Exhibit 10(w)
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS AND ACCORDINGLY
MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE
OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT OR LAWS OR
PURSUANT TO AN EXEMPTION THEREFROM. THE PRINCIPAL AMOUNT OF THIS
NOTE, AND INTEREST IN RESPECT THEREOF, IS SUBORDINATED TO THE
PAYMENT IN FULL OF ALL SENIOR INDEBTEDNESS AND IS SUBJECT TO
SET-OFF, AS DESCRIBED IN THIS NOTE.
FLAVORSOURCE HOLDINGS, INC.
NON-NEGOTIABLE JUNIOR SUBORDINATED NOTE
$250,000 Deerfield, Illinois
October 23, 2000
FOR VALUE RECEIVED, the undersigned, FLAVORSOURCE HOLDINGS INC., a
Delaware corporation (together with its successors, the "Corporation"), hereby
promises to pay ▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, jointly as community property,
(together with their successors and permitted assigns, the "Holder"), at the
Holder's address at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, the
aggregate principal amount of Two Hundred Fifty Thousand Dollars ($250,000) on
the Maturity Date. Certain capitalized terms are used in this Note as defined
in Article 6.
ARTICLE
PAYMENT
1.1 Interest. The outstanding principal amount of this Note shall
bear interest from (but excluding) the date hereof to (and including) the
Maturity Date (computed on the basis of a 365 or 366 day year, as the case may
be) at a rate per annum equal to 8% from (but excluding) the date hereof to
(and including) the Maturity Date. Subject to Article 5, such interest shall
be payable (i) annually in arrears, with respect to each calendar year of the
Corporation (or portion thereof), no later than the 120th day following the
end of such calendar year (or portion thereof), commencing with the period
ending December 31, 2000, and (ii) on the Maturity Date.
1.2 Principal. Subject to Article 5, the Corporation shall pay the
entire principal amount of this Note (or such lesser amount then outstanding)
on the Maturity Date.
1.3 Business Days. Whenever payment of principal of, or interest
on, this Note shall be due on a date that is not a Business Day, the date for
payment thereof shall be the next succeeding Business Day and interest due on
the unpaid principal and any other amounts payable hereunder shall accrue
during such extension and shall be payable on such succeeding Business Day.
ARTICLE 2
PREPAYMENTS
2.1 Optional Prepayment. The Corporation shall have the right to
prepay the principal amount of this Note in whole or in part at any time, or
from time to time, without payment of any premium or penalty whatsoever,
together with interest thereon accrued to the date of prepayment, and any such
prepayment shall be applied to reduce the Corporation's principal payment
obligation under Section 1.2; provided, however, that so long as any Senior
Indebtedness remains outstanding and unpaid, any commitment to provide Senior
Indebtedness is outstanding, or any other amount is owing to the holders of
Senior Indebtedness, this Note may not be prepaid in whole or in part, without
the written consent of the holders of Senior Indebtedness.
ARTICLE 3
NO SET-OFF
3.1 No Set-Off. The Corporation shall not be entitled to set off
and reduce any amounts payable hereunder for any obligations or liabilities of
the Holder to the Corporation.
ARTICLE 4
DEFAULTS
4.1 Events of Default. If one or more of the following events
("Events of Default") shall have occurred and be continuing:
(a) the Corporation shall fail to pay any principal or interest
on this Note when due and the same shall not have been cured within
20 Business Days after written notice thereof has been given to the
Corporation by the Holder;
(b) the Corporation shall commence a voluntary case or other
proceeding seeking liquidation, reorganization or other relief with
respect to itself or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian or other
similar official, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an
involuntary case or other proceeding commenced against it, or shall
make a general assignment for the benefit of creditors; or
(c) an involuntary case or other proceeding shall be commenced
against the Corporation seeking liquidation, reorganization or other
relief with respect to it or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official, and such involuntary case or
other proceeding shall remain undismissed and unstayed for a period
of 90 days; or an order for relief shall be entered against the
Corporation under the Federal bankruptcy laws as now or hereafter in
effect;
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then, and in every such event, subject to the provisions of Article 5, the
Holder may, by notice to the Corporation which notice shall be delivered by the
Corporation to the holders of Senior Indebtedness, declare the principal amount
of this Note together with accrued interest thereon, to be, and such principal
amount of this Note (and accrued interest thereon) shall thereupon become, due
and payable on the tenth Business Day following delivery of such notice to the
Corporation without presentment, demand, protest or further notice of any kind,
all of which are hereby waived by the Corporation.
