EXHIBIT 10.22
FORM OF PLEDGE AND SECURITY AGREEMENT
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THIS PLEDGE AND SECURITY AGREEMENT, dated as of January 19, 1999, by and
between GENETIC VECTORS, INC., a Florida corporation ("PLEDGOR"), and CAPITAL
RESEARCH LTD., a Delaware corporation (the "PLEDGEE").
WHEREAS, Pledgee is the holder of a Promissory Note (the "NOTE") of even
date herewith made by Pledgor in the original principal amount of $163,500;
WHEREAS, Pledgee desires to obtain a security interest in certain property
owned by Pledgor; and
WHEREAS, as an inducement to Pledgee's purchase of the Note, Pledgor has
agreed to grant to Pledgee a security interest in and to the Pledged Collateral
(as hereinafter defined).
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, and for other good and valuable consideration, the adequacy
and receipt for which are hereby acknowledged, the parties hereto hereby agree
as follows:
ARTICLE 1.
DEFINITIONS AND INTERPRETATIONS
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Section 1.1. INTERPRETATIONS.
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Nothing herein expressed or implied is intended or shall be construed to
confer upon any person other than Pledgee any right, remedy or claim under or by
reason hereof. All covenants, stipulations and agreements herein contained by or
on behalf of Pledgee shall be for the sole and exclusive benefit of Pledgee.
Section 1.2. OBLIGATIONS SECURED.
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The obligations secured hereby are the obligations of Pledgor to Pledgee
under the Note sold by Pledgor to Pledgee, in the maximum principal amount
thereof outstanding from time to time, and any additional amounts payable by or
chargeable to Pledgor thereunder or hereunder (collectively, the "OBLIGATIONS").
ARTICLE 2.
PLEDGE AND ADMINISTRATION OF PLEDGED COLLATERAL
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Section 2.1. PLEDGED COLLATERAL.
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(a) Pledgor hereby pledges to Pledgee, and creates in Pledgee
for its benefit, a security interest, for such time as the Obligations shall
remain outstanding, in and to all of Pledgor's right, title and interest in and
to:
(i) the property (the "PLEDGED PROPERTY") listed on EXHIBIT
1 attached hereto (and signed by Pledgor), including, without limitation, any
securities described therein (which securities are collectively referred to as
the "PLEDGED SECURITIES"), now owned by Pledgor, and all machinery, equipment,
automobiles, accounts receivable, inventory and general intangibles, patents,
patent applications, licenses and all other intellectual property rights owned
by or acquired by Borrower on or after the date of this Agreement; and
(ii) all products and proceeds from the Pledged Property.
The property pledged in Section 2.1(a)(i) hereof, the Pledged Securities and the
products thereof and the proceeds of all such items are hereinafter collectively
referred to as the "Pledged Collateral." The security interest granted by
Pledgor to Pledgee in and to the Pledged Collateral shall be free and clear of
all security interests and restrictions on transfer of any kind except as
provided in this Agreement or as may be imposed by applicable law.
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(b) Simultaneously with the execution and delivery of this
Agreement, Pledgor shall make, execute, acknowledge, file, record and deliver to
Pledgee any documents reasonably requested by Pledgee to perfect its
first-in-priority security interest in the Pledged Collateral. Simultaneously
with the execution and delivery of this Agreement, Pledgor shall make, execute,
acknowledge, file, record and deliver to Pledgee such documents and instruments,
including, without limitation, financial statements, certificates, affidavits
and forms as may, in Pledgee's reasonable judgment, be necessary to effectuate,
complete or perfect, or to continue and preserve, the first-in-priority security
interest of Pledgee in the Pledged Collateral, and Pledgee shall hold such
documents and instruments as secured party, subject to the terms and conditions
contained herein.
Section 2.2. RIGHTS; INTERESTS; ETC.
-----------------------
(a) So long as no Event of Default (as hereinafter defined)
shall have occurred and be continuing:
(i) Pledgor shall be entitled to exercise any and all rights
pertaining to the Pledged Collateral or any part thereof for any purpose not
inconsistent with the terms hereof; and
(ii) Pledgor shall be entitled to receive and retain any and
all payments paid or made in respect of the Pledged Collateral.
