Document:

exv10w31a

 

Exhibit 10.31A

MASTER SECURITY AGREEMENT

dated as of June 25, 2002 (“Agreement”)

     THIS
AGREEMENT is between  General Electric Capital Corporation (together with its successors and
assigns, if an “Secured Party”) and Avalon Pharmaceuticals, Inc (“Debtor”).  Secured Party has an office at 401 Merritt 7
Suite 23, Norwalk, CT 06851-1177. Debtor is a corporation organized and existing under the laws of the state of Delaware. Debtor’s mailing
address and chief place of business is 19 Firstfield Road, Gaithersburg, MD 20878.

1. CREATION OF SECURITY INTEREST.

     Debtor grants to Secured Party, its successors and assigns, a security interest in and
against all property listed on any collateral schedule now or in the
future annexed to or made a part of this Agreement “Collateral Schedule”), and in and against
all additions, attachments, accessories and accessions to such
property, all substitutions, replacements or exchanges therefor, and all insurance and/or
other proceeds thereof (all such property is individually and collectively
called the “Collateral”). This security interest is given to secure the payment and
performance of all debts, obligations and liabilities of any kind whatsoever of
Debtor to Secured Party, now existing or arising in the future, including but not limited to
the payment and performance of certain Promissory Notes from time
to time identified on any Collateral Schedule
(collective “Notes” and each  “Note”), and any
renewals, extensions and modifications of such debts,
obligations and liabilities (such Notes, debts, obligations and liabilities are called the
“Indebtedness”).

2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF DEBTOR.

     Debtor represents, warrants and covenants as of the date of this Agreement and as of the date of each Collateral Schedule that:

     (a) Debtor’s exact legal name is as set forth in the preamble of this Agreement
and Debtor is, and will remain, duly organized, existing and in good standing
under the laws of the State set forth in the preamble of this
Agreement, has its
chief executive offices at the location specified in the preamble, and is, and
will remain, duly qualified and licensed in every jurisdiction wherever
necessary to carry on its business and operations;

     (b) Debtor has adequate power and capacity to enter into, and to perform its
obligations under this Agreement, each Note and any other documents evidencing,
or given in connection with, any of the Indebtedness (all of the foregoing are
called the “Debt Documents”);

     (c) This
Agreement and the other Debt Documents have been duly authorized,
executed and delivered by Debtor and constitute legal, valid and binding
agreements enforceable in accordance with their terms, except to the extent that
the enforcement of remedies may be limited under applicable bankruptcy and
insolvency laws;

     (d) No approval, consent or withholding of objections is required from any
governmental authority or instrumentality with respect to the entry into, or
performance by Debtor of any of the Debt Documents, except any
already obtained;

     (e) The entry into, and performance by, Debtor of the Debt Documents its will
not (i) violate any of the organizational documents of Debtor or any judgment,
order, law or regulation applicable to Debtor, or (ii) result in any breach of
or constitute & default under any contract to which Debtor is a party, or result
in the creation of any lien, claim or encumbrance on any of Debtor’s property
(except for liens in favor of Secured Party) pursuant to any indenture,
mortgage, deed of trust, bank loan, credit agreement, or other agreement or
instrument to which Debtor is a party;

     (f) There are no suits or proceedings pending in court or before any commission,
board or other administrative agency against or affecting Debtor which could, in
the aggregate, have a material adverse effect on Debtor, its business or
operations, or its ability to perform its obligations under the Debt Documents,
nor does Debtor have reason to believe that any such suits or proceedings are
threatened;

     (g) All financial statements delivered to Secured Party in connection  with the
Indebtedness have been prepared in accordance with generally accepted accounting
principles, and since the date of the most recent financial statement there has
been no material adverse change in Debtors financial condition;

     (h) The
Collateral is not, and will not be, used by Debtor for personal, family
or household purposes;

     (i) The Collateral is, and will remain, in good condition and repair and Debtor
will not be negligent in its care and use;

     (j) Debtor is, and will remain, the sole and lawful owner, and in possession of,
the Collateral, and has the sole right and lawful authority to grant the
security interest described in this Agreement; and

     (k) The Collateral is, and will remain, free and clear of all liens, claim and
encumbrances of any kind whatsoever, except for (i) liens in favor of Secured
Party, (ii) liens for taxes not yet due or for taxes being contested in good
faith and which do not involve, in the judgment of Secured Party, any risk of
the sale, forfeiture or loss of any of the Collateral, and (iii) inchoate
materialmen’s, mechanic’s, repairmen’s and similar liens arising by operation of
law in the normal course of business for amounts which arc not delinquent (all
of such liens are called  “Permitted Lines”).

