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Exhibit 10.23
SECOND FORBEARANCE AGREEMENT
THIS AGREEMENT (the "Second Forbearance Agreement") is made as
of September 23, 1996, 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 an agreement made as of April 29, 1996, by and between Oakmont and Rexall
Sundown (the "First 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
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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 the 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, 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 Kirkpatrick & Lockhart LLP ("K&L"),
counsel to Rexall Sundown, at its office at 1500 Oliver Building, Pittsburgh,
PA 15222, 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 Bill of Sale, conveying the Personal
Property to a person or persons to be designed by Rexall Sundown. The Deed and
the Bill of Sale are hereinafter together referred to as the "Transfer
Documents". K&L has been holding the Transfer
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Documents in escrow pursuant to the terms of the First Forbearance Agreement.
Oakmont has defaulted in the timely payment of the amounts due
under the First Forbearance Agreement (the "Modified Obligations"). 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. The effectiveness of this Second Forbearance
Agreement is conditioned on Rexall Sundown's receipt, on or before the date of
this Second Forbearance Agreement, of the sum of $182,966.00, which sum shall
be credited against the payments that became due on June 30, July 31, and
August 31, 1996, under paragraphs 2 and 3 of the First Forbearance Agreement.
2. Subject to the fulfillment of the condition specified
in paragraph 1 above, 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, or the First Forbearance Agreement available by reason of any
payment default thereunder occurring prior to the date of this Second
Forbearance
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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. Likewise subject to the fulfillment of the
condition set forth in paragraph 1 above, 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 8 below) shall have occurred and be continuing.
3. Oakmont will pay Rexall Sundown the sum of $59,950.00
on or before September 30, 1996. This sum shall be credited against the
payment coming due on September 30, 1996, under paragraph 3 of the First
Forbearance Agreement.
4. On or before October 31, 1996, Oakmont will pay
Rexall Sundown the sum of $561,948.33. The payment made pursuant to this
paragraph shall be applied first to accrued and unpaid interest on the Modified
Obligations (including the additional interest accrued at the rate of 6% from
April 1, 1996 through October 31, 1996, as provided in the Note), next to the
$100,000.00 forbearance fee provided for in paragraph 4 of the First
Forbearance Agreement, and the balance to the unpaid principal amount of the
Modified Obligations.
5. Oakmont will pay RSL the following additional amounts
on or before the following dates:
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November 30, 1996 $60,000.00
December 31, 1996 $60,000.00
January 31, 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.
6. On or before February 28, 1997, Oakmont shall pay the
outstanding balance due under the Purchase Agreement, the Note, and the
Security Documents as modified by the First Forbearance Agreement and this
Second Forbearance Agreement (collectively, the "Modified Documents").
7. If Oakmont shall pay all other amounts due and owing
under the Modified Documents on or before December 31, 1996, then, at the time
such amounts are paid in full, Oakmont shall pay Rexall Sundown an additional
sum of $50,000.00 as an additional forbearance fee; or in the alternative, if
Oakmont shall fail to pay in full all other amounts due and owing under the
Modified Documents on or before December 31, 1996, then, at the time such other
amounts are paid in full, Oakmont shall pay Rexall Sundown an additional sum of
$100,000.00 as an additional forbearance fee.
8. Any of the following events shall constitute an
"Event of Default" for purposes of this Second Forbearance Agreement: (i) Any
of the payments required to be made pursuant to this Second 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
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obligation under the Modified Documents (other than any default waived by
Rexall Sundown pursuant to paragraph 2 above) and any applicable grace or cure
period shall have expired.
9. 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 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.
10. If, in accordance with this Second 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 Second Forbearance Agreement shall impair Rexall
Sundown's right to enforce its lien and security interest in the Assets.
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11. 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.
12. This Second Forbearance Agreement may be executed in
multiple counterparts and 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.
13. 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:
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Title:
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REXALL SUNDOWN, INC.
By:
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Title:
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