Exhibit 10.1


 


	
  

  	
   

  	
  UBS Bank USA

  
	
   

  	
   

  
	
   

  	
  KV

  



 


ADDENDUM TO CREDIT LINE ACCOUNT APPLICATION AND

AGREEMENT


 


	
  Credit Line Account

  	
   

  	
   

  	
   

  	
  Account
  Number

  	
   

  	
   

  
	
  GENETRONICS, INC

  	
   

  	
  5V

  	
   

  	
  54463

  	
   

  	
  UJ

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Collateral Account

  	
   

  	
   

  	
   

  	
  Account
  Number

  	
   

  	
   

  
	
  GENETRONICS, INC ATTN
  ACCOUNTING

  	
   

  	
  UJ

  	
   

  	
  53976

  	
   

  	
  UJ72

  



 


This
Addendum (this “Addendum”) is attached to, incorporated by reference into and
is fully a part of the Credit Line Account Application and Agreement between
UBS Bank, USA (the “Bank”) and the borrower named in the signature area below
(the “Borrower”), dated as of the date hereof (as amended or otherwise modified
from time to time, the
“Agreement”). This Addendum and the Agreement shall not become effective and
binding upon the Bank until this Addendum has been executed by the Borrower and
accepted by the Bank at it
home office. Any conflict between
the terms of the Agreement and this Addendum shall be resolved in accordance with the terms of this Addendum.
Defined terms used herein to have the respective meanings set forth in the
Agreement unless otherwise defined in this Addendum. This Addendum shall supersede and replace all prior Addendum(s) by
and between the Borrower and the Bank with respect to the subject matter of
this Addendum.


 


A. The
Bank, UBS Financial Services Inc. and the Borrower each acknowledge and agree
that;


 


Definitions


 


1.              The
Agreement is amended by adding the following definitions in Section 1:


 


“·                                    “Additional Payments” has the meaning
specified in Section 5 g).


·                                          “ARS Collateral” means any and all Collateral
consisting of Auction Rate Securities.


·                                          “ARS Payments” has the meaning specified in Section 5
g).


·                                         “Auction Rate Securities” means any and all
securities determined by the Bank, in its sole and absolute discretion, as
being commonly referred to as “Auction Rate Securities,” which, for greater
certainty, include, without limitation, debt securities on which the interest
rate payable is periodically re-set by an auction process and/or equity
securities on which any dividend payable is periodically re-set by
an auction process.


·                                          “Taxable SLARC Maximum Auction Rate” means the
applicable “reset rate,” “maximum auction rate” or other similar
rate as may be specified in the prospectus or other documentation governing any
applicable Taxable Student Loan Auction Rate Securities as representing the
failed auction rate or similar rate payable on such Auction Rate Securities, in
each case expressed as a per-annum rate and as calculated in
the Bank’s sole and absolute discretion.


·                                          “Taxable Student Loan Auction Rate Securities”
means any and all Auction Rate Securities Collateral consisting of securities
determined by the Bank, in its sole and absolute discretion, as being commonly
referred to as “Student Loan Auction Rate Securities” and on which the
interest or dividend rate paid or payable to the Borrower by the issuer of such securities is taxable to the Borrower.”


 


Terms of
Advances


 


2.              The
Agreement is amended by adding the following as Section 3 e):


 


