Exhibit 10.16
GUARANTY AND PLEDGE AGREEMENT
GUARANTY AND PLEDGE AGREEMENT (this "Agreement"), dated as of December
30, 2004, among Systems Evolution Inc., an Idaho corporation (the "Company"),
the pledgors signatory hereto (collectively, the "Pledgors"), and the pledgees
signatory hereto and their respective endorsees, transferees and assigns
(collectively, the "Pledgees").
W I T N E S S E T H:
WHEREAS, pursuant to a Securities Purchase Agreement, dated the date
hereof, between Company and certain of the Pledgees (the "Purchase Agreement"),
Company has agreed to issue to certain of the Pledgees and certain of the
Pledgees have agreed to purchase from Company certain of Company's 8% Callable
Secured Convertible Notes, due two years from the date of issue (the "Notes"),
which are convertible into shares of Company's Common Stock, par value $.01 per
share (the "Common Stock"). In connection therewith, Company shall issue certain
of the Pledgees certain Common Stock purchase warrants (the "Warrants"); and
WHEREAS, pursuant to the terms of a securities purchase agreement dated
August 31, 2004 (the "August Purchase Agreement" and collectively with the
Purchase Agreement, the "Securities Purchase Agreements"), Borrower sold
convertible promissory notes to certain of the Pledgees (together with the
Notes, the "Debt Securities," all as more particularly described in Exhibit A
hereto).
WHEREAS, as a material inducement to certain of the Pledgees to enter
into the Purchase Agreement, and as a material inducement to certain of the
Pledgees to have them agree to terminate the Lock-Up Agreement that was executed
in connection with the August Purchase Agreement, the Pledgees have required and
the Pledgors have agreed (i) to unconditionally guarantee the timely and full
satisfaction of all obligations of the Company, whether matured or unmatured,
now or hereafter existing or created and becoming due and payable (the
"Obligations") to the Pledgees, their successors, endorsees, transferees or
assigns under the Securities Purchase Agreements or other transaction documents
referred to therein (collectively, the "Transaction Documents") to the extent of
the Collateral (as defined in Section 5 hereof), and (ii) to grant to the
Pledgees, their successors, endorsees, transferees or assigns a security
interest in the number of shares of Common Stock currently owned by the Pledgors
as set forth on Exhibit B hereto (collectively, the "Shares"), as collateral
security for Obligations. Terms used and not defined herein shall have the
meaning ascribed to them in the Purchase Agreement.
WHEREAS, have agreed to set forth their respective rights and
obligations with respect to the Collateral in an Agreement among Pledgees of
even date herewith.
NOW, THEREFORE, in consideration of the foregoing recitals, and the
mutual covenants contained herein, the parties hereby agree as follows:
1. Guaranty. To the extent of the Collateral, the Pledgors hereby
absolutely, unconditionally and irrevocably guarantee to the Pledgees, their
successors, endorsees, transferees and assigns the due and punctual performance
and payment of the Obligations owing to the Pledgees, their successors,
endorsees, transferees or assigns when due, all at the time and place and in the
amount and manner prescribed in, and otherwise in accordance with, the
Transaction Documents, regardless of any defense or set off counterclaim which
the Company or any other person may have or assert, and regardless of whether or
not the Pledgees or anyone on behalf of the Pledgees shall have instituted any
suit, action or proceeding or exhausted its remedies or taken any steps to
enforce any rights against the Company or any other person to compel any such
performance or observance or to collect all or part of any such amount, either
pursuant to the provisions of the Transaction Documents or at law or in equity,
and regardless of any other condition or contingency. The Pledgors shall have no
obligation whatsoever to the Pledgees beyond the Collateral pledged for the
Obligations set forth herein.
