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EXHIBIT 10.29
STOCK PLEDGE AGREEMENT
THIS STOCK PLEDGE AGREEMENT ("Agreement") is entered into as of June 6,
1997, by and between CombiChem, Inc., a California corporation ("Secured
Party"), and Xxxxxxx Xxxxx ("Pledgor"), with reference to the following facts:
A. Contemporaneously with the execution of this Agreement and pursuant
to a certain Stock Purchase Agreement, dated the date hereof, by and between
Pledgor and Secured Party (the "Stock Purchase Agreement"), Pledgor is
delivering a Promissory Note Secured by Stock Pledge Agreement to Secured Party
in the original principal amount of Twenty Three Thousand Forty Three and 77/100
Dollars ($23,043.77) (the "Promissory Note"), in order to evidence a loan which
Secured Party has agreed to make to Pledgor in connection with Pledgor's
purchase of shares of Secured Party's Common Stock pursuant to the Stock
Purchase Agreement.
B. Pledgor desires to secure its obligations under the Promissory Note
by granting Secured Party a first priority security interest in the shares of
Common Stock of Secured Party being acquired by Pledgor under the Stock Purchase
Agreement, and any and all new or additional securities of Secured Party
subsequently acquired by or distributed to Pledgor.
NOW, THEREFORE, in consideration of the mutual terms, covenants and
conditions contained herein, the parties hereby agree as follows:
1. Security. The term "Pledged Stock" shall mean Four Hundred Nine
Thousand Six Hundred Sixty Seven (409,667) shares of Common Stock of Secured
Party registered in the name of Pledgor, together with all certificates,
options, rights or other securities of Secured Party acquired by Pledgor
including any distributions issued as an addition to, in substitution or in
exchange for, or on account of, any such shares, and all proceeds of the
foregoing, as further described in and subject to the provisions of Section 4
below, now or hereafter owned or acquired by Pledgor, and any and all new or
additional securities subsequently distributed to Pledgor by Secured Party.
2. Grant of Security Interest. As security for full and timely payment,
performance and satisfaction of the Obligations (as defined in Section 3 below),
Pledgor hereby grants to Secured Party a first priority security interest in the
Pledged Stock. Upon the execution hereof, the Pledged Stock and any related
stock powers shall be deposited with Secured Party.
3. Obligations of Pledgor. As used herein, the term "Obligations" shall
mean: (a) all of Pledgor's obligations, covenants and agreements under the
Promissory Note and (b) all of Pledgor's obligations, covenants and agreements
under this Agreement.
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4. Pledged Stock. In the event Pledgor shall become entitled to receive
or shall receive, in connection with any of the Pledged Stock, (a) any stock
certificate, including any certificate representing a stock dividend or any
certificate in connection with any increase or reduction of capital,
reclassification, merger, consolidation, sale of assets, combination of shares,
stock split or spin-off, (b) any option, warrant or right, whether as an
addition to or in substitution of any of the Pledged Stock, or otherwise, (c)
any dividend or distribution payable in property, including securities issued as
a dividend on the Pledged Stock, or (d) any other distributions of any kind
whatsoever, Pledgor shall accept same as encumbered by the security interest
created hereby, and shall deliver same forthwith to Secured Party in the exact
form received, including as appropriate, Pledgor's endorsement or appropriate
stock powers duly executed in blank, to be held by Secured Party, as a part of
the Pledged Stock, subject to the terms hereof.
5. Representations and Warranties of Pledgor. Pledgor warrants and
represents to Secured Party that (a) Pledgor is the legal and beneficial owner
of all of the Pledged Stock, (b) all of the shares of the Pledged Stock are
owned by Pledgor free of any pledge, mortgage, lien or security interest of any
kind, except as created hereby, or under the Stock Purchase Agreement, and (c)
upon execution and delivery by Pledgor of this Agreement and upon delivery of
the Pledged Stock to Secured Party, this Agreement shall create a valid and
perfected first priority security interest in the Pledged Stock, and the
proceeds thereof, subject to no prior security interest.
