Exhibit 6
STOCK PLEDGE AGREEMENT
This STOCK PLEDGE AGREEMENT (this "Agreement") is made and
entered into as of April 15, 1997 by and among Xxxxxx X. Xxxxx,
an individual ("Beneficiary"), Xxxxx X. Xxxxxxxxx, and individual
("Pledgor"), and THE IMMUNE RESPONSE CORPORATION, a Delaware
corporation ("Pledgee") with reference to the facts set forth in
the Recitals below:
RECITALS
WHEREAS, Pledgor is a co-founder of Pledgee and has been a
director of Pledgee since 1986;
WHEREAS, Beneficiary is the President, Chief Executive
Officer and a director of Pledgee;
WHEREAS, Pledgor is an individual of substantial net worth;
WHEREAS, Beneficiary and Pledgee have entered into a Unit
Purchase Agreement, of even date herewith, pursuant to which
Beneficiary has purchased from Pledgee 253,715 Units, each Unit
consisting of one share of Pledgee's Common Stock and a warrant
to purchase one share of Pledgee's Common Stock. As partial
consideration for Pledgee's Units, and for other good and
valuable consideration, Beneficiary has delivered to Pledgee that
certain Promissory Note (the "Note"), dated as of April 17, 1997,
executed by Beneficiary in favor of Pledgee in the principal
amount of ONE MILLION FOUR HUNDRED EIGHTY-FOUR THOUSAND TWO
HUNDRED THIRTY-TWO AND 75/100 DOLLARS ($1,484,232.75)(the
"Loan");
WHEREAS, to induce Pledgee to make the Loan, Pledgor has
agreed to pledge to Pledgee as security for repayment of the Loan
certain shares of capital stock with a fair market value
approximately equal to double the principal amount of the Loan;
and
WHEREAS, Beneficiary has agreed not to sell any shares of
Pledgee's Common Stock purchased pursuant to the Unit Purchase
Agreement prior to maturity of the Note and repayment of the
Loan:
NOW, THEREFORE, in consideration of the foregoing premises
and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Pledgor, Pledgee
and Beneficiary hereby agree as follows:
1. Pledge. In consideration of Pledgee's making
of the Loan to Beneficiary, receipt of which is hereby
acknowledged, Pledgor hereby agrees and covenants to pledge,
grant a security interest in, assign, transfer and deliver to
Pledgee, as collateral security for the payment and performance
in full when due by Beneficiary of the Obligations (defined
below), and on the earliest date permitted under that certain
lock-up agreement to which Pledgor is a party (described in
Exhibit A hereto, the "Lock-up Agreement"), a number of shares of
capital stock, more particularly described on the attached
Schedule 1, having an aggregate fair market value at the time
transferred to Pledgee equal to double the principal amount of
the Loan (collectively, the "Pledged Shares"), together with the
certificates evidencing same, which certificates shall be duly
endorsed in blank or accompanied by stock powers duly executed in
blank.
From the date hereof until such time as the Pledged
Shares may be transferred to Pledgee in accordance with this
Section 1 and the Lock-up Agreement, Pledgor shall segregate and
hold separate for safekeeping the Pledged Shares and the
certificates evidencing the same.
2. Obligations Secured. Subject only to the time
restrictions contained in the Lock-up Agreement, this Agreement
is made, and the security interest pledged herein will be given,
to secure payment and performance in full of all obligations
(collectively the "Obligations") of Beneficiary owing to Pledgee
under the Note, and to secure performance in full of all
Obligations of both Beneficiary and Pledgor owing to Pledgee
under this Agreement, together with all extensions, amendments,
restatements, modifications, supplements and renewals thereof,
when the same shall become due, whether at maturity, at a time
fixed for payment or by acceleration or otherwise, in accordance
with the terms of the Note, together with Beneficiary's and
Pledgor's performance and compliance with all other terms and
conditions of this Agreement and any other agreement now or in
the future entered into between Beneficiary and Pledgee with
respect to the Loan or any modifications, amendments,
restatements, supplements or renewals thereof.
