UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D/A
Under the Securities Exchange Act of 1934
(Amendment No. 1)
Debut Broadcasting Corporation, Inc.
-----------------------------------
(Name of Issuer)
Common Stock, par value $0.003 per share
----------------------------------
(Title of Class of Securities)
24276 P 101
-----------------------------
(CUSIP Number)
Ronald E. Heineman
4525 Bells Lane, Suite 137
Cincinnati, OH 45244
513-602-3268
------------------------------
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications)
September 8, 2010
-----------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition that is the subject of this Schedule
13D, and is filing this schedule because of Sections 240.13d-1(e),
240.13d-1(f) or 240.13d-1(g) check the following box /_/.
Note: Schedules filed in paper format shall include a signed
original and five copies are to be sent. See Section 240.13d-7 for
other parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to
the subject class of securities, and for any subsequent amendment
containing information which would alter disclosures provided
in a prior cover page.
The information required on the remainder of this cover page shall
not be deemed to be "filed" for the purpose of Section 18 of the
Securities Exchange Act of 1934 ("Act") or otherwise subject to
the liabilities of that section of the Act but shall be subject
to all other provisions of the Act (however, see the Notes).
CUSIP No. 24276 P 101
1 NAME OF REPORTING PERSONS
River Falls Financial Services, LLC
EIN 20-5172680
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) / / (b) / /
3 SEC USE ONLY
4 SOURCE OF FUNDS Not applicable.
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e)/_/
6 CITIZENSHIP OR PLACE OF ORGANIZATION River Falls is a
Kentucky limited liability company.
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:
7 SOLE VOTING POWER: Not applicable.
8 SHARED VOTING POWER: Not applicable.
9 SOLE DISPOSITIVE POWER: Not applicable.
10 SHARED DISPOSITIVE POWER: Not applicable.
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON:
7,240,000, assuming full exercise of current right to buy
7,240,000 shares
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES /_/
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 18%
14 TYPE OF REPORTING PERSON OO
This Amendment No. 1 amends and supplements the Schedule 13D
originally filed by River Falls Financial Services, LLC on October
1, 2009 (the "Initial 13D").
Item 1. Security and Issuer.
Item 1 is amended and supplemented as follows:
The reporting person owns no Debut capital stock. River Falls is
deemed beneficial owner of 7,240,000 shares of Debut's common stock
as a result of its right to purchase such shares pursuant to its
interest in a Convertible Promissory Note from Debut dated
September 21, 2009, originally held by River Falls and subsequently
sold to Diversified Support Systems, LLC as of September 8, 2010
pursuant to a Note Purchase Agreement. In connection with the sale
transaction Debut, River Falls and Diversified entered into a
Participation Agreement pursuant to which (i) River Falls retained
a 50% interest in the Note and the conversion and option rights
with respect to Debut common stock provided thereunder, and (ii)
the aggregate number of shares purchasable under the Note was fixed
at 14,480,000. The transaction in which the Note was issued was
reported on Form 8-K by Debut on September 25, 2009. The Note was
attached as Exhibit 7.1 to the Initial 13D. Mr. Heineman is not
currently a record owner or beneficial owner of Debut common stock.
However, were River Falls to exercise its purchase rights and own
Debut common stock, Mr. Heineman would be deemed a beneficial owner
of such shares pursuant to his authority to vote and divest such
shares on behalf of River Falls.
Item 2. Identity and background.
Item 2 is supplemented and amended as follows:
River Falls Financial Services, LLC is a Kentucky limited liability
company with a principal address at 11921 Brinley Ave., Louisville,
Kentucky. The principal business activity of River Falls is to
serve as a holding company for various investments. Ron Heineman's
principal business address is at 4525 Bells Lane, Suite 137,
Cincinnati, OH 45244. Mr. Heineman's principal employment is as
CEO and Chairman of Debut, at the foregoing address. Mr. Heineman
also provides human resources consulting, management, merger and
acquisition and restructuring services to a variety of enterprises,
sometimes in the course of which he serves as an officer of the
client. Mr. Heineman is manager of River Falls.
Item 5. Interest in Securities of the Issuer.
