f8k042010ex10v_fund.htm


    
      Exhibit 10.5

    

    PLEDGE AND SECURITY
AGREEMENT

     

    THIS PLEDGE AND SECURITY
AGREEMENT (this “Agreement”) is made
as of the 29th day
of March, 2010, by Fund.com,
Inc., a Delaware corporation (the “Pledgor”), in favor
of Albert Hallac, on
behalf of himself and the other Hallac Members who have
executed this Agreement (individually and collectively, the “Secured Party”, and
together with the Pledgor, collectively, the “Parties”), and Zukerman Gore Brandeis &
Crossman, LLP (the “Collateral
Agent”).

     

    WHEREAS, the Pledgor and the
Secured Party are parties to that certain Securities Purchase and Restructuring
Agreement, dated as of March 26, 2010, by and among Weston Capital Management,
LLC, a Delaware limited liability company (the “Company”), PBC-Weston
Holdings, LLC, a Delaware limited liability company, the Pledgor and the Secured
Party (the “Restructuring
Agreement”);

     

    WHEREAS, pursuant to the
Restructuring Agreement, among other things, the Pledgor is acquiring 50.9% of
the membership interests of the Company (the “Membership Interests”) from
the Hallac Members for $5.5 million, of which $5.0 million dollars will be
evidenced by a Senior Secured Variable Principal Amount Promissory Note (the
“Reset Note”)
attached as Exhibit
A hereto (unless otherwise defined herein, capitalized terms shall have
the same meaning as defined in the Reset Note);

     

    WHEREAS, the Pledgor has
agreed to pledge to the Secured Party pursuant to this Agreement all of the
Membership Interests it has acquired from the Hallac Members in order to secure
the Pledgor’s obligations under the Reset Note; and

     

    WHEREAS, the Collateral Agent
has been appointed by the Secured Party to act as the representative of the
Secured Party for all purposes under this Agreement.

     

    NOW, THEREFORE, the Pledgor
agrees as follows:

     

    1.   OBLIGATIONS
SECURED.  This Agreement
secures (a) the payment in full of the $2,450,000 Installment Payment due and
owing by the Pledgor to the Secured Party under the Reset Note, and (b) the
payment and performance of all other agreements, obligations and covenants of
the Pledgor to the Secured Party under the Reset Note (including, without
limitation, any and all payment obligations, restrictive covenants, Liquidity
Rights and other obligations that may arise at any time whatsoever pursuant to
the Restructuring Agreement, including but not limited to the provisions set
forth in Article 5, Article 7 and
Article 8
thereof, including, without limitation, after any election by the Holders to
cause a Mandatory Prepayment and Conversion of the Reset Note in whole or in
part and for so long as any member of the Secured Party beneficially owns any
“Note Shares” (as defined in the Restructuring Agreement)) (collectively, the
“Obligations”).

     

    
      
         


      

      
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    2.   PLEDGE.  In consideration
of the Secured Party having extended credit to Pledgor pursuant to the Reset
Note, the Pledgor hereby pledges and grants to the Secured Party, as security
for the Obligations, a first priority lien and security interest in 50.9% of the
Membership Interests (subject to any pro rata dilution or adjustment that would
result solely from actions taken by the Company from and after the date hereof
that do not result in any default or violation of the provisions of the Reset
Note, this Agreement or the Restructuring Agreement) held by the Pledgor and
described on Exhibit
B attached hereto and the instruments representing such Membership
Interests, and all cash, rights, instruments and other property or proceeds from
time to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of the Membership Interests (collectively, the “Pledged
Collateral”).  The Pledged Collateral is hereby expressly
governed by Article 8 of the New York Uniform Commercial Code.