3. COLLATERAL.

     (a) Until
the declaration of any default, Debtor shall remain in possession of the
Collateral; except that Secured Party shall have the right to possess (i)
any chattel paper or instrument that constitutes a part of the Collateral, and (ii) any other
Collateral in which Secured Party’s security interest may be perfected
only by possession. Secured Party may inspect any of the Collateral during normal business
hours after giving Debtor reasonable prior notice. If Secured Party
asks, Debtor will promptly notify Secured Party in writing of the
location of any Collateral.

     (b) Debtor shall (i) use the Collateral only in its trade or business, (ii) maintain all of
the Collateral in good operating order and repair, normal wear and
tear excepted, (iii) use and maintain the Collateral only in compliance with manufacturers
recommendations and all applicable laws, and (iv) keep all of the

 

 

Collateral free and clear of
all liens, claims and encumbrances (except for Permitted Liens).

     (c) Secured Party does not authorize and Debtor agrees it shall not (i) part with possession
of any of the Collateral (except to Secured Party or for
maintenance and repair), (ii) remove any of the Collateral from the continental United States,
or (iii) sell, rent, lease, mortgage, license, grant a security interest
in or otherwise transfer or encumber (except for Permitted Liens) any of the
Collateral .

     (d) Debtor
shall pay promptly when due all taxes, license fees, assessments and
public and
private charges levied or assessed on any of the Collateral, on
its use, or on this Agreement or any of the other Debt Documents. At its option, Secured
Party may discharge taxes, liens, security interests or other
encumbrances at any time levied or placed on the Collateral and may pay for the maintenance,
insurance and preservation of the Collateral and effect
compliance with the terms of this Agreement or any of the other Debt Documents Debtor agrees
to reimburse Secured Party, on demand, all costs and expenses
incurred by Secured Party in connection with such payment or performance and agrees that such
reimbursement obligation shall constitute Indebtedness.

     (e) Debtor shall, at all times, keep accurate and complete records of the
Collateral, and Secured Party shall have the right to inspect and make copies of
all of Debtor’s books and records relating to the Collateral during normal business hours,
after giving Debtor reasonable prior notice.

     (f) Debtor agrees and acknowledges that any third person who may at any time possess all or
any portion of the Collateral shall be deemed to hold, and
shall hold, the Collateral as the agent of, and as pledge holder for, Secured Party. Secured
Party may at any time give notice to any third person described in the
preceding sentence that such third person is holding the Collateral as the agent of , and as
pledge holder for, the Secured Party.

4. INSURANCE.

     (a) Debtor
shall at all times bear the entire risk of any loss, theft, damage to, or
destruction of, any of the Collateral from any cause whatsoever.

     (b) Debtor agrees to keep the Collateral insured against loss or damage by fine and extended
coverage perils, theft, burglary, and for any or all Collateral
which are vehicles, for risk of loss by collision, and if requested by Secured Party, against
such other risks as Secured Party may reasonably require. The
insurance coverage shall be in an amount no less than the full replacement value of the
Collateral, and deductible amounts, insurers and policies shall be
acceptable to Secured Party. Debtor shall deliver to Secured Party policies or certificates
of insurance evidencing such coverage. Each policy shall name
Secured Party as a loss payee, shall provide for coverage to Secured Party regardless of the
breach by Debtor of any warranty or representation made therein,
shall not be subject to co-insurance, and shall provide that coverage
may not be canceled or
altered by the insurer except upon thirty (30) days prior written
notice to Secured Party. Debtor appoints Secured Party as its attorney-in-fact to make proof of
loss, claim for insurance and adjustments with insurers, and to
receive payment of and execute or endorse all documents, checks or drafts in connection with
insurance payments, Secured Party shall not act as Debtor’s
attorney-in-fact unless Debtor is in default. Proceeds of insurance shall be applied, at the
option of Secured Party, to repair or replace the Collateral or to reduce
any of the Indebtedness.

