Exhibit Q
PLEDGE AGREEMENT
GRANTED BY: P.P. LUXCO HOLDINGS II S.A.R.L., a corporation
constituted under the laws of and registered with the
register of commerce and companies under number
B-88.549 of Luxembourg and having its registered office
at 20 avenue Monterey, X.X. 000-X, 0000 Xxxxxxxxxx,
(xxx "Pledgor")
IN FAVOUR OF: NATIONAL BANK OF CANADA, a bank constituted
under the laws of Canada and having an office at 600 de
la Gauchetiere West (Ground Floor), Montreal, Quebec,
H3B 4L2,
(the "Lender")
WHEREAS a credit agreement dated as of July 30, 2004 was entered into between
the Lender and Picchio Pharma Inc. (the "Borrower") (as amended, modified or
supplemented from time to time, the "Credit Agreement") pursuant to which the
Lender has agreed to extend credit to the Borrower;
WHEREAS pursuant to a guarantee agreement dated July 30, 2004, the Pledgor has
guaranteed the performance of all obligations of the Borrower to the Lender
arising from or under the Credit Agreement as well as all obligations of the
Borrower referred to in Section 9.4 of 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:
-2-
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.
1.2 "COLLATERAL" means the assets subject to the security constituted by
Section 2.1.
1.3 "OBLIGATIONS" means all obligations, indebtedness and liabilities of
the Pledgor to the Lender under or arising from the Credit Agreement
or the Guarantee.
1.4 "SECURITIES" means the 2,400,000 common shares of Neurochem Inc.
evidenced by certificate 001689 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 Lender 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. $40,000,000 with
interest from the date hereof at a rate of 20% per annum.
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 Lender.
-3-
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 Lender.
3. Dealing with Collateral
3.1 Holding of the Collateral
3.1.1 The Securities delivered to the Lender may be held by the
Lender or on its behalf by a custodian appointed by the
Lender.
3.1.2 In the holding of the Collateral, the Lender and its custodian
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 Lender 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 Lender 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 Lender will have the right to
exercise same.
3.3 Dividends and Interest Payments
3.3.1 Unless the Pledgor has been notified by the Lender that an
Event of Default has occurred and is continuing, the Pledgor
is entitled to receive all dividend or interest payments in
respect of the Collateral.
3.3.2 Upon the Lender 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 Lender
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-
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 Lender, become immediately enforceable and, in addition to
any right or remedy granted to a pledgor or other creditor
under the laws of the Province of Quebec or the laws of
Luxembourg, the Lender 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
Lender or its nominee;
(2) vote any of the Collateral (whether or not registered in
the name of the Lender 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 Lender;
(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 Lender 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 or otherwise deal with the Borrower or any
guarantor as the Lender sees fit without prejudice to the
liability of the Pledgor to the Lender or the Lender's rights
hereunder. The Lender shall not be required to exercise any
recourse against the Borrower or any guarantor.
4.1.3 The Lender 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 Lender 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-
5. MISCELLANEOUS
5.1 Additional Securities
Whenever securities other than those specifically described in
Section 1.4 are to become subject to this Agreement, the Grantor
must execute a confirmation in the form of the annex hereto or in
such other form as may be acceptable to the Lender.
5.2 Payment of expenses
The Obligations will also include all reasonable expenses of the
Lender, 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 Lender may apply any proceeds of collection or realization of
the Collateral to reduce any part of the Obligations in such order
as the Lender 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 9.6 of the Credit
Agreement, in the circumstances specified in said Section, or (ii)
in the circumstances described in Section 9.7(b) of the Credit
Agreement. Upon any such release, the Collateral or the applicable
portion thereof then in the custody of the Lender or its depositary
must be delivered to the Pledgor as soon as practicable.
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
on the first page of this Agreement 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
-6-
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 Lender
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
Lender 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 Lender 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
Lender.
5.8 Governing Law
This Agreement is governed by and construed in accordance with the
laws of the Province of Quebec.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
July 30, 2004.
P.P. LUXCO HOLDINGS II S.A.R.L.
Per: /s/ Xxxxxxxxx Xxxxxx
------------------------------
NATIONAL BANK OF CANADA
Per: /s/ Xxxx Xxxxxxx
------------------------------
Per: /s/ Xxxxxxx Xxxxxx
------------------------------
A N N E X
TO: National Bank of Canada
Reference is made to the Pledge Agreement dated July 30, 2004 made between P.P.
Luxco Holdings II S.A.R.L. (the "Pledgor") and National Bank of Canada (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 1.3 of the
Pledge), for an amount of Cdn $40,000,000 with interest from the date of the
Pledge at a rate of 20% per annum.
Description
Made as of this o day of o, 2004.
P.P. LUXCO HOLDINGS II S.A.R.L.
Per: _______________________________
