EXHIBIT 10.121
PROMISSORY NOTE AND SECURITY AGREEMENT
WITH FOOTHILL CAPITAL CORPORATION
SECURED PROMISSORY NOTE
$350,000.00 Los Angeles, California
October 26, 1995
FOR VALUE RECEIVED, the undersigned ("Maker") hereby promises to pay to
FOOTHILL CAPITAL CORPORATION, a California corporation ("Foothill"), or order,
at ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
or at such other address as the holder of this Secured Promissory Note ("Note")
may specify in writing, the principal sum of Three Hundred Fifty Thousand
Dollars ($350,000.00) or, if less, the then outstanding principal amount of the
term loan made by Foothill in connection with that certain Security Agreement,
dated as of even date herewith, between Maker and Foothill (as hereafter
amended, restated, supplemented, or modified from time to time, the
"Agreement"), plus interest and the Monthly Service Charge (defined below) in
the manner and upon the terms and conditions set forth below. This Note is made
in connection with the Agreement, the provisions of which are incorporated
herein by reference. All capitalized terms used herein, unless otherwise defined
herein, shall have the meanings ascribed to them in the Agreement.
1. Rate and Payment of Interest
The principal balance of this Note shall bear interest from the date
hereof until paid in full at a per annum rate equal to four (4)
percentage points above the Reference Rate. For purposes of this Note,
"Reference Rate" means the highest of the variable rates of interest
per annum most recently announced by: (a) Bank of America, N.T. & S.A.,
San Francisco, California; (b) Mellon Bank, N.A., Pittsburgh,
Pennsylvania; and (c) Citibank, N,A., New York, New York, or any
successor to any of the foregoing institutions, as its "Prime Rate" or
"Reference Rate", as the case may be, whether or not such announced
rate is the best rate available from such financial institution, all as
determined by Foothill. In the event that the Reference Rate is changed
from time to time hereafter, the applicable rate of interest hereunder
automatically and immediately shall be increased or decreased by an
amount equal to the Reference Rate change. The rates of interest
charged hereunder shall be based upon the average Reference Rate in
effect during the month. Upon the occurrence of an Event of Default
under the Agreement, the rate of interest on this Note shall, at the
option of the holder of this Note, be increased to eight (8) percentage
points above the Reference Rate. Interest charged on this Note shall be
computed on the basis of a three hundred sixty (360) day year for
actual days elapsed.
In no event shall the interest rate or rates payable under
this Note, plus any other amounts paid in connection herewith, exceed the
highest rate permissible under any law that a court of competent jurisdiction
shall, in a final determination, deem applicable. Maker and Foothill intend
legally to agree upon the rate or rates of interest (and the other amounts paid
in connection herewith) and manner of payment stated within this Note; provided,
however, that anything contained herein to the contrary notwithstanding, if said
interest rate or rates of interest (or other amounts paid in connection
herewith) or the manner of payment exceeds the maximum allowable under
applicable law, then, ipso facto as of the date of this Note, Maker is and shall
be liable only for the payment of such maximum as allowed by law, and payment
received from Maker in excess of such legal maximum, whenever received, shall be
applied to reduce the principal balance of this Note to the extent of such
excess.
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2. Schedule of Payments
Principal, interest, and the Monthly Service Charge under this Note
shall be due and payable according to the following schedule:
A. Interest and the Monthly Service Charge shall be due and
payable in arrears on the first (1st) day of each month
commencing December 1, 1995, and continuing thereafter until
this Note has been paid in full;
B. Forty-seven (47) installments of principal, each in the
amount of Seven Thousand Two Hundred Ninety Dollars
($7,290.00), shall be due and payable on the first (1st) day
of each month commencing December 1, 1995;
C. One (1) installment of principal in the amount Seven
Thousand Three Hundred Seventy Dollars ($7,370.00) (or the
outstanding remaining principal balance of this Note, if
such outstanding principal balance is other than $7,370.00)
shall be due and payable on November 1, 1999; and
D. Any remaining outstanding principal, together with all
accrued and unpaid interest thereon and any other sums owing
in connection herewith (including, but not limited to,
Monthly Service Charges that remain unpaid), shall be due
and payable in full on November 1, 1999.
3. Monthly Service Charges
In addition to the interest and other amounts due under this Note, a
service charge of 3/10 of one percent (.3%) per month shall be payable
monthly in arrears based on the average daily outstanding principal
balance of this Note, calculated on the basis of a 360-day year and
paid for actual days elapsed (the "Monthly Service Charge").
4. Prepayment
Voluntary prepayments of the principal balance of this Note shall be
permitted at any time; provided that each such prepayment shall be
accompanied by all interest and any Monthly Service Charges that have
accrued and remain unpaid with respect to the amount of principal being
repaid and a prepayment fee equal to the following:
(i) Ten percent (10%) of the amount prepaid with respect to any
prepayments made prior to June 1, 1997; and
(ii) Three percent (3%) of the amount prepaid with respect to any
prepayments made on or after June 1, 1997, and prior to
November 1, 1999.
Amounts repaid or prepaid with respect to this Note may not be
re-borrowed. Partial prepayments of principal shall be applied to
scheduled payments of principal in the inverse order of their maturity.
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5. Holder's Right of Acceleration
Upon the occurrence of an Event of Default under the Agreement,
including, but not limited to, the failure to pay any installment of
principal, interest, or Monthly Service Charge hereunder when due, the
holder of this Note may, at its election and without notice to Maker,
declare the entire balance hereof (including, but not limited to, all
principal, interest, and Monthly Service Charges) immediately due and
payable.
6. Additional Rights of Holder
If any installment of principal, interest, or Monthly Service Charges
hereunder is not paid when due, the holder shall have the following
rights in addition to the rights set forth herein, in the Agreement,
and under law:
A. the right to compound interest and the Monthly Service
Charge by adding the unpaid interest and/or Monthly Service
Charge to principal, with such amount thereafter bearing
interest and the Monthly Service Charge at the rates
provided in this Note; and
B. if any installment is more than ten (10) days past due, the
right to collect a charge equal to the greater of Fifteen
Dollars ($15.00) or five percent (5%) of the late payment
for each month in which it is late. This charge is a result
of a reasonable endeavor by Maker and the holder to estimate
the holder's added costs and damages resulting from Maker's
failure to make timely payments under this Note; hence Maker
agrees that the charge shall be presumed to be the amount of
damage sustained by the holder since it is extremely
difficult to determine the actual amount necessary to
reimburse the holder for damages.
7. General Provisions
A. If this Note is not paid when due, Maker further promises to
pay all costs of collection, foreclosure fees, and
reasonable attorneys' fees incurred by the holder, whether
or not suit is filed hereon, together with the fees, costs
and expenses as provided in the Agreement.
B. Maker hereby consents to any and all renewals, replacements,
and/or extensions of time for payment of this Note before,
at, or after maturity.
C. Maker hereby consents to the acceptance, release, or
substitution of security for this Note.
D. Presentment for payment, demand, notice of dishonor,
protest, and notice of protest are hereby expressly waived.
E. No delay or omission on the part of the holder of this Note
in exercising any right shall operate as a waiver thereof or
of any other right.
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F. Any waiver of any rights under this Note, the Agreement, or
under any other agreement, instrument, or paper signed by
Maker is neither valid nor effective unless made in writing
and signed by the holder of this Note.
