PLEDGE AGREEMENT
Exhibit 10.4
THIS PLEDGE AGREEMENT, dated as of April 29, 2008, is made and given by GLOBAL EMPLOYMENT
HOLDINGS, INC., a corporation organized under the laws of the State of Delaware (the “Pledgor”) to
XXXXX FARGO BANK, NATIONAL ASSOCIATION (the “Secured Party”), acting through its Xxxxx Fargo
Business Credit operating division.
RECITALS
A. GLOBAL EMPLOYMENT SOLUTIONS, INC., a Colorado corporation (“Global”), EXCELL PERSONNEL
SERVICES CORPORATION, an Illinois corporation (“Excell”), FRIENDLY ADVANCED SOFTWARE TECHNOLOGY,
INC., a New York corporation (“Friendly”), TEMPORARY PLACEMENT SERVICE, INC., f/k/a Michaels &
Associates, Inc. and successor by merger to Temporary Placement Service, Inc., a Georgia
corporation (“TPS”), SOUTHEASTERN STAFFING, INC., a Florida corporation (“Southeastern”),
SOUTHEASTERN PERSONNEL MANAGEMENT, INC., a Florida corporation (“SPM”), MAIN LINE PERSONNEL
SERVICES, INC., a Pennsylvania corporation (“Main Line”), BAY HR, INC., a Florida corporation
(“BHR”), SOUTHEASTERN GEORGIA HR, INC., a Georgia corporation (“SGHR”), SOUTHEASTERN STAFFING II,
INC., a Florida corporation (“SEII”), SOUTHEASTERN STAFFING III, INC., a Florida corporation
(“SEIII”), SOUTHEASTERN STAFFING IV, INC., a Florida corporation (“SEIV”), SOUTHEASTERN STAFFING V,
INC., a Florida corporation (“SEV”), SOUTHEASTERN STAFFING VI, INC., a Florida corporation
(“SEVI”), and KEYSTONE ALLIANCE, INC., a Florida corporation (“Keystone”) (Global, Excell,
Friendly, TPS, Southeastern, SPM, Main Line, BHR, SGHR, SEII, SEIII, SEIV, SEV, SEVI, and Keystone
are each referred to herein as a “Borrower” and collectively as the “Borrowers”), and the Secured
Party have entered into a Credit and Security Agreement dated as of April 29, 2008 (as the same may
hereafter be amended, restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”) pursuant to which the Secured Party has agreed to extend to the Borrowers certain
credit accommodations.
B. The Pledgor is the owner of the shares (the “Pledged Shares”) of stock described in
Schedule I hereto issued by the corporations named therein.
C. The Secured Party has required that this Agreement be executed and delivered by the
Pledgor.
D. The Pledgor is the ultimate corporate parent of the Borrowers.
E. The Pledgor expects to derive benefits from the extension of credit accommodations to the
Borrowers and finds it advantageous, desirable and in the best interests of the Pledgor to comply
with the requirement that this Agreement be executed and delivered to the Secured Party.
NOW, THEREFORE, in consideration of the premises and in order to induce the Secured Party to
extend credit accommodations to the Borrowers, the Pledgor hereby agrees with the Secured Party for
the Secured Party’s benefit as follows:
1. Defined Terms.
(a) As used in this Agreement, the following terms shall have the meanings indicated:
“Collateral” shall have the meaning given to such term in Section 2.
“Event of Default” shall have the meaning given to such term in Section 11.
“Lien” shall mean any security interest, mortgage, pledge, lien, charge,
encumbrance, title retention agreement or analogous instrument or device (including the
interest of the lessors under capitalized leases), in, of or on any assets or properties of
the Person referred to.
“Obligations” shall mean (a) all indebtedness, liabilities and obligations of
each Borrower to the Secured Party of every kind, nature or description, including each
Borrower’s obligation on any promissory note or notes under the Credit Agreement and any
note or notes hereafter issued in substitution or replacement thereof, (b) any and all other
liabilities and obligations of each Borrower to the Secured Party of every kind, nature and
description, whether direct or indirect or hereafter acquired by the Secured Party from any
Person, absolute or contingent, regardless of how such liabilities arise or by what
agreement or instrument they may be evidenced, (c) all liabilities of the Pledgor under any
guaranty heretofore, herewith or hereafter given by the Pledgor to the Secured Party with
respect to any or all of each Borrower’s liabilities and obligations to the Secured Party,
and (d) all liabilities of the Pledgor under this Agreement, and in all of the foregoing
cases whether due or to become due, and whether now existing or hereafter arising or
incurred.
