PLEDGE AND CONTROL AGREEMENT
Exhibit 10.5
THIS PLEDGE AND CONTROL
AGREEMENT dated as of SEPTEMBER 17, 2008 (as
amended, modified or restated from time to time, this “Agreement”),
is by and among (a) THERMO
CREDIT, LLC, a Colorado limited liability company (together with its
successors and assigns, “Lender”);
and (b) ▇▇▇▇ ▇▇▇▇▇▇▇▇,
an individual residing in the State of Louisiana (“Nowalsky”),
and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇,
an individual residing in the State of Florida (“▇▇▇▇▇▇▇▇▇▇”
and together with Nowalsky, jointly, severally and in
solido, “Pledgor”).
RECITALS
WHEREAS, Lender has extended
certain financial accommodations to UNITED ESYSTEMS, INC., a
Nevada corporation (“ESystems”),
NETCOM DATA SOUTHERN
CORP., a Georgia corporation (“Southern”),
NETCOM DATA CORP., a
Georgia corporation (“Netcom”)
and UNITED CHECK SERVICES,
L.L.C., a Louisiana limited liability company (“Check
Services” and together with ESystems, Southern and Netcom, jointly,
severally and in
solido, “Debtor”)
on the terms and conditions of that certain LOAN, PLEDGE AND SECURITY
AGREEMENT dated as of even date herewith (as
amended, modified or restated from time to time, the “Loan
Agreement”), between Debtor and Lender in the (terms not otherwise
defined herein shall have the same meanings as in the Loan
Agreement);
WHEREAS, it is expressly
understood among Pledgor and Lender that the execution and delivery of this
Agreement is a condition precedent to Lender’s obligation to make the Loans
under the Loan Agreement and is an integral part of the transactions
contemplated thereby; and
NOW, THEREFORE, for good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:
1. Grant of
Security Interest. Pledgor pledges, assigns and grants to
Lender a first lien security interest and lien in all right, title and interest
in and to all of the Capital Stock of ESystems (including but limited to all of
the Capital Stock listed on Schedule 1(a)
attached hereto) now owned by Pledgor and all Capital Stock of ESystems
hereafter acquired in connection with the Subordinate Indebtedness (as such term
is defined in that certain SUBORDINATION AGREEMENT dated
as of even date herewith, by and among ▇▇▇▇▇▇▇▇▇▇, Lender and Debtor). ,
regardless of class or designation, and all substitutions therefor and
replacements thereof, all proceeds thereof and all rights relating thereto,
including, without limitation, any certificates representing the Capital Stock,
the right to request after the occurrence and during the continuation of an
Event of Default that such Capital Stock be registered in the name of Lender or
any of its nominees, the right to receive any certificates representing any of
the Capital Stock and the right to require that such certificates be delivered
to Lender together with undated powers or assignments of investment securities
with respect thereto, duly endorsed in blank by such Pledgor, all warrants,
options, share appreciation rights and other rights, contractual or otherwise,
in respect of such Capital Stock and of all dividends, distributions of income,
profits, surplus, or other compensation by way of income or liquidating
distributions, in cash or in kind, and cash, instruments, and other property
from time to time received, receivable, or otherwise distributed in respect of
or in addition to, in substitution of, on account of, or in exchange for any or
all of the foregoing (the foregoing being, the “Collateral”)
as collateral for the Indebtedness.
2. Pledgor's
Warranties. Pledgor hereby represents and warrants to Lender
as follows:
(a) Financing
Statements; Liens and Security Interests. No financing
statement covering the Collateral is or will be on file in any public office,
except the financing statements relating to this security interest, and no
security interest, other than the one herein created, has attached or been
perfected in the Collateral or any part thereof. This Agreement
creates a valid first priority security interest in favor of Lender in the
Collateral. The taking possession by the Lender of the certificates
representing the Capital Stock (if any) and all other certificates and
instruments constituting Collateral will perfect and establish the first
priority of the Lender's security interest in the Capital Stock.
