Exhibit 10.3

 

Execution Version

 

PLEDGE AND SECURITY AGREEMENT

 

THIS PLEDGE AND SECURITY AGREEMENT (this “Agreement”) is made this 8th day of
January, 2018, by and between HUNT FS HOLDINGS, LLC, a Delaware limited
liability company (the “Pledgor”), and MMA CAPITAL MANAGEMENT, LLC, a Delaware
limited liability company (the “Lender”).

 

RECITALS

 

Lender and Hunt FS Holdings II, LLC, a Delaware limited liability company and a
wholly-owned subsidiary of the Pledgor (the “Company”), have entered into a
Purchase Agreement dated the date hereof (as the same may be amended from time
to time called the “Purchase Agreement”).

 

Pursuant to the Purchase Agreement, the Company has delivered to Lender in
payment of the Purchase Price (as defined in the Purchase Agreement) its
Promissory Note in the original principal amount of Fifty-Seven Million Dollars
($57,000,000) (the “Note”).

 

The Pledgor is the sole member of the Company, and will receive substantial
financial benefits from the transactions described in the Purchase Agreement
including the payment of the Purchase Price by delivery of the Note.

 

In order to induce the Lender to accept the Note in payment of the Purchase
Price, the Pledgor has agreed to pledge and grant to the Lender a continuing
security interest in and to the Collateral (as hereafter defined) to secure the
payment of the Secured Obligations (as hereinafter defined) and the performance
by the Company of its obligations under the Note.

 

AGREEMENTS

 

NOW, THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Pledgor and the Lender agree as follows:

 

ARTICLE I

 

DEFINITIONS AND RULES OF CONSTRUCTION

 

SECTION 1.1.          Definitions. Unless otherwise defined herein, all
capitalized terms used in this Agreement shall have the meanings provided in the
Note. In addition, the following capitalized terms, when used in this Agreement,
shall have the following meanings unless otherwise indicated:

 

“CMA” means a Continuing Membership Application that must be filed by a member
firm pursuant to FINRA Rule 1017 with FINRA seeking approval to continue in
membership after, among other events, a direct or indirect change in its equity
ownership or partnership capital that results in one or more Persons directly or
indirectly owning or controlling twenty-five (25) percent or more of such
member's equity or partnership capital.

 

 

 

  

“Collateral” has the meaning set forth in Section 2.1.

 

“Collateral Documents” means this Agreement and any documents ancillary hereto.

 

“Distributions” has the meaning set forth in Section 2.1(b).

 

“Equity Interests” means (i) the membership, ownership and other equity
interests in the Company both now and hereafter existing, (ii) any option,
warrant or other direct or indirect right to acquire, convert into or exchange
for an equity interest in the Company, and (iii) any and all rights, powers and
remedies resulting from, or in connection with any of the foregoing, including,
without limitation, all rights, powers and remedies of any nature under or by
reason of the Operating Agreement, and all claims, causes of action and rights
of suit resulting therefrom, or in connection therewith.

 

“Event of Default” has the meaning set forth in Article V.

 

“FINRA” means the Financial Industry Regulatory Authority, Inc.

 

“Hunt Securities” means Hunt Financial Securities, LLC, which is registered with
the SEC as a broker-dealer under Section 15(a) of the Securities Exchange Act of
1934 (CRD# 169919), is a FINRA member, and is wholly-owned by the Company, which
is wholly-owned by the Pledgor.

 

“Lien” means any mortgage, deed of trust, pledge, security interest, assignment,
encumbrance, judgment, lien, claim or charge of any kind in, on, of or in
respect of, any asset or property or any rights to any asset or property,
including, without limitation, (a) any interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title retention agreement
relating to any such asset or property and (b) any option, right of first
refusal or similar right.

 

“Operating Agreement” means the Limited Liability Company Agreement of the
Company dated as of July 20, 2017, as amended by the First Amendment thereto,
dated on or about the date hereof, and all other amendments thereto.

 

“Paid in Full” and “Payment in Full” mean the payment in full of all Secured
Obligations (other than in respect of contingent indemnification and expense
reimbursement claims not then due and owing).

 

“Permitted Encumbrances” means Permitted Liens as described in clause (i) and
(ii) of the definition thereof.

 

“Permitted Liens” means (i) Liens on the Collateral in favor of the Lender, (2)
Liens securing any Specified Notes and (iii) Liens arising by operation of law.

 

“Pledged Equity Interests” has the meaning set forth in Section 2.1(a).

 

“Records” shall have the meaning ascribed to it in the UCC and shall include all
agreements, books, ledgers, instruments, correspondence, memoranda or other
documents comprising, covering or relating to the Collateral.

 

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“SEC” means the U.S. Securities and Exchange Commission.

 

“Secured Obligations” means, collectively, the due and punctual payment and
performance, when and, as due, of (a) the principal of Note and the interest
(including any Default Interest) accruing under the Note and all Payee Costs (as
defined in the Note), and (b) all covenants, agreements, duties, debts,
obligations and liabilities of each of the Company and the Pledgor under or
pursuant to the Note, this Agreement and any other Collateral Documents,
including, without limitation, all indemnification obligations and all Lender’s
Costs.

 

“UCC” or “Uniform Commercial Code” means the Uniform Commercial Code as in
effect from time to time in the State of New York or, when the laws of any other
state govern the method or manner of the perfection or enforcement of any
security interest in any of the Collateral, the Uniform Commercial Code as in
effect from time to time in such state.

 

SECTION 1.2.          Rules of Construction. Unless otherwise defined herein,
all terms used herein which are defined by the UCC shall have the same meanings
as are assigned to them by the UCC unless and to the extent varied by this
Agreement. No provision of this Agreement shall be construed for or against any
party on the grounds that one party or the other was the drafter hereof, it
being acknowledged that this Agreement was fully negotiated by the parties and
their counsel. For purposes of this Agreement: (a) the words “include”,
“includes” and “including” shall be deemed to be followed by the words “without
limitation”; (b) the word “or” is not exclusive; and (c) the words “herein”,
“hereof”, “hereby”, “hereto” and “hereunder” refer to this Agreement as a whole.
Unless the context otherwise requires, references herein: (x) to Articles,
Sections, and Exhibits mean the Articles and Sections of, and Exhibits attached
to, this Agreement; (y) to an agreement, instrument or other document means such
agreement, instrument or other document as amended, supplemented and modified
from time to time to the extent permitted by the provisions thereof; and (z) to
a statute means such statute as amended from time to time and includes any
successor legislation thereto and any regulations promulgated thereunder. The
headings in this Agreement are for reference only and shall not affect the
interpretation of this Agreement.

 

ARTICLE II

 

THE COLLATERAL

 

SECTION 2.1.          The Pledge and Grant. In order to secure the prompt and
complete payment and performance when due of all of the Secured Obligations, the
Pledgor hereby pledges to the Lender, and hereby grants to the Lender a
continuing security interest in and lien on, all of the following property of
the Pledgor, both now owned and existing and hereafter created, acquired or
arising (all such property being herein collectively referred to as the
“Collateral”) and all right, title and interest of the Pledgor in and to the
Collateral:

 

(a)          the Equity Interests owned by the Pledgor that have been issued by
the Company and are outstanding as of the date hereof, and any additional Equity
Interests and other equity interests in the Company obtained by the Pledgor in
the future (collectively, the “Pledged Equity Interests”);

 

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(b)          all monies and/or property (including, without limitation, general
intangibles, (including payment intangibles), accounts, documents, instruments,
investment property, commercial tort claims, and chattel paper) due or to become
due to the Pledgor under or in connection with the Pledged Equity Interests
including, without limitation: (i) any income, bonuses, profits or fees; (ii)
any dividend or distribution of cash or property, including, without limitation,
(A) any and all distributions of cash flow and profits and (B) any dividend or
distribution occurring as a result of a split, revision, reclassification or
other like change of the Pledged Equity Interests; (iii) any return of capital
contributions; (iv) any cash or property resulting from the dissolution,
termination, winding up, and/or liquidation of the Company; and (v) any other
right to receive monies and/or property on account of, or in connection with,
the interests of the Pledgor as a member of the Company (collectively,
“Distributions”);

 

(c)          all cash and non-cash proceeds and products of the Collateral
described in clauses (a) and (b) above, together with all substitutions,
replacements and renewals thereof; and

 

(d)          all Records relating or pertaining to the Collateral described in
clauses (a) through (c) above.

