EXHIBIT 10.35
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PLEDGE AND SECURITY AGREEMENT
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THIS PLEDGE AND SECURITY AGREEMENT ("Agreement"), dated February
23rd, 2001, is made by and between XXXXXXXX.XXX, INC. ("Borrower"), a DELAWARE
corporation, and FINOVA MEZZANINE CAPITAL INC., ("FINOVA") a Tennessee
corporation with its principal office and place of business in Nashville,
Tennessee, in its capacity as collateral agent for itself and for Argosy
Investment Partners, L.P. ("Argosy"), a Pennsylvania limited partnership
("FINOVA and Argosy are collectively referred to as "Lender"; FINOVA is referred
to in its agency capacity as "Agent").
RECITALS:
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WHEREAS, pursuant to that certain First Amended and Restated Loan
Agreement of even date herewith among DynaGen, Inc., a Delaware corporation,
RxBazaar, Inc., a Delaware corporation; Superior Pharmaceutical Company, an Ohio
corporation; Argosy and FINOVA, in its individual capacity and as Collateral
Agent (as now existing and as may hereafter be amended, the "Loan Agreement"),
Lender has a loan outstanding to Borrower in the aggregate principal amount of
$2,250,000; and
WHEREAS, it is a condition of Lender's agreement to allow Borrower
to assume the Loan that Borrower execute and deliver this Agreement to Lender.
AGREEMENT:
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NOW THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration the receipt and sufficiency of which are hereby
acknowledged, Borrower and Lender hereby agree as follows:
1. Pledge. As collateral security for the payment and performance in
full of the Obligations (as defined in the Loan Agreement), Borrower hereby
pledges, hypothecates, assigns, transfers unto Agent, and hereby grants to Agent
a security interest in, the collateral described in Schedule 1 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 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 referred to as the "Pledged Securities"). Upon delivery
to Agent, the Pledged Securities shall be accompanied by executed stock powers
in blank and by such other instruments or documents as Agent 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 1 and made a part hereof. Each schedule so
delivered shall supersede any prior schedule so delivered. In the event that
additional securities of the issuers listed on Schedule 1 are issued to
Borrower, Borrower agrees to promptly deliver the certificates representing such
securities together with stock powers endorsed in blank, to Agent as part of the
collateral pledged hereunder and such securities shall constitute part of the
Pledged Securities, provided that if Borrower at the time of issuance has
obligations outstanding to The CIT Group/Business Credit, Inc. ("CIT"), such
delivery shall be to CIT rather than to Agent. Notwithstanding any other
provision hereof, except during the continuance of an Event of Default under and
as defined in the Loan Agreement, Borrower shall be entitled to receive and
retain all distributions made by the issuer of the Pledged Securities.
2. Obligations Secured. This Agreement is made, and the security
interest created hereby is granted to Agent, to secure prompt payment of the
Obligations (as defined in the Loan Agreement) and the prompt performance of
each of the covenants and duties of Borrower under the Loan Documents (as
defined in the Loan Agreement).
3. Representations and Warranties. Borrower hereby represents and
warrants to Agent (a) that Borrower is the legal and equitable owner of the
Pledged Securities, (b) that Borrower 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 interests
of every kind and nature, except for the prior security interest granted to CIT,
(c) that any consent or approval of any governmental body or regulatory
authority, or of any other party, that was or is necessary to the validity of
this pledge, has been obtained, and (d) that the Pledged Securities are not
subject to any limitations, restrictions, or obligations pursuant to any
shareholder agreement, voting trust agreement or similar instrument.
4. Registration in Nominee Name; Denominations. Subject to the
rights of CIT, during the continuation of an Event of Default, Agent 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
Borrower, endorsed or assigned in blank or in favor of Agent. During the
continuance of an Event of Default, upon request and delivery of certificates
representing the Pledged Securities to the issuer of the Pledged Securities,
Agent may have such Pledged Securities registered in the name of Agent or any
nominee or nominees of Agent. Agent 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.
5. Remedies Upon Default. Upon the occurrence and during the
continuance of an Event of Default, then, and in any such event, Agent shall
have all of the rights, privileges and remedies of a secured party under the
Uniform Commercial Code as in effect in the State of Tennessee, and without
limiting the foregoing, Agent may (a) collect any and all amounts payable in
respect of the Pledged Securities and exercise 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 Agent shall deem
appropriate, including without limitation, at Agent's option, the purchase of
all or any part of the Pledged Securities at any public sale by Agent (subject
to compliance by Agent with any securities laws applicable thereto). Upon
consummation of any sale, Agent shall have the right to assign, transfer and
deliver to the purchaser or purchasers thereof the Pledged Securities so sold.
