Document:

lmfa-ex1033_11.htm

 

 

Exhibit 10.33

Loan No:  9100010227

 

IRREVOCABLE CONTINUING GUARANTY AGREEMENT

 

THIS IRREVOCABLE CONTINUING GUARANTY AGREEMENT (this “Guaranty”) is effective as of March 15, 2017 and entered into this 31st day of March, 2017, by LM FUNDING AMERICA, INC., a Delaware corporation (“Guarantor”), and delivered to HEARTLAND BANK, an Arkansas state bank (“Lender”), with respect to the following facts:

 

(A)The Guarantor has requested that LMF SPE#2, LLC, a Florida limited liability company (“Borrower”), and Lender has agreed to, continue to make a loan available to Borrower in a principal amount not to exceed Seven Million Four Hundred Thirty One Thousand Nine Hundred Thirty Eight and 50/100 United States Dollars ($7,431,938.50) (the “Loan”), pursuant to that certain Credit Agreement dated as of December 30, 2014, as amended by that certain First Amendment to Credit Agreement dated as of the date hereof (as so amended and as the same may be further amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), such Loan being represented by a Term Promissory Note dated December 30, 2014 in the maximum principal amount of amount of Seven Million Four Hundred Thirty One Thousand Nine Hundred Thirty Eight and 50/100 United States Dollars ($7,431,938.50), as amended by that certain First Amendment to Term Promissory Note, dated April 9, 2015 and that certain Second Amendment to Term Promissory Note, dated the date hereof (as so amended and as the same may be amended, restated, supplemented or otherwise modified from time to time and including any and all renewals, substitutions, modifications, rearrangements, extensions and replacements thereof shall be referred to as the “Note”).

 

(B)Payment of the indebtedness evidenced by the Note may now or hereafter be secured by other documents or instruments of pledge, guaranty, or hypothecation (the Credit Agreement and all such other documents or instruments concerning, evidencing, securing or guaranteeing the Indebtedness (defined below) being collectively referred to as the “Loan Documents”).

 

(C)In consideration of Lender continuing to make the Loan available to Borrower, Guarantor has agreed, at the request of Borrower, to irrevocably and unconditionally guarantee to Lender, the Indebtedness upon the terms and conditions provided herein.

 

NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Guarantor agrees with Lender as follows:

 

ARTICLE I.REPRESENTATIONS AND WARRANTIES

 

Guarantor makes the following representations and warranties to Lender which shall be continuing representations and warranties and the obligation of Guarantor so long as any Indebtedness shall remain unpaid.

 

Section 1.1 Guaranty Authorized and Binding.  Guarantor’s execution, delivery and 

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performance of this Guaranty are duly authorized and do not require the consent or approval of any governmental body or other regulatory authority.  This Guaranty is a valid and legally binding obligation of Guarantor enforceable in accordance with its terms.

 

Section 1.2 No Conflict.  The execution and delivery of this Guaranty by Guarantor are not, and the performance of this Guaranty will not be, in contravention of, or in conflict with, any agreement, indenture or undertaking to which Guarantor is a party or by which Guarantor or any of Guarantor's properties are or may be bound or materially affected and do not, and will not, cause any security interest, lien or other encumbrance to be created or imposed upon any such properties.

 

Section 1.3 Litigation.  Other than as set forth in Schedule 1.3 attached hereto, there is no litigation or other proceeding pending or, to the knowledge of Guarantor, threatened against, or affecting, Guarantor or Guarantor's properties which, if determined adversely to Guarantor, would have a material adverse effect on the financial condition, properties, businesses or operations of Guarantor; and Guarantor is not in default with respect to any order, writ, injunction, decree or demand of any court or other governmental or regulatory authority.

 

Section 1.4 Financial Condition. The financial statements of Guarantor which have heretofore been submitted in writing by Guarantor to Lender in connection herewith are true and correct and fairly present the financial condition of Guarantor for the period covered thereby.  Since the date the financial statements were delivered to Lender there has not been a material adverse change in the financial condition of Guarantor.  Guarantor has no knowledge of any liabilities, contingent or otherwise which are not reflected in the financial statements; and, other than in the ordinary course of Guarantor's business, Guarantor has not entered into any commitments or contracts which are not reflected in the financial statements or which may have a material adverse effect upon Guarantor's financial condition, operations or business as now conducted. 

 

Section 1.5 Financial Benefit.  Guarantor hereby acknowledges and warrants that Guarantor has derived or expects to derive a financial advantage from each and every loan or other extension of credit and from each and every renewal, extension, release of collateral or other relinquishment of legal rights made or granted or to be made or granted by Lender to the Borrower in connection with the Indebtedness.

 

Section 1.6 Review of Documents; Financial Condition of Borrower.  Guarantor hereby acknowledges that Guarantor has copies of and is fully familiar with each and every document executed and delivered to Lender by the Borrower in connection with the Loan (including without limitation the Loan Documents) and represents and warrants that all necessary action has been taken by the Borrower to authorize execution of the Loan Documents by Borrower and to engage in the transactions thereby contemplated.  Further, Guarantor warrants and represents to Lender that it has independently reviewed the financial condition of Borrower, and is not relying upon any statement or other representation from Borrower or Lender regarding the decision to execute this Guaranty.  Further, Guarantor warrants, represents, understands and agrees that the obligation of Guarantor hereunder is one of payment and performance, and includes without limitation all obligations of Borrower to Lender pursuant to the Loan Documents, including without limitation all 

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damages or losses suffered by Lender by entry into and consummation of the Credit Agreement (whether by enforcement or otherwise) and all indemnifications provided by Borrower to Lender.

ARTICLE II.GUARANTY

 

Section 2.1 Guaranty.  Guarantor irrevocably, absolutely, and unconditionally guarantees and promises to pay to, or to the order of, Lender, on demand, in lawful money of the United States of America, any and all of the Indebtedness.  The word “Indebtedness,” as used herein, includes all advances, debts, obligations, indemnification and liabilities of Borrower to Lender pursuant to the Loan, now or hereafter advanced, incurred or created (and all renewals, extensions, modifications and rearrangement thereof, without limit as to the number of such extensions or the period or periods thereof) (including without limitation those also described in Section 2.4 hereof), whether voluntary or involuntary and however arising, whether due or not due, absolute or contingent, liquidated or unliquidated, determined or undetermined, direct or indirect, and whether the Borrower may be liable separately or jointly with others or whether recovery upon such Indebtedness may be or hereafter become barred by any statute of limitations, or whether such Indebtedness may be or hereafter become otherwise unenforceable.

 

Section 2.2 Irrevocable, Unconditional and Continuing  Guaranty.  This is an irrevocable, unconditional and continuing guaranty of the Indebtedness, and the liability of  Guarantor hereunder is absolute.  This Guaranty may be terminated as to future transactions only, and any such termination shall be effective only as of noon of the next business day after written notice thereof is received by Lender addressed to and otherwise delivered to Lender pursuant to and as required by Section 3.3 hereof.  No such notice shall release Guarantor from any liability existing when such notice is received.