(b) Ownership. Pledgor
owns the Collateral free from any setoff, claim, restriction, lien, security
interest or encumbrance except for taxes not yet due and payable and the
security interest hereunder. Except as set forth in the
Organizational Documents of ESystems (a true and correct copy of which is
attached hereto as Exhibit
A), there are no options or other rights, contractual or otherwise, with
respect to the Capital Stock in favor of any third party and no such options or
rights shall be created until full payment and performance of all of the
Indebtedness and termination or expiration of any obligation or commitment of
Lender to make advances or loans to Debtor.
(c) Power and
Authority. Pledgor has full
power and authority to make this Agreement, and all necessary consents and
approvals of any persons, entities, governmental or regulatory authorities and
securities exchanges have been obtained to effectuate the validity of this
Agreement.
3. Pledgor's
Covenants. Until full
payment and performance of all of the Indebtedness and termination or expiration
of any obligation or commitment of Lender to make advances or Loans to, unless
Lender otherwise consents in writing:
(a) Agreement. Pledgor shall
perform all of its agreements herein.
(b) Ownership
of Collateral. Pledgor shall
defend the Collateral against all claims and demands of all persons at any time
claiming any interest therein adverse to Lender. Pledgor shall keep
the Collateral free from all liens and security interests.
(c) Lender's
Costs. Pledgor shall pay
all reasonable costs necessary preserve, defend and enforce the security
interest created by this Agreement, and preserve, defend, enforce and collect
the Collateral, including but not limited to taxes, assessments, reasonable
attorney's fees, legal expenses and expenses of sales. Whether the
Collateral is or is not in Lender's possession, and without any obligation to do
so and without waiving Pledgor's default for failure to make any such payment,
Lender at its option may pay any such costs and expenses and discharge
encumbrances on the Collateral, and such payments shall be a part of the
Indebtedness and bear interest at the rate set out in the
Indebtedness.
(d) Possession
of Collateral. If the Capital
Stock is certificated, Pledgor shall deliver all such certificates to Lender,
and following and during the continuation of an Event of Default, Pledgor shall
deliver all other instruments and documents which are a part of the Collateral
and in Pledgor's possession to Lender immediately, or if hereafter acquired,
immediately following acquisition, in a form suitable for transfer by delivery
or accompanied by duly executed instruments of transfer or assignment in blank
with signatures appropriately guaranteed in form and substance reasonably
satisfactory to Lender.
(e) Power of
Attorney. Pledgor appoints
Lender and any officer thereof as Pledgor's attorney-in-fact with full power in
Pledgor's name and on Pledgor's behalf to do every act which Pledgor is
obligated to do or may be required to do hereunder following the occurrence and
during the continuation of an Event of Default; however, nothing in this
paragraph shall be construed to obligate Lender to take any action hereunder nor
shall Lender be liable to Pledgor for failure to take any action
hereunder. This appointment shall be deemed a power coupled with an
interest and shall not be terminable as long as the Indebtedness is outstanding
and shall not terminate on the disability or incompetence of
Pledgor. Without limiting the generality of the foregoing, Lender
shall have the right and power following the occurrence and during the
continuation of an Event of Default, to receive, indorse and collect all checks
and other orders for the payment of money made payable to Pledgor representing
any dividend, interest payment or other distribution payable in respect of the
Collateral or any part thereof.
4. Rights
and Powers of Lender. Lender, after an
Event of Default and during the continuation thereof, without liability to
Pledgor may: take control of proceeds, including securities received as
dividends or by reason of splits; release the Collateral in its possession to
any Pledgor, temporarily or otherwise; take control of funds generated by the
Collateral, such as cash dividends, interest and proceeds, and use same to
reduce any part of the Indebtedness; exercise all other rights which an owner of
such Collateral may exercise; and transfer any of the Collateral or evidence
thereof into its own name or that of its nominee. Lender shall not be
liable for failure to collect any account or instruments, or for any act or
omission on the part of Lender, its officers, agents or
employees,
except for its or their own willful misconduct or gross
negligence. The foregoing rights and powers of Lender will be in
addition to, and not a limitation upon, any rights and powers of Lender given by
law or elsewhere in this Agreement.
