Contract
Exhibit
10.3
THIS
SECURITY AGREEMENT (the “Agreement”) dated this 19th day of October, 2007, is
executed and delivered by DECORIZE, INC., a Delaware corporation, GUILDMASTER,
INC., a Missouri corporation, and FAITH WALK DESIGNS, INC., a Missouri
corporation (collectively, the “Borrower”), as debtor, in favor of GUARANTY
BANK,
a
state
chartered trust company with banking powers (the “Lender”), as secured party,
pursuant to the terms of the Credit Agreement (hereinafter defined).
W
I T N E S S E T H
WHEREAS,
Borrower
has obtained from Lender a Revolving Loan, in an amount not to exceed Three
Million and 00/100 Dollars ($3,000,000.00) (the “Loan”), pursuant to that
certain Credit Agreement (as may be amended, restated or modified from time
to
time, the “Credit Agreement”) dated the same date hereof by and among Lender and
Borrower, which Loan is evidenced by that certain Revolving Promissory Note
dated the same date hereof (the “Note”). All terms used but not otherwise
defined herein shall have the meaning set forth in the Credit Agreement;
and
WHEREAS,
Borrower and the Lender desire to secure the Obligations for the benefit
of
Lender pursuant to the terms of the Credit Agreement.
NOW,
THEREFORE, in consideration of the Loan by the Lender, and other good and
valuable consideration, receipt and sufficiency of which are hereby acknowledged
by the Borrower, the Borrower hereby agrees with the Lender as
follows.
1. Grant
of Security Interest.
To
secure the Obligations, Borrower hereby grants to Lender, pursuant to the
terms
of the Credit Agreement, a continuing first lien on and priority security
interest in, and the right to set off against, any and all right, title and
interest of the Borrower, whether now, or hereafter, owned, existing, created,
acquired or arising, in and to any and all of Borrower’s personal property,
wherever located and whomever held by (collectively the “Collateral”). The
Collateral includes Borrower’s personal property identified on Exhibit A
attached hereto, and the following:
(ii) All
Goods
and Inventory, and all documents of title of at any time evidencing or
representing a part thereof, including all inventories of raw materials,
work-in-process, finished goods, and merchandise, materials and supplies
and all
other personal property and assets of every kind and description held for
sale,
rental or lease or held to be furnished under contracts for services or consumed
in Borrower’s business, or in any case held, used or useable in the supply,
servicing, advertising, processing, packaging, delivery or shipping of such
property;
(iii) All
Equipment, machinery, tools furniture, and fixtures of every sort and spare
parts therefor, all storage media containing computer programs and data,
and all
tools, dies, and molds, and all motor vehicles, trailers, tractors, barges,
and
ships of every sort and spare parts and accessories therefor, whether or
not
titled or certificated;
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(iv) All
General Intangibles, including Payment Intangibles, all computer programs,
data
and databases, leases, licenses, claims and causes of action against others
(whether in litigation, settlement or otherwise), and tax refunds, and all
summaries, compilations, mailing and customer, client or supplier lists,
and
other supporting evidence records relating to the business, assets, liabilities
or capital of Borrower, and all disks, files, tapes, printouts, books, records,
periodicals, directories, publications and other documents and media where
the
foregoing is stored or embodied, and all patents, patent applications,
trademarks, trademark applications, trade secrets, trade names, service marks,
trade styles, and copyrights,
designs, prototypes, labels, molds, inventions, improvements, processes,
manufacturing techniques, know-how, specifications
in each
case whether or not registered, licensed or filed;
(v) All
rights under all licenses, permits, leases, contracts, governmental approvals,
franchises, applications for any of the foregoing, renewals of any of the
foregoing, and similar rights or privileges or immunities;
(vi) (A)
all
dividends, cash, securities, instruments and other property from time to
time
paid, payable or otherwise distributed to Borrower in respect of or in exchange
for any shares or other capital stock or trust, partnership or limited liability
company interests, all Investment Property, Certificated Securities,
Uncertificated Securities, Security Entitlements, Securities Accounts,
securities accounts, margin accounts, financial assets, hedging contracts,
options contracts, and futures contracts; (B) any and all distributions made
to
Borrower in respect of any such shares or capital stock, or trust, partnership
or limited liability company interests, whether in cash or in kind, by way
of
dividends or stock splits, or pursuant to a merger or consolidation or