Item 5 is amended and supplemented as follows:
(a) Assuming complete exercise of its conversion/option rights,
River Falls would own 7,240,000 shares, or 18% of the Debut
common stock. Upon any such exercise Mr. Heineman would be
deemed a beneficial owner of such shares, as would Diversified
Support Services, LLC, owing to Mr. Heineman's position as
manager of each of Diversified and River Falls. Were River
Falls and Diversified to each fully exercise their purchase
rights under the Note, each of River Falls, Diversified and
Mr. Heineman would be deemed beneficial owners of an aggregate
of 14,480,000 shares, or 30.4% of the then outstanding Debut
common stock.
(b) Not applicable, as neither reporting person owns any shares.
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(c) Neither reporting person has engaged in a transaction in the
class of securities reported in the past 60 days.
(d) Not applicable, no such securities are owned.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships
with Respect to Securities of the Issuer.
Item 6 is supplemented as follows:
As discussed in Item 1 above, River Falls' interest in the Note was
reduced by 50% in connection with the Note Purchase Agreement and
the Participation Agreement. In connection with those transactions
Diversified issued River Falls a Promissory Note in payment of the
purchase price and pledged the Note back to River Falls to secure
payment of the purchase price.
Item 7. Materials to be filed as Exhibits.
Exhibit 7.1 Convertible Promissory Note incorporated by reference
to Exhibit 7.1 to the Initial Schedule 13D.
Exhibit 7.2 Note Purchase Agreement
Exhibit 7.3 Participation Agreement
Exhibit 7.4 Promissory Note from Diversified to River Falls
Exhibit 7.5 Pledge Agreement from Diversified to River Falls
Signature
After reasonable inquiry and to the best of my knowledge
and belief, I certify that the information set forth in this
statement is true, complete and correct.
Dated: November 19, 2010
RIVER FALLS FINANCIAL SERVICES, LLC
BY: /s/ Ronald E. Heineman
-----------------------------
Ronald E. Heineman, Manager
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EXHIBIT 7.2
NOTE PURCHASE AGREEMENT
-----------------------
AGREEMENT dated as of September 8, 2010, by and between Diversified
Support Systems, LLC (the "Purchaser"), and River Falls Financial
Services, LLC (the "Seller").
In consideration of the mutual covenants herein contained, and
other valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto agree as follows:
1. Sale of Note. Seller hereby sells to Purchaser, and Purchaser
hereby purchases from Seller, the Convertible Promissory Note
dated July 31, 2009 (the "Note") of Debut Broadcasting
Corporation, Inc. (the "Company") to Seller at a purchase
price equal to $362,000 (the "Purchase Price"). The Purchase
Price shall be paid in accordance with the Note executed and
delivered by Purchaser at the closing. Seller shall retain
a one-half interest in the Note pursuant to the Participation
Agreement between the parties the date hereof.
2. Representations of Seller. Seller represents and warrants to
Purchaser as follows:
(a) Seller holds good title to the Note, free of any adverse
claims or restrictions on transfer. The amount due on the
Note as of the date hereof is $724,000, consisting of
$650,000 principal and $74,000 accrued interest.
(b) Neither the execution and delivery of this Agreement,
Amendment No. 1 to Voting Agreement among Seller, Company
and certain other parties, the Amended Unconditional
Guaranties of certain affiliates of the Company to
Purchaser, nor the sale of the Note contemplated hereby
will constitute a default under or violate any term or
provision of any agreement to which Seller or the Company
is a party.
3. Miscellaneous.
(a) Waiver. A party's failure to insist on compliance or
enforcement of any provision of this Agreement, shall
not affect the validity or enforceability or constitute a
waiver of future enforcement of that provision or of any
other provision of this Agreement by that party or any
other party.
(b) Governing Law. This Agreement shall in all respects be
subject to, and governed by, the internal laws of the
state of Ohio.
(c) Severability. The invalidity or unenforceability of
any provision in the Agreement shall not in any way
affect the validity or enforceability of any other
provision and this Agreement shall be construed in all
respects as if such invalid or unenforceable provision
had never been in the Agreement.
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(d) Assignment. This Agreement, together with any amendments
to it, shall be binding upon and shall inure to the
benefit of the parties and their respective successors,
assigns, heirs, and personal representatives.
(e) Amendments. This Agreement may be amended at any time by
mutual consent of the parties, with any such amendment to
be invalid unless in writing, signed by the parties
hereto.
