AGREEMENT TO ACCEPT COLLATERAL IN SATISFACTION OF OBLIGATIONS
Exhibit
10.03
AGREEMENT
TO ACCEPT COLLATERAL
IN
SATISFACTION OF OBLIGATIONS
THIS
AGREEMENT TO ACCEPT COLLATERAL IN SATISFACTION OF OBLIGATIONS (the
"Agreement") is made as of August __, 2007, by and among, Dalrada
Financial Corp., a Delaware corporation (the "Debtor"), Xxxxxxx X.
Xxxxxxx, as collateral agent ("Collateral Agent"), Longview Fund, L.P.
("Longview") and the other parties identified on Schedule A hereto
(together with Longview, "Secured Creditors") and Fenix Capital, LLC, a
Delaware limited liability company ("Newco").
RECITALS
AND ACKNOWLEDGEMENTS
As
the basis for, and as further
consideration for this Agreement, the parties hereto hereby acknowledge and
agree as follows:
1. Debtor
is indebted and obligated to Secured Creditors pursuant to secured convertible
notes issued February 13, 2006 and more specifically identified in Schedule
A hereto in the aggregate principal amount of approximately $7,435,093.00
(collectively, the "Secured Notes") and on which approximately
$8,085,592.00 in principal, accrued interest and other amounts is outstanding
as
of the date hereof.
2. The
Solvis Group, Inc., a Nevada corporation, The Solvis Group, Inc., a Michigan
corporation and Sourceone Group, Inc., a Delaware corporation (collectively,
"Guarantors") are indebted and obligated to the Secured Creditors
pursuant to guaranties of the Secured Notes dated February 13, 2006 for the
benefit of Secured Creditors (the "Guaranties").
3. Each
of the Secured Creditors is the holder of a properly perfected valid and fully
enforceable security interest in all of the assets of the Debtor (collectively,
the "Collateral"), including without limitation the assets set forth in
Section 2 below, pursuant to (a) a Security Agreement dated February
13,
2006 by and among Debtor, Guarantors, Collateral Agent and Secured Creditors
(the "Security Agreement" ) and (b) UCC-1 financing statements filed in
connection therewith.
4. Debtor
is in default of its obligations to Secured Creditors under the Secured Notes
for failure to pay principal or interest pursuant to Section 3.1 of the Secured
Notes, among other reasons, and Guarantors are in default of their obligations
to Secured Creditors under the Guaranties for failure to pay the outstanding
obligations of Debtor under the Secured Notes pursuant to Section 3.1 of the
Guaranties, among other reasons; as a result of such defaults by Debtor and
Guarantors, Secured Creditors are entitled to enforce their rights and remedies
as provided in the Security Agreement, the Guaranties and under applicable
law.
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5. Secured
Creditors have fully performed under the Secured Notes, and Debtor has no claim
or cause of action against Secured Creditors arising under the Secured Notes
or
as to the Collateral or for any other reason.
6. Secured
Creditors have assigned all of their rights in the Secured Notes, the Security
Agreement and the Collateral to Newco, and Newco is now the holder of the
security interests in the Collateral referenced in the Agreement.
7. Debtor
acknowledges and agrees that the amount of indebtedness outstanding under the
Secured Notes exceeds the value of the Collateral. Nevertheless, in
exchange for the consensual and expedient resolution of Debtor's defaults,
Debtor and Secured Creditors have agreed that Newco as the secured creditor
shall accept, in full and complete satisfaction of Debtor's indebtedness and
obligations under the Secured Notes, (i) the transfer of the Collateral to
Newco
as described in Section 2 below and (ii) the agreement of Debtor to
comply with the other terms, conditions and covenants set forth in this
Agreement.
NOW,
THEREFORE, in consideration of the
above recitals and agreements and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:
1. Incorporation
of Recitals and Agreements. The introduction, recitals and
agreements above, and the defined terms contained therein, are hereby
incorporated into this Agreement by this reference.
2. Acceptance
of Collateral.
2.1 Acknowledgements,
Waivers and Representations Relating to New York Uniform Commercial
Code.
(a) This
Agreement constitutes Debtor's present and immediate agreement to Newco's
acceptance of the Collateral, as provided in Section 9-620(c)(2) of the New
York
Uniform Commercial Code (the "NY-UCC"), and Debtor waives any right to
any further notice or any right to object as provided therein.
