EXHIBIT 10.19
STOCK PURCHASE PLEDGE AGREEMENT
THIS AGREEMENT dated as of October 15, 2001, made by Xxxxxx X. Xxxxxx,
Ph.D. ("PLEDGOR"), having a mailing address of 00000 Xxxxxxxxxxx Xxx, Xxxxx
Xxxxxxx, Xxxxxxxx 00000, to and for the benefit of Advancis Pharmaceutical
Corporation, a Delaware corporation (referred to herein as "PLEDGEE," which term
shall also include any subsequent assignee or holder of this Agreement), having
a mailing address of 000 Xxxxxxx Xxxx, Xxxxxxxxxxxx, Xxxxxxxx 00000, Attention:
Vice President.
Pledgor is the owner of the Four Hundred Twenty Thousand (420,000)
shares (the "PLEDGED SHARES") of common stock issued by Pledgee (in its capacity
as issuer of the Pledged Shares, Pledgee is sometimes referred to herein as the
"ISSUER"), and more fully described as follows:
Pledged Shares issued by Advancis Pharmaceutical Corporation to Pledgor and
evidenced by the following certificate(s):
Certificate No. No. of Shares Owned Type of Shares
-------------- ------------------- --------------
33 420,000 Common Stock
Pledgor purchased said Pledged Shares (referred to herein as the "STOCK
PURCHASE") from Pledgee on the date of this Agreement with purchase-money
financing provided by Pledgee (referred to herein as the "PURCHASE CREDIT").
To evidence the terms of the Purchase Credit, Pledgor has made payable
to the order of Pledgee, and delivered to Pledgee, that certain Stock Purchase
Promissory Note dated on or about the same date as this Agreement in the
principal amount of Ninety Four Thousand Five Hundred and 00/100 Dollars
($94,500) (the "NOTE," as it may be amended and extended from time to time, and
including any replacement notes or substitute notes, and any combinations
thereof in any denominations, that may be issued for the Note or to further
evidence the Purchase Credit from time to time).
It is a condition of the Purchase Credit that the indebtedness
evidenced by the Note and the other obligations of Pledgor to Pledgee under the
Note and this Agreement are to be secured with this Agreement and the pledge of
the Pledged Shares to Pledgee.
Unless otherwise defined in this Agreement (and including any terms
defined above), capitalized terms that are used in this Agreement and defined in
the Note shall have the meanings given to them in the Note.
NOW, THEREFORE, in consideration of the premises and of the sum of one
dollar ($1.00) and other good and valuable consideration, the receipt of which
is acknowledged hereby, and in order to induce Pledgee to extend the Purchase
Credit, Pledgor hereby agrees with Pledgee as follows:
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SECTION 1. Pledge. Pledgor hereby pledges and grants to Pledgee
a security interest in the following property (referred to herein as the
"PLEDGED COLLATERAL"):
(i) the Pledged Shares and the certificates
representing the Pledged Shares, and all dividends, cash,
instruments and other property and proceeds from time to time
received, receivable or otherwise distributed in respect of or
in exchange for any or all of the Pledged Shares; and
(ii) all additional shares of stock of Issuer from
time to time acquired by Pledgor in any manner, and the
certificates representing such additional shares, and all
dividends, cash, instruments and other property and proceeds
from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of
such shares.
SECTION 2. Security for Obligations. This Agreement secures the
prompt payment and performance of (a) all obligations of Pledgor to Pledgee now
or hereafter existing under the Note, whether for principal, interest, fees,
costs, expenses or otherwise, and (b) all obligations of Pledgor to Pledgee now
or hereafter existing under this Agreement (all such obligations of Pledgor to
Pledgee described in clauses (a) and (b) of this sentence are referred to herein
as the "OBLIGATIONS").
SECTION 3. Delivery of Pledged Collateral. All certificates or
instruments representing or evidencing Pledged Collateral shall be delivered to
and held by or on behalf of Pledgee pursuant hereto and shall be in suitable
form for transfer by delivery, or shall be accompanied by duly executed but
undated stock powers or other instruments of transfer or assignment, in blank,
all in form and substance satisfactory to Pledgee. Pledgee shall have the right,
at any time in Pledgee's discretion and without notice to Pledgor, to transfer
to or to register in the name of Pledgee or any of Pledgee's nominees any or all
of the Pledged Collateral, subject only to the revocable rights specified in
Section 6(a). In addition, Pledgee shall have the right at any time to exchange
certificates or instruments representing or evidencing Pledged Collateral for
certificates or instruments of smaller or larger denominations.
