STOCK PLEDGE AGREEMENT
This
Stock Pledge Agreement is entered into as of February 28, 2007, by and between
the individuals listed on Exhibit A (“Pledgors”) and La Jolla Cove Investors,
Inc. (“Pledgee”).
WHEREAS,
MultiCell Technologies, Inc. (“MultiCell” or the “Company”) and Pledgee are
parties to those certain Debenture Purchase Agreement, Registration Rights
Agreement and 7¾% Convertible Debenture, each dated February 28, 2007
(collectively the “Agreements”) pursuant to which MultiCell, Inc. has, among
other things, sold a 7¾% Convertible Debenture (the “Debenture”) to Pledgee;
and
WHEREAS,
in order to induce the Pledgee to enter into the Agreements, purchase the
Debenture, and advance Multicell $250,000 prior to an effective Registration
Statement (as defined in the 7¾% Convertible Debenture), the Pledgors are
entering into this Stock Pledge Agreement to provide collateral security for
a
portion of MultiCell’s obligations under the Agreements.
NOW,
THEREFORE, in consideration of the mutual promises and covenants contained
herein, in consideration of Pledgee entering into the Agreements, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
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1.
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Pledge
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To
secure
the due and punctual payment and performance of MultiCell’s obligations under
the Agreements only with respect to the repayment any accrued and unpaid
interest thereon of the initial $250,000 advanced to the Company by the Pledgee
prior to an effective Registration Statement for the transaction contemplated
in
the Agreements, Pledgors hereby pledge, hypothecate, assign, transfer and
deliver unto the Pledgee, and hereby grants to the Pledgee a security interest
in the following:
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a.
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2,527,638
shares of Multicell Common Stock listed in Exhibit A attached hereto
(the
“Pledged Securities”) and the certificates representing or evidencing the
Pledged Securities, and all cash, securities, interest, dividends,
rights
and other property at any time and from time to time received, receivable
or otherwise distributed in respect of or in exchange for any or
all of
the Pledged Securities;
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b.
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all
other property hereafter delivered to the Pledgee in substitution
for or
in addition to any of the foregoing, all certificates and instruments
representing or evidencing such other property and all cash, securities,
interest, dividends, rights and other property at any time and from
time
to time received, receivable or otherwise distributed in respect
of or in
exchange for any or all thereof;
and
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c.
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all
proceeds of all of the foregoing (all such Pledged Securities, additional
shares, certificates, instruments, cash, securities, interest, dividends,
rights and other property being collectively called the
“Collateral”);
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1
To
have
and to hold the Collateral, together with all rights, titles, interests,
privileges and preferences appertaining or incident thereto, unto the Pledgee,
its successors and assigns, subject, however, to the terms and conditions
hereafter set forth.
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2.
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Representations
and Warranties
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The
Pledgors represent and warrant as follows:
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a.
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The
Pledgors own all of the Pledged Securities, free and clear of any
liens,
encumbrance, charge or security interest of any nature whatsoever,
other
than the security interest granted
hereunder.
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b.
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All
shares of stock included in the Pledged Securities are duly authorized
and
validly issued, fully paid, non-assessable and subject to no options
to
purchase or similar rights of any person or entity. The Pledgors
are not
and will not become a party to or otherwise bound by any agreement,
other
than this Pledge Agreement, which restricts in any manner the rights
of
any present or future hold of any of the Pledged Securities with
respect
thereto.
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c.
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This
Stock Pledge Agreement has been duly executed and delivered by the
Pledgors and constitutes a valid and binding obligation of the Pledgors.
Upon delivery of the Pledged Securities to the Pledgee hereunder,
the
Pledgee will have valid and perfected security interests in the Collateral
subject to no prior lien. No registration, recordation or filing
with any
governmental body, agency or official is required in connection with
the
execution or delivery of this Stock Pledge Agreement, or necessary
for the
validity or enforceability hereof or for the perfection of the security
interest granted herein. The execution, delivery performance and
enforcement of this Stock Pledge Agreement do not and will not contravene,
or constitute a default under any provision of applicable law or
regulation or of any agreement, judgment, injunction, order decree
or
other instrument binding upon the Pledgors or result in the creation
or
imposition of any lien (other than the security interests granted
herein)
upon any asset of the Pledgors.