otherwise, or any substitute security issued to Borrower upon conversion,
reorganization or otherwise; and (C) any and all other property hereafter
delivered to Borrower or Lender in substitution for or in addition to any
of the
foregoing (including without limitation all securities issued pursuant to
any
shareholder agreement, stock purchase agreement, partnership agreement, trust
agreement or indenture, limited liability company operating agreement, stock
purchase rights or other agreement to which Borrower may now or hereafter
be a
party, all certificates and instruments representing or evidencing such property
and all cash, securities, interest, dividends, rights, and other property
at any
time and from time to time received, receivable or otherwise distributed
in
respect of or in exchange for any or all thereof);
(vii) All
of
Borrower’s property in the possession, custody or control of Lender in any way,
whether or not for safekeeping, custody, pledge, transmission, collection
or
otherwise;
(viii) All
funds
paid to Lender or in transit to any deposit account or fund established by
Borrower, and any securities in which such funds may be invested;
and
(ix) All
cash
and non-cash proceeds and products of the foregoing, all proceeds from insurance
on any of the foregoing, all goodwill associated with the foregoing, all
additions and accessions to and replacements and substitutions for any of
the
foregoing, everything that becomes (or is held for the purpose of being)
affixed
to or installed in any of the foregoing, and all products, rents, income,
dividends, royalties, and profits of or from any of the foregoing.
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This
Agreement is made and given to secure, and shall secure, the payment of and
performance of any and all indebtedness, obligations and liabilities of the
Borrower to the Lender, including without limitation the principal advanced
or
any interest on the Note and Loan Documents, and under this Agreement in
accordance with their terms and to satisfy all of its other liabilities to
Lender, whether under the Note or under the Credit Agreement or otherwise,
whether now existing or hereafter incurred, matured or unmatured, direct
or
contingent, joint or several, including any extensions, modifications, renewals,
and substitutions, including, but without limitation, advances for principal
or
interest payments to prior secured parties, mortgagors, or lienors, or for
taxes, levies, insurance, rent, repairs to or maintenance or storage of any
of
the Collateral, for all of Lender’s expenses and costs, including reasonable
fees and expenses of its counsel, in connection with the preparation,
administration, amendment, modification, or enforcement of the Credit Agreement
and the documents required thereunder and in connection therewith, including,
without limitation, any proceeding brought or threatened to enforce payment
of
any of the obligations under the Loan Documents (collectively the
“Obligations”). Notwithstanding the foregoing, Borrower and Lender agree that
the costs payable by Borrower in connection with the origination of the Loan
(i.e., attorney fees, loan documentation costs, recording fees, etc.) shall
not
exceed $10,000.
2. Defined
Terms. The
term
“Loan Documents” and all other capitalized terms used herein but not otherwise
defined herein shall have the meanings given to them in the Credit Agreement.
All capitalized terms used and not otherwise defined herein or in the Credit
Agreement have the meanings given them in the Uniform Commercial Code as
in
effect from time to time in the State of Missouri (“UCC”). To the extent the
provisions of this Agreement conflict with the provisions of the Credit
Agreement, the Credit Agreement shall govern. The prior sentences
notwithstanding, any reference to any agreement, document, or instrument,
including this Agreement, any other Loan Document and any agreement, document
or
instrument defined herein or therein, means such agreement, document, or
instrument as it may have been or may be amended, restated, extended, renewed,
replaced, or otherwise modified and in effect from time to time in accordance
with the terms thereof and, if applicable, the terms hereof, and includes
all
attachments thereto and instruments incorporated therein, if any.
3. Possession of
Collateral. Other
than during an Event of Default, Borrower may have possession of all Collateral
except for Collateral which is in the possession of Lender or Collateral
which
Lender must possess in order to have a perfected first priority Security
Interest therein, and Borrower may use each item of the Collateral in its
possession in any lawful manner not inconsistent with this Agreement, the
other
Loan Documents or with any policy of insurance covering the same.
4. Borrower’s
Representations and Warranties.
