Unassociated Document


     

     

     

     

     

     

     

    
      
        

      

       

    

    PLEDGE
      AGREEMENT 

     

    
      
        

      

    

    
 

     

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

      INDEX
        

       

      
        	
                Article

              	
                 

              	
                 

              	
                 

              	
                Page

              	
                 

              
	
                1.

              	
                 

              	
                RECITALS
                  AND DEFINITIONS

              	
                 

              	 	 
	 	 	 	 	 	 
	
                2.

              	
                 

              	
                CREATION
                  OF A PLEDGE AND SECURED OBLIGATIONS

              	
                 

              	 	 
	 	 	 	 	 	 
	
                3.

              	
                 

              	
                VALIDITY
                  OF THE SECURITY

              	
                 

              	 	 
	 	 	 	 	 	 
	
                4.

              	
                 

              	
                PERFECTION
                  OF THE PLEDGE OVER SHARES

              	
                 

              	 	 
	 	 	 	 	 	 
	
                5.

              	
                 

              	
                PLEDGOR'S
                  REPRESENTATIONS AND WARRANTIES

              	
                 

              	 	 
	 	 	 	 	 	 
	
                6.

              	
                 

              	
                RIGHT
                  TO RECEIVE DIVIDENDS AND VOTING RIGHTS

              	
                 

              	 	 
	 	 	 	 	 	 
	
                7.

              	
                 

              	
                FREE
                  CAPITAL INCREASES

              	
                 

              	 	 
	 	 	 	 	 	 
	
                8.

              	
                 

              	
                PLEDGOR'S
                  UNDERTAKINGS

              	
                 

              	 	 
	 	 	 	 	 	 
	
                9.

              	
                 

              	
                ENFORCEMENT
                  OF THE PLEDGE

              	
                 

              	 	 
	 	 	 	 	 	 
	
                10.

              	
                 

              	
                THE
                  NOTEHOLDERS' REPRESENTATIVE

              	
                 

              	 	 
	 	 	 	 	 	 
	
                11.

              	
                 

              	
                DISCHARGE
                  OF THE PLEDGE

              	
                 

              	 	 
	 	 	 	 	 	 
	
                12.

              	
                 

              	
                NOTICES

              	
                 

              	 	 
	 	 	 	 	 	 
	
                13.

              	
                 

              	
                MISCELLANEOUS

              	
                 

              	 	 
	 	 	 	 	 	 
	
                14.

              	
                 

              	
                GOVERNING
                  LAW AND JURISDICTION

              	
                 

              	 	 
	 	 	 	 	 	 
	
                15.

              	
                 

              	
                TAXES
                  CHARGES AND EXPENSES

              	
                 

              	 	 
	 	 	 	 	 	 
	
                SCHEDULE
                  1

              	 	 	 


      

       

       

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    BETWEEN

     

    
      	1.  	
              FINANZIARIA
                SIRTON S.P.A., a
                joint stock company (società
                per azioni)
                incorporated and organised under the laws of the Republic of Italy
                with
                registered office at Piazza XX Settembre, 2, 22079 Villa Guardia,
                Como,
                Italy, Fiscal Code and number of registration in the Companies Register
                of
                Como No. 00193780137, with a fully paid corporate capital of Euro
                4,791,129.00.,
                represented by Dr. Laura Ferro duly empowered by the resolution of
                the
                board of directors of May 24, 2004 (the “Pledgor”);

            


    

     

    AND

     

    
      	2.  	
              I-Bankers
                Securities Inc. (the “Noteholders’
                Representative”),
                as representative of the holders of the Series A Senior Convertible
                Promissory Notes (the “Notes”)
                of Gentium S.p.A., a joint
                stock company (società
                per azioni)
                incorporated and organised under the laws of the Republic
                of Italy with
                registered office at Piazza XX Settembre, 2, 22079, Villa Guardia,
                Como,
                Italy,
                Fiscal Code and number of registration in the Companies Register
                of Como
                No. 02098100130, with a fully paid corporate capital of Euro 5,000,000.00,
                (“Gentium”
                or the “Company”),
                which Notes were issued pursuant to Subscription Agreements (the
                “Subscription
                Agreements”)
                between Gentium and the Noteholders, as
                purchasers.

