BORROWER SECURITY AND PLEDGE
AGREEMENT
In
consideration of loans, advances, overdrafts, letters of credit,
acceptances, swaps, securities transactions, forward contracts,
foreign currency transactions and all other credit transactions and
financial accommodations to be given and to be continued from time
to time to BioMimetic Therapeutics, Inc., a Delaware corporation
(“Debtor”), by Deutsche Bank AG, Cayman Islands Branch,
or any of its affiliates (collectively, “Lender”),
Debtor hereby agrees with Lender as follows:
1. As
collateral security for the punctual payment and performance of all
present and future liabilities and obligations, liquidated or
contingent, of Debtor under the Time Promissory Note dated on or
about the date hereof made by the Debtor to the Lender (as it may
be extended, amended, restated or otherwise modified and any
replacement thereof or substitution therefor, the “Time
Note”) and the Securities Account Control Agreement dated on
or about the date hereof among the Debtor, the Lender and Deutsche
Bank Securities Inc., as it may be amended from time to time (the
“SACA”) (the Time Note and the SACA, individually and
collectively “Associated Agreements”), or under this
Agreement, whether at stated maturity, by acceleration or
otherwise, whether now existing or hereafter incurred, whether now
or hereafter due, whether for principal, interest (including but
not limited to interest accruing after the commencement of any
bankruptcy or insolvency proceeding, whether or not allowed or
allowable thereunder), fees, costs, attorneys’ fees, court
costs, taxes, damages, expenses, indemnities, or otherwise, and
howsoever evidenced (collectively, the “Obligations”),
but only to the extent such Obligations are set forth in the
Associated Agreements or herein, Debtor hereby assigns, pledges and
grants to Lender a continuing first priority security interest in
and lien upon all right, title and interest of Debtor in and to the
account described in Schedule A hereto and all subaccounts
thereof (individually and collectively, the “Collateral
Account”) and all items now or hereafter deposited therein,
credited thereto or payable thereto from time to time, including
some or all of the securities listed on Schedule B hereto
(subject to the terms of Section 18 hereof), including
(A) all cash, securities, shares, certificates, notes,
instruments, rights, promissory notes, payment intangibles, general
intangibles, accounts, receivables, letter of credit rights and all
other property and financial assets now or hereafter received or
receivable in connection with any sale, exchange, redemption or
other disposition of any of the foregoing, (B) all dividends,
interest and other distributions, whether in cash, securities,
promissory notes, payment intangibles, general intangibles,
accounts or other property on or in respect of any of the
foregoing, (C) all additions to and substitutions for any of
the foregoing, (D) all present and future rights, claims,
remedies and privileges of Debtor pertaining to any of the
foregoing (exclusive of any rights, claims, or remedies against
Lender), (E) all general intangibles, payment intangibles, and
contract rights of Debtor relating to any of the foregoing
(exclusive of any rights, claims or remedies against Lender), and
(F) all proceeds, products and profits of any of the foregoing
(including proceeds of proceeds, proceeds of insurance policies and
claims against third parties), in each case whether now existing or
hereafter arising or acquired (collectively, the
“Collateral”).
