EXHIBIT 99.10
PLEDGE AGREEMENT
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(Principal Shareholder)
TO: MERCATOR ADVISORY GROUP, LLC
1. GRANT OF SECURITY INTEREST. For valuable consideration, the undersigned,
Xxxxx X. Xxxxxx ("PLEDGOR"), hereby pledges to MERCATOR ADVISORY GROUP, LLC as
collateral agent (in such capacity, "AGENT") for the holders (the "HOLDERS") of
those certain 6-1/2% Secured Convertible Debentures (the DEBENTURES") listed on
Schedule 1 attached hereto, issued jointly and severally by MediaBus Networks,
Inc., a Florida corporation ("MEDIABUS") and its wholly owned subsidiary,
Presidion Solutions, Inc., a Florida corporation ("PRESIDION" and, with
MediaBus, the "BORROWERS"), in favor of the purchasers of the Debentures named
on Schedule 1 ("MERCATOR"), and grants to Mercator a security interest in, all
of the following property (collectively called "COLLATERAL"): (i) 7,881,749
shares of the common stock of MediaBus (the "STOCK") and (ii) whatever is or may
be receivable or received with respect to the Stock (hereinafter collectively
called "PROCEEDS"), including without limitation, (a) all rights to payment,
however arising, (b) all proceeds of any sale or other disposition of the Stock,
and (c) all stock rights, rights to subscribe, stock splits, liquidating
dividends, cash dividends, dividends paid in stock, new securities or other
property of any kind which Pledgor is or may hereafter be entitled to receive on
account of the Stock, whether received by Pledgor due to stock splits or
dividends paid in stock or sums paid upon or in respect of the Stock, upon the
liquidation or dissolution of MediaBus or otherwise. In the event that Pledgor
receives any such Proceeds, Pledgor will hold the same in trust on behalf of and
for the benefit of Mercator and will immediately deliver all such Proceeds to
Mercator in the exact form received, with the endorsement of Pledgor if
necessary and/or appropriate undated stock powers duly executed in blank, to be
held by Mercator as part of the Collateral, subject to all of the terms hereof.
Mercator is acting hereunder for the benefit of the holders of the Debentures on
a proportional basis in accordance with the amounts of their respective
interests in the Debentures.
2. OBLIGATIONS SECURED. The obligations secured hereby (collectively, the
"SECURED OBLIGATIONS") are the payment and performance of: (a) that certain
Guaranty of even date herewith by Pledgor in favor of Mercator (the "GUARANTY");
and (b) all obligations of Pledgor to Mercator under this Pledge Agreement.
3. DELIVERY OF COLLATERAL. Upon the execution of this Pledge Agreement,
Pledgor shall deliver to Mercator the certificates representing the Stock,
together with (i) a stock power in the form set forth in EXHIBIT A attached
hereto duly executed in blank with Pledgor's signature covered by a medallion
signature guarantee, (ii) a third party release form and (iii) a "NO STOP
TRANSFER LETTER," all acceptable to Mercator in form and substance.
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4. VOTING RIGHTS; CASH DIVIDENDS. Notwithstanding any contrary provision of
this Pledge Agreement, as long as Pledgor is the owner of the Stock, Pledgor
shall be entitled to all voting rights with respect to the Collateral and shall
be entitled to receive all cash payments, dividends or distributions paid in
respect of the Collateral, subject to Sections 1 and 5 of this Agreement.
5. ADDITIONAL SECURITIES; STOCK DIVIDENDS; DISTRIBUTIONS. If, while this
Pledge Agreement is in effect, Pledgor becomes entitled to receive or receives
any securities or other property in addition to, in substitution of, or in
exchange for any of the Collateral (whether as a distribution in connection with
any recapitalization, reorganization or reclassification, a stock dividend or
otherwise), Pledgor shall accept such securities or other property on behalf of
and for the benefit of Mercator as additional security for the Secured
Obligations, and shall promptly deliver to Mercator such additional security,
together with duly executed forms of stock power or assignment, and such
additional security shall be deemed to be part of the Collateral hereunder.
