FORBEARANCE AGREEMENTDefault Notice Forbearance Agreement |
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Search Default Notice Forbearance Agreement by:
Exhibit 10.19
FORBEARANCE
AGREEMENT
---------------------
THIS FORBEARANCE
AGREEMENT (this
"Agreement") is entered into as of
January 1, 2006, by and among IMPERIAL PETROLEUM RECOVERY CORPORATION
("IPRC")
and SUCCESSOR IN INTEREST TO MOBIL OIL CORPORATION ("Successor").
BACKGROUND
A. IPRC is indebted to
Successor pursuant to an Agreement dated
October 6,
1999 (the "Original
Agreement") between IPRC and
Mobil Technology corporation
("MTC"), pursuant to which MTC
provided IPRC with a security deposit of one
million United States Dollars (US $1,000,000)
(the "Security Deposit"), which
Security Deposit IPRC was obligated to
repay on August 10, 2003, together with
accrued interest thereon as specified in the Original Agreement.
B. As security for its
obligation to repay the Security
Deposit, IPRC
granted MTC a
security interest in the Torrance
MST Equipment (the
"Collateral").
C. On or about December
6, 2002, MTC
assigned all of its rights
and
remedies under the Original
Agreement, including its
security interest in the
Collateral, to Successor .
D. On or about June 8, 2004, Successor
and IPRC entered into a Security
Deposit Payment Forbearance
Agreement (the "First Forbearance
Agreement"),
whereby, inter alia,
IPRC agreed to
repay the Security
Deposit in six
installments, and Successor agreed to forbear its immediate collection of the
Security Deposit.
E.
IPRC has failed to honor
its payment obligations
under the First
Forbearance Agreement, as a result of which Successor is entitled to
terminate
its agreement to forbear thereunder and take certain other actions, as set
forth
therein.
F. IPRC has advised Successor that
it is unable to repay the full amount of
the Security Deposit
and that if full payment is
required, IPRC it may be
compelled to liquidate and/or seek
protection under the bankruptcy laws of
the
United States. IPRC has
requested that Successor
forgive a portion of the
Indebtedness (as defined below) and that it continue to forbear
in accordance
with the terms and conditions set forth herein.
G. Unless otherwise
defined herein, all capitalized
terms used but not
defined herein shall have the meaning ascribed to them in the Original
Agreement
and/or the First Forbearance Agreement.
NOW,
THEREFORE, in consideration
of the foregoing
and of the
agreements and mutual covenants
set forth below, for other good
and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
and
intending to be legally bound hereby, the parties hereto agree as follows:
Section 1. Acknowledgement of
Indebtedness. IPRC acknowledges and
confirms
that it is justly indebted to Successor
in the total principal amount of U.S.
$1,000,000, together with accrued, unpaid interest thereon as provided for in
the Original Agreement
(the
"Indebtedness"); and IPRC
is in default of its
obligations to Successor
under both the Original
Agreement and the First
Forbearance Agreement.
<PAGE>
Section 2. Repayment. IPRC shall pay
Successor the total sum of $500,000 in
US. Dollars, in immediately available
funds, remitted by wire transfer or bank
draft as set forth in Section 11(1), as follows:
(a) On or before March 1, 2006, IPRC shall pay
Successor the sum
of $200,000.
(b) On or before March 31, 2006, IPRC shall pay Successor
the
sum of $75,000.
(c) On or before June 30, 2006, IPRC shall pay
Successor the sum
of $75,000.
(d) On or before
September 30, 2006, IPRC shall pay Successor
the sum of $75,000.
(e) On or before December 31, 2006, IPRC shall
pay Successor the
sum of $75,000.
Section 3. Satisfaction of
Indebtedness. So long as no Event of Default has
occurred hereunder, and all payments required to be made hereunder have been
made as and when due, and in accordance
with this Agreement (the "Termination
Date"), Successor shall forgive the
balance of the Indebtedness, including
all
interest accrued and accruing thereon,
and the Indebtedness shall be deemed
satisfied and released, and IPRC shall
have no further obligations to Successor
on account of the Indebtedness, and
Successor shall release all liens
on and
other security interests in the Collateral.
Section 4.
Forbearance. So long as no Event
of Default has
occurred
hereunder, Successor shall forbear in the exercise of its rights and remedies
to
collect the Indebtedness; provided,
however, that if any Event of Default under
this Agreement shall have occurred, this Agreement shall terminate and
Successor
shall be free to exercise immediately
all of its rights and remedies to collect
the Indebtedness, and any and all other amounts owed to Successor for any
reason
whatsoever, including without
limitation, all applicable interest,
costs and
fees, all of which Successor expressly reserves.
Section 5. Agreements and Covenants
by IPRC.
(a) Limitations on
Dividends. Until the Termination Date,
IRPC agrees
that, without Successor 's express prior
written consent, it shall not pay any
dividend or other distribution (whether
in cash, securities or other property)
with respect to any capital stock or other equity
interest of IPRC, or any
payment (whether in cash, securities or
other property), including any sinking
fund or similar deposit, on account of the purchase, redemption,
retirement,
acquisition, cancellation or
termination of any such
capital stock or other
equity interest, or on account
of any return of capital to the
stockholders,
partners or members of IPRC.
(b) Limitations on Security
Interests. IPRC shall not grant any
other
security interest or enter into any
further pledge or encumbrance of any of its
assets or properties without the prior written consent of Successor .
(c) Other Information.
IPRC shall deliver to Successor in form and
detail satisfactory to Successor , promptly after any
request, copies of such
additional information regarding the business, financial or corporate affairs
of
IPRC, or compliance with the terms of this Agreement, as Successor may from
time
to time reasonably request.
2
<PAGE>
(d) Preservation of Existence.
IPRC shall preserve, renew and maintain
in full force and effect its legal existence and good standing under the laws
of
the jurisdiction of its organization.
(e) Books and Records. IPRC shall maintain proper books of record
and
account, in which full,
true and correct entries
in conformity with GAAP
consistently applied shall be made of all financial transactions
and matters
involving its assets and business.
(f) Inspection
Rights. IPRC shall
permit representatives and
independent contractors of Successor to examine its corporate,
financial and
operating records, and make
copies thereof or abstracts
therefrom, and to
discuss its affairs, finances and
accounts with its directors, officers,
and
independent public accountants, at such
reasonable times during normal business
hours and as often as may be reasonably desired; provided, however, that when a
Default or Event of Default exists Successor (or any of its representatives or
independent contractors) may do any of the foregoing at the expense of
IPRC at
any time and without advance notice.
Section 6. Acknowledgments, Representations and Warranties. IPRC hereby
acknowledges, agrees, warrants and represents that:
(a) It is a corporation
duly organized and
existing, and in good
standing, under the laws of the State of Nevada.
(b) It has full power and authority
to execute, deliver and perform
this Agreement, and this Agreement is a
legal, valid and binding obligation of
IPRC, enforceable against IPRC in accordance with its terms.
(c) This Agreement and all
documents and agreements to be executed and
delivered pursuant to the
terms hereof, have been
duly authorized by all
requisite corporate action on the part of IPRC.






