AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT
AMENDED
AND RESTATED
PLEDGE AND SECURITY AGREEMENT
(this “Agreement”), dated as
of July 2, 2009, made by and among Beyond Commerce, Inc. (the “Company”) and each
holder of Company’s common stock signatory hereto (the “Pledgor” and,
collectively, the “Pledgors”) in favor
of OmniReliant Holdings, Inc. (the “Pledgee”).
W I T N E S S E T H:
WHEREAS, the Company, the
Pledgee and a Pledgor have previously entered into a pledge and security
agreement dated June 29, 2009 whereby Pledgor Linlithgow Holdings LLC pledged
2,500,000 shares of the Company’s Common Stock;
WHEREAS, the Company, the
Pledgee and Pledgor Linlithgow Holdings LLC wish to amend and restate the June
29, 2009 pledge and security agreement so that additional Pledgors may pledge
their shares of the Company’s Common Stock;
WHEREAS, Pledgee has lent to
the Company, and the Company has agreed to borrow from the Pledgee, up to an
aggregate of $3,500,000 pursuant to the terms and conditions set forth in the
Amended and Restated Securities Purchase Agreement (the “Purchase Agreement”)
and the Debentures of the Company (the “Debentures”);
WHEREAS, pursuant to the
provisions of the Debentures, and as a condition to the obligation of the
Pledgee to lend thereunder, the Pledgors, as principals, employees and
shareholders of the Company, have agreed to make the pledge contemplated by this
Agreement in order to induce Pledgee to perform their obligations under the
Debentures;
WHEREAS, as a condition to the
obligation of the Pledgee to lend pursuant to the Debentures, the Company agrees
to undertake such action contemplated by this Agreement in order to induce
Pledgee to perform their obligations under the Debentures;
WHEREAS, Pledgors own the
shares of common stock, $0.001 par value per share, of the Company (the “Common Stock”) as set
forth opposite the Pledgors’ respective names on Schedule A attached
hereto;
WHEREAS, terms used but not
otherwise defined in this Agreement that are defined in Article 9 of the Uniform
Commercial Code in effect in the State of New York at that time (whether or not
the UCC applies to the affected Pledged Collateral) (the "UCC") shall have the
meanings ascribed to them in the UCC; and
WHEREAS, if an aggregate of
$3,500,000 worth of funding (with the Company receiving proceeds of $3,000,000),
as described in the Purchase Agreement, does not occur on or around July 30,
2009, the difference between the amount of shares pledged hereunder and four
times the number of shares of Common Stock the Debentures are convertible into
based on the closing price of the Company’s Common Stock on July 30, 2009, will
be returned to the Pledgors on a pro rata basis;
NOW, THEREFORE, in
consideration of the premises, covenants and promises contained herein and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:
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SECTION
1. Pledge and Security
Interest. The Pledgor hereby unconditionally and irrevocably
pledges, grants and hypothecates to the Pledgee, and grants to the Pledgee a
continuing first priority security interest in, a first lien upon and a right of
set-off against, all of its respective rights, titles and interests of
whatsoever kind and nature in (the “Security Interest”),
and to secure the complete and timely payment, performance and discharge in
full, as the case may be, of all of the obligations pursuant to the Debentures,
the following (collectively, the “Pledged
Collateral”):
(a) the
shares of Common Stock owned by the Pledgor and set forth on Schedule A attached
hereto (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
proceeds of any and all of the foregoing Pledged Collateral, in whatever form
(including, without limitation, proceeds that constitute property of the types
described above).
(c) if an
aggregate of $3,500,000 worth of funding (with the Company receiving proceeds of
$3,000,000), as described in the Purchase Agreement, does not occur on or around
July 30, 2009, the difference between the amount of shares pledged hereunder and
four times the number of shares of Common Stock the Debentures are convertible
into based on the closing price of the Company’s Common Stock on July 30, 2009,
will be returned to the Pledgors on a pro rata basis.