(b) Debtor
waives any right to redeem the Collateral under Sections
9-623
and
9-624(c) of the NY-UCC.
(c) Pursuant
to Section 9-622 of the NY-UCC, Debtor and Newco acknowledge and agree that,
upon the Closing (as defined in Section 5), Newco's acceptance of the
Collateral (i) discharges the obligations of Debtor under the Secured Notes
and
is consented to by Debtor; (ii) transfers to Newco all of Debtor's rights in
the
Collateral; (iii) discharges the security interest that is the subject of the
Security Agreement and any subordinate security interest or other subordinate
lien; and (iv) terminates any other subordinate interest (provided that any
obligations of the Guarantors under the Guaranties, other than obligations
relating to the Secured Notes, shall survive).
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(d) Debtor
represents and warrants to Secured Creditors and Newco that, other than as
set
forth on Schedule B, during the past thirty (30) calendar days through
the date of this Agreement there has not been, there currently is not, and
there
will not be during the period from the date hereof through the Closing, any
Person (as defined below) other than Secured Creditors or Newco holding a
security interest, lien or other interest in the Collateral, whether or not
perfected. Debtor represents and warrants to Secured Creditors and
Newco that, notwithstanding anything set forth on Schedule B, Newco (as a
result of the assignment from Secured Creditors to Newco) holds a properly
perfected valid and fully enforceable security interest in the Collateral that
is first in right over any and all of the liens and other interests set forth
on
Schedule B. "Person" means an individual, corporation,
partnership, limited liability company, limited liability partnership,
syndicate, person, trust, association, organization or other entity, including
any governmental authority, and including any successor, by merger or otherwise,
of any of the foregoing.
2.2 Transfer
of Collateral. Pursuant to Section 9-620 of the NY-UCC, Newco and
Debtor agree that Newco hereby accepts at the Closing the Collateral in full
and
complete satisfaction of Debtor's indebtedness and obligations to Newco under
the Secured Notes. The Collateral includes, without limitation, the
following (capitalized terms used in this Section 2.2 but not defined in
this Section 2.2 or elsewhere in this Agreement shall have the respective
meanings ascribed to them in Article IX of the NY-UCC):
(a) All
right, title and interest of Debtor in, to and in respect of all Accounts,
Goods, real or personal property, all books and records relating to the
foregoing and all products and Proceeds of the foregoing, and as set forth
below:
(i) All
right, title and interest of Debtor in, to and in respect of all: Accounts,
interests in goods represented by Accounts, returned, reclaimed or repossessed
goods with respect thereto and rights as an unpaid vendor; contract rights;
Chattel Paper; investment property; General Intangibles (including but not
limited to, tax and duty claims and refunds, registered and unregistered
patents, trademarks, service marks, certificates, copyrights trade names,
applications for the foregoing, trade secrets, goodwill, processes, drawings,
blueprints, customer lists, licenses, whether as licensor or licensee, choses
in
action and other claims, and leasehold interests in equipment, real estate
and
fixtures); Documents; Instruments; letters of credit, bankers' acceptances
or
guaranties; cash moneys, deposits; securities, bank accounts, deposit accounts,
credits and other property owned or held in any capacity by Debtor, as well
as
agreements or property securing or relating to any of the items referred to
above;
(ii) Goods: All
right, title and interest of Debtor in, to and in respect of goods, including,
but not limited to:
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(A) All
Inventory, wherever located, of whatever kind, nature or description, including
all raw materials, work-in-process, finished goods, and materials to be used
or
consumed in Debtor's business; finished goods, timber cut or to be cut, oil,
gas, hydrocarbons, and minerals extracted or to be extracted, and all names
or
marks affixed to or to be affixed thereto for purposes of selling same by the
seller, manufacturer, lessor or licensor thereof and all Inventory returned
to
Debtor by its customers or repossessed by Debtor and all of Debtor's right,
title and interest in and to the foregoing (including all of Debtor's rights
as
a seller of goods);
(B) All
Equipment and fixtures, wherever located, including, without limitation, all
machinery, furniture and fixtures, and any and all additions, substitutions,
replacements (including spare parts), and accessions thereof and thereto
(including, but not limited to Debtor's rights to acquire any of the foregoing,
whether by exercise of a purchase option or otherwise);
(iii) Property: All
right, title and interests of Debtor in, to and in respect of any other personal
property in or upon which Debtor has a security interest, lien or right of
setoff;
(iv) Books
and Records: All books and records relating to any of the above
including, without limitation, all computer programs, printed output and
computer readable data in the possession or control of the Debtor, any computer
service bureau or other third party; and
(v) Products
and Proceeds: All products and Proceeds of the foregoing in
whatever form and wherever located, including, without limitation, all insurance
proceeds and all claims against third parties for loss or destruction of or
damage to any of the foregoing.
