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EXHIBIT 10.27
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT ("Agreement"), dated as of February 24, 1997, is
made between CombiChem, Inc., a California corporation ("Secured Party"), and
Xxxxxxx Xxxxx, Xx., an individual resident of the State of California
("Pledgor").
Pledgor and Secured Party hereby agree as follows:
SECTION 1. Definitions; Interpretation.
(a) As used in this Agreement, the following terms shall have the
following meanings:
"Event of Default" has the meaning set forth in Section 6.
"Lien" means any mortgage, deed of trust, pledge, security interest,
assignment, deposit arrangement, charge or encumbrance, lien, or other type of
preferential arrangement.
"Note" means that certain Promissory Note of even date herewith made by
Pledgor in favor of Secured Party, as amended, modified, renewed, extended or
replaced from time to time.
"Obligations" means the indebtedness, liabilities and other obligations of
Pledgor to Secured Party under or in connection with this Agreement and the
Note, including, without limitation, all unpaid principal of the Note, and all
other amounts payable by Pledgor to Secured Party thereunder or in connection
therewith, whether now existing or hereafter arising, and whether due or to
become due, absolute or contingent, liquidated or unliquidated, determined or
undetermined.
"Person" means an individual, corporation, partnership, joint venture,
trust, unincorporated organization, governmental agency or authority, or any
other entity of whatever nature.
"Pledged Collateral" has the meaning set forth in Section 2(a).
"Pledged Shares" means the Shares of the Secured Party's Common Stock
described in Schedule 1.
"Service" shall have the meaning set forth in Section 5.1 of that certain
Restricted Stock Purchase Agreement dated the date of this Agreement between
Secured Party and Pledgor.
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"UCC" means the Uniform Commercial Code as the same may, from time to
time, be in effect in the State of California; provided, however, in the event
that, by reason of mandatory provisions of law, any or all of the attachment,
perfection or priority of the security interest in any Pledged Collateral is
governed by the Uniform Commercial Code as in effect in a jurisdiction other
than the State of California, the term "UCC" shall mean the Uniform Commercial
Code as in effect in such other jurisdiction for purposes of the provisions
hereof relating to such attachment, perfection or priority and for purposes of
definitions related to such provisions.
(b) All capitalized terms used in this Agreement and not otherwise
defined herein shall have the meanings assigned to them in the Note.
(c) Where applicable and except as otherwise defined herein or in the
Note, terms used in this Agreement shall have the meanings assigned to them in
the UCC.
(d) In this Agreement, (i) the meaning of defined terms shall be equally
applicable to both the singular and plural forms of the terms defined; and (ii)
the captions and headings are for convenience of reference only and shall not
affect the construction of this Agreement.
SECTION 2. Security Interest.
(a) As security for the payment and performance of the Obligations,
Pledgor hereby pledges, assigns, transfers, hypothecates and sets over to
Secured Party, and hereby grants to Secured Party a security interest in, all of
Pledgor's right, title and interest in, to and under (i) the Pledged Shares,
(ii) all rights, interests and claims with respect to the Pledged Shares, (iii)
any securities, property, interest and other payments and distributions issued
as an addition to, in redemption of, in renewal or exchange for, in substitution
or upon conversion of, or otherwise on account of, the Pledged Shares, and (iv)
all cash and non-cash proceeds of the Pledged Shares and any of the foregoing,
in each case from time to time received or receivable by, or otherwise paid or
distributed to, the Pledgor, and whether presently existing or owned or
hereafter arising or acquired and wherever located (collectively, the "Pledged
Collateral").
(b) Pledgor hereby agrees to deliver to or for the account of Secured
Party, at the address and to the Person or Persons to be designated by Secured
Party, the Pledged Shares, which shall be accompanied by duly executed
assignments in blank, in form attached hereto as Exhibit A.
(c) If Pledgor shall become entitled to receive or shall receive any
securities or other instruments or obligations as an addition to, in redemption
of, in renewal or exchange for, in substitution or upon conversion of, or
otherwise on account of, the Pledged Shares, Pledgor shall accept the foregoing
as Secured Party's agent. Upon accepting any of the foregoing, Pledgor shall
promptly send a notification to Secured Party with a description thereof, which
notification shall be deemed to be a Schedule to this Agreement and may be
attached hereto.
