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EXHIBIT 10.8
THIRD FORBEARANCE AGREEMENT
THIS THIRD FORBEARANCE AGREEMENT (the "Third Forbearance Agreement") is
made as of April 1, 1997, by and between OAKMONT PHARMACEUTICALS, INC., a
Delaware corporation ("Oakmont"), and REXALL SUNDOWN, INC., a Florida
corporation ("Rexall Sundown"), as assignee of RSL Holdings, Inc. (formerly
known as Pennex Laboratories, Inc. and, before that, RS Acquisition, Inc.), a
Pennsylvania corporation ("RSL"), for the purpose of amending the payment terms
under that certain Forbearance Agreement dated April 29, 1996 by and between
Oakmont and Rexall Sundown (the "First Forbearance Agreement"), and that certain
Second Forbearance Agreement dated September 23, 1996 by and between Oakmont and
Rexall Sundown (the "Second Forbearance Agreement").
Pursuant to an Agreement of Purchase and Sale dated as of December 29,
1995, by and between RSL as Seller and Oakmont as Buyer (the "Purchase
Agreement"), RSL sold to Oakmont various assets formerly used in RSL's
pharmaceutical manufacturing business (collectively, the "Assets"), including
(i) certain real estate in Plum Borough, Allegheny County, Pennsylvania (the
"Real Property"), wherein RSL conducted its pharmaceutical manufacturing
operations, and (ii) various items of personal property (collectively, the
"Personal Property") including equipment used by RSL in the conduct of its
operations conducted at the Real Property and inventory located at the Real
Property. RSL retained a mortgage lien on the Real Property and a security
interest in the Personal Property to secure Oakmont's payment of the unpaid
balance of the purchase price of the Assets and various other obligations owed
by Oakmont to RSL (collectively, the "Obligations") pursuant to a promissory
note dated January 31, 1996 (the "Note") and a mortgage dated February 1, 1996
and a security agreement dated January 31, 1996 (such mortgage and security
agreement are together hereinafter referred to as the "Security Documents").
Thereafter, RSL transferred all of its rights in respect of the Obligations and
in and under the Note and Security Documents to Rexall Sundown.
Oakmont defaulted in the timely payment of the Obligations. Thereafter,
Rexall Sundown and Oakmont entered into the First Forbearance Agreement and the
Second Forbearance Agreement, whereby Rexall Sundown agreed to forbear from the
enforcement of its right to payment on the outstanding balance of the
Obligations on the terms and conditions set forth therein.
Simultaneously with the execution and delivery of the First Forbearance
Agreement, Oakmont delivered to Xxxxxxxxxxx & Xxxxxxxx LLP ("K&L"), counsel to
Rexall Sundown, at its office at 0000 Xxxxxx Xxxxxxxx, Xxxxxxxxxx, XX 00000, the
following items: (i) an executed and acknowledged Deed of Conveyance, conveying
the Real Property to a person or persons to be designated by Rexall Sundown; and
(ii) an executed Xxxx of Sale, conveying the Personal Property to a person or
persons to be designated by Rexall Sundown (the Deed and the Xxxx of Sale are
hereinafter collectively referred to as the "Transfer Documents"). K&L has been
holding the Transfer Documents in escrow pursuant to the terms of the First
Forbearance Agreement.
Oakmont has also defaulted in the timely payment of the amounts due
under the First Forbearance Agreement and the Second Forbearance Agreement (the
"Modified Obligations").
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Rexall Sundown is willing to forbear from the enforcement of its rights and
remedies in respect of such default, on the terms and conditions set forth
herein.
NOW THEREFORE, in consideration of the foregoing recitals and the
mutual promises herein contained, Oakmont and Rexall Sundown, each intending to
be legally bound, hereby, agree as follows:
1. Rexall Sundown waives any right to accelerate the maturity of the
outstanding balance of the Modified Obligations or to exercise any other right
or remedy under the Purchase Agreement, the Note, the Security Documents, the
First Forbearance Agreement or the Second Forbearance Agreement available by
reason of any payment default thereunder occurring prior to the date of this
Third Forbearance Agreement, and if such acceleration shall be deemed to have
occurred prior to the date hereof by reason of any such default, such
acceleration shall be deemed nullified and rescinded. Rexall Sundown further
agrees not to accelerate the maturity of the Modified Obligations or take any
other action to enforce payment of the Modified Obligations unless an Event of
Default (as defined below in paragraph 5 below) shall have occurred and be
continuing.
2. Oakmont will pay Rexall Sundown the following amounts on or before
the following dates:
April 30, 1997: $60,000.00
May 31, 1997: $60,000.00
June 30, 1997: $60,000.00
Payments made pursuant to this paragraph shall be applied first to accrued and
unpaid interest on the Modified Obligations, and next to the unpaid principal
balance of the Modified Obligations.