(b) All
right, title and interest of Debtor in, to and in respect of the
following:
(i) the
shares of stock, partnership interests, member interests or other equity
interests acquired by Debtor of any and all entities (such entities, being
hereinafter referred to collectively as the "Pledged Issuers" and
individually as a "Pledged Issuer"), the certificates representing such
shares, partnership interests, member interests or other interests all options
and other rights, contractual or otherwise, in respect thereof and all
dividends, distributions, cash, instruments, investment property and other
property received, receivable or otherwise distributed in respect of or in
exchange for any or all of such shares, partnership interests, member interests
or other interests;
(ii) all
additional shares of stock, partnership interests, member interests or other
equity interests acquired by Debtor, of any Pledged Issuer, the certificates
representing such additional shares, all options and other rights, contractual
or otherwise, in respect thereof and all dividends, distributions, cash,
instruments, investment property and other property received, receivable or
otherwise distributed in respect of or in exchange for any or all of such
additional shares, interests or equity; and
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(iii) all
security entitlements of Debtor in, and all Proceeds of, any and all of the
foregoing acquired by Debtor and howsoever its interest therein may arise or
appear (whether by ownership, security interest, lien, claim or
otherwise).
Notwithstanding
the above, the Collateral shall not include any personal property which is
subject to a purchase money mortgage or other purchase money lien or security
interest (including capital leases).
2.3 Specific
Components of Collateral. Without limiting the broad scope of
Section 2.2, Debtor acknowledges that the Collateral includes the
following:
(a) all
accounts receivable of Debtor;
(b) all
customer lists of Debtor, including without limitation the customer lists
attached hereto as Schedule C; and
(c) all
rights of Debtor pursuant to the Stock Purchase and Sale Agreement dated
September 1, 2006 by and among the shareholders of All Staffing, Inc., a
Tennessee corporation ("All Staffing"), and Debtor (including all rights
to ownership of the Shares referenced therein).
3. Covenants
of Debtor.
3.1 Non-Solicitation;
Reasonableness; Referral.
(a) Non-Solicitation. For
a period of five (5) years after the Closing Date, Debtor shall not, and
shall cause its affiliates, directors, officers, employees and agents not to,
either directly or indirectly, as a stockholder, investor, partner, director,
officer, employee, consultant or otherwise, solicit business from any Person
(as
defined in Section 2.1(d)) that is an existing customer, or was a
customer within the prior three (3) years, of Debtor (the
"Customers"), including without limitation those customers identified on
Schedule C. For purposes of this Section 3.1(a),
the "Territory" shall mean the United States and any other place where
Debtor has previously conducted its business.
(b) Reasonableness. Debtor
acknowledges that the duration and geographic scope of the non-solicitation
provisions set forth in Section 3.1(a) are reasonable. In
the event that any court determines that the duration or the geographic scope,
or both, are unreasonable and that such provision is to that extent
unenforceable, the provision shall remain in full force and effect for the
greatest time period and in the greatest area that would not render it
unenforceable. Debtor and Newco intend that this non-solicitation
provision will be deemed to be a series of separate covenants, one for each
and
every county in the Territory.
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(c) Referral. For
a period of five (5) years after the Closing Date, Debtor shall, and shall
cause its affiliates, directors, officers, employees and agents to, refer all
business inquiries from the Customers to Newco or such Person (as defined in
Section 2.1(d)) as Newco may designate in writing to Debtor from time to
time. Debtor and its affiliates shall not independently pursue any
such inquiries without the prior written consent of Newco.
3.2 Maintenance
of Collateral. Between the signing hereof through the Closing,
Debtor (a) shall not transfer any of the Collateral to any Person (as defined
in
Section 2.1(d)) without the prior written consent of Longview and (b)
shall use best commercial efforts to preserve in tact the Collateral and to
preserve the value thereof.