ARTICLE 5
SUBORDINATION
5.1 Amounts Payable Subordinated to Senior Indebtedness.
Notwithstanding any provision of this Note to the contrary, the Corporation
covenants and agrees, and the Holder by acceptance of this Note likewise
covenants and agrees, that all Amounts Payable shall be subordinated to the
extent set forth in this Article 5 to the prior payment in full, in cash or
cash equivalents satisfactory to the holders of Senior Indebtedness, of all
Senior Indebtedness. This Article 5 shall constitute a continuing offer to and
covenant with all persons who become holders of, or continue to hold, Senior
Indebtedness (irrespective of whether such Senior Indebtedness was created or
acquired before or after the issuance of this Note). The provisions of this
Article 5 are made for the benefit of all present and future holders of Senior
Indebtedness (and their successors and assigns), and shall be enforceable by
them directly against the Holder.
5.2 Priority and Payment Over of Proceeds in Certain Events.
(a) Upon any payment or distribution of assets of the
Corporation, whether in cash, property, securities or otherwise, in
the event of any dissolution, winding up or total or partial
liquidation, reorganization, arrangement, adjustment, protection,
relief or composition, or assignment for the benefit of creditors of
the Corporation, whether voluntary or involuntary or in bankruptcy,
insolvency, receivership, reorganization, relief or other
proceedings or upon an assignment for the benefit of creditors or
any other marshalling of all or part of the assets and liabilities
of the Corporation (the foregoing events herein collectively
referred to as an "Insolvency Event"), all Senior Indebtedness shall
first be paid in full, in cash, or payment provided for in cash
equivalents in a manner satisfactory to the holders of Senior
Indebtedness, before the Holder shall be entitled to receive any
payment or distribution of assets of the Corporation relating to any
Amounts Payable. Upon any Insolvency Event, any payment or
distribution of assets of the Corporation, whether in cash,
property, securities or otherwise, to which the Holder would be
entitled relating to any Amounts Payable other than pursuant to the
provisions of this Article 5, shall be made by the Corporation or by
any receiver, trustee in bankruptcy, liquidating trustee, agent or
other person making such payment or distribution, directly to the
holders of the Senior Indebtedness or their representatives for
application to the payment or prepayment of all such Senior
Indebtedness in full after giving effect to any concurrent payment
or distribution to the holders of such Senior Indebtedness.
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(b) If (x) there has occurred and is continuing a default in
the payment of all or any portion of any Senior Indebtedness, unless
and until such default shall have been cured or waived, the
Corporation shall not make any payment on or with respect to any
Amounts Payable or acquire this Note (or any portion thereof) for
cash, property, securities or otherwise; or (y) an event (not
involving the non-payment of any Senior Indebtedness) shall have
occurred or, with the giving of notice, or passage of time, or both,
would occur, that would allow any holders of Senior Indebtedness to
accelerate or otherwise demand the payment thereof, and any holders
of Senior Indebtedness give notice of such event to the Corporation
(the date that such notice is received by the Corporation is the
"Notice Date"), the Corporation shall not make any payment on or
with respect to any Amounts Payable or acquire this Note (or any
portion hereof) for cash, property, securities or otherwise during
the period (the "Blockage Period") commencing on the Notice Date and
ending on the earlier of (1) two years after the Notice Date if at
the end of such two year period such event is not the subject of
judicial proceedings and such Senior Indebtedness shall not have
been accelerated, (2) the date such event is cured or waived to the
satisfaction of the holders of the Senior Indebtedness, or (3) the
date the holders of Senior Indebtedness shall have given notice to
the Corporation of the voluntary termination of the Blockage Period.
