Exhibit 4.7
STOCK PLEDGE
AGREEMENT
STOCK PLEDGE AGREEMENT (this "Agreement"), dated
July 15, 2008 made by Lou Wood, Pamela Jo Ross Wood, Louis Alfred
Wood III and Nancy Seale in favor of La Jolla Cove Investors, Inc.,
a California corporation (the "Pledgee"). Each of Lou
Wood, Pamela Jo Ross Wood, Louis Alfred Wood III and Nancy Seale
may be referred to herein individually as a "Pledgor," and
collectively as the "Pledgors."
W I T N E S S E T
H:
WHEREAS, pursuant to the provisions of that
certain Securities Purchase Agreement of even date herewith between
Espre Solutions, Inc. (the "Company") and the Pledgee (the
"Purchase Agreement"), the Pledgee has agreed to lend to the
Company and the Company has agreed to borrow from the Pledgee an
aggregate of $2,000,000, $250,000 of which shall be advanced in
cash as of the date of the closing of the Purchase Agreement (the
"Cash Advance") under certain terms and conditions set forth in the
Purchase Agreement and as further set forth in the Debenture (as
defined in the Purchase Agreement);
WHEREAS, pursuant to the provisions of the
Purchase Agreement, and as a condition to the obligation of the
Pledgee to lend thereunder, each Pledgor has agreed to make the
pledge contemplated by this Agreement in order to induce the
Pledgee to perform its obligations under the Purchase
Agreement;
WHEREAS, each Pledgor is a shareholder of the
Company, and as such, will derive direct and indirect benefits from
the Purchase Agreement; and
WHEREAS, all capitalized terms used but not
defined herein shall have the meanings ascribed to them in the
Purchase Agreement.
NOW, THEREFORE, in consideration of the
premises, covenants and promises contained herein and for other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby agree as
follows:
1.1
Pledge and Security Interest . Each Pledgor
hereby pledges to the Pledgee, and grants to the Pledgee a
continuing security interest in, the following (collectively, the
"Pledged Collateral"):
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An aggregate of
Six Million (6,000,000) shares of common stock (the "Pledged
Shares" or "Pledged Collateral") of the Company, in the aggregate,
owned by the Pledgors, which shall, for the term of this agreement,
be placed in the name of the Pledgee, represented by the
certificates identified in Schedule 1(a) annexed hereto
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, provided however that Pledgee
shall have no beneficial ownership interest (with beneficial
ownership calculated in accordance with Section 13(d) of the
Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder) in the Pledged Shares unless
and until an Event of Default (as defined below) has occurred and
the Pledgee has elected to exercise the rights set forth in Section
13 of this Agreement; and
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all proceeds of
any and all of the foregoing Pledged Collateral, in whatever form
(including, without limitation, proceeds that constitute property
of the types described above).
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SECTION 2. Security for
Obligations . This Agreement secures the payment and
performance of the following obligations (collectively, the
"Obligations"): all present and future indebtedness, obligations,
covenants, duties and liabilities of any kind or nature of the
Company to the Pledgee now existing or hereafter arising under or
in connection with this Agreement, the Purchase Agreement, the
Debenture, and any and all related agreements, documents and
instruments, each as now existing and as hereafter amended,
modified and supplemented (collectively, the "Transaction
Documents"), provided however, that the Obligations shall be
limited at any given time to an amount not to exceed the lesser of
(i) the Cash Advance, or (ii) that portion of the Cash Advance that
has not been converted into the Company's Common Stock under the
terms of the Debenture and remains represented by the outstanding
principal balance of the Debenture. THE PLEDGEE HEBERY
EXPRESSLY CONFIRMS AND AGREES THAT NOTWITHSTANDING THE PLEDGE OF
THE PLEDGED SHARES, THE PLEDGEE SHALL HAVE NO RECOURSE TO OR
AGAINST ANY PLEDGOR FOR ANY OF THE COMPANY'S OBLIGATIONS TO THE
PLEDGOR, OTHER THAN AS TO THE PLEDGED SHARES, AS SET FORTH HEREIN,
AND THAT NO PLEDGOR SHALL BE PERSONALLY LIABLE TO THE PLEDGEE FOR
OR ON ACCOUNT OF ANY OBLIGATION OF THE COMPANY TO THE PLEDGEE,
OTHER THAN AS TO THE PLEDGED SHARES, AS SET FORTH
HEREIN.
SECTION 3. Delivery of
Pledged Collateral . Concurrently herewith, all
certificates representing or evidencing the Pledged Shares, in
suitable form for transfer by delivery, and in the name of the
Pledgee are being deposited with and delivered to the Pledgee
represented by a stock certificate or certificates evidencing
6,000,000 shares of the Company's Common Stock (the aggregate of
all such certificates referred to herein as a "Pledged Shares
Certificate").
SECTION 4. Representations and
Warranties . Each Pledgor represents and warrants as
follows:
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The Pledged
Shares set forth opposite the Pledgor's name in Schedule 1(a)
attached hereto have been beneficially owned by such Pledgor for at
least twelve months prior to the date hereof.
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The Pledgor is
the legal, record and beneficial owner of the Pledged Collateral
represented opposite such Pledgor's name in Schedule 1(a) attached
hereto, free and clear of any lien, security interest, restriction,
option or other charge or encumbrance (each a "Lien", and
collectively, "Liens") except for the security interest created by
this Agreement.
