EXHIBIT 4.23
PLEDGE AND SECURITY AGREEMENT
PLEDGE AND SECURITY AGREEMENT (this "Agreement"), dated September __,
2003, made by Amnis Systems Inc. (the "Pledgor") in favor of Xxxxxxxxxxx Limited
Partnership (the "Pledgee").
W I T N E S S E T H:
WHEREAS, pursuant to the provisions of that certain Securities Purchase
Agreement of even date herewith between the Pledgor and the Pledgee (the
"Purchase Agreement"), the Pledgee has agreed to lend to the Company and the
Company has agreed to borrow from the Pledgee $250,000 under certain terms and
conditions set forth in the Purchase Agreement;
WHEREAS, pursuant to the provisions of the Purchase Agreement, and as a
condition to the obligation of the Pledgee to lend thereunder, the Pledgor has
agreed to make the pledge contemplated by this Agreement in order to induce the
Pledgee to perform its obligations under the Purchase Agreement;
WHEREAS, the Pledgor is the sole-shareholder of Optivision, Inc., a
California company, and based on the Pledgor's representations and warranties
contained in the Purchase Agreement, such entity is its only active Subsidiary
(the "Active Subsidiary"); and
WHEREAS, all capitalized terms used but not defined herein shall have
the meanings ascribed to them in the Purchase Agreement.
NOW, THEREFORE, in consideration of the premises, covenants and
promises contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
SECTION 1. (A) GRANT OF SECURITY INTEREST.
(a) To secure the complete and timely payment, performance and
discharge in full, as the case may be, of all of the obligations, the
Pledgor hereby, unconditionally and irrevocably, pledges, grants and
hypothecates to the Pledgee, a continuing security interest, subject
only to the liens set forth on SCHEDULE 1(A), in, a lien upon and a
right of set-off against all of their respective right, title and
interest of whatsoever kind and nature in the Collateral (as defined
below) (the "SECURITY INTEREST").
(b) Terms used but not otherwise defined in this Agreement that
are defined in Article 9 of the UCC (such as "general intangibles" and
"proceeds") shall have the respective meanings given such terms in
Article 9 of the UCC.
(c) As used herein, "COLLATERAL" means the collateral in which
the Pledgees are granted a security interest by this Agreement and
which shall include the following, whether presently owned or existing
or hereafter acquired or coming into existence, and all additions and
accessions thereto and all substitutions and replacements thereof, and
all proceeds, products and accounts thereof, including, without
limitation, all proceeds from the sale or transfer of the Collateral
and of insurance covering the same and of any tort claims in connection
therewith:
(i) All Goods of the Pledgor, including, without
limitations, all machinery, equipment, computers, motor
vehicles, trucks, tanks, boats, ships, appliances, furniture,
special and general tools, fixtures, test and quality control
devices and other equipment of every kind and nature and
wherever situated, together with all documents of title and
documents representing the same, all additions and accessions
thereto, replacements therefor, all parts therefor, and all
substitutes for any of the foregoing and all other items used
and useful in connection with the Pledgor's businesses and all
improvements thereto (collectively, the "EQUIPMENT"); and
(ii) All Inventory of the Pledgor; and
(iii) All of the Pledgor's contract rights and
general intangibles, including, without limitation, all
partnership interests, stock or other securities, licenses,
distribution and other agreements, computer software
development rights, leases, franchises, customer lists,
quality control procedures, grants and rights, goodwill,
trademarks, service marks, trade styles, trade names, patents,
patent applications, copyrights, deposit accounts, income tax
refunds and the Pledged Collateral as defined below
(collectively, the "GENERAL INTANGIBLES"); and
(iv) All Receivables of the Pledgor including all
insurance proceeds, and rights to refunds or indemnification
whatsoever owing, together with all instruments, all documents
of title representing any of the foregoing, all rights in any
merchandising, goods, equipment, motor vehicles and trucks
which any of the same may represent, and all right, title,
security and guaranties with respect to each Receivable,
including any right of stoppage in transit; and
(v) All of the Pledgor's documents, instruments and
chattel paper, files, records, books of account, business
papers, computer programs and the products and proceeds of all
of the foregoing Collateral set forth in clauses (i)-(iv)
above.