 

SECTION 2.2.          Pledge and Security Interest for Security Only. The pledge
and security interest granted hereby are intended as security only and shall not
subject the Lender to, or transfer or in any way affect or modify, any
obligation or liability of the Pledgor with respect to any of the Collateral or
any transaction in connection therewith.

 

SECTION 2.3.          The Equity Interests.

 

The Equity Interests shall not be securities governed by Article 8 of the
Uniform Commercial Code. The Equity Interests shall at all times be
uncertificated and the Operating Agreement shall require that all Equity
Interests be uncertificated. In the event that any securities comprising part of
the Collateral nonetheless become certificated, the certificates shall be
promptly delivered to the Lender, accompanied by proper instruments of
assignment substantially in the form attached hereto as Exhibit A, duly executed
and endorsed by the Pledgor and by such other instruments or documents as the
Lender may reasonably request sufficient to transfer the title thereto to the
Lender or its nominee.

 

SECTION 2.4.          Voting Rights, Distributions; Etc.

 

(a)          So long as no Event of Default shall have occurred and be
continuing:

 

(i)          the Pledgor shall have the right, from time to time, and for any
purpose not inconsistent with the Note and this Agreement, to exercise all
voting and ownership rights with respect to the Pledged Equity Interests and to
consent to or ratify action taken at, or waive notice of, any meeting of, or
action taken by, members of the Company with the same force and effect as if
such Pledged Equity Interests were not pledged hereunder, provided that such
action would not materially and adversely affect the rights or remedies of the
Lender hereunder;

 

(ii)         the Pledgor shall be entitled to receive, retain, use and
distribute any and all Distributions paid on the Collateral to the extent and
only to the extent that such Distributions are permitted by, and otherwise paid
in accordance with, the terms and conditions of the Note, the Operating
Agreement and all applicable laws; and

 

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(iii)        the Pledgor shall be entitled to exercise any subscription or
conversion privileges accruing as the owner of the Pledged Equity Interests, to
the extent permitted in the Operating Agreement; provided that any additional
interests obtained or purchased on account of any such subscription or
conversion privileges shall be subject to this Agreement and shall constitute
part of the Collateral.

 

(b)          Upon the occurrence and during the continuance of an Event of
Default, all rights of the Pledgor to receive Distributions which the Pledgor is
authorized to receive pursuant to paragraph (a)(ii) of this Section 2.4 shall
cease, and all such rights shall thereupon become vested in the Lender, which
shall have the sole and exclusive right and authority to receive and retain such
Distributions. All Distributions which are received by the Pledgor contrary to
the provisions of this Section 2.4 shall be received in trust for the benefit of
the Lender, shall be segregated from other property or funds of the Pledgor and
shall be forthwith delivered to the Lender in the same form as so received
(together with any necessary endorsement, which the Pledgor hereby agrees to
execute and deliver). Any and all money and other property paid over to or
received by the Lender pursuant to the provisions of this subparagraph (b) shall
be retained by the Lender and shall be applied to the Secured Obligations in
accordance with the provisions of Section 6.2 hereof.

 

(c)          Upon the occurrence and during the continuance of an Event of
Default, all rights of the Pledgor to exercise the voting and other consensual
rights associated with 24.50% of the Pledged Equity Interests in the Company
that the Pledgor would otherwise be entitled to exercise pursuant to Section
2.4(a)(i) shall immediately cease, and all such rights shall thereupon become
vested in the Lender, which shall then have the sole right to exercise such
voting and other consensual rights. The remaining voting and other consensual
rights retained by the Pledgor shall immediately cease for the Pledgor and
become vested in the Lender upon the earlier of (1) FINRA approval of the CMA,
or (2) thirty (30) calendar days from the filing of a CMA deemed substantially
complete by FINRA.

 

(d)          Upon the occurrence and during the continuance of an Event of
Default, all rights of the Pledgor to exercise the subscription and conversion
rights associated with 24.50% of the Pledged Equity Interests in the Company
that the Pledgor would otherwise be entitled to exercise pursuant to Section
2.4(a)(iii) shall immediately cease, and all such rights shall thereupon become
vested in the Lender, which shall then have the sole right to exercise such
subscription and conversion rights. The remaining subscription and conversion
rights retained by the Pledgor shall immediately cease for the Pledgor and
become vested in the Lender upon the earlier of (1) FINRA approval of the CMA,
or (2) thirty (30) calendar days from the filing of a CMA deemed substantially
complete by FINRA.

 

(e)          All rights of the Pledgor to exercise the management and control of
the business, assets and affairs of the Company, it would otherwise be entitled
to exercise under the Operating Agreement shall immediately cease upon the
earlier of (1) FINRA approval of the CMA, or (2) thirty (30) calendar days from
the filing of a CMA deemed substantially complete by FINRA (in each case
following an Event of Default), and all such rights shall thereupon become
vested in the Lender, which shall have the sole right to exercise such
management and control rights.

 

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SECTION 2.5.          Filings.

 

(a)          At any time upon the reasonable request of the Lender, the Pledgor
shall promptly file in any relevant jurisdiction any financing statement (or
amendment) thereto that contains the information required by Article 9 of the
UCC of such jurisdiction for the filing of such financing statement (or
amendment) relating to the Collateral, as the Lender may reasonably deem such
financing statement (or amendment) necessary or desirable in obtaining the full
benefits of, or as applicable in perfection and preserving the Liens of, the
Lender.

 

(b)          The Pledgor hereby irrevocably authorizes the Lender at any time
and from time to time to file in any relevant jurisdiction any financing
statements and amendments thereto that contain the information required by
Article 9 of the UCC of each applicable jurisdiction for the filing of any
financing statement or amendment relating to the Collateral without the
signature of Pledgor where permitted by law, in each case, as the Lender
reasonably determines is necessary to perfect and continue perfected, maintain
the priority of or provide notice of the Lender’s security interest in the
Collateral under this Agreement. Pledgor agrees to provide all necessary
information related to such filings to the Lender promptly upon request by the
Lender.

 

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES

 

The Pledgor represents and warrants to the Lender that the following statements
are true, and correct:

 

SECTION 3.1.          General Representations. As of the date hereof,

 

(a)          Existence. The Pledgor: (i) is a Delaware limited liability company
duly organized and validly existing under the laws of the State of Delaware;
(ii) is in good standing (or its equivalent) under the laws of the State of
Delaware; (iii) has all requisite limited liability company power, and has all
governmental licenses, authorizations, consents and approvals necessary to own
its assets and carry on its business as now being or as proposed to be conducted
except where the lack of such licenses, authorizations, consents and approvals
would not be reasonably likely to have a material adverse effect on the ability
of Pledgor to perform its obligations hereunder; and (iv) is qualified to do
business and is in good standing (or its equivalent) in all other jurisdictions
in which the nature of the business conducted by it makes such qualification
necessary except where failure so to qualify would not be reasonably likely
(either individually or in the aggregate) to have a material adverse effect on
the ability of Pledgor to perform its obligations hereunder.

