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This PLEDGE AGREEMENT (this "Agreement") is dated as of __________
1997 and entered into by and between ChiRex Inc., (the "Pledgor"), and Bankers
Trust Company, as security agent for and representative of (in such capacity
herein called "Secured Party") the financial institutions ("Lenders") party to
the Facilities Agreement (as defined below).
PRELIMINARY STATEMENTS
A. Pledgor is the legal and beneficial owner of (i) the shares
of stock (the "Pledged Shares") described in Part A of Schedule I annexed hereto
and issued by the corporations named therein and (ii) the indebtedness (the
"Pledged Debt") described in Part B of said Schedule I and issued by the
obligors named therein.
B. Pledgor, Secured Party, Bankers Trust International PLC and
Midland Bank plc as joint arrangers, Bankers Trust Company as Agent, the Lenders
party thereto and certain other parties have entered into a Facilities Agreement
dated as of __________, 1997 (as it may hereafter be amended, supplemented or
otherwise modified from time to time, being the "Facilities Agreement",
capitalised terms used herein and not otherwise defined shall have the meanings
set forth in the Facilities Agreement) with, among others, the Borrower and the
Pledgor pursuant to which Lenders have made certain commitments, subject to the
terms and conditions set forth in the Facilities Agreement, to extend certain
credit facilities to the Borrower.
C. The Pledgor has guarantied the prompt payment and
performance when due of all obligations of all Obligors under the Facilities
Agreement.
D. It is a condition precedent to the initial extensions of
credit by Lenders under the Facilities Agreement that the Pledgor shall have
granted the security interests and undertaken the obligations contemplated by
this Agreement.
NOW, THEREFORE, in consideration of the premises and in order to
induce Lenders to make the Advances and other extensions of credit under the
Facilities Agreement, and for other good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the Pledgor hereby agrees with
Secured Party as follows:
SECTION 1. Pledge of Security. Pledgor hereby pledges and assigns to
Secured Party, and hereby grants to
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Secured Party a security interest in, all of Pledgor's right, title and interest
in and to the following, in each case whether now or hereafter existing or in
which Pledgor now has or hereafter acquires an interest and wherever the same
may be located (the "Pledged Collateral"):
(a) the Pledged Shares and the certificates representing the Pledged
Shares and any interest of Pledgor in the entries on the books of any financial
intermediary pertaining to the Pledged Shares, and all dividends, cash,
warrants, rights, instruments and other property or proceeds from time to time
received, receivable or otherwise distrib uted in respect of or in exchange for
any or all of the Pledged Shares;
(b) all additional shares of, and all securities convertible into
and warrants, options and other rights to purchase or otherwise acquire, stock
of any issuer of the Pledged Shares from time to time acquired by Pledgor in any
manner (which shares shall be deemed to be part of the Pledged Shares), the
certificates or other instruments representing such additional shares,
securities, warrants, options or other rights and any interest of Pledgor in the
entries on the books of any financial intermediary pertaining to such additional
shares, and all dividends, cash, warrants, rights, instruments and other
property or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such additional
shares, securities, warrants, options or other rights;
(c) all shares of, and all securities convertible into and warrants,
options and other rights to purchase or otherwise acquire, stock of any person
that, after the date of this Agreement, becomes, as a result of any occurrence,
a direct subsidiary of Pledgor (which shares shall be deemed to be part of the
Pledged Shares), the certificates or other instruments representing such shares,
securities, warrants, options or other rights and any interest of Pledgor in the
entries on the books of any financial intermediary pertaining to such shares,
and all dividends, cash, warrants, rights, instruments and other property or
proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such shares, securities, warrants,
options or other rights;
(d) the Pledged Debt and the instruments evidenc ing the Pledged
Debt, and all interest, cash, instruments and other property or proceeds from
time to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of the Pledged Debt;
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(e) all additional indebtedness from time to time owed to Pledgor by
any obligor on the Pledged Debt and the instruments evidencing such
indebtedness, and all interest, cash, instruments and other property or proceeds
from time to time received, receivable or otherwise distributed in respect of or
in exchange for any or all of such indebted ness;
(f) all indebtedness from time to time owed to Pledgor by any person
that, after the date of this Agreement, becomes, as a result of any occurrence,
a direct or indirect Subsidiary of Pledgor, and all interest, cash, instruments
and other property or proceeds from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such
indebtedness; and
(g) to the extent not covered by Clauses (a) - (f) above, all
proceeds of any and all of the foregoing Pledged Collateral. For purposes of
this Agreement, the term "proceeds" includes whatever is receivable or received
when Pledged Collateral or proceeds are sold, exchanged, collected or otherwise
disposed of, whether such disposition is voluntary or involuntary, and includes,
without limitation, proceeds of any indemnity or guaranty payable to Pledgor or
Secured Party from time to time with respect to any of the Pledged Collateral.
