Document:

exv10w39

 

Exhibit 10.39

MARYLAND INDUSTRIAL DEVELOPMENT FINANCING AUTHORITY

(the
“Issuer”)

and

AVALON PHARMACEUTICALS,
INC. 
(the “Borrower”)

and

MANUFACTURERS AND TRADERS TRUST COMPANY

(the “Remarketing Agent”)

PLACEMENT AND REMARKETING AGREEMENT

$12,000,000

MARYLAND INDUSTRIAL DEVELOPMENT FINANCING AUTHORITY

TAXABLE VARIABLE RATE DEMAND REVENUE BONDS

(AVALON PHARMACEUTICALS, INC. FACILITY)

Series 2003

Dated as of
April 1, 2003

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	 	PAGE	 
	RECITALS 
	 	 	1	 
	Section 1. Definitions 
	 	 	2	 
	Section 2. Appointment of Placement and Remarketing Agent; Acceptance 
	 	 	2	 
	Section 3. Initial Placement of Bonds 
	 	 	2	 
	Section 4. Determination of Variable Rate 
	 	 	3	 
	Section 5. Remarketing of Bonds Tendered on a Tender Date 
	 	 	3	 
	Section 6. Remarketing of Bonds Not Required Under Certain Circumstances 
	 	 	5	 
	Section 7. Nature of Remarketing Agent’s Obligations 
	 	 	5	 
	Section 8. Payment of Fees and Expenses 
	 	 	6	 
	Section 9. Furnishing of Offering Materials 
	 	 	6	 
	Section 10. Certain Representations, Warranties and Covenants of Remarketing Agent 
	 	 	7	 
	Section 11. Certain Representations, Warranties, Covenants and Agreements of Issuer 
	 	 	8	 
	Section 12. Certain Representations, Warranties and Covenants of the Borrower 
	 	 	9	 
	Section 13. Term of Placement and Remarketing Agreement 
	 	 	10	 
	Section 14. Resignation or Removal of Remarketing Agent 
	 	 	10	 
	Section 15. Cancellation of Placement and Remarketing Agreement by Remarketing Agent 
	 	 	11	 
	Section 16. Indemnification 
	 	 	12	 
	Section 17. Dealing with the Other Parties 
	 	 	14	 
	Section 18. No Extinguishment of Bonds 
	 	 	14	 
	Section 19. Blue Sky Qualification of Bonds 
	 	 	14	 
	Section 20. Events of Default 
	 	 	14	 
	Section 21. Books and Records 
	 	 	15	 
	Section 22. Notices, Principal Office and Representative of Remarketing Agent 
	 	 	15	 
	Section 23. Amendments 
	 	 	17	 
	Section 24. Benefit of Placement and Remarketing Agreement, Successors and Assigns 
	 	 	17	 
	Section 25. Representations and Warranties Remain Operative 
	 	 	17	 
	Section 26. Section Headings 
	 	 	17	 
	Section 27. Severability 
	 	 	18	 
	Section 28. Counterparts 
	 	 	18	 
	Section 29. Governing Law 
	 	 	18	 
	Section 30. Limited Liability of the Issuer 
	 	 	18	 
	Section 31. Effective Date 
	 	 	19	 
	Section 32. Specialty 
	 	 	19	 

 

 

PLACEMENT AND REMARKETING AGREEMENT

     THIS PLACEMENT AND REMARKETING AGREEMENT is dated as of April 1, 2003, and is made and
entered into by and among MARYLAND INDUSTRIAL DEVELOPMENT FINANCING AUTHORITY, a body corporate
and politic and a public instrumentality of the State of Maryland
(the “Issuer”), AVALON
PHARMACEUTICALS, INC., a Delaware corporation (the “Borrower”), and MANUFACTURERS AND TRADERS
TRUST COMPANY, a New York banking corporation (“M&T Bank”), in its capacity as placement agent
and/or remarketing agent (the “Remarketing Agent”).

RECITALS

     Pursuant to and in accordance with the Maryland
Industrial Development Financing Authority
Act, Article 83A, Title 5, Subtitle 9 of the Annotated Code of Maryland, and the Maryland
Economic Development Revenue Bond Act, Article 41, §14-101 et seq., of the Annotated Code of
Maryland, the Issuer has determined to issue and sell its $12,000,000 Taxable Variable Rate Demand
Bonds (Avalon Pharmaceuticals, Inc. Facility) Series 2003 (the “Bonds”) for the purpose of
financing a portion of the construction and equipping of an administrative and laboratory facility
(“Facility”) in that certain leased premises located in Germantown, Maryland and more fully
described in that certain Lease dated as of June 11, 2002, by and between Avalon Pharmaceuticals,
Inc. (“Borrower”), as tenant, and Westphalia Center II Limited Partnership, as landlord. The
Issuer has entered into the Trust Indenture of even date herewith with Allfirst Trust Company
National Association, a national banking association, as Trustee (the “Trustee”), as security for
the Bonds (the “Indenture”).

     In order to enhance the marketability of the Bonds, the Borrower has requested that M&T Bank
issue to the Trustee M&T Bank’s irrevocable, transferable
direct-pay letter of credit (the “Letter
of Credit”) to provide payment for, and to secure the payment of the principal of, and interest
on, and the purchase price of the Bonds. M&T Bank has issued the Letter of Credit pursuant to a
Letter of Credit Agreement of even date herewith by and between M&T Bank and the Borrower (the
“Letter of Credit Agreement”) concurrently with the issuance and delivery of the Bonds.

     The Indenture and the Bonds provide, among other things, that (a) the Bonds shall bear
interest at the Variable Rate (as defined in the Indenture), (b) the Variable Rate shall be
determined by the Remarketing Agent in the manner set forth in the Indenture and the Bonds, and
(c) the Issuer will purchase or cause to be purchased any of the Bonds tendered by the holders
thereof on each Tender Date (as defined in the Indenture).

     This Placement and Remarketing Agreement is entered into by and among the Issuer, the Borrower
and the Remarketing Agent to provide for (a) the initial placement of the Bonds, (b) the
determination of the Variable Rate, as in effect from time to time, and (c) the remarketing of
Bonds Tendered or Deemed Tendered for Purchase (as defined in the Indenture), all according to the
terms and subject to the conditions set forth in this Placement and Remarketing Agreement.

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     NOW, THEREFORE, for and in consideration of the covenants herein made, and subject to the
conditions herein set forth, the parties hereto agree as follows:

     Section 1.  Definitions.

          Unless the context clearly indicates a contrary meaning, each capitalized term used in this
Placement and Remarketing Agreement shall have the meaning given to that term in the Indenture.

     Section 2. 
Appointment of Placement and Remarketing Agent, Acceptance.

          Subject to the terms and conditions set forth in this Placement and Remarketing Agreement,
the Issuer, with the approval of the Borrower, hereby appoints M&T Bank as exclusive Placement
Agent for the initial placement of the Bonds and as exclusive Remarketing Agent for the subsequent
remarketing of the Bonds. M&T Bank hereby accepts such appointment and accepts and agrees to
perform the duties and obligations imposed upon it as Placement Agent and Remarketing Agent under
this Placement and Remarketing Agreement and under the Indenture, subject to the terms, conditions
and limitations set forth in this Placement and Remarketing Agreement. This Placement and
Remarketing Agreement constitutes the appointment referred to in Section 10.22 of the Indenture,
and executed counterparts or copies of this Placement and Remarketing Agreement may be delivered
to the Issuer and the Trustee.

     THE ISSUER AND THE BORROWER HEREBY ACKNOWLEDGE AND CONSENT TO THE FACT THAT M&T BANK IS
PROVIDING THE LETTER OF CREDIT FOR THE BONDS AND ACTING AS PLACEMENT AND REMARKETING AGENT FOR THE
BONDS AND ITS AFFILIATE, ALLFIRST TRUST COMPANY NATIONAL ASSOCIATION, IS ACTING AS TRUSTEE,
REGISTRAR AND PAYING AGENT WITH RESPECT TO THE BONDS.

     Section 3.  Initial Placement of Bonds.

          The Remarketing Agent in its capacity as placement agent hereby agrees to price all of the
Bonds on the Closing Date at a price equal to 100% of the principal amount thereof and shall cause
to be delivered to the Trustee the purchase price so paid therefor in immediately available funds,
and shall deliver to the Trustee a list of all the initial purchasers of such Bonds, including the
name, address and taxpayer or other identifying number of, and the principal amount of Bonds
purchased by, each such purchaser. In connection with the initial placement of the Bonds, the
Remarketing Agent will offer and sell the Bonds to no more than thirty-five institutional investors
each of which the Remarketing Agent reasonably believes is a Qualified Investor. As used herein,
the term “Qualified Investor” means any investor that (a) is an “accredited investor” within the
meaning of Regulation D of Rule 501(a) of the Securities Act of 1933, as amended, which is
purchasing any of the Bonds at private sale for investment purposes, (b) has such knowledge and
experience in financial and business matters that it is capable of evaluating the merits and risks
of the prospective investment in the Bonds, and (c) is not purchasing for more than one account or
with a view to distributing the Bonds. Neither the Issuer, the Borrower nor any other person shall
have any

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right to place any Bonds upon their initial issuance except through the Remarketing Agent under
this Placement and Remarketing Agreement.

     Section 4. Determination of Variable Rate.