 

(b)          No Breach. The execution and delivery of this Agreement and the
Collateral Documents to which Pledgor is a party and the performance of
Pledgor’s obligations hereunder and thereunder will not conflict with or result
in (i) a breach of the organizational documents of Pledgor, or (ii) a breach of
any applicable law, rule or regulation, or (iii) a breach of any order, writ,
injunction or decree of any governmental authority, except where such breach
would not be reasonably likely to have a material adverse effect on the ability
of Pledgor to perform its obligations hereunder, or (iv) a breach of any other
agreement or instrument to which Pledgor is a party or by which Pledgor of any
of its property is bound or to which Pledgor is subject, except where such
breach would not be reasonably likely to have a material adverse effect on the
ability of Pledgor to perform its obligations hereunder, or (v) the creation or
imposition of any lien (except for liens created pursuant to the Collateral
Documents) upon any property of Pledgor.

 

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(c)          Authorization. Pledgor has all necessary limited liability company
power, authority and legal right to execute, deliver and perform its obligations
under this Agreement and the Collateral Documents to which Pledgor is a party;
the execution, delivery and performance by Pledgor of this Agreement and the
Collateral Documents to which Pledgor is a party have been duly authorized by
all necessary corporate or other action on its part; and this Agreement and the
Collateral Documents to which Pledgor is a party have been duly and validly
executed and delivered by Pledgor.

 

(d)          Approvals. No authorizations, approvals or consents of, and no
filings or registrations with, any government authority or any securities
exchange are necessary for the execution, delivery or performance by Pledgor of
this Agreement or the Collateral Documents to which Pledgor is a party or for
the legality, validity or enforceability hereof or thereof, except for filings
and recordings in respect of the liens created pursuant to the Collateral
Documents.

 

(e)          Enforceability. This Agreement and the Collateral Documents to
which Pledgor is a party are legal, valid and binding obligations of Pledgor and
are enforceable against Pledgor in accordance with their terms except as such
enforceability may be limited by (i) the effect of any applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors’
rights generally and (ii) general principles of equity.

 

(f)          Material Adverse Effect. Since the date of the Closing Statements,
there has been no development or event nor, to Pledgor’s knowledge, any
prospective development or event, which has had or is reasonably likely to have
a material adverse effect on the ability of Pledgor to perform its obligations
under this Agreement and the Collateral Documents to which it is a party.

 

(g)          Compliance with Applicable Law. The Pledgor, and to Pledgor's
knowledge, the Company, and the Company's subsidiaries are in compliance in all
material respects with, and are not in material default or violation of,
applicable federal, state, local or foreign law (statutory, common or
otherwise), constitution, treaty, convention, ordinance, code, rule, regulation,
order, injunction, judgment, decree, ruling or other similar requirement
enacted, adopted, promulgated or applied by any governmental, self-regulatory,
state, municipal, local, or other authority, or any policy and/or guideline of
any such authority related to the Pledgor, Company, or the Company's
subsidiaries, and their respective businesses, which has had or is reasonably
likely to have a material adverse effect on the value of the Company or its
subsidiaries, or the ability of the Pledgor to perform its obligations under
this Agreement and the Collateral Documents to which it is a party.

 

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(h)          Litigation & Regulatory Enforcement Action. There are no actions,
suits, arbitrations, investigations or enforcement actions (including, without
limitation, any of the foregoing which, to the knowledge of Pledgor, are pending
or threatened) or other legal, regulatory or administrative proceedings
affecting Pledgor, the Company, or the Company's subsidiaries before any
governmental or other authority which would reasonably be expected to have a
material adverse effect on the value of the Pledgor, the Company or its
subsidiaries, or the ability of the Pledgor to perform its obligations under
this Agreement and the Collateral Documents to which it is a party.

 

(i)          Investment Company Act. Pledgor is not required to be registered as
an “investment company”, or a company “controlled by an investment company,”
within the meaning of the Investment Company Act of 1940.

 

(j)          Anti-Money Laundering Laws. Pledgor has complied with all
applicable anti-money laundering laws and regulations, including without
limitation the USA PATRIOT Act of 2001 (collectively, the “Anti-Money Laundering
Laws”).

 

(k)          No Prohibited Persons. None of the Pledgor, the Company, or the
Company's subsidiaries nor, to Pledgor's knowledge, any of their respective
officers, directors or members is a Person (or fifty percent (50%) or greater
owned by a Person): (i) whose name appears on the United States Treasury
Department’s Office of Foreign Assets Control’s (“OFAC”) most current list of
“Specifically Designated National and Blocked Persons” (which list may be
published from time to time in various mediums including, but not limited to,
the OFAC website or (ii) is otherwise the target of sanctions administered by
OFAC.

 

(l)          Consents. Pledgor has obtained the consent of all Persons whose
consent is required for the execution, delivery and performance of this
Agreement other than such consents the lack of which would not reasonably be
expected to have a material adverse effect on the ability of Pledgor to perform
its obligations under this Agreement and the Collateral Documents to which it is
a party.

 

SECTION 3.2.          Title, Liens and Authority. As of the date hereof, the
Pledgor is the sole owner of the Collateral and has good and marketable title to
all of the Collateral, and has full power and authority to pledge, and/or grant
a security interest in, the Collateral to the Lender pursuant hereto and to
execute, deliver and perform the obligations of the Pledgor in accordance with
the terms of this Agreement without the consent or approval of any Person other
than (a) the regulatory approvals specified in Section 7.18 and (b) any consent
or approval which has been obtained and provided to the Lender. The Equity
Interests are not securities governed by Article 8 of the Uniform Commercial
Code and are not represented by certificates. The Collateral is free and clear
of any Liens or adverse claims (except for, in the case of the Pledged Equity
Interests, the Permitted Encumbrances, and in the case of any other items of
Collateral, subject to Permitted Liens) and no Person other than Pledgor has any
interest whatsoever in any of the Collateral. The security interest granted by
the Pledgor to the Lender pursuant to this Agreement is a first priority (in the
case of the Pledged Equity Interests, subject only to the Permitted
Encumbrances, and in the case of any other items of Collateral, subject to
Permitted Liens) security interest in the Collateral. As of the date hereof, the
Pledgor has not executed or filed, or authorized any third party to file, any
financing statement or other instrument similar in effect covering all or any
part of the Collateral or listing the Pledgor as debtor in any recording office,
except those that have been filed in favor of the Lender pursuant to this
Agreement.

 

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SECTION 3.3.          Names, Locations, Etc. As of the date hereof, (i) each of
the Pledgor and the Company is a limited liability company duly organized and
existing under the laws of the State of Delaware, (ii) the Lien on the
Collateral granted to the Lender hereby does not contravene any of the
provisions of the Operating Agreement, (iii) the correct legal name of the
Pledgor is that specified on the signature page of this Agreement and the
Pledgor has conducted business under such legal name since its formation, (iv)
the organizational identification number of the Pledgor in the State of Delaware
is 0880855, (v) the federal tax identification number of the Pledgor is
46-4074992, (vi) the Pledgor has not been the surviving entity in a merger
within the last five (5) years, (vii) the chief executive office of the each of
the Pledgor and the Company is located at 230 Park Avenue, 19th Floor, New York,
New York 10169, and (viii) there have been no changes to foregoing information
in the past five years.

 

SECTION 3.4.          The Pledged Equity Interests. The Pledged Equity Interests
include one hundred percent (100%) of the Equity Interests held by the Pledgor
as of the date hereof and one hundred percent (100%) of the total Equity
Interests issued and outstanding as of the date hereof. There are no agreements
or commitments by the Company or any other Person for the issuance of: (a) any
additional Equity Interests; (b) any securities or equity interests convertible
voluntarily by the holder thereof or automatically upon the occurrence or
nonoccurrence of any event or condition into, or exchangeable for, any Equity
Interests; or (c) any warrants, options, rights of first refusal or other
rights, or other commitments entitling any Person to purchase or otherwise
acquire any Equity Interests. The Collateral is not subject to any voting trust
agreement or other agreement relating to the ownership or voting control of the
Collateral. The Pledged Equity Interests have been duly and validly authorized
and issued by the Company and are fully paid.

