EXHIBIT 10.38
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PLEDGE AND SECURITY AGREEMENT
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THIS PLEDGE AND SECURITY AGREEMENT, dated as of November 19, 1999, by
and between GENETIC VECTORS, INC., a Florida corporation ("PLEDGOR"), and
ORBITER FUND, LTD. (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 $200,000;
WHEREAS, Pledgee desires to obtain a security interest in certain
property owned by Pledgor;
WHEREAS, Pledgee acknowledges that Pledgor has previously pledged and
granted security interests in the Pledged Collateral as defined herein; 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.
Section 1.2. OBLIGATIONS SECURED.
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The obligations secured hereby are the obligations of Pledgor to
Pledgee under the Note issued 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, subject to the rights of previous pledgees and other holders of
security interests in the Pledged Collateral (as defined herein), 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 Pledged Property 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
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Pledgor to Pledgee in and to the Pledged Collateral is subject to the rights of
previous pledgees and other holders of security interests in the Pledged
Collateral.
(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 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 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.
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(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 the rights of previous pledgees and other
holders of security interests in the Pledged Collateral and subject to Section
2.2(b)(iii) hereof, all rights of Pledgor to exercise the rights which it would
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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 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) Subject to the rights of previous pledgees and other
holders of security interests in the Pledged Collateral, 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;
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(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,
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 (30) 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,
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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
unstayed and in effect for any period of ninety (90) days.
ARTICLE 3.
ATTORNEY-IN-FACT; PERFORMANCE
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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, and subject to the rights of previous
pledgees and other holders of security interests in the Pledged Collateral,
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, xxx for, foreclose, or realize on the Pledged Collateral as and when
Pledgee may determine. To facilitate collection, and subject to the rights of
previous pledgees and other holders of security interest in the Pledged
Collateral, Pledgee may notify account debtors and obligors on any Pledged
Collateral to make payments directly to Pledgee.
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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.
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES
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Section 4.1. AUTHORIZATION; ENFORCEABILITY.
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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.
---------------------------------
Pledgor warrants and represents that Pledgor is the legal and
beneficial owner of the Pledged Collateral.
Section 4.3. DUE ORGANIZATION.
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, subject to the rights of previous pledgees and other holders of security
interests in the Pledged Collateral (i) be entitled to receive all distributions
with respect to the Pledged Collateral, (ii) to cause the Pledged Collateral to
be transferred into the name of Pledgee or its nominee, (iii) to dispose of the
Pledged Collateral, and (iv) 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
REMEDIES.
Upon the occurrence of an Event of Default, in addition to any rights
and remedies available at law or in equity, and subject to the rights of
previous pledgees and other holders of security interests in the Pledged
Collateral, 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
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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 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) Subject to the rights of previous pledgees and other holders of
security interests in the Pledged Collateral 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) Subject to the rights of previous pledgees and other holders of
security interests in the Pledged Collateral in addition to all of the rights
and remedies which Pledgor and Pledgee may have pursuant to this Agreement,
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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) Subject to the rights of previous pledgees and other holders
of security interests in the Pledged Collateral 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 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, reasonable 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, subject to the rights of previous pledgees and other holders of security
interests in the Pledged Collateral, be entitled and empowered, by intervention
in such proceeding or otherwise:
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(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 reasonable 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) Subject to the rights of previous pledgees and other
holders of security interests in the Pledged Collateral 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 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.
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Section 5.4. DUTIES REGARDING PLEDGED COLLATERAL.
-----------------------------------
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
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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
Agreement or any other document delivered in connection herewith (which other
loan instruments collectively shall be referred to as 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
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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;
(b) within fifteen (15) 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
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.
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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 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.
Section 6.4. CONTRACTS AND OTHER COLLATERAL.
-------------------------------
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.
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, subject to the rights of previous pledgees and
other holders of security interests in the Pledged Collateral, defend Pledgee's
right, title and interest in and to each and every part of the Pledged
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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.
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, Pledgor shall not, unless
Pledgee shall consent otherwise in writing:
Section 7.1. LIENS AND ENCUMBRANCES.
-----------------------
incur any liens incurred in respect of indebtedness on the Pledged
Collateral which are superior to the Obligations.
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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) five (5) days after mailing if
mailed from within the continental United States by certified mail, return
receipt requested to the party entitled to receive the same, if to Pledgor,
Genetic Vectors, Inc., 0000 X.X. 00xx Xxxxxx, Xxxxx 000, Xxxxx, Xxxxxxx 00000,
Attention: Xxxx X. XxXxxx, Xx., with a copy to Xxxxxxx X. Xxxxxx, Esq.,
Xxxxxxxxxxx & Xxxxxxxx LLP, 000 X. Xxxxxxxx Xxxxxxxxx, 00xx Xxxxx, Xxxxx,
Xxxxxxx 00000 and if to Pledgee, at the addresses shown on the books of Pledgor.
Any party may change its address by giving notice to the other party stating its
new address. Commencing on the tenth (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.
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Section 8.3. EXPENSES.
--------
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
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
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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. Pledgee and Pledgor hereto agree that the mailing of any process in
any suit, action or proceeding in accordance 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.
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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:
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Title:
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ORBITER FUND, LTD.
By:
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Title:
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