“The
Borrower acknowledges that the Bank will not make an Advance against the ARS
Collateral in amounts equal to the fair market or per value of the ARS Collateral unless the Borrower arranges for another person or entity
to provide additional collateral or assurances on terms and
conditions satisfactory to the Bank. In requesting an Approved Amount equal to
the par value of the ARS Collateral, the Borrower has arranged for UBS Financial Services Inc.
to provide, directly or through a
third party, the pledge of additional
collateral and/or assurances to the Bank so that the Bank will consider making
Advances from time to time in accordance with the terms of this Agreement and in amounts equal to. in the aggregate, the par value
of the ARS Collateral at the date
of an Advance. In addition, the Borrower, the Bank and UBS Financial Services
Inc. acknowledge and agree that if (a) the Bank is repaid all of the
Credit Line Obligations due to the Bank under the Agreement and this Addendum
and (b) as part of such repayment, the Bank realizes on the additional collateral and/or assurances pledged or otherwise
provided by UBS Financial Services and/or any such third party to the Bank,
then the Agreement shall not terminate and the Bank shall automatically assign
to UBS Financial Services Inc. and any such third party, and UBS Financial Services
Inc. and any such third party shall automatically assume and be subrogated to,
all of the Bank’s rights, claims and interest in and under the Agreement and
this Addendum, Including without limitation, the security interest in the
Collateral, including without limitation the ARS Collateral, granted the Bank
under the Agreement and this Addendum (further including, without limitation,
interest, dividends, distributions, premiums, other income and payments
received in respect of any and all such Collateral) to the extent of the amount
that the Bank has realized on all or any part of the additional collateral
and/or assurances pledged or otherwise provided by UBS Financial Services
and/or any such third party to the Bank in order to effect the repayment of the
Credit Line Obligations due to the Bank
under the Agreement. Upon such automatic assignment and subrogation, UBS Financial Services Inc.
and any such third party shall be entitled to directly exercise any and all
rights and remedies afforded the Bank under the Agreement, this Addendum and
any and all other documents and agreements entered into in connection with the Agreement and/or this Addendum.”


 


KV Rev 08/08 Zero Net Cost LTPV Loan Conversion Addendum


 


1

















 


	
  

  	
  Credit
  Line Account Number

  	
   

  
	
  5V

  	
  54463

  	
  UJ

  
				



 


Interest


 


3.              The Agreement is amended by adding the
following as a new Section 4 d), Section 4 e), Section 4 f) and Section 4
g):


 


“d)                               Notwithstanding anything to the contrary in
this Agreement, and subject to the provisions of Sections 4 e) and f) of this Agreement,
the interest rate charged on any and all outstanding Variable Rate Advances
shall be the lesser of (i) the amount prescribed by Sections 4 a), b), or
c) of this Agreement, as applicable, and (ii) the then applicable weighted
average rate of interest or dividend rate paid to the Borrower by the issuer of
the ARS Collateral.


e)                                      The Bank and the Borrower acknowledge and
agree that the Bank shall be entitled to determine or adjust, at any time and
from time to time, the interest rate payable by the Borrower to the Bank on all
or any part of the outstanding Variable Rate Advances to reflect any changes in
the composition of the ARS Collateral, to address any inability to determine interest
rates, or for any other reason
that, in the Bank’s sole and absolute discretion, is necessary to give
effect to the intent of the provisions of this Agreement, including,
without limitation, this Section 4 (it being acknowledged and agreed that
the provisions of this Section 4 are intended to cause the interest
payable by the Borrower under this Agreement to equal the interest or dividend
rate payable to the Borrower by the issuer of any ARS Collateral) and any and
all such adjustments by the Bank hereunder shall be conclusive and binding on the
Bank and the Borrower absent manifest error.


f)                                        If and to the extent that any or all of the
ARS Collateral consists of Taxable Student Loan Auction Rate Securities, then notwithstanding anything to the contrary in this Agreement, when calculating such weighted average
interest rate, the interest rate paid to the Borrower with respect to such Taxable Student Loan Auction Rate
Securities shall be deemed to be equal to (i) For the period from the date
of this Addendum through and including January 21, 2009, the applicable
coupon rate(s) and (ii) from January 22, 2009 and thereafter, the
then applicable Taxable SLARC Maximum
Auction Rate, for, and to the
extent of, such Taxable Student Loan Auction Rate Securities. The Borrower will
be charged interest on the Loan in months in which the Borrower does not
receive interest on the Taxable Student Loan Auction Rate Securities.


g)                                     The interest rate charged under this Section 4
on any and all Variable Rate Advances outstanding as of the date of this Addendum shall commence on the first day of the first billing cycle
immediately after the date of this Addendum.”


 


Payments


 


4.              The Agreement is amended by adding the
following as Section 5g):


 


“The
Borrower will make
additional payments (“Additional Payments”) as follows:


 


·                                          The proceeds of any liquidation, redemption,
sale or other disposition of all or part of the ARS Collateral will be
automatically transferred to the Bank as payments. The amount of these payments will be determined by the proceeds received in the Collateral Account,
and may be as much as the total Credit Line Obligations.