               (a) On each Adjustment Date, the Remarketing Agent shall determine, and give notice of, the
Variable Rate in accordance with the Indenture; provided, however, the Remarketing Agent shall
notify the Trustee of the Variable Rate no later than 4:00 p.m. prevailing Baltimore, Maryland time
on the Adjustment Date that is also the last Business Day of the month. The Variable Rate shall be
determined by the Remarketing Agent at the lowest rate necessary to remarket all of the outstanding
Bonds at par as determined by the Remarketing Agent in its sole discretion based on prevailing
market conditions and may, but need not, be established by reference to one or more financial
indices. Upon written request from the Borrower, the Remarketing Agent will provide the Borrower
with information concerning interest rates determined by the Remarketing Agent in connection with
its remarketing of other variable rate demand bonds.

               (b) As provided in Section 2.4(d) of the Indenture, so long as a Credit Facility is in effect,
the interest rate payable on the Bonds may not exceed the Maximum Rate.

     Section 5. Remarketing of Bonds Tendered on a Tender Date.

               (a) Upon receipt of notice from the Trustee of the receipt by the Trustee of any Optional
Tender Notice meeting the requirements of the Indenture, the Remarketing Agent shall use its best
efforts to solicit purchasers for and sell the principal amount of the Bonds specified in such
Optional Tender Notice, any such sale to be made on the Optional Tender Date on which such Bonds
are to be purchased at a price equal to 100% of the principal amount thereof, plus accrued interest
(if any) thereon to the Optional Tender Date.

               (b) At least forty (40) days before each Mandatory Tender Date, the Remarketing Agent shall
receive written notice from the Trustee of such Mandatory Tender Date and the aggregate principal
amount of Bonds to be remarketed on such Mandatory Tender Date, which amount shall be equal to the
aggregate principal amount of Bonds Outstanding on such Mandatory Tender Date, less the aggregate
principal amount of Bonds to be redeemed, if any, on such Mandatory Tender Date.

               (c) Upon receipt of written notice from the Trustee as to the aggregate principal amount of
Bonds to be remarketed on any Mandatory Tender Date described in paragraph (b) above, the
Remarketing Agent shall use its best efforts to solicit purchasers for and sell the principal
amount of Bonds specified in such notice, any such sale to be made on the Mandatory Tender Date on
which such Bonds are to be purchased at a price equal to 100% of the principal amount thereof, plus
accrued interest (if any) thereon to the Mandatory Tender Date.

               (d) In no event will the Remarketing Agent remarket any Bonds Tendered or Deemed Tendered for
Purchase on any Tender Date at a price less than 100% of the principal amount thereof, plus accrued
interest (if any) thereon to the applicable Tender Date.

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               (e) Not later than 2:00 p.m. prevailing Baltimore, Maryland time on the second Business Day
prior to each Tender Date, the Remarketing Agent (i) shall give telephonic notice (promptly
confirmed in writing) to the Trustee, the Borrower, the Paying Agent, the Bond Registrar and the
Credit Facility Provider of the principal amount of Bonds that it has been unable to remarket, and
(ii) shall deliver to the Trustee the name, address and tax identification number of each
purchaser to whom the Remarketing Agent has remarketed and sold Bonds.

               (f) The Remarketing Agent shall use its best efforts to solicit purchasers for and sell any
Pledged Bonds held by the Pledged Bonds Custodian pursuant to the Pledged Bonds Custody Agreement.
The Remarketing Agent shall give telephonic notice (promptly confirmed in writing) to the Trustee,
the Borrower, the Bond Registrar, the Paying Agent and the Credit Facility Provider of the
principal amount of any Pledged Bonds that are remarketed at any time by the Remarketing Agent.

               (g) Upon successful remarketing of Pledged Bonds, the Remarketing Agent will transfer, or
cause to be transferred, the purchase price from the purchaser of such Pledged Bonds directly to
the appropriate Credit Facility Provider for the account of the Borrower.

               (h) As provided in the Indenture, there shall be no remarketing of Bonds pursuant to the
provisions of this Section 5 if (1) a Mandatory Tender Date is a Termination Date and the Borrower
has not provided a Substitute Credit Facility, or (2) there shall have occurred and be continuing
an Event of Default under the Indenture.

          In addition, anything in this Placement and Remarketing Agreement to the contrary
notwithstanding, there shall be no remarketing of Pledged Bonds pursuant to this Section unless
and until an amount equal to the amount of the Bond Purchase Principal Drawing the proceeds of
which were used to purchase such Pledged Bonds has been restored to the Credit Facility and the
Credit Facility Provider has confirmed to the Trustee in writing that such Credit Facility has not
expired in accordance with its terms.

               (i) The Remarketing Agent shall hold the proceeds of any sale of Bonds that have been
remarketed pursuant to this Placement and Remarketing Agreement and the Indenture in trust for the
person who tendered, or is deemed to have tendered, such Bond for purchase, and shall deliver the
proceeds of such sale to the Trustee for deposit into the Purchase Account of the Bond Fund; at
the same time the Remarketing Agent shall notify the Borrower, the Bond Registrar, the Paying
Agent and the Credit Facility Provider of the amount so deposited. The proceeds of any sale of
Pledged Bonds by the Remarketing Agent shall be paid by the Remarketing Agent directly to the
Credit Facility Provider for the account of the Borrower.

               (j) Notwithstanding anything herein to the contrary, the Remarketing Agent, the Borrower, and
the Issuer hereby agree that (i) the Remarketing Agent shall not solicit the Issuer or the Borrower
or any of its affiliates, as potential purchasers of the Bonds Tendered or Deemed Tendered for
Purchase on any Optional Tender Date or Mandatory Tender Date or sell such Bonds to the Issuer or
the Borrower or any of its affiliates, except that the Remarketing Agent may

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solicit the Issuer as potential purchasers of any Pledged Bonds and (ii) neither the Issuer nor
the Borrower or any of its affiliates shall, on their own or through an agent, attempt to purchase
any Bonds tendered for purchase on any Optional Tender Date or Mandatory Tender Date, provided
that the Issuer or the Borrower or its affiliates may purchase any Pledged Bonds.

               In connection with the remarketing of the Bonds, the Remarketing Agent will offer and sell
the Bonds only to investors each of which the Remarketing Agent reasonably believes is a Qualified
Investor.

     Section 6. Remarketing of Bonds Not Required under Certain Circumstances.

          Notwithstanding any other provision set forth in this Placement and Remarketing Agreement,
the Remarketing Agent shall not be obligated to solicit purchasers for any Bond to be tendered on
a Tender Date or for any Pledged Bond, or to remarket and place any Bond or Pledged Bond if (a) an
Event of Default under the Indenture, or under the Letter of Credit Agreement or this Placement
and Remarketing Agreement shall have occurred and be continuing; and (b) the Remarketing Agent
shall have determined, in its sole discretion, that a Disclosure Statement (hereinafter defined)
is required for distribution to prospective purchasers of the Bonds and that a Disclosure
Statement is not available or, if available, is not reasonably satisfactory to the Remarketing
Agent in form or substance.

     Section 7. Nature of Remarketing Agent’s Obligations.

               (a) Without limiting the other provisions of this Placement and Remarketing Agreement, the
Remarketing Agent is hereby expressly authorized and directed to honor its obligations under, and
in compliance with, the terms of the Indenture and this Placement and Remarketing Agreement without
regard to, and without any duty on its part to inquire into, the existence of any disputes or
controversies between the Issuer, the Borrower, the Trustee, the Bond Registrar, the Paying Agent,
the Credit Facility Provider, or any other person or the respective rights, duties or liabilities
of any of them or whether any facts or occurrences represented in any of the documents presented
under this Placement and Remarketing Agreement are true and correct, provided, however, in the
event the Remarketing Agent has actual knowledge of any such dispute or controversy the Remarketing
Agent shall notify the Borrower of the same, and the Remarketing Agent shall continue to perform
its obligations hereunder in accordance with the terms hereof.

               (b) The Remarketing Agent may purchase for its own account any Bonds Tendered or Deemed
Tendered for Purchase on a Tender Date, but is in no way obligated to, advance its own funds to
purchase any Bonds Tendered or Deemed Tendered for Purchase on a Tender Date.

               (c) Until this Placement and Remarketing Agreement expires or has been terminated or canceled
in accordance with its terms, the Remarketing Agent shall act as exclusive remarketing agent with
respect to the Bonds on the terms and conditions herein contained at all times. Neither the Issuer
nor any other person shall have any right to remarket any Bonds except through the Remarketing
Agent under this Placement and Remarketing Agreement.

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               (d) The Remarketing Agent’s sole responsibilities hereunder acting in its capacity as
Remarketing Agent shall consist of (i) the determination of the Variable Rate with respect to the
Bonds as herein provided; (ii) the solicitation of purchasers for Bonds Tendered or Deemed
Tendered for Purchase on a Tender Date and the solicitation of purchasers for Pledged Bonds as
herein provided; (iii) effecting, on a best efforts basis, sales of such Bonds in accordance with
this Placement and Remarketing Agreement; (iv) performing its other functions as Remarketing
Agent as set forth in this Placement and Remarketing Agreement and in the Indenture, subject to
the limitations set forth in this Placement and Remarketing Agreement; and (v) performing such
other related functions as may be requested by the Issuer (with consent of the Borrower) and
agreed to by the Remarketing Agent. The Remarketing Agent shall not be liable to the Issuer or
any other person for any failure by any purchaser of Bonds obtained by the Remarketing Agent to
pay the purchase price of such Bonds, unless the Remarketing Agent delivers, or causes to be
delivered, the Bonds to a purchaser without receiving the purchase price therefor in return.

