set forth in this Section 6.2, all Confidential Information
furnished by the Transferor to the Transferee, as well as the terms, conditions and provisions of this Sale and Contribution Agreement
and any other Transaction Document, shall be kept confidential by the Transferee and shall be used by the Transferee only in connection
with this Sale and Contribution Agreement and any other Transaction Document and the transactions contemplated hereby and thereby.
Notwithstanding the foregoing, the Transferee may disclose such information to its actual and potential partners, directors, employees,
managers, officers, agents, investors (including any holder of debt securities of the Transferee and such holder’s advisors,
agents and representatives), co-investors, insurers and insurance brokers, underwriters, financing parties, equityholders, brokers,
advisors, lawyers, bankers, trustees and representatives subject in each case to the confidentiality requirements set forth in
the GSK Agreements, the TRC LLC Agreement and the Master Agreement; provided, that such Persons (i) shall be informed of
the confidential nature of such information and shall be obligated to keep such information confidential pursuant to obligations
of confidentiality no less onerous than those set out herein or (ii) shall have executed and delivered a Confidentiality Agreement.

 

    	 	14	 

     

    

 

Section 6.3           Further
Assurances.

 

(a)          Subject
to the terms and conditions of this Sale and Contribution Agreement, the GSK Agreements, the Master Agreement and the TRC LLC
Agreement and applicable confidentiality obligations, each of the Transferor and the Transferee will use its commercially reasonable
efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary under Applicable Laws
to consummate the transactions contemplated by the Transaction Documents to which the Transferor or the Transferee, as applicable,
is party, including to (i) perfect the sale and contribution of the Transferred Assets to the Transferee pursuant to this Sale
and Contribution Agreement, (ii) execute and deliver such other documents, certificates, instruments, agreements and other writings
and to take such other actions as may be necessary or desirable, or reasonably requested by the Transferor or the Transferee,
as applicable in order to consummate or implement expeditiously the transactions contemplated by any Transaction Document to which
the Transferor or the Transferee, as applicable, is party, (iii) perfect, protect, more fully evidence, vest and maintain in the
Transferee, good, valid and marketable rights and interests in and to the Transferred Assets free and clear of all Liens (other
than those permitted by the Transaction Documents), (iv) create, evidence and perfect the Transferee’s back-up security
interest granted pursuant to Section 2.1(d), and (v) enable the Transferee to exercise or enforce any of the Transferee’s
rights under any Transaction Document to which the Transferor or the Transferee, as applicable, is party, including following
the Closing Date.

 

(b)          Subject
to the terms and conditions of this Sale and Contribution Agreement, the GSK Agreements, the Master Agreement, the TRC LLC Agreement
and applicable confidentiality obligations, the Transferor and the Transferee shall cooperate and provide assistance as reasonably
requested by the Transferor or the Transferee, as applicable, at the expense of the Transferor or the Transferee, as applicable
(except as otherwise set forth herein), in connection with any litigation, arbitration, investigation or other proceeding (whether
threatened, existing, initiated or contemplated prior to, on or after the date hereof) to which the Transferor or the Transferee,
as applicable, any of its Affiliates (other than the other party hereto) or controlling persons or any of their respective officers,
directors, equityholders, controlling persons, managers, agents or employees is or may become a party or is or may become otherwise
directly or indirectly affected or as to which any such Persons have a direct or indirect interest, in each case relating to any
Transaction Document, the transactions described herein or therein or the Transferred Assets but in all cases excluding any litigation
brought by the Transferor against the Transferee or brought by the Transferee (for itself or on behalf of any Transferee Indemnified
Party) against the Transferor.

 

(c)          Each
of the Transferor and the Transferee shall comply with all Applicable Laws with respect to the Transaction Documents to which
it is party, the Transferred Assets and all ancillary agreements related thereto, the violation of which would have a Material
Adverse Effect.

 

    	 	15	 

     

    

 

(d)          The Transferor shall not enter into any contract, agreement or other legally binding arrangement (whether written or oral),
or grant any right to any other Person, in any case that would reasonably be expected to conflict with the Transaction Documents;
provided, however that the Transferor may enter into such documents as may be necessary to effect a Restructuring which
will not materially and adversely impair the rights of Noteholders under the Indenture.

 

Section 6.4           Payments
on Account of the Transferred Assets.

 

(a)          Notwithstanding the terms of the Innoviva Instruction, if TRC LLC, Innoviva or any other Person pays the Class C Distributions
to the Transferor (or any of its Subsidiaries other than the Transferee) directly and not to the Collection Account, then (i) such
payment or distribution shall be held by the Transferor (or such Subsidiary) in trust for the benefit of the Transferee, (ii) the
Transferor (or such Subsidiary) shall have no right, title or interest whatsoever in such payment or distribution and shall not
create or suffer to exist any Lien thereon and (iii) the Transferor (or such Subsidiary) promptly, and in any event no later than
two Business Days following the receipt by the Transferor (or such Subsidiary) of such payment or distribution, shall remit such
payment or distribution to the Collection Account pursuant to Section 6.4(b) in the exact form received with all necessary
endorsements.

 

(b)          The
Transferor shall make all payments required to be made by it to the Transferee pursuant to this Sale and Contribution Agreement
by wire transfer of immediately available funds, without Set-off, to the Collection Account.

 

(c)          The
Transferee shall make all payments required to be made by it to the Transferor pursuant to this Sale and Contribution Agreement
by wire transfer of immediately available funds, without Set-off, to the following account (or to such other account as the Transferor
shall notify the Transferee in writing from time to time) (the “Transferor Account”):

 

	Bank Name:	 	Bank of America, N.A.
	ABA Number:	 	[Redacted]
	Account Number:	 	[Redacted]
	Account Name:	 	Theravance Biopharma R&D, Inc.
	Attention:	 	Asif Ali

 

Section 6.5           Existence.
The Transferor shall preserve and maintain its existence; provided, that the foregoing shall not prohibit the Transferor
from entering into any merger, consolidation or amalgamation with, or selling or otherwise transferring all or substantially all
of its assets to, any other Person if the Transferor is the continuing or surviving entity or if the surviving or continuing or
acquiring entity assumes (either expressly or by operation of law) all of the obligations of the Transferor under the Transaction
Documents.

 

Section 6.6           Payment of Expenses; Commingling of Assets. Until the Indenture has been satisfied and discharged in full in accordance
with its terms, (a) the Transferor shall pay from its own funds and assets all obligations and indebtedness incurred by it and
(b) the Transferor shall not commingle its assets with those of the Transferee except as specifically permitted in the Transaction
Documents.

 

    	 	16	 

     

    

 

Section 6.7           The
Master Agreement and the Extension Agreement With Respect to Theravance Biopharma.

 

(a)          Theravance
Biopharma shall perform and comply with the Master Agreement and the Collaboration Agreement to the extent relating to the Extension
Agreement and shall not take any action, or fail to take any action, that breaches, violates or could reasonably be expected to
breach or violate the Master Agreement or the Collaboration Agreement to the extent relating to the Extension Agreement.

 

(b)          (i)
Theravance Biopharma shall enforce the Master Agreement and the Collaboration Agreement to the extent relating to the Extension
Agreement and its rights under the Master Agreement and the Collaboration Agreement to the extent relating to the Extension Agreement,
in each case to the extent that the failure to do so under this clause (i) would be reasonably expected to have a direct or indirect
material and adverse effect on Theravance Biopharma’s or its permitted transferees’, successors’ and permitted
assigns’ (as applicable), including the Transferor’s and the Transferee’s, rights or obligations under the Master
Agreement, the Collaboration Agreement to the extent relating to the Extension Agreement and the TRC LLC Agreement to the extent
relating to the Issuer Class C Units, and (ii) Theravance Biopharma shall not amend, modify, supplement, waive, cancel, terminate
or grant any consent under the Master Agreement and the Collaboration Agreement to the extent relating to the Extension Agreement,
or take any other action or fail to take any action having the effect of the foregoing, or agree to do any of the foregoing directly
or indirectly, in whole or in part, to the Master Agreement or the Collaboration Agreement to the extent relating to the Extension
Agreement or any rights under the Master Agreement or the Collaboration Agreement to the extent relating to the Extension Agreement,
in each case to the extent that such action or inaction referred to in this clause (ii) would be reasonably expected to have a
direct or indirect material and adverse effect on the rights or obligations of Theravance Biopharma or its permitted transferees,
successors and permitted assigns (as applicable), including the Transferor and the Transferee, under the Master Agreement, the
Collaboration Agreement to the extent relating to the Extension Agreement or the TRC LLC Agreement to the extent relating to the
Issuer Class C Units.

 

(c)          Notwithstanding
anything to the contrary in the foregoing clauses (a) and (b) of this Section 6.7, Theravance Biopharma is permitted to take any
action or fail to take any action with respect to any agreement or drug program (other than the Collaboration Agreement and drug
programs under the Collaboration Agreement), including the Strategic Alliance Agreement and/or any drug programs (including the
MABA program) that are covered under the Strategic Alliance Agreement, including a transfer, sale, mortgage, pledge, assignment
or disposal of, either directly or indirectly, in whole or in part, by operation of law or otherwise, its interest in the MABA
program.

 

(d)          It is understood and agreed between the Transferor and the Transferee that neither the Transferor nor the Transferee shall
have any obligation or liability with respect to the allocations of resources, scope, intensity and duration of efforts or decisions
and judgments made in connection with development and commercialization (including acts or omissions that result in or increase
the likelihood of, greater or lesser commercial success): (i) with respect to, or as among, any Products or (ii) as among any one
or more Products, on the one hand, and other products or therapeutically active components, on the other hand.

 

    	 	17	 

     

    

 

Section 6.8           The
Master Agreement and the TRC LLC Agreement With Respect to the Transferor.

 

(a)          The
Transferor shall perform and comply with the Master Agreement (if applicable) and the TRC LLC Agreement and shall not take any
action, or fail to take any action, that breaches, violates or could reasonably be expected to breach or violate the Master Agreement
(if applicable) or the TRC LLC Agreement.

 

(b)          (i) The Transferor shall enforce the Master Agreement (if applicable) and the TRC LLC Agreement and its rights under the
Master Agreement (if applicable) and the TRC LLC Agreement, in each case to the extent that the failure to do so under this clause
(i) would be reasonably expected to have a direct or indirect material and adverse effect on Theravance Biopharma’s or its
permitted transferees’, successors’ and permitted assigns’ (as applicable), including the Transferor’s
and the Transferee’s, rights or obligations under the Master Agreement (if applicable) and the TRC LLC Agreement, in each
case to the extent relating to the Issuer Class C Units, and (ii) the Transferor shall not amend, modify, supplement, waive, cancel,
terminate or grant any consent under the Master Agreement (if applicable) or the TRC LLC Agreement, or take any other action or
fail to take any action having the effect of the foregoing, or agree to do any of the foregoing directly or indirectly, in whole
or in part, to the Master Agreement (if applicable) or the TRC LLC Agreement or any rights under the Master Agreement (if applicable)
or the TRC LLC Agreement, in each case to the extent that such action or inaction referred to in this clause (ii) would be reasonably
expected to have a direct or indirect material and adverse effect on the rights or obligations of Theravance Biopharma or its permitted
transferees, successors and permitted assigns (as applicable), including the Transferor and the Transferee, under the Master Agreement
(if applicable) or the TRC LLC Agreement, in each case to the extent relating to the Issuer Class C Units.

 

(c)          The Transferor shall not take any action to, directly or indirectly, impact, delay, forgive, release or compromise any amount
owed to or becoming owing to Theravance Biopharma and its permitted transferees, successors and permitted assigns (as applicable),
including the Transferor and the Transferee in respect of the Class C Distributions under the TRC LLC Agreement in a manner material
and adverse to the Noteholders.

 

(d)          Notwithstanding
anything to the contrary in the foregoing clauses (a), (b) and (c) of this Section 6.8, the Transferor is permitted to take any
action or fail to take any action with respect to any agreement or drug program (other than the Collaboration Agreement and drug
programs under the Collaboration Agreement), including the Strategic Alliance Agreement and/or any drug programs (including the
MABA program) that are covered under the Strategic Alliance Agreement, including a transfer, sale, mortgage, pledge, assignment
or disposal of, either directly or indirectly, in whole or in part, by operation of law or otherwise, its interest in the MABA
program.

 

Section 6.9           Risk
Retention Requirement. Other than as permitted by the U.S. Credit Risk Retention Rules, neither Theravance Biopharma nor one
or more of its Wholly-Owned Affiliates (as defined under the U.S. Credit Risk Retention Rules) may sell, transfer or hedge the
Retained Notes until the latest of (i) two years from the Closing Date, (ii) the date the unpaid principal balance (if applicable)
of the Collateral is 33% or less of the initial unpaid principal balance of the Collateral or (iii) the first date the principal
amount of the Notes is 33% or less of the original principal amount of the Notes (the “Risk Retention Period”);
provided that the Risk Retention Period will end with respect to the Notes immediately upon the earlier of the time at which no
Notes are outstanding and such time as the “sponsor” (as defined under the U.S. Credit Risk Retention Rules) of the
offer and sale of the Notes, in its capacity as sponsor of such offer and sale, is no longer required by the U.S. Credit Risk
Retention Rules to retain an economic interest in the Notes.