·                                          All other interest, dividends, distributions,
premiums, other income and payments that are received in the Collateral Account
in respect of any ARS Collateral will be automatically transferred to the Bank
as payments, These are referred to as “ARS Payments.” The amount of each ARS Payment will vary, based on the proceeds received
in the Collateral Account. The Bank estimates that the ARS Payments will range
from zero to fifteen ($15.00) dollars per month per $1,000 in par value of
Pledged ARS. The Bank will notify the Borrower at least ten (10) days in
advance of any ARS Payment that falls outside of this range. If the Borrower would prefer to have advance notice of each payment to be made to Advances,
the Borrower may cancel ARS Payments as described below.


·                                          The Borrower agrees that any cash, check or
other deposit (other than a deposit of securities) made to the Collateral
Account is an individual authorization to have such amount transferred to the
Bank as a payment. The amount of each payment is the amount of the deposit.


 


Each
Additional Payment will be applied, as of the date received by the Bank, in the manner set forth
in the last sentence of Section 5 d). The Borrower acknowledges that
neither the Bank nor UBS Financial Services Inc. sets or arranges for any
schedule of Additional Payments. Instead, Additional Payments will be
transferred automatically from the Collateral Account whenever amounts are received in the Collateral Account, generally on the second
Business Day after receipt.


 


The
Borrower may elect to stop ARS Payments at any time, and this election will cancel all ARS Payments that would occur three
(3) Business Days or more after the Bank receives such notice. If the Borrower
stops ARS Payments, the Borrower
will continue to be obligated to pay principal, interest, and other amounts
pursuant to the Agreement. If the Borrower elects to cancel ARS Payments, all
other Additional Payments will be cancelled. Cancelling ARS Payments and
Additional Payments may result in higher interest charges by the Bank because
amounts received in the Collateral Account will not be automatically
transferred and credited. Any amounts received in the Collateral Account will
remain in the Collateral Account unless the Bank permits you to withdraw all or
part of such amounts. Your notice to cancel must be sent to: Attention: Head of
Credit Risk Monitoring, UBS Bank USA, 299 South Main Street, Suite 2275,
Salt Lake City, Utah 84111, or call (801) 741-0310.


 


Important Disclosure About Required Payments. If Additional Payments are sufficient to pay
all accrued interest on Advances on or before a due date, then the Borrower
need not make an additional interest payment. Excess Additional Payments will
be applied against principal. However, if Additional Payments are not sufficient to pay all accrued interest on Advances on or before a due date, then the Bank may, in its sole discretion (1) capitalize unpaid interest as an additional Advance, or (2) require
the Borrower to make payment of all accrued and unpaid interest.”


 


2

















 


	
  

  	
  Credit
  Line Account Number

  	
   

  
	
  5V

  	
  54463

  	
  UJ

  
				



 


Remedies


 


5.              The Agreement is amended by adding the
following as Section 10 e):


 


“The
Borrower agrees that in the event the Bank determines to liquidate or
sell any Collateral, the Bank shall, to the fullest, extent permitted by
applicable law, have the right to do so in any manner, including, without
limitation, the sale of Collateral individually or in a block, for cash or for
credit, in a public or private sale, with or without public notice, through the
use of sealed bids or otherwise, with the
aid of any advisor or agent who may be an affiliate of the Bank or in any other manner as the Bank in its sole discretion shall choose. The
Borrower acknowledges that the price the Bank obtains for Collateral in the
Bank’s chosen method of sale may be lower than might be otherwise
obtained in another method of sale, and the Borrower hereby agrees
that any such sale shall not be considered to be not commercially
reasonable solely because of such lower price. The Borrower understands that
there may not be a liquid market for the Collateral and that, as a result, the
price received for the Collateral upon liquidation or sale by the Bank may be
substantially less than the Borrower paid for such Collateral or than the last
market value available for it, if any. The Borrower further agrees that any
sale by the Bank shall not be considered to be not commercially reasonable solely because there are few (including only one) or no third parties who
submit bids or otherwise offer to buy the Collateral. The Borrower understands
that the Bank’s sale of any of the Collateral may be subject to various state
and federal property and/or securities laws and regulations, and that
compliance with such laws and regulations may result in delays and/or a lower
price being obtained for the Collateral. The Borrower agrees that the Bank
shall have the right to restrict any prospective purchasers to those who, in
the Bank’s sole discretion, the Bank deems to be qualified. The Borrower
acknowledges that the Bank shall have sole authority to determine, without
limitation, the time place, method of advertisement and manner of sale and that
the Bank may delay or adjourn any such sale in its sole discretion. The
Borrower expressly authorizes the Bank to take any action with respect to the
Collateral as the Bank deems necessary or advisable to facilitate any
liquidation or sale, and the Borrower agrees that the Bank
shall not be held liable for taking or failing to take any such action,
regardless if a greater price may have been obtained for the Collateral if such
action was or was not taken, as applicable. The Borrower hereby waives, to the
fullest extent permitted by law, any legal right of appraisal, notice,
valuation, stay, extension, moratorium or redemption that the
Borrower would otherwise have with respect to a sale of the
Collateral.”