5. Indebtedness. Upon
maturity of the Indebtedness or an Event of Default, Lender may:
(a) Liquidation
of Collateral. Sell, or instruct any agent or broker to sell,
all or any part of the Collateral in a public or private sale, direct any agent
or broker to liquidate all or any part of any account and deliver all proceeds
thereof to Lender, and apply all proceeds to the payment of any or all of the
Indebtedness in such order and manner as Lender shall, in its discretion, choose
or hold such proceeds as additional Collateral for the
Indebtedness. Lender shall have all rights with respect to the
Collateral as set forth in the Note.
(b) Code. All of the
rights, powers and remedies of a secured creditor under the Code or the Loan
Agreement.
Pledgor specifically understands and agrees that any sale by Lender of all or part of the Collateral pursuant to the terms of this Agreement may be effected by Lender at times and in manners which could result in the proceeds of such sale as being significantly and materially less than might have been received if such sale had occurred at different times or in different manners, and Pledgor hereby releases Lender and its officers and representatives from and against any and all obligations and liabilities arising out of or related to the timing or manner of any such sale. If, in the opinion of Lender, there is any question that a public sale or distribution of any Collateral will violate any state or federal securities law, Lender may offer and sell such Collateral in a transaction exempt from registration under federal securities law, and any such sale made in good faith by Lender shall be deemed "commercially reasonable.”
6. Limitation
of Liability. NOTWITHSTANDING ANYTHING
CONTAINED HEREIN TO THE CONTRARY THE OBLIGATION OR OBLIGATIONS OF PLEDGOR WITH
RESPECT TO THE INDEBTEDNESS OF DEBTOR SHALL BE SOLELY LIMITED TO THE
COLLATERAL. SHOULD THE COLLATERAL BE INSUFFICIENT TO REPAY THE
INDEBTEDNESS, PLEDGOR SHALL HAVE NO OBLIGATION TO REPAY LENDER FOR ANY
SHORTFALL. IT IS FURTHER AGREED THAT, NOTWITHSTANDING ANYTHING
CONTAINED WITHIN THIS AGREEMENT TO THE CONTRARY AND SPECIFICALLY BUT NOT LIMITED
TO SECTION
3(C), LENDER AGREES THAT
IN THE EVENT IT IS REQUIRED TO EXERCISE ITS REMEDIES WITH RESPECT TO THE
COLLATERAL, PLEDGORS SHALL HAVE NO PERSONAL OBLIGATION TO LENDER FOR ANY COSTS
INCLUDING, BUT NOT LIMITED TO, BROKER’S COMMISSIONS, TAXES, COURT COSTS,
ATTORNEY FEES, WHETHER ASSOCIATED EITHER DIRECTLY OF INDIRECTLY WITH THE ACTIONS
TAKEN BY LENDER IN ORDER TO EFFECT THE EXERCISE OF ITS RIGHTS WITH RESPECT TO
THE COLLATERAL. ALL SUCH COSTS ARE TO BE PAID OUT OF THE PROCEEDS, IF
ANY, DERIVED FROM THE SALE OF THE COLLATERAL OR ADDED TO THE INDEBTEDNESS OF
DEBTOR.
7. General.
(a) Parties
Bound. Lender's rights
hereunder shall inure to the benefit of its successors and assigns, and in the
event of any assignment or transfer of any of the Indebtedness or the
Collateral, Lender thereafter shall be fully discharged from any responsibility
with respect to the Collateral so assigned or transferred, but Lender shall
retain all rights and powers hereby given with respect to any of the
Indebtedness or the Collateral not so assigned or transferred. All
representations, warranties and agreements of Pledgor, if more than one, are
joint and several and all shall be binding upon the successors and assigns of
Pledgor.
