LOAN AND PLEDGE AGREEMENT
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This Loan and Pledge Agreement (the "Agreement") dated
as of January 28, 2000, by and between Cistron Biotechnology,
Inc., a Delaware corporation ("Cistron"), and Xxxxxxx X. Xxxxxxx
("Xxxxxxx").
1. Cistron hereby loans to Xxxxxxx the amount of
$102,158.27 (the "Loan"), on a non-recourse basis secured only
by the Four Hundred Eighty-One Thousand Seven Hundred Twenty-Two
(481,722) shares of Cistron common stock, $.01 par value per
share (the "Shares"), being purchased by Xxxxxxx upon exercise
of options to purchase the Shares.
2. The Loan is evidenced by a non-recourse,
promissory note (the "Note") executed by Xxxxxxx in favor of
Cistron, secured by a pledge of the Shares by Xxxxxxx. Xxxxxxx
does not assume any personal liability or responsibility for the
failure to pay the principal amount of the Note. The sole
remedy available upon such failure shall be to proceed against
the Collateral in accordance with the terms of this Agreement.
3. The Note shall be due and payable in full on the
earliest of January 1, 2002, the merger or sale of Cistron, or
the liquidation or dissolution of Cistron. In addition, the
Note shall be due and payable in part or in whole to the extent
provided under paragraph 5.
4. Xxxxxxx agrees to pay to Cistron all expenses
incurred by Cistron, including reasonable attorneys' fees, in
proceeding against the Collateral in which the security interest
is granted under this Agreement.
5. Xxxxxxx agrees to do, execute, acknowledge,
deliver, file and take any and all such other actions as Cistron
may deem necessary or advisable in order to direct Cistron's
transfer agent for its common stock that beginning on the date
hereof and ending on the date the Note is paid in full, the
transfer agent shall pay all proceeds from the sale of Shares
and any
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dividends or other distributions with respect to the Shares
directly to Cistron. Cistron shall apply such proceeds,
dividends or distributions to the reduction of the principal
amount of the Note. In connection with any sale of the Shares
prior to the full payment of the Note, Cistron shall deliver the
certificates representing the Shares to the transfer agent for
Cistron's common stock upon receipt of the foregoing proceeds
from any such sale.
6. Xxxxxxx hereby pledges with Cistron as collateral
(the "Collateral") security for the due and punctual payment of
the Note in accordance with its terms and the performance by
Xxxxxxx of his obligations under the Note, the Shares (which
include any other securities or property receivable or
distributable with respect thereto after the date hereof). The
certificate(s) representing the Shares, together with a stock
power(s) attached thereto executed in blank by Xxxxxxx, are
being delivered to Cistron and shall be retained by Cistron
until the Note has been paid in full. At the time the Note
shall have been paid in full, Cistron shall deliver to Xxxxxxx
the certificate representing the Shares, together with the stock
power.
7. So long as no Event of Default (as hereinafter
defined) shall have occurred and be continuing Xxxxxxx shall
have the irrevocable proxy to vote and have all other consensual
rights with respect to the Shares, and Cistron shall deliver to
Xxxxxxx any proxies, reports or other materials received by it
which are necessary to enable Xxxxxxx to exercise such rights.
Upon the occurrence of an Event of Default, all voting and other
consensual rights of Xxxxxxx in the Shares shall cease and may
be exercised by Cistron.
8. Upon the occurrence of an Event of Default,
Cistron shall have and may exercise all rights and remedies
afforded to a secured party under the New Jersey Uniform
Commercial Code, including, without limitation, the right to
sell the Shares at a public or private sale (provided that
Cistron shall give Xxxxxxx at least 5 days prior written notice
of the date in
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which any public sale is to be held or the date after which any
private sale may be made), at which sale Cistron may purchase
the Shares (free from any right of redemption by Xxxxxxx, which
right is hereby waived and released) and have the right to
retain the Shares in full satisfaction of Xxxxxxx'x obligations
under the Note in accordance with the provisions of the New
Jersey Uniform Commercial Code.
9. Each of Xxxxxxx and Cistron has all power and
authority necessary to enter into and consummate the
transactions contemplated by this Agreement and this Agreement
is valid and enforceable against each of Cistron and Xxxxxxx in
accordance with its terms. Xxxxxxx has not created or permitted
any lien or encumbrance to attach to the Shares, other than the
pledge set forth in this Agreement.
10. If any of the following events ("Events of
Default") shall occur:
(a) Xxxxxxx shall default in the payment of any
part of the principal on the Note when the same shall become due
and payable, whether at maturity, by acceleration or otherwise;
(b) Xxxxxxx shall default in the performance or
compliance with any term or provision contained in this
Agreement;
(c) Xxxxxxx shall (i) become insolvent or be
unable, or admit in writing his inability, to pay his debts as
they mature, (ii) make a general assignment for the benefit of
creditors, (iii) be adjudicated a bankrupt or insolvent or file
a voluntary petition in bankruptcy, (iv) file a petition or an
answer seeking an arrangement with creditors or to take
advantage of any insolvency law or (v) file an answer admitting
to the material obligations of, or consent to, or default in
answering, or fail to have dismissed within 60 days after the
filing thereof, a petition filed against him in any bankruptcy
or insolvency proceeding; or
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(d) If any of the Shares shall be encumbered,
pledged, attached or levied upon or seized at any legal
proceeding; then the holder of the Note may at any time by written
notice to Xxxxxxx (or without such notice with respect to subsection
(c) above), declare the entire unpaid principal on the Note to be
forthwith due and payable, without other notices or demands of
any kind, all of which are hereby waived by Xxxxxxx.
11. Xxxxxxx will do, execute, acknowledge, deliver,
file and record all such further acts, conveyances, transfers
and assurances as Cistron may deem necessary or advisable to
perfect, preserve, protect and continue the pledge granted by
this Agreement.
12. All notices and communications provided for
herein shall be delivered or mailed by registered or certified
mail, postage prepaid, or telegraphed, addressed as follows:
If to Cistron at:
Cistron Biotechnology, Inc.
00 Xxxxxxxxxx Xxxxxx
Xxxx Xxxxx, Xxx Xxxxxx 00000
If to Xxxxxxx:
Xx. Xxxxxxx X. Xxxxxxx
00 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
or such other address or to the attention of such other person
as the recipient party has specified by prior written notice to
the sending party.
13. All representations and warranties made by
Xxxxxxx and Cistron herein shall survive the making of the Loan
and the delivery of the Note hereunder.
14. No delay on the part of Cistron in exercising any
right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any right,
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power or privilege hereunder preclude other or further exercise
thereof, or the exercise of any other right, power or privilege.
The rights and remedies herein provided are cumulative and are
not exclusive of any rights or remedies which Cistron would
otherwise have.
15. This Agreement and the Note shall be construed
under the laws of the State of New Jersey applicable to
agreements made and performed entirely in such State.
16. This Agreement shall be binding upon the
successors and assigns of the parties hereto; provided, however,
that this Agreement and the Shares shall not be assignable by
Xxxxxxx.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the date and year first above written.
CISTRON BIOTECHNOLOGY, INC.
By:/S/XXXXXXX X. XXXXXXX
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Xxxxxxx X. Xxxxxxx
Title: CHAIRMAN & CEO
/S/ XXXXXXX X. XXXXXXX
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Xxxxxxx X. Xxxxxxx
