Exhibit 10.1
PLEDGE AGREEMENT
This PLEDGE AGREEMENT (the "Pledge Agreement") is made and entered
into as of March 2, 2004 by MGI PHARMA, INC., a Minnesota corporation (the
"Pledgor"), having its principal office at 0000 Xxxx Xxx Xxxxxxxx Xxxx, Xxxxx
000, Xxxxxxxxxxx, Xxxxxxxxx 00000, in favor of Xxxxx Fargo Bank, National
Association, in its capacity as trustee (the "Trustee") for the holders from
time to time (the "Holders") of the Notes (as defined below), issued by the
Pledgor under the Indenture referred to below. Capitalized terms used and not
defined in this Pledge Agreement have the meanings set forth or referred to in
the Indenture.
PRELIMINARY STATEMENTS:
(1) The Pledgor and Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce,
Xxxxxx & Xxxxx Incorporated as representative of the Initial Purchasers are
party to a Purchase Agreement dated February 25, 2004 (the "Purchase
Agreement"), pursuant to which the Pledgor will issue and sell to the Initial
Purchasers, acting severally and not jointly, the respective principal amounts
set forth next to the Initial Purchasers' respective names in Schedule A to the
Purchase Agreement of $348,000,000 aggregate principal amount at maturity of
Senior Subordinated Convertible Notes due 2024 (the "Notes") (this includes the
$301,000,000 aggregate principal amount at maturity of the Notes (the "Initial
Notes") plus the additional $47,000,000 aggregate principal amount at maturity
of the Notes which were purchased pursuant to Section 2(b) of the Purchase
Agreement, (the "Option Notes")).
(2) The Pledgor and the Trustee have entered into that certain
indenture dated as of the date hereof (as amended, restated, supplemented or
otherwise modified from time to time, the "Indenture"), pursuant to which the
Pledgor is issuing the Notes on the date hereof.
(3) In order to pledge the security entitlements (as further
described below), the Pledgor has deposited not less than $17,080,985.76 in cash
to the Pledged Account (as defined below) and hereby irrevocably instructs the
Trustee to deliver such cash for the purchase of the Pledged Security
Entitlements (as defined below) identified in Schedule I hereto.
(4) The Pledgor is the beneficial owner of, and desires to pledge the
security entitlements (the "Pledged Security Entitlements") with respect to, (i)
the United States Treasury securities identified by CUSIP number in Schedule I
hereto, and credited to the trust account with Xxxxx Fargo Bank, National
Association (the "Account Holder") and held by the Trustee, having ABA No.
000000000, Account No. 00000000, and entitled "MGI PHARMA, INC. Senior
Subordinated Convertible Notes due 2024, Collateral Pledge Account" (the
"Pledged Account") and (ii) all other financial assets credited from time to
time to the Pledged Account (collectively with the assets described in clause
(i) above, the "Pledged Financial Assets");
(5) To secure the obligation of the Pledgor under the Indenture and
the Notes to pay all of each of the first six scheduled interest payments on the
Notes when due and to secure repayment of the principal amount and interest on
the Notes and Liquidated Damages (as defined in the Indenture), if any, in the
event that the Notes become due and payable prior to such time as the first six
scheduled interest payments thereon shall have been paid in full (collectively,
the "Obligations"), the Pledgor has agreed (i) to pledge to the Trustee for its
benefit
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and the ratable benefit of the Holders of the Notes, a security interest in the
Collateral (as defined below) securing the payment and performance by the
Pledgor of all of the Obligations and (ii) to execute and deliver this Pledge
Agreement; the Collateral will be sufficient upon receipt of scheduled interest
and principal payments in respect thereto to provide for the payment of the
first six scheduled interest payments on the Notes;
(6) It is a condition precedent to the initial purchase of the Notes
by the Initial Purchasers that the Pledgor shall have executed and delivered
this Pledge Agreement; and
(7) Unless otherwise defined herein or in the Indenture, terms used
in Article 8 or 9 of the Uniform Commercial Code as in effect in the State of
New York ("UCC") and/or in the Federal Book Entry Regulations (as defined below)
are used in this Pledge Agreement as such terms are defined in such Article 8 or
9 and/or the Federal Book Entry Regulations. The term "Federal Book Entry
Regulations" means (a) the federal regulations contained in Subpart B
("Treasury/Reserve Automated Debt Entry System (TRADES)") governing book-entry
securities consisting of U.S. Treasury bonds, notes and bills and Subpart D
("Additional Provisions") of 31 C.F.R. Part 357, 31 C.F.R. Section 357.2,
Section 357.10 through Section 357.14 and Section 357.41 through Section 357.44
and (b) to the extent substantially identical to the federal regulations
referred to in clause (a) above (as in effect from time to time), the federal
regulations governing other book-entry securities.