 

    	 	18	 

     

    

 

Section 6.10          Treatment
of Notes as Debt. The Transferor shall treat the Notes as debt for U.S. federal income tax purposes.

 

Section 6.11         Tax
Matters. The Transferor shall, prior to the Restructuring, use commercially reasonable efforts to avoid being treated as engaged
in a U.S. trade or business. Other than in connection with the Restructuring, the Transferor shall not change its jurisdiction
of organization or tax residence while the Notes are outstanding prior to the Transferor providing the Trustee an opinion of nationally
recognized U.S. tax counsel satisfactory to the Trustee to the effect that any such change should not cause a “significant
modification” of the Notes for U.S. federal income tax purposes.

 

Section 6.12        Foreign
Corrupt Practices. None of the Transferor or, to the knowledge of the Transferor, any director, officer, agent, employee,
Affiliate or other Person acting on behalf and for the benefit of the Transferor or any of its Subsidiaries shall materially violate
the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder or the U.K. Bribery Act 2010.

 

Section 6.13         Money Laundering Laws. At all times throughout the term of this Sale and Contribution Agreement, the operations of
the Transferor and its Subsidiaries will be conducted in compliance in all material respects with the applicable provisions of
the Currency and Foreign Transactions Reporting Act of 1970, as amended and the applicable money laundering statutes of all relevant
jurisdictions.

 

Section 6.14         Sanctions. The Transferor will not, directly or knowingly indirectly, use the proceeds of the sale of the Transferred
Assets, or lend, contribute or otherwise make available such proceeds to any subsidiaries, joint venture partners or other Persons,
to fund any activities of or business with any Person, or in any country or territory, that, at the time of such funding, is the
target of sanctions of the type described in Section 3.16(a), in each case, in violation of applicable sanctions or in any other
manner that will result in a violation by any Person party hereto of sanctions of the type described in Section 3.16(a).

 

Section 6.15         Refinancing. The offering of the Notes by the Transferee on the Closing Date shall have been consummated or shall
be consummated substantially concurrently with the refinancing of the notes issued by the 2018 Transferee pursuant to an indenture
dated as of November 30, 2018.

 

    	 	19	 

     

    

 

ARTICLE
VII

THE CLOSING

 

Section 7.1           Closing. The closing of the transactions contemplated hereby (the “Closing”)
shall take place on the Closing Date at the offices of Skadden, Arps, Slate, Meagher & Flom LLP located at 4 Times Square,
New York, New York 10036 (or at One Manhattan West, New York, New York 10001 if the Closing occurs on or after March 2, 2020),
or at such other place as the parties hereto mutually agree.

 

Section 7.2           Closing
Deliverables of the Transferor. At the Closing, the Transferor shall deliver or cause to be delivered to the Transferee the
following:

 

(a)          the
Servicing Agreement, the Account Control Agreement, the Pledge and Security Agreement and the Note Purchase Agreements, each executed
by the Transferor;

 

(b)          the Innoviva Instruction executed by the Transferor; and

 

(c)          such
other certificates, documents and financing statements as the Transferee may reasonably request, including (i) the documents contemplated
by Article VI of the Note Purchase Agreements and (ii) a financing statement reasonably satisfactory to the Transferee to evidence
and perfect the sale, contribution, assignment, transfer, conveyance and grant of the Transferred Assets pursuant to Section 2.1
and the back-up security interest granted pursuant to Section 2.1(d).

 

Section 7.3           Closing
Deliverables of the Transferee. At the Closing, the Transferee shall deliver or cause to be delivered to the Transferor the
following:

 

(a)          the
payment of the Cash Purchase Price in accordance with Section 2.2;

 

(b)          $20,000,000
aggregate principal amount of Retained Notes in accordance with Section 2.2; and

 

(c)          such
other certificates, documents and financing statements as the Transferor may reasonably request.

 

    	 	20	 

     

    

 

ARTICLE
VIII

INDEMNIFICATION

 

Section 8.1           Indemnification
by the Transferor. The Transferor agrees to indemnify and hold each of the Transferee and its Affiliates (other than the Transferor
and Theravance Biopharma) and any and all of their respective partners, directors, managers, members, officers, employees, agents
and controlling persons (each, a “Transferee Indemnified Party”) harmless
from and against, and to pay to each Transferee Indemnified Party the amount of, any and all Losses awarded against or incurred
or suffered by such Transferee Indemnified Party, whether or not involving a third party claim, demand, action or proceeding,
arising out of (i) any breach of any representation, warranty or certification made by the Transferor in any of the Transaction
Documents to which the Transferor is party or certificates given by the Transferor to the Transferee in writing pursuant to this
Sale and Contribution Agreement or any other Transaction Document, (ii) any breach of or default under any covenant or agreement
by the Transferor to the Transferee pursuant to any Transaction Document to which the Transferor is party and (iii) any fees,
expenses, costs, liabilities or other amounts incurred or owed by the Transferor to any brokers, financial advisors or comparable
other Persons retained or employed by it in connection with the transactions contemplated by this Sale and Contribution Agreement;
provided, however, that the foregoing shall exclude any indemnification to any Transferee Indemnified Party (A)
that has the effect of imposing on the Transferor any recourse liability for the Class C Distributions because of the insolvency
or other creditworthiness problems of TRC LLC or GSK or the insufficiency of the Class C Distributions, whether as a result of
the amount of cash flow arising from the failure of Innoviva to comply with the TRC LLC Agreement or the royalty payments made
by GSK pursuant to the GSK Agreements or otherwise, unless resulting from the failure of the Transferor to perform its obligations
under this Sale and Contribution Agreement, (B) that results from the bad faith, gross negligence or willful misconduct of such
Transferee Indemnified Party or its Affiliates (other than the Transferor or Theravance Biopharma) or (C) to the extent resulting
from the failure of any Person other than the Transferor to perform any of its obligations under any of the Transaction Documents.
Any amounts due to any Transferee Indemnified Party under this Section 8.1 shall be payable by the Transferor to such Transferee
Indemnified Party upon demand.

 

Section 8.2           Indemnification by Theravance Biopharma. Theravance Biopharma agrees to indemnify and hold each Transferee
Indemnified Party harmless from and against, and to pay to each Transferee Indemnified Party the amount of, any and all
Losses awarded against or incurred or suffered by such Transferee Indemnified Party, whether or not involving a third party claim,
demand, action or proceeding, arising out of (i) any breach of any representation, warranty or certification made by Theravance
Biopharma in Article V of this Sale and Contribution Agreement (ii) any breach of or default under any covenant or agreement by
Theravance Biopharma to the Transferee pursuant to Section 6.7 of this Sale and Contribution Agreement and (iii) any fees, expenses,
costs, liabilities or other amounts incurred or owed by Theravance Biopharma to any brokers, financial advisors or comparable other
Persons retained or employed by it in connection with the transactions contemplated by this Sale and Contribution Agreement; provided,
however, that the foregoing shall exclude any indemnification to any Transferee Indemnified Party (A) that results from
the bad faith, gross negligence or willful misconduct of such Transferee Indemnified Party or any of its Affiliates (other than
the Transferor or Theravance Biopharma) or (B) to the extent resulting from the failure of any Person other than Theravance Biopharma
to perform any of its obligations under any of the Transaction Documents. Any amounts due to any Transferee Indemnified Party under
this Section 8.2 shall be payable by Theravance Biopharma to such Transferee Indemnified Party upon demand.

 

    	 	21	 

     

    

 

Section 8.3           Procedures. If any claim, demand, action or proceeding (including any investigation by any Governmental Authority)
shall be brought against an indemnified party in respect of which indemnity is to be sought against an indemnifying party pursuant
to Sections 8.1 or 8.2, as applicable, the indemnified party shall, promptly after receipt of notice of the commencement of any
such claim, demand, action or proceeding, notify the indemnifying party in writing of the commencement of such claim, demand, action
or proceeding, enclosing a copy of all papers served, if any; provided, that the omission to so notify such indemnifying
party will not relieve the indemnifying party from any liability that it may have to any indemnified party under Sections 8.1 or
8.2, as applicable, unless, and only to the extent that, the indemnifying party is actually prejudiced by such omission. In the
event that any such action is brought against an indemnified party and it notifies the indemnifying party of the commencement thereof
in accordance with this Section 8.3, the indemnifying party will be entitled, at the indemnifying party’s sole cost and expense,
to participate therein and, to the extent that it may wish, to assume the defense thereof, with counsel reasonably satisfactory
to such indemnified party, and, after notice from the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party will not be liable to such indemnified party under this Article VIII for any legal
or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable
costs of investigation. In any such proceeding, an indemnified party shall have the right to retain its own counsel, but the reasonable
fees and expenses of such counsel shall be at the expense of such indemnified party unless (a) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel at the indemnifying party’s expense, (b) the indemnifying
party has assumed the defense of such proceeding and has failed within a reasonable time to retain counsel reasonably satisfactory
to such indemnified party or (c) the named parties to any such proceeding (including any impleaded parties) include both the indemnifying
party and the indemnified party and representation of both parties by the same counsel would be inappropriate due to actual or
potential conflicts of interests between them based on the advice of counsel to the indemnifying party. It is agreed that the indemnifying
party shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable
fees and expenses of more than one separate law firm for each jurisdiction for all such indemnified parties. The indemnifying party
shall not be liable for any settlement of any proceeding effected without its written consent. No indemnifying party shall, without
the prior written consent of the indemnified party, effect any settlement, compromise or discharge of any claim or pending or threatened
proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder
by such indemnified party, unless such settlement, compromise or discharge, as the case may be, (i) includes an unconditional written
release of such indemnified party, in form and substance reasonably satisfactory to the indemnified party, from all liability on
claims that are the subject matter of such claim or proceeding, (ii) does not include any statement as to an admission of fault,
culpability or failure to act by or on behalf of any indemnified party and (iii) does not impose any continuing material obligation
or restrictions on any indemnified party.

 

Section 8.4           Exclusive
Remedy. Except in the case of fraud or intentional breach, following the Closing, the indemnification afforded by this Article
VIII shall be the sole and exclusive remedy for money damages awarded against or incurred or suffered by a Transferee
Indemnified Party in connection with the transactions contemplated by the Transaction Documents, including with respect
to any breach of any representation, warranty or certification made by a party hereto in any of the Transaction Documents or certificates
given by a party hereto in writing pursuant hereto or thereto or any breach of or default under any covenant or agreement by a
party hereto pursuant to any Transaction Document. Notwithstanding anything in this Sale and Contribution Agreement to the contrary,
in the event of any breach or failure in performance of any covenant or agreement contained in any Transaction Document, the non-breaching
party shall be entitled to specific performance, injunctive or other equitable relief pursuant to Section 9.2.

 

    	 	22	 

     

    

 

ARTICLE
IX

MISCELLANEOUS

 

Section 9.1          Survival.
All representations, warranties and covenants made herein and in any other Transaction Document shall survive the execution and
delivery of this Sale and Contribution Agreement and the Closing. The rights hereunder to indemnification, payment of Losses or
other remedies based on such representations, warranties and covenants shall not be affected by any investigation conducted with
respect to, or any knowledge acquired (or capable of being acquired) at any time (whether before or after the execution and delivery
of this Sale and Contribution Agreement or the Closing) in respect of the accuracy or inaccuracy of or compliance with, any such
representation, warranty or covenant. The waiver of any condition based on the accuracy of any representation or warranty, or
on the performance of or compliance with any covenant, shall not affect the rights hereunder to indemnification, payment of Losses
or other remedies based on such representations, warranties and covenants.

 

Section 9.2           Specific
Performance. Each of the parties hereto acknowledges that the other party hereto will have no adequate remedy at law if it
fails to perform any of its obligations under any of the Transaction Documents. In such event, each of the parties hereto agrees
that the other party hereto shall have the right, in addition to any other rights it may have (whether at law or in equity), to
specific performance of this Sale and Contribution Agreement.

 

Section 9.3           Notices. All notices, consents, waivers and other communications hereunder shall be in writing and shall be effective
(a) upon receipt when sent through the mails, registered or certified mail, return receipt requested, postage prepaid, with such
receipt to be effective the date of delivery indicated on the return receipt, (b) upon receipt when sent by an overnight courier,
(c) on the date personally delivered to an authorized officer of the party to which sent or (d) on the date transmitted by facsimile
or other electronic transmission with a confirmation of receipt, in all cases, with a copy emailed to the recipient at the applicable
address, addressed to the recipient as follows:

 

if to the Transferor, to:

Theravance Biopharma R&D,
Inc.

c/o Theravance Biopharma US,
Inc.

901 Gateway Boulevard

South San Francisco, CA 94080

Attention: Brett A. Grimaud, Assistant Secretary, Vice President & Assistant General Counsel

Telephone: (650) 808-3785

Facsimile: (650) 808-6095

Email: BGrimaud@theravance.com

 

    	 	23	 

     

    

 

With a copy to:

 

Skadden, Arps, Slate, Meagher
 & Flom LLP

One Manhattan West

New York, NY 10001

Attention: Andrew M. Faulkner

Telephone: (212) 735-2853

Facsimile: (917) 777-2853

E-Mail: andrew.faulkner@skadden.com

 

Skadden, Arps, Slate, Meagher
 & Flom LLP

525 University Ave

Palo Alto, CA 94301

Attention: Amr Razzak

Telephone: (650) 470-4533

Facsimile: (650) 798-6504

E-Mail: amr.razzak@skadden.com

 

if to the Transferee, to:

Triple Royalty Sub II LLC

c/o Theravance Biopharma US, Inc.