G. A waiver by the holder of this Note upon any one occasion
shall not be construed as a bar or waiver of any right or
remedy on any future occasion.
H. Should any one or more of the provisions of this Note be
determined illegal or unenforceable, all other provisions
shall nevertheless remain effective.
I. This Note cannot be changed, modified, amended, or
terminated orally.
J. The validity of this Note, its construction, interpretation,
and enforcement, and the rights of the parties hereto shall
be determined under, governed by, and construed in
accordance with the laws of the State of California, without
reference to the principles of conflicts of laws thereof.
8. Security for this Note
This Note is secured by collateral described in the Agreement, and is
subject to all of the terms and conditions thereof, including, but not
limited to, the remedies specified therein or granted in connection
therewith.
9. Venue; Jurisdiction; Waiver of Trial by Jury
MAKER AGREES THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH
THIS NOTE SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND FEDERAL
COURTS LOCATED IN THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, OR,
AT THE SOLE OPTION OF FOOTHILL, IN ANY OTHER COURT IN WHICH FOOTHILL
SHALL INITIATE LEGAL OR EQUITABLE PROCEEDINGS AND WHICH HAS SUBJECT
MATTER JURISDICTION OVER THE MATTER IN CONTROVERSY. MAKER WAIVES, TO
THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO
ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO
THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 9.
MAKER, TO THE EXTENT IT MAY LEGALLY DO SO, HEREBY EXPRESSLY WAIVES ANY
RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION, CAUSE OF ACTION,
OR PROCEEDING ARISING UNDER OR WITH RESPECT TO THIS NOTE, OR IN ANY WAY
CONNECTED WITH, OR RELATED TO, OR INCIDENTAL TO, THE DEALINGS OF THE
PARTIES HERETO WITH RESPECT TO THIS NOTE OR THE TRANSACTIONS RELATED
THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND
IRRESPECTIVE OF WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE.
MAKER, TO THE EXTENT IT MAY LEGALLY DO SO, HEREBY AGREES THAT ANY SUCH
CLAIM, DEMAND, ACTION, CAUSE OF ACTION, OR PROCEEDING SHALL BE DECIDED
BY A COURT TRIAL WITHOUT A JURY AND THAT THE HOLDER OF THIS NOTE MAY
FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 9 WITH ANY COURT
AS WRITTEN EVIDENCE OF THE CONSENT OF MAKER TO THE WAIVER OF ITS RIGHT
TO TRIAL BY JURY.
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IN WITNESS WHEREOF, this Note has been executed and delivered on the
date first set forth above.
Fantastic Foods International, Inc.,
a California corporation
By: /s/ ▇.▇. ▇▇▇▇▇▇
---------------------------------
Name: ▇.▇. ▇▇▇▇▇▇
Its: President
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SECURITY AGREEMENT
THIS SECURITY AGREEMENT is entered into as of October 26, 1995, between
FOOTHILL CAPITAL CORPORATION, a California corporation ("Foothill"), with a
place of business located at ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, and FANTASTIC FOODS INTERNATIONAL, INC., a
California corporation ("Borrower"), with its chief executive office located at
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
The parties agree as follows:
1. Definitions and Construction
1.1 Definitions. As used in this Agreement, the following terms
shall have the following definitions:
"Accounts" means all presently existing and hereafter arising
accounts, contract rights, and all other forms of obligations
owing to Borrower arising out of the sale or lease of goods or
the rendition of services by Borrower, whether or not earned
by performance, and any and all credit insurance, guaranties,
and other security therefor, as well as all merchandise
returned to or reclaimed by Borrower and Borrower's Books
relating to any of the foregoing.
"Agreement" means this Security Agreement and any extensions,
riders, supplements, notes, amendments, or modifications to or
in connection with this Security Agreement.
"Borrower's Books" means all of Borrower's books and records
including: ledgers; records indicating, summarizing, or
evidencing Borrower's assets or liabilities, or the
Collateral; all information relating to Borrower's business
operations or financial condition; and all computer programs,
disc or tape files, printouts, runs, or other computer
prepared information, and the equipment containing such
information.
"Closing Date" means the date on which Foothill makes the loan
to Borrower under the Term Note.
"Code" means the California Uniform Commercial Code.
"Collateral" means each of the following: the Accounts;
Borrower's Books; the Equipment; the General Intangibles; the
Inventory; the Negotiable Collateral; any money, or other
assets of Borrower which hereafter come into the possession,
custody, or control of Foothill; and the proceeds and
products, whether tangible or intangible, of any of the
foregoing, including proceeds of insurance covering any or all
of the Collateral, and any and all Accounts, Equipment,
General Intangibles, Inventory, Negotiable Collateral, money,
deposit accounts, or other tangible or intangible property
resulting from the sale or other disposition of the
Collateral, or any portion thereof or interest therein, and
the proceeds thereof.
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"Equipment" means all of Borrower's present and hereafter
acquired machinery, machine tools, motors, equipment,
furniture, furnishings, fixtures, vehicles (including motor
vehicles and trailers), tools, parts, dies, jigs, goods,
including, without limitation, the items of Borrower's
equipment set forth on Schedule E-1 attached hereto, and any
interest in any of the foregoing, and all attachments,
accessories, accessions, replacements, substitutions,
additions, and improvements to any of the foregoing, wherever
located.
"Event of Default" has the meaning set forth in Section 8.
"Foothill Expenses" means all: costs or expenses (including
taxes, photocopying, notarization, telecommunication, and
insurance premiums) required to be paid by Borrower under any
of the Loan Documents that are paid or advanced by Foothill;
documentation, filing, recording, publication, appraisal
(including periodic Collateral appraisals), and search fees
assessed, paid, or incurred by Foothill in connection with
Foothill's transactions with Borrower; costs and expenses
incurred by Foothill in the disbursement of funds to Borrower
(by wire transfer or otherwise); charges paid or incurred by
Foothill resulting from the dishonor of checks; costs and
expenses paid or incurred by Foothill to correct any default
or enforce any provision of the Loan Documents, or in gaining
possession of, maintaining, handling, preserving, storing,
shipping, selling, preparing for sale, or advertising to sell
the Collateral, or any portion thereof, whether or not a sale
is consummated; costs and expenses paid or incurred by
Foothill in examining Borrower's Books; costs and expenses of
third party claims or any other suit paid or incurred by
Foothill in enforcing or defending the Loan Documents; and
Foothill's reasonable attorneys' fees and expenses incurred in
advising, structuring, drafting, reviewing, administering,
amending, terminating, enforcing (including attorneys' fees
and expenses incurred in connection with a "workout," a
"restructuring," or an Insolvency Proceeding concerning
Borrower or any guarantor of the Obligations), defending, or
concerning the Loan Documents, whether or not suit is brought.
"GAAP" means generally accepted accounting principles as in
effect from time to time in the United States, consistently
applied.
"General Intangibles" means all of Borrower's present and
future general intangibles and other personal property
(including choses or things in action, goodwill, patents,
trade names, trademarks, service marks, copyrights,
blueprints, drawings, purchase orders, customer lists, monies
due or recoverable from pension funds, route lists, monies due
under any royalty or licensing agreements, infringement
claims, computer programs, computer discs, computer tapes,
literature, reports, catalogs, deposit accounts, insurance
premium rebates, tax refunds, and tax refund claims) other
than goods and Accounts, and Borrower's Books relating to any
of the foregoing.