SECTION 4. Representations and Warranties. Pledgor represents
and warrants as follows:
(a) Pledgor is the legal and beneficial owner of record
of the Pledged Collateral free and clear of any lien, security interest, option
or other charges or encumbrance except for the security interest created by this
Agreement.
(b) Pledge of the Pledged Shares pursuant to this
Agreement creates a valid and perfected first priority security interest in the
Pledged Shares, securing the payment of the Obligations.
(c) Pledgor (i) has good right and legal authority to
pledge the Pledged Collateral owned by Pledgor in the manner hereby done or
contemplated and (ii) will defend Pledgor's title or interest thereto or therein
against any and all attachments, liens, claims,
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encumbrances, security interests or other impediments of any nature, however
arising, of all persons whomsoever.
SECTION 5. Further Assurances. Pledgor agrees that at any time
and from time to time, at the expense of Pledgor, Pledgor will promptly execute
and deliver all further instruments and documents, and take all further action,
that may be necessary or desirable, or that Pledgee may request, in order to
perfect and protect any security interest granted or purported to be granted
hereby or to enable Pledgee to exercise and enforce Pledgee's rights and
remedies hereunder with respect to any Pledged Collateral.
SECTION 6. Voting Rights; Dividends; Etc. (a) So long as no
Event of Default or event which, with the giving of notice or the lapse of time,
or both, would become an Event of Default shall have occurred and be continuing:
(i) Pledgor shall be entitled to exercise any and all
voting and other consensual rights pertaining to the Pledged
Collateral or any part thereof for any purpose not
inconsistent with the terms of this Agreement; provided,
however, that Pledgor shall not exercise or refrain from
exercising any such right if, in Pledgee's judgment, such
action would have a material adverse effect on the value of
the Pledged Collateral or any part thereof, and, provided,
further, that Pledgor shall give Pledgee at least five (5)
days' written notice of the manner in which Pledgor intends to
exercise, or the reasons for refraining from exercising, any
such right.
(ii) Pledgor shall be entitled to receive and retain
any and all dividends paid in respect of Pledged Collateral,
provided, however, that any and all
(A) dividends paid or payable other than in
cash in respect of, and instruments and other
property received, receivable or otherwise
distributed in respect of, or in exchange for, any
Pledged Collateral,
(B) dividends and other distributions paid
or payable in cash in respect of any Pledged
Collateral in connection with a partial or total
liquidation or dissolution or in connection with a
reduction of capital, capital surplus or
paid-in-surplus, and
(C) cash paid, payable or otherwise
distributed in respect of principal of, or in
redemption of, or in exchange for, any Pledged
Collateral,
shall be, and shall forthwith be delivered to Pledgee to hold
as, Pledged Collateral and shall, if received by Pledgor, be
received in trust for the benefit of Pledgee, be segregated
from the other property or funds of Pledgor, and be forthwith
delivered to Pledgee as Pledged Collateral in the same form as
so received (with any necessary endorsement).
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(iii) Pledgee shall execute and deliver (or cause to
be executed and delivered) to Pledgor all such proxies and
other instruments as Pledgor may reasonably request for the
purpose of enabling Pledgor to exercise the voting and other
rights which Pledgor is entitled to exercise pursuant to
paragraph (i) above and to receive the dividends or interest
payments which Pledgor is authorized to receive and retain
pursuant to paragraph (ii) above.
(b) Upon the occurrence and during the continuance of an
Event of Default or an event which, with the giving of notice or the lapse of
time, or both, would become an Event of Default:
(i) All rights of Pledgor to exercise the voting and
other consensual rights which Pledgor would otherwise be
entitled to exercise pursuant to Section 6(a)(i) and to
receive the dividend payments which Pledgor would otherwise be
authorized to receive and retain pursuant to Section 6(a)(ii)
shall cease, and all such rights shall thereupon become vested
in Pledgee who shall thereupon have the sole right to exercise
such voting and other consensual rights and to receive and
hold as Pledged Collateral such dividend payments.
(ii) All dividend payments which are received by
Pledgor contrary to the provisions of paragraph (i) of this
Section 6(b) or contrary to any other agreement with Pledgee
shall be received in trust for the benefit of Pledgee, shall
be segregated from other funds of Pledgor and shall be
forthwith paid over to Pledgee as Pledged Collateral in the
same form as so received (with any necessary endorsement).