“Person” shall mean any individual, corporation, partnership, joint venture,
limited liability company, association, joint stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
“Pledged Shares” shall have the meaning given to such term in Recital B above.
“Security Interest” shall have the meaning given to such term in Section 2.
(b) Terms Defined in Uniform Commercial Code. All other terms used in this
Agreement that are not specifically defined herein or the definitions of which are not
incorporated herein by reference shall have the meaning assigned to such terms in Revised
Article 9 of the Uniform Commercial Code as adopted in the State of Colorado (the “Code”).
- 2 -
(c) Singular/Plural, Etc. Unless the context of this Agreement otherwise
clearly requires, references to the plural include the singular, the singular, the plural
and “or” has the inclusive meaning represented by the phrase “and/or.” The words ”
“include,” “includes” and “including” shall be deemed to be followed by the phrase “without
limitation.” The words “hereof,” “herein,” “hereunder,” and similar terms in this
Agreement refer to this Agreement as a whole and not to any particular provision of this
Agreement. References to Sections are references to Sections in this Pledge Agreement
unless otherwise provided.
2. Pledge. As security for the payment and performance of all of the Obligations, the
Pledgor hereby pledges to the Secured Party and grants to the Secured Party a security interest
(the “Security Interest”) in the following, including any securities account containing a
securities entitlement with respect to the following (the “Collateral”):
(a) The Pledged Shares and 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.
(b) All additional shares of stock of any issuer of the Pledged Shares from time to
time acquired by the Pledgor in any manner, 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 shares.
(c) All proceeds of any and all of the foregoing (including proceeds that constitute
property of types described above).
3. Delivery of Collateral. All certificates and instruments representing or evidencing
the Pledged Shares shall be delivered to the Secured Party contemporaneously with the execution of
this Agreement. All certificates and instruments representing or evidencing Collateral received by
the Pledgor after the execution of this Agreement shall be delivered to the Secured Party promptly
upon the Pledgor’s receipt thereof. All such certificates and instruments shall be held by or on
behalf of the Secured Party 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 the Secured Party. With respect to all Pledged Shares consisting
of uncertificated securities, book-entry securities or securities entitlements, the Pledgor shall
either (a) execute and deliver, and cause any necessary issuers or securities intermediaries to
execute and deliver, control agreements in form and substance satisfactory to the Secured Party
covering such Pledged Shares, or (b) cause such Pledged Shares to be transferred into the name of
the Secured Party. The Secured Party shall have the right at any time, whether before or after an
Event of Default, to cause any or all of the Collateral to be transferred of record into the name
of the Secured Party or its nominee (but subject to the rights of the Pledgor under Section 6) and
to exchange certificates representing or evidencing Collateral for certificates of smaller or
larger denominations. If the Collateral is in the possession of a bailee, the Pledgor will join
with the Secured Party in notifying the bailee of the interest of the Secured Party and in
obtaining from the bailee an acknowledgment that it hold the Collateral for the benefit of the
Secured Party.
- 3 -
4. Certain Warranties and Covenants. The Pledgor makes the following warranties and
covenants:
(a) The Pledgor has title to the Pledged Shares and will have title to each other item
of Collateral hereafter acquired, free of all Liens except the Security Interest and the
Lien of Whitebox Convertible Arbitrage Partners, LP, for itself and in its capacity as
collateral agent for the Subordinated Creditors (in such capacity as collateral agent for
the Subordinated Creditors, together with any replacement or successor collateral agent, the
“Subordinated Creditors’ Collateral Agent”).
(b) The Pledgor has full power and authority to execute this Pledge Agreement, to
perform the Pledgor’s obligations hereunder and to subject the Collateral to the Security
Interest created hereby.
(c) No financing statement covering all or any part of the Collateral is on file in any
public office (except for any financing statements filed by the Secured Party or the
Subordinated Creditors’ Collateral Agent).
(d) The Pledged Shares have been duly authorized and validly issued by the issuer
thereof and are fully paid and non-assessable. The Pledged Shares are not subject to any
offset or similar right or claim of the issuers thereof.
(e) The Pledged Shares constitute 100% of the issued and outstanding shares of stock of
the respective issuers thereof.
