Exhibit 10.114
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MEMORANDUM OF UNDERSTANDING
FOR AMENDMENT OF
$500,000 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 ("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 (iv) the Registration Rights Agreement, (v) the
"DRM Undertaking", 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, CXI 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 1, 2004. 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 CXI or any subsidiary of CXI shall receive from any
third party in connection with any on or more debt and/or equity cash
financings. Any such mandatory prepayments shall be applied first to
accrued and unpaid interest and net to principal in the order of first
maturing indebtedness. CXI shall provide the Investors (or its
representative, Xxxxxxxxx Traurig, LLP) with true copies of all letters
of intent or related written proposals acceptable to CXI which are
received by CXI 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) CXI's
failure to register under the Securities Act of 1933, as amended, for
the benefit of the Investors all shares of CXI common stock and shares
issuable under the CXI warrants described herein, pursuant to an
effective registration statement on Form S-3 or Form S-1 by not later
than August 31, 2003; or (ii) the voluntary or involuntary filing of
any proceedings against CXI under Chapter 11 of the Federal Bankruptcy
Act or similar state statutes.
(d). Contemporaneously herewith, CXI shall (i) extend the expiration
date on Warrants previously issued pro rata, to the Investors on April
16, 2001, for 1,000,000 shares of CXI common stock, each such warrant
to have an exercise price equal to the April 5, 2001 closing price for
CXI's common stock (i.e., $0.05 per share) and will now expire on April
16, 2004; (ii) CXI shall issue to the Investors, pro rata, warrants for
an additional 500,000 shares of CXI common stock in the form as that
attached hereto, each such warrant to have an exercise price equal to
the October 29, 2002 closing price for CXI's common stock (i.e., $0.05
per share) and will expire on January 1, 2005. The warrants will
contain cashless exercise features and the shares of CXI common stock
issuable upon exercise of the warrants will be included in S-3
registration statement that CXI will file with the SEC by May 31, 2003.
In all other respects, the warrants shall be subject to the same
registration rights as are contained in the Registration Rights
Agreement; and (iii) CXI shall cancel the Warrant issued to the
Investors on January 24, 2002, pro rata, for 500,000 shares of CXI
common stock, with an exercise price equal to the January 24, 2002
closing price for CXI's common stock (i.e., $0.15 per share).
(e). CXI will file an S-3 registration statement with the SEC by May
31, 2003 and shall cause such registration statement to be declared
effective by the SEC by not later than August 31, 2003.
(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 CXI in connection with any indebtedness owed by CXI to such third
party lender; provided, that such third party lender shall not be any
affiliate of CXI.
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.
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
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Understanding has been duly approved and authorized by the board of directors of
CXI; 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, February 10, 2003 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 18th day of November 2002 and made effective as
of the 29th day of October 2002 (the "Effective Date").
COMMODORE APPLIED TECHNOLOGIES, INC.
By: /s/ Xxxxx X. XxXxxxxxx
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Name: Xxxxx X. XxXxxxxxx
Title: Chief Financial Officer
INVESTORS:
XXXXXXX ASSOCIATES
/s/ Xxxxxxx X. Xxxxxxxxx
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Xxxxxxx X. Xxxxxxxxx, General Partner
KLASS PARTNERS, LTD
/s/ Xxxxx Xxxxxxxxx
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Xxxxx Xxxxxxxxx, President
/s/ Xxx Xxxx Xxxxxxxxx
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Xxx Xxxx Xxxxxxxxx
/s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
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Schedule A - INVESTORS
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Amount of Original Number of Cancelled Warrants Number of New Warrants for Number of Warrants for
Name and Address: Investment on November for CXI Common Stock issued CXI Common Stock issued CXI Common Stock issued
13, 2000 January 24, 2002: October 29, 2002: on April 16, 2001
subject to extension:
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Xxxxxxx Associates
C/o Xxxxxxx Xxxxxxxxx $150,000 166,667 166,667 300,000
000 Xxxxxxx Xxxx
Xxxxxx, XX 00000
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Xxx Xxxx Xxxxxxxxx
000 Xxxx 00xx Xxxxxx $ 75,000 83,332 83,332 150,000
Xxx. 0X
Xxx Xxxx, Xxx Xxxx 00000
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Xxxxxxx X. Xxxxx
000 Xxxx Xxx Xxxxxx $ 25,000 27,778 27,778 50,000
Xxxxxxxxx 0X
Xxx Xxxx, XX 00000
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Klass Partners, Ltd.
C/o Xxxxx Xxxxxxxxx $250,000 222,222 222,222 500,000
00 Xxxxxxxx Xxxxxx
Xxx. 000
Xxxxxxxxx, Xxxxxx 00000
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Total . . . . $500,000 500,000 500,000 1,000,000
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