EXHIBIT 99.2
COLLATERAL ASSIGNMENT OF CONTRACTS
Assignee Genesis Merchant Partners, LP
(or "Genesis") 15 Valley Drive
Greenwich, Connecticut 06831
Assignors: Nascent Wine Company, Inc.
("Assignor") 2355A Paseo de las Americas
San Diego, California 92154
Note Purchase Agreement: Purchase Agreement dated March 31, 2008 between the
Assignee and the Assignor
For valuable consideration received and to induce Assignee to grant the
Extended Term as defined in the Senior Secured Promissory Note dated March 31,
2008 in the principal amount of $1,000,000 from Assignor to Genesis (the
"Note"), Assignor and Assignee hereby agree as follows:
1. Capitalized terms used herein which are not otherwise defined shall
have the meaning as provided in the Note Purchase Agreement or the Note.
2. The Extended Term, as defined in the Note, has been granted and the
Maturity Date of the Note is hereby extended to March 31, 2009.
3. The Assignor as further security for the payment and the performance
of any obligations of Assignor to Assignee pursuant to the Transaction
Agreements, hereby collaterally assigns, pledges, transfers and sets over unto
the Assignee all of Assignor's right, title, and interest in and to the
Assignor's rights and remedies in any of the following contracts entered into or
held by the Assignor (collectively, the "Contracts"): (a) that certain
Promissory Note ("Promissory Note"), dated July 15, 2008, AIP, Inc. to Assignor
and in the principal amount of $1,000,000.00 (the "Note"), and (b) that certain
Settlement Agreement dated June 30, 2008 by and between Assignor and Pasani,
S.A. de C.V., and other parties (the "Settlement Agreement"). Both the Note and
the Settlement Agreement are attached hereto and made a part hereof as Schedule
A. Collectively, AIP, Inc. and Pasani, S.A. de C.V. may be referred to as
"Payors".
4. This Assignment is made to further secure the Obligations as defined
in the Security Agreement dated March 31, 2008. This Assignment shall terminate
upon complete, indefeasible satisfaction of the Obligations as defined in the
Security Agreement.
5. Assignor hereby immediately assigns to Assignee all payments and
proceeds which Assignor will receive under the Contracts. Assignor and Payors
shall each execute and deliver the Direction Letter regarding Payment of
Proceeds attached hereto as Exhibit 1. Until all obligations to Assignee have
been satisfied by Assignor in full, the Payors will be instructed to remit
payment directly to Genesis on behalf of Assignor. Genesis shall provide account
information to the Payors for such purpose. Any excess funds received by
Assignee under the Contracts, in excess of the Obligations, shall be remitted
back to Assignor within five (5) business days of the funds being received by
Assignee. Payments received by Assignee hereunder shall be applied as provided
in the Note. Other than the fact that each payment by the Payors received by
Assignee shall reduce the amount payable by Assignor pursuant to the Note, this
Assignment shall not affect Assignors' obligations to Genesis pursuant to any of
the Transaction Agreements.
6. Upon the occurrence of any Event of Default (as defined in the
Transaction Documents), Assignee may, without notice or demand, elect to
exercise any and all of Assignor's rights and remedies from time to time under
any one or more Contracts without any interference or objection from Assignor.
7. Upon the occurrence of an Event of Default, Assignee may without
notice or demand, at its option, from time to time take over and enjoy the
benefits of any one or more of the Contracts, to the same extent as Assignor
might do. Assignor hereby releases Assignee from any and all claims which it has
or might have against Assignee arising out of any of such actions by Assignee.
Assignee may in connection with any and all of the foregoing powers, and without
limiting the same, effect new Contracts, cancel or surrender existing Contracts,
alter and amend the terms of and renew existing Contracts and Assignor hereby
irrevocably appoints Assignee as its attorney in fact, coupled with an interest,
to do all acts pertaining thereto in Assignor's place and stead.
8. Nothing herein shall constitute a satisfaction of any indebtedness,
liability or obligation, now or hereafter owed by Assignor to Assignee. Nothing
herein contained shall be construed as making Assignee a mortgagee in
possession, or as constituting a waiver or suspension by Assignee of its right
to enforce payment of the debts or other obligations under the terms of any of
the Transaction Agreements. Assignee is not the agent, partner, or joint
venturer of either the Assignor or of any of the Governmental Authorities or
other persons or entities.
11. At the option of Assignee, except as otherwise provided herein,
this Assignment may be enforced from time to time upon the occurrence and during
the continuance of an Event of Default with or without order of any court and
with or without appointment of a receiver, as Assignee shall determine. Assignee
may also at any time cease to enforce this Assignment. Any failure on the part
of the Assignee promptly to exercise any option hereby given or reserved shall
not prevent the exercise of any such option at anytime thereafter. Assignee may
pursue and enforce any remedy or remedies accorded to it herein independently
of, in conjunction or concurrently with, or subsequent to its pursuit and
enforcement of any other remedy or remedies which it may have under the
Transaction Agreements or by law.
