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Exhibit 10.70
PROMISSORY NOTE
$200,000 South San Francisco, California
September 2, 1997
THIS NOTE IS ISSUED BY THE UNDERSIGNED IN EXCHANGE FOR THAT CERTAIN NOTE WITH A
PRINCIPAL AMOUNT OF TWO HUNDRED THOUSAND DOLLARS ($200,000) ISSUED BY THE
UNDERSIGNED TO THE COMPANY ON APRIL 15, 1993. FROM AND AFTER THE DATE OF THIS
NOTE, THAT APRIL 15, 1993 NOTE SHALL BE NULL AND VOID.
FOR VALUE RECEIVED, the undersigned hereby unconditionally promises to
pay to the order of ARRIS PHARMACEUTICAL CORPORATION, a Delaware corporation
(the "Company"), at the offices of the Company, 385 Oyster Point Boulevard,
South San Francisco, California, or at such other place as the holder hereof may
designate in writing, in lawful money of the United States of America and in
immediately available funds, the principal sum of Two Hundred Thousand Dollars
($200,000) together with interest accrued from the date hereof on the unpaid
principal at the rate of 6.23% per annum, or the maximum rate permissible by law
(which under the laws of the State of California shall be deemed to be the laws
relating to permissible rates of interest on commercial loans), whichever is
less, compounded annually, as follows:
PRINCIPAL REPAYMENT. The outstanding principal amount hereunder
shall be DUE AND PAYABLE IN FULL ON JANUARY 2, 2001; and
INTEREST PAYMENTS. Interest shall be compounded annually
(calculated on the basis of a 365-day year for the actual number of days
elapsed) and shall be payable IN ARREARS ON THE PRINCIPAL REPAYMENT
DATE.
In addition, and notwithstanding anything to the foregoing, in the event
the undersigned either (i) ceases providing services to the Company, whether as
an employee, consultant or member of the Company's Board of Directors, for any
reason or no reason or (ii) breaches the restrictive covenant not to compete
with the Company set forth in Section 5 of that employment agreement entered
into between the undersigned and the Company, the principal and all accrued
interest due under this Note shall immediately become due and payable.
This Note may be prepaid at any time without penalty. All money paid
toward the satisfaction of this Note shall be applied first to the payment of
interest as required hereunder and then to the retirement of the principal.
The full amount of this Note is secured by a pledge of shares of Common
Stock of the Company, and is subject to all of the terms and provisions of that
Pledge Agreement of September 2, 1997 between the undersigned and the Company, a
copy of which is attached as Exhibit A.
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The undersigned hereby represents and agrees that the amounts due under
this Note are not consumer debt, and are not incurred primarily for personal,
family or household purposes, but are for business and commercial purposes only.
The undersigned hereby waives presentment, protest and notice of
protest, demand for payment, notice of dishonor and all other notices or demands
in connection with the delivery, acceptance, performance, default or endorsement
of this Note.
The holder hereof shall be entitled to recover, and the undersigned
agrees to pay when incurred, all costs and expenses of collection of this Note,
including without limitation, reasonable attorneys' fees.
This Note shall be governed by, and construed, enforced and interpreted
in accordance with, the laws of the State of California, excluding conflict of
laws principles that would cause the application of laws of any other
jurisdiction.
/s/ JOHN P. WALKER
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John P. Walker
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EXHIBIT A
PLEDGE AGREEMENT DATED SEPTEMBER 2, 1997
PLEDGE AGREEMENT
1. As collateral security for the payment of that certain $200,000
promissory note issued this date to Arris Pharmaceutical Corporation ("Pledgee")
by the undersigned (hereinafter called "indebtedness"), the undersigned hereby
assigns, transfers to and pledges with the Pledgee the securities listed on
Exhibit A hereto which were previously delivered to be deposited with Pledgee,
accompanied by an instrument of assignment, in blank, substantially in the form
of Exhibit B hereto, together with any stock rights, rights to subscribe,
dividends paid in cash or other property in connection with the complete or
partial liquidation of Pledgee, stock dividends, dividends paid in stock, new
securities or other property except cash dividends other than liquidating
dividends to which the undersigned is or may hereafter become entitled to
receive on account of such property, and in the event that the undersigned
receives any such, the undersigned will immediately deliver it to Pledgee to be
held by Pledgee hereunder in the same manner as the property originally pledged
hereunder, accompanied by appropriate duly executed instruments of transfer or
assignment, in blank, substantially in the form of Exhibit B hereto. All
property assigned, transferred to and pledged with Pledgee under this paragraph
is hereinafter called "collateral."
