Exhibit 10.130
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MEMORANDUM OF UNDERSTANDING
FOR AMENDMENT OF
$500,000 CXII (Formerly known as CXI) BRIDGE LOAN DOCUMENTS
1. Transaction: (i) Securities Purchase Agreement by and among
Commodore Environmental Services, Inc., a Delaware corporation ("COES")
Commodore Applied Technologies, Inc., a Delaware corporation ("CXII" formerly
known as CXI), and Xxxxxxx Associates, Klass Partners, Ltd., Xxx Xxxx Xxxxxxxxx
and Xxxxxxx X. Xxxxx, Esq. (individually an "Investor" and collectively, the
"Investors"), (ii) corresponding 12% Senior Secured Promissory Notes due July
13, 2001 (the "Notes") originally issued in the aggregate principal amount of up
to $500,000 issued to the Investors in the proportion shown on Schedule A
annexed hereto, (iii) the Security Agreement, and (iv) the Registration Rights
Agreement, and all other documents executed and delivered incident thereto, all
dated as of November 13, 2000 (collectively the "Bridge Loan Documents").
2. Amendments: Notwithstanding anything to the contrary in the Bridge
Loan Documents, the Investors, CXII and COES hereby agree to amend the Bridge
Loan Documents as follows:
(a). The Maturity Date (as defined in the Notes) of all Notes will be
extended so that all of the unpaid principal and accrued interest on
the Notes shall be payable on or before January 15, 2005. The Notes
shall be subject to mandatory prepayment as set forth in 2(b) below.
(b). The Notes will be subject to earlier mandatory prepayment or whole
or in part, as the case may be, out of all net proceeds in excess of
$3.0 million which CXII or any subsidiary of CXII shall receive from
any third party in connection with any debt and/or equity cash
financing. Any such mandatory prepayments shall be applied first to
accrued and unpaid interest and net to principal in the order of first
maturing indebtedness. CXII shall provide the Investors (or its
representative, Xxxxxxx Savage, LLP) with true copies of all letters of
intent or related written proposals acceptable to CXII which are
received by CXII in connection with any such external financings, not
later than 10 days from receipt of same; failure to so provide the
Investors with such copies to represent an event of default under the
Notes.
(c) An "event of default" under the Notes (as restated by the terms of
this Memorandum of Understanding ("MOU")) shall consist of: (i) CXII's
failure to register under the Securities Act of 1933, as amended, for
the benefit of the Investors all shares of CXII common stock and shares
issuable under the CXII warrants described herein, pursuant to an
effective registration statement on Form S-3 or Form S-1 by not later
than January 31, 2005; or (ii) the voluntary or involuntary filing of
any proceedings against CXII under Chapter 11 of the Federal Bankruptcy
Act or similar state statutes.
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(d). Contemporaneously herewith, CXII shall (i) issue new Warrants
previously issued pro rata, to the Investors on April 16, 2001, for
1,000,000 shares of CXII common stock, each such warrant to have an
exercise price equal to $0.0285 per share and will now expire on April
16, 2006; (ii) CXII shall issue new Warrants previously issued to the
Investors, pro rata, on October 29, 2002, for an additional 500,000
shares of CXII common stock in the form as that attached hereto, each
such warrant to have an exercise price equal to $0.0285 per share and
will expire on October 29, 2006; (iii) CXII shall issue to the
Investors, pro rata, warrants for an additional 1,000,000 shares of
CXII common stock in the form as that attached hereto, each such
warrant to have an exercise price equal to 0.0285 per share and will
expire on February 15, 2007. The warrants will contain cashless
exercise features and the shares of CXII common stock issuable upon
exercise of the warrants will be included in S-3 registration statement
that CXII will file with the SEC by November 30, 2004. In all other
respects, the warrants shall be subject to the same registration rights
as are contained in the Registration Rights Agreement; and (iv) CXII
shall cancel the Warrant issued to the Investors on April 16, 2001, pro
rata, for 1,000,000 shares of CXII common stock, with an exercise price
of $0.05 per share; (v) CXII shall cancel the Warrant issued to the
Investors on October 29, 2002, pro rata, for 500,000 shares of CXII
common stock, with an exercise price of $0.05 per share.
(e). CXII will file an S-3 registration statement with the SEC by
November 30, 2004 and shall cause such registration statement to be
declared effective by the SEC by not later than January 31, 2005.
(f). The Investors shall subordinate their security agreement in their
Collateral (as defined in the Security Agreement) in favor of any
lender to the extent of the first $3.0 million of net proceeds (after
selling commissions but before other customary closing costs) received
by CXII in connection with any indebtedness owed by CXII to such third
party lender; provided, that such third party lender shall not be any
affiliate of CXII.
