Unassociated Document


     

    Exhibit
      10.3

     

    
      PLEDGE
        AGREEMENT

      


      This
        PLEDGE AGREEMENT (this “Agreement”),
        effective as of the 1st
        day of
        January 2007 by and between THE S.J. WEGMAN COMPANY (the “Pledgor”)
        and
        BIOSPECIFICS TECHNOLOGIES CORP., a Delaware corporation (the “Secured
        Party”).

      


      RECITALS

      


      WHEREAS,
        the Secured Party has loaned to the general partner of the Pledgor and to
        Wilbur
        Street Corp., a New York corporation wholly-owned by Pledgor (“Pledgor
        Subsidiary”),
        the
        aggregate principal amount of $1,016, 595 and $304,390, respectively, and
        simultaneously herewith the general partner of Pledgor and Wilbur Street
        Corp.
        are delivering to the Secured Party two Promissory Notes (the “Notes”)
        evidencing such loans.

      


      WHERAS,
        the Pledgor wishes to grant a first priority security interest in the Collateral
        (as defined below) to Secured Party in order to secure the Notes and all
        other
        obligations and amounts owing at any time by Pledgor to Secured Party hereunder
        (the “Secured
        Obligations”).
        

      


      NOW,
        THEREFORE, in consideration of the premises and understandings contained
        herein
        and for good and valuable consideration, receipt of which is hereby
        acknowledged, the parties agree as follows: 

      


      1.   Pledge
        Agreement. 
        To secure the full, prompt and complete payment and performance of the Secured
        Obligations, Pledgor hereby pledges to, grants to, and creates in favor of,
        Secured Party, a first priority and continuing security interest in, the
        following property, whether now owned or hereafter acquired:

      


      a.   all
        shares of the common stock of the Secured Party held by the Pledgor and all
        certificates evidencing the same and all successor stock to said shares,
        replacement stock for said shares, substituted stock for said shares or
        additional shares of the Secured Party’s stock issued or transferred as a
        dividend on or stock split of or otherwise received because of or in lieu
        of the
        ownership of said shares of common stock of the Secured Party during the
        term of
        this Agreement, whether the same resulted from merger, consolidation,
        reorganization or otherwise; 

      


      b.   any
        and
        all other instruments or cash or, in kind, dividends or other property which
        anyone is or may hereafter become entitled to receive with respect to
        replacement of, substitution for, or succession to the aforesaid
        shares;

      


      c.   all
        of
        the rights, interests and privileges with respect to the foregoing.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      All
        of
        the foregoing property and instruments shall be individually and collectively
        hereinafter referred to as “Collateral.”
The
        Collateral shall be held by the Secured Party in accordance with the terms
        and
        provisions contained in this Agreement.

      


      2.   Delivery
        of Pledged Shares. 
        Contemporaneously herewith, Pledgor has delivered to Secured Party all of
        the
        certificates representing the Collateral, together with separate stock or
        other
        transfer forms duly endorsed, in blank, for the transfer of the Collateral.
        If
        at any time prior to the termination of this Agreement, Pledgor obtains
        possession of any other certificate, document or other evidence representing
        any
        of the Collateral, Pledgor shall immediately deliver such certificate, document
        or other evidence to the Secured Party. During such time as any such
        certificate, document or other evidence representing any of the Collateral
        are
        in Pledgor’s possession or control, Pledgor shall hold or control such
        certificate, document or other evidence in accordance with this Agreement
        and
        the Uniform Commercial Code in effect in the State of New York (the
“UCC”).
        All
        certificates, documents or other evidence delivered to Secured Party shall
        be
        accompanied by separate stock or other powers duly indorsed, in blank, for
        transfer.

      


      3.   Voting
        and Dividend Rights. 
        During the term of this Agreement, and until such time, if any, that there
        is a
        default in the payment of the Secured Obligations, and only until such default
        has not been cured, the Pledgor or his assigns shall have the right to vote
        the
        shares now or hereafter pledged. In the event the Pledgor is in default of
        any
        of the Secured Obligations, then the Board of Directors of the Secured Party,
        acting through its officers, in its sole and absolute discretion, shall have
        the
        right (but not the obligation) to vote the shares of the Secured Party’s stock
        held pursuant to this escrow and exercise and receive all other rights and
        privileges, including dividends, which are associated with the ownership
        of such
        shares. Other than as set forth above, the Pledgor shall exercise the rights
        of
        a stockholder of the Secured Party (or its successors).