(B) PLEDGE. In order to perfect the Pledgee's security
interest in certain of the General Intangibles, the Pledgor hereby
pledges to the Pledgee, and grants to the Pledgee a continuing security
interest in, the following (collectively, the "Pledged Collateral"):
(a) All shares of common stock including a stock power
executed in blank (the "Pledged Shares") of the Active Subsidiary
identified in SCHEDULE 1(A) annexed hereto representing the Pledged
Shares, and all dividends, cash, instruments and other property from
time to time received, receivable or otherwise distributed in respect
of or in exchange for any or all of the Pledged Shares; and
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(b) all proceeds of any and all of the foregoing Pledged
Collateral, in whatever form (including, without limitation, proceeds
that constitute property of the types described above).
SECTION 2. SECURITY FOR OBLIGATIONS. This Agreement secures
the payment and performance of the following obligations (collectively, the
"Obligations"): all present and future indebtedness, obligations, covenants,
duties and liabilities of any kind or nature of the Company to the Pledgees (or
any of them) now existing or hereafter arising under or in connection with the
Transaction Documents (as defined in Section 2(h) of the Securities Purchase
Agreement).
SECTION 3. DELIVERY OF PLEDGED COLLATERAL. All certificates
representing or evidencing the Pledged Shares, in suitable form for transfer by
delivery, or accompanied by instruments of transfer or assignment duly executed
in blank, have been previously deposited with and delivered to Xxx Xxxx (the
"Agent"), as collateral agent for the Pledgees. The Pledged Shares shall be held
by the Agent first on behalf of both Bristol Investment Fund, LTD ("Bristol")
and Alpha Capital Aktiengesellschaft ("Alpha") as set forth in that certain
Pledge and Security Agreement between the Company and Alpha dated May 9, 2003
and that certain Intercreditor Agreement between Bristol and Alpha and
acknowledged by the Company dated May 9, 2003, then on behalf of Alpha, Bristol
and SDS Merchant Fund, LP ("SDS") as set forth in that certain Pledge and
Security Agreement between the Company and Alpha, Bristol and SDS dated May 9,
2003 and then on behalf of the Pledgee. The Agent shall have the right, at any
time after the occurrence of an Event of Default (as hereinafter defined),
without notice to the Pledgor, to transfer to or to register in the name of the
Agent or its nominees any or all of the Pledged Collateral. In addition, the
Agent shall have the right at any time to exchange certificates or instruments
representing or evidencing Pledged Collateral for certificates or instruments of
smaller or larger denominations.
SECTION 4. REPRESENTATIONS AND WARRANTIES. The Pledgor
represents and warrants as follows:
(a) Attached hereto as Schedule 4(a) is a listing, as of the
date hereof, of all creditors of Pledgor, including approximate amounts
owed to each such creditor.
(b) The Pledgor is the legal, record and beneficial owner of
the Pledged Collateral and the Collateral, free and clear of any lien,
security interest, restriction, option or other charge or encumbrance
(collectively, "Liens") except for the security interest created by
this Agreement and the liens disclosed on SCHEDULE 1(A).
(c) The pledge of the Pledged Collateral and the grant of the
Security Interest pursuant to this Agreement creates a valid and
perfected security interest in the Pledged Collateral and the
Collateral, securing payment and performance of the Obligations subject
only to a senior security interest as set forth on Schedule 1(a).
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(d) No consent of any other person or entity and no
authorization, approval, or other action by, and no notice to or filing
with, any governmental authority or regulatory body is required (i) for
the pledge by the Pledgor of the Pledged Collateral pursuant to this
Agreement or for the execution, delivery or performance of this
Agreement by the Pledgor, (ii) for the perfection or maintenance of the
security interest created hereby, or (iii) for the exercise by the
Agent of the voting or other rights provided for in this Agreement or
the remedies in respect of the Pledged Collateral pursuant to this
Agreement (except as may be required in connection with any disposition
of any portion of the Pledged Collateral by laws affecting the offering
and sale of securities generally).
(e) There are no conditions precedent to the effectiveness of
this Agreement that have not been satisfied or waived.
(f) The mailing address of the Pledgor is 0000 Xxxxxxxx
Xxxxxx, Xxxx Xxxx, Xxxxxxxxxx 00000, and the Pledgor will not change
its address except upon not less than thirty (30) days' prior written
notice to the Agent and the Pledgees. The Pledgor represents and
warrants that they have no place of business or offices where their
respective books of account and records are kept (other than
temporarily at the offices of its attorneys or accountants) or places
where Collateral is stored or located, except as set forth on SCHEDULE
A attached hereto.
