EXHIBIT 10.37
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GUARANTY AND PLEDGE AGREEMENT
GUARANTY AND PLEDGE AGREEMENT (this "Agreement"), dated as of
February 15, 2001, among DynaGen, Inc., a Delaware corporation (the "Company"),
XxXxxxxx.xxx, Inc., a Delaware corporation ("Bazaar"), and the pledgors
signatory hereto (collectively, the "Pledgor"), and the pledgee signatory hereto
and its respective endorsees, transferees and assignees (the "Pledgee").
W I T N E S S E T H:
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WHEREAS, Bazaar and the Pledgee are parties to a Securities Purchase
Agreement, of even date herewith (the "Purchase Agreement"), pursuant to which
Bazaar issued and sold to the Pledgee shares of its Series A Convertible
Preferred Stock (the "Bazaar Preferred Stock");
WHEREAS, the Company and the Pledgee are parties to an Exchange and
Purchase Agreement, of even date herewith (the "Exchange Agreement"), pursuant
to which the Pledgee may exchange all or a portion of the Bazaar Preferred Stock
for shares of the Company's 8% Series O Preferred Stock, $.001 par value per
share; and
WHEREAS, as a material inducement to the Pledgee to purchase the
Bazaar Preferred Stock, the Pledgee has required and the Pledgor has agreed: (i)
to unconditionally guarantee the timely and full satisfaction of all obligations
of: (A) Bazaar, whether matured or unmatured, now or hereafter existing or
created and becoming due and payable, under the Transaction Documents (as
defined in the Purchase Agreement), to any Purchaser (as defined in the Exchange
Agreement) and (B) the Company, whether matured or unmatured, now or hereafter
existing or created and becoming due and payable, under the Transaction
Documents (as defined in the Exchange Agreement), to any Purchaser (as defined
in the Purchase Agreement) (such obligations of Bazaar and the Company are
collectively the "Obligations") and (ii) to grant to the Pledgee a security
interest in an aggregate of the number of shares of common stock, $0.01 par
value per share, of the Company, currently owned by the Pledgor and reflected
next to its signature on the signature page hereto (collectively, the "Shares"),
as collateral security for Obligations. Terms used and not defined herein shall
have the meaning ascribed to them in the Purchase Agreement.
NOW, THEREFORE, in consideration of the foregoing recitals, and the
mutual covenants contained herein, the parties hereby agree as follows:
1. Security. As collateral security for the punctual payment and
performance, when due, by the Company and Bazaar of all the Obligations, the
Pledgor, hereby pledges with, hypothecates, transfers and assigns to the Pledgee
all of the Shares and all proceeds, shares and other securities received,
receivable or otherwise distributed in respect of or in exchange for the Shares,
including, without limitation, any shares and other securities into which such
Shares may be convertible or exchangeable (collectively referred to as the
"Collateral"). Simultaneously herewith, the Pledgor shall deliver to the Pledgee
the certificate(s) representing the Shares, stamped with a bank medallion
guarantee, along with a stock transfer power duly executed in blank by the
Pledgor, to be held by the Pledgee as security. Any other Collateral received by
the Pledgor shall also be delivered to the Pledgee together with any executed
stock powers or other transfer documents requested by the Pledgee, which request
may be made at any time prior to the date when the Obligations shall have been
paid and otherwise satisfied in full.
2. Voting Power, Dividends, Etc. and other Agreements.
(a) Unless and until an Event of Default (as set forth in
Section 3 hereof) has occurred, the Pledgor shall be entitled to:
(i) exercise all voting and/or consensual powers pertaining
to the Shares or other Collateral, or any part thereof, for all
purposes;
(ii) receive and retain dividends paid with respect to the
Shares or other Collateral; and
(iii) receive the benefits of any income tax deductions
available to the Pledgor as a shareholder of the Company.
(b) The Pledgor agrees that it will not sell, assign, transfer,
pledge, hypothecate, encumber or otherwise dispose of the Shares.
(c) The Pledgor and the Company jointly and severally agree to
pay all costs including all reasonable attorneys' fees and disbursements
incurred by the Pledgee in enforcing this Agreement in accordance with its
terms.
3. Default and Remedies.
(a) For the purposes of this Agreement "Event of Default" shall
mean:
(i)default in or under any of the Obligations after the
expiration, without cure, of any applicable cure period;
(ii)a breach in any material respect by the Company of any
of its representations or warranties in the Transaction Documents
(as defined in the Exchange Agreement);
(iii)a breach in any material respect by Bazaar of any of
its representations or warranties in the Transaction Documents (as
defined in the Purchase Agreement);
(iv) a breach in any material respect by the Pledgor of any
of its representations or warranties in this Agreement; or
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(v) the occurrence of a Triggering Event (as defined in the
Certificate of Designation (as defined in the Exchange Agreement)).