Each such purchaser at any such sale shall hold the property sold absolutely,
free from any claim or right on the part of the Borrower, and the Borrower
hereby waives (to the extent permitted by law) all rights of redemption, stay or
appraisal that Borrower now has or may at any time in the future have under any
rule of law or statute now existing or hereinafter enacted. Borrower hereby
expressly waives notice to redeem and notice of the time, place and manner of
such sale (except to the extent otherwise required by law).
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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 Agent's other remedies hereunder, shall be applied by Agent in the
manner set forth in the Loan Agreement.
7. Reimbursement of Agent. Borrower agrees to reimburse Agent, upon
demand, for all expenses, including without limitation reasonable attorneys'
fees, incurred by it in connection with the administration and enforcement of
this Agreement after the occurrence and during the continuation of an Event of
Default, and agrees to indemnify Agent 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 Agent.
8. No Waiver. No failure on the part of Agent to exercise, and no
delay in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy by Agent 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 Agent Liability. Except in the case of their
willful misconduct or gross negligence, neither Agent nor its officers,
employees, agents, representatives or nominees shall be liable for any loss
incurred by Borrower arising out of any act or omission of Agent, its officers,
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 the Obligations and their respective successors and
assigns.
11. Governing Law; Amendments. This Agreement shall in all respects
be construed in accordance with and governed by the laws of the State of
Tennessee 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 parties hereto. Time is of the
essence with respect to the obligations of Borrower pursuant to this Agreement.
12. Further Assurances. Borrower agrees to do such further acts and
things, and to execute and deliver such additional conveyances, assignments,
agreements and instruments, as Agent 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
Agent its rights and remedies hereunder.
13. Headings. Section numbers and headings used herein are for
convenience only and are not to affect the construction of or to be taken into
consideration in interpreting this Agreement.
14. Counterparts. This Agreement may be executed in any number of
counterparts and by different parties to this Agreement in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same Agreement.
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15. Voting. As long as no Event of Default shall have occurred and
be continuing, the Borrower shall be entitled to exercise all voting and
consensual powers with respect to the Pledged Securities. Immediately and
without further notice to the Borrower, upon the occurrence and during the
continuance of any Event of Default, Agent shall have the right, at its
election, to exercise all voting and consensual rights with respect to the
Pledged Securities, and the Borrower shall exercise and deliver to Agent such
proxies as shall be necessary to permit Agent's exercise of such voting and
consensual rights.
16. Consent to Jurisdiction; Exclusive Venue. Borrower hereby
irrevocably consents to the Jurisdiction of the United States District Court for
the Middle District of Tennessee and of all Tennessee. state courts sitting in
Davidson County, Tennessee, for the purpose of any litigation to which Agent may
be a party and which concerns this Agreement or the Obligations. It is further
agreed that venue for any such action shall lie exclusively with courts sitting
in Davidson County, Tennessee, unless Agent agrees to the contrary in writing.
17. Waiver of Trial by Jury. Agent AND BORROWER HEREBY KNOWINGLY AND
VOLUNTARILY WITH THE BENEFIT OF COUNSEL WAIVE TRIAL BY JURY IN ANY ACTIONS,
PROCEEDINGS, CLAIMS OR COUNTER-CLAIMS, WHETHER IN CONTRACT OR TORT OR OTHERWISE,
AT LAW OR IN EQUITY, ARISING OUT OF OR IN ANY WAY RELATING TO THIS AGREEMENT OR
THE LOAN DOCUMENTS.
IN WITNESS WHEREOF, Borrower and Agent 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.
BORROWER:
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XXXXXXXX.XXX. INC.
By: /s/ C. Xxxxxx Xxxxxx
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Title: Executive Vice President
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AGENT:
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FINOVA MEZZANINE CAPITAL INC.
By: illegible
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Title: Vice President
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The undersigned hereby acknowledges and confirms that the necessary
changes and registrations on the books of the undersigned have been made to
reflect the pledge of the Pledged Securities under the Pledge Agreement. In
particular, the undersigned acknowledges and confirms that Agent has been
designated as the only registered pledgee of the Pledged Securities.
SUPERIOR PHARMACEUTICAL COMPANY
By: /s/ C. Xxxxxx Xxxxxx
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Title: President
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