(g) No part of the Collateral has been judged invalid or
unenforceable. No written claim has been received that any Collateral
or Pledgor's use of any Collateral violates the rights of any third
party. There has been no adverse decision to Pledgor's claim of
ownership rights in or exclusive rights to use the Collateral in any
jurisdiction or to Pledgor's right to keep and maintain such Collateral
in full force and effect, and there is no proceeding involving said
rights pending or, to the best knowledge of the Pledgor, threatened
before any court, judicial body, administrative or regulatory agency,
arbitrator or other governmental authority.
(h) The Pledgor shall at all times maintain their respective
books of account and records relating to the Collateral at their
respective principal place of business and their respective Collateral
at the locations set forth on SCHEDULE A attached hereto and may not
relocate such books of account and records or tangible Collateral
unless they deliver to the Pledgees at least 30 days prior to such
relocation (i) written notice of such relocation and the new location
thereof (which must be within the United States) and (ii) evidence that
appropriate financing statements under the UCC and other necessary
documents have been filed and recorded and other steps have been taken
to perfect the Security Interest to create in favor of the Pledgees a
valid, perfected and continuing lien in the Collateral.
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(i) Except for the filing of financing statements pursuant to
the UCC with the proper filing and recording agencies in the
jurisdictions indicated on SCHEDULE B, attached hereto, no
authorization or approval of or filing with or notice to any
governmental authority or regulatory body is required either (i) for
the grant by the Pledgor of, or the effectiveness of, the Security
Interest granted hereby or for the execution, delivery and performance
of this Agreement by the Pledgor or (ii) for the perfection of or
exercise by the Pledgees of its rights and remedies hereunder.
(j) Effective on the date of execution of this Agreement, the
Pledgor hereby authorizes the Agent to file one or more financing
statements under the UCC with respect to the Security Interest with the
proper filing and recording agencies in the jurisdictions indicated on
SCHEDULE B, attached hereto and in such other jurisdictions as may be
requested by the Pledgees.
(k) The execution, delivery and performance of this Agreement
by the Pledgor does not conflict with, or constitute a default (or an
event that with notice or lapse of time or both would become a default)
under, or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time or
both) of, any agreement, credit facility, debt or other instrument
(evidencing Pledgor's debt or otherwise) or other understanding to
which Pledgor is a party or by which any property or asset of the
Pledgor is bound or affected. No consent (including, without
limitation, from stock holders or creditors of the Pledgor) is required
for the Pledgor to enter into and perform its obligations hereunder.
(l) The Pledgor shall at all times maintain the liens and
Security Interest provided for hereunder as valid and perfected liens
and security interests in the Collateral in favor of the Pledgees until
this Agreement and the Security Interest hereunder shall be terminated.
The Pledgor hereby agrees to defend the same against any and all
persons. The Pledgor shall safeguard and protect all Collateral for the
account of the Pledgees. At the request of the Pledgees, the Pledgor
will sign and deliver to the Pledgees at any time or from time to time
one or more financing statements pursuant to the UCC in form reasonably
satisfactory to the Pledgees and will pay the cost of filing the same
in all public offices wherever filing is, or is deemed by the Pledgees
to be, necessary or desirable to effect the rights and obligations
provided for herein. Without limiting the generality of the foregoing,
the Pledgor shall pay all fees, taxes and other amounts necessary to
maintain the Collateral and the Security Interest hereunder, and the
Pledgor shall obtain and furnish to the Pledgees from time to time,
upon demand, such releases and/or subordinations of claims and liens
which may be required to maintain the priority of the Security Interest
hereunder.
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(m) The Pledgor will not transfer, pledge, hypothecate,
encumber, license (except for non-exclusive licenses granted by a
Pledgor in its ordinary course of business and sales of inventory),
sell or otherwise dispose of any of the Collateral without the prior
written consent of a majority in interest of the Pledgees.
(n) The Pledgor shall keep and preserve its Equipment,
Inventory and other tangible Collateral in good condition, repair and
order and shall not operate or locate any such Collateral (or cause to
be operated or located) in any area excluded from insurance coverage.
(o) The Pledgor shall, within ten (10) days of obtaining
knowledge thereof, advise the Pledgees promptly, in sufficient detail,
of any substantial change in the Collateral, and of the occurrence of
any event which would have a material adverse effect on the value of
the Collateral or on the Pledgees' security interest therein.
