PLEDGE AND SECURITY AGREEMENTSecurity Agreement |
|
|
You are currently viewing: This Security Agreement involves
INSITE VISION INCORPORATED | US Bank National Association. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here. |
|
|
|
|
Exhibit 10.4
PLEDGE AND SECURITY AGREEMENT
MADE BY
INSITE VISION INCORPORATED
TO
U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE
DATED AS OF FEBRUARY 21, 2008
Table
of Contents
i
ii
iii
PLEDGE AND SECURITY AGREEMENT
This
PLEDGE AND SECURITY AGREEMENT, dated as of February 21, 2008,
is made by INSITE
VISION INCORPORATED, a Delaware corporation, in favor of U.S.
Bank National Association, a national banking association, as
the Trustee under the Indenture, as grantee
hereunder.
W
I
T
N
E
S
S
E
T
H
:
WHEREAS,
pursuant to the Purchase and Sale Agreement, contemporaneous
with the execution and delivery of this Pledge and Security
Agreement, the Parent has sold, transferred, conveyed,
assigned, contributed and granted all of the Purchased Assets
to the Issuer, in consideration of the payment by the Issuer
to the Parent of the Cash Purchase Price and the issuance by
the Issuer to the Parent of all of the Capital Securities of
the Issuer owned by the Parent;
WHEREAS,
in order to secure the repayment of the Original Class A Notes
issued by the Issuer pursuant to the Indenture, the Issuer
shall grant a security interest in certain of its property and
rights to the Trustee for the benefit of the Noteholders,
including Royalty Payments actually made by Inspire under the
Inspire License Agreement (but not the rights thereunder to
receive such payments) and the Replacement Royalty Payments,
if any, its rights under the Purchase and Sale Agreement, any
Accounts and certain other collateral in accordance with the
terms and conditions thereof;
WHEREAS,
in addition to the grant of security interest by the Issuer to
the Trustee as set forth in the immediately preceding recital,
in order to further secure repayment of the Original Class A
Notes, the Trustee desires that the Parent pledge all of the
Capital Securities of the Issuer owned by the Parent to the
Trustee for the benefit of the Noteholders; and
WHEREAS,
the Parent and the Trustee hereby agree that the Parent shall
execute and deliver this Pledge and Security Agreement and
make the pledge contemplated hereby to the Trustee for its
benefit;
NOW,
THEREFORE, in consideration of the foregoing premises and for
other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, and in order to
induce the Noteholders to purchase the Original Class A Notes
issued pursuant to the Indenture, the Parent agrees, for the
benefit of the Trustee on behalf of each Noteholder, as
follows:
ARTICLE
I
RULES OF CONSTRUCTION AND DEFINED TERMS
Section
1.1
Rules of Construction and Defined Terms .
The rules of construction set forth in
Annex A shall
apply to this Pledge and Security Agreement and are hereby
incorporated by reference into this Pledge and Security Agreement
as if set forth fully in this Pledge and Security Agreement.
Capitalized terms used but not otherwise defined in this Pledge and
Security Agreement shall have the respective meanings given to such
terms in
Annex A ,
which is hereby incorporated by reference into this Pledge and
Security Agreement as if set forth fully in this Pledge and
Security Agreement. Not all terms defined in
Annex A are
used in this Pledge and Security Agreement.
1
ARTICLE
II
PLEDGE
Section
2.1
Pledge .
As security for the payment and performance of the Secured
Obligations and subject to and in accordance with the provisions of
this Pledge and Security Agreement, the Parent hereby pledges,
grants, assigns, hypothecates, transfers and delivers (subject to
Section 3.1) to the Trustee, its successors and assigns, for the
security and benefit of the Noteholders, a continuing first
priority security interest in all of the Parent’s right,
title and interest in, to and under the following property, whether
now owned or hereafter acquired (the “
Issuer Pledged Collateral ”):
(a)
all
of the Parent’s Capital Securities in the Issuer,
whether now owned or acquired in the future, and all
certificates, agreements or other instruments, if any,
representing such Capital Securities (the “
Issuer Pledged Equity ”);
(b)
subject
to Section 6.4, the right to receive all monies and property
representing a distribution in respect of the Issuer Pledged
Equity (except for proceeds of the Notes to the extent not
applicable to any Redemption of the Notes), whether by way of
dividend, redemption, liquidation payments, repurchase or
otherwise; and
(c)
subject
to Section 6.4, all proceeds, products and accessions of and
to the Issuer Pledged Equity and any of the foregoing,
including all shares, securities, rights, monies or other
property accruing, offered or issued at any time by way of
redemption, conversion, exchange, substitution, preference,
option or otherwise in respect of the Issuer Pledged
Equity;
TO
HAVE AND TO HOLD the Issuer Pledged Collateral, together with
all right, title, interest, powers, privileges and preferences
pertaining or incidental thereto, unto the Trustee, its
successors and assigns, forever, subject to the terms and
conditions set forth herein.
