Document:

exhibit4-8.htm

EXHIBIT 4.8

 

PLEDGE AND SECURITY AGREEMENT

 

This Pledge and Security Agreement (this “Agreement”) is entered into as of August 14, 2012, by and between United American Healthcare Corporation, a Michigan corporation (“Pledgor”), and St George Investments LLC, an Illinois limited liability company (“Lender”).

 

A. Pledgor has issued to Lender (i) that certain promissory note dated September 28, 2011, in the original principal amount of $400,000, as amended (“Note #1”), (ii) that certain promissory note dated December 9, 2011, in the original principal amount of $300,000, as amended (“Note #2”), (iii) that certain promissory note dated February 9, 2012, in the original principal amount of $350,000, as amended (“Note #3”), (iv) that certain promissory note dated May 16, 2012, in the original principal amount of $75,000, as amended (“Note #4”) (collectively, the “Prior Notes”).

 

B. Lender and Pledgor are parties to that certain Note Purchase Agreement, dated as of the date hereof (the “Purchase Agreement”), wherein Pledgor is issuing to Lender a secured promissory note of even date herewith in the original principal balance of $370,000 (“Note #5”) (the Prior Notes and Note #5 are collectively referred to as the “Promissory Notes”).

 

C. Pledgor acquired 5,044,922 common membership units (“Common Units”) of Pulse Systems, LLC, a Delaware limited liability company (“Pulse”), as well as certain Warrants to Purchase Common Units of Pulse (the “Warrants”).

 

D. In order to induce Lender to make the loan evidenced by Note #5, Pledgor has agreed to pledge all Common Units that Pledgor holds in Pulse (the “Pledged Units”) as security for performance and payment of all obligations under the Promissory Notes.

 

E. Pledgor hereby desires to pledge the Pledged Units pursuant to the terms and conditions of this Agreement.

 

NOW, THEREFORE, the parties hereto agree as follows:

 

1. Defined Terms. All capitalized terms used and not otherwise defined herein shall have the meanings set forth in the Purchase Agreement. The following terms shall have the following meanings:

 

“Event of Default” shall have the meaning set forth in Note #5.

 

“Fifth Third Bank” means Fifth Third Bank, a Michigan banking corporation.

 

“Fifth Third Loan” means a loan to Pulse made by Fifth Third Bank pursuant to that certain Loan and Security Agreement dated March 31, 2009, between the Company and Fifth Third Bank, as amended by that certain First Amendment to Loan and Security Agreement dated as of September 23, 2009, that certain Second Amendment to Loan and Security Agreement dated as of June 18, 2010, that certain Third Amendment to Loan and Security Agreement dated as of June 30, 2011, and any further amendment(s) thereto.

 

  

  

  

“Fifth Third Security Interest” means a security interest in favor of Fifth Third Bank granted as part of Fifth Third Loan.

 

“Lien” means any mortgage, lien, deed of trust, charge, pledge, security interest, or other encumbrance.

 

“Proceeds” shall mean “proceeds,” as such term is defined in section 9-306(1) of the UCC and, in any event, shall include, without limitation, (1) all dividends or distributions in cash or in kind made to Pledgor from time to time in respect of the Pledged Units, (2) any and all proceeds of any insurance, indemnity, warranty or guaranty payable to Pledgor from time to time with respect to any of the Pledged Units, (3) any and all payments (in any form whatsoever) made or due and payable to Pledgor from time to time in connection with any requisition, confiscation, condemnation, seizure or forfeiture of all or any part of the Pledged Units by any foreign or domestic government or any instrumentality or agency thereof (a “Governmental Authority”) (or any person acting under color of any such Governmental Authority) and (4) any and all other amounts from time to time paid or payable under or in connection with any of the Pledged Units. In addition, the term Proceeds shall include, without limitation, all accounts, chattel paper, deposit accounts, instruments, intellectual property, equipment, inventory, consumer goods, farm products, documents, general intangibles and other proceeds which arise from the sale, lease, transfer, or other use or disposition of any kind of the Pledged Units and all proceeds of any type (all of the foregoing shall have the meaning given them in the UCC except as otherwise defined herein).

 

“UCC” shall mean the Uniform Commercial Code as the same may, from time to time, be in effect in the State of Illinois; provided, however, that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection, priority or exercise of remedies of Lender’s security interest in any of the Pledged Units is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of Illinois, the term “UCC” shall mean the Uniform Commercial Code as adopted and in effect in such other jurisdiction for purposes of the provisions hereof relating to such attachment, perfection, priority or exercise of remedies and for purposes of definitions related to such provisions.

 

2. Grant of Security Interest.

 

a. Grant. As collateral security for the prompt and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of the Promissory Notes, Pledgor hereby grants to Lender for its benefit a security interest in all of Pledgor’s right, title and interest in, to and under the Pledged Units and the Proceeds with respect to the foregoing.

 

b. Certificates. To the extent available and upon repayment of the Fifth Third Loan, all certificates and instruments, if any, representing or evidencing the Pledged Units shall be delivered to and held by or on behalf of Lender pursuant hereto and shall be in suitable form for transfer by delivery, or shall be accompanied by duly executed instruments of transfer or assignment in blank, all in form and substance satisfactory to Lender. Upon the occurrence of an Event of Default, following repayment of the Fifth Third Loan, Lender shall have the right at any

 

  

  

  

time, in its discretion and without further notice to Pledgor, to transfer to or register in the name of Lender or any of its nominees any or all of the Pledged Units.

 

3. Limitations on Lender’s Rights and Obligations. As long as Lender is a pledgee hereunder, it is expressly agreed by Pledgor that, anything herein to the contrary notwithstanding, (a) Lender shall not have any obligation or liability for the performance by Pledgor of its obligations as a member of the Company by reason of or arising out of this Agreement or the granting to Lender of the security interest provided for herein or the receipt by Lender of any payment relating hereto, and (b) Lender shall not be required or obligated in any manner to perform or fulfill any of the obligations of Pledgor in its capacity as a member of the Company or to make any inquiry as to the nature or the sufficiency of any payment received by Pledgor or the sufficiency of any performance by any other party of any obligation owed to Pledgor, as the case may be, or to present or file any claim, or to take any action to collect or enforce any performance or the payment of any amounts which may have been assigned to the Company or to which the Company may be entitled at any time or times.

 

4. Representations and Warranties. Pledgor hereby represents and warrants that:

 

a. Capitalization. The Pledged Units constitute 100% of the outstanding Common Units of the Company as of the date hereof.