     Section 8. Payment of Fees and Expenses.

               (a) For the services to be performed by the Remarketing Agent under this Placement and
Remarketing Agreement, the Borrower agrees to pay the Remarketing Agent (i) on the Closing Date the
balance due on a non-refundable placement fee equal to Ninety-Five Basis Points (.95%) of the
aggregate principal amount of the Bonds (of which, the Remarketing Agent acknowledges prior receipt
of $23,000) and (ii) on the Closing Date and on each anniversary thereof during the term of this
Placement and Remarketing Agreement, a non-refundable remarketing fee
equal to 0.125% of the
aggregate principal amount of Bonds Outstanding on such date.

               The Borrower shall be subject to a late fee equal to 5% of the amount due if any of the fees
described above are not paid on the date when due. In addition, if such fee and late fee, if
applicable, are not paid within 15 days of the date due, the Borrower shall pay interest on such
fee and late fee from such fifteenth day at the fluctuating rate equal to the Reimbursement Rate
(as defined in the Letter of Credit Agreement).

               (b) In addition, within 10 days of receipt of any invoice therefor, the Borrower shall
reimburse the Remarketing Agent for its reasonable expenses (including, without limitation, the
reasonable fees and disbursements of its counsel) incurred in connection with the preparation of
any Disclosure Statement (hereinafter defined) or in connection with the enforcement of any
provision of this Placement and Remarketing Agreement.

               (c) In addition to the fees and expenses contained in this Section 8, the Borrower agrees to
pay an initial rating agency fee to the rating agency selected by the Remarketing Agent on the
Closing Date and thereafter the annual fee payable on each subsequent anniversary of the Closing
Date to such rating agency selected by the Remarketing Agent.

     Section 9. Furnishing of Offering Materials.

               (a) The Borrower, at its expense, shall furnish the Remarketing Agent with copies of any
official statement, private placement memorandum or other disclosure statement

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or offering document requested by the Remarketing Agent and relating to the Bonds (a “Disclosure
Statement”) in such quantities as the Remarketing Agent may reasonably request from time to time.

               (b) The Borrower, at its expense, shall furnish the Remarketing Agent with such information
with respect to the Issuer, the Borrower, the Credit Facility Provider (other than M&T Bank) and
the Bonds as the Remarketing Agent shall reasonably request from time to time.

               (c) If, at any time during the term of this Placement and Remarketing Agreement, any event
known to the Borrower relating to or affecting the Issuer, the Borrower, the Credit Facility
Provider, this Placement and Remarketing Agreement or the Bonds shall occur which might materially
adversely affect (i) the operations, financial or other condition or results of operations of the
Borrower to such an extent that the ability of the Borrower to perform its obligations under the
Letter of Credit Agreement is impaired, or (ii) the ability of the Issuer to perform its
obligations under the Bonds, then the Borrower shall promptly notify the Remarketing Agent in
writing of the circumstances and details of such event.

               (d) If the Remarketing Agent determines that it is necessary or desirable to use a Disclosure
Statement in connection with its remarketing of any of the Bonds, the Remarketing Agent will notify
the Borrower and the Borrower, at the Borrower’s expense, shall provide the Remarketing Agent with
a Disclosure Statement satisfactory to the Remarketing Agent and its counsel in their reasonable
discretion. The Borrower, at its expense, shall supply the Remarketing Agent with as many copies of
the Disclosure Statement as the Remarketing Agent reasonably requests from time to time and, upon
request, will amend the Disclosure Statement from time to time so that the Disclosure Statement
will not contain any untrue statement of a material fact or omit to state a material fact necessary
to make the statements in the Disclosure Statement, in light of the circumstances under which they
are made, not misleading at the time the Disclosure Statement is delivered to a purchaser of Bonds.

     Section 10. Certain Representations, Warranties and Covenants of the Remarketing Agent.

          The Remarketing Agent makes the following representations and warranties to the Issuer and the
Borrower:

               (a) The Remarketing Agent is duly and validly organized and in good standing under the laws of
the State of Maryland, has full power and authority to enter into, and perform its obligations
under, this Placement and Remarketing Agreement.

               (b) The Remarketing Agent is authorized by law to perform all duties imposed upon it as
Remarketing Agent by this Placement and Remarketing Agreement.

               (c) The Remarketing Agent has not and shall not take any action or omit to take any action
which action or omission will cause the Remarketing Agent to breach, violate or default under any
of the Bond Documents (including, without limitation, this Placement and Remarketing Agreement) or
the Credit Facility Documents to which it is a party.

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     Section 11. Certain Representations, Warranties, Covenants and Agreements of the Issuer.

          The Issuer represents, warrants, covenants and agrees with the Remarketing Agent as follows:

               (a) Each of the Issuer’s representations and warranties set forth in any of the Bond Documents
(including, without limitation, this Placement and Remarketing Agreement) or the Credit Facility
Documents to which the Issuer is a party is true and correct in all material respects as of the
date of the initial authentication and delivery of the Bonds and is incorporated herein by
reference.

               (b) Any certificate signed by an Authorized Issuer Representative and delivered to the
Remarketing Agent shall be deemed to be a representation by the Issuer to the Remarketing Agent as
to the statements made therein.

               (c) The Issuer will not take or omit to take any action which action or omission will in any
way cause the proceeds from the sale of the Bonds to be applied in a manner other than as provided
in the Indenture.

               (d) The Issuer shall use its best efforts to promptly notify the Remarketing Agent by
telephone, confirmed in writing, of:

                    (i) the occurrence or existence of any event or condition which
becomes known to the Issuer and which would make any of its representations contained herein
incorrect or untrue in any material respect if made on, and as of, any date during the term of
this Placement and Remarketing Agreement; and

                    (ii) any resignation or removal of, and any appointment of a successor for, the Trustee,
the Bond Registrar, or the Paying Agent which becomes known to it.

               (e) The Issuer will not amend or consent to any amendment of any of the Bond Documents or the
Credit Facility Documents without the prior written consent of the Remarketing Agent (which consent
shall not be withheld, unless the Remarketing Agent determines in its sole discretion that the
amendment would adversely affect its ability to perform its functions as Remarketing Agent).

               (f) The Issuer has not and shall not take any action or omit to take any action which action
or omission will cause the Issuer to breach, violate or default under any of the Bond Documents
(including, without limitation, this Placement and Remarketing Agreement) or Credit Facility
Documents to which it is a party, or any other agreement or instrument to which the Issuer is a
party and which is to be used or contemplated for use in the consummation of the transactions
contemplated hereby and by the Indenture.

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     Section 12.     Certain
Representations, Warranties and Covenants of the Borrower

          The Borrower makes the following representations and warranties to the Remarketing Agent and
the Issuer:

               (a) Each of the Borrower’s representations and warranties set forth in any of the Bond
Documents to which it is a party (including, without limitation, this Placement and Remarketing
Agreement) or the Credit Facility Documents is true and correct in all material respects as of the
date of the initial authentication and delivery of the Bonds and each is incorporated herein by
reference.

               (b) Any certificate signed by an Authorized Borrower Representative and delivered to the
Remarketing Agent shall be deemed to be a representation by the Borrower to the Remarketing Agent
as to the statements made therein.

               (c) The Borrower will not take or omit to take any action which action or omission will in any
way cause the proceeds from the sale of the Bonds to be applied in a manner other than as provided
in the Indenture.

               (d) The Borrower shall use its best efforts to promptly notify the Remarketing Agent by
telephone, confirmed in writing, of:

                    (i) the occurrence or existence of any event or condition which
becomes known to the Borrower and which would make any of its representations contained herein
incorrect or untrue in any material respect if made on, and as of, any date during the term of
this Placement and Remarketing Agreement; and

                    (ii) any resignation or removal of, and any appointment of a successor for, the Trustee,
the Bond Registrar, or the Paying Agent which becomes known to it.

               (e) The Borrower will not amend or consent to any amendment of any of the Bond Documents or
the Credit Facility Documents without the prior written consent of the Remarketing Agent (which
consent shall not be withheld, unless the Remarketing Agent determines in its sole discretion that
the amendment would adversely affect its ability to perform its functions as Remarketing Agent).

               (f) The Borrower has not and shall not take any action or omit to take any action which action
or omission will cause the Borrower to breach, violate or default under any of the Bond Documents
(including, without limitation, this Placement and Remarketing Agreement) or Credit Facility
Documents or any other agreement or instrument to which the Borrower is a party and which is to be
used or contemplated for use in the consummation of the transactions contemplated hereby and by the
Indenture.

9

 

               (g) The Borrower knows of no Event of Default under the Bond Documents or the Credit
Facility Documents.

               (h) The Borrower knows of no fact or circumstance which but for the giving of notice or
passage of time or both would constitute an Event of Default under the Bond Documents or the
Credit Facility Documents.

               (i) The Borrower has reviewed or caused to be reviewed all Disclosure Statements, including
all amendments thereto, and all information relating to the Borrower set forth therein is true,
accurate and complete.

     Section 13.     Term of Placement and Remarketing Agreement.

