Document:

amacore_8k-ex1003.htm

Exhibit 10.3

 

STOCK PLEDGE AND ESCROW AGREEMENT

 

THIS STOCK PLEDGE AND ESCROW AGREEMENT (this “Agreement”), dated as of August 16, 2010, is made by and between The Amacore Group, Inc., a Delaware corporation (“Pledgor”), VICIS CAPITAL MASTER FUND (“Vicis”), a series of the Vicis Capital Master Trust, a trust formed under the laws of the Cayman Islands, and Quarles & Brady LLP (“Escrow Agent”).  All capitalized terms used herein without definitions shall have the respective meanings ascribed to them in the Securities Purchase Agreement of even date herewith by and between Vicis and Pledgor (the “Securities Purchase Agreement”).

 

  R E C I T A L S:

 

A.           Pledgor is the legal and beneficial owner of the Pledged Interests (as hereinafter defined) hereby pledged by Pledgor.

 

B.           Pursuant to the Securities Purchase Agreement of even date herewith between Pledgor and Vicis, Vicis has agreed to make a loan of up to $5,000,000 (the “Loan”) to Pledgor, to be evidenced by one or more 15% Senior Secured Convertible Notes due June 30, 2011 (each a “Note” and collectively, the “Notes”).

 

C.           In order to secure the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of the Note and to secure all of the Pledgor’s Obligations (as hereinafter defined) to Vicis, the Pledgor has agreed to irrevocably pledge to Vicis the Pledged Interests (as hereinafter defined).

 

D.           It is a condition precedent to Vicis making the Loan that Pledgor execute and deliver to Vicis a stock pledge and escrow agreement in the form hereof.  This is the Stock Pledge and Escrow Agreement referred to in the Securities Purchase Agreement.

 

AGREEMENTS

 

In consideration of the recitals and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Pledgor hereby agrees with Vicis, as follows:

 

1.           Defined Terms.  All terms defined in the Uniform Commercial Code in effect from time to time in the State and used herein shall have the same definitions herein as specified therein; provided, however, if a term is defined in Article 9 of the Uniform Commercial Code of the State differently than in another Article of the Uniform Commercial Code of the State, the term has the meaning specified in Article 9.  As used herein, the following terms have the following meanings:

 

“Code” means the Uniform Commercial Code from time to time in effect in the State.

 

“Collateral” means the Pledged Interests and all Proceeds.

 

  

 

  

“Issuer” means each issuer of Pledged Interests listed on Schedule 1 hereto.

 

“Obligations” shall mean (a) the principal of, and interest on, the Notes, and any renewal, extension or refinancing thereof; (b) all debts, liabilities, obligations, covenants and agreements of Pledgor contained in the Transaction Documents; and (c) any and all other debts, liabilities and obligations of Pledgor to Vicis.

 

“Pledged Interests” means the membership interests, shares of capital stock or other equity interests listed on Schedule 1 hereto, together with all membership or stock certificates, options or rights of any nature whatsoever that may be issued or granted by Issuer to Pledgor in respect of the Pledged Interests while this Agreement is in effect.

 

“Proceeds” means all “proceeds” as such term is defined in Section 9-102 of the Code and shall include, without limitation, all dividends or other income from the Pledged Interests, collections thereon, or distributions with respect thereto.

 

“Securities Act” means the Securities Act of 1933, as amended.

 

“State” means the State of Delaware.

 

2.           Pledge; Grant of Security Interest.  Pledgor hereby grants to Vicis a first priority security interest in the Collateral as security for the prompt and complete performance of all of the Obligations.

 

3.           Escrow of Pledged Interests.  Within a reasonable time following the execution of the Transaction Documents, the Pledgor Shall deliver to the Escrow Agent certificates representing the Pledged Interests, together with duly executed stock powers or other appropriate transfer documents executed in blank by the Pledgor.  Such stock certificates shall be held by the Escrow Agent until released pursuant to the terms of Section 4 below.

 

4.           Release of Pledged Interests from Escrow.  Upon the earlier of (a) payment of all amounts due to Vicis under the Notes in accordance with their respective terms or (b) the full conversion of the Notes into common stock of the Pledgor, Vicis and Pledgor shall jointly notify the Escrow Agent to such effect in writing. Upon receipt of such written notice, the Escrow Agent shall return to the Pledgor the certificates representing the Pledged Interests, whereupon any and all rights of Vicis in the Pledged Interests shall be terminated. Notwithstanding anything to the contrary contained herein, upon the earlier of (a) payment of all amounts due to Vicis under the Notes in accordance with their terms or (b) the full conversion of the Notes into common stock of the Pledgor, Vicis’s security interest and rights in and to the Pledged Interests shall terminate.

 

5.           Concerning the Escrow Agent.

 

  

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(a)           Disputes.  If any dispute arises with respect to the Pledged Interests or this Agreement, or if any disagreements arise among the parties hereto with respect to the interpretation of this Agreement, or concerning their rights and obligations hereunder, or the propriety of any action contemplated by the Escrow Agent hereunder, or if the Escrow Agent in good faith is in doubt what action should be taken hereunder, the Escrow Agent shall not be obligated to resolve the dispute or disagreement or to release the Pledged Interests, but may commence an action in the nature of an interpleader and seek to deposit the Pledged Interests with a court of competent jurisdiction, and thereby be discharged from any further duty or obligation with respect to the Pledged Interests.  Upon the interpleader action being properly brought, all parties being joined and the Pledged Interests being deposited with the court, the Escrow Agent shall be discharged from any obligations accruing thereafter with respect to the Pledged Interests.  The Escrow Agent, in its sole discretion, may, in lieu of filing such action in interpleader, elect to cease performance under this Agreement in connection with any instruction or notice received regarding the release of the Pledged Interests until the Escrow Agent has received: (a) a written notice of resolution of such dispute or disagreement signed by the parties to such dispute or disagreement, or (b) a certified copy of a final judgment of a court of competent jurisdiction, provided, however, that a certified copy of a final judgment shall serve as a valid de­termination only if the time for appeal has expired and no appeal has been perfected or all appeals have been exhausted or no right of appeal exists.