901 Gateway Boulevard

South San Francisco, CA 94080

Attention: Brett A. Grimaud, Vice President and Assistant Secretary

Telephone: (650) 808-3785

Facsimile: (650) 808-6095

Email: BGrimaud@theravance.com

 

With a copy to:

 

Skadden, Arps, Slate, Meagher
 & Flom LLP

One Manhattan West

New York, NY 10001

Attention: Andrew M. Faulkner

Telephone: (212) 735-2853

Facsimile: (917) 777-2853

E-Mail: andrew.faulkner@skadden.com

 

Skadden, Arps, Slate, Meagher
 & Flom LLP

525 University Ave

Palo Alto, CA 94301

Attention: Amr Razzak

Telephone: (650) 470-4533

Facsimile: (650) 798-6504

E-Mail: amr.razzak@skadden.com

 

    	 	24	 

     

    

 

if to Theravance Biopharma, to:

Theravance Biopharma, Inc.

c/o Theravance Biopharma US,
Inc.

901 Gateway Boulevard

South San Francisco, CA 94080

Attention: Brett A. Grimaud, Assistant Secretary, Vice President & Assistant General Counsel

Telephone: (650) 808-3785

Facsimile: (650) 808-6095

Email: BGrimaud@theravance.com

 

With a copy to:

 

Skadden, Arps, Slate, Meagher
 & Flom LLP

One Manhattan West

New York, NY 10001

Attention: Andrew M. Faulkner

Telephone: (212) 735-2853

Facsimile: (917) 777-2853

E-Mail: andrew.faulkner@skadden.com

 

Skadden, Arps, Slate, Meagher
 & Flom LLP

525 University Ave

Palo Alto, CA 94301

Attention: Amr Razzak

Telephone: (650) 470-4533

Facsimile: (650) 798-6504

E-Mail: amr.razzak@skadden.com

 

Each party hereto may, by notice given
in accordance herewith to the other party hereto, designate any further or different address to which subsequent notices, consents,
waivers and other communications shall be sent.

 

Section 9.4           Successors and Assigns.

 

(a)          Other
than in connection with the Restructuring, neither the Transferor nor Theravance Biopharma shall assign or otherwise transfer
this Sale and Contribution Agreement without the prior written consent of the Transferee, except that the Transferor or Theravance
Biopharma, as applicable, may assign this Sale and Contribution Agreement, in whole or in part, without the consent of the Transferee
to (i) an acquirer of the Transferor or Theravance Biopharma, as applicable, or a successor to all or substantially all of the
assets of the Transferor or Theravance Biopharma, as applicable, whether by merger, sale of stock, sale of assets or other similar
transaction, if the surviving or continuing or acquiring entity assumes (either expressly or by operation of law) all of the obligations
of the Transferor or Theravance Biopharma, as applicable, under this Sale and Contribution Agreement or (ii) an Affiliate of the
Transferor or Theravance Biopharma, as applicable, for so long as such Affiliate remains an Affiliate of the Transferor or Theravance
Biopharma, as applicable, and if the Transferor or Theravance Biopharma, as applicable, guarantees the performance of this Sale
and Contribution Agreement by such Affiliate.

 

    	 	25	 

     

    

 

(b)          Except as provided in Section 9.15, any assignment or transfer of this Sale and Contribution Agreement by the Transferee
shall require the prior written consent of the Transferor and Theravance Biopharma. The Transferor and Theravance Biopharma shall
be under no obligation to reaffirm any representations, warranties or covenants made in this Sale and Contribution Agreement or
any of the other Transaction Documents or take any other action in connection with any such assignment by the Transferee.

 

(c)          Subject
to the terms and conditions of this Section 9.4, this Sale and Contribution Agreement shall be binding upon and inure to the benefit
of the parties hereto and their permitted successors and assigns. Any purported assignment or other transfer in violation of this
Section 9.4 shall be void ab initio and of no force or effect.

 

Section 9.5           Independent
Nature of Relationship. Except for any Capital Securities of the Transferee held by the Transferor, the Retained Notes, and
the Transferor’s role as Servicer under the Servicing Agreement, the relationship between the Transferor and the Transferee
is solely that of transferor and transferee, and neither the Transferor nor the Transferee has any fiduciary or other special
relationship with the other party hereto or any of its Affiliates. Nothing contained herein or in any other Transaction Document
shall be deemed to constitute the Transferor and the Transferee as a partnership, an association, a joint venture or any other
kind of entity or legal form.

 

Section 9.6           Entire
Agreement. This Sale and Contribution Agreement and the other Transaction Documents, constitute the entire agreement between
the parties hereto with respect to the subject matter hereof and supersede all prior agreements, understandings and negotiations,
both written and oral, between the parties hereto with respect to the subject matter of this Sale and Contribution Agreement.
No representation, inducement, promise, understanding, condition or warranty not set forth herein (or in the other Transaction
Documents) has been made or relied upon by any party hereto. Except as described in Section 9.11 and Section 9.15, neither this
Sale and Contribution Agreement nor any provision hereof is intended to confer upon any Person other than the parties hereto and
the other Persons referenced in Article VIII any rights or remedies hereunder.

 

Section 9.7           Governing Law; Submission to Jurisdiction; Service of Process.

 

(a)          THIS
SALE AND CONTRIBUTION AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL SUBSTANTIVE LAWS OF THE STATE
OF NEW YORK WITHOUT REFERENCE TO THE RULES THEREOF RELATING TO CONFLICTS OF LAW OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS
LAW OF THE STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE
WITH SUCH LAWS.

 

(b)          Each
of the parties hereto hereby irrevocably and unconditionally submits, for itself and its property, to the non-exclusive jurisdiction
of the Supreme Court of the State of New York sitting in New York County and of the United States District Court of the Southern
District of New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this
Sale and Contribution Agreement, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New
York State court or, to the extent permitted by Applicable Law, in such federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by Applicable Law.

 

    	 	26	 

     

    

 

(c)          Each
of the parties hereto hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so,
any objection that it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating
to this Sale and Contribution Agreement in any court referred to in Section 9.7(b). Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by Applicable Law, the defense of an inconvenient forum to the maintenance of such action
or proceeding in any such court.

 

(d)          Each
of the parties hereto irrevocably consents to service of process in the manner provided for notices in Section 9.3. Nothing in
this Sale and Contribution Agreement will affect the right of any party hereto to serve process in any other manner permitted
by Applicable Law. Each of the parties hereto waives personal service of any summons, complaint or other process, which may be
made by any other means permitted by New York law.

 

Section 9.8           Waiver
of Jury Trial. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS SALE AND CONTRIBUTION AGREEMENT,
OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE OTHER PARTY
HERETO WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTY HERETO HAVE BEEN INDUCED TO ENTER INTO THIS SALE AND CONTRIBUTION AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 9.8.

 

Section 9.9           Severability.
If one or more provisions of this Sale and Contribution Agreement are held to be invalid, illegal or unenforceable by a court
of competent jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision of this Sale and
Contribution Agreement, which shall remain in full force and effect, and the parties hereto shall replace such invalid, illegal
or unenforceable provision with a new provision permitted by Applicable Law and having an economic effect as close as possible
to the invalid, illegal or unenforceable provision. Any provision of this Sale and Contribution Agreement held invalid, illegal
or unenforceable only in part or degree by a court of competent jurisdiction shall remain in full force and effect to the extent
not held invalid, illegal or unenforceable.

 

Section 9.10         Counterparts. This Sale and Contribution Agreement may be executed in any number of counterparts, each of which so
executed shall be deemed to be an original, but all of such counterparts shall together constitute but one and the same instrument.
Any counterpart may be executed by facsimile or other electronic transmission, and such facsimile or other electronic transmission
shall be deemed an original.

 

    	 	27	 

     

    

 

Section 9.11        Amendments;
No Waivers. Neither this Sale and Contribution Agreement nor any term or provision hereof may be amended, supplemented, restated,
waived, changed or otherwise modified except with the written consent of the parties hereto; provided, that unless (i)
the amendment or other modification is solely for purposes of correcting a technical error, inconsistency or ambiguity, adding
to the covenants or agreements to be observed by the Transferee for the benefit of the Noteholders, complying with the requirements
of the SEC or any other regulatory body or any Applicable Law or (ii) the amendment or other modification does not adversely affect
the interests of the Noteholders in any material respect as confirmed in an Officer’s Certificate of the Transferee, the
Transferee shall provide at least ten (10) Business Days’ prior written notice of the amendment or other modification to
the Noteholders and the amendment or the modification shall not be effective if the Controlling Party notifies the Transferee
within such ten (10) Business Day period that it would be materially adversely affected by the amendment or other modification
and does not consent to the amendment or other modification. The Noteholders shall be third party beneficiaries of this Sale and
Contribution Agreement for purposes of this provision. No failure or delay by any party hereto in exercising any right, power
or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or privilege. No notice to or demand on any party hereto in
any case shall entitle it to any notice or demand in similar or other circumstances. No waiver or approval hereunder shall, except
as may otherwise be stated in such waiver or approval, be applicable to subsequent transactions. No waiver or approval hereunder
shall require any similar or dissimilar waiver or approval thereafter to be granted hereunder. The rights and remedies of the
Noteholders provided in this Section 9.11 shall be cumulative and not exclusive of any rights or remedies of the Noteholders provided
by Applicable Law.

 

Section 9.12        Limited
Recourse. The Transferor accepts that the enforceability against the Transferee of any obligations of the Transferee hereunder
shall be limited to the Collateral and the Issuer Pledged Collateral. Once all such Collateral and Issuer Pledged Collateral has
been realized upon and such Collateral and Issuer Pledged Collateral has been applied in accordance with the Indenture, any outstanding
obligations of the Transferee to the Transferor hereunder shall be extinguished. The Transferor further agrees that it shall take
no action against any employee, director, officer or administrator of the Transferee in relation to this Sale and Contribution
Agreement; provided, that nothing herein shall limit the Transferee (or its permitted successors or assigns) from pursuing
claims, if any, against any such Person; provided, further, that the foregoing shall not in any way limit, impair
or otherwise affect any rights of the Transferor to proceed against any employee, director, officer or administrator of the Transferee
(a) for intentional and willful fraud or intentional and willful misrepresentations on the part of or by such employee, director,
officer or administrator or (b) for the receipt by any such employee, director, officer or administrator of the Transferee of
any distributions or payments to which the Transferor or any successor in interest is entitled. For the avoidance of doubt, this
Section 9.12 does not affect the obligations of any holder of Capital Securities of the Transferee under the Pledge and Security
Agreement or the ability of the Trustee or any Noteholder to exercise any rights or remedies it may have under the Pledge and
Security Agreement.

 

    	 	28	 

     

    

 

Section 9.13        Cumulative
Remedies for the Transferor. The remedies herein provided for the Transferor are cumulative and not exclusive of any remedies
provided by Applicable Law.

 

Section 9.14         Table
of Contents and Headings. The Table of Contents and headings of the Articles and Sections of this Sale and Contribution Agreement
have been inserted for convenience of reference only, are not to be considered a part hereof and shall in no way modify or restrict
any of the terms or provisions hereof.

 

Section 9.15         Acknowledgment and Agreement. Each of the Transferor and Theravance Biopharma expressly acknowledges and agrees that
all of the Transferee’s right, title and interest in, to and under this Sale and Contribution Agreement shall be pledged
and assigned to the Trustee as collateral by the Transferee pursuant to the Indenture, and each of the Transferor and Theravance
Biopharma consents to such pledge and assignment. Each of the parties hereto acknowledges and agrees that the Trustee, acting on
behalf of the Noteholders, is a third party beneficiary of the rights of the Transferee arising hereunder that have been assigned
and pledged to the Trustee under the Indenture, which rights may be enforced by the Trustee only so long as an Event of Default
has occurred and is continuing and the Trustee is exercising remedies under the Indenture, in each case (if required thereunder)
at the Direction of the Controlling Party. In all other cases, the Transferee shall have the right to give and withhold consents
and exercise or refrain from exercising rights and remedies hereunder. The Trustee shall also be a third party beneficiary of this
Sale and Contribution Agreement in order to permit the Trustee to exercise such other rights as are granted to the Trustee hereunder.

 

Section 9.16        Currency Exchange. If, for the purpose of obtaining a judgment or order in any court, it is necessary to convert
a sum due hereunder from Dollars into another currency, the Transferor has agreed, to the fullest extent that it may effectively
do so, that the rate of exchange used shall be that at which, in accordance with normal banking procedures, the Transferee could
purchase Dollars with such other currency in the Borough of Manhattan, The City of New York on the Business Day preceding the day
on which final judgment is given.

