Exhibit 10.35.4
STANDSTILL AGREEMENT
THIS AGREEMENT effective as provided herein by and between ENVIRONMENTAL
REMEDIATION HOLDING CORPORATION ("ERHC"), a Colorado corporation, with offices
at 1686 General Mouton Avenue, Lafayette, LA 70508 and the Investors or their
permitted assigns whose names are included in Schedule A annexed hereto and made
a part hereof (collectively the "Investors" or individually, the "Investor").
WHEREAS, ERHC issued its 12.0% convertible notes due on the earlier of the
date upon which the Company received debt or equity financing in excess of
$4,000,000 or December 31, 1999 (the "Notes) and granted warrants to purchase
ERHC's common stock with an exercise date on or before June 18, 2002 (the
"Warrants"); and
WHEREAS, ERHC has executed and its Board of Directors have approved a
letter of intent dated April 8, 1999 with ERHC Investment Group, Inc. which
requires certain consents from the Investors and amendments and modifications to
the Notes and the Warrants, a copy of which letter of intent is annexed hereto
and made a part hereof as Exhibit A (the "Letter of Intent"); and
WHEREAS, the parties wish to confirm in writing their understanding and
agreement regarding these matter.
NOW THEREFORE in consideration of the mutual promises contained herein and
for other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties agree as follows:
1. Confidential Information. Investors' consent and amendments and
modifications to the Notes and Warrants as provided in the Letter of Intent
are conditions precedent to the Initial Closing. This is due to the fact
that the Notes and Warrants have certain adjustments which may render it
impossible for ERHC to issue the requisite control interest required under
the term of the Letter of Intent. The matters contained herein and in the
Letter of Intent are confidential information not available to the public.
These matters will only be made public with a filing by ERHC of a Form 8K
within the time required from the Initial Closing as defined in the Letter
of Intent (the "Initial Closing"), the date on which an 8K event takes
place. Accordingly, the Investors expressly agree not to disclose, use or
trade on this information either directly or indirectly in any manner until
such time as the Form 8K reporting this Letter of Intent is filed with the
SEC.
2. Amendments and Modifications. From the date of the Initial Closing under
the Letter of Intent, it is agreed that the following terms and conditions
are amended and modified:
A. The Notes are amended and modified as follows:
1. The provision for payment of interest contained in paragraph 1(b)
is deleted and in its place shall read "Interest on the unpaid
balance of this Note at the rate of twelve percent (12.0%) per
annum shall accrue from the date hereof and shall be payable on
the earlier of (i) the Maturity Date or (ii) the Conversion Date
as to all or that portion of the Note converted in cash or in the
form of shares in common stock in an amount equal to the amount
of interest due divided by the Conversion Price. The Company may
elect to make accrued interest payments at any time in the form
of shares in common stock in an amount equal to the amount of
interest due to date divided by the Conversion Price. In such
event, only interest which accrues from such election payment
shall be payable on any subsequent election date or on maturity
or conversion."
2. In addition to the amendment to paragraph 1(b), the following
will be added to such paragraph: "Notwithstanding any other
provision contained in this paragraph 1(b), interest is waived
from the date of the Initial Closing and thereafter until October
15, 1999.
3. The provisions for voluntary conversion contained in paragraph
4(a) is amended to permit, in addition to conversion of all or a
portion of the Notes, for the conversion of outstanding interest
and penalties, if any, into Common Stock at the time a voluntary
conversion of principal is made for the amount of interest due on
the Notes.
4. The Conversion Price in paragraph 4(b) of the Notes is amended to
be $0.25.
C. In addition to the foregoing amendments and modifications, the
Investors consent and agree to the following additional terms:
1. From the date of the Initial Closing and thereafter until October
15, 1999 (i) not to convert all or any part of the Notes, (ii)
not to declare a default or seek acceleration of any payments
under the Notes, (iii) not to commence any collections actions or
proceedings under the Notes (iv) not to commence any foreclosure
or bankruptcy actions under the Notes and (v) not to declare any
Event of Default or commence any arbitration action under the
Notes or Warrants.
2. From the date of execution of this Agreement, to waive all rights
under any adjustments, antidilution provisions or preemptive
rights previously granted in the Notes or Warrants or provided by
these amendments and modifications (i) relative to the
transaction contemplated in the Letter of Intent or (ii) relative
to any settlement with Procura Financial entered into by the
Company upon commercially reasonable to complete the assignment
of all rights, title and interest in Sao Tome in favor of the
Company.
