VOLUNTARY SURRENDER AGREEMENT
Exhibit
10.2
(All
Assets)
THIS VOLUNTARY SURRENDER AGREEMENT (the
“Agreement”) is dated as of August ___, 2009 (the “Effective Date”) and made by
and among:
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(1)
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(2)
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M&I Business Credit,
LLC, a Minnesota limited liability company, (hereinafter, together
with its participants, successors and assigns, the
“Creditor”).
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R
E C I T A L S:
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A.
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Capitalized
terms used but not otherwise defined herein shall have the meanings set
forth in the Credit Agreement (as defined
herein).
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B.
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Debtors
and Creditor entered into a Credit and Security Agreement dated November
8, 2007 (as amended or supplemented, the “Credit Agreement”), whereby the
Creditor made loans to Debtors and Debtors executed and delivered for the
Creditor’s benefit certain Security
Documents.
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C.
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Pursuant
to Section 3(a) of the Credit Agreement, the Creditor was granted Security
Interests in all Collateral, including all proceeds and products thereof
and, including without limitation, the following: Debtors’ inventory,
documents of title, accounts, equipment and fixtures, investment property,
general intangibles, and other miscellaneous collateral and all other
assets, whether now owned or hereinafter
acquired.
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D.
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Creditor
has perfected its Security Interests in the Collateral by, among other
things, filing financing statements with the Secretary of State of
Minnesota. Said financing statements represent a first secured
interest in the Collateral.
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E.
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As
of August ____, 2009, the Debtors’ Obligations to Creditor equal the
principal sum of $_____________, plus accrued interest of $___________
(which sums, together with accrued and unpaid fees and expenses of
Creditor, together with all other sums now or hereafter owing to Creditor
under the Credit Agreement and related loan documents shall be referred to
herein as the “Obligations”).
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F.
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Debtors
are in default under the Credit Agreement and unable to cure such defaults
and/or repay its Obligations to the
Creditor.
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G.
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Creditor
has the right to accelerate and demand immediate payment of all amounts
owing under the Credit Agreement.
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H.
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Pursuant
to the Credit Agreement, Creditor has the right to take possession of and
to foreclose upon the Collateral if a defaults
exists.
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I.
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Creditor
has made demand that Debtors marshal and turn over the
Collateral.
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J.
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Debtors
have offered the Collateral for sale for a reasonable time period, have
solicited offers to purchase the Collateral, have received various offers
to purchase the Collateral or portions thereof and have engaged Xxxxx
Dalvey of Mount Yale Capital Group to assist Debtors in identifying and
soliciting prospective purchasers for the Collateral. As
of the date hereof, the Debtors have failed to close on any such
sales.
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K.
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Debtors
have further received an offer (the “Stock Purchase Transaction”) from
Swordfish Financial, Inc. (“Swordfish Financial”) to purchase
approximately 10,987,417 shares of common stock of NVI in exchange for a
promissory note payable to NVI in the amount of $3,500,000 (the “Swordfish
Note”).
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L.
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Creditor
desires that Debtors marshal and turn over possession of all Collateral to
Creditor and Debtors have requested that Creditor provide certain
accommodations in connection with the Stock Purchase Transaction, each
pursuant and subject to the terms of this
Agreement.
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NOW, THEREFORE, in
consideration of the foregoing, and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties agree
as follows:
A
G R E E M E N T:
1. Affirmation of
Facts. Debtors agree that: (a) each of the recitals set forth
above are true and correct statements of fact; (b) all agreements and other
documents evidencing and governing the Obligations, including without
limitation, the Credit Agreement, together with all other related Security
Documents and documents executed by or for the benefit of Creditor are in full
force and effect and binding on Debtors; (c) Debtors are now in default under
the aforementioned agreements and other documents governing the Obligations and
acknowledge and agree that the Creditor has duly demanded and accelerated
payment of all Obligations, each of which are currently due and payable in full
to Creditor; and (d) Creditor has the immediate right to exercise all rights and
remedies under the Credit Agreement and the other Security Documents, including
without limitation, any foreclosure rights and remedies, without further notice
to or consent of any party.
2. Demand/Turn
Over. Creditor hereby makes demand for marshalling and turn
over of the Collateral (including all computers, software, books and records
(inclusive of all electronic storage media and passwords as needed to access any
such information) of Debtors related thereto and possession of the Debtors’
premises located at 0000 Xxxxxxxx Xxxxxxx Xxxx, Xxxxxxxx, XX (the “Premises”)
and Debtor agrees that it will tender to Creditor possession of Premises and all
of Collateral on the Effective Date.