SECTION 2. Security for Obligations. This Agreement secures, and the
Pledged Collateral is collateral security for, the prompt payment or performance
in full when due, whether at stated maturity, by required prepayment,
declaration, acceleration, demand or otherwise (including the payment of amounts
that would become due but for the operation of the automatic stay under Section
362(a) of the Bankruptcy Code, 11 U.S.C. ss.362(a)), of all obligations and
liabilities of every nature of Pledgor now or hereafter existing under or
arising out of or in connection with the Facilities Agreement and any other
Finance Document (and all extensions or renewals thereof), whether for
principal, interest (including without limitation interest that, but for the
filing of a petition in bankruptcy with respect to Pledgor or any other Obligor,
would accrue on such obligations), fees, expenses, indemnities or otherwise,
whether voluntary or involuntary, direct or indirect, absolute or contingent,
liquidated or unliquidated, whether or not jointly owed with others, and whether
or not from time to time decreased or extinguished and later increased, created
or incurred, and all or any portion of such obligations or liabilities that are
paid, to the extent all or any part of such payment is avoided or recovered
directly or indirectly from Secured Party or any Lender as a preference,
fraudulent transfer or otherwise (all such obligations and liabilities being the
"Underlying Debt"), and all obligations of every nature of Pledgor now or
hereafter existing under this Agreement (all such obligations of Pledgor,
together with the Underlying Debt, being the "Secured Obligations").
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SECTION 3. Delivery of Pledged Collateral. All certificates or
instruments representing or evidencing the Pledged Collateral shall be delivered
to and held by or on behalf of Secured Party pursuant hereto and shall be in
suitable form for transfer by delivery or, as applicable, shall be accompanied
by Pledgor's endorsement, where necessary, or duly executed instruments of
transfer or assignment in blank, all in form and substance reasonably
satisfactory to Secured Party. During the occurrence and continuation of an
Event of Default, Secured Party shall have the right, at any time in its
discretion, to transfer to or to register in the name of Secured Party or any of
its nominees any or all of the Pledged Collateral, subject only to the revocable
rights specified in Section 7(a). Secured Party shall notify the Pledgor in
writing as soon as practicable following the exercise of such right. In
addition, Secured Party shall have the right at any time to exchange
certificates or instruments representing or evidencing Pledged Collateral for
certificates or instruments of smaller or larger denominations.
SECTION 4. Representations and Warranties. The representations and
warranties in respect of the Pledgor set forth in Clauses 12.2 - 12.6 in the
Facilities Ageement are incorporated herein by reference. In addition, Pledgor
represents and warrants as follows:
(a) Due Authorization, etc. of Pledged Collateral. All of the
Pledged Shares have been duly authorized and validly issued and are fully paid
and non-assessable. The instrument(s) evidencing the Pledged Debt has been duly
authorized authenticated or issued, and delivered and is the legal valid and
binding obligation of the issuer thereof, and the issuer thereof is not in
default thereunder.
(b) Description of Pledged Shares. The Pledged Shares constitute 100
percent of the issued and outstanding shares of stock of each of the direct
subsidiaries of Pledgor, and there are no outstanding warrants, options or other
rights to purchase, or other agreements outstanding with respect to, or property
that is now or hereafter convertible into, or that requires the issuance or sale
of, any Pledged Shares. The Pledged Debt constitutes all of the issued and
outstanding intercompany indebtedness owing to Pledgor evidenced by a promissory
note issued by any direct or indirect subsidiary of Pledgor.
(c) Ownership of Pledged Collateral. Pledgor is the legal, record
and beneficial owner of the Pledged Collateral free and clear of any Security
Interest except for the security interest created by this Agreement.
(d) Governmental Authorizations. No authorization, approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for either (i) the pledge by Pledgor of the Pledged
Collateral pursuant to this Agreement and the grant by Pledgor of the security
interest granted hereby, (ii) the execution, delivery or performance of this
Agreement by Pledgor, or (iii) the exercise by Secured Party of the voting or
other rights, or the remedies in respect of the Pledged Collateral, provided for
in this Agreement (except as may be required in connection with a disposition of
Pledged Collateral by laws
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affecting the offering and sale of securities generally), the failure to so
obtain or undertake would be likely to result in a Material Adverse Effect.