Borrower represents and warrants to the Lender the following:
4.1. Name;
Jurisdiction; Taxpayer ID Number. The
correct corporate name and jurisdiction of formation of Borrower is set forth
in
the first paragraph of this Agreement, and the Borrower does not conduct
and,
during the five-year period immediately preceding the date of this Agreement,
has not conducted, business under any trade name or other fictitious name.
The
Internal Revenue Service taxpayer identification number of the Borrower and
the
organizational identification number of the Borrower issued by the Borrower’s
jurisdiction of formation are set forth on Schedule
A
attached
hereto.
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4.2. Offices;
Places of Business.
Borrower’s principal place of business and the books and records relating to all
Accounts and the Collateral is located at the address set forth on Schedule
A.
All
addresses (including applicable counties) of all other places of business
of the
Borrower shall at all times be additionally listed on Schedule
A.
Unless
Lender otherwise consents in writing, all of the tangible Collateral will
be
kept at Borrower’s chief executive office or such other places of business
described in the Credit Agreement, including Collateral which is movable
when
the same is not in use; and without Borrower first making arrangements
satisfactory to Lender to protect Lender’s Security Interest therein, Borrower
will not place any of the tangible Collateral in any other location. No
Collateral shall at any time be in the possession or control of any
warehouseman, bailee or any of Borrower’s agents or processors without Lender’s
prior written consent and unless Lender, if Lender has so requested, has
received warehouse receipts or bailee letters satisfactory to Lender prior
to
the commencement of such storage. Notwithstanding the foregoing, Borrower
may
allow EnCore, Inc. to have possession and control of the Collateral pursuant
to
the terms of Agreement between Borrower and EnCore, Inc. dated September
14,
2006. Borrower shall, upon the request of Lender, notify any such warehouseman,
bailee, agent or processor of the Security Interests created hereby and shall
instruct such person to provide a written agreement to Lender that such person
holds all such Collateral for Lender’s account subject to Lender’s
instructions.
4.3. Name,
Entity or Office Changes. If
Borrower intends to change its name, change its structure, change the location
of Borrower’s principal place of business, create new or otherwise amend its
trade names or trademarks, change its state of organization, or open other
places of business, Borrower will, prior to taking any such action, provide
Lender no less than thirty (30) days prior written notice of the same and,
prior
to taking any such action, will promptly execute such additional documents
as
Lender may reasonably request in order to maintain a fully perfected first
priority Security Interest in favor of Lender in the Collateral.
4.4. Insurance.
Borrower
will keep the Collateral insured in accordance with the terms of the Credit
Agreement.
4.5. Collateral Not to Become
Fixtures.
Without
first making arrangements satisfactory to Lender to protect its Security
Interest, Borrower will not allow the Collateral to become affixed to or
installed in any property (including but not limited to any real
estate).
4.6. Condition of Collateral;
Disposal of Collateral.
Borrower
will keep the Collateral in the condition required under the terms of the
Credit
Agreement. Borrower will not transfer, convey or otherwise dispose of any
Collateral (or any interest therein) unless and only to the extent permitted
herein or by the Credit Agreement.
4.7. Liens.
Borrower
is the lawful owner of the Collateral free and clear, and will keep free
and
clear, of all security interests, liens, encumbrances, registered pledges,
adverse claims, voting trust restrictions and any other claims of others
except
with respect to Permitted Liens (as defined in the Credit Agreement and
incorporated herein) or as otherwise disclosed to Lender in the Credit
Agreement. Borrower will pay and discharge all taxes assessed on the Collateral
in accordance with the terms of the Loan Documents.
4.8. Collateral Disposition.
Borrower
has not, and will not, sell, assign, transfer, encumber or otherwise dispose
of
any of Borrower’s rights in the Collateral except (i) in the ordinary course of
Borrower’s business or (ii) except as otherwise allowed in the Credit
Agreement.
4.9. Authorization.
Borrower has the full right, power and authority to enter into this Agreement
and to pledge the Collateral. Borrower’s articles of incorporation and bylaws do
not prohibit execution of this Agreement by Borrower or any term or condition
contained in this Agreement.
4.10. Binding Effect. This
Agreement is binding upon Borrower, as well as Borrower’s heirs, successors,
representatives and assigns, and is legally enforceable in accordance with
its
terms subject to limitations imposed by bankruptcy, insolvency, moratorium
or
other similar laws affecting the rights of creditors generally or the
application of general equitable principles.