            


    

     

    


    WHEREAS

     

    
      	(A) 	
              The
                Pledgor
                is the owner of 100% of the capital of Gentium.

            


    

     

    
      	(B) 	
              It
                is a condition precedent to the Noteholders’ purchasing the Notes pursuant
                to the Subscription Agreements and any other relating agreements
                that the
                Pledgor, as the owner of all the issued and outstanding stock of
                Gentium,
                pledges the shares of Gentium as listed in Schedule 1 hereto (the
                “Pledged
                Shares”)
                to the Noteholders’ Representative and enters into this Pledge
                Agreement.

            


    

     

    
      	(C) 	
              Under
                the Private Placement Memorandum, Section 11 of the Financing Terms
                Agreement and Section 5 of the Note, the Pledgor will secure the
                performance of the Company’s obligations under the Notes through a pledge
                to the Noteholders of up to one million six hundred fifty thousand
                (1,650,000) shares constituting thirty-three percent (33%) of the
                shares
                of outstanding Common Stock of the
                Company.

            


    

     

    NOW,
      THEREFORE,
      the
      Pledgor agrees with the Noteholders’ Representative as follows:

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    
      	1.  	
              RECITALS
                AND DEFINITIONS

            


    

     

    
      	1.1  	
              The
                above recitals together with Schedules constitute an integral and
                essential part of this agreement.

            


    

     

    
      	1.2  	
              Save
                otherwise provided for in this agreement, the terms defined in the
                Subscription Agreements, the Notes and any other relating agreements
                shall
                have the same meaning where used in this
                agreement.

            


    

     

    
      	2.  	
              CREATION
                OF THE PLEDGE
                AND SECURED OBLIGATIONS

            


    

     

    
      	2.1  	
              The
                Pledgor unconditionally and irrevocably pledges in favour of the
                Noteholders’ Representative (for itself and on behalf of the Noteholders)
                the Pledged Shares, as security for the due and punctual payment
                of
                Gentium’s obligations under the Notes, when due, whether at maturity, by
                acceleration, by notice of prepayment or otherwise (the “Secured
                Obligations”)
                subject to the terms and conditions set forth
                herein.

            


    

     

    
      	2.2  	
              The
                rights arising under the pledge created pursuant to this agreement
                shall
                cover:

            


    

     

    
      	2.2.1  	
              the
                Pledged Shares, as defined above;

            


    

     

    
      	2.2.2  	
              all
                dividends subsequent to the occurrence of an Event of Default according
                to
                Section 8 of the Notes, as provided for in article 6
                below;

            


    

     

    
      	2.2.3  	
              all
                profits or revenues deriving from the
                above;

            


    

     

    
      	2.3  	
              Upon
                condition that an Event of Default according to Section 8 of the
                Notes
                occurs, the rights arising under this pledge shall extend to any
                increases
                in the Pledged Shares such as increases in the nominal value or new
                shares
                deriving from free capital increases which are owned by the Pledgor,
                as
                well as all rights in respect thereof and all dividends, but with
                the
                express exclusion of increases in the nominal value or new shares
                deriving
                from paid increase of capital.

            


    

     

    
      	2.4  	
              The
                assets and interests mentioned in articles 2.1, 2.2 and 2.3 are
                hereinafter collectively referred to as the “Pledged
                Assets”.

            


    

    
      	 	 


    

    
      	2.5
               	For
              the sole purpose of the tax treatment of this agreement, the Pledgor
              declares that the value of the Pledged Shares is equal to Euro 1,650,000,
              that is the nominal value of the shares as resulting from the articles
              of
              association of Gentium.


    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    
      	3.  	
              VALIDITY
                OF THE SECURITY

            


    

     

    
      	3.1  	
              The
                security constituted by this agreement shall remain valid in its
                entirety
                notwithstanding any partial repayment or satisfaction of the Secured
                Obligations, until these are satisfied in full.

