Exhibit 10.4

 

 
 
DATED FEBRUARY 14, 2019
 
BANK ACCOUNT PLEDGE AGREEMENT
  

between
  

AZURRX BIOPHARMA SAS
as Pledgor
 

and
 
ADEC PRIVATE EQUITY INVESTMENTS, LLC
as Beneficiary
 

 

 
 

TABLE OF CONTENTS
 

CLAUSE  
PAGE
1
Definitions and Interpretation
2
2
The Pledge
3
3
Representations and Warranties
4
4
Undertakings
4
5
Enforcement
4

6
Duration
5

7
Expenses
5
8
Retention of Security
5
9
Notices
5

10
Assignments
5

11
Miscellaneous
5

12
Governing Law – Jurisdiction
6

Schedule 1
Pledged Accounts
8

Schedule 2
Form of Notice of Pledge to the Account Holder
9

Schedule 3
Form of Blocking Notice
12

Schedule 4
Form of Unblocking Notice
15

 

 
 
1

 
 
THIS BANK ACCOUNT PLEDGE AGREEMENT (HEREINAFTER, TOGETHER WITH ITS SCHEDULES AND
AS AMENDED FROM TIME TO TIME, THE "PLEDGE AGREEMENT") IS MADE ON FEBRUARY 14,
2019,
 
BETWEEN:
 
1.
AZURRX BIOPHARMA SAS, a French société par actions simplifiée, having its
registered office located at _________________________, France and registered
under number ___________ RCS ____________,
 
(the "Pledgor"),
 
AND
 
2.
ADEC PRIVATE EQUITY INVESTMENTS LLC, a company with its registered office at
_____________, registered under number ____________,
 
(together with its successors, assignees and transferees, the "Beneficiary")
 
WHEREAS:
 
(A) 
Pursuant to a Note Purchase Agreement dated 14 February 2019 entered into
between AzurRx BioPharma, Inc., a Delaware Corporation (the "Company"), and the
Beneficiary as purchaser (the "Note Purchase Agreement"), the Company sold and
issued to the Beneficiary the Note (as defined in the Note Purchase Agreement).
 
(C) 
In order to further ensure repayment of the Liabilities (as defined below), the
Pledgor has agreed among other things to grant a pledge over the Pledged
Accounts (as defined below) on the terms set out below.
 
IT IS AGREED AS FOLLOWS:
 
1
DEFINITIONS AND INTERPRETATION
 
1.1
In this Pledge Agreement (including the recitals):
 
"Account Holder" means ______________.
 
"Note Agreement" means the documentation relating to the Notes (as defined in
the Note Purchase Agreement) and set out in Exhibit A and Exhibit B of the Note
Purchase Agreement.
 
"Enforcement Event" means an Event of Default under the Notes.
 
"Event of Default" has the meaning given to this term in the Note Agreement.
 
"Liabilities" means, all payment, repayment and redemption obligations at any
time due, owing or incurred by the Pledgor as guarantor to the Beneficiary under
or in respect of the Transaction Documents, plus, in each case, all sums due as
interests, compounded interest, late payment interest, commissions, costs,
indemnities, penalties, or incidental expenses, in each case calculated pursuant
to the Transaction Documents.
 
"Party" means a party to the present Pledge Agreement.
 
 
2

 
 
"Pledge" means the first ranking security created or expressed to be created in
favour of the Beneficiary over the Pledged Balance as described in this Pledge
Agreement.
 
"Pledged Accounts" means the accounts list in Schedule 1.
 
"Pledged Balance" means in accordance with article 2360 of the French Code
civil, the amounts, either provisory or final and subject to any current
operations, standing to the credit of the Pledged Accounts (including any
interest and other accessories) as at the day of enforcement of the Pledge.
 
"Pledge Period" means the period beginning on the date hereof and ending on the
date on which all of the Liabilities have been irrevocably and unconditionally
discharged in full.
 
"Schedule" means a schedule to this Pledge Agreement.
 
"Transaction Documents" has the meaning given to this term in the Note Purchase
Agreement.
 
1.2
In this Pledge Agreement, unless a contrary indication appears, terms not
defined in clause 1.1 of this Agreement have the same meaning when used herein
that the one ascribed to them in the recitals or in the relevant Transaction
Documents.
 
2
THE PLEDGE
 
2.1
In order to further ensure the full and punctual performance and discharge of
the Liabilities owed by it, the Pledgor hereby pledges the Pledged Balance to
the benefit of the Beneficiary, who accepts it, in accordance with article 2355
et seq. of the French Code civil and articles L.521-1 et seq. of the French Code
de commerce.
 