5. REPORTS.

     (a) Debtor
shall promptly notify Secured Party of (i) any change in the name of Debtor,
(ii) any change in the state of its incorporation or registration,
(iii) any relocation of its chief executive offices, (iv) any relocation of any of the
Collateral, (v) any of the Collateral being lost, stolen, missing, destroyed,
materially damaged or worn out, or (vi) any lien, claim or encumbrance other than Permitted
Liens attaching to or being made against any of the Collateral.

     (b) Debtor will deliver to Secured Party Debtor’s complete financial statements, certified by
a recognized firm of certified public accountants, within
ninety (90) days of the close of each fiscal year of Debtor. If Secured Party requests,
Debtor will deliver to Secured Party copies of Debtor’s quarterly financial
reports certified by Debtor’s chief financial officer, within ninety (90) days after the close
of each of Debtor’s fiscal quarter. Debtor will deliver to Secured Party
copies of all Forms 10-K and 10-Q, if any, within 30 days after the dates on which they are
filed with the Securities and Exchange Commission.

6. FURTHER ASSURANCES.

     (a) Debtor shall, upon request of Secured Party, furnish to Secured Part such further
information, execute and deliver to Secured Party such documents
and instruments (including, without limitation, Uniform Commercial Code financial statements)
and shall do such other acts and things as Secured Party may
at any time reasonably request relating to the perfection or protection of the security
interest created by this Agreement or for the purpose of carrying out the
intent of this Agreement. Without limiting the foregoing, Debtor shall cooperate and do all
acts deemed necessary or advisable by Secured Party to continue in
Secured Party a perfected first security interest in the Collateral, and shall obtain and
furnish to Secured Party any subordinations, releases, landlord waivers,
lessor waivers, mortgagee waivers, or control agreements, and similar document as may be from
time to time requested by, and in form and substance
satisfactory to Secured Party.

     (b) Debtor authorizes Secured Party to file a financing statement and amendments thereto
describing the Collateral and containing any other information
required by the applicable Uniform Commercial Code. Debtor irrevocably grants to Secured Party
the power to sign Debtor’s name and generally to act on
behalf of Debtor to execute and file applications for title, transfers of title, financing
statements, notices of lien and other documents pertaining to any or all of
the Collateral; this power is coupled with Secured Party’s
interest in the Collateral.
Debtor shall, if any certificate of title be required or permitted by law for any
of the Collateral, obtain and promptly deliver to Secured Party such certificate showing the
lien of this Agreement with respect to the Collateral. Debtor ratifies
its prior authorization for Secured Party to file financing statements and amendments thereto
describing the Collateral and containing any other information
required by the Uniform Commercial Code if filed prior to the date hereof.

     (c) Debtor shall indemnify and defend the Secured Party, its successors and assigns, and
their respective directors, officers and employees, from and
against all claims, actions and suits (including, without limitation,
related attorney’s fees)
of any kind whatsoever arising, directly or indirectly, in connection
with any of the Collateral.

 7. DEFAULT AND REMEDIES.

     (a) Debtor shall be in default under this Agreement and each of the other Debt Documents
if:

          (i) Debtor breaches its obligation to pay when due any installment or other amount due
or coming due under any of the Debt Documents;

 

 

          (ii) Debtor,
without the prior written consent of Secured Party, attempts to or does sell,
rent, lease, license, mortgage, grant a security interest in, or
otherwise transfer or encumber (except for Permitted Liens) any of the Collateral;

          (iii) Debtor
breaches any of its insurance obligations under Section 4;

          (iv) Debtor
breaches any of its other obligations under any of the Debt documents and
fails to cure that breach within thirty (30) days after written
notice from Secured Party;

          (v) Any warranty, representation or statement made by Debtor in any of the Debt Documents or
otherwise in connection with any of the
Indebtedness shall be false or misleading in any material respect;

          (vi) Any
of the Collateral is subjected to attachment, execution, levy seizure or confiscation
in any legal proceeding or otherwise, or if any legal or
administrative proceeding is commenced against Debtor or any of the Collat which
in the good faith judgment of Secured Party subjects any of the
Collateral to a material risk of attachment, execution, levy, seizure or confiscation no bond
is posted or protective order obtained to negate such risk;

