EXHIBIT 10.2
PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of August 9, 1994, made by Northeast
General Pharmaceutical Factory, Lyncroft Corporation, ▇▇▇▇▇▇▇ Consultants
Ltd., Dziou Tai Associates and ▇▇▇▇▇▇ Holding Limited (individually and
collectively referred to as the "Pledgor"), in favor of Celcor, Inc., a
Delaware corporation (the "Pledgee").
PRELIMINARY STATEMENTS:
A. Each Pledgor is a shareholder of Northeast (USA) Corp.
("Northeast").
B. Northeast has requited that Pledgee make a short term loan
(the "Loan") to Northeast in the amount of Seven Hundred Thousand Dollars
($700,000).
C. In order to induce Pledgee to make the Loan to Northeast, each
Pledgor has agreed to pledge all of the shares of common stock of Northeast
owned by such Pledgor as collateral security for the payment of the Loan.
D. Pledgor wish to enter into this Agreement in order to effect
the pledge and to set forth the terms and conditions governing the pledge of
the shares of Northeast common stock.
ARTICLE 1. THE PLEDGE.
Section 1.01. Security for Obligations. Each Pledgor hereby
guarantees the full and prompt payment when due (and not just the
collectibility) and the full, prompt and unconditional performance of each and
every term and condition of all Obligations (as hereinafter defined), provided
that the Pledgee's recourse against any Pledgor shall be limited solely to the
pledged collateral (as hereinafter defined). For purposes of this Agreement,
the term "Obligations" shall mean the indebtedness evidenced by and all
amounts payable pursuant to that certain promissory note dated the date
hereof, made by Northeast in favor of Pledgee in the principal amount of Seven
Hundred Thousand ($700,000) Dollars, including, all amendments and
modifications to, extensions of and substitutions for such Note, including in
the event of a default, interest, late fees, legal expenses and collection
costs.
Section 1.02. Pledge. As collateral security for the full and
punctual payment of the Obligations when due and payable, each Pledgor hereby
pledges, grants, assigns, hypothecates and delivers to Pledgee and grants to
Pledgee a security interest in, the following (the "Pledged Collateral"):
(a) the number of shares of common stock of Northeast
listed opposite the name of such Pledgor on Exhibit A annexed hereto
(the "Pledged Shares"), together with the certificates representing the
Pledged Shares, and all dividends, cash, 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 Shares; and
(b) all additional shares of stock or other securities of
Northeast from time to time received by any Pledgor in respect of or in
substitution for the Pledged Shares, and the certificates representing
such additional shares, and all dividends, cash, instruments and other
property from time to time received, receivable or otherwise distributed
in respect of or in exchange for any or all of such additional shares
(which shall then be included in the definition of "Pledged Shares").
Section 1.03. Delivery of Pledged Collateral.
(a) All certificates or instruments representing or
evidencing the Pledged Collateral shall be delivered to and held by or
on behalf of the Pledgee pursuant hereto and shall be in suitable form
for transfer by delivery, or shall be accompanied by duly executed
instruments of transfer or assignment in blank, all in form and
substance satisfactory to Pledgee so that the transfer thereof may be
registered in the name of the Pledgee or any other transferee. The
Pledgee shall have the right, at any time in its discretion and without
notice to the Pledgor, to transfer to or register in the name of the
Pledgee, or any of its nominees, any or all of the Pledged Collateral.
In addition, the Pledgee shall have the right at any time to exchange
certificates or instruments representing or evidencing Pledged
Collateral for certificates or instruments of smaller or larger
denominations.
(b) The Pledgor further agrees and covenants to
promptly deliver to Pledgee any other securities constituting or
evidencing Pledged Collateral which it may acquire or which may come
into its possession or control during the term hereof (accompanied by
proper instruments of transfer or endorsements executed in blank in
accordance with the instructions of Pledgee), to be held by Pledgee
subject to this Agreement, but free and clear of all other liens,
encumbrances and adverse claims. The Pledgor agrees to execute and
deliver such other instruments or documents as Pledgee may reasonably
request in order to effectuate said transfers.
