SURRENDER AGREEMENT
THIS SURRENDER AGREEMENT
(“Surrender Agreement”) made as of the 2nd day of June, 2008 by and between
TRIDENT GROWTH FUND,
L.P. (“Trident”)
and FEQ Gas LLC (“FEQ”,
together with Trident collectively referred to as "LENDERS"), and COMPUSVEN, INC., a Florida
corporation (the, "OBLIGOR”)
W I T N E S E T
H:
WHEREAS, On April 1, 2005,
Trident made a loan to Stellar Technologies, Inc., now known as GeM Solutions,
Inc. (“GeM”) in the principal amount of $1,600,000 for which GeM issued a
promissory note and entered into a loan agreement, security agreement, a warrant
to purchase shares, and other documents related to or in furtherance of that
transaction as well as various amendments thereafter (the “GeM Loan
Documents”). GeM’s obligations under the GeM Loan Documents were
guaranteed by the Obligor pursuant to a written guaranty agreement which
guaranty was secured by a lien on all of Obligor’s property for which Obligor
executed a security agreement. Hereinafter, the guaranty agreement,
security agreement and any other documents executed by Obligor in connection
with the GeM Loan Documents, together with the GeM Loan Documents shall
collectively be referred to as the “Trident Loan Documents” and the obligations
of Obligor thereunder shall be referred to as the “Trident
Obligations”;
WHEREAS, based on
the Trident Loan Documents, the amount of the Trident Obligations, secured by a
lien on all of the Obligor’s property and proceeds thereof as of July 31, 2007
is in the principal and interest amount of $1,678,904.11.
WHEREAS, on July 13, 2007 FEQ
made a loan to GeM in the principal amount of $100,000 for which GeM issued a
promissory note and, together with Obligor entered into a loan and security
agreement and other documents related to or in furtherance of that transaction
as well as various amendments thereafter (the “FEQ Loan Documents”) and the
obligations of the Obligor thereunder shall be referred to as the “FEQ
Obligations”. The FEQ Obligations are secured by a lien on all of
Obligor’s property and the proceeds thereof. Hereinafter, the FEQ
Loan Documents, together with the Trident Loan Documents shall collectively be
referred to as the “Loan Documents” and the Trident Obligations and FEQ
Obligations shall be collectively referred to as the “Obligations”;
WHEREAS, on July 13, 2007,
Trident and FEQ entered into that certain Intercreditor Agreement pursuant to
which the parties agree that the liens held by FEQ have priority over the liens
held by Trident to the extent provided therein;
WHEREAS, pursuant to the Loan
Documents the Obligor granted to each of the Lenders a perfected valid security
interest in all property of the Obligor to secure the prompt payment,
performance and discharge in full of all of the Obligor’s obligations under the
Loan Documents;
WHEREAS, various events of
default exist under the Loan Documents including, without limitation, the
following (the “Existing Defaults”): (i) both GeM and Obligor
defaulted in making payments required under the Trident Loan Documents and any
and all cure periods
have
expired and (ii) on September 20, 2007 GeM filed a
petition under Chapter 11 of the US Bankruptcy Code in the US Bankruptcy Court
for the District of Delaware (“Bankruptcy Proceedings”);
WHEREAS, Lenders have declared
all Obligations immediately due and owing and Obligor is unable to pay
same.
WHEREAS, GeM filed a plan of
reorganization in the Bankruptcy Proceedings (the “Plan”) which was confirmed by
the Bankruptcy Court by order dated May 1, 2008.
WHEREAS, under the Plan, each
of the Lenders will receive certain consideration on account of and in
satisfaction their respective secured claims against both GeM and Obligor for
upon consummation of the Plan;
WHEREAS, the
consummation of the Plan is conditioned upon the occurrence of the “Effective
Date” (as defined in the Plan) and a condition to the occurrence of Effective
Date and Lenders’ receipt of the consideration provided to them under the Plan
on account of their claims against GeM and the Obligor is the transfer of all of
Obligor’s property to GeM, as a reorganized debtor, free and clear of all
liens;
WHEREAS, Obligor desires to
surrender to the Lenders, and the Lenders desire to accept and take possession
of, upon the terms and subject to the conditions set forth herein, the
Collateral (as defined herein) for disposition by the Lenders as a secured
parties under the Uniform Commercial Code as presently in effect in the States
of Florida and/or Delaware, as applicable (“UCC”);
NOW THEREFORE, in
consideration of the mutual promises, terms and provisions contained herein, the
parties intending to be legally bound, hereby agree as follows:
1. RECITALS. The
parties agree that the recitals set forth hereinabove are incorporated by
reference as if fully set forth herein and are hereby made a part of this
Surrender Agreement.