3. On or before July 31, 1997, Oakmont shall pay Rexall Sundown the
outstanding balance due under the Purchase Agreement, the Note, and the Security
Documents as modified by the First Forbearance Agreement, the Second Forbearance
Agreement and this Third Forbearance Agreement (collectively, the "Modified
Documents"), as specifically set forth on Exhibit A attached hereto.
4. In addition to the amounts due to Rexall Sundown pursuant to Section
3 hereof, Oakmont shall pay to Rexall Sundown an additional forbearance fee of
$250,000 not later than July 31, 1997.
5. Any of the following events shall constitute an "Event of Default"
for purposes of this Third Forbearance Agreement: (i) Any of the payments
required to be made pursuant to this Third Forbearance Agreement shall not be
made in full on or before its respective due date; or (ii) Oakmont shall have
defaulted in the payment or performance of any other duty or obligation under
the Modified Documents (other than any default waived by Rexall Sundown pursuant
to paragraph 1 above) and any applicable grace or cure period shall have
expired.
6. If any Event of Default shall have occurred and be continuing, then,
in any such event, Rexall Sundown may accelerate the maturity of all the
remaining amounts payable hereunder, and, in addition, may do any or all of the
following: (a) cause K&L to deliver the
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Transfer Documents to Rexall Sundown; cause such Transfer Documents to be
completed by the insertion of the name of the transferee or transferees of the
Real Property and the Personal Property; and cause any or all of the Transfer
Documents to be filed or recorded in the appropriate public records; (b) cause
judgment to be entered in favor of Rexall sundown (or its assignee) and against
Oakmont for all or any part of the outstanding balance of such amounts pursuant
to the warrant of attorney hereinafter set forth; and (c) exercise any and all
other rights and remedies provided by law.
7. If, in accordance with this Third Forbearance Agreement, Rexall
Sundown elects to cause K&L to deliver to Rexall Sundown the Transfer Documents,
then Oakmont shall be released and discharged from any and all further liability
in respect of the amounts payable hereunder; provided, however, that nothing in
this Third Forbearance Agreement shall impair Rexall Sundown's right to enforce
its lien and security interest in the Assets.
8. If all the amounts payable to Rexall Sundown under the Modified
Documents are paid in full, then upon receipt of such payment, Rexall Sundown
shall release its lien and security interest in the Assets and shall cause K&L
to return the Transfer Documents to Oakmont.
9. This Third Forbearance Agreement may be executed in multiple
counterparts by different parties on different counterparts, each of which shall
be deemed an original, but all of which shall be deemed one and the same
instrument.
10. OAKMONT HEREBY AUTHORIZES ANY ATTORNEY OF ANY COURT IN THE
COMMONWEALTH OF PENNSYLVANIA TO APPEAR FOR OAKMONT AT ANY TIME AFTER THE
OCCURRENCE OF AN EVENT OF DEFAULT HEREUNDER, AND CONFESS A JUDGMENT OR JUDGMENTS
AGAINST OAKMONT AND IN FAVOR OF REXALL SUNDOWN OR ITS ASSIGNS, AS MANY TIMES AS
SHALL BE NECESSARY OR EXPEDIENT, FOR ALL OR ANY PART OF THE THEN OUTSTANDING
BALANCE DUE AND PAYABLE HEREUNDER, TOGETHER WITH AN ATTORNEY'S FEE OF 15% OF
SUCH AMOUNT, WITH RELEASE OF ALL ERRORS AND WITHOUT STAY OF EXECUTION.
IN WITNESS WHEREOF, we have hereunto set our hands and seals on or as
of the day and year first above written.
OAKMONT PHARMACEUTICALS, INC.
By: /s/ Xxxxxx Xxxxxxxxx
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Name: Xxxxxx X. Xxxxxxxxx
Title: CEO
REXALL SUNDOWN, INC.
By: /s/ Xxxxx Xxxxxx
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Name: Xxxxx Xxxxxx
Title: CFO
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Exhibit A
OAKMONT PHARMACEUTICALS
BALANCES DUE @ 7/31/97
Int @ 12% Int @ 6% Total
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Nov 29,975.00 29,975.00
Dec 30,974.17 30,974.17
Jan 30,974.17 30,974.17
Feb 27,976.67 27,976.67
March 61,948.33 30,974.17 92,922.50
April 59,950.00 29,975.00 89,925.00
May 61,948.33 30,974.17 92,922.50
June 59,950.00 29,975.00 89,925.00
July 59,950.00 29,975.00 89,925.00
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303,746.67 271,773.33 575,520.00
Past due interest @ 6% (4/96-10/96) 213,821.68
Principal Balance 5,995,000.00
First forebearance fee 100,000.00
Second forebearance fee 100,000.00
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Total 6,984,941.68
Payment due April 30, 1997 (60,000.00)
Payment due May 31, 1997 (60,000.00)
Payment due June 30, 1997 (60,000.00)
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Balance due July 31, 1997 6,804,341.68
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