4.11. Investment
Property as Collateral.
None of
the Collateral constitutes Investment Property.
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5. Inspection. No
more
than once a year unless an Event of Default exists, during normal business
hours
that does not otherwise unnecessarily interfere with Borrower’ business, Lender
and any of its authorized agents may examine and inspect the Collateral upon
providing notice to Borrower.
6. Disbursement Directly to Seller
of Collateral. To
the
extent, if any, that Borrower has advised Lender that any of the Collateral
is
being acquired with proceeds of any loan, advance or other financial
accommodation from Lender, such proceeds may be disbursed by Lender directly
to
the seller of such Collateral.
7. Adverse Conditions Affecting Collateral
. Borrower
will notify Lender within 30 days of becoming aware of any material adverse
fact
or condition which bears upon the value of the Collateral including any adverse
fact or condition, or the occurrence of any event, which (i) bears upon the
collectibility of any material Account including the ability of any Account
debtor to perform under any agreement evidencing any material Account (including
the bankruptcy, insolvency or failure of any Account debtor to pay its debts
as
they become due), or (ii) causes material loss or depreciation in the value
of any material item of the Collateral and the amount of such loss or
depreciation. Borrower will provide such additional information to Lender
regarding the amount of any loss or depreciation in value of the Collateral
as
Lender may reasonably request from time to time.
8. Protection of Security Interest
.
Lender
may, at Borrower’s sole cost, file a copy of this Agreement or a Financing
Statement in any public office deemed necessary by Lender to perfect or continue
its Security Interest in the Collateral, and Borrower hereby
ratifies any such Financing Statement previously filed by Lender and
irrevocably
authorizes Lender to do any of the foregoing. Borrower will execute or cause
the
execution of such additional Financing Statements and other documents (and
pay
the cost of filing or recording the same in all public offices deemed necessary
by Lender) and do such other acts and things, including execution of
applications and certificates of title naming Lender as a secured party and
delivery of same to Lender, as Lender may from time to time request or deem
necessary to establish and maintain a valid and perfected Security Interest
in
the Collateral. Borrower will, immediately upon Lender’s reasonable request,
place a durable notice of the existence of Lender’s Security Interest, in form
and by means reasonably acceptable to Lender, upon such items of the Collateral
as are designated by Lender. Borrower will not create any Chattel Paper without
placing a legend on the Chattel Paper acceptable to Lender indicating Lender
has
a Security Interest in the Chattel Paper. Borrower will not file any document
releasing Lender’s Security Interest in any of the Collateral without the prior
written authorization of Lender.
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9. Preservation of Collateral;
Expenditures.
After
first giving notice to Borrower, Lender may perform any obligation of Borrower
hereunder or under any other Loan Document which Borrower fails to perform
and
such failure results in an Event of Default; provided, however, that after
the
occurrence of an Event of Default and during the continuance, Lender will
not be
obligated to provide Borrower with any such notice. After first giving notice
to
Borrower, Lender may, in its commercially reasonable judgment at any time,
take
any other action which it reasonably deems necessary for the maintenance
or
preservation of any of the Collateral or the Security Interest of Lender
therein, including the payment and discharge of taxes, liens, security interests
and encumbrances of any kind against the Collateral, or the procurement of
insurance; provided, however that after the occurrence of an Event of Default
and during the continuance, Lender will not be obligated to provide Borrower
with any such notice. Any actions taken by Lender pursuant to this Section
will
not be deemed a waiver of any Event of Default. Upon the occurrence and during
the continuance of an Event of Default, Lender may adjust, settle or cancel
claims under any policy of insurance covering items of the Collateral and
endorse any draft received in connection therewith in payment of a loss or
otherwise. Borrower agrees to reimburse Lender on demand for all costs and
expenses incurred or paid by Lender pursuant to this Section, together with
interest thereon at the highest default or post-maturity rate provided in
the
Credit Agreement or the Note. Any amounts, until so reimbursed to Lender,
will,
without further action by Lender or Borrower, be added to and become a part
of
the Obligations and secured hereby. Lender may, for the foregoing purposes
during the continuance of an Event of Default, act in its own name or that
of
Borrower. Borrower hereby grants to Lender its power of attorney, irrevocable
so
long as any of the Obligations are outstanding, to take any of the actions
described or permitted by this Section. Lender is not obligated to exercise
its
rights under this Section and will not be liable to Borrower for any failure
to
do so.
