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EXHIBIT 10.24
PLEDGE AGREEMENT
In consideration of the loan which Discovery Partners International,
Inc., a California corporation (the "Company") having its principal offices at
00000 Xxxxx Xxxxxx Xxxxx Xxxx, Xx Xxxxx, XX 00000, has on this day extended to
the undersigned Xxxxxxxx Xxxxxxxxx and as security for the payment of that
certain promissory note ("Note") in the principal sum of $68,000.00 payable to
the Company or order which the undersigned has on this day executed to evidence
such loan, the undersigned hereby grants the Company a security interest in, and
pledges with the Company, the following securities and other property:
(i) 170,000 shares of the Company's Common Stock represented by share
certificate no. ____ (the "Shares");
(ii) any and all new, additional or different securities subsequently
distributed with respect to the shares identified in (i) above which are to be
delivered to and deposited with the Company Secretary pursuant to the
requirements of Section 3 of this Agreement:
(iii) any and all other property and money which is delivered to or
comes into possession of the Company pursuant to the terms and provisions of
this Agreement; and
(iv) the proceeds of any sale, exchange or disposition of the property
and securities described in (i), (ii), or (iii) above.
All securities, property and money so assigned, transferred to and
pledged with the Company shall be herein referred to as the "Collateral". The
Company shall hold the Collateral in accordance with the following terms and
provisions:
1. Warranties. The undersigned hereby warrants that the undersigned is
the owner of the Collateral and has the right to pledge the Collateral and that
the Collateral is free from liens, adverse claims and other security interests
(other than the Company's repurchase rights against the Shares).
2. Rights and Powers. The Company may, without obligation to do so,
exercise at any time and from time to time one or more of the following rights
and powers with respect to any or all of the collateral:
a. accept in its discretion other property of the undersigned in
exchange for all or part of the Collateral and release Collateral to the
undersigned to the extent necessary to effect such exchange, and in such event
the money, property or securities received in the exchange shall be held by the
Company as substitute security for the Note and all other indebtedness secured
hereunder;
b. perform such acts as are necessary to preserve and protect the
Collateral and the rights, powers and remedies granted with respect to such
Collateral by this Agreement; and
c. receive, endorse and give receipt for, or collect by legal
proceedings or otherwise, dividends or other distributions made or paid with
respect to the Collateral, provided
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and only if there exists at the time an outstanding event of default under
Section 8 of this Agreement.
Expenses reasonably incurred in the exercise of such rights and powers
shall be payable by the undersigned and form part of the indebtedness secured
hereunder as provided in Section 10.
So long as there exists no event of default under Section 8 of this
Agreement, the undersigned may exercise all shareholder voting rights and be
entitled to receive any cash distributions with respect to the Collateral.
Accordingly, until such time as an event of default occurs under this Agreement,
all shareholder meeting notices and other shareholder materials which the
Company receives with respect to the Collateral shall be delivered to the
undersigned at the address indicated below.
3. Duty to Deliver. Any Shares and any new, additional or different
securities which may now or hereafter become distributable with respect to the
Collateral by reason of a stock dividend, stock split or reclassification of the
capital stock of the Company or by reason of a merger, consolidation or other
reorganization affecting the capital structure of the Company shall, upon
receipt by the undersigned, be promptly delivered to and deposited with the
Company Secretary as part of the Collateral hereunder. Such securities shall be
accompanied by one or more properly endorsed stock power assignments.
4. Care of Collateral. The Company shall exercise reasonable care in the
custody and preservation of the Collateral, but shall have no obligation to
initiate any action with respect to, or otherwise inform the undersigned of, any
conversion, call, exchange right, preemption right, subscription right, purchase
offer or other right or privilege relating to or affecting the Collateral. The
Company shall have no duty to preserve the rights of the undersigned against
adverse claims or to protect the Collateral against the possibility of a decline
in market value. The Company shall not be obligated to take any action with
respect to the Collateral requested by the undersigned unless the request is
made in writing and the Company determines that the requested action will not
unreasonably jeopardize the value of the Collateral as security for the Note and
other indebtedness secured hereunder.
The Company may at any time deliver all or part of the Collateral to
the undersigned, and the receipt thereof by the undersigned shall constitute a
complete and full acquittance for the Collateral so delivered. The Company shall
accordingly be discharged from any further liability or responsibility for the
delivered Collateral.
