EXHIBIT 4.5
PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of June 18, 1997, made by the undersigned
DynaGen, Inc., a Delaware corporation with its principal office at 00 Xxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000 (the "Borrower"), in favor of Xxxx X.
Xxxxxxxxxxx ("Xxxxxxxxxxx"), Xxxxxx Xxxxx ("Xxxxx") and Xxxxxx Xxxxxxx
("Canning") (individually a "Lender" and collectively the "Lenders").
RECITALS
WHEREAS, pursuant to the terms of that certain Agreement and Plan of
Merger by and among the Borrower, DynaGen Acquisition Corp., Superior
Pharmaceutical Company ("Superior") and the Lenders dated March 7, 1997, as
amended (the "Merger Agreement"), the Borrower has agreed to issue secured
promissory notes in the aggregate principal amount of $5,000,000 (individually a
"Note" and collectively the "Notes") to the Lenders, such notes to be secured by
a pledge of the Pledged Securities (as hereinafter defined) ;
WHEREAS, the Borrower is the legal and beneficial owner of the Pledged
Securities.
NOW, THEREFORE, in consideration of the premises, the Borrower hereby
agrees with the Lenders as follows:
1. Defined Terms. Unless otherwise defined herein, terms that are
defined in the Notes and used herein are so used as so defined, and the
following terms shall have the following meanings:
"Code" means the Uniform Commercial Code from time to time in effect in
the Commonwealth of Massachusetts.
"Collateral" means the Pledged Securities and all Proceeds.
"Event of Default" means an Event of Default as defined in Section 3 of
the Notes.
"Obligations" means the unpaid principal of and interest on the Notes
and all other obligations and liabilities of the Borrower to the Lenders,
whether direct or indirect, absolute or contingent, due or to become due, or now
existing or hereafter incurred, which may arise under, out of, or in connection
with the Notes or this Pledge Agreement and any other document made, delivered
or given in connection therewith or herewith, whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs, expenses
(including, without limitation, all reasonable fees and disbursements of counsel
to the Lenders) or otherwise.
"Pledge Agreement" means this Pledge Agreement, as amended,
supplemented or otherwise modified from time to time.
"Pledged Securities" means the shares of capital stock and other
securities listed on Schedule I hereto, together with all stock certificates,
instruments, options or rights of any nature whatsoever that may be issued or
granted to the Borrower in respect of the Pledged Securities, while this Pledge
Agreement is in effect.
Pledge Agreement -- Page 2
"Proceeds" means all "proceeds" as such term is defined in Section
9-306(1) of the Code and, in any event, shall include, without limitation, all
dividends or other income from the Pledged Securities, collections thereon or
distributions with respect thereto.
2. Pledge; Grant of Security Interest. The Borrower hereby delivers to
the Lenders all the Pledged Securities and hereby grants to the Lenders a first
security interest in the Collateral, as collateral security for the prompt and
complete payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of the Obligations. The Lenders shall deposit 72, 86
and 42 of the Pledged Securities with Hagerstrand, Xxxxx and Canning,
respectively, c/o Superior Pharmaceutical Company, 0000 Xxxxxx Xxxxxx Xxxxx,
Xxxxxxxxxx, XX 00000. The Borrower and Lenders acknowledge that the Lenders are
also holding the collateral for the benefit of Sirrom Capital Corporation
("Sirrom") and Odyssey Investment Partners, L.P. ("Odyssey") in accordance with
that certain Subordination Agreement of even date herewith by and among Sirrom
(as collateral agent), the Lenders, the Borrower and Superior.
3. Stock Powers. Concurrently with the delivery to the Lenders of each
certificate or instrument representing the Pledged Securities, the Borrower
shall deliver an undated stock power or other transfer document covering such
certificate or instrument, duly executed in blank.
4. Representations and Warranties. The Borrower represents and warrants
to the Lenders that:
(a) the Borrower is the record and beneficial owner of, and
has good and marketable title to, the Pledged Securities listed on Schedule I,
free of any and all security interests, liens or options in favor of, or claims
of, any other person or entity; and
(b) upon delivery to the Lenders of the certificates and
instruments evidencing the Pledged Securities, the lien granted pursuant to this
Pledge Agreement will constitute a valid, perfected first priority lien on the
Pledged Securities enforceable as such against all creditors of the Borrower and
any person or entities purporting to purchase any Collateral from the Borrower.