 

Section 2.3   Nature of Guaranty.  The liability of Guarantor hereunder is independent of the obligation of Borrower (or any other guarantor having joint and several liability to Lender regarding the Indebtedness) and a separate action or separate actions may be brought and prosecuted against Guarantor, whether or not any action is brought or prosecuted against the Borrower or whether the Borrower is joined in any such action or actions.  The liability of Guarantor is independent of and not in consideration of or contingent upon the liability of any other person under this or any similar instrument, and the release of, or cancellation by, any signer of a similar instrument shall not act to release or otherwise affect the liability of Guarantor.  Any payment by the Borrower which operates to toll any statute of limitations applicable to the Borrower shall also operate to toll the statute of limitations applicable to Guarantor.

 

Section 2.4  Authorization.  Guarantor authorizes Lender, without notice or demand and without affecting his liability hereunder, from time to time to:

 

(a)Create new indebtedness or renew, compromise, extend (without limit as to the number of extensions or the period thereof), increase, accelerate and otherwise change the time for payment of, or otherwise change the terms of, the Indebtedness, or any part thereof, including increasing or decreasing the rate of interest thereon, if agreed to by Borrower; and

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(b)Take and hold security for the payment of this Guaranty or the Indebtedness, perfect such security or refrain from perfecting such security, whether or not such security is required as a condition to the making of the Loan, and exchange, enforce, waive or release (whether intentionally or unintentionally) any such security or any part thereof, purchase such security at a public or private sale, and apply any such security and direct the order or manner of sale thereof as Lender in its discretion may determine.

 

Section 2.5  Waivers.  Guarantor waives the right to require Lender to proceed against the Borrower or any other person liable on the Indebtedness, to proceed against or exhaust any security held from the Borrower or any other person, or to pursue any other remedy available to Lender, and Guarantor waives the right to have the property of the Borrower first applied to the discharge of the Indebtedness.  Lender may, at its election, exercise any right or remedy it may have against the Borrower or any security held by Lender, including, without limitation, the right to foreclose upon any such security by one or more judicial or nonjudicial sales, whether or not every aspect of such sale is commercially reasonable, without affecting or impairing in any way the liability of Guarantor, except to the extent the Indebtedness has been paid, and Guarantor waives any defense arising out of the absence, impairment or loss of any right of reimbursement, contribution or subrogation or any other right or remedy of Guarantor against the Borrower or any such security, whether resulting from such election by Lender or otherwise.  Guarantor understands that if all or any part of the liability of the Borrower to Lender for the indebtedness is secured by real property, Guarantor shall be liable for the full amount of Guarantor's liability hereunder notwithstanding foreclosure on such real property or any other reason impairing Guarantor's right to proceed against the Borrower.  In addition, Guarantor hereby waives, to the fullest extent permitted by law, (a) any defense arising as a result of any election by Lender in any proceeding instituted under the Bankruptcy Code, and (b) any defense based on any borrowing or grant of a security interest under the Bankruptcy Code.

 

Section 2.6 Additional Waivers.  Guarantor waives all presentments, demands for performance, notices of nonperformance, protests, notices of protest, notices of dishonor and notices of acceptance of this Guaranty.  Guarantor assumes the responsibility for being and keeping informed of the financial condition of the Borrower and of all other circumstances bearing upon the risk of nonpayment of the Indebtedness which diligent inquiry would reveal, and agrees that Lender shall have no duty to advise Guarantor of information known to it regarding such condition or any such circumstances.

 

Section 2.7 The Borrower.  It is not and shall not be necessary for Lender to inquire into the powers of Borrower or the members, managing members, trustees or agents acting or purporting to act on behalf of Borrower and any Indebtedness made or created in reliance upon the professed exercise of such powers shall be guaranteed hereunder.  Guarantor agrees that Lender's books and records showing the account between Lender and Borrower shall be admissible in any proceeding or action and shall be binding upon Guarantor for the purpose of establishing the items therein set forth and shall constitute prima facie proof thereof.

 

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Section 2.8 Bankruptcy No Discharge.  Notwithstanding anything to the contrary herein contained, this Guaranty shall continue to be in effect or be reinstated, as the case may be, if at any time, payment, or any part hereof, of any or all of the Indebtedness is rescinded or must otherwise be restored or returned by Lender upon the insolvency, bankruptcy or reorganization of the Borrower or otherwise, all as though such payment had not been made.  Notwithstanding any modification, discharge or extension of the Indebtedness or any amendment, modification, stay or cure of Lender's rights which may occur in any bankruptcy or reorganization case or proceeding concerning the Borrower whether permanent or temporary, and whether assented to by Lender, Guarantor hereby agrees that Guarantor shall be obligated hereunder to pay the Indebtedness and discharge Guarantor's other obligations in accordance with the Indebtedness and the terms of this Guaranty.  Guarantor understands and acknowledges that by virtue of this Guaranty, any and all risks of insolvency, bankruptcy or a reorganization case or proceeding with respect to the Borrower have been specifically assumed.  As an example and not in any way of limitation, a subsequent modification of the Indebtedness in any reorganization case concerning the Borrower shall not affect the obligation of Guarantor to pay the Indebtedness in accordance with its original terms.

 

Section 2.9 The Subordination.  Guarantor hereby absolutely subordinates, both in right of payment and in time of payment, any present or future indebtedness of the Borrower to Guarantor to the Indebtedness of the Borrower to Lender.  If, whether or not at Lender's request, Guarantor shall collect, enforce or receive payment from the Borrower upon any indebtedness of the Borrower to Guarantor, any such sums shall be received by Guarantor as trustee for Lender and shall be paid over to Lender on account of the Indebtedness of the Borrower to Lender, but without reducing or affecting in any manner the liability of Guarantor under the other provisions of this Guaranty.  Guarantor shall file in any bankruptcy or other proceeding in which the filing of claims is required by law, all claims which Guarantor may have against the Borrower relating to any indebtedness of the Borrower to Guarantor and does hereby assign to Lender all rights of Guarantor thereunder.  If Guarantor does not file any such claim, the Lender as limited attorney-in-fact for Guarantor is hereby authorized to do so in the name of Guarantor or, in Lender's discretion, to assign the claim to a nominee and to cause proof of claim to be filed in the name of Lender's nominee.  The foregoing power of attorney is coupled with an interest and cannot be revoked.  Lender or its nominee shall have the sole right to accept or reject any plan proposed in any such proceeding and to take any other action which a party filing a claim is entitled to do.  In all such cases, whether in administration, bankruptcy or otherwise, the person or persons authorized to pay such claim shall pay, and Guarantor does hereby authorize such person or persons to pay to Lender the amount payable on such claim and, to the full extent necessary for that purpose, Guarantor hereby assigns to Lender all of Guarantor's rights to any such payments or distributions to which Guarantor would otherwise be entitled.  Any instruments now or hereafter evidencing any indebtedness of the Borrower to Guarantor shall be marked with a legend that the same are subject to this Guaranty and, if Lender so requests, shall be delivered to Lender.

 

ARTICLE III.MISCELLANEOUS

 

Section 3.1 Survival of Warranties.  All agreements, obligations, representations and warranties made herein shall survive the execution and delivery of this Guaranty and 

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repayment, foreclosure or other enforcement of the Credit Agreement or any of the other Loan Documents, the same surviving for the maximum limitations period and so long as Borrower shall have any direct, indirect, liquidated or contingent liability to Lender, by indemnification or otherwise.

