Exhibit 4.4
MEMBERSHIP INTEREST PLEDGE
AGREEMENT
THIS MEMBERSHIP INTEREST PLEDGE
AGREEMENT, dated as of October 29, 2008, is executed and delivered
by FNDS3000 CORP., a Delaware corporation (the “
Pledgor ”), in favor of SHERINGTON HOLDINGS, LLC, a
Georgia limited liability company (the “ Secured Party
”).
W I T N E S
S E T H :
WHEREAS, pursuant to a certain Note
Purchase Agreement dated as of the date hereof, among the Pledgor,
Atlas Merchant Services, LLC, a Nevada limited liability company
(the “ Company ”), and the Secured Party, (as
the same may be amended, restated, modified or supplemented and in
effect from time to time, the “ Note Agreement
”), the Secured Party has agreed, subject to the satisfaction
of certain conditions precedent, to purchase that certain Secured
Convertible Promissory Note, issued by the Debtor and the Company,
jointly and severally, in the original principal amount of $320,000
(the “ Convertible Note ”); and
WHEREAS, Pledgor is the owner of all
of the membership interests of the Company; and
WHEREAS, it is a condition precedent
to the Secured Party’s purchase of such Convertible Note and
other financial accommodations under the Note Agreement that the
Debtor shall have granted the security interests contemplated by
this Agreement in order to secure the payment and performance of
the Obligations;
NOW, THEREFORE, in consideration of
the premises and the covenants hereinafter contained, for other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, and to induce (i) the Secured
Party to purchase the Convertible Note, it is agreed as
follows:
1. Definitions . Unless
otherwise defined herein, the following shall have the following
respective meanings (such meanings being equally applicable to both
the singular and plural form of the terms defined):
“ Act ” shall
mean the Securities Act of 1933, as amended, and the regulations
promulgated from time to time thereunder.
“ Agreement ”
shall mean this Membership Interest Pledge Agreement, including all
amendments, modifications and supplements and any exhibits or
schedules to any of the foregoing, and shall refer to the Agreement
as the same may be in effect at the time such reference becomes
operative.
“ Bankruptcy Code
” shall mean Title 11, United States Code, as amended from
time to time, and any successor statute thereto.
Membership Interest Pledge Agreement
“ Pledged Collateral
” shall have the meaning assigned to such term in
Section 2 hereof.
All other capitalized terms
contained herein and not otherwise defined herein shall have the
meanings ascribed to such terms in the Note Agreement.
2. Pledge . Pledgor hereby
pledges, conveys, hypothecates, mortgages, assigns, sets over,
delivers and grants to the Secured Party a security interest in all
of the following (collectively, the “ Pledged
Collateral ”):
2.1 all membership interests of the
Company from time to time acquired by Pledgor in any manner (which
interests shall be deemed to constitute the “ Pledged
Interests ”), and the certificates, if any, representing
such additional interests, and all dividends, distributions, cash,
instruments, investment property and other property or proceeds
from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such
interests;
2.2 all rights to receive cash and
other distributions of assets from the Company; and
2.3 all proceeds of any of the
foregoing.
3. Security for Obligations .
This Agreement secures, and the Pledged Collateral is security for,
the payment and performance of all of the Obligations.
4. Delivery of Pledged
Collateral . All certificates, if any, representing or
evidencing the Pledged Interests shall be delivered to and held by
or on behalf of the Secured Party pursuant hereto and shall be
accompanied by duly executed instruments of transfer or assignment
in blank, all in form and substance satisfactory to the Secured
Party. The Secured Party shall have the right, as its determines to
be necessary or advisable in its discretion in connection with the
exercise of its remedies under Section 8 hereof, and
without notice to the Pledgor, at any time after the occurrence of
an Event of Default, to transfer to or to register in the name of
the Secured Party or its nominees, subject to the terms of this
Agreement, any or all of the Pledged Interests. In addition, the
Secured Party shall have the right at any time to exchange
certificates or instruments representing or evidencing Pledged
Interests for certificates or instruments of smaller or larger
denominations.
