Exhibit 10.94
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FORBEARANCE AGREEMENT
AND
FIRST AMENDMENT TO LOAN DOCUMENTS
FORBEARANCE AGREEMENT AND FIRST AMENDMENT TO LOAN DOCUMENTS,
dated as of January 11, 2002 (this "Agreement"), made by and among Commodore
Applied Technologies, Inc. (the "Borrower"), Commodore Advanced Sciences, Inc.
("CASI"), and Milford Capital & Management (the "Lender").
PRELIMINARY STATEMENT
WHEREAS, on June 13, 2001, Lender made a loan (the "Loan") to
the Borrower in the original principal amount of $500,0000, as evidenced by a
certain Secured Promissory Note dated as of June 13, 2001 in the original
principal amount of $500,000 (the "Note") executed and delivered to the Lender
by the Borrower; capitalized terms used herein but not defined herein having the
meaning specified in the Note;
WHEREAS, CASI executed and delivered to the Lender a certain
Guaranty and Suretyship Agreement dated as of June 13, 2001 (the "Guaranty")
whereby inter alia, CASI unconditionally guaranteed the payment and performance,
inter alia, of all of Borrower's obligations under the Note;
WHEREAS, the Note is secured, inter alia, by (a) a certain
Security Agreement dated as of June 13, 2001 executed and delivered by Borrower
and CASI (collectively, the "Obligors") to the Lender (the "Security
Agreement"), and (b) a certain Patent Collateral Assignment dated as of June 13,
2001 executed by Borrower to the Lender (the "Patent Assignment");
WHEREAS, the Borrower has granted to Lender a certain Warrant
to Purchase Common Stock of Commodore Applied Technologies, Inc. dated as of
June 13, 2001, whereby inter alia, the Lender has the option of purchasing up to
166,667 shares of the Common Stock of the Borrower at an exercise price of $.21
per share (the "Warrant") and the Borrower and the Lender entered into that
certain Registration Rights Agreement dated as of June 13, 2001 (the
"Registration Agreement");
WHEREAS, the Borrower has failed to make the scheduled payment
of principal and interest due on December 13, 2001 and such failure constitutes
an Event of Default under the Note;
WHEREAS, the Borrower has requested that Lender forbear from
exercising its rights and remedies under the Note, the Guaranty, the Security
Agreement, and the Parent Assignment (collectively, the "Loan Documents") from
December 13, 2001 through February 12, 2002 (the "Forbearance Period") with
respect to certain existed and anticipated Events of Defaults;
WHEREAS, the Borrower has further requested that upon the end
of the Forbearance Period, the payments under the Note be rescheduled as set
forth in the Restated Note (hereinafter defined);
WHEREAS, Lender is willing to grant such a forbearance and
enter into such amendment, but only upon the terms and conditions herein
contained;
NOW THEREFORE, the Obligors and the Lender hereby agree as
follows:
SECTION 1. Recitals. The Recitals are incorporated into this
Agreement by reference.
SECTION 2. Forbearance. The Lender hereby agrees to forbear
from accelerating the indebtedness evidenced by the Note during the Forbearance
Period and to refrain during the Forbearance Period from taking any enforcement
actions against the Borrower, but only to the extent that the Defaults giving
rise to such remedies relate to failure to make the principal and interest
payments due on December 13, 2001 and January 13, 2001 under the Note (the
"Acknowledged Defaults").
SECTION 3. Forbearance Fee. The Obligors hereby jointly and
severally agree to pay to Lender the sum of $7,500 as a Forbearance Fee (the
"Forbearance Fee"), such Forbearance Fee to be due and payable on February 13,
2002. The parties agree that the Forbearance Fee is fully earned on the date
hereof.
SECTION 4. Effect of Waiver. Except as set forth expressly
herein, all terms of the Note and the other Loan Documents shall be and remain
in full force and effect, and shall constitute the legal, valid, binding and
enforceable obligations of the Borrower and the Guarantor. The forbearance set
forth in Section 2 hereof: (a) shall relate only to the Acknowledged Events of
Default, and (b) is subject to the satisfaction of the conditions precedent set
forth in Section 7 hereof. The waiver hereby granted by the Lender shall not
apply to any other past, present or future noncompliance with any provision of
the Note or any of the other Loan Documents (including, without, limitation, any
Event of Default occurring or in existence after the end of the Forbearance
Period, whether or not related to an Acknowledged Event of Default), and all
rights, powers and remedies of the Lender are reserved with respect thereto).