(f) Entire Agreement. This Agreement contains the entire
agreement and understanding by and between the Purchaser
and Sellers with respect to the matters covered herein,
and no representations, promises, agreements, or
understandings, written or oral, relating to the purchase
of shares by Purchasers from Seller, not contained in
this Agreement, including without limitation those
provided in the Mutual Purchase Agreement dated July 26,
1986, shall be of any force or effect.
IN WITNESS WHEREOF, Seller and Purchasers have duly executed this
Agreement as of the day and year first above written.
SELLER:
RIVER FALLS FINANCIAL SERVICES, LLC
BY: /s/ Ronald E. Heineman
------------------------
Ronald E. Heineman
PURCHASER:
DIVERSIFIED SUPPORT SYSTEMS, LLC
BY: /s/ Ronald E. Heineman
------------------------
Ronald E. Heineman
EXHIBIT 7.3
PARTICIPATION AGREEMENT
Participation Agreement dated as of September 8, 2010, between
River Falls Financial Services, LLC ("Participant") and Diversified
Support Systems, LLC ("Lender") and joined in by Debut Broadcasting
Corporation, Inc. ("Borrower").
WITNESSETH
WHEREAS, Participant entered into a loan transaction with
Borrower on August 5, 2009, which loan is evidenced by a
Convertible Promissory Note (the "Note"), guaranties of certain
Borrower subsidiaries and related loan documents (hereinafter
referred to as the "Documents"), pursuant to which transaction
Lender has made a loan of $724,000 to Borrower (the "Loan"); and
WHEREAS, Participant is selling the Loan to Lender on the date
hereof, in connection therewith Lender becoming the "Holder" under
the Note;
WHEREAS, Participant desires to retain a one-half interest in
the Note,
NOW, THEREFORE, IT IS AGREED:
1. The parties agree to share in the Loan 50% each
("Participation Percentage"). No further loans shall be made
pursuant to the Note. A party's Participating Percentage shall be
commensurately reduced (and the other party's increased) if they
exercise their conversion privilege under Section 2.1 of the Note.
2. A. Each party shall initially own a one-half interest
in the Loan, in accordance with their respective Participation
Percentages, and in all documents, instruments and collateral
issued by the Borrower to Lender, and in all payments made thereon
and in any recoveries or distributions in connection therewith.
B. Any payments on the Note, in whole or in part, or
recoveries ("Collections") shall be paid to the parties in relation
to their Participating Percentage.
C. All Collections received shall be applied first
to the payment of all costs and expenses incurred in effecting
such Collections (including, without limitation, any costs,
expenses, attorney's fees and charges relating to the Loan, with
the balance being paid to the parties.
D. Section 2.2 of the Note is hereby amended to reduce
the number of Option Shares to 14,480,000, 7,240,000 for each of
Lender and Participant.
3. Lender shall service and enforce the Loan and in so
doing shall exercise due care. Neither Lender, not its officers,
employees and attorneys shall be liable except for bad faith or
gross misconduct.
4. Promptly within fifteen (15) days upon final clearance
of any payments received by Lender on account of the Loan,
Lender shall (except as modified in Paragraph 2 above) distribute
the same to the Participant in accordance with its Participation
Percentage.
Promptly upon receipt of any financial statements, notices or
communications or reports of the Borrower, Lender shall forward
copies of same to the Participant.
5. Lender shall act as principal for itself and as
agent for the Participant in all matters dealing with the service
of the Loan, and as trustee solely for purposes of collecting and
distributing the amounts received by it. Lender's records shall,
at all times, reflect the participation of the Participant
in accordance with its Participation Percentage.
6. Lender shall give Participant prompt written notice of
any of the following:
A. Consent to or permit any substitution, withdrawal
or release of any collateral or other security securing the
payment of the Loan except in accordance with the terms of the
Note and Agreements and other related documents.
B. Amend or modify the terms of the Documents.
Lender shall take such appropriate legal action for the enforcement
thereof as Lender deems advisable in its sole discretion, upon
notice to the Participant.
7. All expenses including, but not limited to, counsel fees
and court costs paid or incurred by Lender in any such action
shall be borne by the parties hereto in proportion to their
respective Participation Percentage and Lender Percentage, at the
time of default in consideration of the participation interest.
