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Exhibit 10.(lxvi)
PLEDGE AND ESCROW AGREEMENT
THIS PLEDGE AND ESCROW AGREEMENT (the "Agreement") made and entered into
as of this first day of September, 1998 by and among ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
(hereinafter referred to as "Pledgor"), Viragen, INC., a Delaware corporation
(hereinafter referred to as "Pledgee") and ATLAS, ▇▇▇▇▇▇▇▇, TROP & BORKSON, P.A.
(hereinafter referred to as "Escrow Agent").
W I T N E S S E T H:
WHEREAS, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (the Pledgor referred to in this Agreement) is
the Executive Vice President of Viragen, Inc (the Pledgee referred to in this
Agreement) and entered into a Stock Option Agreements with the Pledgee on
October 15, 1994, a copy of which is attached hereto as Exhibit A;
WHEREAS, pursuant to such Stock Option Agreements, Pledgor was afforded
the right to acquire 50,000 shares of Common Stock of the Pledgee at $1.00 per
share for an aggregate purchase price of $50,000.
WHEREAS, the Pledgor has executed a five-year promissory note in the
principal amount of $50,000 (the "Note") in favor of Pledgee for the purchase
price payable in respect to the acquisition of the 50,000 shares of Common Stock
of the Pledgee, a copy of which is attached hereto as Exhibit B;
WHEREAS, to secure the payment of the Note, Pledgor has agreed to grant
Pledgee a security interest in all 50,000 shares of the Common Stock of the
Pledgee (the "Pledged Shares"); and
WHEREAS, the Pledgor and the Pledgee have requested the Escrow Agent to
act as escrow agent for the Pledged shares in accordance with the terms of this
Agreement;
NOW, THEREFORE, in consideration of the premises, covenants and agreement
hereinafter set forth, the parties mutually agree as follows:
1. SECURITY INTEREST. Pledgor hereby grants to Pledgee a first lien
security interest, superior to all other liens and encumbrances, in
and to the Pledged Shares. Copies of stock powers representing the
Pledged Shares, endorsed in blank, and copies of the certificates
representing the Pledged Shares, are attached hereto as Exhibit "C".
The Pledged Shares and stock powers shall be held by
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Escrow Agent as collateral for the indebtedness owed by the Pledgor
to Pledgee pursuant to the Note.
2. REPRESENTATIONS, WARRANTIES AND COVENANTS. Pledgor hereby
represents, warrants and covenants that, except for the security
interest granted hereunder, and except that the Pledged Shares are
partially paid shares subject to assessment for the balance of the
purchase price as represented by the principal amount of the Note,
Pledgor is the legal and equitable owner of the Pledged ▇▇▇▇▇▇ and
holds same free and clear of all liens, charges, encumbrances and
security interest of every kind and nature, and that Pledgor will
make no assignment, pledge, mortgage, hypothecation or transfer of
the Pledged Share; that Pledgor has good right and legal authority
to pledge the Pledged Shares in the manner hereby done or
contemplated and will defend Pledgor's title to the Pledged Shares
against the claim of all persona whomsoever; that no consent or
approval of any governmental body or regulatory authority, or of any
securities exchange, is necessary to the validity of the pledge
effected hereby, except for any consents or approvals which have
been obtained; that the pledge of the Pledged Shares is effective to
vest in Pledgee the rights of the Pledgor in the Pledged shares set
forth herein; and that the Pledged Shares have been duly and validly
authorized.
3. RIGHT TO VOTE. Except as otherwise provided herein, during the term
of this Agreement and so long as Pledgor is not in default in the
performance of any of the terms of this Agreement or in the payment
of principal or interest under the Note, the Pledgor shall be
entitled to all rights of ownership, including, but not limited to,
the right to vote the Pledged shares on all corporate questions.
4. ADJUSTMENTS. In the event that, during the term of this Agreement,
any stock dividend shall be declared an or with respect to any
0(pound) the Pledged Shares, or there is a reclassification,
readjustment, merger, consolidation, stack split or any other change
is made in the capital structure of the Pledgee which has issued the
Pledged Shares or any successor thereto, all hew, substituted and
additional shares or other securities issued by reason of such a
change shall be delivered and held by Escrow Agent under the terms
of this Agreement in the same manner as the Pledged Shares.