 

Section 3.2 Failure or Indulgence Not Waiver. No failure or delay on the part of Lender in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any power, right or privilege preclude any other or further exercise of any such power, right or privilege.  All powers, rights and privileges hereunder are cumulative to, and not exclusive of, any powers, rights or privileges otherwise available.

 

Section 3.3   Notices.   All notices, demands and requests given or required to be given by any party hereto to any other party shall be in writing.  All such notices, demands and requests by the Lender to the Guarantor shall be deemed to have been properly given if served in person or mailed by United States registered or certified mail, return receipt requested, postage prepaid, or by Federal Express, Airborne or any other insured and reputable overnight delivery service, addressed to the Guarantor at the following address:

 

LM FUNDING AMERICA, INC.
302 Knights Run Avenue
Suite 1000
Tampa, FL 33602

Attn:  Bruce M. Rodgers

 

 

or to such other address as Guarantor may from time to time designate by written notice to the Lender given as herein required.  All notices, demands and requests by Guarantor to the Lender shall be deemed to have been properly given if served in person or mailed by United States registered or certified mail, return receipt requested, postage prepaid, or by Federal Express, Airborne or any other insured and reputable overnight delivery service, addressed to the Lender at the following address:

 

HEARTLAND BANK

One Information Way

Suite 300 

Little Rock, Arkansas 72202 

Attention:  Mark Hoffpauir

 

or to such other address as the Lender may from time to time designate by written notice to the Guarantor given as herein required.  Notices, demands and requests sent pursuant to this paragraph shall be deemed to be received (i) if personally delivered in the manner aforesaid, on the date of delivery, (ii) if sent by registered or certified mail in the manner aforesaid, on the earlier of the second (2nd) business day following the day sent, or (iii) if sent by overnight delivery service in the manner aforesaid, on the next business day immediately following the day sent.

 

Section 3.4  Severability.  In case any provision of this Guaranty shall be invalid, 

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illegal or unenforceable, such provisions shall be severable from the rest of this Guaranty and the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

Section 3.5 Applicable Law. This Guaranty and the rights and obligations of the parties hereto shall be governed by and construed and enforced in accordance with the laws of the State of Florida and the United States of America; provided that Lender shall retain all rights under Federal Law. 

Section 3.6 Jurisdiction and Venue.  Any dispute under this Guaranty or the other Loan Documents shall be resolved by the arbitration procedures set forth at Section 11.23 of the Credit Agreement.  Each party irrevocably and unconditionally agrees that it will not commence any action, litigation or proceeding of any kind whatsoever against any other party in any way arising from or relating to this Guaranty and all contemplated transactions, including, but not limited to, contract, equity, tort, fraud, and statutory claims in any form other than the U.S. Federal District Courts located in Arkansas or, if such court does not have subject matter jurisdiction, the courts of the State of Arkansas, and any appellate court from any thereof.  Each party irrevocably and unconditionally submits to the exclusive jurisdiction of such courts and agrees to bring any such action, litigation or proceeding only in such courts. Each party agrees that a final judgment in any such action, litigation, or proceeding is conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

Section 3.7  Assignability.  This Guaranty shall inure to the benefit of the Lender and its respective successors and assigns. Lender may assign this Guaranty or any of its rights and powers hereunder without notice, with all or any of the Indebtedness hereby guaranteed, and in such event the assignee shall have the same rights and remedies as if originally named herein in place of Lender; provided, however, that Lender shall have an unimpaired right, prior and superior to that of any such assignee to enforce the provisions of the Guaranty for the benefit of Lender as to so much of the Indebtedness that it has not sold, assigned or transferred.

 

Section 3.8 Survival of Guaranties.  This Guaranty shall be binding upon the heirs, successors, representatives and assigns of Guarantor.

 

Section 3.9 Headings.  Headings of the Articles and Sections of this Guaranty are inserted for convenience only and shall not be deemed to constitute a part hereof.

 

Section 3.10 Expenses and Fees.  Guarantor hereby agrees to be responsible for and to pay all costs and expenses, including, without limitation, reasonable attorneys' fees and foreclosure fees, incurred by Lender in connection with the collection of all sums guaranteed hereunder and the defense or enforcement of any of Lender's rights hereunder, whether or not suit is filed, and whether such collection be from the Borrower or from Guarantor.

 

[Signature Page Follows]

 

 

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IN WITNESS WHEREOF, Guarantor has executed this Guaranty and it has been delivered to and accepted by Lender as of the date first above written.

 

 

 

GUARANTOR:

 

LM FUNDING AMERICA, INC

a Delaware corporation

 

 

By: /s/ Bruce M. Rodgers

Name:  Bruce M. Rodgers

Title:  Chief Executive Officer

 

 

 

 

 

[Signature Page to Irrevocable Continuing Guaranty Agreement]

WPB_ACTIVE 7608109.3 

 

 

SCHEDULE 1.3

 

Pending or Threatened Litigation

 

[see attached]

 

WPB_ACTIVE 7608109.3lmfa-ex1034_13.htm

Exhibit 10.34

Loan No:  9100010227

PLEDGE AGREEMENT 

THIS PLEDGE AGREEMENT is effective as of March 15, 2017 and entered into this 31st day of March, 2017 by and between LM FUNDING AMERICA, Inc., a Delaware corporation, as grantor (“Grantor”), and HEARTLAND BANK, an Arkansas state bank, on behalf of itself and its Affiliates (“Secured Party”).

 

R E C I T A L S

WHEREAS, LMF SPE#2, LLC, a Florida limited liability company, as borrower (“Borrower”), Grantor, CGR63, LLC, a Florida limited liability company, and LM Funding, LLC, a Florida limited liability company (“LMF”), as guarantors, and Secured Party, as lender, have entered into a Credit Agreement dated as of December 30, 2014, as amended by that certain First Amendment to Credit Agreement dated as of the date hereof (as so amended and as the same may be further amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”).

WHEREAS, Grantor is the beneficial owner of all of the membership interests of LMF, and LMF is the sole member and manager of Borrower.

WHEREAS, Grantor is entering into this Pledge Agreement (as it may be amended, restated or modified from time to time, this “Agreement”) in order to, among other things, induce Secured Party to continue to extend credit under the Credit Agreement.

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

1.DEFINITIONS

1.1.Reference to Pledge Agreement

.  Unless otherwise specified, all references herein to Articles, Sections, Preliminary Statements, Exhibits, and Schedules refer to Articles and Sections of, and Preliminary Statements, Exhibits and Schedules to, this Agreement.  All Exhibits and Schedules shall be deemed a part of this Agreement.  All Schedules include amendments and supplements thereto from time to time. 

1.2.Principles of Construction

.  Words used herein, regardless of the number and gender specifically used, shall be deemed and construed to include any other number, singular or plural, and any other gender, masculine, feminine or neutral, as the context indicates is appropriate.  Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation”.  All references to agreements and other contractual instruments shall be deemed to include subsequent amendments, permitted assignments and other modifications thereto, but only to the extent such amendments, assignments and other modifications are not prohibited by the terms of any Loan Document.  Furthermore, any reference to any law shall include all statutory and regulatory provisions consolidating, amending, replacing or interpreting such law and any 

Pledge Agreement (LM Funding, LLC and CRE Funding, LLC)

WPB_ACTIVE 7608584.3 

Exhibit 10.34

reference to any law or regulation shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time.

