STOCK PLEDGE AGREEMENT
This
Stock Pledge Agreement (this “Agreement”)
is
dated as of January 31, 2006 by and between Acura Pharmaceuticals, Inc., a
New
York corporation (the “Pledgor”),
and
Xxxxx Partners III, L.P., a Delaware limited partnership, acting in its capacity
as agent for the Lenders, as hereinafter defined (the “Agent”),
for
the benefit of the Lenders.
PRELIMINARY
STATEMENTS
The
Pledgor has entered into a Loan Agreement of even date herewith (as the same
may
be amended, modified, supplemented or restated from time to time, the
“Loan
Agreement;”
terms
which are capitalized in this Agreement and not otherwise defined shall have
the
meanings ascribed to them in the Loan Agreement) with the Lenders party thereto
(the “Lenders”).
It is
a condition precedent to the effectiveness of the Loan Agreement that the
Pledgor shall have executed this Agreement and made the pledges referred to
herein in favor of the Agent, for the ratable benefit of the Lenders, as
contemplated hereby.
AGREEMENT
In
consideration of the premises and to induce the Lenders to enter into the Loan
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Pledgor hereby agrees with
the
Agent as follows:
ARTICLE
1
PLEDGE
OF PLEDGED STOCK
1.1 DEFINITIONS;
INTERPRETATION OF AGREEMENT
Unless
the context otherwise requires, all terms not defined herein or in the Loan
Agreement shall have the meaning set forth in the New York Uniform Commercial
Code (the “Code”).
Acceptance of or acquiescence in a course of performance rendered under this
Agreement shall not be relevant in determining the meaning of this Agreement
even though the accepting or acquiescing party had knowledge of the nature
of
the performance and opportunity for objection.
1.2 PLEDGE
OF THE PLEDGED STOCK; POWER OF ATTORNEY
(a) As
security for the prompt payment and performance when due of the obligations
now
or hereafter owing by the Pledgor to the Lenders under the Loan Agreement,
the
Notes, the other Transaction Documents and under the agreements, documents
and
instruments delivered by the Pledgor pursuant thereto or in connection therewith
(collectively, the “Obligations”),
the
Pledgor hereby pledges to the Agent, for the ratable benefit of the Lenders,
and
grants to the Agent, for the ratable benefit of the Lenders, a lien on and
security interest having priority over any and all other security interests,
in
the following (collectively the “Pledged
Collateral”):
(i)
all of the issued and outstanding shares of common stock of Acura Pharmaceutical
Technologies, Inc. (“APT”
or
“Subsidiary”),
which
shares are more particularly described on Schedule
A
attached
hereto (the “Pledged
Stock”),
(ii)
all additional shares of common stock at any time issued to the Pledgor by
APT,
(iii) the certificates evidencing all Pledged Collateral, (iv) subject to
Section 1.6 hereof, all dividends, cash, securities, investment property,
instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of the Pledged
Stock and such shares and securities, and (v) all proceeds of any and all
Pledged Collateral (including, without limitation, proceeds constituting any
property of the types described above). The Pledgor shall deliver to the Agent
original stock certificates for all of the Pledged Stock, each accompanied
by an
undated stock power executed in blank by the Pledgor.
(b) The
Agent
shall have no obligation with respect to the Pledged Collateral or any other
property held or received by it hereunder except to use reasonable care in
the
custody thereof. The Agent may hold the Pledged Collateral in the form in which
it is received by it.
(c) The
Pledgor, to the fullest extent permitted by law, hereby constitutes and
irrevocably appoints the Agent (and any officer or agent of the Agent, with
full
power of substitution and revocation) as the Pledgor’s true and lawful
attorney-in-fact, in the Pledgor’s stead and in the name of the Pledgor or in
the name of the Agent, to transfer, upon the occurrence and during the
continuance of an Event of Default or at any time the Agent, based on all the
facts and circumstances then existing, and in the exercise of its commercially
reasonable credit judgment, believes, and has so notified the Pledgor in
writing, that, in connection with the Loan Agreement and the agreements,
documents and instruments delivered by the Pledgor pursuant thereto or in
connection therewith, fraud has occurred with respect to the Pledgor or any
other Person controlling, controlled by, or under common control with the
Pledgor which has a material adverse effect on the operations or condition
(financial or otherwise) of the Pledgor and its subsidiaries, taken as a whole
(a “Fraud”),
the
Pledged Collateral on the books of APT, in whole or in part, to the name of
the
Agent or such other Person or Persons as the Agent may designate and, upon
the
occurrence and during the continuance of an Event of Default or at any time
the
Agent, based on all the facts and circumstances then existing, and in the
exercise of its commercially reasonable credit judgment, believes, and has
so
notified the Pledgor in writing, that Fraud has occurred, to take all such
other
and further actions as the Pledgor could have taken with respect to the Pledged
Collateral which the Agent in its reasonable judgment determines to be necessary
or appropriate to accomplish the purposes of this Agreement.