          This Placement and Remarketing Agreement shall become effective upon execution by the
Remarketing Agent, the Borrower and the Issuer, and (unless terminated or canceled in accordance
with its terms) shall continue in full force and effect until the earliest of (i) the date on
which all of the Bonds are paid in full; (ii) the effective date of any cancellation of this
Placement and Remarketing Agreement by the Remarketing Agent pursuant to the terms of Section 15
of this Placement and Remarketing Agreement; (iii) the effective date of the removal or
resignation of the Remarketing Agent pursuant to the terms of Section 14 of this Placement and
Remarketing Agreement or (iv) the date of the final maturity of the Bonds.

     Section 14.     Resignation or Removal of Remarketing Agent.

               (a) The Remarketing Agent may be removed upon 30 days’ prior written notice from the Borrower
by an instrument signed by the Issuer and the Borrower and filed with the Remarketing Agent, the
Credit Facility Provider and the Trustee; provided, however, that the removal of the Remarketing
Agent shall not be effective until (i) the Borrower shall have paid to the Remarketing Agent all
amounts due the Remarketing Agent hereunder (provided, however, that if a final non-appealable
judgment shall have been entered against the Remarketing Agent in which it is determined that the
Remarketing Agent was grossly negligent or engaged in willful misconduct in connection with the
performance of its duties, the Borrower shall not be responsible for payment of the Remarketing
Agent’s outstanding fees) and (ii) the Issuer, at the Borrower’s direction, has appointed a
successor Remarketing Agent, which meets all of the requirements of the Indenture and has been
approved by the Credit Facility Provider (which consent shall not be unreasonably withheld).

               (b) The Remarketing Agent may at any time resign and be discharged of all duties and
obligations hereunder and under the Indenture by giving notice, in writing, 30 days’ prior to the
effective date of such resignation, to the Issuer, the Borrower, the Credit Facility Provider and
the Trustee.

               (c) Upon the expiration, termination or cancellation of this Placement and Remarketing
Agreement or the effective date of the removal or resignation of the Remarketing Agent, the
Remarketing Agent shall pay over, assign and deliver to the Trustee (or any person

10

 

designated in writing by the Trustee) any amounts held in trust hereunder or under the
Indenture by the Remarketing Agent and shall make available to the Issuer, and/or the Borrower for
inspection and copying, all documents and records relating to this Placement and Remarketing
Agreement then in the Remarketing Agent’s possession.

     Section 15.     Cancellation of Placement and Remarketing Agreement by Remarketing Agent.

          The Remarketing Agent may refuse to remarket Bonds under this Placement and Remarketing
Agreement or cancel its obligations under this Placement and Remarketing Agreement at any time by
notifying the Issuer, the Borrower, the Trustee and the Credit Facility Provider in writing of its
election to dp so, if:

               (a) Legislation is introduced by amendment or otherwise in, or is enacted by the Congress of
the United States of America, or a decision of a court established under Article III of the
Constitution of the United States of America is rendered, or a stop order, ruling, regulation or
official statement by, or on behalf of, the United States Securities and Exchange Commission or
other governmental agency having jurisdiction of the subject matter is made or proposed, to the
effect that the offering or sale of the Bonds or of obligations of the general character of the
Bonds, as contemplated hereby, is or would be in violation of any provision of the Securities Act
of 1933, as amended and as then in effect, or the Securities Exchange Act of 1934, as amended and
as then in effect, or the Trust Indenture Act of 1939, as amended and as then in effect, or with
the purpose or effect of otherwise prohibiting the offering or sale of the Bonds or of obligations
of the general character of the Bonds, as contemplated hereby and by the Indenture.

               (b) Any information becomes known which, in the opinion of the Remarketing Agent, makes
untrue, incorrect or misleading in any material respect any statement or information contained in
any Disclosure Statement, as the information contained therein has been supplemented or amended by
other information, as of the date furnished or supplied to the Remarketing Agent, or causes any
Disclosure Statement, as so supplemented or amended, to contain an untrue, incorrect or misleading
statement of a material fact or to omit to state a material fact required to be stated therein or
necessary to make the statements made therein, in light of the circumstances under which they were
made, not misleading.

               (c) Any legislation, resolution, ordinance, rule or regulation is introduced in, or is enacted
by, any federal governmental body, department or agency of the United States or the State of
Maryland, or a decision by any court of competent jurisdiction within the United States or the
State of Maryland is rendered which, in the opinion of the Remarketing Agent, materially adversely
affects the marketability of the Bonds.

               (d) Additional material restrictions not in force as of the date hereof shall have been
imposed upon trading in securities generally by any governmental authority or by any national
securities exchange or any restrictions are materially increased.

11

 

               (e) Any governmental authority imposes, as to the Bonds, or obligations of the general
character of the Bonds, any material restrictions not now in force, or increases materially those
now in force.

               (f) A general banking moratorium shall have been established by federal or Maryland
authorities.

               (g) Any rating of the Bonds, either of the Credit Facility Provider or the holding company of
the Credit Facility Provider shall have been reduced or withdrawn by a national rating service,
which, in the opinion of the Remarketing Agent, materially adversely affects the marketability of
the Bonds.

               (h) A war involving the United States of America shall have been declared, or any existing
conflict involving the armed forces of the United States of America shall have escalated, or any
other national emergency relating to the effective operation of government or the financial
community shall have occurred, which, in the opinion of the Remarketing Agent, materially
adversely affects the marketability of the Bonds.

               (i) Any representation or warranty of the Issuer or the Borrower contained in any of the Bond
Documents (including, without limitation, this Placement and Remarketing Agreement) or the Credit
Facility Documents at any time proves to have been false or incorrect in any material respect when
made.

               (j) Any event of default or Event of Default, as the case may be, under this Placement and
Remarketing Agreement, the Indenture or the Letter of Credit Agreement occurs and is continuing.

     Section 16.     Indemnification. Subject to the provisions of Section 30 hereof:

               (a) To the extent permitted by law, the Borrower agrees to indemnify and hold harmless the
Issuer and the Remarketing Agent and their directors, officers and employees and each person, if
any, who controls the Remarketing Agent within the meaning of Section 15 of the Securities Act of
1933, as amended (such persons being referred to herein collectively as the “Indemnified Persons”
and individually as an “Indemnified Person”) from and against any and all losses, claims, damages
or liabilities, joint and several, to which any Indemnified Person may become subject, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof) arise out of, or are
based upon, any untrue statement or alleged untrue statement of a material fact contained in any
Disclosure Statement or any other information with respect to the Borrower provided by the
Borrower, or arising out of, or based upon, the omission or alleged omission to state in any
Disclosure Statement or other information provided by the Borrower a material fact necessary in
order to make the statements and information therein not misleading in any material respect; and
the Borrower will reimburse each Indemnified Person for any legal or other expenses incurred by
such Indemnified Person in connection with investigating, defending or preparing to defend any such
action or claim. The indemnity agreement in this paragraph shall be in addition to any liability
which the Borrower may otherwise have to any Indemnified Person.

12

 

               (b) In case any action is brought against any Indemnified Person based upon a Disclosure
Statement or any other information with respect to the Borrower provided by the Borrower and in
respect of which indemnity may be sought against the Borrower under subparagraph (a) above, the
Indemnified Person shall promptly notify the Borrower, in writing, and the Borrower shall assume
the defense thereof, including the employment of counsel satisfactory to the Indemnified Person and
the payment of all expenses. The failure to so notify the Borrower shall not relieve the Borrower
from any liability under this Section 16 which it may have to such Indemnified Person who failed to
give notice to the Borrower, unless the failure (except failure by the Issuer) to give notice shall
have deprived the Borrower of a reasonable opportunity to contest any such matter nor shall such
failure relieve the Borrower from (A) liability to any other Indemnified Person, or (B) any other
liability which it may have to any Indemnified Person. The Indemnified Person shall have the right
to employ separate counsel in any such action and to participate in the defense thereof, but, the
fees and expenses of any such counsel shall be paid by the Borrower only if (1) the Borrower fails
to assume the defense of such action as provided herein or (2) the Indemnified Person shall have
reasonably concluded that there may be one or more legal defenses available to it which are
different from or additional to those available to the Borrower or other persons represented by
counsel employed by the Borrower and representation of the Borrower and the Indemnified Person by
the same counsel would be inappropriate or impermissible under applicable standards of professional
conduct. The Borrower shall not be liable for any settlement of any such action effected without
its consent, but if settled with the consent of the Borrower or if there be a final judgment for
the plaintiff in any such action, the Borrower agrees to indemnify and hold harmless the
Indemnified Person from and against any loss or liability by reason of such settlement or judgment.

               (c) The Borrower shall also reimburse any Indemnified Person for all reasonable expenses
incurred by it, including compensation for witnesses’ time and the fees and expenses of separate
counsel, in connection with such Indemnified Person being compelled to appear as a witness in any
action or proceeding against the Issuer or the Borrower or in connection with the Bonds, whether or
not the Indemnified Person is named in such action or proceeding.

               (d) No Indemnified Person (other than the Issuer and its officials, agents or employees) shall
be indemnified for any losses, claims, damages or liabilities resulting from gross negligence by
such Indemnified Person. Notwithstanding the above, the Issuer and its officials, agents or
employees shall not be indemnified above to the extent they are covered by or have the defense or
sovereign immunity. Further, no Indemnified Person, including the Issuer and its officials,
agents, or employees, shall be indemnified for any losses, claims, damages or liabilities resulting
from willful misconduct or intentional violation of law by such Indemnified Person.