(p) The Pledgor shall promptly execute and deliver to the
Pledgees such further deeds, mortgages, assignments, security
agreements, financing statements or other instruments, documents,
certificates and assurances and take such further action as the
Pledgees may from time to time request and may in its sole discretion
deem necessary to perfect, protect or enforce its security interest in
the Collateral.
(q) The Pledgor shall permit the Pledgees and their
representatives and agents to inspect the Collateral at any time, and
to make copies of records pertaining to the Collateral as may be
requested by a Secured Party from time to time.
(r) The Pledgor shall take all steps reasonably necessary to
diligently pursue and seek to preserve, enforce and collect any rights,
claims, causes of action and accounts receivable in respect of the
Collateral.
(s) The Pledgor shall promptly notify the Pledgees in
sufficient detail upon becoming aware of any attachment, garnishment,
execution or other legal process levied against any Collateral and of
any other information received by the Pledgor that may materially
affect the value of the Collateral, the Security Interest or the rights
and remedies of the Pledgees hereunder.
(t) All information heretofore, herein or hereafter supplied
to the Pledgees by or on behalf of the Pledgor with respect to the
Collateral is accurate and complete in all material respects as of the
date furnished.
(u) The Pledgor shall at all times preserve and keep in full
force and effect their respective valid existence and good standing and
any rights and franchises material to its business.
(v) The Pledgor will not change its name, corporate structure,
or identity, or add any new fictitious name unless it provides at least
30 days prior written notice to the Pledgees of such change and, at the
time of such written notification, such Pledgor provides any financing
statements or fixture filings necessary to perfect and continue
perfected the Security Interest granted and evidenced by this
Agreement.
(w) The Pledgor may not consign any of its Inventory or sell
any of its Inventory on xxxx and hold, sale or return, sale on
approval, or other conditional terms of sale without the consent of a
majority in interest of the Pledgees which shall not be unreasonably
withheld.
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(x) The Pledgor may not relocate its chief executive office to
a new location without providing 30 days prior written notification
thereof to the Pledgees and so long as, at the time of such written
notification, the Pledgor provides any financing statements or fixture
filings necessary to perfect and continue perfected the Security
Interest granted and evidenced by this Agreement.
SECTION 5. FURTHER ASSURANCES. The Pledgor agrees that at any
time and from time to time, at the expense of the Pledgor, the Pledgor shall
promptly execute and deliver all further instruments and documents, and take all
further action, that may be necessary or desirable, or that the Agent and/or the
Pledgees may reasonably request, in order to perfect and protect any security
interest granted or purported to be granted hereby or to enable the Agent and/or
any Pledgee to exercise and enforce its rights and remedies hereunder with
respect to any Pledged Collateral.
SECTION 6. VOTING RIGHTS; DIVIDENDS; ETC.
(a) So long as no Event of Default shall have occurred:
(i) The Pledgor shall be entitled to exercise or
refrain from exercising any and all voting and other
consensual rights pertaining to the Pledged Collateral or any
part thereof for any purpose not inconsistent with the terms
of this Agreement; provided, however, that the Pledgor shall
not exercise or refrain from exercising any such right if, in
the reasonable judgment of the Pledgees, such action would
have a material adverse effect on the value of the Pledged
Collateral or any material part thereof; provided, further,
that the Pledgor shall give the Pledgees at least ten (10)
days' prior written notice of the manner in which it intends
to exercise, or the reasons for refraining from exercising,
any such right.
(ii) The Pledgor shall be entitled to receive and
retain any and all cash dividends and interest paid in respect
of the Pledged Collateral; provided, however, that any and
all:
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(A) dividends and interest paid or payable other than
in cash in respect of, and instruments and other property
received, receivable or otherwise distributed in respect of,
or in exchange for, any Pledged Collateral,
(B) dividends and other distributions paid or payable
in cash in respect of any Pledged Collateral in connection
with a partial or total liquidation or dissolution or in
connection with a reduction of capital, capital surplus or
paid-in-surplus, and
(C) cash paid, payable or otherwise distributed in
respect of principal of, or in redemption of, or in exchange
for, any Pledged Collateral,
shall be, and shall be forthwith delivered to the Agent to hold as,
Pledged Collateral, and shall, if received by the Pledgor, be received
in trust for the benefit of the Pledgees, be segregated from the other
property or funds of the Pledgor, and be forthwith delivered to the
Agent as Pledged Collateral in the same form as so received (with any
necessary endorsement or assignment).
