Exhibit 10.24
Forbearance Agreement by and between Registrant
and the Committee of Unsecured Creditors
FORBEARANCE AGREEMENT
This Forbearance Agreement is entered into as of , 2000, by and
between The Lamaur Corporation ("Lamaur") and the Committee of Unsecured
Creditors of Lamaur, acting on behalf of all general unsecured Creditors of
Lamaur, by and through its members, Xxxxx Illinois, Inc., U.S. Can Company,
Sequist Perfect, AeroPres Corp., Longview Fibre, Cognis Corp., and National
Starch and Chemical (the "Committee").
RECITALS
A. WHEREAS, Lamaur is indebted to its general unsecured creditors in the
approximate aggregate amount of $8,000,000, as of February 29, 2000, (the
"Existing Debt"). Lamaur and the Committee desire to address Lamaur's repayment
of the Existing Debt in accordance with the terms of this Forbearance Agreement.
B. WHEREAS, as a result of the Existing Debt, Lamaur's general unsecured
creditors are entitled to pursue certain remedies to attempt to recover the
Existing Debt according to state law. Lamaur has asked the Committee, on behalf
of all general unsecured creditors of Lamaur, to forbear from exercising those
remedies relating to the recovery of the Existing Debt and to encourage other
unsecured creditors to do likewise and the Committee on behalf of all general
unsecured creditors of Lamaur has agreed.
NOW, THEREFORE, for good and valuable consideration, the parties agree as
follows:
1. Acknowledgment of Liability. As of the date of this Forbearance
Agreement, Lamaur owes its general unsecured creditors an amount equal to the
Existing Debt. Notwithstanding the foregoing, Lamaur reserves any and all
claims, offsets or defenses that Lamaur may now have with respect to the payment
of the Existing Debt.
2. Forbearance. Lamaur acknowledges and agrees that neither the Committee,
nor Lamaur's general unsecured creditors is in any way agreeing to waive any
claim against Lamaur as a result of this Forbearance Agreement or the
performance by the parties of their respective obligations hereunder. Subject to
the conditions contained herein and performance by Lamaur of all of the terms of
this Forbearance Agreement after the date hereof, the Committee shall, until
December 31, 2001, forbear from exercising any remedies they may have against
Lamaur as a result of their status as unsecured creditors of Lamaur as of the
date hereof or the occurrence of any default(s) under any agreement(s) relating
thereto by and between Lamaur and the Committee or any general unsecured
creditors. In the event that an unsecured creditor who is not a member of the
Committee, but who is owed a portion of the Existing Debt attempts to engage in
collection efforts against Lamaur, Lamaur will promptly notify the committee of
the existence of such creditor and the Committee will use good faith efforts to
contact such creditor for the purpose of soliciting that Creditor's agreement to
be bound by the terms hereof to the same extent that current Committee members
have agreed to be bound. This forbearance shall not be deemed a continuing
waiver or forbearance with respect to any default which may occur under any such
agreement(s) or hereunder after the date of this Forbearance Agreement.
3. Grant of Security Interest. For and in consideration of this Forbearance
Agreement, Lamaur hereby grants to the Committee, on behalf of all of Lamaur's
general unsecured creditors, a security interest in certain presently existing
collateral (as described in that certain form UCC-1 financing statement, in
substantially the form attached hereto as Exhibit "A") in order to secure prompt
repayment of the Existing Debt; provided, however, that the security interest
granted herein shall be junior in priority to any and all existing liens and to
any and all interests of Congress Financial Corporation ("CFC"). As a result
hereof, Lamaur agrees to execute that certain Security Agreement attached hereto
as Exhibit "B." The Security Agreement shall remain in full force and effect
until the Existing Debt is satisfied in full. The Committee hereby authorizes
its attorney, Xxxxx Xxxxx, Esq., to terminate and release the UCC upon full
payment to unsecured creditors as provided for hereunder, upon receipt of a
written representation of such payment by an authorized Lamaur representative.
