ASSIGNMENT OF NOTE, LOAN DOCUMENTS AND SECURITY INTERESTS
This ASSIGNMENT OF NOTE, LOAN DOCUMENTS
AND SECURITY INTERESTS (this “Assignment
Agreement”), dated effective June 30, 2010, is made by STILLWATER
NATIONAL BANK AND TRUST COMPANY (the “Assignor”)
in favor of ▇▇▇▇ INVESTMENTS I, LLC and D. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ (collectively, the
“Assignee”).
RECITALS:
A. Assignor has previously
extended credit to HEMIWEDGE INDUSTRIES, INC. (formerly
called ▇▇▇▇▇▇▇ Industries, Inc.), a Delaware corporation (“Industries”), ▇▇▇▇▇▇▇ MACHINE WORKS, INC., a
Texas corporation (“Machine”), and HEMIWEDGE VALVE
CORPORATION, a Texas corporation (“Hemiwedge”) (Industries, Machine and Hemiwedge
(collectively, the “Borrowers”) which is currently
evidenced by that certain Amended and Restated Promissory Note (Term Note) in
the original principal face amount of $751,000.00 dated September 30, 2008 (the
“Note”).
B. A
Loan Agreement and additional documents have been signed by the Borrowers and
other various parties as guarantors (“Guarantors”)
in favor of the Assignor to evidence and secure the indebtedness now evidenced
by the Note and which are otherwise executed in connection with or related to
the indebtedness now evidenced by the Note, including but not limited to loan
agreements, guaranty agreements, security agreements, stock pledge agreements,
financing statements and certain amendments thereto as described in Appendix A
to this Assignment Agreement (the “SNB Loan
Documents”).
C. Assignor
wishes to assign and transfer to Assignee, all of Assignor’s benefits, rights,
title, interest, liens and security interests in and to the Notes and all of the
SNB Loan Documents.
D. On
even date herewith, the Borrowers and certain of the Guarantors executed a
Consent and Acknowledgement of Assignment and Release consenting to the
assignment of the SNB Loan Documents and Assigned Rights (defined below) by
Assignor to Assignee.
NOW
THEREFORE, in consideration of the mutual promises, covenants and conditions
hereinafter set forth and for other good and valuable consideration, the receipt
and sufficiency of which are hereby expressly acknowledged, the parties hereto
hereby agree as follows:
Page 1 of 12
AGREEMENT:
Assignment. In
consideration of the payment made contemporaneously herewith by the Assignee to
the Assignor of the Purchase Price (as defined below), Assignor hereby assigns
and transfers to Assignee, for the equal and ratable benefit of each Assignee,
all of Assignor’s right, title and interest in and to the Note and the SNB Loan
Documents and all debts, obligations, liens, security interests and contract
rights evidenced thereby and any and all claims and rights of action the
Assignor has or may have against the Borrowers with respect to the Note and SNB
Loan Documents (collectively, the “Assigned
Rights”), WITHOUT RECOURSE, AND IN AN “AS IS” CONDITION AND BASIS AND
WITHOUT REPRESENTATIONS AND WARRANTIES, EXPRESS OR IMPLIED, OF ANY TYPE, KIND OR
CHARACTER, SAVE AND EXCEPT THE EXPRESS REPRESENTATIONS OR WARRANTIES SET FORTH
IN PARAGRAPH 5 OF THIS ASSIGNMENT AGREEMENT.
1. Purchase
Price. Contemporaneously herewith, the Assignee has paid the
Assignor the purchase price for the Assigned Rights in an amount equal to
$575,000.00 in current funds by wire transfer (the “Purchase
Price”).
2. Assignments of Specific
Documents. Contemporaneously herewith on receipt of the
Purchase Price, Assignor will (a) execute and deliver to Assignee this
Assignment Agreement and originals of all SNB Loan Documents listed and
described in Appendix A hereto (b) record or deliver to the Assignee UCC-3
Amendments reflecting an assignment of all of the Assignor’s filed financing
statements covering the collateral described in the SNB Loan Documents, (c)
execute and deliver such further instruments as may be necessary to assign the
Note and all of the SNB Loan Documents to the Assignee, (d) deliver all
collateral in the possession of Assignor, including certain stock certificates,
and (e) endorse the Note as follows and deliver the same to the
Assignee:
“For
value received, pay to the order of ▇▇▇▇ INVESTMENTS I, LLC and D.▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, for their equal and ratable benefit, without recourse and without
representation or warranty of any kind except as provided in that certain
Assignment of Note, Loan Documents and Security Interests of even date
herewith.”
