EXHIBIT AA
PLEDGE AGREEMENT
GRANTED BY: P.P. LUXCO HOLDINGS II S.A.R.L., a corporation constituted under
the laws of Luxembourg, registered with the register of commerce
and companies under number B 88.549 and having its registered
office at 00 xxxxxx Xxxxxxxx, X.X. 000, X-0000 Xxxxxxxxxx,
(xxx "PLEDGOR")
IN FAVOUR OF: The LENDERS and the AGENT, as hereinafter defined,
(each, a "PLEDGEE" and collectively, the "PLEDGEES")
WHEREAS Picchio Pharma Inc. (the "BORROWER"), National Bank of Canada, as
Agent, and the Lenders are parties to a credit agreement dated as of January 26,
2006 (as same may be amended, supplemented or restated from time to time, the
"CREDIT AGREEMENT") pursuant to which the Lenders have agreed to extend credit
to the Borrower;
WHEREAS pursuant to a guarantee agreement dated January 26, 2006, the
Pledgor has guaranteed the performance of all obligations of the Borrower to the
Lenders arising from or under the Credit Agreement (as amended, modified or
supplemented from time to time, the "GUARANTEE");
WHEREAS the execution of this Agreement and the performance of the
obligations of the Pledgor thereunder are a condition of the extension of credit
to the Borrower under the Credit Agreement;
WHEREAS the Pledgor benefits from the extension of credit made to the
Borrower under the Credit Agreement.
NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:
1. INTERPRETATION
In this Agreement, unless something in the subject matter or context is
inconsistent therewith:
1.1 Capitalized terms used herein and defined in the Credit Agreement have
the meaning assigned to them in the Credit Agreement unless otherwise
defined herein.
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1.2 "AGENT" means National Bank of Canada, acting in its capacity as Agent
for the Lenders under the Credit Agreement, and any assignee or
successor thereof as permitted under the Credit Agreement.
1.3 "COLLATERAL" means the assets subject to the security constituted by
Section 2.1.
1.4 "LENDER" means each of the Lenders under the Credit Agreement as well
as any of their respective successors and assignees as permitted under
the Credit Agreement.
1.5 "OBLIGATIONS" means all obligations, indebtedness and liabilities of
the Pledgor to Pledgees under or arising from the Credit Agreement or
the Guarantee.
1.6 "SECURITIES" means the 9,868,368 common shares of Neurochem Inc.
evidenced by certificates numbers 001281, 001285, 001689, 001690 and
001762 and all other securities which may in the future become subject
to this Agreement.
2. THE SECURITY
2.1 Grant of Security
To secure the payment and performance of the Obligations, the Pledgor
hereby grants to the Pledgees a hypothec and security interest in, and
a pledge on, the following property (the "COLLATERAL"):
2.1.1 the Securities and all rights relating thereto;
2.1.2 all dividend, interest and other income and all principal paid
or payable in respect of any Securities;
2.1.3 all other property that may at any time be received or
receivable or otherwise distributed or distributable to the
Pledgor in respect of, in substitution for, in addition to or in
exchange for, any of the foregoing; and
2.1.4 all proceeds of disposition or collection of the foregoing.
For purposes of the laws of the Province of Quebec, the hypothec
hereby constituted is for an amount of Cdn.$50,000,000 with interest
from the date hereof at a rate of 20% per annum.
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2.2 Delivery of Collateral
Certificates representing the Securities endorsed in blank for
transfer or accompanied by powers of attorney must be delivered
immediately to the Agent, for the benefit of the Pledgees.
2.3 Representations
The Pledgor represents and warrants that it owns the Securities, that
the Securities are freely negotiable and that it has full right and
authority to enter into this Agreement and to deliver the Securities
to the Agent for the benefit of the Pledgees.
3. DEALING WITH COLLATERAL
3.1 Holding of the Collateral
3.1.1 The Securities delivered to the Agent for the benefit of the
Pledgees may be held by the Agent or on behalf of the Pledgees by
a custodian appointed by the Agent.