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12. Assignor represents, warrants and covenants to and with the
Assignee as follows:
a. Assignor has the right to execute and deliver this
Assignment;
b. Assignor has made no prior assignment, encumbrance of any
kind or transfer of any Contracts and it will not assign, pledge or
otherwise encumber the same without the prior written consent of
Assignee;
c. The Contracts are subject to no defenses, setoffs or
counterclaims whatsoever;
d. Assignor will not cancel, terminate or accept any surrender
of any of the Contracts, or amend or modify the same in any material
respect, without having obtained the prior written consent of Assignee;
e. Assignor will not waive or give any consent with respect to
any default or variation in the performance of the Contracts, it will
at all times take proper steps to enforce all of the provisions and
conditions thereof and prevent the same from lapsing, and it will
notify Assignee of any defaults under the Contracts;
f. No party is in breach of any Contract;
g. Assignor shall observe and perform all obligation imposed
on it under the Contracts; will maintain the Contracts in full force
and effect; will not do or permit to be done anything to impair the
security thereof;
h. Assignor will exercise and diligently and promptly enforce
its rights with the Contracts;
i. Assignor will not execute any other assignment of
Assignor's interest in the Contracts;
j. Assignor will notify Assignee in writing of (i) any default
by any party under any Contract, (ii) the giving of any notice by any
party under or relative to any Contract to Assignor of any alleged
default by Assignor, in the performance or observance of any of the
terms of the Contract, or of the termination or expiration of any such
Contract, together with a true copy of each such notice, and (iii) any
other event or occurrence which could affect the Assignor's rights
under the Contracts or the value thereof to the Assignee.
13. Assignee shall not be liable for any loss or liability sustained by
Assignor resulting from any act or omission in connection with Assignee's
exercise of its rights and remedies hereunder, without exception. At no time
prior to the express, voluntary assumption thereof by Assignee shall Assignee be
obligated to perform or discharge any obligation or duty under any Contract. To
the extent permitted by law, Assignor agrees to indemnify Assignee for any cost,
expense, liability, loss or damage which may be incurred under any Contract or
by reason of this Assignment or the exercise of Assignee's rights hereunder. In
the event Assignee incurs any such cost, expense or liability referred to above
or in the exercise of its rights hereunder in defense of any such claims or
demands, the amount thereof, including costs and reasonable attorney's fees,
shall be secured by this Assignment and the other Transaction Agreements and
Assignor shall reimburse Assignee immediately therefor upon the demand of
Assignee. The foregoing indemnity shall survive any release or termination of
this Assignment.
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14. Assignee may take or release other security for the Obligations or
any part thereof secured by this Assignment, and may further release any party
primarily or secondarily liable, and may apply any other security held by
Assignee to the satisfaction of the Obligations or any part thereof without
prejudice to any rights under this Assignment.
15. Nothing contained in this Assignment nor any act done or omitted by
Assignee pursuant to the terms of this Assignment shall be deemed a waiver by
Assignee or any of rights or remedies under any of the Transaction Agreements
and this Assignment is executed without prejudice to any rights or remedies
possessed by Assignee under the terms of any other instruments, whether referred
to herein or otherwise or under applicable law. The right of Assignee to collect
the principal, interest and other indebtedness secured by this Assignment, and
to enforce any other security, may be exercised by Assignee prior or subsequent
to any action taken under this Assignment. All rights and remedies of the
Assignee however arising or created are cumulative and not exclusive.
16. MISCELLANEOUS PROVISIONS.
a. ASSIGNMENT. This Agreement shall inure to the benefit of
and be binding upon the parties and their respective heirs, legal
representatives, successors and assigns. Genesis' interests in and
rights under this Agreement and other Transaction Agreements are freely
assignable, in whole or in part, by Genesis. In addition, nothing in
this Agreement or any of the Transaction Agreements shall prohibit
Genesis from pledging or assigning this Agreement or any of the
Transaction Agreements or any interest therein. Assignor shall not
assign its rights and interest hereunder without the prior written
consent of Genesis, and any attempt by Assignor to assign without
Genesis' prior written consent is null and void. Any assignment shall
not release Assignor from the Obligations.
b. APPLICABLE LAW; CONFLICT BETWEEN DOCUMENTS, JURISDICTION.