 

Section 9.17        Judgment
Currency. The obligation of the Transferor in respect of any sum payable by it to the Transferee hereunder shall, notwithstanding
any judgment or order in a currency other than Dollars, be discharged only to the extent that, on the Business Day following receipt
by the Transferee of any sum adjudged to be so due in the Judgment Currency, the Transferee may in accordance with normal banking
procedures purchase Dollars with the Judgment Currency. If the amount of Dollars so purchased is less than the sum originally
due to the Transferee in the Judgment Currency (determined in the manner set forth in Section 9.16), the Transferor agrees, as
a separate obligation and notwithstanding any such judgment, to indemnify the Transferee against such loss, and, if the amount
of the Dollars so purchased exceeds the sum originally due to the Transferee, the Transferee shall remit to the Transferor such
excess, provided that the Transferee shall have no obligation to remit any such excess as long as the Transferor shall have failed
to pay the Transferee any obligations due and payable to the Transferee hereunder, in which case such excess may be applied to
such obligations of the Transferor in accordance with the terms hereof. The foregoing indemnity shall constitute a separate and
independent obligation of the Transferor and shall continue in full force and effect notwithstanding any such judgment or order
as aforesaid.

 

    	 	29	 

     

    

 

Section 9.18       
Waiver of Immunity. To the extent that the Transferor or Theravance Biopharma may in any jurisdiction claim for itself
or its assets immunity (to the extent such immunity may now or hereafter exist, whether on the grounds of sovereign immunity or
otherwise) from suit, execution, attachment (whether in aid of execution, before judgment or otherwise) or other legal process
(whether through service or notice or otherwise), and to the extent that in any such jurisdiction there may be attributed to itself
or its assets such immunity (whether or not claimed), the Transferor or Theravance Biopharma, as the case may be, irrevocably agrees
with respect to any matter arising under this Sale and Contribution Agreement for the benefit of the Transferee not to claim, and
irrevocably waives, such immunity to the full extent permitted by the Applicable Laws of such jurisdiction.

 

[REMAINDER OF THE PAGE INTENTIONALLY LEFT
BLANK]

 

    	 	30	 

     

    

 

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

 

 

	 	THERAVANCE BIOPHARMA R&D, INC.
	 	 
	 	 
	 	By:	 /s/ Brett A. Grimaud
	 	 	Name:	Brett A. Grimaud
	 	 	Title:	 Assistant Secretary, Vice President 

and Assistant General Counsel
	 	 
	 	 
	 	TRIPLE ROYALTY SUB II LLC
	 	 
	 	 
	 	By:	/s/ Brett A. Grimaud
	 	 	Name:	 Brett A. Grimaud
	 	 	Title:	Vice President and Assistant Secretary

 

TRIPLE
ROYALTY SUB II LLC

Sale and Contribution
Agreement

 

     

     

    

 

The following party shall be a party to
this Agreement

solely with respect to Articles V and IX
and Sections 6.7, 6.9, 8.2, 8.3 and 8.4:

 

 

	THERAVANCE BIOPHARMA, INC.	 
	 	 
	 	 
	By:	/s/ Bradford J. Shafer	 
	 	Name:	 Bradford J. Shafer	 
	 	Title:	 Executive Vice President and Secretary	 

 

TRIPLE
ROYALTY SUB II LLC

Sale and Contribution
Agreement

 

     

     

    

 

EXHIBIT A

 

FORM OF INNOVIVA INSTRUCTION

 

February 28, 2020

VIA EMAIL

 

Innoviva, Inc.

[Address Redacted]

 

Ladies and Gentlemen:

 

Reference is hereby made to that certain
limited liability company agreement (as amended from time to time, the “TRC LLC Agreement”) of Theravance Respiratory
Company, LLC, a Delaware limited liability company (“TRC LLC”), dated as of May 31, 2014, between Innoviva,
Inc., a Delaware corporation (formerly known as Theravance, Inc.) (“Innoviva”), and Theravance Biopharma R&D,
Inc. (“Theravance Biopharma R&D”), as assignee of Theravance Biopharma, Inc. (“Theravance Biopharma”),
pursuant to the Assignment and Assumption Agreement, dated as of June 1, 2014, by and among Theravance Biopharma, as the assignor,
Theravance Biopharma R&D, as the assignee, and Innoviva, Inc., as the manager of TRC LLC and as a member of TRC LLC.

 

Pursuant to the Sale
and Contribution Agreement, dated as of November 30, 2018, by and between Theravance Biopharma R&D, as the transferor (the
 “Transferor”) and Triple Royalty Sub LLC, a Delaware limited liability company and wholly-owned subsidiary of
the Transferor (the “2018 Transferee”), Theravance Biopharma R&D sold, contributed, assigned, transferred,
conveyed and granted its equity interest in the 6,375 Class C Units in TRC LLC to the 2018 Transferee.

 

Pursuant to a Sale Agreement,
dated as of the date hereof, the 2018 Transferee intends to sell its interest in the 6,375 Class C Units in TRC LLC to Theravance
Biopharma R&D in exchange for cash in an amount sufficient to allow the 2018 Transferee to redeem and cancel its outstanding
notes and pay all of its accrued and unpaid fees and expenses.

 

Pursuant to the Sale and Contribution Agreement,
dated as of the date hereof, by and among Theravance Biopharma R&D, as the transferor, Triple Royalty Sub II LLC, as the transferee
(the “Transferee”), and Theravance Biopharma, Inc., Theravance Biopharma R&D transferred to the Transferee
its right, title and interest as a holder of 6,375 Class C Units in TRC LLC. Following such transfer, the Transferee, a wholly-owned
subsidiary of Theravance Biopharma R&D, will become a member of TRC LLC.

 

     

     

    

 

As of the date hereof, you, as the manager
of TRC LLC, are hereby irrevocably and unconditionally directed to cause TRC LLC to make all payments and distributions due to
the Transferee, as a member of TRC LLC, by wire transfer in United States dollars to the following account:

 

Bank Name: U.S. Bank National Association

ABA Number: [Redacted]

Account Number: [Redacted]

Reference: Triple II Royalty Notes Collection Acct

 

In addition, as of the date hereof, you,
as the manager of TRC LLC, are hereby irrevocably and unconditionally directed to amend Exhibit A to the TRC LLC Agreement to reflect
the admission of the Transferee as a new member of TRC LLC and the holder of 6,375 Class C Units in TRC LLC.

 

Further, you are hereby irrevocably and
unconditionally instructed to send all reports or other notices sent or required to be sent to the Transferee pursuant to the TRC
LLC Agreement, to the following parties at the following addresses, beginning immediately:

 

Triple Royalty Sub II LLC

c/o Theravance Biopharma US, Inc.

901 Gateway Boulevard

South San Francisco, CA 94080

Attention: Brett A. Grimaud, Vice President and Assistant Secretary

Facsimile: (650) 808-6095

Email: BGrimaud@theravance.com

 

With a copy to:

 

Skadden, Arps, Slate, Meagher & Flom
LLP

One Manhattan West

New York, NY 10001

Attention: Andrew M. Faulkner

Facsimile: (917) 777-2853

E-Mail: andrew.faulkner@skadden.com

 

Skadden, Arps, Slate, Meagher & Flom
LLP

525 University Ave

Palo Alto, CA 94301

Attention: Amr Razzak

Telephone: (650) 470-4533

Facsimile: (650) 798-6504

E-Mail: amr.razzak@skadden.com

 

and

 

    	 	Exhibit A-2	 

     

    

 

Theravance Biopharma US, Inc., as Servicer

901 Gateway Boulevard

South San Francisco, CA 94080

Attention: Brett A. Grimaud, Assistant Secretary, Vice President & Assistant General Counsel

Facsimile: (650) 808-6095

Email: BGrimaud@theravance.com

 

With a copy to:

 

Skadden, Arps, Slate, Meagher & Flom
LLP

One Manhattan West

New York, NY 10001

Attention: Andrew M. Faulkner

Facsimile: (917) 777-2853

E-Mail: andrew.faulkner@skadden.com

 

Skadden, Arps, Slate, Meagher & Flom
LLP

525 University Ave

Palo Alto, CA 94301

Attention: Amr Razzak

Telephone: (650) 470-4533

Facsimile: (650) 798-6504

E-Mail: amr.razzak@skadden.com

 

    	 	Exhibit A-3	 

     

    

 

Thank you for your cooperation regarding
this matter.

 

	Very truly yours,	 
	 	 
	THERAVANCE BIOPHARMA US, INC.	 
	 	 
	 	 
	By:	 	 
	 	Name:	 
	 	Title:	 

 

    	 	Exhibit A-4	 

     

    

 

Annex A

 

Rules of Construction
and Defined TermsExhibit 10.2

PLEDGE AND SECURITY AGREEMENT

 

MADE BY

 

THERAVANCE BIOPHARMA R&D, INC.,
AS EQUITYHOLDER,

 

IN FAVOR OF

 

U.S. BANK NATIONAL ASSOCIATION,

A NATIONAL BANKING ASSOCIATION,

AS TRUSTEE

 

Dated as of February 28, 2020 

 

    

     

    

 

Table of Contents

 

	 	Page
	 	 
	Article I RULES OF CONSTRUCTION AND DEFINED TERMS	2
	Section 1.1   	Rules of Construction and Defined Terms	2
	 	 	 
	Article II PLEDGE	2
	Section 2.1   	Pledge	2
	 	 
	Article III DELIVERY OF ISSUER PLEDGED COLLATERAL	3
	Section 3.1   	Delivery of Issuer Pledged Collateral	3
	Section 3.2   	Capital Securities	3
	 	 
	Article IV REPRESENTATIONS AND WARRANTIES	4
	Section 4.1   	Representations and Warranties	4
	 	 
	Article V SUPPLEMENTS; FURTHER ASSURANCES	6
	Section 5.1   	Supplements	6
	Section 5.2   
	Further Assurances
	6
	 	 
	Article VI COVENANTS	6
	Section 6.1  	No Sale and No Liens	6
	Section 6.2   	Notices	7
	Section 6.3   	Voting Rights	7
	Section 6.4   	Distributions	7
	Section 6.5   	Capital Securities	8
	Section 6.6   	Legal Existence	8
	Section 6.7   	Compliance with Laws	8
	Section 6.8   	Modifications	8
	Section 6.9   	No Liquidation or Dissolution	8
	Section 6.10   	Monies Held in Trust	8
	Section 6.11   	No Claims	8
	Section 6.12   	Notice to Trustee	9
	Section 6.13   	Other Covenants	9
	 	 
	Article VII TRUSTEE APPOINTED ATTORNEY-IN-FACT	10
	Section 7.1   	Trustee Appointed Attorney-In-Fact	10
	 	 
	Article VIII REASONABLE CARE	10
	Section 8.1   	Reasonable Care	10
	 	 
	Article IX NO LIABILITY	10
	Section 9.1   	No Liability	10

 

    i

     

    

 

	Article X REMEDIES UPON
    EVENT OF DEFAULT	11
	Section 10.1   	Remedies Upon Event of Default	11
	 	 
	Article XI PURCHASE OF THE ISSUER PLEDGED COLLATERAL	13
	Section 11.1   	Purchase of the Issuer Pledged Collateral	13
	 	 
	Article XII EXPENSES	13
	Section 12.1   	Expenses	13
	 	 
	Article XIII NO WAIVER; REMEDIES	14
	Section 13.1   	No Waiver; Remedies	14
	 	 
	Article XIV AMENDMENTS	14
	Section 14.1   	Amendments	14
	 	 
	Article XV RELEASE; TERMINATION	14
	Section 15.1   	Release; Termination	14
	 	 
	Article XVI NOTICES	15
	Section 16.1   	Notices	15
	 	 
	Article XVII CONTINUING SECURITY INTEREST	15
	Section 17.1   	Continuing Security Interest	15
	 	 
	Article XVIII SECURITY INTEREST ABSOLUTE	15
	Section 18.1   	Security Interest Absolute	15
	Section 18.2   	Obligations of Equityholders Several and Not Joint	16
	 	 
	Article XIX INDEMNITY	16
	Section 19.1   	Indemnity	16
	 	 
	Article XX OBLIGATIONS SECURED BY ISSUER PLEDGED COLLATERAL	17
	Section 20.1   	Obligations Secured by Issuer Pledged Collateral	17
	 	 
	Article XXI SEVERABILITY	17
	Section 21.1   	Severability	17
	 	 
	Article XXII COUNTERPARTS; EFFECTIVENESS	17
	Section 22.1   	Counterparts; Effectiveness	17
	 	 
	Article XXIII REINSTATEMENT	18
	Section 23.1   	Reinstatement	18

  

    ii

     

    

 

	Article XXIV SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL; SERVICE OF PROCESS	18
	 	 
	Section 24.1   	SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL; SERVICE OF PROCESS	18
	 	 
	Article XXV GOVERNING LAW	19
	Section 25.1   	GOVERNING LAW	19
	 	 
	Article XXVI TABLE OF CONTENTS AND HEADINGS	19
	Section 26.1   	Table of Contents and Headings	19
	 	 
	Article XXVII CONVERSION OF CURRENCY; WAIVER OF IMMUNITY	19
	Section 27.1   	Currency Conversion	19
	Section 27.2   	Judgment Currency	20
	Section 27.3   	Waiver of Immunity	20

 

		Annex A	Rules of Construction and Defined Terms

 

    iii

     

    

 

 

PLEDGE AND SECURITY AGREEMENT

 

This PLEDGE AND SECURITY
AGREEMENT, dated as of February 28, 2020 (this “Pledge and Security Agreement”), is made by Theravance Biopharma
R&D, Inc., a Cayman Islands exempted company (“Theravance Biopharma R&D”), as the equityholder (in such
capacity, the “Equityholder”) of Triple Royalty Sub II LLC, a Delaware limited liability company, as the issuer
(the “Issuer”), in favor of U.S. Bank National Association, a national banking association, not in its individual
capacity but solely as the trustee (the “Trustee”) under the Indenture, dated as of the date hereof, by and
between the Issuer, the Trustee, and solely with respect to Sections 2.11(o) and 2.11(p) thereof, Theravance Biopharma, Inc., a
Cayman Islands exempted company.