5. DEFAULT. In the event of default by the Pledgor under the Note, in
addition to any right or remedy which it may have hereunder, the
Pledgee shall have all of the rights and remedies of a secured party
under Article 9 of the Uniform commercial Code as it is now or
hereafter in effect in the State of Florida, including without
limitation the right to retain or to sell or otherwise dispose at
all or any portion of the Pledged Shares. Upon the occurrence of a
default under the Note, the Pledgee shall, in its sole discretion,
have the right to cancel the Pledged Shares or to offer for sale,
and to sell, all or any of the Pledged Shares at any private or
public sale; provided, however, that the Pledge shall give to the
Pledgor at least ten (10) business days notice of the time, date and
place of any such private or public sale, which provision for
notice, the Pledgor hereby expressly agrees is commercially
reasonable. Furthermore, the Pledgor hereby expressly agrees that
the Pledgee may (1) sell all or any portion of the Pledged Shares at
any private or public sale for cash, upon credit, or for other
property, for immediate or future delivery, and
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for such price or prices and on such terms as the Pledgee in its
sole discretion shall deem appropriate, (ii) bid on and purchase the
Pledged Shares at any private or public sale, and (iii) hold any of
the Pledged shares purchased by the Pledgee at any private or public
sale in its own right, free and clear of any and all claims of the
Pledgor. The Pledgee may, from time to time, upon such default, sell
all or any part of the Pledged Shares. The Pledgor hereby appoints
Pledgee an its attorney-in-fact to execute such documents and take
such action as may be necessary to accomplish the provisions of this
Agreement, including, without limiting the generality of the
foregoing, the right to ask for, demand, ▇▇▇ for, collect, receive
and give acquittance for any and all monies due or to become due
with respect to or in connection with any of the Pledged shares, to
endorse checks, drafts, orders and other instruments for the payment
of money representing any interest or dividend or other distribution
with respect to or in connection with the Pledged shares or any part
thereof and to give full discharge for the same, to settle,
compromise, prosecute or defend any action, claim or proceeding with
respect thereto and to sell, assign, endorse, pledge, transfer and
make any agreement respecting same, or otherwise deal with the name.
Such appointment in irrevocable and coupled with an interest. Unless
Pledgee retains the Pledged Shares in full satisfaction or Pledgor's
obligations under the Note as provided herein, Pledgee shall apply
the proceeds of disposition of the Pledge shares in the manner
provided by Florida law. In lieu of any such sale, Pledgee may
retain the Pledged Shares in full satisfaction or Pledgor's
obligations under the Note.
6. ESCROW. Pledgor shall deposit with Escrow Agent the Plodded shares,
along with the aforesaid stock powers (all of which items shall
hereinafter be referred to as the "Pledged Documents" including all
stack assignments), to be held in escrow for future delivery as
follows:
a. Escrow Agent shall deliver the Pledged Documents to Pledgee
within ten (10) business days after receiving an affidavit
signed by Pledgee stating that:
(i) Pledgor is in default under the Note and all periods of
time within which to cure such default have expired;
(ii) Pledgee is accelerating the entire unpaid balance due
under the Note; and
(iii) Pledgee demands delivery of the Pledged Documents.
Pledgee shall simultaneously furnish Pledgor with a copy of
such affidavit. If Escrow Agent has not received any protest
or objection from Pledgor within ten (10) business days of
receipt of such affidavit, the Pledged Documents shall be
delivered to the Pledgee. Upon such delivery of the Pledged
Documents, Escrow Agent's duties hereunder shall terminate.
b. In the event Escrow Agent has received written instructions
signed by both Pledgor and Pledgee notifying Escrow Agent of a
sale of a portion of the Pledged Shares pursuant to the
Employment Agreement, ESCROW Agent may release a portion or
all of the Pledged Shares, as provided in such written
instruction, and if Escrow Agent is designated to be the
recipient of the proceeds from the sale of all OR a portion of
the Pledged Shares, then
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Escrow Agent shall deliver any such proceeds received in
accordance with such written instructions.
c. In the event Escrow Agent has not delivered the Pledged
Documents pursuant to subparagraph a. above, then Escrow Agent
shall deliver the Pledged Document; to Pledgor within ten (10)
business day; after receipt of the original of the Note
marked. "Paid in full", accompanied by instructions from
Pledgor indicating that the Note has been paid in full and the
Pledged documents shall be delivered to Pledgor at the address
specified therein. Upon ouch delivery of the Pledged
Documents, Escrow Agent's duties hereunder shall terminate.