2. Waiver of Demand. The Pledgors hereby unconditionally: (i) waive any
requirement that the Pledgees, in the event of a breach in any material respect
by the Company of any of its representations or warranties in the Transaction
Documents, first make demand upon, or seek to enforce remedies against, the
Company or any other person before demanding payment of enforcement hereunder;
(ii) covenant that this Agreement will not be discharged except by complete
performance of all the Obligations to the extent of the Collateral; (iii) agree
that this Agreement shall remain in full force and effect without regard to, and
shall not be affected or impaired, without limitation, by, any invalidity,
irregularity or unenforceability in whole or in part of the Transaction
Documents or any limitation on the liability of the Company thereunder, or any
limitation on the method or terms of payment thereunder which may now or
hereafter be caused or imposed in any manner whatsoever; and (iv) waive
diligence, presentment and protest with respect to, and notice of default in the
performance or payment of any Obligation by the Company under or in connection
with the Transaction Documents.
3. Release. The obligations, covenants, agreements and duties of the
Pledgors hereunder shall not be released, affected or impaired by any assignment
or transfer, in whole or in part, of the Transaction Documents or any
Obligation, although made without notice to or the consent of the Pledgors, or
any waiver by the Pledgees, or by any other person, of the performance or
observance by the Company or the Pledgors of any of the agreements, covenants,
terms or conditions contained in the Transaction Documents, or any indulgence in
or the extension of the time or renewal thereof, or the modification or
amendment (whether material or otherwise), or the voluntary or involuntary
liquidation, sale or other disposition of all or any portion of the stock or
assets of the Company or the Pledgors, or any receivership, insolvency,
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bankruptcy, reorganization, or other similar proceedings, affecting the Company
or the Pledgors or any assets of the Company or the Pledgors, or the release of
any proper from any security for any Obligation, or the impairment of any such
property or security, or the release or discharge of the Company or the Pledgors
from the performance or observance of any agreement, covenant, term or condition
contained in or arising out of the Transaction Documents by operation of law, or
the merger or consolidation of the Company, or any other cause, whether similar
or dissimilar to the foregoing.
4. Subrogation.
(a) Unless and until complete performance of all the Obligations to the
extent of the Collateral, the Pledgors shall not be entitled to exercise any
right of subrogation to any of the rights of the Pledgees against the Company or
any collateral security or guaranty held by the Pledgees for the payment or
performance of the Obligations, nor shall the Pledgors seek any reimbursement
from the Company in respect of payments made by the Pledgors hereunder.
(b) In the event that the Pledgors shall become obligated to perform or
pay any sums hereunder, or in the event that for any reason the Company is now
or shall hereafter become indebted to the Pledgors (other than for salary or
business expenses), the amount of such sum shall at all times be subordinate as
to lien, time of payment and in all other respects, to the amounts owing to the
Pledgees under the Transaction Documents and the Pledgors shall not enforce or
receive payment thereof until all Obligations due to the Pledgees under the
Transaction Documents have been performed or paid. Nothing herein contained is
intended or shall be construed to give to the Pledgors any right of subrogation
in or under the Transaction Documents, or any right to participate in any way
therein, or in any right, title or interest in the assets of the Pledgees.
5. Security. As collateral security for the punctual payment and
performance, when due, by the Company of all the Obligations, the Pledgors
hereby pledge with, hypothecate, transfer and assign to the Pledgees all of the
Shares and all proceeds, shares and other securities received, receivable or
otherwise distributed in respect of or in exchange for the Shares, including,
without limitation, any shares and other securities into which such Shares may
be convertible or exchangeable (collectively, the "Additional Collateral" and
together with the Shares, the "Collateral"). On or prior to the date of this
Agreement, the Pledgors shall deliver to the Pledgees the certificate(s)
representing the Shares, stamped with a bank medallion guarantee, along with a
stock transfer power duly executed in blank by the Pledgors, to be held by the
Pledgees or their agent as security. Any Collateral received by the Pledgors on
or after the date hereof shall be immediately delivered to the Pledgees together
with any executed stock powers or other transfer documents requested by the
Pledgees, which request may be made at any time prior to the date when the
Obligations shall have been paid and otherwise satisfied in full.