 

b. Title. Except for the security interest granted to Lender pursuant to this Agreement and the Fifth Third Security Interest, Pledgor is the sole owner of the Pledged Units having good and marketable title thereto, free and clear of any and all Liens and any transfer restrictions affecting the Pledged Units other than any restrictions on transfer which may be imposed under the Company’s operating agreement or other governing documents or applicable federal and state securities laws.

 

c. No Other Security Interests. No Lien exists or will exist on any part of the Pledged Units other than the security interest granted herein and the Fifth Third Security Interest.

 

d. Second Priority Perfected Security Interest. This Agreement is effective to create a valid and continuing second priority Lien on and second priority perfected security interest in the Pledged Units in favor of Lender and prior to all other Liens except for the Fifth Third Security Interest, and is enforceable as such as against creditors of and purchasers from Pledgor. Upon repayment of the Fifth Third Loan, Lender’s security interest granted herein shall be a first priority security interest in the Pledged Units prior to all other Liens.

 

e. No Conflict. Neither Pledgor’s execution and delivery hereof nor its consummation of the transactions contemplated hereby nor its compliance with any of the terms and provisions hereof (i) does or will contravene any existing requirement of any Governmental Authority applicable to or binding on it or any of its properties, (ii) does or will result in the creation of any Lien (other than the Lien created hereby) upon the Pledged Units under any organizational document, indenture, mortgage, chattel mortgage, deed of trust, conditional sales contract, bank loan or credit agreement, partnership agreement, limited liability company agreement or other agreement or instrument to which it is a party or by which it or any of its

 

  

  

  

properties be bound or affected, except as may have been validly waived in connection with this Agreement.

 

f. Enforceability. Pledgor has duly executed and delivered this Agreement and this Agreement constitutes a legal, valid and binding obligation of Pledgor enforceable against Pledgor in accordance with the terms hereof, except for the effect of applicable laws regarding bankruptcy, insolvency, moratorium or fraudulent transfer or similar laws affecting the enforcement of creditors’ rights generally or by equitable principles relating to enforceability.

 

g. Legal Capacity. Pledgor has full power, authority and legal right and capacity to enter into and perform its obligations under this Agreement and each other document contemplated hereby to which Pledgor is or will be a party and to consummate the transactions contemplated hereby and thereby.

 

5. Covenants. Pledgor covenants and agrees with Lender that from and after the effectiveness of this Agreement until the full payment and performance of Pledgor under the Note:

 

a. Further Assurances. At any time and from time to time, upon the written request of Lender, Pledgor will promptly execute and deliver any and all such further instruments and documents as Lender may reasonably deem necessary to obtain the full benefits and security of this Agreement, including, without limitation, executing and filing such financing or continuation statements, securities account control agreements or amendments thereto, as may be necessary or desirable or that Lender may reasonably request in order to perfect, preserve and enforce the security interest created hereby.

 

b. Limitation on Liens on Pledged Units. Pledgor will not create, permit or suffer to exist, and will defend the Pledged Units against and take such other action as is necessary to remove, any Lien on the Pledged Units, except the Lien granted pursuant to this Agreement and the Fifth Third Bank Security Interest, and will defend the right, title and interest of Lender in and to Pledgor’s rights under the Pledged Units against the claims and demands of all third parties whomsoever. Pledgor shall not cause nor permit any further Liens on the Pledged Units other than the Fifth Third Bank Security Interest, and Pledgor shall not cause or permit any amendment to any provision of any membership unit purchase agreements with the Company or the Company’s operating agreement that would impair or otherwise negatively affect the Pledged Units or Lender without the prior written consent of Lender.

 

c. Limitations on Disposition. Pledgor will not sell, assign, exchange, lease, transfer, pledge or otherwise dispose of, or grant any option or other rights with respect to, the Pledged Units or any portion thereof.

 

d. Possession of Pledged Units Collateral. Pledgor shall deliver any and all additional certificates or other indicia of ownership of the Pledged Units to Lender within three business days after receipt by Pledgor and, upon Lender’s request, shall execute all pledge agreements, security agreements, stock powers, financing statements and all other documents that Lender deems necessary or advisable to grant Lender a valid, perfected security interest in such Pledged Units.

 

  

  

  

Additional Financings. Until all of Pledgor’s obligations evidenced by the Note have been repaid, Pledgor shall not cause the Company to (nor shall the Company) undertake any additional equity or debt financing transactions, nor shall Pledgor cause the Company to undertake any transaction which would have the effect of diluting the value of the Pledged Units in any manner (including the issuance of additional common units of the Company) or creating senior securities to the Pledged Units, without the prior written consent of Lender.

 

e. Warrants. Pledgor may not transfer, assign, pledge, hypothecate, or otherwise encumber in any manner the Warrants and the Common Units underlying such Warrants. Any Common Units acquired by Pledgor in connection with the Warrants shall automatically be deemed Pledged Units under this Agreement.

 

6. Voting Rights. Pledgor shall be permitted to exercise all voting rights with respect to the Pledged Units; provided, however, that no vote shall be cast or other action taken which would be inconsistent with or result in any violation of any provision of the Note or any other provision of this Agreement.

 

7. Legend. In addition to all other legends which may be found on such certificates, Pledgor agrees that all certificates representing all Pledged Units will have endorsed upon them in bold-face type a legend in substantially the following form:

 

THE UNITS EVIDENCED HEREBY ARE SUBJECT TO THE TERMS OF A PLEDGE AND SECURITY AGREEMENT IN FAVOR OF ST GEORGE INVESTMENTS LLC (A COPY OF WHICH MAY BE OBTAINED WITHOUT CHARGE FROM THE COMPANY), AND BY ACCEPTING ANY INTEREST IN SUCH UNITS THE PERSON ACCEPTING SUCH INTEREST SHALL BE DEEMED TO AGREE TO AND SHALL BECOME BOUND BY ALL THE PROVISIONS OF SUCH PLEDGE AND SECURITY AGREEMENT.