3. Delivery and
Cooperation. On and after the Effective Date, Debtors shall
cooperate in the surrender of Collateral to Creditor (wherever located) for sale
or other foreclosure by Creditor of its security interests and the sale of
Collateral and the collection of accounts receivable, including, without
limitation, forwarding all collections and monies to the
Creditor. Debtors acknowledge and agree that the existing collateral
account arrangements shall (including the collateral account maintained with
Deerwood Bank for the benefit of Creditor) shall remain in effect; provided
however that if Lender shall request that any accounts receivable (or other
Collateral proceeds) be remitted directly to Creditor, then Debtors shall
provide such notices and take such actions as Creditor may request to effectuate
the same. Debtors shall further cooperate and assist in all actions
necessary to deliver full possession and access to the Premises to Creditor,
including obtaining any consent or approval of Debtors’ landlord thereto and
providing all necessary keys and security passcodes.
4. Stock Purchase
Transaction. In connection with Debtors’ proposed Stock
Purchase Transaction, Debtors and Creditor agree as follows:
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(a)
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Debtors
shall not close or consummate such transactions until after the Effective
Date of this Agreement and after the turnover over and deliver of
possession of the Collateral and Premises to
Creditor;
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(b)
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________________
(“Subordinated Creditor”) intends to provide a $200,000 loan to Debtors
(the “Subordinated Creditor Loan”) to fund, among other things, certain
obligations and expenses of the Debtors in consummating the Stock Sale
Transaction, which loan is to be secured by a subordinate security
interest in all personal property of Debtors. Debtors intend to
deposit the proceeds of such Subordinated Creditor Loan in a depository
account with ___________ Bank (the “Subordinate Loan
Account”). Creditor will not object to the foregoing and will
not seek to attach or levy against the Subordinate Loan Account or the
funds deposited therein provided that Debtors shall cause the Subordinated
Creditor to execute and deliver a Subordination Agreement in favor of
Creditor pursuant to which the Subordinated Creditor shall subordinate the
repayment of the Subordinated Creditor Loan and its security interest in
the Collateral to the repayment of the Obligations owing to Creditor and
Creditor’s security interest in such
assets;
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(c)
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Debtors
shall and shall cause Swordfish Financial to deliver the original
Swordfish Note to Creditor and to execute a written acknowledgment and
agreement in favor of Creditor pursuant to which they shall acknowledge
and agree that until Creditor shall confirm in writing that the
Obligations have been paid in full: (i) Creditor shall holds and retain a
security interest in the Swordfish Note, (ii) all payments due under such
Note shall be wired directly to Creditor; and (iii) the obligations of
Swordfish thereunder may not be waived, modified, or terminated except
with the prior written consent of Creditor;
and
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(d)
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Notwithstanding
the turn over of the Collateral, Creditor agrees that it will permit
Debtors to continue to seek orders for the purchase of Debtors’ “Cass
Creek” and “Hunting” inventory after the Effective Date subject to the
following terms and conditions:
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(i)
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Creditor
shall (and shall cause its Consultants (as hereinafter defined) to)
communicate and cooperate with Debtors in obtaining such sales provided
that Creditor shall have the right to final approval of the same, which
sales shall, among other things, be to credit-worthy parties, unaffiliated
with Debtors (and/or Swordfish), and on standard and customary
terms;
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(ii)
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With
respect to any approved sale, Creditor shall (and shall cause its
Consultants to) cooperate and assist in the release and delivery of the
applicable Inventory to the agreed upon
buyer;
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(iii)
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All
accounts receivable and collections resulting from such sales shall be
payable directly to Creditor in accordance with such remittance/collection
procedures as Creditor may request;
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(iv)
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In
consideration of the foregoing, Debtors agree to pay Creditor, a monthly
liquidation charge in the amount of $_____________ (the “Liquidation
Charge”) commencing on the date hereof and continuing on the same date of
each month hereafter until the Obligations have been paid in
full. If Debtors fail to make such payment to Creditor, then
Creditor shall have the right to charge Debtors a Liquidation Fee of
$___________; and
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(v)
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Debtors
rights (and Creditor’s obligations) under this Section 4(d) are terminable
by Creditor at any time in Creditor’s sole and absolute discretion, for
any reason or no reason at all, and with or without notice to
Debtors.
