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EXHIBIT 10.54
PROMISSORY NOTE
$110,000.00 San Diego, CA
April 6, 2001
For value received, the undersigned hereby promises to pay to Discovery
Partners International, Inc., a Delaware corporation, or order (the "Holder") at
9640 Towne Centre Drive, San Diego, CA 92121, the principal amount of One
Hundred Ten Thousand Dollars ($110,000.00), plus interest accrued thereon.
This Promissory Note shall bear 5.07 percent simple interest per annum,
until due (upon maturity or acceleration), and after it is due (upon maturity or
acceleration) shall bear interest at 10 percent per annum, compounded annually.
Accrued interest shall be due and payable on each anniversary of the
date of this Promissory Note. All principal and remaining accrued interest shall
be due and payable in a lump sum on April 6, 2006.
This Promissory Note may be prepaid at any time, without premium or
penalty; provided, that any such prepayment must be of the entire principal
amount plus all accrued interest.
Upon the happening of any of the following events, Holder may, at its
option, declare immediately due and payable the entire unpaid principal amount
of this Promissory Note, together with all interest thereon, plus any other
amounts payable at the time of such declaration pursuant to this Promissory
Note. Such events are the following: (1) the maker of this Promissory Note
("Maker") shall admit in writing his inability to pay his debts as they become
due, shall make a general assignment for the benefit of creditors or shall file
any petition or action for relief under any bankruptcy, reorganization,
insolvency or moratorium law, or any other law or laws for the relief of, or
relating to, debtors; or (2) an involuntary petition shall be filed against
Maker under any bankruptcy, reorganization, insolvency or moratorium law, or any
other law or laws for the relief of, or relating to, debtors unless such
petition shall be dismissed or vacated within sixty (60) days of the date
thereof; or (3) Maker shall fail to make any payment of interest when due; or
(4) Maker's employment with the Holder shall, for any reason whatsoever, cease.
This Promissory Note is secured by a Pledge Agreement of even date
herewith. This is a full-recourse Promissory Note. The Holder is not required to
proceed first against the Pledge Agreement collateral.
The acceptance by Holder of any payment hereunder which is less than the
payment in full of all amounts due and payable at the time of such payment shall
not constitute a waiver of the right to accelerate at that time or any
subsequent time or nullify any prior acceleration without the express consent of
Holder except as and to the extent otherwise provided by law.
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The Maker of this Promissory Note waives diligence, presentment, protest
and demand and also notice of protest, demand, dishonor and nonpayment of this
Promissory Note, and expressly agrees that this Promissory Note, or any payment
hereunder, may be extended from time to time and consents to the acceptance of
security, if any, or the release of security, if any, from this Promissory Note,
all without in any way affecting the liability of the Maker.
The right to plead any and all statutes of limitations as a defense to
any demand on this Promissory Note, or any instrument securing this Promissory
Note, or any and all obligations or liabilities arising out of or in connection
with this Promissory Note, is expressly waived by Maker to the fullest extent
permitted by law.
No extension of the time for the payment of this Promissory Note, or any
installment hereof, made by agreement by the Holder hereof with any person now
or hereafter liable for the payment of this Promissory Note shall affect the
original liability under the terms of this Promissory Note by Maker even if it
is not a party to such agreement.
If Holder should institute collection efforts, of any nature whatsoever,
to attempt to collect any and all amounts due hereunder upon the default of
Maker, Maker shall be liable to pay to Holder immediately and without demand all
reasonable costs and expenses of collection incurred by Holder, including
without limitation reasonable attorneys fees, whether or not suit or other
action or proceeding be instituted and specifically including but not limited to
collection efforts that may be made on appeal or through a bankruptcy court, and
all such sums shall be fully secured by all instruments, if any, securing this
Promissory Note.
The provisions of this Promissory Note are intended by Maker to be
severable and divisible and the invalidity or unenforceability of a provision or
term herein shall not invalidate or render unenforceable the remainder of this
Promissory Note or any part thereof.
This Promissory Note shall be governed by and construed and interpreted
in accordance with the internal laws of the State of California.
/s/ RICK BROWN
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Rick Brown
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PLEDGE AGREEMENT
In consideration of the loan which Discovery Partners International,
Inc., a California corporation (the "Company") having its principal offices at
9640 Towne Centre Drive, San Diego, CA 92121, has on this day extended to the
undersigned Rick Brown and as security for the payment of that certain
promissory note ("Note") in the principal sum of $110,000.00 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) 50,000 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 that 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
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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 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
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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.
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.
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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.
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 6th day of April, 2001.
/s/ RICK BROWN
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Rick Brown
Address:
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Agreed to and Accepted by:
Discovery Partners International, Inc.
By: /s/ RICCARDO PIGLIUCCI
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Riccardo Pigliucci
Chief Executive Officer
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