PLEDGE AND SECURITY AGREEMENT
THIS PLEDGE AND SECURITY AGREEMENT (the "SECURITY AGREEMENT") is made as of
June 17, 1997, by and between SuperGen, Inc., a California corporation (the
"COMPANY"), and Tako Ventures, LLC, a California limited liability company
("LENDER").
RECITALS
The Company and Lender have entered into a Convertible Secured Note, Option
and Warrant Purchase Agreement of even date herewith (the "PURCHASE AGREEMENT"),
pursuant to which, among other things, (i) Lender has agreed to extend a
$15,300,000 loan to the Company pursuant to the Convertible Secured Note, and
(ii) the Company has agreed to secure the performance of the Company's
obligations under the Note, the Company has agreed to grant Lender a first
priority security interest in the Collateral, as defined herein.
NOW, THEREFORE, the Company and Lender agree as follows:
AGREEMENT
1. CERTAIN DEFINITIONS. Capitalized terms used herein without definition
shall have the meanings ascribed to such terms in the Purchase Agreement.
2. PLEDGE OF COLLATERAL.
(a) Subject to the provisions of Section 7 of this Security
Agreement, the Company hereby pledges, assigns and delivers to Lender and grants
to Lender a first lien and security interest in the funds advanced by Purchaser
to the Company as evidenced by the Note, together with all short-term debt
instruments and obligations acquired therewith (including, without limitation,
the certificates of deposit and time deposit accounts and instruments described
in ANNEX A hereto), all substitutions therefor, all interest and other amounts
in the nature of interest paid thereon, and all other cash and noncash proceeds
of the foregoing (all hereinafter called the "COLLATERAL"), to the full extent
of any interest of the Company therein, as security for the timely performance
of all obligations of the Company pursuant to the Note (the "OBLIGATIONS").
(b) Any certificate or certificates for the securities included in
the Collateral, accompanied by an instrument of assignment duly executed in
blank by the Company, have been, or will be immediately upon the subsequent
receipt thereof by the Company, delivered by the Company to Lender.
3. REPRESENTATIONS AND WARRANTIES. The Company represents and warrants
to Lender that:
(a) all interest in the Collateral held by the Company is owned by
the Company free and clear of any security interests, liens, encumbrances,
options or other restrictions;
(b) the Company has full power and authority to create a first lien
on the Collateral in favor of Lender and no disability or contractual obligation
exists that would prohibit the Company from pledging the Collateral pursuant to
this Security Agreement; and
(c) the Collateral is not the subject of any present or threatened
suit, action, arbitration, administrative or other proceeding, and the Company
knows of no reasonable grounds for the institution of any such proceedings.
4. COVENANTS. The Company hereby covenants and agrees that for as long
as, and to the extent that, the security interest granted by this Security
Agreement shall continue and exist, without the advance written consent of
Lender, the Company shall:
(a) perform all of the Obligations according to their terms;
(b) defend the title to any interest of the Company in the Collateral
(to the extent such Collateral (i) has not been released pursuant to Section 7
or has been reinstated pursuant to Section 7 and (ii) is subject to any security
interest created by this Security Agreement) against all persons and against all
claims and demands whatsoever;
(c) immediately upon Lender's request, execute and deliver such
further instruments and documents, and take all such other action, as Lender
deems reasonably necessary or desirable to further evidence and perfect this
pledge and grant of security in the Collateral (to the extent such Collateral
(i) has not been released pursuant to Section 7 or has been reinstated pursuant
to Section 7 and (ii) is subject to any security interest created by this
Security Agreement);
(d) immediately upon demand of Lender, furnish further assurance of
title, execute any written agreement or do any other acts necessary to
effectuate the purposes and provisions of this Security Agreement, execute any
instrument or statement required by law or otherwise in order to perfect or
continue the security interest of the Lender in the Collateral (to the extent
such Collateral (i) has not been released pursuant to Section 7 or has been
reinstated pursuant to Section 7 and (ii) is subject to any security interest
created by this Security Agreement) or to terminate the security interest of the
Lender in the Collateral (to the extent such Collateral has been released
pursuant to Section 7 and is not subject to any security interest created by
this Agreement), and pay all costs of filing in connection therewith;
(e) keep the Collateral (to the extent such Collateral (i) has not
been released pursuant to Section 7 or has been reinstated pursuant to Section 7
and (ii) is subject to any security interest created by this Security Agreement)
free and clear of all liens, charges, encumbrances, taxes and assessments, other
than the lien and security interest granted by this Security Agreement; and
(f) pay, when due, all taxes, assessments and license fees relating
to the Collateral (to the extent such Collateral (i) has not been released
pursuant to Section 7 or has been reinstated pursuant to Section 7 and (ii) is
subject to any security interest created by this Security Agreement).