5. 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 that the Secured Party may
reasonably request, in order to perfect and protect the Security Interest or to enable the Secured
Party to exercise and enforce its rights and remedies hereunder with respect to any Collateral (but
any failure to request or assure that the Pledgor execute and deliver such instruments or documents
or to take such action shall not affect or impair the validity, sufficiency or enforceability of
this Agreement and the Security Interest, regardless of whether any such item was or was not
executed and delivered or action taken in a similar context or on a prior occasion).
6. Voting Rights; Dividends; Etc.
(a) Subject to Section 6(d), the Pledgor shall be entitled to exercise or refrain from
exercising any and all voting and other consensual rights pertaining to the Pledged Shares
or any other stock that becomes part of the Collateral or any part thereof for any purpose
not inconsistent with the terms of this Agreement or the Credit Agreement; provided,
however, that the Pledgor shall not exercise or refrain from exercising any such
right if such action could reasonably be expected to have a material adverse effect on the
value of the Collateral or any material part thereof.
- 4 -
(b) Subject to Section 6(e), the Pledgor shall be entitled to receive, retain, and use
in any manner not prohibited by the Credit Agreement or any Subordination Agreement (as
defined in the Credit Agreement) any and all dividends paid in respect of the Collateral;
provided, however, that any and all
(i) dividends paid or payable other than in cash in respect of, and instruments
and other property received, receivable or otherwise distributed in respect of, or
in exchange for, any Collateral,
(ii) dividends and other distributions paid or payable in cash in respect of
any 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
(iii) cash paid, payable or otherwise distributed in redemption of, or in
exchange for, any Collateral,
shall be, and shall be forthwith delivered to the Secured Party to hold as, Collateral and shall,
if received by the Pledgor, be received in trust for the benefit of the Secured Party, be
segregated from the other property or funds of the Pledgor, and be forthwith delivered to the
Secured Party as Collateral in the same form as so received (with any necessary indorsement or
assignment). The Pledgor shall, upon request by the Secured Party, promptly execute all such
documents and do all such acts as may be necessary or desirable to give effect to the provisions of
this Section 6(b).
(c) The Secured Party 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 that it is
entitled to exercise pursuant to Section 6(a) hereof and to receive the dividends that it is
authorized to receive and retain pursuant to Section 6(b) hereof.
(d) Upon the occurrence and during the continuance of any Event of Default, the Secured
Party shall have the right in its sole discretion, and the Pledgor shall execute and deliver
all such proxies and other instruments as may be necessary or appropriate to give effect to
such right, to terminate all rights of the Pledgor to exercise or refrain from exercising
the voting and other consensual rights that it would otherwise be entitled to exercise
pursuant to Section 6(a) hereof, and all such rights shall thereupon become vested in the
Secured Party who shall thereupon have the sole right to exercise or refrain from exercising
such voting and other consensual rights; provided, however, that the Secured
Party shall not be deemed to possess or have control over any voting rights with respect to
any Collateral unless and until the Secured Party has given written notice to the Pledgor
that any further exercise of such voting rights by the Pledgor is prohibited and that the
Secured Party or its assigns will henceforth exercise such voting rights; and
provided, further, that neither the registration of any item of Collateral
in the Secured Party’s name nor the exercise of any voting rights with respect thereto shall
be deemed to constitute a retention by the Secured Party of any such Collateral in
satisfaction of the Obligations or any part thereof.
- 5 -
(e) Upon the occurrence and during the continuance of any Event of Default:
(i) all rights of the Pledgor to receive the dividends that it would otherwise
be authorized to receive and retain pursuant to Section 6(b) hereof shall cease, and
all such rights shall thereupon become vested in the Secured Party who shall
thereupon have the sole right to receive and hold such dividends as Collateral, and
(ii) all payments of dividends that are received by the Pledgor contrary to the
provisions of Section 6(e)(i) shall be received in trust for the benefit of the
Secured Party, shall be segregated from other funds of the Pledgor and shall be
forthwith paid over to the Secured Party as Collateral in the same form as so
received (with any necessary indorsement).
7. Transfers and Other Liens; Additional Shares.
(a) Except as may be permitted by the Credit Agreement, the Pledgor agrees that it will
not (i) sell, assign (by operation of law or otherwise) or otherwise dispose of, or grant
any option with respect to, any of the Collateral, or (ii) create or permit to exist any
Lien, upon or with respect to any of the Collateral.
