Exhibit 10.1
WAIVER AND AMENDMENT AGREEMENT
WAIVER AND AMENDMENT AGREEMENT, dated as of May 4, 2005 (this
"Amendment Agreement"), by and between HQ Sustainable Maritime Industries, Inc.,
a corporation organized and existing under the laws of the State of Delaware,
U.S.A. ("HQSM") and Sino-Xxxx Canada (S.S.C.) Limited, a limited liability
corporation organized and existing under the laws of the country of Canada
("Sino-Xxxx").
RECITALS
A. Pursuant to that certain Purchase Agreement, dated as of August 17, 2004 (the
"Purchase Agreement"), by and among HQSM, Sino-Xxxx and Sealink Wealth Limited,
a limited liability corporation organized and existing under the laws of the
British Virgin Islands, HQSM made in favor of Sino-Xxxx a Convertible Promissory
Note, dated August 17, 2004 (the "Note"), in the original principal amount of
U.S. $11,111,345. In accordance with the terms thereof, the Note matured in
October of 2004.
B. Pursuant to a letter dated November 4, 2004 (the "Demand Letter"), Sino-Xxxx
demanded of HQSM payment in full of the principal amount and accrued interest
due and outstanding under the Note or, in lieu of such payment and in full and
complete satisfaction of the Note, offered to accept (1) 15,730,493 shares (the
"Common Shares") of common stock, $0.001 par value per share, of HQSM, (2)
100,000 shares (the "Preferred Shares") of preferred stock, $0.001 par value per
share, of HQSM, issuable pursuant to a certificate of designation; provided that
HQSM shall make a cash payment to Sino-Xxxx of the accrued and unpaid interest
on the Note (the "Cash Payment").
C. Pursuant to that certain Agreement, dated as of November 4, 2004 (the
"Agreement"), by and among HQSM and Sino-Xxxx, HQSM accepted such offer from
Sino-Xxxx and HQSM issued the Common Shares to Sino-Xxxx in November 2004;
agreed to issue and deliver to Sino-Xxxx one or more certificates representing
the Preferred Shares as promptly as feasible, but in any event no later than the
earliest of (i) ten (10) calendar days following receipt by HQSM of all
requisite approvals (including without limitation, shareholder approvals) for
such issuance, and (ii) the six (6) month anniversary of the date of the Demand
Letter; and agreed to make the Cash Payment to Sino-Xxxx as promptly as
feasible, but in any event no later than 10 days following the execution and
delivery of the Agreement.
D. HQSM and Sino-Xxxx now wish to amend the Agreement to (i) extend the due date
for the issuance and delivery of the Preferred Shares; and (ii) extend the due
date for delivery of the Cash Payment.
E. Sino-Xxxx has also agreed to waive any and all defaults that have occurred
and presently exist under the Agreement and under the Note.
NOW THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements set forth below, and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto hereby agree as follows:
I. Amendment after Agreement
1. Section 1.01(b) of the Agreement is hereby amended by deleting
therefrom the phrase "the six (6) month anniversary of the date of the Demand
Letter" and by inserting in lieu thereof the phrase "the twelve (12) month
anniversary date of the Demand Letter".
2. Section 1.01(c) of the Agreement is hereby amended by deleting
therefrom the phrase "ten (10) calendar days following the execution and
delivery of the Agreement by the parties hereto," and inserting in lieu thereof
the phrase "the twelve (12) month anniversary date of the Demand Letter".
II. Waiver of Defaults
Sino-Xxxx hereby waives any and all defaults that have occurred and are
continuing under the Agreement and under the Note, including, without
limitation, default related to non-payment by HQSM of the Cash Payment in
accordance with the terms of the Agreement.
III. No Other Modifications
Except as specifically amended herein, the terms and provisions of the
Agreement shall remain unchanged and in full force.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
HQ SUSTAINABLE MARITIME INDUSTRIES, INC.
By: /s/ Xxxxxxx Sporns
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Name: Xxxxxxx Sporns
Title: CEO and President
SINO-XXXX CANADA (S.S.C.) LIMITED
By: /s/ Xxxxxxx Xxxx Li
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Name: Xxxxxxx Xxxx Li
Title: Director