(d) The
powers of attorney granted pursuant to this Agreement and all authority hereby
conferred are granted and conferred solely to protect the Agent’s interests in
the Pledged Collateral and shall not impose any duty upon the attorney-in-fact
to exercise such powers. Such powers of attorney shall be irrevocable prior
to
the payment in full of the Obligations and shall not be terminated prior thereto
or affected by any act of the Pledgor or other Persons or by operation of law.
The foregoing power of attorney, being coupled with an interest, is irrevocable
so long as any Obligation remains outstanding.
(e) Except
to
the extent that the Agent releases its pledge of any of the Pledged Collateral,
each Person who shall be a transferee of the beneficial ownership of any of
the
Pledged Collateral shall be deemed to have irrevocably appointed the Agent,
with
full power of substitution and revocation, as such Person’s true and lawful
attorney-in-fact in such Person’s name and otherwise to do any and all acts
herein permitted and to exercise any and all powers herein conferred;
provided,
however,
that no
Person shall exercise any such power of attorney unless an Event of Default
shall have occurred and be continuing, and subject to the terms of the Loan
Agreement regarding the exercise of remedies upon an Event of Default, or from
and after such time as such Person has notified the Pledgor in writing that
based on all the facts and circumstances then existing, and in the exercise
of
its commercially reasonable judgment, such Person believes that Fraud has
occurred.
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1.3 RIGHTS
OF PLEDGOR; VOTING
(a) During
the term of this Agreement, and so long as the Pledgor has not received a Voting
Notice (as defined below) from the Agent following (i) the occurrence and during
the continuance of an Event of Default, and subject to the terms of the Loan
Agreement regarding the exercise of remedies upon an Event of Default, or (ii)
from and after such time as the Agent determines that based on all the facts
and
circumstances then existing, and in the exercise of its commercially reasonable
judgment, the Agent believes that Fraud has occurred, the Pledgor shall have
the
right to vote any of the Pledged Collateral in all corporate matters except
those which would contravene this Agreement, the Loan Agreement or any of the
agreements, documents and instruments delivered by the Pledgor and each
Subsidiary pursuant thereto unless the Agent consents in writing thereto.
(b) Upon
the
occurrence and during the continuance of an Event of Default, and subject to
the
terms of the Loan Agreement regarding the exercise of remedies upon an Event
of
Default, or from or from and after such time as the Agent has notified the
Pledgor in writing that based on all the facts and circumstances then existing,
and in the exercise of its commercially reasonable judgment, Agent believes
that
Fraud has occurred, the Pledgor shall give the Agent at least fifteen (15)
days’
prior notice of (i) any meeting of stockholders of the Subsidiary or any meeting
of directors of the Subsidiary convened for any purpose and (ii) any written
consent which the Pledgor proposes to execute as the stockholder of the
Subsidiary or which any of the representatives of the Pledgor proposes to
execute as a director of the Subsidiary. During the continuance of an Event
of
Default, and subject to the terms of the Loan Agreement regarding the exercise
of remedies upon an Event of Default, or from and after such time as the Agent
determines that based on all the facts and circumstances then existing, and
in
the exercise of its commercially reasonable judgment, the Agent believes that
Fraud has occurred, the Pledgor hereby authorizes the Agent to send its agents
and representatives to any such meeting of stockholders or directors of the
Subsidiary that the Agent wishes to attend, and agrees to take such steps as
may
be necessary to confirm and effectuate such authority, including, without
limitation, causing the Subsidiary to give reasonable prior written notice
to
the Agent of the time and place of any such meeting and the principal actions
to
be taken thereat.