               (e) If the indemnification provided for herein is held by a court to be unavailable or is
insufficient to hold any Indemnified Person harmless in respect of any losses, claims, damages or
liabilities (or actions in respect thereof), then the Borrower shall contribute to the amount paid
or payable by the Indemnified Person (other than the Issuer and its officers, members, agents or
employees) as a result of the losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect the relative fault of the Borrower on the
one

13

 

hand and the Indemnified Person on the other hand, as well as any other relevant equitable
considerations.

               (f) The indemnity agreements contained in this Section 16 shall remain operative and in full
force and effect, regardless of any investigation made by or on behalf of the Borrower or the
Remarketing Agent and shall survive the termination or cancellation of this Placement and
Remarketing Agreement.

     Section 17.     Dealing with the Other Parties.

          To the extent permitted by law, the Remarketing Agent, in its individual capacity, either as
principal or agent, may engage in or be interested in any financial or other transaction with the
Issuer, the Borrower, the Trustee, the Bond Registrar, the Paying Agent and the Credit Facility
Provider and may act as depository, trustee or agent for any committee or body of holders of the
Bonds or of other obligations of the Issuer as freely as if it did
not act as Remarketing Agent
hereunder.

     Section 18.     No Extinguishment of Bonds.

          It is the express intention of the parties hereto that neither the determination of any
interest rate on the Bonds nor any purchase, sale or transfer of any Bonds as herein provided,
shall constitute or be construed to be the extinguishment of any Bonds or the obligations
represented thereby or the reissuance of any Bonds.

     Section 19.          Blue Sky Qualification of Bonds.

          The Issuer and the Borrower shall cooperate with the Remarketing Agent in the qualification
of the Bonds and the Credit Facility (if necessary) for offering and sale and the determination of
the eligibility of the Bonds for investment under the laws of such jurisdictions as the
Remarketing Agent shall designate and shall use their best efforts to continue any such
qualification in effect so long as required for the remarketing of the Bonds by the Remarketing
Agent; provided, however, that the Issuer shall not be required to execute a special or general
consent to service of process or to qualify as a foreign corporation in connection with any such
qualification; and provided, further, that the Borrower shall be responsible for all fees and
expenses incurred by the Remarketing Agent pursuant to this Section 19. The Remarketing Agent will
not remarket Bonds in any jurisdiction in which the laws of such jurisdiction prohibit such
remarketing.

     Section 20.     Events of Default.

          As used herein, the term “Event of Default” means, in addition to the meaning set forth in
Article IX of the Indenture, (a) the failure by the Borrower to make any payment required by this
Placement and Remarketing Agreement within 10 days after receipt of a written notice from the
Remarketing Agent stating that such amount is due and owing or (b) the failure by the Borrower to
promptly perform and observe each of the covenants and agreements made by it in this Placement and
Remarketing Agreement. Upon the occurrence of an Event of Default, the Remarketing Agent

14

 

may take such action at law or in equity as it deems necessary or desirable to collect the amounts
then due and thereafter to become due to the Remarketing Agent and to enforce the performance and
observance by the Borrower and the Issuer of the covenants and agreements made by them in this
Placement and Remarketing Agreement.

     Section 21.     Books and Records.

          The Remarketing Agent shall keep books and records concerning the purchase and sale of Bonds
pursuant to this Placement and Remarketing Agreement in a manner consistent with prudent industry
practice and shall make such books and records available for inspection by the Issuer, the
Borrower, the Trustee and the Credit Facility Provider at all reasonable times.

     Section 22.     Notices, Principal Office and Representatives of Remarketing Agent.

          Except as otherwise provided in this Agreement, all notices, demands, requests, consents,
approvals, certificates or other communications required under this Agreement to be in writing
shall be sufficiently given and shall be deemed to have been properly given (i) if delivered by
hand, when written confirmation of delivery is received by the sender, (ii) three days after the
same is mailed by certified mail, postage prepaid, return receipt requested, or (iii) if sent by
overnight courier, 24 hours after delivery to such overnight courier, addressed to the person to
whom any such notice, demand, request, approval, certificate or other communication is to be given,
at the appropriate address for the Principal Office of such person designated below:

	 	 	 	 	 	 	 
	

	 	Remarketing
	 	 	 	Manufacturers and Traders Trust Company
	

	 	Agent:
	 	 	 	25 South Charles Street, 12th Floor
	

	 	 	 	 	 	Baltimore, Maryland 21201
	

	 	 	 	 	 	Attention: Howard M. Sakin
	 
	 	 	 	 	 	 
	

	 	 	 	with a copy to:	 	 
	 
	 	 	 	 	 	 
	

	 	 	 	 	 	Alan S. Mark, Esquire
	

	 	 	 	 	 	Paley Rothman Goldstein, Rosenberg & Cooper, Chartered
	

	 	 	 	 	 	4800 Hampden Lane, 7th Floor
	

	 	 	 	 	 	Bethesda, Maryland 20814
	 
	 	 	 	 	 	 
	

	 	Issuer:
	 	 	 	MARYLAND INDUSTRIAL DEVELOPMENT
	

	 	 	 	 	 	FINANCING AUTHORITY
	

	 	 	 	 	 	Department of Business and Economic Development
	

	 	 	 	 	 	217 Redwood Street, 22nd Floor
	

	 	 	 	 	 	Baltimore, Maryland 21202
	

	 	 	 	 	 	Attn.: Executive Director

15

 

	 	 	 	 	 	 	 
	

	 	Borrower:
	 	 	 	Avalon Pharmaceuticals, Inc.
	

	 	 	 	 	 	20358 Seneca Meadows Parkway
	

	 	 	 	 	 	Germantown, Maryland 20876
	

	 	 	 	 	 	Attention: GaryLessing
	 
	 	 	 	 	 	 
	

	 	 	 	with a copy to:	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	Mark Gruhin, Esq.
	

	 	 	 	 	 	Schmeltzer, Aptaker & Shepard, P.C.
	

	 	 	 	 	 	2600 Virginia Avenue, N.W.
	

	 	 	 	 	 	Suite 1000, The Watergate
	

	 	 	 	 	 	Washington, D.C. 20878
	 
	 	 	 	 	 	 
	

	 	Trustee, Paying
	 	 	 	Allfirst Trust Company,
	

	 	Agent and
	 	 	 	National Association
	

	 	Registrar:
	 	 	 	25 South Charles Street, 16th Floor
	

	 	 	 	 	 	BANG 101-591
	

	 	 	 	 	 	Baltimore, Maryland 21201
	

	 	 	 	 	 	Attention: Sharon A. Surguy
	 
	 	 	 	 	 	 
	

	 	 	 	with a copy to:	 	 
	 
	 	 	 	 	 	 
	

	 	 	 	 	 	Alan S. Mark, Esquire
	

	 	 	 	 	 	Paley Rothman Goldstein, Rosenberg & Cooper, Chartered
	

	 	 	 	 	 	4800 Hampden Lane, 7th Floor
	

	 	 	 	 	 	Bethesda, Maryland 20814
	 
	 	 	 	 	 	 
	

	 	M&T:
	 	 	 	Manufacturers and Traders Trust Company
	

	 	 	 	 	 	25 South Charles Street, 15th Floor
	

	 	 	 	 	 	Baltimore, Maryland 21201
	

	 	 	 	 	 	Attention: Letter of Credit Department
	 
	 	 	 	 	 	 
	

	 	 	 	and	 	 
	 
	 	 	 	 	 	 
	

	 	 	 	 	 	Manufacturers and Traders Trust Company
	

	 	 	 	 	 	Anstec Building
	

	 	 	 	 	 	1410 Spring Hill Road
	

	 	 	 	 	 	Suite 125
	

	 	 	 	 	 	McLean, Virginia 22102
	

	 	 	 	 	 	Attention: David Diluigi

16

 

	 	 	 	 	 	 	 
	

	 	 	 	with a copy to:	 	 
	 
	 	 	 	 	 	 
	

	 	 	 	 	 	Alan S. Mark, Esquire
	

	 	 	 	 	 	Paley Rothman Goldstein, Rosenberg & Cooper, Chartered
	

	 	 	 	 	 	4800 Hampden Lane, 7th Floor
	

	 	 	 	 	 	Bethesda, Maryland 20814

     The Remarketing Agent, the Borrower, the Issuer and all other parties entitled to notices
hereunder may, by notice given under this Placement and Remarketing Agreement, designate other
addresses to which subsequent notices, requests, reports or other communications shall be
directed. During any period in which the Bond Registrar and the Paying Agent are the same and have
the same address, any notice required to be given to either the Bond Registrar or the Paying
Agent, or both, may be given by one notice to the address for the Bond Registrar and Paying Agent
set forth above. In addition, so long as M&T Bank is the Remarketing Agent, any telephonic notice
required hereunder shall be given only to Howard M. Sakin at (410) 244-7940, unless another person
is designated by the Remarketing Agent in writing to the Issuer and the Trustee.

     Section 23.     Amendments.

          This Placement and Remarketing Agreement may be amended from time to time by an instrument in
writing executed by the parties hereto, with the consent of the Credit Facility Provider, but
without the consent of the holders of the Bonds then Outstanding. The Borrower agrees to supply
the Trustee with a copy of each amendment.