3.3 Legal
Requirements. Debtor shall take all actions necessary to comply
promptly with all legal requirements which may be imposed on Debtor with respect
to the consummation of the transfers contemplated by this Agreement and will
promptly cooperate with and furnish information to such other party or parties
in connection with any such requirements as may be imposed upon such other
party
or parties in connection with the consummation of the transfers contemplated
by
this Agreement. Debtor shall take all necessary actions to obtain
(and to cooperate with such other party or parties) any consent, authorization,
order or approval of, or any exemption by, any governmental or regulatory
authority, or other third party, required to be obtained or made by such party
or parties in connection with this Agreement.
3.4 Proprietary
Information. From and after the Closing Date, Debtor shall hold
in confidence, and shall cause its affiliates, directors, officers, employees
and agents to hold in confidence, all knowledge, information and documents
of a
confidential nature or not generally known to the public with respect to the
Collateral (including, but not limited to, customer lists, financial
information, intellectual property rights, technical information or
data).
4. No
Liabilities Assumed. Notwithstanding anything contained herein,
Secured Creditors and Newco shall not assume or become responsible for, and
Debtor shall retain and remain solely liable for and obligated to discharge
and
indemnify and hold Secured Creditors and Newco harmless for, any and all
liabilities, indebtedness, guarantees or obligations of any kind, character
or
description (whether known or unknown, whether absolute or contingent, whether
disputed or undisputed, whether liquidated or unliquidated, whether accrued
or
unaccrued, whether secured or unsecured, whether joint or several, whether
due
or to become due, whether vested or unvested, and whether claims with respect
thereto are asserted before or after the Closing) of Debtor (collectively,
the
"Debtor Liabilities"), including without limitation the
following:
(a) all
liabilities related to or arising in connection with the activities of Debtor
or
its business or otherwise;
(b) all
liabilities and obligations of Debtor under this Agreement and instruments
of
conveyance contemplated by this Agreement;
(c) all
federal, state and local taxes, and any charges, penalties, interest, fees,
imposts, duties or other assessments with respect thereto ("Tax" or
collectively "Taxes") arising out of the operation of Debtor's business
or relating to the Collateral, including income, gross receipts, excise,
employment, sales, use, transfer, license, payroll, franchise, severance, stamp,
occupation, environmental, customs, duties, tariffs, ad valorem, value added
or
other fees or taxes, and also including all liabilities and obligations for
Taxes arising in connection with the completion of the transfers contemplated
by
this Agreement;
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(d) all
liabilities and obligations under any agreement, contract, lease or license
to
which any Debtor is a party;
(e) all
liabilities ascribed to Secured Creditors or Newco by operation of successor
liability provisions of applicable laws;
(f) all
liabilities and obligations pursuant to any law, rule or regulation, any
judgment, decree or order of any governmental entity, or any
permit;
(g) all
liabilities arising out of any claim, suit, action, arbitration, proceeding,
investigation or other similar matter, whether based on negligence, gross
negligence, intentional misconduct, fraud, breach of warranty, breach of
contract, strict liability, enterprise liability or otherwise, (whether now
pending or hereafter initiated);
(h) all
liabilities to or in respect of any former or existing security holder, officer,
director, employee, consultant, contractor, customer, supplier, joint venturer,
partner or agent, whether under any plan, policy, agreement (written, oral,
express or implied), arrangement, instrument, law, rule, regulation, order,
charter provision or otherwise, including but not limited to any salaries,
accrued vacation time, personal time and sick leave payable, bonuses and
employee severance obligations; and
(i) any
liability under any environmental law.
5. The
Closing.
5.1 Time;
Place; Location. The closing of the transfers contemplated by
this Agreement (the "Closing") shall take place at the offices of Xxxxxx,
Xxxx & Xxxxxxxx LLP, 0000 Xxxxxxxxx, Xxxxxx, Xxxxxxxxxx 00000 at
10:00 a.m. local time on the date hereof; provided that the
transfers contemplated by this Agreement may be reversed in the sole discretion
of Longview following the Closing in the event that, in the sole judgment of
Longview, one or more of the conditions subsequent set forth in Section 6
has occurred; provided, further, that, in the event Longview so
elects to reverse the transfers contemplated by this Agreement, this Agreement
shall be deemed to have been terminated pursuant to Section 9 and the
Closing shall be deemed never to have occurred. The date on which the
Closing occurs shall be referred to herein as the "Closing
Date."