6. Voting Power, Dividends, Etc. and other Agreements.
(a) Unless and until an Event of Default (as set forth in Section 7
hereof) has occurred, the Pledgors shall be entitled to:
(i) Exercise all voting and/or consensual powers pertaining to the
Collateral, or any part thereof, for all purposes;
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(ii) Receive and retain dividends paid with respect to the Collateral;
and
(iii) Receive the benefits of any income tax deductions available to
the Pledgors as shareholders of the Company.
(b) The Pledgors agree that they will not sell, assign, transfer,
pledge, hypothecate, encumber or otherwise dispose of the Collateral.
(c) The Pledgors and the Company jointly and severally agree to pay all
costs including all reasonable attorneys' fees and disbursements incurred by the
Pledgees in enforcing this Agreement in accordance with its terms.
7. Default and Remedies.
(a) For the purposes of this Agreement, "Event of Default" shall mean:
(i) default in or under any of the Obligations after the expiration,
without cure, of any applicable cure period;
(ii) a breach in any material respect by the Company of any of its
representations or warranties in the Transaction Documents; or
(iii) a breach in any material respect by the Pledgors of any of their
representations or warranties in this Agreement.
(b) the Pledgees shall have the following rights upon any Event of
Default:
(i) the rights and remedies provided by the Uniform Commercial Code as
adopted by the State of New York (the "UCC") (as said law may at any time be
amended);
(ii) the right to receive and retain all dividends, payments and other
distributions of any kind upon any or all of the Collateral;
(iii) the right to cause any or all of the Collateral to be transferred
to its own name or to the name of its designee and have such transfer recorded
in any place or places deemed appropriate by the Pledgees; and
(iv) the right to sell, at a public or private sale, the Collateral or
any part thereof for cash, upon credit or for future delivery, and at such price
or prices in accordance with the UCC (as such law may be amended from time to
time). Upon any such sale the Pledgees shall have the right to deliver, assign
and transfer to the purchaser thereof the Collateral so sold. The Pledgees shall
give the Pledgors not less than ten (10) days' written notice of its intention
to make any such sale. Any such sale, shall be held at such time or times during
ordinary business hours and at such place or places as the Pledgees may fix in
the notice of such sale. The Pledgees may adjourn or cancel any sale or cause
the same to be adjourned from time to time by announcement at the time and place
fixed for the sale, and such sale may be made at any time or place to which the
same may be so adjourned. In case of any sale of all or any part of the
Collateral upon terms calling for payments in the future, any Collateral so sold
may be retained by the Pledgees until the selling price is paid by the purchaser
thereof, but the Pledgees shall incur no liability in the case of the failure of
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such purchaser to take up and pay for the Collateral so sold and, in the case of
such failure, such Collateral may again be sold upon like notice. The Pledgees,
however, instead of exercising the power of sale herein conferred upon them, may
proceed by a suit or suits at law or in equity to foreclose the security
interest and sell the Collateral, or any portion thereof, under a judgment or
decree of a court or courts of competent jurisdiction, the Pledgors having been
given due notice of all such action. The Pledgees shall incur no liability as a
result of a sale of the Collateral or any part thereof. All proceeds of any such
sale, after deducting the reasonable expenses and reasonable attorneys' fees
incurred in connection with such sale, shall be applied in reduction of the
Obligations, and the remainder, if any, shall be paid to the Pledgors.
8. Application of Proceeds; Release. The proceeds of any sale or
enforcement of or against all or any part of the Collateral, and any other cash
or collateral at the time held by the Pledgees hereunder, shall be applied by
the Pledgees first to the payment of the reasonable costs of any such sale or
enforcement, then to reimburse the Pledgees for any damages, costs or expenses
incurred by the Pledgees as a result of an Event of Default, then to the payment
of the principal amount or stated valued (as applicable) of, and interest or
dividends (as applicable) and any other payments due in respect of, the
Obligations. The remainder, if any, shall be paid to the Pledgors. As used in
this Agreement, "proceeds" shall mean cash, securities and other property
realized in respect of, and distributions in kind of, the Collateral, including
any thereof received under any reorganization, liquidation or adjustment of debt
of any issuer of securities included in the Collateral.