3.1.2 In the holding of the Collateral, the Pledgees and a custodian
on their behalf are only bound to exercise the same degree of
care as they would exercise with respect to similar property of
similar value held in the same place.
3.2 Voting Rights
3.2.1 Unless the Pledgor has been notified by the Agent that an Event
of Default has occurred and is continuing, the Pledgor is
entitled to exercise all the rights to vote and to give proxies,
consents and waivers in respect of the Securities. No such action
may be taken if same would impair the security constituted hereby
or would violate or be inconsistent with this Agreement or any of
the Credit Documents.
3.2.2 Upon the occurrence and the continuance of an Event of Default,
the Agent may give to the Pledgor a notice prohibiting the
Pledgor from exercising the rights to vote and to give proxies,
consents and waivers in respect of the Securities, at which time
all such rights of the Pledgor will cease immediately and the
Pledgees will have the right to exercise same.
3.3 Dividends and Interest Payments
3.3.1 Unless the Pledgor has been notified by the Agent that an Event
of Default has occurred and is continuing, the Pledgor is
entitled to
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receive all dividend or interest payments in respect of the
Collateral.
3.3.2 Upon the Agent giving to the Pledgor notice that an Event of
Default has occurred and is continuing, all rights of the Pledgor
pursuant to Section 3.3.1 will cease and the Pledgees will have
the sole and exclusive right and authority to receive and retain
all payments that the Pledgor would otherwise be authorized to
retain pursuant to Section 3.3.1.
4. DEFAULT AND REMEDIES
4.1 Remedies
4.1.1 On or after the occurrence of an Event of Default which is
continuing, the security granted hereby will, at the option of
the Pledgees, become immediately enforceable and, in addition to
any right or remedy granted to pledgees or other creditors under
the laws of the Province of Quebec or the laws of Luxembourg, the
Pledgees will have the rights and remedies set out below, all of
which rights and remedies may be enforced successively,
concurrently or both:
(1) register any part of the Collateral into the name of the
Agent, for the benefit of the Pledgees, or its nominee;
(2) vote any of the Collateral (whether or not registered in the
name of the Agent, for the benefit of the Pledgees, or its
nominee) and give or withhold all consents and waivers in
respect thereof;
(3) exercise all rights attached to any of the Collateral;
(4) from time to time collect, sell or otherwise realize upon
any Collateral in such manner as may seem advisable to the
Pledgees;
(5) purchase any of the Collateral, whether in connection with a
sale made pursuant to judicial proceedings or otherwise; and
(6) take or accept the Collateral in satisfaction of the
Obligations in the manner required by law.
4.1.2 The Pledgees may (i) grant extensions of time, (ii) take and
perfect or abstain from taking and perfecting security, (iii)
give up security, (iv) accept compositions or compromises, (v)
grant releases and discharges, and (vi) release any part of the
Collateral
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or otherwise deal with the Borrower or any guarantor as the
Pledgees see fit without prejudice to the liability of the
Pledgor to the Pledgees or the Pledgees' rights hereunder. The
Pledgees shall not be required to exercise any recourse against
the Borrower or any guarantor.
4.1.3 The Pledgees will not be liable or responsible for any failure
to collect or realize the Collateral and will not be bound to
exercise any right attached to the Collateral. The Pledgees in
exercising or refraining from exercising any of its rights
hereunder shall not be liable to the Pledgor for any depreciation
in value of the Collateral.
5. MISCELLANEOUS
5.1 Additional Securities
Whenever securities other than those specifically described in Section
1.6 are to become subject to this Agreement, the Pledgor must execute
a confirmation in the form of the annex hereto or in such other form
as may be acceptable to the Agent.
5.2 Payment of expenses
The Obligations will also include all reasonable expenses of the
Pledgees and the Agent, including the reasonable fees and
disbursements of any adviser or legal counsel, incurred in connection
with preserving, collecting or realizing the Collateral, or incidental
to the safekeeping or the release of any Collateral.