5. Payment of Taxes and Other Charges. The undersigned shall pay, prior
to the delinquency date, all taxes, liens, assessments and other charges against
the Collateral, and in the event of the undersigned's failure to do so, the
Company may at its election pay any or all of such taxes and charges without
contesting the validity of legality thereof. The payments so made shall become
part of the indebtedness secured hereunder and shall be payable immediately by
the undersigned, without demand, and until paid shall bear interest at the same
rate as provided for in the Note.
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6. Transfer of Collateral. In connection with the transfer or assignment
of the Note (whether by negotiation, discount or otherwise), the Company may
transfer all or any part of the Collateral, and the transferee shall thereupon
succeed to all the rights, powers and remedies granted the Company hereunder
with respect to the Collateral so transferred. Upon such transfer, the Company
shall be fully discharged from all liability and responsibility for the
transferred Collateral.
7. Release of Collateral. Provided all indebtedness secured hereunder
shall at the time have been paid in full, any Shares and other Collateral shall
be released from pledge and returned to the undersigned.
8. Events of Default. The occurrence of one or more of the following
events shall constitute an event of default under this Agreement:
a. failure of the undersigned to pay when due under the Note (either
at scheduled maturity or upon acceleration) any principal or accrued interest;
b. the occurrence of any event of default specified in the Note;
c. the failure of the undersigned to perform any obligation imposed
upon the undersigned by reason of this Agreement; or
d. the breach of any warranty of the undersigned contained in this
Agreement.
Upon the occurrence of any such event of default, the Company may, at
its election, declare the Note and all other indebtedness secured hereunder to
become immediately due and payable and may exercise any or all of the rights and
remedies granted to a secured party under the provisions of the California
Uniform Commercial Code (as now or hereafter in effect), including (without
limitation) the power to dispose of the Collateral by public or private sale or
to accept the Collateral in full payment of the Note and all other indebtedness
secured hereunder. Any proceeds realized from the disposition of the Collateral
pursuant to the power of sale hereby granted to the Company shall first be
applied to the payment of expenses incurred by the Company in connection with
the disposition, and the balance shall be applied to the payment of the Note and
any other indebtedness secured hereunder in such order of application as the
Company shall deem appropriate. Any surplus proceeds shall be paid over to the
undersigned. In the event such proceeds prove insufficient to satisfy all
indebtedness secured hereunder, then the undersigned shall be personally liable
for the deficiency.
9. Other Remedies. The rights, powers and remedies granted to the
Company pursuant to the provisions of this agreement shall be in addition to all
rights, powers and remedies granted to the Company under any statute or rule of
law. Any forbearance, failure or delay by the Company in exercising any right,
power or remedy under this Agreement shall not be deemed to be a waiver of such
right, power or remedy. Any single or partial exercise of any right, power or
remedy under this Agreement shall not preclude the further exercise thereof, and
every right, power and remedy of the Company under this Agreement shall continue
in full force and effect until such right, power or remedy is specifically
waived by an instrument executed by the Company.
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10. Costs and Expenses. All costs and expenses (including reasonable
attorneys' fees) incurred by the Company in the exercise or enforcement of any
right, power, or remedy granted it under this Agreement shall become part of the
indebtedness secured hereunder and shall be payable immediately by the
undersigned, without demand, and until paid shall bear interest at the maximum
rate permitted by law.
11. Applicable Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of California and shall be
binding upon the executors, administrators, heirs and assigns of the
undersigned.
12. Severability. If any provision of this Agreement is held to be
invalid under applicable law, then such provision shall be ineffective only to
the extent of such invalidity, and neither the remainder of such provision nor
any other provisions of this Agreement shall be affected thereby.
13. Amendment. This Agreement may not be amended except in a writing
signed by the undersigned and the Company.
14. Entire Agreement. This Agreement constitutes the entire agreement of
the undersigned and the Company with regard to the subject matter hereof, and
supersedes all prior or contemporaneous discussions, negotiations,
understandings and agreements, whether written or oral.
IN WITNESS WHEREOF, this Pledge Agreement has been executed by the
undersigned on this 31st day of January, 1999.
/s/ Xxxxxxxx Xxxxxxxxx
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Xxxxxxxx Xxxxxxxxx
Address: X.X. Xxx 000
Xxxxx Xx, XX 00000
Agreed to and Accepted by:
Discovery Partners International, Inc.
By: /s/ Xxxx Xxxxxxxxxxx
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Xxxx Xxxxxxxxxxx
Chief Financial Officer
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