Pledgee agrees to deliver the Note to Pledgor marked "paid in
full", immediately upon satisfaction thereof.
7. DISPUTE. It is specifically understood and agreed that should
any dispute arise between the parties hereto concerning this
Agreement or its construction, or for any other reason, the Escrow
Agent in its sole discretion, shall have the right to deposit the
Pledged Documents held by it pursuant to this Escrow Agreement and
any documents relating thereto that may have been delivered to the
Escrow Agent, with the Clerk of the Circuit Court of Broward County,
Florida, and notify all parties concerned, and whereupon, all
liability hereunder on the part of the Escrow Agent shall fully
cease except to the extent of accounting for the Pledged Documents
and any other documents that may have been delivered to it.
8. INTERPLEADER. In the event the Escrow Agent places the Pledged
Documents that have actually been delivered to Escrow Agent in the
registry of the Circuit Court in and for Broward County, Florida,
and files an action of interpleader naming Pledgor and Pledgee, and
other necessary parties, Escrow Agent shall be released and relieved
from any and all further obligations and liabilities hereunder or in
connection herewith. Pledgor and Pledgee hereby, jointly and
severally, indemnify and hold Escrow Agent harmless from any damages
OR losses arising hereunder or in connection herewith, including,
but not limited to, all costs and expenses incurred by Escrow Agent
in connection with the filing at such action and reasonable
attorneys' teen and costs for Escrow Agent's attorney(s) through and
including all appeals.
9. NATURE OF ESCROW AGENT'S DUTIES. It is agreed that the duties
of Escrow Agent are only such as are herein specifically provided
and are purely ministerial in nature. Hence, Escrow Agent shall not
be held liable for any matter or thing except for Escrow Agent's
gross negligence or willful misconduct. Pledgor and Pledgee shall at
all times hereafter, jointly and severally indemnify Escrow Agent
and hold Escrow Agent harmless from any claim assorted against it
and tram any damages, costs, expenses, liability and/or losses
sustained by Escrow Agent (except for Escrow Agent's gross
negligence or willful misconduct), including, but not limited to,
reasonable attorneys' fees and costs for Escrow Agent's attorney(s)
through and including all appeals and whether or not litigation is
instituted. The obligations and duties of the Escrow Agent are
confined to those specifically enumerated in this Agreement. The
Escrow Agent shall not be subject to nor be under any obligation to
ascertain or construe the terms and conditions of any instrument
whether or not now or hereafter deposited with or delivered to the
Escrow Agent or referred to in this Agreement. Nor shall the Escrow
Agent be obliged to inquire as to the form, execution and
sufficiency
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or validity or any instruments, or to inquire as to the
identity, authority or rights of any person executing or
delivering the same.
10. RETANTION OF LEGAL COUNSEL. It is agreed that Escrow Agent
shall have full discretion as to whom it may retain as legal
counsel to protect its interests (including retaining itself
ad a law firm) and same shall not affect or in any way
prejudice or limit Escrow Agent's entitlement to reasonable
attorneys' fees for the services of such attorneys as set
forth in this Escrow Agreement.
11. VENUE. It is recognized that this Escrow Agreement shall be
deemed to have been entered into by the parties hereto in
Broward County, Florida, and that the property which is the
subject of thin Escrow Agreement is located in Broward County,
Florida. Therefore, it is agreed that venue with respect to
any matter arising herefrom shall only lie in Broward County,
Florida, except to the extent, and only to the extent, that
thin provision with respect to venue is deemed in
contravention of any applicable law.
12. AMBIGUITY: CONFLICTING INSTRUCTIONS. In the event the Escrow
Agent shall be uncertain as to its duties or rights hereunder
or shall receive instructions, claims or demands from any of
the parties hereto or from third persons with respect to the
Pledged documents held hereunder, which in its sole opinion,
are in conflict with any provision of this Agreement, it shall
be entitled to refrain from taking any action until it shall
be directed otherwise in writing by all the parties hereto and
said third persons, if any, or by a final order or judgment of
a court of competent jurisdiction.