This Agreement shall be governed by and interpreted in accordance with
federal law and, except as preempted by federal law, the laws of the
state named in Genesis' address on the first page hereof without regard
to that state's conflict of laws principles. If the terms of this
Agreement should conflict with the terms of any Note Purchase Agreement
or any commitment letter that survives closing, the terms of this
Agreement shall control. The state or federal courts located in
Connecticut shall have exclusive jurisdiction to hear and determine any
claims or disputes pertaining to this Agreement or to any matter
arising out of or related to this Agreement; PROVIDED, that any appeals
from those courts may have to be heard by a court located outside of
Connecticut. The parties expressly submit and consent in advance to
such jurisdiction in any action or suit commenced in any such court,
and waive any objection which they may have based upon lack of personal
jurisdiction, improper venue or FORUM NON CONVENIENS and hereby consent
to the granting of such legal or equitable relief as is deemed
appropriate by such court. The parties hereby waive personal service of
the summons, complaint and other process issued in any such action or
suit and agrees that service of such summons, complaints and other
process may be made as set forth in the Notice section below.
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c. SEVERABILITY. If any provision of this Agreement or of the
other Transaction Agreements shall be prohibited or invalid under
applicable law, such provision shall be ineffective but only to the
extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this
Agreement or other such document.
d. NOTICES. Any notices to Assignor shall be sufficiently
given, if in writing and mailed or delivered to the Assignor's address
shown above or such other address as provided hereunder and to Genesis,
if in writing and mailed or delivered to Genesis Merchant Partners
L.P., 15 Valley Drive, Greenwich, Connecticut 06831 or such other
address as Genesis may specify in writing from time to time with a copy
to Jonathan M. Wells, Esq., Gilbride, Tusa, Last & Spellane LLC, 31
Brookside Drive, Greenwich, Connecticut 06830. In the event that
Assignor changes Assignor's address at any time prior to the date the
Obligations are paid in full, Assignor agrees to promptly give written
notice of said change of address by registered or certified mail,
return receipt requested, all charges prepaid.
e. PLURAL; CAPTIONS. All references in the Transaction
Agreements to Genesis, Assignor, Assignee, a person, document or other
nouns of reference mean both the singular and plural form, as the case
may be, and the term "person" shall mean any individual, person or
entity. The captions contained in the Transaction Agreements are
inserted for convenience only and shall not affect the meaning or
interpretation of the Transaction Agreements.
f. BINDING CONTRACT. Assignor by execution of and Genesis by
acceptance of this Agreement agree that each party is bound to all
terms and provisions of this Agreement.
g. JOINT AND SEVERAL OBLIGATIONS. If there is more than one
Assignor, each is jointly and severally obligated.
h. FEES AND TAXES. Assignor shall promptly pay all
documentary, intangible recordation and/or similar taxes on this
transaction whether assessed at closing or arising from time to time.
i. LIMITATION ON LIABILITY; WAIVER OF PUNITIVE DAMAGES. EACH
OF THE PARTIES HERETO, INCLUDING GENESIS BY ACCEPTANCE HEREOF, AGREES
THAT IN ANY JUDICIAL, MEDIATION OR ARBITRATION PROCEEDING OR ANY CLAIM
OR CONTROVERSY BETWEEN OR AMONG THEM THAT MAY ARISE OUT OF OR BE IN ANY
WAY CONNECTED WITH THIS AGREEMENT, THE TRANSACTION AGREEMENTS OR ANY
OTHER AGREEMENT OR DOCUMENT BETWEEN OR AMONG THEM OR THE OBLIGATIONS
EVIDENCED HEREBY OR RELATED HERETO, IN NO EVENT SHALL ANY PARTY HAVE A
REMEDY OF, OR BE LIABLE TO THE OTHER FOR, (1) INDIRECT, SPECIAL OR
CONSEQUENTIAL DAMAGES OR (2) PUNITIVE OR EXEMPLARY DAMAGES. EACH OF THE
PARTIES HEREBY EXPRESSLY WAIVES ANY RIGHT OR CLAIM TO PUNITIVE OR
EXEMPLARY DAMAGES THEY MAY HAVE OR WHICH MAY ARISE IN THE FUTURE IN
CONNECTION WITH ANY SUCH PROCEEDING, CLAIM OR CONTROVERSY, WHETHER THE
SAME IS RESOLVED BY ARBITRATION, MEDIATION, JUDICIALLY OR OTHERWISE.