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| 3. |
Delivery
of Pledged Securities
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All
Pledged Securities delivered to the Pledgee by Pledgors pursuant hereto shall
be
in suitable form for transfer by delivery, or shall be accompanied by duly
executed instruments of transfer or assignment in blank, with signatures
appropriately guaranteed, and accompanied in each case by any required transfer
tax stamps, all in form and substance reasonably satisfactory to
Pledgee.
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Filing;
Further Assurances
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The
Pledgors will, at their expense and in such manner and form as the Pledgee
may
reasonably require, execute, deliver, file and record any financing statement,
specific assignment or other paper and take any other action that may reasonably
be necessary or desirable, or that the Pledgee may reasonably request, in order
to create, preserve, perfect or validate any security interest or to enable
the
Pledgee to exercise and enforce its rights hereunder with respect to any of
the
Collateral. To the extent permitted by applicable law, the Pledgors hereby
authorize the Pledgee to execute and file, in the name of the Pledgors or
otherwise, Uniform Commercial Code financing statements which the Pledgee in
its
sole discretion may deem necessary or appropriate to further perfect the
security interest granted herein.
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5.
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Default
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The
occurrence of any of the following shall constitute a default
hereunder:
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a.
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90
days elapses from the date of this Stock Pledge Agreement without
an
effective Registration Statement (as defined in the
Debenture);
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b.
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any
representation or warranty of the Pledgors contained herein shall
be
untrue in any material respect; or
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c.
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the
Pledged Securities trade at a price below
$0.16.
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Upon
the
occurrence of a default, and when the Pledged Securities trade at a price of
$0.40 or less, the Pledgee may exercise from time to time any rights and
remedies available to it under the Uniform Commercial Code as in effect in
California or otherwise available to it, including, but not limited to, sale,
assignment or other disposal of the Pledged Securities in exchange for cash
or
credit. Any proceeds of any disposition of the Pledged Securities shall be
applied first to the payment of the expenses of such sale or other realization,
second to payment in full of all amounts owing under the Agreements with respect
to repayment of the initial $250,000 advanced by Pledgee and any accrued and
unpaid interest thereon, and finally, assuming sufficient funds remain after
repayment of the initial $250,000 and accrued and unpaid interest thereon,
80%
of any surplus remaining from such proceeds shall be paid to the Pledgors within
four (4) business days of the sale of all of the Pledged Securities. Pledgors
hereby personally guarantee repayment of any shortfall resulting from the sale
of the Pledged Securities and repayment of the initial $250,000 amount advanced
by Pledgee under the Debenture, plus any accrued and unpaid interest
thereon.
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Termination
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Upon
the
repayment by the Company or conversion into shares of Multicell’s Common Stock
by Pledgee of the $250,000 and any accrued and unpaid interest thereon advanced
to the Company by Pledgee under terms and conditions of the Agreements, this
Stock Pledge Agreement shall terminate and all rights to the Collateral shall
revert to the Pledgors. Upon any such termination, the Pledgee will, at
Pledgors’ expense, execute and deliver to the Pledgors such documents as the
Pledgors shall reasonably request to evidence such termination or the release
of
the Collateral.
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7.
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Notices
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All
notices, requests, demands or other communications required or permitted
hereunder shall be in writing and shall be delivered personally, or sent by
facsimile machine or by a nationally recognized overnight courier service,
and
shall be deemed given when so delivered personally, or by facsimile machine
or
overnight courier service as follows:
For
Pledgors:
See
Exhibit B attached hereto.
For
Pledgee:
La
Jolla
Cove Investors, Inc.
0000
Xxxxxxxx Xxxxxx, Xxxxx 000
Xx
Xxxxx,
XX 00000
Facsimile:
000-000-0000
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8.
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General
Provisions.
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a. Entire
Agreement; Modifications; Waiver.
This
Stock Pledge Agreement constitutes the entire agreement between the parties
pertaining to the subject matter contained in it, except for any other
agreements referenced herein. This Stock Pledge Agreement supersedes all prior
and contemporaneous agreements (other than those entered into in writing
simultaneously with this Stock Pledge Agreement), representations, and
understandings of the parties. No supplement, modification, or amendment of
this
Stock Pledge Agreement shall be binding unless executed in writing by all the
parties. No waiver of any of the provisions of this Stock Pledge Agreement
shall
be deemed, or shall constitute, a waiver of any other provisions, whether or
not
similar, nor shall any waiver constitute a continuing waiver. No waiver shall
be
binding unless executed in writing by the party making the waiver.
b. Counterparts.
This
Stock Pledge Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instruments. Facsimile execution shall be deemed
originals.
c. Severability.
