Exhibit 10.84
Carme Cosmeceutical Sciences,
Inc.
620 Airpark Road
Napa, California
94558
FORBEARANCE LETTER
AGREEMENT
November 8, 2004
U.S. International Trading Corp.
879 West 190 th Street
Los Angeles, California
Re: Loan to U.S. International
Trading Corp., a Nevada corporation (“ Borrower
”)
Ladies and Gentlemen:
This letter agreement (“
Agreement ”) is intended to set forth the terms upon
which Carme Cosmeceutical Sciences, Inc., a Delaware corporation
(“ Lender ”), the current holder of the loan
described below (the “ Loan ”), will agree to
forbear from enforcing rights to which Lender is entitled due to
the current defaults under the Loan.
The Loan is evidenced and secured
by, among other documents and instruments, (i) a Secured Promissory
Note (the “ Note ”) dated October 1, 2002, in
the original principal amount of $2,300,000, by Borrower, as maker,
payable to the order of Lender, pursuant to which interest accrues
from the date thereof; (ii) an Intellectual Property Security
Agreement dated as of September 27, 2004 (“ Security
Agreement ”), and encumbering certain personal property
described therein (the “ Property ”); (iii) a
UCC Financing Statement (the “ Financing Statement
”) reflecting Borrower as Debtor and Lender as Secured Party
filed with the Office of the Secretary of State of the State of
Nevada, and (iv) a Purchase and Sale Agreement dated September 27,
2002, between Borrower and Lender (the “ Purchase
Agreement ”).
The Note, the Security Agreement,
the Financing Statement, the Purchase Agreement and all other
documents executed in connection with or otherwise pertaining to
the Loan shall be collectively referred to as the “ Loan
Documents .”
1. Status . Lender
alleges the Loan is in default for, among other things, failure of
Borrower to make payments as required by the terms of the Note
(collectively, the “ Existing Defaults ”).
Borrower disputes these allegations.
2. Forbearance After
Default . Subject to the terms of this Agreement and
provided no Termination Event (as defined below) occurs, Lender
agrees not to take any action to foreclose upon the Property or
otherwise pursue any of its rights or remedies under the Loan
Documents (all of which rights and remedies are collectively
referred to as the “ Enforcement Proceedings ”).
Borrower hereby acknowledges and agrees Lender has a right to
pursue all remedies available to Lender under the Loan Documents,
at law and in equity, after the occurrence of a Termination Event
(the “ Forbearance Expiration Date
”).
3. Payment of
Indebtedness . Notwithstanding anything in the Note to the
contrary, Borrower shall make payments under the Note as follows,
each of which payments shall be made by cashiers’ check, wire
transfer or other immediately available funds to the address of
Lender as set forth in the Note and as otherwise set forth in the
Note (including, without limitation, the second paragraph of the
Note):
(i) Three (3) payments of Forty
Thousand Dollars ($40,000) each, which shall be made not later than
December 31, 2004, respectively.
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(ii) One (1) payment of One Million
Dollars ($1,000,000), which shall be made not later than December
31, 2004.
(iii) Four Hundred Thousand Dollars
($400,000), which shall bear interest from and after December 31,
2004, at the rate of eight percent (8%) per annum (on the basis of
a 360-day year and the actual number of days elapsed), and which
shall be repaid in equal quarterly installments of Forty Four
Thousand Five Hundred Fifty Seven and 71/100 Dollars ($44,557.71)
by not later than each of the following dates:
Payments shall be applied to the
indebtedness under the Note in the manner set forth in the third
paragraph of the Note. Any or all such payments may be made earlier
than such dates without penalty in the manner set forth in the
fourth paragraph of the Note. All other terms of the Note shall
apply to all payments required to be made hereunder. If all such
payments are timely made in the manner required by this Agreement,
Borrower’s obligation to pay the amounts under the Note shall
be deemed satisfied.
4. Representations, Warranties
and Acknowledgments . Borrower represents, warrants,
acknowledges, and agrees to and with Lender that:
(a) Borrower is a duly organized,
validly existing corporation under the laws of the State of Nevada.
Panch R. Prasad is the sole officer, director and shareholder of
Borrower. Borrower has the power and authority to enter into this
Agreement. The execution and delivery of this Agreement by Borrower
and the performance of the obligations hereunder by Borrower have
been duly and properly authorized pursuant to all requisite
corporate action and does not require the consent or approval of
any other party. The execution and delivery of this Agreement by
Borrower do not and will not (i) violate any provision of any law,
rule, regulation, order, writ, judgment, injunction, decree,
determination or award presently in effect having applicability to
Borrower or Borrower’s articles of incorporation or bylaws,
or (ii) result in a breach or constitute or cause a default under
any indenture, agreement, lease or instrument to which Borrower is
a party. Borrower is not in default under any such law, rule,
regulation, order, writ, judgment, injunction, decree,
determination or award or any such indenture, agreement, lease or
instrument.
(b) The Loan Documents constitute
valid and legally binding obligations of Borrower and are
enforceable against Borrower in accordance with the terms of the
Loan Documents. Borrower acknowledges that references in the Loan
Documents to U.S. International Trading Corporation are to
Borrower.
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(c) Neither this Agreement, nor any
payments made or other actions taken pursuant to this Agreement nor
any discussions between Lender and Borrower regarding same is
intended to, and shall not be deemed or construed to constitute a
modification, amendment or waiver to cure the Existing Defaults,
constitute a reinstatement, novation or release of the Loan or the
Loan Documents or an extension of the maturity date of the Loan, or
constitute a modification, amendment or waiver of the Loan or the
Loan Documents, except as expressly set forth herein. Except as
otherwise expressly provided in this Agreement, Lender reserves all
of its rights and remedies in connection with such
defaults.
(d) Borrower has contemporaneously
provided to Lender unaudited consolidated balance sheets and income
statements of Borrower as of June 30, 2004,