(b) The Pledgor agrees that it will (i) cause each issuer of the Pledged Shares that it
controls not to issue any stock or other securities in addition to or in substitution for
the Pledged Shares issued by such issuer, except to the Pledgor, and (ii) pledge hereunder,
immediately upon its acquisition (directly or indirectly) thereof, any and all additional
shares of stock or other securities of each issuer of the Pledged Shares.
8. Secured Party Appointed Attorney-in-Fact. As additional security for the
Obligations, the Pledgor hereby irrevocably appoints the Secured Party the Pledgor’s
attorney-in-fact, with full authority in the place and stead of such Pledgor and in the name of
such Pledgor or otherwise, from time to time in the Secured Party’s good-faith discretion, to take
any action and to execute any instrument that the Secured Party may reasonably believe necessary or
advisable to accomplish the purposes of this Agreement (subject to the rights of the Pledgor under
Section 6 hereof), in a manner consistent with the terms hereof, including, without limitation, to
receive, indorse and collect all instruments made payable to the Pledgor representing any dividend
or other distribution in respect of the Collateral or any part thereof and to give full discharge
for the same.
9. Secured Party May Perform. The Pledgor hereby authorizes the Secured Party to file
financing statements with respect to the Collateral (including financing statements containing a
broader description of the Collateral than the description set forth herein). The Pledgor
irrevocably waives any right to notice of any such filing. If the Pledgor fails to perform any
agreement contained herein, the Secured Party may itself perform, or cause performance of, such
agreement, and the reasonable expenses of the Secured Party incurred in connection therewith shall
be payable by the Pledgor under Section 14 hereof.
- 6 -
10. The Secured Party’s Duties. The powers conferred on the Secured Party hereunder
are solely to protect its interest in the Collateral and shall not impose any duty upon it to
exercise any such powers. The Secured Party shall be deemed to have exercised reasonable care in
the safekeeping of any Collateral in its possession if such Collateral is accorded treatment
substantially equal to the safekeeping which the Secured Party accords its own property of like
kind. Except for the safekeeping of any Collateral in its possession and the accounting for monies
and for other properties actually received by it hereunder, the Secured Party shall have no duty,
as to any Collateral, as to ascertaining or taking action with respect to calls, conversions,
exchanges, maturities, tenders or other matters relative to any Collateral, whether or not the
Secured Party has or is deemed to have knowledge of such matters, or as to the taking of any
necessary steps to preserve rights against any Persons or any other rights pertaining to any
Collateral. The Secured Party will take action in the nature of exchanges, conversions,
redemption, tenders and the like requested in writing by the Pledgor with respect to any of the
Collateral in the Secured Party’s possession if the Secured Party in its reasonable judgment
determines that such action will not impair the Security Interest or the value of the Collateral,
but a failure of the Secured Party to comply with any such request shall not of itself be deemed a
failure to exercise reasonable care.
11. Default. Each of the following occurrences shall constitute an Event of Default
under this Agreement: (a) the Pledgor shall fail to observe or perform any covenant or agreement
applicable to the Pledgor under this Agreement; (b) any representation or warranty made by the
Pledgor in this Agreement or in any financial statements, reports or certificates heretofore or at
any time hereafter submitted by or on behalf of the Pledgor to the Secured Party shall prove to
have been false or materially misleading when made; (c) any Event of Default shall occur under the
Credit Agreement, the Guaranty by the Pledgor in favor of the Secured Party or the Security
Agreement by the Pledgor in favor of the Secured Party; (d) the Secured Party receives at any time
any information indicating that the Secured Party’s Security Interest is not enforceable, is not
perfected or in not prior to all other security interests or other interests in the Collateral,
except as otherwise agreed by the Secured Party.
12. Remedies upon Default. If any Event of Default shall have occurred and be
continuing:
(a) The Secured Party may exercise in respect of the Collateral, in addition to other
rights and remedies provided for herein or otherwise available to it, all the rights and
remedies of a secured party on default under Revised Article 9 of the Code in effect at that
time, and may, without notice except as specified below, sell the 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 Secured Party’s offices or elsewhere, for cash, on credit or for future
delivery, and upon such other terms as the Secured Party may reasonably believe are
commercially reasonable. The Pledgor agrees that, to the extent notice of sale shall be
required by law, at least ten days’ prior 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 Secured Party shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given. The Secured Party 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 hereby waives all requirements of law, if any,
relating to the marshalling of assets which would be applicable in connection with the
enforcement by the Secured Party of its remedies hereunder, absent this waiver. The Secured
Party may disclaim warranties of title and possession and the like.