(b) Upon the occurrence and during the continuance of an
Event in Default:
(i) Subject to Section 2.2(b)(iii) hereof, all rights of
Pledgor to exercise the rights which it would otherwise be entitled to exercise
pursuant to Section 2.2(a)(i) hereof and to receive payments which it would
otherwise be authorized to receive and retain pursuant to Section 2.2(a)(ii)
hereof shall be suspended, and all such rights shall thereupon become vested in
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Pledgee who shall thereupon have the sole right to exercise such rights and to
receive and hold as Pledged Collateral such payments; provided, however, that if
Pledgee shall become entitled and shall elect to exercise its right to realize
on the Pledged Collateral pursuant to Article V hereof, then all cash sums
received by Pledgee, or held by Pledgor for the benefit of Pledgee and paid over
pursuant to Section 2.2(b)(ii) hereof, shall be applied against any outstanding
Obligations.
(ii) All interest, dividends, income and other payments and
distributions which are received by Pledgor contrary to the provisions of
Section 2.3(b)(i) hereof shall be received in trust for the benefit of Pledgee,
shall be segregated from other property of Pledgor and shall be forthwith paid
over to Pledgee;
(iii) notwithstanding anything contained hereto to the
contrary, Pledgor shall retain any voting rights it may have with respect to any
of the Pledged Securities until such time as Pledgee is entitled and elects to
exercise its rights to realize on the Pledged Securities pursuant to Article V
hereof.
(c) Each of the following events shall constitute a default
under this Agreement (each an "EVENT OF DEFAULT"):
(i) any default, whether in whole or in part, shall occur in
the payment to Pledgee of principal, interest or other item comprising the
Obligations as and when due, which default shall continue for a period of thirty
(30) days after the receipt of written notice thereof by Pledgor;
(ii) any default, whether in whole or in part, shall occur
in the due observance or performance of any other covenant, term or provision to
be performed under this Agreement by Pledgor, or the Note, and all exhibits
thereto which default is not described in any other subsection of this Section,
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and such default shall continue for a period of thirty (30) days after the
receipt of written notice thereof by Pledgor; provided, however, that if Pledgor
shall have commenced to cure such default within such thirty-day period and
shall proceed continuously in good faith and with due diligence to cure such
default, then such period instead shall be sixty (60) days;
(iii) Pledgor shall: (1) make a general assignment for the
benefit of its creditors; (2) apply for or consent to the appointment of a
receiver, trustee, assignee, custodian, sequestrator, liquidator or similar
official for itself or any of its assets and properties; (3) commence a
voluntary case for relief as a debtor under the United States Bankruptcy Code;
(4) file with or otherwise submit to any governmental authority any petition,
answer or other document seeking: (A) reorganization, (B) an arrangement with
creditors or (C) to take advantage of any other present or future applicable law
respecting bankruptcy, reorganization, insolvency, readjustment of debts, relief
of debtors, dissolution or liquidation; (5) file or otherwise submit any answer
or other document admitting or failing to contest the material allegations of a
petition or other document filed or otherwise submitted against it in any
proceeding under any such applicable law, or (6) be adjudicated a bankrupt or
insolvent by a court of competent jurisdiction; or
(iv) any case, proceeding or other action shall be commenced
against Pledgor for the purpose of effecting, or an order, judgment or decree
shall be entered by any court of competent jurisdiction approving (in whole or
in part) anything specified in Section 2.2(c)(iii) hereof, or any receiver,
trustee, assignee, custodian, sequestrator, liquidator or other official shall
be appointed with respect to Pledgor, or shall be appointed to take or shall
otherwise acquire possession or control of all or a substantial part of the
assets and properties of Pledgor, and any of the foregoing shall continue
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unstayed and in effect for any period of sixty (60) days.
ARTICLE 3.
ATTORNEY-IN-FACT; PERFORMANCE
-----------------------------
Section 3.1. PLEDGEE APPOINTED ATTORNEY-IN-FACT.
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Upon the occurrence of an Event of Default and only as long as such Event
of Default shall be continuing, Pledgor hereby appoints Pledgee as Pledgor's
attorney-in-fact, with full authority in the place and stead of Pledgor and in
the name of Pledgor or otherwise, from time to time in Pledgee's discretion to
take any action and to execute any instrument which Pledgee may reasonably deem
necessary to accomplish the purposes of this Agreement, including, without
limitation, to receive and collect all instruments made payable to Pledgor
representing any payments in respect of the Pledged Collateral or any part
thereof and to give full discharge for the same. Pledgee may demand, collect,
receipt for, settle, compromise, adjust, ▇▇▇ for, foreclose, or realize on the
Pledged Collateral as and when Pledgee may determine. To facilitate collection,
Pledgee may notify account debtors and obligors on any Pledged Collateral to
make payments directly to Pledgee.