6. Transfer of Interests. Pledgor hereby covenants that, until such
time as the Obligations have been fully paid, performed and satisfied, Pledgor
will not sell, convey or otherwise dispose of any of the Pledged Stock or any
interest therein, or create, incur or permit to exist any pledge, mortgage,
lien, charge, encumbrance or any security interest whatsoever in or with respect
to any of the Pledged Stock, or the proceeds thereof, other than the security
interest created hereby.
7. Default. As used herein, the term "Default" shall mean the failure
of full and timely payment or performance and satisfaction of any of the
Obligations.
8. Rights of Secured Party. Upon the occurrence of a Default, Secured
Party may, at its option, do any one or more of the following: (a) declare all
indebtedness of Pledgor to Secured Party to be immediately due and payable,
whereupon all unpaid principal and interest on the Promissory Note shall become
and be immediately due and payable; (b) exercise any and all of the rights and
remedies of a secured party as provided for by the California Commercial Code;
(c) proceed by an action or actions at law or in equity to recover the
indebtedness secured hereby or to foreclose this Agreement and sell the
collateral, or any portion thereof, pursuant to a judgment or decree of a court
or courts of competent jurisdiction; (d) proceed immediately to have any or all
of the Pledged Stock registered in Secured Party's name or in the name of a
nominee; (e) exercise all voting rights with respect to the Pledged Stock and
all other corporate rights, including any rights of conversion, exchange,
subscription or other rights, privileges or options pertaining thereto as if
Secured Party were the absolute owner thereof, including, without limitation,
the right to exchange any or all of the
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Pledged Stock upon the merger, consolidation, reorganization, recapitalization
or other readjustment of Pledgor; (f) enforce one or more remedies hereunder,
successively or concurrently; and (g) proceed immediately to dispose of and
realize upon the Pledged Stock, or any part thereof, and in connection
therewith, sell or otherwise dispose of and deliver the Pledged Stock, 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 Secured Party's offices or elsewhere, at
such prices and on such terms as Secured Party may deem best, for cash or on
credit, or for future delivery without assumption of any credit risk, with the
right of Secured Party or any purchaser to purchase at any such sale either the
whole or any part of the Pledged Stock (in connection with any such sale or
disposition, Secured Party need not give more than thirty (30) calendar days
notice of the time and place of any public sale or of the time after which a
private sale may take place, which notice Pledgor hereby acknowledges to be
reasonable).
9. Proceeds. The proceeds of any disposition of all or any part of the
Pledged Stock, as provided in Section 8 above, shall be applied as follows: (a)
first, to the costs and expenses incurred in connection therewith or incidental
thereto, including reasonable attorneys' fees and legal expenses; (b) second, to
the satisfaction of the Obligations; (c) third, to the payment of any other
amounts required by applicable law; and (d) fourth, to Pledgor to the extent of
any surplus remaining.
10. Private Sale. Pledgor recognizes and acknowledges that Secured Party
may be unable to effect a public sale of all or a part of the Pledged Stock and
may elect to resort to one or more private sales to purchasers who will be
obligated to agree, among other things, to acquire the Pledged Stock for their
own account, for investment, and not with a view to the distribution or resale
thereof. Pledgor acknowledges that any such private sales may be at prices and
on terms less favorable than those of public sales, and agrees that such private
sales shall be deemed to have been made in a commercially reasonable manner and
that Secured Party has no obligation to delay sale of any Pledged Stock to
permit Pledgor to register it for public sale under the Securities Act of 1933,
as amended.
11. Release of Pledged Stock. Upon the execution hereof, Pledgor shall
deliver to Secured Party, the stock certificate or certificates representing the
Pledged Stock, including Pledgor's endorsement thereon or appropriate stock
powers duly executed in blank, to be held in accordance with the terms of this
Agreement. Provided all indebtedness secured hereunder shall at the time have
been paid in full, the Pledged Stock shall be released from pledge and returned
to Pledgor upon the full and final satisfaction of Pledgor's obligations under
the Promissory Note and this Agreement, subject to any continuing escrow
requirements under the Stock Purchase Agreement.