5. Covenants. The Borrower covenants and agrees with the Lenders that,
from and after the date of this Pledge Agreement until the Obligations are paid
in full:
(a) If the Borrower shall, as a result of its ownership of the
Pledged Securities, become entitled to receive or shall receive any stock
certificate or other certificate or instrument (including, without limitation,
any certificate representing a stock dividend or a distribution in connection
with any reclassification, increase or reduction of capital or any certificate
or instrument issued in connection with any reorganization), option or rights,
whether in addition to, in substitution of, as a conversion of, or in exchange
for any of the Pledged Securities or otherwise in respect thereof, the Borrower
shall accept the same as the Lenders' agent, hold the same in trust for the
Lenders and deliver the same forthwith to the Lenders in the exact form
received, together with an undated stock power or other transfer document
covering such certificate or instrument duly executed in blank to be held by the
Lenders hereunder as additional collateral security for the Obligations. Any
sums paid upon or in respect of the Pledged Securities upon the liquidation or
dissolution of the issuer thereof shall be paid over to the Lenders as
additional collateral security hereunder for the Obligations, and in case any
distribution of capital shall be made on or in respect of the Pledged Securities
or any property shall be distributed upon or with respect to the Pledged
Securities pursuant to the recapitalization or reclassification of the capital
of the issuer thereof or pursuant to the reorganization thereof, the property so
distributed shall be delivered to the Lenders, subject to the terms hereof, as
additional collateral security for the Obligations. If any sums of money or
Pledge Agreement -- Page 3
property so paid or distributed in respect of the Pledged Securities shall be
received by the Borrower, the Borrower shall, until such money or property is
paid or delivered to the Lenders, hold such money or property in trust for the
Lenders, segregated from other funds of the Borrower, as additional collateral
security for the Obligations.
(b) Without the prior written consent of the Lenders holding a
majority of the outstanding principal amount under the Notes, the Borrower shall
not (i) sell, assign, transfer, exchange or otherwise dispose of, or grant any
option with respect to, the Collateral, or (ii) create, incur or permit to exist
any lien or option in favor of, or any claim of any person or entity with
respect to, any of the Collateral, or any interest therein. The Borrower will
defend the right, title and interest of the Lenders in and to the Collateral
against the claims and demands of all persons and entities. The Lenders
acknowledge and agree that the Borrower has granted a second security interest
to Sirrom and Odyssey pursuant to the Pledge and Security Agreement of even date
herewith by and among Sirrom (as collateral agent for itself and Odyssey), the
Borrower and Superior.
(c) At any time and from time to time, upon the written
request of the Lenders holding a majority of the outstanding principal amount
under the Notes, and at the sole expense of the Borrower, the Borrower shall
promptly and duly execute and deliver such further instruments and documents and
take such further actions as such Lenders may reasonably request for the
purposes of obtaining or preserving the full benefits of this Pledge Agreement
and of the rights and powers herein granted. If any amount payable under or in
connection with any of the Collateral shall be or become evidenced by any
promissory note, other instrument or chattel paper, such note, instrument or
chattel paper shall be promptly delivered to the Lenders, duly endorsed in a
manner satisfactory to the Lenders holding a majority of principal amount under
the Notes, to be held as Collateral pursuant to this Pledge Agreement.
(d) The Borrower agrees to pay, and to save the Lenders
harmless from, any and all liabilities with respect to, or resulting from any
delay in paying any and all stamp, excise, sales or other taxes (exclusive of
taxes based on income, gross receipts, franchise rights and related items) that
may be payable or determined to be payable with respect to any of the Collateral
or in connection with any of the transactions contemplated by this Pledge
Agreement.
6. Cash Dividends; Voting Rights. Notwithstanding the provisions of
Section 5(a) hereof, unless an Event of Default shall have occurred, the
Borrower shall be permitted to receive all cash dividends and other cash
distributions paid by the issuer of any of the Pledged Securities in respect of
the Pledged Securities and to exercise all voting and corporate rights with
respect to the Pledged Securities.