(e) Perfection. The pledge of the Pledged Collateral pursuant to
this Agreement creates a valid and perfected first priority security interest in
the Pledged Collateral, securing the payment of the Secured Obligations.
(f) Margin Regulations. The pledge of the Pledged Collateral
pursuant to this Agreement does not violate Regulation G, T, U or X of the Board
of Governors of the Federal Reserve System.
(g) Other Information. All material written information heretofore,
herein or hereafter supplied to Secured Party by or on behalf of Pledgor with
respect to the Pledged Collateral is accurate and complete in all respects.
SECTION 5. Transfers and Other Security Interests; Additional
Pledged Collateral Covenants; etc. Pledgor shall:
(a) not, (i) sell, assign (by operation of law or otherwise) or
otherwise dispose of, or grant any option with respect to, any of the Pledged
Collateral, (ii) create or suffer to exist any Security Interest upon or with
respect to any of the Pledged Collateral, except for the Security Interest under
this Agreement, or (iii) permit any issuer of Pledged Shares to merge or
consolidate unless all the outstanding capital stock of the surviving or
resulting corporation is, upon such merger or consolidation, pledged hereunder
and no cash, securities or other property is distributed in respect of the
outstanding shares of any other constituent corporation;
(b) (i) cause each issuer of Pledged Shares not to issue any stock
or other securities in addition to or in substitution for the Pledged Shares
issued by such issuer, except to Pledgor, (ii) pledge hereunder, immediately
upon its acquisition (directly or indirectly) thereof, any and all additional
shares of stock or other securities of each issuer of Pledged Shares, and (iii)
pledge hereunder, immediately upon its acquisition (directly or indirectly)
thereof, any and all shares of stock of any person that, after the date of this
Agreement, becomes, as a result of any occurrence, a direct subsidiary of
Pledgor;
(c) (i) pledge hereunder, immediately upon their issuance, any and
all instruments or other evidences of additional indebtedness from time to time
owed to Pledgor by any obligor on the Pledged Debt, and (ii) pledge hereunder,
immediately upon their issuance, any and all instruments or other evidences of
indebtedness from time to time owed to Pledgor by any person that after the date
of this Agreement becomes, as a result of any occurrence, a direct or indirect
subsidiary of Pledgor;
(d) promptly notify Secured Party of any event of which Pledgor
becomes aware causing material loss or depreciation in the value of the Pledged
Collateral;
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(e) promptly deliver to Secured Party all written notices received
by it with respect to the Pledged Collateral; and
(f) pay promptly when due all taxes, assessments and governmental
charges or levies imposed upon, and all claims against, the Pledged Collateral,
except to the extent the validity thereof is being contested in good faith;
provided that Pledgor shall in any event pay such taxes, assessments, charges,
levies or claims not later than five days prior to the date of any proposed sale
under any judgement, writ or warrant of attachment entered or filed against
Pledgor or any of the Pledged Collateral as a result of the failure to make such
payment.
SECTION 6. Further Assurances; Pledge Amendments.
(a) Pledgor agrees that from time to time, at the expense of
Pledgor, Pledgor will promptly execute and deliver all further instruments and
documents, and take all further action, that may be reasonably necessary or
desirable, or that Secured Party may reasonably request, in order to perfect and
protect any security interest granted or purported to be granted hereby or to
enable Secured Party to exercise and enforce its rights and remedies hereunder
with respect to any and all Pledged Collateral. Without limiting the generality
of the foregoing, Pledgor will: (i) if applicable, execute and file such
financing or continuation statements, or amendments thereto, and such other
instruments or notices, as may be necessary or desirable, or as Secured Party
may reasonably request, in order to perfect and preserve the Security Interests
granted or purported to be granted hereby and (ii) at Secured Party's request,
appear in and defend any action or proceeding that may affect Pledgor's title to
or Secured Party's Security Interest in all or any part of the Pledged
Collateral.
(b) Pledgor further agrees that it will, upon obtaining any
additional shares of stock or other securities required to be pledged hereunder
as provided in Section 5(b) and/or Section 5(c), promptly (and in any event
within twenty Business Days) deliver to Secured Party a Pledge Amendment, duly
executed by Pledgor, in substantially the form of Schedule II annexed hereto (a
"Pledge Amendment"), in respect of the additional Pledged Shares and/or Pledged
Debt to be pledged pursuant to this Agreement. Pledgor hereby authorizes Secured
Party to attach each Pledge Amendment to this Agreement and agrees that all
Pledged Shares and/or Pledged Debt listed on any Pledge Amendment delivered to
Secured Party shall for all purposes hereunder be considered Pledged Collateral;
provided that the failure of Pledgor to execute a Pledge Amendment with respect
to any additional Pledged Shares and/or Pledged Debt pledged pursuant to this
Agreement shall not impair the Security Interest of Secured Party therein or
otherwise adversely affect the rights and remedies of Secured Party hereunder
with respect thereto.