By virtue of accepting this Note and the benefits hereof, during any
time period during which payment of any part of Amounts Payable due
under this Note is prohibited by any of the terms of this Note, the
Holder shall not be entitled, and will not take any action,
including any judicial process, to accelerate, demand payment or
enforce any Indebtedness in respect of this Note or any other claim
with regard to any Amounts Payable.
(c) If, notwithstanding the foregoing provisions prohibiting
payments or distributions, the Holder shall have received any
payment of, or on account of, any Amounts Payable that was
prohibited by this Article 5, before all Senior Indebtedness shall
have been paid in full, in cash or cash equivalents satisfactory to
the holders of the Senior Indebtedness, then and in such event such
payments or distributions shall be received and held in trust for
the holders of the Senior Indebtedness and promptly paid over or
delivered to the holders of the Senior Indebtedness remaining unpaid
thereof to the extent necessary to pay in full, in cash or cash
equivalents satisfactory to the holders of the Senior Indebtedness,
such Senior Indebtedness in accordance with its terms after giving
effect to any concurrent payment or distribution to the holder of
such Senior Indebtedness; provided, that any such payment which is,
for any reason, not so paid over or delivered shall be held in trust
by the Holder for the holders of Senior Indebtedness.
(d) So long as any Senior Indebtedness remains outstanding, or
the commitment to make credit extensions of said Senior Indebtedness
shall not have been terminated, the Holder will not be entitled to
take, demand, or receive, directly or indirectly, by setoff,
redemption, purchase or in any manner, any voluntary prepayment or
other payment of any Amounts Payable in amounts or in a manner which
are in violation of the provisions of this Article 5.
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(e) Upon any payment or distribution of assets referred to in
Section 5.2(a), the Holder shall be entitled to rely upon any order
or decree of a court of competent jurisdiction in which such
dissolution, winding up, liquidation or reorganization proceedings
are pending, and upon a certificate of the receiver, trustee in
bankruptcy, or liquidating trustee delivered to the Holder for the
purpose of ascertaining the persons entitled to participate in such
distribution of assets, the holders of Senior Indebtedness and other
Indebtedness of the Corporation, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all
other facts pertinent thereto or to this Article 5.
5.3 Rights of Holders of Senior Indebtedness Not To Be Impaired,
etc.
(a) No right of any present or future holder of any Senior
Indebtedness to enforce the subordination and other terms and
conditions provided herein shall at any time in any way be
prejudiced or impaired by any act or failure to act by any such
holder, or by any noncompliance by the Corporation, with the terms
and provisions and covenants herein regardless of any knowledge
thereof that any such holder may have or otherwise be charged with.
(b) This Article 5 may not be amended without the written
consent of each holder of the Senior Indebtedness and of the Holder,
and any purported amendment without such consent shall be void. No
holder of Senior Indebtedness shall be prejudiced in such holder's
right to enforce the subordination and other terms and conditions of
this Note by any act or failure to act by the Corporation or anyone
in custody of its assets or property.
5.4 Subrogation. Subject to and upon the payment in full, in cash
or cash equivalents satisfactory to the holders of the Senior Indebtedness, of
all Senior Indebtedness, the Holder shall be subrogated, to the extent of
payments or distributions made to the holders of Senior Indebtedness pursuant
to or by reason of this Article 5, to the rights of the holders of such Senior
Indebtedness to receive payments or distributions of assets of the Corporation
made on such Senior Indebtedness until all amounts due under this Note shall
be paid in full; and for the purposes of such subrogation, no payments or
distributions to holders of such Senior Indebtedness of any cash, property or
securities to which the Holder would be entitled except for the provisions of
this Article 5, and no payment over pursuant to the provisions of this Article
5 to holders of such Senior Indebtedness by the Holder, shall, as among the
Corporation, its creditors (other than holders of such Senior Indebtedness)
and the Holder be deemed to be a payment by the Corporation to or on account
of such Senior Indebtedness, it being understood that the provisions of this
Article 5 are solely for the purpose of defining the relative rights of the
holders of such Senior Indebtedness, on the one hand, and the Holder, on the
other hand.