            


    

     

    
      	3.2  	
              The
                security constituted by this agreement shall be in addition to any
                other
                real or personal guarantee to which the Noteholders may be entitled
                in
                respect of all or some of the Secured
                Obligations.

            


    

     

    
      	4.  	
              PERFECTION
                OF THE PLEDGE OVER SHARES 

            


    

     

    
      	4.1.  	
              The
                Pledgor, after having accomplished all the formalities required by
                the
                applicable provisions for executing the pledge provided for by this
                agreement, will deliver
                as soon as reasonably practicable to the Noteholders’ Representative the
                Pledged Shares.

            


    

     

    
      	4.2.  	
              The
                Noteholders’ Representative shall (i) not dispose, sell or constitute any
                right over the Pledged Shares save that pursuant to article 9 of
                this
                agreement, and (ii) keep and preserve the Pledged Shares in compliance
                with the provisions of the Italian Civil Code and any othe applicable
                provisions of law.

            


    

     

    
      	5.  	
              PLEDGOR’S
                REPRESENTATIONS AND
                WARRANTIES

            


    

     

    
      	5.1  	
              The
                Pledgor represents and warrants to the Noteholders’ Representative
                that:

            


    

     

    
      	5.1.1  	
              it
                has full capacity to enter into this agreement and to perform the
                obligations under this agreement, and that all the resolutions necessary
                in connection thereto have been duly and validly adopted and have
                not been
                nor will be, to the extent necessary,
                withdrawn;

            


    

     

    
      	5.1.2  	
              The
                Pledgor and Gentium are joint stock companies, validly incorporated
                and
                existing under the laws of the Republic of
                Italy;

            


    

     

    
      	5.1.3  	
              The
                Pledgor and Gentium are not at the date hereof subject to any insolvency
                proceedings of any kind or any other proceedings or action whatsoever
                which could prevent the regular carrying out of the corporate objects,
                or
                constitutes any restriction to the rights of their creditors or prevents
                the execution of this agreement and of pledge herein provided
                for;

            


    

     

    
      	5.1.4  	
              the
                Pledged Shares represent up to 33% of the corporate capital of Gentium
                and
                have been validly issued, subscribed and are fully paid up in the
                total
                nominal amount of Euro 1,650,000;

            


    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    
      	5.1.5  	
              the
                Pledgor has not assigned, transferred or otherwise disposed of, or
                otherwise agreed to sell, transfer or otherwise dispose of any of
                its
                rights, title or interest to or in the Pledged
                Shares;

            


    

     

    
      	5.1.6  	
              the
                Pledgor is the sole legal owner of the Pledged Shares, which are
                free and
                clear of any security or third party right, real or personal, of
                any kind,
                with the exception of those arising directly and exclusively out
                of the
                law and the pledge granted to the Noteholders’ Representative
                hereunder;

            


    

     

    
      	5.1.7  	
              the
                Pledged Shares are not subject to attachment or seizure or any other
                restrictive measures and are freely transferable and no procedures
                are
                pending, including precautionary measures, in relation to the Pledged
                Shares, before any Court, arbitration panel or other Italian authorities,
                nor it is aware of third parties’ intention to commence such
                actions;

            


    

     

    
      	5.1.8  	
              the
                setting up of this pledge and the provisions under this agreement
                do not
                conflict with any other agreements or arrangements to which the Pledgor
                or
                Gentium are parties, or with any other provisions of law or corporate
                documents binding for the Pledgor or
                Gentium.

            


    

     

    
      	6.  	
              RIGHT
                TO RECEIVE DIVIDENDS AND VOTING
                RIGHTS

            


    

     

    
      	6.1  	
              Until
                the occurrence of an event defined as an Event of Default in Section
                8 of
                the Notes, no dividends attached to the Pledged Shares shall be paid
                to
                the Pledgor. Upon the occurrence of an event defined as an Event
                of
                Default in Section 8 of the Notes and as far as such Event of Default
                shall be continuing, any dividend due by Gentium in relation to the
                Pledged Shares shall be paid to the Noteholders’
                Representative.
                The dividends received as above shall be used by the Noteholders’
                Representative to discharge the Secured Obligations already expired
                or,
                should no Secured Obligations have expired, shall be retained by
                the
                Noteholders’ Representative as a security of the Secured
                Obligations.

