Earthworks amendment defers debt payments to North Bay
Earthworks Industries Inc. (“EWK”) and its wholly-owned subsidiary, Cortina Integrated Waste Management Inc. (“CIWM”) (together “Earthworks”) have signed an Amendment Agreement dated March 19, 2019 (“the Amendment”) revising the terms of their Settlement Agreement with North Bay Corporation and its wholly-owned California subsidiary, Cortina Landfill Company (together “North Bay”) relating to Earthworks’ indebtedness to North Bay of $4,644,916 (the Balance Amount”). The principal terms of the Amendment Agreement are as follows:
a) annual installment payments of $500,000 each which were to commence to be payable March 31, 2019 are deferred by two years and will now commence to be payable March 31, 2021;
b) North Bay will settle $20,000 of the Balance Amount by subscribing that amount for shares of Earthworks in the next private placement financing that Earthworks undertakes
c) the Payout Option that Earthworks has to settle the Balance Amount is extended to March 31, 2021 but the amount payable to exercise the Payout Option is increased to $2,250,000;
d) in the event that EWK signs and closes an arms length agreement to sell 100% of the shares of CIWM for consideration which exceeds the then amount of the Balance Amount, or if CIWM signs and closes an arms length agreement to sell all or a portion of its Cortina landfill project:
(i) EWK or CIWM, which, whichever is the seller, shall forthwith after the closing pay to North Bay the whole amount of the Balance Amount and accrued interest then owing; and
(ii) EWK or CIWM, whichever is the seller, shall also forthwith after the closing of the sale agreement, pay to North Bay 10% of the amount of consideration received from the sale, less:
A. the amount paid pursuant to Sub-Clause (i); and
B. $6,720,633, being a portion of EWK’s investment in and costs of the Cortina landfill project.
e) if EWK or CIWM execute a final sale agreement as anticipated by Sub-Clause (d), the Payout Option will be suspended and will become again an exercisable option only if the sale agreement is terminated and not closed;
f) Earthworks will repay to North Bay a loan North Bay recently made to Earthworks of $50,000 on or before April 30, 2019.
All references to monies above are in U.S. dollars.