 

(b)           Extent of Duties of Escrow Agent.

 

(i)           The Escrow Agent shall be responsible only for performance of its duties as specified in this Agreement, and no implied covenants, duties or obligations shall bind or be enforceable against the Escrow Agent.  The Escrow Agent shall not be liable to any person or entity for any act or failure to act unless due to the Escrow Agent’s willful misconduct.

 

(ii)           Subject to Section 5(b)(i) hereof, the Escrow Agent shall not be liable for any action taken or omitted by it, or any action suffered by it to be taken or administered in good faith and in the exercise of its own best judgment, and may rely conclusively and shall be protected in acting in good faith upon any order, notice, demand, certificate, advice of counsel (including counsel selected by the Escrow Agent), statement, instrument, report or other document (not only as to its due execution and the validity and effectiveness thereof, but also as to the truth and acceptability of any information therein contained) which is reasonably believed by the Escrow Agent to be genuine and to be signed by the proper person or persons.

 

(iii)           Pledgor shall indemnify the Escrow Agent and hold it harmless from any and all claims, liabilities, damages, losses, or any other expenses, fees or charges of any character or nature, which it may incur or with which it may be threatened by reason of its acting as Escrow Agent under this Agreement, including but not limited to any and all damages, costs, losses and other expenses, including reasonable attorneys’ fees and expenses, resulting from or arising in connection with any action, suit, or proceeding incident to the Escrow Agent’s acting as such hereunder, unless such action, suit or proceeding relates to the Escrow Agent’s willful misconduct.

 

(c)           CONFLICT WAIVER. THE PLEDGOR HEREBY ACKNOWLEDGES THAT THE ESCROW AGENT IS ACTING AS LEGAL COUNSEL TO VICIS IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED AND REFERRED TO HEREIN. THE PLEDGOR AGREES THAT IN THE EVENT OF ANY DISPUTE ARISING IN CONNECTION WITH THIS AGREEMENT OR OTHERWISE IN CONNECTION WITH ANY TRANSACTION OR AGREEMENT CONTEMPLATED AND REFERRED TO HEREIN, THE ESCROW AGENT SHALL BE PERMITTED TO CONTINUE TO REPRESENT VICIS AND THE PLEDGOR WILL NOT SEEK TO DISQUALIFY SUCH COUNSEL AND WAIVES ANY OBJECTION PLEDGOR MIGHT HAVE WITH RESPECT TO THE ESCROW AGENT ACTING AS THE ESCROW AGENT PURSUANT TO THIS AGREEMENT AND LEGAL COUNSEL TO VICIS.

 

  

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6.           Representations and Warranties.  Pledgor represents and warrants that:

 

(a)           all the shares of such Pledged Interests have been duly and validly issued and are fully paid and nonassessable;

 

(b)           Pledgor is the record and beneficial owner of, and has good and marketable title to, such Pledged Interests, free of any and all liens or options in favor of, or claims of, any other person, except the security interest created by this Agreement; and

 

(c)           upon either (i) the delivery to Vicis of the stock or membership interest certificates evidencing such Pledged Interests and the stock or membership interest powers or (ii) the filing of a financing statement listing Pledgor as debtor and Vicis as secured party and describing the Collateral, the security interest created by this Agreement will constitute a valid, perfected first priority security interest in the Collateral granted by Pledgor, enforceable in accordance with its terms against all creditors of Pledgor and any persons purporting to purchase any Collateral from Pledgor, except as affected by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing.

 

7.           Covenants.  Pledgor covenants and agrees with Vicis that, from and after the date of this Agreement until the Obligations are performed in full:

 

(a)           If Pledgor shall, as a result of its ownership of any Pledged Interests, become entitled to receive or shall receive any stock or membership interest certificate (including, without limitation, any certificate representing a stock or membership interest dividend or a distribution in connection with any reclassification, increase or reduction of capital or any certificate issued in connection with any reorganization), option or rights, whether in addition to, in substitution of, as a conversion of, or in exchange for any shares of any Pledged Interests, or otherwise in respect thereof, Pledgor shall accept the same as the agent of Vicis, hold the same in trust for Vicis and deliver the same forthwith to Vicis in the exact form received, duly indorsed by Pledgor to Vicis, if required, together with an undated stock or membership interest power covering such certificate duly executed in blank by Pledgor, to be held by Vicis, subject to the terms hereof, as additional collateral security for the Obligations of Pledgor.  Any property distributed to Pledgor upon or in respect of any Pledged Interests upon the liquidation, dissolution, recapitalization or reorganization of an Issuer, shall be delivered to Vicis as additional collateral security for the Obligations of Pledgor.  If any property distributed in respect of any Pledged Interests shall be received by Pledgor while an Event of Default exists, Pledgor shall, until such property is delivered to Vicis, hold the property in trust for Vicis, segregated from other property of Pledgor, as additional collateral security for the Obligations of Pledgor.

 

  

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(b)           Without the prior written consent of Vicis, Pledgor shall not vote to enable, or take any other action to permit, an Issuer to issue any stock or membership interest or other equity securities of any nature or to issue any other securities convertible into or granting the right to purchase or exchange for any stock or membership interest or other equity securities of any nature of an Issuer, sell, assign, transfer, exchange, or otherwise dispose of, or grant any option with respect to, the Collateral, or create, incur or permit to exist any lien or option in favor of, or any claim of any person with respect to, any of the Collateral, or any interest therein, except for Pledgor and except for the security interests created by this Agreement. Pledgor will defend the right, title and interest of Vicis in and to the Collateral against the claims and demands of all persons whomsoever.