      


      4.   Events
        of Default. 
        Each of the following shall constitute an event of default under this agreement
        so long as the event occurs or continues to occur and is not waived (each
        an
“Event
        of Default”):
        

      


      a.   There
        shall be a default in the payment, when due and payable, of the Secured
        Obligations; or 

      


      b.   Pledgor
        shall be dissolved or become insolvent, or shall make a transfer in fraud
        of
        creditors, or shall make any assignment for the benefit of creditors, or
        shall
        admit in writing his inability to pay his debts as they become due; or


      


      c.   Pledgor
        shall file a petition or an answer under any title, section or chapter of
        the
        United States Bankruptcy Code, as amended, or under any present or future
        law or
        statute of the United States of America or any state or other jurisdiction
        thereof relevant to bankruptcy, insolvency or other relief of debtors.


      


      5.   Remedies. 
        Upon the occurrence of an Event of Default as defined herein:

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      a.   The
        Company shall have in each case all of the remedies of a secured party under
        the
        UCC, and, without limiting the generality of the foregoing, shall have the
        right, in its sole discretion, to sell, resell, assign and deliver all or,
        from
        time to time, any part of the Collateral, or any interest in or option or
        right
        to purchase any part thereof, on any securities exchange on which the Collateral
        may be listed (in the case of the shares of the Secured Party), at any private
        sale or at public auction, with or without demand of performance or other
        demand, advertisement or notice of the time or place of sale or adjournment
        thereof or otherwise (except that the Secured Party shall give ten days’ notice
        to the Pledgor of the time and place of any sale pursuant to this Section
        5),
        for cash, on credit or for other property, for immediate or future delivery,
        and
        for such price or prices and on such terms as the Secured Party shall, in
        its
        sole discretion, determine, the Pledgor hereby waiving and releasing any
        and all
        right or equity of redemption whether before or after sale hereunder. At
        any
        such sale the Secured Party may bid for and purchase the whole or any part
        of
        the Collateral so sold free from any such right or equity of
        redemption.

      


      b.   The
        Secured Party shall apply the proceeds of any such sale first to the payment
        of
        all costs and expenses, including reasonable attorney’s fees, incurred by the
        Secured Party in enforcing its rights under this Agreement, and second to
        the
        payment of accrued and unpaid interest on and then of unpaid principal of
        the
        Note, and thereafter to the payment of any other Secured Obligations, and
        the
        Pledgor shall continue to be liable for any deficiency. 

      


      c.   The
        Pledgor recognizes that the Secured Party may be unable to effect a public
        sale
        of all or part of any shares of the Secured Party constituting part of the
        Collateral by reason of certain prohibitions contained in the Securities
        Act of
        1933 or in the rules and regulations promulgated thereunder or in applicable
        state securities or “blue sky” laws, but may be compelled to resort to one or
        more private sales to a restricted group of purchasers who will be obliged
        to
        agree, among other things, to acquire the shares of the Secured Party
        constituting part of the Collateral for their own account, for investment
        and
        not with a view to the distribution or resale thereof. The Pledgor agrees
        that
        private sales so made may be at prices and on other terms less favorable
        to the
        seller than if the shares of the Secured Party constituting part of the
        Collateral were sold at public sale, and that the Secured Party has no
        obligation to delay the sale of such shares for the period of time necessary
        to
        permit the registration of the shares for public sale under the Securities
        Act
        of 1933 and under applicable state securities or “blue sky” laws. The Pledgor
        agrees that a private sale or sales made under the foregoing circumstances
        shall
        be deemed to have been made in a commercially reasonable manner. 

      


      d.   If
        any
        consent, approval or authorization of any state, municipal or other governmental
        department, agency or other governmental department, agency or authority
        should
        be necessary to effectuate any sale or disposition by the Secured Party pursuant
        to this Section 5 of the Collateral, the Pledgor will execute all such
        applications and other instruments as may be required in connection with
        securing any such consent, approval or authorization and will otherwise use
        the
        Pledgor’s best efforts to secure the same. 

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      e.   The
        remedies provided in this Agreement and the Notes are cumulative and not
        exclusive of any remedies provided by law. Exercise of one or more remedy(ies)
        by Secured Party does not require that all or any other remedy(ies) be exercised
        and does not preclude later exercise of the same remedy. 