     Section 24.     Benefit of Placement and Remarketing Agreement: Successors and Assigns.

          This Placement and Remarketing Agreement will inure to the benefit of and be binding upon the
Remarketing Agent, the Issuer, the Borrower and their respective successors and assigns. The terms
“successors” and “assigns” shall not include any purchaser of any of the Bonds merely because of
such purchase.

     Section 25.     Representations and Warranties Remain Operative.

          All of the representations and warranties of the Remarketing Agent, the Borrower and the
Issuer in this Placement and Remarketing Agreement shall remain operative and in full force and
effect, regardless of (a) any independent investigation made by or on behalf of the Remarketing
Agent, (b) delivery of, and any payment for, any of the Bonds hereunder or (c) termination or
cancellation of this Placement and Remarketing Agreement.

     Section 26.     Section Headings.

          Section headings have been inserted in this Placement and Remarketing Agreement as a matter of
convenience of reference only; and, they are not a part of this Placement and Remarketing Agreement
and will not be used in the interpretation of any provision of this Placement and Remarketing
Agreement.

17

 

     Section 27.     Severability.

          If any provision of this Placement and Remarketing Agreement is held or deemed to be or
shall, in fact, be invalid, inoperative or unenforceable as applied in any particular case in any
jurisdiction or jurisdictions, or in all jurisdictions because it conflicts with any provisions of
any constitution, statute or rule of public policy, or for any other reason, such circumstances
shall not have the effect of rendering the provision in question invalid, inoperative or
unenforceable in any other case or circumstances, or of rendering any other provision or
provisions of this Placement and Remarketing Agreement invalid, inoperative or unenforceable to
any extent whatsoever.

     Section 28.     Counterparts.

          This Placement and Remarketing Agreement may be executed in several counterparts, each of
which shall be regarded as an original but all of which shall constitute one and the same
document.

     Section 29.     Governing Law.

          This Placement and Remarketing Agreement shall be governed by and construed in accordance
with the laws of the State of Maryland.

     Section 30.
Limited Liability of the Issuer. Notwithstanding any provision or
obligations to the contrary hereinbefore or hereinafter set forth, no provision of any agreement
(including this Placement and Remarketing Agreement) relating to the Bonds shall be construed so as
to give rise to any liability of the Issuer, the Department, the State of Maryland, any political
subdivision or any agent of any thereof, or to give rise to a charge upon the general credit of the
State of Maryland, the Department, any political subdivision or any agency thereof, or the Issuer.
Neither this Placement and Remarketing Agreement nor any claim hereunder shall constitute a debt of
the Issuer, the Department, the State of Maryland, or any political subdivisions or any agent of
any thereof, or a pledge of the full faith and credit or taxing power of the Issuer, the
Department, the State of Maryland or any political subdivision or any agency thereof, nor shall
this Placement and Remarketing Agreement or any claim hereunder create any monetary liability on,
or obligate the State of Maryland, the Department or the Issuer to make any appropriation for,
payment. The Issuer has no taxing power. The liability of the Issuer hereunder and under the Bonds
shall be limited solely to the funds pledged therefor in accordance with the Indenture, and any
other funds or property given as security therefor by the Borrower, and the lien of any judgment
shall be restricted thereto.

     The Issuer shall not be required to do any act whatsoever or exercise any diligence whatsoever
to mitigate the damages of the Borrower, the owners of the Bonds, the Trustee, the Placement Agent
or the Remarketing Agent if any event of default shall occur under this Placement and Remarketing
Agreement or the Indenture or any document delivered in connection therewith.

18

 

     Notwithstanding anything to the contrary contained in any agreement executed by the Issuer in
connection with this Placement and Remarketing Agreement or any other agreement or document
executed by the Issuer in connection with the Bonds, the Issuer shall have no liability, legal,
moral or otherwise, except from the funds pledged to the payment of the Bonds under the terms of
the Indenture, to the Trustee, any owner of the Bonds, the Placement Agent, the Remarketing Agent
or the Borrower, in connection with the Bonds, this Placement and Remarketing Agreement, or any
agreement or document executed or used in connection with the Bonds.

     Section 31.     Effective Date.

          This Placement arid Remarketing Agreement has been dated as of the date above written solely
for the purpose of convenience of reference and shall become effective upon its execution and
delivery, on the Closing Date, by the parties hereto. All representations and warranties set forth
herein shall be deemed to have been made on the Closing Date.

     Section 32.     Specialty.

          The parties hereto acknowledge and agree that they are executing and delivering this Placement
and Remarketing Agreement as an instrument and contract under seal which is a specialty under
Section 5-102 of the Courts and Judicial Proceedings Article of the Annotated Code of Maryland.

19

 

     IN WITNESS WHEREOF, the parties hereto have caused this Placement and Remarketing
Agreement to be duly executed and delivered, under seal, by their respective duly authorized
officers, as of the date first above written.

	 	 	 	 	 	 	 
	ATTEST:	 	MARYLAND INDUSTRIAL DEVELOPMENT
FINANCING AUTHORITY	 	 
	 
	 	 	 	 	 	 
	/s/ [ILLEGIBLE]

	 [SEAL]	By:
	 	/s/ Bernard Koman	 	 
	 	 	 	 	 	 	 
	Executive Director

	 	 	 	NAME: Bernard Koman	 	 
	

	 	 	 	TITLE: Chairman	 	 
	 
	 	 	 	 	 	 
	ATTEST:	 	AVALON PHARMACEUTICALS, INC.	 	 
	 
	 	 	 	 	 	 
	/s/ Ammarie
Breman Rice

	 [SEAL]	By:
	 	/s/ Kenneth C. Carter	 	 
	 	 	 	 	 	 	 
	

	 	 	 	NAME: Kenneth C. Carter	 	 
	

	 	 	 	TITLE: CEO	 	 
	 
	 	 	 	 	 	 
	ATTEST:	 	MANUFACTURERS AND TRADERS	 	 
	

	 	 	 	TRUST COMPANY	 	 
	 
	 	 	 	 	 	 
	[ILLEGIBLE]

	 [SEAL]	By:
	 	/s/ Howard Sakin	 	 
	 	 	 	 	 	 	 
	

	 	 	 	NAME: Howard Sakin	 	 
	

	 	 	 	TITLE: VICE	 	 

20exv10w40

 

Exhibit 10.40

AVALON PHARMACEUTICALS, INC.,

as Borrower

and

MANUFACTURERS AND TRADERS TRUST COMPANY,

as Bank

PLEDGE AND SECURITY
AGREEMENT

$12,000,000

Maryland Industrial Development Financing Authority

Taxable Variable Rate Demand Revenue Bonds

(Avalon Pharmaceuticals, Inc. Facility)

Series 2003

Dated as of April 1, 2003

 

 

PLEDGE AND SECURITY AGREEMENT

     THIS PLEDGE AND SECURITY AGREEMENT is dated as of April 1, 2003 and is made by and between
AVALON PHARMACEUTICALS, INC., a Delaware corporation qualified to do
business in the State of
Maryland (the “Borrower”) and MANUFACTURERS AND TRADERS TRUST COMPANY, a New York banking
corporation (“M&T Bank”).

RECITALS

     Pursuant to and in accordance with the Maryland Industrial Development Financing Authority
Act, Article 83A, Title 5, Subtitle 9 of the Annotated Code of Maryland, and the Maryland Economic
Development Revenue Bond Act, Article 41, §14-101 et seq., of the Annotated Code of Maryland, the
Maryland Industrial Development Financing Authority, a body politic and corporate and a public
instrumentality of the State of Maryland (the “Issuer”) has determined to issue arid sell its
Taxable Variable Rate Demand. Revenue Bonds (Avalon Pharmaceuticals, Inc. Facility), Series 2003,
in the original aggregate principal amount of $12,000,000 (the
“Bonds”) under a Trust Indenture
of even date herewith (the “Indenture”), between the Issuer and Allfirst Trust Company National
Association, as Trustee (the “Trustee”).

     The
Indenture requires the Issuer to purchase, or cause the Trustee to purchase, the Bonds
from the Owners thereof under certain circumstances as set forth in
Section 4.1 and Section 4.2
of the Indenture.

     In connection with the issuance of the Bonds, the Bank has agreed to issue its irrevocable
transferable direct-pay letter of credit (the “Letter of
Credit”) to the Trustee, which may be drawn
upon to pay, inter alia, the purchase price of the Bonds under certain circumstances as set forth
in Section 4.1 and Section 4.2 of the Indenture and in the Letter of Credit.

     The Letter of Credit is to be issued upon the terms and conditions of a Letter of Credit
Agreement of even date herewith by and between the Borrower and the
Bank (the “Letter of Credit
Agreement”).

     It is a condition precedent, among others, to the obligation of the Bank to enter into the
Letter of Credit Agreement and to issue the Letter of Credit that the Borrower shall have executed
and delivered this Pledge and Security Agreement to the Bank.

     NOW, THEREFORE, in consideration of the premises and in order to induce the Bank to enter
into the Letter of Credit Agreement and to issue the Letter of Credit thereunder and for other
good and valuable consideration receipt and sufficiency of which are hereby acknowledged, the
Borrower and the Bank hereby agree as follows:

          1. Defined
Terms. Unless otherwise defined herein, all terms defined in the Letter of
Credit Agreement or in the Letter of Credit when used in this Pledge and Security Agreement shall
have the same meanings as set forth in the Letter of Credit Agreement or the Letter of Credit.