2. DEFINITIONS. All
capitalized terms used but not defined in the this Surrender Agreement shall
have the meanings ascribed to them in the Loan Documents.
3. LOAN DOCUMENTS STILL IN
FORCE.
(a) Except as
expressly and specifically modified by this Surrender Agreement, notwithstanding
any other provisions of this Surrender Agreement or any claims of the parties to
the contrary, the Loan Documents shall and do hereby remain in full force and
effect, and the terms and provisions of the Loan Documents are hereby ratified
and confirmed.
(b) Except as
expressly and specifically modified by this Surrender Agreement, all parties
shall remain bound to, perform and continue to perform all of their respective
obligations under the Loan Documents and shall continue to have all of their
rights and remedies thereunder and shall be bound by all of the terms and
provisions of the Loan
Documents. Without
limiting the generality of the foregoing, the parties hereby agree that this
Surrender Agreement is not a substitution, novation, discharge or release of any
or all of the Loan Documents or the indebtedness evidenced and/or secured
thereby.
4. PRIORITY. It
is hereby expressly acknowledged, ratified, confirmed and agreed that the Loan
Documents secure the Obligations, notwithstanding any claims of any of the
parties to the contrary. Obligor acknowledges and agrees that the
security interests in Obligor’s property granted to the Lenders under the Loan
Documents remain valid, perfected, first priority security interests therein
(subject to the Intercreditor Agreement), and that this Surrender Agreement does
not disturb, alter, or lessen the priority of any such security interests
granted to the Lenders under the Loan Documents and Intercreditor
Agreement. The Obligor represents and warrants that, as of the date
of this Surrender Agreement, there are no claims, setoffs or defenses to the
Lenders’ exercise of any rights or remedies available to the Lenders under the
terms and provisions of the Loan Documents.
5. EXISTING
DEFAULTS.
(a) Acknowledgments. Obligor
acknowledges, admits and agrees that (i) the Existing Defaults have occurred
under the Loan Documents and are existing, (ii) the appropriate parties have
each been lawfully and properly notified of same and (iii) all obligations of
Obligor to the Lenders under the Loan Documents are presently outstanding and
are immediately due and payable in full, without defense, setoff or
counterclaim.
(b) Enforcement. Obligor
agrees, admits and acknowledges that said Existing Defaults are material
defaults under the Loan Documents and that by virtue thereof, the Lender have
the absolute right to pursue its remedies and enforce immediate payment of the
Obligations and that there are no defenses or disputes as to the existence of
the Existing Defaults and Lender’s right to pursue its remedies by virtue
thereof.
(c) No Waiver of Existing
Defaults. Notwithstanding this Surrender Agreement, the
Lenders do not waive any of the Existing Defaults, but expressly reserves same,
which remain in full force and effect.
6. DEBT
ACKNOWLEDGMENT.
(a) Obligor
acknowledges, admits and agrees that (i) as of July 31, 2007 the total principal
and accrued interest outstanding on the Trident Obligations is in the sum of
$1,678,904.11, plus all interest accruing after July 31, 2007, plus all other
costs, expenses, claims and charges to which the Trident is entitled under the
Trident Loan Documents, against which obligation there are no offsets, defenses,
claims, counterclaims or objections by Obligor, and (ii) as of July 31, 2007 the
total principal outstanding on the FEQ Obligations is in the sum of $100,000,
plus all accrued and unpaid interest which is due and owing under the FEQ Loan
Documents, plus all other costs, expenses, claims and charges to which the FEQ
is entitled under the FEQ Loan Documents, against which obligation there are no
offsets, defenses, claims, counterclaims or objections by Obligor.