(b) Upon and after the occurrence of any Event of Default:
(i) All rights of the Pledgor to exercise or refrain from
exercising the voting and other consensual rights which it would
otherwise be entitled to exercise pursuant to Section 6(a)(i) and to
receive the dividends and interest payments which it would otherwise be
authorized to receive and retain pursuant to Section 6(a)(ii) shall
cease, and all such rights shall thereupon become vested in the Agent
who shall thereupon have the sole right to exercise or refrain from
exercising such voting and other consensual rights and to receive and
hold as Pledged Collateral such dividends and interest payments.
(ii) All dividends and interest payments which are received by
the Pledgor contrary to the provisions of paragraph (i) of this Section
6(b) shall be received in trust for the benefit of the Pledgees, shall
be segregated from other funds of the Pledgor and shall be forthwith
paid over to the Agent as Pledged Collateral in the same form as so
received (with any necessary endorsement).
SECTION 7. TRANSFERS AND OTHER LIENS; ADDITIONAL SHARES. The Pledgor
agrees that it shall not (i) sell, assign (by operation of law or otherwise) or
otherwise dispose of, or grant any option with respect to, any of the Pledged
Collateral, or (ii) create or permit to exist any Lien upon or with respect to
any of the Pledged Collateral, except for the security interest granted pursuant
to this Agreement.
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SECTION 8. AGENT APPOINTED ATTORNEY-IN-FACT.
(a) The Pledgor hereby appoints the Agent as the Pledgor's
attorney-in-fact, with full authority in the place and stead of the
Pledgor and in the name of the Pledgor or otherwise, from time to time
in the Agent's discretion to take any action and to execute any
instrument which the Agent may deem necessary or desirable to
accomplish the purposes of this Agreement, including, without
limitation, to receive, endorse and collect all instruments made
payable to the Pledgor representing any dividend, interest payment or
other distribution in respect of the Pledged Collateral or any part
thereof and to give full discharge for the same.
(b) The Pledgor authorizes the Agent, and does hereby make,
constitute and appoint the Agent and its respective officers, agents,
successors or assigns with full power of substitution, as the Pledgor's
true and lawful attorney-in-fact, with power, in the name of the
Pledgees or the Pledgor, to, after the occurrence and during the
continuance of an Event of Default, (i) endorse any Debentures, checks,
drafts, money orders, or other instruments of payment (including
payments payable under or in respect of any policy of insurance) in
respect of the Collateral that may come into possession of the
Pledgees; (ii) to sign and endorse any financing statement pursuant to
the UCC or any invoice, freight or express xxxx, xxxx of lading,
storage or warehouse receipts, drafts against Pledgors, assignments,
verifications and notices in connection with accounts, and other
documents relating to the Collateral; (iii) to pay or discharge taxes,
liens, security interests or other encumbrances at any time levied or
placed on or threatened against the Collateral; (iv) to demand,
collect, receipt for, compromise, settle and xxx for monies due in
respect of the Collateral; (v) generally, to do, at the option of the
Pledgees, and at the expense of the Pledgor, at any time, or from time
to time, all acts and things which the Pledgees deem necessary to
protect, preserve and realize upon the Collateral and the Security
Interest granted therein in order to effect the intent of this
Agreement and the Debentures all as fully and effectually as the
Pledgor might or could do; and (vi) in the event of the bankruptcy of
the Pledgor, to appoint a receiver or equivalent person to xxxxxxxx
Pledgor's assets, and the Pledgor hereby ratifies all that said
attorney shall lawfully do or cause to be done by virtue hereof. This
power of attorney is coupled with an interest and shall be irrevocable
for the term of this Agreement and thereafter as long as any of the
Obligations shall be outstanding.
(c) On a continuing basis, the Pledgor will make, execute,
acknowledge, deliver, file and record, as the case may be, with the
proper filing and recording agencies in any jurisdiction, including,
without limitation, the jurisdictions indicated on SCHEDULE B, attached
hereto, all such instruments, and take all such action as may
reasonably be deemed necessary or advisable, or as reasonably requested
by the Pledgees, to perfect the Security Interest granted hereunder and
otherwise to carry out the intent and purposes of this Agreement, or
for assuring and confirming to the Pledgees the grant or perfection of
a security interest in all the Collateral under the UCC.