12. Partial Release of Pledged Stock. Provided that there are no unpaid
enforcement or collection costs due and payable under the terms of the
Promissory Note, and provided further that Pledgor executes such documents,
agreements and certificates as may reasonably be required by Holder in order to
effectuate the partial release contemplated herein, a portion of the shares of
Pledged Stock shall be released from
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pledge and returned to Pledgor upon receipt of a prepayment under the Promissory
Note, subject to any continuing escrow requirements under the Stock Purchase
Agreement. In the event such release is permitted pursuant to any such escrow,
the number of shares of Pledged Stock to be released from pledge and returned to
Pledgor shall be that number of shares of Pledged Stock which bears the same
ratio to the total number of shares of Pledged Stock as the amount of prepayment
under the Promissory Note bears to the total of the principal and accrued
interest then payable under the Promissory Note, provided that no fractional
shares shall be released from pledge under this paragraph 12.
13. Irrevocable Proxy and Power of Attorney. To further secure
Obligations hereunder, Pledgor grants the irrevocable proxy and power of
attorney set forth in this Section 13 to Secured Party for the purposes set
forth below. Pledgor hereby irrevocably constitutes and appoints Secured Party,
any person or entity who becomes the successor to Secured Party, or any officer
of Secured Party or such successor (the "Attorneys"), and each of the foregoing
acting singly, in each case with full power of substitution and resubstitution,
the true and lawful agent and attorney-in-fact of such Purchaser, with full
power and authority in such Purchaser's name, place and stead, to vote the
shares of Pledged Stock in favor of any corporate transaction which has
otherwise been approved by the shareholders of Secured Party and in which (i)
more than fifty percent (50%) of the outstanding shares of the common stock of
Secured Party will be acquired by a single purchaser or a group of purchasers
acting in concert, (ii) all or substantially all of the assets of Holder are
acquired by a single purchaser or group of purchasers, and (iii) Holder merges
with or into another organization; and to do and perform each and every other
act and thing whatsoever requisite, necessary or appropriate to be done to carry
out the purposes of this paragraph 13 as fully to all intents and purposes as
Pledgor might or could do if personally present, Pledgor hereby ratifying all
that such attorney-in-fact shall do or cause to be done by these presents. It is
expressly understood and intended by Pledgor that the irrevocable proxy and
power of attorney granted in this paragraph 13 is coupled with an interest, is
irrevocable and may be delegated by said Attorneys. The irrevocable proxy and
power of attorney shall survive the death or incapacity of such Pledgor and
shall continue until all Pledged Shares have been released from pledge
hereunder.
14. Voting Rights. Except as set forth in Paragraph 13 hereof, so long
as no Default shall have occurred or exist under this Agreement, Secured Party
shall have no voting rights with respect to the Pledged Stock.
15. Written Notices. Pledgor agrees to promptly deliver to Secured Party
a copy of all written notices received by Pledgor with respect to the Pledged
Stock.
16. Performance by Pledgor. Upon full payment and performance of all of
the Obligations by Pledgor and upon payment of all additional costs and expenses
provided herein, this Agreement shall terminate and Secured Party shall deliver
or caused to be delivered to Pledgor (except as set forth in the Stock Purchase
Agreement or otherwise),
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such of the Pledged Stock as shall not have been sold or otherwise disposed of
pursuant to this Agreement.
17. Remedies. The rights and remedies provided herein are cumulative and
are in addition to, and not exclusive of, any rights or remedies provided in
other instruments and agreements between Secured Party and Pledgor, or as
provided by law, including, without limitation, the rights and remedies of a
secured party under the California Commercial Code.
18. Successors and Assigns. This Agreement is binding upon and shall
inure to the benefit of the parties hereto, and their successors and assigns.