(b) The
Obligations are the valid liabilities and obligations of Obligor.
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7. NO WAIVERS OR
UNDERSTANDINGS.
(a) No
Waivers.
(i) No course
of dealing or negotiations between the parties or actions taken or not taken
prior to the entry of this Surrender Agreement shall constitute a waiver of any
of the Lenders’ respective rights or remedies under the Loan Documents (all of
which rights and remedies are reserved unto the Lenders and remain in full force
and effect).
(ii) The delay
or failure of any of the Lenders to exercise in one or more instances, any
right, power, remedy, privilege or option given under this Surrender Agreement
or the Loan Documents, either before or after the entry of this Surrender
Agreement, shall not be construed as a waiver or relinquishment of such right or
option, nor shall any single or partial exercise thereof or any discontinuance
of steps to enforce such right, power, remedy, privilege or option preclude any
further exercise thereof or any other right, power, remedy, privilege or
option.
(iii) Except as
otherwise specifically provided in this Surrender Agreement, the Lenders do not
hereby waive any rights or remedies which either has or may now or hereafter
have under the Surrender Agreement or the Loan Documents and all terms and
provisions of such agreements and instruments shall remain in full force and
effect.
(b) No
Amendments.
(i) Any
waiver, permit, consent, modification or approval of any kind or character on
the part of the Lenders of any breach or default under this Surrender Agreement,
or the Loan Documents or any such waiver of any provisions or condition of the
aforementioned must be in writing signed by all parties and shall be effective
only to the extent specifically set forth in such writing.
(ii) This
Surrender Agreement and the Loan Documents may only be amended in
writing signed by all parties hereto.
8. SURRENDER OF
COLLATERAL.
(a) Collateral. As
used in this Surrender Agreement, the term “Collateral” shall mean all
Collateral set forth on Exhibit A annexed hereto.
(b) Possession. The
Obligor hereby surrenders, delivers and grants to the Lenders quiet possession
of all of the Collateral, wherever located, and the Obligor agrees to assemble
the Collateral, including all books of account and other books and records
relating to the Collateral, and make it immediately available to the Lenders or
the Obligor’s place of business at the address for the Obligor set forth in the
Loan Documents. Upon delivery of possession of the Collateral, the
Obligor also shall execute, as may be necessary, and deliver to the Lenders any
and all other documents, instruments and certificates as may reasonably be
required in order to assure to the Lenders the benefits of this Surrender
Agreement. The Obligor agrees to give the Lenders immediate full and
continuing access to the Obligor’s business premises
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for
the purpose of the Lenders’ exercise of possession and other rights with respect
to the Collateral. The Lenders may, at any time, remove any and all
of the Collateral from the premises where the same is located and take such
other actions with respect thereto as the Lenders may deem
appropriate. This surrender of the Collateral is made by Obligor to
the Lenders in recognition of the Lenders’ rights as a secured parties under the
UCC and other applicable law.
(c) Disposition of the
Collateral. The Lenders hereby advise the Obligor that they
intend to dispose of the Collateral by private sale and transfer to GeM, as a
reorganized debtor under chapter 11 of the Bankruptcy Code (“Reorganized GeM”),
pursuant to the provisions of the UCC. The Obligor hereby renounces
its respective rights to any notice of the disposition of the Collateral and to
any rights of redemption with respect thereto.
(d) Other
Remedies. The Lenders reserve all rights and remedies
available to them against the Obligor and any other persons who may be obligated
to the Lenders for the Obligations under the Loan Documents.
(e) Satisfaction of
Obligations. Lenders each agree that upon (i) the Effective Date of
the Plan, (ii) their receipt of the consideration and treatment provided to them
under the Plan, and (iii) the transfer of the Collateral to Reorganized GeM free
and clear of all liens and security interests, the Obligations shall be fully
paid and satisfied.
9. REPRESENTATION AND
WARRANTIES REGARDING COLLATERAL. The Obligor represents and
warrants to the Lender that, as of the date hereof:
(a) The Obligor owns the
Collateral and has full right, power and authority to surrender the Collateral
to the Lenders.