Section 3.2. PLEDGEE MAY PERFORM.
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If Pledgor fails to perform any agreement contained herein, Pledgee, at
its option, may itself perform, or cause performance of, such agreement, and the
reasonable expenses of Pledgee incurred in connection therewith shall be payable
by Pledgor under Section 8.3.
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ARTICLE 4.
REPRESENTATIONS AND WARRANTIES
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Section 4.1. AUTHORIZATION; ENFORCEABILITY.
-----------------------------
Each of the parties hereto represents and warrants that it has taken all
action necessary to authorize the execution, delivery and performance of this
Agreement and the transactions contemplated hereby; and upon execution and
delivery, this Agreement shall constitute a valid and binding obligation of the
respective party, subject to applicable bankruptcy, insolvency, reorganization,
moratorium and similar laws affecting creditors' rights or by the principles
governing the availability of equitable remedies.
Section 4.2. OWNERSHIP OF PLEDGED COLLATERAL.
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Pledgor warrants and represents that Pledgor is the legal and beneficial
owner of the Pledged Collateral free and clear of any lien, security interest,
option or other charge or encumbrance except for the security interest created
by this Agreement or as may be imposed by applicable law.
Section 4.3. DUE ORGANIZATION.
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Pledgor warrants and represents that it: (i) is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Florida; (ii) has the corporate power and authority necessary to entitle it to
use its corporate name and to own, lease or otherwise hold its properties and
assets and to carry on its business as presently conducted or proposed to be
conducted; and (iii) is duly qualified and in good standing to do business as
presently conducted or proposed to be conducted.
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ARTICLE 5.
DEFAULT; REMEDIES; SUBSTITUTE COLLATERAL
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Section 5.1. DEFAULT AND REMEDIES.
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(a) If an Event of Default described in Section 2.2(c)(i) and
(ii) occurs and is continuing for the period set forth therein, then in each
such case the Holder may declare the principal amount to be due and payable
immediately, by a notice in writing to the Company, and upon any such
declaration, such principal amount shall become immediately due and payable. If
an Event of Default described in Sections 2.2(c)(iii) or (iv) occurs and is
continuing for the period set forth therein, then the principal amount of the
Note shall automatically become immediately due and payable without declaration
or other act on the part of any Holder.
(b) Upon the occurrence of an Event of Default, the Holder shall
be entitled to receive all distributions with respect to the Pledged Collateral,
to cause the Pledged Collateral to be transferred into the name of Pledgee or
its nominee, to dispose of the Pledged Collateral, and to realize upon any and
all rights in the Pledged Collateral then held by Pledgee.
Section 5.2. METHOD OF REALIZING UPON THE PLEDGED COLLATERAL: OTHER
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REMEDIES.
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Upon the occurrence of an Event of Default, in addition to any rights and
remedies available at law or in equity, the following provisions shall govern
Pledgee's right to realize upon the Pledged Collateral;
(a) Any item of the Pledged Collateral may be sold for cash or
other value in any number of lots at brokers board, public auction or private
sale and may be sold without demand, advertisement or notice (except that
Pledgee shall give Pledgor thirty (30) business days' prior written notice of
the time and place or of the time after which a private sale may be made (the
"SALE NOTICE")), which notice shall in any event be commercially reasonable. At
any sale or sales of the Pledged Collateral, Pledgor may bid for and purchase
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the whole or any part of the Pledged Collateral and, upon compliance with the
terms of such sale, may hold, exploit and dispose of the same without further
accountability to Pledgee. Pledgor will execute and deliver, or cause to be
executed and delivered, such instruments, documents, assignments, waivers,
certificates, and affidavits and supply or cause to be supplied such further
information and take such further action as Pledgee reasonably shall require in
connection with any such sale.
(b) Any cash being held by Pledgee as Pledged Collateral and all
cash proceeds received by Pledgee in respect of, sale of, collection from, or
other realization upon all or any part of the Pledged Collateral shall be
applied as follows:
(i) to the payment of all amounts due the Holder for the
expenses reimbursable to it or them hereunder or owed to it pursuant to Section
8.3 hereof;
(ii) to the payment of the amounts then due and unpaid for
principal of and interest on the Note.
