Exhibit 10.8.2
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FORBEARANCE AGREEMENT
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THIS FORBEARANCE AGREEMENT, dated as of January 24, 2002 (the
"AGREEMENT") is between STRATUS SERVICES GROUP, INC. ("STRATUS"), and SOURCE ONE
PERSONNEL (together with its successors and assigns, hereinafter referred to as
"SOURCE ONE").
WHEREAS, Stratus executed and delivered a Note to Source One dated July
27, 2001 in the principal amount of $600,000.00, which Note constituted partial
payment for certain assets sold to Stratus by Source One by Asset Purchase
Agreement dated July 27, 2001 (the "PURCHASE AGREEMENT"), which Note, including
interest, was due and payable in full on January 27, 2002 ("NOTE 1"); and
WHEREAS, pursuant to the Purchase Agreement, Status also delivered to
Source One a Note in the amount of $1,800,000.00 dated July 27, 2001, which Note
requires quarterly installment payments of principal and interest, commencing
one hundred and twenty (120) days after July 27, 2001 ("NOTE 2") (Note 1 and
Note 2 are referred to as the "NOTES"); and
WHEREAS, Stratus has notified Source One that is will be unable to make
the January 28, 2002 payment due under Note 1 and will be unable to make the
payment due under Note 2, due March 27, 2002, and hereby acknowledges that upon
non-payment on the dates due, it will be in default under the Notes and has
requested Source One to forbear from exercising its rights and remedies under
the Notes in accordance with the terms of the Purchase Agreement and the
Security Agreement; and
WHEREAS, Source One has agreed to such forbearance in accordance with
the terms herein.
NOW THEREFORE, Stratus and Source agree as follows:
1. FORBEARANCE
1.01 Stratus acknowledges that when payment is not made under Note1 on
January 28, 2002 and under Note2 on March 27, 2002, it will be in default of the
payment and performance of the Notes and performance of the Security Agreements
securing the Notes. Stratus acknowledges that Source One, upon non-payment of
the amounts due under either Note by Status on the date due,, will be entitled
to exercise all of its rights and remedies under the Notes and Security
Agreements, as well as the Purchase Agreement without regard to any cure periods
under the Notes and without further notice to or demand on Status.
1.02 Source One is willing to forbear from exercising its rights and
remedies under the Notes, the Security Agreements and the Purchase Agreement
(the "DOCUMENTS") until April 30, 2002, or until the sale of the Stratus
Engineering Division, if earlier, (the "FORBEARANCE PERIOD"), provided that such
forbearance is on the terms and conditions set forth in this Agreement and,
further provided, that except as expressly waived in this Agreement, such
forbearance does not expressly waive or otherwise prejudice the rights and
remedies of Source One.
1.03 At the expiration of the Forbearance Period, subject to no Event
of Termination occurring, all principal and interest due under the Notes at that
time shall be paid in full.
2. REPRESENTATIONS AND WARRANTIES OF STRATUS
2.1 Stratus represents and warrants to Source One:
2.1.1 They have requested that Source One forbear from
exercising its rights and remedies under the Documents against Stratus, and that
such request is in the best interests of Stratus.
2.1.2 They reaffirm all the terms and conditions of the
Documents and acknowledge that except as provided herein, they will be in
default upon non-payment by the due dates for payments as provided under the
Notes without regard to any cure periods, and the Notes will continue to be due
and payable in accordance with these terms. They further affirm that Stratus is
justly indebted to Source One as set forth in this Agreement and that the Notes
and Documents are not subject to any defenses, setoffs, recoupment or
counterclaims whatsoever against Source One.
2.2 Nothing herein shall be construed as requiring Source One to
extend the Forbearance Period.
2.3 In the event that any bankruptcy or insolvency proceeding is filed
by or against Stratus, Source One shall be absolutely and unconditionally
entitled to relief from the automatic stay with respect to the Acquired Business
and Assets as defined under the Purchase Agreement. Stratus hereby consents to,
shall not oppose or contest, and shall not request or cause any Creditor's
Committee or any party in interest to oppose or contest, any application for
relief from the automatic stay which may be filed by Source One.
2.4 The persons acting on behalf of the Stratus have been duly
authorized and have all requisite authority to bind the Stratus to this
Agreement.
2.5 Stratus has obtained any and all consents and/or waivers of third
parties, required to be obtained by Stratus to execute and deliver this
Agreement and perform its obligations thereunder.