5.3 Application of payments
The Pledgees may apply any proceeds of collection or realization of
the Collateral to reduce any part of the Obligations in such order as
the Pledgees sees fit or may retain the whole or any part of such
proceeds as additional Collateral.
5.4 Release of the Security
The security created hereunder will be released after termination of
the Facility and performance and payment in full of the Obligations.
Partial releases may also be obtained (i) further to a request from
the Borrower made in accordance with Section 9.7 of the Credit
Agreement, in the circumstances specified in said Section, or (ii) in
the circumstances described in Section 9.8(b) of the Credit Agreement.
Upon any such release, the Collateral or the applicable portion
thereof then in the custody of the Agent or its depositary must be
delivered to the Pledgor as soon as practicable.
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5.5 Notices
5.5.1 Any notice to be given to a party in connection with this
Agreement will be given in writing and will be given by personal
delivery, by a reputable delivery service or by telecopier
addressed to the recipient at its address specified in the
Guarantee or at such other address as may be notified by such
party to the others pursuant to this Section 5.5.
5.5.2 Any notice given by personal delivery or by a delivery service
will be conclusively deemed to have been given at the time of
such delivery and, if given by telecopier on the day of
transmittal if before 9:00 a.m. (Montreal time) on a Business
Day, or on the following Business Day if such transmission occurs
on a day which is not a Business Day or after 9:00 a.m. (Montreal
time) on a Business Day. If the telecopy transmission system
suffers any interruptions by way of a strike, slow-down, a force
majeure, or any other cause, a party giving a notice must do so
using another means of communication not affected by the
disruption.
5.6 Power of Attorney
The Pledgor hereby irrevocably constitutes and appoints the Agent the
attorney of the Pledgor, with full power of substitution, to do, make
and execute all documents, acts, matters or things with the right to
use the names of the Pledgor whenever and wherever the Agent may deem
necessary or expedient to perfect the security constituted hereby and,
after occurrence and continuance of an Event of Default, to exercise
all rights and powers of the Pledgor in respect of the Collateral
under this Agreement.
5.7 Other Security
The security constituted and the rights of the Pledgees hereunder are
in addition to, and not in substitution for, any other right,
guarantee and security held or to be held in the future by the
Pledgees.
5.8 Further Assurances
The Pledgor must, upon demand from the Agent, perform all acts and
execute all deeds and documents necessary to give full effect to this
Agreement and to ensure that it is at all times enforceable, including
without limitation the execution of any written acknowledgement that
the Collateral or any portion thereof is pledged in favour of any
Pledgee which is not a Lender as at the date hereof and that any
certificate representing the Securities or any portion thereof is held
by the Agent on behalf and in favour of such Pledgee.
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5.9 Governing Law
This Agreement is governed by and construed in accordance with the
laws of the Province of Quebec.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of January 26,
2006.
P.P. LUXCO HOLDINGS II S.A.R.L.
Per: /s/ Xxxxxxxxxxx Xxxxxx
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NATIONAL BANK OF CANADA, as Agent
Per: /s/ Xxxxxxx Xxxxxxxx
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Per: /s/ Xxxxx Xxxxxxxxxx
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ANNEX
TO: NATIONAL BANK OF CANADA, AS AGENT
Reference is made to the Pledge Agreement dated January 26, 2006 made between
P.P. Luxco Holdings II S.A.R.L. (the "PLEDGOR") and the Lenders and the Agent
(as amended from time to time, the "PLEDGE").
The Pledgor confirms that the following securities have become subject to the
Pledge and that all provisions of the Pledge apply to such securities. For
greater certainty, the Pledgor hereby hypothecates and pledges such securities
and all property related thereto of the type described in Section 2.1 of the
Pledge, as security for the Obligations (as defined in Section 1.4 of the
Pledge), for an amount of Cdn$50,000,000 with interest from the date of the
Pledge at a rate of 20% per annum.
Description
Made as of this ____ day of _________, 200___.
P.P. LUXCO HOLDINGS II S.A.R.L.
Per:
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