Page 2 of 12
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STILLWATER
NATIONAL BANK AND TRUST COMPANY
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By:
_________________________________
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Name:
_________________________________
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Title:
_________________________________
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3. Representations and
Warranties. Assignor represents and warrants to Assignee as
follows:
(a) Authority to
Execute. Assignor is duly authorized and has full corporate
and Bank power, authority and legal capacity to execute, deliver and perform its
obligations under this Assignment Agreement and to sell the Assigned Rights to
Assignee as contemplated herein.
(b) Owner and
Holder. Assignor is the owner and holder of and has good title
to the Note, SNB Loan Documents and all other Assigned Rights, and warrants
title to said Assigned Rights in and to the Assignee and its successors, heirs
and assigns.
(c) Balance as of June 30,
2010. The outstanding principal balance on the Note as of June
30, 2010, is $673,125.00. Interest accrued but unpaid through June
30, 2010 is $12,219.70.
(d) No
Actions. Although the maturity date on the Note has passed,
Assignor has not instituted, and will not institute or threaten to take, any
legal action or enforcement claim or any other action
against the Borrowers on, or with respect to, the SNB Loan Documents or the
Assigned Rights, the Note or against the Collateral secured by the SNB Loan
Documents either by written notice to the Borrowers or by any other action or
proceeding.
Page 3 of 12
(e) No Liens or
Encumbrances. The Assigned Rights are not subject to any
liens, encumbrances or security interests created by the Assignor in favor of
any person or entity and Assignor has not previously transferred, assigned or
hypothecated its interest in the Assigned Rights to any other person or
entity.
(f) No Prior Approval
Required. Assignor’s execution, delivery and performance of
this Assignment Agreement do not require prior approval of any other lender or
person including, without limitation, any state or federal governmental
authority having jurisdiction over Assignor.
(g) Absence of
Claims/Lawsuits. There are no demands, claims, lawsuits,
actions, arbitrations or disputes pending or threatened by Borrowers or any of
them or any Guarantor under the SNB Loan Documents or any of their officers,
directors, members or shareholders against Assignor in connection with the Note,
the SNB Loan Documents or Assigned Rights.
All
parties hereto acknowledge that Assignor has made no representations or
warranties to Assignee except as expressly set forth in this Paragraph 5 of this
Assignment Agreement.
4. Representations, Warranties
and Agreement of Assignee. Assignee hereby agrees as follows
and represents and warrants to Assignor that the following statements are true
and correct, as of the date of this Assignment Agreement:
(a) Authority to
Execute. Assignee has full power, authority and legal capacity
to execute, deliver and perform its obligations under this Assignment Agreement,
and to purchase the Assigned Rights from Assignor.
(b) Business
Judgment. Assignee has exercised Assignee’s own independent
judgment, as determined by Assignee to be necessary and advisable, in making
Assignee’s decision to enter this Assignment Agreement and purchase the Assigned
Rights, that Assignee has reviewed copies of the Note and the SNB Loan Documents
and has been provided an opportunity to ask questions and obtain such
information as Assignee deems necessary to make an informed decision prior to
executing this Assignment Agreement and purchasing the Assigned
Rights.
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(c) Business
Knowledge. Assignee (either alone or with Assignee’s
attorneys, accountants or other advisors) possesses the requisite business and
investment knowledge and experience to evaluate the potential risks and merits
of its purchase of the Assigned Rights.
(d) Own
Account. Assignee has sufficient financial ability and net
worth to bear the economic risk of its investment in the Assigned Rights for an
indefinite period of time and to withstand a total loss of such investment and
Assignee represents that it is purchasing the Assigned Rights for Assignee’s own
account.
(e) Potential
Bankruptcy. Assignee is aware of the precarious financial
condition of Borrower.
7. Disclaimer. EXCEPT
FOR THOSE EXPRESSED IN PARAGRAPH 5 HEREOF, NO WARRANTIES OR REPRESENTATIONS,
EXPRESS OR IMPLIED, HAVE BEEN MADE BY ASSIGNOR OR BY ANYONE ACTING ON ASSIGNOR’S
BEHALF, PARTICULARLY, BUT WITHOUT IN ANY WAY LIMITING THE GENERALITY OF THE
FOREGOING, NO WARRANTIES OR REPRESENTATIONS REGARDING (i) THE COLLECTABILITY OF
THE NOTE, (ii) THE CREDITWORTHINESS OF BORROWERS, (iii) THE VALUE OF ANY
COLLATERAL SECURING PAYMENT OF THE NOTE, (iv) THE ENFORCEABILITY OF THE NOTE AND
COLLATERAL DOCUMENTS SECURING THE NOTE, OR (v) THE CONDITION OF THE UNDERLYING
COLLATERAL INCLUDING BUT NOT LIMITED TO ANY ENVIRONMENTAL MATTER OR CONDITION,
WHETHER LATENT OR PATENT. ALL ASSIGNED RIGHTS SOLD TO ASSIGNEE UNDER
THIS ASSIGNMENT AGREEMENT ARE SOLD AND TRANSFERRED WITHOUT RECOURSE EXCEPT AS
MAYBE OTHERWISE SET FORTH HEREIN.
