Exhibit

10.26.2




 




June 28,2001




 




 




Morgan Stanley & Co. Incorporated

(the “Broker”)




555

California Street, Suite 2200




San

Francisco, CA   94104




 




Re: Notice of Pledge and Security




 




Gentlemen:




 




Please

be advised that the undersigned, PharSight Corporation (“Pledgor”), has pledged

a security interest in Account No. 14-78895 (the “Account”) held by Broker, as

securities intermediary, and in all of the securities, proceeds, cash or other

assets now or hereafter held in the Account ( collectively, the “Collateral”),

to Silicon Valley Bank (“Pledgee”) pursuant to the terms and provisions of a

certain Loan and Security Agreement (the “Agreement”), dated June 13, 2001

..




 




Broker,

Pledgor and Pledgee, by signing this letter, hereby agree as follows:




 




a)

The Account shall be retitled “Pharsight Corporation- Pledgor Silicon Valley

Bank - Pledgee”;




 




b

) Pledgee has a security interest in the Collateral and is authorized to

instruct the Broker with regard to the Account;




 




c)

Broker is hereby notified of Pledgee’s security interest, and agrees to comply

with all instructions and entitlement orders of Pledgee with regard to the

Account.  Broker shall not comply with

instructions and entitlement orders with respect to the Collateral or the Account

that are originated by the Pledgor except as described in Paragraph D below.

Broker represents that it has not previously been notified of any other

assignment or interest in the Collateral or the Account and has no knowledge of

any assignment or interest in the Collateral or the Account.  Broker is also hereby authorized and agrees

to send duplicate copies of any and all statements and confirmations relating

to the Account directly to the Pledgee at the address indicated below,  or to such other address as Pledgee may

designate in writing. This pledge will remain in full force and effect until

Pledgee notifies Broker in writing to the contrary;




 




d) Pledgee hereby instructs Broker that until further

instruction in writing from an Authorized Officer of Pledgee (as defined below)

that Pledgee is assuming exclusive control over the Account (“Notice of

Exclusive Control”), the Broker shall comply with directions of Pledgor with

respect to any transactions, including withdrawals, in the Account; provided

however, that Broker will not distribute to Pledgor any Collateral in the

Account and will not comply with any notification or entitlement order that

would require Broker to make a free delivery of the 




 





























 




Collateral to Pledgor or any other third party.  Notwithstanding anything contained herein,

upon receipt of a Notice of Exclusive Control (it being understood that Broker

shall have no duty or obligation whatsoever to investigate or determine whether

the Notice of Exclusive Control was rightfully or legally issued), Broker shall

only follow the directions and instructions of Pledgee with regard to the

Account.  In that case, if Pledgee so

requests, Broker will proceed to liquidate the assets of the Account in

accordance with Pledgee’s instructions and to deliver the proceeds to Pledgee.




 




For purposes of this Agreement, “Authorized Officer of

Pledgee” shall refer to anyone of the following individuals: [Names of

Authorized Officers]. If Pledgee finds it necessary to designate a replacement

for any of the designated Authorized Officers of Pledgee, written notice of

replacement shall be given to Broker, which notice shall be signed by the

President, an Executive Vice President, a Senior Vice President, or such other

officer of Pledgee as Broker may approve. 

However, Broker shall be entitled to rely on any notice it receives from

someone whom it reasonably believes is an Authorized Officer of Pledgee;




 




e)

Broker shall have no obligation to monitor the Account for any purpose in

connection with the pledge granted hereunder. The Pledgee accepts and acknowledges

full responsibility for reviewing daily confirmations and monthly statements to

ensure that it is adequately secured;




 




f)

Pledgor and Pledgee hereby agree to indemnify and hold harmless Broker, its

affiliates, officers, and employees from and against any and all claims, causes

of actions, liabilities, lawsuits, demands, and/or damages, including, without

limitation. any and all court costs and reasonable attorney’s fees, that might

result by reason of the actions of Broker pursuant to this Agreement except

those claims arising from Broker’s gross negligence or willfu1 misconduct.  Broker shall not be responsible for any

losses, claims, damages, liabilities and expenses incurred by Pledgor or

Pledgee, except to the extent that such losses, claims, damages, liabilities or

expenses arise out of the bad faith, gross negligence, or criminal acts or

omissions on the part of Broker;




 




g)

Broker may terminate this Agreement at any timeby canceling the Account and transferring all funds and securities

in the Account to Pledgee;




 




h)

As of the date hereof, the Collateral has not been paid to or withdrawn by the

Pledgor; Broker is not in  receipt

of any notice of withdrawal or redemption with regard to the Collateral or

notice not to renew the Account, and Broker has not given any notice that the

Account will not be renewed or extended, as the case may be;




 




i)

Broker’s records indicate that the value of the Collateral, as of the date

hereof, is approximately

                                 ;






 




j)

Broker subordinates any right of offset Broker may now or hereafter have

against the Collateral for any indebtedness now or hereafter owing to Broker by

the Pledgors to the security interest of Pledgee; provided that Broker shall

continue to have a first perfected security interest in the Collateral with

respect to any charges incurred in connection with the operation of the

Account, including, but not limited to, fees, commissions and any costs related

to unsettled securities transactions.




 




 




2





























 




k) This Agreement shall be governed by the law of the State

of New York, excluding its conflict of law rules.  The parties hereby agree that (i) the “securities intermediary’s

jurisdiction” with respect to the Account and the Collateral is New York and

(ii) the parties shall not agree with any other person that such securities

intermediary’s jurisdiction is any jurisdiction other than New York.




 




	

   


  	

  Very truly yours,


  
	

   


  	

  PHARSIGHT CORPORATION


  
	

   


  	

   


  
	

   


  	

  /s/ Robin A. Kehoe


  
	

   


  	

  By:


  	

  Robin A. Kehoe


  
	

   


  	

  Title:


  	

  CFO


  





 




	

  Read and Agreed to:


  
	

  MORGAN STANLEY & CO. INCORPORATED


  
	

   


  
	

  By:


  	

  /s/ Thomas O'Connell


  
	

   


  	

  Name:  Thomas O'Connell


  
	

   


  	

  Title:  Managing

  Director


  
	

   


  
	

  SILICON VALLEY BANK


  
	

   


  
	

  By:


  	

  /s/ Sam Thompson


  
	

   


  	

  Name:  Sam Thompson


  
	

   


  	

  Title:  Vice

  President


  
	

   


  	

  Address:


  
	

  3003 Tasman Drive


  
	

  Santa Clara, CA 

  95054


  
			





 




 




3