3. Through the Initial Closing, to accept shares of Common Stock for
all accrued and unpaid interest and penalties on the Notes as of
the Initial Closing, which shares shall be delivered within ten
(10) days of the Closing Date.
4. In consideration for the reduction in the Conversion Price of the
Notes, each Investor waives any and all claims relative to
additional warrants which may or may not have been required to be
granted under the terms of the Term Sheet for this offering.
5. From the date of execution of this Agreement and thereafter until
October 15, 1999, to vote with the Company in the event that any
third party, other than each of the other note and warrant
holders listed as a Selling Shareholder in Amendment No. 3 to the
Form S- 1 filed with the SEC, commences any bankruptcy or
foreclosure action against the Company or any of its subsidiaries
3. Effects of No Closing under the Letter of Intent. In the event that no
Closing as defined in the Letter of Intent (the "Closing") occurs within
ninety (90) days from the date of the Initial Closing, the amendments,
modifications and consents in paragraph 2 above shall be null and void ab
initio.
4. ERHC Representations and Warranties. ERHC represents and warrants that the
amendments, modifications and consents set forth in paragraph 2 are
substantially similar to the amendments, modifications and consents sought
from each of the other convertible note and warrant holders listed as
Selling Shareholders in the Amendment No. 3 to the Form S-1 filed with the
SEC and differ only in those matters which are specific to any particular
note or warrant transaction listed therein.
5. Effect upon Other Terms and Conditions. Notwithstanding the amendments and
modifications contained herein, it is expressly agreed by the parties
hereto that all other terms, conditions and provisions of the Notes and
Warrants remain in full force and effect.
6. Ratification. The Investors ratify the acts of and hold harmless the Board
of Directors and Officers for all actions taken by them in compliance with
the interpretations of any court of competent jurisdiction as to the
application of the Business Judgement Rule from inception through the
Initial Closing Date.
7. Intended Beneficiaries. ERHC and ERHC Investment Group Inc. are the
intended beneficiaries of this Agreement. In the event of any breach, the
parties and the intended beneficiaries of this Agreement shall have all
remedies available at law or in equity including the right to seek
injunctive relief.
8. Effective Date. This Agreement shall be effective and binding upon ERHC and
the each Investor set forth in Schedule A individually from the date of
execution by each Investor.
9. Binding Obligations. The obligations of the parties set forth herein shall
be binding upon and inure to the benefit of each party's heirs, executors,
administrators, beneficiaries, transferees, successors and assigns.
10. Governing Law, Jurisdiction and Venue. The governing law, jurisdiction and
venue set forth in the Notes and Warrants shall remain in full force and
effect.
11. Counterparts. This Agreement may be executed in one or more counterpart,
each of which when taken together shall represent one binding agreement.
Delivery of an executed counterpart hereof via telecopier shall be as
effective as delivery of a manually executed counterpart hereof.
IN WITNESS WHEREOF, each party set their hand and seal effective as
provided herein.
ENVIRONMENTAL REMEDIATION HOLDING CORPORATION
By: /s/ JAMES A. GRIFFIN
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James A. Griffin, Secretary
INVESTOR:
Execution Date: April 21, 1999 By: /s/ AZRIEL NAGAR
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Signature and Title
Print Name: Azriel Nagar
Execution Date: May 5, 1999 By: /s/ EDWARD REHQUIN
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Signature and Title
Print Name: Edward Rehquin
Print Title: President
Execution Date: April 22, 1999 By: /s/ JOSEPH GRIFFIN SPANO
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Signature and Title
Print Name: Joseph Griffin Spano
Execution Date: , 1999 By: /s/ DAVID B. THORNBURGH
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Signature and Title
Print Name: David B. Thornburgh MD
Print Title: Trustee
Execution Date: 4-23 , 1999 By: /s/ DAVID B. THORNBURGH
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Signature and Title
Print Name: David B. Thornburgh MD
Print Title: Trustee
[Signature Page Second 1998 Financing]
SCHEDULE A
AZRIEL NAGAR
EDWARD R. ROLQUIN
JOSEPH SPANO AND VALERIA SPANO
DAVID B. THORNBURGH
DAVID B. THORNBURGH FAMILY TRUST