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(d) Pledgor shall execute and deliver to Secured Party concurrently with
the execution of this Agreement, and at any time and from time to time
thereafter, all financing statements, assignments, continuation financing
statements, termination statements, endorsements, and other documents and
instruments, in a form reasonably satisfactory to Secured Party, and take all
other action, as Secured Party may reasonably request, to effect a transfer of a
perfected first priority security interest in and pledge of the Pledged
Collateral to Secured Party pursuant to the UCC and to continue perfected,
maintain the priority of or provide notice of the security interest of Secured
Party in the Pledged Collateral and to accomplish the purposes of this
Agreement.
(e) Pledgor agrees that this Agreement shall create a continuing
security interest in and pledge of the Pledged Collateral which shall remain in
effect until terminated in accordance with Section 16.
(f) Pledgor hereby consents to any assignment of the Pledged Collateral
and the security interests related thereto. After any such assignment, such
assignee shall be the Secured Party hereunder and shall possess all the rights
of Secured Party hereunder.
SECTION 3. Representations and Warranties. Pledgor represents and warrants
to Secured Party that:
(a) Pledgor has all requisite power and authority to execute, deliver
and perform its obligations under this Agreement.
(b) This Agreement constitutes the legal, valid and binding obligation
of Pledgor, enforceable against Pledgor in accordance with its terms.
(c) No authorization, consent, approval, license, exemption of, or
filing or registration with, any governmental authority or agency, or approval
or consent of any other Person, is required for the due execution, delivery or
performance by Pledgor of this Agreement.
(d) Pledgor is the legal and beneficial owner of the Pledged Shares
subject to no Lien except for the pledge and security interest created by this
Agreement.
(e) Pledgor's residence is located at the address set forth on the
signature pages hereof.
SECTION 4. Covenants. So long as any of the Obligations remain
unsatisfied, Pledgor agrees that:
(a) Pledgor will, at its own expense, appear in and defend any action,
suit or proceeding which purports to affect its title to, or right or interest
in, the Pledged Collateral or the security interest of Secured Party therein and
the pledge to Secured Party thereof.
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(b) Pledgor will not surrender or lose possession of (other than to
Secured Party), exchange, sell, convey, transfer, assign or otherwise dispose of
or transfer the Pledged Collateral or any right, title or interest therein.
(c) Pledgor will not create, incur or permit to exist any Liens upon or
with respect to the Pledged Collateral, other than the security interest of and
pledge to Secured Party created by this Agreement.
SECTION 5. Payments on the Pledged Collateral.
(a) Unless an Event of Default shall have occurred, Pledgor shall be
entitled to receive and retain for its own account any dividends in respect of
the Pledged Collateral; provided that Secured Party shall receive, and Pledgor
shall not be entitled to receive, any cash paid, payable or otherwise
distributed, and any other property, instruments, securities or obligations, in
redemption of, or in exchange for or in substitution of, any Pledged Collateral.
Upon and after the occurrence and during the continuance of any Event of
Default, Secured Party shall be entitled to receive all distributions and
payments of any nature with respect to the Pledged Collateral, to be held by
Secured Party as part of the Pledged Collateral.
(b) Distributions and other payments and property which are received by
Pledgor but which it is not entitled to retain as a result of the operation of
subsection (a) shall be held in trust for the benefit of Secured Party, be
segregated from the other property or funds of Pledgor, and be forthwith paid
over or delivered to Secured Party in the same form as so received.
SECTION 6. Events of Default. Any of the following events which shall
occur and be continuing shall constitute an "Event of Default":
(a) Pledgor shall fail to pay when due any amount payable hereunder or
under the Note and such failure shall continue for five (5) days.
(b) Any representation or warranty by Pledgor under or in connection
with this Agreement or the Note shall prove to have been incorrect in any
material respect when made or deemed made.
(c) Pledgor shall fail to perform or observe in any material respect any
other term, covenant or agreement contained in this Agreement or the Note on its
part to be performed or observed and any such failure shall remain unremedied
for a period of fifteen (15) days from the occurrence thereof.
(d) Any impairment in the priority of Secured Party's Lien hereunder.
(e) Any levy upon, seizure or attachment of any of the Pledged
Collateral.
(f) Pledgor's Service with Secured Party shall be terminated for any
reason.
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SECTION 7. Remedies.