SECTION 5. No Novation or Mutual Departure. The Obligors
expressly acknowledge and agree that: (a) there has not been, and this Agreement
does not constitute or establish, a novation with respect to the Note or any of
the Loan Documents, or a mutual departure from the strict terms, provisions and
conditions thereof, other than as specifically specified in Section 2 hereof;
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and (b) nothing in this Waiver shall affect or limit the Lender's right to
demand payment of liabilities owing from the Obligors under, or to demand strict
performance of the terms, provisions and conditions of, the other Loan Document,
to exercise any and all rights, powers and remedies under the Loan Documents or
at law or in equity, or to do any and all of the foregoing, immediately at any
time after (a) the occurrence of an Event of Default, other than arising from an
Acknowledged Event of Default during the Forbearance Period or (b) the
occurrence of any Event of Default after the Forbearance Period.
SECTION 6. Amended and Restated Note. The Obligors are
contemporaneously herewith executing and delivering to the Lender that certain
Amended and Restated Secured Promissory Note (the "Restated Note") in form and
substance as attached hereto as Exhibit A. Lender shall hold the Restated Note
in escrow and the Restated Note shall not be effective until February 13, 2002;
provided however that Lender shall only release the Restated Note from escrow on
February 13, 2002 if (a) the conditions precedent set forth in Section 7 hereof
are satisfied, and (b) no Event of Default other than the Acknowledged Defaults
shall have occurred during the Forbearance Period. Upon its release from Escrow
the Restated Note shall amend and restate the Note in its entirety effective as
of February 13, 2002.
SECTION 7. Conditions to Effectiveness. This is effective when
duly executed by all parties, but Section 2 of this Agreement shall become
effective when all of the following conditions have been satisfied, provided
however, that if all such conditions are not satisfied on or before January 15,
2002, Section 2 shall be of no force or effect:
(a) the Lender shall have received the Restated Note, duly
executed by the Borrower;
(b) the Lender shall have received counterparts of this
Agreement executed by the Obligors and the Lender;
(c) the Lender shall have received true, correct and
complete (including all attachments) file-stamped copies of each of the
financing statements filed in connection with the Loan when originally made,
each of which financing statement shall be preceded by a cover sheet indicating
the jurisdiction in which such statement was filed and date such statement was
filed;
(d) the Lender shall have received the Consent and
Acknowledgement of Shaar Fund, Ltd. in form and substance as set forth in
Exhibit B; and
(e) the Lender shall have received a certificate of the
Secretary or Assistant Secretary of each Obligor, dated the date hereof,
attesting to all corporate action taken by each of the Obligors, including
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resolutions of its Board of Directors authorizing the execution, delivery and
performance of the Restated Note and this Agreement and each other document to
be delivered pursuant to this Agreement and certifying true copies of the
articles of incorporation, by-laws and other organizational documents of each of
the Obligors.
SECTION 8. Representations and Warranties of the Obligors. The
Obligors jointly and severally represent and warrant as follows:
(a) The representations and warranties contained in the
Loan Documents are true and correct in all material respects on and as of the
date hereof as though made on and as of such date. In addition, all
representations and warranties contained in the Warrant and Registration
Agreement (collectively, the "Warrant Documents") are true and correct in all
material respects on and as of the date hereof as though made on and as of such
date.
(b) After giving effect to this Agreement, no event has
occurred and is continuing, which constitutes an Event of Default under the Note
(other than the "Acknowledged Defaults"), or any of the other Loan Documents, or
would constitute an Event of Default under the Note or any of the other Loan
Documents but for the giving of notice or the passage of time, or both (other
than the Acknowledged Defaults"), and the execution, delivery and performance of
this Agreement shall not cause or constitute any such default or any such Event
of Default under any of the Loan Documents, as amended hereby.