9. Representations and Warranties.
(a) The Pledgors hereby represent and warrant to the Pledgees that:
(i) the Pledgors have full power and authority and legal right to
pledge the Collateral to the Pledgees pursuant to this Agreement and this
Agreement constitutes a legal, valid and binding obligation of the Pledgors,
enforceable in accordance with its terms.
(ii) the execution, delivery and performance of this Agreement and
other instruments contemplated herein will not violate any provision of any
order or decree of any court or governmental instrumentality or of any mortgage,
indenture, contract or other agreement to which the Pledgors are parties or by
which the Pledgors and the Collateral may be bound, and will not result in the
creation or imposition of any lien, charge or encumbrance on, or security
interest in, any of the Pledgors' properties pursuant to the provisions of such
mortgage, indenture, contract or other agreement.
(iii) the Pledgors are the sole record and beneficial owner of all of
the Shares; and
(iv) the Pledgors own the Collateral free and clear of all Liens.
(b) The Company represents and warrants to the Pledgees that:
(i) it has no knowledge that any of the representations or warranties
of the Pledgors herein are incorrect or false in any material respect;
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(ii) all of the Shares were validly issued, fully paid and non
assessable; and
(iii) the Pledgors are the record holder of the Shares.
10. No Waiver; No Election of Remedies. No failure on the part of the
Pledgees to exercise, and no delay in exercising, any right, power or remedy
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise by the Pledgees of any right, power or remedy preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.
The remedies herein provided are cumulative and are not exclusive of any
remedies provided by law. In addition, the exercise of any right or remedy of
the Pledgees at law or equity or under this Agreement or any of the documents
shall not be deemed to be an election of Pledgee's rights or remedies under such
documents or at law or equity.
11. Termination. This Agreement shall terminate on the date on which
all Debt Securities have been repaid, either at maturity or otherwise, or
converted.
12. Further Assurances. The parties hereto agree that, from time to
time upon the written request of any party hereto, they will execute and deliver
such further documents and do such other acts and things as such party may
reasonably request in order fully to effect the purposes of this Agreement. The
Pledgees acknowledge that they are aware that the Pledgors shall have no
obligations whatsoever to the Pledgees beyond the Collateral pledged for the
Obligations set forth herein, and no request for further assurance may or shall
increase such Obligations.
13. Miscellaneous.
(a) Modification. This Agreement contains the entire understanding
between the parties with respect to the subject matter hereof and specifically
incorporates all prior oral and written agreements relating to the subject
matter hereof. No portion or provision of this Agreement may be changed,
modified, amended, waived, supplemented, discharged, canceled or terminated
orally or by any course of dealing, or in any manner other than by an agreement
in writing, signed by the party to be charged.
(b) Notice. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earliest of (i) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile
telephone number specified in this Section prior to 6:30 p.m. (New York City
time) on a Business Day (as defined in the Purchase Agreement), (ii) the
Business Day after the date of transmission, if such notice or communication is
delivered via facsimile at the facsimile telephone number specified in this
Agreement later than 6:30 p.m. (New York City time) on any date and earlier than
11:59 p.m. (New York City time) on such date, (iii) the Business Day following
the date of mailing, if sent by nationally recognized overnight courier
services, or (iv) upon actual receipt by the party to whom such notice is
required to be given. The address for such notices and communications shall be
as follows:
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If to the Company:
Systems Evolution Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
With copies to:
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
If to the Pledgors:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
c/o Systems Evolution Inc.