8. Remedies.

 

a. If an Event of Default has occurred and is continuing (and has not been rescinded or waived pursuant to Note #5), in addition to, and not by way of limitation of, all rights and remedies granted in this Agreement and in any other instrument or agreement securing, evidencing or relating to the Note or otherwise available at law or in equity, without any other notice to or demand upon Pledgor, Lender shall have all rights and remedies of a secured party under the UCC. Without limiting the generality of the foregoing, subject to the rights of Fifth Third Bank under the Fifth Third Security Interests, Lender, without demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except any notice required by applicable law referred to below) to or upon Pledgor or any third party (all and each of which demands, defenses, advertisements and notices are to the fullest extent permitted by applicable law hereby waived), may in such circumstances forthwith collect, receive, appropriate and realize upon the Pledged Units so pledged hereunder, or any part thereof, and/or may forthwith sell, assign, give option or options to purchase or otherwise dispose of and deliver the Pledged Units or any part thereof (or contract to do any of the foregoing), in one or more units at public or private sale or sales upon such terms and conditions as it may deem advisable and at such prices as it may deem best, for cash or on credit or for

 

  

  

  

future delivery without assumption of any credit risk. Lender shall have the right upon any such public sale or sales, and, to the fullest extent permitted by applicable law, upon any such private sale or sales, to purchase the whole or any part of the Pledged Units so sold, free of any right or equity of redemption in Pledgor, which right or equity is hereby waived or released. Lender shall apply any Proceeds from time to time held by it and the net proceeds of any such collection, recovery, receipt, appropriation, realization or sale, after deducting all reasonable costs and expenses of every kind incurred therein or incidental to the care or safekeeping of any of the Pledged Units or in any way relating to the Pledged Units or the rights of Lender hereunder, including, without limitation, reasonable attorneys’ fees and disbursements, to the payment in whole or in part of the Note, and only after such application and after the payment by Lender of any other amount required by any provision of applicable law.

 

b. Pledgor recognizes that Lender may be unable to effect an unrestricted public sale of any or all of the Pledged Units, by reason of certain prohibitions in the Securities Act of 1933, as amended, and applicable state securities laws or otherwise, and may be compelled to resort to one or more public or private sales thereof to a restricted group of purchasers which will be obligated to agree, among other things, to acquire such securities for their own account for investment and not with a view to the distribution or resale thereof. Pledgor acknowledges and agrees that any such private sale or restricted public sale may result in prices and other terms less favorable to Lender than if such sale were an unrestricted public sale and agrees that such circumstances shall not, in and of themselves, result in a determination that such sale was not made in a commercially reasonable manner.

 

9. Reinstatement. This Agreement shall, to the fullest extent permitted by applicable law, remain in full force and effect and continue to be effective should any petition be filed by or against Pledgor for liquidation or reorganization, should Pledgor become insolvent or make an assignment for the benefit of creditors or should a receiver or trustee be appointed for all or any significant part of Pledgor’s assets, and shall continue to be effective or be reinstated, as the case may be, to the fullest extent permitted by applicable law, if at any time payment and performance of the Note, or any part thereof, is, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee of the Note, whether as a “voidable preference,” “fraudulent conveyance,” or otherwise, all as though such payment or performance had not been made. In the event that any payment, or any part thereof, is rescinded, reduced, restored or returned, the Note, to the fullest extent permitted by applicable law, shall be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

 

10. Successors and Assigns. The terms and provisions of this Agreement shall be binding upon, and, subject to the provisions of this Section 10, the benefits thereof shall inure to, the parties hereto and their respective successors and assigns; provided, however, that Pledgor shall not assign this Agreement or any of the rights, duties or obligations of Pledgor hereunder without the prior written consent of Lender.

 

11. Notices. Any notice or communication given pursuant to this Agreement by any party to any other party shall be in writing and shall be sufficiently given if personally delivered, sent by facsimile or other means of electronic transmission or sent by mail, postage prepaid to

 

  

  

  

the parties at the following addresses or to such other address as any party may hereafter designate to the others by like notice:

 

if to Pledgor:

 

United American Healthcare Corporation

300 River Place, Suite 4950

Detroit, Michigan 48207-4291

Attn: Robert T. Sullivan, CFO

If to Lender:

St George Investments LLC

303 East Wacker Drive, Suite 1200

Chicago, Illinois  60601

Attention: John M. Fife

with a copy to (which shall not constitute notice):

Hansen Black Anderson PLLC

2940 West Maple Loop Drive, Suite 103

Lehi, Utah 84043

Attention: Jonathan K. Hansen

Facsimile: (801) 922-5019

Each such notice or other communication shall for all purposes of this Agreement be treated as effective or having been given when delivered if delivered personally, or, if sent by mail, at the earlier of its receipt or four (4) days after the same has been deposited in a regularly maintained receptacle for the deposit of the United States mail, addressed and mailed as aforesaid or, if sent by facsimile, upon confirmation of facsimile transfer or, if sent by electronic mail, upon confirmation of delivery when directed to the electronic mail address set forth above. In the event of any conflict between Lender’s books and records and this Agreement or any notice delivered hereunder, Lender’s books and records will control absent fraud or error.

12. Severability. Whenever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such provision shall be modified to achieve the objective of the parties to the fullest extent permitted and such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement or the validity or enforceability of this Agreement in any other jurisdiction.

 

13. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. The parties hereto confirm that any telecopy or electronic copy of another party’s executed counterpart of this Agreement (or its signature page thereof) will be deemed to be an executed original thereof.

 

  

  

  

No Waiver; Cumulative Remedies. Lender shall not by any act, delay, omission or otherwise be deemed to have waived any of its rights or remedies hereunder, and no waiver shall be valid unless in writing, signed by Lender, and then only to the extent therein set forth. A waiver by Lender of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which Lender would otherwise have had on any future occasion. No failure to exercise nor any delay in exercising on the part of Lender, any right, power or privilege hereunder, shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege hereunder preclude any other or future exercise thereof or the exercise of any other right, power or privilege. The rights and remedies hereunder provided are cumulative and may be exercised singly or concurrently, and are in addition to any rights and remedies provided by law. None of the terms or provisions of this Agreement may be waived, altered, modified or amended except by an instrument in writing, duly executed by Lender and, where applicable, by Pledgor.

 

14. Attorneys’ Fees. In the event of any action at law or in equity to enforce or interpret the terms of this Agreement, the parties agree that the party who is awarded the most money shall be deemed the prevailing party for all purposes and shall therefore be entitled to an additional award of the full amount of the attorneys’ fees and expenses  paid by such prevailing party in connection with the litigation and/or dispute without reduction or apportionment based upon the individual claims or defenses  giving rise to the fees and expenses.  Nothing herein shall restrict or impair a court’s power to award fees and expenses for frivolous or bad faith pleading.

 

15. Construction and Interpretation. The parties hereto have participated jointly in the negotiation and drafting of this Agreement and each party has been represented by its own legal counsel or had the opportunity to seek legal cousel. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement.