(b) The Lenders have a first
priority lien (subject to the Intercreditor Agreement) on all of the items of
Collateral pursuant to their filings of UCC-1 financing statements with the
State of Florida. There are no other secured creditors of the Obligor
and no other person has any interest in the Collateral
(c) All of the
Collateral is and has been since the date of the Loan Documents, located at
000 000xx Xxxxxx
Xxxxx, Xxxxx Xx. 0, Xxxxxx, XX 00000 and at no other location;
(d) Obligor
has the power and authority to enter into this Surrender Agreement and to
perform the transactions contemplated hereby. The execution, delivery
and performance of this Surrender Agreement has been duly authorized by the
Board of Directors and shareholders of the Obligor, and will not violate any
agreement to which the Obligor is a party or any provision of law, ordinance or
regulation to which it is subject. This Surrender Agreement
constitutes the legal, valid and binding obligation of the Obligor enforceable
against it in accordance with its terms.
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(j) The Obligor has not taken any
action to seek relief under the United States Bankruptcy Code and, to the best
of the Obligor’s knowledge, no creditors have commenced any proceeding seeking
to subject the Obligor to the jurisdiction of the United States Bankruptcy Court
or to enjoin or otherwise effect this Surrender Agreement or the transactions
contemplated hereby.
10. ASSISTANCE IN REALIZATION
UPON COLLATERAL.
(a) As a
material inducement to the Lenders to enter into this Surrender Agreement, the
Obligor covenants and agrees to render any necessary assistance to the Lenders
in connection with the disposition of or any other realization upon the
Collateral and otherwise to confirm in the Lenders the rights, benefits and
privileges conveyed hereby.
(b) Obligor
hereby agrees to execute and deliver to the Lenders and/or Reorganized GeM, as
purchaser of the Collateral from the Lenders (“Purchaser”), from time to time,
on or after the date hereof, such further certificates, instruments, records or
other documents, assurances or other things as may be reasonably necessary to
facilitate and consummate the sale and transfer of any or all of the Collateral
to Reorganized GeM.
11. NO ASSUMPTION OF PRIOR
LIABILITIES. In no event shall the Lenders have any obligation
for payment or performance of any obligations of the Obligor, whether for rent,
insurance, payroll, payroll or other taxes, or any other obligation incurred or
otherwise arising prior to or after the date hereof.
12. INDEMNIFICATION. The
Obligor agrees to indemnify the Lenders and hold the Lenders harmless from and
against any and all claims, damages or expenses (including reasonable attorney’s
fees) suffered or incurred by, or asserted against, the Lenders by any person or
entity, including but not limited to any third party creditors, which arise from
or relate in any way to this Surrender Agreement or to any subsequent sale of
the Collateral to any third party, except claims or liabilities arising from the
Lenders’ gross negligence or willful misconduct.
13. WAIVER OF AUTOMATIC
STAY. The Obligor agrees that if a petition under any chapter
of Title 11 of the United States Code (the “Bankruptcy Code”) is filed by or
against it, Obligor in its capacity as Debtor and Debtor-in-Possession (where
applicable) under the Bankruptcy Code, does hereby agree to consent to the
vacation of the automatic stay of 11 U.S.C. § 362 (the
“Stay”). The Obligor hereby unconditionally and irrevocably waives
the benefits of the automatic stay of 11 U.S.C. § 362 (the “Stay”) and its
right to oppose a motion to lift such Stay, and does hereby admit and agree that
the grounds to vacate the Stay to permit the Lenders to enforce their rights and
remedies hereunder and under the Loan Documents and Intercreditor Agreement
exist and shall continue to exist, which grounds include, without limitation,
the fact the Obligor hereby represents and admits that it, as Debtor, has no
equity in its property and such property is not necessary to an effective
reorganization.
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14. HEADINGS. Paragraph
or section headings used herein are for convenience only and shall not be used
to interpret any term hereof.
15. COUNTERPARTS. This
Surrender Agreement may be executed in any number of counterparts each of which
when so executed and delivered, shall be an original, and all such counterparts
shall together constitute one and the same instrument.