19. Governing Law. This Agreement has been accepted and is performable
within San Diego County, California. This Agreement shall be governed and
construed in accordance with the internal laws of the State of California.
20. Notices. Any notice or other communication required or permitted
hereunder shall be in writing and shall be deemed to have been given on the
third business day after mailing within the United States, postage prepaid, by
registered or certified mail, return receipt requested, addressed as follows:
If to Pledgor: Xxxxxxx Xxxxx, Xx.
c/o CombiChem, Inc.
0000 Xxxxxx Xxxxx Xx
Xxx Xxxxx, XX 00000
If to Secured Party: CombiChem, Inc.
0000 Xxxxxx Xxxxx Xx
Xxx Xxxxx, XX 00000
Each of the parties hereto shall be entitled to specify a different address by
giving written notice to the other parties hereto in accordance with this
Section 20.
21. Entire Agreement. This Agreement and any other agreement expressly
referred to herein supersedes any and all other agreements, either oral or in
writing, among the parties hereto, with respect to the subject matter hereof and
contains all of the covenants and agreements among the parties with respect to
the subject matter hereof.
22. Waiver; Modification. No term or condition of this Agreement shall
be deemed to have been waived nor shall there be any estoppel to enforce any
provision of this Agreement except by written instrument of the party charged
with such waiver or estoppel. No amendment or modification of this Agreement
shall be deemed effective unless and until executed in writing by all of the
parties hereto.
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23. Severability. All agreements and covenants contained herein are
severable and in the event that any of them shall be held to be invalid by any
court of competent jurisdiction, this Pledge Agreement shall be interpreted as
if such invalid agreements or covenants were not contained herein.
24. Delay; Time of Essence. No failure or delay by a party in exercising
any right, power or privilege hereunder shall operate as a waiver thereof, and
no single or partial exercise thereof shall preclude any other or further
exercise or the exercise of any other right, power, or privilege. Time is of the
essence of each and every provision of this Agreement of which time is an
element.
25. Attorneys' Fees. In any action or proceeding brought to enforce or
interpret any provision of this Agreement, the prevailing party shall be
entitled to recover reasonable attorneys' fees in addition to any other
available remedy.
PLEDGOR: SECURED PARTY:
CombiChem, Inc.
/s/ Xxxxxxx Xxxxx By: Xxxxx X. Xxxx
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[Name of Pledgor] Its: C.S.O./C.O.O.
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SECTION 83(b) TAX ELECTION
This statement is being made under Section 83(b) of the Internal Revenue Code,
pursuant to Treas. Reg. Section 1.83-2.
(1) The taxpayer who will perform services is:
Name:
Address: c/o CombiChem, Inc.
0000 Xxxxxx Xxxxx Xx
Xxx Xxxxx, Xxxxxxxxxx 00000
Social Security No.:
(2) The property with respect to which the election is being made is shares of
the Common Stock of CombiChem, Inc. (the "Company").
(3) The property was issued on _________________, 199_.
(4) The taxable year in which the election is being made is the calendar year
199_.
(5) The property is subject to a repurchase right pursuant to which the
Company has the right to acquire the property at the original purchase
price if for any reason taxpayer's service with the issuer is terminated.
The repurchase right will lapse with respect to the shares in
_____________, _______.
(6) The fair market value at the time of transfer (determined without regard
to any restriction other than a restriction which by its terms will never
lapse) is $____ per share.
(7) The amount paid for such property is $____ per share.
(8) A copy of this statement was furnished to the Company for whom taxpayer
will render the services underlying the transfer of property.
(9) This statement is executed as of: _____________________, 199_.
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Taxpayer Spouse (if any)
THIS FORM MUST BE FILED AT THE INTERNAL REVENUE SERVICE CENTER WHERE TAXPAYER
FILES HIS/HER FEDERAL INCOME TAX RETURNS. FILING MUST BE MADE WITHIN 30 DAYS
AFTER THE EXECUTION DATE OF THE SHAREHOLDER AGREEMENT.