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5.5 Obligations of the Corporation Unconditional. Nothing contained
in this Note is intended to or shall impair, as between the Corporation and
the Holder, the obligation of the Corporation, which is absolute and
unconditional, to pay to the Holder all Amounts Payable, as and when the same
shall become due and payable in accordance with their terms, or to affect the
relative rights of the Holder and other creditors of the Corporation (other
than the holders of Senior Indebtedness), except as provided in Section 5.2.
5.6 Article 5 Not To Prevent Events of Default. The failure to make
a payment of any Amounts Payable by reason of any provision of this Article 5
shall not be construed as preventing the occurrence of an Event of Default
under Section 4.1 hereof, except as provided in Section 5.2.
5.7 Additional Rights of Holders of Senior Indebtedness. If the
Senior Indebtedness has not been paid in full, in cash or cash equivalents
satisfactory to the holders of Senior Indebtedness, at a time in which the
Corporation is subject to an Insolvency Event, (a) the holders of the Senior
Indebtedness are hereby irrevocably authorized, but shall have no obligation,
to demand, sue for, collect and receive every payment or distribution received
in such Insolvency Proceeding in respect of any and all amounts payable by the
Corporation in respect of this Note and give acquittance therefor and to file
claims and proofs of claim, as their interests may appear, and (b) the Holder
shall duly and promptly take, for the account of the holders of the Senior
Indebtedness, as their interests may appear, such actions as the holders of
the Senior Indebtedness may request to collect and receive all Amounts Payable
by the Corporation in respect of this Note and to file appropriate claims or
proofs of claim in respect of this Note. Upon request by the Corporation, the
Holder of this Note shall deliver to the holders of Senior Indebtedness or
parties contemplating becoming holders of Senior Indebtedness a written
statement confirming that (i) the provisions (including the subordination
provisions) of this Note are in full force and effect; and (ii) that such
party is or will be entitled to rely upon and enjoy the benefits of the
provisions (including the subordination provisions) of this Note as a holder
of Senior Indebtedness.
5.8 Senior Indebtedness Changes. By virtue of accepting this Note
and the benefits hereof, the Holder hereby waives any and all notice of
renewal, extension or accrual of any of the Senior Indebtedness, present or
future, and agrees and consents that without notice to or consent of the
Holder: (a) the obligations and liabilities of the Corporation or any other
party or parties under the Senior Indebtedness may, from time to time, in
whole or in part, be renewed, refinanced, replaced, extended, refunded,
modified, amended, accelerated, compromised, supplemented, terminated,
increased, decreased, sold, exchanged, waived or released; (b) the holders of
Senior Indebtedness and their representatives may exercise or refrain from
exercising any right, remedy or power granted by any document creating,
evidencing or otherwise related to the Senior Indebtedness or at law, in
equity, or otherwise, with respect to the Senior Indebtedness or in connection
with any collateral security or lien (legal or equitable) held, given or
intended to be given therefor (including, without limitation, the right to
perfect any lien or security interest created in connection therewith); (c)
any and all collateral security and/or liens (legal or equitable) at any time,
present or future, held, given or intended to be given for the Senior
Indebtedness, and any rights or remedies of the holders of Senior Indebtedness
and their representatives in respect thereof, may, from time to time, in whole
or in part, be exchanged, sold, surrendered, released, modified, perfected,
unperfected, waived or extended by the Holders and their representatives; (d)
any balance or balances of funds with any holder of Senior Indebtedness at any
time standing to the credit of the Corporation or any guarantor of any of the
Senior Indebtedness may, from time to time, in whole or in part, be
surrendered or released, all as the holders of Senior Indebtedness,
6
their representatives or any of them may deem advisable and all without
impairing, abridging, diminishing, releasing or affecting the subordination to
the Senior Indebtedness provided for herein; and (e) the Corporation may incur
any amount or type of Senior Indebtedness (including Senior Indebtedness owed to
Affiliates), or modify, restate, refinance, replace or amend any Senior
Indebtedness from time to time, on terms and conditions acceptable to the
Corporation, without notice to or approval by the Holder.