AGREEMENT
NOW, THEREFORE, in consideration of the premises herein contained, and
in order to induce the Initial Purchasers to purchase the Notes, the Pledgor
hereby agrees with the Trustee, for the benefit of the Trustee and for the
ratable benefit of the Holders of the Notes, as follows:
SECTION 1. Pledge and Grant of Security Interest. The Pledgor hereby
pledges and grants to the Trustee, for its benefit and for the ratable benefit
of the Holders of the Notes, a security interest in and continuing lien on all
of the Pledgor's right, title and interest in and to the property set out in
paragraphs (a) through (d) below (in each case, whether now owned or hereafter
acquired or created by the Pledgor, wherever located and whether now or
hereafter existing or arising and whether consisting of security accounts,
securities (including United States Treasury securities), security entitlements,
financial assets and other investment property, deposit accounts, payment
intangibles and other general intangibles or any other property) (hereinafter
collectively referred to as the "Collateral"):
(a) the Pledged Financial Assets and the certificates, if any,
representing the Pledged Financial Assets, and all dividends, interest, money
(as defined in the UCC (for the avoidance of doubt)), instruments and other
property from time to time received, receivable or otherwise distributed or
distributable in respect of or in exchange for any or all of such Pledged
Financial Assets;
(b) the Pledged Account and all security entitlements with respect
thereto, all Pledged Security Entitlements with respect to all Pledged Financial
Assets from time to time credited, or required to be credited to the Pledged
Account, any and all securities accounts in
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which the Pledged Security Entitlements are carried, and all dividends,
interest, cash, instruments and other property from time to time received,
receivable or otherwise distributed or distributable in respect of or in
exchange for any or all of such Pledged Security Entitlements;
(c) all other securities, securities entitlements and other financial
assets hereafter acquired by the Pledgor pursuant to Article 12 of the
Indenture; and
(d) all proceeds of any and all of the Collateral (including, without
limitation, proceeds that constitute property of the types described in clauses
(a), (b) and (c) of this Section 1), all investments of the Collateral and, to
the extent not otherwise included, all payments in respect of insurance (whether
or not the Trustee is the loss payee thereof) payable by reasons of loss or
damage or any indemnity, warranty or guaranty, or otherwise and all cash
proceeds, in each case with respect to the Collateral.
SECTION 2. Security for Obligations. This Pledge Agreement secures,
and the Collateral is collateral security for, the prompt and complete payment
and performance when due (whether at stated maturity, by acceleration or
otherwise) of all the Obligations of the Pledgor, whether for principal,
interest, Liquidated Damages, fees or otherwise, now or hereafter existing,
under this Pledge Agreement, the Notes or the Indenture (all such obligations
being the "Secured Obligations").
SECTION 3. Maintaining the Pledged Account. So long as any Secured
Obligation shall remain outstanding:
(a) The Pledgor will maintain separately the Pledged Account with the
Account Holder.
(b) It shall be a term and condition of the Pledge Agreement,
notwithstanding any term or condition to the contrary in any other agreement
relating to the Pledged Account, and except as otherwise provided by the
provisions of Section 5 and Section 18 hereof, that no funds shall be paid or
released to or for the account of, or withdrawn by or for the account of, the
Pledgor or any other Person from the Pledged Account except as expressly
provided in this Pledge Agreement.
The Pledged Account shall be subject to such applicable laws, and such
applicable regulations of the Board of Governors of the Federal Reserve System
and of any other appropriate banking or governmental authority, as may now or
hereafter be in effect.
SECTION 4. Delivery of Collateral. (a) All certificates or
instruments representing or evidencing the Pledged Financial Assets or the
Pledged Security Entitlements shall be delivered to and held by or on behalf of
the Trustee pursuant hereto and shall be in suitable form for transfer by
delivery, or shall be accompanied by duly executed instruments of transfer or
assignment in blank, all in form and substance satisfactory to the Trustee. The
Trustee shall have the right, at any time in its discretion and without notice
to the Pledgor, to transfer to or to register in the name of the Trustee or any
of its nominees any or all of the Collateral. In addition, the Trustee shall
have the right at any time to exchange certificates or instruments representing
or evidencing any or all of the Collateral for certificates or instruments of
smaller or larger denominations. Also, the Trustee shall have the right at any
time to convert
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Collateral consisting of financial assets credited to the Pledged Account to
Collateral consisting of financial assets held directly by the Trustee, and to
convert Collateral consisting of financial assets held directly by the Trustee
to Collateral consisting of financial assets credited to the Pledged Account.
(b) With respect to any Collateral in which the Pledgor has any
right, title or interest and that constitutes an uncertificated security, the
Pledgor shall cause the issuer thereof either (i) to register the Trustee as the
registered owner of such security or (ii) to agree in writing with the Pledgor
and the Trustee that such issuer will comply with instructions with respect to
such security originated by the Trustee without further consent of the Pledgor,
such agreement to be in form and substance satisfactory to the Trustee.
(c) With respect to any Collateral in which the Pledgor has any
right, title or interest and that constitutes a security entitlement, the
Pledgor shall cause the securities intermediary with respect to such security
entitlement either (i) to identify in its records the Trustee as the entitlement
holder of such security entitlement against such securities intermediary or (ii)
to agree in writing with the Pledgor and the Trustee that such securities
intermediary will comply with entitlement orders (that is, notifications
communicated to such securities intermediary directing transfer or redemption of
the financial asset to which the Pledgor has a security entitlement) originated
by the Trustee without further consent of the Pledgor, such agreement to be in
substantially the form of Annex A hereto or otherwise in form and substance
satisfactory to the Trustee.
(d) With respect to any Collateral that constitutes a securities
account, the Pledgor will comply with subsection (c) of this Section 4 with
respect to all security entitlements carried in such securities account.
(e) Prior to or concurrently with the execution and delivery hereof
and prior to the transfer to the Trustee of the Pledged Security Entitlements,
as provided in subsections (a) through (c) of this Section 4, the Trustee shall
establish the Pledged Account with the Account Holder. Upon transfer of the
Pledged Financial Assets to the Trustee, as confirmed to the Trustee by the
securities intermediary, the Trustee shall make appropriate book entries
indicating that the Pledged Financial Assets have been credited to and are held
in the Pledged Account. Subject to the other terms and conditions of this Pledge
Agreement, all funds or other property held by the Trustee pursuant to this
Pledge Agreement shall be held in the Pledged Account subject (except as
expressly provided in Sections 5(a), (b) and (c) hereof) to the exclusive
control (as defined in Section 8-106 of the UCC) of the Trustee and exclusively
for the benefit of the Trustee and for the ratable benefit of the Holders of the
Notes and segregated from all other funds or other property otherwise held by
the Trustee.
