AMENDMENT TO LOAN AND SECURITY AGREEMENT
Exhibit
10.18
AMENDMENT
TO LOAN AND SECURITY AGREEMENT
This
AMENDMENT TO LOAN AND SECURITY AGREEMENT is made as of May 19, 2008 (this
"Amendment"),
by
and among Mercator Momentum Fund III, LP, a California limited partnership
(together with its successors, assigns and designees, the "Lender"),
as
Lender, and Global Clean Energy Holdings, Inc., a Utah corporation formerly
known as Medical Discoveries, Inc. ("Borrower"),
as
borrower. Unless expressly defined in this Amendment, all capitalized terms
have
the meanings given to them in that certain Loan and Security Agreement, dated
September 7, 2007 (the “Loan
Agreement”).
RECITALS
A. Pursuant
to the Loan Agreement, Lender agreed to make available to Borrower a secured
term credit facility (the "Loan")
in the
amount of up to One Million Dollars ($1,000,000) (the "Loan
Amount").
B. Lender
has, to date, only extended a total of $350,000 under the Loan Agreement, of
which $150,000 has been repaid and $200,000 of principal remains outstanding
(the “Existing
Loan Balance”).
The
Existing Loan Balance is due and payable on June 21, 2008.
C. Each
of the draw-downs to be made under the Loan Agreement (the, “Loans”)
are to
be evidenced by, among other things, secured promissory notes in the form of
Exhibit
A
attached
to the Loan Agreement (together with all renewals, rearrangements, replacements,
modifications, substitutions, and extensions thereof, each, a “Note”
and,
collectively, the “Notes”).
D. Borrower
now desires to draw-down an additional $250,000 under the Loan (the
“Additional
Draw-Down”),
and
combine the Existing Loan Balance and the Additional Draw-Down (collectively,
the “Total
Outstanding Loan Balance”)
into
one Note having a principal balance of $450,000, with an extension of the
maturity date of the Loan to August 19, 2008 (the “Revised
Note”).
E. As
an inducement to Lender to lend the Additional Draw-Down and to accept the
Revised Note, Borrower agrees (i) that the Revised Note shall bear interest
at
the rate of 8.68% per
annum,
and
(ii) to issue to Lender a warrant to purchase shares of Common Stock as more
particularly set forth herein.
E. Lender
and Borrower now desire to amend the Loan Agreement to reflect the (i) loan
of
the Additional Draw-Down, (ii) the terms of the Revised Note, and (iii) certain
other amendments to the Loan Agreement.
AGREEMENT
NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency
of
which are hereby acknowledged by the parties, the parties agree as
follows:
Section
1. Section 1 of the Loan Agreement is hereby amended and restated to read in
its
entirety as follows:
“Section
1. The
Loan.
1.1 Agreement
to Lend.
In
reliance upon the representations and warranties contained herein and subject
to
compliance by Borrower with the terms and conditions of this Amendment, the
parties hereby agree as follows:
(a) Effective
as of the date of this Amendment, Lender shall lend Borrower the Additional
Draw-Down.
(b) The
Note evidencing the Existing Loan Balance will be superseded by the Revised
Note, which will evidence the Total Outstanding Loan Balance, with a principal
balance of $450,000, and will bear interest at the rate of 8.68% per
annum
, the
form of which is attached hereto as Exhibit
A.
Borrower
and Lender hereby agree that the Existing Loan Balance shall remain a “Loan” as
defined under the Loan Agreement, and that the Additional Draw-Down under this
Amendment likewise shall constitute a “Loan” under the Loan Agreement and shall
be subject to the terms and conditions of the Loan Agreement, as modified by
this Amendment and by the Revised Note.
1.2 Delivery
of Revised Note and Existing Note. Concurrently with the execution and delivery
of this Amendment and the funding of the Additional Draw-Down, (i) Lender is
returning the originally executed Existing Note to Borrower, and (ii) Borrower
is delivering to Lender an originally executed Revised Note.
1.3 Interest
Payment on Existing Loan. Concurrently with the execution of this Amendment,
Borrower is paying all unpaid interest that has accrued through the date of
this
Amendment on the Existing Loan Balance.
1.4 Interest
on the Principal Indebtedness.
Interest on the outstanding principal indebtedness of the Revised Note shall
accrue at the rate of 8.68% per
annum
and be
payable upon maturity or the prepayment thereof, in the manner and at the times
set forth in the Revised Note.
1.5 Consideration.
In
consideration for Lender’s agreement to loan the Additional Draw-Down and extend
the maturity of the Loan and for the other agreements made by Lender hereunder,
Borrower and Lender agree that, concurrently with the execution of this
Amendment and the Revised Note and the funding of the Additional Draw-Down
,
Borrower will, on the first business day following the date of this Amendment,
issue to Lender a one-year Common Stock purchase warrant (the “New
Warrant”),
pursuant to which Lender shall have the right to purchase a number of shares
of
Common Stock equal to $75,000 divided by 130% of the Closing Price (as defined
below). The New Warrant shall have an exercise price equal to 130% of the
Closing Price. For the purposes of this Section 1.5, the term “Closing Price”
shall mean the last price of the Common Stock on the date of this Agreement
as
published by the OTC Bulletin Board.
Section
2. Section 2 of the Loan Agreement is hereby amended and restated in its
entirety to read as follows:
“Section
2. Representations
and Warranties of Borrower.