As used in this Agreement the term "EVENT OF DEFAULT" means the
occurrence of any of the following events:
(a) If Pledgor shall fail to make a payment of
principal or interest under the Note when
due, and such failure shall continue more
than ten (10) days after Pledgee gives
Pledgor written notice thereof; or
(b) If Pledgor shall fail to make any other
payment, or fail to perform any other
obligation of Pledgor, under the Note or
this Agreement, other than obligations
within the scope of the immediately
preceding clause (a), and such failure shall
continue more than ten (10) days after
Pledgee gives Pledgor written notice
thereof; or
(c) If there shall be filed by or against
Pledgor any petition under the United States
Bankruptcy Code or any similar federal or
state statute; or
(d) Commencement of any proceeding under any
federal or state statute or rule providing
for the relief of debtors, composition of
creditors,
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arrangement, reorganization, receivership,
liquidation or any similar event by or
against Pledgor.
SECTION 7. Transfers and Other Liens; Additional Shares. (a)
Pledgor agrees that Pledgor will not (i) sell or otherwise dispose of, or grant
any option with respect to, any of the Pledged Collateral, or (ii) create or
permit to exist any lien, security interest, or other charge or encumbrance upon
or with respect to any of the Pledged Collateral, except for the security
interest under this Agreement.
(b) Pledgor agrees that if the Issuer shall issue any
stock or other securities to Pledgor or in respect of, in addition to, or in
substitution for, the Pledged Collateral, Pledgor will pledge hereunder, and
deliver to Pledgee, immediately upon Pledgor's acquisition (directly or
indirectly) thereof, any and all such stock or other securities of Issuer,
including any stock powers relating to stock or other securities.
SECTION 8. Pledgee Appointed Attorney-in-Fact. Pledgor hereby
appoints Pledgee, and any officer or agent of Pledgee, with full power of
substitution, Pledgor's attorney-in-fact, with full authority in the place and
stead of Pledgor and in the name of Pledgor or otherwise, from time to time in
Pledgee's discretion to take any action and to execute any instrument which
Pledgee may deem necessary or advisable to accomplish the purposes of this
Agreement, which appointment is irrevocable and coupled with an interest.
Without limiting the generality of the foregoing, Pledgee shall have the right,
with full power of substitution either in Pledgee's name or in the name of
Pledgor, to ask for, demand, xxx for, collect, receipt and give acquittance for
any and all moneys due or to become due under and by virtue of any Pledged
Collateral, to endorse checks, drafts, orders and other instruments for the
payment of money payable to Pledgor representing any interest or dividend, or
other distribution payable in respect of the Pledged Collateral or any part
thereof or on account thereof and to give full discharge for the same, to
settle, compromise, prosecute or defend any action, claim or proceedings with
respect thereto, and to sell, assign, endorse, pledge, transfer and make any
agreement respecting, or otherwise deal with, the same.
SECTION 9. Continuing Security Interest; Transfer of Notes;
Return of Collateral. This Agreement shall create a continuing security interest
in the Pledged Collateral and shall (i) remain in full force and effect until
payment in full of the Obligations, (ii) be binding upon Pledgor and his, her,
their, or its respective personal representatives, successors and assigns, and
(iii) inure, together with the rights and remedies of Pledgee hereunder, to the
benefit of Pledgee and Pledgee's successors, transferees and assigns. Without
limiting the generality of the foregoing clause (iii) Pledgee may assign or
otherwise transfer any Note held by Pledgee to any other person or entity, and
such other person or entity shall thereupon become vested with all the benefits
in respect thereof granted to Pledgee herein or otherwise. Upon the payment in
full of the Obligations, Pledgor shall be entitled to the return, upon Pledgor's
request and at Pledgor's expense, of such of the Pledged Collateral as shall not
have been sold or otherwise applied pursuant to the terms of this Agreement. If
any of the Pledged Collateral is owned by more than one person, then Pledgee may
deliver such Pledged Collateral to any one or more of such persons, whose
receipt shall be binding on all such persons.
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SECTION 10. Reasonable Care. Pledgee shall be deemed to have
exercised reasonable care in the custody and preservation of the Pledged
Collateral in Pledgee's possession if the Pledged Collateral is accorded
treatment substantially equal to that which Pledgee accords Pledgee's own
property, it being understood that Pledgee shall not have responsibility for (i)
ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relative to any Pledged Collateral, whether
or not Pledgee has or is deemed to have knowledge of such matters, or (ii)
taking any necessary steps to preserve rights against any parties with respect
to any Pledged Collateral. No action taken by Pledgee or omitted to be taken
with respect to the Pledged Collateral or any part thereof shall give rise to
any defense, counterclaim or offset in favor of Pledgor or to any claim or
action against Pledgee in the absence of the gross negligence or willful
misconduct of Pledgee.