1.3.Definitions

.  Unless otherwise defined herein, or the context hereof otherwise requires, each term defined in either of the Credit Agreement or in the UCC is used in this Agreement with the same meaning; provided that, if the definition given to such term in the Credit Agreement conflicts with the definition given to such term in the UCC, the Credit Agreement definition shall control to the extent legally allowable; and if any definition given to such term in Article 9 of the UCC conflicts with the definition given to such term in any other chapter of the UCC, the Article 9 definition shall prevail. All definitions herein shall be equally applicable to both the singular and plural forms of the defined terms.  As used herein, the following terms have the meanings indicated:

 “Collateral” shall have the meaning set forth in Section 2.1.

“Control” shall have the meaning set forth in Section 9-314 of the UCC.

“Grantor” shall have the meaning set forth in the introductory paragraph of this Agreement and includes Grantor’s respective successors and assigns.

“Instrument” means any “instrument”, as such term is defined in Section 9.102(a)(47) of the UCC.

“LMF” shall have the meaning set forth in the recitals of this Agreement.

“LMF Operating Agreement” shall mean the Operating Agreement of LMF, dated as of January 8, 2008.

“Pledged Equity Interests” means all limited liability company interests issued by LMF listed on Exhibit A, including but not limited to all rights to participate in the management of the LMF as a member, and any and all certificates representing such limited liability company interests and any interest of Grantor on the books and records of LMF with respect to such limited liability company interests and all dividends, other distributions, cash, warrants, rights, options, instruments, securities and other property or other Proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such limited liability company interests.

“Proceeds” means any “proceeds,” as such term is defined in Section 9-102(a)(64) of the UCC, and, in any event, shall include, but not be limited to, (a) any and all dividends and distributions with respect to any of the Pledged Equity Interests, (b) proceeds of any insurance, indemnity, warranty, or guaranty payable to Grantor from time to time with respect to any of the Pledged Equity Interests, (c) any and all payments (in any form whatsoever) made or due and payable to Grantor from time to time in connection with any requisition, confiscation, condemnation, seizure, or forfeiture of all or any part of the Pledged Equity Interests by any Governmental Authority (or any person acting under color of Governmental Authority), and (d) any and all other amounts from time to time paid or payable under or in connection with any of the Pledged Equity Interests.

Pledge Agreement (LM Funding, LLC and CRE Funding, LLC)

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“Section” means a numbered Section of this Agreement, unless another document is specifically referenced.

“Secured Obligations” means, collectively, the Obligations (as defined in the Credit Agreement), whether or not (a) such Obligations arise or accrue before or after the filing by or against Grantor of a petition under the Bankruptcy Code, or any similar filing by or against Grantor under the laws of any jurisdiction, or any bankruptcy, insolvency, receivership or other similar proceeding, (b) such Obligations are allowable under Section 502(b)(2) of the Bankruptcy Code or under any other insolvency proceedings, (c) the right of payment in respect of such Obligations is reduced to judgment, or (d) such Obligations are liquidated, unliquidated, similar, dissimilar, related, unrelated, direct, indirect, fixed, contingent, primary, secondary, joint, several, or joint and several, matured, disputed, undisputed, legal, equitable, secured, or unsecured.

“Security” has the meaning set forth in Section 8-102(a)(15) of the UCC.

“Security Interests” means the pledge and security interests securing the Secured Obligations, including (a) the pledge and security interest in the Collateral granted in this Agreement, and (b) all other security interests created or assigned as additional security for the Secured Obligations pursuant to the provisions of this Agreement.

“Specified LLC Rights” means any equity interests, securities, dividends or other distributions and any other right or property which Grantor shall receive or shall become entitled to receive for any reason whatsoever with respect to, in substitution for or in exchange for the Pledged Equity Interests.

“UCC” means the Uniform Commercial Code as the same may, from time to time, be in effect in the State of Florida; provided, however, that in any event, by reason of mandatory provisions of law, any or all of the attachment, perfection or priority (or terms of similar import in any applicable jurisdiction) of Secured Party’s Security Interest in any Collateral is governed by the UCC (or other similar law) as in effect in a jurisdiction (whether within or outside the United States) other than the State of Florida, the term “UCC” shall mean the Uniform Commercial Code (or other similar law) as in effect in such other jurisdiction for purposes of the provisions hereof relating to such attachment, perfection or priority (or terms of similar import in such jurisdiction) and for purposes of definitions related to such provisions.

2.GRANT OF SECURITY INTEREST

2.1.Grant of Security Interest.  

(a)As collateral security for the Secured Obligations, Grantor hereby pledges and grants to Secured Party (including its Affiliates), a first priority Lien on and security interest in and to, and agrees and acknowledges that Secured Party has and shall continue to have, a Security Interest in and to, all of Grantor’s right, title and interest in and to (i) the Pledged Equity Interests and (ii) all Proceeds of the Pledged Equity (all of the property being described in the preceding clauses (i) and (ii) the “Collateral”), whether now owned or hereafter acquired, wherever located, howsoever arising or created and whether now existing or hereafter arising, existing or created.

Pledge Agreement (LM Funding America, Inc.)3

WPB_ACTIVE 7608584.3 

 

(b)The Security Interests are granted as security only and shall not subject Secured Party or any holder of the Secured Obligations to, or transfer or in any way modify, any Obligations or liability of Grantor with respect to any of the Collateral.

2.2.Grantor Remains Liable

.  Notwithstanding anything to the contrary contained herein, (a) Grantor shall remain liable under the contracts and agreements included in the Collateral, and under the LMF Operating Agreement, to the extent set forth therein to perform all of its respective duties and obligations thereunder to the same extent as if this Agreement had not been executed, (b) the exercise by Secured Party of any of its rights hereunder shall not release Grantor from any of its duties or obligations under the contracts and agreements included in the Collateral or under the LMF Operating Agreement, and (c) Secured Party shall not have any obligations or liability under any of the contracts and agreements included in the Collateral by reason of this Agreement or under the LMF Operating Agreement, nor shall Secured Party be obligated to perform any of the obligations or duties of Grantor thereunder or to take any action to collect or enforce any claim for payment assigned hereunder. 

2.3.Authorization to File Financing Statements

.  Grantor hereby irrevocably authorizes Secured Party at any time and from time to time to file in any UCC jurisdiction any initial financing statements and amendments thereto that describe the Collateral and contain any other information required by Part 5 of Article 9 of the UCC for the sufficiency or filing office acceptance of any financing statement or amendment, including whether Grantor is an organization, the type of organization and any organization identification number issued to Grantor.  Grantor agrees to furnish any such information to Secured Party promptly upon request.