     

    3.   THE
COLLATERAL AGENT.  The Collateral
Agent agrees to hold the Pledged Collateral and to perform its obligations in
accordance with the terms and provisions of this Agreement.  The
Parties agree that the Collateral Agent shall not assume any responsibility for
the failure of the Parties or the Company to perform in accordance with the
Restructuring Agreement, the Reset Note and any other agreements related to the
foregoing.  The acceptance by the Collateral Agent of its
responsibilities hereunder is subject to the following terms and conditions
which the parties hereto agree shall govern and control with respect to the
Collateral Agent's rights, duties and liabilities hereunder:

     

    (a)   Documents.  The
Collateral Agent shall be protected in acting upon any written notice, request,
waiver, consent, receipt or other paper or document furnished to it, not only as
to its due execution and validity and the effectiveness of its provisions, but
also as to the truth and accuracy of any information therein contained, which
the Collateral Agent in good faith believes to be genuine and what it purports
to be.  The Collateral Agent shall be entitled to rely upon and shall
be fully protected in acting upon any written notices or instructions provided
by the Secured Party, including but not limited pursuant to Section 9(a)
hereof.  Should it be necessary for the Collateral Agent to act upon
any instructions, directions, documents or instruments issued or signed by or on
behalf of any corporation, partnership, fiduciary or individual acting on behalf
of another party hereto, it shall not be necessary for the Collateral Agent to
inquire into such corporation's, partnership's, fiduciary's or individual's
authority.  The Collateral Agent is also relieved from the necessity
of satisfying itself as to the authority of the persons executing this Agreement
in a representative capacity on behalf of any of the Parties.

     

    (b)   Status.  The
Collateral Agent is acting under this Agreement as a stakeholder only and shall
be considered an independent contractor with respect to the
Parties.  No term or provision of this Agreement is intended to
create, nor shall any such term or provision be deemed to have created, any
principal-agent, trust, joint venture, partnership, debtor-creditor or
attorney-client relationship between or among the Collateral Agent, the Parties
or the Company.  To the extent any beneficiary under this Agreement is
or has been represented by the Collateral Agent, such beneficiary hereby waives
any conflict of interest and irrevocably authorizes and directs the Collateral
Agent to carry out the terms and provisions of this Agreement fairly as to all
parties, without regard to any such representation.  The Collateral
Agent’s only duties are those expressly set forth in this Agreement, and the
Secured Party authorizes the Collateral Agent to perform those duties in
accordance with its usual practices.  The Collateral Agent may
exercise or otherwise enforce any of its rights, powers, privileges, remedies
and interests under this Agreement and applicable law, or perform any of its
duties under this Agreement by or through its partners, employees, attorneys,
agents or designees.  Notwithstanding the foregoing, the Pledgor
expressly acknowledges that it is aware that the Collateral Agent has previously
and is currently representing the Secured Party (and certain of its affiliates)
on certain matters, including but not limited to the transactions contemplated
by the Restructuring Agreement and the Reset Note, and nothing herein shall
prevent or preclude the Collateral Agent from continuing to represent the
Secured Party and its affiliates in any fashion or with respect to any matter
whatsoever, including but not limited to, any dispute relative to the Pledged
Collateral, this Pledge Agreement, the Restructuring Agreement, the Reset Note ,
the Fifth Amended and Restated Operating Agreement of the Company or in
connection with any matter relative to the Secured Party ( or any affiliate
thereof), the Pledgor or otherwise.

     

    
      
         


      

      
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    (c)   Discharge of Collateral
Agent.  Upon delivery of all of the Pledged Collateral pursuant
to the terms hereof or to a successor collateral agent, or upon the termination
of this Agreement, the Collateral Agent shall thereafter be discharged from any
further obligations hereunder.  The Collateral Agent is hereby
authorized, in any and all events, to comply with and obey any and all final
judgments, orders and decrees of any court of competent jurisdiction which may
be filed, entered or issued, and all final arbitration awards and, if it shall
so comply or obey, it shall not be liable to any other person by reason of such
compliance or obedience.