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(d) The Pledgor hereby irrevocably appoints the Agent as the
Pledgor's attorney-in-fact, with full authority in the place and stead
of the Pledgor and in the name of the Pledgor, from time to time in the
Agent's discretion, to take any action and to execute any instrument
which the Pledgees may deem necessary or advisable to accomplish the
purposes of this Agreement, including the filing, in its sole
discretion, of one or more financing or continuation statements and
amendments thereto, relative to any of the Collateral without the
signature of the Pledgor where permitted by law.
SECTION 9. PLEDGEES MAY PERFORM. If the Pledgor fails to
perform any agreement contained herein, the Agent and/or any Pledgee may itself
perform, or cause performance of, such agreement, and the expenses of the Agent
and/or such Pledgee incurred in connection therewith shall be payable by the
Pledgor under Section 14.
SECTION 10. THE AGENT'S DUTIES. The duties and rights of the
Agent are as set forth on ANNEX A attached hereto and incorporated herein by
reference. Any fees of the Agent for its services hereunder shall be paid by the
Pledgees. The powers conferred on the Agent hereunder are solely to protect the
interests of the Pledgees in the Pledged Collateral and shall not impose any
duty upon the Agent to exercise any such powers. Except for the safe custody of
any Pledged Collateral in its possession and the accounting for moneys actually
received it hereunder, neither the Agent nor any Pledgee shall have any duty as
to any Pledged Collateral, as to ascertaining or taking action with respect to
calls, conversions, exchanges, maturities, tenders or other matters relative to
any Pledged Collateral, whether or not such party has or is to have knowledge of
such matters, or as to the taking of any necessary steps to preserve rights
against any parties or any other rights pertaining to any Pledged Collateral.
The Agent and each Pledgee shall be deemed to have exercised reasonable care in
the custody and preservation of any Pledged Collateral in its possession if such
Pledged Collateral is accorded treatment substantially equal to that which such
party accords its own property.
SECTION 11. EVENT OF DEFAULT. The occurrence of any of the
following events shall constitute an event of default under this Agreement
(each, an "Event of Default"):
(a) The failure of the Pledgor to observe, perform or comply
with any act, duty, covenant, agreement or obligation under this
Agreement;
(b) If any of the representation or warranty of the Pledgor
set forth in this Agreement shall be breached or shall be untrue or
incorrect in any material respect;
(c) The filing of any financing statement with regard to any
of the Pledged Collateral other than pursuant to this Agreement, or the
attachment of any additional Lien to any portion of the Pledged
Collateral in favor of any Person other than the Pledgees; or
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(d) If any default or event of default shall occur under any
of the Transaction Documents (as defined in Section 2(h) of the
Securities Purchase Agreement), including, without limitation, any
"Event of Default" as defined in the Convertible Debentures.
SECTION 12. CROSS-DEFAULT; CROSS-COLLATERALIZATION. The
Pledgor acknowledges and agrees that any default under the terms of this
Agreement shall constitute a default by the Company under the Convertible
Debentures and the other Transaction Documents, and that any default under the
Convertible Debentures or any of the other Transaction Documents shall
constitute a default under this Agreement. The security interests, liens and
other rights and interests in and relative to any of the real or personal
property of the Pledgor now or hereafter granted to the Pledgees by the Pledgor
pursuant to any agreement, document or instrument, including, but not limited
to, this Agreement, the Purchase Agreement, the Warrants or the Convertible
Debentures, shall serve as security for any and all of the Obligations, and, for
the repayment thereof, Pledgees may resort to any such collateral in such order
and manner as they may elect.
SECTION 13. REMEDIES UPON EVENT OF DEFAULT. Upon and after the
occurrence of any Event of Default:
(a) The Agent may exercise in respect of the Collateral and
the Pledged Collateral, in addition to other rights and remedies
provided for herein or otherwise available to the Agent (including,
without limitation, the vesting in the Agent pursuant to Section
6(b)(i) of the sole right to exercise voting rights pertaining to the
Pledged Collateral, including, without limitation, voting rights with
respect to the sale of assets of Issuer), all the rights and remedies
of a secured party on default under the Uniform Commercial Code in
effect in the State of New York at that time (the "UCC"), and may also,
without notice except as specified below, sell the Pledged Collateral
or any part thereof in one or more parcels at public or private sale,
at any exchange, broker's board or at any of the Agent's offices or
elsewhere, for cash, on credit or for future delivery, and upon such
other terms as the Agent may deem commercially reasonable. The Pledgor
agrees that, to the extent notice of sale shall be required by law, at
least ten (10) days' notice to the Pledgor of the time and place of any
public sale or the time after which any private sale is to be made
shall constitute reasonable notification. The Agent shall not be
obligated to make any sale of Pledged Collateral regardless of notice
of sale having been given. The Agent may adjourn any public or private
sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the
time and place to which it was so adjourned. The Pledgor acknowledges
and agrees that the Pledged Collateral consisting of the Pledged
Shares, and/or any other shares of common stock of Issuer, is of a type
customarily sold on a recognized market, and accordingly that no notice
of the sale thereof need be given.