 

SECTION 3.5.          Perfected Security Interest. Upon the filing of a UCC
financing statement with the Secretary of State of the State of Delaware, the
Lender will have a valid, enforceable and perfected first priority (in the case
of the Pledged Equity Interests, subject only to the Permitted Encumbrances, and
in the case of any other items of Collateral, subject to Permitted Liens)
security interest in the Collateral.

 

ARTICLE IV

 

COVENANTS OF PLEDGOR

 

The Pledgor covenants and agrees with the Lender as follows:

 

SECTION 4.1.          Title, Liens and Taxes. The Pledgor shall, at the cost and
expense of the Pledgor, take any and all actions necessary to defend the
Pledgor’s title to the Collateral against all Persons and against any adverse
claim or Lien of any nature whatsoever (in the case of the Pledged Equity
Interests, subject only to the Permitted Encumbrances, and in the case of any
other items of Collateral, subject to Permitted Liens) and to defend the Lien of
the Lender in the Collateral and the priority (or intended priority) thereof.
Except to the extent contested in good faith, the Pledgor will pay all taxes and
assessments levied or placed on the Collateral prior to the earlier of (a) the
date when any interest or penalty would accrue for the nonpayment thereof, and
(b) the date when such taxes or assessments become a Lien subject to foreclosure
(unless Pledgor has obtained a court order, posted a bond or taken any similar
measure which prevents foreclosure).

 

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SECTION 4.2.          Further Assurances. Promptly following the reasonable
request of the Lender, (a) furnish such further assurances of title as may be
reasonably required by the Lender, and (b) deliver and execute or cause to be
delivered and executed, in form and content reasonably satisfactory to the
Lender, any assignment, security agreement, or other document as the Lender may
reasonably request in order to perfect, preserve, maintain, or continue the
perfection of the Lender’s security interest in the Collateral and/or its
priority. The Pledgor will pay to the Lender within five Business Days following
notice by the Lender the reasonable and documented costs of preparing and filing
any financing, continuation or termination statement as well as any recordation
or transfer tax required by law to be paid in connection with the filing or
recording of any such statement. The Pledgor hereby authorizes the Lender at any
time and from time to time to file in any appropriate filing office any initial
financing statements and amendments thereto and continuations thereof covering
the Collateral and any additional collateral for the Secured Obligations. Except
as otherwise permitted by applicable laws, the Pledgor shall not file any
amendments, correction statements or termination statements concerning the
Collateral without the prior written consent of the Lender. Promptly following
request of the Lender, the Pledgor shall deliver to the Lender all evidence of
its ownership of the Collateral as may be reasonably required by the Lender.

 

SECTION 4.3.          Notices. The Pledgor will promptly, but no later than five
(5) Business Days after obtaining knowledge thereof, give written notice to the
Lender of (i) any event which materially and adversely affects the value of the
Collateral, (ii) any event which materially adversely affects the ability of the
Pledgor or of the Lender to dispose of the Collateral, or the rights and
remedies of the Lender in relation thereto, including, without limitation, the
levy of any legal process against the Collateral and the adoption of any order,
arrangement or procedure affecting the Collateral, whether governmental or
otherwise, (iii) any actions, suits, or proceedings pending, or to the Pledgor’s
knowledge, threatened in writing, against the Pledgor, the Pledgor’s property or
against the Company, which may, either in any one case or in the aggregate,
materially adversely affect the Collateral, (iv) any default by the Company in
the payment or performance of any instrument or agreement relating to any
Material Indebtedness of the Company, the effect of which is to cause such
Material Indebtedness to become due and payable prior to stated or scheduled
maturity, and (v) any sale or other disposition of any substantial part of the
property and assets of the Company.

 

SECTION 4.4.          Changes of Name; Jurisdiction of Organization etc. The
Pledgor shall provide a written notice to the Lender within 20 days following
the change of its name, its jurisdiction of organization, its organization
identification number or the location of its chief executive office. The Pledgor
shall cooperate with the Lender in making all filings that are reasonably
required in order for the Lender to continue at all times following such change
to have a legal, valid and perfected security interest in all the Collateral.

 

SECTION 4.5.          Ownership. Until the Payment in Full of the Note, the
Pledgor shall at all times directly own 100% of the Equity Interests of the
Company free and clear of all Liens (except Liens of the Lender).

 

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SECTION 4.6.          Records. The Pledgor will (a) at all times maintain at its
chief executive office, in accordance with generally accepted accounting
principles, consistently applied, accurate and complete Records in all material
respects, and (b) at such reasonable times and intervals during normal business
hours and upon reasonable notice, permit the Lender or any Person designated by
the Lender to enter any places of business of the Pledgor or any other premises
where any Records may be kept and to examine, audit, inspect, and make extracts
from and photocopies of any such Records; provided that, excluding any such
visits and inspections during the continuation of an Event of Default, the
Lender shall not exercise the rights under this clause (c) more than one time
during any calendar year absent the existence of an Event of Default.

 

SECTION 4.7.          Company Affairs, Etc.

 

(a)          The Pledgor will perform, observe and carry out in all material
respects the provisions of the Operating Agreement (and its other organizational
documents, if any) to be performed, observed and carried out by the Pledgor. The
Pledgor will promptly furnish to the Lender such information concerning the
operations, business, affairs and financial condition of the Company as the
Lender may reasonably request.

 

(b)          The Pledgor will not, without the prior written consent of the
Lender, consent to or approve of any amendments or changes to the Operating
Agreement (or any of its other organizational documents, if any) in a manner
that could reasonably be expected to adversely affect in any material respect
the rights or interests of the Lender (including, without limitation, any
amendment causing its membership interests or other equity interests, or any of
them, to be a “security” as defined in and governed by Article 8 of the Uniform
Commercial Code of the State of New York - Investment Securities).

 

(c)          The Pledgor shall not permit the Company to sell, transfer, convey,
pledge or otherwise encumber all or substantially all of its assets or to enter
into a merger, consolidation, reorganization or similar restructure without the
prior written consent of the Lender.

 

SECTION 4.8.          No Restrictions on Disposition. Notwithstanding any
provisions of the Operating Agreement which restrict the disposition of Equity
Interests or provide for rights of first refusal or an option, the Pledgor
hereby waives all such restrictions and rights and agrees that any sale,
transfer, or other form of disposition by the Lender of all or any portion of
the Collateral pursuant to the exercise of its remedies under this Agreement
shall not be subject to any restrictions on disposition or rights of first
refusal or options set forth in the Operating Agreement and, subject to any
applicable regulatory approvals specified in Section 7.18, shall not require the
consent of any Person and upon such disposition, the purchaser, assignee or
transferee shall automatically be admitted to the Company as a substituted
member.

 

SECTION 4.9.          Indemnification. The Pledgor agrees to indemnify the
Lender, each of its Affiliates and each of its and their respective directors,
officers, managers, members, employees, attorneys and agents (each, an
“Indemnified Party”), and hold them harmless from, any and all losses, claims,
damages, liabilities and related expenses, including reasonable and documented
counsel fees and expenses, incurred by or asserted against it arising out of, or
as a result of, the execution, delivery or performance of this Agreement or any
claim, litigation, investigation or proceeding relating hereto or to the
Collateral; provided, however, that such indemnity shall not be available to any
Indemnified Party to the extent that such claims, damages, losses, liabilities
or related expenses are determined by a court of competent jurisdiction by final
and non-appealable judgment to have resulted from (i) the fraud, bad faith,
gross negligence or willful misconduct of the Lender, (ii) a claim brought by
the Pledgor or the Company against the Lender for breach in bad faith of the
Lender’s obligations under the Note or any Collateral Document, or (iii) a claim
solely among the Lender (including in the capacity as agent) and its assignees
permitted under Section 7.9 below.  Without prejudice to the survival of any
other agreement of Pledgor under this Agreement, the agreements and obligations
of the contained in this Section shall survive termination of this Agreement and
Payment in Full. 

