EXHIBIT 10.35
COLLATERAL ASSIGNMENT OF CONTRACT RIGHTS
THIS COLLATERAL ASSIGNMENT OF CONTRACT RIGHTS is made and
entered into the 13th day of December, 2004 by DCI USA, INC, a
Delaware corporation (the "Assignor"), in favor of CORNELL
CAPITAL PARTNERS, LP, a Delaware limited partnership
("Assignee").
BACKGROUND
The Company has entered into a Securities Purchase
Agreement dated as of the date hereof (as amended, modified,
restated or supplemented from time to time (the "SPA Agreement")
pursuant to which Assignee provides or will provide certain
financial accommodations to Assignor.
In order to induce Assignee to provide or continue to
provide the financial accommodations described in the SPA
Agreement, Assignor has agreed to assign certain obligations
described herein to Assignee on the terms and conditions set
forth herein.
WITNESSETH:
WHEREAS, pursuant to that certain SPA Agreement with made by
Assignor in favor of Assignee, Assignor has assigned certain
obligations of 000 Xxxxxx Xxxxxx, LLC (the "Xxxxxx LLC") which
are specified on Schedule I hereto, and
WHEREAS, in order to secure the obligations of the Assignor
under the SPA Agreement, the parties hereto desire that Assignee
be granted an assignment and security interest in all rights of
the Assignor as purchaser under those certain agreements of sale
listed on Schedule I hereto (each an "Assigned Contract" and
collectively, the "Assigned Contracts").
NOW, THEREFORE, in consideration of the promises and
covenants contained herein and other good and valuable
consideration, the receipt and sufficiency of which are
acknowledged by the Assignor, and intending to be legally bound,
Assignor assigns to Assignee all of its right, title and interest
in and to the Assigned Contracts to the fullest extent permitted
by law.
1. Except as otherwise expressly provided herein,
capitalized terms used in this Assignment shall have the
respective meanings given to them in the SPA Agreement.
2. Assignor has granted, bargained, sold, assigned,
transferred and set over and by these presents does hereby grant,
bargain, sell, assign, transfer, grant a security interest in and
set over unto Assignee, its respective successors and assigns,
all the rights, interests and privileges which Assignor has or
may have in or under any Assigned Contract, including without
limiting the generality of the foregoing, the present and
continuing right with full power and authority, in its own name,
or in the name of Assignor, or otherwise, but subject to the
provisions and limitations of Section 3 hereof, (i) to make claim
for, enforce, perform, collect and receive any and all rights
under any Assigned Contract, (ii) to do any and all things which
Assignor is or may become entitled to do under any Assigned
Contract, and (iii) to make all waivers and agreements, give all
notices, consents and releases and other instruments and to do
any and all other things whatsoever which Assignor is or may
become entitled to do under any Assigned Contract.
3. The acceptance of this Assignment and the payment or
performance under the Assigned Contracts shall not constitute a
waiver of any rights of Assignee under the terms of the SPA
Agreement, it being understood that, until the occurrence of an a
default under the SPA Agreement or the Convertible Debenture
issued thereunder, and the exercise of Assignee's rights under
Section 4 hereof, Assignor shall have all rights to the Assigned
Contracts and to retain, use and enjoy the same.
4. Assignor, upon the occurrence of a payment default
under the SPA Agreement or the Convertible Debenture issued
thereunder, hereby authorizes Assignee, at Assignee's option, to
enforce and exercise all rights and privileges with respect to
the Assigned Contract(s) that, pursuant to Schedule I, is
associated with the payment which is in default. Assignor does
hereby irrevocably constitute and appoint Assignee, while this
Assignment remains in force and effect and, in each instance, to
the full extent permitted by applicable Law, its true and lawful
attorney in fact, coupled with an interest and with full power of
substitution and revocation, for Assignor and in its name, place
and stead, to demand and enforce compliance with all the terms
and conditions of each Assigned Contract and all benefits accrued
thereunder, whether at law, in equity or otherwise; provided,
however, that Assignee shall not exercise any such power unless
and until a default in the payment associated with that Contract
shall have occurred. Assignor acknowledges and agrees that
(i) the power of attorney herein granted shall in no way be
construed as to benefit Assignor; and (ii) the Assignee herein
granted this power of attorney shall have NO duty to exercise any
powers granted hereunder for the benefit of Assignor. The
Assignee hereby accepts this power of attorney and all powers
granted hereunder for the benefit of the Assignee.