REPRESENTATIONS AND WARRANTIES

.  Grantor represents and warrants to Secured Party that:

3.1.Title, Authorization, Validity and Enforceability

.  Grantor has good and valid rights in and title to the Collateral with respect to which it has purported to grant a Security Interest hereunder, free and clear of all other Liens, and has full power and authority to grant to Secured Party the Security Interest in such Collateral pursuant hereto.  The execution and delivery by Grantor of this Agreement has been duly authorized by proper limited liability company proceedings, and this Agreement constitutes a legal, valid and binding obligation of Grantor and creates a Security Interest which is enforceable against Grantor in all now owned and hereafter acquired Collateral.  When financing statements have been filed in the appropriate offices against Grantor in the locations listed on Exhibit B, Secured Party will have a fully perfected first priority Security Interest in that Collateral in which a Security Interest may be perfected by filing, subject to no other Liens.  

3.2.Conflicting Laws and Contracts

.  Neither the execution and delivery by Grantor of this Agreement, the creation and perfection of the Security Interest in the Collateral granted hereunder, nor compliance with the terms and provisions hereof will violate any law, rule, regulation, order, writ, judgment, injunction, decree or award binding on Grantor or Grantor’s articles or certificate of incorporation, bylaws, articles of organization or operating agreement or other charter documents, as the case may be, the provisions of any indenture, instrument or agreement to which Grantor is a party or is subject, or by which it, or its property, is bound, or 

Pledge Agreement (LM Funding America, Inc.)4

WPB_ACTIVE 7608584.3 

 

conflict with or constitute a default thereunder, or result in the creation or imposition of any Lien pursuant to the terms of any such indenture, instrument or agreement (other than any Lien of Secured Party).

3.3.Reserved

.  

3.4.Litigation

.  Other than as set forth in Exhibit C, there is no litigation investigation or governmental proceeding threatened against Grantor or any of its properties which would reasonably be expected to result in a Material Adverse Event with respect to the Collateral or Grantor.

3.5.No Other Names

.  Grantor has not conducted business under any name except the name in which it has executed this Agreement.

3.6.No Default or Event of Default

.  No Default or Event of Default has occurred.

3.7.No Financing Statements

.  No financing statement describing all or any portion of the Collateral which has not lapsed or been terminated naming Grantor as debtor has been filed in any jurisdiction except (a) financing statements naming Secured Party as the secured party, and (b) as permitted by Section 4.1(d).

3.8.Pledged 

Equity Interests.  Exhibit A sets forth a true, correct, and complete list of the Pledged Equity Interests.  Grantor is the direct and beneficial owner of the Pledged Equity Interests set forth in Exhibit A free and clear of any Liens, except for the security interest granted to Secured Party hereunder.  Grantor further represents and warrants that (a) all such Pledged Equity Interests are duly and validly issued, are fully paid and non‐assessable and (b) none of the Pledged Equity Interests are certificated, and they are not Securities as defined in Article 8 of the UCC of the applicable jurisdiction.

COVENANTS

.  From the date of this Agreement, and thereafter until this Agreement is terminated:

4.1.General.

(a)Inspection.  Grantor will permit Secured Party, by its representatives and agents (i) to inspect the Collateral, (ii) to examine and make copies of the records of Grantor relating to the Collateral and (iii) to discuss the Collateral and the related records of Grantor with, and to be advised as to the same by, Grantor’s officers, employees, and accountants all at such reasonable times and intervals as Secured Party may determine, and all at Grantor’s expense.

(b)Taxes.  Grantor will pay when due all taxes, assessments and governmental charges and levies upon the Collateral, except those which are being contested in good faith by appropriate proceedings and with respect to which no Lien exists and as to which appropriate reserves are being maintained.

(c)Records and Reports; Notification of a Default and Event of Default.  Grantor will maintain true, complete, and accurate books and records with respect to the 

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WPB_ACTIVE 7608584.3 

 

Collateral, and furnish to Secured Party such reports relating to the Collateral at such intervals as Secured Party shall from time to time reasonably request.  Grantor will, upon becoming aware thereof, give prompt notice in writing to Secured Party of the occurrence of any Default or Event of Default and of any other development, financial or otherwise, which would reasonably be expected to materially and adversely affect the Collateral.  Grantor shall mark its books and records to reflect the Security Interest of Secured Party under this Agreement.

(d)Financing Statements and Other Actions; Defense of Title.  Grantor will deliver to Secured Party all financing statements and deliver to the Secured Party the originals of all certificates (if any) evidencing any of the Pledged Equity Interests and take such other actions as may from time to time be reasonably requested by Secured Party in order to maintain a first perfected Security Interest in the Collateral and/or to otherwise enable the Secured Party to enjoy its interest, rights and remedies under this Agreement.  Grantor will take any and all actions necessary to defend title to the Collateral against all persons and to defend the Security Interest of Secured Party in the Collateral and the priority thereof against any Lien not expressly permitted hereunder.

(e)Disposition of Collateral.  Grantor will not sell, lease or otherwise dispose of the Collateral except as permitted under the Credit Agreement.

(f)Liens.  Grantor will not create, incur, or suffer to exist any Lien on the Collateral except the Security Interest created by this Agreement.

(g)Change in Location, Jurisdiction of Organization or Name.  Grantor will not (a) maintain a place of business at a location other than a location specified on Exhibit D, (b) change its name or taxpayer identification number, (c) change its mailing address, or (d) change its jurisdiction of organization, unless in each case Grantor shall have given Secured Party not less than thirty (30) days’ prior written notice thereof, and Secured Party shall have reasonably determined that such change will not adversely affect the validity, perfection or priority of Secured Party’s Security Interest in the Collateral.  Prior to making any of the foregoing changes, Grantor shall execute and deliver all such additional documents and perform all additional acts as Secured Party, in its sole discretion, may request in order to continue or maintain the existence and priority of its Security Interest in all of the Collateral.

(h)Other Financing Statements.  Grantor will not sign and/or file or authorize the signing and/or filing on its behalf of any financing statement naming it as debtor covering all or any portion of the Collateral, except for financing statements naming the Secured Party as secured party. 

4.2.Securities

.  Grantor will (a) deliver to Secured Party immediately upon execution of this Agreement the originals of all certificates evidencing any Collateral (if any), (b) hold in trust for Secured Party upon receipt and immediately thereafter deliver to Secured Party any future certificates evidencing Collateral, and (c) upon Secured Party’s request, deliver to Secured Party (and thereafter hold in trust for Secured Party upon receipt and immediately deliver to Secured Party) any other document evidencing or constituting Collateral.

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WPB_ACTIVE 7608584.3 

 

4.3.Stock, Pledged Equity Interests, and Other Ownership Interests.

(a)Issuance of Securities.  Grantor shall not permit any Pledged Equity Interest to at any time constitute a Security or consent to the issuer of any such interests taking any action to have such interests treated as a Security unless (i) Secured Party has consented to such action in writing, and (ii)(A) all certificates or other documents constituting such Security have been delivered to Secured Party and such Security is properly defined as such under Article 8 of the UCC of the applicable jurisdiction, whether as a result of actions by the issuer thereof or otherwise, or (B) Secured Party has entered into a control agreement with the issuer of such Security or with a securities intermediary relating to such Security, and such Security is defined as such under Article 8 of the UCC of the applicable jurisdiction, whether as a result of actions by the issuer thereof or otherwise.

4.4.Compliance with Agreements

.  Grantor shall comply in all material respects with all mortgages, deeds of trust, instruments, and other agreements binding on it or affecting its properties or business.