 

W I T N E S S E T H :

 

WHEREAS, contemporaneously
with the execution and delivery of this Pledge and Security Agreement, pursuant to the Sale and Contribution Agreement, dated as
of the date hereof, by and among Theravance Biopharma R&D, as the transferor (in such capacity, the “Transferor”),
the Issuer, as the transferee (in such capacity, the “Transferee”), and solely with respect to Articles V and
IX and Sections 6.7, 8.2, 8.3 and 8.4 thereof, Theravance Biopharma, Inc., a Cayman Islands exempted company, the Transferor has
sold and contributed to the Transferee all of the Transferor’s right, title and interest as a holder of the Issuer Class
C Units, including the Issuer Class C Units and any and all of the economic rights and governance, voting and other consensual
rights that may arise as a holder of the Issuer Class C Units under the TRC LLC Agreement; provided, however, that
the distribution of net cash payments to the Issuer from Theravance Respiratory Company, LLC, a Delaware limited liability company
(“TRC LLC”), will commence with the payment related to the payment of royalties by GSK to TRC LLC in the first
fiscal quarter of 2020;

 

WHEREAS, contemporaneously
with the execution and delivery of this Pledge and Security Agreement, pursuant to the Indenture, the Issuer has issued its Original
Notes to the Noteholders;

 

WHEREAS, in order to
secure the repayment of such Original Notes, any Subordinated Notes and any Refinancing Notes, the Issuer shall, except as otherwise
expressly provided in the Indenture, grant a security interest in all of its property and rights to the Trustee for the benefit
of the Noteholders in accordance with the terms and conditions thereof; and

 

WHEREAS, in addition
to the grant of security interest by the Issuer to the Trustee as set forth in the preceding recital, in order to further secure
repayment of the Original Notes, any Subordinated Notes and any Refinancing Notes, the Equityholder has agreed to pledge all of
the Capital Securities of the Issuer owned by the Equityholder to the Trustee for the benefit of the Noteholders.

 

NOW, THEREFORE, in
consideration of the foregoing premises and for other good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, and in order to induce the Noteholders to purchase the Original Notes issued pursuant to the Indenture, the Equityholder
agrees for the benefit of the Trustee on behalf of each Noteholder, as follows:

 

    

     

    

 

Article
I

 

RULES OF CONSTRUCTION AND DEFINED TERMS

 

Section 1.1           
Rules of Construction and Defined Terms. Capitalized terms used but not otherwise defined in this Pledge and Security
Agreement shall have the respective meanings given to such terms in Annex A attached hereto, which is hereby incorporated
by reference herein. The rules of construction set forth in Annex A attached hereto shall apply to this Pledge and Security
Agreement and are hereby incorporated by reference herein. Not all terms defined in Annex A are used in this Pledge and Security
Agreement.

 

Article
II

 

PLEDGE

 

Section 2.1           Pledge. As security for the punctual payment and performance of the Secured Obligations as and when due and subject
to and in accordance with the provisions of this Pledge and Security Agreement, the Equityholder hereby pledges, grants, assigns,
hypothecates, transfers and delivers (subject to Section 3.1) to the Trustee, its successors and assigns, for the security
and benefit of the Noteholders, a continuing security interest in all of the Equityholder’s right, title and interest in,
to and under the following property, whether now owned or existing or hereafter acquired or arising (the “Issuer Pledged
Collateral”):

 

(a)          
all of the Equityholder’s Capital Securities in the Issuer, whether now owned or acquired in the future, and all certificates,
agreements and other instruments, if any, representing such Capital Securities, including, without limitation all management, voting
and member status rights with respect to the Issuer (the “Issuer Pledged Equity”);

 

(b)           
the right to receive all monies and property representing a distribution in respect of the Issuer Pledged Equity (except
those representing proceeds of the issuance of the Original Notes, any Subordinated Notes or any Refinancing Notes to the extent
not applicable to any Redemption of the Notes), whether by way of distribution, redemption, liquidation payments, repurchase or
otherwise;

 

(c)           
all substitutions, replacements and additions to any of the Issuer Pledged Collateral;

 

(d)           
any and all of the economic rights and governance, voting and other commercial rights that may arise as or for the benefit of
a holder of any of the Issuer Pledged Collateral;

 

(e)          
any rights related to the Equityholder’s capital account in the Issuer in respect of the Issuer Pledged Equity; and

 

(f)          
all proceeds of and to the Issuer Pledged Equity and any of the foregoing, including all shares, securities, rights, monies
or other property accruing, offered or issued at any time by way of redemption, conversion, exchange, substitution, preference,
option or otherwise in respect of the Issuer Pledged Equity; provided, however, that all of the proceeds received
or unbilled but to be received by the Equityholder in respect of any sale, transfer or other disposition of such Issuer Pledged
Equity shall be excluded (x) to the extent such Issuer Pledged Equity remains or concurrently therewith becomes subject to this
Pledge and Security Agreement and (y) such sale, transfer or other disposition is permitted pursuant to Sections 6.1 and
17.1;

 

    2

     

    

 

TO HAVE AND TO HOLD the Issuer Pledged
Collateral, together with all right, title, interest, powers, privileges and preferences pertaining or incidental thereto, unto
the Trustee, its successors and assigns, subject to the terms and conditions set forth herein.

 

Article
III

 

DELIVERY OF ISSUER PLEDGED COLLATERAL

 

Section 3.1          
Delivery of Issuer Pledged Collateral. Contemporaneously with the execution of this Pledge and Security Agreement,
the Equityholder shall deliver or cause to be delivered to the Trustee, to the extent not previously delivered, (a) any and all
certificates and other instruments evidencing the Issuer Pledged Equity then held in the form of certificates or other instruments
by the Equityholder, together with undated stock powers or assignments of such certificates duly executed and signed in blank,
including Membership Interest Certificate No.1 of 100% of the Issuer dated the Closing Date, (b) any and all certificates or other
instruments or documents representing any of the Issuer Pledged Collateral then held by the Equityholder and (c) all other property
comprising part of the Issuer Pledged Collateral then held in the form of certificates or other instruments by the Equityholder
with proper instruments of assignment or transfer duly executed and such other instruments or documents as may be reasonably necessary
to effect the purposes contemplated hereby.

 

Section 3.2           
Capital Securities. If the Equityholder shall become entitled to receive or shall receive, in respect of the Issuer
Pledged Equity, any Capital Securities, options, warrants, rights or other similar property, including any certificate representing
any distribution in connection with any recapitalization, reclassification or increase or reduction of capital (whether as an addition
to, in substitution of or in exchange for such Issuer Pledged Equity or otherwise), the Equityholder agrees:

 

(a)           
to accept the same as the agent of the Trustee;

 

(b)           
to hold the same in trust on behalf of and for the benefit of the Trustee and the Noteholders and separate and apart from
its other property; and

 

(c)           
to deliver any and all certificates or instruments evidencing the same to the Trustee on or before the close of business
on the fifth Business Day following the receipt thereof by the Equityholder, in the exact form received, with the endorsement or
assignment in blank of the Equityholder when necessary and with appropriate undated irrevocable proxies duly executed in blank
(with signatures properly guaranteed), to be held by the Trustee, subject to the terms of this Pledge and Security Agreement, as
additional Issuer Pledged Collateral.

 

    3

     

    

 

Article
IV

 

REPRESENTATIONS
AND WARRANTIES

 

Section 4.1           
Representations and Warranties. The Equityholder represents and warrants to the Trustee, as of the date the Equityholder
becomes a party to this Pledge and Security Agreement, as follows:

 

(a)            
The Equityholder has been duly incorporated with limited liability and is validly existing and in good standing under the
laws of its jurisdiction and has all licenses, permits, franchises and governmental authorizations necessary to carry on its business
as now being conducted and shall appoint and employ agents or attorneys in each jurisdiction where it shall be necessary to take
action under this Pledge and Security Agreement. So long as Theravance Biopharma R&D is the Equityholder, the registered office
of the Equityholder is located in the Cayman Islands. The Equityholder is duly licensed or qualified to do business in good standing
in each jurisdiction in which such qualification or good standing is required by Applicable Law, except where the failure to be
so qualified or in good standing would not be a Material Adverse Change. The Equityholder has the full power and authority to own
the property it purports to own and to carry on its business as presently conducted and as proposed to be conducted.

 

(b)           
The Equityholder is the sole legal and beneficial owner of the Issuer Pledged Collateral, free and clear of any Lien other
than the Lien created pursuant to this Pledge and Security Agreement and the Indenture or other Permitted Liens. No security agreement,
financing statement or other public notice with respect to all or any part of the Issuer Pledged Collateral is on file or of record
in any public office, except such as may have been filed in favor of the Trustee pursuant to this Pledge and Security Agreement
and the Indenture.

 

(c)           
The consummation of the transactions contemplated hereby has been duly and validly authorized by the Equityholder. The Equityholder
has full power to execute and deliver this Pledge and Security Agreement and to perform its obligations hereunder and to pledge
all the Issuer Pledged Collateral pursuant to this Pledge and Security Agreement. This Pledge and Security Agreement has been duly
authorized, executed and delivered by the Equityholder. This Pledge and Security Agreement constitutes a legal, valid and binding
obligation of the Equityholder enforceable against the Equityholder in accordance with its terms, except as enforceability may
be limited by applicable bankruptcy, insolvency, moratorium or other similar Applicable Laws affecting creditors’ rights
generally and except as enforceability may be limited by general principles of equity (whether considered in a suit at law or in
equity). All requisite action has been taken by the Equityholder to make this Pledge and Security Agreement valid and binding upon
the Equityholder.

 

(d)            
All necessary governmental approvals and consents of other parties (including directors, officers, partners, members, managers
or creditors of the Equityholder) have been obtained that are required (i) for the execution, delivery and performance by the Equityholder
of this Pledge and Security Agreement or (ii) for the pledge by the Equityholder of the Issuer Pledged Collateral pursuant to this
Pledge and Security Agreement (except as may be required (w) in connection with filings of any UCC financing statements, (x) in
connection with any disposition of all or any part of the Issuer Pledged Collateral under any Applicable Laws affecting the offering
and sale of securities generally, (y) under Applicable Laws and applicable interpretations thereof providing for the supervision
or regulation of the banking or trust businesses generally and applicable to the Trustee and (z) with respect to the Trustee as
a result of any relationship that the Trustee may have with Persons not parties to, or any activity or business the Trustee may
conduct other than pursuant to, any of the Transaction Documents).

 

    4

     

    

 

(e)           
This Pledge and Security Agreement creates a valid security interest in the Issuer Pledged Collateral securing the Secured
Obligations, and the Equityholder has done such other acts, if any, reasonably requested by the Trustee to perfect the security
interest in the Issuer Pledged Collateral granted hereunder (including permitting the Trustee to file any appropriate UCC financing
statement against the Equityholder). The Equityholder has taken such other action, if any, as may be required under the laws of
its jurisdiction to ensure the validity, perfection and priority of the security interests of the Trustee in the Issuer Pledged
Collateral.

 

(f)           
The execution, delivery and performance by the Equityholder of this Pledge and Security Agreement and the consummation of
the transactions contemplated by this Pledge and Security Agreement with respect to the Equityholder do not (i) violate the provisions
of the memorandum and articles of association of the Equityholder, (ii) violate the provisions of any Applicable Law (including
any Applicable Law relating to usury matters), regulation or order of any Governmental Authority applicable to the Equityholder
except where such violation would not be a Material Adverse Change, (iii) result in a breach of, or constitute a default under,
any material agreement relating to the management or affairs of the Equityholder, or any indenture, credit agreement or loan agreement
or any other similar material agreement, lease or instrument to which the Equityholder is a party or by which the Equityholder
or any of its material properties may be bound (which default or breach has not been permanently waived by the other party to such
document) or (iv) result in or create any Lien (other than Permitted Liens) under, or require any consent that has not been obtained
under, any indenture (including the Indenture), credit agreement or loan agreement or any other material agreement, instrument
or document or the provisions of any order, writ, judgment, injunction, decree, determination or award of any Governmental Authority,
binding upon the Issuer Pledged Collateral.

 

(g)           There are no proceedings and there is no action, suit or proceeding at law or in equity or by or before any Governmental
Authority now pending against the Equityholder or, to the best knowledge of the Equityholder, threatened against the Equityholder
that questions the validity or legality of or seeks damages in connection with this Pledge and Security Agreement or that seeks
to prevent the consummation of any of the transactions contemplated by this Pledge and Security Agreement.

 

(h)            The percentage of limited liability company interests of Issuer Pledged Equity held by the Equityholder is set forth under
the Equityholder’s signature hereto.