(c) Pledgee shall have the right to appoint or
designate one or more agents (the "Agent") for the purpose of retaining
physical possession of the certificates or instruments representing or
evidencing the Pledged Collateral.
Section 1.04. Continuing Agreement. This Agreement shall create
a continuing security interest in the Pledged Collateral and shall remain in
full force and effect until payment in full of the Obligations. Upon the
payment in full of the Obligations, the Pledgor shall be entitled to the
return, upon its request and at its expense, of such of the Pledged Collateral
as shall not have been sold or otherwise applied pursuant to the terms hereof.
ARTICLE 2. REPRESENTATIONS AND WARRANTIES OF PLEDGOR.
Each Pledgor hereby represents and warrants (as to itself) as
follows:
Section 2.01. Issuance. The Pledged Shares pledged by such
Pledgor have been duly authorized and validly issued by Northeast and are
fully paid and non-assessable.
Section 2.02. Ownership and Liens. Each Pledgor is the legal and
beneficial owner of the Pledged Collateral pledged by such Pledgor free and
clear of any lien, except for the security interest created by this Agreement.
Section 2.03. Perfection. The pledge of the Pledged Collateral
pursuant to this Agreement creates a valid and perfected first priority
security interest in the Pledged Collateral securing the payment of the
Obligations.
Section 2.04. No Authorization Required. No authorization,
approval, or other action by, and no notice to or filing with, any
governmental authority, regulatory body or third person is required either (a)
for the pledge by the Pledgor of the Pledged Collateral pursuant to this
Agreement, or for the execution, delivery or performance of this Agreement by
the Pledgor, or (b) for the exercise by the Pledgee 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 such disposition by laws affecting the offering and sale of
securities generally).
Section 2.05. Good Standing. Each corporate or partnership
Pledgor is duly organized and validly existing under the laws of its state of
incorporation or organization, is qualified to do business in each
jurisdiction where it is required to be qualified, and has the power and
authority to own its properties and assets and to carry on its business.
ARTICLE 3. COVENANTS.
Section 3.01. Further Assurances. The Pledgor agrees that at any
time and from time to time, at the expense of the Pledgor, the Pledgor will
promptly execute and deliver all further instruments and documents, and take
all further action, that may be necessary or desirable, or that Pledgee may
request, in order to perfect and protect any security interest granted or
purported to be granted hereby or to enable Pledgee to exercise and enforce
its rights and remedies hereunder with respect to any Pledged Collateral.
Section 3.02. Transfers and Other Liens; Additional Shares.
(a) Each Pledgor agrees that it will defend its
title to the Pledged Collateral owned by it against the claims of all
persons other than the Pledgee.
(b) The Pledgor agrees that it will not (i) sell,
further encumber or otherwise dispose of, or grant any option with
respect to, any of the Pledged Collateral, or (ii) create or permit to
exist any lien upon or with respect to any of the Pledged Collateral,
except for the security interest created by this Agreement.
ARTICLE 4. THE PLEDGEE.
Section 4.01. Pledgee Appointed Attorney-in-Fact. The Pledgor
hereby irrevocably appoints the Pledgee as the Pledgor's attorney-in-fact,
with full authority in the place and stead of the Pledgor and in the name of
the Pledgor or otherwise, from time to time in the Pledgee's discretion to
take any action and to execute any instrument which the Pledgee may deem
necessary or advisable to accomplish the purposes of this Agreement,
including, without limitation, to receive, endorse and collect all instruments
made payable to the Pledgor representing any dividend, interest payment, or
other distribution in respect of the Pledged Collateral or any part thereof
and to give full discharge for the same. This appointment shall be deemed to
be coupled with an interest. Without limiting the generality of the
foregoing, if an Event of Default shall have occurred and be continuing under
any of the Obligations, the Pledgee shall have the right and power to receive,
endorse and collect all checks and other orders for the payment of money made
payable to the Pledgor representing any dividend, interest payment, principal
payment or other distribution payable or distributable with respect to the
Pledged Collateral or any part thereof and to give full discharge for the
same.