     

    (d)   Disputes;
Interpleader.  In the event that (i) any dispute shall arise
between the Parties with respect to the disposition or disbursement of any of
the assets held hereunder or (ii) the Collateral Agent shall be uncertain as to
how to proceed in a situation not explicitly addressed by the terms of this
Agreement whether because of conflicting demands by the other parties hereto or
otherwise, the Collateral Agent shall be permitted to interplead all of the
assets held hereunder into a court of competent jurisdiction, and thereafter be
fully relieved from any and all liability or obligation with respect to such
interpleaded assets.  The parties hereto other than the Collateral
Agent further agree to pursue any redress or recourse in connection with such a
dispute, without making the Collateral Agent a party to the same.

     

    (e)   Limitations on Collateral
Agent Duties.  The Collateral Agent shall have only those
duties as are specifically provided herein, which shall be deemed purely
ministerial in nature, and shall under no circumstance be deemed a fiduciary for
any of the parties to this Agreement.  The Collateral Agent shall
neither be responsible for, nor chargeable with, knowledge of the terms and
conditions of any other agreement, instrument or document between the other
parties hereto, in connection herewith, including without limitation the Reset
Note, Restructuring Agreement and any other agreements relating to the
foregoing.  This Agreement sets forth all matters pertinent to the
collateral agency contemplated hereunder, and no additional obligations of the
Collateral Agent shall be inferred from the terms of this Agreement or any other
agreement

     

    (f)   Court
Orders.  In the event that any Pledged Collateral shall be
attached, garnished or levied upon by any court order, or the delivery thereof
shall be stayed or enjoined by an order of a court, or any order, judgment or
decree shall be made or entered by any court order affecting the property
deposited under this Agreement, the Collateral Agent is hereby expressly
authorized, in its sole discretion, to obey and comply with all writs, orders or
decrees so entered or issued, which it is advised by legal counsel of its own
choosing is binding upon it, whether with or without jurisdiction, and in the
event that the Collateral Agent obeys or complies with any such writ, order or
decree it shall not be liable to any of the parties hereto or to any other
person, firm or corporation, by reason of such compliance notwithstanding such
writ, order or decree be subsequently reversed, modified, annulled, set aside or
vacated.

     

    
      
         


      

      
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    (g)   Exculpation.  The
Collateral Agent and its designees, and each of their respective partners,
members, employees, attorneys and agents, shall not incur any liability
whatsoever for the taking of any action in accordance with the terms and
provisions of this Agreement, for any mistake or error in judgment, for
compliance with any applicable law or any attachment, order or other directive
of any court or other authority (irrespective of any conflicting term or
provision of this Agreement), or for any act or omission of any other person
engaged by the Collateral Agent in connection with this Agreement other than
those attributable to the gross negligence or willful misconduct as finally
determined pursuant to applicable law by a court or governmental authority
having jurisdiction; and each of the Parties hereby irrevocably waives any and
all claims and actions whatsoever against the Collateral Agent and its
designees, and each of their respective partners, members, employees, attorneys
and agents, arising out of or related directly or indirectly to any and all of
the foregoing acts, omissions and circumstances other than those of gross
negligence or willful misconduct as finally determined pursuant to applicable
law by a court or governmental authority having jurisdiction.

     

     

    (h)   Resignation or Termination
of Collateral Agent.  The Collateral Agent shall have the right
to resign at any time by giving written notice of such resignation to the
Secured Party and the Pledgor and the Secured Party and the Pledgor shall have
the right to terminate the services of the Collateral Agent hereunder at any
time by giving a joint written notice of such termination to the Collateral
Agent, in each case specifying the effective date of such resignation or
termination.  Within thirty (30) days after receiving or delivering
the aforesaid notice, as the case may be, the Secured Party and the Pledgor
agree to appoint a successor collateral agent to which the Collateral Agent
shall surrender the Pledged Collateral then held hereunder to such successor
collateral agent.  Except as otherwise agreed to in writing by the
Parties, no Pledged Collateral shall be released unless and until a successor
collateral agent has been appointed in accordance with this
Section 3(h).