 


Representations, Warranties and Covenants by the Loan
Parties


 


6.              The Agreement is amended by adding the following as
Section 11 g):


 


“g)                               If at any time there are Credit Lint obligations outstanding under the Credit Line, then in connection with
any ARS Collateral, if at any time any such ARS Collateral may be sold,
exchanged, redeemed, transferred or otherwise conveyed by the Borrower for
gross proceeds that are, in the aggregate, not less than the par value of such
Auction Rate Securities to any party, including, without limitation, to UBS
Financial Services Inc. and/or any of its affiliates (any such sale, exchange,
redemption, transfer or conveyance referred to herein as an “ARS Liquidation”),
the Borrower agrees (i) to immediately effect such ARS Liquidation to the extent necessary to satisfy all Credit line
Obligations in full and (ii) that the proceeds of any such ARS Liquidation
so effected shall be immediately and automatically used to pay down any and all
such outstanding Credit Line Obligations to the extent of such proceeds. The
Borrower hereby acknowledges and agrees with the Bank and directs UBS Financial Services Inc. that to the extent permitted by applicable law, this
section 11 g) shall constitute an irrevocable
instruction, direction and standing sell order to UBS Financial Services Inc.
to effect an ARS Liquidation to the extent it is possible to do
so at any time during the term of this Agreement. The Borrower further agrees
with the Bank and UBS Financial Services Inc. to execute and deliver to the Bank
and/or UBS Financial Services Inc. such further documents and agreements as may
be necessary in the sole and absolute discretion of the Bank and/or UBS
Financial Services Inc. to effect the foregoing irrevocable instruction,
direction and standing sell order.”


 


Waivers


 


7.              The Agreement is amended by adding the
following as Section 21:


 


“The Borrower hereby (i) acknowledges and admits
its indebtedness and obligations to the Bank under the Agreement; and (ii) acknowledges,
admits and agrees that it has no and shall assert no defenses, offsets,
counterclaims or claims in respect of its obligations under the Agreement, in
each case notwithstanding any claim or asserted claim that it may have, or
purport to have, against any affiliate of the Bank.”


 


Schedules I and II


 


8.                                      a)                                      Schedule I of the Agreement is amended in its entirety to read as
follows:


 


	
  $25,001 to
  $499,999

  	
   

  	
  2.750

  	
  %

  
	
  $500,000 to
  $999,999

  	
   

  	
  1.750

  	
  %

  
	
  $1,000,000 to $4,999,999

  	
   

  	
  1.500

  	
  %

  
	
  $5,000,000 and
  over

  	
   

  	
  1.250

  	
  %

  



 


b)                                     Schedule II of the Agreement is deleted in its
entirety and replaced with: “[Intentionally Deleted].”


 


3

















 


	
  

  	
  Credit
  Line Account Number

  	
   

  
	
  5V

  	
  54463

  	
  UJ

  
				



 


No Fixed Rate Advance/Prime
Credit Lines


 


9.              The Bank and the Borrower acknowledge and agree that notwithstanding anything to the contrary in
the Agreement: (a) the Borrower shall not request and the Bank shall not
make a Fixed Rate Advance; and (b) there shall be no Prime Credit Line
facilities available under the Agreement.