 

(c)           At any time and from time to time, upon the written request of Vicis to Pledgor, and at its sole expense, Pledgor will promptly and duly execute and deliver such further instruments and documents and take such further actions as Vicis may reasonably request for the purposes of obtaining or preserving the full benefits of this Agreement and of the rights and powers herein granted.  If any amount payable under or in connection with any of the Collateral shall be or become evidenced by any promissory note, other instrument or chattel paper, such note, instrument or chattel paper shall be immediately delivered to Vicis, duly endorsed in a manner satisfactory to Vicis, to be held as Collateral pursuant to this Agreement.

 

(d)           Pledgor shall pay, and save Vicis harmless from, any and all liabilities with respect to, or resulting from any delay in paying, any and all stamp, excise, sales or other taxes which may be payable or determined to be payable with respect to any of the Collateral granted by Pledgor or in connection with any of the transactions contemplated by this Agreement.

 

(e)           Pledgor covenants and agrees to comply with the requirements set forth in Articles VII and VIII of the Securities Purchase Agreement.

 

8.           Voting Rights.  Unless an Event of Default shall have occurred and be continuing, and written notice that Vicis intends to exercise voting rights is given to Pledgor by Vicis, Pledgor shall be permitted to exercise all voting and related rights with respect to such Pledged Interests; provided, however, that no vote shall be cast or related right exercised or other action taken which, in the reasonable judgment of Vicis, would impair the Collateral or which would be inconsistent with or result in any violation of any provision of this Agreement.

 

9.           Rights of Vicis.  If an Event of Default shall occur and be continuing, Vicis shall have the right to have any or all shares of Pledged Interests registered in its name or the name of its nominee, and Vicis or its nominee may thereafter exercise all voting, related and other rights pertaining to such Pledged Interests at any meeting of members or shareholders of an Issuer or otherwise and  any and all rights of conversion, exchange, subscription and any other rights, privileges or options pertaining to such Pledged Interests as if it were the absolute owner thereof (including, without limitation, the right to exchange at its discretion any and all of the Pledged Interests upon the merger, consolidation, reorganization, recapitalization or other fundamental change in the corporate or limited liability company structure of an Issuer, or upon the exercise by Pledgor or Vicis of any right, privilege or option pertaining to such Pledged Interests, and in connection therewith, the right to deposit and deliver any and all of such Pledged Interests with any committee, depositary, transfer agent, registrar or other designated agency upon such terms and conditions as Vicis may determine).

 

  

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The rights of Vicis hereunder shall not be conditioned or contingent upon the pursuit by Vicis of any right or remedy against an Issuer or any obligor or against any other person which may be or become liable in respect of all or any part of the Obligations or against any collateral security therefor, guarantee thereof or right of offset with respect thereto.  Vicis shall not be liable for any failure to demand, collect or realize upon all or any part of the Collateral or for any delay in doing so, nor shall Vicis be under any obligation to sell or otherwise dispose of any Collateral upon the request of Pledgor or any other person or to take any other action whatsoever with regard to the Collateral or any part thereof.

 

10.           Remedies; Sale Proceeds.

 

(a)           If an Event of Default shall occur and be continuing, Vicis may exercise, in addition to all other rights and remedies granted in this Agreement, all rights and remedies of a secured party under the Code as Vicis deems advisable.  Without limiting the generality of the foregoing, Vicis, without demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except any notice required by law referred to below) to or upon Pledgor, an Issuer, any obligor or any other person (all and each of which demands, defenses, advertisements and notices are hereby waived), may in such circumstances forthwith collect, receive, appropriate and realize upon the Collateral, or any part thereof, and/or may forthwith sell, assign, give option or options to purchase or otherwise dispose of and deliver the Collateral or any part thereof (or contract to do any of the foregoing), in one or more parcels at public or private sale or sales, in the over-the-counter market, at any exchange, broker’s board or office of Vicis or elsewhere upon such terms and conditions as it may deem advisable and at such prices as are commercially reasonable, for cash or on credit or for future delivery without assumption of any credit risk.

 

Vicis shall have the right upon any such public sale or sales, and, to the extent permitted by law, upon any such private sale or sales, to purchase the whole or any part of the Collateral so sold, free of any right or equity of redemption in Pledgor, which right or equity is hereby waived or released.  If any notice of a proposed sale or other disposition of Collateral shall be required by law, such notice shall be deemed reasonable and proper if given at least ten (10) days before such sale or other disposition.

 

(b)           Vicis 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 costs and expenses of every kind incurred in respect thereof or incidental to the care or safekeeping of any of the Collateral or in any way relating to the Collateral or the rights of Vicis hereunder, including, without limitation, attorneys’ fees and disbursements of counsel (including in-house counsel) to Vicis, to the payment in whole or in part of the Obligations, as Vicis may otherwise decide, and only after such application and after the payment by Vicis of any other amount required by any provision of law, including, without limitation, Section 9-615(4)(a) of the Code, need Vicis account for the surplus, if any, to Pledgor.  To the extent permitted by applicable law, Pledgor waives all claims, damages and demands it may acquire against Vicis arising out of the exercise by it of any rights hereunder, except such claims and damages arising out of the gross negligence or willful misconduct of Vicis.  Pledgor shall remain liable for any deficiency if the proceeds of any sale or other disposition of Collateral are insufficient to pay the Obligations of Pledgor and the fees and disbursements of any attorneys employed by Vicis to collect such deficiency.

 

  

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11.           Private Sales.