Without limiting the generality of the foregoing, the Collateral shall be
deposited into and (until released pursuant to Section 7) maintained in an
account or accounts with financial institutions reasonably acceptable to Lender,
from which withdrawals, payments and transfers to the Company shall be made only
upon the joint signatures of a duly authorized representative of the Company and
a duly authorized representative of Lender, and the Company shall not withdraw,
cancel, redeem or seek the payment, release, delivery, or assignment of, or
transfer of any right, title or interest in, the Collateral (until released
pursuant to Section 7), to the extent that any portion of the Principal Amount
under the Note shall remain outstanding and shall not theretofore have been
converted into Common Stock or repaid. The restrictions set forth in this
Section 4 shall not apply to any portion of the Collateral that has been
released pursuant to Section 7 and is not subject to a security interest
pursuant to this Agreement
5. AUTHORIZATION OF LENDER ACTION. The Company irrevocably authorizes
and empowers Lender,
(a) at any time and from time to time after delivery by Lender of a
notice of an Event of Default, either in its own name or in the Company's name,
to:
(i) demand, collect, and receive payment of any and all
monies or proceeds represented by, or due with respect to, the Collateral;
(ii) execute any endorsements of the Collateral and any or all
instruments or documents for the withdrawal or repayment of some or all of same;
(iii) insert in any instrument or document utilized for the
withdrawal of funds represented by the Collateral signed by the Company the date
and amount due under the Collateral and to complete such instrument or document
in any respect Lender deems necessary or desirable;
(iv) deal in all respects with the Collateral as the holder
thereof, and the Company irrevocably constitutes and appoints Lender as its
attorney to do any and all things Lender deems necessary or desirable to effect
this Security
Agreement and the enforcement of Lender's rights and remedies hereunder; and
(b) at any time and from time to time, either before or after the
delivery by Lender of a notice of an Event of Default, either in its own name or
in the Company's name, to:
(i) notify any issuer of Collateral of Lender's interest
therein; and
(ii) file all appropriate financing statements required to
perfect Lender's first lien and security interest in the Collateral.
6. DEFAULT AND REMEDIES. Upon the occurrence of an Event of Default (as
defined in the Note), Lender may exercise all rights and remedies of a secured
party with respect to the Collateral. After the disposal of any of the
Collateral, Lender may deduct all reasonable legal and other expenses and fees
for protecting its interests and enforcing its remedies under this Security
Agreement, the Purchase Agreement, and the other Transaction Documents, and
shall apply the residue of the proceeds to, or hold as a reserve against, the
Obligations in such manner as Lender, in its reasonable discretion, shall
determine, and shall pay the balance, if any to the Company.
7. RELEASE OF COLLATERAL. The pledge of and grant of a security interest
in the Collateral pursuant to this Security Agreement (a) shall remain in effect
as long as, and to the extent that, any portion of the Principal Amount under
the Note shall remain outstanding and shall not theretofore have been converted
into Common Stock or repaid, and (b) shall be of no further force or effect, and
any previously unreleased Collateral shall be returned and released to the
Company, upon (i) the conversion of any previously unconverted portion of the
Note into Common Stock or the repayment of any previously unpaid Principal
Amount thereunder, and (ii) the performance of the Company's obligations under
the Note (including, without limitation, the Company's obligations under Section
1.1 of the Purchase Agreement) with respect to such total or partial conversion
or repayment. In the event that a portion of the Note shall be converted into
Common Stock pursuant to Section 1.1 of the Purchase Agreement, a proportionate
portion of the Collateral shall be released to the Company. Notwithstanding the
foregoing, and notwithstanding any other provision of this Security Agreement,
the security interest created by this Security Agreement shall be reinstated if
(and to the extent that) any payment must be returned by Lender, or is set
aside, for any reason, including, but not limited to, upon or after the
insolvency, bankruptcy or reorganization of the Company.
8. MISCELLANEOUS.
(a) WAIVERS AND AMENDMENTS. This Security Agreement or any
provision hereof may be amended, waived, discharged or terminated only by a
statement in writing signed by the party against which enforcement of the
amendment, waiver, discharge or termination is sought.
(b) SURVIVAL. The representations, warranties, covenants and
agreements made herein shall survive the making of this Security Agreement, the
Purchase Agreement and the other Transaction Documents and the closing of the
transactions contemplated hereby and thereby, notwithstanding any investigation
made by Lender. All statements as to factual matters contained in any
certificate delivered by or on behalf of a party pursuant hereto or in
connection with the transactions contemplated hereby shall be deemed to be
representations and warranties by such party hereunder as of the date of such
certificate or instrument.
(c) SUCCESSORS AND ASSIGNS. Except as expressly provided or
contemplated by this Security Agreement and the exhibits hereto, neither this
Security Agreement nor the rights, obligations or interests hereunder shall be
assigned by either party hereto (other than by operation of law) without the
prior written consent of the other party; PROVIDED, that nothing herein shall
prevent or limit the ability of Lender to assign any or all of its rights under
this Security Agreement to an affiliate of Lender. Subject to the foregoing
limitations, the provisions hereof shall inure to the benefit of, and be binding
upon and enforceable by, the parties hereto and their respective successors and
assigns.
(d) ENTIRE AGREEMENT. This Security Agreement together with the
Purchase Agreement, the other Transaction Documents and the other instruments
delivered pursuant hereto or thereto constitute the full and entire
understanding and agreement between the parties with regard to the subjects
hereof and thereof and supersede all prior and contemporaneous agreements,
understandings, negotiations and discussions, whether oral or written, of the
parties with respect thereto.
(e) NOTICES. All notices and other communications required or
permitted hereunder shall be in writing and shall be delivered personally or by
overnight courier or mailed by first class mail, or Express Mail, postage
prepaid, or via facsimile, delivered as follows:
(i) if to Lender, to:
Tako Ventures, LLC
c/o Xx. Xxxxxx Xxxxx
Xxxxxx & Xxxxx X.X.
000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
with copies to:
Springs, Rivin, Detwiler, Dudnick & Stikker
000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxx, Esq.
Xxxx Xxxx Xxxx & Freidenrich
A Professional Corporation
000 Xxxxxxxx Xxxxxx
Xxxx Xxxx, XX 00000
Attention: Xxx X. Xxxxxx, Esq. & Xxxx X. Rock, Esq.
or at such other address as Lender shall have furnished to the Company
in writing,
(ii) if to the Company, to:
SuperGen, Inc.
Xxx Xxxxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
with a copy to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx,
Professional Corporation
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxx Xxxx, Esq. and Page Xxxxxxxxx, Esq.
or at such other address as the Company shall have furnished to Lender
in writing.
Notices that are mailed by (i) first class mail shall be deemed received three
(3) business days after deposit in the mail and (ii) Express Mail or overnight
courier shall be deemed received one (1) business day after deposit in the mail.
In the event that the notice is sent by facsimile, notice shall be deemed to
have been received when sent and confirmed as to receipt.
(f) SEVERABILITY. In case any provision of this Security Agreement
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions of this Security Agreement shall not
in any way be affected or impaired thereby.
(g) INTERPRETATION. Captions and titles of sections of this Security
Agreement are for convenience of reference only and are not to be considered in
construing this Security Agreement. When reference is made in this Security
Agreement to a "section", such reference shall be to a section of this Security
Agreement unless otherwise specified. Whenever the words "include", "includes",
or "including" are used in this Security Agreement they shall be deemed to be
followed by the words "without limitation." The words "herein," "hereof" and
words of similar import refer to this Security Agreement as a whole, and not to
any single provision thereof.
(h) COUNTERPARTS. This Security Agreement may be executed in any
number of counterparts, each of which shall be an original, but all of which
together shall constitute one instrument.