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SECTION 7. Voting Rights and Dividends in respect of Pledged Shares;
Etc.
(a) So long as no Event of Default shall have occurred and be
continuing:
(i) Pledgor shall be entitled to exercise any and all voting
and other consensual rights pertaining to the Pledged Collateral or any
part thereof for any purpose not inconsistent with the terms of this
Agreement or the Facilities Agreement; provided, however, that Pledgor
shall not exercise or refrain from exercising any such right if Secured
Party shall have notified Pledgor that, in Secured Party's judgment, such
action would have a material adverse effect on the value of the Pledged
Collateral or any part thereof; and provided, further, that Pledgor shall
give Secured Party at least five Business Days' prior written notice of
the manner in which it intends to exercise, or the reasons for refraining
from exercising, any such right. It is understood, however, that neither
(A) the voting by Pledgor of any Pledged Shares for, or Pledgor's consent
to, the election of directors at a regularly scheduled annual or other
meeting of stockholders or with respect to incidental matters at any such
meeting, nor (B) Pledgor's consent to or approval of any action otherwise
permitted under this Agreement and the Facilities Agreement shall be
deemed inconsistent with the terms of this Agreement or the Facilities
Agreement within the meaning of this Section 7(a)(i), and no notice of any
such voting or consent need be given to Secured Party;
(ii) Pledgor shall be entitled to receive and retain, and to
utilize free and clear of the Security Interest under this Agreement, any
and all dividends and interest paid in respect of the Pledged Collateral;
provided, however, that any and all
A. dividends and interest paid or payable other than in
cash in respect of, and instruments and other property received,
receivable or otherwise distributed in respect of, or in exchange for, any
Pledged Collateral,
B. dividends and other distributions paid or payable in
cash in respect of any Pledged Collateral in connection with a partial or
total liquidation or dissolution or in connection with a reduction of
capital, capital surplus or paid-in-surplus, and
C. cash paid, payable or otherwise distributed in
respect of principal or in redemption of or in exchange for any Pledged
Collateral,
shall be, and shall forthwith be delivered to Secured Party to hold as,
Pledged Collateral and shall, if received by Pledgor, be received in trust
for the benefit of Secured Party, be segregated from the other property or
funds of Pledgor and
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be forthwith delivered to Secured Party as Pledged Collateral in the same
form as so received (with all necessary endorsements); and
(iii) Secured Party shall promptly execute and deliver (or
cause to be executed and delivered) to Pledgor all such proxies, dividend
payment orders and other instruments as Pledgor may from time to time
reasonably request for the purpose of enabling Pledgor to exercise the
voting and other consensual rights which it is entitled to exercise
pursuant to paragraph (i) above and to receive the dividends, principal or
interest payments which it is authorized to receive and retain pursuant to
paragraph (ii) above.
(b) Upon the occurrence and during the continuation of an Event of
Default:
(i) upon written notice from Secured Party to Pledgor, all
rights of Pledgor to exercise the voting and other consensual rights which
it would otherwise be entitled to exercise pursuant to Section 7(a)(i)
shall cease, and all such rights shall thereupon become vested in Secured
Party who shall thereupon have the sole right to exercise such voting and
other consensual rights;
(ii) all rights of Pledgor to receive the dividends and
interest payments which it would otherwise be authorized to receive and
retain pursuant to Section 7(a)(ii) shall cease, and all such rights shall
thereupon become vested in Secured Party who shall thereupon have the sole
right to receive and hold as Pledged Collateral such dividends and
interest payments; and
(iii) all dividends, principal and interest payments which are
received by Pledgor contrary to the provisions of paragraph (ii) of this
Section 7(b) shall be received in trust for the benefit of Secured Party,
shall be segregated from other funds of Pledgor and shall forthwith be
paid over to Secured Party as Pledged Collateral in the same form as so
received (with any necessary indorsements).