            


    

     

    
      	6.2  	
              Notwithstanding
                the provisions of article 2352 of the Italian Civil Code, the right
                to
                exercise voting rights at the shareholders’ meetings of Gentium, which are
                attached to the Pledged Shares, shall be conditionally waived by
                the
                Noteholders and shall be exercised by the Pledgor, but the occurrence
                of
                an event defined as an Event of Default in Section 8 of the Notes
                shall constitute a revocation of such waiver by the Noteholders of
                the
                right to exercise voting rights by the Pledgor as from the date on
                which
                the Pledgor has received the communication provided by article 6.1
                and as
                far as such Event of Default shall be continuing.
                

            


    

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    
      	6.3  	
              The
                occurrence of any event or circumstance which, pursuant to the above
                provisions, constitute an Event of Default under Section 8 of the
                Notes,
                will entitle and legitimate the Noteholders, through the Noteholders’
                Representative, to receive dividends and to exercise the voting rights
                as
                far as such Event of Default shall be continuing.
                

            


    

     

    
      	6.4  	
              Subject
                to the provisions above, the transfer of voting rights at the
                shareholders’ meetings according to article 6.3 above shall be valid and
                effective for any meeting held after the notice of an Event of Default
                has
                been sent, or in the meeting in which such notice is delivered, and
                the
                transfer of the right to receive dividends will apply to every dividend,
                effectively paid by Gentium after the above-mentioned notice has
                been
                sent.

            


    

     

    
      	6.5  	
              As
                long as the voting rights attached to the Pledged Shares belong to
                the
                Pledgor pursuant to this agreement, the Pledgor will provide or cause
                to
                be provided to the Noteholders’ Representative, not less than 15 days
                before the meeting and in any way within 48 hours from its receipt,
                copy
                of the call notice, the agenda of the shareholders’ meeting, any further
                acts or documents necessary for the Noteholders (through the Noteholders’
                Representative) to be fully informed on such agenda and an indication
                of
                the voting intention of the
                Pledgor.

            


    

     

    
      	6.6  	
              Should
                the Pledgor intend to hold a totalitarian shareholders’ meeting of
                Gentium, it will provide or cause to be provided to the Noteholders’
                Representative, as soon as practicably possible, a notice containing
                the
                specification of the matters to be discussed in such totalitarian
                shareholders’ meeting and any further acts or documents necessary for the
                Noteholders (through the Noteholders’ Representative) to be fully informed
                on such matters.

            


    

     

    
      	6.7  	
              Should
                the Noteholders (through the Noteholders’ Representative) exercise the
                voting right pursuant to the provisions of this article 6, the Pledgor
                accepts that it cannot have recourse to any objection, opposition
                to or
                defence against, including a request for a protective injunction
                or urgent
                judicial measures, with respect to:

            


    

     

    
      	6.7.1  	
              the
                right of the Noteholders (through the Noteholders’ Representative) to
                exercise the voting rights in meetings and its right to receive dividends,
                as provided above; 

            


    

     

    
      	6.7.2  	
              the
                manner in which it exercises the voting rights attached to the Pledged
                Shares, provided that the voting rights are exercised only for the
                purposes of protecting the rights of the Noteholders, except in the
                case
                of wilful misconduct or negligence on the part of the Noteholders
                and/or
                of the Noteholders’ Representative.

            


    

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    
      	7.  	
              FREE
                CAPITAL INCREASES

            


    

     

    
      	7.1  	
              In
                the event of free capital increase in corporate capital of Gentium
                the
                pledge over shares will cover the Pledgor’s shares issued and subscribed
                as a result of such increase in the corporate capital.
                The expression “Pledged Shares” will then include all those new shares.
                

            


    

     

    
      	7.2  	
               For
                the purpose of this article, the Pledgor undertakes to execute, if
                necessary, a pledge agreement in the form hereof and any instrument
                which
                may be necessary in order to include the newly issued shares in the
                Pledged Shares.