2.2
The Parties hereby agree that as from the date of this Pledge Agreement, the
Pledge shall be notified (by a notice substantially in the form set out in
Schedule 2 (Form of Notice of Pledge to the Account Holder)) by the Beneficiary,
to the Account Holder, in accordance with articles 2362 and 2363 of the French
Code civil.
 
2.3
The Pledgor shall be free to use the amounts standing to the credit of the
Pledged Account as it sees fit until the Pledged Account has been blocked in
accordance with Paragraph 2.4 below and subject to the Pledged Accounts never
showing a debit balance.
 
2.4
At any time after the occurrence of an Event of Default and the notification by
the Beneficiary to the Account Holder and the Pledgor of the occurrence of the
same by way of a notice substantially in the form set out in Schedule 3 (Form of
Blocking Notice) to this Pledge Agreement (a "Blocking Notice"), the Bank
Accounts shall be blocked until a notice (substantially in the form set out in
Schedule 4 (Form of Unblocking Notice) to this Agreement) is sent to the Pledgor
and the Account Holder confirming that the said Event of Default has been
remedied or has been waived in accordance with the Transaction Documents or
ceased to exist for any other reason (an "Unblocking Notice") provided that the
blocking of the Pledged Accounts shall not prohibit (i) debit transfers from the
Pledged Accounts necessary to carry out the payment of the Liabilities, and (ii)
any credit transfer to the Pledged Accounts. Upon receipt of an Unblocking
Notice, the provisions of Paragraph ‎2.4 shall apply.
 
2.5
The Pledgor will do its best efforts to procure that on the date hereof the
Account Holder delivers to the Beneficiary the notice referred to in Paragraph
‎2.2 above duly countersigned by it for acknowledgement of receipt.
 
3
REPRESENTATIONS AND WARRANTIES
 
3.1
Without prejudice to the representations and warranties set out in the other
Transaction Documents, the Pledgor represents and warrants on the date hereof to
the Beneficiary that:
 
(a)
it has the power and authority to grant the Pledge;
 
(b)
all of the authorisations and consents necessary to execute this Pledge
Agreement, to perform its obligations hereunder and to give these warranties and
representations, have been obtained and remain in force;
 
(c)
it has full, valid and legal title to the Pledged Accounts and the Pledged
Balance which are not the subject of any security, attachment, escrow or
encumbrance of any nature whatsoever, other than the Pledge;
 
 
3

 
 
(d)
the Pledge creates a first ranking pledge over the Pledged Balance, save for any
statutory liens and privileges (privilèges légaux);
 
(e)
it has no bank accounts other than the Pledged Accounts (except for any New Bank
Account pledged from time to time to the benefit of the Beneficiary).
 
3.2
The representations and warranties made pursuant to Paragraph ‎3.1 above shall
be deemed repeated, until the end of the Pledge Period, on the dates on which
the representations and warranties are to be repeated under the Transaction
Documents.
 
4
UNDERTAKINGS
 
The Pledgor undertakes in favour of the Beneficiary and for the duration of the
Pledge Period:
 
(a)
to promptly inform the Beneficiary of the opening of any new bank account (the
"New Bank Account") other than the Pledged Accounts;
 
(b)
to pledge the balance of any New Bank Account to the benefit of the Beneficiary
promptly upon opening the same and, for that purpose, to execute a pledge
agreement relating to the balance of this New Bank(s) Account(s) reflecting this
Pledge Agreement mutatis mutandis;
 
(c)
not to close the Pledged Accounts without the prior written consent of the
Beneficiary, if further to such closure, the Pledgor does not hold bank accounts
which are subject to any pledge created pursuant to the provisions of Paragraph
‎(b) above;
 
(d)
not to grant or allow to subsist any pledge, security or any rights whatsoever
over the Pledged Accounts and/or the Pledged Balance other than in favour of the
Beneficiary or with its written consent;
 
(e)
at its own expense, to promptly execute and deliver all further instruments and
documents, and take all further action, that the Beneficiary may reasonably
request, in order to perfect and protect any interest to be granted or purported
to be granted hereunder or to enable the Beneficiary to exercise and enforce its
rights under this Pledge Agreement with respect to the Pledged Accounts and the
Pledged Balance; and
 
(f)
not to do anything that could affect adversely the rights of the Beneficiary
under the Pledge (in particular the validity and enforceability of the Pledge).
 