"Insolvency Proceeding" means any proceeding commenced by or
against any person or entity under any provision of the United
States Bankruptcy Code, as amended, or under any other
bankruptcy or insolvency law, including assignments for the
benefit of creditors, formal or informal moratoria,
compositions, extensions generally with its creditors, or
proceedings seeking reorganization, arrangement, or other
similar relief.
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"Inventory" means all present and future inventory in which
Borrower has any interest, including goods held for sale or
lease or to be furnished under a contract of service and all
of Borrower's present and future raw materials, work in
process, finished goods, and packing and shipping materials,
wherever located, and any documents of title representing any
of the above and Borrower's Books relating to any of the
foregoing.
"Judicial Officer or Assignee" means any trustee, receiver,
controller, custodian, assignee for the benefit of creditors,
or any other person or entity having powers or duties like or
similar to the powers and duties of a trustee, receiver,
controller, custodian, or assignee for the benefit of
creditors.
"Loan Documents" means, collectively, this Agreement, the Term
Note and any other agreement entered into in connection with
this Agreement, together with all alterations, amendments,
changes, extensions, modifications, refinancings, refundings,
renewals, replacements, restatements, or supplements, of or to
any of the foregoing.
"Negotiable Collateral" means all of Borrower's present and
future letters of credit, notes, drafts, instruments,
documents, leases, and chattel paper, and Borrower's Books
relating to any of the foregoing.
"Obligations" means all loans, advances, debts, principal,
interest (including any interest that, but for the provisions
of the United States Bankruptcy Code, would have accrued),
premiums, liabilities (including all amounts charged to
Borrower's loan account pursuant to any agreement authorizing
Foothill to charge Borrower's loan account), obligations,
fees, lease payments, guaranties, covenants, and duties owing
by Borrower to Foothill of any kind and description (whether
pursuant to or evidenced by the Loan Documents, by any note or
other instrument, or by any other agreement between Foothill
and Borrower, and whether or not for the payment of money),
whether direct or indirect, absolute or contingent, due or to
become due, now existing or hereafter arising, and including
any debt, liability, or obligation owing from Borrower to
others that Foothill may have obtained by assignment or
otherwise, and further including all interest not paid when
due and all Foothill Expenses that Borrower is required to pay
or reimburse by the Loan Documents, by law, or otherwise.
"Pay-Off Letters" means letters, in form and substance
reasonably satisfactory to Foothill, from other lenders,
secured creditors, or lessors respecting the amount necessary
to (a) repay in full all of the obligations of Borrower owing
to such lenders, secured creditors, and/or lessors and (b)
obtain (i) terminations/releases of all of the security
interests or liens existing in favor of such lenders, secured
creditors, and/or lessors in and to the properties or assets
of Borrower and (ii) good and marketable title to such
properties or assets (in the case of leased property).
"Permitted Liens" means: (a) liens and security interests held
by Foothill; and (b) liens for unpaid taxes that are not yet
due and payable.
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"Term Note" means that certain Secured Promissory Note, of
even date herewith, by Borrower to the order of Foothill, in
the original principal amount of Three Hundred Fifty Thousand
Dollars ($350,000), and any extensions, renewals,
replacements, or substitutions therefor.
1.2 Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP.
When used herein, the term "financial statements" shall
include the notes and schedules thereto.
1.3 Code. Any terms used in this Agreement which are defined in
the Code shall be construed and defined as set forth in the
Code unless otherwise defined herein.
1.4 Construction. Unless the context of this Agreement clearly
requires otherwise, references to the plural include the
singular, to the singular include the plural, and the term
"including" is not limiting. The words "hereof," "herein,"
"hereby," "hereunder," and similar terms in this Agreement
refer to this Agreement as a whole and not to any particular
provision of this Agreement. Section, subsection, clause, and
exhibit references are to this Agreement unless otherwise
specified.
1.5 Schedules and Exhibits. All of the schedules and exhibits
attached to this Agreement shall be deemed incorporated
herein by reference.
2. Fees
Borrower shall pay to Foothill the following fees:
2.1 Closing Fee. A one time closing fee of Seven Thousand
Dollars ($7,000) which is earned, in full, on the Closing
Date and is due and payable by Borrower to Foothill in
connection with this Agreement on the Closing Date;
2.2 Appraisal and Documentation Fees . Foothill's customary
appraisal fee of Seven Hundred Fifty Dollars ($750) per day
per appraiser, plus out-of-pocket expenses for each appraisal
of the Collateral performed by Foothill or its agents.
3. Conditions to Effectiveness: Term of Agreement
3.1 Conditions Precedent. The obligation of Foothill to make the
loan evidenced by the Term Note is subject to the
fulfillment, to the satisfaction of Foothill and its
counsel, of each of the following conditions on or before
the Closing Date:
(a) The Closing Date shall occur on or before October
31, 1995;
(b) Other than with respect to Permitted Liens (if
any), Borrower's existing lenders, creditors, and
lessors shall have executed and delivered Pay-Off
Letters, UCC termination statements, bills of
sale, and other documentation evidencing the
termination of their liens and security interests
in the assets of Borrower (and the transfer of
title to such assets to Borrower, in the case of
leased property) or a subordination agreement in
form and substance satisfactory to Foothill in its
sole discretion;
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(c) Foothill shall have received copies of Borrower's
Bylaws and Articles or Certificate of Incorporation,
as amended, modified, or supplemented to the Closing
Date, certified by the Secretary of Borrower;
(d) Foothill shall have received a certificate of
corporate status with respect to Borrower, dated
within ten (10) days of the Closing Date, by the
Secretary of State of the state of incorporation of
Borrower, which certificate shall indicate that
Borrower is in good standing in such state;
(e) Foothill shall have received a certificate from the
Secretary of Borrower attesting to the resolutions of
Borrower's Board of Directors authorizing its
execution and delivery of this Agreement and the
other Loan Documents to which Borrower is a party and
authorizing specific officers of Borrower to execute
same;
(f) Foothill shall have received certificates of
corporate status with respect to Borrower, each dated
within ten (10) days of the Closing Date, such
certificates to be issued by the Secretary of State
of the states in which its failure to be duly
qualified or licensed would have a material adverse
effect on the financial condition or assets of
Borrower, which certificates shall indicate that
Borrower is in good standing;
(g) Foothill shall have received the insurance
certificates, certified copies of policies, required
by Section 6.7 hereof along with a 438BFU Lender's
Loss Payable Endorsement naming Foothill as sole loss
payee, all in form and substance satisfactory to
Foothill and its counsel;
(h) Foothill shall have received each of the following
documents and agreements, in form and substance
satisfactory to Foothill and its counsel, duly
executed, and each such document and agreement shall
be in full force and effect:
(1) This Agreement;
(2) Secured Promissory Note; and
(3) Validity Guaranty from ▇▇▇ ▇. ▇▇▇▇▇▇,
individually;
(i) Foothill shall have received searches reflecting the
filing of its financing statements and fixture
filings, and shall have received certificates of
title with respect to the Collateral which shall have
been duly executed in order to perfect all of the
security interests granted to Foothill;
(j) Foothill shall have received landlord and
mortgagee waivers from the lessors and mortgagees
of the locations where the Equipment is located;
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(k) Foothill shall have received the Closing Fee
referenced in Section 2.1, all of Foothill Expenses
incurred as of the Closing Date, and all other costs
and expenses incurred by Foothill in connection
herewith, including without limitation, audit fees,
search fees, appraisal fees, documentation, recording
and filing fees, and the fees and costs of ▇▇▇▇▇▇,
▇▇▇▇▇ & Bockius LLP, for the negotiation, preparation
and documentation of the Loan Documents;
(l) All representations and warranties set forth in this
Agreement and the other Loan Documents are true and
correct as of the Closing Date, no "Event of Default"
has occurred under this Agreement or any of the other
Loan Documents, and all of the Loan Documents are in
full force and effect: and
(m) All other documents and legal matters in connection
with the transactions contemplated by this Agreement
shall have been delivered or executed or recorded and
shall be in form and substance satisfactory to
Foothill and its counsel.