(iii) the balance, if any, to the person or persons
entitled thereto, including, without limitation, Pledgor.
(c) In addition to all of the rights and remedies which Pledgor
and Pledgee may have pursuant to this Agreement, Pledgor and Pledgee shall have
all of the rights and remedies provided by law, including, without limitation,
those under the Uniform Commercial Code.
(d) (i) If Pledgor fails to pay such amounts due upon the
occurrence of an Event of Default which is continuing, then the Holder may
institute a judicial proceeding for the collection of the sums so due and
unpaid, may prosecute such proceeding to judgment or final decree and may
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enforce the same against Pledgor and collect the monies adjudged or decreed to
be payable in the manner provided by law out of the property of Pledgor,
wherever situated.
(ii) Pledgor agrees that it shall be liable for any
reasonable expenses incurred by the Holder in connection with enforcement,
collection and preservation of the Note, including, without limitation, legal
fees and expenses, and such amounts shall be deemed included under Section 8.3
hereof.
Section 5.3. PROOFS OF CLAIM.
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(a) In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial proceeding relating to Pledgor or the property of Pledgor or of
such other obligor or their creditors, the Holder (irrespective of whether the
principal of the Note shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Holder shall have made
any demand on Pledgor for the payment of overdue principal, if any, or interest)
shall be entitled and empowered, by intervention in such proceeding or
otherwise:
(i) to file and prove a claim for the whole amount of
principal of the Note and interest owing and unpaid in respect of the Note and
to file such other papers or documents as may be necessary or advisable in order
to have the claims of the Holder (including any claim for the legal fees and
expenses and other expenses paid or incurred by the Holder permitted hereunder
and of the Holder allowed in such judicial proceeding), and
(ii) to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute the same; and any
custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Holder and, in the event that the Holder
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shall consent to the making of such payments directed to the Holder, to pay to
the Holder any amounts for expenses due it hereunder.
(b) Nothing herein contained shall be deemed to authorize the
Holder to authorize, consent to or accept or adopt on behalf of any Holder any
plan of reorganization, arrangement, adjustment or composition affecting the
rights of any Holder thereof or to authorize the Holder to vote in respect of
the claim of any Holder in any such proceeding.
Section 5.4. DUTIES REGARDING PLEDGED COLLATERAL.
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Pledgee shall have no duty as to the collection or protection of the
Pledged Collateral or any income thereon or as to the preservation of any rights
pertaining thereto, beyond the safe custody and reasonable care of any of the
Pledged Collateral actually in Pledgee's possession.
ARTICLE 6.
AFFIRMATIVE COVENANTS
---------------------
Pledgor covenants and agrees that, from the date hereof and until the
Obligations have been fully paid and satisfied, unless Pledgee shall consent
otherwise in writing (as provided in Section 8.4 hereof):
Section 6.1. EXISTENCE, PROPERTIES, ETC.
---------------------------
(a) Pledgor shall do, or cause to be done, all things, or proceed
with due diligence with any actions or courses of action, that may be reasonably
necessary (i) to maintain its due organization, valid existence and good
standing under the laws of its state of incorporation, and (ii) to preserve and
keep in full force and effect all qualifications, licenses and registrations in
those jurisdictions in which the failure to do so could have a Material Adverse
Effect (as defined in this Section 6.1(a)); and (b) Pledgor shall not do, or
cause to be done, any act impairing its corporate power or authority (i) to
carry on its business as now conducted, and (ii) to execute or deliver this
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Agreement or any other document delivered in connection herewith (which other
loan instruments collectively shall be referred to the "LOAN INSTRUMENTS") to
which it is or will be a party, or perform any of its obligations hereunder or
thereunder. For purpose of this Agreement, the term "MATERIAL ADVERSE EFFECT"
shall mean any material and adverse affect, whether individually or in the
aggregate, upon (a) Pledgor's assets, business, operations, properties or
condition, financial or otherwise; (b) the ability of Pledgor to make payment as
and when due of all or any part of the Obligations; or (c) the Pledged
Collateral.
Section 6.2. ACCOUNTS AND REPORTS.