 

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SECTION 4.10.         CMA Filing. Upon an Event of Default, the Pledgor shall,
and shall direct the Company and Hunt Securities to, use their reasonable best
efforts to take all necessary and appropriate steps to obtain the regulatory and
other authorizations required for Hunt Securities to continue operating as a
broker-dealer by, among other things: (a) ensuring that Hunt Securities, within
ten Business Days of an Event of Default, submits a CMA which it believes to be
substantially complete to FINRA requesting “fast track” approval; (b) responding
to FINRA inquiries or requests related to the CMA, including requests for
additional documents or information within the time frames set forth in Rule
1017; and (c) ensuring that the Pledgor, the Company, Hunt Securities, and each
of their respective owners, officers, directors, employees, contractors, or
other principals or agents, do not engage in activity during pendency of the CMA
application that could delay the approval of the CMA. In furtherance of and
without limiting the Pledgor's covenants under this Section 4.9, the Pledgor
shall: (i) as promptly as practicable, notify the Lender of any written
communication from FINRA related to the CMA; (ii) permit the Lender to review in
advance any proposed written communication to FINRA with respect to the CMA and
incorporate the Lender's comments thereto; (iii) provide the Lender with an
opportunity to attend any substantive meeting with FINRA in respect of the CMA;
and (iv) furnish the Lender with copies of all written correspondence and
filings between the Pledgor, the Company, or Hunt Securities and their
respective representatives on the one hand, and FINRA or members of its staff on
the other hand, related to the CMA.

 

ARTICLE V

 

EVENTS OF DEFAULT

 

Each of the following shall be an “Event of Default” hereunder:

 

(a)          an Event of Default as defined in the Note;

 

(b)          the breach or violation in any material respect (or, with respect
to any covenant qualified by materiality, in any respect) of any covenant or
agreement of Pledgor under this Agreement which is not cured within thirty (30)
days of the earlier of written notice from Lender or the Pledgor having
knowledge of such breach or violation, except that no cure period shall be
permitted for breach or violation of Sections 2.3, 4.1, 4.3, 4.5, and 4.7(b) and
(c); and

 

(c)          any representation or warranty made by the Pledgor under Article
III of this Agreement shall not be true in all material respects (or if such
representation or warranty is qualified by Material Adverse Effect or other
materiality qualification, in all respects) as of the date made.

 

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ARTICLE VI

 

RIGHTS AND REMEDIES

 

SECTION 6.1.          Rights and Remedies of the Lender. Upon and after the
occurrence and during the continuance of an Event of Default, the Lender may,
without notice or demand other than as expressly provided for under the
provisions of this Agreement, exercise in any jurisdiction in which enforcement
hereof is sought, the following rights and remedies, in addition to the rights
and remedies available to the Lender under the other provisions of the Note,
this Agreement and any other Collateral Documents, the rights and remedies of a
secured party under the UCC and all other rights and remedies available to the
Lender under applicable laws, all such rights and remedies being cumulative and
enforceable alternatively, successively or concurrently:

 

(a)          The Lender may sell the Collateral, or any part thereof, at public
or private sale or at any broker’s board or on any securities exchange, for
cash, upon credit or for future delivery as the Lender shall deem appropriate,
and at such price or prices as may be satisfactory to the Lender, provided that
the Lender shall be permitted only sell 24.50% of the Pledged Equity Interests
immediately and shall be permitted to sell 100% of the Pledged Equity Interests
upon the earlier of (a) FINRA approval of the CMA, or (b) thirty (30) calendar
days from the filing of a substantially complete CMA. The Lender shall be
authorized at any such sale (if it deems it advisable to do so) to restrict the
prospective bidders or purchasers of any of the Collateral to Persons who will
represent and agree that they are purchasing the Collateral for their own
account for investment and not with a view to the distribution or sale thereof,
and upon consummation of any such sale the Lender shall have the right to
assign, transfer and deliver to the purchaser or purchasers thereof the
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 the Pledgor, and the
Pledgor hereby waives all rights of redemption, stay, valuation and appraisal
which the Pledgor now has or may at any time in the future have under any rule
of law or statute now existing or hereafter enacted.

 

The Lender shall give the Pledgor ten (10) days’ prior written notice (which the
Pledgor agrees is reasonable notice within the meaning of the UCC) of the
Lender’s intention to make any sale or other disposition of Collateral. Such
notice, in the case of a public sale, shall state the time and place for such
sale, in the case of a sale at a broker’s board or on a securities exchange,
shall state the board or exchange at which such sale is to be made and the day
on which the Collateral, or portion thereof, will first be offered for sale at
such board or exchange and, in the case of a private sale or other disposition,
shall state the date after which such sale or other disposition may be made. Any
such public sale shall be held at such time or times within ordinary business
hours and at such place or places as the Lender may fix and state in the notice
of such sale. At any such sale, the Collateral, or portion thereof, to be sold
may be sold in one lot as an entirety or in separate parcels, as the Lender may
(in its sole and absolute discretion) determine. The Lender shall not be
obligated to make any sale of any Collateral if it shall determine not to do so,
regardless of the fact that notice of sale of such Collateral shall have been
given. The Lender may, without notice or publication, adjourn any public or
private sale or cause the same to be adjourned from time to time by announcement
at the time and place fixed for sale, and such sale may, without further notice,
be made at the time and place to which the same was so adjourned. In case any
sale of all or any part of the Collateral is made on credit or for future
delivery, the Collateral so sold may be retained by the Lender until the sale
price is paid in full by the purchaser or purchasers thereof, but the Lender
shall not incur any liability in case any such purchaser or purchasers shall
fail to take up and pay for the Collateral so sold and, in case of any such
failure, such Collateral may be sold again upon like notice. At any public sale
made pursuant to this Section 6.1, the Lender may bid for or purchase, free from
any right of redemption, stay or appraisal on the part of the Pledgor (all of
such rights being also hereby waived and released by the Pledgor), the
Collateral or any part thereof offered for sale and may make payment on account
thereof by using any claim then due and payable to the Lender from the Pledgor
as a credit against the purchase price, and the Lender may, upon compliance with
the terms of sale, hold, retain and dispose of such property without further
accountability to the Pledgor therefor. For purposes hereof, a written agreement
to purchase the Collateral or any portion thereof shall be treated as a sale
thereof and the Lender shall be free to carry out such sale pursuant to such
agreement, and the Pledgor shall not be entitled to the return of the Collateral
or any portion thereof subject thereto, notwithstanding the fact that after the
Lender shall have entered into such an agreement all Events of Default shall
have been remedied and the Secured Obligations paid in full.

 

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The Pledgor recognizes that the Lender may be unable to effect a public sale or
other disposition of the Collateral due to the lack of a ready market for the
Collateral, a limited number of potential buyers of the Collateral or certain
prohibitions contained in the Securities Act of 1933, as amended (the
“Securities Act”), state securities laws, and other applicable laws, and that
the Lender may be compelled to resort to one or more private sales or other
dispositions thereof to a restricted group of purchasers. The Pledgor agrees
that such private sales or other dispositions may be at prices and other terms
less favorable to the seller than if sold at public sales or other dispositions
and that such private sales or other dispositions shall not solely by reason
thereof be deemed not to have been made in a commercially reasonable manner. The
Lender shall be under no obligation hereunder or otherwise (except as provided
by applicable law) to delay a sale or other disposition of any of the Collateral
for the period of time necessary to permit the registration of such securities
for public sale or other public disposition under the Securities Act and
applicable state securities laws. Any such sale or other disposition of all or a
portion of the Collateral may be for cash or on credit or for future delivery
and may be conducted at a private sale or other disposition where the Lender or
any other Person or entity may be the purchaser of all or part of the Collateral
so sold or otherwise disposed of. The Lender shall incur no liability as a
result of the sale or other disposition of any of the Collateral, or any part
thereof, at any private sale which complies with the requirements of this
Article VI. The Pledgor hereby waives, to the extent permitted by applicable
law, any claims against the Lender arising by reason of the fact that the price
at which any of the Collateral, or any part thereof, may have been sold or
otherwise disposed of at such private sale was less than the price that might
have been obtained at a public sale or other public disposition, even if the
Lender accepts the first offer deemed by the Lender on good faith to be
commercially reasonable under the circumstances and does not offer any of the
Collateral to more than one offeree.

