FORBEARANCE AGREEMENTForbearance Agreement |
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SEQUIAM CORP | JOHN SVENNINGSEN | Stephen A. Ross,. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here. |
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Exhibit 10.1
FORBEARANCE AGREEMENT
This Forbearance Agreement (“Agreement”) is made as of November 29, 2006 by and between SEQUIAM CORPORATION, a California corporation having a place of business and mailing address at 300 Sunport Lane, Orlando, Florida 32809 (“Borrower”) and Stephen A. Ross, as duly authorized agent for the TRUST UNDER THE WILL OF JOHN SVENNINGSEN, having a place of business and mailing address at 33 Whitney Avenue, New Haven, Connecticut 06510 (“Holder”).
BACKGROUND:
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A. |
On May 18, 2005, Borrower and Holder’s predecessor-in-interest, Lee Harrison Corbin, Attorney-in-Fact, for the Trust Under the Will of John Svenningsen, entered into that certain Securities Purchase Agreement (the “SPA”), pursuant to which, among other things, Borrower agreed to issue a warrant to Holder to purchase up to 10,025,000 of Borrower’s common stock. |
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B. |
In connection with the SPA, on May 18, 2005, Borrower executed that certain Amended, Restated and Consolidated Senior Secured Term Note in favor of Holder’s predecessor-in-interest, Lee Harrison Corbin, Attorney-in-Fact, for the Trust Under the Will of John Svenningsen (the “Note”), pursuant to which, among other things, Holder agreed to advance certain amounts to Borrower and to consolidate certain existing loans and other credit accommodations into a single note evidencing principal indebtedness of $3,650,000 (the “Loan”). |
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C. |
The SPA and the Note, together with all other agreements, notes, instruments, warrants, security agreements, and other documents previously, now or hereafter executed and delivered to Holder governing the transactions between Holder and Borrower, including without limitation, the Loan, as same may have been or be amended, restated, supplemented or modified from time to time, are collectively referred to herein as the “Loan Documents”. |
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D. |
Borrower has previously acknowledged and agreed that certain defaults and/or events and/or conditions which, upon declaration by Holder and/or with notice or the lapse of time, or both, would become events of default under the Loan Documents, have occurred and are continuing, which if declared and the obligations under the Loan Documents accelerated, would entitle Holder to immediate payment in full of all obligations under the Loan Documents and would also entitle Holder to exercise all rights and remedies provided for under the Loan Documents if repayment in full of the obligations thereunder did not occur. |
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E. |
Borrower has requested, and Holder, has agreed, in accordance with the terms and conditions set forth herein, to forbear from declaring an event of default under the Loan Documents and exercising all rights and remedies provided Holder thereunder, including without limitation, taking action to collect payment in full of the obligations under the Loan Documents. |
NOW, THEREFORE, Holder and Borrower agree as follows:
1. Incorporation of Recitals. Each of the foregoing recitals is hereby acknowledged and affirmed as being accurate and complete and is hereby incorporated as part of this Agreement.
2. Forbearance. Subject to the satisfaction of the terms and conditions set forth herein, until that date (the “Forbearance Termination Date”), which is the earliest to occur of (a) December 15, 2006, or (b) the date of the occurrence of any one or more of the events of default under this Agreement set forth in Section 6 below, Holder will not exercise or enforce its rights or remedies against Borrower to which Holder would be entitled under the terms of the Loan Documents by reason of the existing events of default thereunder; provided that such forbearance shall not act as a waiver of Holder's right to enforce any such right or remedy after the Forbearance Termination Date. Furthermore, nothing contained herein shall be construed as requiring Holder to extend the Forbearance Termination Date. Notwithstanding anything to the contrary set forth in any of the Loan Documents, Borrower agrees to pay in full in cash on the Forbearance Termination Date the outstanding principal amount of all obligations to Holder under the Loan Documents, together with all interest thereon (including any and all interest accruing at the default rate of interest) and all costs, fees and expenses of Holder incurred in connection therewith.
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3. Payments/Forbearance Fees. In consideration hereof by its execution of this Agreement, Borrower hereby authorizes Holder to charge, on the date hereof, to its revolving loan account a forbearance fee of $0.
4. Cross-Default and Cross-Collateralization. Borrower agrees that (a) all collateral previously, now or hereafter pledged by Borrower to Holder as collateral security for any loans, obligations or liabilities of any kind or description of Borrower to Holder shall serve as security for all obligations and (b) a default by any of Borrower under the terms of this Agreement or any of the other Loan Documents shall constitute a default in and to all obligations and under all of the Loan Documents. Further,