SECTION
2. Security for
Obligations. This Agreement secures the payment and
performance of the following obligations (collectively, the “Obligations”): all
present and future indebtedness, obligations, covenants, duties and liabilities
of any kind or nature of the Company to the Pledgee now existing or hereafter
arising under or in connection with this Agreement or the Debentures
(collectively, the “Transaction
Documents”).
SECTION
3. Delivery of Pledged
Collateral. Within 3 business days of the date hereof, all
certificates representing or evidencing the Pledged Shares, in suitable form for
transfer by delivery, or accompanied by instruments of transfer or assignment
duly executed in blank, are being deposited with and delivered to the Agent, as
collateral agent for the Pledgee. The Agent shall have the right, at
any time after the occurrence of an Event of Default (as hereinafter defined)
(unless such Event of Default is waived in writing by the Pledgee), without
notice to the Pledgor, to transfer to or to register in the name of the Pledgee
or their nominees any or all of the Pledged Collateral. In addition,
the Agent shall have the right at any time after the occurrence of an Event of
Default (unless such Event of Default is waived in writing by the Pledgee), to
exchange certificates or instruments representing or evidencing Pledged
Collateral for certificates or instruments of smaller or larger
denominations.
SECTION
4. Representations and
Warranties. The Pledgor, severally and not jointly with the
other Pledgors, represents and warrants as follows:
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(a) Except as
set forth on Schedule
4(a) hereto, the Pledgor is the legal, record and beneficial owner of the
Pledged Collateral owned by the Pledgor, free and clear of any lien, security
interest, restriction, option or other charge or encumbrance (collectively,
"Liens").
(b) The
pledge of the Pledged Collateral and the grant of the Security Interest pursuant
to this Agreement creates a valid and perfected first priority security interest
in the Pledged Collateral, securing payment and performance of the
Obligations.
(c) Except
for the filing of financing statements pursuant to the UCC with the proper
filing and recording agencies in the proper jurisdictions pursuant to the
security agreement between the Company and the Pledgee, entered into
concurrently with this Agreement, no consent of any other person or entity and
no authorization, approval, or other action by, and no notice to or filing with,
any governmental authority or regulatory body is required (i) 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, (ii) for
the perfection or maintenance of the security interest created hereby, or (iii)
for 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 any disposition of any
portion of the Pledged Collateral by laws affecting the offering and sale of
securities generally).
(d) There are
no conditions precedent to the effectiveness of this Agreement that have not
been satisfied or waived.
(e) Effective
on the date of execution of this Agreement, the Pledgor hereby authorizes the
Agent to file one or more financing statements under the UCC with respect to the
Security Interest with the proper filing and recording agencies in the
jurisdictions indicated on Schedule B attached
hereto, and in such other jurisdictions as may be requested by the
Pledgee.
(f) The
Pledgor will not transfer, pledge, hypothecate, sell or otherwise dispose of any
of the Pledged Collateral without the prior written consent of the
Pledgee.
(g) The
Pledgor shall promptly execute and deliver to the Pledgee such further
assignments, security agreements, financing statements or other instruments,
documents, certificates and assurances and take such further action as the
Pledgee may from time to time request and may in its sole discretion deem
necessary to perfect, protect or enforce its security interest in the Pledged
Collateral.
(h) All
information heretofore, herein or hereafter supplied to the Pledgee by or on
behalf of the Pledgor with respect to the Pledged Collateral is accurate and
complete in all material respects as of the date furnished.
SECTION
5. Further
Assurances. The Pledgor, severally and not jointly with the
other Pledgors, agrees that at any time and from time to time, at the expense of
the Pledgor, the Pledgor shall promptly execute and deliver all further
instruments and documents, and take all further action, that may be necessary or
desirable, or that the Agent and/or the Pledgee may reasonably request, in order
to perfect and protect any security interest granted or purported to be granted
hereby or to enable the Agent and/or Pledgee to exercise and enforce their
rights and remedies hereunder with respect to any Pledged
Collateral. The Company agrees that at any time and from time to
time, at the expense of the Company, the Company shall promptly execute and
deliver all further instruments and documents, and take all further action, that
may be necessary or desirable, or that the Pledgee may reasonably
request.