ARTICLE
III
DELIVERY OF ISSUER PLEDGED COLLATERAL
Section
3.1
Delivery of Issuer Pledged Collateral .
Contemporaneously with the execution of this Pledge and Security
Agreement, the Parent shall deliver or cause to be delivered to the
Trustee, to the extent not previously delivered, (a) any and all
certificates and other instruments evidencing the Issuer Pledged
Equity then held in the form of certificates or other instruments
by the Parent, together with undated stock powers or assignments of
such certificates duly executed and signed in blank, (b) any and
all certificates or other instruments or documents representing any
of the Issuer Pledged Collateral then held by the Parent and (c)
all other property comprising part of the Issuer Pledged Collateral
then held in the form of certificates or other instruments by the
Parent with proper instruments of assignment or transfer duly
executed and such other instruments or documents as the Trustee may
reasonably request to effect the purposes contemplated
hereby.
2
Section
3.2
Recording of
Lien .
The Parent shall record the Lien of the Trustee on its records at
its principal office within ten Business Days after the date hereof
and provide to the Trustee written confirmation that such Lien has
been so recorded and that there are no other Liens on its records
with respect to the Issuer Pledged Equity.
Section
3.3
Capital Securities .
If the Parent shall become entitled to receive or shall receive, in
respect of the Issuer Pledged Equity, any Capital Securities,
options, warrants, rights or other similar property, including any
certificate representing any distribution in connection with any
recapitalization, reclassification or increase or reduction of
capital (whether as an addition to, in substitution of or in
exchange for such Issuer Pledged Equity or otherwise), the Parent
agrees:
(a)
to
accept the same as the agent of the Trustee;
(b)
to
hold the same in trust on behalf of and for the benefit of the
Trustee and separate and apart from its other property;
and
(c)
to
deliver any and all certificates or instruments evidencing the
same to the Trustee on or before the close of business on the
fifth Business Day following the receipt thereof by the
Parent, in the exact form received, with the endorsement or
assignment in blank of the Parent when necessary and with
appropriate undated irrevocable proxies duly executed in blank
(with signatures properly guaranteed), to be held by the
Trustee, subject to the terms of this Pledge and Security
Agreement, as additional Issuer Pledged
Collateral.
ARTICLE
IV
REPRESENTATIONS AND WARRANTIES
Section
4.1
Representations and Warranties .
As
of the date hereof, the Parent represents and warrants as
follows:
(a)
The
Parent has been duly organized, is validly existing and is in
good standing under the laws of its jurisdiction of
organization and has all licenses, permits, franchises and
governmental authorizations necessary to carry on its business
as now being conducted and shall appoint and employ agents or
attorneys in each jurisdiction where it shall be necessary to
take action under this Pledge and Security Agreement. The
Parent is duly licensed or qualified to do business in good
standing in each jurisdiction in which such qualification is
required by law, except where such failure to qualify would
not reasonably be likely to result in a Material Adverse
Effect. The Parent has the full power and authority to own the
property it purports to own and to carry on its business as
presently conducted and as proposed to be
conducted.
(b)
The
Parent is the sole legal and beneficial owner of the Issuer
Pledged Collateral free and clear of any Lien other than the
Lien created pursuant to this Pledge and Security Agreement
and the Indenture or other Permitted Liens. No security
agreement, financing statement or other public notice with
respect to all or any part of the Issuer Pledged Collateral is
on file or of record in any public office, except such as may
have been filed in favor of the Trustee pursuant to this
Pledge and Security Agreement and the Indenture.