            


    

     

    
      	7.3  	
              The
                Pledgor shall ensure that
                the pledge over the newly issued shares is duly executed pursuant
                to the
                applicable provisions.

            


    

     

    
      	7.4  	
              The
                rights arising under the pledge over the Pledgor’s shares resulting from
                any future free increases in the capital of the Company, in accordance
                with the provisions of the above paragraphs, shall be construed as
                forming
                part of the same rights of pledge constituted pursuant to this agreement
                subject to the same provisions as contained
                herein.

            


    

     

    
      	8.  	
              PLEDGOR’S
                UNDERTAKINGS

            


    

     

    
      	8.1  	
              Unless
                otherwise expressly permitted by the Subscription Agreements, the
                Notes or
                other relating agreements, the Pledgor
                shall:

            


    

     

    
      	8.1.1  	
              not
                sell, transfer, exchange or otherwise dispose of the Pledged Shares
                and
                not to execute any agreements or deeds or consent to any act causing
                restictions or limitations in relation to the Pledged
                Shares;

            


    

     

    
      	8.1.2  	
              exercise
                the voting rights attached to the Pledged Shares, whilst and until
                it has
                the right thereto pursuant to article 6.2 above, in a manner which
                does
                not prejudice the rights and interests of the Noteholders as owners
                of the
                security rights applicable to the Pledged Assets and, in general,
                not take
                or omit to take any action which would adversely affect the validity
                of
                the pledge provided for by this agreement, its enforceability or
                would
                diminish the value of the Pledged
                Assets;

            


    

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    
      	8.1.3  	
              not
                consent to the creation of any privilege or third party right, security
                or
                any other charge with respect to the Pledged Assets, with the exception
                of
                those rights and privileges arising directly and exclusively out
                of the
                law;

            


    

     

    
      	8.1.4  	
              co-operate
                with the Noteholders’ Representative for the purposes of defending the
                rights of the latter relating to the Pledged Assets against the claims
                of
                any third parties;

            


    

     

    
      	8.1.5  	
              from
                time to time and at any time, promptly enter into and execute any
                further
                documents and deeds and undertake all further actions which might
                be
                necessary or which the Noteholders’ Representative should reasonably
                request in order to: (1) perfect and maintain the effectiveness of
                the
                pledge constituted by this agreement and/or (2) allow the Noteholders
                to
                exercise their rights with respect to the Pledged Assets;
                

            


    

     

    
      	8.1.6  	
              promptly
                send to the Noteholders’ Representative copy of any material communication
                or information received in relation to Gentium or to the Pledged
                Assets;

            


    

     

    
      	8.1.7  	
              inform
                the Noteholders’ Representative of any eventual claim or action brought by
                any party in relation to the Pledged
                Assets.

            


    

     

    
      	8.2  	
              The
                costs arising as a result of the above-mentioned obligations shall
                be
                borne by the
                Pledgor.

            


    

     

    
      	9.  	
              ENFORCEMENT
                OF THE PLEDGE

            


    

     

    
      	9.1  	
              The
                Pledgor accepts that, for the purposes of the enforcement of this
                pledge,
                following the occurrence of an event defined as Event of Default
                in
                section 8 of the Notes, the Noteholders’ Representative is authorised to
                sell the Pledged Shares in whole or in part, and in one or more steps,
                pursuant to the article 2797 of the Italian Civil Code. The Noteholders’
                Representative may also appoint a different financial institution
                to
                arrange the sale, or a financial brokerage company or any other
                intermediary in the securities market, or proceed directly to a sale
                to
                third parties at the
                best price available on the market.


            


    

     

    
      	9.2  	
              The
                above is without prejudice to any other form of enforcement of the
                pledge
                or sale of the Pledged Shares as provided for by law, including,
                without
                limitation, request for obtaining assignment or transfer of the Pledged
                Shares under article 2798 of the Italian Civil
                Code.

