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Exhibit
10.13
EXECUTION
COPY
SUBSIDIARY STOCK PLEDGE
AGREEMENT
THIS STOCK PLEDGE AGREEMENT
(“ Agreement ”) is dated and made as of
July 30, 2007, by Vita Licensing, Inc., a Delaware corporation
(the “ Pledgor ”), in favor of LB I Group Inc.,
a Delaware corporation (the “ Collateral Agent
”), for the benefit of holders of those certain 10% Senior
Secured Promissory Notes described in the Note Purchase Agreement
(as defined below).
W I T N E S S E T
H:
WHEREAS, Orthovita, Inc.,
(the “ Borrower ”) is entering into that certain
Senior Secured Note and Warrant Purchase Agreement, dated as of
even date herewith (as the same may be amended, modified,
supplemented or restated from time to time, the “ Note
Purchase Agreement ”), with the Collateral Agent and
certain other Purchasers (as defined therein), pursuant to which
the Purchasers have agreed to furnish debt financing to the
Borrower (defined below) by way of the purchase of (i) the
Pledged Company’s senior secured notes and (ii) warrants
to purchase the Borrower’s Common Stock;
WHEREAS, it is a condition
precedent to the effectiveness of the Note Purchase Agreement that
the Pledgor as a Wholly-owned Subsidiary of the Borrower, shall
have executed this Agreement and made the pledge in favor of the
Collateral Agent, as contemplated hereby; and
WHEREAS, this Agreement is
given and is intended to provide additional security for the
Obligations (as defined in the Note Purchase Agreement).
NOW, THEREFORE, in
consideration of the premises and to induce the Purchasers and the
Collateral Agent to enter into the Note Purchase Agreement, and for
other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Pledgor hereby agrees with
the Collateral Agent as follows:
1. Definitions .
Unless the context otherwise requires, all terms used but not
expressly defined herein shall have the meanings given to them in
the Note Purchase Agreement or, if they are not defined in the Note
Purchase Agreement but are defined in the UCC, they shall have the
same meaning herein as in the UCC.
2. Pledge of the Pledged
Stock; Power of Attorney . As security for the prompt payment
and performance when due of the Obligations, the Pledgor hereby
pledges to the Collateral Agent and grants to the Collateral Agent,
for the benefit of the holders of the Notes, a perfected lien on
and security interest in, the following (collectively, the “
Pledged Collateral ”): (i) all of the issued and
outstanding shares of common stock of Vita Special Purpose Corp., a
Delaware corporation and Wholly owned subsidiary of Pledgor (the
“ Pledged Company ”), all of which shares are
listed on Schedule 2 hereto (the “ Pledged Stock
”), (ii) all additional shares of stock or other
securities at any time issued by the Pledged Company to the
Pledgor, (iii) the certificates evidencing all of the Pledged
Stock and such additional shares and securities, (iv) all
general intangibles arising from or relating to the Pledged Stock
and such additional shares and securities; (v) all dividends,
cash, instruments and other property from time to time
received,
receivable or otherwise distributed in
respect of or in exchange for any or all of the Pledged Stock and
such shares and securities and (vi) all proceeds of any of the
foregoing (including, without limitation, proceeds constituting any
property of the types described above). The Pledgor has delivered
to the Collateral Agent original stock certificates for all of the
Pledged Stock, each accompanied by an undated stock power executed
in blank by the Pledgor. The pledge and security interest described
herein shall continue in effect to secure all Obligations from time
to time incurred or arising unless and until all Obligations have
been indefeasibly paid and satisfied in full.
