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Exhibit 10.55
CONNETICS CORPORATION
SECURED LOAN AGREEMENT
This Secured Loan Agreement is made as of January 9, 1998 by and
between Connetics Corporation, a Delaware corporation (the "Company") and Xxxx
X. Xxxxxxx ("Borrower").
RECITALS
Borrower desires to borrow, and the Company desires to lend to Borrower
up to an aggregate of $18,000 (the "Borrowed Amount"). The parties desire that
such loan shall be secured pursuant to a Security Agreement of even date
herewith (the "Security Agreement") by an aggregate of 110,000 shares of the
Company's Common Stock (as adjusted for subsequent stock splits, reverse stock
splits and recapitalization) (the "Shares") issuable upon the exercise of
options to purchase Common Stock held by Borrower (the "Options") while any
Borrowed Amount is outstanding on the terms and conditions contained herein and
in the Security Agreement.
AGREEMENT
In consideration of the foregoing, and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties agree as
follows:
1. AGREEMENT TO LEND. Subject to the terms and conditions contained in
this Agreement and upon execution of this Agreement, the Company agrees to issue
to Borrower a check or other readily available funds in the Borrowed Amount upon
the date of this Agreement.
2. PROMISSORY NOTE. In consideration of the Company's delivery of the
Borrowed Amount, Borrower will execute a secured promissory note in the form
attached hereto as Exhibit A (the "Note"), in the principal amount of such
Borrowed Amount and bearing interest at a rate of 8.5% per annum, compounded
annually.
3. SECURITY AGREEMENT. Borrower will additionally execute the Security
Agreement in the form attached hereto as Exhibit B as security for Borrower's
obligation to repay the Borrowed Amount, and, upon any exercise of the Options,
will deliver, or cause to be delivered, all certificates representing Shares to
the Company or its designee as pledgeholder of the Shares, together with such
other documents of assignment and other documents as may be reasonably requested
by the Company. The Shares will be held by the Company or its designee as
pledgeholder and shall be released in accordance with the terms of the Security
Agreement.
4. NO EMPLOYMENT RIGHTS. Nothing in this Agreement or the Note is
intended or shall be construed to confer upon Borrower any right to employment
or continued employment with the Company, or shall alter in any way the nature
of Borrower's employment with the Company.
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5. MISCELLANEOUS.
(a) SUCCESSORS AND ASSIGNS. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties. Nothing in this Agreement, express or
implied, is intended to confer upon any party other than the parties hereto or
their respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
(b) GOVERNING LAW. This Agreement and all acts and
transactions pursuant hereto and the rights and obligations of the parties
hereto shall be governed, construed and interpreted in accordance with the laws
of the State of California, without giving effect to principles of conflicts of
law.
(c) NOTICES. Any notice required or permitted by this
Agreement shall be in writing and shall be deemed sufficient upon receipt, when
delivered personally or by a nationally-recognized delivery service (such as
Federal Express or UPS) or confirmed facsimile, or forty-eight (48) hours after
being deposited in the U.S. mail as certified or registered mail with postage
prepaid, if such notice is addressed to the party to be notified at such party's
address or facsimile number as set forth below, or as subsequently modified by
written notice.
(d) SEVERABILITY. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, the parties agree to
renegotiate such provision in good faith. In the event that the parties cannot
reach a mutually agreeable and enforceable replacement for such provision, then
(i) such provision shall be excluded from this Agreement, (ii) the balance of
the Agreement shall be interpreted as if such provision were so excluded and
(iii) the balance of the Agreement shall be enforceable in accordance with its
terms.
(e) ADVICE OF LEGAL COUNSEL. Each party acknowledges and
represents that, in executing this Agreement, it has had the opportunity to seek
advice as to its legal rights from legal counsel and that the person signing on
its behalf has read and understood all of the terms and provisions of this
Agreement. This Agreement shall not be construed against any party by reason of
the drafting or preparation thereof.
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The parties hereto have executed this Secured Loan Agreement as of the
day and year first above written.
XXXX X. XXXXXXX
/s/ Xxxx X. Xxxxxxx
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(Signature)
Address: 0000 Xxx Xxxxx Xxxxx
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Xxxx Xxxx, XX 00000
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CONNETICS CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------
Title: President and Chief Executive
Officer
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Address: 0000 Xxxx Xxxxxxxx Xxxx
Xxxx Xxxx, XX 00000
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SECURED PROMISSORY NOTE
$18,000 Palo Alto, California
JANUARY 9, 1998
FOR VALUE RECEIVED, Xxxx X. Xxxxxxx ("Borrower") promises to pay to
Connetics Corporation, a Delaware corporation (the "Company"), the principal sum
of Eighteen Thousand Dollars ($18,000), together with interest on the unpaid
principal hereof from the date hereof at the rate of 8.5% per annum, compounded
annually.