5. Representations and
Warranties . The Pledgor hereby represents and warrants to the
Secured Party that:
5.1 The Pledgor is, and will be, the
sole holder of record and the sole beneficial owner of the Pledged
Collateral, free and clear of any lien, pledge, security interest
or other encumbrance thereon or affecting the title thereto except
for the pledge and security interest created by this
Agreement.
5.2 None of the Pledged Collateral
is evidenced by certificates.
5.3 The Pledgor has the right and
requisite authority to pledge, assign, transfer, deliver, deposit
and set over the Pledged Collateral to the Secured Party as
provided herein.
Membership Interest Pledge Agreement
5.4 None of the Pledged Interests
has been issued or transferred in violation of the securities
registration, securities disclosure or similar laws of any
jurisdiction to which such issuance or transfer may be subject. The
Pledgor’s execution and delivery of this Agreement and the
pledge of the Pledged Collateral hereunder do not, directly or
indirectly, violate or result in a violation of any such
laws.
5.5 No consent, approval,
authorization or other order of any Person and no consent,
authorization, approval, or other action by, and no notice to or
filing with, any governmental departments, commissions, boards,
bureaus, agencies or other instrumentalities, domestic or foreign,
is required to be made or obtained by the Pledgor either
(a) for the pledge of the Pledged Collateral pursuant to this
Agreement or for the execution, delivery or performance of this
Agreement by the Pledgor or (b) for the exercise by the
Secured Party 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 such disposition by laws affecting the offering and sale of
securities generally.
5.6 The execution and delivery of
this Agreement, together with the delivery of certificates, if any,
evidencing the Pledged Interests and the filing of appropriate
financing statements executed and delivered by the Pledgor to the
Secured Party in connection herewith, will create a valid first
priority perfected security interest in the Pledged Collateral and
the proceeds thereof, securing the payment of the Obligations,
subject to no other lien, pledge, security interest or other
encumbrance.
5.7 This Agreement has been duly
authorized, executed and delivered by the Pledgor and constitutes a
legal, valid and binding obligation of the Pledgor enforceable in
accordance with its terms, except as enforceability may be limited
by bankruptcy, insolvency, or other similar laws affecting the
rights of creditors generally or by the application of general
principles of equity.
The representations and warranties
set forth in this Section 5 shall survive the execution
and delivery of this Agreement.
6. Covenants . The Pledgor
covenants and agrees that until the payment in full of the
Obligations:
6.1 Without the prior written
consent of the Secured Party, the Pledgor will not sell, assign,
transfer, pledge, or otherwise encumber any of its rights in or to
the Pledged Collateral pledged or any unpaid dividends or other
distributions or payments with respect thereto or grant or suffer
to exist any lien, pledge, security interest or other encumbrance
thereon. Pledgor will not permit any of the Pledged Interests to be
certificated.
6.2 The Pledgor will, at its
expense, promptly execute, acknowledge and deliver all such
instruments and take all such action as the Secured Party from time
to time may reasonably request in order to ensure to the Secured
Party the benefits of the pledge and security interest in and to
the Pledged Collateral intended to be created by this Agreement,
including the
Membership Interest Pledge Agreement
filing of any necessary Uniform Commercial Code
financing statements, which may be filed by the Secured Party, with
or without the signature of the Pledgor, and will cooperate with
the Secured Party, at Pledgor’s expense, in obtaining all
necessary approvals and making all necessary filings under federal
or state law in connection with such security interest or any sale
or transfer of the Pledged Collateral. Pledgor hereby authorizes
the Secured Party to file such Uniform Commercial Code financing
statements, describing the Pledged Collateral, in the records of
such jurisdictions as such Secured Party may determine to be
necessary or desirable to perfect and preserve its security
interest in and to the Pledged Collateral.
6.3 Pledgor has and will defend the
title to the Pledged Collateral and the security interest of the
Secured Party thereon against the claim of any Person and will
maintain and preserve such security interest.