          (vii) Debtor breaches or is in default under any other agreement between Debtor and
Secured Party;

          (viii) Debtor
or any guarantor or other obligor for any of the Indebtedness
(collectivel “Guarantor”) dissolves, terminates its existence, becomes
insolvent or ceases to do business as a going concern;

          (ix) If Debtor or any Guarantor is a natural person, Debtor or any such Guarantor dies or
becomes incompetent;

          (x) A receiver is appointed for all or of any part of the property of Debtor or any
Guarantor, or Debtor or any Guarantor makes any assignment for
the benefit of creditors;

          (xi) Debtor or any Guarantor files a petition under any bankruptcy, insolvency or similar
law, or any such petition is filed against Debtor or any
Guarantor and is not dismissed within forty-five (45) days; or

          (xii) Debtor’s improper filing of an amendment or termination statement relating to a filed
financing statement describing the Collateral

     (b) If Debtor is in default, the Secured Party, at its option, may declare any or all of
the Indebtedness to be immediately due and payable, without
demand or notice to Debtor or any Guarantor. The accelerated obligations and liabilities shall
bear interest (both before and after any judgment) until paid in
full at the lower of eighteen percent (18%) per annum or the maximum rate not prohibited by
applicable law.

     (c) After default, Secured Party shall have all of the rights and remedies of a Secured Party
under the Uniform Commercial Code, and under any other
applicable law. Without limiting the foregoing, Secured Party shall have the right to (i)
notify any account debtor of Debtor or any obligor on any instrument
which constitutes part of the Collateral to make payment to the Secured Party, (ii) with or
without legal process, enter any premises where the Collateral may be
and take possession of and remove the Collateral from the premises or store it on the
premises, (iii) sell the Collateral at public or private sale, in whole or in
part, and have the right to bid and purchase as said sale, or (iv) lease or otherwise dispose
of all or part of the Collateral, applying proceeds from such
disposition to the obligations then in default, if requested by Secured Party, Debtor shall
promptly assemble the Collateral and make it available to Secured
Party at a place to be designated by Secured Party which is reasonably convenient to both
parties. Secured Party may also render any or all of the Collateral
unusable at the Debtor’s premises and may dispose of such Collateral on such premises without
liability for rent or costs. Any notice that Secured Party is
required to give to Debtor under the Uniform Commercial Code of the
time and place of any
public sale or the time after which any private sale or other
intended disposition of the Collateral is to be made shall be deemed to constitute reasonable
notice if such notice is given to the last known address of Debtor at
least five (5) days prior to such action.

     (d) Proceeds
from any sale or lease or other disposition shall be applied: first, to all costs
of repossession, storage, and disposition including without
limitation attorneys’, appraisers’, and auctioneers’ fees; second, to discharge the
obligations then in default; third, to discharge any other Indebtedness of Debtor
to Secured Party, whether as obligor, endorser, guarantor, surety or indemnitor ; fourth, to
expenses incurred in paying or settling liens and claims against the
Collateral; and lastly, to Debtor, if there exists any surplus.
Debtor shall remain fully
liable for any deficiency.

     (e) Debtor agrees to pay all reasonable attorneys’ fees and other costs incurred by Secured
Party in connection with the enforcement, assertion, defense
or preservation of Secured Party’s rights and remedies under this Agreement, or if prohibited
by law, such lesser sum as may be permitted. Debtor further agrees
that such fees and costs shall constitute Indebtedness.

     (f) Secured
Party’s rights and remedies under this Agreement or otherwise arising are
Cumulative and may be exercised singularly or concurrently.
Neither the failure nor any delay on the part of the Secured Party to exercise any right,
power or privilege under this Agreement shall operate as a waiver, nor
shall any single or partial exercise of any right, power or privilege preclude any other or
further exercise of that or any other right, power or privilege.
SECURED PARTY SHALL NOT BE DEEMED TO HAVE WAIVED ANY OF ITS RIGHTS UNDER THIS AGREEMENT OR
UNDER ANY OTHER
AGREEMENT, INSTRUMENT OR PAPER SIGNED BY DEBTOR UNLESS SUCH WAIVER IS EXPRESSED IN WRITING
AND SIGNED BY SECURED
PARTY. A waiver on any one occasion shall not be construed as a bar
to or waiver if any right
or remedy on any future occasion.