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(e)
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Reserved.
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5. Engagement of
Consultants. Creditor intends to engage each of [Xxx Xxxx], ________________
and ______________________ (collectively, the “Consultants”) as agents and
represents of Creditor to assist in the liquidation, collection and safeguarding
of the Collateral. After the Effective Date, the Consultants will no
longer be employees, agents or representatives of Debtors and will solely be
agents and representatives of Creditor. Without limiting the terms of
Section 7 below, Creditor is not assuming any payroll, benefit or other
employment related obligations due by Debtors to Consultants.
6. Access to
Records/Premises. Creditor and Debtors agree that so long as
Creditor has possession of the Premises and/or the applicable records, Creditor
shall from time to time grant Debtors supervised access to the Premises, upon
reasonable advance written notice and normal business hours, to retrieve copies
of any business or accounting records maintained at the Premises, including any
computers or other electronic records located thereon, and/or in the
alternative, to cooperate in the provision of such records to Debtors
electronically.
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7. No Assumption of
Liabilities. Notwithstanding anything to the contrary contained herein,
Creditor is not assuming any liabilities or obligations of Debtors to any other
person, entity or governmental authority, including without limitation, with
respect to the Collateral or the Premises.
8. Creditor’s Reservation of
Rights. Debtors acknowledge that the Creditor is not accepting
the Collateral under this Agreement in full or partial satisfaction of the
Debtors’ Obligations to Creditor. Creditor is not amending or waiving
and hereby reserves all of its rights and remedies under the Uniform Commercial
Code, the Credit Agreement, Security Documents, and any other documents between
Creditor and each Debtor, including without limitation Creditor’s right to
pursue a deficiency against Debtors.
9. Waiver of
Sale Rights. On the Effective Date,
Debtors renounce and waive: (a) all rights to notification of, or right to
object to, any sale or retention of the Collateral under any applicable law,
including without limitation, Sections 9-611 and 9-620 of the Uniform Commercial
Code as adopted in the State of Minnesota; and (b) any right to redeem the
Collateral subject to security interests in favor of Creditor pursuant to
Section 9-623 of the Uniform Commercial Code and Section 336.9-623 of the
Minnesota Statutes.
10. No
Defense. Debtors hereby acknowledge and agree that no events,
conditions or circumstances have arisen or exist as of the date hereof which
would give Debtors the right to assert a defense, counterclaim and/or set off to
any claim by Creditor for the Obligations or any documents securing the
Obligations, including without limitation, the Credit Agreement and the Security
Documents, and to the extent any such defense, right of setoff or counterclaim
against Creditor shall exist, whether known or unknown, each of the same are
hereby absolutely released and forever waived by the Debtors.
11. Representations and
Warranties. The Debtors hereby represent and warrant to
Creditor as follows:
(a) Each
Debtor has all requisite power and authority to execute this and to perform all
of its obligations hereunder, and this Agreement has been duly executed and
delivered by and constitutes the legal, valid and binding obligation of each
Debtor, enforceable in accordance with its terms.
(b) The
execution, delivery and performance by each Debtor of this Agreement have been
duly authorized by all necessary corporate and do not (i) require any
authorization, consent or approval by any governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, or (ii) violate
any provision of any law, rule or regulation or of any order, writ, injunction
or decree presently in effect, having applicability to each Debtor, or the
articles of incorporation or by-laws of each Debtor.
12. Relationship of the
Parties. The relationship of the parties to this Agreement is
that of debtor and creditor. In no event shall Debtors and Creditor
be deemed to be partners or joint venturers nor is any agency relationship
created hereunder.
13. Release. Debtors
hereby release Creditor and all of its officers, directors, agents, employees,
legal counsel and other representatives from any and all claims, demands, causes
of action, liability, damage, loss, costs and expenses which it has paid,
incurred or sustained, or believes it has paid, incurred or sustained, known or
unknown, absolute or contingent, liquidated or unliquidated, as a result of or
related to:
(a) The
transactions evidenced by or related to the agreements and other documents
governing the Obligations, including without limitation, the Credit Agreement
and/or Security Documents;
(b) Any
actions or omissions of Creditor or any of its officers, directors, agents,
employees, legal counsel or other representatives in connection therewith or
related thereto; or
(c) The
extension or denial of credit under the agreements and other documents governing
the Obligations; or
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(d) Any payments
or collateral received by Creditor at anytime.