Payment shall be made by the Participant within five (5) days
after receipt of notice from Lender of its pro rata share. Any such
payment not made shall accrue interest at the interest rate
applicable to the loan. Said payment and interest shall be deducted
by Lender from the next payment(s) due said Participant hereunder
or out of any recoveries.
8. Lender shall have full and complete authorization and
shall not be liable to the Participants for any action taken or
suggested by it hereunder in good faith and in accordance with the
option of counsel provided it has complied with the requirement of
notice hereunder.
9. Any notice required hereunder shall be sent via
electronic mail to a designated representative of each party. In
the event consent is required hereunder then the failure of a party
to respond in writing to Lender within five (5) days of the date of
notification shall be deemed consent to the action.
10. This agreement has been entered into in Ohio, and shall
be construed in accordance with and governed by the laws of the
state of Ohio.
11. This agreement may be executed in any number of
counterparts at one time or at different times, all of which taken
together shall constitute one and the same instrument, and any
of the parties hereto may execute this agreement by signing any
such counterpart, and this agreement shall be deemed executed as
of the date first above written.
12. This agreement shall be binding upon and inure to the
benefit of the parties hereto, their respective successors and
assigns.
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13. This agreement embodies the entire agreement and
understanding between the parties and supersedes all prior
agreements and understandings relating to the subject matter
hereof.
IN WITNESS WHEREOF, the parties hereto have set their hands
and seals the day and the year first above written.
DIVERSIFIED SUPPORT SYSTEMS, LLC
BY: /s/ Ronald E. Heineman
------------------------
Ronald E. Heineman
TITLE: Manager
RIVER FALLS FINANCIAL SERVICES, LLC
BY: /s/ Ronald E. Heineman
------------------------
Ronald E. Heineman
TITLE: Manager
And joined in by
DEBUT BROADCASTING CORPORATION, INC.
BY: /s/ Sariah Hopkins
------------------------
Sariah Hopkins
TITLE: CFO
EXHIBIT 7.4
PROMISSORY NOTE
---------------
$362,000 September 8, 2010
This Promissory Note is made by Diversified Support Systems, LLC,
an Ohio corporation (the "Maker") for the benefit of River Falls
Financial Services, LLC, Kentucky limited liability company
("Holder"). Maker hereby promises to pay to Holder, or assigns,
$362,000 and interest accrued at an annual rate of three percent
(3%), as follows: $3,495.50 payable monthly on the 8th day of each
month commencing October 8, 2010, with the balance of the principal
and accrued interest being payable on September 8, 2015. In
addition, if Maker receives payments on the promissory note between
Holder and Debut Broadcasting Corporation, Inc. ("Debut") dated
July 31, 2009 (the "Debut Note") transferred from Holder to Maker
the date hereof, or receives consideration on the sale of Debut
stock received in connection with its conversion and option rights
under the Debut Note, 75% of such amounts shall be promptly paid by
Maker to Holder in partial satisfaction of this Note.
Notwithstanding the foregoing, if a transaction occurs with
respect to Debut resulting in Maker no longer being an affiliate of
Debut, Maker shall use commercially reasonable efforts to cause
Debut to pay Maker sufficient proceeds in connection with such
transaction (e.g. in respect of Maker's and its affiliates equity
or debt holdings in Debut) to satisfy this Note, whereupon Maker
shall prepay this Note.
Presentment, demand and protest, and notices of protest, dishonor,
and non-payment of this Note and all notices of every kind are
hereby waived.
No single or partial exercise of any power hereunder shall
preclude the other or further exercise thereof or the exercise of
any other power. No delay or omission on the part of the holder
hereof in exercising any right hereunder shall operate as a waiver
of such right or of any other right under this Note. Maker shall
have the right to prepay this note without penalty or charge of any
kind.
This Note shall be governed by and construed in accordance with the
domestic laws of the Commonwealth of Kentucky.