6. TERMINATION. This Pledge Agreement will terminate upon the indefeasible
payment in full or other termination of all of the Secured Obligations.
Notwithstanding any contrary provision of this Pledge Agreement, the liability
of Pledgor hereunder shall be reinstated and revived and the rights of Mercator
shall continue if and to the extent that for any reason any amount at any time
paid on account of any Secured Obligation is rescinded or must otherwise be
restored by Mercator or any Holder, whether as a result of any proceedings in
bankruptcy or reorganization or otherwise, all as though such amount had not
been paid. The determination as to whether any amount so paid must be rescinded
or restored shall be made by Mercator or the applicable Holder(s) in its sole
discretion; PROVIDED HOWEVER, that if Mercator or the applicable Holder(s)
chooses to contest any such matter at the request of Pledgor, Pledgor agrees to
indemnify and hold Mercator and the Holders harmless from and against all costs
and expenses, including without limitation reasonable attorneys' fees and costs,
expended or incurred by Mercator or such Holder(s) in connection therewith,
including without limitation, in any litigation with respect thereto. Upon
termination, Mercator shall surrender the certificates evidencing the Collateral
to Pledgor together with all forms of stock power or assignment.
7. OBLIGATIONS OF MERCATOR. Mercator's obligation with respect to the
Collateral and Proceeds in its possession shall be strictly limited to the duty
to exercise reasonable care in the custody and preservation of such Collateral
and Proceeds, and such duty shall not include any obligation to ascertain or to
initiate any action with respect thereto or to inform Pledgor of maturity dates,
conversion, call or exchange rights, or offers to purchase the Collateral or
Proceeds, or any similar matters, notwithstanding Mercator's knowledge of the
same. Mercator shall have no duty to take any steps necessary to preserve the
rights of Pledgor against prior parties, or to initiate any action to protect
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against the possibility of a decline in the market value of the Collateral or
Proceeds. Mercator shall not be obligated to take any action with respect to the
Collateral or Proceeds requested by Pledgor unless such request is made in
writing and Mercator determines, in its sole discretion, that the requested
action would not unreasonably jeopardize the value of the Collateral and
Proceeds as security for the Secured Obligations. Mercator may at any time
deliver the Collateral and Proceeds, or any part thereof, to Pledgor, and the
receipt thereof by any Pledgor shall be a complete and full acquittance for the
Collateral and Proceeds so delivered, and Mercator shall thereafter be
discharged from any liability or responsibility therefor.
8. REPRESENTATIONS AND WARRANTIES. Pledgor represents and warrants to
Mercator and the Holders that: (a) Pledgor is the owner and has possession or
control of the Collateral, including without limitation the Stock; (b) Pledgor
has the right to pledge the Collateral and Proceeds; (c) all Collateral and
Proceeds are genuine, free from liens, adverse claims, setoffs, default,
prepayment, defenses and conditions precedent of any kind or character, except
the lien created hereby; and (d) all statements contained herein and, where
applicable, in the Collateral, are true and complete in all material respects.
9. COVENANTS OF PLEDGOR.
(a) Pledgor agrees in general: (i) to indemnify Mercator against all
losses, claims, demands, liabilities and expenses of every kind arising from the
security interest in the Collateral and Proceeds granted herein, but excluding
any such losses, claims, demands, liabilities and expenses as may be
attributable solely to Mercator's gross negligence or willful misconduct; (ii)
to pay all costs and expenses, including without limitation reasonable
attorneys' fees, incurred by Mercator in the perfection and preservation of the
Collateral or Mercator's interest therein and/or the realization, enforcement
and exercise of Mercator's rights, powers and remedies hereunder; (iii) to
permit Mercator to exercise its powers; and (iv) to execute and deliver such
documents as Mercator reasonably deems necessary to create, perfect and continue
the security interests contemplated hereby.