- 7 -
(b) The Secured Party may notify any Person obligated on any of the Collateral that the
same has been assigned or transferred to the Secured Party and that the same should be
performed as requested by, or paid directly to, the Secured Party, as the case may be. The
Pledgor shall join in giving such notice, if the Secured Party so requests. The Secured
Party may, in the Secured Party’s name or in the Pledgor’s name, demand, xxx for, collect or
receive any money or property at any time payable or receivable on account of, or securing,
any such Collateral or grant any extension to, make any compromise or settlement with or
otherwise agree to waive, modify, amend or change the obligation of any such Person.
(c) Any cash held by the Secured Party as Collateral and all cash proceeds received by
the Secured Party in respect of any sale of, collection from, or other realization upon all
or any part of the Collateral may, in the discretion of the Secured Party, be held by the
Secured Party as collateral for, or then or at any time thereafter be applied in whole or in
part by the Secured Party against, all or any part of the Obligations (including any
expenses of the Secured Party payable pursuant to Section 14 hereof).
13. Waiver of Certain Claims. The Pledgor acknowledges that because of present or
future circumstances, a question may arise under the Securities Act of 1933, as from time to time
amended (the “Securities Act”), with respect to any disposition of the Collateral permitted
hereunder. The Pledgor understands that compliance with the Securities Act may very strictly limit
the course of conduct of the Secured Party if the Secured Party were to attempt to dispose of all
or any portion of the Collateral and may also limit the extent to which or the manner in which any
subsequent transferee of the Collateral or any portion thereof may dispose of the same. There may
be other legal restrictions or limitations affecting the Secured Party in any attempt to dispose of
all or any portion of the Collateral under the applicable Blue Sky or other securities laws or
similar laws analogous in purpose or effect. The Secured Party may be compelled to resort to one
or more private sales to a restricted group of purchasers who will be obliged to agree, among other
things, to acquire such Collateral for their own account for investment only and not to engage in a
distribution or resale thereof. The Pledgor agrees that the Secured Party shall not incur any
liability, and any liability of the Pledgor for any deficiency shall not be impaired, as a result
of the sale of the Collateral or any portion thereof at any such private sale in a manner that the
Secured Party reasonably believes is commercially reasonable (within the meaning of Section 9-627
of the Code). The Pledgor hereby waives any claims against the Secured Party arising by reason of
the fact that the price at which the Collateral may have been sold at such sale was less than the
price that might have been obtained at a public sale or was less than the aggregate amount of the
Obligations, even if the Secured Party shall accept the first offer received and does not offer any
portion of the Collateral to more than one possible purchaser. The Pledgor further agrees that the
Secured Party has no obligation to delay sale of any Collateral for the period of time necessary to
permit the issuer of such Collateral to qualify or register such Collateral for public sale under
the Securities Act, applicable Blue Sky laws and other applicable state and
federal securities laws, even if said issuer would agree to do so. Without limiting the
generality of the foregoing, the provisions of this Section would apply if, for example, the
Secured Party were to place all or any portion of the Collateral for private placement by an
investment banking firm, or if such investment banking firm purchased all or any portion of the
Collateral for its own account, or if the Secured Party placed all or any portion of the Collateral
privately with a purchaser or purchasers.
- 8 -
14. Costs and Expenses; Indemnity. The Pledgor will pay or reimburse the Secured
Party on demand for all out-of-pocket expenses (including in each case all filing and recording
fees and taxes and all reasonable fees and expenses of counsel and of any experts and agents)
incurred by the Secured Party in connection with the creation, perfection, protection,
satisfaction, foreclosure or enforcement of the Security Interest and the preparation,
administration, continuance, amendment or enforcement of this Agreement, and all such costs and
expenses shall be part of the Obligations secured by the Security Interest. The Pledgor shall
indemnify and hold the Secured Party harmless from and against any and all claims, losses and
liabilities (including reasonable attorneys’ fees) growing out of or resulting from this Agreement
(including enforcement of this Agreement) or the Secured Party’s actions pursuant hereto. Any
liability of the Pledgor to indemnify and hold Secured Party harmless pursuant to the preceding
sentence shall be part of the Obligations secured by the Security Interest. The obligations of the
Pledgor under this Section shall survive any termination of this Agreement.