 

(a)           Pledgor recognizes that Vicis may be unable to effect a public sale of any or all the Pledged Interests, by reason of certain prohibitions contained in the Securities Act and applicable state securities laws or otherwise, and may be compelled to resort to one or more private sales thereof to a restricted group of purchasers which will be obliged 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 may result in prices and other terms less favorable than if such sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall not be deemed to have been made in a commercially unreasonable manner solely by virtue of such private sale.  Vicis shall be under no obligation to delay a sale of any of the Pledged Interests for the period of time necessary to permit the applicable Issuer thereof to register such securities for public sale under the Securities Act, or under applicable state securities laws, even if such Issuer would agree to do so.

 

(b)           Pledgor further agrees to use its best efforts to do or cause to be done all such other acts as may be necessary to make such sale or sales of all or any portion of the Pledged Interests pursuant to this section valid and binding and in compliance with any and all other applicable requirements of law, except that Pledgor shall not be obligated to register the Pledged Interests under state or federal securities laws.  Pledgor further agrees that a breach of any of the covenants contained in this Section will cause irreparable injury to Vicis, that Vicis has no adequate remedy at law in respect of such breach and, as a consequence, that each and every covenant contained in this Section 11 shall be specifically enforceable against Pledgor, and Pledgor hereby waives and agrees not to assert any defenses against an action for specific performance of such covenants except for a defense that no Event of Default has occurred.

 

12.           Irrevocable Authorization and Instruction to Issuer.  Pledgor hereby authorizes and instructs each Issuer of its Pledged Interests to comply with any instruction received by it from Vicis in writing that (a) states that an Event of Default exists and (b) is otherwise in accordance with the terms of this Agreement, without any other or further instructions from Pledgor, and Pledgor agrees that Issuer shall be fully protected in so complying.

 

13.           Vicis’s Appointment as Attorney-in-Fact. Pledgor hereby irrevocably constitutes and appoints Vicis and any officer or agent of Vicis, 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 and in the name of Pledgor or in the name of Vicis, from time to time in the discretion of Vicis so long as an Event of Default exists, 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 which may be necessary or desirable to accomplish the purposes of this Agreement, including, without limitation, any financing statements, endorsements, assignments or other instruments of transfer.

 

  

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Pledgor hereby ratifies all that said attorneys shall lawfully do or cause to be done pursuant to the power of attorney granted in this Section 13.  All powers, authorizations and agencies contained in this Agreement are coupled with an interest and are irrevocable until the Obligations are performed in full.

 

14.           Duty of Vicis.  The sole duty of Vicis with respect to the custody, safekeeping and physical preservation of the Collateral in its possession, under Section 9-207 of the Code or otherwise, shall be to deal with it in the same manner as Vicis deals with similar securities and property for its own account.  Neither Vicis nor any of its directors, officers, employees or agents shall be liable for failure to demand, collect or realize upon any of the Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of Pledgor or any other person or to take any other action whatsoever with regard to the Collateral or any part thereof.

 

15.           Filing Financing Statements  Pledgor authorizes Vicis to file financing statements with respect to the Collateral without the signature of Pledgor in such form and in such filing offices as Vicis reasonably determines appropriate to perfect the security interests of Vicis under this Agreement.

 

16.           Notices  All notices, requests and demands to or upon Vicis, Pledgor or Issuer (to be delivered care of the Pledgor) to be effective shall be delivered in the manner set forth in Section 10.6 of the Securities Purchase Agreement.

 

17.           Severability  Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

18.           Amendments in Writing; No Waiver; Cumulative Remedies.  Vicis shall not by any act (except by a written instrument signed by Vicis), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Event of Default or in any breach of any of the terms and conditions hereof.  No failure to exercise, nor any delay in exercising, on the part of Vicis, any right, power or privilege hereunder shall operate as a waiver thereof.  No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege.  A waiver by Vicis of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which Vicis would otherwise have on any future occasion.  The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any other rights or remedies provided by law.

 

19.           Section Headings.  The section headings used in this Agreement are for convenience of reference only and are not to affect the construction hereof or be taken into consideration in the interpretation hereof.

 

  

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20.           Successors and Assigns.  This Agreement shall be binding upon the successors and assigns of Pledgor and shall inure to the benefit of Vicis and their successors and assigns.

 

21.           GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO ITS CONFLICTS OF LAW PROVISIONS.

 

22.           CONSENT TO JURISDICTION AND VENUE.  ALL ACTIONS OR PROCEEDINGS BROUGHT AGAINST PLEDGOR WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT ONLY IN COURTS LOCATED IN THE CITY AND THE STATE OF NEW YORK OR THE FEDERAL COURTS LOCATED IN THE SOUTHERN DISTRICT OF NEW YORK AND PLEDGOR CONSENTS TO THE JURISDICTION OF SUCH COURTS.  PLEDGOR WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH COURT AND ANY RIGHT IT MAY HAVE NOW OR HEREAFTER HAVE TO CLAIM THAT ANY SUCH ACTION OR PROCEEDING IS IN AN INCONVENIENT COURT.

 

23.           WAIVER OF RIGHT TO JURY TRIAL.  PLEDGOR AND VICIS ACKNOWLEDGE AND AGREE THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS PLEDGE AGREEMENT WOULD BE BASED UPON DIFFICULT AND COMPLEX ISSUES AND, THEREFORE, PLEDGOR AND VICIS AGREE THAT ANY LAWSUIT ARISING OUT OF ANY SUCH CONTROVERSY SHALL BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.

 

 

  

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IN WITNESS WHEREOF, the undersigned has caused this Pledge and Escrow Agreement to be duly executed and delivered as of the date first above written.

 

 

	 	 
THE AMACORE GROUP, INC.