10. Limitation of Obligation
of Secured Party.
Lender
shall use ordinary reasonable care in the physical preservation and custody
of
the Collateral in Lender’s possession, but shall have no other obligation to
protect the Collateral or its value. In particular, but without limitation,
Lender shall have no responsibility for: (a) any change in the market value
of
the Collateral or for the collection or protection of any income and proceeds
from the Collateral; (b) ascertaining any maturities, calls, conversions,
exchanges, offers, tenders, or similar matters relating to any of the
Collateral; or (c) informing Borrower about any of the above, whether or
not
Lender has or is deemed to have knowledge of such matters. Lender will be
deemed
to have exercised reasonable care in the custody and preservation of any
Collateral in its possession (even if it fails to sell or convert Collateral
which is falling in market value) if Lender treats such Collateral in
substantially the same way that Lender treats the collateral of its other
customers when dealing with similar types of collateral under similar
circumstances. The failure of Lender to preserve or protect any rights with
respect to any of the Collateral against other parties will not be deemed
a
failure to exercise reasonable care in the custody or preservation of such
Collateral.
11. Default.
The term
“Event of Default” has the meaning as set forth in the Credit Agreement and thus
the occurrence and continuance of any event of or the existence of any condition
which is specified as an Event of Default under the Credit Agreement shall
constitute an Event of Default hereunder.
12. Remedies.
Upon
the
occurrence and during the continuation of an Event of Default, Lender will
have
and may exercise any or all of its rights and remedies as provided in the
Credit
Agreement and in the other Loan Documents, at law or in equity, and/or treat
all
of Borrower’s property in Lender’s possession as part of the Collateral to
secure payment of the Obligations, in addition to exercising any one or more
of
the following rights and remedies:
(i) Declare
all Obligations immediately due and payable, without notice of any kind to
Borrower.
(ii) Utilize
any and all of its rights and pursue any and all of its remedies under the
UCC,
under any other applicable law, at equity, or pursuant to this Agreement
and the
other Loan Documents with respect to the Collateral.
(iii) Register
any securities included in the Collateral in Lender’s name and exercise any
rights normally incident to the ownership of securities.
(iv) Maintain
a judicial suit for foreclosure and sale of the Collateral.
(v) Effect
transfer of title upon sale of all or part of the Collateral. For this purpose,
Borrower irrevocably appoints Lender as its attorney-in-fact to execute
endorsements, assignments and instruments in the name of Borrower as shall
be
necessary or reasonable.
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All
of
Lender’s rights and remedies, whether evidenced by this Agreement, the Credit
Agreement or other Loan Documents or by any other writing, shall be cumulative
and may be exercised singularly or concurrently. Election by Lender to pursue
any remedy shall not exclude pursuit of any other remedy, and an election
to
make expenditures or to take action to perform an obligation of Borrower
under
this Agreement, after Borrower’s failure to perform, shall not affect Lender’s
right to declare an Event of Default and to exercise its remedies hereunder.
Borrower agrees that, to the extent notice of sale shall be required by
applicable law, ten (10) days notice shall constitute commercially reasonable
notification.
13. Certificate Regarding Collateral.
Upon
the
occurrence and during the continuation of an Event of Default, whenever Lender
so requires, Borrower will execute and deliver to Lender a certificate, in
form
and detail satisfactory to Lender and signed by a knowledgeable officer of
Borrower, scheduling all material Collateral, as Lender may reasonably require,
together with such copies of invoices (with evidence of shipment attached),
if
available, original purchase orders, service contracts, bills of lading,
original warehouse receipts or similar documents of title, pertaining to
Borrower’s Accounts and Inventory as Lender may reasonably require.
14. No Release or Impairment
of
Collateral.