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j. FINAL AGREEMENT. This Agreement and the other Transaction
Agreements represent the final agreement between the parties and may
not be contradicted by evidence of prior, contemporaneous or subsequent
agreements of the parties. There are no unwritten agreements between
the parties.
k. EACH PARTY ACKNOWLEDGES THAT THE TRANSACTIONS REPRESENTED
BY THIS AGREEMENT ARE COMMERCIAL TRANSACTIONS.
l. WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY APPLICABLE
LAW, EACH PARTY BY EXECUTION HEREOF, KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES ANY RIGHT EACH MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION BASED ON, OR ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS AGREEMENT, THE TRANSACTION AGREEMENTS OR ANY
AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONNECTION WITH THIS
AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY WITH RESPECT
HERETO. THIS PROVISION IS A MATERIAL INDUCEMENT TO GENESIS TO ACCEPT
THIS AGREEMENT. EACH OF THE PARTIES AGREES THAT THE TERMS HEREOF SHALL
SUPERSEDE AND REPLACE ANY PRIOR AGREEMENT RELATED TO ARBITRATION OF
DISPUTES BETWEEN THE PARTIES CONTAINED IN ANY LOAN DOCUMENT OR ANY
OTHER DOCUMENT OR AGREEMENT HERETOFORE EXECUTED IN CONNECTION WITH,
RELATED TO OR BEING REPLACED, SUPPLEMENTED, EXTENDED OR MODIFIED BY,
THIS AGREEMENT.
[Signature Page Follows]
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IN WITNESS WHEREOF Assignor has caused this Assignment to be executed
under seal as of the ____ day of October, 2008.
ASSIGNORS:
Nascent Wine Company, Inc.
/s/ signature By: /s/ Peter V. White, CFO
- ---------------------------------- --------------------------------
Witness
ASSIGNEE:
Genesis Merchant Partners, LP
/s/ Theresa M. Bildt By: /s/ signature
- ---------------------------------- --------------------------------
Witness
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SCHEDULE A
Attach:
-------
1. Promissory Note
2. Settlement Agreement
EXHIBIT 1
---------
Nascent Wine Company, Inc.
2355 Paseo De Las Americas
San Diego, California 92154
October __, 2008
VIA FEDERAL EXPRESS
AIP, Inc.
318 Indian Trace #454
Weston, Florida 33326
Re: Direction Letter Regarding Payments of Proceeds Pursuant to
that Certain Promissory Note ("Note") dated July 15, 2008
between Nascent Wine Company, Inc. ("Nascent") and AIP, Inc.
("AIP")
Ladies and Gentlemen:
The undersigned has authorized Genesis Merchant Partners, L.P.
("Genesis") to receive all payments to which the undersigned is entitled under
the Note.
By this letter, you are hereby directed (1) to make all checks, in
payment of sums due to Nascent under the Note, payable to the order of "Genesis
Merchant Partners, LP", and (2) to deliver such checks or otherwise make such
payments to the following address:
Genesis Merchant Partners, LP
15 Valley Drive
Greenwich, Connecticut 06831
The foregoing direction is irrevocable, except with the written consent
of Genesis (or its successors or assigns), notwithstanding any future contrary
request or direction from the undersigned or any other person (other than
Genesis (or its successors or assigns)). Please execute the enclosed copy of
this letter and return to the undersigned to confirm receipt and acceptance.
Thank you for your cooperation.
Nascent Wine Company, Inc.
By:
-------------------------------
Agreed to and Accepted by
AIP, Inc.
By:
-------------------------------
Nascent Wine Company, Inc.
2355 Paseo De Las Americas
San Diego, California 92154
October ___, 2008
VIA FEDERAL EXPRESS
Pasani, S.A. de C.V.
20770 Highway 281
Suite 108-494
San Antonio, Texas 78258
Re: Direction Letter Regarding Payments of Proceeds Pursuant to
that Certain Settlement Agreement ("Settlement Agreement")
dated June 30, 2008 between Nascent Wine Company, Inc.
("Nascent") and Pasani, S.A. de C.V. and other parties
("Pasani") as referenced by the Settlement Agreement
Ladies and Gentlemen:
The undersigned has authorized Genesis Merchant Partners, LP
("Genesis") to receive all payments of cash or additional funds to which the
undersigned is entitled under the Settlement Agreement. Payments to be made in
inventory to the undersigned under the Settlement Agreement should continue to
be directed to the undersigned.
By this letter, you are hereby directed (1) to make all checks, in
payment of sums due to Nascent under the Settlement Agreement, payable to the
order of "Genesis Merchant Partners, LP", and (2) to deliver such checks or
otherwise make such payments to the following address:
Genesis Merchant Partners, LP
15 Valley Drive
Greenwich, Connecticut 06831
The foregoing direction is irrevocable, except with the written consent
of Genesis (or its successors or assigns), notwithstanding any future contrary
request or direction from the undersigned or any other person (other than
Genesis (or its successors or assigns)). Please execute the enclosed copy of
this letter and return to the undersigned to confirm receipt and acceptance.
Thank you for your cooperation.
Nascent Wine Company, Inc.
By:
-------------------------------
Agreed to and Accepted by
Pasani, S.A. de C.V.
By:
-------------------------------