 

By:                                                                                    

     Name:

     Title:

VICIS CAPITAL MASTER FUND

 

    By:  Vicis Capital LLC

 

By:                                                                                    

      Name:

      Title:

 

 

 

Accepted and Agreed by:

ESCROW AGENT:

QUARLES & BRADY LLP

 

______________________________

 

 

 

  

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SCHEDULE 1

TO PLEDGE AGREEMENT

 

 

DESCRIPTION OF PLEDGED INTERESTS

 

	
Issuer

	
Class of Interest

	
Stock Certificate No(s).

	
No. of Shares Pledged

	  	  	  	  
	  	  	  	  
	  	  	  	  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

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ACKNOWLEDGMENT AND CONSENT

 

The undersigned is an Issuer referred to in the foregoing Stock Pledge and Escrow Agreement and hereby acknowledges receipt of a copy of the Stock Pledge and Escrow Agreement, dated as of August __, 2010, made by Pledgor (as defined therein) in favor of Vicis (as defined therein) (as amended, supplemented or otherwise modified from time to time, the “Pledge Agreement”).  The undersigned agrees for the benefit of Vicis as follows:

 

1.           The undersigned will be bound by the terms of the Pledge Agreement and will comply with such terms insofar as such terms are applicable to the undersigned.

 

2.           The undersigned will notify Vicis promptly in writing of the occurrence of any of the events described in paragraph 5(a) of the Pledge Agreement.

 

 

	 	 
[ISSUER NAME]

 

By:                                                                                    

 

 

 

 

 

 

 

 

12Unassociated Document

    
      
        

      

    

    EXHIBIT
10.6

      

    GUARANTY
AGREEMENT

    
       

        

      THIS
GUARANTY AGREEMENT (this “Guaranty”) is made as
of August 16, 2010 by and between each of the undersigned (each a “Guarantor” and
collectively, the “Guarantors”), and
Vicis Capital Master Fund (“Vicis”), a sub-trust
of Vicis Capital Series Master Trust, a unit trust organized and existing under
the laws of the Cayman Islands.

       

      R E C I T A L
S

       

      WHEREAS,
Each Guarantor is a wholly owned subsidiary of The Amacore Group, Inc., a
Delaware corporation (“Issuer”).

       

      WHEREAS,
pursuant to a Securities Purchase Agreement of even date herewith by and between
Vicis and Issuer (as amended or modified from time to time, the “Purchase Agreement”),
Vicis has made or will make an investment (the “Investment”) in
Issuer’s 15% Senior Secured Convertible Notes due June 30, 2011 (the “Acquired
Notes”).

       

      WHEREAS,
it is a condition precedent to Vicis’s investment in the Acquired Notes that
each Guarantor execute and deliver to Vicis a guaranty in the form
hereof.

       

      WHEREAS,
this is the Guaranty Agreement referred to in the Purchase
Agreement.

       

      NOW,
THEREFORE, in consideration of the recitals and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
each Guarantor hereby agrees with Vicis as follows:

       

      ARTICLE
1

      DEFINITIONS

       

      When used
in this Guaranty, capitalized terms shall have the respective meanings ascribed
to them in the Purchase Agreement, the preamble, the recitals and as
follows:

       

      1.1   Event of
Default.  “Event of Default” shall have the meaning specified
in the Purchase Agreement.

       

      1.2   Guaranty.  “Guaranty”
shall mean this Guaranty, as the same shall be amended, supplemented or
otherwise modified from time to time in accordance with the terms
hereof.

       

      1.3   Law.  “Law”
shall mean any federal, state, local or other law, rule, regulation or
governmental requirement of any kind, and the rules, regulations,
interpretations and orders promulgated thereunder.

       

      1.4   Obligations.  “Obligations”
shall mean (a) the obligation to pay interest and principal on the Acquired
Notes as required by the terms thereof and the Transaction Documents; (b)
obligations associated with any renewal, extension, refinancing, or amendment to
the terms of the Acquired Notes; (c) all debts, liabilities, obligations,
covenants and agreements of the Issuer and Guarantors to Vicis contained in the
Transaction Documents; and (d) any and all other debts, liabilities and
obligations of the Guarantors and Issuer to Vicis.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      1.5   Person.  “Person”
shall mean and include an individual, partnership, corporation, trust,
unincorporated association and any unit, department or agency of
government.

       

      ARTICLE
2

      THE
GUARANTY

       

      2.1   The
Guaranty.  Each Guarantor, for itself, its successors and
assigns, hereby unconditionally and absolutely guarantees to Vicis the full and
complete payment and performance when due (whether at stated maturity, by
acceleration or otherwise) of each of the Obligations.  This is a
guaranty of payment and performance and not of collection.

       

      2.2   Waivers and
Consents.

       

      (a)   Each
Guarantor acknowledges that the obligations undertaken herein involve the
guaranty of obligations of a Person other than such Guarantor and, in full
recognition of that fact, such Guarantor consents and agrees that Vicis may, at
any time and from time to time, without notice or demand, and without affecting
the enforceability or continuing effectiveness hereof: (i) supplement, modify,
amend, extend, renew, accelerate or otherwise change the time for payment or the
other terms of the Obligations or any part thereof, including without limitation
any increase or decrease of the principal amount thereof or the rate(s) of
interest thereon; (ii) supplement, modify, amend or waive, or enter into or give
any agreement, approval or consent with respect to, the Obligations or any part
thereof, or any of the Transaction Documents or any additional security or
guaranties, or any condition, covenant, default, remedy, right, representation
or term thereof or thereunder; (iii) accept new or additional instruments,
documents or agreements in exchange for or relative to any of the Transaction
Documents or the Obligations or any part thereof; (iv) accept partial payments
on the Obligations; (v) receive and hold additional security or guaranties for
the Obligations or any part thereof; (vi) release, reconvey, terminate, waive,
abandon, fail to perfect, subordinate, exchange, substitute, transfer and/or
enforce any security or guaranties, and apply any security and direct the order
or manner of sale thereof as Vicis in its sole and absolute discretion may
determine; (vii) release any Person from any personal liability with respect to
the Obligations or any part thereof; (viii) settle, release on terms
satisfactory to Vicis or by operation of applicable Law or otherwise, liquidate
or enforce any Obligations and any security or guaranty in any manner, consent
to the transfer of any security and bid and purchase at any sale; and/or (ix)
consent to the merger, change or any other restructuring or termination of the
corporate existence of Issuer or any other Person, and correspondingly
restructure the Obligations, and any such merger, change, restructuring or
termination shall not affect the liability of such Guarantor or the continuing
effectiveness hereof, or the enforceability hereof with respect to all or any
part of the Obligations.