3.2 Term. This Agreement shall become effective upon the execution
and delivery hereof by Borrower and Foothill, and shall
continue in full force and effect until all Obligations have
been indefeasibly paid in full.
4. Creation of Security Interest
4.1 Grant of Security Interest. Borrower hereby grants to Foothill
a continuing security interest in all currently existing and
hereafter acquired or arising Collateral in order to secure
prompt repayment of any and all Obligations and in order to
secure prompt performance by Borrower of each of its covenants
and duties under the Loan Documents. Foothill's security
interest in the Collateral shall attach to all Collateral
without further act on the part of Foothill or Borrower.
4.2 Delivery of Additional Documentation Required. Borrower shall
execute and deliver to Foothill, prior to or concurrently with
Borrower's execution and delivery of this Agreement and at any
time thereafter at the request of Foothill, all financing
statements, continuation financing statements, fixture
filings, security agreements, chattel mortgages, pledges,
assignments, endorsements of certificates of title,
applications for title, affidavits, reports, notices, letters
of authority, and all other documents that Foothill may
reasonably request, in form satisfactory to Foothill, to
perfect and continue perfected Foothill's security interests
in the Collateral and in order to fully consummate all of the
transactions contemplated under the Loan Documents.
4.3 Power of Attorney. Borrower hereby irrevocably makes,
constitutes, and appoints Foothill (and any of Foothill's
officers, employees, or agents designated by Foothill) as
Borrower's true and lawful attorney, with power to: (a) sign
the name of Borrower on any of the documents described in
Section 4.2 or on any other similar documents to be
executed, recorded, or filed in order to perfect or continue
perfected Foothill's security interest in the Collateral;
(b) endorse Borrower's name on any checks, notices,
acceptances, money orders, drafts, or other item of payment
or security that may come into Foothill's possession; (c) at
any time that an Event of Default has occurred or Foothill
deems itself insecure, make, settle, and adjust all claims
under Borrower's policies of insurance in respect of the
Collateral and make all determinations and decisions with
respect to such policies of insurance. The appointment of
Foothill as Borrower's attorney, and each and every one of
Foothill's rights and powers, being coupled with an
interest, is irrevocable until all of the Obligations have
been fully repaid and performed and Foothill's obligation to
provide advances hereunder is terminated.
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4.4 Right to Inspect. Foothill (through any of its officers,
employees, or agents) shall have the right, from time to time
hereafter, to inspect Borrower's Books and to check, test, and
appraise the Collateral in order to verify Borrower's
financial condition or the amount, quality, value, condition
of, or any other matter relating to, the Collateral.
5. Representations and Warranties
Borrower represents and warrants as follows:
5.1 Prior Encumbrances. Borrower has good and indefeasible title
to the Collateral, free and clear of liens, claims, security
interests, or encumbrances except for Permitted Liens. Except
with respect to certain machinery and equipment that will be
purchased with the proceeds of the loan represented by the
Term Note, none of the Collateral has been purchased by
Borrower within the six (6) months period preceding the
Closing Date, except for sales to Borrower in the ordinary
course of the seller's business.
5.2 Location of Equipment. The Equipment is not now and shall not
at any time hereafter be stored with a bailee, warehouseman,
or similar party without Foothill's prior written consent.
Borrower shall keep the Equipment only at the following
locations: (i) ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
and (ii) ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇, ▇, ▇▇▇ ▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇. None of the Equipment has been located,
during the six (6) month period prior to the Closing Date, in
any jurisdiction other than the county(ies) and state(s) set
forth in this Section.
5.3 Location of Chief Executive Office. The chief executive office
of Borrower is located at the address indicated in the first
paragraph of this Agreement and Borrower covenants and agrees
that it will not, without thirty (30) days prior written
notification to Foothill, relocate such chief executive
office.
5.4 Fictitious Business Name(s). Borrower uses only the
following Fictitious Business Names and none other: (a)
▇▇▇▇▇▇▇ Foods, Inc., (b) The Pasta Fresca Co., Inc., (c)
▇▇▇▇ ▇▇▇▇▇▇▇, (d) Santino's, and (e) Pasta Fresca Co.
5.5 Due Organization and Qualification. Borrower is and shall at
all times hereafter be duly organized and existing and in
good standing under the laws of the state of its
incorporation and qualified and licensed to do business in,
and in good standing in, any state in which the conduct of
its business or its ownership of the Collateral requires
that it be so qualified.
[FFI\AGR:FOOTSEC.AGR]
7
5.6 Due Authorization: No Conflict. The execution, delivery, and
performance of the Loan Documents are within Borrower's
corporate powers, have been duly authorized, and are not in
conflict with nor constitute a breach of any provision
contained in Borrower's Articles or Certificate of
Incorporation, or By-laws, nor will they constitute an event
of default under any material agreement to which Borrower is
a party.
5.7 Litigation. There are no actions or proceedings pending by or
against Borrower before any court or administrative agency and
Borrower does not have knowledge or belief of any pending,
threatened, or imminent litigation, governmental
investigations, or claims, complaints, actions, or
prosecutions involving Borrower or any guarantor of the
Obligations, except for ongoing collection matters in which
the Borrower is the plaintiff.
5.8 No Material Adverse Change in Financial Condition. All
financial statements relating to Borrower or any guarantor of
the Obligations that have been or may hereafter be delivered
by Borrower to Foothill have been prepared in accordance with
GAAP and fairly present Borrower's financial condition as of
the date thereof and Borrower's results of operations for the
period then ended. There has not been a material adverse
change in the financial condition of Borrower since the date
of the latest financial statements submitted to Foothill on or
before the Closing Date.
5.9 Solvency. Borrower's assets at a fair valuation exceed the
amount of all of its debts at a fair valuation and Borrower is
able to pay all of its debts (including trade debts and
contingent liabilities) as they become due.
5.10 Environmental Condition. None of Borrower's properties or
assets has ever been used by Borrower or, to the best of
Borrower's knowledge, by previous owners or operators in the
disposal of, or to produce, store, handle, treat, release, or
transport, any hazardous waste or hazardous substance. None of
Borrower's properties or assets has ever been designated or
identified in any manner pursuant to any environmental
protection statute as a hazardous waste or hazardous substance
disposal site, or a candidate for closure pursuant to any
environmental protection statute. No lien arising under any
environmental protection statute has attached to any revenues
or to any real or personal property owned or operated by
Borrower. Borrower has not received a summons, citation,
notice, or directive from the Environmental Protection Agency
or any other federal or state governmental agency concerning
any action or omission by Borrower resulting in the releasing
or disposing of hazardous waste or hazardous substances into
the environment.