5.2 Transfer
to Newco. At the Closing, Debtor hereby transfers, or agrees to
cause to be transferred, to Newco all of the Collateral (and all of their right,
title and interest thereto), including without limitation the specific assets
identified on Schedule D hereto. Without limiting the
foregoing, Debtor shall cause all tangible Collateral to be delivered, at the
expense of Debtor, to such place or places and in such manner as shall be
designated by Longview or Newco in their complete discretion at or subsequent
to
the Closing. [Note to Debtor: Subject to further review and
revision based upon contents of Schedule
D.]
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6. Conditions
Subsequent.
6.1 Conditions
Subsequent to Obligations of Secured Creditors and Newco. The
transfers contemplated by this Agreement may be reversed by Longview in
accordance with Section 5.1 within the one-hundred-eighty (180) calendar
days following the Closing Date in the event that, in the sole judgment of
Longview, one or more of the following conditions subsequent has occurred
following the Closing:
(a) Debtor
has not performed and complied with all obligations, covenants and conditions
herein required to be performed or complied with by Debtor.
(b) Debtor
has not obtained all authorizations, consents, orders and approvals of all
governmental entities and officials and all third party consents that are
necessary or desirable for the consummation of the transfers contemplated by
this Agreement.
(c) Longview
is not satisfied, in its sole and complete discretion, that the Closing is
advisable to Secured Creditors and Newco.
(d) Longview
or Newco has not obtained agreements, waivers and/or consents from All Staffing
and/or the prior shareholders of All Staffing that Longview and/or Newco deems
necessary in connection with the transfers contemplated by this Agreement in
their absolute discretion, in forms acceptable to Longview and Newco in their
absolute discretion.
(e) The
requirements relating to consent of the Internal Revenue Service and notice
of a
non-judicial sale of property pursuant to Section 7425(c) of the Internal
Revenue Code of 1986, as amended, and Internal Revenue Service Publication
786
have not been satisfied, in the sole determination of Longview.
(f) Secured
Creditors and Newco are not satisfied in their absolute discretion that all
applicable notices to be provided by Secured Creditors or Newco under the NY-UCC
and other applicable law have been provided.
6.2 Conditions
to Obligations of Debtor. The obligations of Debtor to complete
the transfers contemplated by this Agreement are not subject to any conditions
of any kind.
7. Further
Assurances. At any time and from time to time after the Closing
Date, at the request of Longview or Newco, Debtor shall execute and deliver
such
other instruments of transfer, conveyance or assignment and take such action
as
Longview or Newco may reasonably request in order to transfer, convey and assign
to Newco and to confirm Newco's rights to, title in and ownership of the
Collateral and to place Newco in actual possession and operating control
thereof.
8. Indemnification
for Benefit of Secured Creditors and Newco. Debtor shall
indemnify, and shall cause its affiliates to jointly and severally indemnify,
Secured Creditors and Newco and their affiliates in respect of, and hold Secured
Creditors and Newco and their affiliates harmless against, any and all debts,
obligations and other liabilities (whether absolute, accrued, contingent, fixed
or otherwise, or whether known or unknown, or due or to become due or
otherwise), monetary damages, fines, fees, penalties, interest obligations,
deficiencies, diminutions in value of assets, losses and expenses (including
amounts paid in settlement, court costs, costs of investigators, reasonable
fees
and expenses of attorneys, accountants, financial advisors and other experts,
and other expenses of litigation) ("Damages") incurred or suffered by
Secured Creditors, Newco or any of their affiliates resulting from, relating
to,
constituting or arising out of this Agreement, including without limitation
(a)
any failure of Debtor to perform any covenant or agreement of Debtor contained
in this Agreement, (b) any breach of any representation or warranty of Debtor
contained in this Agreement and (c) the Debtor Liabilities.