(b) Pledgor agrees with regard to the Collateral and Proceeds, unless
Mercator agrees otherwise in writing: (i) not to permit any lien on the
Collateral or Proceeds, except in favor of Mercator; (ii) not to sell,
hypothecate or otherwise dispose of, nor permit the transfer by operation of law
of, any of the Collateral or Proceeds or any interest therein; (iii) to keep
complete and accurate records regarding all Collateral and Proceeds, and to
permit Mercator to inspect the same and make copies thereof at any reasonable
time; (iv) after the occurrence and during the continuance of any Event of
Default, if requested by Mercator, to receive and use reasonable diligence to
collect Proceeds, in trust and as the property of Mercator, and to immediately
endorse as appropriate and deliver such Proceeds to Mercator daily in the exact
form in which they are received together with a collection report in form
satisfactory to Mercator; (v) not to commingle Collateral or Proceeds, or
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collections thereunder, with other property; (vi) after the occurrence and
during the continuance of any Event of Default, in the event Mercator elects to
receive payments of Proceeds hereunder, to pay all expenses incurred by Mercator
in connection therewith, including without limitation expenses of accounting,
correspondence, collection efforts, filing, recording, record keeping and
expenses incidental thereto; (vii) to provide any service and do any other acts
which may be reasonably necessary to keep all Collateral and Proceeds free and
clear of all defenses, rights of offset and counterclaims; and (viii) if the
Collateral or Proceeds consists of securities and so long as no Event of Default
exists, to vote said securities and to give consents, waivers and ratifications
with respect thereto, provided that no vote shall be cast or consent, waiver or
ratification given or action taken which would impair Mercator's interests in
the Collateral and Proceeds or be inconsistent with or violate any provisions of
this Pledge Agreement.
10. POWERS OF MERCATOR. Pledgor appoints Mercator Pledgor's true
attorney-in-fact to perform any of the following powers, which are coupled with
an interest, are irrevocable until termination of this Pledge Agreement and may
be exercised from time to time by Mercator's agents, or any of them, whether or
not Pledgor is in default (unless otherwise provided below): (a) to perform any
obligation of Pledgor hereunder in Pledgor's name or otherwise which Pledgor has
failed to perform after reasonable notice or after the occurrence and during the
continuance of an Event of Default; (b) to notify any person or entity obligated
on any security, instrument or other document subject to this Pledge Agreement
of Mercator's rights hereunder; (c) upon the occurrence and during the
continuance of any Event of Default, to enter into any extension,
reorganization, deposit, merger or consolidation agreement, or any other
agreement relating to or affecting the Collateral or Proceeds, and in connection
therewith to deposit or surrender control of the Collateral and Proceeds; (d) to
accept other property from Pledgor or from any other person or entity in
exchange for the Collateral and Proceeds, and to do and perform such acts and
things as Mercator may deem proper, with any money or property received in
exchange for the Collateral or Proceeds, at Mercator's option, to be applied to
the Secured Obligations or held by Mercator under this Pledge Agreement; (e)
after the occurrence and during the continuance of any Event of Default, to make
any compromise or settlement Mercator deems desirable or proper in respect of
the Collateral and Proceeds; (f) to process and preserve the Collateral and
Proceeds; (g) after the occurrence and during the continuance of any Event of
Default, to exercise all rights, powers and remedies which Pledgor would have,
but for this Pledge Agreement, with respect to all Collateral and Proceeds
subject hereto; and (h) to do all acts and things, and execute all documents in
the name of Pledgor or otherwise, as Mercator reasonably deems necessary, proper
or convenient in connection with the preservation, perfection or enforcement of
its rights hereunder. The foregoing shall include, without limitation, the right
of Mercator or its nominee to exchange, at its discretion, any and all
Collateral and/or Proceeds upon the merger, consolidation, reorganization,
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recapitalization or other readjustment of the issuer thereof, or upon the
exercise by the issuer thereof or Mercator of any right, privilege or option
pertaining to any shares of the Collateral and/or Proceeds, and in connection
therewith, the right to deposit and deliver any and all of the Collateral and/or
Proceeds with any committee, depository, transfer agent, registrar or other
designated agency upon such terms and conditions as Mercator may determine. All
of the foregoing rights, privileges or options may be exercised without
liability on the part of Mercator or its nominee except to account for property
actually received. Mercator shall have no duty to exercise any of the foregoing
or any other rights, privileges or options with respect to the Collateral or
Proceeds, and shall not be responsible for any failure to do so or delay in so
doing.