            


    

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    
      	9.3  	
              Any
                cash held by the Noteholders’ Representative as object of this pledge and
                all cash proceeds received in respect of the sale of or other realisation
                of the Pledged Assets shall be applied in the following
                order:

            


    

     

    
      	a)  	
              to
                the payment of all costs and expenses (including documented and reasonable
                attorney’s fees and legal expenses taxes, duties and other costs) incurred
                by the Noteholders’ Representative in connection with: (i) the custody of,
                preservation, use or operation of, or the sale of the Pledged Assets;
                (ii)
                the exercise or enforcement of any of Noteholders’ rights hereunder; or
                (iv) the failure of the Pledgor to perform or comply with any of
                the
                provisions hereof;

            


    

     

    
      	b)  	
              to
                the payment first of interests and then of principal of the Secured
                Obligations in accordance with the terms of the Subscription Agreements,
                the Notes and other relating
                agreements;

            


    

     

    
      	c)  	
              other
                proceeds, if any, to the Pledgor or to whomsoever shall be lawfully
                entitled to receive the same.

            


    

     

    
      	10.  	
              THE
                NOTEHOLDERS’
REPRESENTATIVE

            


    

     

    
      	
              10.1. 
                

            	
              The
                Noteholders’ Representative represents and warrants to the Guarantor that
                it has irrevocable right, power and authority (i) to enter into and
                perform this agreement and bind all of the Noteholders to its terms,
                (ii)
                to give and receive directions and notices hereunder; and (iii) to
                make
                all determinations that may be required or that it deems appropriate
                under
                this agreement.

            


    

     

    
      	
              10.2. 
                

            	
              Until
                notified in writing by the Noteholders’ Representative that it has
                resigned or by a majority in interest of the Noteholders, including
                Generation Capital Associates, that it has been removed, the Pledgor
                may
                act upon the directions, instructions and notices of the Noteholders’
                Representative named above and, thereafter, upon the directions,
                instructions and notices of any successor(s) named in a writing executed
                by a majority-in-interest of the Noteholders filed with the
                Pledgor.

            


    

     

    
      	11.  	
              DISCHARGE
                OF THE PLEDGE

            


    

     

    The
      Noteholders’ Representative shall have to release the pledge set up under this
      agreement, upon request and at the expenses of the Pledgor, on the date on
      which
      all of the obligations and liabilities of Gentium to the Noteholders under
      the
      Subscription Agreements, the Notes and other relating agreements have been
      discharged in full.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    Subject
      to the above, the pledge constituted pursuant to this agreement shall cease
      to
      be effective and the Pledged Assets shall return to the Pledgor, and the
      Noteholders’ Representative (i) shall release in favour of the Pledgor such part
      of the Pledged Assets not sold or otherwise assigned pursuant to this agreement,
      (ii) shall execute and deliver to the Pledgor those documents that the latter
      may reasonably request to give evidence of such release and (iii) shall take
      all
      actions that may be necessary or useful to return the Pledged Assets to the
      Pledgor.

     

    
      	12.  	
              NOTICES 

            


    

     

    
      	12.1  	
              Except
                as otherwise expressly specified herein, all notices, requests and
                other
                communications required or permitted hereunder shall be in writing
                and
                shall be sent by an internationally recognized overnight courier
                service;
                by certified or registered mail, return receipt requested (or, in
                the case
                of a notice sent to an address in Italy, by international express
                mail,
                return receipt requested); by facsimile transmission; or by hand
                delivery.
                The address for such notices and communications shall be as
                follows:

            


    

     

    If
      to
      the Pledgor:

     

    Finanziaria
      Sirton S.p.A.

     

    Address:

     

    Piazza
      XX
      Settembre, 2, 22079 Villa Guardia, Como, Italy 

     

    Telephone
      number:

     

    Facsimile:

     

    Attention:
      Mr. Sauro Carsana

     

    


     

    If
      to
      Gentium:

     

    Gentium
      S.p.A.