Section 4.02. Pledgee May Perform. If the Pledgor fails to
perform any agreement contained herein, the Pledgee may itself perform, or
cause performance of, such agreement, and the expenses of the Pledgee incurred
in connection therewith shall be payable by the Pledgor under Section 6.02
hereof.
Section 4.03. Reasonable Care. The Pledgee shall be deemed to
have exercised reasonable care in the custody and preservation of the Pledged
Collateral in its possession if the Pledged Collateral is accorded treatment
substantially equal to that which it accords its own property, it being
understood that neither Pledgee, nor any Agent of Pledgee, shall have
responsibility for (a) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative to any
Pledged Collateral, whether or not Pledgee or Agent has or is deemed to have
knowledge of such matters, or (b) taking any necessary steps to preserve
rights against any parties with respect to any Pledged Collateral.
ARTICLE 5. DEFAULT.
Section 5.01 Events of Default. The occurrence of any of the
following events shall constitute an event of default ("Event of Default")
hereunder:
(a) a default occurs under any of the Obligations;
(b) any representation contained herein shall have been
materially misleading or untrue when made or when deemed to have been
made; or
(c) Pledgor fails to perform any covenant contained herein
within 10 days after notice from Pledgee; provided that if such default
cannot reasonably be cured within such ten day period, such period shall
be extended, provided that actions to cure the default are commenced
within such 10 day period and are diligently pursued to completion.
Section 5.02 Voting Rights; Dividends; Etc. (a) So long as no
Event of Default shall have occurred and be continuing:
(i) The Pledgor shall be entitled to exercise any and all voting
and other consensual rights pertaining to the Pledged Collateral or any part
thereof for any purpose not inconsistent with the terms of this Agreement;
provided, however, that the Pledgor shall not exercise or refrain from
exercising any such right if, in the Pledgee's judgment, such action would
have a material adverse effect on the value of the Pledged Collateral or any
part thereof, and, provided, further, that the Pledgor shall give the Pledgee
at least five days' written notice of the manner in which it intends to
exercise, or the reasons for refraining from exercising, any such right.
(ii) The Pledgor may receive and retain any distributions,
dividends and interest paid in respect of the Pledged Collateral. Upon the
occurrence and during the continuance of an Event of Default, any and all:
(A) dividends, distributions and interest paid or payable
in respect of, and instruments and other property received, receivable
or otherwise distributed in respect of, or in exchange for, any Pledged
Collateral,
(B) dividends and other distributions paid or payable in
cash in respect of any Pledged Collateral in connection with a partial
or total liquidation or dissolution or in connection with a reduction of
capital, capital surplus or paid-in-surplus, and
(C) cash paid, payable or otherwise distributed in respect
of principal of, or in redemption of, or in exchange for, any Pledged
Collateral,
shall be forthwith delivered to the Pledgee and, at the discretion of the
Pledgee, applied against the Obligations or held as Pledged Collateral. If
any such item is received by the Pledgor, it shall be received in trust for
the benefit of the Pledgee, be segregated from the other property or funds of
the Pledgor, and shall be forthwith delivered to the Pledgee (or its
designated Agent) as Pledged Collateral in the same form as so received (with
any necessary endorsement).
(iii) The Pledgee shall execute and deliver (or cause to be
executed and delivered) to the Pledgor all such proxies and other instruments
as the Pledgor may reasonably request for the purpose of enabling the Pledgor
to exercise the voting and other rights which it is entitled to exercise
pursuant to paragraph (i) above.
(b) Upon the occurrence and during the continuance of an Event of
Default:
(i) All rights of the Pledgor to exercise the voting and
other consensual rights which it would otherwise be entitled to exercise
pursuant to Section 5.02(a)(i) shall cease, and all such rights shall
thereupon become vested in the Pledgee, who shall thereupon have the
sole right to exercise such voting and other consensual rights;
provided, however, that the Pledgee, in its sole discretion from time to
time, may refrain from exercising, and shall not be obligated to
exercise any such voting or consensual rights; and
(ii) All dividends and interest payments which are received
by the Pledgor contrary to the provisions of paragraph (ii) of Section
5.02(a) shall be received in trust for the benefit of the Pledgee, shall
be segregated from other funds of the Pledgor and shall be forthwith
paid over to the Pledgee as Pledged Collateral in the same form as so
received (with any necessary endorsement).