 

(b)          If the Lender determines to exercise its right to sell all or any
of the Collateral pursuant to this Article VI, the Pledgor agrees that, upon
request of the Lender, the Pledgor will, at its own expense: (i) provide the
Lender with such information and projections as may be necessary or, in the
opinion of the Lender, advisable to enable the Lender to effect the sale of such
Collateral; and (ii) do or cause to be done all such other acts and things as
may be necessary to make the sale of such Collateral valid and binding and in
compliance with all applicable laws. Pledgor agrees that a breach of any of the
covenants contained in this Article VI will cause irreparable injury to the
Lender, that the Lender have no adequate remedy at law in respect of such breach
and, as a consequence, agree that each and every covenant contained in this
Article VI shall be specifically enforceable against the Pledgor by the Lender.

 

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(c)          The Lender shall immediately with respect to 24.50% of the Pledged
Equity Interests, have the right, but not the obligation, to exercise all voting
rights of the Pledgor in the Company as set forth in Section 2.4(c). The Lender
shall obtain the preceding rights with respect to 100% of the Pledged Equity
Interests upon the earlier of (a) FINRA approval of the CMA, or (b) thirty (30)
calendar days from the filing of a substantially complete CMA. The Lender shall
be able to exercise these rights without liability of any kind to the Pledgor or
account for any property actually received by the Lender. The Lender shall have
no duty to exercise any of the aforesaid rights and shall not be responsible for
any failure to do so or delay in so doing.

 

(d)          Notwithstanding anything to the contrary contained herein, the Note
or any other Collateral Document, the Pledgor does not waive its right to
receive any Collateral or proceeds thereof that remain after the exercise of
remedies by the Lender and the Payment in Full.

 

SECTION 6.2.          Application. The proceeds of collection, sale or other
disposition of all or any part of the Collateral coming into the Lender’s
possession after the occurrence and during the continuance of an Event of
Default shall be applied by the Lender in the manner set forth in Section 5 of
the Note. Any proceeds remaining after the Payment in Full shall be paid to the
Pledgor.

 

SECTION 6.3.          No Waiver, Etc. No failure or delay by the Lender to
insist upon the strict performance of any term, condition, covenant or agreement
of the Note, this Agreement or of the other Collateral Documents, or to exercise
any right, power or remedy consequent upon a breach thereof, shall constitute a
waiver of any such term, condition, covenant or agreement or of any such breach,
or preclude the Lender from exercising any such right, power or remedy at any
later time or times. By accepting payment after the due date of any amount
payable under the Note, this Agreement or any of the other Collateral Documents,
the Lender shall not be deemed to waive the right either to require prompt
payment when due of all other amounts payable under the Note, this Agreement or
any of the other Collateral Documents, or to declare an Event of Default for
failure to effect such prompt payment of any such other amount. The payment by
the Pledgor, the Company or any other Person and the acceptance by the Lender of
any other amount due and payable under the provisions of the Note, this
Agreement or the other Collateral Documents at any time during which an Event of
Default exists shall not in any way or manner be construed as a waiver of such
Event of Default by the Lender or preclude the Lender from exercising any right
of power or remedy consequent upon the occurrence and during the continuance of
such Event of Default. All rights and remedies herein provided are cumulative
and are not exclusive of any rights or remedies provided by law.

 

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ARTICLE VII

 

MISCELLANEOUS

 

SECTION 7.1.          Course of Dealing; Amendment. No course of dealing between
the Lender and the Pledgor shall be effective to amend, modify or change any
provision of this Agreement, the Note or any other Collateral Documents. The
Lender shall have the right at all times to enforce the provisions of this
Agreement, the Note and each other Collateral Documents in strict accordance
with the provisions hereof and thereof, notwithstanding any conduct or custom on
the part of the Lender in refraining from so doing at any time or times. The
failure of the Lender at any time or times to enforce its rights under such
provisions, strictly in accordance with the same, shall not be construed as
having created a custom in any way or manner contrary to specific provisions of
the Note, this Agreement or the other Collateral Documents or as having in any
way or manner modified or waived the same. This Agreement may not be amended,
modified, or changed in any respect except by an agreement in writing signed by
the Lender and the Pledgor.

 

SECTION 7.2.          Waiver of Default. The Lender may, at any time and from
time to time, execute and deliver to the Pledgor a written instrument waiving,
on such terms and conditions as the Lender may specify in such written
instrument, any of the requirements of this Agreement or any Event of Default
and its consequences, provided, that any such waiver shall be for such period
and subject to such conditions as shall be specified in any such instrument. In
the case of any such waiver, the Pledgor and the Lender shall be restored to
their former positions prior to such Event of Default and shall have the same
rights as they had hereunder. No such waiver shall extend to any subsequent or
other Event of Default, or impair any right consequent thereto and shall be
effective only in the specific instance and for the specific purpose for which
given.

 

SECTION 7.3.          Security Interest Absolute. Until the termination or
release pursuant to Section 7.12 (and subject to reinstatement thereunder), all
rights and remedies of the Lender hereunder and under applicable laws and all
agreements and obligations of the Pledgor hereunder shall be absolute and
unconditional irrespective of, and shall not be released, discharged, impaired
or affected by, (a) any lack of validity or enforceability of the Note, this
Agreement or any of the other Collateral Documents, (b) any change in the amount
of any or all of the Secured Obligations or any change in the time, manner or
place of payment of any or all of the Secured Obligations or any change of any
other provision or term of any or all of the Secured Obligations, (c) any
amendment to, or modification or waiver of, consent to, or departure from, any
of the provisions of the Note, this Agreement or the other Collateral Documents,
(d) any exchange, substitution, release, addition or non-perfection of any
collateral and security for any of the Secured Obligations, (e) the release of,
in whole or in part, any Person, including, without limitation, the Company and
the Pledgor, obligated or liable for the payment of all or any part of the
Secured Obligations or any attempt, pursuit, enforcement or exhaustion of any
rights or remedies the Lender may have against any such Person or against any
collateral and security for any or all of the Secured Obligations, (f) the
failure, omission, lack of diligence or delay by the Lender to exercise or
enforce any rights and remedies it may have under the Note, this Agreement, the
other Collateral Documents or applicable laws, and (g) any other event or
circumstance which might otherwise constitute a legal or equitable discharge,
release or defense of the Pledgor or of the Collateral (other than Payment in
Full).

 

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SECTION 7.4.          Certain Waivers. To the extent permitted by law:

 