4.5.Compliance with Laws

.  Grantor shall comply, in all material respects, with all applicable laws, rules, regulations, and orders of any court or Governmental Authority.

4.6.Further Assurances

.  At any time and from time to time, upon the request of Secured Party, and at the sole expense of Grantor, Grantor shall promptly execute and deliver all such further instruments and documents and take such further action as Secured Party may deem reasonably necessary or desirable (a) to assure Secured Party that its Security Interests hereunder are perfected with a first priority Lien and (b) to carry out the provisions and purposes of this Agreement, including (i) the filing of such financing statements as Secured Party may require, (ii) furnishing to the Secured Party from time to time statements and schedules further identifying and describing the Collateral and such other reports in connection with the Collateral as Secured Party may reasonably request, all in reasonable detail, and (iii) taking all actions required by law in any relevant UCC, or by other law as applicable in any foreign jurisdiction.  Grantor shall promptly endorse and deliver to Secured Party all documents, instruments, and chattel paper that it now owns or may hereafter acquire with respect to the Collateral.

5.EVENTS OF DEFAULT

5.1.Remedies

.  Upon the occurrence and during the continuance of an Event of Default under the Credit Agreement or any other Loan Document (as such term is defined in the Credit Agreement), and subject to the terms and conditions of the Cure Agreement, Secured Party may exercise any or all of the following rights and remedies:

(a)Those rights and remedies provided in this Agreement, Credit Agreement or any other applicable Loan Document.

(b)Those rights and remedies available to a secured party under the UCC (whether or not the UCC applies to the affected Collateral) or under any other applicable law (including any law governing the exercise of a bank’s right of setoff or bankers’ lien) when a debtor is in default under a security agreement.

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WPB_ACTIVE 7608584.3 

 

(c)Without notice except as specifically provided in Section 8.1 or elsewhere herein, sell, lease, assign, grant an option or options to purchase or otherwise dispose of the Collateral or any part thereof in one or more parcels at public or private sale, for cash, on credit or for future delivery, and upon such other terms as Secured Party may deem commercially reasonable.  Neither Secured Party’s compliance with any applicable state or federal law in the conduct of such sale, nor its disclaimer of any warranties relating to the Collateral, shall be considered to affect the commercial reasonableness of such sale.

(d)During the existence of any Event of Default, all payments and distributions made on behalf of Grantor’s Specified LLC Rights shall be paid or delivered to Secured Party (except that if the Secured Party has not taken any other material enforcement action, Grantor may receive tax distributions (in accordance with Section 4.5 of the LMF Operating Agreement) and distribute same as “Tax Distributions” under the Credit Agreement), and Grantor agrees to take all such action as Secured Party may deem necessary or appropriate to cause all such payments and distributions to be made to Secured Party.  Further, Secured Party shall have the right, during the existence of any Event of Default, to notify and direct LMF (subject as aforesaid with respect to tax distributions) to make all payments, dividends, and any other distributions payable in respect thereof directly to Secured Party.  LMF shall be fully protected in relying on the written statement of Secured Party that it then holds a Security Interest which entitles it to receive such payments and distributions.  Any and all money and other property paid over to or received by Secured Party hereunder shall be retained by as additional Collateral hereunder or applied to the Obligations.

(e)Grantor recognizes that, by reason of certain prohibitions contained in the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (collectively, the “Securities Act”) and applicable state securities laws, Secured Party may be compelled, with respect to any sale of all or any part of the Collateral conducted without prior registration or qualification of such Collateral under the Securities Act and/or such state securities laws, to limit purchasers to those who will agree, among other things, to acquire the Collateral for their own account, for investment and not with a view to the distribution or resale thereof.  Grantor acknowledges that any such private sale may be at prices and on terms less favorable than those obtainable through a public sale without such restrictions (including a public offering made pursuant to a registration statement under the Securities Act) and, notwithstanding such circumstances, Grantor agrees that any such private sale shall be deemed to have been made in a commercially reasonable manner and that Secured Party shall have no obligation to engage in public sales and no obligation to delay the sale of any Collateral for the period of time necessary to permit the issuer thereof to register it for a form of public sale requiring registration under the Securities Act or under applicable state securities laws, even if such issuer would, or should, agree to so register it.  If Secured Party determines to exercise its right to sell any or all of the Collateral, upon written request, Grantor shall furnish to Secured Party all such information as Secured Party may request in order to determine the number and nature of interest, shares or other instruments included in the Collateral which may be sold by Secured Party in exempt transactions under the Securities Act and the rules and regulations of the Securities and Exchange Commission thereunder, as the same are from time to time in effect. In case of any sale of all or any part of the Collateral on credit 

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WPB_ACTIVE 7608584.3 

 

or for future delivery, such Collateral so sold may be retained by Secured Party until the selling price is paid by the purchaser thereof, but the Secured Party shall not incur any liability in case of the failure of such purchaser to take up and pay for such assets so sold and in case of any such failure, such Collateral may again be sold upon like notice.  Secured Party, instead of exercising the power of sale herein conferred upon them, may proceed by a suit or suits at law or in equity to foreclose Security Interests created hereunder and sell such Investment Property, or any portion thereof, under a judgment or decree of a court or courts of competent jurisdiction. 

(f)If Secured Party sells any of the Collateral upon credit, Grantor will be credited only with payments actually made by the purchaser, received by Secured Party, and applied to the indebtedness of the purchaser.  In the event the purchaser fails to pay for the Collateral, Secured Party may resell the Collateral, and Grantor shall be credited with the Proceeds of the sale

WAIVERS, AMENDMENTS AND REMEDIES

.  No delay or omission of Secured Party to exercise any right or remedy granted under this Agreement shall impair such right or remedy or be construed to be a waiver of any Event of Default, or an acquiescence therein, and any single or partial exercise of any such right or remedy shall not preclude any other or further exercise thereof or the exercise of any other right or remedy.  No waiver, amendment or other variation of the terms, conditions or provisions of this Agreement whatsoever shall be valid unless in writing signed by Secured Party and then only to the extent in such writing specifically set forth.  All rights and remedies contained in this Agreement or by law afforded shall be cumulative and all shall be available to Secured Party until this Agreement has been terminated pursuant to Section 8.11.

7.PROCEEDS

7.1.Application of Proceeds

.  Upon the occurrence and during the continuation of an Event of Default, the Proceeds of the Collateral may be applied by Secured Party to payment of the Secured Obligations in such manner and order as Secured Party may elect in its sole discretion.

8.GENERAL PROVISIONS

8.1.Notice of Disposition of Collateral

.  Grantor hereby waives notice of the time and place of any public sale or the time after which any private sale or other disposition of all or any part of the Collateral may be made.  To the extent such notice may not be waived under applicable law, any notice made shall be deemed reasonable if sent to Grantor, addressed as set forth in Section 9.1, at least ten (10) days prior to (a) the date of any such public sale or (b) the time after which any such private sale or other disposition may be made.  Secured Party shall not be obligated to make any sale or other disposition of the Collateral regardless of notice having been given.  Subject to the provisions of applicable law, Secured Party may postpone or cause the postponement of the sale of all or any portion of the Collateral by announcement at the time and place of such sale, and such sale may, without further notice, to the extent permitted by law, be made at the time and place to which the sale was postponed, or Secured Party may further postpone such sale by announcement made at such time and place.