     

    4. COVENANTS OF THE
PLEDGOR.

     

    (a)   The
Pledgor will defend the Pledged Collateral against the claims and demands of all
other parties, will keep the Pledged Collateral free from all other security
interests, liens or other encumbrances and will not sell, transfer, lease,
assign, deliver or otherwise dispose of any Pledged Collateral or any interest
therein without the prior written consent of the Secured Party;

     

    (b)   Without
the prior written consent of the Secured Party, the Pledgor will not change its
address, will not change the address at which all records concerning the Pledged
Collateral are kept and will not make any change in the Pledgor’s name, identity
or organizational status, unless it has given thirty days prior written notice
thereof to the Secured Party;

     

    
      
         


      

      
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    (c)   The
Pledgor will pay all taxes, assessments and other charges of every nature that
may be levied or assessed against the Pledged Collateral and which, if unpaid,
would become a lien against any of the Pledgor’s assets, except to the extent
the Pledgor is reasonably contesting in good faith any such tax, assessment or
other charge with an adequate reserve provided therefore; and

     

    (d)   The
Pledgor will provide to the Secured Party, in form reasonably satisfactory to
the Secured Party, promptly upon the request of the Secured Party, all
information relating to the Pledgor and to the business, operations, assets,
affairs or condition (financial or other) of the Pledgor that is so
requested.

     

    5.   PROCEEDS.  Except as
otherwise provided in the Restructuring Agreement and Reset Note, as long as no
Event of Default (as defined below), has occurred, the Pledgor shall be entitled
to receive and retain, and to utilize free and clear of the lien of this
Agreement, any and all distributions and other payments paid in respect of the
Pledged Collateral.

     

    6.   NO
LIABILITY AS MEMBER.  The Secured Party
shall have no liability or duties as a member of the Company or for any
obligations of the Pledgor, unless and until the Secured Party, or his
assignee(s) enforces this pledge and becomes a member and then only from and
after the date of becoming a member of the Company.

     

    7.   NOTIFICATION
AND PAYMENTS.  The Secured Party
may notify the Pledgor in writing, at any time after the occurrence of an Event
of Default (as hereinafter defined), and without waiving in any manner the
pledge, that any distributions and other payments on account of and from the
Pledged Collateral received by the Pledgor (a) shall be held by the Pledgor
in trust for the Secured Party in the same medium in which received,
(b) shall not be commingled with any assets of the Pledgor and
(c) shall be turned over to the Secured Party not later than the next
business day following the day of its receipt.

     

    8.   EVENTS OF
DEFAULT.  The happening of
any of the following events shall constitute an “Event of Default” hereunder:
(a) the occurrence and continuation of an “Event of Default” as defined in
Section 8 of the Note, (b) the default by the Pledgor in the performance of any
Obligation or undertaking or any representation or warranty in this Agreement
(and the failure of the Pledgor to cure such default during any applicable cure
period under the Reset Note), (c) the filing of any voluntary or involuntary
petition under any chapter of the United States Bankruptcy Code or any similar
federal or state statute by or against the Pledgor, (d) the application for
the appointment of a receiver or a custodian under the United States Bankruptcy
Code or applicable state law of any property of the Pledgor, the making of a
general assignment for the benefit of the creditors of the Pledgor, the
insolvency of the Pledgor however evidenced or the failure of the Pledgor to pay
its debts as they mature or (e) the issuing of any attachment, execution or
other process or the filing of any lien against any of the Pledged
Collateral.