     (g) DEBTOR
AND SECURED PARTY UNCONDITIONALLY WAIVE THEIR RIGHTS TO A JURY TRIAL OF ANY CLAIM
OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, ANY OF THE OTHER DEBT DOCUMENTS,
ANY OF THE INDEBTEDNESS
SECURED HEREBY, ANY DEALINGS BETWEEN DEBTOR AND SECURED PARTY RELATING TO THE SUBJECT MATTER
OF THIS TRANSACTION OR ANY RELATED TRANSACTIONS, AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED
BETWEEN DEBTOR AND SECURED PARTY. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL
DISPUTES THAT MAY BE FILED IN ANY COURT. THIS WAIVER IS IRREVOCABLE. THIS WAIVER MAY NOT BE MODIFIED EITHER ORALLY
OR IN WRITING. THE WAIVER ALSO SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS
TO THIS AGREEMENT, ANY OTHER DEBT DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THIS
TRANSACTION OR ANY RELATED TRANSACTION. THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE
COURT,

8. MISCELLANEOUS.

     (a) This Agreement, any Note and/or any of the other Debt Documents may be assigned, in
whole or in part, by Secured Party without notice to Debtor,
and Debtor agrees not to assert against any such assignee, or assignee’s assigns, any defense,
set-off, recoupment claim or counterclaim which Debtor has or

 

 

may at any time have against
Secured Party for any reason whatsoever. Debtor agrees that if
Debtor receives written notice of an assignment from Secured
party, Debtor will pay all amounts payable under any assigned Debt
Documents, to such assignee or as instructed
by Secured Party. Debtor also agrees to
confirm in writing receipt of the notice of assignment as may he reasonably requested by Secured
Party or assignee.

     (b) All notices to be given in connection with this Agreement shall be in writing,
shall be addressed to the parties at their respective addresses set forth in
this Agreement (unless and until a different address may be specified in a written notice to
the other party), and shall be deemed given (i) on the date of receipt
if delivered in hand or by facsimile transmission, (ii) on the next business day after being
sent by express mail, and (iii) on the fourth business day after being
sent by regular, registered or certified mail. As used herein, the term “business day” shall
mean and include any day other than Saturdays, Sundays, or other
days on which commercial banks in New York, New York are required or
authorized to be closed.

     (c) Secured Party may correct patent errors and fill in all blanks in this Agreement or in any
Collateral Schedule consistent with the agreement of the
parties.

     (d) Time is of the essence of this Agreement. This Agreement shall be binding, jointly and
severally, upon all parties described as the “Debtor” and their
respective heirs, executors, representatives, successors and assigns,
and shall [ILLEGIBLE] to the
benefit of Secured Party, its successors and assigns.

     (e) This Agreement and its Collateral Schedules constitute the entire agreement between the
parties with respect to the subject matter of this Agreement
and supersede all prior understandings (whether written, verbal or
implied) with respect to
such subject matter. THIS AGREEMENT AND ITS COLLATERAL
SCHEDULES SHALL NOT BE CHANGED OR TERMINATED ORALLY OR BY COURSE OF CONDUCT, BUT ONLY BY A
WRITING SIGNED BY
BOTH PARTIES. Section headings contained in this Agreement have been included for convenience
only, and shall not affect the construction or interpretation
of this Agreement.

     (f) This Agreement shall continue in full force and effect until all of the indebtedness has
been indefeasibly paid in full to Secured Party or its assignee.
The surrender, upon payment or otherwise, of any Note or any of the
other documents evidencing
any of the Indebtedness shall not affect the right of Secured
Party to retain the Collateral for such other Indebtedness as may then exist or as it may
be reasonably contemplated will exist in the future. This Agreement
shall automatically be reinstated if Secured Party is ever required to return or restore the
payment of all or any portion of the Indebtedness (all as though such
payment had never been made).

     (g) THIS
AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL IN ALL
RESPECTS BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATCONNECTICUT (WITHOUT REGARD
TO THE
CONFLICT OF LAWS PRINCIPLES OF SUCH STATE), INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY
AND PERFORMANCE,
REGARDLESS OF THE LOCATION OF THE EQUIPMENT.