(c) In order to permit Secured Party to exercise the voting and
other consensual rights which it may be entitled to exercise pursuant to Section
7(b)(i) and to receive all dividends and other distributions which it may be
entitled to receive under Section 7(a)(ii) or Section 7(b)(ii), (i) Pledgor
shall promptly execute and deliver (or cause to be executed and delivered) to
Secured Party all such proxies, dividend payment orders and other instruments as
Secured Party may from time to time reasonably request and (ii) without limiting
the effect of the immediately preceding clause (i), Pledgor hereby grants to
Secured Party during the occurrence and continuation of an Event of Default an
irrevocable proxy to vote the Pledged Shares and to exercise all other rights,
powers, privileges and remedies to which a holder of the Pledged Shares would be
entitled (including, without limitation, giving or withholding written consents
of shareholders, calling special meetings of shareholders and voting at such
meetings), which proxy shall be effective, automatically and without the
necessity of any action
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(including any transfer of any Pledged Shares on the record books of the issuer
thereof) by any other person (including the issuer of the Pledged Shares or any
officer or agent thereof), upon the occurrence and continuation of an Event of
Default and which proxy shall only terminate upon the payment in full of the
Secured Obligations.
SECTION 8. Secured Party Appointed Attorney-in-Fact. Pledgor hereby
irrevocably appoints Secured Party as Pledgor's attorney-in-fact, with full
authority in the place and stead of Pledgor and in the name of Pledgor, Secured
Party or otherwise, from time to time in Secured Party's discretion to take any
action and to execute any instrument that Secured Party may deem necessary or
advisable to accomplish the purposes of this Agreement, including without
limitation:
(a) if applicable, to file one or more financing or continuation
statements, or amendments thereto, relative to all or any part of the Pledge
Collateral without the signature of Pledgor;
(b) to ask for, demand, collect, ▇▇▇ for, recover, compound, receive
and give acquittance and receipts for moneys due and to become due under or in
respect of any of the Pledged Collateral;
(c) to receive, endorse and collect any drafts or other instruments
made payable to Pledgor representing any dividend, principal or interest payment
or other distribution in respect of the Pledged Collateral or any part thereof
and to give full discharge for the same;
(d) to file any claims or take any action or institute any
proceedings that Secured Party may deem necessary or desirable for the
collection of any of the Pledged Collateral or otherwise to enforce the rights
of Secured Party with respect to any of the Pledged Collateral; and
(e) upon the occurrence and during the continuation of an Event of
Default, generally to sell, transfer, pledge, make any agreement with respect to
or otherwise deal with any of the Pledged Collateral as fully and completely as
though Secured Party were the absolute owner thereof for all purposes, and to
do, at Secured Party's option and Pledgor's expense, at any time or from time to
time, all acts and things that Secured Party deems necessary to protect,
preserve or realize upon the Pledged Collateral and Secured Party's Security
Interest therein in order to effect the intent of this Agreement, all as fully
and effectively as Pledgor might do.
SECTION 9. Secured Party May Perform. If any Pledgor fails to
perform any agreement contained herein, Secured Party may itself perform, or
cause performance of, such agreement, and the expenses of Secured Party incurred
in connection therewith shall be payable by Pledgor under Section 13(b).
SECTION 10. Standard of Care. The powers conferred on Secured Party
hereunder are solely to protect its interest in the Pledged Collateral and shall
not impose any duty upon it to exercise any such powers. Except for the exercise
of
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reasonable care in the custody of any Pledged Collateral in its possession and
the accounting for moneys actually received by it hereunder, Secured Party shall
have no duty as to any Pledged Collateral, it being understood that Secured
Party shall have no responsibility for (a) ascertaining or taking action with
respect to calls, conversions, exchanges, maturities, tenders or other matters
relating to any Pledged Collateral, whether or not Secured Party has or is
deemed to have knowledge of such matters, (b) taking any necessary steps (other
than steps taken in accordance with the standard of care set forth above to
maintain possession of the Pledged Collateral) to preserve rights against any
parties with respect to any Pledged Collateral, (c) taking any necessary steps
to collect or realize upon the Secured Obligations or any guarantee therefor, or
any part thereof, or any of the Pledged Collateral, or (d) initiating any action
to protect the Pledged Collateral against the possibility of a decline in market
value. Secured Party shall be deemed to have exercised reasonable care in the
custody and preservation of Pledged Collateral in its possession if such Pledged
Collateral is accorded treatment substantially equal to that which Secured Party
accords its own property consisting of negotiable securities.
SECTION 11. Remedies.