5
ENFORCEMENT
 
5.1
General
 
Upon the occurrence of an Enforcement Event, the Beneficiary may immediately and
in its absolute discretion, exercise any right under:
 
(a)
applicable law; or
 
(b)
Clause 5.2 (Procedure for enforcement of Pledged Balance) of this Agreement.
 
to enforce all or any part of the Pledge in any manner they see fit.
 
5.2
Procedure for enforcement – Pledged Balance
 
(a)
Subject to Clause 5.1 (General), the Beneficiary may in respect of the Pledged
Balance, request the transfer of ownership of the Pledged Balance, in accordance
with the article 2365 of the French Code civil.
 
 
4

 
 
(b)
In accordance with the provision of article 2366 of the French Code civil, the
excess of the sum of the Pledged Balance as at the date of enforcement of the
Pledge over the then outstanding amount of the Liabilities shall be returned to
the Pledgor.
 
6
DURATION
 
6.1
This Pledge Agreement and the Pledge shall remain in full force and effect
throughout the Pledge Period.
 
6.2
At the end of the Pledge Period, the Beneficiary shall, at the request, and
costs of the Pledgor, execute and deliver all instruments to allow the release
and the termination of the Pledge.
 
7
EXPENSES
 
7.1
The Beneficiary may, at its absolute discretion, register this Pledge Agreement
with the relevant tax administration. In that respect, all powers are granted to
the holder of an original copy of such Pledge Agreement.
 
7.2
All payments which may be made by the Pledgor under this Pledge Agreement
(including damages for its breach) shall be made in the currency of account and
to such account, with such financial institution and in such other manner as the
Beneficiary may reasonably direct.
 
8
RETENTION OF SECURITY
 
If the Beneficiary reasonably considers that any amount paid or credited to it
under any Transaction Documents is capable of being avoided or otherwise set
aside in the context of insolvency proceedings or any similar event relating to
the Pledgor or any other person and for any other reason, the Beneficiary shall
be entitled not to release the Pledge and shall incur no liability in this
respect.
 
9
NOTICES
 
Each communication to be made under or in connection with this Pledge Agreement
shall be made in accordance with the applicable provisions of the relevant
Transaction Documents, as though the same was set out herein mutatis mutandis.
 
10
ASSIGNMENTS
 
10.1
All rights and prerogatives of the Beneficiary under this Pledge Agreement and
the Pledge shall benefit to their respective successors and assigns in
accordance with the provisions of the Transaction Documents.
 
10.2
In the event that an assignment by the Beneficiary of its rights and/or
liabilities and/or its status as a party under the Transaction Documents
occurred or was deemed to occur by way of novation, the Beneficiary expressly
reserves and maintains its rights and prerogatives under this Pledge Agreement
and the Pledge for the benefit of its assigns, in accordance with the provisions
of article 1334 of the French Code civil and with the consent of Pledgor.
 
11
MISCELLANEOUS
 
11.1
This Agreement and the Pledge created hereunder are in addition and without
prejudice to any other guarantees or security interests existing or to be
created or granted either by the Pledgor or any other person pursuant to the
terms of the Transaction Documents.
 
11.2
Where there is any ambiguity or conflict between the rights conferred by law and
those conferred by or pursuant to any Transaction Documents, the terms of that
Transaction Documents shall prevail to the extent legally possible.
 
11.3
No failure to exercise, nor any delay in exercising, on the part of the
Beneficiary, any right or remedy under any Transaction Documents shall operate
as a waiver, nor shall any single or partial exercise of any right or remedy
prevent any further or other exercise or the exercise of any other right or
remedy. The rights and remedies provided in the Transaction Documents are
cumulative and not exclusive of any rights or remedies provided by law.
 
11.4
Where any provision of this Pledge Agreement shall be or become illegal, invalid
or unenforceable it is agreed that the other provisions of this agreement shall
remain legal valid and enforceable against the Parties independently of the
illegal, invalid or unenforceable provision.
 
 
5

 
 
11.5
Subject to Clause 6 (Duration), the Pledge is a continuing security and will
extend to the ultimate balance of the Liabilities, regardless of any
intermediate payment or discharge in whole or in part.
 