Maker hereby irrevocably submits to the exclusive jurisdiction and
venue of any state or federal court sitting in Jefferson County,
Kentucky in any action or proceeding arising out of or relating to
this Note, and irrevocably agrees that all claims in respect of
such action or proceeding may be heard and determined in such
State or federal Court. Maker hereby irrevocably waives, to the
fullest extent he may do so, the defense of an inconvenient forum
to the maintenance of such action or proceeding. Maker hereby
consents and agrees that the summons and complaint and any other
process which may be served in any such action or proceeding may be
served by mailing (by registered or certified mail) or delivering
a copy of such process to Maker's registered agent in its state of
organization. Maker agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner
provided by law.
IN WITNESS WHEREOF, the parties have caused this Note to be issued
as of the date above.
DIVERSIFIED SUPPORT SYSTEMS, LLC
By: /s/ Ron Heineman
--------------------------
Ron Heineman, Manager
EXHIBIT 7.5
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT, dated as of this is made by Diversified
Support Systems, LLC (the "Pledgor"), with an address at 4524
Bells Lane, Suite 137, Cincinnati, OH, 45244 in favor of River
Falls Financial Services, LLC (the "Secured Party"), with an
address at 11921 Brinley Ave., Louisville, KY 40243.
1. Pledge. In order to induce the Secured Party to extend the
Obligations (as defined below), the Pledgor hereby grants a
security interest in and pledges to the Secured Party all of the
Pledgor's right, title and interest in and to the Convertible
Promissory Note from Debut Broadcasting Corporation, Inc. dated
July 1, 2009 to Secured Party (the "Debut Note"), together with all
additions, substitutions, replacements and proceeds and all income,
interest, dividends and other distributions thereon, including
without limitation shares of Debut capital stock received upon
exercise of certain conversion and option rights under the Debut
Note (the "Collateral"). If the Collateral shall ever include
certificated securities, such certificates shall be delivered to
the Secured Party accompanied by duly executed blank stock powers
or assignments as applicable. The Pledgor hereby authorizes the
transfer of possession of all certificates, instruments, documents
and other evidence of the Collateral to the Secured Party.
2. Obligations Secured. The Collateral secures payment to
the Secured Party of all amounts owing to Secured Party from
Pledgor pursuant to the Promissory Note from Pledgor to Secured
Party the date hereof (hereinafter referred to collectively as the
"Obligations").
3. Representations and Warranties. The Pledgor represents
and warrants to the Secured Party as follows:
3.1. There are no restrictions on the pledge or transfer
of any of the Collateral, other than restrictions referenced on the
face of any certificates evidencing the Collateral.
3.2. The Pledgor is the legal owner of the Collateral,
which is registered in the name of the Pledgor, the Custodian (as
hereinafter defined) or a nominee.
3.3. The Collateral is free and clear of any security
interests, pledges, liens, encumbrances, charges, agreements,
claims or other arrangements or restrictions of any kind, except as
referenced in Section 3.1 above; and the Pledgor will not incur,
create, assume or permit to exist any pledge, security interest,
lien, charge or other encumbrance of any nature whatsoever on any
of the Collateral or assign, pledge or otherwise encumber any right
to receive income from the Collateral.
3.4. The Pledgor has the right to transfer the Collateral
free of any encumbrances and the Pledgor will defend the Pledgor's
title to the Collateral against the claims of all persons, and any
registration with, or consent or approval of, or other action by,
any federal, state or other governmental authority or regulatory
body which was or is necessary for the validity of the pledge of
and grant of the security interest in the Collateral has been
obtained.
3.5. The pledge of and grant of the security interest in
the Collateral is effective to vest in the Secured Party a valid
and perfected first priority security interest, superior to the
rights of any other person, in and to the Collateral as set forth
herein.
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4. Default.
4.1. Upon the occurrence of any of the following events
(each an "Event of Default"): (i) any default under the Note, (ii)
the failure by the Pledgor to perform any of its obligations under
this Pledge Agreement, (iii) the falsity, inaccuracy or material
breach by the Pledgor of any written warranty, representation or
statement made or furnished to the Secured Party by or on behalf of
the Pledgor, or (iv) the failure of the Secured Party to have a
perfected first priority security interest in the Collateral, then
the Secured Party is authorized in its discretion to declare any or
all of the Obligations to be immediately due and payable without
demand or notice, which are expressly waived, and may exercise any
one or more of the rights and remedies granted pursuant to this
Pledge Agreement or given to a secured party under the Uniform
Commercial Code of the applicable state, as it may be amended from
time to time, or otherwise at law or in equity, including without
limitation the right to sell or otherwise dispose of the Collateral.