(c) Notwithstanding
the occurrence of an Event of Default, and subject to the terms of the Loan
Agreement regarding the exercise of remedies upon an Event of Default, or the
determination by the Agent that based on all the facts and circumstances then
existing, and in the exercise of its commercially reasonable judgment, the
Agent
believes that Fraud has occurred, the Pledgor may continue to exercise the
voting rights of the Pledgor as herein described (and subject to the limitations
herein) except to the extent that the Agent elects to exercise voting power
(as
determined by it in its sole discretion) by providing written notice to the
Pledgor at any time during the continuance of an Event of Default or from and
after such time as the Agent has determined that based on all the facts and
circumstances then existing, and in the exercise of its commercially reasonable
judgment, the Agent believes that Fraud has occurred (a “Voting
Notice”),
whereupon the Agent shall have the exclusive right during the continuance of
an
Event of Default or from and after the Agent’s determination of Fraud to
exercise such rights to the extent specified in such Voting Notice, and the
Pledgor shall take all such steps as may be necessary to effectuate such rights
until the Agent notifies the Pledgor in writing of the release of such rights.
Once any such Event of Default has been cured or waived and such cure or waiver
is confirmed by the Agent to the Pledgor in writing, any relevant Voting Notice
shall be deemed to be rescinded.
3
1.4 NO
RESTRICTIONS ON TRANSFER
The
Pledgor warrants and represents that except as otherwise provided in (i) the
Xxxxxx Stock Pledge Agreement dated March 29, 2000 executed by the Pledgor
to
secure the Senior Note (as amended, the “Xxxxxx
Stock Pledge Agreement”);
(ii)
the Stock Pledge Agreement dated as of June 22, 2005 executed by the Pledgor
to
secure a certain bridge loan (the “June Bridge
Loan”)
extended
pursuant to the terms of that certain Loan Agreement, dated as of June 22,
2005
(the “June
Bridge Loan Stock Pledge Agreement”);
(iii)
the Stock Pledge Agreement dated as of September 16, 2005 executed by the
Pledgor to secure a certain bridge loan (the “September
Bridge Loan”)
extended
pursuant to the terms of that certain Loan Agreement, dated as of September
16,
2005 (the “September
Bridge Loan Stock Pledge Agreement”);
and
(iv) the Stock Pledge Agreement dated as of November 9, 2005 executed by the
Pledgor to secure a certain bridge loan (the “November
Bridge Loan”)
extended
pursuant to the terms of that certain Loan Agreement, dated as of November
9,
2005 (the “November
Bridge Loan Stock Pledge Agreement”),
there
are no restrictions on the transfer of the Pledged Stock (except for such
restrictions imposed by operation of law), that there are no options, warrants
or rights pertaining thereto, and that the Pledgor has the right to transfer
the
Pledged Stock free of any encumbrances and without the consent of the creditors
of the Pledgor or the consent of the Subsidiary or any other Person or any
governmental agency whatsoever.
1.5 NO
TRANSFER OF LIENS; ADDITIONAL SECURITIES
The
Pledgor agrees that it will not sell, transfer or convey any interest in, or
suffer or permit any lien or encumbrance to be created upon or with respect
to,
any of the Pledged Collateral during the term of this Agreement, except to
or in
favor of the Agent, or as agreed to in writing in advance by the Agent in
accordance with the terms of the Loan Agreement. The Pledgor shall not cause,
suffer or permit the Subsidiary to issue any common or preferred stock, or
any
other equity security or any other instruments convertible into equity
securities, to any Person, unless the Agent otherwise consents in writing (which
consent may be withheld in the Agent’s reasonable credit judgment).