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WPB_ACTIVE 7608584.3 

 

8.2.Secured Party Performance of Grantor’s Obligations

.  Without having any obligation to do so, Secured Party may perform or pay any Obligations which Grantor has agreed to perform or pay in this Agreement, and Grantor shall reimburse Secured Party for any amounts paid by Secured Party pursuant to this Section 8.2.  Grantor’s obligation to reimburse Secured Party pursuant to the preceding sentence shall be a Secured Obligation payable on demand.

8.3.Authorization for Secured Party to Take Certain Action

.  Grantor irrevocably authorizes Secured Party at any time and from time to time in the sole discretion of Secured Party, and appoints Secured Party as its attorney in fact, coupled with an interest, (a) to execute on behalf of such Grantor as debtor and to file financing statements necessary or desirable in Secured Party’s sole discretion to perfect and to maintain the perfection and priority of Secured Party’s Security Interest in the Collateral, (b) during the existence of any Event of Default, to indorse and collect any cash Proceeds of the Collateral, (c) to apply the Proceeds of any Collateral received by Secured Party to the Secured Obligations as provided in Section 7 and (d) to discharge past due taxes, assessments, charges, fees or Liens on the Collateral (except for such Liens as are specifically permitted hereunder), and Grantor agrees to reimburse Secured Party on demand for any payment made or any expense incurred by Secured Party in connection therewith, provided that this authorization shall not relieve Grantor of any of its obligations under this Agreement, the Credit Agreement or any other Loan Document (as defined in the Credit Agreement).

8.4.Specific Performance of Certain Covenants

.  Grantor acknowledges and agrees that a breach of any of the covenants contained in Sections 4.1(d), 4.1(f), 4.2, or 8.6 or in Section 7 will cause irreparable injury to Secured Party, that Secured Party has no adequate remedy at law in respect of such breaches and therefore agrees, without limiting the right of Secured Party to seek and obtain specific performance of other Obligations of Grantor contained in this Agreement, that the covenants of Grantor contained in the Sections referred to in this Section 8.4 shall be specifically enforceable against Grantor.

8.5.Reserved.

8.6.Dispositions Not Authorized

.  Grantor is not authorized to sell or otherwise dispose of the Collateral, except for dispositions permitted under the Credit Agreement, and notwithstanding any course of dealing between Grantor and Secured Party or other conduct of Secured Party, no authorization to sell or otherwise dispose of the Collateral (except as permitted under the Credit Agreement) shall be binding upon Secured Party unless such authorization is in writing signed by Secured Party.  

8.7.Benefit of Agreement

.  The terms and provisions of this Agreement shall be binding upon and inure to the benefit of Grantor, Secured Party and their respective successors and assigns, except that Grantor shall not have the right to assign its rights or delegate its obligations under this Agreement or any interest herein, without the prior written consent of Secured Party.

8.8.Survival of Representations

.  All representations and warranties of Grantor contained in this Agreement shall survive the execution and delivery of this Agreement.

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WPB_ACTIVE 7608584.3 

 

8.9.Taxes and Expenses

.  Any taxes (including income taxes) payable or ruled payable by Federal or State authority in respect of this Agreement shall be paid by Grantor, together with interest and penalties, if any.  Grantor shall reimburse Secured Party for any and all out‐of‐pocket expenses and internal charges (including reasonable attorneys’, auditors’ and accountants’ fees) paid or incurred by Secured Party in connection with the preparation, execution, delivery, and administration of this Agreement and in the audit, analysis, administration, collection, preservation or sale of the Collateral (including the expenses and charges associated with any periodic or special audit of the Collateral).  In addition, Grantor shall be obligated to pay all of the costs and expenses incurred by Secured Party, including attorneys' fees and court costs, in obtaining or liquidating the Collateral, in enforcing payment of the Secured Obligations, or in the prosecution or defense of any action or proceeding by or against Secured Party or Grantor concerning any matter arising out of or connected with this Agreement, any Collateral or the Secured Obligations, including any of the foregoing arising in, arising under or related to a case under any bankruptcy, insolvency or similar law.  Any and all costs and expenses incurred by Grantor in the performance of actions required pursuant to the terms hereof shall be borne solely by Grantor.

8.10.Headings

.  The title of and Section headings in this Agreement are for convenience of reference only, and shall not govern the interpretation of any of the terms and provisions of this Agreement.

8.11.Termination

.  This Agreement shall continue in effect (notwithstanding the fact that from time to time there may be no Secured Obligations outstanding) until (a) the Credit Agreement has terminated pursuant to its express terms and (b) all of the Secured Obligations (except Secured Obligations consisting of contingent indemnification provisions for which no claim has been asserted) have been paid in full in cash in full and no commitments of Secured Party which would give rise to any Secured Obligations are outstanding; provided that any termination of this Agreement under this Section 8.11 is subject to Section 8.18.  Upon any such termination, the Secured Party shall (i) return any original certificates evidencing the Pledged Equity Interests previously delivered by Grantor to the Secured Party, (ii) authorize, at the expense of Grantor, UCC-3 termination statements to be filed terminating financing statements filed to perfect the Security Interests and (iii) at the expense of Grantor, take such other actions as Grantor may reasonably request to reflect such termination.

8.12.FINAL AGREEMENT

.  THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

8.13.CHOICE OF LAW

.  THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF FLORIDA, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.

8.14.INDEMNITY

.  GRANTOR DOES HEREBY ASSUME ALL LIABILITY FOR THE COLLATERAL, FOR THE SECURITY INTEREST OF SECURED PARTY, AND FOR 

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WPB_ACTIVE 7608584.3 

 