 

          2. Pledge. The Borrower hereby pledges, assigns, hypothecates and transfers to the
Bank all of the Borrower’s right, title and interest in and to all Bonds that constitute Bonds
Tendered or Deemed Tendered for Purchase and are not remarketed by the Remarketing Agent, and which
are required to be delivered to the Pledged Bonds Custodian following a Bond Purchase Principal
Drawing by the Trustee under the Letter of Credit (collectively, the
“Pledged Bonds”), and hereby
grants to the Bank a first lien on, and security interest in, all of the Borrower’s right, title
and interest in and to the Pledged Bonds, the interest thereon and all proceeds thereof, as
collateral security for the prompt and complete performance and payment by the Borrower, when due
and payable from time to time (by acceleration, at stated maturity or otherwise) of all of the
Borrower’s Letter of Credit Obligations.

          3. Custody
of Pledged Bonds. The Borrower shall deliver or cause to be delivered
to the Pledged Bonds Custodian or to any other designated agent of
the Bank all Bonds Tendered or
Deemed Tendered for Purchase with respect to which a Bond Purchase Principal Drawing under the
Letter of Credit is honored by the Bank. The Borrower hereby acknowledges the designation and
appointment of Allfirst Trust Company National Association as Pledged Bonds Custodian under the
Pledged Bonds Custody Agreement and agrees that the Pledged Bonds Custodian will hold the Pledged
Bonds as agent for the Bank. If a Bond Purchase Principal Drawing under the Letter of Credit is
honored by the Bank, the Borrower agrees that the Pledged Bonds Custodian shall receive and hold
the Bonds Tendered or Deemed Tendered for Purchase for the benefit of the Bank in accordance with
the Pledged Bonds Custody Agreement.

          4. Interest on Pledged Bonds; Payment of Principal of Pledged Bonds. If, while the
Pledged Bonds Custodian or the Bank holds any Pledged Bonds, the Borrower becomes entitled to
receive or receives any interest payment in respect of such Pledged Bonds, the Borrower agrees to
accept the same as agent for the Bank and to hold the same in trust on behalf of the Bank and to
deliver, or cause to be delivered, the same forthwith to the Bank. In addition, any principal
payments received by the Borrower in respect of Pledged Bonds held by the Pledged Bonds Custodian
or the Bank shall be held in trust by the Borrower on behalf of the Bank, and shall be delivered
forthwith to the Bank. All sums of money so paid in respect of interest on such Pledged Bonds
which are actually received by the Bank shall be credited (as provided in Section 5.1 of the Letter
of Credit Agreement) against the obligation of the Borrower to pay interest and principal,
respectively, to the Bank under Section 5.1 of the Letter of Credit Agreement.

          5. Pledged Collateral. All property at any time pledged to the Bank hereunder and
held by the Bank hereunder or by the Pledged Bonds Custodian under the Pledged Bonds Custody
Agreement (whether or not described herein or in the Pledged Bonds Custody Agreement) and all
income therefrom and proceeds thereof are herein collectively sometimes called the “Pledged
Collateral.”

          6. Release of Pledged Bonds. The Bank agrees that, so long as no Event of Default has
occurred and is continuing under the Letter of Credit Agreement, the Bank will release Pledged
Bonds from the lien of this Pledge and Security Agreement at such
time as:

2

 

               (a) the
Bank has been reimbursed or paid in full in accordance with Section 5.1 of the Letter
of Credit Agreement for all amounts paid by the Bank under the Letter of Credit pursuant to the
Bond Purchase Principal Drawing, the proceeds of which were used to purchase such Pledged Bonds;
and

               (b) the Bank has received written notice from the Borrower stating that:

                    (i) the Borrower requests the Bank to release from the lien of this Pledge and Security
Agreement Pledged Bonds in a principal amount equal to the amount by which the Bank has been
reimbursed or paid with respect to the Bond Purchase Principal Drawing as specified in (a) above;
and

                    (ii) the Pledged Bonds for which release is being requested are to be delivered to (A) the
Borrower, (B) the Remarketing Agent for delivery to a purchaser thereof, (C) the Trustee for
cancellation, or (D) such other person specified in the written notice;

provided, however, that in no event will the Bank release any Pledged Bonds from the lien of this
Pledge and Security Agreement until after the Bank has reinstated the Principal Portion of the
Letter of Credit in an amount equal to the amount of the Bond Purchase Principal Drawing, the
proceeds of which were used to purchase such Pledged Bonds.

     The
Bank will cause delivery of the Pledged Bonds as set forth in subsection (b)(ii) above,
and, if Pledged Bonds are held by the Pledged Bonds Custodian, the Bank will request the Pledged
Bonds Custodian to release such Pledged Bonds. No Pledged Bonds will be released if there has
occurred and is continuing an Event of Default under the Letter of
Credit Agreement.

          7. Rights of the Bank. The Bank shall not be liable for failure to collect or
realize upon the Borrower’s Letter of Credit Obligations or any
collateral security (including the
Pledged Collateral) or guarantee therefor, or any part thereof, or for any delay in so doing, nor
shall the Bank be under any obligation to take any action whatsoever with regard thereto,
including (without limitation) any of the aforesaid rights, privileges or options. If an Event of
Default under the Letter of Credit Agreement has occurred and is continuing, the Bank may
thereafter, without notice, exercise all rights, privileges or options pertaining to any Pledged
Bonds as if it were the absolute owner thereof, upon such terms and conditions as it may
determine, all without liability.

          8. Remedies. In the event that following any Event of Default any portion of the
Borrower’s Letter of Credit Obligations has been declared due and payable, the Bank, without
demand of performance or other demand, advertisement or notice of any kind (except the notice
specified below of time and place of public or private sale) to the Borrower or any other person
(all and each of which demands, advertisements and/or notices are hereby expressly waived), may
forthwith collect, receive, appropriate, and realize upon the Pledged Collateral, or any part
thereof, and/or may forthwith sell, assign, give option or options to purchase, contract to sell
or otherwise dispose of and deliver the Pledged Collateral, or any part thereof, in one or more
parcels at public or private sale or sales, at any exchange, broker’s board or at any of the Bank’s
offices or elsewhere upon such terms and conditions as the Bank may deem advisable

3

 

and at such prices as the Bank may deem best, for cash or on credit or for future delivery
without assumption of any credit risk, with the right to the Bank, upon any such sale or sales
public or private, to purchase the whole or any part of the Pledged Collateral so sold, free of
any right or equity of redemption in the Borrower, which right or equity is hereby expressly
waived or released.

          The net proceeds of any such collection, recovery, receipt, appropriation, realization or
sale, shall be applied:

          First,
to the payment of all reasonable costs and expenses of every kind incurred in
connection with the collection, recovery, receipt, appropriation, realization or sale of any
portion of the Pledged Collateral or incidental to the care or safekeeping of any portion of the
Pledged Collateral, and to the payment of any other amount required
by any provisions of law
(including, without limitation, Section 9-608(a)(1)(A) of the Uniform Commercial Code, as in
effect in Maryland, or in any other state where the Pledged Bonds may be located from time to
time);

          Second, to the satisfaction of the Borrower’s Letter of Credit Obligations; and

          Lastly, any surplus remaining after the application described above shall he paid by the Bank
to the Borrower.

          The Borrower agrees that the Bank need not give more than 10 days’ notice of the time and
place of any public sale or of the time after which a private sale or other intended disposition
of any portion of the Pledged Collateral is to take place and that such notice constitutes
commercially reasonable notification of such matters; provided, however that the Bank need not
give the Borrower such notice of the time and place of any public or private sate of Pledged
Collateral, if, after the occurrence of an Event of Default under the Letter of Credit Agreement,
the Borrower executes a statement renouncing or modifying any right to notification of sale or
other intended disposition of the Pledged Collateral. In addition to
the rights and remedies
granted to it in this Pledge and Security Agreement and in any other instrument or
agreement securing, evidencing or relating to any of the Borrower’s Letter of Credit Obligations
to the Bank, the Bank shall have the authority to exercise all the rights and remedies of a
secured party under the Uniform Commercial Code, as In effect in
Maryland. The Borrower shall be
liable for the deficiency if the proceeds of any sale or other disposition of the Pledged
Collateral are insufficient to pay all amounts to which the Bank is entitled, including the fees
of any attorneys employed by the Bank to collect such deficiency.