SECTION 9. References to and Effect on the Facility Documents.
(a) Upon the effectiveness of the Restated Note, on and
after the date hereof, each reference in the Loan Documents to "the Note," or
words of like import shall mean and be a reference to the Restated Note.
(b) Except as specifically amended herein, the Loan
Documents and the Warrant Documents remain in full force and effect and are
hereby ratified and confirmed. Without limiting the generality of the foregoing,
(i) the Guaranty does and shall continue to secure the payment of all of
Borrower's obligations under to Lender, whether primary or secondary, direct,
absolute or contingent, sole, joint and/or several, heretofore, now or hereafter
acquired or arising, whether at maturity or acceleration, pursuant to the or in
connection with the Loan and otherwise due and owing pursuant to the Loan
Documents, as modified hereby, and (ii) the Security Agreement does and shall
continue to secure the payment of all "Obligations" as defined therein (which
shall include obligations under the "Restated Note").
(c) The execution, delivery and effectiveness of this
Agreement shall not, except as expressly provided herein, operate as a waiver of
any right, power or remedy of the Lender under any of the Loan Documents or
under any of the Warrant Documents, nor constitute a waiver of any provision of
any of the foregoing.
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SECTION 10. Acknowledgment of Outstanding Loans. The Obligors
hereby acknowledge, certify and agree that: (a) the outstanding principal
balance of the Loan on the date hereof is $187,500; and (b) the obligations of
the Obligors to repay the Loan (with interest and expenses) to the Lender and to
perform or otherwise satisfy their respective other obligations under the Loan
Documents (i) each remain and shall continue in full force and effect, both
before and after giving effect to this Agreement, (ii) are not subject to any
defense, counterclaim, setoff, right of recoupment, abatement, reduction or
other claim or determination, and (iii) are and shall continue to be governed by
the terms and provisions of the Loan Documents as supplemented, modified and
amended by this Agreement.
SECTION 11. Costs, Expenses and Taxes. The Obligors jointly
and severally agree to pay on demand all costs and expenses of the Lender in
connection with the preparation, execution and delivery of this Agreement and
the Restated Note, and any other instruments and documents to be delivered
hereunder, including, without limitation, the reasonable fees and out-of-pocket
expenses of counsel for the Lender with respect thereto and with respect to
advising the Lender as to its rights and responsibilities hereunder and
thereunder. The Obligors further jointly and severally agree to pay on demand
all costs and expenses, if any (including, without limitation, reasonable
counsel fees and expenses), in connection with the enforcement (whether through
negotiations, legal proceedings or otherwise) of this Agreement, and any other
instruments and documents to be delivered hereunder, including, without
limitation, reasonable counsel fees and expenses in connection with the
enforcement of rights under this Section. In addition, the Obligors jointly and
severally agree to pay on demand any and all stamp and other taxes payable or
determined to be payable in connection with the execution and delivery of this
Agreement, and any other instruments and documents to be delivered hereunder,
and jointly and severally agree to save the Lender harmless from and against any
and all liabilities with respect to or resulting from any delay in paying or
omission to pay such taxes.
SECTION 12. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed to be an original and all of which taken together as a whole shall
constitute but one and the same instrument.
SECTION 13. Governing Law. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of New York.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective authorized signatories, as of the
date first above written.
MILFORD CAPITAL & MANAGEMENT
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BY:
ITS:
Commodore Applied Technologies, Inc.
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BY: Xxxxxx X. Xxxxxx
ITS: Chairman and Chief Executive Officer
ALTHOUGH NO NOTICE TO OR APPROVAL
FROM THE UNDERSIGNED GUARANTOR IS REQUIRED,
THE UNDERSIGNED GUARANTOR ACKNOWLEDGES,
CONFIRMS AND JOINS IN THE REQUEST
FOR THE FOREGOING AGREEMENT
Commodore Advanced Sciences, Inc.
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BY: Xxxxx X. XxXxxxxxx
ITS: Treasurer and Secretary
..StmLib1:926764.1 01/09/02
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