 

16. Governing Law and Consent to Jurisdiction. All issues and questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by, and construed in accordance with, the laws of the State of Illinois without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of Illinois or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Illinois.  In furtherance of the foregoing, the internal law of the State of Illinois shall control the interpretation and construction of this Agreement, even though under that jurisdiction’s choice of law or conflict of law analysis, the substantive law of some other jurisdiction would ordinarily apply.  By executing this Agreement, all parties hereto agree to submit to the exclusive jurisdiction of and agree to the venue of the courts of the State of Illinois located in Cook County, Illinois.  The parties hereto agree not to bring any action in any court of law located outside of Cook County, Illinois. THE PLEDGOR HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

  

  

  

Headings. Captions and headings in this Agreement are for convenience only and are not to be deemed part of this Agreement.

 

17. Power of Attorney; Appointment and Powers of Lender. Upon the occurrence and during the continuance of an Event of Default, Pledgor hereby irrevocably constitutes and appoints Lender and any officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of Pledgor or in Lender’s own name, for the purpose of carrying out the terms of this Agreement, to take any and all appropriate action and to execute any and all documents and instruments that may be necessary or desirable to accomplish the purposes of this Agreement and, without limiting the generality of the foregoing, hereby gives such attorneys the power and right, on behalf of Pledgor, without notice to or assent by Pledgor, to do the following:

 

a. generally to sell, transfer, pledge, make any agreement with respect to or otherwise deal with any of the Pledged Units in such manner as is consistent with the UCC and as fully and completely as though Lender was the absolute owner thereof for all purposes, and to do at Pledgor’s expense, at any time, or from time to time, all acts and things which Lender deems necessary to protect, preserve or realize upon the Pledged Units and Lender’s security interest therein, in order to effect the intent of this Agreement, all as fully and effectively as Pledgor might do, including, without limitation, (A) upon written notice to Pledgor, the exercise of voting rights with respect to the Pledged Units, which rights may be exercised, if Lender so elects, with a view to causing the liquidation of assets of the Company, and (B) the execution, delivery and recording, in connection with any sale or other disposition of any Pledged Units, of the endorsements, assignments or other instruments of conveyance or transfer with respect to such Pledged Units; and

 

b. to the extent that Pledgor’s authorization given in Section 21 is not sufficient, to file such financing statements with respect hereto, with or without Pledgor’s signature, or a photocopy of this Agreement in substitution for a financing statement, as Lender may deem appropriate and to execute in Pledgor’s name such financing statements and amendments thereto and continuation statements which may require Pledgor’s signature.

 

18. Termination. Upon the full payment and performance of the Note, this Agreement shall terminate and be of no further force and effect. Upon any such termination, Lender shall authenticate and deliver to Pledgor the Pledged Units together with such documents as Pledgor may reasonably request to evidence such termination at Pledgor’s expense.

 

19. Authorization to File UCC Financing Statements. Pledgor hereby authorizes Lender to file UCC financing statements concerning the Pledged Units. Pledgor will execute and deliver any documents (properly endorsed, if necessary) reasonably requested by Lender for the perfection or enforcement of any security interest or lien, give good faith, diligent cooperation to Lender, and perform such acts reasonably requested by Lender for perfection and enforcement of any security interest or lien, including, without limitation, obtaining control for purposes of perfection with respect to the Pledged Units. Lender is authorized to file, record, or otherwise utilize such documents as it deems necessary to perfect and/or enforce any security interest or lien granted hereunder.

 

  

  

  

Consent to Admission. In the event of any foreclosure of the security interests encumbering the Pledged Units hereunder, Pledgor hereby agrees that Lender or any other recipient of the Pledged Units in connection with such foreclosure shall be admitted as a member of the Company upon such recipient’s agreement to be bound by the Company’s operating agreement.

 

[Remainder of page intentionally left blank]

 

  

  

  

IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed as set forth above.

 

PLEDGOR:

UNITED AMERICAN HEALTHCARE CORPORATION,

a Michigan  corporation

                                                      By:           /s/ Robert T. Sullivan

                                                      Name:      Robert T. Sullivan

                                                      Title:        Chief Financial Officer

WITH RESPECT TO SECTION 5(E) ONLY:

ST GEORGE INVESTMENTS LLC,

an Illinois limited liability company

By:           Fife Trading, Inc.,

an Illinois corporation,

its Manager

                                                                By:           /s/ John M. Fife

                                                                Name:      John M. Fife

                                                                Title:        President

Agreed and Accepted:

ST GEORGE INVESTMENTS LLC,

an Illinois limited liability company

By:           Fife Trading, Inc.,

an Illinois corporation,

its Manager

By:           /s/ John M. Fife

Name:      John M. Fife

Title:        President

 

[Signature page to Pledge and Security Agreement]exhibit4-9.htm

EXHIBIT 4.9

 

 

THE OBLIGATIONS EVIDENCED BY THIS AGREEMENT ARE SUBORDINATED TO THE PRIOR PAYMENT IN FULL OF THE “SENIOR DEBT” AND THE TERMINATION OF THE “SENIOR COMMITMENT” (AS SUCH TERMS ARE DEFINED IN THE SUBORDINATION AGREEMENT HEREINAFTER REFERRED TO) PURSUANT TO, AND TO THE EXTENT PROVIDED IN, THE SUBORDINATION AGREEMENT DATED AS OF AUGUST 17, 2012, BY AND BETWEEN FIFTH THIRD BANK, AN OHIO BANKING CORPORATION, AND ST GEORGE INVESTMENTS LLC, AN ILLINOIS LIMITED LIABILITY COMPANY.

 

 

SECURITY AGREEMENT

 

This Security Agreement (this “Security Agreement”), dated as of August 14, 2012, is executed by Pulse Systems, LLC, a Delaware limited liability company (“Guarantor”), in favor of St George Investments LLC, an Illinois limited liability company (“Secured Party”).