(f) All Collateral shall be retained in the appropriate account
pending disbursement pursuant to the terms hereof.
(g) Concurrently with the execution and delivery of this Pledge
Agreement, the Trustee shall deliver to the Pledgor a duly executed Control
Agreement (the "Control Agreement"), in the form of Annex A hereto.
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SECTION 5. Disbursements. (a) Three business days prior to the due
date of any of the first six scheduled interest payments on the Notes, the
Pledgor may, pursuant to written instructions given by the Pledgor to the
Trustee (an "Issuer Order"), direct the Trustee to release from the Pledged
Account and pay to the Holders of the Notes proceeds to provide for payment, in
whole or in part, of such interest then due on the Notes. Upon receipt of an
Issuer Order, the Trustee will (i) issue a Payment Order (as defined in the
Control Agreement) to the Account Holder for the release from the Pledged
Account of such funds to the Trustee in accordance with such Issuer Order and
(ii) pay such funds to the Holders of the Notes in accordance with the Indenture
and the Notes. In the event that the funds released from the Pledged Account on
any interest payment date are not sufficient to pay in full the interest due on
the Notes on such interest payment date (a "Shortfall"), nothing in this Section
5 shall relieve the Pledgor of its obligations under the Notes and the Indenture
to pay such Shortfall to the Holders of the Notes on such interest payment date;
provided, however, that no such Shortfall shall be paid from proceeds of the
Collateral unless such proceeds constitute a Surplus (as defined below).
Furthermore, nothing in this Pledge Agreement shall relieve the Pledgor of its
obligations under the Notes and the Indenture to pay Liquidated Damages, if any.
In the event that the funds available for release from the Pledged Account on
any interest payment date exceed the interest due on the Notes on such interest
payment date (a "Surplus"), such Surplus shall be retained in the Pledged
Account and may be applied to the next Shortfall(s), if any. Nothing in this
Section 5 shall affect the Trustee's rights to apply the Collateral to the
payments of amounts due on the Notes upon acceleration thereof.
(b) If the Pledgor makes any of the first six scheduled interest
payments on the Notes or portion of such an interest payment from a source of
funds other than the Pledged Account ("Pledgor Funds"), the Pledgor may, after
payment in full of such interest payment, direct the Trustee pursuant to an
Issuer Order to issue a Payment Order (as defined in the Control Agreement) to
the Account Holder for the release to the Pledgor or to another party at the
direction of the Pledgor (the "Pledgor's Designee") proceeds from the Pledged
Account in an amount less than or equal to the amount of Pledgor Funds applied
to such interest payment; provided, however, that the foregoing shall not apply
in the event that such payment of Pledgor Funds is made in order to compensate
for any Shortfall. Upon receipt by the Trustee of such Issuer Order and provided
the Trustee has received such interest payment, the Trustee shall direct the
Account Holder pursuant to a Payment Order to pay over to the Pledgor or the
Pledgor's Designee, as the case may be, the requested amount from proceeds in
the Pledged Account as soon as practicable.
(c) At least three Business Days prior to the due date of each of the
first six scheduled interest payments on the Notes, the Pledgor shall give the
Trustee notice (by Issuer Order) as to whether such interest payment will be
made pursuant to Section 5(a) or 5(b) above and the respective amounts of
interest that will be paid from the Pledged Account and from Pledgor Funds. Any
Pledgor Funds to be used to make any interest payment shall be delivered to the
Trustee, in immediately available funds, prior to 10:00 a.m. (New York City
time) on such interest payment date. If no such notice is given or such Pledgor
Funds have not been so delivered, the Trustee will act pursuant to Section 5(a)
above as if it had received an Issuer Order pursuant thereto for the payment of
the interest then due from the Pledged Account.
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(d) The Trustee shall instruct the Account Holder to liquidate
Collateral in the Pledged Account (pursuant to written instructions from the
Pledgor) in order to make any of the scheduled payments of interest on the
Notes, unless there are sufficient funds in the Pledged Account on such interest
payment date. The Trustee shall be entitled to instruct the Account Holder to
sell any Collateral as contemplated hereunder prior to the maturity of such
Collateral and shall not be responsible for any costs and expenses of such sale.
(e) Nothing contained in this Pledge Agreement shall (i) afford the
Pledgor any right to issue entitlement orders with respect to any of the Pledged
Security Entitlements or any securities account in which any such security
entitlement may be carried, or otherwise afford the Pledgor control of any
Pledged Security Entitlement or (ii) otherwise give rise to any rights of the
Pledgor with respect to the Pledged Financial Assets or any securities account
in which any such security entitlement may be carried, other than the Pledgor's
rights under this Pledge Agreement as the beneficial owner of collateral pledged
to and subject to the exclusive control (except as expressly provided in
Sections 5(a) and (b) hereof prior to an Event of Default) of the Trustee in its
capacity as such (and not as a securities intermediary) before the payment in
full, when due, of the first six scheduled interest payments on the Notes. The
Pledgor acknowledges, confirms and agrees that the Trustee is an entitlement
holder of the Pledged Security Entitlements solely as Trustee for the Holders of
the Notes and not as a securities intermediary.
SECTION 6. Investing of Amounts in the Pledged Account. If requested
and as directed in writing by the Pledgor, the Trustee will, subject to the
provisions of Sections 3, 5 and 13 of this Pledge Agreement, from time to time,
instruct the Account Holder to invest interest paid on the Pledged Financial
Assets and reinvest other proceeds of any Pledged Financial Assets that may
mature or be sold, in each case, in (i) identified United States Treasury
securities or (ii) selected shares of a money market fund registered under the
Investment Company Act of 1940, as amended, the portfolio of which consists of
United States Treasury securities, in each case credited to the Pledged Account.