15. Waivers and Amendments; Remedies. This Agreement can be waived, modified,
amended, terminated or discharged, and the Security Interest can be released, only explicitly in a
writing signed by the Secured Party. A waiver so signed shall be effective only in the specific
instance and for the specific purpose given. Mere delay or failure to act shall not preclude the
exercise or enforcement of any rights and remedies available to the Secured Party. All rights and
remedies of the Secured Party shall be cumulative and may be exercised singly in any order or
sequence, or concurrently, at the Secured Party’s option, and the exercise or enforcement of any
such right or remedy shall neither be a condition to nor bar the exercise or enforcement of any
other.
16. Waiver of Defenses. The Pledgor waives the benefit of any and all defenses and
discharges available to a guarantor, surety, indorser or accommodation party, dependent on its
character as such. Without limiting the generality of the foregoing, the Pledgor (in such
capacity) waives presentment, demand for payment, and notice of nonpayment or protest of any note
other instrument evidencing any of the Obligations; and the Pledgor agrees that the Pledgor’s
liability hereunder and the Security Interest hereby created shall not be affected or impaired in
any way by any of the following acts and things (which the Secured Party may do from time to time
without notice to the Pledgor): (a) by any sale, pledge, surrender, compromise, settlement,
release, renewal, extension, indulgence, alteration, substitution, exchange, change in,
modification, or other disposition of any of the Obligations or any evidence thereof or any
collateral therefor, (b) by any acceptance or release of collateral for or guarantors of any of the
Obligations, (c) by any failure, neglect or omission to realize upon or protect any of the
Obligations or to obtain, perfect, enforce or realize upon any collateral therefor or to exercise
any Lien upon or right of appropriation of any moneys, credits or property toward the liquidation
of any of the Obligations, or (d) by any application of payments or credits upon any of the
Obligations. The Secured Party
- 9 -
shall not be required, before exercising its rights under this Agreement, to first resort for
payment of any of the Obligations to any Borrower or any other Persons, its or their properties or
estates, or any collateral, property, Liens or other rights or remedies whatsoever. The Pledgor
agrees not to exercise any right of contribution, recourse, subrogation or reimbursement available
to the Pledgor against any Borrower or any other Person or property, unless and until all
Obligations and all other debts, liabilities and obligations owed by each Borrower and the Pledgor
to the Secured Party have been paid and discharged. The Pledgor expects to derive benefits from
the transactions resulting in the creation of the Obligations. The Secured Party may rely
conclusively on the continuing warranty, hereby made, that the Pledgor continues to be benefitted
by the Secured Party’s extension of credit accommodations to the Borrowers and the Secured Party
shall have no duty to inquire into or confirm the receipt of any such benefits, and this Agreement
shall be effective and enforceable by the Secured Party without regard to the receipt, nature or
value of any such benefits.
17. Notices. Any notice or other communication to any party in connection with this
Agreement shall be in writing and shall be sent by manual delivery, telefacsimile transmission,
overnight courier or United States mail (postage prepaid) addressed to such party at the address
specified on the signature page hereof, or at such other address as such party shall have specified
to the other party hereto in writing. All periods of notice shall be measured from the date of
delivery thereof if manually delivered, from the date of sending thereof if sent by telefacsimile
transmission, from the first business day after the date of sending if sent by overnight courier,
or from four days after the date of mailing if mailed.
18. Representations and Warranties. The Pledgor hereby represents and warrants to the
Secured Party that:
(a) The Pledgor is a corporation duly incorporated, validly existing and in good
standing under the laws of the jurisdiction of its incorporation and has the corporate power
and authority and the legal right to own and operate its properties and to conduct the
business in which it is currently engaged.
(b) The Pledgor has the corporate power and authority and the legal right to execute
and deliver, and to perform its obligations under, this Agreement and has taken all
necessary corporate action to authorize such execution, delivery and performance.