(b) the Pledgee shall have the following rights upon any Event
of Default:
(i)the rights and remedies provided by the Uniform
Commercial Code as adopted by the State of New York (the "UCC") (as
said law may at any time be amended);
(ii)the right to receive and retain all dividends, payments
and other distributions of any kind upon any or all of the Shares or
other Collateral;
(iii)the right to cause any or all of the Shares or other
Collateral to be transferred to its own name or to the name of its
designee and have such transfer recorded in any place or places
deemed appropriate by the Pledgee; and
(iv) the right to sell, at a public or private sale, the
Collateral or any part thereof for cash, upon credit or for future
delivery, and at such price or prices in accordance with the UCC (as
such law may be amended from time to time). Upon any such sale the
Pledgee shall have the right to deliver, assign and transfer to the
purchaser thereof the Collateral so sold. The Pledgee shall give the
Pledgor not less than ten (10) days' written notice of its intention
to make any such sale. Any such sale, shall be held at such time or
times during ordinary business hours and at such place or places as
the Pledgee may fix in the notice of such sale. The Pledgee may
adjourn or cancel any sale or cause the same to be adjourned from
time to time by announcement at the time and place fixed for the
sale, and such sale may be made at any time or place to which the
same may be so adjourned. In case of any sale of all or any part of
the Collateral upon terms calling for payments in the future, any
Collateral so sold may be retained by the Pledgee until the selling
price is paid by the purchaser thereof, but the Pledgee shall incur
no liability in the case of the failure of such purchaser to take up
and pay for the Collateral so sold and, in the case of such failure,
such Collateral may again be sold upon like notice. The Pledgee,
however, instead of exercising the power of sale herein conferred
upon it, may proceed by a suit or suits at law or in equity to
foreclose the security interest and sell the Collateral, or any
portion thereof, under a judgment or decree of a court or courts of
competent jurisdiction, the Pledgor having been given due notice of
all such action. The Pledgee shall incur no liability as a result of
a sale of the Collateral or any part thereof. All proceeds of any
such sale, after deducting the reasonable expenses and reasonable
attorneys' fees incurred in connection with such sale, shall be
applied in reduction of the Obligations, and the remainder, if any,
shall be paid to the Pledgor.
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4. Application of Proceeds; Release. The proceeds of any sale or
enforcement of or against all or any part of the Collateral, and any other cash
or collateral at the time held by the Pledgee hereunder, shall be applied by the
Pledgee first to the payment of the reasonable costs of any such sale or
enforcement, then to reimburse the Pledgee for any damages, costs or expenses
incurred by the Pledgee as a result of an Event of Default, then to the payment
of the principal amount or stated value (as applicable) of, and interest or
dividends (as applicable) and any other payments due in respect of, the
Obligations. The remainder, if any, shall be paid to the Pledgor. As used in
this Agreement, "proceeds" shall mean cash, securities and other property
realized in respect of, and distributions in kind of, the Collateral, including
any thereof received under any reorganization, liquidation or adjustment of debt
of any issuer of securities included in the Collateral.
5. Representations and Warranties.
(a) The Pledgor hereby represents and warrants to the Pledgee
that:
(i)the Pledgor has full power and authority and legal right
to pledge the Collateral to the Pledgee pursuant to this Agreement
and this Agreement constitutes a legal, valid and binding obligation
of the Pledgor enforceable in accordance with its terms;
(ii)the execution, delivery and performance of this
Agreement and other instruments contemplated herein will not violate
any provision of any order or decree of any court or governmental
instrumentality or of any mortgage, indenture, contract or other
agreement to which the Pledgor is a party or by which the Pledgor
and the Collateral may be bound, and will not result in the creation
or imposition of any lien, charge or encumbrance on, or security
interest in, any of Pledgor's properties pursuant to the provisions
of such mortgage, indenture, contract or other agreement;
(iii)the Pledgor is the sole record and beneficial owner of
all of the Shares;
(iv) the Pledgor owns the Shares and other Collateral
relating thereto pledged by it hereunder free and clear of all
Liens; and
(v) the Pledgor is not an affiliate of the Company (as
defined in Rule 144(a)(1) promulgated under the Securities Act of
1933, as amended (the "Securities Act")) and acquired the Shares on
the date indicated next to its signature.
(b) The Company represents and warrants to the Pledgee that:
(i) it has no knowledge that any of the representations or
warranties of the Pledgor herein are incorrect or false in any
material respect;
(ii) all of the Shares were validly issued, fully paid and
non- assessable; and
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(iii) the Pledgor is the record holder of the Shares.
6. No Waiver; No Election of Remedies. No failure on the part of the
Pledgee to exercise, 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 Pledgee of any right, power or remedy preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.
The remedies herein provided are cumulative and are not exclusive of any
remedies provided by law. In addition, the exercise of any right or remedy of
the Pledgee at law or equity or under this Agreement or any of the documents
shall not be deemed to be an election of Pledgee's rights or remedies under such
documents or at law or equity.