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8.
Miscellaneous.
(a) Costs and
Expenses. Assignee shall pay the legal fees and expenses
incurred by Assignor in connection with this Assignment Agreement and the
transactions contemplated hereby provided that it is acknowledged that such
legal fees are included in the Purchase Price that has been paid
contemporaneously herewith and nothing further is owed by Assignee to Assignor
in this regard. All recording fees, transfer taxes, documentary
taxes, title charges, or other costs necessitated by the assignment of the
Assigned Rights to Assignee, if any, shall be borne and paid by
Assignee.
(b) Time is of the
Essence. Time is of the essence of this Assignment Agreement
with respect to closing on the date hereof. No extension of time for
closing shall be granted to either party hereunder without the express written
consent of the other party.
(c) Waiver. No
waiver by either party hereto of the other party’s breach of any term, covenant
or condition contained in this Assignment Agreement shall be deemed to be a
waiver of any subsequent breach of the same or any other term, covenant or
condition of this Assignment Agreement.
(d) Severability. If
any term, covenant, condition or provision of this Assignment Agreement is
unlawful, invalid or unenforceable, such illegality, invalidity or
unenforceability shall not affect the remaining provisions of this Assignment
Agreement, which shall remain in full force and effect and shall be binding upon
the parties.
(e) Headings. The
headings of the sections of this Assignment Agreement are inserted for
convenience only and shall not affect the meaning or interpretation of this
Assignment Agreement or any provision thereof.
(f) Governing
Law. The parties hereto agree that this Assignment Agreement
shall be construed, and the rights and obligations of the parties under the
Assignment Agreement shall be determined, in accordance with the laws of the
State of Texas, without regard to its conflicts of law provisions.
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(g) Entire
Agreement. This Assignment Agreement, including any
agreements, attachments, exhibits and schedules referred to herein and attached
hereto, constitutes the entire agreement between the parties hereto pertaining
to the subject matter hereof and supersedes any and all prior agreements,
representations and understanding of the parties, written or oral.
(h) Amendment. This
Assignment Agreement may only be modified, amended or waived by a written
instrument duly executed by authorized representatives of all of the parties
hereto.
(i) Construction. Unless
the context requires otherwise, singular nouns and pronouns used herein shall be
deemed to include the plural, and pronouns of one gender shall be deemed to
include the equivalent pronoun of the other gender.
(j) Counterparts;
Effectiveness. This Assignment Agreement may be executed in
any number of counterparts, each of which shall be deemed an original and all of
which shall constitute one and the same instrument.
(k) Facsimile
Execution. This Assignment Agreement may be executed by
facsimile signature which shall be considered an original in all
respects.
(l) Waiver of Jury
Trial. All parties hereto waive the right to a trial by jury
of any actions brought to enforce, construe, or interpret this Assignment
Agreement.
(m) Notice of
License. On or about October 15, 2008, Hemiwedge and
Tejas Research & Engineering, L.P., a Texas limited partnership("Tejas")
entered into an Intellectual Property Agreement by which Tejas, among other
things, received a license to use certain of Hemiwedge’s intellectual
property. The Assigned Rights are subject to such license and Tejas' (or
any of its assignees') rights thereunder.
[the signatures appear on the
following page]
Page 7 of 12
IN WITNESSWHEREOF, the parties hereto
have caused this Assignment Agreement to be duly executed as of the date written
above.
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STILLWATER
NATIONAL BANK AND TRUST
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COMPANY
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By:
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Name:
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Title:
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(the “Assignor”)
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▇▇▇▇
INVESTMENTS I, LLC
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By:
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Name:
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▇▇▇▇▇▇ ▇▇▇▇
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Title:
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Member
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and
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D.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇,
individually
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(the “Assignee”)
Page 8 of 12
APPENDIX
A
LIST OF
LOAN DOCUMENTS ASSIGNED TO ASSIGNEE
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1.
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Amended and Restated
Promissory Note (Term Note) in the amount of $751,000.00, among
▇▇▇▇▇▇▇ Industries
Inc., ▇▇▇▇▇▇▇
Machine Works Inc., Hemiwedge Valve
Corporation, and Stillwater National Bank and
Trust Company, dated with effect on September 30,
2008.
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2.
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Amended and Restated
Security Agreement among ▇▇▇▇▇▇▇ Industries
Inc., ▇▇▇▇▇▇▇
Machine Works Inc., Hemiwedge Valve
Corporation, and Stillwater National Bank and
Trust Company, dated with effect on September 30,
2008.
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3.
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Assignment
Agreement between ▇▇▇▇▇▇▇ Industries Inc.
and Hemiwedge Valve
Corporation, dated with effect on December 2,
2005.