16. SEVERABILITY. The
provisions of this Surrender Agreement are sever able. If any
provision of this Surrender Agreement shall be held invalid or unenforceable in
whole or in part in any jurisdiction, such invalidity or unenforceability shall
not in any manner affect the validity or enforceability of such provision in any
other jurisdiction or any other provisions of this Surrender Agreement in any
jurisdiction.
17. SURVIVAL. This
Surrender Agreement and all of its terms and provisions, shall and do hereby
survive the consummation of any and all transactions provided for herein or in
this Surrender Agreement.
18. FACSIMILE
SIGNATURE. This Surrender Agreement may be initially executed
by facsimile and shall be effective and binding upon execution by facsimile
signature provided that originally executed copies are provided by any party to
any other party within ten (10) days of request therefore.
19. FURTHER
ASSURANCES. Obligor hereby directs Lenders to file any
appropriate documents, financing statements or affidavits to reflect this
Surrender Agreement, and the transactions contemplated
hereby. Obligor hereby agrees to execute and deliver to the Lenders,
from time to time, on or after the date hereof, such further certificates,
instruments, records or other documents, assurances or other things as may be
reasonably necessary to give effect to this Surrender Agreement.
20. GOVERNING
LAW. This Surrender Agreement is and shall be deemed to be a
contract entered into and made pursuant to the laws of the State of Delaware and
shall in all respects be governed, construed, applied and enforced in accordance
with the laws of the State of Delaware.
21. NOTICES TO OBLIGOR.
Notwithstanding anything to the contrary contained in the Loan Documents, any
notice to the Obligor shall be binding and effective on the party to whom it is
directed if such notice is delivered by facsimile, or any other means authorized
under the Loan Documents, only to their counsel as follows:
| IF TO OBLIGOR: | Xxxx Xxxxx |
|
Compusven,
Inc.
|
|
| 000 000xx Xxxxxx Xxxxx, Xxxxx Xx. 0 | |
| Xxxxxx, XX 00000 |
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| IF TO TRIDENT: | Xxxx Xxxx, Esquire, |
|
Aple Xxxxxx &
Xxxx, LLP,
|
|
| 000 Xxxxx Xxxxxxxxx, Xxxxx 000, | |
| Xxxxxxx, XX 00000; |
| IF TO FEQ: | Xxxxxxx X. Xxxxxx, Esquire, and Xxxx Xxxxxx, Esq. |
|
Xxxxxx Xxxxxxx
LLP,
|
|
| 000 Xxxxxxxx Xx., Xxxxx 0000, | |
| Xxxx Xxxxx, XX 00000 |
IN WITNESS WHEREOF, the
parties hereto have affixed their hands and seals, or have caused these presents
to be duly executed by their proper corporate officers, all as of the date set
forth above.
| ATTEST: | COMPUSVEN, INC. | |||
|
|
/s/
Xxxx X. Xxxxx
|
|||
|
Secretary
|
President
|
| ATTEST: | TRIDENT GROWTH FUND, L.P. | |||
| By: Trident Management, LLC, General Partner | ||||
|
|
/s/
Xxxxx Xxxx
|
|||
|
|
|
| ATTEST: | FEQ GAS, LLC | |||
|
|
/s/
Xxxxxx X. Xxxxxxxx
|
|||
|
|
|
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EXHIBIT
A
COLLATERAL
Accounts,
cash, contract rights, property, equipment, general intangibles (including,
without limitation, all goodwill, trademarks, service marks, trade styles, trade
names, patents, patent applications, copyrights), inventory, instruments,
deposit accounts, chattel paper, software, domain names, investment property,
books and records, computer files, goods, leases, and all other assets of
Obligor and (a) all attachments, accessions, accessories, tools, parts,
supplies, increases and additions to and all replacements of and substitutions
for any of the foregoing property described in this Exhibit A, (b) all products
and proceeds of the foregoing property described in this Exhibit A, (c) all
accounts, contract rights, general intangibles, instruments, rents, moneys,
payments, and all other rights arising out of a sale, lease, or other
disposition of any of the foregoing property , described in this Exhibit A and
(d) all proceeds (including insurance proceeds) from the sale, destruction, loss
or other disposition of any of the foregoing property described in this Exhibit
A.
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