(a) Upon the occurrence and during the continuance of any Event of
Default, Secured Party may declare any of the Obligations to be immediately due
and payable and shall have, in addition to all other rights and remedies granted
to it in this Agreement or the Note, all rights and remedies of a secured party
under the UCC and other applicable laws. Without limiting the generality of the
foregoing, Pledgor agrees that any item of the Pledged Collateral may be sold
for cash or on credit or for future delivery without assumption of any credit
risk, in any number of lots at the same or different times, at any exchange,
brokers' board or elsewhere, by public or private sale, and at such times and on
such terms, as Secured Party shall determine; provided, however, that Pledgor
shall be credited with the net proceeds of sale only when such proceeds are
finally collected by Secured Party in cash. Pledgor hereby agrees that the
sending of notice by ordinary mail, postage prepaid, to the address of Pledgor
set forth herein, of the place and time of any public sale or of the time after
which any private sale or other intended disposition is to be made, shall be
deemed reasonable notice thereof if such notice is sent ten (10) days prior to
the date of such sale or other disposition or the date on or after which such
sale or other disposition may occur; provided that Secured Party may provide
Pledgor shorter notice or no notice, to the extent permitted by the UCC or other
applicable law. The Pledgor and the Secured Party agree that such notice
constitutes "notice" within the meaning of Section 9504(3) of the UCC. Pledgor
recognizes that Secured Party may be unable to make a public sale of any or all
of the Pledged Collateral, by reason of prohibitions contained in applicable
securities laws or otherwise, and expressly agrees that a private sale to a
restricted group of purchasers for investment and not with a view to any
distribution thereof shall be considered a commercially reasonable sale. Secured
Party shall have the right upon any such public sale, and, to the extent
permitted by law, upon any such private sale, to purchase the whole or any part
of the Pledged Collateral so sold, free of any right or equity of redemption,
which right or equity of redemption Pledgor hereby releases to the extent
permitted by law.
(b) For the purpose of enabling Secured Party to exercise its rights
under this Section 7 or otherwise in connection with this Agreement, Pledgor
hereby constitutes and appoints Secured Party its true and lawful attorney, with
full power of substitution, in the name of the Pledgor, the Secured Party or
otherwise, for the sole use and benefit of the Secured Party, but at the expense
of the Pledgor, to the extent permitted by law to exercise, at any time and from
time to time while an Event of Default has occurred and is continuing, all or
any of the following powers with respect to all or any of the Pledged
Collateral: (i) to demand, xxx for, collect, receive and give acquittance for
any and all monies due or to become due upon or by virtue thereof; (ii) to
settle, compromise, compound, prosecute or defend any action or proceeding with
respect thereto; (iii) to sell, transfer, assign or otherwise deal in or with
the same or the proceeds or avails thereof, as fully and effectually as if the
Secured Party were the absolute owner thereof; and (iv) to extend the time of
payment of any or all thereof and to make any allowance and other adjustments
with reference thereto.
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(c) The cash proceeds actually received from the sale or other
disposition or collection of Pledged Collateral, and any other amounts received
in respect of the Pledged Collateral the application of which is not otherwise
provided for herein, shall be applied first, to the payment of the reasonable
costs and expenses of Secured Party in exercising or enforcing its rights
hereunder and in collecting or attempting to collect any of the Pledged
Collateral, and to the payment of all other amounts payable to Secured Party
pursuant to Section 10; and second, to the payment of the Obligations. Any
surplus thereof which exists after payment and performance in full of the
Obligations shall be promptly paid over to Pledgor or otherwise disposed of in
accordance with the UCC or other applicable law. Pledgor shall remain liable to
Secured Party for any deficiency which exists after any sale or other
disposition or collection of Pledged Collateral.
SECTION 8. Notices. All notices or other communications hereunder shall be
in writing and mailed, sent or delivered (including by facsimile transmission)
to the respective parties hereto at or to their respective addresses or
facsimile numbers set forth below their names on the signature pages hereof, or
at or to such other address or facsimile number as shall be designated by any
party in a written notice to the other parties hereto. All such notices and
other communications shall be effective: (i) if delivered by hand, when
delivered; (ii) if sent by mail, upon the earlier of the date of receipt or five
business days after deposit in the mail, first class; and (iii) if sent by
facsimile transmission, when sent.
SECTION 9. No Waiver; Cumulative Remedies. No failure on the part of
Secured Party to exercise, and no delay in exercising, any right, remedy, power
or privilege hereunder shall operate as a waiver thereof, nor shall any single
or partial exercise of any such right, remedy, power or privilege preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege. The rights and remedies under this Agreement are cumulative
and not exclusive of any rights, remedies, powers and privileges that may
otherwise be available to Secured Party.
SECTION 10. Costs and Expenses. Pledgor agrees to pay on demand all costs
and expenses of Secured Party, including reasonable attorneys' fees, in
connection with the enforcement of this agreement, and the sale or collection
of, or other realization upon, any of the Pledged Collateral.
SECTION 11. Binding Effect. Subject to the restrictions on assignment
contained in the Note, this Agreement shall be binding upon, inure to the
benefit of and be enforceable by Pledgor, Secured Party and their respective
successors and assigns.