5.11 Reliance by Foothill; Cumulative. Each warranty and
representation contained in this Agreement shall be
conclusively presumed to have been relied on by Foothill
regardless of any investigation made or information possessed
by Foothill. The warranties and representations set forth
herein shall be cumulative and in addition to any and all
other warranties and representations that Borrower shall now
or hereinafter give, or cause to be given, to Foothill.
[FFI\AGR:FOOTSEC.AGR]
8
6. Affirmative Covenants
Borrower covenants and agrees that, so long as any credit hereunder
shall be available and until payment in full of the Obligations, and
unless Foothill shall otherwise consent in writing, Borrower shall do
all of the following:
6.1 Financial Statements, Reports, Certificates. Borrower agrees
to deliver to Foothill: (a) as soon as available, but in any
event within thirty (30) days after the end of each month
during each of Borrower's fiscal years, a company prepared
balance sheet, income statement, and cash flow statement
covering Borrower's operations during such period; and (b) as
soon as available, but in any event within ninety (90) days
after the end of each of Borrower's fiscal years, financial
statements of Borrower for each such fiscal year, reviewed by
independent certified public accountants acceptable to
Foothill, by such accountants to have been prepared in
accordance with GAAP, together with a certificate of such
accountants addressed to Foothill stating that such
accountants do not have knowledge of the existence of any
event or condition constituting an Event of Default, or that
would, with the passage of time or the giving of notice,
constitute an Event of Default. Such reviewed financial
statements shall include a balance sheet, profit and loss
statement, and cash flow statement, and such accountants'
letter to management. Borrower shall have issued written
instructions to its independent certified public accountants
authorizing them to communicate with Foothill and to release
to Foothill whatever financial information concerning Borrower
that Foothill may request. If Borrower is a parent company of
one or more subsidiaries, or affiliates, or is a subsidiary or
affiliate of another company, then, in addition to the
financial statements referred to above, Borrower agrees to
deliver financial statements prepared on a consolidated basis.
Borrower hereby irrevocably authorizes and directs all
auditors, accountants, or other third parties to deliver to
Foothill, at Borrower's expense, copies of Borrower's
financial statements, papers related thereto, and other
accounting records of any nature in their possession, and to
disclose to Foothill any information they may have regarding
Borrower's business affairs and financial conditions.
6.2 Other Reports. Borrower agrees to deliver to Foothill (i)
within twenty-one (21) business days after Borrower's payroll
taxes are due, evidence that such payroll taxes have been
timely and fully paid, and (ii) promptly after receipt by
Borrower, copies of the quarterly statements delivered by ADP
to Borrower regarding evidence that such payroll taxes have
been paid.
6.3 Tax Returns. Borrower agrees to deliver to Foothill copies of
each of Borrower's future federal income tax returns, and any
amendments thereto, within thirty (30) days of the filing
thereof with the Internal Revenue Service.
6.4 Title to Equipment. Upon Foothill's request, Borrower shall
immediately deliver to Foothill, properly endorsed, any and
all evidences of ownership of, certificates of title, or
applications for title to any items of Equipment.
[FFI\AGR:FOOTSEC.AGR]
9
6.5 Maintenance of Equipment. Borrower shall keep and maintain the
Equipment in good operating condition and repair, and make all
necessary replacements thereto so that the value and operating
efficiency thereof shall at all times be maintained and
preserved. Borrower shall not permit any item of Equipment to
become a fixture to real estate or an accession to other
property, and the Equipment is now and shall at all times
remain personal property.
6.6 Taxes. All assessments and taxes, whether real, personal, or
otherwise, due or payable by, or imposed, levied, or assessed
against Borrower or any of its property have been paid, and
shall hereafter be paid in full, before delinquency or before
the expiration of any extension period. Borrower shall make
due and timely payment or deposit of all federal, state, and
local taxes, assessments, or contributions required of it by
law, and will execute and deliver to Foothill, on demand,
appropriate certificates attesting to the payment or deposit
thereof. Borrower shall make timely payment or deposit of all
tax payments and withholding taxes required of it by
applicable laws, including those laws concerning F.I.C.A.,
F.U.T.A., state disability, and local, state, and federal
income taxes, and shall, upon request, furnish Foothill with
proof satisfactory to Foothill indicating that Borrower has
made such payments or deposits.
6.7 Insurance.
(a) Borrower, at its expense, shall keep the Collateral
insured against "all risks" including loss or damage
by fire, theft, explosion, sprinklers, and all other
hazards and risks, and in the full insurable value
thereof. Borrower also shall maintain business
interruption, public liability, and property damage
insurance relating to Borrower's ownership and use of
the Collateral.
(b) All such policies of insurance shall be in such
form, with such companies, and in such amounts as
may be satisfactory to Foothill. All such policies
of insurance (except those of public liability and
property damage) shall contain a 438BFU lender's
loss payable endorsement, or an equivalent
endorsement in a form satisfactory to Foothill,
showing Foothill as loss payee thereof, and shall
contain a waiver of warranties, and shall specify
that the insurer must give at least ten (10) days
prior written notice to Foothill before canceling
its policy for any reason. Borrower shall deliver
to Foothill certified copies of such policies of
insurance and evidence of the payment of all
premiums therefor. All proceeds payable under any
such policy shall be payable to Foothill to be
applied on account of the Obligations.
6.8 Foothill Expenses. Borrower shall immediately and without
demand reimburse Foothill for all sums expended by Foothill
which constitute Foothill Expenses and Borrower hereby
authorizes and approves all advances and payments by Foothill
for items constituting Foothill Expenses. Any Foothill
Expenses not paid promptly by Borrower shall constitute
Obligations and shall accrue interest at the rate and in the
manner of Obligations existing under the Term Note.
[FFI\AGR:FOOTSEC.AGR]
10
6.9 No Setoffs or Counterclaims. All payments hereunder and under
the other Loan Documents made by or on behalf of Borrower
shall be made without setoff or counterclaim and free and
clear of, and without deduction or withholding for or on
account of, any federal, state or local taxes.
7. Negative Covenants
Borrower covenants and agrees that, so long as any credit hereunder
shall be available and until payment in full of the Obligations,
Borrower will not do any of the following without Foothill's Prior
written consent:
7.1 Liens. Create, incur, assume, or permit to exist, directly or
indirectly, any lien on or with respect to any of the
Collateral, of any kind, whether now owned or hereafter
acquired, or any income or profits therefrom, except for
Permitted Liens.
7.2 Restrictions on Fundamental Changes. Enter into any
acquisition, merger, consolidation, reorganization, or
recapitalization, or reclassify its capital stock, or
liquidate, wind up, or dissolve itself (or suffer any
liquidation or dissolution), or convey, sell, assign, lease,
transfer, or otherwise dispose of, in one transaction or a
series of transactions, all or any substantial part of its
business, property, or assets, whether now owned or hereafter
acquired, or acquire by purchase or otherwise all or
substantially all the assets, stock, or other evidence of
beneficial ownership of any person or entity.
7.3 Extraordinary Transactions and Disposal of Collateral. Sell,
lease, or otherwise dispose of, move, relocate, or transfer,
whether by sale or otherwise, any of the Collateral (except
that Inventory may be sold by Borrower in the ordinary course
of Borrower's business in accordance with past practice).
7.4 Change Name. Change Borrower's name, business structure, or
identity, or add any new fictitious name.