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Pledgor shall maintain a standard system of accounting in accordance with
generally accepted accounting principles consistently applied and provide, at
its sole expense, to Pledgee the following:
(a) as soon as available, a copy of any notice or other
communication alleging any nonpayment or other material breach or default, or
any foreclosure or other action respecting any material portion of its assets
and properties, received respecting any of the indebtedness of Pledgor in excess
of $15,000 (other than the Obligations), or any demand or other request for
payment under any guaranty, assumption, purchase agreement or similar agreement
or arrangement respecting the indebtedness or obligations of others in excess of
$15,000, including any received from any person acting on behalf of the Holder
or beneficiary thereof; and
(b) within five (5) business days after the making of each
submission or filing, a copy of any report, registration statement, proxy
statement, financial statement, notice or other document, whether periodic or
otherwise, submitted to the shareholders of Pledgor, or submitted to or filed by
Pledgor with any governmental authority involving or affecting (i) any
registration of Pledgor or its securities; (ii) Pledgor that could have a
Material Adverse Effect; (iii) the Obligations; (iv) any part of the Pledged
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Collateral or (v) any of the transactions contemplated in this Agreement or the
Loan Instruments, including, without limitation, those submitted or filed
pursuant to the Securities Act of 1933, as amended, and the Securities Exchange
Act of 1934, as amended.
Section 6.3. MAINTENANCE AND INSURANCE.
---------------------------
(a) Pledgor shall maintain or cause to be maintained, at its own
expense, all of its assets and properties in good working order and condition,
making all necessary repairs thereto and renewals and replacements thereof.
(b) Pledgor shall maintain or cause to be maintained, at its own
expense, insurance in form, substance and amounts (including deductibles), which
Pledgor deems reasonably necessary to Pledgor's business, (i) adequate to insure
all assets and properties of Pledgor, which assets and properties are of a
character usually insured by persons engaged in the same or similar business
against loss or damage resulting from fire, flood, hurricanes or other risks
included in an extended coverage policy; (ii) against public liability and other
tort claims that may be incurred by Pledgor; (iii) as may be required by the
Loan Instruments or applicable law and (iv) as may be reasonably requested by
Pledgee, all with adequate, financially sound and reputable insurers, and all
naming Pledgee as an additional insured and loss payee under a standard
mortgagee's endorsement as Pledgee's interest may appear.
Section 6.4. CONTRACTS AND OTHER COLLATERAL.
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Pledgor shall perform all of its obligations under or with respect to each
instrument, receivable, contract and other intangible included in the Pledged
Collateral to which Pledgor is now or hereafter will be party on a timely basis
and in the manner therein required, including, without limitation, this
Agreement; and Pledgor shall endorse all of its rights under all such
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instruments, agreements and other receivable on a timely basis to the full
extent permitted by applicable law.
Section 6.5. DEFENSE OF COLLATERAL, ETC.
-----------------------------
Pledgor shall defend and enforce its right, title and interest in and to
any part of: (a) the Pledged Collateral; and (b) if not included within the
Pledged Collateral, those assets and properties whose loss could have a Material
Adverse Effect, Pledgor shall defend Pledgee's right, title and interest in and
to each and every part of the Pledged Collateral, each against all manner of
claims and demands on a timely basis to the full extent permitted by applicable
law.
Section 6.6. PAYMENT OF DEBTS, TAXES, ETC.
-------------------------------
Pledgor shall pay, or cause to be paid, all of its indebtedness and other
liabilities and perform, or cause to be performed, all of its obligations in
accordance with the respective terms thereof, and pay and discharge, or cause to
be paid or discharged, all taxes, assessments and other governmental charges and
levies imposed upon it, upon any of its assets and properties on or before the
last day on which the same may be paid without penalty, as well as pay all other
lawful claims (whether for services, labor, materials, supplies or otherwise) as
and when due; provided, however, that it shall not constitute a breach of this
paragraph if Pledgor fails to perform any such obligation or to pay any such
indebtedness or other liability (except for the Obligations), tax, assessment,
or governmental or other charge, levy or claim (i) if the effect of such failure
to pay or perform will not (A) accelerate the maturity thereof, or of any other
debt or obligation of Pledgor, or (B) subject any part of the assets and
properties of Pledgor to sale or forfeiture.
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ARTICLE 7.
NEGATIVE COVENANTS
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Pledgor covenants and agrees that, from the date hereof until the
Obligations have been fully paid and satisfied, unless Pledgee shall consent
otherwise in writing:
Section 7.1. INDEBTEDNESS.