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SECTION
6. Voting Rights; Dividends;
Etc.
(a) So long
as no Event of Default shall have occurred (unless such Event of Default is
waived in writing by the Pledgee):
(i) The
Pledgor shall be entitled to exercise or refrain from exercising 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
reasonable judgment of such Pledgee, such action would have a material adverse
effect on the Security Interest or the rights and remedies of the Pledgee
hereunder; provided, further, that the
Pledgor shall give the Pledgee at least ten (10) days' prior written notice of
the manner in which it intends to exercise, or the reasons for refraining from
exercising, any such right.
(ii) The
Pledgor shall be entitled to receive and retain any and all cash dividends and
interest paid in respect of the Pledgor’s Pledged Collateral.
(b) Upon and
after the occurrence of any Event of Default (unless such Event of Default is
waived in writing by the Pledgee):
(i) All
rights of the Pledgor to exercise or refrain from exercising the voting and
other consensual rights which it would otherwise be entitled to exercise
pursuant to Section 6(a)(i) and to receive the dividends and interest payments
which it would otherwise be authorized to receive and retain pursuant to Section
6(a)(ii) shall cease, and all such rights shall thereupon become vested in the
Agent who shall thereupon have the sole right to exercise or refrain from
exercising such voting and other consensual rights and to receive and hold as
Pledged Collateral such dividends and interest payments.
(ii) All
dividends and interest payments which are received by the Pledgors contrary to
the provisions of paragraph (i) of this Section 6(b) shall be received in trust
for the benefit of the Pledgee, shall be segregated from other funds of the
applicable Pledgor and shall be forthwith paid over to the Agent as Pledged
Collateral in the same form as so received (with any necessary
endorsement).
SECTION
7. Transfers and Other Liens;
Additional Shares. During the term of this Agreement, the
Pledgor agrees that it shall not (i) sell, assign (by operation of law or
otherwise) 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
granted pursuant to this Agreement.
SECTION
8. Agent Appointed
Attorney-in-Fact.
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(a) Effective
only upon an Event of Default (unless such Event of
Default is waived in writing by the Pledgee), the Pledgors hereby appoints the
Agent as the Pledgors’ attorney-in-fact, with full authority in the place and
stead of, and in the name of, the Pledgors or otherwise, from time to time in
the Agent's discretion to take any action and to execute any instrument which
the Agent may deem necessary or desirable to accomplish the purposes of this
Agreement, including, without limitation, to receive, endorse and collect all
instruments made payable to the Pledgors 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.
(b) The
Pledgor, severally and not jointly, authorizes the Agent, and do hereby make,
constitute and appoint the Agent and its respective officers, agents, successors
or assigns with full power of substitution, as the Pledgors’ true and lawful
attorney-in-fact, with power, in the name of the Pledgee or the Pledgors, after
the occurrence and during the continuance of an Event of Default, (i) to endorse
any checks, drafts, money orders or other instruments of payment (including
payments payable under or in respect of any policy of insurance) in respect of
the Pledged Collateral that may come into possession of the Pledgee; (ii) to
sign and endorse any financing statement pursuant to the UCC or any invoice,
freight or express xxxx, xxxx of lading, storage or warehouse receipts, drafts
against Pledgors, assignments, verifications and notices in connection with
accounts, and other documents relating to the Pledged Collateral; (iii) to pay
or discharge taxes, liens, security interests or other encumbrances at any time
levied or placed on or threatened against the Pledged Collateral; (iv) to
demand, collect, receipt for, compromise, settle and xxx for monies due in
respect of the Pledged Collateral; (v) generally to do, at the option of the
Pledgee, and at the expense of the Pledgors, severally and jointly, at any time,
or from time to time, all acts and things which the Pledgee deem necessary to
protect, preserve and realize upon the Pledged Collateral and the Security
Interest granted herein in order to effect the intent of this Agreement all as
fully and effectually as the Pledgors might or could do; and (vi) in the event
of the bankruptcy of the Pledgor, to appoint a receiver or equivalent person to
xxxxxxxx the Pledgor’s assets, and the Pledgor hereby ratifies all that said
attorney-in-fact shall lawfully do or cause to be done by virtue hereof. This
power of attorney is coupled with an interest and shall be irrevocable for the
term of this Agreement and thereafter as long as any of the Obligations shall be
outstanding.