4.2. (a) At any bona fide public sale the Secured Party
shall be free to purchase all or any part of the Collateral. Any
such sale may be on cash or credit. The Secured Party shall be
authorized at any such sale (if it deems it advisable to do so) to
restrict the prospective bidders or purchasers to persons who will
represent and agree that they are purchasing the Collateral for
their own account in compliance with Regulation D of the Securities
Act of 1933 or any other applicable exemption available under such
Act. The Secured Party will not be obligated to make any sale if
it determines not to do so, regardless of the fact that notice of
the sale may have been given. The Secured Party may adjourn any
sale and sell at the time and place to which the sale is adjourned.
If the Collateral is customarily sold on a recognized market or
threatens to decline speedily in value, the Secured Party may sell
such Collateral at any time without giving prior notice to
the Pledgor. Whenever notice is otherwise required by law to be
sent by the Secured Party to the Pledgor of any sale or other
disposition of the Collateral, five days written notice sent to the
Pledgor at the notice address specified below will be reasonable.
(b) The Pledgor recognizes that the Secured Party
may be unable to effect or cause to be effected a public sale of
the Collateral by reason of certain prohibitions contained in the
Securities Act of 1933, as amended (the "Act"), so that the Secured
Party may be compelled to resort to one or more private sales to a
restricted group of purchasers who will be obligated to agree,
among other things, to acquire the Collateral for their own
account, for investment and without a view to the distribution or
resale thereof. The Pledgor understands that private sales so made
may be at prices and on other terms less favorable to the seller
than if the Collateral were sold at public sales, and agrees that
the Secured Party has no obligation to delay or agree to delay the
sale of any of the Collateral for the period of time necessary to
permit the issuer of the securities which are part of the
Collateral (even if the issuer would agree), to register such
securities for sale under the Act. The Pledgor agrees that private
sales made under the foregoing circumstances shall be deemed to
have been made in a commercially reasonable manner.
4.3. The net proceeds arising from the disposition of the
Collateral after deducting expenses incurred by the Secured Party
will be applied to the Obligation. If any excess remains after the
discharge of the Obligations, the same will be paid to the Pledgor.
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5. Voting Rights and Transfer. Prior to the occurrence of
any Event of Default, the Pledgor will have the right to exercise
all voting rights with respect to the Collateral. At any time
after the occurrence of any such Event of Default, the Secured
Party may transfer any or all of the Collateral into its name or
that of its nominee and may exercise all voting rights with
respect to the Collateral, but no such transfer shall constitute a
taking of such Collateral in satisfaction of any or all of the
Obligations unless the Secured Party expressly so indicates by
letter mailed or delivered to the Pledgor.
6. Dividends and Interest. The Pledgor will have the right
to receive all cash dividends and interest declared and paid on the
Collateral prior to the occurrence of any Event of Default. In the
event any additional shares are issued to the Pledgor as a stock
dividend or in lieu of interest on any of the Collateral, as a
result of any split of any of the Collateral, by reclassification
or otherwise, any certificates evidencing any such additional
shares will be immediately delivered to the Secured Party and such
shares will be subject to this Pledge Agreement and a part of the
Collateral to the same extent as the original Collateral. At any
time after the occurrence of an Event of Default, the Secured Party
shall be entitled to receive all cash or stock dividends and
interest declared or paid on the Collateral, all of which shall be
subject to the Secured Party's rights under Section 4 above.
7. Further Assurances. At any time and from time to time,
upon demand of the Secured Party, the Pledgor will give, execute,
file and record any notice, financing statement, continuation
statement, instrument, document or agreement that the Secured Party
may consider necessary or desirable to create, preserve, continue,
perfect or validate any security interest granted hereunder or to
enable the Secured Party to exercise or enforce its rights
hereunder with respect to such security interest. Without limiting
the generality of the foregoing, the Pledgor hereby irrevocably
appoints the Secured Party as the Pledgor's attorney-in-fact to do
all acts and things in the Pledgor's name that the Secured Party
may deem necessary or desirable. The Secured Party is authorized
to file financing statements, continuation statements and other
documents under the Uniform Commercial Code relating to the
Collateral without the signature of the Pledgor, naming the Pledgor
as debtor and the Secured Party as secured party.