8. Events of Default
Any one or more of the following events shall constitute an event of
default (each, an "Event of Default") under this Agreement:
8.1 If Borrower fails to pay when due and payable or when declared
due and payable, any portion of the Obligations (whether of
principal, interest [including any interest which, but for the
provisions of the United States Bankruptcy Code, would have
accrued on such amounts], fees and charges due Foothill,
taxes, reimbursement of Foothill Expenses, or otherwise);
8.2 If Borrower fails or neglects to perform, keep, or observe any
term, provision, condition, covenant, or agreement contained
in this Agreement, in any of the Loan Documents, or in any
other present or future agreement between Borrower and
Foothill;
[FFI\AGR:FOOTSEC.AGR]
11
8.3 If there is a material impairment of the prospect of repayment
of any portion of the Obligations owing to Foothill or a
material impairment of the value or priority of Foothill's
security interests in the Collateral;
8.4 If any material portion of Borrower's assets is attached,
seized, subjected to a writ or distress warrant, or is levied
upon, or comes into the possession of any Judicial Officer or
Assignee;
8.5 If an Insolvency Proceeding is commenced by Borrower;
8.6 If an Insolvency Proceeding is commenced against Borrower;
8.7 If Borrower is enjoined, restrained, or in any way prevented
by court order from continuing to conduct all or any
material part of its business affairs;
8.8 If a notice of lien, levy, or assessment is filed of record
with respect to any of Borrower's assets by the United States
Government, or any department, agency, or instrumentality
thereof, or by any state, county, municipal, or governmental
agency, or if any taxes or debts owing at any time hereafter
to any one or more of such entities becomes a lien, whether
▇▇▇▇▇▇ or otherwise, upon any of Borrower's assets and the
same is not paid on the payment date thereof:
8.9 If a judgment or other claim becomes a lien or encumbrance
upon any material portion of Borrower's assets;
8.10 If there is a default in any material agreement to which
Borrower is a party with third parties resulting in a right by
such third parties, whether or not exercised, to accelerate
the maturity of Borrower's indebtedness thereunder;
8.11 If any misstatement or misrepresentation exists now or
hereafter in any warranty, representation, statement, or
report made to Foothill by Borrower or any officer, employee,
agent, or director of Borrower, or if any such warranty or
representation is withdrawn by any officer or director; or
8.12 If the obligation of any guarantor or other third party under
any loan document is limited or terminated by operation of law
or by the guarantor or other third party thereunder, or any
guarantor or other third party becomes the subject of an
Insolvency Proceeding.
9. Foothill's Rights and Remedies
9.1 Rights and Remedies. Upon the occurrence of an Event of
Default Foothill may, at its election, without notice of its
election and without demand, do any one or more of the
following, all of which are authorized by Borrower:
(a) Declare all Obligations, whether evidenced by this
Agreement, by any of the other Loan Documents, or
otherwise, immediately due and payable;
[FFI\AGR:FOOTSEC.AGR]
12
(b) Terminate this Agreement and any of the other Loan
Documents as to any future liability or obligation of
Foothill, but without affecting Foothill's rights and
security interest in the Collateral and without
affecting the Obligations;
(c) Without notice to or demand upon Borrower or any
guarantor, make such payments and do such acts as
Foothill considers necessary or reasonable to
protect its security interest in the Collateral.
Borrower agrees to assemble the Collateral if
Foothill so requires, and to make the Collateral
available to Foothill as Foothill may designate.
Borrower authorizes Foothill to enter the premises
where the Collateral is located, to take and
maintain possession of the Collateral, or any part
of it, and to pay, purchase, contest, or
compromise any encumbrance, charge, or lien that
in Foothill's determination appears to be prior or
superior to its security interest and to pay all
expenses incurred in connection therewith. With
respect to any of Borrower's owned premises,
Borrower hereby grants Foothill a license to enter
into possession of such premises and to occupy the
same, without charge, for up to one hundred twenty
(120) days in order to exercise any of Foothill's
rights or remedies provided herein, at law, in
equity, or otherwise;
(d) Without notice to Borrower (such notice being
expressly waived) set off and apply to the
Obligations any and all (i) balances and deposits
of Borrower held by Foothill, or (ii) indebtedness
at any time owing to or for the credit or the
account of Borrower held by Foothill;
(e) Store, maintain, repair, prepare for sale,
advertise for sale, and sell (in the manner
provided for herein) the Collateral. Foothill is
hereby granted a license or other right to use,
without charge, Borrower's labels, patents,
copyrights, rights of use of any name, trade
secrets, trade names, trademarks, service marks,
and advertising matter, or any property of a
similar nature, as it pertains to the Collateral,
advertising for sale and selling any Collateral
and Borrower's rights under all licenses and all
franchise agreements shall inure to Foothill's
benefit;
(f) Sell the Collateral at either a public or private
sale, or both, by way of one or more contracts or
transactions, for cash or on terms, in such manner
and at such places (including Borrower's premises)
as Foothill determines is commercially reasonable.
It is not necessary that the Collateral be present
at any such sale;
(g) Foothill may credit bid and purchase at any public
sale.
Foothill shall give notice of the disposition of the
Collateral as follows:
(i) Foothill shall give Borrower and each
holder of a security interest in the
Collateral who has filed with Foothill a
written request for notice, a notice in
writing of the time and place of public
sale, or, if the sale is a private sale
or some other disposition other than a
public sale is to be made of the
Collateral, then the time on or after
which the private sale or other
disposition is to be made;
[FFI\AGR:FOOTSEC.AGR]
13
(ii) The notice shall be personally delivered
or mailed, postage prepaid, to Borrower
as provided in Section 12, at least five
(5) calendar days before the date fixed
for the sale, or at least five (5)
calendar days before the date on or
after which the private sale or other
disposition is to be made, unless the
Collateral is perishable or threatens to
decline speedily in value. Notice to
persons other than Borrower claiming an
interest in the Collateral shall be sent
to such addresses as they have furnished
to Foothill; and
(iii) If the sale is to be a public sale,
Foothill also shall give notice of the
time and place by publishing a notice
one time at least five (5) calendar days
before the date of the sale in a
newspaper of general circulation in the
county in which the sale is to be held.
9.2 Deficiency: Excess Proceeds. Any deficiency that exists
after disposition of the Collateral as provided above will
be paid immediately by Borrower. Any excess will be
returned, without interest and subject to the rights of
third parties, by Foothill to Borrower.
9.3 Remedies Cumulative. Foothill's rights and remedies under this
Agreement, the Loan Documents, and all other agreements shall
be cumulative. Foothill shall have all other rights and
remedies not inconsistent herewith as provided under the Code,
by law, or in equity. No exercise by Foothill of one right or
remedy shall be deemed an election, and no waiver by Foothill
of any Event of Default shall be deemed a continuing waiver.
No delay by Foothill shall constitute a waiver, election, or
acquiescence by it.