4
1.6 ADJUSTMENTS
OF CAPITAL STOCK; PAYMENT AND APPLICATION OF DIVIDENDS
Subject
to the Loan Agreement, in the event that during the term of this Agreement
any
stock dividend, reclassification, readjustment or other change is declared
or
made in the capital structure of the Subsidiary or if any other or additional
shares of stock of the Subsidiary are issued to the Pledgor, all new,
substituted and additional shares or other securities issued by reason of any
such change or acquisition shall immediately be delivered by the Pledgor to
the
Agent and shall be deemed to be part of the Pledged Collateral under the terms
of this Agreement in the same manner as the shares of capital stock originally
pledged hereunder. Subject to the Loan Agreement, upon the occurrence and during
the continuance of an Event of Default and subject to the terms of the Loan
Agreement regarding the exercise of remedies upon an Event of Default, or from
and after such time as the Agent determines that based on all the facts and
circumstances then existing, and in the exercise of its commercially reasonable
judgment, the Agent believes that Fraud has occurred, all cash dividends
received by or payable to the Pledgor in respect of the Pledged Collateral,
including any additional shares of stock or investment property received by
the
Pledgor as a result of the Pledgor’s record ownership of the Pledged Stock,
shall immediately be delivered by the Pledgor to the Agent, to be held by the
Agent as Pledged Collateral hereunder or to be applied by the Agent against
the
Obligations. Upon the occurrence and during the continuance of an Event of
Default and subject to the terms of the Loan Agreement regarding the exercise
of
remedies upon an Event of Default, or from and after such time as the Agent
determines that based on all the facts and circumstances then existing, and
in
the exercise of its commercially reasonable judgment, the Agent believes that
Fraud has occurred, the Pledgor will not demand and will not be entitled to
receive, any cash dividends or other income, interest or property in or with
respect to the Pledged Collateral, and if the Pledgor receives any of the same,
the Pledgor shall immediately deliver it to the Agent to be held by it and
applied as provided in the preceding sentence.
1.7 WARRANTS
AND OPTIONS
In
the
event that during the term of this Agreement subscription warrants or other
rights or options shall be issued to the Pledgor in connection with the Pledged
Collateral, all such stock warrants, rights and options shall forthwith be
assigned to the Agent by the Pledgor, and such stock warrants, rights and
options shall be, and, if exercised by the Pledgor, all new stock issued
pursuant thereto shall be, pledged by the Pledgor to the Agent to be held as,
and shall be deemed to be part of, the Pledged Collateral under the terms of
this Agreement in the same manner as the shares of capital stock originally
pledged hereunder.
1.8 RETURN
OF PLEDGED COLLATERAL UPON TERMINATION
Upon
the
termination of the Loan Agreement and the indefeasible payment in full in cash
of the Obligations and all other amounts payable under this Agreement, the
Agent
shall cause to be transferred or returned to the Pledgor all of the stock
pledged by the Pledgor herein and any money, property and rights received by
the
Agent pursuant hereto, to the extent the Agent has not taken, sold or otherwise
realized upon the same as permitted hereunder, together with all other documents
reasonably required by the Pledgor to evidence termination of the pledge
contemplated hereby.
5
ARTICLE
2
EVENTS
OF DEFAULT; REMEDIES
2.1 RIGHTS
OF AGENT UPON DEFAULT
Upon
the
occurrence and during the continuance of any Event of Default and subject to
the
terms of the Loan Agreement regarding the exercise of remedies upon an Event
of
Default, or from and after such time as the Agent determines that based on
all
the facts and circumstances then existing, and in the exercise of its
commercially reasonable judgment, the Agent believes that Fraud has occurred,
the Agent shall have and at any time may exercise with respect to the Pledged
Collateral, the proceeds thereof, and any other property or money held by the
Agent hereunder, all rights and remedies available to it under law, including,
without limitation, those given, allowed or permitted to a secured party by
or
under the Code, and all rights and remedies provided for herein and in the
Loan
Agreement.
2.2 DISPOSITION
OF PLEDGED STOCK
(a) Without
limiting the foregoing, in the event that the Agent elects to sell the Pledged
Stock (such term including, for purposes of this Section 2.2, the Pledged Stock
and all other shares of stock or securities at any time forming part of the
Pledged Collateral), the Agent shall have the power and right in connection
with
any such sale, exercisable at its option and in its absolute discretion, to
sell, assign, and deliver the whole or any part of the Pledged Stock or any
additions thereto at a private or public sale for cash, on credit or for future
delivery and at such price as the Agent deems to be satisfactory. Any such
disposition which shall be made by private sale or other private proceeding
shall be made upon not less than ten (10) days’ prior written notice to Pledgor
specifying the date and time at which such disposition is to be made. Notice
of
any public sale shall be sufficient if it describes the Pledged Collateral
to be
sold in general terms, and is published at least once in The New York Times
not
less than ten (10) days prior to the date of sale. If The New York Times is
not
then being published, publication may be made in lieu thereof in any newspaper
then being circulated in the City of New York, New York, as the Agent may elect.
