EXHIBIT 10.5
Schedule 1.02(b)
to
Stock Purchase Agreement
PLEDGE AND SECURITY AGREEMENT
Secured Party Name and Address Debtor's Name and Address
UTEK CORPORATION LEXON, INC.
000 Xxxxxxx Xxxxxx 0000 Xxxxx Xxxx, Xxxxx 000
Xxxxx Xxxx, Xxxxxxx 00000 Xxxxx, Xxxxxxxx 00000-0000
("Secured Party") ("Debtor")
As of the date indicated above, the undersigned Debtor and the
undersigned Secured Party, with addresses as they appear herein, agree as
follows:
1. Grant of Security Interest. For value received, Debtor, LEXON, INC.,
an Oklahoma corporation, grants to UTEK CORPORATION, Secured Party, a first
prior security interest in the pledged shares and the collateral described in
Paragraph 2 ("Collateral") to secure the obligations of Debtor to Secured Party,
pursuant to that certain Secured Promissory Note ("Note") dated of even date
herewith.
2. Collateral. The Collateral consists of 1,000 shares ("Pledged
Shares") of Common Stock of Cancer Diagnostics, Inc. ("CDI") which represents
all the issued and outstanding shares of CDI common stock. The Collateral also
includes all proceeds from the sale of such Collateral. The Pledged Shares shall
be issued in the name of Debtor or duly endorsed for transfer to Debtor or
endorsed in blank.
3. Escrow of The Pledged Shares. The Pledged Shares shall be delivered
to Xxx Xxxxxx, Esquire, in escrow ("Escrow Agent"), who hereby agrees to hold
the Pledged Shares for the benefit of Debtor and either surrender possession
thereof upon full payment of the Note or return the Pledged Shares to Secured
Party upon the demand of Secured Party during an event of default under the
Note, after the giving of all notices required in the Note and hereunder and the
expiration of all grace periods hereunder and under the Note.
4. Dividends and Voting Pledged Shares. While the Note remains unpaid
and not in default, Debtor shall be entitled to receive all dividends with
respect to and to vote all the Pledged Shares. So long as this Agreement and the
Note are not in default, Debtor shall be entitled to attend all meetings, to
vote the Pledged Shares and consent to shareholder actions in their sole
discretion and to enjoy and exercise all the rights of ownership of the
Collateral, except that the Pledged Shares shall not be sold by Debtor until the
Note is paid in full.
5. Negative Covenant of Debtor. While the Note remains not paid in
full, neither Debtor nor CDI will make any distributions of money or property to
its principal founding shareholders, directors, or officers, whether as loans,
cash dividends, repayment of loans or otherwise, other than the payment of
reasonable compensation for services rendered.
6. Release of Pledged Shares. Upon payment in full of the Note and all
interest and other obligations payable by Debtor under the Note, the security
interest hereby created shall ve released automatically and all certificates
representing the Pledged Shares and all other rights, titles and interests in
and to the Pledged Shares shall return and deliver to Debtor.
7. No Transfer of Pledged Shares. While the Note remains unpaid, Debtor
shall not have the right, power or authority to sell, assign, pledge or convey
the Pledged Shares or any interest in the Pledged Shares without Secured Party's
prior written consent, so long as the security interest hereby created remains
in effect.
8. Representations and Warranties with regard to the Pledged Shares.
Debtor represent and warrant to Secured Party that Debtor has full legal power
to grant to Secured Party the security interest hereby granted in the Pledged
Shares as herein provided.
9. Events of Default. Debtor shall be in default under this Agreement
upon the happening of any of the following events or conditions, herein called
"Events of Default":
(a) Default in the payment of any liability of Debtor to Secured
Party under the Note; or
(b) Any event which results in the acceleration of the maturity of
the Note; or
(c) Any Event of Default under the Note.
10. Remedies with Respect to Pledged Shares. During the continuation of
any Event of Default:
(a) Secured Party may, with 15 days' written notice to Debtor,
declare all obligations of Debtor under the Note to be
immediately due and payable; and
(b) Secured Party shall be entitled to proceed on its security
interest in the Pledged Shares in accordance with the Uniform
Commercial Code then in effect in Florida, by giving Debtor at
least 15 days' prior notice thereof; provided however, Debtor
shall cooperate and use all reasonable efforts to assist Secured
Party in foreclosing upon its security interest in the
Collateral, including without limitation, consenting to the
appointment of a receiver.
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(c) Secured Party will be entitled to recover all costs plus
reasonable attorneys' fees and expenses and the fees and
expenses of a receiver, if one is appointed, incurred in
holding the Pledged Shares and enforcing its rights hereunder
before applying the balance of any proceeds from the
disposition of the Pledged Shares to the satisfaction of
Debtor's obligations under the Note.
(d) Secured Party will have the right to transfer any or all of
the Pledged Shares into the name or the name of their
nominees, and shall be under a duty, to exercise such rights
and privileges as required by law.
11. Governing Law. The law governing this secured transaction is the
State of Florida. For words or phrases defined in the Florida Uniform Commercial
Code, the Code definition will control their meaning. A determination that any
provision contained herein is not enforceable will have no effect on the
validity of the remaining provision.
12. Obligations of Debtor Secured by this Agreement. The security
interest herein granted is given to secure all of the obligations of Debtor to
Secured Party under the Note and all extensions and renewals of liabilities for
any term or terms, all interest due or to become due on the liabilities of
Debtor to Secured Party under the Note, and all costs, attorneys' fees, and
other expenditures of Secured Party in the collection and/or enforcement of any
obligation or liability of Debtor to Secured Party thereunder.
13. Expenditures of Secured Party. Debtor is liable for and agrees to
pay Secured Party all expenditures of Secured Party for taxes of Collateral, and
all costs, attorneys' fees and other expenditures of Secured Party in the
enforcement or collection of the Note. All rights and remedies of Secured Party
hereunder are cumulative of all other rights or remedies provided by law, and
may be exercised singularly or concurrently; and the exercise of any one or more
of them will not be a waiver of any other. No waiver, change, modification or
discharge of any of Secured Party's rights or Debtor's duties as so specified or
allowed will be effective unless contained in a written instrument signed by
Secured Party.
14. Waivers. No act, delay, omission, or course of action by Debtor or
Secured Party, including Secured Party's waiver of remedy because of any default
hereunder, will constitute a waiver of any of Secured Party's rights and
remedies under this Agreement or any other agreement between the parties, or
under the documents evidencing the liabilities secured hereby. Waiver by Secured
Party of any rights or remedies under the terms of this Agreement or with
respect to any of Debtor's liabilities to Secured Party will not be a bar to the
exercise of any right or remedy on any subsequent occasion. All rights and
remedies of Secured Party are cumulative and may be exercised singularly or
concurrently, and the exercise of any one or more of them will not be a waiver
of any other. No waiver, change, modification or discharge of any of Secured
Party's rights of Debtor's duties as so specified or allowed will be effective
unless in writing and signed by Secured Party.
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15. Agreement Binding on Successors and Assigns. This Agreement shall
be binding upon the heirs, executors, administrators, successors and assigns of
the parties hereto.
SECURED PARTY DEBTOR
UTEK CORPORATION LEXON, INC.
By: /s/ XX. XXXXXXXX XXXXX By /s/ XXXXXXX XXXXX
Xx. Xxxxxxxx Xxxxx Xxxxxxx Xxxxx, President
Chairman and Chief Executive Officer
ESCROW AGENT:
/s/ XXX XXXXXX
Xxx Xxxxxx, Escrow Agent
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