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9. Termination. This
Agreement may be terminated only by Longview in accordance with Sections
5.1 and 6.1, without any liability of any kind on the part of
Secured Creditors or Newco to Debtor or any other Person (as defined in
Section 2.1(d)). In the event of the termination of this
Agreement pursuant to the foregoing sentence, the obligations of the parties
to
complete the transactions contemplated by this Agreement shall expire and none
of the parties shall have any further obligations under this Agreement, except
as provided in Sections 8 and 11.6. For the avoidance
of doubt and without limiting the foregoing, should this Agreement be terminated
by Longview, Section 2.1(c), Section 2.2 and any other provision
of this Agreement purporting to discharge any obligation of Debtor or Guarantors
shall be void and of no force or effect whatsoever. Debtor may not
terminate this Agreement for any reason.
10. Collateral
Agent Consent, Covenants and Waiver. Collateral Agent
hereby
(i)
consents to the disposition of the Collateral contemplated by this Agreement,
including without limitation for purposes of Section 10 of the Credit Agreement
and hereby waives any notice requirements in connection therewith under the
Security Agreement; (ii) hereby transfers its rights pursuant to the Security
Agreement to Secured Creditors to the extent necessary to effect the transfers
contemplated by this Agreement; (iii) consents to the transfer to Newco
described in paragraph 6 of the Recitals and Acknowledgements of this Agreement;
and
(iv)
covenants to take all other commercially reasonable actions necessary to effect
the transfers contemplated by this Agreement. Collateral Agent hereby
waives the requirement set forth in Section 11(g) of that certain Collateral
Agent Agreement dated as of February 13, 2006 among Collateral Agent and Secured
Creditors, which provides for Secured Creditors to pay to Collateral Agent
the
sum of $10,000 to apply against hourly fees for services rendered pursuant
to
such agreement, in the Event of Default (as defined therein). Secured
Creditors hereby instruct Collateral Agent to enter into this Agreement and
all
other agreements deemed necessary by Longview to effect the transfers
contemplated by this Agreement.
11. Miscellaneous.
11.1 Secured
Creditors acknowledge and agree that the transfers contemplated by this
Agreement have been agreed to by each of Secured Creditors, and, to the extent
inconsistent with the terms of this Agreement, Secured Creditors hereby waive
any requirements relating to pro rata distribution contained in the
Security Agreement, including such requirement contained in Section 10.3
thereof.
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11.2 This
Agreement and the other documents referred to herein contain the entire
agreement among the parties with respect to the subject matter hereof, and
no
representation, undertaking, promise or condition concerning the subject matter
hereof shall be binding upon the parties unless clearly expressed in this
Agreement. No statement or writing subsequent to the date hereof
which purports to modify or add to the terms or conditions hereof shall be
binding unless contained in a writing which makes specific reference to this
Agreement and which is signed by the parties hereto to be charged with the
terms
thereof.
11.3 No
course of dealing among the parties hereto or failure or delay on the part
of
Secured Creditors or Newco in exercising any rights or remedies hereunder shall
operate as a waiver of any rights or remedies of Secured Creditors or Newco
under this Agreement or any other agreement. No single or partial
exercise of any rights or remedies hereunder by Secured Creditors or Newco
shall
operate as a waiver or shall preclude the exercise of any other rights or
remedies of Secured Creditors or Newco hereunder.
11.4 Neither
this Agreement nor any of the rights, interests or obligations hereunder may
be
assigned by Debtor without the prior written consent of Longview or
Newco. A change in control of Debtor or a transfer of all or
substantially all of Debtor's assets shall constitute an assignment for such
purposes. Secured Creditors and Newco may assign this Agreement at
any time with the consent of Longview.
11.5 The
provisions of this Agreement shall inure to the benefit of and be binding upon
the parties and their respective permitted successors and
assigns. This Agreement is solely for the benefit of the parties
hereto and their permitted successors and assigns. No other Person
(as defined in Section 2.1(d)) shall have any rights, benefits or
remedies under or because of the existence of this Agreement.
11.6 The
acknowledgements, agreements, representations and warranties of Debtor contained
in this Agreement shall survive the expiration or other termination of this
Agreement.
11.7 If
any term or provision of this Agreement or the application thereof to any party
or circumstance shall be held to be invalid, illegal or unenforceable in any
respect by a court of competent jurisdiction, the validity, legality and
enforceability of the remaining terms and provisions of this Agreement shall
not
in any way be affected or impaired thereby, and the affected term or provision
shall be modified to the minimum extent permitted by law so as to achieve most
fully the intention of this Agreement.