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4. Access to Corporate Records. For an in further consideration of this
Forbearance Agreement, Lamaur agrees to make available to the Committee certain
"Sensitive and Confidential Information," as defined in, pursuant to and
conditioned upon execution by the Committee of that certain Lamaur Corporation
Confidential Non-Disclosure Agreement, in substantially the form attached here
as Exhibit "C", as requested by the Committee, including but not limited to,
monthly financial information.
5. Payment Terms. Lamaur agrees to provide each of its general unsecured
creditors with a choice of payment of such creditor's portion of existing debt
to be made in writing by each creditor, consisting of:
A. Either an immediate 60% payment in full of the total nondisputed
outstanding debt to the individual creditors holding claims of up to a total of
$5,000, or those creditors holding claims of larger than $5,000 who elect to
reduce their claim to $5,000 to obtain 60% of $5,000, or
B. 100% payment of the total nondisputed outstanding debt as follows:
1. 40% of the total allowed claim to be paid upon execution of this
agreement to accept the payment schedule,
2. 5% to be paid on or before June 30, 2000,
3. 22% to be paid on or before January 2, 2001,
4. 5% to be paid on or before June 30, 2001,
5. 28% to be paid on or before December 31, 2001
6. Miscellaneous.
a. Successors and Assigns. This Forbearance Agreement shall be binding upon
and shall inure to the benefit of the Committee and Lamaur and their respective
constituents, successors and assigns; provided, however, that the foregoing
shall not authorize any assignment by the Committee of any of its rights or
duties hereunder.
b. Entire Agreement. This Forbearance Agreement contains the entire
agreement of the parties hereto and supersedes any other oral or written
agreements or understandings with respect to the subject matter hereof.
c. Governing Law. The parties acknowledge and agree that the conditions,
validity and enforceability of any terms or provisions of this Forbearance
Agreement shall be determined by the laws of the State of Minnesota governing
contracts entered into and to be performed in the State of Minnesota.
d. Interpretation of Agreement. This Agreement, the exhibits hereto, and
the documents to be executed in connection herewith, constitute a fully
negotiated agreement among commercially sophisticated parties and therefore
shall not be construed or interpreted for or against any party.
e. Venue. Any action to enforce, interpret or challenge the terms of this
Agreement, the exhibits hereto, and the documents to be executed in connection
herewith shall be brought within the State or Federal Courts of Minnesota, as
appropriate.
f. Attorneys' Fees and Costs. The parties hereto shall bear their own costs
and attorneys' fees related to this Forbearance Agreement.
g. Time is of the Essence. Time is of the essence as to each and every term
and provision of this Forbearance Agreement.
h. Counterparts. This Forbearance Agreement may be signed in counterparts
and all of such counterparts when properly executed by the appropriate parties
thereto together shall serve as a fully executed document, binding upon the
parties.
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i. Legal Effect. If any provision of this Forbearance Agreement conflicts
with applicable law, such provision shall be deemed severed from this
Forbearance Agreement, and the balance of this Forbearance Agreement shall
remain in full force and effect.
j. Due Authorization. Each individual executing this Forbearance Agreement
on behalf of an entity is duly authorized to so execute this Forbearance
Agreement and the entity on behalf of which this Forbearance Agreement is so
executed is valid, binding and enforceable against such entity.
IN WITNESS WHEREOF, the undersigned have executed this Forbearance
Agreement as of the first date above written.
THE LAMAUR CORPORATION
By:
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Title:
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The Committee of Unsecured Creditors of
Lamaur Corporation
By: Xxxxx Illinois, Inc.
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Xxxxxxxx Xxxxx
Its: Co-Chairman
By: U.S. Can Company
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Xxxx Xxxxxx
Its: Co-Chairperson
By: Xxxxxxxx Perfect
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Xxxxx Trojan
By: AeroPres Corp
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Xxxxxxx Xxxxxxx
By: Longview Fibre
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Xxxxxxx Xxxxxxx
By: Cognis Corporation
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Xxxxx Xxxxxxxx
By: National Starch & Chemical
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Xxxx Xxxxx
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