2. Debtor
represents and warrants to Lender that: (a) the information
regarding Debtor set forth opposite Debtor’s signature below
(“Debtor Information”) is true, correct and complete on
the date hereof, (b) Debtor is duly organized and validly
existing in good standing under the laws of its jurisdiction of
formation, and is duly qualified and in good standing in all such
foreign jurisdictions where its business or property so requires,
(c) Debtor has all necessary right, power and authority to own
Debtor’s property and assets, to transact the business in
which Debtor is engaged and to grant to Lender a security interest
in the Collateral, and has taken all necessary action to authorize
Debtor’s execution, delivery and performance of this
Agreement, including all necessary actions by members or managers,
as the case may be, and all filings and recordations, (d) the
execution, delivery and performance by Debtor of this Agreement do
not violate, breach or conflict with (i) Debtor’s
constituent documents, (ii) any agreement, contract or
instrument to which Debtor is a party or by which Debtor or its
properties are bound, or (iii) any applicable law, regulation,
decree, order or the like, (e) as a result of entering into
this Agreement and after giving effect to the transactions
contemplated by this Agreement, Debtor is not, and will not be
rendered, insolvent, (f) this Agreement is the legal, valid
and binding obligation of Debtor, enforceable against Debtor in
accordance with its terms, (g) the financial statements of
Debtor previously delivered to Lender in connection with the
Obligations are true, correct and complete and fairly present the
financial condition of Debtor as of the date thereof and there has
been no material adverse change in the financial condition of
Debtor between the date of the last financial statement of Debtor
delivered to Lender and the date hereof (other than as a result of
any change in the financial condition of Borrower resulting from a
change in the treatment or value of the Collateral),
(h) Debtor is and at all times will continue to be the legal
and beneficial owner of the Collateral (subject to the terms of
Section 18 hereof), (i) except for the security interest
granted to Lender hereunder, and except as otherwise set forth on
Schedule C hereto, Debtor owns the Collateral free and clear
of any Lien (as defined in Schedule C hereto) and all
Collateral has been validly pledged hereunder, (j) there are
no filings or recordations against the Collateral which grant or
purport to grant a Lien in any Collateral to any other
person,
(k) all Collateral which consists of equity interests has been
validly acquired and validly issued, and is fully paid and
non-assessable and no Collateral is evidenced or represented by any
certificate, note or chattel paper other than such as has been
delivered to Lender together with appropriate stock powers or other
instruments of transfer therefor, (1) except for governmental
regulatory proceedings relating to the use and/or marketing
approval of products manufactured by the Debtor, there are no
actions or proceedings pending or threatened before any court or
governmental authority, against or affecting Debtor, that
(i) purports to affect the legality, validity or
enforceability of this Agreement or the consummation of the
transactions contemplated hereby or (ii) could reasonably be
expected to have a material adverse effect on the financial
condition, operations, business, assets, and prospects of Debtor,
(m) Debtor is not (i) an “investment company” or a
company “controlled” by an “investment
company,” within the meaning of the Investment Company Act of
1940, as amended or (ii) subject to any other law or
regulation which purports to restrict or regulate Debtor’s
ability to borrow money, and (n) Debtor is a corporation and
those parties or party set forth in Debtor’s Information are
authorized to act on behalf of the corporation.
3. Debtor
covenants and agrees with Lender that: (a) Lender’s sole
duty with respect to the Collateral is to use such care as it uses
for similar property for its own account, and Lender shall not be
obligated to preserve rights in the Collateral against prior
parties, (b) Debtor will (i) be solely responsible for
all matters relating to the Collateral, including ascertaining
maturities, calls, conversions, exchanges and tenders,
(ii) not, and will not purport to, grant or suffer Liens
against, or sell, transfer or dispose of any Collateral (subject to
the terms of Section 18 hereof), (iii) from time to time
take all actions (including entering into any control agreement
requested by Lender and otherwise cooperate with Lender in
maintaining control with respect to that Collateral in which a
security interest may be perfected by control pursuant to the UCC,
as hereinbelow defined or other applicable law) and make all
filings, registrations and recordations requested by Lender in
connection with Lender’s security interest in the Collateral,
(iv) promptly notify Lender of the occurrence of any default
hereunder or otherwise in respect of the Obligations, and
(v) hold in trust for, and forthwith pay over to, Lender in
the form received (except for any necessary endorsements) all
property, proceeds or distributions received by Debtor on account
