EXHIBIT 10.19
FORBEARANCE AGREEMENT
THIS FORBEARANCE AGREEMENT ("Agreement") is made as of the 8th day of
August, 2001, by and between FIRST COLONY MERCHANT AND XXXXXX TRADING LIMITED
(collectively "Lender") and CAN CAL RESOURCES LIMITED ("Borrower").
R E C I T A L S:
A. On or about November 23, 2000, Lender and Borrower entered into a Loan
Agreement by and between Lender and Borrower ("Loan Agreement") whereby Lender
loaned Borrower $300,000 with interest to be paid semiannually on May 24 and
November 24.
B. Borrower failed to make the interest payment due May 24, 2001.
C. The sum of $24,000.00 is now due and owing to Lender by Borrower.
D. The Borrower has requested that Lender modify the existing documents and
forbear from pursuing legal action regarding the default.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and other good and valuable consideration, the receipt and
sufficient of which are hereby acknowledged, the Lender and Borrower agree as
follows:
1. Recitals. The Recitals are incorporated into and made a part of this
Agreement.
2. Capitalized Terms. Unless otherwise defined herein, capitalized terms
shall have the same meaning as in the Loan Agreement.
3. Modification of Existing Documents. The existing documents shall be
modified as follows:
a. Payment of $24,000 representing the payment of interest which
should have been made on or before May 24, 2001, shall be added to the principal
and shall be paid on or before November 24, 2001. Interest shall accrue on the
outstanding principal amount as specified in the Loan Agreement.
b. Alternatively, the Lender may, up through close of business
November 20, 2001, purchase the number of common voting stock of the Borrower
determined by using a purchase price per share of 50% of the lowest trading
price published by Yahoo! Finance Historical Quote during the period from the
date of the Loan Agreement through
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November 19, 2001 and dividing the cost per share so determined into the total
of the $24,000 plus interest on the $24,000 through the date of the exercise.
The Lender must exercise this option in whole by giving written notice to the
Borrower on or before November 20, 2001. Upon exercise of the option, the amount
of principal shall be reduced by $24,000 and the Borrower shall owe no interest
on the $24,000.
4. Representations and Warranties. In order to induce Lender to enter
into this Agreement, the Borrower hereby acknowledges, represents, and warrants
to Lender as follows:
a. Financing. Lender is not required to extend the Borrower any more
financing.
b. Release and Waivers. Borrower, for itself and its heirs,
personalrepresentatives, successors and assigns, hereby jointly and severally,
releases, discharges, and forever waives and relinquishes any and all claims,
demands, obligations, liabilities, defenses, affirmative defenses, and causes of
action of whatsoever kind or nature whether known or unknown which they or it
has, may have, or might have or may assert now or in the future against Lender
directly or indirectly arising out of, based upon, or in any manner connected
with any transaction, event, circumstance, action or occurrence which occurred,
existed, was taken, permitted, or begun prior to the execution of this
Agreement. In connection with the general release set forth above, Borrower, for
themselves and Borrower's affiliates, and each of them, hereby waive and
relinquish all rights and benefits afforded under the provisions of Section 1542
of the California Civil Code, which provides as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE
TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE
MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR."
c. Litigation. There is no litigation, at law in equity, nor any
proceeding before any Federal, state, or other governmental or administrative
agency or any arbitration pending or, to the knowledge of the Borrower,
threatening against the Borrower nor any other litigation or proceeding pending
or, to the knowledge of the Borrower, threatened affecting any collateral in
favor of the Lender.
d. Enforceability. The Loan Agreement, the Deed of Trust and Option
Agreement and any other attachments to the Loan Agreement constitute the legal,
valid and binding obligation of the Borrower.
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e. No Offset. Borrower has no defense, affirmative defenses, setoffs,
or counterclaims which may or could have occurred or existed regarding the
amounts due pursuant to the Loan Agreement or its attachments.
5. Force and Effect of Loan Agreement. Except as amended or modified by
this Agreement, the Loan Agreement, the Option Agreement, and the Deed of Trust
remain in full force and effect.
6. Integrated Agreement. This Agreement, together with the Loan
Agreement, the Option, and the Deed of Trust and any other agreements,
documents, obligations and transactions contemplated by this Agreement or the
Loan Agreement constitute the entire agreement and understanding between the
parties and supersede all other prior written and contemporaneous agreements and
may not be altered or amended except by written agreement signed by the parties.
IN WITNESS WHEREOF, the parties have executed or caused to be executed
this Agreement, as indicated below.
BORROWER
CAN CAL RESOURCES LIMITED
By: /s/ Xxxx Xxxxxxx
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LENDER
FIRST COLONY MERCHANT
By: /s/ Xxxxxx X. Xxxxx
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