 

A.           Guarantor is a party to that certain Guaranty Agreement dated August 14, 2012 in favor of Secured Party (the “Guaranty Agreement”), a copy of which is attached hereto as Exhibit A, pursuant to which Guarantor guarantees the obligations of United American Healthcare Corporation, a Michigan corporation (“UAHC”) under (i) that certain promissory note dated September 28, 2011 executed by UAHC in favor of Secured Creditor in the original principal amount of $400,000, as amended (“Note #1”), (ii) that certain promissory note dated December 9, 2011 executed by UAHC in favor of Secured Creditor in the original principal amount of $300,000, as amended (“Note #2”), (iii) that certain promissory note dated February 9, 2012 executed by UAHC in favor of Secured Creditor in the original principal amount of $350,000, as amended (“Note #3”), (iv) that certain promissory note dated May 16, 2012 executed by UAHC in favor of Secured Creditor in the original principal amount of $75,000, as amended (“Note #4”) and (v) that certain secured promissory note dated August 14, 2012 executed by UAHC in favor of Secured Creditor in the original principal amount of $370,000, as amended (“Note #5”) (all such promissory notes are collectively referred to as the “Promissory Notes”).

 

B.           Guarantor is a wholly owned subsidiary of UAHC. A substantial amount of the cash proceeds from Note #1, Note #2, Note #3, and Note #4 were contributed by UAHC to Guarantor to, among other things, pay certain contractual obligations of the Guarantor. All of the loan proceeds from Note #5 will be transferred from UAHC to Borrower.

 

C.           Secured Party is purchasing Note #5 and amending Note #1, Note #2, Note #3, and Note #4, pursuant to that certain Note Purchase Agreement substantially in the form attached hereto as Exhibit B (the “Purchase Agreement”).

 

D.           In order to induce Secured Party to extend the credit evidenced by Note #5, Guarantor has agreed to enter into this Security Agreement and to grant Secured Party the security interest in the Collateral (as defined below).

 

NOW, THEREFORE, in consideration of the above recitals and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Guarantor hereby agrees with Secured Party as follows:

 

  

  

  

 

1. Definitions and Interpretation. When used in this Security Agreement, the following terms have the following respective meanings:

 

“Collateral” has the meaning given to that term in Section 2 hereof.

 

“Lien” shall mean, with respect to any property, any security interest, mortgage, pledge, lien, claim, charge or other encumbrance in, of, or on such property or the income therefrom, including, without limitation, the interest of a vendor or lessor under a conditional sale agreement, capital lease or other title retention agreement, or any agreement to provide any of the foregoing, and the filing of any financing statement or similar instrument under the UCC or comparable law of any jurisdiction.

 

“Obligations” means (a) all loans, advances, future advances, debts, liabilities and obligations, howsoever arising, owed by UAHC and/or Guarantor to Secured Party or any affiliate of Secured Party of every kind and description, now existing or hereafter arising, whether created by the Promissory Notes, this Security Agreement, the Purchase Agreement, any other Transaction Documents (as defined in the Purchase Agreement), any modification or amendment to any of the foregoing, or other contract or by a quasi-contract, tort, statute or other operation of law, whether incurred or owed directly to Secured Party or as an affiliate of Secured Party or acquired by Secured Party or an affiliate of Secured Party by purchase, pledge or otherwise, (b) all costs and expenses, including attorneys’ fees, incurred by Secured Party or any affiliate of Secured Party in connection with the Promissory Notes or in connection with the collection or enforcement of any portion of the indebtedness, liabilities or obligations described in the foregoing clause (a), (c) the payment of all other sums, with interest thereon, advanced in accordance herewith to protect the security of this Security Agreement, and (d) the performance of the covenants and agreements of Guarantor contained in this Security Agreement and the Guaranty Agreement. Guarantor acknowledges that the amount of the Obligations may exceed the principal amount of the Promissory Notes.

 

“Permitted Liens” means (a) Liens for taxes not yet delinquent or Liens for taxes being contested in good faith and by appropriate proceedings for which adequate reserves have been established; (b) Liens in respect of property or assets imposed by law which were incurred in the ordinary course of business, such as carriers’, warehousemen’s, materialmen’s and mechanics’ Liens and other similar Liens arising in the ordinary course of business which are not delinquent or remain payable without penalty or which are being contested in good faith and by appropriate proceedings; (c) Liens incurred or deposits made in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other types of social security, and mechanic’s Liens, carrier’s Liens and other Liens to secure the performance of tenders, statutory obligations, contract bids, government contracts, performance and return of money bonds and other similar obligations, incurred in the ordinary course of business, whether pursuant to statutory requirements, common law or consensual arrangements; (d) Liens in favor of Secured Party under this Security Agreement; (e) Liens securing obligations under a capital lease if such Liens do not extend to property other than the property leased under such capital lease; (f) Liens upon any equipment acquired or held by Guarantor to secure the purchase price of such equipment or indebtedness incurred solely for the purpose of financing the acquisition of such equipment, so long as such Lien extends only to the equipment financed, and any accessions, replacements, substitutions and proceeds (including insurance proceeds) thereof or thereto, and (g) Liens upon any Collateral in favor of Senior Creditor.

 

“Senior Creditor” means Fifth Third Bank, an Ohio banking corporation, as successor by merger with Fifth Third Bank, a Michigan banking corporation, and its successors and assigns.

 

“UCC” means the Uniform Commercial Code as in effect in (a) the State of Delaware, (b) the State of California, and (c) the State of Illinois from time to time.

 

  

  

  

Unless otherwise defined herein, all terms defined in the UCC have the respective meanings given to those terms in the UCC. The Recitals set forth above are hereby agreed to and incorporated into this Agreement.

 

2. Grant of Security Interest.  As security for the Obligations, Guarantor hereby pledges to Secured Party and grants to Secured Party a security interest in all right, title, interest, claims and demands of Guarantor in and to the property described in Schedule 1 hereto, and all replacements, proceeds, products, and accessions thereof (collectively, the “Collateral”).

 

3. Authorization to File Financing Statements. Guarantor hereby irrevocably authorizes Secured Party at any time and from time to time to file in any filing office in any Uniform Commercial Code jurisdiction or other jurisdiction of Guarantor (including without limitation Delaware, California, and Illinois) any financing statements or documents having a similar effect and amendments thereto that provide any other information required by the Uniform Commercial Code (or similar law of any non United States jurisdiction, if applicable) or such state or jurisdiction for the sufficiency or filing office acceptance of any financing statement or amendment, including whether Guarantor is an organization, the type of organization and any organization identification number issued to Guarantor. Guarantor agrees to furnish any such information to Secured Party promptly upon Secured Party’s request.

 

4. General Representations and Warranties.  Guarantor represents and warrants to Secured Party that (a) Guarantor is the owner of the Collateral and that no other person has any right, title, claim or interest (by way of Lien or otherwise) in, against or to the Collateral, other than Permitted Liens, and (b) upon the filing of UCC-1 financing statements with the Delaware Secretary of State, California Secretary of State, and Illinois Secretary of State, Secured Party shall have a perfected security interest in the Collateral to the extent that a security interest in the Collateral can be perfected by such filing, subordinate only to the Permitted Liens.