7. Rights of the Lenders. (a) If an Event of Default occurs and is
continuing: (i) each Lender shall have the right to receive his pro rata share
of any and all cash dividends paid in respect of the Pledged Securities and make
application thereof to the Obligations in such order as he may determine, and
(ii) each Lender's pro rata share of the Pledged Securities shall be registered
in the name of such Lender or his nominee, and each Lender or his nominee may
thereafter exercise (A) all voting, corporate, and other rights pertaining to
such Pledged Securities at any meeting or otherwise and (B) any and all rights
of conversion, exchange, subscription and any other rights, privileges or
options pertaining to such Pledged Securities as if he were the absolute owner
thereof (including, without limitation, the right to exchange at his discretion
any and all of such Pledged Securities upon the merger, consolidation,
reorganization, recapitalization or other fundamental change in the corporate or
partnership structure of the issuer thereof or upon the exercise by the Borrower
or such Lender of any right, privilege or option pertaining to such Pledged
Securities and in connection therewith, the right to deposit and deliver any and
all of such Pledged Securities with any committee, depository, transfer agent,
registrar or other designated agency upon such terms and conditions
Pledge Agreement -- Page 4
as he may determine), all without liability except to account for property
actually received by him, but the Lenders shall have no duty to exercise any
such right, privilege or option and shall not be responsible for any failure to
do so or delay in so doing.
(b) The rights of the Lenders hereunder shall not be
conditioned or contingent upon the pursuit by the Lenders or any of them of any
right or remedy against the Borrower or against any other person or entity that
may be or become liable in respect of all or any part of the Obligations or
against any other collateral security therefor, guarantee thereof or right of
offset with respect thereto. The Lenders shall not be liable for any failure to
demand, collect or realize upon all or any part of the Collateral or for any
delay in doing so, nor shall they or any of them be under any obligation to sell
or otherwise dispose of any Collateral upon the request of the Borrower or any
other person or entity or to take any other action whatsoever with regard to the
Collateral or any part thereof.
(c) It is expressly acknowledged and agreed by the parties
hereto that the exercise of Buyer's rights contained in Article X of the Merger
Agreement is not an Event of Default under the Notes; provided, however, that
any right of indemnification shall not be exercised until the final resolution
or settlement of any claim pursuant to Section 10.6 of the Merger Agreement.
8. Remedies. If an Event of Default occurs and is continuing, each
Lender may exercise, in addition to all other rights and remedies granted in
this Pledge Agreement and in any other instrument or agreement securing,
evidencing or relating to the Obligations, all rights and remedies of a secured
party under the Code. Without limiting the generality of the foregoing, each
Lender, without demand of performance or other demand, presentment, protest,
advertisement or notice of any kind (except any notice required by law referred
to below) to or upon the Borrower, any guarantor or any other person or entity
(all and each of which demands, defenses, advertisements and notices are hereby
expressly waived), may in such circumstances forthwith collect, receive,
appropriate and realize upon his pro rata share of the Collateral, or any part
thereof, and/or may forthwith sell, assign, give option or options to purchase
or otherwise dispose of and deliver his pro rata share of the Collateral or any
part thereof (or contract to do any of the foregoing), in one or more parcels at
public or private sale or sales, in the over-the-counter market, at any
exchange, broker's board or office of such Lender or elsewhere upon such terms
and conditions as he may deem advisable and at such prices as he may deem best,
for cash or on credit or for future delivery without assumption of any credit
risk. The Lenders shall have the right upon any such public sale or sales, and,
to the extent permitted by law, upon any such private sale or sales, to purchase
the whole or any part of the Collateral so sold, free of any right or equity of
redemption in the Borrower, which right or equity is hereby expressly waived and
released. Each Lender shall apply any Proceeds from time to time held by him and
the net proceeds of any such collection, recovery, receipt, appropriation,
realization or sale, after deducting all reasonable costs and expenses of every
kind incurred therein or incidental to the care or safekeeping of any of the
Collateral or in any way relating to the Collateral or the rights of the Lenders
hereunder, including, without limitation, reasonable attorneys' fees and
disbursements, to the payment in whole or in part of the Obligations, in such
order as each Lender may elect, and only after such application and after the
payment by such Lender of any other amount required by any provision of law,
including, without limitation, Section 9-504(1)(c) of the Code, need such Lender
account for the surplus, if any, to the Borrower. To the extent permitted by
applicable law, the Borrower waives all claims, damages and demands it may
acquire against the Lenders arising out of the exercise by the Lenders of any of
their rights hereunder. If any notice of a proposed sale or other disposition of
Collateral shall be required by law, such notice shall be deemed reasonable and
proper if given at least ten (10) days before such sale or other disposition.
Pledge Agreement -- Page 5
9. Limitation on Duties Regarding Collateral. The Lenders' sole duty
with respect to the custody, safekeeping and physical preservation of the
Collateral in their possession, under Section 9-207 of the Code or otherwise,
shall be to deal with it in the same manner as the Lenders deal with similar
securities, instruments and property for their own account. Neither the Lenders
nor any of their employees or agents shall be liable for failure to demand,
collect or realize upon any of the Collateral or for any delay in doing so or
shall be under any obligation to sell or otherwise dispose of any Collateral
upon the request of the Borrower or otherwise.