Each
term, covenant, condition or provision of this Stock Pledge Agreement shall
be
viewed as separated and distinct, and in the event that any such term, covenant,
condition or provision shall be held by a court of competent jurisdiction to
be
invalid, the remaining provisions shall continue in full force and
effect.
d. Necessary
Acts.
Each
party to this Stock Pledge Agreement agrees to perform any further acts and
execute and deliver any further documents that may be reasonably necessary
to
carry out the provisions of this Stock Pledge Agreement.
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e. Interest.
At such
time that money is either due to Pledgors or Pledgee, and if such amount is
not
paid within five business days, then that amount shall accrue interest at the
rate of nine and three-quarters percent (9 ¾%) per annum.
f. Attorneys’
Fees.
Should
any party hereto employ an attorney for the purpose of enforcing or constituting
this Stock Pledge Agreement, or any judgment based on this Stock Pledge
Agreement, in any legal proceeding whatsoever, including insolvency, bankruptcy,
arbitration, declaratory relief or other litigation, the prevailing party shall
be entitled to receive from the other party or parties thereto reimbursement
for
all reasonable attorneys’ fees and all reasonable costs, including but not
limited to service of process, filing fees, court and court reporter costs,
investigative costs, expert witness fees, and the cost of any bonds, whether
taxable or not, and that such reimbursement shall be included in any judgment
or
final order issued in that proceeding. The “prevailing party” means the party
determined by the court to most nearly prevail and not necessarily the one
in
whose favor a judgment is rendered.
g. Stop
Transfer Order.
In the
event that any type of stop transfer order is given to the Company’s transfer
agent regarding the Pledged Securities and, as a result thereof, Pledgee is
unable to sell any portion of the Pledged Securities, the parties acknowledge
that Pledgee will incur substantial damages as a result thereof, and Pledgors
agrees to pay liquidated damages to Pledgee in the amount of $100,000, which
shall be in addition to all other obligations of Pledgors
hereunder.
h. Time
of Essence.
Time is
of the essence in the performance of all obligations under this Stock Pledge
Agreement.
i. Governing
Law.
The
parties expressly agree that the laws of the State of California shall govern
the validity, performance and enforcement of this Stock Pledge Agreement. Should
either party institute legal suit or action for enforcement of any obligation
contained herein, it is hereby agreed that the California courts shall have
personal and in rem jurisdiction, and that venue of such suit or action shall
be
in the downtown branch of the courts of San Diego County,
California.
j. Jury
Trial Waiver.
To the
fullest extent permitted by law, each of the parties hereto hereby knowingly,
voluntarily and intentionally waives its respective rights to a jury trial
of
any claim or cause of action based upon or arising out of this Stock Pledge
Agreement or any other document or any dealings between them relating to the
subject matter of this Stock Pledge Agreement and other documents.
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SIGNATURE
PAGE
IN
WITNESS WHEREOF the parties have executed this Stock Pledge Agreement effective
as of the day and year first above written.
| Pledgors: | La Jolla Cove Investors, Inc.: |
| By: /s/Xxxxxxx XX Xxxxx | By: /s/X.X. Xxxx |
| By: /s/W. Xxxxxx Xxxxxx | Its: Portfolio Manager |
By:
/s/Xxxxxxx
Xxxxx
By:
/s/Xxxxxx
Page
By:
/s/Xx
Xxxxxxx
By:
/s/Xxxx
Xxxxx
By:
/s/Xxxxxxx
Xxxx
By:
/s/Xxxxx
Xxxxxxxxx
By:
/s/Xxx
Xxx
By:
/s/Xxxxx
Xxxxxxxxxx
By:
/s/Xxxxxxx
Xxxxxxx
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EXHIBIT
A
TO STOCK PLEDGE AGREEMENT
2,527,683
registered shares of common stock of MultiCell Technologies, Inc. owned by
the
following Pledgors:
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W.
Xxxxxx Xxxxxx
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Xxxxxxx
Xxxxx
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Xxx
Xxxx
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Xx
Xxxxxxx
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Xxxxx
Xxxxxxxxx
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Xxxxxxx
Xxxxx
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Xxx
Xxx
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Xxxxx
Xxxxxxxxxx
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Xxxxxxx
Xxxxxxx
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Xxxxxxxx
Xxxx
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Xxxx
Xxxxx
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EXHIBIT
B
TO STOCK PLEDGE AGREEMENT
Individual
Signature Pages for Pledgors.
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