 

5. Additional Covenants.  Guarantor hereby agrees:

 

5.1. to perform all acts that may be necessary to maintain, preserve, protect and perfect in the Collateral, the Lien granted to Secured Party therein, and the perfection and priority of such Lien, except for Permitted Liens;

 

5.2. to procure, execute and deliver from time to time any endorsements, assignments, financing statements and other writings reasonably deemed necessary or appropriate by Secured Party to perfect, maintain and protect Secured Party’s Lien hereunder and the priority thereof;

 

5.3. to provide at least fifteen (15) days prior written notice to Secured Party of any of the following events: (i) any changes or alterations of Guarantor’s name, (ii) any changes with respect to Guarantor’s address or principal place of business, (iii) any changes in the location of any Collateral, or (iv) the formation of any subsidiaries of Guarantor;

 

5.4. upon the occurrence of an Event of Default (as defined in Note #5) under the Purchase Agreement or any of the Promissory Notes, thereafter, at Secured Party’s request, to endorse (up to the outstanding amount under all of the Promissory Notes at the time of Secured Party’s request), assign and deliver any promissory notes included in the Collateral to Secured Party, accompanied by such instruments of transfer or assignment duly executed in blank as Secured Party may from time to time specify;

 

5.5. to the extent the Collateral is not delivered to Secured Party pursuant to this Security Agreement, to keep the Collateral at the principal office of Guarantor and not to remove the

 

  

  

  

5.6. Collateral from such location without providing at least thirty (30) days prior written notice to Secured Party; and

 

5.7. not to sell or otherwise dispose, or offer to sell or otherwise dispose, of the Collateral or any interest therein.

 

6. Authorized Action by Secured Party. Guarantor hereby irrevocably appoints Secured Party as its attorney-in-fact (which appointment is coupled with an interest) and agrees that Secured Party may perform (but Secured Party shall not be obligated to and shall incur no liability to Guarantor or any third party for failure so to do) any act which Guarantor is obligated by this Security Agreement to perform, and to exercise such rights and powers as Guarantor might exercise with respect to the Collateral, including the right to (a) collect by legal proceedings or otherwise and endorse, receive and receipt for all dividends, interest, payments, proceeds and other sums and property now or hereafter payable on or on account of the Collateral; (b) enter into any extension, reorganization, deposit, merger, consolidation or other agreement pertaining to, or deposit, surrender, accept, hold or apply other property in exchange for the Collateral; (c) make any compromise or settlement, and take any action Secured Party deems advisable, with respect to the Collateral; (d) insure, process and preserve the Collateral; (e) pay any indebtedness of Guarantor relating to the Collateral; (f) execute and file UCC financing statements and other documents, instruments and agreements with respect to the Collateral or as otherwise required or permitted hereunder; and (g) take any and all appropriate action and to execute any and all documents and instruments that may be necessary or useful to accomplish the purposes of this Security Agreement; provided, however, that Secured Party shall not exercise any such powers granted pursuant to subsections (a) through (c) prior to the occurrence of an Event of Default and shall only exercise such powers during the continuance of an Event of Default. The powers conferred on Secured Party under this Section 6 are solely to protect its interests in the Collateral and shall not impose any duty upon it to exercise any such powers. Secured Party shall be accountable only for the amounts that it actually receives as a result of the exercise of such powers, and neither Secured Party nor any of its officers, managers, owners, employees or agents shall be responsible to Guarantor for any act or failure to act, except with respect to Secured Party’s own gross negligence or willful misconduct.

 

7. Default and Remedies.

 

7.1. Default.  Guarantor shall be deemed in default under this Security Agreement upon the occurrence of an Event of Default (as defined in Note #5).

 

7.2. Remedies.  Upon the occurrence of any such Event of Default, Secured Party shall have the rights of a secured creditor under the UCC, all rights granted by this Security Agreement and by law, including, without limiting the foregoing, (i) the right to require Guarantor to assemble the Collateral and make it available to Secured Party at a place to be designated by Secured Party, and (ii) the right to take possession of the Collateral, and for that purpose Secured Party may enter upon premises on which the Collateral may be situated and remove the Collateral therefrom.  Guarantor hereby agrees that fifteen (15) days’ notice of a public sale of any Collateral or notice of the date after which a private sale of any Collateral may take place is reasonable.  In addition, Guarantor waives any and all rights that it may have to a judicial hearing in advance of the enforcement of any of Secured Party’s rights and remedies hereunder, including, without limitation, Secured Party’s right following an Event of Default to take immediate possession of Collateral and to exercise Secured Party’s rights and remedies with respect thereto. Secured Party may also have a receiver appointed to take charge of all or any portion of the Collateral and to exercise all rights of Secured Party under this Security Agreement.  Secured Party may exercise any of its rights under this Section 7.2 without demand or notice of any kind.  The remedies in this Security Agreement, including without limitation this Section 7.2, are in addition to, not in limitation of, any other right, power, privilege, or remedy, either in law, in equity, or otherwise, to which Secured

 

  

  

  

 

7.3. Party may be entitled.  No failure or delay on the part of Secured party in exercising any right, power, or remedy will operate as a waiver thereof, nor will any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right hereunder.  All of Secured Party’s rights and remedies, whether evidenced by this Security Agreement or by any other agreement, instrument or document shall be cumulative and may be exercised singularly or concurrently.