     

    Address:

     

    Piazza
      XX
      Settembre, 2, 22079 Villa Guardia, Como, Italy 

     

    Telephone
      number:

     

    Facsimile:

     

    Attention:
      Mr. Sauro Carsana

     

    


    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    If
      to
      the Noteholders’ Representative:

     

    Address:

     

    _________________

     

    Telephone
      number:

     

    Facsimile:

     

    Attention:

     

    Any
      party
      may designate a different notice address, contact person, telephone number
      or
      facsimile number with respect to such party by providing a notice describing
      such changes to the other party hereto in accordance with the provisions of
      this
      Section 12.1. Any notice sent by internationally recognized overnight mail
      courier service shall be deemed to be delivered to the address shown on the
      mailing receipt on the expected date of delivery upon proper evidence of mailing
      for purposes of this Section 12.1. Any notice sent by certified or registered
      mail, return receipt requested (or, in the case of a notice sent to an address
      in Italy, by international express mail, return receipt requested), shall be
      deemed to be delivered five business days after mailing. Any notice sent by
      facsimile transmission shall be deemed delivered as of the open of business
      on
      the business day following the date on which sent provided the sender receives
      written confirmation of transmission and provided that within 24 hours such
      notice is also sent by regular mail or by an internationally-recognized
      overnight mail courier service to the appropriate address specified above.
      Any
      notice sent by hand delivery shall be deemed delivered as of the date of
      delivery.

     

    
      	13.  	
              MISCELLANEOUS

            


    

     

    
      	13.1  	
              No
                amendment to the provisions of this agreement, or to the rights arising
                under the pledge constituted herein, or any waiver of the rights
                arising
                hereunder, shall be effective unless such amendment or waiver is
                in a
                written deed and signed by the Pledgor and by the Noteholders’
                Representative or in case of a waiver, by the waiving
                party.

            


    

    
      	 	 


    

    
      	13.2  
              	
              In
                case of any one or more of the provisions contained in this agreement
                should be invalid, illegal or unenforceable in any respect, the validity,
                legality and enforceability of the remaining provisions contained
                herein
                shall not in any way be affected or impaired thereby, and the parties
                hereto agree to negotiate in good faith to replace any such invalid,
                illegal or unenforceable provision with a new valid, legal and enforceable
                provision that, to the extent possible, will preserve the financial
                bargain of this agreement or to otherwise amend this agreement to
                obtain
                such effect.

            


    

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    
      	14.  	
              GOVERNING
                LAW AND JURISDICTION

            


    

     

    
      	14.1  	
              This
                agreement and the rights arising under the pledge constituted thereby
                are
                governed by the Italian law.

            


    

     

    
      	14.2  	
              The
                courts of Milan shall have exclusive jurisdiction to settle any dispute
                arising from or in relation to the interpretation, execution, performance
                or termination of this agreement.

            


    

     

    
      	15.  	
              TAXES
                CHARGES AND EXPENSES

            


    

     

    
      	15.1  	
              Taxes,
                charges and expenses relating to this agreement, including legal
                and
                notarial fees and registration tax, shall be borne by the
                Pledgor.

            


    

     

    
      	15.2  	
              Upon
                Noteholders’ Representative written and documented request, the Pledgor
                shall promptly reimburse the Noteholders (through the Noteholders’
                Representative) for any stamp duty and other taxes, expense and costs
                (including reasonable legal and notarial fees), that the latter has
                incurred in relation to:

            


    

     

    
      	(i) 
              	
              the
                setting up, preservation or enforcement of this
                pledge;

            


    

     

    
      	(ii) 
              	
              any
                breach by the Pledgor to the obligations deriving from this
                agreement.

            


    

     

    
      
        
        

      

      
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      SIGNATORIES
       

      The
        Pledgor 
         

        Finanziaria
          Sirton
          s.p.A.

         

        /s/
          Dr.
          Laura Ferro

        By:
          Dr.
          Laura Ferro

        As:
          Director

         

         

      

    

    The
      Noteholders’ Representative

     

    Michael
      McCory

     

    /s/
      Michael McCory

    By:
      Michael McCory

    As:
      Self


     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

       

    

    SCHEDULE
      1

     

    Pledged
      Shares

     

    1,650,000

     

     

    
      
        
        

      

      
        15