(a) If any Event of Default shall have occurred and be continuing
and, in any case other than the failure to pay amounts due upon final maturity,
the Agent has served notice on the Borrower pursuant to Clause 14.3
(Cancellation and Repayment) under the Facilities Agreement, Secured Party may
exercise in respect of the Pledged Collateral, in addition to all other rights
and remedies provided for herein or otherwise available to it, all the rights
and remedies of a secured party on default under the Uniform Commercial Code as
in effect in any relevant jurisdiction (the "Code") (whether or not the Code
applies to the affected Pledged Collateral), and Secured Party may also in its
sole discretion, without notice except as specified below, sell the Pledged
Collateral or any part thereof in one or more parcels at public or private sale,
at any exchange or broker's board or at any of Secured Party's offices or
elsewhere, for cash, on credit or for future delivery, at such time or times and
at such price or prices and upon such other terms as Secured Party may deem
commercially reasonable, irrespective of the impact of any such sales on the
market price of the Pledged Collateral. Secured Party or any Lender may be the
purchaser of any or all of the Pledged Collateral at any such sale and Secured
Party, as agent for and representative of Lenders (but not any Lender or Lenders
in its or their respective individual capacities unless Majority Lenders shall
otherwise agree in writing), shall be entitled, for the purpose of bidding and
making settlement or payment of the purchase price for all or any portion of the
Pledged Collateral sold at any such public sale, to use and apply any of the
Secured Obligations as a credit on account of the purchase price for any Pledged
Collateral payable by Secured Party at such sale. Each purchaser at any such
sale shall hold the property sold absolutely free from any claim or right on the
part of Pledgor, and Pledgor hereby waives (to the extent permitted by
applicable law) all rights of redemption, stay and/or appraisal which it now has
or may at any time in the future have under any rule of law or statute now
existing or hereafter enacted. Pledgor agrees that, to the extent notice of sale
shall be required by law, at least ten days' notice to Pledgor of the time and
place of any public sale or the time after which
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any private sale is to be made shall constitute reasonable notification. Secured
Party shall not be obligated to make any sale of Pledged Collateral regardless
of notice of sale having been given. Secured Party may adjourn any public or
private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time and
place to which it was so adjourned. Pledgor hereby waives any claims against
Secured Party arising by reason of the fact that the price at which any Pledged
Collateral may have been sold at such a private sale was less than the price
which might have been obtained at a public sale, even if Secured Party accepts
the first offer received and does not offer such Pledged Collateral to more than
one offeree. If the proceeds of any sale or other disposition of the Pledged
Collateral are insufficient to pay all the Secured Obligations, Pledgor shall be
liable for the deficiency and the fees of any attorneys employed by Secured
Party to collect such deficiency.
(b) Pledgor recognizes that, by reason of certain prohibitions
contained in the Securities Act of 1933, as from time to time amended (the
"Securities Act"), and applicable state securities laws, Secured Party may be
compelled, with respect to any sale of all or any part of the Pledged Collateral
conducted without prior registration or qualification of such Pledged Collateral
under the Securities Act and/or such state securities laws, to limit purchasers
to those who will agree, among other things, to acquire the Pledged Collateral
for their own account, for investment and not with a view to the distribution or
resale thereof. Pledgor acknowledges that any such private sales may be at
prices and on terms less favorable than those obtainable through a public sale
without such restrictions (including, without limitation, a public offering made
pursuant to a registration statement under the Securities Act) and,
notwithstanding such circumstances, Pledgor agrees that any such private sale
shall be deemed to have been made in a commercially reasonable manner and that
Secured Party shall have no obligation to engage in public sales and no
obligation to delay the sale of any Pledged Collateral for the period of time
necessary to permit the issuer thereof to register it for a form of public sale
requiring registration under the Securities Act or under applicable state
securities laws, even if such issuer would, or should, agree to so register it.
(c) If Secured Party determines to exercise its right to sell any or
all of the Pledged Collateral, upon written request, Pledgor shall and shall
cause each issuer of any Pledged Debt to be sold hereunder from time to time to
furnish to Secured Party all such information as Secured Party may request in
order to determine the number of instruments included in the Pledged Collateral
which may be sold by Secured Party in exempt transactions under the Securities
Act and the rules and regulations of the Securities and Exchange Commission
thereunder, as the same are from time to time in effect.