5.9 Waivers. In the event the holders of Senior Indebtedness elect
to exercise their remedies to liquidate any collateral given to secure the
Senior Indebtedness, the Holder hereby waives any right it may have to contest
the validity of or the value obtained as a result of the exercise of remedies
by the holders of Senior Indebtedness, including, but not limited to, a
foreclosure, a sale pursuant to the Uniform Commercial Code or the acceptance
by the holders of Senior Indebtedness in lieu of foreclosure. The Holder
further waives any right it may have either in or out of any bankruptcy or
similar proceeding to challenge any action taken by the holders of Senior
Indebtedness as either a preference or fraudulent conveyance and further
agrees not to take any active role in such a proceeding other than the filing
of claim in any such proceeding, which claim shall be subordinate (to the
extent set forth above) to the claims of the holders of Senior Indebtedness.
ARTICLE 6
DEFINITIONS
For purposes of this Note, the following terms have the meanings
set forth below.
"Affiliate" means Jordan Industries, Inc. and any of its respective
direct and indirect subsidiaries and any other person that, directly or
indirectly, through one or more intermediaries, controls or is controlled by
or is under common control with, any of them.
"Amounts Payable" means all principal of, interest on, premium, if
any, fees, costs, expenses, indemnities or any other amounts due from the
Corporation under this Note, and all claims against or liabilities of the
Corporation in respect of this Note.
"Business Day" means any day except a Saturday, Sunday or other
days on which commercial banks in New York City are required or authorized by
law to close.
"Default" means any condition or event that constitutes an Event of
Default or that with notice or lapse of time or both would, unless cured or
waived, become an Event of Default.
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"Exit Event" means (i) the sale of substantially all of the assets
of the Corporation to any third party, (ii) the merger of the Corporation with
any third party, whether or not the Corporation survives such merger, or (iii)
the sale of more than 50% of the issued and outstanding voting capital stock
of the Corporation to any third party. For purposes of this definition, a
"third party" shall be deemed to include an Affiliate of the Corporation.
"Indebtedness" means the principal, interest (including any
interest accruing subsequent to an event specified in Section 4.1(b) or
Section 4.1(c) at the rate specified in the applicable contract whether or not
a claim for such interest is allowed in any such proceeding or case), premium,
if any, fees (including, without limitation, any commitment, agency, facility,
structuring, restructuring or other fee) costs, expenses, indemnities and
other amounts due on or in connection with any indebtedness (including,
without limitation, Senior Indebtedness), whether or not contingent, in
respect of borrowed money or evidenced by bonds, notes, debentures or similar
instruments or letters of credit (or reimbursement agreements in respect
thereof) or representing the deferred and unpaid balance of the purchase price
of any property (including pursuant to capital leases), and any financial
hedging obligations, if and to the extent such indebtedness (other than a
financial hedging obligation) would appear as a liability upon a balance sheet
of such person or entity prepared on a consolidated basis in accordance with
generally accepted accounting principles, other than a trade payable or
accrued expense, and also includes, to the extent not otherwise included, the
guarantee of such items of Indebtedness of another person or entity that are
included within this definition.
"Maturity Date" means the earlier of (i) December 31, 2003 or (ii)
the date which is ten Business Days after the date of the consummation of an
Exit Event.