3. Attorney-in-Fact. Subject to the rights of
Pledgor provided for in this Agreement and the time restrictions
contained in the Lock-up Agreement, Pledgor hereby irrevocably
agrees and covenants to appoint Pledgee as Pledgor's attorney-in-
fact, coupled with an interest, with full authority in the place
and stead of Pledgor and in the name of Pledgor, Pledgee or
otherwise, from time to time to take any action, execute any
document, instrument or other agreement which Pledgee reasonably
may deem necessary or advisable, in its sole discretion, to
accomplish the purposes of this Agreement, including without
limitation, to arrange for the transfer of the Pledged Shares on
the books of the issuer to the name of Pledgee.
4. Dividends. After the Pledged Shares have been
transferred to Pledgee in accordance with Section 1 hereof and
for the remaining term of this Agreement, all dividends and other
amounts received in cash by Pledgee as a result of Pledgee's
record ownership of the Pledged Shares shall be applied to the
payment of the principal and interest on the Loan.
5. Voting Rights. During the term of this
Agreement, and as long as Beneficiary is not in default in the
performance of any of the terms of this Agreement, or in the
payment of the principal or interest of the Loan, or with respect
to any of the other Obligations, Pledgor shall have the right to
vote the Pledged Shares on all corporate questions. Pledgee
shall execute due and timely proxies in favor of Pledgor to this
end.
6. Representations and Warranties of Pledgor.
Pledgor represents and warrants: that Pledgor is the legal and
beneficial owner of the Pledged Shares; that Pledgor has owned
the Pledged Shares for two (2) or more years; that there are no
restrictions on the transfer of any of the Pledged Shares, other
than as may appear on the face of the certificates thereof and
those contained in the Lock-up Agreement; that Pledgor has the
right and power to transfer the Pledged Shares free of any
encumbrances or liens, without obtaining the consents of any
other party or parties; that Pledgor is not now and has never
been an officer or director of the issuer of the Pledged Shares;
and that Pledgor is not now an affiliate (as such term is defined
in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as amended) of the issuer of the
Pledged Shares.
7. Adjustments. In the event that during the term
of this Agreement, any share dividend, reclassification,
readjustment or other change is declared or made in the capital
structure of the company that has issued the Pledged Shares, all
new, substituted and additional shares, or other securities
issued by reason of any such change with respect to the Pledged
Shares, shall be transferred to and held by Pledgee in the same
manner as the Pledged Shares originally pledged to Pledgee under
this Agreement.
8. Warrants and Rights. In the event that during
the term of this Agreement, subscription warrants or any other
rights or options shall be issued in connection with the Pledged
Shares, such warrants, rights and options shall be immediately
assigned by Pledgee to Pledgor, and if exercised by Pledgor, all
new shares or other securities so acquired by Pledgor as a result
thereof shall be immediately assigned to Pledgee to be held in
the same manner as the Pledged Shares originally pledged under
this Agreement and shall in all respects be subject to the terms
of this Agreement.
9. Payment of Loan. Upon payment in full, at
maturity, of all principal and interest due to Pledgee under the
Note, together with any other amounts due to Pledgee under the
terms of the Note or this Agreement, less amounts received and
applied by Pledgee in reduction of the Loan, and upon full
satisfaction of all of the other Obligations provided for under
this Agreement and the Note, Pledgee shall transfer to Pledgor
all of the Pledged Shares and all rights received by Pledgee as a
result of Pledgee's record ownership of the Pledged Shares and
this Agreement shall terminate. Notwithstanding the above
requirement that the Obligations be satisfied in full prior to
Pledgee's release of its interest in the Pledged Shares under
this Agreement, Pledgee shall extend all reasonable cooperation
to Pledgor in connection with any proposed sale by Pledgor of the
Pledged Shares, provided the proceeds of such sale shall be
applied by Pledgor to repay the Loan in full, together with all
other amounts owed to Pledgee with respect to the Obligations.