3. Holders Representations. The Investors will, and hereby do,
represent that: (i) they are and since November 13, 2000, have been, the holders
of the Notes, (ii) they have full power and authority to agree to the terms
herein, and to make execute and deliver this Memorandum of Understanding and
(iii) if subsequent definitive agreements are necessary to implement this
Memorandum of Understanding, at the time thereof, they will have full power and
authority to agree to the terms herein, and to make execute and deliver such
definitive agreements.
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4. Representations by Corporation Parties. Each corporation party
separately represents to the Investors and to each other corporation party that
(i) it has full power and authority to agree to the terms herein, and to make
execute and deliver this Memorandum of Understanding (ii) this Memorandum of
Understanding has been duly approved and authorized by the board of directors of
CXII; and (iii) if subsequent definitive agreements are necessary to implement
this Memorandum of Understanding, at the time thereof, it will have full power
and authority to agree to the terms herein, and to make execute and deliver such
definitive agreements.
5. No default. Each investor hereby acknowledges and agrees that when
each party to this Memorandum of Understanding has executed and delivered this
Memorandum Of Understanding to each other party and when each of the conditions
precedent set forth below have been met, the Notes and all other Bridge Loan
Documents shall be deemed to be in compliance as of the Effective Date hereof.
6. Definitive Agreements. Any party hereto may request the preparation
of and execution and delivery by each party hereto of definitive agreements
which definitive agreements shall incorporate the terms hereof. In the absence
of the making, preparation and delivery of these agreements, this Memorandum of
Understanding is and shall be the definitive agreement of the parties with
respect the amendment of the Bridge Loan Documents.
7. Conditions Precedent. It shall be a condition precedent of the
effectiveness to this Memorandum of Understanding that on or before 1:00 P.M. on
Monday, March 22, 2004 each party hereto shall execute and deliver by facsimile
transmission a copy of this Memorandum of Understanding to each other party
hereto. This MOU may be executed in counterparts, each of which shall constitute
an original.
8. Incorporation by reference. All of the representations and
warranties made by each of the parties to the Security Purchase Agreement are
incorporated herein by reference and are hereby deemed to be made to each other
party as fully as if set forth at length herein. Except as otherwise set forth
herein, the Bridge Loan Documents shall remain in full force and effect as of
their original effective date according to the terms contained therein and
binding upon the parties thereto and hereto.
9. Counterpart, Delivery and Fax Signatures. This Agreement may be
executed in any number of counterparts, each of which shall be deemed an
original, but all of which taken together shall constitute one and the same
instrument. The direct or indirect delivery by hand delivery, mail, courier,
facsimile or otherwise, by any party hereto to any other party hereto bearing
the facsimile signature of such party shall be deemed to be execution and
delivery of an original counterpart version of this Memorandum of Understanding
and shall be deemed to be effective and binding upon such person.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Memorandum of Understanding this 23rd day of February 2004 and made effective as
of the 15th day of February 2004 (the "Effective Date").
COMMODORE APPLIED TECHNOLOGIES, INC.
By: -----------------------------
Name: /s/ Xxxxx X. XxXxxxxxx
Title: Chief Financial Officer
INVESTORS:
XXXXXXX ASSOCIATES
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/s/ Xxxxxxx X. Xxxxxxxxx, General Partner
KLASS PARTNERS, LTD
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/s/ Xxxxx Xxxxxxxxx, President
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/s/ Xxx Xxxx Xxxxxxxxx
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/s/ Xxxxxxx X. Xxxxx
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Schedule A - INESTORS
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Amount of Number of Number of Number of New Number of New Number of New
Name and Address: Original Cancelled Cancelled Warrants for CXII Warrants for CXII Warrants for CXII
Investment on Warrants for CXII Warrants for Common Stock to Common Stock to Common Stock
November 13, 2000 Common Stock CXII Common Replace Warrants Replace Warrants issued on
issued October Stock issued on issued on April issued on October February 15,
29, 2002: April 16, 2001: 16, 2001: 29, 2002: 2004:
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Xxxxxxx Associates
C/o Xxxxxxx Xxxxxxxxx $150,000 166,667 300,000 300,000 166,667 333,334
000 Xxxxxxx Xxxx
Xxxxxx, XX 00000
Xxx Xxxx Xxxxxxxxx
000 Xxxx 00xx Xxxxxx $75,000 83,332 150,000 150,000 83,332 166,664
Xxx. 00X
Xxx Xxxx, Xxx Xxxx
00000
Xxxxxxx X. Xxxxx
000 Xxxx Xxx Xxxxxx $25,000 27,778 50,000 50,000 27,778 55,556
Apartment 4B
Xxx Xxxx, XX 00000
Klass Partners, Ltd.
C/o Xxxxx Xxxxxxxxx $250,000 222,222 500,000 500,000 222,222 444,444
00 Xxxxxxxx Xxxxxx
Xxx. 000
Xxxxxxxxx, Xxxxxx
00000
Total . . . .
$500,000 500,000 1,000,000 1,000,000 500,000 1,000,000
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