11.8 This
Agreement is governed by and is to be construed and enforced as though made
and
to be fully performed in the State of New York, without regard to the conflicts
of law rules. Any and all disputes are to be resolved in the courts
of the state of New York located in New York County.
11.9 Debtor
acknowledges and agree that irreparable damage would occur in the event that
any
of its obligations hereunder are not performed or satisfied in accordance with
the specific terms applicable thereto. Accordingly, it is agreed that
Secured Creditors or Newco shall be entitled to seek an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any state or federal court, in
addition to any other remedy to which they are entitled at law or in
equity.
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11.10 This
Agreement is executed by Debtor voluntarily and not pursuant to any
duress. Furthermore, it is executed in mutual good faith among the
parties and is not given or intended to hinder, delay, or defraud any creditor,
or to contravene any of the bankruptcy laws of the United States, laws governing
fraudulent conveyances or any other applicable laws. Debtor
represents that all of the transfers made and all of the obligations incurred
pursuant to this Agreement are for fair consideration and for reasonably
equivalent value with respect to valid, existing, secured indebtedness due
to
Newco, as the assignee of Secured Creditors.
11.11 The
parties agree to sign, deliver and file any and all additional documents and
to
take any and all other actions that may reasonably be required or appropriate
for a full and complete consummation of the transactions and matters covered
by
this Agreement.
11.12 THE
PARTIES HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY PROCEEDINGS INITIATED
PURSUANT TO EITHER THIS AGREEMENT OR ANY DOCUMENT OR AGREEMENT REFERRED TO
HEREIN.
11.13 This
Agreement may be signed in any number of counterparts with the same effect
as if
the signatures thereto and hereto were upon the same
instrument. Facsimile copies of signatures shall be binding as
original signatures.
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IN
WITNESS WHEREOF, the Debtor, the Collateral Agent, the Secured Creditors and
Newco have caused this Agreement to be executed in their respective names and
by
their duly authorized officers, as of the date first written above.
"DEBTOR"
By:
Name:
Title:
"COLLATERAL
AGENT"
XXXXXXX
X. XXXXXXX
"SECURED
CREDITORS"
LONGVIEW
FUND, L.P.
By:
Name:
Title:
LONGVIEW
EQUITY FUND, L.P.
By:
Name:
Title:
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LONGVIEW
INTERNATIONAL EQUITY FUND, L.P.
By:
Name:
Title:
ALPHA
CAPITAL AKTIENGESELLSCHAFT
By:
Name:
Title:
BALMORE,
S.A.
By:
Name:
Title:
XXXXXX
XXXXXXX
"NEWCO"
FENIX
CAPITAL, LLC
By:
Name:
Title:
13
SCHEDULE
A
SECURED
NOTES
|
SECURED
CREDITOR
|
APPROXIMATE
PRINCIPAL
AMOUNT
OF SECURED CONVERTIBLE NOTE ISSUED ON
FEBRUARY
13, 2006
|
|
LONGVIEW
FUND, LP
000
Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx
Xxxxxxxxx, XX 00000
Fax:
(000) 000-0000
|
$3,500,000.00
|
|
LONGVIEW
FUND, LP
000
Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx
Xxxxxxxxx, XX 00000
Fax:
(000) 000-0000
|
$261,707.00
|
|
LONGVIEW
EQUITY FUND, LP
000
Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx
Xxxxxxxxx, XX 00000
Fax:
(000) 000-0000
|
$1,005,000.00
|
|
LONGVIEW
INTERNATIONAL EQUITY FUND, LP
000
Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx
Xxxxxxxxx, XX 00000
Fax:
(000) 000-0000
|
$495,000.00
|
|
ALPHA
CAPITAL XXXXXXXXXXXXXXXXXX
Xxxxxxxxx
0
0000
Xxxxxxxxxxx
Xxxxx,
Lichtenstein
Fax:
000-00-00000000
|
$492,426.00
|
|
BALMORE,
S.A.
X.X.
Xxx 000, Xxxx Xxxx
Xxxxxxx,
BVI
Fax:
|
$1,380,960.00
|
|
XXXXXX
XXXXXXX
c/o
X. Xxxxxx Associates Inc.
000
Xxxx 00xx
Xxxxxx
Xxx
Xxxx, XX 00000
Fax:
(000) 000-0000
|
$300,000.00
|
|
TOTAL
|
$7,435,093.00
|
14