of any Collateral (subject to the terms of Paragraph 18
hereof), (c) upon and during the continuance of an Event of
Default (as hereinafter defined), Lender may transfer all or any
part of the Collateral to Lender’s name or that of its
nominee, and exercise all rights as if the absolute owner thereof,
and file a proof of claim for, receive payments or distributions
on, and exchange or release Collateral, (d) Lender is
authorized to file financing statements and/or a copy of this
Agreement and give notice to third parties regarding the Collateral
without Debtor’s signature to the extent permitted by
applicable law, (e) Debtor will notify Lender of any change to
the Debtor Information, (f) Lender may rely upon any written
(including fax), telephonic or oral communication in good faith
believed by Lender to have been authorized by Debtor; provided,
however, that if any such communication is oral or telephonic, it
shall be promptly confirmed in writing (including by fax) (but the
lack of such confirmation or any conflict between such confirmation
and the relevant telephonic or oral communications shall not affect
any action taken by Lender in reliance on such telephonic or oral
communications prior to receipt of such confirmation),
(g) once per fiscal quarter Debtor shall deliver to Lender its
quarterly financial statements (or with respect to a fiscal quarter
ending on December 31, its annual financial statements)
prepared in accordance with sound accounting principles and
consistent with the financial statements of Debtor previously
delivered to Lender, certified to Lender by Debtor as true, correct
and complete and accurately reflecting the financial condition of
Debtor as of the date thereof, (h) Debtor shall not sell,
transfer, pledge or encumber or permit the sale, transfer, pledge
or encumbrance of any interest in Debtor, directly or indirectly,
that would or might cause a “Change in Control” of
Debtor without the either (i) prior full repayment of the
Obligations, or (ii) prior written consent of Lender, which
shall not be unreasonably withheld, conditioned or delayed and
(i) notwithstanding anything in this Agreement or the Time
Note to the contrary, if Lender may sell or redeem any Collateral
consisting of auction rate preferred securities at “Par
Value” for cash, it may, but shall not be obligated, to do so
on behalf of Debtor, whether or not an Event of Default is then
continuing and the net proceeds thereof shall be treated as a
payment by the Debtor pursuant to Section 6.2 of the Time Note
and Debtor shall cooperate with Lender in effecting any such
transaction. For the purposes of Section 3(h), “Change
in Control” means the occurrence of any of the following
events: (i) any sale, exchange or other transfer to a party
not affiliated with Debtor of all, or substantially all, of the
business and/or assets of Debtor; (ii) a merger or consolidation of
Debtor with respect to which Debtor is not the surviving entity; or
(iii) a merger, consolidation, or tender offer involving
Debtor if the equity holders of Debtor immediately before such
merger, consolidation, or tender offer do not own, directly or
indirectly, immediately following such merger, consolidation, or
tender offer, more than fifty percent (50%) of the combined voting
power of the outstanding voting securities of Debtor resulting from
such merger, consolidation, or tender offer.
4. Debtor
further covenants and agrees to comply with the Collateral
Maintenance Requirements set forth in Schedule D hereto. If
Debtor fails to comply with the Collateral Maintenance Requirements
(subject to the grace period set forth on Schedule D), Lender
shall have all the rights and remedies of a secured party under the
New York Uniform Commercial Code as then in effect (the
“UCC”) or other applicable law, and may, in addition to
any other right or remedy available to Lender hereunder or under
applicable law, without consent by Debtor, sell, liquidate or
redeem so much of the Collateral as is necessary to reduce
the
2
Obligations so
as to comply with the Collateral Maintenance Requirements then in
effect.
Debtor hereby
agrees that upon and during the continuance of an Event of Default,
the Lender shall determine the value of the Collateral in its sole
and absolute discretion and such determination shall be binding on
the Debtor so long as Lender acts in a commercially reasonable
manner and otherwise in accordance with the UCC. For the avoidance
of doubt, any valuations of the Collateral reflected on account
statements for the Collateral Account shall not be binding upon the
Lender.
5. Except as
otherwise provided below in this Section 5, Debtor hereby
irrevocably, unconditionally and expressly waives, to the fullest
extent permitted by applicable law, all defenses, counterclaims,
rights of setoff, any requirement that Lender first proceed against
any guarantor or any other security, all requirements for notice of
any kind (except as otherwise expressly agreed), demand,
presentment, notice of
non-payment, default or dishonor of any Obligation, notice of
acceptance hereof, marshalling of assets or the like, including
without limitation, any right to notice or judicial hearing in
connection with Lender’s taking posse
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