For tax reporting and withholding purposes, all income earned on investments
held by the Trustee shall be allocated to the Pledgor and, within ten days after
the date of this Pledge Agreement, the Pledgor shall provide such tax reporting
documents to the Trustee as the Trustee may request.
SECTION 7. Representations and Warranties. The Pledgor hereby
represents and warrants that:
(a) This Pledge Agreement has been duly authorized, validly executed
and delivered by the Pledgor and (assuming the due authorization and valid
execution and delivery of this Pledge Agreement by the Trustee and
enforceability of the Pledge Agreement against the Trustee in accordance with
its terms) constitutes a valid and binding agreement of the Pledgor, enforceable
against the Pledgor in accordance with its terms, except as (i) the
enforceability hereof may be limited by bankruptcy, insolvency, fraudulent
conveyance, preference, reorganization, moratorium or similar laws now or
hereafter in effect relating to or affecting creditors' rights or remedies
generally, (ii) the availability of equitable remedies may be limited by
equitable principles of general applicability, (iii) the exculpation provisions
and rights to indemnification hereunder may be limited by U.S. federal and state
securities laws and public policy considerations and (iv) the waiver of rights
and defenses contained in Section 13(d), Section 19(h) and Section 19(l) hereof
may be limited by applicable law.
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(b) The Pledgor's exact legal name (as defined in Section 9-503(a) of
the UCC) is MGI PHARMA, INC. The Pledgor is located (within the meaning of
Section 9-307 of the UCC) in the State of Minnesota and has its chief executive
office in the State of Minnesota.
(c) The Pledgor is the legal and beneficial owner of the Collateral
free and clear of any Lien, claim, option or right of others (except for the
security interests created by this Pledge Agreement, any Liens permitted under
the Indenture and the prior lien of the Account Holder on property in the
Pledged Account to secure payment for property purchased for the Pledged Account
and normal commissions and fees for the Pledged Account (the "Account Holder's
Lien")). No effective financing statement or instrument similar in effect
covering all or any part of the Collateral or listing the Pledgor or any trade
name of the Pledgor with respect to all or any part of the Collateral is on file
in any public or recording office, other than the financing statements filed
pursuant to this Pledge Agreement.
(d) All filings and other actions (including, without limitation, (A)
actions necessary to obtain control of the Collateral as provided in Sections
9-104, 9-105, 9-106 and 9-107 of the UCC and (B) actions necessary to perfect
the Trustee's security interest with respect to the Collateral evidenced by a
certificate of ownership) necessary to perfect the security interest in the
Collateral created under this Pledge Agreement have been duly made or taken and
are in full force and effect, and this Pledge Agreement creates in favor of the
Trustee for its benefit and the ratable benefit of the Holders of the Notes a
valid and, together with such filings and other actions, a perfected first
priority (subject to the Account Holder's Lien) security interest in the
Collateral, securing the payment of the Secured Obligations.
(e) The execution and delivery by the Pledgor of, and the performance
by the Pledgor of its obligations under, this Pledge Agreement will not
contravene any provision of applicable law or the Articles of Incorporation of
the Pledgor or any material agreement or other material instrument binding upon
the Pledgor or any judgment, order or decree of any governmental body, agency or
court having jurisdiction over the Pledgor, or result in the creation or
imposition of any Lien on any assets of the Pledgor, except for the security
interests granted under this Pledge Agreement and the Account Holder's Lien.
(f) No consent of any other person and no approval, authorization,
order of, action by, notice to, filing or qualification with, any governmental
authority, regulatory body, agency or other third party is required for (i) the
grant by the Pledgor of the pledge and security interest granted under this
Pledge Agreement, (ii) the execution or delivery by the Pledgor of, or the
performance by the Pledgor of its obligations under, this Pledge Agreement,
(iii) the perfection or maintenance of the pledge and security interest created
hereunder (including the first priority nature of such pledge or security
interest (subject to the Account Holder's Lien)), except for the filing of
financing and continuation statements under the UCC, which financing statements
have been delivered to the Trustee and which, when filed, shall be in full force
and effect, or (iv) for the exercise by the Trustee of its voting or other
rights provided for in this Pledge Agreement or the remedies in respect of the
Collateral pursuant to this Pledge Agreement, except as may be required in
connection with the disposition of any portion of the Collateral by laws
affecting the offering and sale of securities generally.
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(g) There are no legal or governmental proceedings pending or
threatened to which the Pledgor is a party or to which any of the properties of
the Pledgor is subject that would materially adversely affect the power or
ability of the Pledgor to perform its obligations under this Pledge Agreement or
to consummate the transactions contemplated hereby.
(h) The pledge of the Collateral pursuant to this Pledge Agreement is
not prohibited by law or governmental regulation (including, without limitation,
Regulations T, U and X of the Board of Governors of the Federal Reserve System)
applicable to the Pledgor.
(i) No Event of Default (as defined below) exists.
SECTION 8. Further Assurances. (a) The Pledgor agrees that from time
to time, at the expense of the Pledgor, the Pledgor will promptly execute and
deliver all further instruments and documents, and take all further action, that
may be necessary or desirable, and that the Trustee may reasonably request, in
order to perfect and protect any pledge or security interest granted or
purported to be granted hereunder or to enable the Trustee to exercise and
enforce its rights and remedies hereunder with respect to any Collateral.