ANY USE, POSSESSION, MAINTENANCE, AND MANAGEMENT OF, ALL OR ANY OF THE COLLATERAL, INCLUDING ANY TAXES ARISING AS A RESULT OF, OR IN CONNECTION WITH, THE TRANSACTIONS CONTEMPLATED HEREIN, AND AGREE TO ASSUME LIABILITY FOR, AND TO INDEMNIFY AND HOLD SECURED PARTY AND ITS RESPECTIVE SUCCESSORS, ASSIGNS, AGENTS, ATTORNEYS, AND EMPLOYEES HARMLESS FROM AND AGAINST, ANY AND ALL CLAIMS, CAUSES OF ACTION, OR LIABILITY, FOR INJURIES TO OR DEATHS OF PERSONS AND DAMAGE TO PROPERTY, HOWSOEVER ARISING FROM OR INCIDENT TO SUCH USE, POSSESSION, MAINTENANCE, AND MANAGEMENT, WHETHER SUCH PERSONS BE AGENTS OR EMPLOYEES OF GRANTOR OR OF THIRD PARTIES, OR SUCH DAMAGE BE TO PROPERTY OF GRANTOR OR OF OTHERS.  GRANTOR DOES HEREBY INDEMNIFY, SAVE, AND HOLD SECURED PARTY AND ITS RESPECTIVE SUCCESSORS, ASSIGNS, AGENTS, ATTORNEYS, AND EMPLOYEES HARMLESS FROM AND AGAINST, AND COVENANTS TO DEFEND SECURED PARTY AGAINST, ANY AND ALL LOSSES, DAMAGES, CLAIMS, COSTS, PENALTIES, LIABILITIES, AND EXPENSES (COLLECTIVELY, “CLAIMS”), INCLUDING COURT COSTS AND ATTORNEYS’ FEES, AND ANY OF THE FOREGOING ARISING FROM THE NEGLIGENCE OF SECURED PARTY OR ANY OF THEIR RESPECTIVE OFFICERS, EMPLOYEES, AGENTS, ADVISORS, EMPLOYEES, OR REPRESENTATIVES, HOWSOEVER ARISING OR INCURRED BECAUSE OF, INCIDENT TO, OR WITH RESPECT TO COLLATERAL OR ANY USE, POSSESSION, MAINTENANCE, OR MANAGEMENT THEREOF; PROVIDED, HOWEVER, THAT THE INDEMNITY SET FORTH IN THIS SECTION 8.14 WILL NOT APPLY TO CLAIMS CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SECURED PARTY OR ANY OF THEIR RESPECTIVE OFFICERS, EMPLOYEES, AGENTS, ADVISORS, EMPLOYEES, OR REPRESENTATIVES, AS DETERMINED BY A COURT OF COMPETENT JURISDICTION IN FINAL AND NONAPPEALABLE JUDGMENT.

8.15.Limitation of Obligations.

(a)The provisions of this Agreement are severable, and in any action or proceeding involving any applicable law affecting the rights of creditors generally, if the Obligations of Grantor under this Agreement would otherwise be held or determined to be avoidable, invalid or unenforceable on account of the amount of Grantor’s liability under this Agreement, then, notwithstanding any other provision of this Agreement to the contrary, the amount of such liability shall, without any further action by Grantor or Secured Party, be automatically limited and reduced to the highest amount that is valid and enforceable as determined in such action or proceeding (such highest amount determined hereunder being Grantor’s “Maximum Liability”).

(b)Notwithstanding any or all of the Secured Obligations becoming unenforceable against Grantor or the determination that any or all of the Secured Obligations shall have become discharged, disallowed, invalid, illegal, void or otherwise unenforceable as against Grantor (whether by operation of any present or future law or by order of any court or governmental agency), the Secured Obligations shall, for the purposes of this Agreement, continue to be outstanding and in full force and effect.

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WPB_ACTIVE 7608584.3 

 

8.16.Reserved. 

8.17.Reserved

.  

8.18.Recovered Payments

.  The Secured Obligations shall be deemed not to have been paid, observed or performed, and Grantor’s obligations under this Agreement in respect thereof shall continue and not be discharged, to the extent that any payment, observance or performance thereof by Grantor is recovered from or paid over by or for the account of Secured Party for any reason, including as a preference or fraudulent transfer or by virtue of any subordination (whether present or future or contractual or otherwise) of the Secured Obligations, whether such recovery or payment over is effected by any judgment, decree or order of any court or governmental agency, by any plan of reorganization or by settlement or compromise by Secured Party (whether or not consented to by Grantor) of any claim for any such recovery or payment over.  Grantor hereby expressly waives the benefit of any applicable statute of limitations and agrees that it shall be liable hereunder whenever such a recovery or payment over occurs.

9.NOTICES

9.1.Sending Notices

.  Whenever any notice is required or permitted to be given under the terms of this Agreement, the same shall, except as otherwise expressly provided for in this Agreement, be given in writing, and sent by: (a) certified mail, return receipt requested, postage pre-paid; (b) a national overnight delivery service; (c) hand delivery with written receipt acknowledged; or (d) facsimile, followed by a copy sent in accordance with clause (b) or (c) of this Section 9.1 sent the same day as the facsimile, in each case to the address or facsimile number (together with a contemporaneous copy to each copied addressee), as applicable, set forth in Exhibit D.  Grantor and Secured Party shall not conduct communications contemplated by this Agreement by electronic mail or other electronic means, except by facsimile transmission as expressly provided in this Section 9.1, and the use of the phrase “in writing” or the word “written” shall not be construed to include electronic communications except by facsimile transmissions as expressly provided in this Section 9.1.  Any notice required or given hereunder shall be deemed received the same Business Day if sent by hand delivery or facsimile, the next Business Day if sent by overnight courier, or three (3) Business Days after posting if sent by certified mail, return receipt requested; provided that any notice received after 5:00 p.m. Little Rock, Arkansas time on any Business Day or received on any day that is not a Business Day shall be deemed to have been received on the following Business Day.

9.2.Change in Address for Notices

.  Grantor and Secured Party may change the address for service of notice upon it by a notice in writing to the other party.

9.3Subject to Agreements.  The terms and provisions of this Agreement are (whether or not expressly so stated above) subject to the terms and provisions of the LMF Operating Agreement.  

[Remainder of Page Intentionally Left Blank
Signature Page Follows.]

 

 

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WPB_ACTIVE 7608584.3 

 

IN WITNESS WHEREOF, Grantor and Secured Party have executed this Agreement as of the date first above written.

GRANTOR:

LM FUNDING AMERICA, INC.,

a Delaware corporation

 

 

By: /s/ Bruce M. Rodgers

Name:  Bruce M. Rodgers

Title:  Chief Executive Officer

 

 

SECURED PARTY:

HEARTLAND BANK, 
an Arkansas state bank

 

By: /s/ Mark Hoffpauir
Name:  Mark Hoffpauir

Title:  Executive Vice President

 

[Signature Page to Pledge Agreement]

WPB_ACTIVE 7608584.3 

 

EXHIBIT A

List of Pledged Equity Units 

 

				
	
Grantor
	
Issuer
	
Certificate Number
	
Membership Interests

	
LM Funding America, Inc.
	
LM Funding, LLC
	
N/A
	
100%

	
 
	
 

 
	
 
	
 

	
 
	
 
	
 
	
 

 

Pledge Agreement (LM Funding America, Inc.)Exhibit A to Pledge Agreement

WPB_ACTIVE 7608584.3 

 

EXHIBIT B

UCC Filing Jurisdictions

		
	
Grantor
	
Jurisdiction

	
LM Funding America, Inc.
	
Delaware Secretary of State

 

Pledge Agreement (LM Funding America, Inc.) Exhibit B to Pledge Agreement

WPB_ACTIVE 7608584.3 

 

EXHIBIT C

Litigation

[see attached]

 

 

 

 

Pledge Agreement (LM Funding America, Inc.) Exhibit C to Pledge Agreement

WPB_ACTIVE 7608584.3 

 

 

EXHIBIT D

Principal Place of Business and Mailing Address:

LM Funding America, Inc.

302 Knights Run Ave Suite #1000 

Tampa, Florida 33602
Attention:  Bruce M. Rodgers
Fax No.: (813) 221-7909

With a copy of notices to be sent to:

Business Law Group, P.A.

302 Knights Run Avenue
Suite 1000
Tampa, Florida 33602

Fax No.:  (813) 221-7909

Pledge Agreement (LM Funding America, Inc.)Exhibit D to Pledge Agreement

WPB_ACTIVE 7608584.3

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