Exhibit 10.5
BLOCKED ACCOUNT CONTROL
AGREEMENT
(“Shifting
Control”)
AGREEMENT dated as of May 29,
2009, by and among WEBMEDIABRANDS INC. (“Company”),
ALAN M. MECKLER (“Secured Party”) and Depositary Bank
(“Depositary”).
The parties hereto refer to Account
No. XXXXXXX in the name of Company maintained at Depositary
(the “Account”) and hereby agree as follows:
1. Company and Secured Party notify
Depositary that by separate agreement Company has granted Secured
Party a security interest in the Account and all funds on deposit
from time to time therein. Depositary acknowledges being so
notified.
2. Company, Secured Party and
Depositary agree that the Depositary will comply with instructions
originated by the Secured Party directing disposition of the funds
in the Account without further consent by the Company.
Notwithstanding the foregoing, prior to the Effective Time (as
defined below) Depositary shall honor all withdrawal, payment,
transfer or other fund disposition or other instructions which the
Company is entitled to give under the Account Documentation (as
hereinafter defined) (collectively, “instructions”)
received from the Company concerning the Account. On and after the
Effective Time (and without Company’s consent), Depositary
shall honor all instructions received from Secured Party (but not
those from Company) concerning the Account and Company shall have
no right or ability to access or withdraw or transfer funds from
the Account.
For the purposes hereof, the
“Effective Time” shall be the opening of business on
the second business day next succeeding the business day on
which a notice purporting to be signed by Secured Party in
substantially the same form as Exhibit A , attached hereto,
with a copy of this Agreement attached thereto (a “
Shifting Control Notice ”), is actually received by
the individual employee of Depositary to whom the notice is
required hereunder to be addressed; provided, however, that if any
such notice is so received after 12:00 noon, New York City time, on
any business day, the “ Effective Time ” shall
be the opening of business on the third business day next
succeeding the business day on which such receipt occurs; and,
provided further, that a “ business day ” is any
day other than a Saturday, Sunday or other day on which Depositary
is or is authorized or required by law to be closed.
Notwithstanding the foregoing:
(i) all transactions involving or resulting in a transaction
involving the Account duly commenced by Depositary or any affiliate
prior to the Effective Time and so consummated or processed
thereafter shall be deemed not to constitute a violation of this
Agreement; and (ii) Depositary and/or any affiliate may (at
its discretion and without any obligation to do so) (x) cease
honoring Company’s instructions and/or commence honoring
solely Secured Party’s instructions concerning the Account at
any time or from time to time after it becomes aware that Secured
Party has sent to it a Shifting Control Notice but prior to the
Effective Time therefor (including without limitation halting,
reversing or redirecting any transaction referred to in clause
(i) above), or (y) deem a Shifting Control Notice to be
received by it for purposes of the foregoing paragraph prior to the
specified individual’s actual receipt if otherwise actually
received by Depositary (or if such Shifting Control Notice contains
minor mistakes or other irregularities but otherwise substantially
complies with the form attached hereto as Exhibit A or does
not attach an appropriate copy of this Agreement), with no
liability whatsoever to Company or any other party for doing
so.
3. This Agreement supplements,
rather than replaces, Depositary’s deposit account agreement,
terms and conditions and other standard documentation in effect
from time to time with respect to the Account or services provided
in connection with the Account (the “ Account
Documentation ”), which Account Documentation will
continue to apply to the Account and such services, and the
respective rights, powers, duties, obligations, liabilities and
responsibilities of the parties thereto and hereto, to the extent
not expressly conflicting with the provisions of this Agreement
(however, in the event of any such conflict, the
provisions
1
of this Agreement shall control). Prior to
issuing any instructions on or after the Effective Time, Secured
Party shall provide Depositary with such documentation as
Depositary may reasonably request to establish the identity and
authority of the individuals issuing instructions on behalf of
Secured Party. Secured Party may request the Depositary to provide
other services (such as automatic daily transfers) with respect to
the Account on or after the Effective Time; however, if such
services are not authorized or otherwise covered under the Account
Documentation, Depositary’s decision to provide any such
services shall be made in its sole discretion (including without
limitation being subject to Company and/or Secured Party executing
such Account Documentation or other documentation as Depositary may
require in connection therewith).
4. Depositary agrees not to exercise
or claim any right of offset, banker’s lien or other like
right against the Account for so long as this Agreement is in
effect except with respect to (i) returned or charged-back
items, reversals or cancellations of payment orders and other
electronic fund transfers or other corrections or adjustments to
the Account or transactions therein, (ii) overdrafts in the
Account, (iii) commercial card obligations (incurred prior to
the Effective Time) owing to the Depositary or its affiliate or
(iv) Depositary’s charges, fees and expenses with
respect to the Account or the services provided
hereunder.
5. Notwithstanding anything to the
contrary in this Agreement: (i) Depositary shall have only the
duties and responsibilities with respect to the matters
s