(a)          Until the termination or release pursuant to Section 7.12 (and
subject to reinstatement thereunder), the Pledgor hereby waives and relinquishes
all rights and remedies accorded to pledgors, sureties or guarantors and agrees
not to assert or take advantage of any such rights or remedies, including: (i)
any right to require the Lender to proceed against the Company or any other
Person or to proceed against or exhaust any security held by the Lender at any
time or to pursue any other remedy in the Lender’s power before proceeding
against a Pledgor; (ii) any defense that may arise by reason of the incapacity,
lack of power or authority, death, dissolution, merger, termination or
disability of the Pledgor, the Company or any other Person or the failure of the
Lender to file or enforce a claim against the estate (in administration,
bankruptcy or any other proceeding) of the Pledgor, the Company or any other
Person; (iii) any right to enforce any remedy that the Lender may have against
the Company or any other Person and any right to participate in any security
held by the Lender; (iv) any right to require the Lender to give any notices of
any kind, including, without limitation, notices of nonpayment, nonperformance,
protest, dishonor, default, delinquency or acceleration, or to make any
presentments, demands or protests, except as set forth herein or expressly
provided in the Note of any of the Collateral Documents; (v) any right to assert
the bankruptcy or insolvency of the Company or any other Person as a defense
hereunder or as the basis for rescission hereof and any right under any law
purporting to reduce the Pledgor’s obligations hereunder if the Secured
Obligations are reduced other than as a result of payment of such Secured
Obligations; (vi) any defense based on the repudiation of the Note or any of the
Collateral Documents by the Company or any other Person, the failure by the
Lender to enforce any claim against the Pledgor, the Company or any other Person
or the unenforceability in whole or in part of the Note or any of the Collateral
Documents; (vii) all suretyship and guarantor’s defenses generally; (viii) any
right to insist upon, plead or in any manner whatever claim or take the benefit
or advantage of, any appraisal, valuation, stay, extension, marshaling of
assets, redemption or similar law, or exemption, whether now or at any time
hereafter in force, that may delay, prevent or otherwise affect the performance
by the Pledgor of its obligations under, or the enforcement by the Lender of,
this Agreement; (ix) any requirement on the part of the Lender to mitigate the
damages resulting from any default; (x) any defense based upon an election of
remedies by the Lender, including an election to proceed by non-judicial rather
than judicial foreclosure, that destroys or otherwise impairs the subrogation
rights of the Pledgor, the right of the Pledgor to proceed against the Company
or another Person for reimbursement, or both; (xi) any defense based on any
offset against any amounts that may be owed by any Person to the Pledgor for any
reason whatsoever; (xii) any defense based on any act, failure to act, delay or
omission whatsoever on the part of the Company or the failure by Company to do
any act or thing or to observe or perform any covenant, condition or agreement
to be observed or performed by it under the Note or any of the Collateral
Documents, (xiii) any defense, setoff or counterclaim that may at any time be
available to or asserted by the Company against the Lender or any other Person
under the Note or any of the Collateral Documents; (xiv) any duty on the part of
the Lender to disclose to the Pledgor any facts the Lender may now or hereafter
know about the Company, regardless of whether the Lender has reason to believe
that any such facts materially increase the risk beyond that which the Pledgor
intends to assume, or have reason to believe that such facts are unknown to the
Pledgor, or have a reasonable opportunity to communicate such facts to the
Pledgor; and (xv) any defense based on any change in the time, manner or place
of any payment under, or in any other term of, the Note or any of the Collateral
Documents or any other amendment, renewal, extension, acceleration, compromise
or waiver of or any consent or departure from the terms of the Note or any of
the Collateral Documents (other than Payment in Full).

 

(b)          The Pledgor waives the posting of any bond otherwise required of
the Lender in connection with any judicial process or proceeding to obtain
possession of, replevy, attach, or levy upon the Collateral, to enforce any
judgment or other security for the Secured Obligations, to enforce any judgment
or other court order entered in favor of the Lender, or to enforce by specific
performance, temporary restraining order, preliminary or permanent injunction,
this Agreement or any other agreement or document between the Pledgor and the
Lender.

 

 17 

 

  

(c)          So long as this Agreement is in effect, (i) the Pledgor shall not
have any right of subrogation and the Pledgor waives all rights to enforce any
remedy that the Lender now has or may hereafter have against the Company, and
waives the benefit of, and all rights to participate in, any security now or
hereafter held by the Lender and (ii) the Pledgor waives any claim, right or
remedy that the Pledgor may now have or hereafter acquire against the Company
that arises hereunder and/or from the performance by the Pledgor hereunder,
including any claim, remedy or right of subrogation, reimbursement, exoneration,
contribution, indemnification, or participation in any claim, right or remedy of
the Lender against the Company or any security that the Lender now has or
hereafter acquires. Any amount paid to the Pledgor on account of any such
subrogation rights prior to the Payment in Full shall be held in trust for the
benefit of the Lender and shall immediately thereafter be paid to the Lender.

 

SECTION 7.5.          Notices. Unless otherwise provided herein, any notice or
other communication required or permitted to be given under this Agreement shall
be in writing and shall be given in the manner and become effective as set forth
in the Note, and, as to the Pledgor, addressed to it at the address of the
Company set forth in the Note and as to the Lender, addressed to it at the
address set forth in the Note, or in each case at such other address as shall be
designated by such party in a written notice to the other party.

 

SECTION 7.6.          Performance for Pledgor; Power of Attorney.

 

(a)          If the Pledgor shall fail to perform any covenants contained in
this Agreement or if any representation or warranty on the part of the Pledgor
contained herein shall be breached, the Lender may (but shall not be obligated
to) do the same or cause it to be done or remedy any such breach, and may make
payments for such purpose; provided, however, that the Lender shall in no event
be bound to inquire into the validity of any tax, Lien, imposition or other
obligation which the Pledgor fails to pay or perform as and when required
hereby. Any and all amounts so paid by the Lender shall be reimbursed by the
Pledgor in accordance with the provisions of Section 7.7. Neither the provisions
of this Section 7.7 nor any action taken by the Lender pursuant to the
provisions of this Section 7.7 shall prevent any such failure to observe any
covenant contained in this Agreement nor any breach of representation or
warranty from constituting an Event of Default.

 

 18 

 

  

(b)          Subject to Section 7.18, the Pledgor hereby appoints the Lender the
attorney-in-fact of the Pledgor for the purpose of carrying out the provisions
of this Agreement and taking any action and executing any instrument which the
Lender may deem necessary or advisable to accomplish the purposes hereof, which
appointment is irrevocable and coupled with an interest. Without limiting the
generality of the foregoing, the Lender shall have the right, upon the
occurrence and during the continuance of an Event of Default which is not cured
within ten (10) days of Lender’s written notice to Pledgor of its intent to
exercise the rights set forth in this Section 7.6, with full power of
substitution either in the Lender’s name or in the name of the Pledgor, (a) to
ask for, demand, sue for, collect, receive, receipt and give acquittance for any
and all moneys due or to become due and under and by virtue of any Collateral,
(b) to endorse checks, drafts, orders and other instruments for the payment of
money payable to the Pledgor representing any interest, dividend or other
distribution payable in respect of the Collateral or any part thereof or on
account thereof, (c) to give full discharge for all or any part of the
Collateral, (d) to settle, compromise, prosecute or defend any action, claim or
proceeding with respect to all or any part of the Collateral, (e) to sell,
assign, endorse, pledge, transfer and make any agreement respecting all or any
part of the Collateral, or (f) to otherwise deal with all or any part of the
Collateral as though the Lender were the absolute owner thereof; provided,
however, that nothing herein contained shall be construed as requiring or
obligating the Lender to make any commitment or to make any inquiry as to the
nature or sufficiency of any payment received by the Lender, or to present or
file any claim or notice, or to take any action with respect to the Collateral
or any part thereof or the moneys due or become due in respect thereof or any
property covered thereby, and no action taken by the Lender or omitted to be
taken with respect to the Collateral or any part thereof shall give rise to any
defense, counterclaim or offset in favor of the Pledgor or to any claim or
action against the Lender except to the extent that such defense, counterclaim
or offset is determined by a court of competent jurisdiction by final and
non-appealable judgment to have resulted from (i) the bad faith, gross
negligence or willful misconduct of the Lender which, for the avoidance of
doubt, shall not include the entering into of the Note, this Agreement and the
other Collateral Documents or any actions in connection therewith, (ii) a claim
brought by the Pledgor or any Affiliate thereof against the Lender for breach of
the Lender’s obligations under the Note or any Collateral Document, or (iii) a
claim solely among the Lender (including in the capacity as agent) and its
assignees permitted under Section 7.9 below.