10. Default. In the event that Beneficiary
defaults in the performance of any of the material terms of this
Agreement, or on the payment at maturity of the principal or
interest of the Loan, or defaults with respect to any of the
Obligations, Pledgee shall have all of the rights and remedies
provided to it and be subject to the obligations under the
Delaware Uniform Commercial Code with respect to such default or
nonperformance. In this connection, after the Pledged Shares
have been transferred to Pledgee in accordance with Section 1
hereof, Pledgee may, as permitted by the Delaware Uniform
Commercial Code, and without liability for any diminution in
price that may have occurred, sell all of the Pledged Shares in
the manner and for the price that Pledgee may determine upon
fifteen (15) days written notice to both Beneficiary and Pledgor
of the time and place of any public sale or the time after which
any private sale is to be made. At any bona fide public sale,
Pledgee shall be free to purchase all or any part of the Pledged
Shares. Out of the proceeds of any sale of the Pledged Shares,
Pledgee may retain an amount equal to the principal and interest
then due with respect to the Loan under the Note, plus any other
amounts due with respect to the Obligations or otherwise under
the Note, plus the amount of the expenses of the sale, and shall
pay any balance of the proceeds of any sale to Pledgor after
satisfaction of all of the Obligations. If Beneficiary defaults
in the performance of any of the Obligations before the Pledged
Shares have been transferred to Pledgee in accordance with
Section 1 hereof, or if the proceeds of the sale of such Pledged
Shares are insufficient to cover the principal and interest of
the Loan and other amounts due with respect to the Obligations,
including expenses of the sale, Beneficiary shall remain liable
to Pledgee for any deficiency in accordance with applicable
provisions of the Delaware Uniform Commercial Code.
11. Miscellaneous. This Agreement and the Note
shall be governed by and interpreted in accordance with the laws
of the State of Delaware, except as they may be preempted by
federal law. In any action brought or arising out of this
Agreement or the Note, Pledgor, Pledgee and Beneficiary hereby
consent to the jurisdiction of any federal or state court having
proper venue within the State of California and also consent to
the service of process by any means authorized by California or
federal law. The headings used in this Agreement are for
convenience only and shall be disregarded in interpreting the
substantive provisions of this Agreement. Time is of the essence
in each term of this Agreement and the Note. If any provision of
this Agreement or the Note shall be determined by a court of
competent jurisdiction to be invalid, illegal or unenforceable,
that portion shall be deemed severed therefrom and the remaining
parts shall remain in full force as though the invalid, illegal
or unenforceable portion had never been a part thereof. This
Agreement may be executed in one or more counterparts, all of
which, taken together, shall constitute one and the same
Agreement. The Recitals and any Schedules attached to this
Agreement are hereby incorporated into this Agreement by this
reference.
12. Integration; Interpretation. The Agreement and
the Note contain or expressly incorporate by reference the entire
agreement of the parties with respect to the matters contemplated
herein and supersede all prior negotiations. The Agreement and
the Note shall not be modified except by written instrument
executed by all parties.
13. Further Assurances; Substitution of Collateral.
Beneficiary and Pledgor shall execute, acknowledge and deliver,
upon written request of Pledgee, any and all further documents,
agreements or other instruments, and take such further actions,
as Pledgee may reasonably require for carrying out the purpose
and intent of the covenants set forth in this Agreement. If at
any time, the value of the Pledged Shares declines to such an
extent that in the reasonable opinion of Pledgee such collateral
is inadequate either to secure satisfaction of Beneficiary's
Obligations or to satisfy the requirements of Federal Reserve
Board Regulation G, Pledgee may require Pledgor to substitute
reasonably equivalent collateral for some or all of the Pledged
Shares as security for Beneficiary's satisfaction of the
Obligations, which substituted collateral shall be acceptable to
Pledgee in its sole discretion and shall be subject, in all
respects, to the terms and conditions of this Agreement upon such
substitution. Pledgor shall execute, acknowledge and deliver
such additional documents, agreements and instruments with
respect to such substituted collateral as Pledgee may require,
including without limitation, mortgages, deeds of trust or
financing statements, in form and content sufficient to perfect
Pledgee's security interest in such substituted collateral.
IN WITNESS WHEREOF, Pledgor, Pledgee and Beneficiary
have caused this Agreement to be duly executed as of the date
first written above.
PLEDGOR PLEDGEE
THE IMMUNE RESPONSE
CORPORATION
_____________________________
Xxxxx X. Xxxxxxxxx
By: ___________________
Title: ________________
BENEFICIARY
________________________
Xxxxxx X. Xxxxx, Ph.D.
SCHEDULE 1
PLEDGED SHARES
[TO BE COMPLETED BY BENEFICIARY]
No. of Class of Certificate
Issuer Shares Shares No. Date
------ ------ -------- ----------- ----
Ciena Corporation ______ Common __________ ____