 

(i)            
The Issuer Pledged Equity constitutes “certificated securities” under Article 8 of the Delaware Uniform Commercial
Code.

 

    5

     

    

 

Article
V

 

SUPPLEMENTS; FURTHER ASSURANCES

 

Section 5.1            
Supplements. The Equityholder agrees that, at any time and from time to time, at the Equityholder’s expense,
the Equityholder will promptly execute and deliver all further instruments and documents, and take all further action, that may
be necessary, or may be reasonably requested by the Trustee (acting at the Direction of Noteholders holding a majority of the Outstanding
Principal Balance of the Senior Class of Notes) in order to perfect the security interest of the Trustee in the Issuer Pledged
Collateral and to carry out the provisions of this Pledge and Security Agreement or to enable the Trustee to exercise and enforce
its rights and remedies hereunder with respect to any Issuer Pledged Collateral. The Equityholder hereby authorizes the Trustee
to file (or cause to be filed) such UCC financing statements or continuation statements, or amendments thereto, and such other
instruments or notices as may be necessary to perfect and preserve the security interests and other rights granted or purported
to be granted to the Trustee hereby in respect of the Issuer Pledged Collateral. With respect to the foregoing and the grant of
the security interest hereunder, the Equityholder hereby authorizes the Trustee to file or cause to be filed one or more financing
or continuation statements, and amendments thereto, relative to all or any part of the Issuer Pledged Collateral. The authorization
set forth in this Section 5.1 shall not relieve the Equityholder of the primary obligation to file any such instruments
as set forth herein.

 

Section 5.2          
  Further Assurances. If the Equityholder fails to perform any agreement contained herein on its part after receipt
of a written request to do so from the Trustee (it being understood that no such request need be given after the occurrence and
during the continuance of an Event of Default), the Trustee may (but shall not be obligated to) itself perform, or cause performance
of, such agreement, in which case the expenses of the Trustee, including the reasonable fees and expenses of its counsel, incurred
in connection therewith shall be payable by the Equityholder under Section 12.1 to the extent the Equityholder would have
otherwise been responsible therefor under this Pledge and Security Agreement.

 

Article
VI

 

COVENANTS

 

Section 6.1           
No Sale and No Liens. The Equityholder agrees that, without the consent of the Trustee pursuant to Section 9.1 or
Section 9.2 of the Indenture, as applicable, it will not, other than in connection with the Restructuring, (a) sell or otherwise
dispose of the Issuer Pledged Collateral or any interest therein or obligation thereunder or (b) except for Permitted Liens, create
or permit to exist any Lien upon or with respect to any of the Issuer Pledged Collateral or any interest therein; provided,
however, that, so long as no Event of Default has occurred and is continuing in respect of which the Equityholder has received
written notice from the Trustee or otherwise has actual knowledge thereof, the Equityholder will be entitled to sell, contribute,
assign, transfer, convey or grant the Issuer Pledged Equity (x) subject to the Lien of this Pledge and Security Agreement and (y)
so long as (i) such Issuer Pledged Equity in the hands of each transferee remains subject to the pledge under this Pledge and Security
Agreement, (ii) the Trustee shall have been provided with an Opinion of Counsel as to the continuing validity of such pledge and
perfection of the security interest of the Trustee therein and a written acknowledgement from the transferee that it is acquiring
such Issuer Pledged Equity subject to such pledge and security interest and making representations and warranties to the effect
set forth in Article IV, (iii) the Trustee shall have been provided with an Opinion of Counsel from a law firm with a nationally
recognized tax practice that such sale, contribution, assignment, transfer, conveyance or granting should not cause a “significant
modification” of the Notes for U.S. federal income tax purposes; provided, however, that, notwithstanding the
foregoing, the Trustee shall not be required to be provided with such an Opinion of Counsel if there has been a change in Applicable
Law and counsel to the Equityholder determines in good faith that it is unable to render such an Opinion of Counsel (whereas it
would have been able to render such an Opinion of Counsel had the change in Applicable Law not occurred), (iv) the transferee agrees
in writing for the benefit of the Trustee to be bound by the provisions of this Pledge and Security Agreement and (v) the transferee
is not subject to U.S. federal withholding tax in respect of the Class C Distributions.

 

    6

     

    

 

Section 6.2           
Notices. The Equityholder shall promptly provide the Trustee with copies of all notices and other communications
received by the Equityholder with respect to any Issuer Pledged Collateral registered in the name of the Equityholder that could
adversely affect in any material respect the validity, perfection or priority of the pledge of the Issuer Pledged Collateral owned
by it pursuant to this Pledge and Security Agreement.

 

Section 6.3           
Voting Rights. So long as the Equityholder is the owner of the Issuer Pledged Collateral, notwithstanding anything
to the contrary in this Pledge and Security Agreement or any other Transaction Document, unless an Event of Default has occurred
and is continuing in respect of which the Equityholder has received written notice from the Trustee or otherwise has actual knowledge
thereof, the Equityholder may exercise any and all voting and consensual powers pertaining to the Issuer Pledged Collateral or
any part thereof for any purpose not inconsistent with this Pledge and Security Agreement or the Indenture. If an Event of Default
has occurred and is continuing in respect of which the Equityholder has received written notice from the Trustee, the Equityholder
shall not be entitled to exercise any of the powers described in the preceding sentence as to the Issuer Pledged Collateral, which
powers shall be exercised exclusively by the Trustee.

 

Section 6.4           
Distributions. So long as no Event of Default has occurred and is continuing in respect of which the Equityholder
has received written notice from the Trustee or otherwise has actual knowledge thereof, the Equityholder may receive and retain
any cash distributions (including wire transfers of immediately available funds or payments by check) on the Issuer Pledged Equity.
If an Event of Default has occurred and is continuing in respect of which the Equityholder has received written notice from the
Trustee or otherwise has actual knowledge thereof, the Equityholder shall not be entitled to receive any subsequent cash distributions
(including wire transfers of immediately available funds or payments by check) on the Issuer Pledged Equity and, unless otherwise
agreed by the Senior Trustee at the Direction of Noteholders holding a majority of the Outstanding Principal Balance of the Senior
Class of Notes, all such subsequent distributions otherwise payable or distributable thereafter in respect of the Equityholder’s
Issuer Pledged Collateral shall constitute Issuer Pledged Collateral. All non-cash dividends and distributions automatically shall
be part of the Issuer Pledged Collateral and shall be promptly delivered to the Trustee.

 

    7

     

    

 

Section 6.5           
Capital Securities. The Equityholder agrees that it will not accept any Capital Securities of the Issuer or any rights
or options to acquire any such Capital Securities, each in addition to or in substitution for the Issuer Pledged Collateral, without
prior written consent from the Trustee pursuant to Section 9.1 or Section 9.2 of the Indenture, as applicable, unless the foregoing
are pledged to the Trustee pursuant hereto.

 

Section 6.6           
Legal Existence. The Equityholder shall preserve and maintain (a) its legal existence as an entity in good standing
under the laws of its jurisdiction and (b) its qualification to do business in every jurisdiction where the ownership of its properties
and the nature of its business require it to be so qualified and where the failure to be so qualified would have a material adverse
effect on the security interest created by this Pledge and Security Agreement in respect of the Issuer Pledged Collateral owned
by it; provided, that the foregoing shall not prohibit the Equityholder from (i) taking any action in connection with the
Restructuring or (ii) entering into any merger, consolidation or amalgamation with, or selling or otherwise transferring all or
substantially all of its assets to, any other Person if the Equityholder is the continuing or surviving entity or if the surviving
or continuing or acquiring entity assumes (either expressly or by operation of law) all of the obligations of the Equityholder
under the Transaction Documents.

 

Section 6.7           
Compliance with Laws. The Equityholder shall comply with all Applicable Laws, and obtain, maintain and comply with
all government approvals as shall now or hereafter be necessary under Applicable Law, in each case in connection with the making
and performance by the Equityholder of any material provision of this Pledge and Security Agreement in respect of the Issuer Pledged
Collateral owned by it.

 

Section 6.8           
Modifications. The Equityholder shall not agree to or permit any amendment, supplement, modification, cancellation
or termination of, or waiver with respect to, any of the provisions of any of the organizational documents of the Issuer if any
such amendment, supplement, modification, cancellation, termination or waiver would result in a material adverse change in respect
of the validity, perfection or priority of the pledge of the Issuer Pledged Collateral owned by it pursuant to this Pledge and
Security Agreement or the exercise of the rights by the Trustee of the rights granted to it hereunder in respect thereof.

 

Section 6.9           
No Liquidation or Dissolution. Without the prior written direction by the Trustee pursuant to Section 9.1 or Section
9.2 of the Indenture, as applicable, the Equityholder shall not take any action to liquidate, dissolve or terminate the Issuer,
or to authorize or cause any such liquidation, dissolution or termination, until all of the Secured Obligations are paid in full.

 

Section 6.10       
  Monies Held in Trust. Subject to Section 6.4, the Equityholder shall hold all monies received by it
that constitute Issuer Pledged Collateral (including any payment or other benefit in breach of this Section 6.10 or Section
6.11) in trust for the Trustee for the benefit of the Noteholders.

 

Section 6.11       
 No Claims. Subject to Section 6.4, the Equityholder shall not claim payment, whether directly or by set-off,
Lien, counterclaim or otherwise, of any amount that may be or has become due to the Equityholder from the Issuer (other than in
accordance with Section 3.6(a) of the Indenture, net proceeds of the issuance of any Subordinated Notes and net proceeds of the
issuance of the Original Notes) until all of the Secured Obligations have been paid in full, other than if any amount received
in respect thereof becomes Issuer Pledged Collateral or is entitled to become Issuer Pledged Collateral or to prevent a claim from
becoming time-barred.

 

    8

     

    

 

Section 6.12       
  Notice to Trustee. Upon any sale, contribution, assignment, transfer, conveyance or granting of any Issuer Pledged
Equity by the Equityholder, the Equityholder shall cause the transferee (and, if any Issuer Pledged Equity is retained by the Equityholder,
the Equityholder) to provide the Trustee with executed signature pages to this Pledge and Security Agreement, which shall set forth
the percentage of limited liability company interests of Issuer Pledged Equity held by the transferee and, if applicable, the Equityholder.
The Equityholder will provide two Business Days prior written notice of the Restructuring to the Trustee.

 

Section 6.13       
  Other Covenants. The Equityholder shall:

 

(a)           
file all tax returns and reports required by Applicable Law to be filed by it and pay all taxes required to be paid by it,
except any such taxes that are being diligently contested in good faith by appropriate proceedings and for which adequate reserves
in accordance with GAAP have been set aside on its books, and it shall not file any tax return or report under any name other than
its exact legal name;

 

(b)          
prior to the Restructuring, maintain, and shall cause the Issuer to maintain, the status of the Issuer as an entity that
is not classified as a corporation or publicly traded partnership taxable as a corporation for U.S. federal income tax purposes;

 

(c)          
cause the Issuer to use commercially reasonable efforts to file any form (or comply with any other administrative formalities)
required for an exemption from or a reduction of any withholding tax for which the Issuer is eligible;

 

(d)          
treat the Notes as indebtedness for U.S. federal income tax purposes;

 

(e)          
maintain in place all policies and procedures, and take and continue to take all actions, subject to the procedures and
policies of the Indenture, relating to the separateness of the Issuer and Theravance Biopharma R&D;

 

(f)           
not take any action to cause the Issuer (except as required by Applicable Law) to become subject to any Voluntary Bankruptcy
or Involuntary Bankruptcy;

 

(g)          
not institute against the Issuer, or join any Person in instituting against the Issuer, any Voluntary Bankruptcy or Involuntary
Bankruptcy until one year and one day after the date on which the Notes have been paid in full;

 

(h)          
not cause the Issuer to petition for a Voluntary Bankruptcy or an Involuntary Bankruptcy before one year and one day have
elapsed since the Notes have been paid in full or, if longer, the applicable preference period then in effect;

 

(i)           
cause the Issuer Pledged Equity to continue to constitute certificated securities under the Delaware Uniform Commercial
Code; and

 

(j)           
not pass a resolution to cause the Issuer to be liquidated before one year and two days have elapsed since the Notes have
been paid in full.

 

    9

     

    

 

Article
VII

 

TRUSTEE APPOINTED ATTORNEY-IN-FACT

 

Section 7.1           
Trustee Appointed Attorney-In-Fact. The Equityholder hereby appoints the Trustee, or any Person (including any officer
or agent) whom the Trustee may designate, as the Equityholder’s true and lawful attorney-in-fact, with full irrevocable power
and authority in the place and stead of the Equityholder and in the name of the Equityholder or in its own name, at the Equityholder’s
cost and expense, from time to time in the Trustee’s reasonable discretion to take any action and to execute any instrument
that the Trustee may reasonably deem necessary or advisable to enforce its rights under this Pledge and Security Agreement, including
authority to receive, endorse and collect all instruments made payable to the Equityholder representing any distribution, interest
payment or other payment in respect of the Issuer Pledged Collateral or any part thereof and to give full discharge for the same
and to sign, complete and deliver all transfers, proxies and letters of resignation; provided, however, that such
attorney-in-fact of the Equityholder shall not be a Restricted Party and the Trustee shall not exercise its powers under this Section
7.1 unless an Event of Default has occurred and is continuing and unless so instructed by the Noteholders pursuant to and in
accordance with the Indenture; provided, further, that if there is more than one Equityholder, the Trustee will enforce
its rights and exercise its remedies against all Equityholders ratably and shall not enforce its rights or exercise its remedies
against one Equityholder without similarly enforcing its rights and exercising its remedies against all Equityholders in the same
manner.