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▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
If to the Pledgees: At the address set forth on Schedule A hereto
With copies to: ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esquire
(c) Invalidity. If any part of this Agreement is contrary to,
prohibited by, or deemed invalid under applicable laws or regulations, such
provision shall be inapplicable and deemed omitted to the extent so contrary,
prohibited or invalid, but the remainder hereof shall not be invalidated thereby
and shall be given effect so far as possible.
(d) Benefit of Agreement. This Agreement shall be binding upon and
inure to the parties hereto and their respective successors and assigns.
(e) Mutual Agreement. This Agreement embodies the arm's length
negotiation and mutual agreement between the parties hereto and shall not be
construed against either party as having been drafted by it.
(f) New York Law to Govern. This Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of New
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York without regard to the principals of conflicts of law thereof. Each party
hereby irrevocably submits to the exclusive jurisdiction of the state and
Federal courts sitting in the city of New York, borough of Manhattan, for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court or that
such suit, action or proceeding is improper. Each party hereby irrevocably
waives personal service of process and consents to process being served in any
such suit, action or proceeding by mailing a copy thereof to such party at the
address in effect for notices to it under this agreement and agrees that such
service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law.
(g) Independent Nature of Pledgees
(i) The Company acknowledges that the obligations of the Pledgees under
this Agreement, and any other document entered into in connection with this
Agreement and the transactions contemplated hereby and thereby (the "Pledge
Documents") are several and not joint, and no Pledgee shall be responsible in
any way for the performance of the obligations of any other Pledgee under the
Pledge Documents. This Agreement has been entered into by each Pledgee
independently of any other Pledgee and independently of any information,
materials, statements or opinions as to the business, affairs, operations,
assets, properties, liabilities, results of operations, condition (financial or
otherwise) or prospects of the Company or of the Subsidiaries which may have
made or given by any other Pledgee or by any agent or employee of any other
Pledgee and, as between the Pledgees, no Pledgee or any of its agents or
employees shall have any liability to any other Pledgee relating to or arising
from any such information, materials, statements or opinions. The Company
further acknowledges that nothing contained in the Pledge Documents, and no
action taken by the Pledgees pursuant hereto or thereto, shall be deemed to
constitute the Pledgees as a partnership, an association, a joint venture or any
other kind of entity, or create a presumption that the Pledgees are in any way
acting in concert or as a group with respect to such obligations or the
transactions contemplated hereby. Each of the Pledgees shall be entitled to
independently protect and enforce its rights, including without limitation, the
rights arising out of this Agreement or out of the other Pledge Documents, and
it shall not be necessary for any Pledgee to be joined as an additional party in
any proceeding for such purpose.
(ii) The Pledgees have been represented by their own respective
separate legal counsel in their review and negotiation of the Pledge Documents.
For reasons of administrative convenience only, at the request of the Company,
the Pledgees and their respective counsel have chosen to communicate with the
Company through ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, LLP, counsel to one of the
Pledgees. Such counsel does not represent any of the other Pledgees and each
other Pledgee has retained its own legal counsel in connection with the
negotiation and review of the Pledge Documents. Also for reasons of
administrative convenience only, the Company has elected to provide the Pledgees
with the Pledge Documents for the convenience of the Company and not because it
was required or requested to do so by the Pledgees. The Company acknowledges
that such procedure with respect to the Pledge Documents in no way creates a
presumption that the Pledgees are in any way acting in concert or as a group
with respect to the Pledge Documents or the transactions contemplated hereby or
thereby.
[Signature Pages Follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Guaranty and
Pledge Agreement to be duly executed by their respective authorized persons as
of the date first indicated above.
