EXHIBIT 10.31
-------------
PLEDGE AGREEMENT
----------------
Pledge Agreement (`Agreement") made and effective as of this 23rd
day of February, 2001, by and between XXXXXXXX.XXX, INC., a Delaware corporation
with a principal place of business at 00000 Xxxxxx Xxxxxxx Xxxxx, Xxxxxxxxxx,
Xxxx 00000 ("Pledgor") and THE CIT GROUP/BUSINESS CREDIT, INC., a New York
corporation having its principal place of business at 0000 Xxxxxx xx xxx
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Pledgee" ).
WHEREAS, the Pledgee has extended certain credit facilities (the
"Loan") to Superior Pharmaceutical Company, an Ohio corporation with a place of
business at 00000 Xxxxxx Xxxxxxx Xxxxx, Xxxxxxxxxx, XX 00000 ("Superior"), as
evidenced by, inter alia, a Financing and Security Agreement of even date
herewith (the "Financing Agreement") and a Revolving Loan Promissory Note of
even date herewith (the "Note"); and
WHEREAS, the Pledgor is the owner of 100% of the issued and
outstanding capital stock of Superior, as more particularly set forth on Exhibit
A annexed hereto and made a part hereof (such shares of capital stock are
hereinafter referred to collectively as the "Shares"); and
WHEREAS, as a condition to granting the Loan and as security
therefor, the Pledgee has required that the Pledgor pledge all of the Shares to
the Pledgee in accordance with the terms of this Agreement.
NOW, THEREFORE, in consideration of the mutual promises and
covenants contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Pledgor and the
Pledgee agree as follows:
1. Capitalized Terms. Capitalized terms that are used but not
otherwise defined herein shall have the meanings ascribed to them in the
Financing Agreement.
2. Pledge of Shares. The Pledgor does hereby grant a security
interest in and assign the Shares in pledge to the Pledgee in accordance with
the terms of this Agreement. The certificates representing the Shares, along
with stock powers executed in blank, have been delivered to the Pledgee
contemporaneously herewith, receipt of which the Pledgee acknowledges.
3. Pledge as Security. The Shares pledged by the Pledgor to the
Pledgee pursuant hereto shall be held by the Pledgee in trust hereunder as
security for the Obligations.
4. Distributions. If a stock dividend shall be paid on the Shares,
the shares to be issued in connection therewith (the "Stock Dividend Shares")
shall be deemed to be part of the Shares and the Pledgor shall deliver, or cause
to be delivered to the Pledgee, the certificate(s) representing the Stock
Dividend Shares and the Pledgor shall execute and deliver to the Pledgee such
other and further agreements, instruments and writings as the Pledgee, in its
reasonable discretion, shall deem necessary or advisable to grant to the Pledgee
a security interest in the Stock Dividend Shares, including without limitation,
a pledge agreement, stock powers executed in blank and an irrevocable proxy
coupled with an interest.
5. Voting of Shares. So long as no Event of Default has occurred and
is continuing, the Pledgor shall be entitled to vote the Shares. Upon the
occurrence of an Event of Default and while any such Event of Default is
continuing, the Pledgee shall be entitled to vote the Shares, and for such
purposes, the Pledgor does hereby give to the Pledgee its irrevocable proxy,
coupled with an interest, to vote the Shares. If the Pledgee shall be entitled
to vote the Shares, then the Pledgee may vote the Shares on any matter or
proposal on which such Shares are entitled to vote in any fashion in which the
Pledgee, in its discretion, may determine.
6. Disposition of Shares by Pledgor. The Pledgor shall have no right
to dispose of the Shares, or any of them, before the Shares are released from
this Agreement in accordance with Section 8 hereof.
7. Default.
(a) "Event of Default" shall mean (i) the occurrence of an Event
of Default, as defined in the Financing Agreement or (ii) the Pledgor's breach
of any warranty, representation, covenant or agreement contained herein.
(b) Upon the occurrence of an Event of Default:
(i) The Pledgee shall have the rights of a secured party
under the Uniform Commercial Code, as adopted in the
State of New York, with respect to the Shares.
(ii) The Pledgee may sell, resell, assign and deliver,
grant options for or otherwise dispose of the Shares,
at public or private sale, for cash or credit and on
such commercially reasonable terms as the Pledgee, in
its discretion, may deem desirable, without prior
demand for performance upon the Pledgor but with seven
(7) days' prior written notice thereof given to the
Pledgor.
(c) The proceeds realized upon any disposition of the Shares by
the Pledgee pursuant to this Section 7 shall be applied as follows:
(i) First, to the reasonable costs and expenses, including
attorneys' reasonable fees, incurred by the Pledgee in
the enforcement of its rights and remedies under, and
the performance of, this Agreement and the
Obligations;
(ii) Second, to the payment of the Obligations; and
(iii) Third, to the payment of any surplus then remaining to
the Pledgor or other person(s) entitled thereto.
8. Release of Shares from Pledge. Upon the full and complete
payment, performance and satisfaction of the Obligations, the Shares shall be
released from this Agreement and shall be delivered by the Pledgee to the
Pledgor unless Pledgee is required to deliver same to any junior or subordinated
pledgee.