3
(c)
The
consummation of the transactions contemplated hereby has been
duly and validly authorized by the Parent. The Parent has full
power to execute and deliver this Pledge and Security
Agreement and to perform its obligations hereunder and to
pledge all the Issuer Pledged Collateral pursuant to this
Pledge and Security Agreement. This Pledge and Security
Agreement has been duly authorized, executed and delivered by
the Parent. This Pledge and Security Agreement constitutes a
legal, valid and binding obligation of the Parent enforceable
against the Parent in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy,
insolvency, moratorium or other similar laws affecting
creditors’ rights generally and except as enforceability
may be limited by general principles of equity (whether
considered in a suit at law or in equity). All requisite
action has been taken by the Parent to make this Pledge and
Security Agreement valid and binding upon the
Parent.
(d)
No
consent of any other party (including directors, officers,
members, managers or creditors of the Parent) and no
government approval is required that has not been obtained (i)
for the execution, delivery and performance by the Parent of
this Pledge and Security Agreement and each other Transaction
Document to which it is a party, (ii) for the pledge by the
Parent of the Issuer Pledged Collateral pursuant to this
Pledge and Security Agreement or (iii) for the exercise by the
Trustee of the rights provided for in this Pledge and Security
Agreement or the remedies in respect of the Issuer Pledged
Collateral pursuant to this Pledge and Security Agreement
(except as may be required (x) in connection with any
disposition of all or any part of the Issuer Pledged
Collateral under any laws affecting the offering and sale of
securities generally, (y) under applicable federal and state
laws, rules and regulations and applicable interpretations
thereof providing for the supervision or regulation of the
banking or trust businesses generally and applicable to the
Trustee and (z) with respect to the Trustee as a result of any
relationship that the Trustee may have with Persons not
parties to, or any activity or business the Trustee may
conduct other than pursuant to, any of the Transaction
Documents).
(e)
The
execution and delivery of this Pledge and Security Agreement
concurrently with the delivery to the Trustee of the
certificates and other items contemplated by Section 3.1 and
the taking of the actions described in Section 3.3 constitute
“control” of the Issuer Pledged Equity described
in Section 8-106(b) of the UCC and create a valid security
interest in the Issuer Pledged Collateral securing the Secured
Obligations, and the Parent has done such other acts, if any,
reasonably requested by the Trustee to perfect the security
interest in the Issuer Pledged Collateral granted hereunder
(including permitting the Trustee to file any appropriate UCC
financing statement against the Parent).
(f)
The
execution, delivery and performance of this Pledge and
Security Agreement and the consummation of the transactions
contemplated by this Pledge and Security Agreement do not (i)
violate the provisions of the Parent Organizational Documents,
(ii) violate the provisions of any Applicable Law (including
any usury law), regulation or order of any Governmental
Authority applicable to the Parent except where such violation
would not have or would not be reasonably expected to have a
Material Adverse Effect, (iii) result in a breach of, or
constitute a default under, any material agreement relating to
the management or affairs of the Parent, or any indenture,
credit agreement or loan agreement or any other similar
material agreement, lease or instrument to which the Parent is
a party or by which the Parent or any of its material
properties may be bound (which default or breach has not been
permanently waived by the other party to such document) or
(iv) result in or create any Lien (other than Permitted Liens)
under, or require any consent that has not been obtained
under, any indenture, credit agreement or loan agreement or
any other material agreement, instrument or document to which
the Parent is a party or the provisions of any order, writ,
judgment, injunction, decree, determination or award of any
Governmental Authority, binding upon the Parent, the Issuer
Pledged Collateral or any material properties of the
Parent.
4
(g)
There
are no proceedings and there is no action, suit or proceeding
at law or in equity or by or before any Governmental Authority
now pending against the Parent or, to the best knowledge of
the Parent, threatened against the Parent that questions the
validity or legality of this Pledge and Security Agreement or
that seeks to prevent the consummation of any of the
transactions contemplated by this Pledge and Security
Agreement.
(h)
All
of the Issuer Pledged Equity has been duly authorized and
validly issued by the Issuer and is fully paid and
non-assessable.
ARTICLE
V
SUPPLEMENTS; FURTHER ASSURANCES
Section
5.1
Supplements .
