Exhibit 10.2
ADDENDUM
This Addendum is made and entered into as of January 18, 2006, by and among
H. H. Brown Shoe Technologies, Inc., a Delaware corporation doing business as
Dicon Technologies with its principal office at 124 West Putnam Avenue,
Greenwich, Connecticut 06830 ("Dicon"), Hydrogel Design Systems, Inc., a
corporation organized and existing under the laws of Delaware with its principal
office at 2150 Cabot Blvd. West Suite B, Langhorne, PA 19047, and Foam
Manufacturing, Inc., a Delaware corporation and the wholly owned subsidiary of
Hydrogel Design Systems, Inc. (Hydrogel Design Systems, Inc. and Foam
Manufacturing, Inc. are hereinafter collectively referred to as "Hydrogel").
RECITALS
Dicon and Hydrogel are parties to that certain Agreement dated as of August
29, 2005 (the "Agreement") for the purchase and sale of certain equipment and
the grant of manufacturing and distribution rights.
Pursuant to the Agreement, Hydrogel was required to pay $135,000.00 on the
execution of the Agreement by Dicon and Hydrogel.
To date, Hydrogel has paid Dicon $50,000.00 of the $135,000.00 that is due
and payable under the Agreement.
Hydrogel has requested Dicon to delay the payment of the balance of
$85,000.00 that is due and payable, and Dicon is willing to grant such delay
provided it receives security for the payment of the additional payments under
the Agreement, all as provided and subject to the terms and conditions contained
in this Addendum.
NOW THEREFORE, in consideration of the terms, covenants and provisions
contained herein, the parties do hereby agree as follows:
1. DEFINITIONS: Unless otherwise defined in this Addendum, all capitalized terms
shall have such meaning assigned to them in the Agreement.
2. DELAY OF PAYMENT: Subject to Hydrogel's grant to Dicon of a first priority
purchase money security interest in and to the First Line Equipment to be
shipped to Hydrogel by Dicon, Dicon agrees to delay the due date for the payment
of the $85,000.00 that is due and payable by Hydrogel until no later than the
end of business on February 1, 2006. Hydrogel expressly acknowledges and agrees
that Dicon shall in no event be required to ship the First Line Equipment until
such time as the $85,000.00 payment is received by Dicon.
3. SECURITY INTEREST: In order to secure payment of the second payment of
$135,000.00 that is due and payable by Hydrogel on the Test Date (the
"Indebtedness") and all of Hydrogel's obligations under this Addendum, Hydrogel
does hereby grant to Dicon a present and continuing purchase money security
interest in and to the First Line Equipment (the "Collateral"). Upon payment in
full of the Indebtedness, Dicon agrees to promptly file appropriate UCC-3
Termination Statement(s) to terminate the purchase money security interest
created hereby in the Collateral.
4. COVENANTS OF HYDROGEL: Hydrogel agrees to defend the Collateral against all
claims and demands of all persons. Hydrogel shall be responsible for all risk of
loss and any damage to the Collateral. Hydrogel shall have and maintain
insurance and pay all premiums at all times with respect to the Collateral,
payable to Dicon and Hydrogel as their interests may appear.
5. DEFAULT: Hydrogel shall be in default under this Addendum upon the occurrence
of any event that constitutes a default or breach by Hydrogel of the payment of
the Indebtedness under the terms of the Agreement; or the breach by Hydrogel of
any representation, covenant or other term of this Addendum.
6. REMEDIES: If Hydrogel shall be in default under this Addendum, Dicon,
immediately and at any time thereafter, may declare all of the Indebtedness
secured pursuant to this Agreement immediately due and payable. Dicon shall have
all rights available in law or at equity, including, without limitation, the
right for specific performance of this Agreement or for an injunction against
violations of any of the terms hereof, together with all the rights and remedies
of Dicon under the Delaware Uniform Commercial Code and any other applicable
law, including the right to take possession of the Collateral or to render it
unusable by Hydrogel. Dicon may require Hydrogel to assemble the Collateral and
make it available to Dicon at a place to be designated by Dicon that is
reasonably convenient to both parties. Dicon may, insofar as Hydrogel can give
authority therefore, lawfully enter upon any premises on which the Collateral
may be located and peacefully remain in possession thereon or remove the
Collateral therefrom. If the Collateral is stored by Dicon on Hydrogel's
premises, Dicon shall not be charged or held liable for the cost of the use of
such premises. Dicon shall give Hydrogel commercially reasonable notice of the
time and place of any public sale of the Collateral or of the time after which
any private sale or other intended disposition of the Collateral is to be made.