If any notice of a proposed sale or other disposition of Pledged Collateral
shall be required by law, such notice shall be deemed reasonable and proper
if
mailed, postage prepaid, to the Pledgor at its address set forth in Section
5.5
hereof or such other address as the Pledgor may have, in writing, provided
to
the Agent. The Agent may, if it deems it reasonable, postpone or adjourn any
sale of any collateral from time to time by an announcement at the time and
place of the sale to be so postponed or adjourned without being required to
give
a new notice of sale.
(b) Because
federal and state securities laws may restrict the methods of disposition of
the
Pledged Stock which are readily available to the Agent, and specifically because
a public sale thereof may be impossible or impracticable by reason of certain
restrictions under the Securities Act or under applicable “blue sky” or other
state securities laws as now or hereafter in effect, the Pledgor agrees that
the
Agent may from time to time attempt to sell the Pledged Stock by means of a
private placement restricting the offering or sale to a limited number of
prospective purchasers who meet suitability standards the Agent deems
appropriate and who agree that they are purchasing for their own accounts for
investment and not with a view to distribution, and the Agent’s acceptance of
the highest offer obtained therefrom shall be deemed to be a commercially
reasonable disposition of the Pledged Stock. To the extent permitted by law,
the
Agent or its assigns may purchase all or any part of the Pledged Stock and
any
purchaser thereof shall thereafter hold the same absolutely free from any right
or claim of any kind. To the fullest extent permitted by law, the Agent shall
not be obligated to make any such sale pursuant to notice and may, without
notice or publication, adjourn any public or private sale by announcement at
the
time and place fixed for the sale, and such sale may be held at any time or
place to which the same may be adjourned. If any of the Pledged Stock is sold
by
the Agent upon credit or for future delivery, the Agent shall not be liable
for
the failure of the purchaser to pay for same and, in such event, the Agent
may
resell such Pledged Stock and the Pledgor shall continue to be liable to the
Agent for the full amount of the Obligations to the extent the Agent does not
receive full and final payment in cash therefor.
6
(c) Except
as
otherwise provided in the Loan Agreement or by applicable law, the Agent shall
have the sole right to determine the order in which Obligations shall be deemed
discharged by the application of the proceeds of Pledged Stock or any other
property or money held hereunder or any amount realized thereon.
ARTICLE
3
REPRESENTATIONS
AND WARRANTIES
The
Pledgor represents and warrants to the Agent that:
3.1 CAPITALIZATION;
GOOD TITLE
(a) All
shares of Pledged Stock are fully paid, duly and properly issued, nonassessable
and owned by the Pledgor free and clear of any lien or encumbrance of any kind
whatsoever, excepting those herein granted to the Agent hereunder and in
connection with the June Bridge Loan Agreement, the September Bridge Loan
Agreement and the November Bridge Loan Agreement and those granted to the
holders of the Senior Note. The Pledged Stock constitutes all of the outstanding
securities of any class or kind of the Subsidiary.
(b) Except
in
the case of the liens granted to the holders of the Senior Note and the June
Bridge Loan lenders, the September Bridge Loan lenders and the November Bridge
Loan lenders, no effective financing statement or other instrument similar
in
effect covering all or any part of the Pledged Collateral is on file in any
recording office.
3.2 VALID
SECURITY INTEREST
The
pledge of the Pledged Collateral pursuant to this Agreement creates a valid
and
perfected first-priority security interest, securing the payment of the
Obligations, and all filings and other actions necessary or desirable to perfect
and protect such security interest having been duly made or taken.
7
3.3 CONSENTS
Except
for the consent of the holders of the Senior Note, the June Bridge Loan lenders,
the September Bridge Loan lenders and the November Bridge Loan lenders, no
authorization, approval or other action by, and no notice to or filing with,
any
governmental authority or regulatory body is required for (a) the pledge by
the
Pledgor of the Pledged Collateral pursuant to this Agreement, the grant by
the
Pledgor of the assignment or security interest granted hereby or the execution,
delivery or performance of this Agreement by the Pledgor, (b) the perfection
of
or exercise by the Agent of its rights and remedies provided for in this
Agreement, or (c) the exercise by the Agent of the voting or other rights
provided for in this Agreement or the remedies in respect of the Pledged
Collateral pursuant to this Agreement (except as may be required in connection
with a judicial foreclosure, if applicable, or the disposition of the Pledged
Stock by laws affecting the offering and sale of securities
generally).