11. PAYMENT OF TAXES, CHARGES, LIENS AND ASSESSMENTS. Pledgor agrees to
pay, prior to delinquency, any and all taxes, charges, liens and assessments
against the Collateral and Proceeds, and upon the failure of Pledgor to do so,
Mercator at its option may pay any of them and shall be the sole judge of the
legality or validity thereof and the amount necessary to discharge the same. Any
such payments made by Mercator shall be obligations of Pledgor to Mercator, due
and payable immediately upon demand, together with interest at the rate
applicable to the Loan, as that term is defined in the Guaranty, and shall be
secured by the Collateral and Proceeds, subject to all of the terms and
conditions of this Pledge Agreement.
12. EVENTS OF DEFAULT. The occurrence of any of the following shall
constitute an "EVENT OF DEFAULT" under this Pledge Agreement: (a) any default
(subject to any grace periods applicable thereto) in the payment or performance
of any obligation, or any defined event of default, under the Guaranty or any
other Secured Obligation; (b) any representation or warranty made by Pledgor
herein shall prove to be incorrect, false or misleading in any material respect
when made; (c) Pledgor shall fail to observe or perform any obligation or
agreement contained herein after thirty (30) days' written notice of such
failure; or (d) any attachment or like levy is made against any property of
Pledgor which is not discharged within thirty (30) days.
13. REMEDIES.
(a) Upon the occurrence of any Event of Default, Mercator shall have
the right to declare immediately due and payable all or any Secured Obligations.
Mercator shall have all other rights, powers, privileges and remedies granted to
a secured party upon default under the California Uniform Commercial Code or
otherwise provided by law, including without limitation, the right to contact
all persons or entities obligated to Pledgor on any Collateral or Proceeds and
to instruct such persons or entities to deliver all Collateral and/or Proceeds
directly to Mercator. All of Mercator's rights, powers, privileges and remedies
shall be cumulative. No delay, failure or discontinuance by Mercator in
exercising any right, power, privilege or remedy hereunder shall affect or
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operate as a waiver of such right, power, privilege or remedy; nor shall any
single or partial exercise of any such right, power, privilege or remedy
preclude, waive or otherwise affect any other or further exercise thereof or the
exercise of any other right, power, privilege or remedy. Any waiver, permit,
consent or approval of any kind by Mercator of any default hereunder, or any
such waiver of any provisions or conditions hereof, must be in writing and shall
be effective only to the extent set forth in writing. It is agreed that public
or private sales, for cash or on credit, to a wholesaler or retailer or investor
or user of property of the types subject to this Pledge Agreement, or public
auction, are all commercially reasonable since differences in the sales prices
generally realized in the different kinds of sales are ordinarily offset by the
differences in the costs and credit risks of such sales. Pledgor shall have no
right to redeem the Collateral after any such sale or assignment. At any such
sale or auction, Mercator or any Holder may bid for, and become the purchaser
of, the whole or any part of the Collateral offered for sale. While an Event of
Default exists: (i) Pledgor will not dispose of any of the Collateral or
Proceeds except on terms approved by Mercator; (ii) Mercator may appropriate the
Collateral and apply all Proceeds toward repayment of the Secured Obligations in
such order of application as Mercator may from time to time elect; and (iii) at
Mercator's request, Pledgor will assemble and deliver all Collateral and
Proceeds, and books and records pertaining thereto, to Mercator at a reasonably
convenient place designated by Mercator. For any Collateral or Proceeds
consisting of securities, Mercator shall have no obligation to delay a sale of
any portion thereof for the period of time necessary to permit the issuer
thereof to register such securities for public sale under any applicable state
or federal law, even if the issuer thereof would agree to do so.