 

7.4. Standards for Exercising Rights and Remedies. To the extent that applicable law imposes duties on Secured Party to exercise remedies in a commercially reasonable manner, Guarantor acknowledges and agrees that it is not commercially unreasonable for Secured Party (i) to fail to incur expenses reasonably deemed significant by Secured Party to prepare Collateral for disposition, (ii) to fail to obtain third party consents for access to Collateral to be disposed of, or to obtain or, if not required by other law, to fail to obtain governmental or third party consents for the collection or disposition of Collateral to be collected or disposed of, (iii) to fail to exercise collection remedies against account debtors or other persons obligated on Collateral or to fail to remove liens or encumbrances on or any adverse claims against Collateral, (iv) to exercise collection remedies against account debtors and other persons obligated on Collateral directly or through the use of collection agencies and other collection specialists, (v) to advertise dispositions of Collateral through publications or media of general circulation, whether or not the Collateral is of a specialized nature, (vi) to contact other persons, whether or not in the same business as Guarantor, for expressions of interest in acquiring all or any portion of the Collateral, (vii) to hire one or more professional auctioneers to assist in the disposition of Collateral, whether or not the Collateral is of a specialized nature, (viii) to dispose of Collateral by utilizing Internet sites that provide for the auction of assets of the types included in the Collateral or that have the reasonable capability of doing so, or that match buyers and sellers of assets, (ix) to dispose of assets in wholesale rather than retail markets, (x) to disclaim disposition warranties, (xi) to purchase insurance or credit enhancements to insure Secured Party against risks of loss, collection or disposition of Collateral or to provide to Secured Party a guaranteed return from the collection or disposition of Collateral, or (xii) to the extent deemed appropriate by Secured Party, to obtain the services of other brokers, investment bankers, consultants and other professionals to assist Secured Party in the collection or disposition of any of the Collateral. Guarantor acknowledges that the purpose of this Section is to provide non-exhaustive indications of what actions or omissions by Secured Party would fulfill Secured Party’s duties under the UCC in Secured Party’s exercise of remedies against the Collateral and that other actions or omissions by Secured Party shall not be deemed to fail to fulfill such duties solely on account of not being indicated in this Section. Without limitation upon the foregoing, nothing contained in this Section shall be construed to grant any rights to Guarantor or to impose any duties on Secured Party that would not have been granted or imposed by this Security Agreement or by applicable law in the absence of this Section.

 

7.5. Marshalling. Secured Party shall not be required to marshal any present or future Collateral for, or other assurances of payment of, the Obligations or to resort to such Collateral or other assurances of payment in any particular order, and all of its rights and remedies hereunder and in respect of such Collateral and other assurances of payment shall be cumulative and in addition to all other rights and remedies, however existing or arising. To the extent that it lawfully may, Guarantor hereby agrees that it will not invoke any law relating to the marshalling of Collateral which might cause delay in or impede the enforcement of Secured Party’s rights and remedies under this Security Agreement or under any other instrument creating or evidencing any of the Obligations or under which any of the Obligations is outstanding or by which any of the Obligations is secured or payment thereof is otherwise assured, and, to the extent that it lawfully may, Guarantor hereby irrevocably waives the benefits of all such laws.

 

7.6. Application of Collateral Proceeds.  The proceeds and/or avails of the Collateral, or any part thereof, and the proceeds and the avails of any remedy hereunder (as well as any other

 

  

  

  

 

7.7. amounts of any kind held by Secured Party at the time of, or received by Secured Party after, the occurrence of an Event of Default) shall be paid to and applied as follows:

 

(a) First, to the payment of reasonable costs and expenses, including all amounts expended to preserve the value of the Collateral, of foreclosure or suit, if any, and of such sale and the exercise of any other rights or remedies, and of all proper fees, expenses, liability and advances, including reasonable legal expenses and attorneys’ fees, incurred or made hereunder by Secured Party;

 

(b) Second, to the payment to Secured Party of the amount then owing or unpaid on the Promissory Notes (to be applied first to accrued interest and second to outstanding principal) and all amounts owed under any of the other Transaction Documents; and

 

(c) Third, to the payment of the surplus, if any, to Guarantor, his successors and assigns, or to whosoever may be lawfully entitled to receive the same.

 

In the absence of final payment and satisfaction in full of all of the Obligations, Guarantor shall remain liable for any deficiency.

 

8. Subordination. The obligations evidenced by this Agreement are subordinated to the prior payment in full of the “Senior Debt” and the termination of the “Senior Commitment” (as such terms are defined in the Subordination Agreement hereinafter referred to) pursuant to, and to the extent provided in, the Subordination Agreement dated as of August 14, 2012, by and between Senior Creditor, and Secured Party.

 

9. Miscellaneous.

 

9.1. Notices.  Except as otherwise provided herein, all notices, requests, demands, consents, instructions or other communications to or upon Guarantor or Secured Party under this Security Agreement shall be directed as set forth below (or as the recipient thereof shall otherwise have directed in writing in accordance herewith) in a manner set forth below and will be deemed effectively given the earlier of (i) when received, (ii) when delivered personally, (iii) one business day after being delivered by facsimile, email or other form of electronic communication (with receipt of appropriate confirmation and provided that notice of an Event of Default may not be provided by email), (iv) one business day after being deposited with an overnight courier service of recognized standing, or (v) four days after being deposited in the U.S. mail, first class with postage prepaid.

 

	
  

	
Guarantor:

	
Pulse Systems, LLC

	
  

	
Attn:  Herb Bellucci

	
  

	
4090 Nelson Avenue, Suite J

	
  

	
Concord, California 94520

	
  

	
Secured Party:

	
St George Investments LLC

	
  

	
Attn: John M. Fife

	
  

	
303 East Wacker Drive, Suite 1200

	
  

	
Chicago, Illinois 60601

	
  

	
With a copy to (which shall not constitute notice):

	
  

	
Hansen Black Anderson PLLC

	
  

	
Attn: Jonathan K. Hansen

	
  

	
2940 West Maple Loop Drive, Suite 103

	
  

	
Lehi, Utah 84043

9.2. Nonwaiver.  No failure or delay on Secured Party’s part in exercising any right hereunder shall operate as a waiver thereof or of any other right nor shall any single or partial exercise of any such right preclude any other further exercise thereof or of any other right.

 

9.3. Amendments and Waivers.  This Security Agreement may not be amended or modified, nor may any of its terms be waived, except by written instruments signed by Guarantor and Secured Party. Each waiver or consent under any provision hereof shall be effective only in the specific instances for the purpose for which given.

 

9.4. Assignment.  This Security Agreement shall be binding upon and inure to the benefit of Secured Party and Guarantor and their respective successors and assigns; provided, however, that Guarantor may not sell, assign or delegate rights and obligations hereunder without the prior written consent of Secured Party.

 

9.5. Cumulative Rights, etc.  The rights, powers and remedies of Secured Party under this Security Agreement shall be in addition to all rights, powers and remedies given to Secured Party by virtue of any applicable law, rule or regulation of any governmental authority, or the Promissory Notes, all of which rights, powers, and remedies shall be cumulative and may be exercised successively or concurrently without impairing Secured Party’s rights hereunder.  Guarantor waives any right to require Secured Party to proceed against any person or entity or to exhaust any Collateral or to pursue any remedy in Secured Party’s power.