2.6 Status has entered into a agreement of sale to sell its engineering
division to SEA Consulting Services Corporation by agreement executed and dated
January 24, 2002 (the "Engineering Agreement").
3. EVENTS OF TERMINATION
3.1 The occurrence of any one or more of the following events
shall constitute an Event of Termination hereunder:
3.1.1 The insolvency of Stratus or the failure of Stratus to
pay its debts or liabilities to the Source One as they become due or if Stratus
makes an assignment for the benefit of creditors, or a petition in bankruptcy.
3.1.2 Failure of Stratus to pay when due, any sum that Stratus
is required to pay under this Agreement or under the Documents, or the failure
of Stratus to perform any obligation that Stratus is required to perform under
this Agreement or any of the Documents, as amended by this Agreement.
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3.1.3 Failure of Stratus to perform or observe any term,
covenant, warranty or agreement contained in this Agreement or in any of the
Documents.
3.1.4 Failure of Stratus to pay any indebtedness (other than
as evidenced by the Documents or this Agreement) or any interest or premium
thereon, when due or within any grace period allowed therefor, whether such
indebtedness shall become due by scheduled maturity, by required prepayment, by
acceleration by demand or otherwise; or Stratus shall fail to perform any term,
covenant or agreement on its part to be performed under any agreement or
instrument (other than the Documents or this Agreement) when required to be
performed or within any grace period allowed therefor, if the effect of such
failure is to accelerate or to permit the holder(s) of such indebtedness to
accelerate the maturity of such indebtedness.
3.1.5 The termination, cancellation or breach of the
Engineering Agreement by either party.
3.1.6 Payment by Stratus of the amounts due under Note 1 and
then due and owing under Note 2 as of the date of payment.????
4. RIGHTS AND REMEDIES
4.1 Upon the occurrence of any Event of Termination, except a payment
by Stratus under paragraph 3.1.6 above, Source may, at its option, with or
without notice to Stratus, as permitted by law, do any one or more of the
following:
4.1.1 Enforce the original Documents, in accordance with their
terms, without further notice or opportunity to cure the existing defaults.
4.1.2 Exercise any and all rights and remedies pursuant to the
Documents, in such manner and in any order as Source One in its sole and
exclusive discretion determines.
5. GENERAL PROVISIONS
5.1 This Agreement shall not be construed to reinstate the Documents or
cure any existing defaults by Stratus. Except as expressly modified by this
Agreement, all terms and conditions of the Documents shall remain in full force
and effect. To the extent any provision of this Agreement conflicts with a
provision in the Documents, the terms of this Agreement shall prevail.
5.2 The failure of Source One at any time or times hereafter to require
strict performance by Stratus of any of the provisions, warranties, terms and
conditions contained herein in this Agreement or in the Documents shall not
waive, affect or diminish any right of Source Once at any time or times
thereafter to demand strict performance thereof. No rights of Source One
hereunder shall be deemed to have been waived by any act or knowledge of Source
One, its agents, officers or employees. No waiver by Source One of any of its
rights shall operate as a waiver of any other of its rights or any of its rights
on a future occasion.
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5.3 This Agreement contains the entire understanding between the
parties hereto with respect to the transactions contemplated herein and such
understanding shall not be modified except in writing signed by or on behalf of
the parties hereto.
5.4 Wherever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law.
Should any portion of this Agreement be declared invalid for any reason in any
jurisdiction, such declaration shall have no effect upon the remaining portions
of this Agreement. Furthermore, the entirety of this Agreement shall continue in
full force and effect in all other jurisdictions and said remaining portions of
this Agreement shall continue in full force and effect in the subject
jurisdiction as if this Agreement had been executed with the invalid portions
thereof deleted.
5.5 This Agreement is and shall be deemed to be a contract entered into
and made pursuant to the laws of the State of New Jersey and shall in all
respect be governed, construed, applied and enforced in accordance with the laws
of said State.
IN WITNESS WHEREOF, Stratus and Source One agree to the terms of this
Agreement and acknowledge receipt of a true copy of this Agreement.
ATTEST: STRATUS SERVICES GROUP, INC.
/s/ Xxxxxx X. Xxxxxxx /s/ Xxxxxxx X. Xxxxxxxx
_________________________________ By:________________________________
Xxxxxxx X. Xxxxxxxx,
Chief Financial Officer
SOURCE ONE PERSONNEL, INC.
/s/ Xxxxx Xxxxxxx
_________________________________ By:________________________________
Xxxxx Xxxxxxx, President