SECTION 11. Remedies upon Default. If an Event of Default shall
have occurred and be continuing, Pledgee may sell the Pledged Collateral, or any
part thereof, at public or private sale or at any broker's board or on any
securities exchange, for cash, upon credit or for future delivery as Pledgee
shall deem appropriate. Pledgee shall be authorized at any such sale (if Pledgee
deems it advisable to do so) to restrict the prospective bidders or purchasers
to persons who will represent and agree that they are purchasing the Pledged
Collateral for their own account for investment and not with a view to the
distribution or sale thereof, and upon consummation of any such sale Pledgee
shall have the right to assign, transfer and deliver to the purchaser or
purchasers thereof the Pledged Collateral so sold. Each such purchaser at any
such sale shall hold the property sold absolutely, free from any claim or right
on the part of Pledgor, and Pledgor hereby waives (to the extent permitted by
law) all rights of redemption, stay and appraisal which Pledgor now has or may
at any time in the future have under any rule of law or statute now existing or
hereafter enacted.
Prior to a sale or other disposition of Pledged Collateral,
Pledgee shall give Pledgor, and any other parties required under Title 9 of the
Maryland Uniform Commercial Code (Maryland Uniform Commercial Code - Secured
Transactions) ("ARTICLE 9"), notification as required under Article 9. Any such
public sale shall be held at such time or times within ordinary business hours
and at such place or places as Pledgee may fix and state in the notice of such
sale. At any such sale, the Pledged Collateral, or portion thereof, to be sold
may be sold in one lot as an entirety or in separate parcels, as Pledgee may (in
Pledgee's sole and absolute discretion) determine. Pledgee shall not be
obligated to make any sale of any Pledged Collateral if Pledgee shall determine
not to do so, regardless of the fact that notice of sale of such Pledged
Collateral shall have been given. Pledgee may, without notice or publication,
adjourn any public or private sale or cause the same to be adjourned from time
to time by announcement at the time and place fixed for sale, and such sale may,
without further notice, be made at the time and place to which the same was so
adjourned. In case any sale of all or any part of the Pledged Collateral is made
on credit or for future delivery, the Pledged Collateral so sold may be retained
by Pledgee until the sale price is paid by the purchaser or purchasers thereof,
but Pledgee shall not incur any liability in case any such purchaser or
purchasers shall fail to take up and pay for the Pledged Collateral so sold and,
in case of any such failure, such Pledged Collateral may be sold again upon
notice to Pledgor as set forth in the first sentence of this paragraph. At any
public sale made pursuant to this Section, Pledgee may bid for or purchase, free
(to the extent permitted
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by law) from any right of redemption, stay or appraisal on the part of Pledgor
(all said rights being also hereby waived and released to the extent permitted
by law), the Pledged Collateral or any part thereof offered for sale and may
make payment on account thereof by using any claim then due and payable to
Pledgee from Pledgor as a credit against the purchase price, and Pledgee may,
upon compliance with the terms of sale, hold, retain and dispose of such
property without further accountability to Pledgor therefor. For purposes
hereof, a written agreement to purchase the Pledged Collateral or any portion
thereof shall be treated as a sale thereof; Pledgee shall be free to carry out
such sale pursuant to such agreement, and Pledgor shall not be entitled to the
return of the Pledged Collateral or any portion thereof subject thereto,
notwithstanding the fact that after Pledgee shall have entered into such an
agreement all Events of Default shall have been remedied and the Obligations
paid in full. As an alternative to exercising the power of sale herein conferred
upon Pledgee, Pledgee may proceed by a suit or suits at law or in equity to
foreclose this Agreement and to sell the Pledged Collateral or any portion
thereof pursuant to a judgment or decree of a court or courts having competent
jurisdiction or pursuant to a proceeding by a court-appointed receiver.
To the extent permitted by applicable law, Pledgee shall have
absolute discretion as to the time of application of any such proceeds, moneys
or balances in accordance with this Agreement. Upon any sale of the Pledged
Collateral by Pledgee (including, without limitation, a sale pursuant to a power
of sale granted by statute or under a judicial proceeding), the receipt of
Pledgee or of the officer making the sale shall be a sufficient discharge to the
purchaser or purchasers of the Pledged Collateral being sold, and such purchaser
or purchasers shall not be obligated to see to the application of any part of
the purchase money paid over to Pledgee or such officer or be answerable in any
way for the misapplication thereof.
