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EXHIBIT 4.3
PLEDGE AND SECURITY AGREEMENT
THIS PLEDGE AND SECURITY AGREEMENT ("Agreement"), dated February 26,
1998, by and between DynaGen, Inc., a Delaware corporation ("Pledgor") and Fleet
National Bank, a national banking association with a principal office at Xxx
Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx ("Lender").
WITNESSETH:
WHEREAS, pursuant to a Credit Agreement of even date, by and between,
among others, Pledgor and Lender (the "Credit Agreement"), Lender has made
certain loans to Generic Distributors, Incorporated, a Delaware corporation,
("Borrower") which are unconditionally guaranteed by Pledgor. Specifically, such
loans consist of (i) a term loan arrangement in the original principal amount of
One Million Two Hundred Thousand Dollars ($1,200,000.00) (the "Term Loan") and
(ii) a revolving line of credit in the maximum aggregate principal amount of
Three Hundred Thousand Dollars ($300,000.00) (the "Line of Credit"). The Term
Loan is evidenced by, among other things, a Commercial Term Promissory Note of
even date in the original principal amount of One Million Two Hundred Thousand
Dollars ($1,200,000.00) made and executed by Borrower payable to the order of
Lender (herein referred to, together with any extensions, modifications,
renewals and/or replacements thereof, as the "Term Note"). The Line of Credit is
evidenced by, among other things, a Commercial Revolving Line of Credit
Promissory Note of even date in the maximum aggregate principal amount of Three
Hundred Thousand Dollars ($300,000.00) made and executed by Borrower payable to
the order of Lender (herein referred to, together with any extensions,
modifications, renewals and/or replacements thereof, as the "Line of Credit
Note") (the Term Note and the Line of Credit Note are sometimes referred to
herein collectively as the "Notes", and the Term Loan and the Line of Credit are
sometimes referred to herein collectively as the "Loans"). As stated above,
Pledgor has unconditionally guaranteed the payment and performance of the
Borrower's obligations, liabilities and indebtedness to Lender pursuant to a
Guaranty Agreement of even date (the "Guaranty").
WHEREAS, it is a condition of Lender's agreement to make the Loans to
Borrower that Pledgor execute and deliver this Agreement to Lender to secure
Pledgor's obligations under the Guaranty.
AGREEMENT:
NOW THEREFORE, in consideration of the foregoing, and to enable
Borrower and/or Pledgor to obtain loans and other extensions of credit from
Lender and to induce Lender to have transaction with Borrower and/or Pledgor,
Pledgor agrees as follows:
1. PLEDGE. Pledgor hereby pledges, hypothecates, assigns, transfers,
sets over and delivers unto Lender, and hereby grants to Lender a security
interest in, the collateral described in SCHEDULE A hereto, together with the
proceeds thereof and all cash, additional securities or other property at any
time and from time to time receivable or otherwise distributable in respect
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of, in exchange for, or in substitution for any and all such pledged securities
(all such pledged securities, the proceeds thereof, cash, dividends, additional
securities and other property now or hereafter pledged hereunder are hereinafter
collectively called the "Pledged Securities");
TO HAVE AND TO HOLD the Pledged Securities, together with all rights,
titles, interests, powers, privileges and preferences pertaining or incidental
thereto, unto Lender, its successors and assigns; subject, however, to the
terms, covenants and conditions hereinafter set forth.
Upon delivery to Lender, the Pledged Securities shall be accompanied by
executed stock powers in blank and by such other instruments or documents as
Lender or its counsel may reasonably request. Each delivery of certificates for
such Pledged Securities shall be accompanied by a schedule showing the number of
shares and the numbers of the certificates theretofore and then pledged
hereunder, which schedule shall be attached hereto as SCHEDULE A and made a part
hereof. Each schedule so delivered shall supersede any prior schedule so
delivered.
2. OBLIGATIONS SECURED. This Agreement is made, and the security
interest created hereby is granted to Lender, to secure full payment and
performance of any and all indebtedness and other obligations of Pledgor to
Lender, direct or contingent, however evidenced or denominated, and however or
whenever incurred, including without limitation indebtedness incurred pursuant
to any past, present or future commitment of Lender to Pledgor (regardless of
the class of such future advance), including, without limitation, the
indebtedness evidenced by the Notes (collectively the "Obligations").
3. REPRESENTATIONS AND WARRANTIES. Pledgor hereby represents and
warrants to Lender (a) that Pledgor is the legal and equitable owner of the
Pledged Securities, that Pledgor has the complete and unconditional authority to
pledge the Pledged Securities being pledged by it, and holds the same free and
clear of all liens, charges, encumbrances and security interest of every kind
and nature; and (b) that no consent or approval of any governmental body or
regulatory authority, or of any other party, which was or is necessary to the
validity of this pledge, has not been obtained. Pledgor further represents and
warrants that no part of the Obligations will be used to purchase or carry any
"margin stock", as defined in Regulation U of the Board of Governors of the
Federal Reserve System, 12 CFR ss.221.1 ET SEQ.
4. REGISTRATION IN NOMINEE NAME; DENOMINATIONS. Lender shall have the
right (in its sole and absolute discretion) to hold the certificates
representing the Pledged Securities in its own name or in the name of the
Pledgor, endorsed or assigned in blank or in favor of Lender. Pledgor shall
deliver to Lender all certificates representing the Pledged Securities promptly
upon receipt by Pledgor. Upon request and delivery of certificates representing
the Pledged Securities to the issuer of the Pledged Securities, Lender may have
such Pledged Securities registered in the name of Lender or any nominee or
nominees of Lender. Lender shall at all times have the right to exchange the
certificates representing Pledged Securities for certificates of smaller or
larger denominations for any purpose consistent with this Agreement.