(b) Waiver. No delay of
Lender in exercising any power or right shall operate as a waiver thereof; nor
shall any single or partial exercise of any power or right preclude other or
further exercise thereof or the exercise of any other power or
right. No waiver by Lender of any right hereunder or of any default
by Pledgor shall be binding upon Lender unless in writing, and no failure by
Lender to exercise any
power
or right hereunder or waiver of any default by Pledgor shall operate as a waiver
of any other or further exercise of such right or power or of any further
default. Each right, power and remedy of Lender as provided for
herein or in any of the loan documents related to the Indebtedness, or which
shall now or hereafter exist at law or in equity or by statute or otherwise,
shall be cumulative and concurrent and shall be in addition to every other such
right, power or remedy. The exercise or beginning of the exercise by
Lender of any one or more of such rights, powers or remedies shall not preclude
the simultaneous or later exercise by Lender of any or all other such rights,
powers or remedies.
(c) Notice. Notice shall be
deemed reasonable if mailed postage prepaid at least TEN (10) days before the
related action (or if the Code elsewhere specifies a longer period, such longer
period) to the address of Pledgor set forth on the signature page
hereof. Each notice, request and demand shall be deemed given or
made, if sent by mail, upon the earlier of the date of receipt or THREE (3) days after deposit
in the U.S. Mail, first class postage prepaid, or if sent by any other means,
upon delivery.
(d) Modifications. No provision
hereof shall be modified or limited except by a written agreement expressly
referring hereto and to the provisions so modified or limited and signed by
Pledgor and Lender. The provisions of this Agreement shall not be
modified or limited by course of conduct or usage of trade.
(e) Partial
Invalidity. The
unenforceability or invalidity of any provision of this Agreement shall not
affect the enforceability or validity of any other provision herein, and the
invalidity or unenforceability of any provision of any loan document related to
the Indebtedness to any person or circumstance shall not affect the
enforceability or validity of such provision as it may apply to other persons or
circumstances.
(f) Applicable
Law and Venue. This Agreement
has been delivered in the State of Louisiana and shall be construed in
accordance with the laws of that State. It is performable by Pledgor in the
county or city of Lender's address as set forth in the Loan Agreement and
Pledgor expressly waives any objection as to venue in any such
location. Wherever possible each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provisions
or the remaining provisions of this Agreement.
(g) Financing
Statement. To the extent
permitted by applicable law, a carbon, photographic or other reproduction of
this Agreement or any financing statement covering the Collateral shall be
sufficient as a financing statement. Pledgor hereby authorizes Lender
to file a financing statement on the Collateral without Pledgor’s
signature.
REMAINDER
OF PAGE LEFT INTENTIONALLY BLANK
EXECUTED as of the date first
written above.
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LENDER:
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ADDRESS:
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THERMO
CREDIT, LLC
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▇▇▇
▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇ ▇▇▇▇
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▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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By:
/s/ ▇▇▇▇ ▇.
▇▇▇▇▇▇, ▇▇.
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Name:
▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
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Title:
Executive Vice President
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PLEDGOR:
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ADDRESS:
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/s/ ▇▇▇▇
▇▇▇▇▇▇▇▇
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▇▇▇▇
▇▇▇▇▇▇▇▇
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/s/ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
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3811
Hollow Crossing Drive
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▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
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JOINDER
OF ESYSTEMS
ESYSTEMS acknowledges,
confirms and agrees to the terms and conditions of the foregoing Agreement and
that the lien of Lender on the Collateral has been recorded on the books and
records of ESystems as of the date first written above. ESystems
hereby confirms and agrees that (i) Pledgor is the registered owner of the
Capital Stock, (ii) Pledgor not shall change the registered owner of the Capital
Stock without the prior written consent of Lender, and (iii) the Agreement
constitutes a “control agreement” under the Code. If ESystems shall
receive instructions originated by Lender relating to the Capital Stock,
ESystems shall immediately comply with such instructions without further consent
by Pledgor or any other Person.
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ESYSTEMS:
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ADDRESS:
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▇▇▇▇▇
▇’▇▇▇▇ ▇▇▇▇
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▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
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By:
/s/ ▇▇▇▇▇▇ ▇▇▇▇
GREEN JR.
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Name:
▇▇▇▇▇▇ ▇▇▇▇ Green Jr.
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Title:
Treasurer
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PLEDGE
AND CONTROL AGREEMENT – PAGE 5
THERMO
CREDIT, LLC - UNITED ESYSTEMS, INC.