(c) The
Pledgor hereby irrevocably appoints the Agent 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, from time to time in the Agent’s discretion, to file in its sole
discretion, of one or more financing or continuation statements and amendments
thereto, relative to any of the Collateral without the signature of the Pledgor
where permitted by law.
SECTION
9. Pledgee May
Perform. If any Pledgor fails to perform any agreement
contained herein, the Agent and/or Pledgee may itself perform, or cause
performance of, such agreement, and the expenses of the Agent and/or Pledgee
incurred in connection therewith shall be payable by the Pledgor under Section
14 hereof.
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SECTION
10. The Agent's
Duties. The duties and rights of the Agent are as set forth on
Annex A
attached hereto and incorporated herein by reference. Any fees of the Agent for
its services hereunder shall be paid by the Company. The powers
conferred on the Agent hereunder are solely to protect the interests of the
Pledgee in the Pledged Collateral and shall not impose any duty upon the Agent
to exercise any such powers. Except for the safe custody of any
Pledged Collateral in its possession and the accounting for moneys actually
received it hereunder, neither the Agent nor Pledgee shall have any duty as to
any Pledged Collateral, as to ascertaining or taking action with respect to
calls, conversions, exchanges, maturities, tenders or other matters relative to
any Pledged Collateral, whether or not such party has or is to have knowledge of
such matters, or as to the taking of any necessary steps to preserve rights
against any parties or any other rights pertaining to any Pledged
Collateral. The Agent and Pledgee shall be deemed to have exercised
reasonable care in the custody and preservation of any Pledged Collateral in its
possession if such Pledged Collateral is accorded treatment substantially equal
to that which such party accords its own property.
SECTION
11. Event of
Default. The occurrence of any of the following events shall
constitute an event of default under this Agreement (each, an “Event of
Default”):
(a) The
failure of any Pledgor to observe, perform or comply with any act, duty,
covenant, agreement or obligation under this Agreement, which is not cured
within ten business days following written notice by Agent to the Pledgor;
(b) If any of
the representation or warranty of any Pledgor set forth in this Agreement shall
be breached or shall be untrue or incorrect in any material respect, and is not
cured within ten business days following written notice by Agent to the
Pledgor;
(c) The
filing of any financing statement with regard to any of the Pledged Collateral
other than pursuant to this Agreement, or the attachment of any additional Lien
to any portion of the Pledged Collateral in favor of any Person other than the
Pledgee; or
(d) If any
event of default (and expiration of any cure period) shall occur (unless such
event of default is waived in writing by the Pledgee) under any of the other
Transaction Documents.
SECTION
12. Cross-Default;
Cross-Collateralization.
The
Pledgors acknowledges and agrees that any default under the terms of this
Agreement shall constitute a default by the Company under the Debentures, and
that any event of default (following expiration of any applicable cure period)
under the Debentures shall constitute a default under this
Agreement.