Without limiting the generality of the foregoing, the Pledgor will: (i) if any
Collateral shall be evidenced by a promissory note or other instrument, deliver
and pledge to the Trustee hereunder such note or instrument, duly endorsed and
accompanied by duly executed instruments of transfer or assignment, all in form
and substance satisfactory to the Trustee; (ii) execute and file such financing
or continuation statements, or amendments thereto, and such other instruments or
notices, as may be necessary or desirable, or as the Trustee may reasonably
request, in order to perfect and preserve the pledge and security interest
granted or purported to be granted hereby; (iii) deliver and pledge to the
Trustee for its benefit and the ratable benefit of the Holders of the Notes
certificates representing Collateral that constitutes certificated securities,
accompanied by undated stock or bond powers executed in blank; and (iv) deliver
to the Trustee evidence that all other action that the Trustee may deem
reasonably necessary or desirable in order to perfect and protect the security
interest created by the Pledgor under this Pledge Agreement has been taken.
(b) The Pledgor hereby authorizes the Trustee to file one or more
financing or continuation statements, and amendments thereto, with respect to
the Collateral, in each case without the signature of the Pledgor, and
regardless of whether any particular asset described in such financing
statements falls within the scope of the UCC. Such financing statements may
describe the Collateral by reference to an attached photocopy or other
reproduction of this Pledge Agreement, or in any manner similar in scope to the
description of the Collateral provided in Section 1. The Pledgor ratifies its
authorization for the Trustee to have filed such financing statements,
continuation statements or amendments filed prior to the date hereof.
(c) The Pledgor will furnish to the Trustee from time to time
statements and schedules further identifying and describing the Collateral and
such other reports in connection with the Collateral as the Trustee may
reasonably request, all in reasonable detail.
(d) The Pledgor will promptly pay all reasonable costs and expenses
incurred in connection with any of the foregoing within 45 days of receipt of an
invoice therefor. The Pledgor also agrees, whether or not requested by the
Trustee, to take all actions that are necessary to perfect or continue the
perfection of, or to protect the first priority (subject to the
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Account Holder's Lien) of, the Trustee's security interest in and to the
Collateral, including the filing of all necessary financing and continuation
statements, and to protect the Collateral against the rights, claims or
interests of third persons (other than any such rights, claims or interests
created by or arising through the Trustee).
SECTION 9. Covenants. The Pledgor covenants and agrees with the
Trustee and the Holders of the Notes that from and after the date of this Pledge
Agreement until the earlier of payment in full in cash of (x) each of the first
six scheduled interest payments on the Notes when due under the terms of the
Indenture or (y) all obligations due and owing under the Indenture and the Notes
in the event such obligations become due and payable prior to the payment of the
first six scheduled interest payments on the Notes that:
(a) except as permitted under the Indenture, (A) it will not (and
will not purport to) sell, assign or otherwise dispose of, or grant any option
or warrant with respect to, any of the Collateral or its beneficial interest
therein, and (B) it will not create or suffer to exist any Lien or other adverse
interest upon or with respect to any of the Collateral or its beneficial
interest therein (except for the security interests granted under this Pledge
Agreement and the Account Holder's Lien);
(b) except as permitted under the Indenture, it will not (A) enter
into any agreement or understanding that restricts or inhibits or purports to
restrict or inhibit the Trustee's rights or remedies hereunder, including,
without limitation, the Trustee's right to sell or otherwise dispose of the
Collateral or (B) fail to pay or discharge any tax, assessment or levy of any
nature with respect to its beneficial interest in the Collateral not later than
five days prior to the date of any proposed sale under any judgment, writ or
warrant of attachment with respect to such beneficial interest;
(c) it will not change its name, type of organization, jurisdiction
of organization, organizational identification number or location from those set
forth in Section 7(b) hereof without first giving at least 10 days' prior
written notice to the Trustee and taking all action required by the Trustee for
the purpose of perfecting or protecting the security interest granted by this
Pledge Agreement; and
(d) it will, and will cause the Trustee and the Account Holder to,
execute and deliver on or prior to any Date of Delivery (as defined in Section
2(b) of the Purchase Agreement) a supplement to this Pledge Agreement,
reasonably satisfactory to the Initial Purchasers, providing for the pledge of
additional Collateral to secure all Obligations in respect of the Option Notes.
SECTION 10. Power of Attorney. In addition to all of the powers
granted to the Trustee pursuant to the Indenture, the Pledgor hereby irrevocably
appoints the Trustee as the Pledgor's attorney-in-fact (with full power of
substitution), with full authority in the place and stead of the Pledgor and in
the name of the Pledgor or otherwise, from time to time in the Trustee's
discretion after the occurrence and during the continuance of an Event of
Default, to take any action and to execute any instrument that is necessary or
advisable or as the Trustee may deem necessary or advisable to accomplish the
purposes of this Pledge Agreement, including, without limitation:
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(a) to ask for, demand, collect, xxx for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become due under
or in respect of any of the Collateral,
(b) to receive, indorse and collect any drafts or other instruments,
documents and chattel paper, in connection with clause (a) above,
(c) to file any claims or take any action or institute any
proceedings that the Trustee may deem necessary or desirable for the collection
of any of the Collateral or otherwise to enforce the rights of the Trustee with
respect to any of the Collateral, and
(d) to pay or discharge taxes or Liens levied or placed upon the
Collateral that the Pledgor has failed to pay or discharge in accordance
herewith, the legality or validity thereof and the amounts necessary to
discharge the same to be determined by the Trustee in its sole reasonable
discretion, and such payments made by the Trustee to become part of the
Obligations of the Pledgor to the Trustee, due and payable immediately upon
demand;
provided, however, that the Trustee shall have no obligation to perform any of
the foregoing actions. The Trustee's authority under this Section 10 shall
include, without limitation, the authority to endorse and negotiate any checks
or instruments representing proceeds of Collateral in the name of the Pledgor,
execute and give receipt for any certificate of ownership or any document
constituting Collateral, transfer title to any item of Collateral, or any other
documents deemed necessary or appropriate by the Trustee to preserve, protect or
perfect the security interest in the Collateral granted hereunder and to file
the same, prepare, file and sign the Pledgor's name on any notice of Lien, and
to take any other actions arising from or incident to the powers granted to the
Trustee in this Pledge Agreement. This power of attorney is coupled with an
interest and is irrevocable by the Pledgor.