SECTION 12. Application of Proceeds. Except as expressly provided
elsewhere in this Agreement, all proceeds received by Secured Party in respect
of any sale of, collection from, or other realization upon all or any part of
the Pledged Collateral may, in the discretion of Secured Party, be held by
Secured Party as Pledged Collateral for, and/or then, or at any time thereafter,
applied in full or in part by Secured Party against, the Secured Obligations in
the following order of priority:
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FIRST: To the payment of all costs and expenses of such sale,
collection or other realization, including reasonable compensation to
Secured Party and its agents and counsel, and all other expenses,
liabilities and advances made or incurred by Secured Party in connection
therewith, and all amounts for which Secured Party is entitled to
indemnification hereunder and all advances made by Secured Party hereunder
for the account of Pledgor, and to the payment of all costs and expenses
paid or incurred by Secured Party in connection with the exercise of any
right or remedy hereunder, all in accordance with Section 13;
SECOND: To the payment of all other Secured Obligations in the order
described in Clause 18 of the Facilities Agreement; and
THIRD: To the payment to or upon the order of Pledgor, or to
whosoever may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct, of any surplus then remaining from such
proceeds.
SECTION 13. Indemnity and Expenses.
(a) Pledgor agrees to indemnify Secured Party and each Lender from
and against any and all claims, losses and liabilities in any way relating to,
growing out of or resulting from this Agreement and the transactions
contemplated hereby (including, without limitation, enforcement of this
Agreement), except to the extent such claims, losses or liabilities result from
Secured Party's or such Lender's gross negligence or willful misconduct as
finally determined by a court of competent jurisdiction.
(b) Pledgor shall pay to Secured Party upon demand the amount of any
and all costs and expenses, including the reasonable fees and expenses of its
counsel and of any experts and agents, that Secured Party incurs in connection
with (i) the administration of this Agreement, (ii) the custody or preservation
of, or the sale of, collection from, or other realization upon, any of the
Pledged Collateral, (iii) the exercise or enforcement of any of the rights of
Secured Party hereunder, or (iv) the failure by Pledgor to perform or observe
any of the provisions hereof.
SECTION 14. Continuing Security Interest; Transfer of Loans. This
Agreement shall create a continuing security interest in the Pledged Collateral
and shall (a) remain in full force and effect until the payment in full of all
Secured Obligations and the cancellation or termination of the Commitment, (b)
be binding upon Pledgor, its successors and assigns, and (c) inure, together
with the rights and remedies of Secured Party hereunder, to the benefit of
Secured Party and its succes sors, transferees and assigns. Without limiting the
generality of the foregoing clause (c), but subject to the provisions of Clause
25 of the Facilities Agreement, any Lender may assign or otherwise transfer any
Loans held by it to any other person, and such other person shall thereupon
become vested with all the benefits in respect thereof granted to Lenders herein
or otherwise. Upon the payment in full of all Secured Obligations and the
cancellation or termination of the Commitment and the security interest granted
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hereby shall terminate and all rights to the Pledged Collateral shall revert to
Pledgor. Upon any such termination Secured Party will, at Pledgor's expense,
execute and deliver to Pledgor such documents as Pledgor shall reasonably
request to evidence such termination and Pledgor shall be entitled to the
return, upon its request and at its expense, against receipt and without
recourse to Secured Party, of such of the Pledged Collateral as shall not have
been sold or otherwise applied pursuant to the terms hereof.
SECTION 15. Amendments; Etc. No amendment, modification, termination
or waiver of any provision of this Agreement, and no consent to any departure by
Pledgor therefrom, shall in any event be effective unless the same shall be in
writing and signed by Secured Party and, in the case of any such amendment or
modification, by Pledgor. Any such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which it was given.
SECTION 16. Notices. Any notice or other communication herein
required or permitted to be given shall be in writing and may be personally
served, telexed or sent by telefacsimile or United States mail or courier
service and shall be deemed to have been given when delivered in person or by
courier service, upon receipt of telefacsimile or telex, or three Business Days
after depositing it in the United States mail with postage prepaid and properly
addressed. For the purposes hereof, the address of each party hereto shall be as
set forth under such party's name on the signature pages hereof or, as to either
party, such other address as shall be designated by such party in a written
notice delivered to the other party hereto.
SECTION 17. Failure or Indulgence Not Waiver; Remedies Cumulative.
No failure or delay on the part of Secured Party in the exercise of any power,
right or privilege hereunder shall impair such power, right or privilege or be
construed to be a waiver of any default or acquiescence therein, nor shall any
single or partial exercise of any such power, right or privilege preclude any
other or further exercise thereof or of any other power, right or privilege. All
rights and remedies existing under this Agreement are cumulative to, and not
exclusive of, any rights or remedies otherwise available.
SECTION 18. Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
SECTION 19. Headings. Section and subsection headings in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose or be given any
substantive effect.
SECTION 20. Governing Law; Terms. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL
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BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO THE EXTENT THAT THE CODE PROVIDES
THAT THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES
HEREUNDER, IN RESPECT OF ANY PARTICULAR PLEDGED COLLATERAL ARE GOVERNED BY THE
LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK. Unless otherwise
defined herein or in the Facilities Agreement, terms used in Articles 8 and 9 of
the Uniform Commercial Code in the State of New York are used herein as therein
defined.