All principal and accrued interest shall be due and payable in full on
the earliest of (a) January 9, 2001 or (b) the termination of Borrower's
employment or consulting relationship with the Company for any reason (or for no
reason). Payments of principal and interest shall be made in lawful money of the
United States of America and shall be credited first to the accrued interest,
with the remainder applied to principal.
Borrower may at any time prepay all or any portion of the principal or
interest owing hereunder.
This Note is subject to the terms of a Secured Loan Agreement, dated as
of January 9, by and between the Company and Borrower, and is secured by a
pledge of Common Stock of the Company issuable upon exercise of options held by
Borrower under the terms of a Security Agreement dated January 9, 1998 and is
subject to all the provisions thereof.
Should any action be instituted for the collection of this Note, the
reasonable costs and attorneys' fees therein of the holder shall be paid by
Borrower.
The holder of this Note shall have full recourse against Borrower, and
shall not be required to proceed against the collateral securing this Note in
the event of default.
/s/ XXXX X. XXXXXXX
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Xxxx X. Xxxxxxx
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SECURITY AGREEMENT
This Security Agreement is made as of January 9, 1998 by and between
Connetics Corporation, a Delaware corporation ("Pledgee"), and Xxxx X. Xxxxxxx
("Pledgor").
RECITALS
Pledgee has loaned to Pledgor, and Pledgor has borrowed from Pledgee,
an aggregate of $18,000, which loan is or shall be evidenced by a promissory
note (the "Note") and is to be secured by Pledgor's community property interest
in up to an aggregate of 110,000 shares of Pledgee's Common Stock (the "Shares")
(as adjusted for subsequent stock splits, reverse stock splits and
recapitalization) issuable upon exercise of options held or hereafter acquired
by Pledgee (the "Options").
AGREEMENT
In consideration of the foregoing, and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties to this
Agreement agree as follows:
1. CREATION AND DESCRIPTION OF SECURITY INTEREST; TRANSFERABILITY;
ESCROW.
(a) In consideration of the loan to Pledgor, Pledgor, pursuant
to the Commercial Code of the State of California, hereby pledges the Shares
(sometimes referred to in this Agreement as the "Collateral"). If any of the
Options are exercised, the certificates representing the Shares shall be
delivered immediately, duly endorsed in blank or with executed stock powers, to
the Secretary of Pledgee (the "Pledgeholder"), who shall hold said certificates
subject to the terms and conditions of this Security Agreement.
(b) The pledged stock (together with an executed blank stock
assignment for use in transferring all or a portion of the Shares to Pledgee if,
as and when required pursuant to this Security Agreement) shall be held by the
Pledgeholder as security for the repayment of the Note, and any extensions or
renewals thereof, to be executed by Pledgor pursuant to the terms of the Secured
Loan Agreement.
(c) Except as required to enable Pledgee to exercise its
rights as a secured party, neither the Shares pledged under this Section 1 nor
the Options may be sold, transferred, pledged, hypothecated or otherwise
disposed of by Pledgor.
(d) To ensure the ability of Pledgee to exercise its rights as
a secured party hereunder, Pledgor shall, upon any exercise of the Option,
deliver and deposit with the Secretary of Pledgee, or such other person
designated by Pledgee, the share certificates representing the Shares, together
with a stock power, duly endorsed in blank, in the form attached hereto as
Exhibit B-1. The Shares and stock power(s) shall be held by Pledgee in escrow,
until such time as the Note shall have been paid in full. As a further
inducement to Pledgee to loan to Pledgor the
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funds represented by the Note, the spouse of Pledgor, if any, shall execute and
deliver to Pledgee a Consent of Spouse in the form attached hereto as Exhibit
B-2.
(d) [sic] To the extent that Pledgor's spouse owns any
community property interest in the Shares under California law, the portion of
the Shares subject to such community property interest shall not be pledged
under this Agreement nor be considered part of the Collateral.
2. PLEDGOR'S REPRESENTATIONS AND COVENANTS. To induce Pledgee to enter
into this Security Agreement, Pledgor represents and covenants to Pledgee, its
successors and assigns, as follows:
(a) PAYMENT OF INDEBTEDNESS. Pledgor will pay the principal
sum of the Note secured hereby, together with interest thereon, at the time and
in the manner provided in the Note.
(b) ENCUMBRANCES. All Shares now or hereafter pledged under
this Agreement are and shall be free of all other encumbrances, defenses and
liens, and Pledgor will not further encumber the Shares without the prior
written consent of Pledgee.
3. VOTING RIGHTS. During the term of this pledge and so long as all
payments of principal and interest are made as they become due under the terms
of the Note, Pledgor shall have the right to vote all of the Shares pledged
hereunder.