5. Assignee shall not be obligated to perform or discharge
any obligation or duty to be performed or discharged by Assignor
under any Assigned Contract, and Assignor hereby agrees to
indemnify Assignee for, and to save Assignee harmless from, any
and all liability arising under the Assigned Contracts, other
than arising or resulting from Assignee's (or its agents,
employees or contractors) gross negligence or willful misconduct.
6. Assignor agrees that this Assignment and the
designation and directions herein set forth are irrevocable.
7. Neither this Assignment nor any action or inaction on
the part of Assignee shall constitute an assumption on the part
of Assignee of any obligations or duties under any Assigned
Contract.
8. Assignor covenants and warrants that:
(a) it has the power and authority to assign each of the
Assigned Contracts and there have been no prior assignments of
any Assigned Contract;
(b) each Assigned Contract is and shall be a valid
contract, and that there are and shall be, to Assignor's
knowledge, no defaults on the part of any of the parties thereto;
(c) it will not assign, pledge or otherwise encumber any
Assigned Contract without the prior written consent of Assignee;
(d) it will not cancel, terminate or accept any surrender
of any Assigned Contract, or amend or modify the same directly or
indirectly in any respect whatsoever, without having obtained the
prior written consent of the Assignee thereto;
(e) it will perform and observe, or cause to be performed
and observed, all of the terms, covenants and conditions on its
part to be performed and observed with respect to each Assigned
Contract; and
(f) it will execute from time to time any and all
additional assignments or instruments of further assurance to
Assignee, as Assignee may at any time reasonably request.
9. Assignor shall have the right, from time to time, to
substitute new assigned contracts for any Assigned Contract on
Schedule I so long as the substitute contracts provide for a
purchase price equal to or greater than the Assigned Contract to
be released. Upon any such substitution, the parties hereto
shall confirm the substitution in writing and shall replace
Schedule I with a new Schedule reflecting updated Assigned
Contracts.
10. At such time as the SPA Agreement and Convertible
Debentures issued thereunder are satisfied or discharged, this
Assignment and all of Assignee's right, title and interest
hereunder with respect to the Assigned Contracts shall terminate.
11. This Assignment shall inure to the benefit of Assignee,
and its successors and assigns, and shall be binding upon
Assignor, and its successors, and assigns.
12. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New Jersey
without regard to its conflicts of law principles.
13. EACH PARTY HERETO HEREBY EXPRESSLY WAIVES ANY RIGHT TO
TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (A)
ARISING UNDER THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR
AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR (B) IN
ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS
OF THE PARTIES HERETO OR ANY OTHER AGREEMENT EXECUTED OR
DELIVERED BY THEM IN CONNECTION HEREWITH, 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 AND EACH PARTY HERETO HEREBY AGREES AND CONSENTS THAT
ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY
COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY MAY FILE AN
ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS
WRITTEN EVIDENCE OF THE CONSENT OF EACH PARTY TO THE WAIVER OF
ITS RIGHT TO TRIAL BY JURY.
14. This Agreement may be executed in any number of
counterparts, and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed an
original and all of which taken together shall constitute but one
and the same agreement. Assignor acknowledges and agrees that a
telecopy transmission to Assignee of signature pages hereof
purporting to be signed on behalf of Assignor shall constitute
effective and binding execution and delivery hereof by Assignor.
[SIGNATURE PAGE FOLLOWS]
[SIGNATURE PAGE 1 OF 1 TO
COLLATERAL ASSIGNMENT OF CONTRACT RIGHTS]
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed under seal by their respective
officers or agents thereunto duly authorized, as of the date
first above written.
COMPANY:
DCI USA, INC.
By: /s/ Xxxxx Xxxxxxxxxx
Name: Xxxxx Xxxxxxxxxx
Title: Chairman
INVESTOR:
CORNELL CAPITAL PARTNERS, LP
By: Yorkville Advisors, LLC
Its: General Partner
By: Xxxx Xxxxxx
Name: Xxxx Xxxxxx
Title: Portfolio Manager
ACKNOWLEDGED BY:
000 XXXXXX XXXXXX, LLC
By: /s/ Xxxxx Xxxxxxxxxx
Name: Xxxxx Xxxxxxxxxx
Title: Managing Member