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The Pledgor has
made necessary inquiries of the Company and believes that the
Company fully intends to fulfill and has the capability of
fulfilling Obligations to be performed by the Company in accordance
with the terms of the Transaction Documents.
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The Pledgor is
not acting, and has not agreed to act, in any plan to sell or
dispose of the Pledged Shares in a manner intended to circumvent
the registration requirements of the Securities Act of 1933, as
amended, or any applicable state law.
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The Pledgor has
been advised by counsel of the elements of a bona fide pledge for
purposes of Rule 144(d)(3)(iv) under the Securities Act of 1933, as
amended, including the relevant SEC interpretations and affirms the
pledge of shares by such Pledgor pursuant to this Pledge Agreement
will constitute a bona fide pledge of such shares for purposes of
such Rule.
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This Agreement
constitutes a legal, valid and binding obligation of such Pledgor
enforceable in accordance with its terms (except as the enforcement
thereof may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium, and similar laws, now or
hereafter in effect).
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The pledge of
the Pledged Collateral pursuant to this Agreement creates a valid
and perfected first priority security interest in the Pledged
Collateral, securing payment and performance of the
Obligations.
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No consent of
any other person or entity and no authorization, approval, or other
action by, and no notice to or filing with, any governmental
authority or regulatory body is required (i) for the pledge by the
Pledgor of the Pledged Collateral pursuant to this Agreement or for
the execution, delivery or performance of this Agreement by the
Pledgor, (ii) for the perfection or maintenance of the security
interest created hereby (including the first priority nature of
such security interest), or (iii) for the exercise by the Pledgee
of the voting or other rights provided for in this Agreement or the
remedies in respect of the Pledged Collateral pursuant to this
Agreement (except as may be required in connection with any
disposition of any portion of the Pledged Collateral by laws
affecting the offering and sale of securities
generally).
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There are no
conditions precedent to the effectiveness of this Agreement that
have not been satisfied or waived.
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The mailing
address of the Pledgor is set forth in Section 17 of this Agreement
and the Pledgor will not change its address except upon not less
than thirty (30) days' prior written notice to the
Pledgee.
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SECTION 5. Further
Assurances . Each Pledgor agrees that at any time
and from time to time, at the expense of such Pledgor, such Pledgor
shall promptly execute and deliver all further instruments and
documents, and take all further action, that may be necessary or
desirable, or that the Pledgee may reasonably request, in order to
perfect and protect any security interest granted or purported to
be granted hereby or to enable Pledgee to exercise and enforce its
rights and remedies hereunder with respect to any Pledged
Collateral. The Company and/or each Pledgor shall take
all further action that may be necessary or desirable, or that the
Pledgee may reasonably request to assist in the delivery to the
Pledgee of any legal opinion(s) necessary for the Pledgee to sell
or otherwise dispose of the Pledged Collateral upon an Event of
Default (the "Legal Opinion Assistance"). In the event
that any Pledgor and/or the Company fail to provide the Legal
Opinion Assistance, the Pledgee shall have the right to seek legal
remedy, including without limitation remedies of specific
performance and/or monetary damages, from such Pledgor and/or the
Company for the full amount of damages to the Pledgee resulting
directly or indirectly from such failure to provide the Legal
Opinion Assistance, including without limitation any damages to the
Pledgee resulting from the inability of the Pledgee to sell,
dispose of, or transfer the Pledged Collateral due to the failure
of the Company and/or such Pledgor to provide the Legal Opinion
Assistance.
SECTION 6. Voting
Rights; Dividends; Etc.
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So long
as: (i) no Event of Default shall have occurred and been
declared and (ii) the balance of the Debenture shall not have been
accelerated:
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Each Pledgor
shall be entitled to exercise or refrain from exercising any and
all voting and other consensual rights pertaining to the Pledged
Collateral or any part thereof for any purpose not inconsistent
with the terms of this Agreement;
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Each Pledgor
shall be entitled to receive and retain any and all cash dividends
and interest paid in respect of the Pledged Collateral; provided,
however, that any and all:
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dividends and
interest 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 Pledged
Collateral,
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dividends and
other distributions paid or payable in cash in respect of any
Pledged 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
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cash paid,
payable or otherwise distributed in respect of principal of, or in
redemption of, or in exchange for, any Pledged
Collateral,
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shall be, and
shall be forthwith delivered to the Pledgee to hold as Pledged
Collateral, and shall, if received by any Pledgor, be segregated
from the other property or funds of such Pledgor, and be forthwith
delivered to the Pledgee as Pledged Collateral in the same form as
so received (with any necessary endorsement or
assignment).
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After the
occurrence of any Event of Default if within twenty four hours of
delivery of written notice of such Event of Default (as hereinafter
defined) from the Pledgee the Company has not paid all outstanding
principal and accrued an unpaid interest and fees (including
penalties) owed on the Debenture and any liquidated damages
associated with such Event of Default, until the Debenture shall
have been satisfied by conversion or payment in full:
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All rights of
any and all Pledgors to exercise or refrain from exercising the
voting and other consensual rights which it would otherwise be
entitled to exercise pursuant to Section 6(a)(i) and to receive the
dividends and interest payments which it would otherwise be
authorized to receive and retain pursuant to Section 6(a)(ii) shall
ceas
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