------------
Pledgor shall not directly or indirectly permit, create, incur, assume,
permit to exist, increase, renew or extend on or after the date hereof any
indebtedness on its part, including commitments, contingencies and credit
availabilities, or apply for or offer or agree to do any of the foregoing,
except that Pledgor may incur or permit to exist: (a) indebtedness owed to
Pledgee; (b) indebtedness incurred in the ordinary course of business,
including, without limitation, to suppliers, distributors, carriers,
materialmen, laborers, counsel, accountants, advisors, sellers or lessors of
machinery and equipment and real estate acquired or leased in connection with
Pledgor's business in an amount not to exceed $250,000 at any time; and (c)
other indebtedness expressly subordinated to the obligations by such creditor.
Section 7.2. LIENS AND ENCUMBRANCES.
----------------------
Pledgor shall not directly or indirectly make, create, incur, assume or
permit to exist any assignment, pledge, mortgage, security interest or other
lien or encumbrance of any nature in, to or against any part of the Pledged
Collateral, or offer or agree to do so, or own or acquire or agree to acquire
any asset or property of any character subject to any of the foregoing
encumbrances (including any conditional sale contract or other title retention
agreement), or assign, pledge or in any way transfer or encumber its right to
receive any income or other distribution or proceeds from any part of the
Pledged Collateral, or enter into any sale-leaseback financing respecting any
part of the Pledged Collateral as lessee, or cause or assist the inception or
continuation of any of the foregoing; provided, however, that the foregoing
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restrictions shall not prohibit (to the extent otherwise not prohibited by this
Agreement):
(a) liens for taxes, assessments, governmental charges, levies or
claims described in Section 6.7, if payment thereof shall not then be required
to be made by this Section 7.2;
(b) liens of carriers, warehousemen, mechanics, laborers and
materialmen incurred in the ordinary course of business, so long as there shall
have been set aside on the books of Pledgor such reserve, if any, as shall be
required by generally accepted accounting principles;
(c) liens incurred in the ordinary course of business in
connection with workers' compensation, unemployment insurance, statutory
obligation or social security legislation, or for any purpose at the time
required by law as a condition precedent to the transaction of business or the
exercise of any of the privileges or licenses of Pledgor;
(d) liens incurred in respect of attachments discharged within
thirty (30) days from the making thereof or judgments or awards in force for
less than thirty (30) days or with respect to which Pledgor in good faith shall
be prosecuting an appeal or proceeding for review and with respect to which a
stay of execution upon appeal or proceeding for review shall have been secured
if required;
(e) the security interests and other liens and encumbrances
granted from time to time to Pledgee;
(f) with respect to indebtedness permitted under Section 7.1,
liens incurred in respect of any financing of Pledgor's inventory, accounts
receivable, machinery, equipment and automobiles with a bank or other financial
institution, provided that the loan instruments evidencing such financing
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expressly provide that any lien arising from such financing is subordinate to
the first security interest hereunder and, in the event of a default thereunder,
no collection of the principal, interest and other charges and expenses
thereunder will be made until the full payment of the Obligations, or otherwise
as may be acceptable to the Holder;
(g) liens incurred in respect of indebtedness on the Pledged
Collateral which are subordinated to the Obligations by such creditor(s)
executing the Subordination Agreement; and which are subordinated to the
Obligations, or otherwise as may be acceptable to Pledgee in its sole discretion
and as to which it consents in writing; and
(h) with respect to indebtedness permitted under Section 7.1 and
subject to the limitations set forth in Section 7.1, liens incurred in respect
of indebtedness on machinery, equipment and automobiles purchased or leased by
Pledgor after the date of the execution and delivery of this Agreement by
Pledgor.
ARTICLE 8.
MISCELLANEOUS
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Section 8.1. NOTICES.
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All notices or other communications required or permitted to be given
pursuant to this Agreement shall be in writing and shall be considered as duly
given on: (a) the date of delivery, if delivered in person, by nationally
recognized overnight delivery service or (b) three (3) days after mailing if
mailed from within the continental United States by registered or certified
mail, return receipt requested to the party entitled to receive the same, if to
Pledgor, Genetic Vectors, Inc., ▇▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., with a copy to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.,
▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇ and if to Pledgee, at the addresses shown on the books of Pledgor.
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Any party may change its address by giving notice to the other party stating its
new address. Commencing on the 10th day after the giving of such notice, such
newly designated address shall be such party's address for the purpose of all
notices or other communications required or permitted to be given pursuant to
this Agreement.