     

    
      
         


      

      
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    9.   REMEDIES.  Upon the
occurrence of an Event of Default:

     

    (a)   The
Secured Party may, at any time and from time to time without notice to the
Pledgor, instruct the Collateral Agent to transfer the Pledged Collateral into
its name or the name of its nominee without reference to this Agreement or the
interest granted to the Secured Party in this Agreement; and

     

    (b)   The
Secured Party may, in its sole discretion, declare all or any part of the
Obligations due and payable immediately without demand or notice of any
kind.

     

    10.   ELECTION
OF REMEDIES BY SECURED PARTY. 

     

    (a)           All
cash proceeds received by the Secured Party in respect of any sale of,
collection from, or other realization upon all or any part of the Pledged
Collateral pursuant to the exercise by the Secured Party of its remedies under
this Agreement shall be applied promptly from time to time by the Secured Party
first to the payment of the reasonable expenses (including, but not limited to,
reasonable and documented attorneys’ fees) incurred by the Secured Party as a
result of any Event of Default and then to payment of the
Obligations.

     

    (b)           NOTWITHSTANDING
ANYTHING TO THE CONTRARY, EXPRESS OR IMPLIED, CONTAINED IN THE RESTRUCTURING
AGREEMENT, THE RESET NOTE OR IN THIS AGREEMENT, UPON THE OCCURRENCE OF AN EVENT
OF DEFAULT, IN LIEU OF THE REMEDIES SET FORTH IN HEREIN AND NOTWITHSTANDING ANY
OTHER OBLIGATIONS OF A SECURED PARTY UNDER THE UNIFORM COMMERCIAL CODE WITH
RESPECT TO THE DISPOSITION OF COLLATERAL OR PLEDGED ASSETS, THE SECURED PARTY
MAY ELECT TO ACCEPT AND TAKE LEGAL AND BENEFICIAL OWNERSHIP AND TITLE TO ALL OF
THE PLEDGED COLLATERAL (OR ASSIGN SUCH PLEDGED COLLATERAL TO ITS DESIGNEE(S)) AS
FULL AND COMPLETE LIQUIDATED DAMAGES AND IN FULL SATISFACTION OF ALL PAYMENT
OBLIGATIONS IN RESPECT OF ALL OF THE OBLIGATIONS.  THE EXERCISE BY
SECURED PARTY OF THE REMEDY UNDER THIS SECTION 10(b) SHALL NOT RELIEVE THE
PLEDGOR OF ITS OTHER OBLIGATIONS UNDER THE RESTRUCTURING AGREEMENT OR OTHER
“TRANSACTION DOCUMENTS” (AS THAT TERM IS DEFINED IN THE RESTRUCTURING AGREEMENT,
BUT EXCLUDING THE RESET NOTE).

    


    11.   EXPENSES.  The Pledgor will
upon demand pay to the Secured Party the amount of any and all reasonable and
documented expenses, including the reasonable and documented fees and expenses
of its counsel, which the Secured Party may incur in connection with (a) the
custody or preservation of, or the sale of, collection from, or other
realization upon, any of the Pledged Collateral, (b) the exercise or enforcement
of any of the rights of the Secured Party hereunder or (c) the failure by the
Pledgor to perform or observe any of the provisions hereof.

     

    
      
         


      

      
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    12.   MISCELLANEOUS.

     

    (a)   No course
of dealing and no delay or omission by the Secured Party in exercising any right
or remedy hereunder or with respect to any of the Obligations shall operate as a
waiver thereof or of any other right or remedy, and no single or partial
exercise thereof shall preclude any other or further exercise thereof or the
exercise of any other right or remedy.  The Secured Party may remedy
any default by the Pledgor hereunder or with respect to any of the Obligations
in any reasonable manner without waiving the default remedied and without
waiving any other prior or subsequent default by the Pledgor.  All
rights and remedies of the Secured Party hereunder are cumulative and are in
addition to any and all rights and remedies available to the Secured Party under
the Uniform Commercial Code and other applicable law in effect from time to
time.

     

    (b)   The
rights and benefits of the Secured Party hereunder shall, if the Secured Party
so agrees, inure to any party acquiring any interest in the Obligations or any
part thereof.