          9. Representations, Warranties and Covenants of the Borrower. The Borrower represents
and warrants that: (a) on the date of delivery to the Bank or the Pledged Bonds Custodian of any
Pledged Bonds described herein, neither the Remarketing Agent, the Pledged Bonds Custodian (in its
capacity as Pledged Bonds Custodian) nor the Trustee (in its capacity as Trustee) nor any other
person, firm or corporation (other than the Borrower, the Bank and the Pledged Bonds Custodian)
will have any right, title or interest in and to the Pledged Bonds; (b) the Borrower presently
has, and on the date of each delivery to the Bank or the

4

 

Pledged Bonds Custodian of any Pledged Bonds, the Borrower will have, full power, authority and
legal right to pledge all of its right, title and interest in and to, the Pledged Bonds
pursuant to this Pledge and Security Agreement; (c) this Pledge and Security Agreement has been
duly authorized, executed and delivered by the Borrower and constitutes a legal, valid and binding
obligation of the Borrower enforceable in accordance with its terms, except as enforcement may be
limited by general principles of equity, bankruptcy, insolvency or other similar laws affecting
creditors’ rights generally; (d) no consent of any other party (including, without limitation,
creditors of the Borrower) and no consent, license, permit, approval or authorization of,
exemption by, notice,or report to, or registration, filing or
declaration with, any governmental
authority, domestic or foreign, is required to be obtained by the Borrower in connection with the
execution, delivery or performance of this Pledge and Security Agreement; (e) the execution,
delivery and performance of this Pledge and Security Agreement will not violate any provision of
any applicable law or regulation or of any order, judgment, writ, award or decree of any court,
arbitrator or governmental authority, domestic or foreign, or of any mortgage, indenture, lease,
contract, or other agreement, instrument or undertaking to which the Borrower is a party or which
is or purports to be binding upon the Borrower, or upon any of its assets and will not result in
the creation or imposition of any lien, charge or encumbrance on or security interest In any of
the assets of the Borrower except as specifically contemplated by this Pledge and
Security Agreement; and (f) the pledge, assignment and delivery of such Pledged Bonds pursuant to
this Pledge and Security Agreement will create a valid first, lien on
and first perfected
security interest in all right, title and interest of the Borrower in or to
such Pledged Bonds, and the proceeds thereof,
in favor of the Bank, subject to no prior pledge, lien, mortgage, hypothecation,
security interest, charge, option or encumbrance or to any agreement purporting to grant
to any third party a security interest in the property or assets of the Borrower
which would include the Pledged Bonds. The Borrower covenants and
agrees that It will defend
the Bank’s right, title and security interest in and to the
Pledged Bonds and the proceeds
thereof against the claims and demands of all persons whomsoever; and
covenants and
agrees that it will have like title io and right to pledge any other property at any time
hereafter pledged to the Bank as Pledged Collateral hereunder and will likewise defend the
Bank’s right thereto and security interest therein.

          10. No
Disposition, etc. Except as contemplated herein, without the prior written
consent of the Bank, the Borrower will not sell, assign, transfer, exchange, or otherwise dispose
of, or grant any option with respect to, the Pledged Collateral, nor
will it create, incur or
permit to’ exist any pledge, lien, mortgage, hypothecation, security interest, charge, option or
any other encumbrance with respect to any of the Pledged Collateral, or any interest therein, or
any proceeds thereof, except for the lien and security interest provided for by this Pledge and
Security Agreement.

          11. Sale of Pledged Collateral. (a) The Borrower recognizes that the Bank may be
unable to effect a public sale of any or all of the Pledged Collateral by reason of certain
prohibitions contained in the Securities Act of 1933, as amended, and
applicable state securities
laws, but may be compelled to resort to one or more private sates
thereof to a restricted group of
purchasers who will be obliged to agree, among other things, to
acquire such securities for
their own account for investment and not with a view to the
distribution or resale thereof.
The Borrower acknowledges and agrees that any such private sale may
result in prices and other
terms less favorable to the seller than if such sale were a public
sale and, notwithstanding such

5

 

circumstances, agrees that any such private sale shall be deemed to have been made in a
commercially reasonable manner. The Borrower acknowledges and agrees that the Bank shall be under
no obligation to delay a sale of any of the Pledged Collateral for the period of time
necessary to permit the Issuer or the Borrower to register such securities for public sale under
the Securities Act of 1933, or under applicable state securities laws, even if the Issuer or the
Borrower would agree to do so.

          (b) The
Borrower further agrees to do or cause to be done all such other acts and things as
may be necessary to make such private sale or sales of any portion or
all of the Pledged
Collateral valid and binding and in compliance with any and all applicable laws, regulations,
orders, writs, injunctions, decrees or awards of any and all courts, arbitrators or governmental
instrumentalities, domestic or foreign, having jurisdiction over any such sale or sales, all at
the Borrower’s sole expense.

          12. Further
Assurances. The Borrower agrees that at any time and from time to
time upon the written request of the Bank, the Borrower will execute
and deliver such further
documents and perform such further acts as the Bank may reasonably request in order to effect the
purposes of this Pledge and Security Agreement.

          13. No Waiver; Cumulative Remedies. No act, delay or omission of the Bank shall be
deemed to be a waiver of any rights or remedies granted hereunder and no waiver shall be valid
unless in writing, signed by the Bank, and then only to the extent
therein set forth. A waiver of
any right or remedy hereunder on any one occasion shall not be
construed as a bar to any
right or remedy which the Bank would otherwise have on any future
occasion. No failure to
exercise nor any delay in exercising on the part of the Bank any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power or privilege hereunder preclude any
other right, power or privilege.
The rights and remedies herein provided are cumulative and may be exercised singly or concurrently,
and are not exclusive of any rights or remedies provided by law.

          14. Waivers, Amendments, Governing Law. None of the terms or provisions of this
Pledge and Security Agreement may be waived, altered, modified or amended except by an instrument
in writing, duly executed by the Bank and the Borrower; provided, however, that any waiver,
modification or amendment which materially increases the duties and liabilities of the Pledged
Bonds Custodian hereunder shall not become effective unless such waiver, modification or
amendment shall be consented to by the Pledged Bonds Custodian. This Pledge and Security Agreement
and all obligations of the Borrower hereunder shall be binding upon the successors and assigns of
the Borrower, and shall, together with the rights and remedies of the Bank hereunder, inure to
the benefit of the Bank and its successors and assigns. This Pledge and Security Agreement shall
be governed by, and be construed and interpreted in accordance with the laws of the State of
Maryland.

          15. Notices. All notices, demands, requests, consents, approvals, certificates or
other communications required under this Agreement to be in writing shall he sufficiently given and
shall be deemed to have been properly given (i) if delivered by hand, when written confirmation
of delivery is received by the sender, (ii) three days after the same is mailed by

6

 

certified mail, postage prepaid, return receipt requested, or (iii) if sent by overnight courier,
24 hours after delivery to such overnight courier, addressed to the person to whom any such notice,
demand, request, approval, certificate or other communication is to be given, at the appropriate
address for the Principal Office of such person designated below:

	 	 	 	 	 	 	 	 	 
	 	 	Borrower:	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	Avalon Pharmaceuticals, Inc. 

20358 Seneca Meadows Parkway 

Germantown, Maryland 20876 

Attention: Gary Lessing	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	with a copy to:	 	 
	 
	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	Mark Gruhin, Esq.

Schmeltzer, Aptaker & Shepard, P.C.

2600 Virginia Avenue, N.W.

Suite 1000, The Watergate 

Washington, D.C. 20037	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Bank:	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	Manufacturers and Traders Trust Company

25 South Charles Street

15th Floor, Suite 1501 

Baltimore, Maryland 21202

Attention: Letter of Credit Department	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	and	 	 
	 
	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	Manufacturers and Traders Trust Company

Anstec Building

1410 Spring Hill Road

Suite 125

McLean, Virginia 22102

Attention: David Diluigi	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	with a copy to:	 	 
	 
	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	Fred Levy, Esq. 

Sonnenschein, Nath & Rosenthal 

1301 K Street, N.W. 

Suite 600, East Tower 

Washington, D.C. 20005	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	and	 	 

7

 

	 	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	Alan S. Mark, Esq. 

Paley, Rothman, Goldstein, 

Rosenberg & Cooper, Chartered 

4800 Hampden Lane 

Seventh Floor 

Bethesda, Maryland 20814	 	 

     Any person listed above may, by notice given to the other, designate any further or different
addresses to which subsequent notices, duplicate notices, certificates or other communications
shall be sent.

          17. Counterparts. This Pledge and Security Agreement may be executed in several
counterparts, all of which shall constitute one and the same agreement.

          18. Effective
Date. This Pledge and Security Agreement has been dated as of the date above
written solely for the purpose of convenience of reference and shall become effective upon its
execution and delivery, on the Closing Date. Any and all representations and warranties set forth
herein shall be deemed to have been made on the Closing Date.

[remainder of page intentionally left blank]

8

 

     IN WITNESS WHEREOF, the Borrower has caused this Pledge and Security Agreement to be
duly executed and delivered under seal by its duly authorized officer and the Bank has
caused this Pledge and Security Agreement to be duly executed and delivered under seal by its
duly authorized officer, all as of the Closing Date.

	 	 	 	 	 	 	 
	ATTEST:	 	AVALON PHARMACEUTICALS, INC.	 	 
	

	 	 	 	as Borrower	 	 
	 
	 	 	 	 	 	 
	/s/ [ILLEGIBLE]

	 	By:
	 	/s/ Kenneth C. Carter	 	 
	 	 	 	 	 	 	 
	

	 	 	 	NAME: Kenneth C. Carter	 	 
	

	 	 	 	TITLE: CEO	 	 
	 
	 	 	 	 	 	 
	[SEAL]
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	ATTEST:	 	MANUFACTURERS AND TRADERS	 	 
	

	 	 	 	TRUST COMPANY, as Bank	 	 
	 
	 	 	 	 	 	 
	/s/ [ILLEGIBLE]

	 	By:
	 	/s/ David M. Diluigi	 	 
	 	 	 	 	 	 	 
	

	 	 	 	NAME: David M. Diluigi	 	 
	

	 	 	 	TITLE: VICE PRESIDENT	 	 
	 
	 	 	 	 	 	 
	[SEAL]
	 	 	 	 	 	 

9

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