Section 8.2. SEVERABILITY.
------------
If any provision of this Agreement shall be held invalid or unenforceable,
such invalidity or unenforceability shall attach only to such provision and
shall not in any manner affect or render invalid or unenforceable any other
severable provision of this Agreement, and this Agreement shall be carried out
as if any such invalid or unenforceable provision were not contained herein.
Section 8.3. EXPENSES.
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In the event of an Event of Default, Pledgor will pay to Pledgee the
amount of any and all reasonable expenses, including the reasonable fees and
expenses of its counsel, which Pledgee or the Holder may incur in connection
with: (i) the custody or preservation of, or the sale, collection from, or other
realization upon, any of the Pledged Collateral; (ii) the exercise or
enforcement of any of the rights of Pledgee hereunder or (iii) the failure by
Pledgor to perform or observe any of the provisions hereof.
Section 8.4. WAIVERS, AMENDMENTS, ETC.
--------------------------
Pledgee's delay or failure at any time or times hereafter to require
strict performance by Pledgor of any undertakings, agreements or covenants shall
not waiver, affect, or diminish any right of Pledgee under this Agreement to
demand strict compliance and performance herewith. Any waiver by Pledgee of any
Event of Default shall not waive or affect any other Event of Default, whether
such Event of Default is prior or subsequent thereto and whether of the same or
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a different type. None of the undertakings, agreements and covenants of Pledgor
contained in this Agreement, and no Event of Default, shall be deemed to have
been waived by Pledgee, nor may this Agreement be amended, changed or modified,
unless such waiver, amendment, change or modification is evidenced by an
instrument in writing specifying such waiver, amendment, change or modification
and signed by the Holder.
Section 8.5. CONTINUING SECURITY INTEREST.
----------------------------
This Agreement shall create a continuing security interest in the Pledged
Collateral and shall: (i) remain in full force and effect until payment in full
of the obligations or the conversion of all of the Note as provided therein; and
(ii) be binding upon Pledgor and its successors and (iii) inure to the benefit
of Pledgee and its successors and permitted assigns. Upon the payment or
satisfaction in full of the Obligations, or such conversion of the Note, Pledgor
shall be entitled to the return, at its expense, of such of the Pledged
Collateral as shall not have been sold, returned in accordance with Section 5.2
hereof or otherwise applied pursuant to the terms hereof.
Section 8.6. APPLICABLE LAW: JURISDICTION.
----------------------------
This Agreement and the rights of the parties hereunder shall be governed
by and construed in accordance with the laws of the State of Florida, without
regard to its conflicts of law principles. Pledgee and Pledgor hereto: (i) agree
that any legal suit, action or proceeding arising out of or relating to this
Agreement shall be instituted only in a federal or state court in Miami-Dade
County, Florida; (ii) waive any objection which they may now or hereafter have
to the laying of the venue of any such suit, action or proceeding; and (iii)
irrevocably submit to the jurisdiction of any federal or state court in
Miami-Dade County, Florida, in any such suit, action or proceeding, but such
consent shall not constitute a general appearance or be available to any other
person who is not a party to this Agreement. Pledgee and Pledgor hereto agree
that the mailing of any process in any suit, action or proceeding in accordance
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with the notice provisions of this Agreement shall constitute personal service
thereof.
Section 8.7. ENTIRE AGREEMENT.
This Agreement constitutes the entire agreement among the parties and
supersedes any prior agreement or understanding among them with respect to the
subject matter hereof.
Section 8.8. NUMBER AND GENDER.
-----------------
Wherever from the context it appears appropriate, each term stated in
either the singular or the plural shall include the singular and the plural, and
pronouns stated in either the masculine, the feminine or the neuter gender shall
include the masculine, feminine and neuter.
Section 8.9. COUNTERPARTS.
------------
This Agreement may be executed in counterparts, both of which shall be
deemed an original but both of which shall constitute one and the same
instrument. In addition, this Agreement may contain more than one counterpart of
the signature page and this Agreement may be executed by the affixing of such
signature pages executed by the parties to one copy of the Agreement; all of
such counterpart signature pages shall be read as though one, and they shall
have the same force and effect as though all of the signers had signed a single
signature page.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
GENETIC VECTORS, INC.
By:_________________________________________
Title:______________________________________
CAPITAL RESEARCH LTD.
By:_________________________________________
Title:______________________________________
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