 


Alternative Financing


 


10.       If at any time the Bank exercises its right of
demand under Section 5 a), Section 5 b) and Section 10 b) of the
Loan Agreement, for any reason other than (i) the occurrence of an Event
under Sections 10 a) (iv), (v), (vii), (ix) (if and to the extent any
indebtedness specified thereunder is to the Bank or any of the Bank’s
affiliates), or (xi) of the Agreement; or (ii) in connection with any
termination for cause by UBS Financial Services Inc. of the overall customer
relationship between UBS Financial Services Inc. and the Borrower or its
affiliates, than UBS Financial Services Inc. shall, or shall cause one or more of its affiliates, to provide as soon as reasonably possible,
alternative financing on substantially the same terms and conditions as those
under the Agreement and the Bank agrees that the Agreement shall remain in full
force and effect until such time as such alternative financing has been
established.


 


Margin Calls: Interest Payments


 


11.       Notwithstanding anything to the contrary in
the Agreement, the Bank and the Borrower acknowledge and agree that UBS
Financial Services Inc. or any affiliate thereof may, in its sole and absolute
discretion, elect to: (i) provide additional collateral to the Bank in the
form of United States Treasury Securities if and to the extent that the
Borrower does not maintain in a Collateral Account, Collateral having an
aggregate lending value as specified by the Bank from time to time; and/or (ii) satisfy
any and all amounts of accrued and unpaid interest that are otherwise due and
payable by the Borrower to the Bank under the Agreement, to the extent that the amount of any Additional Payments under the Agreement are
insufficient to satisfy any and all such amounts.


 


Collateral
Account Features


 


12.       Section B f) of the Agreement is deleted
in its entirety and replaced with the following:


 


“If
a  Collateral Account has margin features, the margin features will be
removed by UBS Financial Services Inc. or UBS International Inc., as
applicable, so long as there is no outstanding margin debit in the Collateral
Account, If a Collateral Account has
Resource Management Account® or Business Services Account BSA® features, such
as check writing, cards, bill payment, or electronic funds transfer services,
all such Features shall be removed by UBS Financial Services Inc. or UBS
International Inc., as applicable.”


 


No
Credit Line Checks


 


13.       The Bank and the Borrower acknowledge and
agree that notwithstanding anything to the contrary in the Agreement, the
Credit Line shall not have Credit Line checks.


 


Headings


 


14.       The headings of each of Section of this
Addendum is for descriptive purposes only and shall not be deemed to modify or
qualify the terms, conditions, rights or obligations described in such Section.


 


B.            This Addendum may be signed in multiple
original counterparts, each of which shall be deemed an original and all of which together shall constitute one and the
same instrument.


 


[Signature page(s) follows]


 


4

















 


	
  

  	
  Credit
  Line Account Number

  	
   

  
	
  5V

  	
  54463

  	
  UJ

  
				



 


IN
WITNESS WHEREOF, each of
the parties has signed this Addendum pursuant to due and proper authority as of
the date set forth below:


 




	
  12/19/08

  	
   

  	
  AVTAR DHILLON, Chief Executive Officer/CEO

  	
   

  	
  /s/ Avtar Dhillon

  
	
  Date

  	
   

  	
  Print Name and Title

  	
   

  	
  Signature

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12/19/08

  	
   

  	
  PETER KIES, Chief Financial Officer/CFO

  	
   

  	
  /s/ Peter Kies

  
	
  Date

  	
   

  	
  Print Name and Title

  	
   

  	
  Signature

  






 


 


	
   

  	
  UBS BANK USA

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Scott Blamires

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:
  

  	
  Scott Blamires

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  VP

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Paul Messerby

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:
  

  	
   Paul Messerby

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  VP

  
	
   

  	
   

  
	
   

  	
  UBS FINANCIAL SERVICES INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brain C. Arthur

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Brain C. Arthur

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:
  

  	
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Bonnie Bowes

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:
  

  	
  Bonnie Bowes

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Executive
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
  12/19

  	
  ,
  2008

  



 


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