SECTION 12. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the law of the State of California, except as
required by mandatory provisions of law and to the extent the validity or
perfection of the security interests hereunder, or the remedies hereunder, in
respect of any Pledged Collateral are governed by the law of a jurisdiction
other than California.
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SECTION 13. Entire Agreement; Amendment. This Agreement contains the
entire agreement of the parties with respect to the subject matter hereof and
shall not be amended except by the written agreement of the parties.
SECTION 14. Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
all applicable laws and regulations. If, however, any provision of this
Agreement shall be prohibited by or invalid under any such law or regulation in
any jurisdiction, it shall, as to such jurisdiction, be deemed modified to
conform to the minimum requirements of such law or regulation, or, if for any
reason it is not deemed so modified, it shall be ineffective and invalid only to
the extent of such prohibition or invalidity without affecting the remaining
provisions of this Agreement, or the validity or effectiveness of such provision
in any other jurisdiction.
SECTION 15. Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute but one and the same agreement.
SECTION 16. Termination. Upon payment and performance in full of all
Obligations, this Agreement shall terminate and Secured Party shall promptly
redeliver to Pledgor any of the Pledged Collateral in Secured Party's possession
and shall execute and deliver to Pledgor such documents and instruments
reasonably requested by Pledgor as shall be necessary to evidence termination of
all security interests given by Pledgor to Secured Party hereunder; provided,
however, that the obligations of Pledgor under Section 10 shall survive such
termination.
SECTION 17. Conflicts. In the event of any conflict or inconsistency
between this Agreement and the Note, the terms of this Agreement shall control.
SECTION 18. Separate Counsel. Pledgor acknowledges and agrees that he has
been provided the opportunity and encouraged to consult with counsel of
Pledgor's own choosing with respect to this Agreement and that Xxxxxxx, Xxxxxxx
& Xxxxxxxx LLP solely represents the interests of the Secured Party.
SECTION 19. No Employment or Service Contract. Nothing in this Agreement
shall confer upon Pledgor any right to continue to serve as an employee of
Secured Party for any period of specific duration.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement,
as of the date first above written.
SECURED PARTY
COMBICHEM, INC.
By: /s/ Xxxxx Xxxxx
-------------------------------------
Title: C.O.O. C.S.O.
----------------------------------
0000 Xxxxxx Xxxxx Xx
Xxx Xxxxx, XX 00000
Fax: (000) 000-0000
PLEDGOR
/s/ Xxxxxxx Xxxxx
-----------------------------------------
Xxxxxxx Xxxxx, Xx.
0000 Xxxxxxx Xxxxx
Xxxxxx Xxx Xxx, XX 00000
Fax: (000) 000-0000
[SIGNATURE PAGE TO PLEDGE AGREEMENT]
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SCHEDULE 1
PLEDGED SHARES
Shares of
CombiChem, Inc.
Name and Address Common Stock Date of Issuance
---------------- ------------ ----------------
Xxxxxxx Xxxxx, Xx. 1,280,000 February 24, 1997
0000 Xxxxxxx Xxxxx
Xxxxxx Xxx Xxx, XX
00000
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EXHIBIT A
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, I, Xxxxxxx Xxxxx, Xx., hereby sell, assign and
transfer unto _______________________ ___________________________ (_______)
shares of the Common Stock of CombiChem, Inc., standing in my name on the books
of said corporation represented by Certificate No. 36 herewith and do hereby
irrevocably constitute and appoint attorney to transfer said stock on the books
of the within-named corporation with full power of substitution in the premises.
Dated: ______________________
Signature:
/s/ Xxxxxxx Xxxxx
This Assignment Separate from Certificate was executed in conjunction with
the terms of a Pledge Agreement between the above assignor and CombiChem, Inc.,
dated as of February 24, 1997.
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EXHIBIT B
CONSENT OF SPOUSE
I, Xxxxxxxx X. Xxxxx, the spouse of Xxxxxxx Xxxxx, Xx., the Pledgor in the
foregoing Pledge Agreement between my husband and CombiChem, Inc. (the
"Company"), acknowledge that I have reviewed the Agreement. I hereby appoint my
spouse as my attorney-in-fact with respect to the exercise of any rights under
the Agreement and agree to be bound by the provisions of the Agreement insofar
as I have any rights in the Agreement or any shares of the Company.
Effective: February 24, 1997
/s/ Xxxxxxxx X. Xxxxx
-----------------------------------------
[Signature]
Xxxxxxxx X. Xxxxx
-----------------------------------------
[Print Name]
B-1