     IN WITNESS WHEREOF, Debtor and Secured Party, intending to be legally bound hereby, have
duly executed this Agreement in one or more counterparts, each of which shall be deemed to be an original, as of the day and year first aforesaid.

	 	 	 	 	 	 	 	 	 	 	 
	SECURED PARTY:	 	DEBTOR:
	 
	 	 	 	 	 	 	 	 	 	 
	General Electric Capital Corporation	 	Avaion
Pharmaceuticals, Inc.
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Diane Hernandez
	 	By:
	 	/s/ Kenneth C. Carter
 	 	 	 	 
	

	 	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Name:

	 	Diane Hernandez
	 	Name:
	 	Kenneth C. Carter
 	 	 	 	 
	

	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Title:

	 	Vice President
	 	Title:
	 	 CEO	 	 	 	 
	

	 	 	 	 	 	 

 

 

COLLATERAL SCHEDULE NO. 001

THIS COLLATERAL SCHEDULE NO. 001 is annexed to and made a part of that certain Master
Security Agreement dated as of
June 25, 2002 between General Electric Capital Corporation, together with its sucessors and
assigns, if any, as Secured Party and Avalon Pharmaceuticals, Inc.
as Debtor and describes collateral in which Debtor has granted Secured Party a security interest
in connection with the Indebtedness (as defined in the Security
Agreement) including without limitation that certain Promissory Note
dated 8/22/02 in the original
principal amount of $2,109,942.71.

	 	 	 	 	 	 	 
	Quantity	 	Manufacturer	 	Serial Number	 	Year/Model and Type of Equipment
	 
	 	 	 	 	 	 
	SEE EXHIBIT A ATTACH HERETO AND MADE APART HEREOF.

and including all additions, attachments, accessories and accessions thereto, and any and all
substitutions, replacements or exchanges therefor, and all insurance
and/Or other proceeds thereof.

	 	 	 	 	 	 	 	 	 	 	 
	SECURED PARTY:	 	DEBTOR:
	 
	 	 	 	 	 	 	 	 	 	 
	General Electric Capital Corporation	 	Avaion Pharmaceuticals, Inc.
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Diane Hernandez
	 	By:
	 	/s/ Kenneth C. Carter
 	 	 	 	 
	

	 	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Name:

	 	Diane Hernandez
	 	Name:
	 	Kenneth C. Carter
 	 	 	 	 
	

	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Title:

	 	Vice President
	 	Title:
	 	 CEO	 	 	 	 
	

	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Date:

	 	8/22/02
	 	Date:
	 	8/19/02exv10w31b

 

Exhibit 10.31B

AMENDMENT

     THIS
AMENDMENT is made as of the 25th day of June, 2002 between
General Electric Capital Corporation (“Secure Party”) and Avalon Pharmaceuticals, Inc.
(“Debtor”) in connection with that certain Master Security Agreement, dated as of June 25,
2002 (“Agreement”). The terms of this Amendment are hereby incorporated into the Agreement as
though fully set forth therein. Section references below refer to the section numbers of the
Agreement. The Agreement is hereby amended as follows:

	 	2.  	REPRESENTATIONS, WARRANTIES AND COVENANTS OF DEBTOR.

Subsection (k) is hereby amended with the following:

“(k) The Collateral is, and will remain, free and clear of all liens, claims and
encumbrances of any kind whatsoever, except for (i) liens in favor of Secured
Party, (ii) liens for taxes not yet due or for taxes being contested in good faith
and
which do not involve, in the judgment of Secured Party, any risk of the sale,
forfeiture or loss of any of the Collateral, (iii) inchoate materialmen’s,
mechanic’s,
repairmen’s and similar liens arising by operation of law in the normal course of
business for amounts which are not delinquent, and (iv) landlord liens, claims and
encumbrances not filed against the Collateral (all of such liens are called
“Permitted Liens”).”