(b) Pledgor recognizes that, by reason of certain prohibitions
contained in the Securities Act of 1933, as from time to time amended (the
"SECURITIES ACT"), and applicable state securities laws, Mercator may be
compelled, with respect to any sale of all or any part of the Collateral
conducted without prior registration or qualification of such Collateral under
the Securities Act and/or such state securities laws, to limit purchasers to
those who will agree, among other things, to acquire the Collateral for their
own account, for investment and not with a view to the distribution or resale
thereof. Pledgor acknowledges that any such private sales may be at prices and
on terms less favorable than those obtainable through a public sale without such
restrictions and, notwithstanding such circumstances, Pledgor agrees that any
such private sale shall be deemed to have been made in a commercially reasonable
manner and that Mercator shall have no obligation to engage in a public sale and
no obligation to delay the sale of any Collateral for the period of time
necessary to permit the issuer thereof to register it for a form of public sale
requiring registration under the Securities Act or under applicable state
securities laws, even if such issuer would, or should, agree to so register.
14. DISPOSITION OF COLLATERAL AND PROCEEDS. Upon the transfer of all or any
part of the Secured Obligations, Mercator may transfer all or any part of the
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Collateral or Proceeds and shall be fully discharged thereafter from all
liability and responsibility with respect to any of the foregoing so
transferred, and the transferee shall be vested with all rights and powers of
Mercator hereunder with respect to any of the foregoing so transferred; but with
respect to any Collateral or Proceeds not so transferred, Mercator shall retain
all rights, powers, privileges and remedies herein given. Mercator may apply any
proceeds of any disposition of any of the Collateral or Proceeds, or any part
thereof, to the payment of expenses incurred by Mercator in connection with the
foregoing, including without limitation reasonable attorneys' fees, and Mercator
may apply the balance of such proceeds toward the payment of the Secured
Obligations in such order of application as Mercator may from time to time
elect. Once all Secured Obligations are paid, any and all excess Collateral or
Proceeds shall be returned to Pledgor.
15. STATUTE OF LIMITATIONS. Until this Pledge Agreement terminates, the
power of sale and all other rights, powers, privileges and remedies granted to
Mercator hereunder shall continue to exist and may be exercised by Mercator at
any time and from time to time irrespective of the fact that the Secured
Obligations or any part thereof may have become barred by any statute of
limitations, or that the personal liability of Pledgor may have ceased, unless
such liability shall have ceased due to the payment in full of all Secured
Obligations.
16. MISCELLANEOUS. (a) Pledgor waives any right (i) to require Mercator or
any Holder to make any presentment or demand, or give any notice of nonpayment
or nonperformance, protest, notice of protest or notice of dishonor hereunder,
(ii) to direct the application of payments or security for any Secured
Obligations, or (iii) to require proceedings against others or to require
exhaustion of security; and (b) Pledgor hereby consents to extensions,
forbearances or alterations of the terms of the Secured Obligations, the release
or substitution of security, and the release of any guarantors. Until this
Pledge Agreement terminates, Pledgor shall have no right of subrogation or
contribution, and Pledgor hereby waives any benefit of or right to participate
in any of the Collateral or Proceeds or any other security now or hereafter held
by Mercator or any Holder.
17. NOTICES. All notices, requests and demands required under this Pledge
Agreement must be in writing, addressed to the appropriate party at the address
specified for such party in the Guaranty or to such other address as such party
may designate by written notice to the other party, and shall be deemed to have
been given or made as follows: (a) if personally delivered, upon delivery; (b)
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 and postage prepaid; and (c) if sent by
telecopy, upon receipt.