       

      (b)   Upon the
occurrence and during the continuance of any Event of Default, Vicis may enforce
this Guaranty independently of any other remedy, guaranty or security Vicis at
any time may have or hold in connection with the Obligations, and it shall not
be necessary for Vicis to marshal assets in favor of Issuer, any other guarantor
of the Obligations or any other Person or to proceed upon or against and/or
exhaust any security or remedy before proceeding to enforce this
Guaranty.  Each Guarantor expressly waives any right to require Vicis
to marshal assets in favor of Issuer or any other Person or to proceed against
Issuer or any other guarantor of the Obligations or any collateral provided by
any Person, and agrees that Vicis may proceed against any obligor and/or the
collateral in such order as it shall determine in its sole and absolute
discretion.  Vicis may file a separate action or actions against any
Guarantor, whether action is brought or prosecuted with respect to any security
or against any other Person, or whether any other Person is joined in any such
action or actions.  Each Guarantor agrees that Vicis and Issuer may
deal with each other in connection with the Obligations or otherwise, or alter
any contracts or agreements now or hereafter existing between them, in any
manner whatsoever, all without in any way altering or affecting the security of
this Guaranty.

       

      
        
           

        

        
          -2-

          
            

          

        

        
           

        

      

       

      (c)   The
rights of Vicis hereunder shall be reinstated and revived, and the
enforceability of this Guaranty shall continue, with respect to any amount at
any time paid on account of the Obligations which thereafter shall be required
to be restored or returned by Vicis upon the bankruptcy, insolvency or
reorganization of any Person, all as though such amount had not been
paid.  The rights of Vicis created or granted herein and the
enforceability of this Guaranty shall remain effective at all times to guarantee
the full amount of all the Obligations even though the Obligations, including
any part thereof or any other security or guaranty therefor, may be or hereafter
may become invalid or otherwise unenforceable as against Issuer or any other
guarantor of the Obligations and whether or not Issuer or any other guarantor of
the Obligations shall have any personal liability with respect
thereto.

       

      (d)   To the
extent permitted by applicable law, each Guarantor expressly waives any and all
defenses now or hereafter arising or asserted by reason of:  (i) any
disability or other defense of Issuer or any other guarantor for the Obligations
with respect to the Obligations (other than full payment and performance of all
of the Obligations); (ii) the unenforceability or invalidity of any security for
or guaranty of the Obligations or the lack of perfection or continuing
perfection or failure of priority of any security for the Obligations;
(iii) the cessation for any cause whatsoever of the liability of Issuer or
any other guarantor of the Obligations (other than by reason of the full payment
and performance of all Obligations); (iv) any failure of Vicis to marshal assets
in favor of Issuer or any other Person; (v) any failure of Vicis to give notice
of sale or other disposition of collateral to Issuer or any other Person or any
defect in any notice that may be given in connection with any sale or
disposition of collateral; (vi) any failure of Vicis to comply with applicable
Laws in connection with the sale or other disposition of any collateral or other
security for any Obligation, including, without limitation, any failure of Vicis
to conduct a commercially reasonable sale or other disposition of any collateral
or other security for any Obligation; (vii) any act or omission of Vicis or
others that directly or indirectly results in or aids the discharge or release
of Issuer or any other guarantor of the Obligations, or of any security or
guaranty therefor by operation of Law or otherwise; (viii) any Law which
provides that the obligation of a surety or guarantor must neither be larger in
amount nor in other respects more burdensome than that of the principal or which
reduces a surety’s or guarantor’s obligation in proportion to the principal
obligation; (ix) any failure of Vicis to file or enforce a claim in any
bankruptcy or other proceeding with respect to any Person; (x) the election by
Vicis, in any bankruptcy proceeding of any Person, of the application or
non-application of Section 1111(b)(2) of the United States Bankruptcy Code; (xi)
any extension of credit or the grant of any lien under Section 364 of the United
States Bankruptcy Code; (xii) any use of collateral under Section 363 of the
United States Bankruptcy Code; (xiii) any agreement or stipulation with respect
to the provision of adequate protection in any bankruptcy proceeding of any
Person; (xiv) the avoidance of any lien or security interest in favor of Vicis
for any reason; (xv) any bankruptcy, insolvency, reorganization, arrangement,
readjustment of debt, liquidation or dissolution proceeding commenced by or
against any Person, including without limitation any discharge of, or bar or
stay against collecting, all or any of the Obligations (or any interest thereon)
in or as a result of any such proceeding; or (xvi) any action taken by Vicis
that is authorized by this Section or any other provision of any Transaction
Document.  Until all of the Obligations have been paid in full, each
Guarantor expressly waives all presentments, demands for payment or performance,
notices of nonpayment or nonperformance, protests, notices of protest, notices
of dishonor and all other notices or demands of any kind or nature whatsoever
with respect to the Obligations, and all notices of acceptance of this Guaranty
or of the existence, creation or incurrence of new or additional
Obligations.