The requirements of commercially reasonable notice shall be met if such notice
is mailed, by means of regular or expedited mail service, postage prepaid,
addressed to Hydrogel at Hydrogel's address shown at the beginning of this
Addendum, or the most recent address provided to Dicon pursuant to the
Agreement, if any is applicable, at least ten (10) days before the time of the
sale or other disposition. In the event Dicon disposes of any of the Collateral,
Hydrogel shall remain liable for any deficiency and Dicon shall account for any
surplus. All rights and remedies of Dicon against the Collateral, shall be
cumulative and may be exercised singularly or concurrently. In the event Dicon
seeks to take possession of any of the Collateral by court process, Hydrogel
hereby irrevocably waives any bond and any surety or security relating thereto
required by any statute, court rule or otherwise as an incident to such
possession and waives any demand for possession prior to commencement of any
suit or act to recover with respect thereto.
7. COMMERCIAL ACKNOWLEDGMENT. HYDROGEL ACKNOWLEDGES THAT THE TRANSACTION TO
WHICH THIS ADDENDUM AND THE AGREEMENT RELATE IS A COMMERCIAL TRANSACTION,
HYDROGEL WAIVES ITS RIGHT TO NOTICE OR HEARING UNDER ANY LAW WITH RESPECT TO ANY
PREJUDGMENT REMEDY THAT DICON MAY USE.
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8. WAIVER OF JURY TRIAL. IN THE INTEREST OF A SPEEDY RESOLUTION OF ANY LAWSUIT
WHICH MAY ARISE HEREUNDER, BOTH DICON AND HYDROGEL WAIVE A TRIAL BY JURY IN ANY
ACTION WITH RESPECT TO THIS AGREEMENT AND AS TO ANY ISSUES ARISING RELATING TO
THIS AGREEMENT.
9. MISCELLANEOUS.
a. Dicon may exercise its rights with respect to the Collateral without
resort to other collateral or sources of reimbursement for the Indebtedness.
b. The provisions of this Addendum shall not be affected by any addition or
release of any person or entity primarily or secondarily liable for the
Indebtedness or the release of any other property that may secure the
Indebtedness.
c. Hydrogel shall pay to Dicon on demand any costs, expenses, attorneys'
fees and their disbursements incurred or paid by Dicon in protecting or
enforcing its rights in the Collateral and in collecting any part of the
Indebtedness and such amounts expended pursuant to hereto shall be added to the
Indebtedness.
d. Any delay, failure or waiver by Dicon to exercise any right it may have
under this Addendum is not a waiver of Dicon's right to exercise the same or any
other right at any other time.
e. Hydrogel Design Systems, Inc. and Foam Manufacturing, Inc. shall be
jointly and severally liable for any and all of their respective obligations and
liabilities under this Addendum. A breach by Hydrogel Design Systems, Inc. or
Foam Manufacturing, Inc. under this Addendum or the Agreement shall also
constitute a breach by the other party and shall entitle Dicon to exercise all
of its rights and remedies under this Addendum and at law or in equity against
Hydrogel Design Systems, Inc. or Foam Manufacturing, Inc., or both.
f. This Addendum and the security interest created hereby shall be governed
by the laws of the State of Delaware. Hydrogel agrees that any proceeding
arising out of this Addendum or any document executed in connection herewith may
be instituted in any federal or state court in the State of Connecticut, and
Hydrogel irrevocably submits to the jurisdiction of any such court.
g. No agreement to change or waive the terms of this Addendum shall be
valid unless it is in writing and executed by Hydrogel and Dicon.
h. In the event that there are any provisions contained in this Addendum
which are inconsistent with the provisions contained in the main body of the
Agreement, it shall be deemed to be the intent of the parties hereto that the
provisions contained in this Addendum supersede any inconsistent provisions
therein.
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i. All other terms and conditions of the Agreement shall remain unchanged
and in full force and effect.
IN WITNESS WHEREOF, Hydrogel and Dicon have executed this Addendum
effective as of the date first set forth above.
H. H. Brown Shoe Technologies, Inc. Hydrogel Design Systems, Inc.
d/b/a Dicon Technologies
/s/ Matthew L. Harriton
By:_____________________________________
Matthew L. Harriton, President
/s/ Wayne Celia
By:_______________________________________
Wayne Celia, President, duly authorized
Foam Manufacturing, Inc.
/s/ Matthew L. Harriton
By:_____________________________________
Matthew L. Harriton, President
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