Section 5.03. Remedies upon Default. (a) If any Event of
Default shall have occurred and be continuing:
(i) The Pledgee may exercise in respect of the Pledged
Collateral, in addition to other rights and remedies provided herein or
otherwise available to it, all the rights and remedies of a secured
party upon default of a debtor under the Uniform Commercial Code (the
"UCC") in effect in the State of New Jersey at that time;
(ii) The Pledgee may, without notice, except as specified
below, sell the Pledged Collateral or any part thereof in one or more
parcels at public or private sale, at any exchange, broker's board or at
any of the Pledgee's offices or elsewhere, for cash, on credit or for
future delivery, and at such price or prices and upon such other terms
as the Pledgee may deem commercially reasonable;
(iii) The Pledgee may proceed by suit or suits at law or in
equity to foreclose this Agreement and sell the Pledged Collateral or
any portion thereof pursuant to judgment or decree of a court or courts
having competent jurisdiction and/or pursuant to proceeding by a court-
appointed receiver; and/or
(iv) The Pledgee may execute all voting and consensual
rights with respect to the Pledged Collateral.
(b) The Pledgor agrees that, to the extent notice of sale
shall be required by law, at least 10 days' notice to the Pledgor of the
time and place of any public sale or the time after which any private
sale is to be made shall constitute reasonable notification. The
Pledgee shall not be obligated to make any sale of Pledged Collateral
regardless of notice of sale having been given. The Pledgee may adjourn
any public or private sale from time to time by announcement at the time
and place fixed therefor, and such sale may, without further notice, be
made at the time and place to which it was so adjourned. The Pledgee
shall be authorized at any sale (if it deems it advisable to do so) to
restrict the prospective bidders or purchasers to persons who will
represent and agree that they are purchasing the Pledged Collateral for
their own account in compliance with the Securities Act of 1933, as
amended, and upon consummation of any such sale, the Pledgee shall have
the right to assign, transfer, endorse and deliver to the purchaser or
purchasers thereof the Pledged Collateral so sold. Each such purchaser
at any such sale shall hold the property sold absolutely free from any
claim or right on the part of the Pledgor, and the Pledgor hereby waives
(to the extent permitted by law) all rights of redemption, stay and/or
appraisal which the Pledgor now has or may at any time in the future
have under any rule of law or statute now existing or hereafter enacted.
(c) At any sale made pursuant to this Agreement, the
Pledgee may bid for or purchase, free from any right of redemption, stay
and/or appraisal on the part of the Pledgor (all said rights being also
hereby waived and released to the extent permitted by law), any part of
or all of the Pledged Collateral offered for sale and may make payment
on account thereof by using any Obligation then due and payable as a
credit against the purchase price, and Pledgee may, upon compliance with
the terms of sale, hold, retain and dispose of such property without
further accountability to the Pledgor therefor. For purposes hereof, a
written agreement to purchase all or any part of the Pledged Collateral
shall be treated as a sale thereof and the Pledgee shall be free to
carry out such sale pursuant to such agreement and the Pledgor shall not
be entitled to the return of any Pledged Collateral subject thereto,
notwithstanding the fact that after the Pledgee shall have entered into
such an agreement all events of default which have occurred may have
been remedied or the Obligations may have been paid in full.
(d) Any cash held by the Pledgee as Pledged Collateral and
all cash proceeds received by the Pledgee in respect of any sale or
collection from or other realization upon all or any part of the Pledged
Collateral may, in the discretion of the Pledgee, be held by the Pledgee
as collateral for, and/or then or at any time thereafter applied (after
payment of any amounts payable to the Pledgee pursuant to Section 6.02)
in whole or in part by the Pledgee for the benefit of the Pledgee
against, all or any part of the Obligations, in such order as the
Pledgee shall elect. Any surplus of such cash or cash proceeds held by
the Pledgee and remaining after payment in full of all the Obligations
shall be paid over to the Pledgor or to whomsoever may be lawfully
entitled to receive such surplus.