(i) DELAYS OR OMISSIONS. No delay or omission to exercise any right,
power or remedy accruing to the Company or to Lender shall impair any such
right, power or remedy of the Company or Lender, nor shall it be construed to be
a waiver of any breach or default under this Security Agreement, or an
acquiescence therein, or of or in any similar breach or default thereafter
occurring; nor shall any delay or omission to exercise any right, power or
remedy or any waiver of any single breach or default be deemed a waiver of any
other right, power or remedy or breach or default theretofore or thereafter
occurring. All remedies, either under this Security Agreement, or by law
otherwise afforded to the Company or Lender, shall be
cumulative and not alternative.
(j) GOVERNING LAW/VENUE. THIS SECURITY AGREEMENT SHALL BE DEEMED A
CONTRACT AND INSTRUMENT MADE UNDER THE LAWS OF THE STATE OF CALIFORNIA AND SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF CALIFORNIA AND THE LAWS OF THE UNITED STATES OF AMERICA. THE COMPANY
HEREBY IRREVOCABLY SUBMITS ITSELF TO THE EXCLUSIVE JURISDICTION OF THE STATE AND
FEDERAL COURTS OF THE STATE OF CALIFORNIA LOCATED IN THE CITY OF SAN FRANCISCO
AND AGREES AND CONSENTS THAT SERVICE OF PROCESS MAY BE MADE UPON IT IN ANY LEGAL
PROCEEDING RELATING TO THIS SECURITY AGREEMENT OR THE OBLIGATIONS GUARANTEED BY
THIS SECURITY AGREEMENT BY ANY MEANS ALLOWED UNDER CALIFORNIA OR FEDERAL LAW.
VENUE FOR ANY LEGAL PROCEEDING MAY BE IN SAN FRANCISCO COUNTY, CALIFORNIA.
(k) LEGAL COUNSEL. THE COMPANY ACKNOWLEDGES THAT IT HAS BEEN
REPRESENTED BY INDEPENDENT LEGAL COUNSEL IN CONNECTION WITH ALL MATTERS
CONCERNING THIS SECURITY AGREEMENT, INCLUDING, BUT NOT LIMITED TO, THE
NEGOTIATION, ACCEPTANCE AND EXECUTION OF THIS SECURITY AGREEMENT; THAT THE
COMPANY HAS RELIED UPON THE ADVICE OF ITS INDEPENDENT LEGAL COUNSEL IN AGREEING
TO THE TERMS AND CONDITIONS HEREIN AND IN EXECUTING THIS SECURITY AGREEMENT; AND
THAT IT HAS FREELY AND VOLUNTARILY ENTERED INTO THIS SECURITY AGREEMENT AS THE
PRODUCT OF ARMS LENGTH NEGOTIATIONS.
(l) WAIVER OF JURY TRIAL. THE COMPANY AND LENDER EACH HEREBY WAIVE
ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION, CAUSE OF ACTION, SUIT
OR PROCEEDINGS (1) ARISING UNDER THIS SECURITY AGREEMENT OR ANY OTHER
INSTRUMENT, DOCUMENT, OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH
OR (2) IN ANY WAY CONNECTED WITH OR RELATED TO OR INCIDENTAL TO THE DEALINGS OF
THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS SECURITY AGREEMENT, THE
PURCHASE AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT, OR AGREEMENT EXECUTED OR
DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS RELATED HERETO, IN EACH
CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN
CONTRACT, TORT OR OTHERWISE. THE COMPANY AND LENDER HEREBY AGREE AND CONSENT
THAT ANY SUCH CLAIM, DEMAND, ACTION, CAUSE OF ACTION, SUIT OR PROCEEDING SHALL
BE DECIDED BY A COURT TRIAL, WITHOUT A JURY, AND THAT EITHER PARTY MAY FILE AN
ORIGINAL COUNTERPART OR COPY OF THIS SECURITY AGREEMENT WITH ANY COURT AS
WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE
WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
IN WITNESS WHEREOF, the parties hereto have executed this Security
Agreement as of the date as of the date first written above.
SUPERGEN, INC.
By: /s/ Xx. Xxxxxx Xxxxxxxxx
-----------------------------
Name: Xx. Xxxxxx Xxxxxxxxx
Title: Chief Executive Officer
President and Chief
Executive Officer
TAKO VENTURES, LLC
By CEPHALOPOD CORPORATION,
Member
By: /s/ Xxxxxx X. Xxxxx
--------------------------
Xxxxxx X. Xxxxx
President
ANNEX A
[List certificates of deposit and accounts]