SECTION 21. Consent to Jurisdiction and Service of Process. ALL
JUDICIAL PROCEEDINGS BROUGHT AGAINST PLEDGOR ARISING OUT OF OR RELATING TO THIS
AGREEMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION
IN THE STATE OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT
PLEDGOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND
UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND
WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND BY
ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT. Pledgor hereby
agrees that service of all process in any such proceeding in any such court may
be made by registered or certified mail, return receipt requested, to Pledgor at
its address provided in Section 16, such service being hereby acknowledged by
Pledgor to be sufficient for personal jurisdiction in any action against Pledgor
in any such court and to be otherwise effective and binding service in every
respect. Nothing herein shall affect the right to serve process in any other
manner permitted by law or shall limit the right of Secured Party to bring
proceedings against Pledgor in the courts of any other jurisdiction.
SECTION 22. Waiver of Jury Trial. PLEDGOR AND SECURED PARTY HEREBY
AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT. The scope of this waiver is
intended to be all-encompassing of any and all disputes that may be filed in any
court and that relate to the subject matter of this transaction, including
without limitation contract claims, tort claims, breach of duty claims, and all
other common law and statutory claims. Pledgor and Secured Party each
acknowledge that this waiver is a material inducement for Pledgor and Secured
Party to enter into a business relationship, that Pledgor and Secured Party have
already relied on this waiver in entering into this Agreement and that each will
continue to rely on this waiver in their related future dealings. Pledgor and
Secured Party further warrant and represent that each has reviewed this waiver
with its legal counsel, and that each knowingly and voluntarily waives its jury
trial rights following consultation with legal counsel. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN
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WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. In the event of litigation, this
Agree ment may be filed as a written consent to a trial by the court.
SECTION 23. Counterparts. This Agreement may be executed in one or
more counterparts and by different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed an original, but all
such counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, Pledgor and Secured Party have caused this
Agreement to be duly executed and delivered by their respective duly authorized
representatives as of the date first written above.
CHIREX INC., as Pledgor
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
Print Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chief Financial Officer
BANKERS TRUST COMPANY, as
Secured Party
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Print Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
Acknowledged and Agreed to by
CHIREX (HOLDINGS) LIMITED
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------
Print Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chief Financial Officer
Borrower, by countersigning this Agreement and as a contractual undertaking
acknowledges the terms of this Agreement and irrevocably accepts to pay any
amounts owed by it in respect of the Secured Obligations to the person(s)
entitled to receive such payments in accordance with the terms of this
Agreement, without right of set-off counterclaim or otherwise, notwithstanding
that the validity, scope, methods of enforcement or any other matters relating
to the Pledged Collateral or to this Agreement may in certain jurisdictions, in
particular vis-a-vis third parties, be subject to mandatory provisions of local
laws other than those of the State of New York.
S-1
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SCHEDULE I
Attached to and forming a part of the Pledge Agreement dated as of
_____________, 1997 between ChiRex Inc., as Pledgor, and Bankers Trust Company,
as Secured Party.
Part A
Class of Stock Certi- Par Number of
Stock Issuer Stock ficate Nos. Value Shares
------------ ----- ----------- ----- ------
ChiRex (Holdings) Limited
ChiRex America, Inc.
Part B
Debt Issuer Amount of Indebtedness
----------- ----------------------
ChiRex (Holdings) Limited GBP 25,192,000
SI - 1
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SCHEDULE II
PLEDGE AMENDMENT
This Pledge Amendment, dated _________________, is delivered pursuant to Section
6(b) of the Pledge Agreement referred to below. The undersigned hereby agrees
that this Pledge Amendment may be attached to the Pledge Agreement dated
_________ 1997, between the undersigned and Bankers Trust Company, as Secured
Party (the "Pledge Agreement," capitalized terms defined therein being used
herein as therein defined), and that the [Pledged Shares] [Pledged Debt] listed
on this Pledge Amendment shall be deemed to be part of the [Pledged Shares]
[Pledged Debt] and shall become part of the Pledged Collateral and shall secure
all Secured Obligations.
ChiRex Inc., as Pledgor
By: _________________________________
Print Name:
Title:
Class of Stock Certi- Par Number of
Stock Issuer Stock ficate Nos. Value Shares
------------ ----- ----------- ----- ------
Debt Issuer Amount of Indebtedness
----------- ----------------------
SII - 1