 

SECTION 7.7.          Lender Costs. The Pledgor shall pay to the Lender within
five Business Days following written demand all Lender’s reasonable and
documented out-of-pocket costs and expenses, including reasonable and documented
attorneys’ fees incurred by Lender in protecting or asserting any of Lender’s
rights under this Agreement or any other Collateral Document (including, without
limitation, documented costs incurred in seeking legal advice in connection with
any matter related to the administration or enforcement of this Agreement or in
connection with any default or potential default, regardless of whether suit is
filed) (“Lender Costs”). Lender Costs shall be included in the Secured
Obligations secured hereby. Without prejudice to the survival of any other
agreement of Pledgor under this Agreement or any other Collateral Documents, the
agreements and obligations of the contained in this Section shall survive
termination of this Agreement and Payment in Full.

 

SECTION 7.8.          Severability. If any provision hereof is invalid and
unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(a) the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in favor of the Lender in order to
carry out the intentions of the parties hereto as nearly as may be possible, (b)
the invalidity or unenforceability of any provision hereof in any jurisdiction
shall not affect the validity or enforceability of such provision in any other
jurisdiction, and (c) the parties hereto shall endeavor in good faith
negotiations to replace the invalid or unenforceable provisions with valid and
enforceable provisions, the economic effect of which comes as close as possible
to that of the invalid or unenforceable provisions.

 

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SECTION 7.9.          Assignment. The Pledgor shall not have the right to assign
its rights or obligations hereunder or any interest herein without the prior
written consent of the Lender. The Lender may assign or transfer all or any part
of the Secured Obligations with the Pledgor’s or the Company’s consent (in each
case not to be unreasonably withheld). In the event of any such assignment with
the requisite consent, the rights and remedies of the Lender hereunder shall
extend to, and vest in, any such assignee or assignees who shall have the right
to enforce the provisions of this Agreement as fully as the Lender; provided
that the Lender shall continue to have the unimpaired right to enforce the
provisions of this Agreement as to so much of the Secured Obligations that it
has not sold, assigned or transferred. The Pledgor will use commercially
reasonable efforts to cooperate with the Lender in connection with any such
assignment to the extent consented to as provided in the foregoing sentence, and
will execute and deliver such consents and acceptances to any such assignment
and amendments to this Agreement in order to effect any such assignment
(including, without limitation, the appointment of the Lender as agent for
itself and all assignees).

 

SECTION 7.10.        Survival. All representations and warranties contained in
or made under or in connection with this Agreement shall survive the execution,
delivery and performance of this Agreement.

 

SECTION 7.11.        Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the Pledgor and the Lender and their respective heirs,
personal representatives, successors and assigns.

 

SECTION 7.12.       Continuing Agreement; Termination. This Agreement and the
security interest granted hereby shall be continuing and binding on the Pledgor
regardless of how long before or after the date hereof any of the Secured
Obligations were or are incurred. This Agreement and the security interest
granted hereby shall automatically terminate without any further action by any
Person when all of the Secured Obligations have been Paid in Full, at which time
the Lender will deliver to the Pledgor and authorize the filing of all proper
Uniform Commercial Code termination statements and other releases of the
Collateral prepared by the Pledgor which are reasonably requested by the Pledgor
to evidence such termination, and the Lender shall return all Collateral in its
possession to the Pledgor. The Pledgor agrees that its obligations hereunder
shall continue to be effective or be reinstated, as the case may be, if at any
time all or part of any payment of any Secured Obligation is rescinded or must
otherwise be returned by the Lender or any other Person upon the insolvency,
bankruptcy or reorganization of the Company or any of its Affiliates.

 

SECTION 7.13.         Applicable Law. This Agreement and the rights and
obligations of the parties hereunder shall be construed and interpreted in
accordance with the laws of the State of New York (excluding conflicts of laws
principles (other than Sections 5-1401 of the New York General Obligations
Law)), both in interpretation and performance, provided that the law governing
perfection, the effect of perfection or non-perfection, and the priority of
security interests, shall be determined in accordance with Part 3 of Title 9 of
the UCC. The other provisions of Sections 15, 18, and 19 of the Note are
incorporated herein, mutatis mutandis, as if a part hereof.

 

SECTION 7.14.        [Reserved.]

 

SECTION 7.15.       Duplicate Originals and Counterparts. This Agreement may be
executed in any number of duplicate originals or counterparts and delivered in
original or electronic form in a .pdf (portable document format), with the same
effect as execution and delivery of originals. Each of such duplicate originals
or counterparts shall be deemed to be an original and all taken together shall
constitute but one and the same instrument.

 

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SECTION 7.16.        Exhibits and Schedules. Any exhibits and schedules attached
to this Agreement are an integral part hereof and are hereby incorporated herein
and included in the term “this Agreement”.

 

SECTION 7.17.         Headings. Article and Section headings in this Agreement
are included herein for convenience of reference only, shall not constitute a
part of this Agreement for any other purpose and shall not be deemed to affect
the meaning or construction of any of the provisions hereof.

 

SECTION 7.18.        Regulatory Savings Clause; Change in Law. It is the
intention of the Pledgor and the Lender to effect a change in control of Hunt
Securities, due to the Lender’s exercise of remedies hereunder, only in
compliance with all applicable regulatory requirements for the Collateral,
including, without limitation, the Pledged Equity Interests. The enforcement of
the remedies under this Agreement, the Note, or any other Collateral Documents,
shall be made in compliance with all applicable law and regulations as in effect
at the time.

 

SECTION 7.19        Notice. All notices, requests, consents, claims, demands,
waivers and other communications hereunder shall be in writing and shall be
deemed to have been given: (a) when delivered by hand (with written confirmation
of receipt); (b) when received by the addressee if sent by a nationally
recognized overnight courier (receipt requested); (c) on the date sent by
facsimile or e-mail of a PDF document (with confirmation of transmission) if
sent during normal business hours of the recipient, and on the next Business Day
if sent after normal business hours of the recipient; or (d) on the third day
after the date mailed, by certified or registered mail, return receipt
requested, postage prepaid. Such communications must be sent to the respective
parties at the following addresses (or at such other address for a party as
shall be specified in a notice given in accordance with this Section 7.19.)

 

  If to Pledgor: Hunt FS Holdings, LLC     4401 North Mesa     El Paso, TX 79902
    Attention: Kara E. Harchuck, General Counsel     Fax No.: 312-799-3909    
Email: kara.harchuck@huntcompanies.com         With a copy to (which does not
constitute notice):         Paul, Weiss, Rifkind, Wharton & Garrison LLP    
1285 Avenue of the Americas     New York, New York 10019-6064     Attention:
Jeffrey D. Marell, Esquire     Ross A. Fieldston, Esquire     Facsimile: (212)
492-0105, (212) 492-0075     E-mail:  jmarell@paulweiss.com and
rfieldston@paulweiss.com

 

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  If to Lender: MMA Capital Management, LLC     3600 O’Donnell Street, Suite 600
    Baltimore, Maryland 21224     Attention:  Gary A. Mentesana and Megan
Sophocles     Fax No.:  (443) 263-2857    
Email:  gary.mentesana@mmacapitalmanagement.com and
megan.sophocles@mmacapitalmanagement.com

 

  With a copy to (which does not constitute notice):         Gallagher Evelius &
Jones LLP     218 N. Charles Street, Suite 400     Baltimore, Maryland 21201    
Attention: Stephen A. Goldberg, Esquire     Fax No.:  (410) 468-2786     Email:
sgoldberg@gejlaw.com

 

[Remainder of Page Left Intentionally blank; Signature Page Follows]

 

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IN WITNESS WHEREOF, intending to be legally bound hereby, each of the parties
hereto have executed and delivered this Agreement as of the day and year first
written above.

 

  PLEDGOR:       HUNT FS HOLDINGS, LLC       By: /s/ James. C. Hunt     Name:
James C. Hunt     Title: Chief Executive Officer

 

[Signature Page to Pledge and Security Agreement]

 

 

 

 

  LENDER:       MMA CAPITAL MANAGEMENT, LLC         By: /s/ Michael L. Falcone  
  Name: Michael L. Falcone     Title: Chief Executive Officer and President

 

[Signature Page to Pledge and Security Agreement]