     

    (c)   The
Secured Party and the Pledgor shall include the heirs, distributees, executors
or administrators, successors and assigns of those parties.

     

    (d)   In the
event that the Pledgor shall default in making the Installment Payment under the
Reset Note and Restructuring Agreement, when due, the Collateral Agent shall
have no liabilities or obligations hereunder, other than to act immediately upon
and in accordance with the written instructions of the Secured
Party.  Subject to Article 3 hereof, if any other Event of
Default hereunder shall occur and be continuing the Collateral Agent shall act
in accordance with the written instructions of the Secured Party not earlier
than ten (10) days following receipt such written instructions, a copy of which
the Collateral Agent shall furnish to the Pledgor not later than ten (10) days
before the Collateral Agent shall take any action in accordance with the
instructions of Secured Party.

     

    (e)   No
modification, rescission, waiver, release or amendment of any provision of this
Agreement shall be binding except by a written agreement subscribed by the
Pledgor and by the Secured Party.

     

    (f)   This
Agreement and the transactions evidenced hereby shall be construed under the
laws of New York as the same may from time to time be in effect.  All
terms, unless otherwise defined in this Agreement or in any financing statement,
shall have the definitions set forth in the Uniform Commercial Code adopted in
New York, as the same may from time to time be in effect.  If any term
of this Agreement shall be held to be invalid, illegal or unenforceable, the
validity of all other terms hereof shall in no way be affected
thereby.

     

    (g)   This
Agreement is and is intended to be a continuing security agreement and shall
remain in full force and effect until all of the Obligations and any extensions
or renewals thereof shall be indefeasibly paid in full.  The headings
in this Agreement are for purposes of reference only and shall not limit or
otherwise affect the meaning or construction of any provision of this
Agreement.

     

    


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    IN WITNESS WHEREOF, the
Pledgor has duly executed and delivered this Agreement as of the date first
above written.

     

    
      	 	FUND.COM, INC.	 
	 	 	 	 
	
               

            	
              By:
      

            	 /s/ Gregory
      Webster       	 
	 	 	Name:
      Gregory
      Webster	 
	 	 	Title:    Chief
      Executive Officer	 


       

      
        	 	 SECURED PARTY	 
	 	 /s/ Albert Hallac
      	 
	 	ALBERT
      HALLAC	 
	 	 	 	 
	 	 	 	 
	 	/s/ Mitzi Hallac
      Liotta	 
	 	MITZI
      HALLAC LIOTTA	 
	 	 	 	 
	 	 	 	 
	 	/s/ Joanna
      Hallac	 
	 	JOANNA
      HALLAC	 
	 	 	 	 
	 	 	 	 
	 	/s/ Jeffrey
      Hallac	 
	 	JEFFREY
      HALLAC	 
	 	 	 	 
	 	 	 	 
	 	/s/ Russell
      Hallac	 
	 	RUSSELL
      HALLAC	 
	 	 	 	 
	 	 	 	 
	 	/s/ Victor
      Elmaleh	 
	 	VICTOR
      ELMALEH	 
	 	 	 	 
	 	 	 	 
	 	COLLATERAL
    AGENT:	 
	 	
                 
      ZUKERMAN
      GORE BRANDEIS 

                &
      CROSSMAN LLP

              	 
	 	 	 	 
	 	BY	 	 
	 	 	 	 


      

    

     

    
      
         


      

      
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    EXHIBIT B

    
      DESCRIPTION OF MEMBERSHIP INTERESTS

      


      Membership
Interest certificate #2, representing 5,090 Membership Interests owned of record
and beneficially by Fund.com, Inc., or 50.9% of the aggregate 10,000 Membership
Interests of Weston Capital Management LLC that are issued and outstanding and
owned of record and beneficially by Fund.com, Inc.

       

      
        
           


        

        
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