As an
inducement to Lender to enter into this Amendment and the Revised Note, Borrower
represents and warrants to Lender that, as of the date hereof, all
representations and warranties contained in the Loan Agreement are true and
correct in all material respects except as supplemented, updated or revised
as
follows:
2.1 Amendment
and Revised Note Authorized.
The
execution, delivery and performance of this Amendment and the Revised Note
by
Borrower, are duly authorized and do not require the consent or approval of
any
governmental body or other regulatory authority; are not in contravention of
or
conflict with any law or regulation or any term or provision of its
organizational documents; and the Amendment and the Revised Note are valid
and
binding obligations of Borrower enforceable in accordance with their
terms.
2.2 Collateral.
(a) Borrower
represents and warrants that it has no place of business or offices where its
respective books of account and records are kept (other than temporarily at
the
offices of its attorneys or accountants) or places where the Collateral is
stored or located, other than at its offices at 0000 X. Xxxxxxx Xxxx., #0000
Xxx
Xxxxxxx, XX 00000.
2.3 Change
in Name. Borrower has changed its name to “Global Clean Energy Holdings, Inc.”
2.4 Financial
Information.
The
historical financial data concerning Borrower that has been delivered by
Borrower to the Lender, consisting of the unaudited, internally prepared balance
sheet and income statement for the period ending March 31, 2008, is true,
complete and correct in all material respects and fairly presents the financial
condition of the persons or entities covered thereby as of the date of such
reports. Since the delivery of such data, except as otherwise disclosed in
writing to the Lender, there has been no material adverse change in the assets,
liabilities or financial position of Borrower or in the results of operations
of
Borrower. Borrower has not incurred any obligation or liability, contingent
or
otherwise, not reflected in such financial data which could reasonably be
expected to cause a Material Adverse Effect.
2.5 Eucodis
Sale. The co-development and licensing agreements between Borrower and
Eucodis Pharmaceuticals Forschungs - und Entwicklungs GmbH have been terminated.
In addition, the agreements between Borrower and Eucodis regarding the Eucodis
Sale have expired and, as a result, there currently is no agreement in effect
regarding the possible sale by Borrower of its rights to that certain topical
aromatase inhibitor cream to Eucodis. Borrower is continuing to discuss the
possible sale of its rights in the topical aromatase inhibitor cream with
Eucodis as well as with other potential purchasers. For the purposes of this
Amendment and the Revised Note, the sale of the topical aromatase inhibitor
cream to Eucodis or any other party is hereafter referred to as the
‘SaveCream
Sale.’”
Section
3. Section 4.3 of the Loan Agreement is hereby deleted in its entirety.
Section
4.
Miscellaneous Provisions.
4.1 Termination
of Emmes Group.
Lender
and Borrower hereby agree and acknowledge that the Advisors have resigned.
Lender and Borrower further agree that the Letter Agreement with the Advisors
has been terminated and that the parties no longer need to comply with the
terms
thereof.
4.2 Notices
to Parties.
All
notices or other communications hereunder or under any other Loan Document
by
any
party to any other party shall be in writing unless otherwise provided for
herein and shall be served by hand, certified or registered mail, postage
prepaid, return receipt requested, or facsimile transmission confirmed by
certified or registered
mail. All such notices or other communications shall be deemed to have been
sufficiently given for all purposes hereof on the date of receipt or refusal
to
accept delivery. Addresses for notices are as listed below. Any party may change
the address to which notices are to be sent by notice of such change to the
other parties given as provided herein.
(i)
if to Lender:
Mercator
Momentum Fund III, LP
000
Xxxxx
Xxxxxx Xxxxxx, Xxxxx 0000
Xxx
Xxxxxxx, XX 00000
Attention:
Xxxxx X. Xxxxxxxxx
Telephone:
(000) 000-0000
Telecopier:
(000) 000-0000
with
a
copy to:
Xxxxx
Winner Xxxxxxx, Esq.
00000
Xxxxx Xxxxx
Xxxxxx,
XX 00000
Attention:
Xxxxx Winner Xxxxxxx, Esq.
Telephone:
(000) 000-0000
Telecopier:
(000) 000-0000
(ii)
if to Borrower:
0000
X.
Xxxxxxx Xxxx., #0000
Xxx
Xxxxxxx, XX 00000
Attention:
Xxxxxxx Xxxxxx
Telephone:
(000) 000-0000
Telecopier:
(000) 000-0000
with
a
copy to:
Xxxx
Xxxxx PC
0000
Xxxxxxx Xxxx Xxxx, Xxxxx 0000
Xxx
Xxxxxxx, XX 00000
Attention:
Xxxxxx Xxxxx, Esq.
Telephone:
(000) 000-0000
Telecopier:
(310) 789-142
4.3 Waiver.
Lender hereby waives any and all Events of Default that may have occurred prior
to the date of this Amendment or that exist as of the date of this
Amendment.
4.4 No
Other
Changes to Loan Agreement.
Except
as
amended hereby, the Loan Agreement shall remain in full force and
effect.
IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
by
their duly authorized representatives, as of the date first above
written.
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LENDER:
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MERCATOR
MOMENTUM FUND III, LP,
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a
California limited partnership
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By:
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/s/
MERCATOR MOMENTUM FUND III, LP
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Name:
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Title:
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BORROWER:
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a
Utah corporation
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By:
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Name:
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Title:
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