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(b) Any cash held by the Agent or any Pledgee as Pledged
Collateral and all cash proceeds received by the Agent or any Pledgee
in respect of any sale of, collection from, or other realization upon
all or any part of the Pledged Collateral may, in the discretion of the
Agent or such Pledgee, be held as collateral for, and/or then or at any
time thereafter be applied (after payment of any amounts payable
pursuant to Section 14) in whole or in part against, all or any part of
the Obligations, pro rata to the respective Obligations of each Pledgee
in proportion to their respective principal amounts of Convertible
Debentures. Any surplus of such cash or cash proceeds held by the Agent
or any Pledgee and remaining after payment in full of all the
Obligations shall be paid over to the Pledgor or to whomsoever may be
lawfully entitled to receive such surplus.
SECTION 14. EXPENSES. The Pledgor shall upon demand pay to the
Agent and/or the applicable Pledgee the amount of any and all reasonable
expenses, including reasonable attorneys' fees and expenses and the reasonable
fees and expenses of any experts and agents, which the Agent and/or such Pledgee
may incur in connection with (a) the administration of this Agreement, (b) the
custody or preservation of, or the sale of, collection from, or other
realization upon, any of the Pledged Collateral, (c) the exercise or enforcement
of any of the rights of the Agent and/or such Pledgee hereunder or (d) the
failure by the Pledgor to perform or observe any of the provisions hereof.
SECTION 15. CONTINUING SECURITY INTEREST; TERMINATION. This
Agreement shall create a continuing security interest in the Collateral and the
Pledged Collateral and shall remain in full force and effect until the
indefeasible payment in full of the Obligations. Upon the indefeasible payment
in full of the Obligations, the security interest granted hereby shall terminate
and all rights to the Collateral and the Pledged Collateral shall revert to the
Pledgor. Upon any such termination, the Agent shall, at the Pledgor's expense,
return to the Pledgor such of the Collateral and the Pledged Collateral as shall
not have been sold or otherwise applied pursuant to the terms hereof and execute
and deliver to the Pledgor such documents as the Pledgor shall reasonably
request to evidence such termination.
SECTION 16. GOVERNING LAW; TERMS. THIS AGREEMENT SHALL BE
ENFORCED, GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS. THE PARTIES
HERETO HEREBY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE STATE COURTS OR THE
UNITED STATES FEDERAL COURTS LOCATED IN NEW YORK WITH RESPECT TO ANY DISPUTE
ARISING UNDER THIS AGREEMENT, THE AGREEMENTS ENTERED INTO IN CONNECTION HEREWITH
OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. BOTH PARTIES IRREVOCABLY
WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH SUIT OR
PROCEEDING. BOTH PARTIES FURTHER AGREE THAT SERVICE OF PROCESS UPON A PARTY
MAILED BY FIRST CLASS MAIL SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF
PROCESS UPON THE PARTY IN ANY SUCH SUIT OR PROCEEDING. NOTHING HEREIN SHALL
AFFECT EITHER PARTY'S RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW. BOTH PARTIES AGREE THAT A FINAL NON-APPEALABLE JUDGMENT IN ANY SUCH SUIT OR
PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY
SUIT ON SUCH JUDGMENT OR IN ANY OTHER LAWFUL MANNER. THE PARTY WHICH DOES NOT
PREVAIL IN ANY DISPUTE ARISING UNDER THIS AGREEMENT SHALL BE RESPONSIBLE FOR ALL
FEES AND EXPENSES, INCLUDING ATTORNEYS' FEES, INCURRED BY THE PREVAILING PARTY
IN CONNECTION WITH SUCH DISPUTE.