 

Article
VIII

 

REASONABLE CARE

 

Section 8.1          
Reasonable Care. The Trustee shall be deemed to have exercised reasonable care in the custody and preservation of
the Issuer Pledged Collateral in its possession if the Issuer Pledged Collateral is accorded treatment substantially equivalent
to that which the Trustee accords its own property of the type of which the Issuer Pledged Collateral consists, it being understood
that the Trustee shall have no responsibility for (a) ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relative to any Issuer Pledged Collateral, whether or not the Trustee has or is deemed to
have knowledge of such matters, or (b) taking any necessary steps to preserve rights against any parties with respect to any Issuer
Pledged Collateral absent its gross negligence or willful misconduct.

 

Article
IX

 

NO LIABILITY

 

Section 9.1           
No Liability. Neither the Trustee nor any of its directors, officers, employees or agents shall be deemed to have
assumed any of the liabilities or obligations of the Equityholder as a result of the pledge and security interest granted under
or pursuant to this Pledge and Security Agreement. In the absence of gross negligence or willful misconduct, the Trustee or any
of its directors, officers, employees or agents shall not be liable for any failure to collect or realize upon the Secured Obligations
or any collateral security or guarantee therefor, or any part thereof, or for any delay in so doing nor shall it be under any obligation
to take any action whatsoever with regard thereto.

 

    10

     

    

 

Article
X

 

REMEDIES UPON EVENT OF DEFAULT

 

Section 10.1         
Remedies Upon Event of Default. Subject to Section 4.3 of the Indenture and to the extent permitted by Applicable
Law, if an Event of Default shall have occurred and be continuing and the Trustee shall have given written notice of such Event
of Default to the Equityholder:

 

(a)          
The Trustee may exercise the power of attorney described in Section 7.1 with respect to any of the certificates or
other instruments delivered pursuant to Section 3.1 with respect to the Issuer Pledged Collateral and may sign, complete
and deliver all transfers, proxies and letters of resignation and do all acts and things that the Trustee may in its absolute discretion
specify to enable or assist the Trustee to perfect or improve its security over the Capital Securities, to vest ownership of the
Capital Securities in the Trustee or its nominee, to provide that the Trustee is registered as the holder of the Capital Securities,
to exercise any rights or powers attaching to the Capital Securities, to sell the Capital Securities or otherwise to enforce any
of the rights of the Trustee under this Pledge and Security Agreement.

 

(b)          
The Trustee may exercise in respect of the Issuer Pledged Collateral, in addition to other rights and remedies provided
for herein or otherwise available to it, all the rights and remedies of a secured party on default under the UCC, to the extent
permitted by Applicable Law or the UCC as then in effect in any applicable jurisdiction, and the Trustee may also in its sole discretion,
without notice except as specified below or except as required by mandatory provisions of the UCC and other Applicable Law, sell,
subject to Section 11.1, the Issuer Pledged Collateral or any part thereof in one or more parcels at public or private sale
or at any of the Trustee’s offices or elsewhere, for cash, on credit or for future delivery, and at such price or prices
and upon such other terms as the Trustee may deem commercially reasonable, irrespective of the impact of any such sales on the
market price of the Issuer Pledged Collateral at any such sale. Each purchaser at any such sale shall hold the property, sold absolutely,
free from any claim or right on the part of the Equityholder, and the Equityholder hereby waives (to the extent permitted by Applicable
Law) all rights of redemption, stay and/or appraisal that it now has or may at any time in the future have under any Applicable
Law now existing or hereafter enacted. The Equityholder agrees that, to the extent notice of sale shall be required by Applicable
Law, at least ten days’ notice to the Equityholder of the time and place of any public sale or the time after which any private
sale is to be made shall constitute reasonable notification. The Trustee shall not be obligated to make any sale of Issuer Pledged
Collateral regardless of notice of sale having been given. The Trustee may adjourn any public or private sale from time to time
by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place
to which it was so adjourned. The Trustee shall incur no liability as a result of the sale of the Issuer Pledged Collateral, or
any part thereof, at any public or private sale, absent gross negligence or willful misconduct.

 

    11

     

    

 

(c)          
The Equityholder recognizes that the Trustee may elect in its sole discretion to sell all or a part of the Issuer Pledged
Collateral to one or more purchasers in privately negotiated transactions in which the purchasers will be obligated to agree, among
other things, to acquire the Issuer Pledged Collateral for their own account, for investment and not with a view to the distribution
or resale thereof. The Equityholder acknowledges that any such private sales may be at prices and on terms less favorable than
those obtainable through a public sale (including a public offering made pursuant to a registration statement under the Securities
Act), and the Equityholder and the Trustee agree that such private sales shall be deemed to have been made in a commercially reasonable
manner and that the Trustee has no obligation to engage in public sales or to delay sale of any Issuer Pledged Collateral to permit
the Issuer to register the Issuer Pledged Collateral for a form of public sale thereof requiring registration under the Securities
Act.

 

(d)          
Any cash held by the Trustee as Issuer Pledged Collateral and all cash proceeds received by the Trustee in respect of any
sale of, collection from or other realization upon all or any part of the Issuer Pledged Collateral shall, as soon as reasonably
practicable, be applied (after payment of any amounts payable to the Trustee pursuant to Section 12.1) by the Trustee first,
to the payment of the costs and expenses of such sale, collection or other realization, if any, including reasonable out-of-pocket
costs and expenses of the Trustee (including the reasonable fees and out-of-pocket expenses of its counsel), and all reasonable
expenses, liabilities and advances made or incurred by the Trustee in connection therewith, second, to the payment of the
Secured Obligations in accordance with the terms of the Indenture (including Section 4.14 thereof) and third, to the Equityholder
or its successors or assigns in respect of its respective Issuer Pledged Collateral as indicated on the signature page hereto (or
pursuant to Section 6.12) and in respect to its respective portion of the proceeds from any sale of, collection from or
other realization upon all or any part of the Issuer Pledged Collateral.

 

(e)          
The Equityholder agrees that:

 

(i)            
in any sale of any of the Issuer Pledged Collateral, whenever an Event of Default shall have occurred and be continuing,
the Trustee is hereby authorized to comply with any limitation or restriction in connection with such sale as it may be advised
by counsel is necessary in order to:

 

(A)            
 avoid any violation of Applicable Law (including compliance with such procedures as may restrict the number of prospective
bidders and purchasers, require that such prospective bidders and purchasers have certain qualifications and restrict such prospective
bidders and purchasers to Persons who will represent and agree that they are purchasing for their own account for investment and
not with a view to the distribution or resale of such Issuer Pledged Collateral); or

 

(B)              
obtain any required approval of the sale or of the purchaser by any Governmental Authority or official; and

 

    12

     

    

 

(ii)         
such compliance shall not result in such sale being considered or deemed not to have been made in a commercially reasonable
manner, nor shall the Trustee be liable or accountable to the Equityholder for any discount allowed by the reason of the fact that
such Issuer Pledged Collateral is sold in compliance with any such limitation or restriction.

 

Article
XI

 

PURCHASE OF THE ISSUER PLEDGED COLLATERAL

 

Section 11.1        
Purchase of the Issuer Pledged Collateral. In connection with the potential foreclosure or sale of any Issuer Pledged
Collateral upon the occurrence and continuation of an Event of Default, the Equityholder shall have the right, but not the obligation,
to match any offer to purchase all or any portion of such Issuer Pledged Collateral from a third party. In the event that the Equityholder
does not offer to purchase any Issuer Pledged Collateral within 10 Business Days of such offer, the Trustee may sell any remaining
Issuer Pledged Collateral to third parties; provided, that such third parties shall have first executed a confidentiality
agreement in the form of the Confidentiality Agreement and delivered such confidentiality agreement to the Trustee, the Issuer
and the Equityholder. Subject to the preceding sentence, the Equityholder may, but shall not be required to, bid on and be a purchaser
of the Issuer Pledged Collateral or any part thereof or any right or interest therein at any sale thereof, whether pursuant to
foreclosure, power of sale or otherwise. In connection with any such sale of any Issuer Pledged Collateral by the Trustee pursuant
to this Section 11.1, the Trustee shall apply the purchase price to the payment of the Secured Obligations secured hereby
in accordance with Sections 10.1(d) and 12.1 of this Pledge and Security Agreement and in accordance with Section
4.14 of the Indenture. Any purchaser of all or any part of the Issuer Pledged Collateral shall, upon any such purchase, acquire
good title to the Issuer Pledged Collateral so purchased, free of the security interests created by this Pledge and Security Agreement.

 

Article
XII

 

EXPENSES

 

Section 12.1        
Expenses. The Equityholder will upon demand pay to the Trustee the amount of any and all reasonable expenses, including
the reasonable fees and expenses of its counsel and of any experts and the Trustee, and any transfer Taxes, in each case payable
upon sale of the Issuer Pledged Collateral, which the Trustee may incur solely in connection with (a) the custody or preservation
of, or the sale of, collection from or other realization upon, any of the Issuer Pledged Collateral, (b) the exercise or enforcement
of any of the rights of the Trustee hereunder against the Equityholder or the Issuer Pledged Collateral, (c) the failure by the
Equityholder to perform or observe any of the provisions hereof or (d) the administration of this Pledge and Security Agreement
in respect of the Equityholder. Any amount payable by the Equityholder pursuant to this Section 12.1 shall constitute Secured
Obligations secured hereby; provided, however, if there is more than one Equityholder, in no event shall the Issuer
Pledged Collateral of one Equityholder be used to satisfy the failure by another Equityholder to make any such payment.

 

    13

     

    

 

Article
XIII

 

NO WAIVER; REMEDIES

 

Section 13.1        
No Waiver; Remedies. No failure or delay on the part of the Trustee to exercise, and no course of dealing with respect
to, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise by the Trustee of any right, power or remedy preclude any additional exercise by the Trustee of such right, power
or remedy. The remedies herein provided are to the fullest extent permitted by Applicable Law cumulative and are not exclusive
of any remedies provided by Applicable Law. No notice to or demand on the Equityholder in any case shall entitle the Equityholder
to any other or further notice or demand in similar or other circumstances.

 

Article
XIV

 

AMENDMENTS

 

Section 14.1         
Amendments.

 

(a)          
No waiver, amendment, modification or termination of any provision of this Pledge and Security Agreement, or consent to
any departure by the Equityholder therefrom, shall in any event be effective without the written concurrence of the Trustee pursuant
to Section 9.1 or Section 9.2 of the Indenture, as applicable, and (except as otherwise provided in Section 15.1) none of
the Issuer Pledged Collateral shall be released without the written consent of the Trustee pursuant to Section 9.1 or Section 9.2
of the Indenture, as applicable. Any such waiver or consent shall be effective only in the specific instance and for the specific
purpose for which given.

 

(b)         
As long as Theravance Biopharma R&D (or its successors) is the holder of any Capital Securities of the Issuer, no amendment,
modification or termination of any provision of this Pledge and Security Agreement shall be effective without the written concurrence
of Theravance Biopharma R&D (or its successors).

 

Article
XV

 

RELEASE; TERMINATION

 

Section 15.1         
Release; Termination. Upon payment and performance in full of the Secured Obligations or discharge of the Indenture
pursuant to Section 11.1 of the Indenture, this Pledge and Security Agreement shall terminate automatically, and the Trustee (a)
upon written request by the Equityholder shall promptly deliver to the Equityholder any remaining Issuer Pledged Collateral and
money received in respect thereof in its possession, and all documents, agreements or instruments representing the Issuer Pledged
Collateral held by the Trustee prior to such termination, and (b) upon written request by the Equityholder, shall promptly execute
and deliver to the Equityholder and, if necessary, file or record, at the Equityholder’s expense, all such documentation
(including UCC termination statements) necessary to release, and evidence the release of, the Liens on the Issuer Pledged Collateral,
such documentation to be prepared by the Equityholder and delivered to the Trustee. If the Trustee fails to promptly deliver or
file or record the UCC termination statements referred to in, and in accordance with, clause (b) in the preceding sentence, then
the Equityholder may file or record such UCC termination statements.

 

    14

     

    

 

Article
XVI

 

NOTICES

 

Section 16.1         
Notices. All Notices shall be in writing and shall be effective (a) upon receipt when sent through the mails, registered
or certified mail, return receipt requested, postage prepaid, with such receipt to be effective the date of delivery indicated
on the return receipt, (b) upon receipt when sent by an overnight courier, (c) on the date personally delivered to an authorized
officer of the party to which sent, (d) on the date transmitted by facsimile transmission with a confirmation of receipt or (e)
in the case of any report that is of a routine nature, on the date sent by first class mail or overnight courier or transmitted
by facsimile transmission, in all cases, with a copy emailed to the recipient at the applicable address, addressed to the Equityholder
as set forth under the Equityholder’s signature hereto and to the Trustee in accordance with Section 12.5 of the Indenture.
Each party hereto may, by notice given in accordance herewith to each other party hereto, designate any further or different address
to which subsequent Notices shall be sent.

