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EXHIBIT 99.15
FORBEARANCE AND REPAYMENT AGREEMENT
FORBEARANCE AND REPAYMENT AGREEMENT, dated as of January 30, 1998 (the
"Forbearance Agreement"), by and among The Cerplex Group, Inc., a Delaware
corporation ("Company"), Aurora Electronics, Inc. ("Purchaser") and Citibank,
N.A. (the "Holder"). Capitalized terms used and not otherwise defined herein
shall have the meaning given such terms in that certain Credit Agreement dated
as of October 12, 1994, by and among Company, as Borrower, the lenders listed
therein, as Lenders, and Xxxxx Fargo Bank, National Association, as
Administrative Agent, as amended to date (as so amended, the "Credit
Agreement").
WHEREAS, pursuant to the Credit Agreement, the Lenders (and their
successors in interest, from time to time) made loans (the "Loans") to Company
and the Holder has succeeded to all right, title and interest in the Loans, the
outstanding principal amount of and accrued and unpaid interest on which, as of
the date hereof, are set forth in Exhibit A hereto;
WHEREAS, as of the date hereof, the Holder also holds warrants
("Warrants") to purchase Company Common Stock, the number of which are set
forth on Exhibit A hereto;
WHEREAS, Company and Purchaser and certain affiliates of Purchaser are
negotiating an Agreement and Plan of Merger (the "Merger Agreement") which
contemplates, among other things, a merger of Company and a wholly-owned
subsidiary of Purchaser (the "Merger"), a loan by Purchaser to Company of not
less than $2,000,000 (which loan shall be evidenced by a Note Purchase
Agreement of even date with the Merger Agreement (the "Note Purchase
Agreement")) and a recapitalization of Company, including the repayment of the
Loans and cancellation of the Warrants pursuant to the terms hereof; and
WHEREAS, as a condition to the Purchaser and Company continuing to
negotiate the Merger Agreement and entering into the Merger Agreement, Company
and the Purchaser desire that the Holder agree, and in order to induce the
Purchaser and Company to continue such negotiations and so enter into the
Merger Agreement, the Holder has agreed, to enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein, and intending to be legally bound
hereby, the parties hereto agree as follows:
ARTICLE I
REPAYMENT OF LOAN; CANCELLATION OF WARRANTS
1.1 Repayment of Loans. Subject to the terms and conditions of
this Agreement, in the event that the Merger Agreement and the Note Purchase
Agreement are executed by the respective parties to such agreements on or prior
to January 31, 1998, Company shall have
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received cash proceeds in an amount equal to at least $2,000,000 on or prior to
February 2, 1998 ("Step 1"), funds in an amount not less than $2,000,000 are
transferred on or prior to February 2, 1998 by Purchaser to Company pursuant to
the Note Purchase Agreement and payment of the Purchase Price (as defined
below) is made on or prior to April 30, 1998, Company agrees to pay, and the
Holder agrees to accept, as full repayment of the outstanding principal amount
of the Loans under the Credit Agreement and as full consideration for
cancellation of the Warrants an amount equal to the sum of (i) 98.5% of the
outstanding principal amount of the Loans as of the Closing Date, plus (ii) all
accrued and unpaid interest thereon as of the Closing Date, plus (iii) all
accrued and unpaid fees, expenses and other amounts payable under the Credit
Agreement as of the Closing Date, including, without limitation, the $62,500
final installment of the restructure fee and the $200,000 amendment fee (the
"Purchase Price"). In the event that Step 1 does not occur on or prior to
January 31, 1998 or in the event the Purchase Price is not paid on or prior to
April 30, 1998, this Agreement shall be of no further force and effect. The
Purchase Price shall be payable in cash in immediately available funds.