(a) The Collateral Agent
shall have no obligation with respect to the Pledged Collateral or
any other property held or received by it hereunder except to use
reasonable care in the custody thereof. The Collateral Agent may
hold the Pledged Collateral in the form in which it is received by
the Collateral Agent. The Collateral Agent shall have no obligation
to sell or otherwise deal with the Pledged Collateral at any time
for any reason, whether or not upon request of the Pledgor, and
whether or not the value of the Pledged Collateral, in the opinion
of the Collateral Agent or the Pledgor, is more or less than the
aggregate amount of the Obligations secured hereby, and any such
refusal or inaction by the Collateral Agent shall not be deemed a
breach of any duty which the Collateral Agent may have under law to
preserve the Pledged Collateral.
(b) The Pledgor, to the full
extent permitted by law, hereby constitutes and irrevocably
appoints the Collateral Agent (and any officer or agent of the
Collateral Agent, with full power of substitution and revocation)
as the Pledgor’s true and lawful attorney-in-fact, in the
Pledgor’s stead and in the name of the Pledgor or in the name
of the Collateral Agent, to transfer, upon the occurrence and
during the continuance of an Event of Default, the Pledged
Collateral on the books of the Pledgor and the Pledged Company, in
whole or in part, to the name of the Collateral Agent or such other
Person or Persons as the Collateral Agent may designate and, upon
the occurrence and during the continuance of an Event of Default,
to take all such other and further actions as the Pledgor could
have taken with respect to the Pledged Collateral which the
Collateral Agent in its absolute discretion determines to be
necessary or appropriate to accomplish the purposes of this
Agreement.
(c) The powers of attorney
granted pursuant to this Agreement and all authority hereby
conferred are granted and conferred solely to protect the
Collateral Agent’s interests in the Pledged Collateral and
shall not impose any duty upon the attorney-in-fact to exercise
such powers. Such powers of attorney are coupled with an interest
and shall be irrevocable prior to the payment in full of the
Obligations and the termination of the Note Purchase Agreement, and
shall not be terminated prior thereto or affected by any act of the
Pledgor or other Persons or by operation of law.
(d) Each Person who shall be
a transferee of the beneficial ownership of any of the Pledged
Collateral (any such transfer being prohibited under
Section 5 hereof unless the Collateral Agent consents
thereto) shall be deemed to have irrevocably appointed the
Collateral Agent, with full power of substitution and revocation,
as such Person’s true and lawful attorney-in-fact in such
Person’s name and otherwise to do any and all acts herein
permitted and to exercise any and all powers herein
conferred.
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3. Rights of the Pledgor;
Voting .
(a) During the term of this
Agreement, and so long as no Voting Notice (as defined below) is
issued by the Collateral Agent following the occurrence and during
the continuance of an Event of Default as hereinafter provided in
this Section 3 , the Pledgor shall have the right to
vote any of the Pledged Collateral in all corporate matters except
those which would contravene this Agreement, the Note Purchase
Agreement or any of the other Related Documents, or which would
materially reduce the value of the Pledged Collateral, unless the
Collateral Agent consents thereto. The Pledgor shall not suffer or
permit any such action to be taken by the Pledged Company without
the prior written approval (which approval the Collateral Agent may
withhold in its sole discretion) of the Collateral
Agent.
(b) Upon the occurrence and
during the continuance of an Event of Default: (i) the Pledgor
shall give the Collateral Agent at least five ( 5
) days prior written notice of (A) any meeting of the
stockholders or directors of the Pledged Company convened for any
purpose and (B) any written consent which the Pledgor proposes
to execute as the stockholder of the Pledged Company or which any
representative of the Pledgor proposes to execute as a director of
the Pledged Company, and (ii) in connection with the
foregoing, the Pledgor hereby authorizes the Collateral Agent to
send its agents and representatives to any such meeting of
stockholders or directors of the Pledged Company that the
Collateral Agent wishes to attend, and agrees to take such steps as
may be necessary to confirm and effectuate such right, including,
without limitation, causing the Pledged Company to give reasonable
prior written notice to the Collateral Agent of the time and place
of any such meeting and the principal actions to be taken thereat.