SYSTEMS EVOLUTION INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Chief Executive Officer
Pledgees:
AJW PARTNERS, LLC
By: SMS Group, LLC
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Manager
AJW OFFSHORE, LTD
By: First Street Manager II, LLC
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Manager
AJW QUALIFIED PARTNERS, LLC
By: AJW Manager, LLC
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Manager
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NEW MILLENNIUM CAPITAL PARTNERS II, LLC
By: First Street Manager II, LLC
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Manager
[Signatures Continued on Following Page]
ALPHA CAPITAL AG
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Director
BASSO EQUITY OPPORTUNITY HOLDING FUND LTD.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Authorized Signatory
BASSO HOLDINGS LTD.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Authorized Signatory
BASSO MULTI-STRATEGY HOLDING FUND LTD.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Authorized Signatory
DOUBLE M MASTER FUND LP
/s/ Less ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇
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By: Navigator Management Ltd.
Title: (Authorized Signatory)
[Signatures Continued on Following Page]
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ENABLE GROWTH PARTNERS
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
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By: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Managing Partner
GREENWICH GROWTH FUND LIMITED
/s/ Don Dustin
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By: Don Dustin
Title: Director
PLATINUM PARTNERS VALUE ARBITRAGE FUND LP
/s/ ▇▇▇▇ Nordlichel
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By: ▇▇▇▇ Nordlichel
Title: MM / GP
SRG CAPITAL LLC
/s/ ▇▇▇▇▇▇ ▇. Tyrchin
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By: ▇▇▇▇▇▇ ▇. Tyrchin
Title: Chief Financial Officer
▇▇▇▇▇▇▇▇▇▇▇ ▇▇
/s/ ▇.▇. ▇▇▇▇▇▇▇
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By: ▇.▇. ▇▇▇▇▇▇▇
Title: Chief Financial Officer
TRUK INTERNATIONAL FUND, LP
/s/ Atoll Asset Management LLC
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By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Principal
[Signatures Continued on Following Page]
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TRUK OPPORTUNITY FUND, LLC
/s/ Atoll Asset Management
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By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Principal
WHALEHAVEN CAPITAL LP
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
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By: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Director
WHALEHAVEN FUND LIMITED
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
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By: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Director
Pledgors:
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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-12-
EXHIBIT A
Schedule of Pledgees
Name Principal Amount of Debt Securities
AJW PARTNERS, LLC
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
NEW MILLENNIUM CAPITAL PARTNERS II, LLC
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
AJW OFFSHORE, LTD.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
AJW QUALIFIED PARTNERS, LLC
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
ALPHA CAPITAL AG
L.H. Financial,
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
$200,000
BASSO EQUITY OPPORTUNITY HOLDING FUND LTD.
Basso Capital Management
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
$50,000
Name Principal Amount of Debt Securities
BASSO HOLDINGS LTD.
Basso Capital Management
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
$50,000
BASSO MULTI-STRATEGY HOLDING FUND LTD.
Basso Capital Management
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
$50,000
DOUBLE M MASTER FUND LP
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇▇
$100,000
ENABLE GROWTH PARTNERS
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇
$200,000
GREENWICH GROWTH FUND LIMITED
Canaccord Capital Corporation
Suite 1300
▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
$100,000
PLATINUM PARTNERS VALUE ARBITRAGE FUND LP
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇
$150,000
SRG CAPITAL LLC
▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇
$200,000
Name Principal Amount of Debt Securities
▇▇▇▇▇▇▇▇▇▇▇ ▇▇
Canaccord Capital Corporation
Suite 1300
▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇
$400,000
TRUK INTERNATIONAL FUND, LP
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
$8,750
TRUK OPPORTUNITY FUND LLC
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
$116,250
WHALEHAVEN CAPITAL ▇▇
▇▇▇▇▇▇▇▇▇▇ Securities
Suite 2750
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
$100,000
WHALEHAVEN FUND LIMITED
▇▇▇▇▇▇▇▇▇▇ Securities
Suite 2750
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
$100,000
EXHIBIT B
Pledgors
Name No. of Shares Date Acquired
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 27,780,000 (1)
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 1,000,000 (2)
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. 100,000 (3)
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 6,463,094
(1) Plus 5,000,000 options.
(2) Plus 6,500,000 options.
(3) Plus 1,900,000 options.