If the Pledgor fails to perform any agreement contained herein, the
Trustee may, but without obligation to do so and without notice, itself perform,
or cause performance of, such agreement, and the expenses of the Trustee
incurred in connection therewith shall be payable by the Pledgor under Section
12.
SECTION 11. No Assumption of Duties; Reasonable Care. The powers
conferred on the Trustee hereunder are solely to protect the security interest
of the Trustee for its benefit and the ratable benefit of the Holders of the
Notes in the Collateral and shall not impose any duty on the Trustee to exercise
any such powers. Except for the safe custody of any Collateral in its possession
and the accounting for moneys actually received by it hereunder, the Trustee
shall have no duty as to any Collateral as to (i) ascertaining or taking action
with respect to calls, conversions, exchanges, maturities, tenders or other
matters relative to any Collateral, whether or not the Trustee has or is deemed
to have knowledge of such matters, (ii) taking of any necessary steps to
preserve rights against any parties or any other rights pertaining to any
Collateral or (c) investing or reinvesting any of the Collateral or any loss on
any investment. The Trustee shall be deemed to have exercised reasonable care in
the custody and preservation of any Collateral in its possession if such
Collateral is accorded treatment substantially equal to that which it accords
its own property. The Trustee shall be entitled to all the rights, benefits,
privileges and immunities accorded to it under the Indenture.
10
SECTION 12. Indemnity and Expenses. (a) The Pledgor agrees to
indemnify, defend and save and hold harmless the Trustee, and each Holder of
Notes and their respective officers, directors, employees, agents and advisors
(each, an "Indemnified Party") from and against, and shall pay on demand, any
and all claims, damages, losses, liabilities and expenses (including, without
limitation, reasonable fees and expenses of counsel) that may be incurred by or
asserted or awarded against any Indemnified Party, in each case arising out of
or in connection with or resulting from this Pledge Agreement (including,
without limitation, enforcement of this Pledge Agreement), except to the extent
such claim, damage, loss, liability or expense is from such Indemnified Party's
gross negligence or willful misconduct.
(b) The Pledgor will, within five business days after demand, pay to
the Trustee the amount of any and all reasonable fees and expenses, including,
without limitation, the reasonable fees and expenses of its counsel and of any
experts and agents, that the Trustee may incur in connection with (i) the review
and negotiation of this Pledge Agreement, (ii) the custody or preservation of,
or the sale of, collection from or other realization upon, any of the
Collateral, (iii) the exercise or enforcement of any of the rights of the
Trustee or the Holders of the Notes hereunder or (iv) the failure by the Pledgor
to perform or observe any of the provisions hereof.
SECTION 13. Remedies. If any Event of Default under the Indenture
(including, without limitation, any default hereunder constituting an Event of
Default (any such Event of Default being referred to in this Pledge Agreement as
an "Event of Default")) shall have occurred and be continuing and payments on
the Notes shall have been accelerated in accordance with the provisions of the
Indenture:
(a) The Trustee and the Holders of the Notes may exercise in respect
of the Collateral, in addition to all other rights and remedies given by law or
by this Pledge Agreement or the Indenture, all of the rights and remedies of a
secured party under the UCC (whether or not the UCC applies to the affected
Collateral) and also may without notice except as specified below, sell the
Collateral or any part thereof in one or more parcels at any broker's board or
at public or private sale, in one or more sales or lots, at any of the Trustee's
offices or elsewhere, for cash, on credit or for future delivery, and upon such
other terms as the Trustee may deem commercially reasonable. The Pledgor agrees
that, to the extent notice of sale shall be required by law, at least 10 days'
notice to the Pledgor 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 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 purchaser of any or all Collateral so sold shall
thereafter hold the same absolutely, free from any claim, encumbrance or right
of any kind whatsoever created by or through the Pledgor. Any sale of the
Collateral conducted in conformity with reasonable commercial practices of
banks, insurance companies, commercial finance companies, or other financial
institutions disposing of property similar to the Collateral shall be deemed to
be commercially reasonable. The Trustee or any Holder of Notes may, in its own
name or in the name of a designee or nominee, buy any of the Collateral at any
public sale and, if permitted by applicable law, at any private sale. All
expenses (including court costs and reasonable attorneys' fees, expenses and
disbursements) of, or incident to, the enforcement of
11
any of the provisions hereof shall be recoverable from the proceeds of the sale
or other disposition of the Collateral.
(b) Any cash held by or on behalf of the Trustee and all cash
proceeds received by or on behalf of the Trustee in respect of any sale of,
collection from, or other realization upon all or any part of the Collateral
shall (after payment of any amounts payable to the Trustee pursuant to Section
12(b) of this Pledge Agreement) be promptly released by the Trustee for payment
to the Holders of the Notes and be applied first to, any accrued and unpaid
interest on the Notes, second, to the repayment of the principal amount of the
Notes and Liquidated Damages (if any) on the Notes, and third, to the extent
available, against the remaining Secured Obligations. Any surplus of such cash
or cash proceeds held by or on behalf of the Trustee and remaining after payment
in full of all the Secured Obligations shall be paid over to the Pledgor or to
whomsoever may be lawfully entitled to receive such surplus.
(c) The Trustee may, without notice to the Pledgor except as required
by law and at any time or from time to time, charge, set-off and otherwise apply
all or any part of the Collateral against the Secured Obligations or any part
thereof.