SECTION 12. Expenses. If Pledgor shall default in payment of the
Note, or under this Agreement, and Pledgee refers the Note to an attorney who is
not a salaried employee of Pledgee for collection, Pledgee may charge and
collect from Pledgor reasonable attorneys fees and all court costs and other
collection costs actually incurred by Pledgee relating to Pledgor's default.
SECTION 13. Security Interest Absolute. All rights of Pledgee and
the security interests hereunder, and all obligations of Pledgor hereunder,
shall be absolute and unconditional irrespective of:
(i) any lack of validity or enforceability of the Note or any
other documents relating to the Stock Purchase;
(ii) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Obligations, or any other amendment or
waiver of or any consent to any departure from the Note or any other documents
relating to the Purchase Credit or the Stock Purchase;
(iii) any exchange, release or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to departure
from any guaranty, for all or any of the Obligations; or
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(iv) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, Pledgor in respect of the Obligations
or this Agreement.
SECTION 14. Notices. Any notice required or permitted by or in
connection with this Agreement shall be in writing and shall be made by hand
delivery, or by overnight delivery service, or by certified mail, return receipt
requested, postage prepaid, addressed to the parties at the appropriate address
set forth on the first page of this Agreement or to such other address as may be
hereafter specified by written notice by the parties to each other. Notice shall
be considered given as of the earlier of the date of actual receipt, or the date
of the hand delivery, or one (1) calendar day after delivery to an overnight
delivery service, or three (3) calendar days after the date of mailing,
independent of the date of actual delivery or whether delivery is ever in fact
made, as the case may be, provided the giver of notice can establish that notice
was given as provided herein. Notwithstanding the aforesaid procedures, any
notice or demand upon Pledgor, in fact received by Pledgor, shall be sufficient
notice or demand.
SECTION 15. Amendments; Severability. No amendment or waiver of
any provision of this Agreement nor consent to any departure by Pledgor from any
provision of this Agreement, shall in any event be effective unless the same
shall be in writing and signed by Pledgee, and then such waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given. If any provision of this Agreement is or shall at any time be
invalid and unenforceable in any jurisdiction, then, to the fullest extent
permitted by law, (i) the other provisions of this Agreement shall remain in
full force and effect in such jurisdiction and shall be liberally construed in
favor of Pledgee in order to carry out the intentions of the parties hereto as
nearly as may be possible; and (ii) the invalidity or unenforceability of any
provision of this Agreement in any jurisdiction shall not affect the validity or
enforceability of such provision in any other jurisdiction.
SECTION 16. Maryland Law; Jurisdiction; Venue. This Agreement
shall be governed by the laws of the State of Maryland (excluding Maryland
conflicts of laws rules). Pledgor hereby irrevocably consents to the
non-exclusive personal jurisdiction of the courts of the State of Maryland and,
if a basis for federal jurisdiction exists, the non-exclusive jurisdiction of
the United States District Court for the District of Maryland. Pledgor agrees
that venue shall be proper in any circuit court of the State of Maryland
selected by Pledgee or, if a basis for federal jurisdiction exists, in any
Division of the United States District Court for the District of Maryland.
Pledgor waives any right to object to the maintenance of any suit or claim in
any of the state or federal courts of the State of Maryland on the basis of
improper venue or of inconvenience of forum. Any suit or claim brought by
Pledgor against Pledgee that is based, in whole or in part, directly or
indirectly, on this Agreement or any matters relating to this Agreement, shall
be brought in a court only in the State of Maryland. Pledgor shall not file any
counterclaim against Pledgee in any suit or claim brought by Pledgee against
Pledgor in a jurisdiction outside of the State of Maryland unless under the
rules of the court in which Pledgee brought such suit or claim the counterclaim
is mandatory, and not permissive, and would be considered waived unless filed as
a counterclaim in the claim or suit instituted by Pledgee against Pledgor.
Pledgor agrees that any forum outside the State of Maryland is an inconvenient
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forum and that a suit brought by Pledgor against Pledgee in any court outside
the State of Maryland should be dismissed or transferred to a court located in
the State of Maryland.
IN WITNESS WHEREOF, Pledgor has caused this Agreement to be duly
executed, under seal, and delivered as of the date first above written.
WITNESS:
/s/ Xxxxx X. Xxxxxxxx /s/ Xxxxxx X. Xxxxxx (SEAL)
-------------------------- --------------------------------
Pledgor
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