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SECTION 17. NOTICE. Any notices required or permitted to be
given under the terms hereof shall be sent by certified or registered mail
(return receipt requested) or delivered personally or by courier (including a
recognized overnight delivery service) or by facsimile and shall be effective
five days after being placed in the mail, if mailed by regular United States
mail, or upon receipt, if delivered personally or by courier (including a
recognized overnight delivery service) or by facsimile, in each case addressed
to a party. The addresses for such communications shall be:
If to the Pledgor:
0000 Xxxxxxxx Xxxxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxxx Xxxxxxxx
Facsimile: (000) 000-0000
With copies to:
Sichenzia Xxxx Xxxxxxxx Xxxxxxx LLP
1065 Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxxxx, Esq.
Telephone: 000-000-0000
Facsimile: 212-930-9725
Email: XXxxxxxxxx@xxxxxx.xxx
If to any Pledgees: to the address and fax number set forth immediately below
such Investor's name on the signature pages to the Securities Purchase
Agreement.
If to the Agent:
Xxx Xxxx
0000 Xxxxxx Xxxxxxxxx, Xxxxx Xxxxx
Xxxxxxxxx, XX 00000
Fax: (000) 000-0000
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SECTION 18. WAIVERS.
(a) WAIVERS. The Pledgor waives any right to require the
Pledgees to (i) proceed against any person, (ii) proceed against any
other collateral under any other agreement, (iii) pursue any other
remedy, or (iv) make presentment, demand, dishonor, notice of dishonor,
acceleration and/or notice of non-payment.
(b) WAIVER OF DEFENSE. No course of dealing between the
Pledgor and the Pledgees, nor any failure to exercise nor any delay in
exercising on the part of the Agent or any Pledgee, any right, power,
or privilege under this Agreement or under any of the other Transaction
Documents shall operate as a waiver. No single or partial exercise of
any right, power, or privilege under this Agreement or under any of the
other Transaction Documents shall preclude any other or further
exercise of such right, power, or privilege or the exercise of any
other right, power, or privilege.
SECTION 19. RIGHTS ARE CUMULATIVE. All rights and remedies of the Agent
and the Pledgees with respect to the Pledged Collateral, whether established by
this Agreement, the other Transaction Documents or by law, shall be cumulative
and may be exercised concurrently or in any order.
SECTION 20. INDEMNITY. The Pledgor agrees to indemnify and hold
harmless the Agent, the Pledgees and their respective successors and assigns
against and from all liabilities, losses, and costs (including, without
limitation, reasonable attorneys' fees) arising out of or relating to the taking
or the failure to take action in respect of any transaction effected under this
Agreement or in connection with the lien provided for herein, including, without
limitation, any and all excise, sales or other taxes which may be payable or
determined to be payable with respect to any of the Pledged Collateral. The
liabilities of the Pledgor under this Section 20 shall survive the termination
of this Agreement.
SECTION 21. SEVERABILITY. The provisions of this Agreement are
severable. If any provision of this Agreement is held invalid or unenforceable
in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect only such provision, or part thereof, in such
jurisdiction, and shall not in any manner affect such provision or part thereof
in any other jurisdiction, or any other provision of this Agreement in any
jurisdiction.
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SECTION 22. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be considered an original, but all of which
together shall constitute one and the same instrument.
SECTION 23. AMENDMENTS; ENTIRE AGREEMENT. This Agreement is subject to
modification only by a writing signed by the parties. To the extent that any
provision of this Agreement conflicts with any provision of the Purchase
Agreement or the Convertible Debentures, the provision giving Pledgees greater
rights or remedies shall govern, it being understood that the purpose of this
Agreement is to add to, and not detract from, the rights granted to Pledgees
under the Purchase Agreement and the Convertible Debentures. This Agreement, the
Purchase Agreement, the Convertible Debentures and the other Transaction
Documents constitute the entire agreement of the parties with respect to the
subject matter of this Agreement.
SECTION 24. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective heirs,
executors, legal representatives, successors and assigns; PROVIDED, HOWEVER,
that the Pledgor may not, without the prior written consent of the Pledgees,
assign or delegate any rights, powers, duties or obligations hereunder, and any
such purported assignment or delegation without such consent shall be null and
void.
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IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Agreement as of the date first above written.
PLEDGOR:
AMNIS SYSTEMS INC.
By:
-------------------------------------------------
Name:
Title:
PLEDGEE:
XXXXXXXXXXX LIMITED PARTNERSHIP
By:
--------------------------------------------------
Name:
Title:
AGENT:
-----------------------------------------------------
Xxx Xxxx, Esq.
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