       

      
        
           

        

        
          -3-

          
            

          

        

        
           

        

      

       

      (e)   Each
Guarantor represents and warrants to Vicis that it has established adequate
means of obtaining from Issuer, on a continuing basis, financial and other
information pertaining to the business, operations and condition (financial and
otherwise) of Issuer and its assets and properties.  Each Guarantor
hereby expressly waives and relinquishes any duty on the part of Vicis (should
any such duty exist) to disclose to such Guarantor any matter, fact or thing
related to the business, operations or condition (financial or otherwise) of
Issuer or its assets or properties, whether now known or hereafter known by
Vicis during the life of this Guaranty.  With respect to any of the
Obligations, Vicis need not inquire into the powers of Issuer or agents acting
or purporting to act on its behalf, and all Obligations made or created in good
faith reliance upon the professed exercise of such powers shall be guaranteed
hereby.

       

      (f)   This is a
continuing guaranty and shall remain in full force and effect as to all of the
Obligations until all amounts owing by Issuer to Vicis on the Obligations shall
have been paid in full.

       

      (g)   Each
Guarantor expressly waives any claim for reimbursement, contribution, indemnity
or subrogation which such Guarantor may have against Issuer as a guarantor of
the Obligations and any other legal or equitable claim against Issuer arising
out of the payment of the Obligations by such Guarantor or from the proceeds of
any collateral for this Guaranty, until all amounts owing to Vicis under the
Obligations shall have been paid in full and all commitments to lend have been
terminated or expired.  In furtherance, and not in limitation, of the
foregoing waiver, until all amounts owing to Vicis under the Obligations shall
have been paid in full, each Guarantor hereby agrees that no payment by such
Guarantor pursuant to this Guaranty shall constitute such Guarantor a creditor
of Issuer.  Until all amounts owing to Vicis under the Obligations
shall have been paid in full, each Guarantor shall not seek any reimbursement
from Issuer in respect of payments made by such Guarantor in connection with
this Guaranty, or in respect of amounts realized by Vicis in connection with any
collateral for the Obligations, and each Guarantor expressly waives any right to
enforce any remedy that Vicis now has or hereafter may have against any other
Person and waives the benefit of, or any right to participate in, any collateral
now or hereafter held by Vicis.  No claim which any Guarantor may have
against any other guarantor of any of the Obligations or against Issuer, to the
extent not waived pursuant to this Section, shall be enforced nor any payment
accepted until the Obligations are paid in full and all such payments are not
subject to any right of recovery.

       

      
        
           

        

        
          -4-

          
            

          

        

        
           

        

      

       

      ARTICLE
3

      REPRESENTATIONS
AND WARRANTIES OF GUARANTOR

       

      Each
Guarantor hereby represents and warrants to Vicis as follows:

       

      3.1   Authorization.  Such
Guarantor is duly and validly organized and existing under the laws of the state
of its organization, has the corporate power to own its owned assets and
properties and to carry on its business, and is duly licensed or qualified to do
business in all jurisdictions in which failure to do so would have a material
adverse effect on its business or financial condition.  The making,
execution, delivery and performance of this Guaranty, and compliance with its
terms, have been duly authorized by all necessary corporate action of such
Guarantor.

       

      3.2   Enforceability.  This
Guaranty is the legal, valid and binding obligation of such Guarantor,
enforceable against such Guarantor in accordance with its terms.

       

      3.3   Absence of Conflicting
Obligations.  The making, execution, delivery and performance
of this Guaranty, and compliance with its terms, do not violate any existing
provision of Law; the organizational or charter documents of such Guarantor; or
any agreement or instrument to which such Guarantor is a party or by which it or
any of its assets is bound.

       

      3.4   Consideration for
Guaranty.  Such Guarantor acknowledges and agrees with Vicis
that but for the execution and delivery of this Guaranty by such Guarantor,
Vicis would not have acquired the Acquired Notes.  Such Guarantor
acknowledges and agrees that the proceeds of the sale of the Acquired Notes will
result in significant benefit to such Guarantor who is a wholly owned subsidiary
of Issuer and will benefit from the use of such proceeds.

       

      ARTICLE
4

      COVENANTS
OF THE GUARANTOR

       

      4.1   Actions by
Guarantor.  Each Guarantor shall not take or permit any act, or
omit to take any act, that would:  (a) cause Issuer to breach any of
the Obligations; (b) impair the ability of Issuer to perform any of the
Obligations; or (c) cause an Event of Default under the Purchase
Agreement.

       

      4.2   Reporting
Requirements.  Each Guarantor shall furnish, or cause to be
furnished, to Vicis such information respecting the business, assets and
financial condition of such Guarantor as Vicis may reasonably
request.

       

      ARTICLE
5

      MISCELLANEOUS

       

      5.1   Expenses and Attorneys’
Fees.  Each Guarantor shall pay all reasonable fees and
expenses incurred by Vicis, including the reasonable fees of counsel, in
connection with the protection or enforcement of its rights under this Guaranty,
including without limitation the protection and enforcement of such rights in
any bankruptcy, reorganization or insolvency proceeding involving Issuer or such
Guarantor, both before and after judgment.

       

      
        
           

        

        
          -5-

          
            

          

        

        
           

        

      

       

      5.2   Revocation.  This
is a continuing guaranty and shall remain in full force and effect as to a
Guarantor until Vicis receives written notice of revocation signed by such
Guarantor.  Upon revocation by written notice, this Guaranty shall
continue in full force and effect as to all Obligations contracted for or
incurred before revocation, and as to them Vicis shall have the rights provided
by this Guaranty as if no revocation had occurred.  Any renewal,
extension, or increase in the interest rate(s) of any such Obligation, whether
made before or after revocation, shall constitute an Obligation contracted for
or incurred before revocation.  Obligations contracted for or incurred
before revocation shall also include credit extended after revocation pursuant
to commitments made before revocation.