1.2 Effect of Purchase. Upon payment of the Purchase Price, all
commitments to lend under the Credit Agreement shall terminate and all of the
Holder's Warrants shall be cancelled. In addition, all other rights of the
Holder with respect to Company, other than those rights that by their express
terms survive the termination of the commitments under the Credit Agreement,
shall be terminated, including but not limited to, the Holder's rights under
(i) that certain Registration Rights Agreement dated as of November 19, 1993,
by and among Company, the investors listed on Schedule A thereto and the
security holders of Company listed on Schedule B thereto, as amended to date
(as so amended, the "Registration Rights Agreement"); and (ii) the Credit
Agreement.
1.3 Time and Place of Closing. The closing of the transactions
contemplated hereunder (the "Closing") shall take place at the offices of
Xxxxxxx, Phleger & Xxxxxxxx LLP in Newport Beach, California on April 30, 1998
(the "Closing Date"), or at such other time and place as the parties shall
mutually agree upon.
1.4 Conditions Precedent. The obligations of Holder hereunder are
subject to the satisfaction of the following conditions:
(a) The Merger Agreement shall be in form and substance
reasonably satisfactory to Holder. Holder shall have received a fully executed
or conformed copy of the Merger Agreement and the Merger Agreement shall be in
full force and effect and no provision thereof shall have been modified or
waived in any respect determined by Holder to be material.
(b) The Purchaser and Company shall have executed the
Note Purchase Agreement providing for a loan to Company of an amount equal to
at least $2,000,000 on or prior to January 31, 1998, and Company shall have
received cash proceeds in an amount equal to at least $2,000,000 on or prior to
February 2, 1998, from the issuance of subordinated indebtedness to the
Purchaser, in either case pursuant to documentation in form and substance
reasonably satisfactory to Holder.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES
Except where specifically indicated that a representation and/or
warranty is being given by a specific party, each of the parties represents and
warrants to the other parties that as to itself:
2.1 Organization and Standing. In the case of each of Purchaser
and Company, (a) it is a corporation, duly organized and existing under, and by
virtue of, the laws of the state of its incorporation and is in good standing
under such laws and (b) it has the requisite corporate power to own and operate
its properties and assets, and to carry on its business as presently conducted
and as proposed to be conducted, and (c) it is duly qualified to do business
and is in good standing in each jurisdiction in which the character of the
business conducted by it or the location of the properties owned or leased by
it make such qualification necessary, except for jurisdictions in which the
failure to so qualify would not have a material adverse effect on its business.
In the case of the Holder, (a) it is a national banking association, duly
organized under the laws of the United States, and (b) it has the requisite
power and authority to own its properties and assets, and to carry on its
business as presently conducted.
2.2 Power. In the case of Purchaser and Company, it has all
requisite legal and corporate power and authority to execute and deliver this
Agreement and to carry out and perform its obligations under the terms of this
Agreement. In the case of Holder, it has all requisite legal power and
authority to execute and deliver this Agreement and to carry out and perform
its obligations under the terms of this Agreement.
2.3 Title. In the case of the Holder, it has all right, title and
interest in the Loans and the Warrants, free and clear of all encumbrances.
2.4 All Obligations and Securities. In the case of the Holder,
(a) other than the Warrants, the Holder does not own, either directly or
indirectly, any securities issued by Company, (b) as of the date hereof, the
Loans, accrued interest thereon, fees in an aggregate amount of $200,000 and
reimbursement for outstanding attorneys' fees and other amounts (in an
aggregate amount equal to approximately $100,000) constitute all amounts owed
by Company under the Credit Agreement, and (c) Company has no obligations to
the Holder other than obligations arising pursuant to the Registration Rights
Agreement, the Warrant Agreement, the Warrants and the Credit Agreement.
2.5 Absence of Default.
(a) As of the date hereof and after giving effect to that
certain Seventh Amendment to Credit Agreement and Limited Waiver by and between
Company and Holder, there exists no Event of Default or Potential Event of
Default under the Credit Agreement.