6
SECTION
13. Remedies upon Event of
Default. Upon and after the occurrence of any Event of
Default:
(a) The Agent
may exercise in respect of the Pledged Collateral, in addition to other rights
and remedies provided for herein or otherwise available to the Agent (including,
without limitation, the vesting in the Agent pursuant to Section 6(b)(i) of the
sole right to exercise voting rights pertaining to the Pledged Collateral,
including, without limitation, voting rights with respect to the sale of assets
of the issuer of such Pledged Shares), all the rights and remedies of a secured
party on default under the UCC, and may also, without notice except as specified
below and subject to the applicable securities laws, sell the Pledged Collateral
or any part thereof at public or private sale, at any exchange, broker's board
or at any of the Agent's offices or elsewhere, for cash, on credit or for future
delivery, and upon such other terms as the Agent may deem commercially
reasonable. The Pledgor agrees that, to the extent notice of sale
shall be required by law, at least ten (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 Agent shall not
be obligated to make any sale of Pledged Collateral regardless of notice of sale
having been given. The Agent 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 Pledgor acknowledges and agrees that the Pledged
Collateral consisting of the Pledged Shares, and/or any other shares of common
stock of the Company, is of a type customarily sold on a recognized market, and
accordingly that no notice of the sale thereof need be given. In
addition, Agent may transfer all of the Pledged Collateral to Pledgee, who may
hold all of such Pledged Collateral as payment in full of the
Obligations.
(b) Any cash
held by the Agent or the Pledgee as Pledged Collateral and all cash proceeds
received by the Agent or the Pledgee in respect of any sale of, collection from,
or other realization upon all or any part of the Pledged Collateral may, in the
discretion of the Agent or the Pledgee, be held as collateral for, and/or then
or at any time thereafter be applied (after payment of any amounts payable
pursuant to Section 14) in whole or in part against, all or any part of the
Obligations. Any surplus of such cash or cash proceeds held by the
Agent or the Pledgee and remaining after payment in full of all the Obligations
shall be paid over to the Pledgors, pro-rata, or to whomsoever may be lawfully
entitled to receive such surplus.
SECTION
14. Expenses. The
Pledgors and the Company, severally and jointly, shall upon demand pay to the
Agent and/or the Pledgee the amount of any and all reasonable expenses,
including reasonable attorneys’ fees and expenses and the reasonable fees and
expenses of any experts and agents, which the Agent and/or 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 Agent and/or Pledgee hereunder or (d) the failure by any Pledgor to
perform or observe any of the provisions hereof.
SECTION
15. Continuing Security
Interest; Termination. This Agreement shall create a
continuing security interest in the Pledged Collateral and shall remain in full
force and effect until the indefeasible payment in full of the
Obligations. Upon the indefeasible payment in full of the
Obligations, the security interest granted hereby shall terminate and all rights
to the Pledged Collateral shall revert to the Pledgor. Upon any such
termination, the Agent shall, at the Pledgors’ expense, return, pro-rata, to the
Pledgor such of the Pledged Collateral as shall not have been sold or otherwise
applied pursuant to the terms hereof and execute and deliver to the Pledgors
such documents as the Pledgors shall reasonably request to evidence such
termination.
SECTION
16. Governing Law;
Terms. For the convenience of the Agent, this Agreement shall
be governed by, and construed in accordance with, the laws of the State of New
York, without regard to principles of conflict of laws. The Pledgor
agrees to submit to the in personam jurisdiction
of the state and federal courts situated within the City of New York, State of
New York with regard to any controversy arising out of or relating to this
Agreement. Unless otherwise defined herein, terms defined in Article
9 of the UCC are used herein as therein defined.
7
SECTION
17. Notice. All
notices and other communications hereunder shall be in writing and shall be
deemed to have been received when delivered personally (which shall include,
without limitation, via express overnight courier) or if mailed, three (3)
business days after having been mailed by registered or certified mail, return
receipt requested, postage prepaid, to the addresses of the parties as set forth
herein.
SECTION
18. Waivers.
(a) Waivers. The
Pledgor waives any right to require the Pledgee to (i) proceed against any
person, (ii) proceed against any other collateral under any other agreement,
(iii) pursue any other remedy, or (iv) make presentment, demand, dishonor,
notice of dishonor, acceleration and/or notice of non-payment.