11.6
If any payment by the Pledgor or any discharge given by the Beneficiary (whether
in respect of the obligations of any obligor under the Transaction Documents or
any pledged interests for those obligations or otherwise) is avoided or reduced
as a result of insolvency or any similar event:
 
(a)
the liability of the Pledgor and the Pledge shall continue as if the payment,
discharge, avoidance or reduction had not occurred; and
 
(b)
the Beneficiary shall be entitled to recover the value or amount of that pledged
interest or payment from the Pledgor, as if the payment, discharge, avoidance or
reduction had not occurred,
 
to the fullest extent permitted by law.
 
12
GOVERNING LAW – JURISDICTION
 
12.1
This Pledge Agreement, the Pledge and any non-contractual obligations arising
out of or in connection with them shall be governed by, and construed in
accordance with, French law.
 
12.2
The Parties irrevocably submit to the jurisdiction of the Commercial Court of
Paris (Tribunal de commerce de Paris) for the purpose of hearing and determining
at first instance any dispute arising out of this Pledge Agreement (including a
dispute relating to the existence, validity or termination of this Pledge
Agreement or any non-contractual obligation arising out of or in connection with
this Pledge Agreement) and for the purpose of enforcement of the Pledge.
 
Executed in Paris, on February 14, 2019, in two (2) original copies.
 
 
 
6

 
SIGNATURE PAGE
 
The Pledgor
AZURRX BIOPHARMA SAS
_____________________________Name: Title:
 
 

 
 
The Beneficiary
ADEC PRIVATE EQUITY INVESTMENTS LLC
 
 
 
 
___________________________Name: E. Burke Ross, Jr.Title: Chairman
 
 

 
 
 
 
 
 

 
 
 
7

 
SCHEDULE 1  PLEDGED ACCOUNTS
 
 
 
 
 
 
Name of The Account Holder
Address
Account number (IBAN)
 
 
 
 
 
 

 
 
 
 
8

 
 
SCHEDULE 2  FORM OF NOTICE OF PLEDGE TO THE ACCOUNT HOLDER
 
 
 
A :            
[***]
  [***]
  (le "Teneur de Compte")
 
Cc :            
AZURRX BIOPHARMA SAS
   [***]
   [***]
   France
   (le "Constituant")
 
De :            
_______________________________
    [***]
          

[***]
   (le "Bénéficiaire")
 

Le [date]
 

Messieurs,
 
Nous faisons référence à la convention de nantissement de solde de compte
bancaire intitulée en langue anglaise « Bank Account Pledge Agreement » en date
du __ ________ 2019 (ci-après, la "Convention de Nantissement") conclue entre le
Constituant et le Bénéficiaire aux termes duquel le Constituant a nanti en
faveur du Bénéficiaire le solde créditeur du compte numéro [●] ouvert dans les
livres de votre établissement (les "Comptes Nantis").
 
Les termes et expressions commençant par une majuscule et non expressément
définis dans la présente lettre auront la signification qui est donnée à leur
équivalent en anglais dans la Convention de Nantissement.
 
Conformément à l'Article ‎2.2 de la Convention de Nantissement et à l'article
2362 du Code civil, nous vous notifions par la présente le Nantissement (Pledge)
portant sur le Compte Nanti.
 
Le Constituant pourra librement disposer des sommes figurant au crédit des
Comptes Nantis dans le respect des termes de la Convention de Nantissement
jusqu'à réception par vous d'une Notification de Blocage (Blocking Notice) dans
les conditions prévues par l'Article ‎2.4 de la Convention de Nantissement.
 
Les Comptes Nantis pourront être débloqués et le Constituant pourra à nouveau
librement utiliser les sommes figurant au crédit du Compte Nanti dans le respect
des termes de la Convention de Nantissement à compter de la réception par vous
d'une Notification de Déblocage (Unblocking Notice) dans les conditions prévues
par l'Article ‎2.4 de la Convention de Nantissement.
 
Nous vous prions de bien vouloir confirmer la réception de la présente
notification en nous retournant le second original dûment signé par vos soins.
 