(d) The Pledgor agrees to (i) provide the Trustee with such
information as may be necessary, or in the opinion of the Trustee, advisable to
enable the Trustee to effect the sale of the Collateral and (ii) use its
reasonable best efforts to do or cause to be done all such other acts and things
as may be necessary to make such sale or sales of all or any portion of the
Collateral pursuant to this Section 13 valid and binding and in compliance with
any and all other applicable requirements of law.
SECTION 14. Security Interest Absolute. This Pledge Agreement shall
continue to be effective or be reinstated, as the case may be, if at any time
any payment of any of the Secured Obligations is rescinded or must otherwise be
returned by the Trustee or any Holder of the Notes or by any other Person upon
the insolvency, bankruptcy or reorganization of the Pledgor or otherwise, all as
though such payment had not been made.
SECTION 15. Amendments, Waivers and Consents. No amendment or waiver
of any provision of this Pledge Agreement, and no consent to any departure by
the Pledgor from any provision of this Pledge Agreement, shall in any event be
effective unless the same shall be in writing and signed by the Trustee and the
Pledgor, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given. No failure on the part of
the Trustee or any Holder of the Notes to exercise, and no delay in exercising
any right hereunder, shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right.
SECTION 16. Notices. Any notice or communication given hereunder shall
be sufficiently given if in writing and delivered in person or mailed by first
class mail, commercial courier service or telecopier communication, addressed as
follows; or, as to any party, at such other address as shall be designated by
such party in a written notice to the other parties:
if to the Pledgor:
MGI PHARMA, INC.
12
0000 Xxxx Xxx Xxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
with a copy to:
Xxxxxx & Xxxxxxx LLP
Suite 1500
00 Xxxxx Xxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx
if to the Trustee:
Xxxxx Fargo Bank, National Association
Corporate Trust Services
Xxxxx Xxxxxx & Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxx
Facsimile: 612/667-9825
All such notices and other communications shall, when mailed, delivered or
telecopied, respectively, be effective when deposited in the mails, delivered or
telecopied, respectively, addressed as aforesaid.
SECTION 17. Continuing Security Interest. This Pledge Agreement shall
create a continuing security interest in the Collateral and (a) shall, unless
otherwise provided in this Pledge Agreement, remain in full force and effect
until the payment in full in cash of the Secured Obligations, (b) be binding
upon the Pledgor, its successors and assigns and (c) inure, together with the
rights and remedies of the Trustee hereunder, to the benefit of the Trustee and
the Holders of the Notes and their respective successors, transferees and
assigns.
SECTION 18. Termination. This Pledge Agreement (other than the
Pledgor's obligations under Section 12 hereof) shall terminate upon the earlier
of (i) the redemption of the Notes in whole, (ii) the payment in full of each of
the first six scheduled interest payments on the Notes when due, or (iii) the
discharge of the Indenture. Upon any such termination, without any necessary
action on the part of the Pledgor or the Trustee or Account Holder, (i) the
Control Agreement(s) will terminate and control of the Pledged Account and the
Pledged Security Entitlements shall revert to the Pledgor, (ii) the Trustee
shall promptly notify the Account Holder and obtain from the Account Holder and
deliver to the Pledgor all certificates and instruments representing any portion
of the Pledged Financial Assets constituting certificated securities and (iii)
the Trustee shall no longer have any rights in any of the Collateral.
SECTION 19. Miscellaneous Provisions.
(a) No Adverse Interpretation of Other Agreements. This Pledge
Agreement may not be used to interpret another pledge, security or debt
agreement of the Pledgor or any
13
subsidiary thereof. No such pledge, security or debt agreement (other than the
Indenture) may be used to interpret this Pledge Agreement.
(b) Severability. The provisions of this Pledge Agreement are
severable, and if any clause or provision shall be held invalid, illegal or
unenforceable in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect in that jurisdiction only such clause or
provision, or part thereof, and shall not in any manner affect such clause or
provision in any other jurisdiction or any other clause or provision of this
Pledge Agreement in any jurisdiction.
(c) Headings. The headings in this Pledge 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.
(d) Counterpart Originals. This Pledge Agreement may be signed in two
or more counterparts, each of which shall be deemed an original, but all of
which shall together constitute one and the same agreement. Delivery of an
executed counterpart of a signature page to this Pledge Agreement by telecopier
shall be effective as delivery of an original executed counterpart of this
Pledge Agreement.
(e) Benefits of Pledge Agreement. Nothing in this Pledge Agreement,
express or implied, shall give to any person, other than the parties hereto and
their successors hereunder, and the Holders of the Notes and the Account Holder,
any benefit or any legal or equitable right, remedy or claim under this Pledge
Agreement.
(f) Interpretation of Agreement. To the extent a term or provision of
this Pledge Agreement conflicts with the Indenture, the Indenture shall control
with respect to the subject matter of such term or provision. Acceptance of or
acquiescence in a course of performance rendered under this Pledge Agreement
shall not be relevant to determine the meaning of this Pledge Agreement even
though the accepting or acquiescing party had knowledge of the nature of the
performance and opportunity for objection.
(g) Survival of Representations and Covenants. All representations,
warranties and covenants of the Pledgor contained herein shall survive the
execution and delivery of this Pledge Agreement, and shall terminate only upon
the termination of this Pledge Agreement, except as otherwise specified in such
representations, warranties and covenants.
(h) Waivers. The Pledgor waives presentment and demand for payment of
any of the Obligations, protest and notice of dishonor or default with respect
to any of the Obligations, and all other notices to which the Pledgor might
otherwise be entitled, except as otherwise expressly provided herein or in the
Indenture.