10. Powers Coupled with an Interest. All authorizations and agencies
herein contained with respect to the Collateral are irrevocable and powers
coupled with an interest.
11. Severability. Any provision of this Pledge 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
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
12. Section Headings. The paragraph headings used in this Pledge
Agreement are for convenience of reference only and are not to affect the
construction hereof or to be taken into consideration in the interpretation
hereof.
13. No Waiver; Cumulative Remedies. The Lenders shall not by any act
(except by a written instrument pursuant to paragraph 14 hereof), delay,
indulgence, omission or otherwise be deemed to have waived any right or remedy
hereunder or to have acquiesced in any default or Event of Default or in any
breach of any of the terms and conditions hereof. No failure to exercise, nor
any delay in exercising, on the part of the Lenders or any of them, any right,
power or privilege hereunder shall operate as a waiver thereof. No single or
partial exercise of any right, power or privilege hereunder shall preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. A waiver by the Lenders or any of them of any right or remedy
hereunder on any one occasion shall not be construed as a bar to any right or
remedy that the Lenders would otherwise have on any future occasion. The rights
and remedies herein provided are cumulative, may be exercised singly or
concurrently and are not exclusive of any rights or remedies provided by law.
14. Waivers and Amendments; Successors and Assigns; Governing Law. None
of the terms or provisions of this Pledge Agreement, may be waived, amended,
supplemented or otherwise modified except by a written instrument executed by
the Borrower and the Lenders holding a majority of the outstanding principal
amount under the Notes, provided that any provision of this Pledge Agreement may
be waived in writing by the Lenders holding a majority of the outstanding
principal amount under the Notes in a letter or agreement executed by such
Lenders or by facsimile transmission from such Lenders. This Pledge Agreement
shall be binding upon the successors and assigns of the Borrower and shall inure
to the benefit of the Lenders and their respective successors and assigns. This
Pledge Agreement shall be governed by, and construed and interpreted in
accordance with, the internal laws of the State of Ohio without reference to the
conflict of law provisions, United States of America.
15. Notices. All notices, requests, consents and other communications
hereunder shall be in writing, shall be addressed to the receiving party's
address set forth below or to such other address as a party may designate by
notice hereunder, and shall be either (i) delivered by hand, (ii) made by
telecopy or facsimile transmission, (iii) sent by overnight courier, or (iv)
sent by registered mail, return receipt requested, postage prepaid.
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If to the Obligor: DynaGen, Inc.
00 Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: President
Telecopier: (000) 000-0000
With a copy to: Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP
High Street Tower
000 Xxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxx Xxxxxxx
If to the Lenders Superior Pharmaceutical Company
0000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, XX 00000-0000
Attention: Xxxx X. Xxxxxxxxxxx
With a copy to: Xxxx, Xxxxxxxxxx & Xxxxxxxxx
1800 Star Bank Center
000 Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
Attention: Xxxx Xxxxxxx
All notices, requests, consents and other communications hereunder
shall be deemed to have been given either (i) if by hand, at the time of the
delivery thereof to the receiving party at the address of such party set forth
above, (ii) if made by telecopy or facsimile transmission, at the time that
receipt thereof has been acknowledged by electronic confirmation or otherwise,
(iii) if sent by overnight courier, on the next business day following the day
such notice is delivered to the courier service, or (iv) if sent by registered
mail, on the fifth business day following such mailing is made.
16. Counterparts. This Pledge Agreement may be executed in several
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the undersigned has caused this Pledge Agreement to
be duly executed and delivered as of the date first above.
BORROWER:
DynaGen, Inc.
By: /s/ Xxxxxxxxx X. Xxxxxxx
-------------------------------
Title: Executive Vice President
-------------------------------
LENDERS:
By: /s/ Xxxx X. Xxxxxxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxxxxxx
By: /s/ Xxxxxx Xxxxx
-------------------------------
Name: Xxxxxx Xxxxx
By: /s/ Xxxxxx Xxxxxxx
-------------------------------
Name: Xxxxxx Xxxxxxx
Pledge Agreement -- Page 8
Schedule I
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Pledged Securities
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NAME OF ISSUER DESCRIPTION OF SECURITIES
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Superior Pharmaceutical Company 100 shares of Common Stock, no par value