The
Parent agrees that, at any time and from time to time, at the
Parent’s expense and upon the Trustee’s reasonable
request, the Parent will promptly execute and deliver all further
instruments and documents, and take all further action, that may be
necessary in the reasonable discretion of the Trustee, in order to
perfect the security interest of the Trustee in the Issuer Pledged
Collateral and to carry out the provisions of this Pledge and
Security Agreement or to enable the Trustee to exercise and enforce
its rights and remedies hereunder with respect to any Issuer
Pledged Collateral. The
Parent also agrees that, at any time and from time to time, at the
Parent’s expense and upon the request of the Trustee at the
Direction of Noteholders of a majority of the Outstanding Principal
Balance of the Notes, the Parent will file (or cause to be filed)
such UCC financing statements or continuation statements, or
amendments thereto, and such other instruments or notices as may be
necessary or that the Trustee may reasonably request at the
Direction of Noteholders of a majority of the Outstanding Principal
Balance of the Notes in order to perfect and preserve the security
interests and other rights granted or purported to be granted to
the Trustee hereby. With respect to the foregoing and the grant of
the security interest hereunder, the Parent hereby authorizes the
Trustee to file one or more UCC financing statements or
continuation statements, and amendments thereto, relative to all or
any part of the Issuer Pledged Collateral without the signature of
the Parent where permitted by law. The Parent agrees that a carbon,
photographic or other reproduction of this Pledge and Security
Agreement or any UCC financing statement covering the Issuer
Pledged Collateral or any part thereof shall be sufficient as a UCC
financing statement where permitted by law.
Section
5.2
Further Assurances
.
If the Parent fails to perform any agreement contained herein
after receipt of a written request to do so from the Trustee
(it being understood that no such request need be given after
the occurrence and during the continuance of an Event of
Default), the Trustee may itself perform, or cause performance
of, such agreement, in which case the reasonable expenses of
the Trustee, including the fees and expenses of its counsel,
incurred in connection therewith shall be payable by the
Parent under Section 12.1.
5
ARTICLE
VI
COVENANTS
Section
6.1
No Liens .
The Parent agrees that, without the consent of the Trustee pursuant
to Section 9.1 or Section 9.2 of the Indenture, as applicable, it
will not (a) sell or otherwise dispose of the Issuer Pledged
Collateral or any interest therein or (b) except for Permitted
Liens, create or permit to exist any Lien upon or with respect to
any of the Issuer Pledged Collateral or any interest
therein;
provided ,
however ,
that, so long as no Default or Event of Default is continuing, the
Parent will be entitled to sell, transfer, assign, convey,
contribute or grant the Issuer Pledged Equity subject to the lien
of this Pledge and Security Agreement and satisfaction of the other
conditions set forth in the exception provided in
Section 6.2(a) of the Purchase and Sale
Agreement.
Section
6.2
Notices .
The Parent shall promptly provide the Trustee with copies of all
notices and other communications received by the Parent with
respect to any Issuer Pledged Collateral registered in the name of
the Parent.
Section
6.3
Voting Rights .
So long as the Parent is the owner of the Issuer Pledged
Collateral, notwithstanding anything to the contrary in this Pledge
and Security Agreement or any other Transaction Document, if no
Event of Default has occurred and is continuing, the Parent may
exercise any and all voting and consensual powers pertaining to the
Issuer Pledged Collateral or any part thereof. If an Event of
Default has occurred and is continuing, the Parent shall not be
entitled to exercise any of the powers described in the preceding
sentence, which shall be exercised exclusively by the Trustee.
Notwithstanding the foregoing, upon the occurrence and during the
continuance of an Event of Default comprised of any breach by the
Parent of its covenant in Section 6.2(c) of the Purchase and Sale
Agreement as to which the Trustee exercises remedies at law or
equity available to it pursuant to or in relation to this Pledge
and Security Agreement in respect of the Issuer Pledged Equity, the
Trustee will have the right to instruct the Independent Member to
exercise the powers and authority granted to the Independent Member
pursuant to Section 2.13 of the limited liability company agreement
of the Issuer to exercise any and all rights and options of the
Issuer in relation to the Principal Documents to enforce
performance by the other parties thereto of their obligations
thereunder. If the Independent Member elects not to exercise such
rights and options notwithstanding the provision by the Noteholders
of reasonable indemnity thereto, then the Trustee will have the
right to terminate the Independent Member and to appoint a
successor Independent Member of the Issuer to exercise such rights
and options. The Parent agrees to cooperate with the Trustee to
cause such successor Independent Member to succeed the terminated
Independent Member as the Class B Member of the Issuer, to be
admitted as a member of the Issuer, and to obtain and enjoy to the
exclusion of the terminated Independent Member all interests,
powers, ri
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SITE SEARCH
AGREEMENTS / CONTRACTS
CLAUSES
| Get Email Updates |