      


      6.   Transfer
        by Pledgor. 
        The Pledgor will not sell, assign, transfer or otherwise dispose of, grant
        any
        option with respect to, or mortgage, pledge or otherwise encumber any of
        the
        Collateral or any interest therein. In the event of a sale, assignment, or
        transfer, the Collateral so sold, assigned transferred or otherwise disposed
        of
        shall be released from the pledge hereunder and the proceeds shall be applied
        as
        set forth in the Note and in this Agreement. 

      


      7.   Further
        Assurances. 
        Pledgor will, at his expense and from time to time, promptly execute and
        deliver
        all further instruments, documents and agreements, and take all further action
        that may be reasonably necessary or desirable, or that Secured Party may
        reasonably request, in order to (i) continue, perfect and protect the security
        interest granted or purported to be granted hereby or (ii) enable Secured
        Party
        to exercise and enforce its rights and remedies hereunder with respect to
        any of
        the Collateral, or both. Without prejudice to the generality of the foregoing,
        each such instrument or document shall be in such form as Secured Party shall
        reasonably request and may contain provisions such as are herein contained
        or
        provisions to the like effect or such other provisions of whatsoever kind
        as
        Secured Party shall reasonably consider requisite for the improvement (on and
        subject to the terms hereof), perfection or enforcement of the security
        constituted by, or pursuant to, this Agreement. If Secured Party has the
        right
        to exercise its right to sell all or any of the Collateral hereunder and
        under
        the UCC, Pledgor will, upon the request of Secured Party, at Pledgor’s expense,
        do or cause to be done all such acts and things as may be reasonably necessary
        or desirable, or that Secured Party may reasonably request, to make any sale
        of
        the Collateral or any part thereof valid and binding and in compliance with
        applicable law.

      


      8.   Power
        of Attorney. 
        Pledgor irrevocably appoints the Secured Party (and each person to whom Secured
        Party shall from time to time have delegated the exercise of the power of
        attorney conferred by this Section
        8)
        jointly
        and severally to be his attorney or attorneys and in his name and otherwise
        on
        his behalf, provided an Event of Default which has not been waived, has occurred
        and is continuing, to do all acts and things and to sign, seal, execute,
        deliver, perfect and do all instruments, documents, acts and things which
        may be
        required (or which Secured Party shall consider requisite) for carrying out
        any
        obligation imposed on Pledgor by or pursuant to this Agreement (including
        the
        obligations of Pledgor under Section
        7),
        for
        carrying any sale or other dealing by Secured Party into effect and generally
        for enabling Secured Party to exercise the powers conferred on it by or pursuant
        to this Agreement or by law. Secured Party shall have full power to delegate
        the
        power conferred on it by this Section
        8,
        but no
        such delegation shall preclude the subsequent exercise of such power by Secured
        Party itself or preclude Secured Party from making a subsequent delegation
        thereof to some other person; any such delegation may be revoked by Secured
        Party at any time.

      


      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

         

      

      9.   Amendment. 
        No amendment or modification of this Agreement or waiver of its terms shall
        affect the rights and duties of a party hereto unless executed by the party
        against whom enforcement is sought.

      


      10.   Severability. 
        If any term of this Agreement is found invalid under New York law or laws
        of
        mandatory application by a court of competent jurisdiction, the invalid term
        will be considered excluded from this Agreement and will not invalidate the
        remaining terms of this Agreement.

      


      11.   Entire
        Agreement. 
        This Agreement and the Note set forth the entire agreement of the parties
        with
        respect to subject matter of this Agreement and the Note and supersedes all
        previous understandings, written or oral, in respect thereof.

      


      12.   Governing
        Law. 
        This Agreement shall be governed by and construed in accordance with the
        internal laws of the New York without regard to the choice or conflict of
        law
        provisions contained therein.

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      IN
        WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
        on
        the date set forth below to be effective upon receipt of the Collateral by
        the
        Secured Party. 

      


      


      
        	
                SECURED
                  PARTY:

                 

                BIOSPECIFICS
                  TECHNOLOGIES CORP.

                 

                 

              	 
	
                By:

              	
                /s/
                  Thomas L. Wegman

              	 
	 	
                Name: 
                  Thomas L. Wegman

                Title:   
                  President

              	 
	
                 

                 

              	 	 
	
                PLEDGOR:

                 

                THE
                  S.J. WEGMAN COMPANY

                 

                 

              	 
	
                By:

              	
                /s/
                  Edwin H. Wegman

              	 
	 	
                Name: 
                  Edwin H. Wegman

                Title:   
                  General Partner