Lender’s Security Interest hereunder and Lender’s rights in connection therewith
will continue unimpaired, notwithstanding that Lender takes, exchanges or
releases the Collateral or other security, releases any person primarily
or
secondarily liable for any of the Obligations, grants or allows extensions,
renewals, modifications, rearrangements, restructures, replacements or
refinancings thereof, whether or not the same involve modifications to interest
rates or other payment terms thereof, or indulgences with respect to the
Obligations. Lender may apply to the Obligations in such order as Lender
determines, any proceeds or other amounts received on account of the Collateral
pursuant hereto by the exercise of any right permitted under this Agreement,
regardless of whether there is any other security for the Obligations. Borrower
hereby waives all requirements of presentment, protest, demand, and notice
of
dishonor or non-payment to Borrower or any other party to the Obligations
or the
Collateral.
15. Releases.
In the
event all of the Obligations have been fully and indefeasibly paid, all of
the
Commitments have been canceled or terminated and the Lender has no other
commitment to extend credit or make advances to or for the account of Borrower,
and Lender has received a written request from Borrower in connection therewith
to execute and deliver all applicable UCC termination statements and releases
with respect to the Collateral (collectively, the “Releases”), Lender will, at
Borrower’s sole cost and expense (and Borrower will promptly reimburse Lender
for any reasonable fees and expenses, including but not limited to reasonable
legal fees and expenses, incurred in connection with the preparation, review,
filing or recording of any such releases or terminations) execute and deliver
such Releases to the person and address designated by Borrower in its notice
within a commercially reasonable time after Lender’s receipt of such
notice.
16. No Liability of Lender
for Contracts.
Anything herein to the contrary notwithstanding: (i) Borrower shall remain
liable under the contracts and agreements included in the Collateral to the
extent set forth therein to perform all of its duties and obligations thereunder
to the same extent as if this Agreement had not been executed; (ii) the exercise
by Lender of any of its rights hereunder shall not release Borrower from
any of
its duties or obligations under the contracts and agreements included in
the
Collateral; and (iii) Lender shall have no obligation or liability under
the
contracts and agreements included in the Collateral by reason of this Agreement,
nor be obligated to perform any of the obligations or duties of Borrower
thereunder or to take any action to collect or enforce any claim for payment
assigned hereunder.
17. Further Assurances.
From
time to time, Borrower shall execute and deliver to Lender such additional
documents and will provide such additional information as Lender may reasonably
require to carry out the terms of this Agreement and be informed of Borrower’s
status and affairs.
18. Continuing
Agreement.
This
Agreement shall be a continuing agreement in every respect and shall remain
in
full force and effect until all of the Obligations under the Loan Documents
have
been fully paid and/or satisfied, including without limitation payment of
the
principal and interest under both of the Notes.
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19. Miscellaneous.
19.1. Notices.
All
notices, consents, requests and demands to or upon the respective parties
hereto
shall made and delivered in accordance with the Credit Agreement.
19.2. Amendments and Waivers.
No
amendment to this Agreement will be effective unless it is in writing and
signed
by authorized officers of Borrower and Lender. No waiver of full compliance
with
any provision of this Agreement or consent to any departure by Borrower herefrom
will be effective unless it is in writing and signed by an authorized officer
of
Lender; provided, however, that any such waiver or consent will be effective
only in the specific instance and for the purpose for which given. No failure
by
Lender to exercise, and no delay by Lender in exercising, any right, remedy,
power or privilege hereunder will operate as a waiver thereof, nor will any
single or partial exercise by Lender of any right, remedy, power or privilege
hereunder preclude any other exercise thereof, or the exercise of any other
right, remedy, power or privilege.
Oral
agreements or commitments to loan money, extend credit or to forbear from
enforcing repayment of a debt including promises to extend or renew such
debt
are not enforceable, regardless of the legal theory upon which it is based
that
is in any way related to the credit agreement. To protect you (borrower(s))
and
us (creditor) from misunderstanding or disappointment, any agreements we
reach
covering such matters are contained in this writing, which is the complete
and
exclusive statement of the agreement between us, except as we may later agree
in
writing to modify it.
19.3. Rights Cumulative.
Each of
the rights and remedies of Lender under this Agreement is in addition to
all of
their other rights and remedies under applicable law, and nothing in this
Agreement may be construed as limiting any such rights or remedies.