(b) Waiver of
Defense. No course of dealing between the Pledgors and the
Pledgee, nor any failure to exercise nor any delay in exercising on the part of
the Agent or Pledgee, any right, power, or privilege under this Agreement or
under any of the other Transaction Documents shall operate as a
waiver. No single or partial exercise of any right, power, or
privilege under this Agreement or under any of the other Transaction Documents
shall preclude any other or further exercise of such right, power, or privilege
or the exercise of any other right, power, or privilege.
SECTION
19. Rights Are
Cumulative. All rights and remedies of the Agent and the
Pledgee with respect to the Pledged Collateral, whether established by this
Agreement, the other Transaction Documents or by law, shall be cumulative and
may be exercised concurrently or in any order.
SECTION
20. Indemnity. The
Pledgor, jointly and severally, agrees to indemnify and hold harmless the Agent,
the Pledgee and their respective heirs, successors and assigns against and from
all liabilities, losses and costs (including, without limitation, reasonable
attorneys' fees) arising out of or relating to the taking or the failure to take
action in respect of any transaction effected under this Agreement or in
connection with the lien provided for herein, including, without limitation, any
and all excise, sales or other taxes which may be payable or determined to be
payable with respect to any of the Pledged Collateral, except to the extent
resulting from their gross negligence or intentional misconduct. The
liabilities of the Pledgors under this Section 20 shall survive the termination
of this Agreement.
SECTION
21. Severability. The
provisions of this Agreement are severable. If any provision of this
Agreement is held invalid or unenforceable in whole or in part in any
jurisdiction, then such invalidity or unenforceability shall affect only such
provision, or part thereof, in such jurisdiction, and shall not in any manner
affect such provision or part thereof in any other jurisdiction, or any other
provision of this Agreement in any jurisdiction.
8
SECTION
22. Counterparts. This
Agreement may be executed in several counterparts, each of which shall be
considered an original, but all of which together shall constitute one and the
same instrument.
SECTION
23. Amendments; Entire
Agreement. This Agreement is subject to modification only by a
writing signed by the parties. To the extent any provision of this
Agreement conflicts with any provision of the Debentures, the provision giving
Pledgee greater rights or remedies shall govern, it being understood that the
purpose of this Agreement is to add to, and not detract from, the rights granted
to Pledgee under the Debentures. This Agreement and the other
Transaction Documents constitute the entire agreement of the parties with
respect to the subject matter of this Agreement.
SECTION
24. Successors and
Assigns. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, executors, legal
representatives, successors and assigns; provided, however, that no
Pledgor may, without the prior written consent of the Pledgee, assign or
delegate any rights, powers, duties or obligations hereunder, and any such
purported assignment or delegation without such consent shall be null and
void.
[REMAINDER
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IN WITNESS WHEREOF, the
parties hereto have duly executed and delivered this Agreement as of the date
first above written.
| PLEDGORS: | |||
| /s/ Xxxxx XxXxxxx | |||
| Linlithgow Holdings, LLC | |||
| By: Xxxxx XxXxxxx | |||
| /s/ Xxxxx Xxxxx-Xxxxxxx | |||
| Xxxxx Xxxxx-Xxxxxxx | |||
| /s/ Xxxxxx XxXxxxx | |||
| Xxxxxx XxXxxxx | |||
| THE COMPANY: | |||
| BEYOND COMMERCE, INC. | |||
| By: /s/ Xxxxxx XxXxxxx | |||
| Name: Xxxxxx XxXxxxx | |||
| Title: Chief Executive Officer | |||
| PLEDGEE | |||
| OMNIRELIANT HOLDINGS, INC. | |||
| By: /s/ Xxxx Xxxxxxxx | |||
| Name: Xxxx Xxxxxxxx | |||
| Title: Chief Executive Officer | |||
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