8. Notices. All notices, demands, requests, consents,
approvals and other communications required or permitted hereunder
must be in writing and will be effective upon receipt if delivered
personally to the Pledgor or the Secured Party, or if sent by
facsimile transmission with confirmation of delivery, or by
nationally recognized overnight courier service, to the address set
forth above or to such other address as either the Pledgor or the
Secured Party may give to the other in writing for such purpose.
9. Preservation of Rights. No delay or omission on the part
of the Secured Party to exercise any right or power arising
hereunder will impair any such right or power or be considered
a waiver of any such right or power or any acquiescence therein,
nor will the action or inaction of the Secured Party impair any
right or power arising hereunder. The Secured Party's rights and
remedies hereunder are cumulative and not exclusive of any other
rights or remedies which the Secured Party may have under other
agreements, at law or in equity.
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10. Illegality. In case any one or more of the provisions
contained in this Pledge Agreement should be invalid, illegal or
unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby.
11. Changes in Writing. No modification, amendment or waiver
of any provision of this Pledge Agreement nor consent to any
departure by the Pledgor therefrom, will in any event be effective
unless the same is in writing and signed by the Secured Party, and
then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given. No notice
to or demand on the Pledgor in any case will entitle the Pledgor to
any other or further notice or demand in the same, similar or other
circumstance.
12. Entire Agreement. This Pledge Agreement (including the
documents and instruments referred to herein) constitutes the
entire agreement and supersedes all other prior agreements and
understandings, both written and oral, between the Pledgor and the
Secured Party with respect to the subject matter hereof.
13. Successors and Assigns. This Pledge Agreement will be
binding upon and inure to the benefit of the Pledgor and the
Secured Party and their respective heirs, executors,
administrators, successors and assigns; provided, however, that the
Pledgor may not assign this Pledge Agreement in whole or in part
without the prior written consent of the Secured Party and the
Secured Party at any time may assign this Pledge Agreement in whole
or in part.
14. Interpretation. In this Pledge Agreement, unless the
Secured Party and the Pledgor otherwise agree in writing, the
singular includes the plural and the plural the singular; words
importing any gender include the other genders; references to
statutes are to be construed as including all statutory provisions
consolidating, amending or replacing the statute referred to; the
word "or" shall be deemed to include "and/or", the words
"including", "includes" and "include" shall be deemed to be
followed by the words "without limitation." Section headings
in this Pledge Agreement are included for convenience of reference
only and shall not constitute a part of this Pledge Agreement for
any other purpose. If this Pledge Agreement is executed by more
than one party as Pledgor, the obligations of such persons
or entities will be joint and several.
15. Governing Law and Jurisdiction. This Pledge Agreement
has been delivered to and accepted by the Secured Party and will be
deemed to be made in the commonwealth of Kentucky. The Pledgor
hereby irrevocably consents to the exclusive jurisdiction of any
state or federal court sitting in Jefferson County Kentucky,
and consents that all service of process be sent by nationally
recognized overnight courier service directed to the Pledgor at the
Pledgor's address set forth herein and service so made will be
deemed to be completed on the business day after deposit with such
courier; provided that nothing contained in this Pledge Agreement
will prevent the Secured Party from bringing any action, enforcing
any award or judgment or exercising any rights against the Pledgor
individually, against any security or against any property of the
Pledgor within any other county, state or other foreign or domestic
jurisdiction. The Secured Party and the Pledgor agree that the
venue provided above is the most convenient forum for both the
Secured Party and the Pledgor. The Pledgor waives any objection to
venue and any objection based on a more convenient forum in any
action instituted under this Pledge Agreement.
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The Pledgor acknowledges that it has read and understood all the
provisions of this Pledge Agreement, including the waiver of jury
trial, and has been advised by counsel as necessary or appropriate.
WITNESS the due execution hereof as a document under seal, as of
the date first written above.
DIVERSIFIED SUPPORT SYSTEMS, LLC
BY: /s/ Ronald E. Heineman
------------------------
Ronald E. Heineman
TITLE: Manager
RIVER FALLS FINANCIAL SERVICES, LLC
BY: /s/ Ronald E. Heineman
------------------------
Ronald E. Heineman
TITLE: Manager
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