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5. REMEDIES UPON DEFAULT. Upon the occurrence of a default or Event of
Default under the Credit Agreement, or in the event that any representation or
warranty herein shall prove to have been untrue when made, then, and in any such
event, Lender shall have all of the rights, privileges and remedies of a secured
party under the Uniform Commercial Code as in effect in the Commonwealth of
Massachusetts, and without limiting the foregoing, Lender may (a) collect any
and all rights, privileges, options and remedies of the holder and owner
thereof, and (b) sell, transfer and/or negotiate the Pledged Securities, or any
part thereof, at public or private sale, for cash, upon credit or for future
delivery as Lender shall deem appropriate, including without limitation, at
Lender's option, the purchase of all or any part of said securities at any
public sale by Lender. Upon consummation of any sale, Lender shall have the
right to assign, transfer and deliver to the purchaser or purchasers thereof the
Pledged Securities sol sold. Each such purchaser at any such sale shall hold the
property sold absolutely, from any claim or right on the part of the Pledgor,
and the Pledgor hereby waives (to the extent permitted by law) all rights of
redemption, stay or appraisal that Pledgor now has or may at any time in the
future have under any rule of law or statute now existing or hereinafter
enacted. Pledgor hereby expressly waives notice to redeem and notice of the
time, place and manner of such sale.
6. APPLICATION OF PROCEEDS. The proceeds of the sale of Pledged
Securities sold pursuant to Section 5 hereof, and the proceeds of the exercise
of any of Lender's other remedies hereunder, shall be applied by Lender as
follows:
FIRST: To the payment of all costs and expenses incurred by Lender in
connection with any such sale, including, but not limited to, all court costs
and the reasonable fees and expenses of counsel for Lender in connection
therewith, and
SECOND: To the payment in full of the Obligations, first to accrued
interest and thereafter to the unpaid amount thereof, to the extent not
previously paid by Pledgor, and
THIRD: The excess, if any, shall be paid to Pledgor or any other person
lawfully thereunto entitled.
7. REIMBURSEMENT OF LENDER. Pledgor agrees to reimburse Lender, upon
demand, for all expenses, including without limitation, reasonable attorney's
fees, incurred by it in connection with the administration and enforcement of
this Agreement, and agrees to indemnify Lender and hold it harmless from and
against any and all liability incurred by it hereunder or in connection
herewith, unless such liability shall be due to willful misconduct or gross
negligence on the part of Lender.
8. NO WAIVER. No failure on the part of Lender to exercise, and no
delay in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall nay single or partial exercise of any such right,
power or remedy by Lender preclude any other or further exercise thereof or the
exercise of any other right, power or remedy. All remedies are cumulative and
are not exclusive of any other remedies provided by law.
9. LIMITATION OF LENDER LIABILITY. Except in the case of their
intentional malfeasance or gross negligence, neither Lender nor its partners,
employees, agents, representatives, or
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nominees shall be liable for any loss incurred by Pledgor arising out of any act
or omission of Lender, its partners, employees, agents, representatives or
nominees, with respect to the care, custody or preservation of the Pledged
Securities.
10. BINDING AGREEMENT. This Agreement and the terms, covenants and
conditions hereof shall be binding upon and inure to the benefit of the parties
hereto and to all holders of indebtedness secured hereby and their respective
successors and assigns.
11. GOVERNING LAWS; AMENDMENTS. This Agreement shall in all respects be
construed in accordance with and governed by the laws of the Commonwealth of
Massachusetts applicable to contracts to be wholly performed in such state. This
Agreement may not be amended or modified, nor may any of the Pledged Securities
be released except in a writing signed by the party to be charged therewith.
Time is of the essence with respect to the obligations of Pledgor pursuant to
this Agreement.
12. FURTHER ASSURANCES. Pledgor agrees to do such further acts and
things, and to execute and deliver such additional conveyances, assignments,
agreements and instruments, as Lender may at any time request in connection with
the administration and enforcement of this Agreement or relative to the Pledged
Securities or any part thereof or in order to better assure and confirm unto
Lender its rights and remedies hereunder.
13. HEADINGS. Section numbers and heading used herein are for
convenience only and are not to affect the construction of or to be taken into
consideration in interpreting this
Agreement.
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IN WITNESS WHEREOF, Pledgor and Lender have executed this Agreement, or
have caused this Agreement to be duly executed by a duly authorized officer, all
as of the day first above written.
PLEDGOR:
DYNAGEN, INC.,
Witness: /s/ Xxxx Xxxxxxx a Delaware Corporation
By: /s/ Xxx Xxxxxxx
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Xxx Xxxxxxx a/k/a
Print Name: Xxxxxxxxx X. Xxxxxxx
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Title: Executive Vice President
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LENDER:
FLEET NATIONAL BANK,
Witness: /s/ Xxxxxxx X. Xxxxx a national banking association
XXXXXXX X. XXXXX
By: /s/ Xxxxxxx X. Xxxxxxxx
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Print Name: Xxxxxxx X. Xxxxxxxx
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Title: Vice President
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SCHEDULE A
PLEDGED SECURITIES
NO. OF
ISSUER SHARES CLASS CERTIFICATE NOS.
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Generic Distributors Incorporated 100 Common 1
Able Laboratories, Inc. 51 Common 2
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