10. Taxes and Expenses Regarding the Collateral
If Borrower fails to pay any monies (whether taxes, rents, assessments,
insurance premiums, or otherwise) due to third persons or entities, or
fails to make any deposits or furnish any required proof of payment or
deposit, all as required under the terms of this Agreement, then, to
the extent that Foothill determines that such failure by Borrower could
have a material adverse effect on Foothill's interests in the
Collateral, in its discretion and without prior notice to Borrower,
Foothill may do any or all of the following: (a) make payment of the
same or any part thereof; or (b) obtain and maintain insurance policies
of the type described in Section 6.7, and take any action with respect
to such policies as Foothill deems prudent. Any amounts paid or
deposited by Foothill shall constitute Foothill Expenses, shall be
immediately charged to Borrower and become additional Obligations,
shall bear interest at the then applicable rate set forth in the Term
Note, and shall be secured by the Collateral. Any payments made by
Foothill shall not constitute an agreement by Foothill to make similar
payments in the future or a waiver by Foothill of any Event of Default
under this Agreement. Foothill need not inquire as to, or contest the
validity of, any such expense, tax, security interest, encumbrance, or
lien and the receipt of the usual official notice for the payment
thereof shall be conclusive evidence that the same was validly due and
owing.
[FFI\AGR:FOOTSEC.AGR]
14
11. Waivers: Indemnification
11.1 Demand; Protest; etc. Borrower waives demand, protest, notice
of protest, notice of default or dishonor, notice of payment
and nonpayment, notice of any default, nonpayment at maturity,
release, compromise, settlement, extension, or renewal of
accounts, documents, instruments, chattel paper, and
guarantees at any time held by Foothill on which Borrower may
in any way be liable.
11.2 Foothill's Liability for Collateral. So long as Foothill
complies with its obligations, if any, under Section 9207 of
the Code, Foothill shall not in any way or manner be liable or
responsible for: (a) the safekeeping of the Collateral; (b)
any loss or damage thereto occurring or arising in any manner
or fashion from any cause; (c) any diminution in the value
thereof; or (d) any act or default of any carrier,
warehouseman, bailee, forwarding agency, or other person. All
risk of loss, damage, or destruction of the Collateral shall
be borne by Borrower.
11.3 Indemnification. Borrower agrees to indemnify Foothill and its
officers, employees, and agents and hold Foothill harmless
against: (a) all obligations, demands, claims, and liabilities
claimed or asserted by any other party, and (b) all losses in
any way suffered, incurred, or paid by Foothill as a result of
or in any way arising out of, following, or consequential to
transactions with Borrower whether under this Agreement, or
otherwise. This provision shall survive the termination of
this Agreement.
12. Notices
Unless otherwise provided in this Agreement, all notices or demands by
any party relating to this Agreement or any other agreement entered
into in connection therewith shall be in writing and (except for
financial statements and other informational documents which may be
sent by first-class mail, postage prepaid) shall be personally
delivered or sent by registered or certified mail, postage prepaid,
return receipt requested, or by prepaid telex, TWX, telefacsimile, or
telegram (with messenger delivery specified) to Borrower or to
Foothill, as the case may be, at its addresses set forth below:
If to Borrower: Fantastic Foods International, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇. ▇▇▇▇▇▇
If to Foothill: Foothill Capital Corporation
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Small Business Lending
Division Manager
The parties hereto may change the address at which they are to receive
notices hereunder, by notice in writing in the foregoing manner given
to the other. All notices or demands sent in accordance with this
Section 12, other than notices by Foothill in connection with Sections
9504 or 9505 of the Code, shall be deemed received on the earlier of
the date of actual receipt or three (3) calendar days after the
deposit thereof in the mail. Borrower acknowledges and agrees that
notices sent by Foothill in connection with Sections 9504 or 9505 of
the Code shall be deemed sent when deposited in the mail or
transmitted by telefacsimile or other similar method set forth above.
[FFI\AGR:FOOTSEC.AGR]
15
13. Choice of Law and Venue; Jury Trial Waiver
THE VALIDITY OF THIS AGREEMENT, ITS CONSTRUCTION, INTERPRETATION, AND
ENFORCEMENT, AND THE RIGHTS OF THE PARTIES HERETO SHALL BE DETERMINED
UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS
OF THE STATE OF CALIFORNIA, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS
OF LAW. THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN
CONNECTION WITH THIS AGREEMENT SHALL BE TRIED AND LITIGATED ONLY IN THE
STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF LOS ANGELES, STATE OF
CALIFORNIA OR, AT THE SOLE OPTION OF FOOTHILL, IN ANY OTHER COURT IN
WHICH FOOTHILL SHALL INITIATE LEGAL OR EQUITABLE PROCEEDINGS AND WHICH
HAS SUBJECT MATTER JURISDICTION OVER THE MATTER IN CONTROVERSY. EACH OF
BORROWER AND FOOTHILL WAIVES, TO THE EXTENT PERMITTED UNDER APPLICABLE
LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON
CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS
BROUGHT IN ACCORDANCE WITH THIS SECTION 13. BORROWER AND FOOTHILL
HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS
OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT
CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS. BORROWER AND FOOTHILL REPRESENT THAT EACH HAS
REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY
TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF
LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT
TO A TRIAL BY THE COURT.
14. Destruction of Borrower's Documents
All documents, agings, or other papers delivered to Foothill may be
destroyed or otherwise disposed of by Foothill four (4) months after
they are delivered to or received by Foothill, unless Borrower
requests, in writing, the return of said documents, schedules, or other
papers and makes arrangements, at Borrower's expense, for their return.
15. General Provisions
15.1 Effectiveness. This Agreement shall be binding and deemed
effective when executed by Borrower and Foothill.
15.2 Successors and Assigns. This Agreement shall bind and inure
to the benefit of the respective successors and assigns of
each of the parties; provided, however, that Borrower may
not assign this Agreement or any rights or duties hereunder
without Foothill's prior written consent and any prohibited
assignment shall be absolutely void. No consent to an
assignment by Foothill shall release Borrower from its
Obligations. Foothill may assign this Agreement and its
rights and duties hereunder. Foothill reserves the right to
sell, assign, transfer, negotiate, or grant participations
in all or any part of, or any interest in Foothill's rights
and benefits hereunder. In connection therewith, Foothill
may disclose all documents and information which Foothill
now or hereafter may have relating to Borrower or Borrower's
business. To the extent that Foothill assigns its rights and
obligations hereunder to a third party, Foothill shall
thereafter be released from such assigned obligations to
Borrower and such assignment shall effect a novation between
Borrower and such third party.
[FFI\AGR:FOOTSEC.AGR]
16
15.3 Section Headings. Headings and numbers have been set forth
herein for convenience only. Unless the contrary is
compelled by the context, everything contained in each
paragraph applies equally to this entire Agreement.
15.4 Interpretation. Neither this Agreement nor any uncertainty
or ambiguity herein shall be construed or resolved against
Foothill or Borrower, whether under any rule of construction
or otherwise. On the contrary, this Agreement has been
reviewed by all parties and shall be construed and
interpreted according to the ordinary meaning of the words
used so as to fairly accomplish the purposes and intentions
of all parties hereto.
15.5 Severability of Provisions. Each provision of this Agreement
shall be severable from every other provision of this
Agreement for the purpose of determining the legal
enforceability of any specific provision.
15.6 Amendments in Writing. This Agreement cannot be changed or
terminated orally. All prior agreements, understandings,
representations, warranties, and negotiations, if any, are
merged into this Agreement.
15.7 Counterparts. This Agreement may be executed in any number
of counterparts and by different parties on separate
counterparts, each of which, when executed and delivered,
shall be deemed to be an original, and all of which, when
taken together, shall constitute but one and the same
Agreement.
15.8 Revival and Reinstatement of Obligations. If the incurrence
or payment of the Obligations by Borrower or the transfer by
either or both of such parties to Foothill of any property
of either or both of such parties should for any reason
subsequently be declared to be improper under any state or
federal law relating to creditors' rights, including,
without limitation, provisions of the United States
Bankruptcy Code relating to fraudulent conveyances,
preferences, and other voidable or recoverable payments of
money or transfers of property (collectively, a "Voidable
Transfer"), and if Foothill is required to repay or restore,
in whole or in part, any such Voidable Transfer, or elects
to do so upon the reasonable advice of its counsel, then, as
to any such Voidable Transfer, or the amount thereof that
Foothill is required to repay or restore, and as to all
reasonable costs, expenses and attorneys' fees of Foothill
related thereto, the liability of Borrower shall
automatically be revived, reinstated, and restored and shall
exist as though such Voidable Transfer had never been made.
[FFI\AGR:FOOTSEC.AGR]
17
15.9 Integration. This Agreement, together with the other Loan
Documents, reflects the entire understanding of the parties
with respect to the transactions contemplated hereby and shall
not be contradicted, modified, or qualified by any other
agreement, oral or written, whether before or after the date
hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed at Los Angeles, California.
"Borrower"
Fantastic Foods International, Inc.,
a California corporation
By: /s/ ▇.▇. ▇▇▇▇▇▇
----------------------------------
Name: ▇.▇. ▇▇▇▇▇▇
Title: President
ACCEPTED AND EFFECTIVE
THIS 26TH DAY OF OCTOBER, 1995.
"Foothill"
Foothill Capital Corporation,
a California corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
[FFI\AGR:FOOTSEC.AGR]
18
Schedule E-1
Equipment
[FFI\AGR:FOOTSEC.AGR]
19
Pasta Fresca Company
============== ===============================================================
00101 EXTRUDER: ▇▇▇▇▇▇▇ DEPOSITATO: S/N 1021
00108 PASTA SHEETER, ▇. ▇▇▇▇▇▇▇▇▇
00116 PACKAGE MACHINE, MULTI-VAC: S/N 573-032
00202A TORTELLINI MACHINE, SAIMA: MODEL T4B, S/N B101-4
00202B ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇ TORTELLINI MACHINE, SAIMA, (NOT VIEWED) DESKTOP
00208 PASTEURIZER, ▇. ▇▇▇▇▇▇▇▇▇: S/N 270
00218 DRYER, ▇. ▇▇▇▇▇▇▇▇▇, 3-DOOR
00301 MIXER, TORESANI, MODEL 50A; S/N 86152
00311 PASTA SHEETER, TORESANI; S/N N.A.
00318 PASTA ▇▇▇▇▇▇▇, ▇▇▇▇▇; S/N 010/1
00401 PASTEURIZER, PASTA, 30"; S/N N.A.
00410 FREEZE TUNNEL, PASTA; S/N 90-01-60
00501 PASTA CUTTER, FLAT SAIMA
00511 PACKAGING MACHINE, MULTI-VAC, MODEL M855-F-PC; S/N 1094/1
00519 CASE SEALER, 3M; S/N 5332
00601 REFRIGERATOR, WALK-IN 22 X 32 X 14'
00610 FREEZER, WALK-IN, 28 X 25 X 16'
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ MIXER, TORESANI, 100 KG CAP; S/N N.A. (NOT VIEWED) DESKTOP
00806 PASTA SHEETER, TORESANI
00811 TORTELLINI MACHINE, DOMINIONI; S/N N.A.
00818 LABELER, UNI-LASE
00823 (2) SHRINK WRAPPERS, ▇▇▇▇▇▇▇; S/N (1) 46963 & (1) N.A.
00902 PACKAGING MACHINE, MULTI-VAC; S/N 1352
00908 SHRINK WRAPPER, X-RITE; S/N 001045
[FFI\AGR:FOOTSEC.AGR]
20
Pasta Fresca Company
============== ================================================================
01001 LOT PIZZA EQUIPMENT: (2)PIZZA OVENS S/N ▇▇▇▇▇-▇▇-▇▇/▇▇▇▇▇-▇▇-▇▇;
DOUGH MIXER S/N 70260; DIVIDER ROUNDER S/N 1299; (3) DOUGH
ROLLERS S/N 11-6792, 11140 & 4410; PROOFER
01101 TORTELLINI MACHINE, IMA
01108 FORKLIFT TRUCK, MITSUBISHI, 2700# CAP: S/N 52032
01115 COOKER/▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ BEHIND, 1500# CAP.; S/N N.A.
01301 MIXER, VULCAN, MODEL L-60; S/N 300353
01307 TORTELLINI MACHINE, DOMINIONI
01313 RAVIOLI MACHINE, DOMINIONI; S/N 2559
01319 PASTA CUTTER, DOMINIONI
01401 PASTA MACHINE, DOMINIONI
01407 CHEESE/MEAT GRINDER
01411 MEAT GRINDER, BENCH; S/N 64969
01417 DOUGH SHEETER, PASTA, DOMINIONI; S/N 2442
01501 PASTEURIZER, DOMINIONI
01506 EXTRUDER, L. PARMIGIANA; S/N 200463
01512 REFRIGERATOR, ▇▇▇▇▇▇▇
▇▇▇▇▇ PALLET LIFT TRUCK, CROWN; S/N 36953
01621 PACKAGING MACHINE, MULTI-VAC; S/N 968-152
01701 RAVIOLI MACHINE, TORESANI
01707 DOUGH SHEETER, IMA
01713 GNOCCI MACHINE, DOMINIONI; S/N 3099
01719 EXTRUDER, SAIMA, S/N H4/12
01801 TORTELLINI MACHINE, DOMINIONI
01807 MIXER, ▇▇▇▇▇▇▇▇▇; S/N 224421AAA
01815 EXTRUDER, PASTA, EDLEWEISS; S/N 8501
[FFI\AGR:FOOTSEC.AGR]
21
Pasta Fresca Company
============== ================================================================
01901 REFRIGERATOR, WALK-IN, 7 X 11 X 8
01907 REFRIGERATOR, WALK-IN, 9 X 12 X 8
02002 REFRIGERATOR, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
02007 PALLET LIFT TRUCK, ROL-LIFT; S/N 2659
02012 LOT SAUCE PRODUCTION SYSTEM W(3) KETTLES; S/N'S 39442, 25991/5350
02020 PACKAGING MACHINE, HOLOMATIC; S/N 32775
02101 FREEZER, WALK-IN, 8'7" X 8'7" X 8'
02109 REFRIGERATOR, WALK-IN, 12 X 19 X 8
02114 PUMP/FILLER, FILAMATIC
02120 VERTICAL CHOPPER / MIXER, HOBART
02201 CASE SEALER, 3M; S/N 1355
02208 PACKAGING / HEAT SEALER UNIT; S/N AP-1166 (NOT VIEWED); DESKTOP
02214 KETTLE, 60 GALLON, ELECTRIC; S/N 29783
02301 REFRIGERATOR, TRUE, 3-DOOR
02306 2 BURNERS, ▇▇▇▇▇, ELECTRIC; S/N 7506 & 7507
02312 CONVECTION OVEN, ▇▇▇▇▇▇▇▇; S/N 058261739112
02318 EXHAUST HOOD, 6' WIDE W/HALON SYSTEM
Grand Total
============== ===============================================================
[FFI\AGR:FOOTSEC.AGR]
22