       

      5.3   Assignability;
Successors.  Each Guarantor’s rights and liabilities under this
Guaranty are not assignable or delegable, in whole or in part, without the prior
written consent of Vicis.  The provisions of this Guaranty shall be
binding upon each Guarantor, its successors and permitted assigns and shall
inure to the benefit of Vicis, its successors and assigns.

       

      5.4   Survival.  All
agreements, representations and warranties made herein or in any document
delivered pursuant to this Guaranty shall survive the execution and delivery of
this Guaranty and the delivery of any such document.

       

      5.5   Governing
Law.  This Guaranty and the rights of the parties hereunder
shall be governed in all respects by the laws of the State of New York wherein
the terms of this Guaranty were negotiated, without regard to the conflicts of
laws thereof.

       

      5.6   Execution;
Headings.  This Guaranty may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart.  In the event that any
signature is delivered by facsimile transmission, such signature shall create a
valid and binding obligation of the party executing (or on whose behalf such
signature is executed) with the same force and effect as if such facsimile
signature page were an original thereof.  The article and section
headings in this Guaranty are inserted for convenience of reference only and
shall not constitute a part hereof.

       

      5.7   Notices.  All
notices, requests and demands to or upon Vicis or Guarantor (to be delivered
care of Issuer) shall be delivered in the manner set forth in Section 10.6 of
the Purchase Agreement.

       

      5.8   Amendment.  No
amendment of this Guaranty shall be effective unless in writing and signed by
each Guarantor and Vicis.

       

      5.9   Severability.  Any
provision of this Guaranty which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions of this Guaranty in such jurisdiction or affecting the validity or
enforceability of any provision in any other jurisdiction.

       

      5.10   Taxes.  If
any transfer or documentary taxes, assessments or charges levied by any
governmental authority shall be payable by reason of the execution, delivery or
recording of this Guaranty, each Guarantor shall pay all such taxes, assessments
and charges, including interest and penalties, and hereby indemnifies Vicis
against any liability therefor.

       

      
        
           

        

        
          -6-

          
            

          

        

        
           

        

      

       

      5.11   WAIVER OF RIGHT TO JURY
TRIAL.  EACH GUARANTOR ACKNOWLEDGES AND AGREES THAT ANY
CONTROVERSY WHICH MAY ARISE UNDER THIS GUARANTY WOULD BE BASED UPON DIFFICULT
AND COMPLEX ISSUES AND, THEREFORE, EACH GUARANTOR AGREES THAT ANY LAWSUIT
ARISING OUT OF ANY SUCH CONTROVERSY SHALL BE TRIED IN A COURT OF COMPETENT
JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.

       

      5.12   SUBMISSION TO JURISDICTION;
SERVICE OF PROCESS.  AS A MATERIAL INDUCEMENT TO VICIS TO ENTER
INTO THIS TRANSACTION:

       

      EACH
GUARANTOR AGREES THAT ALL ACTIONS OR PROCEEDINGS IN ANY MANNER RELATING TO OR
ARISING OUT OF THIS GUARANTY OR THE OTHER DOCUMENTS EXECUTED IN CONNECTION
HEREWITH MAY BE BROUGHT ONLY IN COURTS OF THE CITY AND STATE OF NEW YORK OR THE
FEDERAL COURTS LOCATED IN THE CITY AND STATE OF NEW YORK AND GUARANTOR CONSENTS
TO THE JURISDICTION OF SUCH COURTS.  EACH GUARANTOR WAIVES ANY
OBJECTION IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH COURT AND ANY
RIGHT IT MAY HAVE NOW OR HEREAFTER HAVE TO CLAIM THAT ANY SUCH ACTION OR
PROCEEDING IS IN AN INCONVENIENT COURT; AND

       

      Guarantor
consents to the service of process in any such action or proceeding by certified
mail sent to the address specified in Section 5.7. Nothing contained herein
shall affect the right of Vicis to serve process in any other manner permitted
by law or to commence an action or proceeding in any other
jurisdiction.

       

      
        
           

        

        
          -7-

          
            

          

        

        
           

        

      

       

      IN
WITNESS WHEREOF the undersigned have executed this Guaranty as of the day and
year first above written.

       

      
        	
                AMACORE
      DIRECT MARKETING, INC.

                 

                By:
      _____________________________

                      
      Name:

                      
      Title:

              	
                US
      HEALTH BENEFITS GROUP, INC.

                 

                By:
      _____________________________

                      
      Name:

                      
      Title:

              
	 	 
	
                LIFEGUARD
      BENEFIT SERVICES, INC.

                 

                By:
      _____________________________

                      
      Name:

                      
      Title:

              	
                US
      HEALTHCARE PLANS, INC.

                 

                By:
      _____________________________

                      
      Name:

                      
      Title:

              
	 	 
	
                JRM
      BENEFITS CONSULTANTS, LLC

                 

                By:
      _____________________________

                      
      Name:

                      
      Title:

              	
                ON
      THE PHONE, INC.

                 

                By:
      _____________________________

                      
      Name:

                      
      Title:

              

      

      

       

      

       

       

       

       

       

       

      Signature
Page to Guaranty

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      ACCEPTANCE BY
VICIS

       

      This
Guaranty Agreement is accepted by Vicis Capital Master Fund.

       

       

      
        
          	 	      
                  VICIS CAPITAL MASTER FUND

                      By:  Vicis Capital
      LLC

                	 
	 	 	 	 
	
                   

                	
                  By:
      

                	_____________________________	 
	 	 	Name 	 
	 	 	Title 	 
	 	 	 	 

        

      

      
        

       

       

       

       

       

       

       

       

      Acceptance
Page to Guaranty

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