3.4 AUTHORIZATION;
ENFORCEABILITY
The
Pledgor has full right, power and authority to enter into this Agreement and
to
grant the security interest in the Pledged Collateral made hereby, and this
Agreement constitutes the legal, valid and binding obligation of the Pledgor
enforceable against the Pledgor in accordance with its terms, except as the
enforceability thereof may be (a) limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforceability of
creditors’ rights generally, and (b) subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
3.5 NO
CONFLICT
The
execution, delivery and performance by the Pledgor of this Agreement will not
result in any violation, conflict with, or result in a breach of any of the
terms of, or constitute a default under, any agreements, contracts, court orders
or consent decrees, the Certificate of Incorporation or the By-laws, as amended,
of the Pledgor.
ARTICLE
4
Indemnity
and Expenses
4.1 INDEMNITY
The
Pledgor agrees to and hereby indemnifies the Agent and each of the Lenders
from
and against any and all Losses arising out of, or in connection with, or
resulting from this Agreement (including, without limitation, enforcement of
this Agreement) unless resulting from or arising out of the gross negligence
or
willful misconduct of the Agent or such Lender.
8
4.2 EXPENSES
The
Pledgor agrees promptly upon the Agent’s or such Lender’s demand to pay or
reimburse the Agent or such Lender for all reasonable expenses (including,
without limitation, reasonable fees and disbursements of counsel) incurred
by
the Agent or such Lender in connection with (a) any modification or amendment
to
or waiver of any provision of this Agreement requested by the Pledgor, (b)
the
custody or preservation of the Pledged Collateral, (c) any actual or attempted
sale or exchange of, or any enforcement, collection, compromise or settlement
respecting, the Pledged Collateral or any other property or money held hereunder
or any other action taken by the Agent or such Lender hereunder reasonably
necessary to enforce its rights, whether directly or as attorney-in-fact
pursuant to the power of attorney herein conferred, or (d) the failure by the
Pledgor to perform or observe any of the provisions hereof. All such expenses
shall be deemed a part of the Obligations for all purposes of this Agreement
and
the Agent may apply the Pledged Collateral or any other property or money held
hereunder to payment of or reimbursement for such expenses after notice and
demand to the Pledgor.
ARTICLE
5
MISCELLANEOUS
5.1 AGENT
MAY PERFORM
If
the
Pledgor fails to perform any representation, warranty, covenant or agreement
required to be performed by it contained herein, the Agent may, but shall not
be
obligated to, perform, or cause performance of, such representation, warranty,
covenant or agreement, and the out-of-pocket expenses of the Agent incurred
in
connection therewith shall be payable by the Pledgor.
5.2 WAIVERS
AND AMENDMENT
The
rights and remedies given hereby are in addition to all others however arising,
but it is not intended that any right or remedy be exercised in any jurisdiction
in which such exercise would be prohibited by law. No action, failure to act
or
knowledge of the Agent shall be deemed to constitute a waiver of any power,
right or remedy hereunder, nor shall any single or partial exercise thereof
preclude any further exercise thereof or the exercise of any other power, right
or remedy. Any right or power of the Agent hereunder in respect of the Pledged
Collateral and any other property or money held hereunder may at the option
of
the Agent be exercised as to all or any part of the same and the term the
“Pledged Collateral” wherever used herein, unless the context clearly requires
otherwise, shall be deemed to mean (and shall be read as) “the Pledged
Collateral and any other property or money held hereunder or any part thereof.”
This Agreement shall not be amended nor shall any right hereunder be deemed
waived except by a written agreement expressly setting forth the amendment
or
waiver and signed by the Agent.
9
5.3 CONTINUING
SECURITY INTEREST; ASSIGNMENTS OF SECURED DEBT
This
Agreement shall create a continuing security interest having priority over
any
and all security interests in the Pledged Collateral and shall (a) remain in
full force and effect, (b) be binding upon the Pledgor, and the Pledgor’s
successors and assigns, and upon the Subsidiary, and their successors and
assigns, and (c) inure, together with the rights and remedies of the Agent
and
the Lenders hereunder, to the benefit of the Agent, its successors and permitted
assigns. Without limiting the generality of the foregoing clause (c), the Agent
may assign or otherwise transfer all or any portion of its rights and
obligations under this Agreement to any other Person, to the extent and in
the
manner provided in the Loan Agreement and such other Person shall thereupon
become vested with all the benefits in respect hereof granted to the Agent
herein; the Agent shall, however, retain all of its rights and powers with
respect to any part of the Pledged Collateral not transferred. Any agent or
nominee of the Agent shall have the benefit of this Agreement as if named herein
and may exercise all the rights and powers given to the Agent
hereunder.