6.4 Pledgor will, upon obtaining any
additional membership interests of the Company which are not
already Pledged Collateral, promptly (and in any event within three
(3) Business Days) deliver to the Secured Party a Pledge
Amendment, duly executed by Pledgor, in substantially the form of
Exhibit B hereto (a “ Pledge Amendment
”), in respect of the additional Pledged Interests to confirm
the pledge of such additional Pledged Interests pursuant to this
Agreement; provided, however, that the failure of Pledgor to
execute and deliver any such Pledge Amendment shall not prevent
such additional Pledged Interests from being subject to the pledge
and security interest created by this Agreement. Pledgor hereby
authorizes the Secured Party to attach each Pledge Amendment to
this Agreement and agrees that all Pledged Interests listed on any
Pledge Amendment delivered to the Secured Party shall for all
purposes hereunder be considered Pledged Collateral.
6.5 Pledgor will pay all taxes,
assessments and charges levied, assessed or imposed upon the
Pledged Collateral owned by it before the same become delinquent or
become liens upon any of the Pledged Collateral (or, in no event,
more than twenty (20) days following the date on which such
delinquency or lien becomes effective) except where such taxes,
assessments and charges may be contested in good faith by
appropriate proceedings.
7. Distributions;
Etc.
7.1 Assignment of Right of
Pledgor to Receive Distributions . For so long as no Event of
Default exists hereunder, Pledgor shall have the right to receive
cash distributions declared and paid with respect to the Pledged
Collateral. Any and all liquidating distributions, other
distributions in property, return of capital or other distributions
made on or in respect of Pledged Collateral, whether resulting from
a subdivision, combination or reclassification of the outstanding
membership interest of the Company or received in exchange for
Pledged Collateral or any part thereof or as a result of any
merger, consolidation, acquisition or other exchange of assets to
which the Company may be a party or otherwise, shall be and become
part of the Pledged Collateral pledged hereunder and, if received
by Pledgor, shall be received in trust for benefit of the Secured
Party, be segregated from the other property and funds of Pledgor,
and shall forthwith be delivered to the Secured Party to be held
subject to the terms of this Agreement.
Membership Interest Pledge Agreement
7.2 Holding Pledged Collateral;
Exchanges . The Secured Party may hold any of the Pledged
Collateral, endorsed or assigned in blank, and may deliver any of
the Pledged Collateral to the issuer thereof for the purpose of
making denominational exchanges or registrations or transfers or
for such other reasonable purpose in furtherance of this Agreement
as the Secured Party may deem desirable. The Secured Party shall
have the right, if necessary to perfect its security interest, to
transfer to or register in the name of the Secured Party or any of
its nominees, any or all of the Pledged Collateral; provided
that notwithstanding the foregoing, until any transfer of
beneficial ownership with respect to the Pledged Collateral
pursuant to any exercise of remedies under Section 8
hereof, Pledgor shall continue to be the beneficial owner of the
Pledged Collateral. In addition, the Secured Party shall have the
right at any time to exchange certificates or instruments
representing or evidencing Pledged Collateral for certificates or
instruments of smaller or larger denominations.
7.3 Termination of
Pledgor’s Right to Receive Distributions . During the
existence of an Event of Default, all rights of Pledgor to receive
any cash distributions pursuant to Section 7.1 hereof
shall cease, and all such rights shall thereupon become vested in
the Secured Party, and the Secured Party shall have the sole and
exclusive right to receive and retain the distributions which
Pledgor would otherwise be authorized to receive and retain
pursuant to Section 7.1 hereof. In such event, Pledgor
shall pay over to the Secured Party any distributions received by
it with respect to the Pledged Collateral and any and all money and
other property paid over to or received by the Secured Party
pursuant to the provisions of this Section 7.3 shall be
retained by the Secured Party as Pledged Collateral hereunder
and/or shall be applied to the repayment of the Obligations in
accordance with the provisions hereof. If, notwithstanding the
foregoing, Pledgor receives any cash distributions in respect of
the Pledged Collateral following the occurrence and during the
continuance of any Event of Default, Pledgor agrees that such
distributions shall have been received and held in trust and shall
be segregated from the other assets of Pledgor, and Pledgor shall
pay over to the Secured Party, promptly following receipt thereof,
all of such cash distributions so received or which it may
otherwise recover, and any and all money and other property paid
over to or received by the Secured Party shall be retained by the
Secured Party as Pledged Collateral hereunder and/or shall be
applied to the repayment of the Obligations in accordance with the
provisions hereof.