"Note" means this Non-Negotiable Junior Subordinated Note.
"Purchase Agreement" means the Agreement for Purchase and Sale of
Stock, dated as of October ___, 2000, by and among the Corporation and
Holder, as the same has been or may be amended from time to time.
"Senior Indebtedness" shall mean any Indebtedness of the
Corporation (including, without limitation, any intercompany Indebtedness and
the senior subordinated notes issued in connection with the transactions
contemplated by the Purchase Agreement), now or hereafter incurred, or any
documents executed under or in connection therewith, and any amendments,
modifications, deferrals, renewals or extensions of such Indebtedness, and any
amounts owed in respect of any Indebtedness incurred in refinancing, replacing
or refunding the foregoing (including any refinancing, replacing or refunding
with new lenders), unless the terms of such Indebtedness expressly provide
that such Indebtedness is not Senior Indebtedness with respect to this Note.
Nothing in this Note shall restrict an Affiliate of the Corporation from
being a holder of Senior Indebtedness. Indebtedness owed to Affiliates will be
Senior Indebtedness for purposes of this Note. Notwithstanding anything herein
to the contrary, Senior Indebtedness shall include any payables, accrued
expenses, fees or other amounts due to an Affiliate of the Corporation.
Notwithstanding anything herein to the contrary, none of the obligations or
liabilities of the Corporation to the Holder shall be included in Senior
Indebtedness.
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ARTICLE 7
MISCELLANEOUS
7.1 Notices. All notices, requests and other communications to any
party hereunder shall be in writing and shall be delivered personally, sent by
facsimile transmission or sent by certified, registered or express mail,
postage prepaid, and shall be deemed given when so delivered personally, or
sent by facsimile transmission, or if mailed or sent by overnight courier,
upon receipt thereof, as follows:
(a) If to the Corporation to:
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ Building, Suite 4020
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Flavorsource Holdings, Inc.
ArborLake Centre, Suite ▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to (which shall not constitute Notice):
▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to the Holder, to:
▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
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with a copy to (which shall not constitute Notice):
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
Troop ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇, LLP
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Each party may, by notice given in accordance with this Section to the other
party, designate another address or person for receipt of notices hereunder.
7.2 No Waivers. No failure or delay by the Holder in exercising any
right, power or privilege hereunder or under this Note shall operate as a
waiver thereof nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by law. No notice to or demand on
the Corporation in any case shall entitle the Corporation to any other or
further notice or demand in related or similar circumstances requiring such
notice.
7.3 Amendments and Waivers. Subject to Section 5.3, any provision
of this Note may be amended or waived if, but only if, such amendment or
waiver is in writing, signed by the Corporation and the Holder.
7.4 Successors and Assigns. The provisions of this Note shall be
binding upon and inure to the benefit of the Holder and its respective
successors and permitted assigns. Without the prior written consent of the
Corporation and the holders of Senior Indebtedness, the Holder of this Note
agrees that it will not (a) sell, assign, pledge or otherwise transfer, in
whole or in part, directly or indirectly, by operation of law or otherwise,
this Note or any interest therein or (b) create, incur or suffer to exist any
security interest, lien, charge or other encumbrance whatsoever upon this
Note. If requested by a holder of Senior Indebtedness as part of any consent,
the assignee or transferee of the Holder shall agree in writing to be bound by
all of the terms of this Note. The holder hereof hereby waives proof of
reliance hereon by the holders of Senior Indebtedness.
7.5 Replacement Note. Upon receipt of evidence reasonably
satisfactory to the Corporation of the loss, theft, destruction or mutilation
of this Note and of a letter of indemnity reasonably satisfactory to the
Corporation from the Holder and upon reimbursement to the Corporation of all
reasonable expenses incident thereto, and upon surrender or cancellation of
this Note, if mutilated, the Corporation will make and deliver a new Note of
like tenor in lieu of such lost, stolen, destroyed or mutilated Note.