(c) This Agreement constitutes a legal, valid and binding obligation of the Pledgor
enforceable in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors’ rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
- 10 -
(d) The execution, delivery and performance of this Agreement will not (i) violate any
provision of any law, statute, rule or regulation or any order, writ, judgment, injunction,
decree, determination or award of any court, governmental agency or arbitrator presently in
effect having applicability to the Pledgor, (ii) violate or contravene any provision of the
Articles (Certificate) of Incorporation or bylaws of the Pledgor, or (iii)
result in a breach of or constitute a default under any indenture, loan or other
agreement, lease or instrument to which the Pledgor is a party or by which it or any of its
properties may be bound or result in the creation of any Lien thereunder. The Pledgor is
not in default under or in violation of any such law, statute, rule or regulation, order,
writ, judgment, injunction, decree, determination or award or any such indenture, loan or
other agreement, lease or instrument in any case in which the consequences of such default
or violation could have a material adverse effect on the business, operations, properties,
assets or condition (financial or otherwise) of the Pledgor.
(e) Except for any filings, recordings and registrations to perfect the Security
Interest, no order, consent, approval, license, authorization or validation of, or filing,
recording or registration with, or exemption by, any governmental or public body or
authority is required on the part of the Pledgor to authorize, or is required in connection
with the execution, delivery and performance of, or the legality, validity, binding effect
or enforceability of, this Agreement.
(f) There are no actions, suits or proceedings pending or, to the knowledge of the
Pledgor, threatened against or affecting the Pledgor or any of its properties before any
court or arbitrator, or any governmental department, board, agency or other instrumentality
which, if determined adversely to the Pledgor, would have a material adverse effect on the
business, operations, property or condition (financial or otherwise) of the Pledgor or on
the ability of the Pledgor to perform its obligations hereunder.
19. Pledgor Acknowledgments. The Pledgor hereby acknowledges that (a) the Pledgor has
been advised by counsel in the negotiation, execution and delivery of this Agreement, (b) the
Secured Party has no fiduciary relationship to the Pledgor, the relationship being solely that of
debtor and creditor, and (c) no joint venture exists between the Pledgor and the Secured Party.
20. Continuing Security Interest; Assignments under Credit Agreement. This Agreement
shall create a continuing security interest in the Collateral and shall (a) remain in full force
and effect until the payment in full of the Obligations and the expiration of the obligation, if
any, of the Secured Party to extend credit accommodations to any Borrower, (b) be binding upon the
Pledgor, its successors and assigns, and (c) inure, together with the rights and remedies of the
Secured Party hereunder, to the benefit of, and be enforceable by, the Secured Party and its
successors, transferees and assigns. Without limiting the generality of the foregoing clause (c),
the Secured Party may assign or otherwise transfer all or any portion of its rights and obligations
under the Credit Agreement to any other Person to the extent and in the manner provided in the
Credit Agreement, and may similarly transfer all or any portion of its rights under this Pledge
Agreement to such Persons.
21. Termination of Security Interest. Upon payment in full of the Obligations and the
expiration of any obligation of the Secured Party to extend credit accommodations to any Borrower,
the security interest granted hereby shall terminate and all rights to the Collateral shall revert
to the Pledgor. Upon any such termination, the Secured Party will return to the Pledgor such of
the Collateral as shall not have been sold or otherwise applied pursuant to the terms hereof and
execute and deliver to the Pledgor such documents as the Pledgor shall reasonably
request to evidence such termination. Any reversion or return of the Collateral upon
termination of this Agreement and any instruments of transfer or termination shall be at the
expense of the Pledgor and shall be without warranty by, or recourse on, the Secured Party. As
used in this Section, “Pledgor” includes any assigns of Pledgor or whoever else may be lawfully
entitled to any part of the Collateral.
- 11 -
22. Governing Law and Construction. THE VALIDITY, CONSTRUCTION AND ENFORCEABILITY OF
THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF COLORADO; PROVIDED, HOWEVER, THAT NO
EFFECT SHALL BE GIVEN TO CONFLICT OF LAWS PRINCIPLES OF THE STATE OF COLORADO, EXCEPT TO THE EXTENT
THAT THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN
RESPECT OF ANY PARTICULAR COLLATERAL ARE MANDATORILY GOVERNED BY THE LAWS OF A JURISDICTION OTHER
THAN THE STATE OF COLORADO. Whenever possible, each provision of this Agreement and any other
statement, instrument or transaction contemplated hereby or relating hereto shall be interpreted in
such manner as to be effective and valid under such applicable law, but, if any provision of this
Agreement or any other statement, instrument or transaction contemplated hereby or relating hereto
shall be held to be prohibited or invalid under such applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Agreement or any other statement,
instrument or transaction contemplated hereby or relating hereto.