 

Article
XVII

 

CONTINUING SECURITY INTEREST

 

Section 17.1         
Continuing Security Interest. Subject to the provisions of Section 6.1, this Pledge and Security Agreement
shall create a continuing Lien in the Issuer Pledged Collateral and remain in full force and effect until the release thereof pursuant
to Section 15.1 or the sale thereof pursuant to Section 11.1, shall be binding upon the Equityholder and its respective
successors, transferees and assigns and shall inure to the benefit of and be enforceable by the Trustee and its successors, transferees
and assigns; provided, however, that the Equityholder may not (unless otherwise permitted hereunder, including, for
the avoidance of doubt, any assignment to any affiliate of Theravance Biopharma R&D in connection with a Restructuring) assign
any of its obligations hereunder without the prior written consent of the Noteholders or the Trustee pursuant to the Indenture.
The Trustee and the Noteholders may assign or otherwise transfer any indebtedness held by any of them secured by this Pledge and
Security Agreement to any other Person in accordance with the Indenture, and such other Person shall thereupon become vested with
all the benefits in respect thereof granted to the Trustee herein or otherwise.

 

Article
XVIII

 

SECURITY INTEREST ABSOLUTE

 

Section 18.1       
Security Interest Absolute. All rights of the Trustee and security interests hereunder, and all obligations of the
Equityholder hereunder, shall be absolute and unconditional irrespective of, and the Equityholder hereby irrevocably waives vis-à-vis
the Trustee any defenses it may now have or may hereafter acquire in any way relating to, any or all of the following:

 

    15

     

    

 

(a)          
any lack of validity or enforceability of any of the Transaction Documents or any other agreement or instrument relating
thereto (other than against the Trustee);

 

(b)          
any change in the time, manner or place of payment of, or in any other term of, all or any of the Secured Obligations, or
any other amendment or waiver of or any consent to any departure from the Transaction Documents or any other agreement or instrument
relating thereto, including any increase in the Secured Obligations resulting from the extension of additional credit;

 

(c)          
any taking, exchange, surrender, release or non-perfection of any Issuer Pledged Collateral or any other collateral securing
the Secured Obligations, or any release or amendment or waiver of or consent to any departure from any guaranty, for all or any
of the Secured Obligations;

 

(d)          
any manner of application of any other collateral, or proceeds thereof, to all or any of the Secured Obligations, or any
manner of sale or other disposition of any other collateral securing all or any of the Secured Obligations or any other obligations
of the Issuer under or in respect of the Transaction Documents or of any other assets of the Issuer;

 

(e)          
any change, restructuring or termination of the limited liability company structure or existence of the Issuer, including
as a result of the Restructuring;

 

(f)           
the release or reduction of liability of any guarantor or surety with respect to the Secured Obligations; or

 

(g)          
any other circumstance (including any statute of limitations) or any existence of or reliance on any representation to the
Trustee that might otherwise constitute a defense available to, or a discharge of, the obligations of the Equityholder.

 

Section 18.2        
Obligations of Equityholders Several and Not Joint. Notwithstanding any other provision of this Pledge and Security
Agreement, if there is more than one Equityholder, references to the Equityholder herein shall apply to each Equityholder mutatis
mutandis and the obligations of each Equityholder hereunder shall be several and not joint and in no event shall the Issuer
Pledged Collateral of one Equityholder be used to satisfy the failure by any other Equityholder to perform any obligation hereunder.

 

Article
XIX

 

INDEMNITY

 

Section 19.1        
Indemnity. The Equityholder agrees to indemnify, reimburse, defend and save and hold the Trustee and its officers,
directors, employees, trustees, agents, advisors and affiliates (each, an “Indemnitee” and, collectively, the
 “Indemnitees”) harmless from and against, and shall pay on demand, any and all Losses of whatsoever kind and
nature imposed on, asserted against or incurred by any of the Indemnitees solely (a) in connection with the custody or preservation
of, or the sale of, collection from or other realization upon, any of the Issuer Pledged Collateral pursuant to the exercise or
enforcement of any of the rights of the Trustee hereunder, (b) in connection with the failure by the Equityholder to perform or
observe any of the provisions hereof to be performed by it or (c) arising out of or in connection with or resulting from this Pledge
and Security Agreement and the transactions contemplated hereby in respect of the Equityholder, excluding those arising out of
the gross negligence or willful misconduct of any Indemnitee. Each Indemnitee agrees to use its best efforts to promptly notify
the indemnitor(s) of any assertion of any such liability, damage, injury, penalty, claim, demand, action, judgment or suit of which
such Indemnitee has knowledge.

 

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The obligations of
the Equityholder in this Section 19.1 shall survive the termination of this Pledge and Security Agreement.

 

The Trustee shall be
entitled to all of the protections, immunities, indemnities, rights and privileges of the Trustee set forth in the Indenture, whether
or not expressly stated herein.

 

Article
XX

 

OBLIGATIONS SECURED BY ISSUER PLEDGED COLLATERAL

 

Section 20.1         
Obligations Secured by Issuer Pledged Collateral. Any amounts paid by any Indemnitee as to which such Indemnitee
has the right to indemnification, and any amounts paid by the Trustee in preservation of any of its rights or interest in the Issuer
Pledged Collateral, shall constitute Secured Obligations secured by the Issuer Pledged Collateral.

 

Article
XXI

 

SEVERABILITY

 

Section 21.1         
Severability. Any provision of this Pledge and Security Agreement that is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without, to the extent permitted
by Applicable Law, invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction
shall not, to the extent permitted by Applicable Law, invalidate or render unenforceable such provision in any other jurisdiction.
Where provisions of any Applicable Law resulting in such prohibition or unenforceability may be waived, they are hereby waived
by the parties hereto to the full extent permitted by Applicable Law so that this Pledge and Security Agreement shall be deemed
a valid, binding agreement in accordance with its terms, to the extent permitted by Applicable Law.

 

Article
XXII

 

COUNTERPARTS; EFFECTIVENESS

 

Section 22.1         
Counterparts; Effectiveness. This Pledge and Security Agreement and any amendments, waivers, consents or supplements
may be executed in counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument. This Pledge and Security Agreement shall become effective upon the execution
and delivery of a counterpart hereof by each of the original parties hereto and, with respect to any Person becoming a party hereto
after the date hereof, upon the execution and delivery hereof by such Person. Any counterpart may be executed by facsimile or other
electronic transmission, and such facsimile or other electronic transmission shall be deemed an original.

 

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Article
XXIII

 

REINSTATEMENT

 

Section 23.1         
Reinstatement. This Pledge and Security Agreement shall continue to be effective or be reinstated, as the case may
be, with respect to the Equityholder if at any time any amount received by the Trustee hereunder or pursuant hereto is rescinded
or must otherwise be restored or returned by the Trustee, as the case may be, upon the insolvency, bankruptcy, dissolution, liquidation
or reorganization of the Equityholder or upon the appointment of any intervenor or conservator of, or trustee or similar official
for, the Equityholder or any substantial part of its assets, or upon the entry of an order by a bankruptcy court avoiding the payment
of such amount, or otherwise, all as though such payments had not been made.

 

Article
XXIV

 

SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL; SERVICE OF PROCESS

 

Section 24.1         
SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL; SERVICE OF PROCESS.

 

(a)         
ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS PLEDGE AND SECURITY AGREEMENT OR ANY DOCUMENT RELATED HERETO MAY BE
BROUGHT IN THE COURTS OF THE STATE OF NEW YORK LOCATED IN THE BOROUGH OF MANHATTAN, THE CITY OF NEW YORK OR OF THE UNITED STATES
FOR THE SOUTHERN DISTRICT OF NEW YORK, AND THE EQUITYHOLDER HEREBY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS RESPECTIVE PROPERTY,
GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS. THE EQUITYHOLDER AND THE TRUSTEE HEREBY
IRREVOCABLY WAIVE TRIAL BY JURY, AND THE EQUITYHOLDER HEREBY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING
OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION
OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS.

 

(b)         
THE EQUITYHOLDER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR
PROCEEDING BY THE SENDING OF COPIES THEREOF BY FEDERAL EXPRESS OR OTHER OVERNIGHT COURIER COMPANY, TO THE EQUITYHOLDER AT ITS ADDRESS
SPECIFIED BY Section 16.1, SUCH SERVICE TO BECOME EFFECTIVE UPON DELIVERY
THEREOF TO THE EQUITYHOLDER.

 

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(c)          
NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE TRUSTEE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE
LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE EQUITYHOLDER IN ANY OTHER JURISDICTION.

 

Article
XXV

 

GOVERNING LAW

 

Section 25.1      
GOVERNING LAW. THIS PLEDGE AND SECURITY AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL
SUBSTANTIVE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO THE RULES THEREOF RELATING TO CONFLICTS OF LAW OTHER THAN SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS, EXCEPT TO THE EXTENT THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER,
OR THE REMEDIES HEREUNDER, ARE GOVERNED BY THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK.

 

Article
XXVI

 

TABLE OF CONTENTS AND HEADINGS

 

Section 26.1        
Table of Contents and Headings. The Table of Contents and headings of the Articles and Sections of this Pledge and
Security Agreement have been inserted for convenience of reference only, are not to be considered a part hereof and shall in no
way modify or restrict any of the terms or provisions hereof.

 

Article
XXVII

 

CONVERSION OF CURRENCY; WAIVER OF IMMUNITY

 

Section 27.1        
Currency Conversion. If, for the purpose of obtaining a judgment or order in any court, it is necessary to convert
a sum due hereunder from Dollars into another currency, the Equityholder has agreed, to the fullest extent that it may effectively
do so, that the rate of exchange used shall be that at which, in accordance with normal banking procedures, the Trustee could purchase
Dollars with such other currency in the Borough of Manhattan, The City of New York on the Business Day preceding the day on which
final judgment is given.

 

    19

     

    

 

Section 27.2       
Judgment Currency. The obligation of the Equityholder in respect of any sum payable by it to the Trustee hereunder
shall, notwithstanding any judgment or order in a Judgment Currency, be discharged only to the extent that, on the Business Day
following receipt by the Trustee of any sum adjudged to be so due in the Judgment Currency, the Trustee may in accordance with
normal banking procedures purchase Dollars with the Judgment Currency. If the amount of Dollars so purchased is less than the sum
originally due to the Trustee in the Judgment Currency (determined in the manner set forth in Section 27.1), the Equityholder agrees,
as a separate obligation and notwithstanding any such judgment, to indemnify the Trustee against such loss, and, if the amount
of the Dollars so purchased exceeds the sum originally due to the Trustee, the Trustee shall remit to the Equityholder such excess,
provided that the Trustee shall have no obligation to remit any such excess as long as the Equityholder shall have failed to pay
the Trustee any obligations due and payable to the Trustee hereunder, in which case such excess may be applied to such obligations
of the Equityholder in accordance with the terms hereof. The foregoing indemnity shall constitute a separate and independent obligation
of the Equityholder and shall continue in full force and effect notwithstanding any such judgment or order as aforesaid.

 

Section 27.3        
Waiver of Immunity. To the extent that the Equityholder may in any jurisdiction claim for itself or its assets immunity
(to the extent such immunity may now or hereafter exist, whether on the grounds of sovereign immunity or otherwise) from suit,
execution, attachment (whether in aid of execution, before judgment or otherwise) or other legal process (whether through service
or notice or otherwise), and to the extent that in any such jurisdiction there may be attributed to itself or its assets such immunity
(whether or not claimed), the Equityholder irrevocably agrees with respect to any matter arising under this Pledge and Security
Agreement for the benefit of the Trustee not to claim, and irrevocably waives, such immunity to the full extent permitted by the
laws of such jurisdiction.

 

[SIGNATURE PAGES FOLLOW]

 

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

 

	 	U.S. BANK NATIONAL ASSOCIATION,
	 	not in its individual capacity but solely as
	 	Trustee
	 	 
	 	By:	/s/ Alison D.B. Nadeau
	 	 	Name:	Alison D.B. Nadeau
	 	 	Title:	Vice President

 

 

TRIPLE
ROYALTY SUB II LLC

Pledge and Security Agreement

 

    

     

    

  

	 	THERAVANCE BIOPHARMA R&D, INC.
	 	 	 
	 	By:	/s/ Brett A. Grimaud
	 	 	Name:	Brett A. Grimaud 
	 	 	Title:	Assistant Secretary, Vice President and
	 	 	 	Assistant General Counsel
	 	 	 	 
	 	 
	Percentage of membership interests of Issuer

Pledged Equity as of the date hereof: 100%

	 	 
	 	 	Notice Information pursuant to Section 16.1:
	 	 	Theravance Biopharma R&D, Inc.
	 	 	c/o Theravance Biopharma US, Inc.
	 	 	901 Gateway Boulevard
	 	 	South San Francisco, CA 94080
	 	 	Attention:	Brett A. Grimaud, Assistant
	 	 	 	Secretary, Vice President and
	 	 	 	Assistant General Counsel
	 	 	Facsimile:	(650) 808-6095
	 	 	Email:	BGrimaud@theravance.com

 

TRIPLE
ROYALTY SUB II LLC

Pledge and Security Agreement

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