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4.
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Assignment of Loan
Documents and Security Interests and Assumption Agreement among
Stillwater National Bank
and Trust Company, ▇▇▇▇ Investments I LLC,
and ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, dated with effect on April 23,
2010.
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5.
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Contribution
Agreement between ▇▇▇▇▇▇▇ Industries Inc.
and Hemiwedge Valve
Corporation, dated with effect on December 3,
2005.
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Page 9 of 12
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6.
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Guaranty
Agreement between ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and
Stillwater National Bank
and Trust Company, dated with effect on September 30,
2008.
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7.
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Guaranty
Agreement between ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and
Stillwater National Bank
and Trust Company, dated with effect on September 30,
2008.
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8.
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Loan and Consolidation
Agreement among ▇▇▇▇▇▇▇ Industries
Inc., ▇▇▇▇▇▇▇
Machine Works Inc., Hemiwedge Valve
Corporation, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇▇,
and Stillwater National
Bank and Trust Company, dated with effect on September 30,
2008.
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9.
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Lockbox
Agreement among ▇▇▇▇▇▇▇ Industries
Inc., ▇▇▇▇▇▇▇
Machine Works Inc., Hemiwedge Valve
Corporation, and Stillwater National Bank and
Trust Company, dated with effect on January 25,
2008.
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10.
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Lockbox
Agreement among ▇▇▇▇▇▇▇ Industries
Inc., ▇▇▇▇▇▇▇
Machine Works Inc., and Stillwater National Bank and
Trust Company, dated with effect on October 19,
2005.
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11.
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Lockbox
Agreement among Excalibur Holdings
Inc., Excalibur
Industries Inc., ▇▇▇▇▇▇▇ Machine Works
Inc., and Stillwater National Bank and
Trust Company, dated with effect on September 29,
2004.
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12.
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Security
Agreement between Hemiwedge Valve
Corporation and Stillwater National Bank and
Trust Company, dated with effect on December 3,
2005.
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13.
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Security
Agreement among ▇▇▇▇▇▇▇ Industries
Inc., ▇▇▇▇▇▇▇
Machine Works Inc., Hemiwedge Valve
Corporation, and Stillwater National Bank and
Trust Company, dated with effect on January 25,
2008.
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Page 10 of 12
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14.
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Amended and Restated
Security Agreement among ▇▇▇▇▇▇▇ Industries
Inc., ▇▇▇▇▇▇▇
Machine Works Inc., Hemiwedge Valve
Corporation, and Stillwater National Bank and
Trust Company, dated with effect on June 26,
2008.
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15.
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Security
Agreement among ▇▇▇▇▇▇▇ Machine Works
Inc., Excalibur
Holdings Inc., Excalibur Industries
Inc., and Stillwater National Bank and
Trust Company, dated with effect on March 23,
2004.
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16.
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Security
Agreement among Excalibur Industries
Inc., ▇▇▇▇▇▇▇
Machine Works Inc., and Stillwater National Bank and
Trust Company, dated with effect on March 31,
2005.
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17.
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Security
Agreement between ▇▇▇▇▇▇▇ Machine Works Inc.
and Stillwater
National Bank and Trust Company, dated with effect on May 8,
2002.
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18.
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Security
Agreement among ▇▇▇▇▇▇▇ Industries
Inc., ▇▇▇▇▇▇▇
Machine Works Inc., Hemiwedge Valve
Corporation, and Stillwater National Bank and
Trust Company, dated with effect on May 23,
2008.
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19.
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Security
Agreement among ▇▇▇▇▇▇▇ Industries
Inc., ▇▇▇▇▇▇▇
Machine Works Inc., and Stillwater National Bank and
Trust Company, dated with effect on October 19,
2005.
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20.
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Security Agreement
(Accounts, Contracts, Furniture, Fixtures, Equipment, General Intangibles,
Inventory) among Excalibur Holdings
Inc., Excalibur
Industries Inc., ▇▇▇▇▇▇▇ Machine Works
Inc., and Stillwater National Bank and
Trust Company, dated with effect on September 29,
2004.
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21.
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Stock Pledge
Agreement between Excalibur Holdings Inc.
and Stillwater National
Bank and Trust Company, dated with effect on March 23,
2004.
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22.
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Stock Pledge
Agreement between Excalibur Industries
Inc. and Stillwater National Bank and
Trust Company, dated with effect on March 23,
2004.
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Page 11 of 12
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23.
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All Financing
Statements filed of record by Stillwater National Bank and
Trust Company with respect to the Previous Note in the Uniform
Commercial Code records of Texas and Delaware, and all other jurisdictions
where such Bank may have filed any financing statements in connection with
liens securing the obligations of Borrowers under the Previous
Note.
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Page 12 of 12