23. Consent to Jurisdiction. AT THE OPTION OF THE SECURED PARTY, THIS AGREEMENT MAY
BE ENFORCED IN ANY FEDERAL COURT OR COLORADO STATE COURT SITTING IN THE CITY AND COUNTY OF DENVER,
COLORADO; AND THE PLEDGOR CONSENTS TO THE JURISDICTION AND VENUE OF ANY SUCH COURT AND WAIVES ANY
ARGUMENT THAT VENUE IN SUCH FORUMS IS NOT CONVENIENT. IN THE EVENT THE PLEDGOR COMMENCES ANY
ACTION IN ANOTHER JURISDICTION OR VENUE UNDER ANY TORT OR CONTRACT THEORY ARISING DIRECTLY OR
INDIRECTLY FROM THE RELATIONSHIP CREATED BY THIS AGREEMENT, THE SECURED PARTY AT ITS OPTION SHALL
BE ENTITLED TO HAVE THE CASE TRANSFERRED TO ONE OF THE JURISDICTIONS AND VENUES ABOVE-DESCRIBED, OR
IF SUCH TRANSFER CANNOT BE ACCOMPLISHED UNDER APPLICABLE LAW, TO HAVE SUCH CASE DISMISSED WITHOUT
PREJUDICE.
24. Waiver of Jury Trial. EACH OF THE PLEDGOR AND THE SECURED PARTY, BY ITS
ACCEPTANCE OF THIS AGREEMENT, IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
25. Counterparts. This Agreement may be executed in any number of counterparts, each
of which when so executed and delivered shall be deemed to be an original and all of which
counterparts, taken together, shall constitute but one and the same instrument. Delivery of an
executed counterpart of this Agreement by telefacsimile shall be equally as effective as
delivery of an original executed counterpart of this Agreement. Any party delivering an executed
counterpart of this Agreement by telefacsimile also shall deliver an original executed counterpart
of this Agreement but the failure to deliver an original executed counterpart shall not affect the
validity, enforceability, and binding effect of this Agreement.
26. General. All representations and warranties contained in this Agreement or in any
other agreement between the Pledgor and the Secured Party shall survive the execution, delivery and
performance of this Agreement and the creation and payment of the Obligations. The Pledgor waives
notice of the acceptance of this Agreement by the Secured Party. Captions in this Agreement are
for reference and convenience only and shall not affect the interpretation or meaning of any
provision of this Agreement.
- 12 -
IN WITNESS WHEREOF, the Pledgor has caused this Pledge Agreement to be duly executed and delivered
by its officer thereunto duly authorized as of the date first above written.
| GLOBAL EMPLOYMENT HOLDINGS, INC. |
||||
| By: | /s/ Xxxxxx X. Xxxxxxxxxx | |||
| Name: | Xxxxxx X. Xxxxxxxxxx | |||
| Its: Chief Financial Officer | ||||
Address for Pledgor:
GLOBAL EMPLOYMENT HOLDINGS, INC.
00000 Xxxx Xxxxxxx Xx., Xxxxx 000
Xxxx Xxxx, Xxxxxxxx 00000
Telecopier: (000) 000-0000
Attention: President
GLOBAL EMPLOYMENT HOLDINGS, INC.
00000 Xxxx Xxxxxxx Xx., Xxxxx 000
Xxxx Xxxx, Xxxxxxxx 00000
Telecopier: (000) 000-0000
Attention: President
Address for Secured Party:
Xxxxx Fargo Business Credit
MAC C7300 210
0000 Xxxxxxxx
Xxxxxx, Xxxxxxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxxx X. Xxxxx
Xxxxx Fargo Business Credit
MAC C7300 210
0000 Xxxxxxxx
Xxxxxx, Xxxxxxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxxx X. Xxxxx
- 13 -
SCHEDULE I
PLEDGED STOCK
Stock Issuer:
|
Global Employment Solutions, Inc. | |
Percentage Ownership:
|
100% | |
Class of Stock:
|
Common | |
Certificate No(s).:
|
1 | |
Par Value:
|
$0.01 | |
Number of Shares:
|
100 | |
Stock Issuer:
|
Keystone Alliance, Inc. | |
Percentage Ownership:
|
100% | |
Class of Stock:
|
Common | |
Certificate No(s).:
|
1 | |
Par Value:
|
$0.0001 | |
Number of Shares:
|
100 |
PART II
PLEDGED DEBT
None.