	 	5.  	REPORTS.

Subsection (b) is hereby amended with the following:

“(b) Debtor will deliver to Secured Party Debtor’s complete financial
statements, certified by a recognized firm of certified public accountants, within
one hundred twenty (120) days of the close of each fiscal year
of Debtor If
Secured Party requests, Debtor will deliver to Secured Party copies of Debtor’s
quarterly financial reports certified by Debtor’s chief financial officer, within
ninety (90) days after the close of each of Debtor’s fiscal quarter. Debtor will
deliver to Secured Party copies of all Forms 10-K and 10-Q, if any, within 30
days after the dates on which they are filed with the Securities and Exchange
Commission.”

	 	6.  	FURTHER ASSURANCES.

Subsection (b) is hereby amended with the following:

“(b) Debtor authorizes Secured Party to file a financing statement and
amendments thereto describing the Collateral and containing any other
information required by the applicable Uniform Commercial Code. Debtor
irrevocably grants to Secured Party the power to sign Debtor’s name and generally
to act on behalf of Debtor to execute and file applications for title, transfers of
title, financing statements, notices of lien and other documents pertaining to any
or all of the Collateral consistent with the agreement between the Debtor and
Secured Party; this power is coupled with Secured Party’s interest in the

 

 

Collateral. Debtor shall, if any certificate of title be required or permitted
by law
for any of the Collateral, obtain and promptly deliver to Secured Party such
certificate showing the lien of this Agreement with respect to the Collateral.
Debtor ratifies its prior authorization for Secured Party to file financing
statements and amendments thereto describing the Collateral and containing any
other information required by the Uniform Commercial Code if filed prior to the
date hereof.”

Subsection (c) is hereby amended with the following:

“(c) Debtor shall indemnify and defend the Secured Party, its successors and
assigns, and their respective directors, officers and employees, from and against
all third party claims, actions and suits (including, without limitation, related
attorneys’ fees) of any kind whatsoever arising, directly or indirectly, in
connection with any of the Collateral.”

	 	7.  	DEFAULT AND REMEDIES.

Subsection (c)(ii) is hereby amended with the following:

“(ii)
with or without legal process and at a time mutually agreeable between the
Debtor and Secured Party, enter any premises where the Collateral may be and
take possession of and remove the Collateral from the premises or store it on the
premises,”

Subsection (d) is hereby amended with the following:

“(d) Proceeds from any sale or lease or other disposition shall be applied: first,
to all costs of repossession, storage, and disposition including without limitation
reasonable and customary attorneys’, appraisers’, and auctioneers’ fees; second, to
discharge the obligations then in default; third, to discharge any other
Indebtedness of Debtor to Secured Party, whether as obligor, endorser, guarantor,
surety or indemnitor; fourth, to expenses incurred in paying or settling liens and
claims against the Collateral; and lastly, to Debtor, if there exists any surplus.
Debtor shall remain fully liable for any deficiency.”

	 	8.  	MISCELLANEOUS.

Subsection (g) is hereby amended with the following:

“(g) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL IN ALL RESPECTS BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF DELAWARE
(WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES OF SUCH STATE), INCLUDING ALL
MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, REGARDLESS OF THE LOCATION OF
THE EQUIPMENT.”

     TERMS USED, BUT NOT OTHERWISE DEFINED HEREIN SHALL HAVE THE
MEANINGS GIVEN TO THEM IN THE AGREEMENT. EXCEPT AS EXPRESSLY

 

 

AMENDED HEREBY,(ILLEGIBLE)
AGREEMENT SHALL REMAIN IN FULL FORCE AND
EFFECT. IF THERE IS ANY CONFLICT BETWEEN THE PROVISIONS OF THE
AGREEMENT AND THIS AMENDMENT, THEN THIS AMENDMENT SHALL CONTROL.

     IN WITNESS WHEREOF, the parties Hereto have executed this Amendment
simultaneously with the Agreement by signature of their respective authorized representative
set
forth below.

	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	General Electric Capital Corporation	 	Avaion Pharmaceuticals, Inc.
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Diane Hernandez
	 	By:
	 	/s/ Kenneth C. Carter
 	 	 	 	 
	

	 	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Name:

	 	Diane Hernandez
	 	Name:
	 	Kenneth C. Carter
 	 	 	 	 
	

	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Title:

	 	Vice President
	 	Title:
	 	 CEO

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00083-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00083-of-00352.parquet"}]]