14. Legal
Counsel. Debtors hereby warrant and represent to Creditor that
they have consulted with and received advice from legal counsel of its choice
with respect to this Agreement and the documents related hereto or has had the
opportunity to consult with legal counsel of its choice and has made its own
decision not to consult legal counsel. Without limiting the
generality of the foregoing, Debtors acknowledge that they have legal and
business options available to it other than the execution and delivery of this
Agreement and the documents related hereto, but have nevertheless decided to
execute and deliver the Agreement and has done so voluntarily without
duress.
15. Miscellaneous.
(a) Time of
Essence. Time is of the essence of this
Agreement.
(b) Waiver;
Amendment. This Agreement can be waived, amended, terminated
or discharged only explicitly in a writing executed by both parties
hereto.
(c) No Waiver of
Rights. Any delay or failure to act shall not preclude the
exercise or enforcement of any rights and remedies available to
Creditor.
(d) Third-Party Beneficiary
Rights. Creditor and Debtors do not intend to create any third
party beneficiary rights hereunder.
(e) Effect of
Agreement. The terms and conditions of the Credit Agreement,
the Security Documents and all other related documents and agreements
(collectively, the “Loan Documents”) shall remain in full force and
effect. All prior oral and written communications, commitments,
alleged commitments, promises, alleged promises, agreements and alleged
agreements by or among Creditor and Debtors are hereby merged into this
Agreement and such Loan Documents, and shall not be enforceable unless expressly
set forth in this Agreement and the Loan Documents.
(f) Binding
Agreement. This Agreement shall be binding upon Debtors and
Creditor, and their successors and assigns and it shall inure to the benefit of
Debtors and Creditor and their successors and assigns.
(g) Jurisdiction and
Venue. DEBTORS HEREBY CONSENT TO THE EXCLUSIVE JURISDICTION OF
ANY STATE OR FEDERAL COURT SITUATED IN HENNEPIN COUNTY, MINNESOTA AND WAIVES ANY
OBJECTION BASED ON FORUM NON CONVENIENS, WITH REGARD TO ANY ACTIONS, CLAIMS,
DISPUTES OR PROCEEDINGS RELATED TO THIS AGREEMENT, THE CREDIT AGREEMENT, THE
LOAN DOCUMENTS, THE COLLATERAL, THE OBLIGATIONS, OR ANY OTHER SECURITY DOCUMENT,
OR ANY TRANSACTIONS ARISING THEREFROM, OR ENFORCEMENT AND/OR INTERPRETATION OF
ANY OF THE FOREGOING. Nothing herein shall affect Creditor’s rights
to serve process in any manner permitted by law, or limit Creditor’s right to
bring proceedings against Debtors in the competent courts of any other
jurisdiction or jurisdictions.
(h) Governing
Law. This Agreement shall be governed by the substantive laws
of the State of Minnesota, without giving effect to conflict of law provisions
contained therein.
(i) Illegality. If
any provision or application of this Agreement is held unlawful or unenforceable
in any respect, such illegality or unenforceability shall not affect other
provisions or applications which can be given effect, and this Agreement shall
be construed as if the unlawful or unenforceable provision or application had
never been contained herein or prescribed hereby.
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(j) Counterparts. This
Agreement may be executed in any number of counterparts and by facsimile
(including electronic communication), each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument.
16. Further
Assurances. Debtors shall execute and deliver to Creditor such
further instruments of transfer, conveyance, assignment and confirmation as
shall be reasonably helpful, necessary, and/or appropriate to effectuate the
terms of this Agreement, including the transfer of the Collateral, regardless of
whether or not such documents are prepared as of the date hereof.
17. Waiver of Trial by
Jury. DEBTORS
HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING
OUT OF THIS AGREEMENT, THE CREDIT AGREEMENT, THE OTHER LOAN DOCUMENTS, THE
COLLATERAL, THE OBLIGATIONS OR ANY OTHER SECURITY DOCUMENT OR TRANSACTIONS
BETWEEN DEBTORS AND CREDITOR.
IN WITNESS WHEREOF, the
undersigned have executed this Agreement as of the date first above
written.
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By:
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/s/ Xxxxxxx X. Xxxxxx
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Its
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President – Chief Executive
Officer
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NATURE
VISION OPERATING, INC.
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By
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/s/Xxxxxxx X. Xxxxxx
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Its
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President – Chief Executive
Officer
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M&I
BUSINESS CREDIT, LLC
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By:
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Its:
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