The Pledgor hereby irrevocably authorizes and instructs the Pledged
Company to comply with any instruction received by it from the
Collateral Agent in writing that (y) states that an Event of
Default has occurred and is continuing and (z) is otherwise in
accordance with the terms of this Agreement, without any other or
further instructions from the Pledgor, and the Pledgor agrees that
the Pledged Company shall be fully protected in so
complying.
(c) Notwithstanding the
occurrence or continuance of an Event of Default, the Pledgor may
continue to exercise its voting rights as herein described (and
subject to the limitations herein) except to the extent that the
Collateral Agent, at any time during the continuance of an Event of
Default, elects from time to time to exercise voting power (as
determined by it in its sole discretion) by a written notice given
to the Pledgor (a “ Voting Notice ”), whereupon
the Collateral Agent shall have the sole and exclusive right to
exercise such rights to the extent specified in such Voting Notice,
and the Pledgor shall take all such steps as may be necessary to
effectuate such rights until the Collateral Agent notifies the
Pledgor in writing of the revocation of such Voting
Notice.
4. No Restrictions on
Transfer . The Pledgor warrants and represents that, except as
set forth on Schedule 4 hereto, there are no restrictions on
the transfer of the Pledged Collateral except for such restrictions
imposed by operation of law, that there are no options, warrants or
rights pertaining to the Pledged Collateral, and that the Pledgor
has the right to transfer the Pledged Collateral free of any Liens,
preemptive rights, claims and legends and without the consent of
the creditors of the Pledgor or the consent of the Pledged Company,
or any other Person (including any governmental agency) whatsoever.
Without limiting the generality of the foregoing, the Pledged
Collateral is not subject to any voting, “lock-up” or
similar agreement.
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5. No Transfer or Liens;
Additional Securities; Release of Lien . The Pledgor agrees
that, except as permitted under the Note Purchase Agreement, it
will not sell, transfer or convey any interest in, or suffer or
permit any Lien to be created upon or with respect to, any of the
Pledged Collateral during the term of this Agreement. Except as
permitted under the Note Purchase Agreement, the Pledgor shall not
cause, suffer or permit the Pledged Company to issue any common or
preferred stock (or any options or warrants in respect of the
Pledged Company’s common or preferred stock), or any other
equity security, to any Person.
6. Adjustments of Capital
Stock; Payment and Application of Dividends . In the event that
during the term of this Agreement any stock dividend,
reclassification, readjustment or other change is declared or made
in the capital structure of the Pledged Company or if any other or
additional shares of stock of the Pledged Company are issued to the
Pledgor, all new, substituted and additional shares or other
securities issued by reason of any such change or acquisition shall
immediately be delivered by the Pledgor to the Collateral Agent and
shall be deemed to be part of the “Pledged Collateral”
under the terms of this Agreement in the same manner as the shares
of stock originally pledged hereunder. Any additional shares of
stock received by the Pledgor as a result of the Pledgor’s
record ownership of the Pledged Stock shall promptly be delivered
by the Pledgor to the Collateral Agent (each certificate
accompanied by an undated stock power executed in blank by the
Pledgor), to be held by the Collateral Agent as Pledged Collateral
hereunder or, if an Event of Default has occurred and is
continuing, to be applied by the Collateral Agent against the
Obligations. Unless and until an Event of Default shall occur and
be continuing, all cash dividends or distributions payable in
respect of the Pledged Collateral (to the extent such payments are
permitted under the Note Purchase Agreement) may be paid to the
Pledgor; provided , however , that upon the
occurrence and during the continuance of an Event of Default, the
Pledgor will not demand, and will not be entitled to receive, any
cash dividends or other income, interest or property in or with
respect to the Pledged Collateral, and if the Pledgor receives any
of the same, the Pledgor shall promptly deliver it to the
Collateral Agent to be held by it and applied as provided in the
preceding sentence.
7. Warrants and
Options . In the event that during the term of this Agreement
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