Nous vous prions d’agréer, Messieurs, l’expression de nos meilleurs sentiments,
 
 
9

 
 
Le Bénéficiaire
 
[INSERT NAME OF BENEFICIARY]
 
 
 
 
_____________________________
Nom :
Titre :
 
 
Pour accusé de réception
 
Le Teneur de Compte
 
[●]
 
 
 
_____________________________
Nom :
Titre :
 
 
 

 
 
10

 

 
ANNEXE - CONVENTION DE NANTISSEMENT
 
 
 
 
 
11

 
 SCHEDULE 3  FORM OF BLOCKING NOTICE
 
 
 
A :            
[***]
  [***]
  (le "Teneur de Compte")
 
Cc :            
AZURRX BIOPHARMA SAS
   [***]
   [***]
   France
   (le "Constituant")
 
De :            
____________________________
    [***]
            
[***]
    (le "Bénéficiaire")
 

Le [date]
 

Messieurs,
 
Nous faisons référence à la convention de nantissement de solde de compte
bancaire intitulée en langue anglaise « Bank Account Pledge Agreement » en date
du __ _____ 2019 (ci-après, la "Convention de Nantissement") conclue entre le
Constituant et le Bénéficiaire, aux termes de laquelle le Constituant a nanti en
faveur du Bénéficiaire le solde créditeur des comptes numéros [●], [●], ouverts
dans les livres de votre établissement (les "Comptes Nantis").
 
Les termes et expressions commençant par une majuscule et non expressément
définis dans la présente lettre auront la signification qui est donnée à leur
équivalent en anglais dans la Convention de Nantissement.
 
Conformément à l'Article ‎2.4 de la Convention de Nantissement, nous vous
informons de la survenance d'un Cas de Défaut (Event of Default) au titre des
Documents d’Opération (Transaction Documents) et en conséquence, nous vous
demandons de bloquer les Comptes Nantis, de sorte qu'aucune opération de débit
n'y soit plus inscrite, dès la réception des présentes et jusqu'à réception
d'une Notification de Déblocage (Unblocking Notice) dans les conditions prévues
par l'Article ‎2.4 de la Convention de Nantissement.
 
Il est entendu que le blocage des Comptes Nantis n'interdit pas (i)
l'inscription à ce compte des opérations initiées avant la date de réception par
vous de cette instruction écrite de blocage, (ii) l'inscription au débit de ce
compte des montants nécessaires au paiement des Obligations Garanties (Secured
Liabilities) sur notification de notre part et (iii) toute remise au crédit de
ces Comptes Nantis.
 
Nous vous prions d’agréer, Messieurs, l’expression de nos meilleurs sentiments,
 
 
12

 
 
Le Bénéficiaire
 
_____________________________
 
 
 
 
_____________________________
Nom :
Titre :
 
 

 
 
13

 
ANNEXE - CONVENTION DE NANTISSEMENT
 
 
 
 
 
14

 
SCHEDULE 4  FORM OF UNBLOCKING NOTICE
 

 
A :            
[***]
  [***]
  (le "Teneur de Compte")
 
Cc :            
AZURRX BIOPHARMA SAS
   [***]
   [***]
   France
   (le "Constituant")
 
De :            
___________________________________
    [***]
            
[***]
    (le "Bénéficiaire")
 

Le [date]
 

Messieurs,
 
Nous faisons référence à la convention de nantissement de solde de compte
bancaire intitulée en langue anglaise « Bank Account Pledge Agreement » en date
du __ ______ 2019 (ci-après, la "Convention de Nantissement") conclue entre le
Constituant et le Bénéficiaire, aux termes de laquelle le Constituant a nanti en
faveur du Bénéficiaire le solde créditeur des comptes numéros [●], ouverts dans
les livres de votre établissement (les "Comptes Nantis").
 
Les termes et expressions commençant par une majuscule et non expressément
définis dans la présente lettre auront la signification qui est donnée à leur
équivalent en anglais dans la Convention de Nantissement.
 
Conformément à l'Article ‎2.4 de la Convention de Nantissement, nous vous
informons [qu'il a été remédié au] / [que nous avons renoncé à nous prévaloir
du] / [de la disparition du] Cas de Défaut (Event of Default) au titre duquel
nous vous avons transmis le [●] une Notification de Blocage (Blocking Notice).
 
En conséquence nous vous autorisons à débloquer les Comptes Nantis et à
permettre au Constituant d'utiliser librement les sommes figurant au crédit des
Comptes Nantis dans le respect des termes de la Convention de Nantissement et
jusqu'à réception par vous d'une nouvelle Notification de Blocage (Blocking
Notice) dans les conditions prévues par l'Article ‎2.4 de la Convention de
Nantissement.
 
Nous vous prions d’agréer, Messieurs, l’expression de nos meilleurs sentiments,
 
 
15

 
 
Le Bénéficiaire
 
_________________________
 
 
 
 
_____________________________
Nom :
Titre :
 
 

 
 
16

 

 
 
ANNEXE - CONVENTION DE NANTISSEMENT
 
 
 
 
 
17