-2-
9. General Covenants of Pledgor. The Pledgor affirmatively covenants
that while the Obligations, or any of them, remain outstanding, the Pledgor
shall:
(a) Notify the Pledgee of any claim, lien, security interest or
other encumbrance made against the Shares and shall warrant and defend the
Shares against any such claim, lien, security interest or other encumbrance
senior and adverse to the Pledgee; and
(b) At any time and from time to time execute and deliver to the
Pledgee such further instruments, and take such further action as the Pledgee
reasonably may deem necessary or appropriate to effect, maintain, perfect and,
when appropriate, to terminate the interest of the Pledgee in the Shares
hereunder.
10. Representations and Warranties of Pledgor. The Pledgor
represents and warrants to the Pledgee that:
(a) The Pledgor possesses all requisite power to enter into this
Agreement, to pledge to the Pledgee the Shares and to perform its obligations
hereunder;
(b) This Agreement constitutes the valid and binding obligation
of the Pledgor, enforceable in accordance with its terms, and the execution,
delivery and performance of this Agreement does not and will not (i) to the
Pledgor's knowledge violate any provision of law or Pledgor or Superior's
articles of incorporation or by-laws, or (ii) conflict with, or result in
the-breach of any of the terms, conditions or provisions of, or constitute a
default under, any material agreement, instrument, indenture, mortgage, lease or
other contract to which the Pledgor is a party or by which the Pledgor is bound;
(c) the Shares were duly authorized and validly issued to the
Pledgor, are fully paid and nonassessable, and the Pledgor owns the Shares free
and clear of the interests of any party whatsoever; and
(d) no permit, consent, approval or authorization of, or
declaration to or filing with, any governmental or regulatory authority is
required of or by the Pledgor in connection with the execution and delivery of,
and consummation of the transactions contemplated by, this Agreement, other than
Uniform Commercial Code filings with respect to this Pledge Agreement.
11. Assignment. The rights and obligations of the Pledgor hereunder
are personal to the Pledgor, and such rights may not be assigned by the Pledgor,
and such obligations may not be delegated by the Pledgor, without the prior
written approval of the Pledgee.
12. Enforceability; Effect. This Agreement shall be binding upon,
and shall inure to the benefit of, and be enforceable by and against, the
parties hereto and their respective heirs, representatives, successors and
permitted assigns.
13. Severability. The provisions of this Agreement are severable,
and if any one or more provisions are determined to be illegal or otherwise
unenforceable, in whole or in part, the remaining provisions, and any partially
unenforceable provisions to the extent enforceable in any jurisdiction, shall
nevertheless be binding and enforceable.
-3-
14. Notices. Except as otherwise herein provided, any notice or
other communication required hereunder shall be in writing and shall be
sufficiently given if delivered personally, sent by facsimile transmission
(provided that confirmation of receipt of all pages is provided by the receiving
facsimile marking) or sent by FedEx or another nationally recognized overnight
delivery service, or by registered or certified mail, postage prepaid, addressed
as follows:
If to the Pledgee, at: The CIT Group/Business Credit, Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Regional Credit Manager
Fax No.: (000) 000-0000
with a copy to: Xxxxxx Xxxxxx LLP
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Fax No.: (000) 000-0000
Attention: Xxxxxx Xxxxxxx, Esquire
If to the Pledgor, at: XxXxxxxx.xxx, Inc.
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxxx
Fax No.: (000) 000-0000
with a courtesy copy
of any material notice
to the Pledgor's counsel at: Xxxxxxx Xxxx LLP
Xxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxxxxxx, Esquire
Fax No.: (000) 000-0000
provided, however, that the failure of Pledgee to provide Pledgor's counsel with
a copy of such notice shall not invalidate any notice given to the Pledgor and
shall not give Pledgor any rights, claims or defenses due to the failure of
Pledgee to provide such additional notice.
15. Waiver. The failure of either party to enforce any provision or
provisions of this Agreement shall not be construed as a waiver of any such
provision or provisions as to any future violations thereof, nor prevent that
party thereafter from enforcing each and every other provision of this
Agreement. The rights granted herein by and to the parties are cumulative and
the waiver of any single remedy shall not constitute a waiver of such party's
right to assert all other legal remedies available to it under the
circumstances.
16. Miscellaneous. This Agreement supersedes all prior agreements
and understandings between the parties and may not be modified or terminated
orally. No modification, termination or attempted waiver of this Agreement shall
be valid unless in writing and signed by the party against whom the same is
sought to be enforced. This Agreement shall be governed by and construed
according to the laws of the State of New York applicable to
-4-
contracts made and to be performed therein, without giving effect to any
principle of conflict-of-laws that would require the application of the law of
any other jurisdiction.
17. Captions and Paragraph Headings. Captions and paragraph headings
used herein are for convenience only and are not a part of this Agreement and
shall not be used in construing it.
(THIS SECTION INTENTIONALLY LEFT BLANK)
-5-
IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the date fast set forth above.
WITNESS: PLEDGOR
RXBAZAARCOM, INC.
By: /s/ C. Xxxxxx Xxxxxx
--------------------------------
Print Name: C. Xxxxxx Xxxxxx
-----------------------
Title: Executive Vice President
----------------------------
PLEDGEE
THE CIT GROUP/BUSINESS CREDIT, INC.
By: /s/ Xxx Xxxxx
-------------------------------
Print Name: Xxx Xxxxx
-----------------------
Title: Vice President
----------------------------
-6-