2. At any time, without notice, and at the expense of the
undersigned, Pledgee in its name or in the name of its nominee or of the
undersigned may, but shall not be obligated to: (1) collect by legal proceedings
or otherwise all dividends (except cash dividends other than liquidating
dividends), interest, principal payments and other sums now or hereafter payable
upon or on account of said collateral; (2) enter into any extension,
reorganization, deposit, merger, or consolidation agreement, or any agreement in
any wise relating to or affecting the collateral, and in connection therewith
may deposit or surrender control of such collateral thereunder, accept other
property in exchange for such collateral and do and perform such acts and things
as it may deem proper, and any money or property received in exchange for such
collateral shall be applied to the indebtedness or thereafter held by it
pursuant to the provisions hereof; (3) insure, process and preserve the
collateral; (4) cause the collateral to be transferred to its name or to the
name of its nominee; (5) exercise as to such collateral all the rights, powers,
and remedies of an owner, except that so long as the indebtedness is not in
default the undersigned shall retain all voting rights as to the collateral.
3. The undersigned agrees to pay prior to delinquency all taxes,
charges, liens and assessments against the collateral, and upon the failure of
the undersigned to do so Pledgee at its option may pay any of them and shall be
the sole judge of the legality or validity thereof and the amount necessary to
discharge the same.
4. All advances, charges, costs and expenses, including reasonable
attorneys' fees, incurred or paid by Pledgee in exercising any right, power or
remedy conferred by this
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agreement, or in the enforcement thereof, shall become a part of the
indebtedness secured hereunder and shall be paid to Pledgee by the undersigned
immediately and without demand.
5. At the option of Pledgee and without necessity of demand or
notice, all or any part of the indebtedness of the undersigned shall immediately
become due and payable irrespective of any agreed maturity, upon the happening
of any of the following events: (1) failure to keep or perform any of the terms
or provisions of this agreement; (2) default in the payment of principal or
interest when due; (3) the levy of any attachment, execution or other process
against the collateral; or (4) the insolvency, commission of an act of
bankruptcy, general assignment for the benefit of creditors, filing of any
petition in bankruptcy or for relief under the provisions of Title 11, United
States Code, Bankruptcy, of, by, or against the undersigned.
6. In the event of the nonpayment of any indebtedness when due,
whether by acceleration or otherwise, or upon the happening of any of the events
specified in the last preceding paragraph, Pledgee may then, or at any time
thereafter, at its election, apply, set off, collect or sell in one or more
sales, or take such steps as may be necessary to liquidate and reduce to cash in
the hands of Pledgee in whole or in part, with or without any previous demands
or demand of performance or notice or advertisement, the whole or any part of
the collateral in such order as Pledgee may elect, and any such sale may be made
either at public or private sale at its place of business or elsewhere, or at
any broker's board or securities exchange, either for cash or upon credit or for
future delivery; provided, however, that if such disposition is at private sale,
then the purchase price of the collateral shall be equal to the public market
price then in effect, or, if at the time of sale no public market for the
collateral exists, then, in recognition of the fact that the sale of the
collateral would have to be registered under the Securities Act of 1933 and that
the expenses of such registration are commercially unreasonable for the type and
amount of collateral pledged hereunder, Pledgee and the undersigned hereby agree
that such private sale shall be at a purchase price mutually agreed to by
Pledgee and the undersigned or, if the parties cannot agree upon a purchase
price, then at a purchase price established by a majority of three independent
appraisers knowledgeable of the value of such collateral, one named by the
undersigned within 10 days after written request by the Pledgee to do so, one
named by Pledgee within such 10 day period, and the third named by the two
appraisers so selected, with the appraisal to be rendered by such body within 30
days of the appointment of the third appraiser. The cost of such appraisal,
including all appraiser's fees, shall be charged against the proceeds of sale as
an expense of such sale. Pledgee may be the purchaser of any or all collateral
so sold and hold the same thereafter in its own right free from any claim of the
undersigned or right of redemption. Demands of performance, notices of sale,
advertisements and presence of property at sale are hereby waived, and Pledgee
is hereby authorized to sell hereunder any evidence of debt pledged to it. Any
sale hereunder may be conducted by any officer or agent of Pledgee.