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7.6 Corporation's Obligations. The Holder agrees and acknowledges
that this Note and the Corporation's obligations hereunder and for all Amounts
Payable are solely obligations and liabilities of the Corporation. None of the
Corporation's directors, officers, employees, stockholders, advisors,
consultants and affiliates or any other persons shall be obligated or liable
in respect of this Note or any Amounts Payable, and Holder hereby releases
them from any such obligation of liability.
7.7 LITIGATION. THIS NOTE SHALL BE GOVERNED BY, CONSTRUED, APPLIED
AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF DELAWARE,
AND NO DOCTRINE OF CHOICE OF LAW SHALL BE USED TO APPLY ANY LAW OTHER THAN
THAT OF CALIFORNIA, AND NO DEFENSE, COUNTERCLAIM OR RIGHT OF SET-OFF GIVEN OR
ALLOWED BY THE LAWS OF ANY OTHER STATE OR JURISDICTION, OR ARISING OUT OF THE
ENACTMENT, MODIFICATION OR REPEAL OF ANY LAW, REGULATION, ORDINANCE OR DECREE
OF ANY FOREIGN JURISDICTION, BE INTERPOSED IN ANY ACTION HEREON. SUBJECT TO
SECTION 7.8, THE PARTIES AGREE THAT ANY ACTION OR PROCEEDING TO ENFORCE OR
ARISING OUT OF THIS NOTE MAY BE COMMENCED IN THE STATE COURTS, OR IN THE
UNITED STATES DISTRICT COURTS IN ORANGE COUNTY, CALIFORNIA. THE PARTIES
CONSENT TO SUCH JURISDICTION, AGREE THAT VENUE WILL BE PROPER IN SUCH COURTS
AND WAIVE ANY OBJECTIONS BASED UPON FORUM NON CONVENIENS. THE CHOICE OF FORUM
SET FORTH IN THIS SECTION 7.7 SHALL NOT BE DEEMED TO PRECLUDE THE ENFORCEMENT
OF ANY ACTION UNDER THIS AGREEMENT IN ANY OTHER JURISDICTION.
7.8 ARBITRATION. THE HOLDER HEREBY WAIVES AND SHALL NOT SEEK JURY
TRIAL IN ANY LAWSUIT, PROCEEDING, CLAIM, COUNTERCLAIM, DEFENSE OR OTHER
LITIGATION OR DISPUTE UNDER OR IN RESPECT OF THIS NOTE. THE HOLDER AGREES THAT
ANY SUCH DISPUTE RELATING TO OR IN RESPECT OF THIS NOTE, ITS NEGOTIATION,
EXECUTION, PERFORMANCE, SUBJECT MATTER, OR ANY COURSE OF CONDUCT OR DEALING OR
ACTIONS UNDER OR IN RESPECT OF THIS NOTE, SHALL BE SUBMITTED TO, AND RESOLVED
EXCLUSIVELY PURSUANT TO ARBITRATION IN ACCORDANCE WITH THE COMMERCIAL
ARBITRATION RULES OF THE AMERICAN ARBITRATION ASSOCIATION. SUCH ARBITRATION
SHALL TAKE PLACE IN ORANGE COUNTY, CALIFORNIA, AND SHALL BE SUBJECT TO THE
SUBSTANTIVE LAW OF THE STATE OF CALIFORNIA. DECISIONS PURSUANT TO SUCH
ARBITRATION SHALL BE FINAL, CONCLUSIVE AND BINDING ON THE PARTIES. UPON THE
CONCLUSION OF ARBITRATION, THE PARTIES MAY APPLY TO ANY APPROPRIATE COURT OF
THE TYPE DESCRIBED IN SECTION 7.7 TO ENFORCE THE DECISION PURSUANT TO SUCH
ARBITRATION.
[SIGNATURE ON NEXT PAGE]
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FLAVORSOURCE HOLDINGS, INC.
By:
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Vice President
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