7. Termination. This Agreement shall terminate on the date on which
all Obligations have been performed, satisfied, paid or discharged in full.
8. Further Assurances. The parties hereto agree that, from time to
time upon the written request of any party hereto, they will execute and deliver
such further documents and do such other acts and things as such party may
reasonably request in order fully to effect the purposes of this Agreement.
9. Miscellaneous.
(a) Modification. This Agreement contains the entire
understanding between the parties with respect to the subject matter hereof and
specifically incorporates all prior oral and written agreements relating to the
subject matter hereof. No portion or provision of this Agreement may be changed,
modified, amended, waived, supplemented, discharged, canceled or terminated
orally or by any course of dealing, or in any manner other than by an agreement
in writing, signed by the party to be charged.
(b) Notice. Any and all notices or other communications or
deliveries required or permitted to be provided hereunder shall be in writing
and shall be deemed given and effective on the earliest of (i) the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile telephone number specified in this Section prior to 6:30 p.m. (New
York City time) on a Business Day, (ii) the Business Day after the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile telephone number specified in this Agreement later than 6:30 p.m. (New
York City time) on any date and earlier than 11:59 p.m. (New York City time) on
such date, (iii) the Business Day following the date of mailing, if sent by
nationally recognized overnight courier service, or (iv) upon actual receipt by
the party to whom such notice is required to be given. The address for such
notices and communications shall be as follows:
If to the Company: DynaGen, Inc.
0000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn: Chief Financial Officer
With copies to: Xxxxx, Xxxx & Xxxxx LLP
Xxx Xxxx Xxxxxx Xxxxxx
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Xxxxxx, Xxxxxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxx Xxxxxxxx
If to Bazaar: XxXxxxxx.xxx, Inc.
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxxxxx 00000
Facsimile No.: (000) 000 0000
Attn: Xxxx Xxxxxxx
With copies to: Chu, Ring & Xxxxx
00 Xxxxxxx Xx.
Xxxxxx, Xxxxxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attn: Xxxx Xxxx
If to the Pledgor: Infusion Capital Investment Corporation,
and Ocean Marketing Corporation
000 Xxxxx Xxxxxx
Xxxxxxx Xxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxxxx Xxxxxxx
If to the Pledgee: Kenilworth LLC
x/x Xxxxx Xxxxxxxx (Xxxxxx) Limited
Commercial Centre
P.O. Box 31106 SMB
Grand Cayman, Cayman Islands
British West Indies
Facsimile No.: (000) 000-0000
With copies to: Xxxxxxxx Xxxxxxxxx Xxxxxx Xxxxxxxx &
Xxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000 and
(000) 000-0000
Attn: Xxxx X. Xxxxx, Esq.
(c) Invalidity. If any part of this Agreement is contrary to,
prohibited by, or deemed invalid under applicable laws or regulations, such
provision shall be inapplicable and deemed omitted to the extent so contrary,
prohibited or invalid, but the remainder hereof shall not be invalidated thereby
and shall be given effect so far as possible.
(d) Benefit of Agreement. This Agreement shall be binding upon
and inure to the parties hereto and their respective successors and assigns.
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(e) Mutual Agreement. This Agreement embodies the arm's length
negotiation and mutual agreement between the parties hereto and shall not be
construed against either party as having been drafted by it.
(f) New York Law to Govern. This Agreement shall be governed by
and construed and enforced in accordance with the internal laws of the State of
New York without regard to the principles of conflicts of law thereof. Each
party hereby irrevocably submits to the exclusive jurisdiction of the state and
Federal courts sitting in the city of New York, borough of Manhattan, for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court or that
such suit, action or proceeding is improper. Each party hereby irrevocably
waives personal service of process and consents to process being served in any
such suit, action or proceeding by mailing a copy thereof to such party at the
address in effect for notices to it under this Agreement and agrees that such
service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law.
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SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this Guaranty and
Pledge Agreement to be duly executed by their respective authorized persons as
of the date first indicated above.
DYNAGEN, INC.
By: /s/ Xxxxxxxxx X. Xxxxxxx
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Name: Xxxxxxxxx X. Xxxxxxx
Title: Executive Vice President
XXXXXXXX.XXX, INC.
By: /s/ C. Xxxxxx Xxxxxx
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Name: C. Xxxxxx Xxxxxx
Title: Executive Vice President
PLEDGEE:
KENILWORTH LLC
By: illegible
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Name: Navigator Management Ltd.
Title: Director
PLEDGORS:
INFUSION CAPITAL INVESTMENT CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxxxxx
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Name: Xxxxxx X. Xxxxxxxxxxx
Title: President
1,100,000 in March 2000; 250,000 in June 1999
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Date on which such Shares were acquired
OCEAN MARKETING CORPORATION
By: illegible
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Name:
Title: President
650,000 in February 2000 through conversion of a
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note acquired in July 1999
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Date on which such Shares were acquired
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