(i) Authority of the Trustee. (i) The Trustee shall have and be
entitled to exercise all powers hereunder that are specifically granted to the
Trustee by the terms hereof, together with such powers as are reasonably
incident thereto. The Trustee may perform any of its duties hereunder or in
connection with the Collateral by or through agents or employees and shall be
entitled to retain counsel and to act in reliance upon the advice of counsel
concerning all such matters. Except as otherwise expressly provided in this
Pledge Agreement or the Indenture,
14
neither the Trustee nor any director, officer, employee, attorney or agent of
the Trustee shall be liable to the Pledgor for any action taken or omitted to be
taken by the Trustee, in its capacity as Trustee, hereunder, except for its own
bad faith, gross negligence or willful misconduct, and the Trustee shall not be
responsible for the validity, effectiveness or sufficiency hereof or of any
document or security furnished pursuant hereto. The Trustee and its directors,
officers, employees, attorneys and agents shall be entitled to rely on any
communication, instrument or document believed by it or them to be genuine and
correct and to have been signed or sent by the proper person or persons.
(ii) The Pledgor acknowledges that the rights and
responsibilities of the Trustee under this Pledge Agreement with respect to any
action taken by the Trustee or the exercise or non-exercise by the Trustee of
any option, right, request, judgment or other right or remedy provided for
herein or resulting or arising out of this Pledge Agreement shall, as between
the Trustee and the Holders of the Notes, be governed by the Indenture and by
such other agreements with respect thereto as may exist from time to time among
them, but, as between the Trustee and the Pledgor, the Trustee shall be
conclusively presumed to be acting as agent for the Holders of the Notes with
full and valid authority so to act or refrain from acting, and the Pledgor shall
not be obligated or entitled to make any inquiry respecting such authority.
(j) Final Expression. This Pledge Agreement, together with the
Indenture and any other agreement executed in connection herewith, is intended
by the parties as a final expression of this Pledge Agreement and is intended as
a complete and exclusive statement of the terms and conditions thereof.
(k) Rights of Holders of the Notes. No Holder of Notes shall have any
independent rights hereunder other than those rights granted to individual
Holders of the Notes pursuant to Section 6.06 of the Indenture; provided that
nothing in this subsection shall limit any rights granted to the Trustee under
the Notes or the Indenture.
(l) Governing Law; Submission to Jurisdiction; Waiver of Jury Trial;
Waiver of Damages. (i) This Pledge Agreement shall be governed by, and construed
in accordance with, the laws of the state of New York.
(ii) The Pledgor agrees that the Trustee shall, in its capacity
as trustee or in the name and on behalf of any Holder of Notes, have the right,
to the extent permitted by applicable law, to proceed against the Pledgor or the
Collateral in a court in any location reasonably selected in good faith (and
having personal or in rem jurisdiction over the Pledgor or the Collateral, as
the case may be) to enable the Trustee to realize on the Collateral, or to
enforce a judgment or other court order entered in favor of the Trustee. The
Pledgor agrees that it will not assert any counterclaims, setoffs or crossclaims
in any proceeding brought by the Trustee to realize on such property or to
enforce a judgment or other court order in favor of the Trustee, except for such
counterclaims, setoffs or crossclaims which, if not asserted in any such
proceeding, could not otherwise be brought or asserted. The Pledgor waives any
objection that it may have to the location of the court in the city of New York
once the Trustee has commenced a proceeding described in this paragraph
including, without limitation, any objection to the laying of venue or based on
the grounds of forum non conveniens.
15
(iii) The Pledgor agrees that neither any Holder of Notes nor
(except as otherwise provided in this Pledge Agreement or the Indenture) the
Trustee in its capacity as trustee shall have any liability to the Pledgor
(whether arising in tort, contract or otherwise) for losses suffered by the
Pledgor in connection with, arising out of, or in any way related to, the
transactions contemplated and the relationship established by this Pledge
Agreement, or any act, omission or event occurring in connection therewith,
unless such losses were the result of acts or omissions on the part of the
Trustee or such Holder of Notes, as the case may be, constituting bad faith,
gross negligence or willful misconduct.
(iv) To the extent permitted by applicable law, the Pledgor
waives the posting of any bond otherwise required of the Trustee or any Holder
of Notes in connection with any judicial process or proceeding to enforce any
judgment or other court order pertaining to this Pledge Agreement or any related
agreement or document entered in favor of the Trustee or any Holder of Notes, or
to enforce by specific performance, temporary restraining order or preliminary
or permanent injunction, this Pledge Agreement or any related agreement or
document between the Pledgor on the one hand and the Trustee and/or the Holders
of the Notes on the other hand.
16
IN WITNESS WHEREOF, the Pledgor and the Trustee have each caused this
Pledge Agreement to be duly executed and delivered as of the date first above
written.
Pledgor:
MGI PHARMA, INC.
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Executive Vice President and
Chief Financial Officer
Trustee:
XXXXX FARGO BANK, NATIONAL ASSOCIATION
as Trustee
By: /s/ Xxxxxxx Xxxx
-------------------------------------
Name: Xxxxxxx Xxxx
Title: Corporate Trust Officer
SCHEDULE I
Pledged Financial Assets
------------------------
Par Amount Maturity Date CUSIP No. Price
---------- ------------- --------- ------------
2,928,000 8/15/2004 000000XX0 2,915,819.52
2,928,000 2/15/2005 000000XX0 2,900,769.60
2,928,000 8/15/2005 000000XX0 2,876,818.56
2,928,000 2/15/2006 000000XX0 2,838,139.68
2,928,000 8/15/2006 000000XX0 2,801,598.24
2,928,000 2/15/2007 000000XX0 2,747,840.16
1