4. STOCK ADJUSTMENTS. In the event that during the term of the pledge
any stock dividend, reclassification, readjustment or other changes declared or
made in the capital structure of Pledgee, all new, substituted and additional
shares or other securities issued by reason of any such change shall be
delivered to and held by the Pledgeholder under the terms of this Security
Agreement in the same manner as the Shares originally pledged hereunder. In the
event of substitution of such securities, Pledgor, Pledgee and Pledgeholder
shall cooperate and execute such documents as are reasonable so as to provide
for the substitution of such Collateral and, upon such substitution, references
to "Shares" in this Security Agreement shall include the substituted shares of
capital stock of Pledgee held by Pledgor as a result thereof.
5. WARRANTS AND RIGHTS. In the event that, during the term of this
pledge, subscription warrants or other rights or options shall be issued in
connection with the pledged Shares, such rights, warrants and options shall be
the property of Pledgor and, if exercised by Pledgor, all new stock or other
securities so acquired by Pledgor as it relates to the pledged Shares then held
by Pledgeholder shall be immediately delivered to Pledgeholder, to be held under
the terms of this Security Agreement in the same manner as the Shares pledged.
6. DEFAULT. Pledgor shall be deemed to be in default of the Note and of
this Security Agreement in the event:
(a) Payment of principal or interest on the Note shall be
delinquent for a period of 10 days or more; or
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(b) Pledgor fails to perform any of the covenants contained in
this Security Agreement for a period of 10 days after written notice thereof
from Pledgee.
7. REMEDIES IN THE EVENT OF DEFAULT. In the case of an event of
default, as set forth above, Pledgee shall have the right to accelerate payment
of the Note upon notice to Pledgor, and shall thereafter be entitled to pursue
any or all of its remedies under applicable law, including, without limitation,
(a) offsetting from Pledgor's salary, bonuses, vacation pay or other amounts due
to Pledgor from the Pledgee, any amount due and payable by Pledgor under the
Note, and/or (b) proceeding against the Collateral in accordance with the
California Commercial Code.
8. WITHDRAWAL OR SUBSTITUTION OF COLLATERAL. Pledgor shall not sell,
withdraw, pledge, substitute or otherwise dispose of all or any part of the
Collateral without the prior written consent of Pledgee.
9. TERM. The pledge of Shares shall continue until the payment of all
indebtedness secured hereby, at which time the remaining pledged stock shall be
promptly delivered to Pledgor.
10. INSOLVENCY. Pledgor agrees that if a bankruptcy or insolvency
proceeding is instituted by or against Pledgor, or if a receiver is appointed
for the property of Pledgor, or if Pledgor makes an assignment for the benefit
of creditors, the entire amount unpaid on the Note shall become immediately due
and payable, and Pledgee may proceed as provided in the case of default.
11 PLEDGEHOLDER LIABILITY. In the absence of willful or gross
negligence, Pledgeholder shall not be liable to any party for any of his acts,
or omissions to act, as Pledgeholder.
12. MISCELLANEOUS.
(a) SUCCESSORS AND ASSIGNS. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties. Nothing in this Agreement, express or
implied, is intended to confer upon any party other than the parties hereto or
their respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
(b) GOVERNING LAW. This Agreement and all acts and
transactions pursuant hereto and the rights and obligations of the parties
hereto shall be governed, construed and interpreted in accordance with the laws
of the State of California, without giving effect to principles of conflicts of
law.
(c) NOTICES. Any notice required or permitted by this
Agreement shall be in writing and shall be deemed sufficient upon receipt, when
delivered personally or by a nationally-recognized delivery service (such as
Federal Express or UPS) or confirmed facsimile, or forty-eight (48) hours after
being deposited in the U.S. mail as certified or registered mail with postage
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prepaid, if such notice is addressed to the party to be notified at such party's
address or facsimile number as set forth below, or as subsequently modified by
written notice.
(d) SEVERABILITY. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, the parties agree to
renegotiate such provision in good faith. In the event that the parties cannot
reach a mutually agreeable and enforceable replacement for such provision, then
(i) such provision shall be excluded from this Agreement, (ii) the balance of
the Agreement shall be interpreted as if such provision were so excluded and
(iii) the balance of the Agreement shall be enforceable in accordance with its
terms.
(e) ADVICE OF LEGAL COUNSEL. Each party acknowledges and
represents that, in executing this Agreement, it has had the opportunity to seek
advice as to its legal rights from legal counsel and that the person signing on
its behalf has read and understood all of the terms and provisions of this
Agreement. This Agreement shall not be construed against any party by reason of
the drafting or preparation thereof.
The parties hereto have executed this Security Agreement as of the day
and year first above written.
XXXX X. XXXXXXX
/s/ Xxxx X. Xxxxxxx
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(Signature)
Address: 0000 Xxx Xxxxx Xxxxx
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#208
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Xxxx Xxxx, XX 00000
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CONNETICS CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------
Title: President and Chief Executive
Officer
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Address: 0000 Xxxx Xxxxxxxx Xxxx
Xxxx Xxxx, XX 00000
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