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(b) Except with respect to the matters disclosed to
Holder prior to the date hereof, all representations and warranties contained
in the Credit Agreement and the other Loan Documents are true, correct and
complete in all material respects on and as of the date hereof except to the
extent such representations and warranties specifically relate to an earlier
date, in which case they were true, correct and complete in all material
respects on and as of such earlier date.
ARTICLE III
COVENANTS OF THE PARTIES
3.1 Restriction on Exercise. Until and unless this Agreement has
been terminated, the Holder shall not exercise any of its Warrants.
3.2 Restriction on Transfer. Until and unless this Agreement has
been terminated, the Holder shall not, without the prior written consent of
Company, offer to sell, sell, contract to sell, or otherwise dispose of any
Warrants until and unless the transferee of such Warrants has agreed in writing
to be bound by the terms of this Forbearance Agreement, and Company has
consented in writing to such transfer (which consent shall not be unreasonably
withheld).
3.3 Confidentiality. The Holder agrees to keep confidential the
existence and the terms of this Agreement and any information it obtains, from
time to time, regarding the Merger Agreement and the transactions contemplated
thereby.
3.4 Further Assurances. Subject to the conditions to consummation
of the Merger set forth in the Merger Agreement, each party agrees to use its
commercially reasonable efforts to take, or cause to be taken, all appropriate
action, and to do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations to consummate and make
effective the transactions contemplated by this Agreement. If any further
action is necessary or desirable to carry out the purposes of this Agreement,
each party shall use its commercially reasonable efforts to take, or cause to
be taken, all such action as promptly as practicable.
3.5 Legal Fees. If, upon payment of the Purchase Price and after
payment of any outstanding legal fees to counsel for Holder in connection with
this Forbearance Agreement and the transactions contemplated hereby, there is
any amount remaining of the funds on deposit with counsel for Holder as
required by Section 6.20 of the Credit Agreement, Holder shall cause counsel to
Holder to promptly refund to Company the balance of any such amount.
ARTICLE IV
MISCELLANEOUS
4.1 Counterparts. This Agreement may be executed and delivered
(including by facsimile transmission) in one or more counterparts, and by the
different parties hereto in separate
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counterparts, each of which when executed and delivered shall be deemed to be
an original but all of which taken together shall constitute one and the same
instrument.
4.2 Termination. This Agreement shall terminate if the Closing
does not occur on or before April 30, 1998 and shall be of no further force or
effect thereafter.
4.3 Assignment. Except as set forth in Section 3.2 hereof, this
Agreement shall not be assigned by any party by operation of law or otherwise
without the prior written consent of each of the other parties hereto.
4.4 Specific Performance. Each of the parties hereto acknowledges
that a breach by it of any agreement contained in this Agreement will cause the
other party to sustain damage for which it would not have an adequate remedy at
law for money damages, and therefore each of the parties hereto agrees that in
the event of any such breach the aggrieved party shall be entitled to the
remedy of specific performance of such agreement and injunctive and other
equitable relief in addition to any other remedy to which it may be entitled,
at law or in equity.
4.5 Binding Upon Successors. This Agreement is binding upon and
will inure to the benefit of the parties hereto and their respective successors
and permitted assigns.
4.6 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of California, without
giving effect to the principles of conflicts of law.
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IN WITNESS WHEREOF, Company, the Purchaser and the Holder have caused
this Agreement to be duly executed as of the date first above written.
THE CERPLEX GROUP, INC.
By: ____________________________________
Name:
Title:
AURORA ELECTRONICS, INC.
By: ____________________________________
Name:
Title:
CITIBANK, N.A.
By: ____________________________________
Name:
Title:
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EXHIBIT A
Credit Agreement Loans
1. Term Loan (as of 1/30/98):
Principal Outstanding: 25,320,602.21
Interest Outstanding: 340,685.19
2. Revolver Loans (as of 1/30/98):
Principal Outstanding: 4,886,984.14
Interest Outstanding: 68,769.42
Warrants:
WR-9 Issued on August 20, 1997 for 2,137,188 shares of Common Stock
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