13. NOTICES. Notices and deliveries under this Agreement shall be
given or made by certified mail, return receipt requested, as
follows:
PLEDGOR:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
PLEDGEE:
VIRAGEN, INC.
▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ESCROW AGENT:
ATLAS, ▇▇▇▇▇▇▇▇, TROP & BORKSON, P.A.
New River Center, Suite 1900
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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Or such other address as any of the above-mentioned parties
shall have designated in writing to the other parties.
14. TERMINATION. All parties agree that the services of the Escrow
Agent may be terminated by the Escrow Agent or by the joinder
of both Pledgee and Pledgor upon thirty (30) days written
notice to the other. In the event of such termination, the
Pledgee and Pledgor shall mutually agree to a Successor Escrow
Agent. Failing such mutual agreement, application shall be
made to the appropriate court of Broward County, Florida, for
the appointment of a Successor Escrow Agent. Upon such
appointment, the Escrow Agent shall deliver all escrow in
accordance with the terms of this Agreement.
15. MISCELLANEOUS.
a. BENEFIT OF AGREEMENT. This Agreement shall be binding
upon the parties hereto and their heirs, successors,
assigns and personal or legal representatives.
b. MODIFICATION. The Escrow Agent shall not be bound by any
modification, cancellation or rescission of this
Agreement unless in writing and signed by the parties
hereto. In no event, however, shall any modification of
this agreement, which shall affect the rights OR duties
of the Escrow Agent, be binding upon Escrow Agent unless
it shall have given its prior written consent.
c. ATTORNEYS' FEES. In the event Pledgor or Pledgee shall
seek to enforce this Agreement, whether or not through
litigation, the prevailing party shall be entitled to
receive reasonable attorneys' fees and all Costa
incurred in connection with such enforcement, including
fees and costs of appeal.
d. FURTHER COOPERATION. From and after the date of this
Agreement, each of the parties hereto agrees to execute
whatever additional documentation or instruments as are
necessary to carry out the intent and purpose of this
Agreement.
e. WAIVER. No indulgences extended by any party hereto or
any other party shall be construed as a waiver of any
breach on the part of such other party, nor shall any
waiver of one breach be construed as a waiver of any
rights or remedies with respect to any subsequent
breach.
f. CONSTRUCTION. It is the intention of the parties that
the laws of the State of Florida shall govern the
validity of this Agreement, the construction of its
terms, and the interpretation of the rights and duties
of the parties. The parties agree and acknowledge that
each party has reviewed and revised this Agreement and
that the normal rule of construction to the effect that
any ambiguities are to be resolved against the drafting
parties shall not be employed in the interpretation of
this Agreement or any amendment or exhibits thereto.
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g. TRUTH OF RECITALS. The recitals and statements contained
on page 1 of this Agreement are true and correct and are
hereby incorporated into this Agreement.
h. ENTIRE AGREEMENT. This Agreement sets forth the entire
agreement and understanding of the parties on the
subject matter hereof and supersedes all prior
agreements and understandings relating thereto.
i. SEVERABILITY. The invalidity or unenforceability
0(pound) any particular provision of this Agreement
shall not affect the other provisions hereof and this
Agreement shall be construed in all respects as if such
invalid or unenforceable provision was omitted.
j. GENDER. Wherever the context shall so require, all words
herein in any gender shall be deemed to include the
Masculine, feminine or neuter gender; all singular words
shall include the plural and all plural shall include
the singular.
k. HEADINGS. The headings used in this Agreement are used
for reference purposes only and are not to be deemed
controlling with respect to the contents thereof.
l. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, and each such counterpart shall
for all purposes be deemed to be an original.
m. INCORPORATION BY REFERENCE. The Exhibits referred to in
this Agreement are hereby incorporated into this
Agreement by reference.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the day and year first above written.