7. The proceeds of the sale of any of the collateral and all sums
received or collected by Pledgee from or on account of such collateral shall be
applied by Pledgee to the payment of expenses incurred or paid by Pledgee in
connection with any sale, transfer or delivery of the collateral, to the payment
of any other costs, charges, attorneys' fees or expenses mentioned herein, and
to the payment of the indebtedness or any part hereof, all in such order and
manner as Pledgee in its discretion may determine. Pledgee shall pay any balance
to the undersigned.
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8. Pledgee shall be under no duty or obligation whatsoever to make
or give any presentments, demands for performance, notices of non-performance,
protests, notices of protest or notices of dishonor in connection with any
obligations or evidences of indebtedness held by Pledgee as collateral, or in
connection with any obligations or evidences of indebtedness which constitute in
whole or in part the indebtedness secured hereunder.
9. Pledgee may at any time deliver the collateral or any part
thereof to the undersigned and the receipt of the undersigned shall be a
complete and full acquittance for the collateral so delivered, and Pledgee shall
thereafter be discharged from any liability or responsibility therefor.
10. Upon the transfer of all or any part of the indebtedness Pledgee
may transfer all or any part of the collateral and shall be fully discharged
thereafter from all liability and responsibility with respect to such collateral
so transferred, and the transferee shall be vested with all the rights and
powers of Pledgee hereunder with respect to such collateral so transferred; but
with respect to any collateral not so transferred Pledgee shall retain all
rights and powers hereby given.
11. Until all indebtedness shall have been paid in full the power of
sale and all other rights, powers and remedies granted to Pledgee hereunder
shall continue to exist and may be exercised by Pledgee at any time and from
time to time irrespective of the fact that the indebtedness or any part thereof
may have become barred by any statute of limitations, or that the personal
liability of the undersigned may have ceased.
12. The rights, powers and remedies given to Pledgee by this
agreement shall be in addition to all rights, powers and remedies given to
Pledgee by virtue of any statute or rule of law. Pledgee may exercise its
Pledgee's lien or right of setoff with respect to the indebtedness in the same
manner as if the indebtedness were unsecured. Any forbearance or failure or
delay by Pledgee in exercising any right, power or remedy hereunder shall not be
deemed to be a waiver of such right, power or remedy, and any single or partial
exercise of any right, power or remedy hereunder shall not preclude the further
exercise thereof; and every right, power and remedy of Pledgee shall continue in
full force and effect until such right, power or remedy is specifically waived
by an instrument in writing executed by Pledgee.
Dated: September 2, 1997
/s/ JOHN P. WALKER
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John P. Walker
ATTACHMENTS:
Exhibit A - Pledged Securities
Exhibit B - Assignment Separate from Certificate
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EXHIBIT A
PLEDGED SECURITIES
Shares of Common Stock of Arris Pharmaceutical Corporation, a Delaware
corporation, represented by the following certificates:
Certificate No. SFU 5070 in the amount of 23,174 shares
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EXHIBIT B
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED and pursuant to that certain Pledge Agreement dated
as of September 2, 1997, John P. Walker hereby sells, assigns and transfers unto
Arris Pharmaceutical Corporation Twenty Three Thousand One Hundred Seventy Four
(23,174) shares of common stock of Arris Pharmaceutical Corporation, a Delaware
corporation (the "Company"), standing in the undersigned's name on the books of
said corporation represented by Certificate No. SFU 5070 herewith, and does
hereby irrevocably constitute and appoint __________________________ attorney to
transfer the said stock on the books of the said corporation with full power of
substitution in the premises. This Assignment may be used only in accordance
with and subject to the terms and conditions of the Pledge Agreement, in
connection with the pledge of shares of Common Stock held by the undersigned and
pledged pursuant to the Pledge Agreement, and only to the extent that such
shares remain subject to the Company's rights under the Pledge Agreement.
Dated:
/s/ JOHN P. WALKER
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John P. Walker