8. Remedies . Upon the
occurrence and during the continuation of an Event of Default, the
Secured Party shall have the following rights and
remedies:
8.1 All of the rights and remedies
of a secured party under the Uniform Commercial Code of the State
where such rights and remedies are asserted, or under other
applicable law all of which rights and remedies shall be
cumulative, and none of which shall be exclusive, to the extent
permitted by law, in addition to any other rights and remedies
contained in this Agreement.
8.2 The Secured Party may, without
demand and without advertisement, notice or legal process of any
kind (except as may be required by law), all of which Pledgor
waives, at any time or times (a) apply any cash distributions
received by the Secured Party pursuant to Section 7.3 hereof to the
Obligations, and (b) if following such application there remains
outstanding any Obligations, sell the remaining Pledged Collateral,
or any part thereof, at public or private sale or at
Membership Interest Pledge Agreement
any broker’s board or on any securities
exchange, for cash, upon credit or for future delivery as the
Secured Party shall deem appropriate. The Secured Party shall be
authorized at any such sale (if, on the advice of counsel, it deems
it advisable to do so) to restrict the prospective bidders or
purchasers to Persons who will represent and agree that they are
purchasing the Pledged Collateral for its own account for
investment and not with a view to the distribution or resale
thereof, and upon consummation of any such sale the Secured Party
shall have the right to assign, transfer and deliver to the
purchaser or purchasers thereof the Pledged Collateral so sold.
Each such purchaser at any such sale shall hold the property sold
absolutely free from any claim or right on the part of Pledgor, and
Pledgor hereby waives (to the extent permitted by law) all rights
of redemption, stay and/or appraisal which Pledgor now has or may
have at any time in the future under any rule of law or statute now
existing or hereafter enacted. The proceeds realized from the sale
of any Pledged Collateral shall be applied first to the reasonable
costs, expenses and attorneys’ fees and expenses incurred by
the Secured Party for collection and for acquisition, completion,
protection, removal, sale and delivery of the Pledged Collateral;
and then to the remaining Obligations in such manner as the Secured
Party shall determine. If any deficiency shall arise, Pledgor shall
be liable therefor. Notwithstanding any provision in this Agreement
to the contrary, the Secured Party waives any right to compel
Pledgor to accept or be deemed to have accepted any proposal to
accept Collateral in satisfaction of all or part of the Obligations
under the Uniform Commercial Code.
8.3 In addition thereto, Pledgor
further agrees that in the event that notice is necessary under
applicable law, written notice mailed to Pledgor in the manner
specified in Section 17 of this Agreement ten
(10) days prior to the date of the disposition of the Pledged
Collateral subject to the security interest created herein at any
such public sale or sale at any broker’s board or on any such
securities exchange, or prior to the date after which private sale
or any other disposition of said Pledged Collateral will be made,
shall constitute commercially reasonable and fair
notice.
8.4 If, at any time when the Secured
Party shall determine to exercise its right to sell the whole or
any part of the Pledged Collateral hereunder, such Pledged
Collateral or the part thereof to be sold shall not, for any reason
whatsoever, be effectively registered under the Act, the Secured
Party may, in its discretion (subject only to applicable
requirements of law), sell such Pledged Collateral or part thereof
by private sale in such manner and under such circumstances as the
Secured Party may deem necessary or advisable, but subject to the
other requirements of this Section 8 , and shall not be
required to effect such registration or to cause the same to be
effected. Without limiting the generality of the foregoing, in any
such event the Secured Party in its discretion (a) may, in
accordance with applicable securities laws, proceed to make such
private sale notwithstanding that a registration statement for the
purpose of registering such Pledged Collateral or part thereof
could be or shall have been filed under said Act (or similar
statute), (b) may approach and negotiate with a single
possible purchaser to effect such sale, and (c) may restrict
such sale to a purchaser who will represent and agree that such
purchaser is purchasing for its own account, for investment and not
with a view to the distribution or sale of such Pledged Collateral
or part thereof. In addition to a private sale as provided above in
this Section 8 , if any of the Pledged Collateral shall
not be freely distributable to the public without registration
under the Act (or similar statute) at the time of any proposed sale
pursuant to this Section