5.4 GOVERNING
LAW; CONSENT TO JURISDICTION
(a) This
Agreement and the rights of the parties hereunder shall be governed in all
respects by the laws of the State of New York wherein the terms of this
Agreement were negotiated, excluding to the greatest extent permitted by law
any
rule of law that would cause the application of the laws of any jurisdiction
other than the State of New York.
(b) Each
of
the parties hereto hereby irrevocably and unconditionally submits, for itself
and its property, to the nonexclusive jurisdiction of any New York State court
or United States Federal court sitting in New York City, and any appellate
court
from any thereof, in any action or proceeding arising our of or relating to
this
Agreement or any of the other Transaction Documents to which it is a party,
or
for recognition or enforcement of any judgment, and each of the parties hereto
irrevocably and unconditionally agrees that all claims in respect of any such
action or proceeding may be heard and determined in any such New York State
court or, to the fullest extent permitted by law, in such United States Federal
court. Each of the parties hereto agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the right that any party may otherwise have to bring
any action or proceeding relating to this Agreement or any of the other
Transaction Documents in the courts of any other jurisdiction.
(c) Each
of
the parties hereto irrevocably and unconditionally waives, to the fullest extent
it may legally and effectively do so, any objection that it may now or hereafter
have to the laying of venue of any suit, action or proceeding arising out of
or
in relation to this Agreement or any other Transaction Document to which it
is a
party in any such New York State or United States Federal court sitting in
New
York City. Each of the parties hereto hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the maintenance
of such action or proceeding in any such court.
10
5.5 NOTICES
All
notices hereunder shall be in writing (except only as otherwise provided in
Section 5.2) and shall be conclusively deemed to have been received and shall
be
effective (a) on the day on which delivered if delivered personally (including
delivery by courier or overnight mail providing evidence of delivery), or
transmitted by telex or telegram or telecopier with transmission confirmed,
or
(b) five (5) days after the date on which the same is deposited in the United
States mail (certified or registered if required under Section 5.4), with
postage prepaid and properly addressed, and any notice mailed shall be
addressed:
(a)
in
the
case of the Pledgor, to:
000
X.
Xxxxx Xxxxx, Xxxxx 000
Xxxxxxxx,
Xxxxxxxx 00000
Telecopier
No.: (000) 000-0000
with
copies to:
Xx.
Xxxx
& Xxxxx
0
Xxxx
Xxxxx Xxxx
Xxxxxx,
Xxx Xxxxxx 00000
Attention:
Xxxx X. Xxxxxx, Esq.
Telephone
No.: (000) 000-0000
Telecopier
No.: (000) 000-0000
(b)
in
the
case of the Agent, to:
Xxxxx
Partners III, L.P.
000
Xxxxx
Xxxxxx, Xxxxx Xxxxx
Xxx
Xxxx,
XX 00000
Telecopier
No.: (000) 000-0000
Attention:
Xxxxx X. Xxxxxx
with
a
copies to:
Blank
Rome, LLP
Chrysler
Building
000
Xxxxxxxxx Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention:
Xxxxxx X. Xxxxxxxx, Esq.
Telephone
No.: (000) 000-0000
Telecopier
No.: (000) 000-0000
or
at
such other address as the party giving such notice shall have been advised
of in
writing for such purpose by the party to whom or to which the same is
directed.
11
5.6 SEVERABILITY;
ENTIRE AGREEMENT
(a) If
any
provision of this Agreement shall be invalid, illegal, or unenforceable in
any
jurisdiction, the validity, legality or enforceability of any such provision
in
any other jurisdiction shall not be affected or impaired, and to the extent
any
provision is held invalid, illegal or unenforceable, then such provision shall
be deemed severable from, and shall in no way affect the validity or
enforceability of the remaining provisions of this Agreement.