 

9.6. Partial Invalidity.  If any part of this Security Agreement is construed to be in violation of any law, such part shall be modified to achieve the objective of the parties to the fullest extent permitted and the balance of this Security Agreement shall remain in full force and effect.

 

9.7. Expenses. Guarantor shall pay on demand all reasonable fees and expenses, including reasonable attorneys’ fees and expenses, incurred by Secured Party in connection with the custody, preservation or sale of, or other realization on, any of the Collateral or the enforcement or attempt to enforce any of the Obligations which are not performed as and when required by this Security Agreement.

 

9.8. Waiver of Jury Trial. EACH PARTY TO THIS SECURITY AGREEMENT IRREVOCABLY WAIVES ANY AND ALL RIGHTS IT MAY HAVE TO DEMAND THAT ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN ANY WAY RELATED TO THIS SECURITY AGREEMENT OR THE RELATIONSHIPS OF THE PARTIES HERETO BE TRIED BY JURY.  THIS WAIVER EXTENDS TO ANY AND ALL RIGHTS TO DEMAND A TRIAL BY JURY ARISING UNDER COMMON LAW OR ANY APPLICABLE STATUTE, LAW, RULE OR REGULATION. FURTHER, EACH PARTY HERETO ACKNOWLEDGES THAT IT IS KNOWINGLY AND VOLUNTARILY WAIVING ITS RIGHT TO DEMAND TRIAL BY JURY.

 

9.9. Entire Agreement. This Security Agreement, the Guaranty Agreement, and the other Transaction Documents, taken together, constitute and contain the entire agreement of Guarantor and Secured Party with respect to this particular matter and supersede any and all prior agreements, negotiations, correspondence, understandings and communications between the parties, whether written or oral, respecting the subject matter hereof.

 

9.10. Governing Law; Venue.  Except as otherwise specifically set forth herein, the parties expressly agree that this Security Agreement shall be governed solely by the laws of the State of Illinois, without regard to its principles of conflict of laws. Guarantor hereby expressly consents to the personal jurisdiction of the state and federal courts located in or about Cook County, Illinois for any action or proceeding arising from or relating to this Security Agreement, waives, to the maximum extent permitted by law, any argument that venue in any such forum is not convenient, and agrees that any such action or proceeding shall only be venued in such courts.

 

9.11. Counterparts.  This Security Agreement may be executed in any number of counterparts, each of which shall be an original and all of which together shall constitute one instrument.  Facsimile copies of signed signature pages will be deemed binding originals.

 

9.12. Termination of Security Interest.  Upon the payment in full of all Obligations, the security interest granted herein shall terminate and all rights to the Collateral shall revert to Guarantor. Upon such termination, Secured Party hereby authorizes Guarantor to file any UCC termination statements necessary to effect such termination and Secured Party will execute and deliver to Guarantor any additional documents or instruments as Guarantor shall reasonably request to evidence such termination.

 

IN WITNESS WHEREOF, Secured Party and Guarantor have caused this Security Agreement to be executed as of the day and year first above written.

 

SECURED PARTY:

St George Investments LLC

By: Fife Trading, Inc., Manager

By:  /s/ John M. Fife                                                                    

John M. Fife, President

 

 

GUARANTOR:

Pulse Systems, LLC

 

By:  /s/ Robert T. Sullivan                                                                   

Name: Robert T. Sullivan

Title: Chief Financial Officer

   

                                                                       

  

  

  

Exhibit A

Guaranty Agreement

[attached]

  

  

  

Exhibit B

Purchase Agreement

[attached]

  

  

  

SCHEDULE 1

TO SECURITY AGREEMENT

1.           All goods and equipment now owned or hereafter acquired, including, without limitation, all laboratory equipment, computer equipment, office equipment, machinery, fixtures, vehicles, and any interest in any of the foregoing, and all attachments, accessories, accessions, replacements, substitutions, additions, and improvements to any of the foregoing, wherever located;

2.           All inventory now owned or hereafter acquired, including, without limitation, all merchandise, raw materials, parts, supplies, packing and shipping materials, work in process and finished products including such inventory as is temporarily out of Guarantor’s custody or possession or in transit and including any returns upon any accounts or other proceeds, including insurance proceeds, resulting from the sale or disposition of any of the foregoing and any documents of title representing any of the above, and Guarantor’s books relating to any of the foregoing;

3.           All contract rights, general intangibles, health care insurance receivables, payment intangibles and commercial tort claims, now owned or hereafter acquired, including, without limitation, all patents, patent rights (and applications and registrations therefor), trademarks and service marks (and applications and registrations therefor), inventions, copyrights, mask works (and applications and registrations therefor), trade names, trade styles, software and computer programs including source code, trade secrets, methods, processes, know how, drawings, specifications, descriptions, and all memoranda, notes, and records with respect to any research and development, goodwill, license agreements, franchise agreements, blueprints, drawings, purchase orders, customer lists, route lists, infringements, claims, computer programs, computer disks, computer tapes, literature, reports, catalogs, design rights, income tax refunds, payments of insurance and rights to payment of any kind and whether in tangible or intangible form or contained on magnetic media readable by machine together with all such magnetic media;

4.           All now existing and hereafter arising accounts, contract rights, royalties, license rights and all other forms of obligations owing to Guarantor arising out of the sale or lease of goods, the licensing of technology or the rendering of services by Guarantor (subject, in each case, to the contractual rights of third parties to require funds received by Guarantor to be expended in a particular manner), whether or not earned by performance, and any and all credit insurance, guaranties, and other security therefor, as well as all merchandise returned to or reclaimed by Guarantor and Guarantor’s books relating to any of the foregoing;

5.           All documents, cash, deposit accounts, letters of credit, letter of credit rights, supporting obligations, certificates of deposit, instruments, chattel paper, electronic chattel paper, tangible chattel paper and investment property, including, without limitation, all securities, whether certificated or uncertificated, security entitlements, securities accounts, commodity contracts and commodity accounts, and all financial assets held in any securities account or otherwise, wherever located, now owned or hereafter acquired and Guarantor’s books relating to the foregoing;

6.           All other goods and personal property of Guarantor, wherever located, whether tangible or intangible, and whether now owned or hereafter acquired; and

7.           Any and all claims, rights and interests in any of the above and all substitutions for, additions and accessions to and proceeds thereof, including, without limitation, insurance, condemnation, requisition or similar payments and the proceeds thereof.

“Guarantor” means Pulse Systems, LLC, a Delaware limited liability company.

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