19.4. Successors and Assigns.
This
Agreement binds Borrower and its successors and assigns and inures to the
benefit of Lender, and each of their successors, transferees, participants
and
assignees. Borrower may not delegate or transfer any of its obligations under
this Agreement without the prior written consent of Lender. With respect
to
Borrower’s successors and assigns, such successors and assigns include any
receiver, trustee or debtor-in-possession of or for Borrower.
19.5. Severability.
Any
provision of this Agreement which is prohibited, unenforceable or not authorized
in any jurisdiction is, as to such jurisdiction, ineffective to the extent
of
such prohibition, unenforceability or nonauthorization without invalidating
the
remaining provisions hereof or affecting the validity, enforceability or
legality of such provision in any other jurisdiction unless the ineffectiveness
of such provision would result in such a material change as to cause completion
of the transactions contemplated hereby to be unreasonable.
19.6. Governing Law; No
Third Party Rights.
This
Agreement is to be governed by and construed and interpreted in accordance
with
the internal laws of the State of Missouri applicable to contracts made and
to
be performed wholly within such state, without regard to choice or conflicts
of
law principles. This Agreement is solely for the benefit of the parties hereto
and the Lender and its respective successors and assigns pursuant to the
terms
of the Credit Agreement, and no other person has any right, benefit, priority
or
interest under, or because of the existence of, this Agreement.
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19.7. Lender Expenses and Attorneys’
Fees.
Borrower will reimburse Lender for all expenses incurred by Lender in connection
with preparation, administration, amendment, modification and in seeking
to
collect or enforce the Obligations and any other rights under this Agreement
or
any of the other Loan Documents or under any other instrument, document or
agreement evidencing or executed in connection with any of the Obligations,
including reasonable attorneys’ fees and actual attorneys’ expenses (whether or
not there is litigation), court costs and all costs in connection with any
proceedings under the United States Bankruptcy Code, and any expenses incurred
on account of damage to any property to which any of the Collateral may be
affixed. Notwithstanding the foregoing, Borrower and Lender agree that the
costs
payable by Borrower in connection with the origination of the Loan (i.e.,
attorney fees, loan documentation costs, recording fees, etc.) shall not
exceed
$10,000.
19.8. CHOICE
OF FORUM. SUBJECT
ONLY TO THE EXCEPTION IN THE NEXT SENTENCE, BORROWER AND LENDER HEREBY AGREE
TO
THE EXCLUSIVE JURISDICTION OF THE FEDERAL COURT OF THE EASTERN DISTRICT OF
MISSOURI AND THE STATE COURTS OF MISSOURI LOCATED IN XXXXXX
COUNTY
AND WAIVE ANY OBJECTION BASED ON VENUE OR FORUM NON CONVENIENS WITH RESPECT
TO
ANY ACTION INSTITUTED THEREIN, AND AGREE THAT ANY DISPUTE CONCERNING THE
RELATIONSHIP BETWEEN LENDER AND BORROWER OR THE CONDUCT OF EITHER OF THEM
IN
CONNECTION WITH THIS AGREEMENT OR OTHERWISE SHALL BE HEARD ONLY IN THE COURTS
DESCRIBED ABOVE. NOTWITHSTANDING THE FOREGOING, BORROWER AND LENDER ACKNOWLEDGE
THAT ANY APPEALS FROM THE COURTS DESCRIBED IN THE IMMEDIATELY PRECEDING SENTENCE
MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE THOSE
JURISDICTIONS.
19.9. WAIVER
OF JURY TRIAL. BORROWER
HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR
CAUSE
OF ACTION (1) ARISING UNDER THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR
(2) IN
ANY WAY
CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE BORROWER AND
LENDER OR EITHER OF THEM IN RESPECT OF THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER
NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT
OR
OTHERWISE. BORROWER AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION
OR
CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT BORROWER
MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT
AS
WRITTEN EVIDENCE OF THE CONSENT OF THE BORROWER TO THE WAIVER OF THEIR RIGHT
TO
TRIAL BY JURY.
[Signatures
on the Following Page]
10
IN
WITNESS WHEREOF, this Agreement has been duly executed as of the date first
above written.
| BORROWER: | ||
| DECORIZE, INC., a Delaware corporation | ||
| |
|
|
| By: | /s/ Xxxxx Xxxxxxx | |
|
Name:
|
Xxxxx Xxxxxxx |
|
| Title: | President and CEO | |