(b) This
Agreement, together with the other Transaction Documents, constitutes the entire
agreement of the Pledgor and replaces any other or prior agreements or
undertakings, with respect to the subject matter hereof, and there are no other
agreements or undertakings, oral or written, respecting such subject matter
which are intended to have any force or effect after the execution
hereof.
5.7 SUCCESSORS
AND ASSIGNS; HEADINGS
This
Agreement shall be binding upon and shall inure to the benefit of the Pledgor
and the Agent and their respective successors and permitted assigns. Section
headings used herein are for convenience only and shall not affect the meaning
or construction of any of the provisions hereof.
5.8 COUNTERPARTS
This
Agreement may be executed in any number of counterparts, including by facsimile
copy, each executed counterpart constituting an original but all counterparts
together constituting only one instrument.
5.9 FURTHER
ASSURANCES
Pledgor
shall execute, in a proper and timely manner, at or after the date hereof,
such
additional documents and instruments as may be reasonably requested by the
Agent
in connection with the consummation or confirmation of the transactions
contemplated by this Agreement.
5.10 NO
ASSIGNMENT
This
Agreement may not be assigned by the Pledgor without the prior express written
consent of the Agent.
5.11 WAIVERS
OF JURY TRIAL
THE
PLEDGOR AND, BY ITS ACCEPTANCE HEREOF, THE AGENT HEREBY IRREVOCABLY WAIVE ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED
ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY TRANSACTION
DOCUMENT OR THE ACTIONS OF ANY PARTY IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE OR ENFORCEMENT THEREOF.
12
5.12 WAIVERS
OF CONSEQUENTIAL DAMAGES
NEITHER
THE PLEDGOR, THE AGENT OR ANY LENDER, NOR ANY EMPLOYEE, AGENT OR ATTORNEY OF
ANY
OF THEM, SHALL BE LIABLE TO THE OTHER FOR CONSEQUENTIAL DAMAGES ARISING FROM
ANY
BREACH OF CONTRACT, TORT OR OTHER WRONG RELATING TO THIS AGREEMENT OR THE
ESTABLISHMENT, ADMINISTRATION OR COLLECTION OF THE OBLIGATIONS, EXCEPT FOR
BAD
FAITH.
5.13 LIMITATION
OF LIABILITY
THE
AGENT
AND THE LENDERS SHALL NOT HAVE ANY LIABILITY TO THE PLEDGOR (WHETHER SOUNDING
IN
TORT, CONTRACT, OR OTHERWISE) FOR LOSSES SUFFERED BY THE PLEDGOR IN CONNECTION
WITH, ARISING OUT OF, OR IN ANY WAY RELATED TO THE TRANSACTIONS OR RELATIONSHIPS
CONTEMPLATED BY THIS AGREEMENT, OR ANY ACT, OMISSION OR EVENT OCCURRING IN
CONNECTION THEREWITH, UNLESS IT IS DETERMINED BY A FINAL AND NONAPPEALABLE
JUDGMENT OR COURT ORDER BINDING ON THE AGENT OR LENDER, AS APPLICABLE, THAT
THE
LOSSES WERE THE RESULT OF ACTS OR OMISSIONS CONSTITUTING GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT.
[SIGNATURE
PAGE TO FOLLOW]
13
IN
WITNESS WHEREOF, the Pledgor has caused this Stock Pledge Agreement to be
executed by its duly authorized officer as of the date first written
above.
| ACURA PHARMACEUTICALS, INC. | ||
| |
|
|
| By: | /s/ Xxxxxx X. Xxxxxxx | |
|
Name: Xxxxxx X. Xxxxxxx |
||
| Title: President and Chief Executive Officer | ||
Accepted
and Agreed to:
XXXXX
PARTNERS III, L.P.
on
behalf
of itself and as Agent
By:
Claudius, L.L.C, General Partner
000
Xxxxx
Xxxxxx, 0xx
Xx.
Xxx
Xxxx,
Xxx Xxxx 00000
By: /s/
Xxxxx X. Xxxxxx
Name:
Xxxxx X. Xxxxxx, its General Partner
14
SCHEDULE
A
Designation
and Number of
shares
of
capital stock owned by Pledgor
|
Issuer
|
Certificate
No.
|
Designation
|
Number
of Shares
|
|
Acura
Pharmaceutical Technologies, Inc.
|
1
|
Common
Stock, $.01 par value
|
100
|