18. COSTS, EXPENSES AND ATTORNEYS' FEES. Pledgor shall pay to Mercator or
any Holder within ten (10) days after demand the full amount of all payments,
advances, charges, costs and expenses, including without limitation reasonable
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attorneys' fees, expended or incurred by Mercator or such Holder in exercising
any right, power, privilege or remedy conferred by this Pledge Agreement or in
the enforcement thereof, whether incurred at the trial or appellate level, in an
arbitration proceeding or otherwise, and including any of the foregoing incurred
in connection with any bankruptcy proceeding (including without limitation, any
adversary proceeding, contested matter or motion brought by Mercator, any Holder
or any other person or entity) relating to Pledgor, either Borrower or any other
related entity or in any way affecting any of the Collateral or Mercator's
ability to exercise any of its rights or remedies with respect thereto. All of
the foregoing shall be paid by Pledgor with interest from the date of demand
until paid in full at a rate per annum equal to the rate of interest applicable
to the Loan, as that term is defined in the Guaranty.
19. SUCCESSORS; ASSIGNS; AMENDMENT. This Pledge Agreement shall be binding
upon and inure to the benefit of the heirs, executors, administrators, legal
representatives, successors and assigns of the parties, and may be amended or
modified only in a writing signed by Mercator and Pledgor. Each Lender is a
third party beneficiary of this Pledge Agreement.
20. SEVERABILITY OF PROVISIONS. If any provision of this Pledge Agreement
shall be held to be prohibited by or invalid under applicable law, such
provision shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or any
remaining provisions of this Pledge Agreement.
21. GOVERNING LAW. This Pledge Agreement shall be governed by and construed
in accordance with the laws of the State of California.
22. RELEASE OF STOCK COLLATERAL. Upon the effective date of the
Registration Statement, Agent shall only retain sufficient Stock Collateral to
maintain a 5 to 1 ratio of the dollar value of the unconverted Debenture
("REMAINING COLLATERAL"). The Remaining Collateral will be reviewed every thirty
(30) days and adjusted as needed until such time as the terms of the Debenture
are satisfied.
IN WITNESS WHEREOF, this Pledge Agreement has been duly executed as of
February 11, 2003.
"PLEDGOR"
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/s/ Xxxxx X. Xxxxxx
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Signature of Pledgor
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Xxxxx X. Xxxxxx
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Printed Name of Pledgor
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SCHEDULE 1
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DEBENTURES
The Debentures, as defined in the Pledge Agreement to which this
Schedule 1 is attached, are the 6 1/2% Secured Convertible Debentures issued
jointly and severally by MediaBus and Presidion as of February 11, 2003, to the
following purchasers in the following original principal amounts:
Original
Purchaser Principal Amount
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Mercator Focus Fund, L.P. $1,560,000
Mercator Momentum Fund, L.P. $240,000
Mercator Momentum Fund III, L.P. $200,000
EXHIBIT A
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STOCK POWER
FOR VALUE RECEIVED, the undersigned does hereby sell, assign and
transfer unto Mercator Advisory Group, L.L.C. ("TRANSFEREE"), Seven Million
Eight Hundred Eighty One Thousand Seven Hundred Forty Eight (7,881,749) shares
of capital stock of MediaBus Networks, Inc., a Florida corporation (the
"Company"), standing in the name of the undersigned on the books of said Company
and represented by Certificate No(s). _____________, herewith and does hereby
irrevocably constitute and appoint Transferee as the undersigned's true and
lawful attorney to transfer said stock on the books of the Company with full
power of substitution in the premises.
Dated:_________________________________ ________________________________
Signature of Pledgor
________________________________
Printed Name of Pledgor
In the presence of:
________________________________________
Witness:
Medallion Signature Guarantee:
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