ARTICLE 6. MISCELLANEOUS.
Section 6.01. Amendments; Waivers. No amendment or waiver of any
provision of this Agreement, nor consent to any departure by the Pledgor
herefrom, shall in any event be effective unless the same shall be in writing
and signed by the Pledgee, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given.
Section 6.02. Expenses. The Pledgor will, upon demand, pay to the
Pledgee the amount of any and all reasonable expenses, including the
reasonable fees and expenses of its counsel and of any experts which the
Pledgee may incur in connection with (a) the administration of this Agreement,
(b) the custody or preservation of, or the sale of, collection from, or other
realization upon, any of the Pledged Collateral, (c) the exercise or
enforcement of any of the rights of the Pledgee hereunder, or (d) the failure
by the Pledgor to perform or observe any of the provisions hereof.
Section 6.03. Notices. Unless the party to be notified otherwise
notifies the other party in writing, notices shall be given by certified mail,
return receipt requested, overnight courier or by hand delivery, addressed to
such party at its address as follows:
(a) If to the Pledgee:
Celcor, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
(b) If to any Pledgor, at the address set forth opposite such
Pledgor's signature on the signature page hereof.
or to such other person or address as the parties shall have notified each
other in writing.
Section 6.04. Binding Effect. This Agreement shall (a) be binding upon
the Pledgor, its successors, heirs and assigns, and (b) inure, together with
the rights and remedies of the Pledgee hereunder, to the benefit of the
Pledgee and its respective successors, transferees and assigns.
Section 6.05. No Waiver; Cumulative Remedies. No failure on the part
of the Pledgee to exercise, and no delay in exercising, any right, power or
remedy hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right, power or remedy of the Pledgee preclude
any other or further exercise thereof or the exercise of any other right,
power or remedy. All remedies hereunder are cumulative and are not exclusive
of any other remedies provided by law or contract.
Section 6.06. Termination. This Agreement shall terminate when the
Obligations secured hereby have been fully and indefeasibly paid and
performed. At such time the Pledgee shall reassign and redeliver (or cause to
be reassigned or redelivered) to the Pledgor, or to such person or persons as
the Pledgor shall designate, against receipt, such shares of the Pledged
Shares (if any) as shall not have been sold or otherwise applied by the
Pledgee pursuant to the terms hereof and shall still be held by it hereunder,
together with appropriate instruments of reassignment and release. Any such
reassignment shall be without recourse upon or warranty by the Pledgee and at
the expense of the Pledgor.
Section 6.07. Governing Law; Terms. This Agreement shall be governed
by and construed in accordance with the laws of the State of New Jersey,
except as required by mandatory provisions of law and except to the extent
that the validity or perfection of the security interest hereunder, or
remedies hereunder, in respect of any particular Pledged Collateral are
governed by the laws of a jurisdiction other than the State of New Jersey.
Unless otherwise defined herein, terms defined in Article 9 of the Uniform
Commercial Code in the State of New Jersey are used herein as therein defined.
Section 6.08 Counterparts. This Agreement may be signed in one or more
counterparts, each of which shall be deemed an original and all of which shall
constitute a single agreement.
IN WITNESS WHEREOF, the Pledgor and Pledgee have caused this Agreement
to be duly executed and delivered as of the date first above written.
Address: NORTHEAST GENERAL PHARMACEUTICAL
FACTORY
_________________________
_________________________ By:______________________________________
Name:
Title:
Address: LYNCROFT CORPORATION
_________________________
_________________________ By:______________________________________
Name:
Title:
Address: ▇▇▇▇▇▇▇ CONSULTANTS LTD.
_________________________
_________________________ By:______________________________________
Name:
Title:
Address: DZIOU TAI ASSOCIATES
_________________________
_________________________ By:______________________________________
Name:
Title:
Address: ▇▇▇▇▇▇ HOLDING LIMITED
_________________________
_________________________ By:______________________________________
Name:
Title
PLEDGEE:
CELCOR, INC.
By:_______________________________________
Name:
Title: