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EXHIBIT 10.3 TERM LOAN AGREEMENT WITH SOUTHTRUST BANK DATED MARCH 2000
LOAN AGREEMENT
Between
GALAXY FOODS COMPANY
a Delaware corporation
and
SOUTHTRUST BANK
(the "Bank")
dated as of
March 20, 2000
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TABLE OF CONTENTS
(This Table of Contents convenience of reference only for the Loan
Agreement is for and is not intended to define, limit or describe the scope or
intent of any provisions of this Loan Agreement.)
Article Section Heading Page
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ARTICLE ONE PREAMBLES, DEFINITIONS AND
ACCOUNTING TERMS 1
Section 1.01 Incorporation of Preambles 1
Section 1.02 Definitions 1
Section 1.03 Accounting Terms 7
Section 1.04 General Terms 7
ARTICLE TWO THE LOAN 8
Section 2.01 The Loan 7
Section 2.02 Intentionally Omitted 8
Section 2.03 Intentionally Omitted 8
Section 2.04 The Note 8
Section 2.05 Intentionally Omitted 8
Section 2.06 Prepayment 8
Section 2.07 Calculation of Interest; Usury Savings Clause 8
Section 2.08 Place and Manner of Payment 9
Section 2.09 Bank's Right of Set-Off 9
Section 2.10 Application of Payments 9
Section 2.11 Intentionally Omitted 9
Section 2.12 Late Charges 9
ARTICLE THREE CONDITIONS TO EFFECTIVENESS OF THIS
AGREEMENT AND LENDING HEREUNDER 10
Section 3.01 Representations and Warranties 10
Section 3.02 No Default 10
Section 3.03 Loan Documents 10
Section 3.04 Opinion of Borrower's and Guarantor's Counsel 10
Section 3.05 Supporting Documents 10
Section 3.06 Proceedings 11
Section 3.07 Lessor Subordination Agreements 11
Section 3.08 Payment of Fees and Disbursements of Bank's Counsel 11
Section 3.09 Pre-Funding Audit 11
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ARTICLE FOUR REPRESENTATIONS AND WARRANTIES 11
Section 4.01 Organization, Corporate Powers, etc. 11
Section 4.02 Authorization of Loans, etc. 11
Section 4.03 Consents and Approvals 12
Section 4.04 Financial Statements 12
Section 4.05 Tax Returns and Payments 12
Section 4.06 Agreements 12
Section 4.07 No Actions Pending 13
Section 4.08 Title to Properties and Assets, Liens, etc. 13
Section 4.09 Litigation, Etc. 13
Section 4.10 Patents, Trademarks, Franchises, Etc. 13
Section 4.11 ERISA 14
Section 4.12 Outstanding Debt 14
Section 4.13 Places of Business 14
Section 4.14 Priority of Security Interest 14
Section 4.15 Subsidiaries 14
Section 4.16 Collateral to Secure all Obligations 14
Section 4.17 Environmental Matters 14
Section 4.18 Regulation G, Etc. 14
Section 4.19 Holding Company Status 15
Section 4.20 Investment Company Status 15
Section 4.21 Intentionally Omitted 15
Section 4.22 False or Misleading Statements 15
Section 4.23 Bank's Rights to Sell Collateral Following
Event of Default 15
Section 4.24 FDA, other Regulatory Bodies 15
ARTICLE FIVE COVENANTS 15
Section 5.01 Affirmative Covenants 15
Section 5.02 Negative Covenants 20
ARTICLE SIX EVENTS OF DEFAULT 22
Section 6.01 Events of Default 22
ARTICLE SEVEN RIGHTS UPON DEFAULT 24
Section 7.01 Acceleration 25
Section 7.02 Right of Setoff 25
Section 7.03 Other Rights 25
Section 7.04 Uniform Commercial Code 25
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ARTICLE EIGHT MISCELLANEOUS 25
Section 8.01 No Waiver, Cumulative Remedies 25
Section 8.02 Amendments, Etc. 25
Section 8.03 Addresses for Notices, Etc. 25
Section 8.04 Applicable Law and Courts 26
Section 8.05 Waiver of Jury Trial 26
Section 8.06 Survival of Representations and Warranties 26
Section 8.07 Time of the Essence 27
Section 8.08 Headings 27
Section 8.09 Severability 27
Section 8.10 Counterparts 27
Section 8.11 Non-Waiver 27
Section 8.12 Further Assurances 27
Section 8.13 Costs and Expenses 27
Section 8.14 Indemnification regarding Environmental Matters 28
Section 8.15 No Third Party Beneficiaries 28
Section 8.16 Construction of Loan Documents 28
Section 8.17 Collateral to Secure all Loans 28
Section 8.18 Entire Agreement 28
Section 8.19 Successors and Assigns 28
Section 8.20 Relief from Automatic Stay 28
SIGNATURES AND SEALS 29
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LIST OF EXHIBITS
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EXHIBIT A Permitted Debt
EXHIBIT B Places of Business
EXHIBIT C Employee Plans
EXHIBIT D Permitted Security Interests
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LOAN AGREEMENT
THIS LOAN AGREEMENT (this "Agreement"), dated March , 2000 between
GALAXY FOODS COMPANY, a Delaware corporation (hereinafter referred to as the
"Borrower") and SOUTHTRUST BANK, a national banking association (hereinafter
referred to as the "Bank").
W I T N E S S E T H:
WHEREAS, the Borrower desires to borrow the sum of EIGHT MILLION FIVE
HUNDRED THOUSAND AND NO/100 DOLLARS ($8,500,000.00) in order to (a) refinance
and retire existing indebtedness of the Borrower and (b) to provide the
Borrower with financing for the acquisition of new equipment;
WHEREAS, the Bank is willing to lend the Borrower such sums, but only
in accordance with the terms and conditions contained herein;
NOW, THEREFORE, for and in consideration of the above premises and the
mutual covenants and agreements contained herein, the parties hereto do hereby
agree as follows:
ARTICLE ONE
PREAMBLES, DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Incorporation of Preambles. The preambles to this
Agreement set forth above hereby are made a part of this Agreement as though
fully set forth herein.
SECTION 1.02. Definitions. For the purposes of this Agreement, the
following terms, in addition to terms defined elsewhere in this Agreement,
including in the preambles hereof, shall have the respective meanings specified
in this Section 1.02 (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
"Affiliate" shall mean any Person directly or indirectly controlling,
controlled by, or under direct or indirect common control with Borrower or
Borrower, including a Subsidiary. A Person shall be deemed to control a
corporation if such Person possesses, directly or indirectly, the power to
direct or cause the direction of the management and policies of such
corporation, whether through the ownership of voting securities, by contract,
or otherwise.
"Agreement" means this Loan Agreement and all amendments and
modifications hereto.
"Bank" shall mean SOUTHTRUST BANK.
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"Borrower" means GALAXY FOODS COMPANY, a Delaware corporation.
"Business Day" means any Day other than a Saturday, a Sunday, or a Day
on which national banks in Orlando, Florida are authorized by law to remain
closed.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" means the property of the Borrower or any other Person
which is or will be collateral security for the obligations, including at the
date hereof all of the following:
(a) all Machinery and Equipment and the Proceeds thereof, of the
Borrower, whether now owned or hereafter acquired;
(b) all books, records, ledger cards and other property relating
to (a) above, including computer programs, tapes and related software; and
(c) all Proceeds of (a) through (b) above, excluding Borrower's
Inventory.
"Day" means a calendar day, unless the context indicates otherwise.
"Default" means any event or condition that with the passage of time
or the giving of notice, or both, would constitute an Event of Default.
"Default Rate" means five percent (5%) per annum above the Interest
Rate.
"Dollars" and "$" means lawful money of the United States of America.
"Due Date" means the date any payment of principal or interest is due
and payable on any Note or any other payment in respect of the Obligations is
due and payable.
"Employee Plan" shall mean collectively, any Pension Benefit Plan of
the Borrower together with any "employee benefit plan" [as defined in Section
3(3) of the ERISA] of the Borrower as listed on Exhibit "C".
"Environmental Laws" shall mean (i) the Resource Conservation and
Recovery Act, (ii) the Comprehensive Environmental response, Compensation and
Liability Act, (iii) the Clean Water Act, (iv) the Clean Air Act, (v) the Solid
Waste Disposal Act, (vi) the Superfund Amendments and Reauthorization Act of
1986, (vii) the Federal Insecticide, Fungicide, and Rodenticide Act, (viii) the
Toxic Substance Control Act, (ix) the Emergency Planning and Community Right to
Know Act, (x) any and all other federal, state or local laws, regulations or
interpretations applicable to the Borrower or any of the properties or
operations of the Borrower relating to (A) protection of the environment, (B)
discharges to the environment, or (C) the handling, storage, transportation,
removal or disposal of hazardous waste, hazardous substances, or petroleum
products or by-products or natural gas, and
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(xi) any and all other federal, state, or local laws, regulations or
interpretations relating to environmental permitting applicable to any of the
properties or operations of the Borrower.
"EPA" means the Environmental Protection Agency, an agency of the
United States Federal Government.
"ERISA" means the Employment Retirement Income Security Act of 1974,
as amended.
"Equipment" means all now existing and hereafter acquired goods (other
than Inventory) used or bought for use primarily in the Borrower's, business,
wherever located, including, but not limited to, machinery,
furniture, furnishings, fixtures, dies, parts (including spare parts and repair
parts) and tools, together with all fittings, accessories, accessions,
additions, modifications, improvements, equipment and special tools now or
hereafter affixed to any or any part of the foregoing or used in connection
with any part of the foregoing and all replacements of any part thereof and all
Proceeds of any of the foregoing, excluding Borrower's Inventory.
"Event of Default" means an event of default specified in Article Six
of this Agreement.
"FDA Rules" shall have the meaning assigned to that term in Section
4.24 hereof.
"Financing Statement" means the financing statements permitted under
the UCC or any other state law for the purpose of perfecting or continuing the
Security Interest.
"Funded Debt" means and includes without duplication:
(a) any liability or obligation payable more than one year from
the date of creation thereof, which under GAAP is required to be shown on the
balance sheet as a liability,
(b) indebtedness payable more than one year from the date of
creation thereof which is secured by any security interest on property owned by
the Borrower whether or not the indebtedness secured thereby shall have been
assumed by the Borrower or,
(c) guarantees, endorsements (other than endorsements of
negotiable instruments for collection in the ordinary course of business), and
other contingent liabilities (whether direct or indirect) in connection with
the obligations, stocks, or dividends of any Person,
(d) obligations under any contract providing for the making of
loans, advances, or capital contributions to any Person in order to enable such
Person primarily to maintain working capital, net worth, or any other balance
sheet condition or to pay debts, dividends, or expenses, and
(e) obligations under any contract which, in economic effect, is
substantially equivalent to a guarantee,
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all as determined in accordance with GAAP; provided, however, that any such
obligation shall be treated as Funded Debt, regardless of its term, if such
obligation is renewable pursuant to the terms thereof or arises under a
revolving credit or similar agreement effective for more than one year after
the date of creation of such obligation, or may be payable out of the proceeds
of a similar obligation pursuant to the terms of such obligation or of any such
agreement.
"GAAP" means generally accepted accounting principles consistently
applied to the particular item.
"Hazardous Materials Liabilities" shall mean any and all damages
(compensatory and punitive), losses, cleanup costs, liabilities, disabilities,
fines, penalties, costs or expenses (including reasonable attorneys' and
paralegals' fees and expenses), whether incurred or to be incurred, whether
absolute, fixed or contingent, whether civil or criminal, and whether arising
under the Environmental Laws or under any other federal, state or local law,
arising out of or in connection with the handling, use, storage,
transportation, removal or disposal of (i) "hazardous waste, as defined in the
Resource Conservation and Recovery Act or, if broader, as such term or any
similar term is defined in any other applicable federal, state or local law,
regulation or interpretation, (ii) "hazardous substance", as defined in the
Comprehensive Environmental Response, Compensation and Liability Act or, if
broader, as such term or any similar term is defined in any other applicable
federal, state or local law, regulation or interpretation, and/or (iii)
petroleum products or by-products or natural gas.
"Income Tax Expense" shall mean, for any period, the aggregate of (i)
all taxes based upon or measured by the Borrower's income and (ii) franchise
taxes payable by the Borrower, determined in accordance with GAAP.
"Interest Rate" means the applicable rate of interest to be borne by
the Note (except when the Default Rate is in effect) with respect to the Loan,
such rate shall be a floating rate (herein "FLOATING RATE") calculated at an
annual rate of the SOUTHTRUST BANK Base Rate of Interest in effect from time to
time calculated on a daily moving basis upon the principal balance hereof from
time to time outstanding, but in no event to exceed the maximum rate allowed by
Florida Law, as amended, or as preempted and prescribed from time to time by
the Laws of the United States of America or any rule or regulation of any
department or agency thereof. The Base Rate of Interest of SOUTHTRUST BANK
shall be that rate of interest (but not necessarily the best or lowest rate
charged borrowing customers of SOUTHTRUST BANK) described by it as its Base
Rate of Interest, whether or not such rate shall be otherwise published, as
such rate shall vary from time to time, and each adjustment shall be effective
on the day the change occurs.
"Inventory" means all of the Borrower's now owned and hereafter
acquired (a) goods, merchandise or personal property, wherever located, held by
the Borrower for sale or lease or to be furnished under contracts of service,
(b) raw materials, (c) work in process, (d) materials used or
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consumed in the Borrower's business, (e) materials or supplies used or usable
in manufacturing or processing, (f) packaging and shipping materials, (g)
inventory covered by a warehouse receipt, bill of lading or other negotiable or
non-negotiable Document, (g) returned or repossessed merchandise, and (h) all
products and Proceeds of the foregoing.
"Lease" means a lease pursuant to which the Borrower has leased real
property.
"Lessor" means a Person who leases real property to the Borrower or
any Subsidiary for use as a Place of Business.
"Lessor Subordination Agreement" means a written agreement from a
Lessor in favor of the Bank pursuant to which the Lessor shall subordinate any
landlord's lien or security interest that it may have in the Collateral to the
Security Interest of the Bank.
"Liabilities" or "Total Liabilities" means all liabilities and
obligations, all as determined in accordance with GAAP, and shall include
Funded Debt and/or current liabilities, as the case may be.
"Loan" shall have the meaning assigned to that term in Section 2.01
hereof.
"Loan Documents" means this Agreement and the Note, the Security
Agreement, the Lessor Subordination Agreements, and all of the other documents,
agreements, certificates, schedules, notes, statements, and opinions, however
described or referenced herein or executed or delivered pursuant hereto or in
connection with or arising with the transactions contemplated by this Agreement
or evidencing the Obligations.
"Net Income" shall mean, for any period, the aggregate of the net
income of the Borrower, determined in accordance with GAAP.
"Note" means that certain Promissory Note, dated the date hereof, made
by the Borrower to the order of the Bank in the amount of EIGHT MILLION FIVE
HUNDRED THOUSAND AND NO/100 DOLLARS ($8,500,000.00).
"Obligations" means all payment and performance duties, obligations
and liabilities of any kind or nature of the Borrower to the Bank, including
but not limited to (a) the indebtedness evidenced by the Note together with all
accrued but unpaid interest thereon, (b) all costs, expenses and attorneys' and
paralegals' fees and expenses for which the Borrower may be liable, (c) the
obligation to indemnify the Bank for Hazardous Materials Liabilities as set
forth in Section 8.14 of this Agreement, and (d) all other payment and
performance duties, obligations and liabilities of the Borrower to the Bank,
however and whenever incurred, acquired or evidenced, whether primary or
secondary, direct or indirect, absolute or contingent, sole or joint and
several, or due or to become due, including, without limitation, all such
duties, obligations and liabilities of the Borrower or any Guarantor to the
Bank under and pursuant to this Agreement, any Loan Document, and the Note and
all renewals, extensions, modifications or amendments of any thereof.
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"Obligor" means any Person who is obligated under any Obligation to
the Bank and includes, but is not limited to the Borrower.
"Pension Benefit Plan" shall mean any "employee pension benefit plan"
[as defined in Section 3(2) of ERISA] maintained for employees of the Borrower.
"Permitted Debt" means debt of the Borrower or any Subsidiary to any
Person other than the Bank that is permitted under this Agreement, consisting
exclusively of (i) any trade payables incurred by the Borrower in the normal
and ordinary course of its business, (ii) any obligations (other than for
borrowed monies) arising out of the normal and ordinary course of business of
the Borrower or any Subsidiary, (iii) such other indebtedness as may be, or has
been, specifically consented to by the Bank, provided, however, the Bank shall
be under no obligation to grant such consents in the future and nothing herein
shall imply such obligation, and (v) the specific indebtedness identified and
set forth in Exhibit "A" attached hereto and made a part hereof.
"Permitted Security Interests" means any security interest that the
Borrower is permitted to grant to any Person other than the Bank to secure an
obligation of the Borrower to such Person, which shall be only (1) security
interests related to Permitted Debt, (2) Permitted Security Interests listed in
Exhibit "D" attached hereto and made a part hereof, and (3) any security
interest which the Bank consents to, provided, however, nothing herein
contained implies any obligation on the Bank's part to consent to such security
interests
"Person" means any individual, joint venture, partnership, firm,
corporation, trust, unincorporated organization or other organization or
entity, or a governmental body or any department or agency thereof, and shall
include both the singular and the plural.
"Places of Business" means any location at which the Borrower or any
Subsidiary conducts its business, including, but not limiting to, the storage
of Machinery and Equipment, all of which are set forth in Exhibit "B" attached
hereto.
"Principal Place of Business" means the principal place of business
and the headquarters of the Borrower as shown on Exhibit "B" where all of their
respective records are kept.
"Proceeds" means all cash and noncash proceeds received upon the sale,
exchange, collection or other disposition of the Collateral, including but not
limited to insurance payable by reason of loss or damage to Collateral;
provided, however, that nothing in this definition shall in and of itself be
construed to grant the Borrower or any Guarantor any authority whatsoever to
sell or otherwise dispose of the Collateral.
"Prohibited Transaction" means a transaction prohibited by Section 408
of ERISA or Section 4975 of the Code.
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"Related Entity" shall mean any entity if, with respect to the
Borrower, any of the entity's employees fall within any of the following
categories: (a) employees of controlled group of corporations as defined in
Section 414(b) of the Code; (b) employees of partnerships, proprietorships or
other entities that are under common control as defined in Section 414(c) of
the Code; (c) employees of affiliated service groups as defined in Section
414(m) of the Code; or (d) employees of entities that are deemed affiliated or
related to the Borrower in accordance with Sections 414(n) or (o) of the Code.
"Reportable Event" shall have the meaning assigned to that term in
Title IV of ERISA.
"Security Agreement" means, the Security Agreement dated as of the
date hereof by the Borrower in favor of the Bank.
"Security Interest" means the security interest granted to the Bank in
the Collateral pursuant to the Loan Documents.
"Subordinated Debt" shall have the meaning assigned to that term by
GAAP.
"Subsidiary" means any corporation of which fifty percent (50%) or
more of the voting stock is owned, directly or indirectly, by the Borrower.
"Tangible Net Worth" means the excess of total assets over total
liabilities, total assets and total liabilities each to be determined in
accordance with GAAP consistent with those applied in the preparation of the
financial statements referred to in Section 5.01(a), excluding, however, from
the determination of total assets all assets which would be classified as
intangible assets under GAAP, including, without limitation, goodwill, patents,
trademarks, trade names, copyrights, and franchises.
"UCC" means the Uniform Commercial Code of the particular jurisdiction
applicable to that transaction and, in the State of Florida, means the Florida
Uniform Commercial Code, Chapters 671 et seq., Florida Statutes.
SECTION 1.03. Accounting Terms. All accounting terms used herein shall
be construed in accordance with GAAP consistently applied and all financial
data submitted pursuant to this Agreement shall be prepared in accordance with
GAAP. In the event of ambiguities in GAAP, the more conservative principle or
interpretation shall be used.
SECTION 1.04. General Terms. For the purposes of this Agreement, if
the context so requires, the singular includes the plural, the plural includes
the singular, and the gender shall be adjusted to the proper gender for any
particular Person.
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ARTICLE TWO
THE LOAN
SECTION 2.01 The Loan. The loan (the "Loan") shall be a term loan for
the benefit of the Borrower. The terms of the Loan shall be as follows:
(a) The indebtedness of the Borrower under the Loan shall be
evidenced by the Note. Interest on the principal amount outstanding under the
Note at the Interest Rate shall be due and payable beginning on April , 2000,
and shall be payable on the day of each successive month thereafter until March
, 2001, at which time monthly payments each composed of $78,705.00 principal
together with accrued interest at the Interest Rate shall be payable on March ,
2001 and payable on the day of each successive month thereafter until March
_____, 2005, at which time all then unpaid principal and interest shall be
payable in full.
(b) the Loan shall be directly collateralized by the Collateral.
SECTION 2.02. Intentionally Omitted.
SECTION 2.03. Intentionally Omitted.
SECTION 2.04. The Note. The Loan shall be evidenced by the Note. The
Note shall be due and payable in accordance with and as required by the terms
thereof and hereof. The term of the Note shall be as follows:
(a) Interest. The Note shall bear interest from the date thereof
on the unpaid principal balance from time to time outstanding at a floating
interest rate per annum equal to (i) the Interest Rate, or (ii) the Default
Rate following a Default hereunder. Interest shall be calculated in the manner
set forth in Section 2.07.
(b) Default Rate. From and after any Due Date or the date of any
Event of Default hereunder, interest shall accrue on the unpaid principal
balance of the Note and on all accrued but unpaid interest thereon from such
date until the date of payment at the Default Rate.
SECTION 2.05. Intentionally Omitted.
SECTION 2.06. Prepayment. The Borrower may at any time permanently
prepay without penalty all or any part of the Note by designating such
prepayment as a permanent repayment and requesting that the Loan Limit be
reduced accordingly. Permanent Prepayment of less than all of the Loan shall
not result in the release of any of the Collateral.
SECTION 2.07. Calculation of Interest; Usury Savings Clause. Any
interest due on the Note or any of the other obligations shall be calculated on
the basis of a year containing 360 Days. The interest due on any date for
payment of interest hereunder shall be that interest to the extent accrued as
of midnight on the last Day immediately prior to that interest payment date.
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Notwithstanding anything herein or in any Loan Document to the
contrary, the sum of all interest and all other amounts deemed interest under
Florida or other applicable law which may be collected by the Bank hereunder
shall not exceed the maximum lawful interest rate permitted by such law from
time to time. The Bank and the Borrower intend and agree that under no
circumstance shall the Borrower be required to pay interest on the Notes or on
any other Obligations at a rate in excess of the maximum interest rate
permitted by applicable law from time to time, and in the event any such
interest is received or charged by the Bank in excess of that rate, the
Borrower shall be entitled to an immediate refund of any such excess interest
by a credit to and payment toward the unpaid balance of the Loan (such credit
to be considered to have been made at the time of the payment of the excess
interest) with any excess interest not so credited to be immediately paid to
the Borrower by the Bank.
SECTION 2.08. Place and Manner of Payment. All payments by the
Borrower under the Loan Documents shall be made to the Bank at its banking
house at P.O. Box 2166, Orlando, Florida 32802 in lawful money of the United
States of America and in immediately available funds. For purposes of this
Agreement, a payment delivered to the Bank in the form of a check drawn on an
account at the Bank in which there are adequate funds to cover such payment
shall be deemed a payment in immediately available funds. If any payment is due
on a Day that is not a Business Day, the same shall be deemed due on the next
succeeding Business Day.
SECTION 2.09. Bank's Right of Set-off. The Borrower hereby grants to
the Bank a lien on, and a Security Interest in, the deposit balances, accounts,
items, trusts (as permitted by law), certificates of deposit and monies of the
Borrower in the possession of or on deposit with the Bank, or any of its
Affiliates to secure, and as collateral for, the payment and performance of the
obligations. The Bank may at any time and from time to time, upon any Event of
Default, without demand or notice, appropriate and set-off against and apply
the same to the Obligations when and as due and payable.
SECTION 2.10. Application of Payments. All payments (other than
prepayments of principal as set forth in Section 2.06) made on the Note shall
be applied first to interest accrued to the date of payment and rest to the
unpaid principal balance; provided, however, that if an Event of Default
occurs, payments shall be applied first to any costs or expenses, including
attorneys' and paralegals' fees and expenses, that the Bank may incur in
exercising their respective rights under the Loan Documents.
SECTION 2.11. Intentionally Omitted.
SECTION 2.12. Late Charges. If any payment is not made within ten (10)
Days after the Due Date, then, in that event, there shall also be paid to the
Bank, a late charge equal to five percent (5%) of the payment that is due on
the Due Date and not paid. The purpose of such late charge shall be to
reimburse the Bank for their costs and expenses in connection with servicing a
delinquent account.
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ARTICLE THREE
CONDITIONS TO EFFECTIVENESS OF THIS
AGREEMENT AND LENDING HEREUNDER
The obligations of the Bank to be bound by the terms hereof and to
advance any monies under the Note are subject to the following conditions
precedent:
SECTION 3.01. Representations and Warranties. The representations and
warranties set forth in the Loan Documents are true and correct on and as of
the date hereof.
SECTION 3.02. No Default. On the date hereof and on the date of each
Advance, the Borrower shall be in compliance with all the terms and provisions
set forth in the Loan Documents to be observed or performed, and no Default or
Event of Default shall have occurred.
SECTION 3.03. Loan Documents. The Borrower and the Guarantors, as
applicable, shall have delivered or caused to be delivered to the Bank all the
Loan Documents, in form and substance satisfactory to the Bank, as the Bank may
request and all of the Loan Documents shall be in full force and effect.
SECTION 3.04. Opinion of Borrower's Counsel. The Borrower's counsel
shall have delivered an opinion or opinions regarding the transactions
contemplated herein in form and substance satisfactory to the Bank.
SECTION 3.05. Supporting Documents. On or prior to the date hereof,
the Bank shall have received the following supporting documents, all of which
shall be satisfactory in form and substance to the Bank:
(a) a certificate or certificates, dated as of the date hereof,
of (i) the Secretary or any Assistant Secretary of Borrower certifying (A) that
attached thereto is a true and correct copy of certain resolutions adopted by
the Board of Directors of Borrower authorizing the execution and delivery of
the Loan Documents and the performance of Borrower's obligations thereunder,
which resolutions have not been altered or amended in any respect, and remain
in full force and effect at all times since their adoption; (B) that attached
thereto is a true and correct copy of the Certificate of Incorporation of
Borrower, that such Certificate of Incorporation has not been altered or
amended, and no other charter documents have been filed, since the date of the
filing of the last amendment thereto or other charter document as indicated on
the certificate of the Secretary of State of the State of Florida attached
thereto; and (c) the incumbency and signatures of the officers of Borrower
signing the Loan Documents and any report, certificate, letter or other
instrument or document furnished by Borrower in connection therewith; and
(b) a certificate of the Delaware Secretary of State, dated as of
a recent date, as to the good standing of Borrower as well as a certificate
from the Secretary of State for Florida stating that Borrower is in good
standing in such state and is authorized to do business therein.
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SECTION 3.06. Proceedings. All corporate and other proceedings taken
or to be taken in connection with the transactions contemplated hereby and all
documents incident thereto shall be satisfactory in substance and form to the
Bank, and Bank shall have received all such counterpart originals or certified
or other copies of such documents as the Bank may reasonably request.
SECTION 3.07. Lessor Subordination Agreements. Unless otherwise waived
by the Bank, the Borrower shall have delivered or caused to be delivered to the
Bank Lessor Subordination Agreements from the Lessors for each Place of
Business not owned by the Borrower where the Collateral is stored.
SECTION 3.08. Payment of Fees and Disbursements of Bank's Counsel.
Zimmerman, Shuffield, Kiser & Sutcliffe, P.A. counsel to the Bank, shall have
received payment in full for all legal fees charged, and costs incurred, in
connection with the Loan Documents through the date hereof. Such payment shall
be due on the date of execution of this Agreement.
SECTION 3.09. The Loan is subject to and contingent upon the Borrower
immediately furnishing to Lender (at Borrowers expense) a current equipment
appraisal (prepared by an appraiser acceptable to the Lender) reflecting the
quick sale value of the machinery and equipment. The Loan Amount shall not
exceed (i) 75% of the orderly liquidation value of the used equipment; and (ii)
80% of the amount of the invoice on the new equipment. Such appraisal must be
acceptable in all respects to Lender notwithstanding the fact that the Lender
may or may not have approved or selected the appraiser.
ARTICLE FOUR
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Bank that:
SECTION 4.01. Organization, Corporate Powers, etc. The Borrower (i) is
a corporation duly organized, validly existing under the laws of Delaware and
in good standing under the laws of that State, (ii) has all requisite power and
authority, corporate and otherwise, to own its properties and assets and to
carry on its business as now conducted and proposed to be conducted, (iii) is
duly qualified to do business and is in good standing in the State of Florida
and in every other jurisdiction in which the character of its properties or
assets owned or the nature of its activities makes such qualification
necessary, and (iv) has the corporate power and authority to execute and
deliver, and to perform its obligations under this Agreement, the Note, and the
other Loan Documents.
SECTION 4.02. Authorization of Loans, etc. The execution, delivery and
performance of the Loan Documents by the Borrower (a) have been duly authorized
by all requisite corporate action
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(no shareholder action being required pursuant to applicable law), and (b) will
not (i) violate (x) any provision of law, any governmental rule or regulation,
any order of any court or other agency of government, (y) the Articles of
Incorporation or bylaws of the Borrower, or (z) any provision of any indenture,
agreement or other instrument to which the Borrower, is a party or by which it
or any of its properties or assets are bound, (ii) be in conflict with, result
in a breach of or constitute (with due notice or lapse of time or both) a
default under any such indenture, agreement or other instrument, or (iii)
result in the creation or imposition of any lien, charge or encumbrance of any
nature whatsoever upon any of the properties or assets of the Borrower, other
than as permitted by the terms hereof.
SECTION 4.03. Consents and Approvals. No authorization, license,
consent, approval, or undertaking (collectively, "Authorization") is required
under any applicable law in connection with the execution, delivery and
performance by the Borrower of this Agreement or any of the other Loan
Documents.
SECTION 4.04. Financial Statements. The audited and unaudited
financial statements of Borrower, heretofore furnished to the Bank, are true
and complete, have been prepared in accordance with GAAP, omit no material
liabilities (contingent or otherwise) of any kind, and fairly present the
financial condition of Borrower as of their dates and the results of the
operations of Borrower for the fiscal period then ended. Since the furnishing
of the financial statements, there has been no material adverse change in the
financial condition, properties or businesses of Borrower or any Subsidiary.
SECTION 4.05. Tax Returns and Payments. All foreign, federal, state
and local tax returns and reports of the Borrower required to be filed have
been filed, and all taxes, assessments, fees and other governmental charges
upon the Borrower, or upon any of its respective properties, assets, incomes or
franchises, which are due and payable in accordance with such returns and
reports, have been paid, other than those presently (a) payable without penalty
or interest, or (b) being contested in good faith and by appropriate and lawful
proceedings prosecuted diligently. The aggregate amount of the taxes,
assessments, charges and levies being so contested is not material to the
condition (financial or otherwise) or operations of the Borrower. The charges,
accruals, and reserves on the books of the Borrower in respect of federal,
state and local taxes for all fiscal periods to date are adequate and the
Borrower knows of any other unpaid assessment for additional federal, state or
local taxes for any such fiscal period or of any basis therefor. The Borrower
has and will establish all necessary reserves and make all payments required of
it to be set aside or made in regard to all F.I.C.A., withholding, sales or
excise, and all other similar federal, state and local taxes.
SECTION 4.06. Agreements.
(a) The Borrower is not a party to any agreement, indenture,
lease or instrument or subject to any charter or other corporate restriction or
any judgment, order, writ, injunction, decree, rule or regulation materially
and adversely affecting its business, properties, assets, operations or
condition (financial or otherwise). There are no unrealized losses with respect
to any such agreement, indenture, lease or instrument.
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(b) The Borrower is not in default in the performance, observance
of fulfillment of any of the material obligations, covenants or conditions
contained in any material agreement or instrument to which it is a party.
(c) The Borrower enjoys peaceful and undisturbed possession in
all material respects under each Lease and all such Leases are valid and
subsisting and in full force and effect.
SECTION 4.07. No Actions Pending. There is no action, suit,
investigation or proceeding pending or, to the knowledge of Borrower,
threatened against Borrower, or any properties or rights of Borrower before any
court, arbitrator or administrative or governmental body which might result in
any material adverse change in the business, condition or operations of
Borrower
SECTION 4.08. Title to Properties and Assets, Liens, etc. The Borrower
has good and marketable title to its respective real properties other than
properties which it leases and good title to all of its other respective
properties and assets. The Borrower enjoys peaceful and undisturbed possession
under all leases necessary in any material respect for the operation of its
respective properties and assets, none of which contains any unusual or
burdensome provisions which might materially affect or impair the operation of
such properties and assets. All such leases are valid and subsisting and are in
full force and effect.
SECTION 4.09. Litigation, Etc. There are no actions, proceedings or
investigations, however described or denominated, pending or, to the knowledge
of the Borrower, threatened against the Borrower, or affecting the Borrower,
(nor is there any basis therefor known to the Borrower) which, either in any
case or in the aggregate, might result in any material adverse change in the
financial condition, business, prospects, affairs or operations of the
Borrower, or in any of its properties or assets, or in any material impairment
of the right or ability of the Borrower to carry on its operations as now
conducted or proposed to be conducted, or in any material liability on the part
of the Borrower, and none which questions the validity of this Agreement, the
Note or any of the other Loan Documents or of any action taken or to be taken
in connection with the transactions contemplated hereby or thereby.
SECTION 4.10. Patents, Trademarks, Franchises, Etc. The Borrower and
owns or has the right to use all of the patents, trademarks, service marks,
trade names, copyrights, franchises and licenses, and rights with respect
thereto, necessary for the conduct of its business as now conducted or proposed
to be conducted, without any conflict with the rights of others, and, in each
case, subject to no mortgage, pledge, lien, lease, encumbrance, charge,
security interest, title retention agreement or option. Each such asset or
agreement is in full force and effect, and the holder thereof has fulfilled and
performed all of its obligations with respect thereto. No event has occurred or
exists which permits, or after notice or lapse of time or both would adversely
affect or in the future may (so far as the Borrower now foresees) materially
adversely affect, the rights of such holder thereof with respect thereto. No
other license or franchise is known by the Borrower to be necessary to the
operations of the business of the Borrower or any Subsidiary as now conducted
or proposed to be conducted.
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SECTION 4.11. ERISA Requirement. Except as previously disclosed to
Bank in writing, Borrower does not have in force any written or oral bonus
plan, stock option plan, employee welfare, pension or profit sharing plan, or
any other employee benefit arrangement or understanding. In addition, Borrower
and any predecessor of Borrower is not now or was not formerly during the five
year period immediately preceding the effective date of this Agreement a
participating employer in any multi-employer or "multiple employer" plans
within the meaning of Sections 4001(a)(3), 4063 and 4064 of ERISA. Each
employee benefit plan subject to the requirements of ERISA complies with
substantially all of the requirements of ERISA and those plans which are
subject to being "qualified" under Sections 401(a) and 501(a) of the Internal
Revenue Code of 1986, as amended from time to time, have received favorable
determination letters from the Internal Revenue Service so holding. To the
knowledge of the Borrower, there is no matter which would adversely affect the
qualified tax exempt status of any such trust or plan, and except as previously
disclosed to Bank there are no deficiencies or liabilities for any such plan or
trust. To the knowledge of the Borrower, no employee benefit plan sponsored by
Borrower has engaged in a nonexempt "prohibited transaction" as defined in
ERISA.
SECTION 4.12. Outstanding Debt. Except for (i) Permitted Debt and (ii)
the obligations due the Bank, the Borrower has no indebtedness due any other
Person.
SECTION 4.13. Places of Business. The Places of Business identified in
Exhibit "B" identify and set forth all the Places of Business owned or leased
by the Borrower.
SECTION 4.14. Priority of Security Interest. Except for the Permitted
Security Interests, the Security Interest granted to the Bank in the Collateral
shall be a first priority security interest and there will be no other security
interests or other encumbrances upon the Collateral for so long as any
obligation is outstanding to the Bank.
SECTION 4.15. Subsidiaries. There are no Subsidiaries of Borrower.
SECTION 4.16. Collateral to Secure all Obligations. The Collateral
shall secure all of the Obligations.
SECTION 4.17. Environmental Matters. The Borrower is in compliance
with all of the Environmental Laws. The Borrower has timely made and filed any
and all reports or filings with the EPA and/or any other applicable state or
local agencies that are required of it pursuant to the Environmental Laws and
any other laws, regulations, ordinances, etc. governing companies that are
active in the sale and manufacture of those products sold and manufactured by
the Borrower.
Section 4.18. Regulation G, Etc. The Borrower does not own any "margin
securities" as defined in Regulation G (12 CFR Part 207) of the Board of
Governors of the Federal Reserve System (here.Ln called a "margin security").
Neither the Borrower nor any agent acting on its behalf
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has taken any action that might cause this Agreement or the Loan Documents to
violate Regulations G, T, U or X or any other regulation of the Board of
Governors of the Federal Reserve System or to violate the Securities Act of
1933 or the Securities Exchange Act of 1934, in each case as the same is now in
effect or as the same may hereafter be in effect.
SECTION 4.19. Holding Company Status. The Borrower is not a holding
company, or a subsidiary or affiliate of a holding company or a public utility,
within the meaning of the Public Utility Holding Company Act of 1935, as a
mended, or a public utility within the meaning of the Federal Power Act, as
amended.
SECTION 4.20. Investment Company Status. The Borrower is not an
"investment company" or a company "controlled" by an "investment company"
within the meaning of the Investment Company Act of 1940, as amended, or an
"investment advisor" within the meaning of the Investment Advisors Act of 1940,
as amended.
SECTION 4.21. Intentionally Omitted.
SECTION 4.22. False or Misleading Statements. No representation,
warranty or other statement of the Borrower in this Agreement or the Loan
Documents contains any false or misleading statement of a material fact or
omits the statement of a fact necessary to make the statements made, in light
of the circumstances under which they were made, not misleading.
SECTION 4.23. Bank's Rights to Sell Collateral Following Event of
Default. Following an Event of Default, the Bank, as provided in the Loan
Documents, shall have the right to sell, transfer, or otherwise convey the
Collateral without the prior consent or licensure of any federal, state, local,
or other governmental regulatory body.
SECTION 4.24. FDA, other Regulatory Bodies. The Borrower is compliance
with all applicable federal, state and local laws, regulations, and other
requirements for companies involved in the importation, distribution, or sale
of foodstuffs similar to those imported, distributed, or sold by the Borrower,
including, without limitation, any and all applicable Food and Drug
Administration rules and regulations, Customs regulations, or other
governmental regulations regarding comestibles (collectively, the "FDA rules").
ARTICLE FIVE
COVENANTS
SECTION 5.01. Affirmative Covenants. The Borrower covenants, for so
long as any of the principal amount of, or interest on, the Note is outstanding
and unpaid, or any Obligation remains unpaid or unperformed, as follows:
(a) Accounting; Financial Statements; Etc. The Borrower shall
furnish to the Bank:
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(i) As soon as practicable and in any event within
thirty (30) Business Days after the end of each Quarterly Period (other than
the Quarterly Period coterminous with the Borrower's fiscal year-end), the
following audited financial statements: a profit and loss statement,
reconciliation of surplus statement, a balance sheet of Borrower as at the end
of such fiscal period, setting forth in each case in comparative form
consolidated figures for the corresponding period in the preceding fiscal year,
all in reasonable detail and satisfactory in content and form to Bank;
(ii) As soon as practicable and in event within ninety,
(90) Days after the end of each fiscal year, the following audited financial
statements: a consolidated income statement, a profit and loss statement,
reconciliation of surplus statement, and source and application of funds
statement of the Borrower for such year, and a balance sheet of the Borrower as
at the end of such year, setting forth in each case in comparative form
corresponding figures from the preceding annual audit, all in reasonable detail
and satisfactory in scope to the Bank as prepared in accordance with GAAP for,
and certified to, without exception or qualification, the Borrower by
independent certified public accountants of recognized standing selected by the
Borrower, along with an unqualified opinion of such accountants; both the
certificate and the opinion shall be in scope and substance satisfactory to the
Bank;
(iii) As soon as practicable and in event within ninety,
(90) Days after the end of each fiscal year, tax returns of Borrower, and all
schedules thereto.
(iv) 10-q statements which shall be required to be filed
by the Borrower within 30 days of the end of each quarter with the Securities
and Exchange Commission; and
(vi) Such other financial information as the Bank or the
Bank shall reasonably request, within ten (10) Business Days of such request.
Together with each delivery of financial statements required by clauses (i),
(ii), the Borrower will deliver to the Bank an officer's certificate from the
President or Chief Financial Officer of the Borrower certifying that said
financial statements are true and correct to the best of his knowledge; the
Borrower, shall deliver to the Bank along with the financial statements
described in (i) and (ii) above, a certificate of said accountants stating
that, in making the audit necessary to have the certification of such financial
statements, they have obtained no knowledge of an Event of Default or Default,
or, if any such Event of Default or Default exists, specifying the nature and
period of existence thereof. Such accountants, however, shall not be liable to
anyone by reason of their failure to obtain knowledge of any such Event of
Default or Default that would not be disclosed in the course of an audit
conducted in accordance with generally accepted auditing standards. The
Borrower also covenants that forthwith upon any officer of the Borrower
obtaining knowledge of any Event of Default or Default under this Agreement or
any other obligation of the Borrower, it will deliver to the Bank an officer's
certificate specifying the nature thereof, the period of existence thereof, and
what action the Borrower proposes to take with respect thereto.
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(b) Inspection. The Borrower will permit the Bank to visit and
inspect any of the Places of Business of the Borrower including its books and
records (and to make extracts therefrom), and to discuss its respective
affairs, finances and accounts with their respective officers and accountants,
all at such reasonable times and as often as reasonably may be requested. The
Bank shall provide reasonable notice to the Borrower prior to any inspection,
provided an Event of Default does not exist. If an Event of Default does exist,
the Bank shall be entitled to conduct said inspections without prior notice to
the Borrower.
(c) Maintenance of Corporate Existence: Compliance with Laws. The
Borrower shall at all times preserve and maintain in full force and effect its
corporate existence, powers, rights, licenses, permits and franchises in the
jurisdiction of its incorporation; continue to conduct and operate its business
substantially as conducted and operated during the present and preceding fiscal
year of the Borrower; operate in full compliance with all applicable laws
(including, without limitation, Environmental Laws), statutes, regulations,
certificates of authority and orders in respect to the conduct of its
respective business; and qualify and remain qualified as a foreign corporation
in each jurisdiction in which such qualification is necessary or appropriate in
view of its business and operations.
(d) Notice of Default. The Borrower shall immediately notify the
Bank in writing upon the happening, occurrence or existence of any Default and
any Event of Default, and shall provide the Bank with such written notice, a
detailed statement by a responsible officer of the Borrower, as applicable, of
all relevant facts and the action being taken or proposed to be taken by the
Borrower or Subsidiary with respect thereto.
(e) Maintenance of Books and Records. The Borrower shall maintain
its books and records in a condition reasonably satisfactory to the Bank.
(f) Maintenance of Properties. The Borrower shall maintain or
cause to be maintained in good repair, working order and condition all
properties used or useful in its respective business including, but not limited
to, any real property and all improvements located thereon, and from time to
time will make or cause to be made all appropriate repairs, renewals,
improvements and replacements thereof so that the businesses carried on in
connection therewith may be properly and advantageously conducted at all times.
The Borrower will not do or permit any act or thing that might impair the value
or commit or permit any waste of its properties or any part thereof, or permit
any unlawful occupation, business or trade to be conducted on or from any of
its properties. To the extent the Borrower leases any of its places of
business, it shall maintain and keep current at all times all leases for said
places of business.
(g) Notice of Suit, Proceedings, Adverse Change. The Borrower
shall give the Bank notice in writing within five (5) Days of the occurrence of
(i) all threatened or actual actions or suits (at law or in equity) and of all
threatened or actual investigations or proceedings
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by or before any court, arbitrator or any governmental department, commission,
board, bureau, agency or other instrumentality, state, federal or foreign,
affecting the Borrower or its rights or other properties (x) which involves
potential liability of the Borrower individually or in the cumulative,
aggregate amount in excess of $50,000, or (y) which the Board of Directors of
the Borrower believes in good faith is likely to materially and adversely
affect the financial condition of the Borrower or to impair the right or
ability of the Borrower to carry on its businesses as now conducted or to pay
the Obligations or perform its duties under the Loan Documents; (ii) any
material adverse change in the condition (financial or otherwise) of Borrower;
and (iii) any seizure or levy upon any part of the properties of Borrower under
any proceeds or by a receiver.
(h) Bank Accounts. The Borrower hereby agrees to maintain a
checking and depository account with the Bank.
(i) Insurance. The Borrower shall timely procure and maintain and
comply with such insurance and policies of insurance, including without
limitation public liability and product and manufacturer's liability insurance
as may be required by law and such other insurance, to such extent and against
such hazards and liabilities, as is customarily maintained by companies
similarly situated, or as the Bank may from time to time reasonably request in
writing and to furnish to the Bank upon its request evidence of said insurance.
Because it is the intention of this Section 5.01(i) that the Borrower shall at
all times keep all insurable properties and assets included in the Collateral
insured for the full insurable value thereof which shall be equal to at least
the aggregate total amount of the Loan Limit, if there is any material increase
in the values of the Collateral, or any portion thereof, the Borrower shall
maintain such other insurance as reasonably may be required in writing by the
Bank. All insurance policies insuring the Collateral shall contain endorsements
naming the Bank as mortgagee and/or loss payee and shall prohibit cancellation
or modification by the insurers issuing such policies without thirty (30) Days
prior written notice to the Bank. Each liability policy required pursuant to
this Section 5.01(i) shall name the Bank an additional insured and shall be
primary without right of contribution from any other insurance which is carried
by the Bank to the extent that such other insurance provides it with contingent
and/or excess liability insurance with respect to its interest as such in the
Collateral and shall expressly provide that all of the provisions thereof,
except the limits of liability (which shall be applicable to all insureds as a
group) and except liability for premiums (which shall be solely a liability of
the Borrower), shall operate in the same manner as if there were a separate
policy covering each insured.
(j) Tangible Net Worth. The Borrower must have a minimum Tangible
Net Worth equal to at least Twenty-three Million and No/100 Dollars
($23,000,000.00).
(k) Total Liabilities to Tangible Net Worth. The Borrower shall
maintain a ratio of Total Liabilities to Tangible Net Worth of no more than 1.5
to 1 as calculated for any rolling four quarter period, which shall measured
quarterly.
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(l) Maximum Funded Debt to EBITDA. The Borrower shall maintain at
all times a ratio of maximum Funded Debt to EBITDA of not greater than 3.5 to 1
as of March 31, 2001 through March 30, 2002, and not greater than 2.5 to 1 as
of March 31, 2002 and thereafter until all of the obligations have been repaid.
In the event of material expansion of the Borrower's manufacturing facilities,
Bank agrees to readdress this covenant.
(o) Debts, Taxes and Liabilities. The Borrower shall pay and
discharge (i) all of its indebtedness and obligations in accordance with their
terms and before they shall become in default, (ii) all taxes, assessments and
governmental charges or levies imposed upon it or upon its income and profits
or against its properties, prior to the date on which penalties attach thereof,
and (iii) all lawful claims which, if unpaid, might become a lien or charge
upon any of its properties; provided, however, that the Borrower shall not be
required to pay any such indebtedness, obligation, tax, assessment, charge,
levy or claim that is being contested in good faith by appropriate and lawful
proceedings diligently pursued and for which adequate reserves have been set
aside on its books. The Borrower also shall set aside and/or pay as and when
due all monies required to be set aside and/or paid by any federal, state or
local statute or agency in regard to F.I.C.A., withholding, sales or excise or
other similar taxes.
(p) Notification of Change of Name or Business Location. The
Borrower shall notify the Bank of each change in the name of the Borrower and
of each change of the location of the Principal Place of Business and the
office where its records are kept. In regard to any change of name or change of
location, Borrower shall further execute such documents as the Bank may
reasonably request to reflect said change of name or change of location, as the
case may be; provided, however, the Principal Place of Business of the Borrower
and the office where the records of the Borrower are kept may not be kept out
of or removed from Orange County, Florida without the prior written consent of
the Bank.
(q) Stamp, Excise and Intangible Taxes. If any stamp, excise or
non-recurring intangible tax shall become applicable with respect to this
Agreement, the Note or any other Loan Document, the Borrower shall promptly pay
such tax in full (including interest and penalties, if any) and shall hold the
Bank harmless with respect thereto.
(r) Lessor Subordination Agreements. Unless waived by the Bank,
in the event that the Collateral is ever located on any leased premises, the
Borrower shall furnish or cause to be furnished additional executed Lessor
Subordination Agreements for such Leased premises.
(s) Notice of Employee Plan Events, Termination and Litigation.
As soon as possible and in any event within thirty (30) days after the Borrower
knows or has reason to know that any Reportable Event or a Prohibited
Transaction with respect to any Employee Plan has occurred or that the PBGC or
the Borrower or any Related Entity has instituted or will institute proceedings
under ERISA to terminate a Employee Plan, or a partial termination of a
Employee Plan has or is alleged to have occurred, or any litigation regarding a
Employee Plan or naming the trustee of a Employee Plan or the Borrower or any
Related Entity with respect to a Employee Plan is threatened or instituted, the
Borrower will provide to the Bank copies of the written
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statement of the chief financial officer of the Borrower setting forth details
of such Reportable Event, Prohibited Transaction, termination proceeding,
partial termination or litigation and the action being or proposed to be taken
with respect thereto, together with copies of the notice of such Reportable
Event or any other notices, applications or forms submitted to the Pension
Benefit Guaranty Corporation, Internal Revenue Service or the United States
Department of Labor, and copies of any notices or correspondences received from
the Pension Benefit Guaranty Corporation, Internal Revenue Service or the
United States Department of Labor, and copies of any pleadings, notices or
other documents relating to such litigation.
(t) Employee Plan Annual Reports.Promptly after the filing
thereof with the Internal Revenue Service or the PBGC, the Borrower will
provide to the Bank copies of each annual report and annual premium filing form
that is filed with respect to each Employee Plan for each plan year, including
(i) a statement of assets; and liabilities of such Employee Plan as of the end
of such plan year and statements of changes in fund balance and in financial
position, or a statement of changes in net assets available for plan benefits,
for such plan year, certified by the trustee of the Employee Plan or the
independent certified public accountants for such and (ii) if required by law
or applicable regulations, an actuarial statement of such Employee Plan
applicable to such plan year, certified by the actuary for the Employee Plan.
(u) FDA Rules. The Borrower will comply, in a timely fashion,
with all FDA Rules.
SECTION 5.02. Negative Covenants. The Borrower covenants, for so long
as any of the Notes is outstanding and unpaid or any Obligation remains unpaid
or unperformed, as follows:
(a) Subsidiaries.The Borrower shall not form or acquire any
Subsidiary.
(b) Other Agreements. The Borrower will not enter into any
arrangement, contractual or otherwise, that would materially and adversely
affect its duties or the rights of the Bank under the Loan Documents or which
is inconsistent with or limits or abrogates any Loan Document.
(c) Sale of Assets. The Borrower shall not sell, lease,, assign,
transfer or otherwise distribute or dispose of any part or all its respective
assets or properties, tangible or intangible, to any Person; provided, however,
that as long as no Default has occurred, the Borrower may (i) replace its
Equipment due to obsolescence or repair but any such replaced Equipment shall
continue to be part of the Collateral, (ii) sell its Inventory in its normal
course of business, (iii) sell or dispose of other assets not necessary to its
business operations provided that (x) the proceeds of such sale are used to pay
down the Loan, (y) each such sale is to a Person not affiliated with the
Borrower and at a price approximating the fair market value of the assets
disposed of, and (z) the cumulative fair market value of the assets so disposed
of under this clause (iii) during the term of the Agreement does not exceed
$100,000, and (iv) such other sales of assets that the Bank may consent to,
provided, however, that this subsection (iv) in no way implies an obligation on
the part of the Bank to consent to any sales.
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(d) Merger, Consolidation, Dissolution, Etc. Without the written
consent of the Bank, the Borrower will not consolidate with or merge into any
other corporation, or permit another corporation to merge into it, or dissolve
or take or omit to take any action which would result in its dissolution, or
acquire all or substantially all the properties or assets of any other Person,
or enter into any arrangement, directly or indirectly, with any Person whereby
the such entities shall sell or transfer any property, real or personal,
whether now owned or hereafter acquired.
(e) Fiscal Year.The Borrower will not change its fiscal year from
a year ending December 31 without reasonable notice to the Bank.
(f) Changes in Business. The Borrower will not engage in any
business other than the business presently conducted by it on the date of this
Agreement and business of substantially the same -type or directly related
thereto.
(g) No Change of Name or Business Location. The Borrower shall
not, without the prior written consent of the Bank, (i) change its name, or
(ii) change the location of any Place of Business.
(h) Liens. The Borrower shall not create, assume, or suffer to
exist any encumbrance, lien, mortgage or security interest upon any of its
property or assets, whether now owned or hereafter acquired except:
(i) liens for taxes not yet due or which are being
actively contested in good faith by appropriate proceedings; and,
(ii) other liens incidental to the conduct of its
business or the ownership of its property and assets that were not incurred in
connection with the borrowing of money or the obtaining of advances or credit,
and which do not in the aggregate materially detract from the value of its
property or assets or materially impair the use thereof in the operation of its
business;
(iii) The Permitted Security Interests.
(i) Additional Indebtedness. Except for the Permitted Debt, the
Borrower shall not incur, create, assume or permit to exist any indebtedness or
liability for borrowed money, any indebtedness evidenced by notes, bonds,
debentures, or similar obligations or any conditional sales or title retention
agreement or capitalized lease.
(j) Loans, Advances, Investments, and Contingent Liabilities. The
Borrower shall not make or permit to remain outstanding any loan, or advance
to, or guarantee, or endorse or otherwise be or become contingently liable,
directly or indirectly, in connection with any obligations, or the stock or
dividends of, or own, purchase or acquire any stock, obligations or securities
of, or any other interest in, or make any capital contribution to, any other
Person.
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(k) Financial Condition. During the period in which Obligations
remain outstanding, the Borrower shall not experience or incur in the
reasonable opinion of the Bank any material, adverse change in its financial
condition or its ability to pay or perform the Obligations.
(l) Employee Plan Liabilities. Neither the Borrower nor any
Related Entity will permit the aggregate present value of accrued benefits of
any Employee Plan, computed in accordance with actuarial principles and
assumptions applied on a uniform and consistent basis by an enrolled actuary of
recognized standing acceptable to the Bank, to exceed the aggregate value of
assets of the Employee Plans, computed on a fair market value basis, or permit
the aggregate present value of vested benefits of the Employee Plans, computed
in accordance with actuarial principles and assumptions applied on a uniform
and consistent basis; by an enrolled actuary of recognized standing acceptable
to the bank, to exceed the aggregate value of assets of the Employee Plan,
computed on a fair market value basis.
(m) No Transfer of Funds to Affiliates. So long as any obligation
remains outstanding the Borrower shall not transfer any funds to any Affiliate
of the Borrower.
ARTICLE SIX
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. The occurrence of any one or more of
the following events shall constitute an Event of Default hereunder:
(a) Monetary Default on Note. If the Borrower shall default in
any payment of the principal of, or interest on the Note by failing to pay same
within ten (10) days of the Due Date or the date when the same shall become due
and payable; or
(b) Other Monetary Defaults. If the Borrower shall default in the
timely payment of any money due the Bank other than as contemplated by (a)
above within ten (10) days of the due date of said payment; or
(c) Non-Monetary Default. If the Borrower shall default in the
performance of or compliance with any term or covenant contained herein or in
any Loan Document, and the breach or default is not cured and remedied within
sixty (60) days after the Lender has mailed notice thereof to the Borrower; or
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(d) Third Party Default. If the Borrower shall suffer a material
default in the performance of any agreement with any person other than the
Bank;
(e) False Representation. If any representation or warranty made
in writing by or on behalf of the Borrower or in any other Loan Document shall
prove to have been false or incorrect in any material respect on the date as of
which it was made or reaffirmed; or
(f) Bankruptcy. If any Obligor shall make an assignment for the
benefit of creditors, file a petition in bankruptcy, petition or apply to any
tribunal for the appointment of a custodian, receiver or trustee for any of
them or a substantial part of their assets, or shall commence any proceeding
under any bankruptcy, reorganization, arrangement, readjustment of debt,
dissolution or liquidation law or statute of any jurisdiction, whether now or
hereafter in effect, or if there shall have been filed any such petition or
application, or any such proceeding shall have been commenced against any of
them, in which an order for relief is entered or which remains undismissed for
a period of sixty (60) Days or more; or
(g) Insolvency. If any Obligor shall admit in writing its
inability, or be generally unable, to pay its debts as they become due or shall
make an assignment for the benefit of creditors, file a petition in bankruptcy,
petition or apply to any tribunal for the appointment of a custodian, receiver
or trustee for the Borrower, or a substantial part of its assets, or shall
commence any proceeding under any bankruptcy, reorganization, arrangement,
readjustment of debt, dissolution or liquidation law or statute of any
jurisdiction, whether now or hereafter in effect, or if there shall have been
filed any such petition or application, or any such proceeding shall have been
commenced against the Borrower, in which an order for relief is entered or
which remains undismissed for a period of sixty (60) Days or more, or the
Borrower by an act or omission shall indicate its consent to, approval of, or
acquiescence in any such petition, application, or proceeding or order for
relief or the appointment of a custodian, receiver or any trustee for the
Borrower, or any substantial part of any of its properties, or shall suffer any
such custodianship, receivership or trusteeship to continue undischarged for a
period of sixty (60) Days or more; or
(h) Dissolution. If any order, judgment, or decree is entered in
any proceedings against any Obligor decreeing the dissolution of such Obligor
and such order, judgment, or decree remains unstayed and in effect for more
than thirty (30) Days; or
(i) Failure to Pay Debts. If any Obligor shall admit in writing
its inability, or be generally unable, to pay its debts as they become due or
shall make an assignment for the benefit of creditors, file a petition in
bankruptcy, petition or apply to any tribunal for the appointment of a
custodian, receiver or, trustee for the Obligor or a substantial part of its
assets, or shall commence any proceeding under any bankruptcy, reorganization,
arrangement, readjustment of debt, dissolution or liquidation law or statute of
any jurisdiction, whether now or hereafter in effect, or if there shall have
been filed any such petition or application, or any such proceeding shall have
been commenced against the Obligor, in which an order for relief is entered or
which remains undismissed for a period of sixty (60) Days or more, or the
Borrower, by any act or omission shall indicate its consent to,
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approval of, or acquiescence in any petition, application, or proceeding or
order for relief or the appointment of a custodian, receiver or any trustee for
the Borrower or any substantial part of any of its properties, or shall suffer
any such custodianship, receivership or trusteeship to continue undischarged
for a period of sixty (60) Days or more; or
(j) Final Judgments. The Borrower shall suffer final judgments
for payment of money aggregating in excess of $50,000 and shall not discharge
the same within a period of thirty (30) Days unless, pending further
proceedings, execution has not been commenced or has been effectively stayed;
or
(k) Levy. A judgment creditor of the Borrower shall obtain
possession of any of the Collateral by way of levy, distraint, replevin or self
help; or
(1) Contest of Loan Documents. The validity or enforceability of
this Agreement, or any other Loan Document shall be contested by the Borrower
or any Shareholder of the Borrower; or the Borrower shall deny that such Person
has any or further liability or obligations hereunder or thereunder; or
(m) Other Indebtedness to Bank. The Borrower or any Guarantor
shall default in the payment of any indebtedness due the Bank under any other
agreement evidencing indebtedness to the Bank; or
(n) Bank Deemed Insecure. If at any time the Bank reasonably
shall deem themselves insecure.
(o) Fraudulent Conveyance. If the Borrower, or any Obliger shall
have concealed, removed, or permitted to be concealed or removed, any part of
its properties, with intent to hinder, delay or defraud its creditors or any of
them, or made or suffered a transfer of any of its properties which may be
fraudulent under any bankruptcy, fraudulent conveyance, or similar law, or
shall have made any transfer of its properties to or for the benefit of a
creditor at a time when other creditors similarly situated have not been paid,
or shall have suffered or permitted, while insolvent, any creditor to obtain a
lien upon any of its properties through legal proceedings or distraint which is
not vacated within thirty (30) Days from the date thereof.
(p) Reportable Event. If a Reportable Event shall have occurred
in connection with any Employee Plan maintained by the Borrower or any Related
Entity.
ARTICLE SEVEN
RIGHTS UPON DEFAULT
Upon the occurrence and continuance of any Event of Default, the Bank
shall have and may exercise any or all of the rights set forth herein; provided
however, the Bank shall be under no duty or obligation to do so:
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SECTION 7.01. Acceleration. To declare the indebtedness evidenced by
the Note and all other Obligations to be forthwith due and payable, whereupon
the Note and all other Obligations shall become forthwith due and payable, both
as to principal and interest, without presentment, demand, protest or any other
notice or grace period of any kind, all of which are hereby expressly waived,
anything contained herein or in the Note or in such other Obligations to the
contrary notwithstanding and, upon such acceleration, the unpaid principal
balance and accrued interest upon the Note shall from and after such date of
acceleration bear interest at the Default Rate;
SECTION 7.02. Right of Setoff. To exercise its right of setoff as
permitted under Article Three;
SECTION 7.03. Other Rights. To exercise such other rights as may be
permitted under any of the Loan Documents;
SECTION 7.04. Uniform Commercial Code. To exercise from time to time
any and all rights and remedies of secured creditors under the Florida Uniform
Commercial Code and any and all rights and remedies available to it under any
other applicable law; and
ARTICLE EIGHT
MISCELLANEOUS
SECTION 8.01. No Waiver, Cumulative Remedies. No failure or delay on
the part of the Bank in exercising any right, power or remedy hereunder, or
under the Note or the other Loan Documents shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right, power or remedy
preclude any other or further exercise thereof or the exercise of any other
right, power or remedy hereunder or thereunder. The remedies herein and therein
provided are cumulative and not exclusive of any remedies provided by law or in
equity.
SECTION 8.02. Amendments, Etc. No amendment, modification, termination
or waiver of any provision of this Agreement, the Note or the other Loan
Documents, nor consent to any departure by any Obligor therefrom, shall in any
event be effective unless the same shall be in writing and signed by the Bank,
and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
SECTION 8.03. Addresses for Notices, Etc. All notices, requests,
demands and other communications (other than routine communications between the
Borrower and the Bank, or between the Bank) provided for hereunder and any
other of the Loan Agreements shall be in writing and mailed or personally
delivered to each of the parties hereto, regardless of whether said notice is
only required to be given to only selected parties hereto at the addresses
indicated below:
If to Borrower: GALAXY FOODS COMPANY
2441 Viscount Row
Orlando, Florida 32809
Attention: Keith A. Ewing
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With copy to: BAKER & HOSTETLER LLP
SunTrust Center, Suite 2300
200 South Orange Avenue
Orlando, Florida 32801-3432
Attn: Ken Wright, Esquire
If to the Bank: SOUTHTRUST BANK
P.O. Box 2166
Orlando, Florida 32802
Attn: Todd H. Banes, Vice President
With a copy to: Zimmerman, Shuffield, Kiser &
Sutcliffe, P.A.
315 E. Robinson Street
Suite 600
Orlando, Florida 32802
Attn: LYNNE R. WILSON
or, as to each party, at such other address as shall be designated by such
party in written notice to the other party complying as to, delivery with the
terms hereof. Except as otherwise expressly provided in this Agreement or in
any other of the Loan Documents, all such notices, requests, demands and other
communication shall be effective and given 5 days after being deposited in the
United States mails (postage prepaid) by registered or certified mail, return
receipt requested, or when personally delivered to the addressee.
SECTION 8.04. Applicable Law and Courts. This Agreement, and each of
the Loan Documents and transactions contemplated herein (unless specifically
stipulated to the contrary in such document) shall be governed by and
interpreted in accordance with the laws of the State of Florida. At the option
of the Bank, any action to enforce this Agreement or any Loan Document may be
brought in the appropriate court in Orange County, Florida, any objection that
the Borrower otherwise would have to jurisdiction or venue in such courts being
expressly waived hereby.
SECTION 8.05. Waiver of Jury Trial. The Bank and the Borrower hereby
knowingly, voluntarily, and intentionally waive any right to trial by jury on
any matter arising out of or in connection with the Loan Documents or the
relationships among the parties contemplated by the Loan Documents.
SECTION 8.06. Survival of Representations and Warranties. All
representations, warranties, covenants and agreements contained herein or made
in writing by the Borrower or any other Person in connection herewith shall
survive the execution and delivery of this Agreement, the Note and the other
Loan Documents and be true and correct until all of the Obligations have been
satisfied.
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SECTION 8.07. Time of the Essence. Time is of the essence of this
Agreement, the Note and the other Loan Documents.
SECTION 8.08. Headings. The headings in this Agreement are intended to
be for convenience of reference only, and shall not defined or limit the scope,
extent or intent or otherwise affect the meaning of any portion hereof.
SECTION 8.09. Severability. In case any one or more of the provisions
contained in this Agreement, the Note or the other Loan Documents shall for any
reason be held to be invalid, illegal or unenforceable in any respect, the same
shall not affect any other provision of this Agreement, the Note or the other
Loan Documents, but this Agreement, the Note and the other Loan Documents shall
be construed as if such invalid or illegal or unenforceable provision had never
been contained therein. Notwithstanding the foregoing, in the event said matter
would adversely affect the rights of the Bank under any or all of the Loan
Documents, the same shall be an Event of Default.
Section 8.10. Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and
the same instrument and any of the parties hereto may execute this Agreement by
signing any such counterpart.
SECTION 8.11. Non-Waiver. No delay, forbearance, or nonexercise by the
Bank in exercising any of its rights under this Agreement and no course of
dealing or course of performance between the Bank and the Borrower shall
operate as a waiver of any rights of the Bank unless the Bank have expressly so
waived said rights in a writing signed by it. Any such action shall not
preclude the Bank from thereafter exercising their rights as set forth in this
Agreement and the other Loan Documents.
SECTION 8.12. Further Assurances. The Borrower shall, from time 'to
time, execute such additional documents as reasonably may be requested by the
Bank or its counsel, to carry out and fulfill the intent and purpose of this
Agreement and the Loan Documents.
SECTION 8.13. Costs and Expenses. The Borrower shall be responsible
for and pay all costs and expenses incurred by the Bank in connection with any
or all of the Facilities including, but not limited to, documentary stamp
taxes, intangible tax, recording fees, etc., including any and all penalties
levied thereon. The Borrower also shall reimburse the Bank for any costs,
expenses and attorneys' or paralegals' fees or expenses that the Bank shall
reasonably incur in connection with this Agreement (such costs, expenses and
attorney's or paralegals' fees or expenses incurred in connection with the
preparation and negotiation of the same shall be due and payable on the date of
execution of this Agreement) or the relationship of the parties hereunder even
absent the occurrence of a Default, including, without limitation, any such
costs or expenses relating to any modification of any Loan Document, any waiver
of the terms of any thereof and any routine advice relating to perfection or
continued perfection of the Security Interest or related matters. Further, in
the event of the occurrence of any Default, the Bank shall be entitled to
recover from the Borrower, whether suit be brought or not, all costs, expenses
and attorneys' and paralegals' fees incurred in connection therewith, including
on appeal or in administrative or bankruptcy proceedings. The provisions of
this Section 8.13 shall survive the execution of the Loan Documents and the
payment of all of the other Obligations.
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SECTION 8.14. Indemnification Regarding Environmental Matters. The
Borrower agrees to indemnify, protect, and hold harmless the Bank all its
successors and assigns from and against any and all Hazardous Materials
Liabilities.
SECTION 8.15. No Third Party Beneficiaries. The parties intend that
this Agreement is solely for their benefit and no Person not a party hereto
shall have any rights or privileges under this Agreement whatsoever either as
the third party beneficiary or otherwise.
SECTION 8.16. Construction of Loan Documents. Each Loan Document has
been prepared and negotiated through the efforts of the Bank and the Borrower.
Accordingly, regardless of which party drafted a particular Loan Document, any
construction of the Loan Documents shall be made without any reference
whatsoever as to which party drafted or insisted upon said Loan Document.
SECTION 8.17. Collateral to Secure all Loans. All of the Collateral
shall secure each and every Obligation regardless of which Borrower or
Shareholder has rights in any particular item of Collateral.
SECTION 8.18. Entire Agreement. Except as otherwise expressly provided
herein, this Agreement and the other Loan Documents embody the entire agreement
and understanding between the parties hereto relating to the subject matter
hereof.
SECTION 8.19. Successors and Assigns. All covenants and agreements in
this Agreement by or on behalf of any of the parties hereto shall bind and
inure to the benefit of each respective parties' permitted successors and
assigns; provided, however, this clause shall not by itself authorize any
delegation of duties by the Borrower, or any other assignment which is be
prohibited by the terms and conditions of this Agreement.
SECTION 8.20. Relief from Automatic Stay. The Borrower hereby agrees
that, in consideration of the Bank funding the Loan, in the event that the
Borrower shall (i) file with any bankruptcy court of competent jurisdiction or
be the subject any petition under Title 11 of the United States Code, as
amended ("Title 11), (ii) be the subject of any order for relief issued under
Title 11, (iii) file or be the subject of any petition seeking any
reorganization, arrangement, composition, readjustment, liquidation,
dissolution, or similar relief under an present or future federal or state act
or law relating to insolvency or bankruptcy, or other relief from creditors for
debtors, (iv) have sought or consented to or acquiesced in the appointment of
any trustee, receiver, conservator, or liquidator, (v) be the subject of any
order, judgment, or decree entered by any court of competent jurisdiction
approving a petition filed against such party for any reorganization,
arrangement, composition, readjustment, liquidation, dissolution, or similar
relief under any present or further federal or state act or law relating to
insolvency or bankruptcy, or other relief from creditors for debtors, the Bank
shall thereupon be entitled to relief from any automatic stay imposed by
Section 362 of Title 11, or otherwise, on or against the exercise of the rights
and remedies otherwise available to the Bank under this Agreement and the Loan
Documents, and as otherwise provided by law.
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IN WITNESS WHEREOF, each of the parties hereto has caused this
agreement to be executed, sealed and delivered, as applicable, by their duly
authorized officers on the Day and year first above written.
"BANK" "BORROWER"
SOUTHTRUST BANK GALAXY FOODS COMPANY, a Delaware corporation
By: /s/Todd H. Banes By: /s/ Keith A. Ewing
------------------------- -------------------------
Todd H. Banes Keith A. Ewing
Vice President Chief Financial Officer
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EXHIBIT "A"
-----------
PERMITTED DEBT
--------------
1. That certain revolving line of credit facility for purposes of working
capital in favor of FINOVA MEZZANINE CAPITAL ("FINOVA") in the amount
of $4,000,000.00 (the "FINOVA LOAN"); provided, however, that any
security interest of FINOVA shall be subordinate to the interest of
the Bank in that certain collateral described in the Security
Agreement of even date herewith entered into between Borrower and
Bank, as evidenced by that certain Subordination Agreement of even
date herewith between FINOVA and Bank. The Bank acknowledges that
Borrower will be evaluating the possibility of refinancing and/or
increasing its existing working capital revolving line of credit
facility in the future; however, the Bank's acknowledgment of this
possibility shall not obligate Bank to permit said refinanced or
increased credit facility as a Permitted Debt hereunder.
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EXHIBIT "B"
-----------
PLACES OF BUSINESS
------------------
1. 2441 Viscount Row, Orlando, Florida 32809
2. 2901 Titan Row, Orlando, Florida.
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<PAGE> 37
EXHIBIT "C"
-----------
EMPLOYEE PLANS
--------------
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EXHIBIT "D"
-----------
PERMITTED SECURITY INTERESTS
----------------------------
1. That certain security interest in favor of Brungary Equipment Co.,
Inc. as to One (1) 1996 Hyster Model N30XMR, S/N E138H02058T, Fleet
#65764, as reflected in the UCC-1 Financing Statement filed on
September 3, 1996, Filing No. 960000183931.
2. That certain security interest in favor of W.R. Grace & Co. - Conn.,
Cryovac Division, as to One 2050AVFFS System, as reflected in the
UCC-1 Financing Statement filed on October 16, 1997, Filing No.
970000233726..
3. That certain security interest in favor of Brungart Equipment Co.,
Inc. as to One 1997 Hyster N30XMR, S/N E138H02764U, Fleet 66058, as
reflected in the UCC-1 Financing Statement filed on November 17, 1997,
Filing No. 970000258397.
4. That certain security interest in favor of Ikon Office Solutions as to
Savin 206 Color Copier, VC206-5A9670008, Savin Interface -
Non-serialized, Fiery XJ-170-4F17P-B66570, as reflected in the UCC-1
Financing Statement filed on March 4, 1998, Filing No. 980000047039.
5. That certain security interest in favor of The CIT Group/Equipment
Financing, Inc. as to One (1) New Bader-601 Separator Machine,
together with all replacements, addition, accessions and accessories
incoporated therein and/or affixed thereto and all proceeds thereof,
including, but not limited to, amounts payable under any insurance
policy, as reflected in the UCC-1 Financing Statement filed on
September 15, 1999, Filing No. 990000211054.
6. That certain security interest in favor of The CIT Group, Equipment
Financing, Inc. as to One (1) Safeline Microprocessor Based Metal
Detector, and One (1) Safeline Metal Detector Conveyor System,
together with all replacements, additions, accessions, and accessories
incorporated therein and/or affixed thereto and all replacements
thereof, including, but not limited to, amounts payable under any
insurance policy, as reflected in the UCC-1 Financing Statement filed
on September 15, 1999, Filing No. 990000211185-6.
7. That certain security interest in favor of Ikon Office Solutions, Inc.
as to Canon Color Copier Model 1120 NND00734, Canon Colorpass M25
Server G00036841, and Cnaon RDF-E2, ZSP00766, as reflected in the
UCC-1 Financing Statement filed on February 21, 2000, Filing No.
200000044148--3.
33