PLEDGOR:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
PLEDGEE:
VIRAGEN, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
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President
ESCROW AGENT:
ATLAS, ▇▇▇▇▇▇▇▇, TROP & BORKSON, P.A.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Authorized Person
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PROMISSORY NOTE
$50,000 September 1, 1998
FOR VALUE RECEIVED, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ("Maker"), having an address at
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, hereby promises to pay to the
order of VIRAGEN, INC., a Delaware corporation ("Holder"), having an address at
▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, the principal sum fifty
thousand dollars ($50,000), together with simple interest thereon at the annual
rate equal to the greater of (i) 3.5% and (ii) the Mid-Term Applicable Federal
Rate (as defined in Section 1274 of the Internal Revenue Code of 1986, as
amended from time to time, or any successor provision of law) in effect on the
date hereof, at the address of Holder set forth above, payable as follows:
Interest accrued hereon shall be paid semi-annually on each six-month
anniversary of the date of this Note. The entire principal amount of this Note,
together with any then accrued and unpaid interest, shall be payable on the
fifth (5th) anniversary of the date of this Note (the "Maturity Date").
In the event that Holder incurs attorneys' fees and/or costs in
connection with the enforcement of this Note, Maker shall pay Holder,
immediately upon Holder's demand therefor, the amount of all reasonable
attorneys' fees and costs so incurred by Holder.
Each of the following shall constitute an event of default under this
Note ("Event of Default"):
(i) the failure of Maker to pay all sums owing to Holder hereunder
on or before the Maturity Date;
(ii) the failure of Maker to pay to Holder any installment of
interest when due;
(iii) the filing of a petition by Maker pursuant to which Maker
seeks to avail himself of the protection of any federal or
state bankruptcy, insolvency or similar law;
(iv) the initiation of any federal or state bankruptcy or
insolvency proceeding against Maker; or
(v) the making of a general assignment by Maker for the benefit of
Maker's creditors.
Upon the occurrence of an Event of Default (other than the Event of
Default described in subparagraph (i), which is inapplicable to the following
provision) or in the event of the sale, transfer, further pledging or
disposition of any common stock of Holder owned by Maker which
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secures this Note, unless concurrently with such sale, transfer, further pledge
or disposition, Maker prepays a portion of principal necessary to release the
stock being sold, transferred, further pledged or disposed of from said security
interest, Holder may, in Holder's sole and absolute discretion, accelerate this
Note by declaring in a written notice to Maker that the then entire outstanding
principal sum hereof; together with all then accrued and unpaid interest hereon,
is immediately due and payable. The entire amount accelerated (inclusive of any
accrued and unpaid interest) will, commencing the date notice of acceleration is
given, bear interest until paid at a rate equal to the lower of (a) 12% per
annum and (b) the highest rate then permitted by law (the "Default Rate"). In
the event that the Event of Default described in subparagraph (i) occurs,
interest shall then accrue at the Default Rate on the aggregate amount of all
sums which are then owing to Holder hereunder.
Maker may prepay this Note, in whole or in part, at any time or from
time to time, without premium or penalty; provided, however, that any prepayment
will be applied first to pay accrued and unpaid interest and then in reduction
of principal; and, provided further, that each partial prepayment of principal
shall be at least $9,000 or, if greater than $9,000, a multiple of $9,000.
Maker hereby waives presentment, demand, protest, notice of dishonor,
notice of nonpayment, notice of protest and diligence in collection. The
non-exercise by Holder of any of Holder's rights hereunder in any particular
instance shall not constitute a waiver thereof in that or any subsequent
instance. Any waiver of any right, term or condition hereby by Holder must be in
writing to be valid. Maker acknowledges that no oral waiver shall be binding,
nor shall Maker have the right to rely on any oral statement purporting to be a
waiver.
This Note shall inure to the benefit of Holder and Holder's successors
and assigns. This Note shall be binding upon Maker and Maker's successors and
assigns.
In no contingency or event whatsoever shall the amount paid or agreed
to be paid to Holder or deemed advanced for the use, forbearance or detention of
any amount advanced hereunder exceed the highest lawful rate permissible under
any law which a court of competent jurisdiction may deem applicable hereto, and
any such excess shall automatically be credited to the principal amount hereof
so that at all times this Note is and remains a lawful instrument.
Maker shall reimburse Holder the amount of all-documentary stamp taxes
and similar taxes or fees which are payable by Holder or assessable in respect
of this Note.
This Note shall be governed by Florida law in all respects.
MAKER:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
