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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): November 18, 1999
THE UNIMARK GROUP, INC.
(Exact name of Registrant as specified in charter)
Texas 0-26096 75-2436543
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
UniMark House
124 McMaking Road
Bartonville, Texas 76226
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (817) 491-2992
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ITEM 2. Acquisition or Disposition of Assets.
SALE OF SIMPLY FRESH FRUIT, INC.
On November 2, 1999, The UniMark Group, Inc., a Texas corporation (the
"Company"), issued a press release announcing that Simply Fresh Fruit, Inc., a
California corporation and wholly-owned subsidiary of the Company ("SFFI"), had
sold substantially all of SFFI's assets (the "Assets") to SFFI Company, Inc., a
California corporation ("Buyer"), for approximately $3.6 million in cash and
notes.
The sale price for the Assets included approximately: (1) $666,667 in
immediately available funds; (2) a $1,567,001 no interest 90 day secured note;
(3) a $1,100,000 secured note bearing interest at a rate of 8% per annum; (4)
the forgiveness of the remaining payments under a certain covenant- not- to
compete; and (5) the return to the Company of 68,182 shares of UniMark common
stock.
SFFI, a fruit processing company located in Los Angeles, primarily
sells private label fruit salads to the food service industry and non-branded
fresh-cut fruit.
ITEM 7. Financial Information, Pro Forma Financial Information and Exhibits.
(b) Pro Forma Financial Information.
The pro forma financial information set forth in Part I, Item
1 of the registrant's Quarterly Report on Form 10-Q for the quarterly period
ended September 30, 1999 is incorporated herein by reference.
(c) Exhibits.
Exhibit 99.1 - Press Release, dated November 2, 1999,
announcing that SFFI had sold substantially
all of its assets to Buyer;
Exhibit 99.2 - Asset Purchase Agreement by and between
SFFI, Sam Perricone, the Sam Perricone
Children's Trust - 1972 and Buyer;
Exhibit 99.3 - Bill of Sale, Assignment and Assumption
Agreement by and among Buyer and SFFI;
Exhibit 99.4 - $1,567,001 non-interest bearing 90 Day
Secured Note payable to the order of
UniMark;
Exhibit 99.5 - $1,100,000 Four Year Secured Note bearing
interest at a rate of 8% per annum, payable
to the order of UniMark;
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Exhibit 99.6 - Security Agreement (Assets) by and Between
Buyer and UniMark;
Exhibit 99.7 - Guaranty Agreement by and between Sam
Perricone and UniMark;
Exhibit 99.8 - Non-Competition Agreement by and between
SFFI, Buyer and UniMark;
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
THE UNIMARK GROUP, INC.
(Registrant)
Date: November 18, 1999 By: /s/ Soren Bjorn
------------------------------------
Soren Bjorn
President, Chief Executive
Officer and Secretary
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
------- -----------
<S> <C>
99.1 - Press Release, dated November 2, 1999, announcing that SFFI
had sold substantially all of its assets to Buyer.
99.2 - Asset Purchase Agreement by and between SFFI, Sam Perricone,
the Sam Perricone Children's Trust - 1972 and Buyer.
99.3 - Bill of Sale, Assignment and Assumption Agreement by and
amoung Buyer and SFFI.
99.4 - $1,567,001 non-interest bearing 90 Day Secured Note payable
to the order of UniMark.
99.5 - $1,100,000 Four Year Secured Note bearing interest at a rate
of 8% per annum, payable to the order of UniMark.
99.6 - Security Agreement (Assets) by and between Buyer and
UniMark.
99.7 - Guaranty Agreement by and between Sam Perricone and UniMark.
99.8 - Non-competition Agreement by and between SFFI Buyer and
UniMark
</TABLE>
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EXHIBIT 99.1
FOR IMMEDIATE RELEASE For Further Information, Contact:
November 2, 1999 Soren Bjorn, President & CEO
Charles A. Horne,
CFO/Investor
Relations
817-491-2992
THE UNIMARK GROUP, INC.
ANNOUNCES THE SALE OF CALIFORNIA OPERATIONS
AND RETURNED FOCUS ON BRANDED PRODUCTS
Bartonville, TX November 2, 1999 - The UniMark Group, Inc. (NASDAQ NMS symbol:
"UNMG"), producer and marketer of Sunfresh(R) brand citrus and tropical fruit
products, announced today that it has sold substantially all the assets of its
California based subsidiary, Simply Fresh Fruit, Inc., in a transaction valued
at approximately $3.6 million.
Simply Fresh, a fruit processing company located in Los Angeles, primarily
sells private label fruit salads to the food service industry and non-branded
fresh-cut fruits. For the year ended December 31, 1998 Simply Fresh had net
sales of $11.9 million.
"The divestiture of Simply Fresh is the result of a careful strategic
evaluation and analysis of a business segment that we believe offers less
growth opportunities and lower operating margins than our branded retail
product lines. This divestiture, coupled with the recent sale of our Canadian
subsidiary, return our company to a business model where we can best leverage
our manufacturing facilities in Mexico with our Sunfresh(R) brand and
distribution network in the United States" said Soren Bjorn, President and CEO.
Certain of the above information is forward-looking and as such, only reflects
the Company's best assessment at this time. Investors are cautioned that
forward-looking statements involve risks and uncertainty, that actual results
may differ materially from such statements, and that investors should not place
undue reliance on such statements. For discussion of factors that may affect
actual results, investors should refer to the Company's filings with the
Securities and Exchange Commission.
-END-
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EXHIBIT 99.2
ASSET PURCHASE AGREEMENT
Dated October 18, 1999
among
SFFI COMPANY, INC.,
SAM PERRICONE, as guarantor,
SAM PERRICONE CHILDREN'S TRUST - 1972
THE UNIMARK GROUP, INC.
and
SIMPLY FRESH FRUIT, INC.
To Be Effective as of October 2, 1999
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ASSET PURCHASE AGREEMENT
THIS AGREEMENT (this "Agreement"), dated as of this 18th day of October
1999, is entered into by and among SFFI Company, Inc., a California corporation
(the "Buyer"), Sam Perricone (the "Guarantor"), the Sam Perricone Children's
Trust - 1972 (the "Children's Trust"), the UniMark Group, Inc. ("UniMark") and
Simply Fresh Fruit, Inc., a California corporation ("Seller").
WITNESSETH:
WHEREAS, Seller owns all of the assets described in Section 1.1 of this
Agreement and listed on Exhibits 1.1(a)-(h) attached hereto (collectively, the
"Assets"), and Seller desires to sell such Assets to Buyer on the terms and
conditions set forth in this Agreement; and
WHEREAS, Seller leases the real property and improvements described in
Section 1.1(g) of this Agreement and more fully described on Exhibit 1.1(g)
attached hereto (the "Real Property") and Seller desires to assign its interest
in such Real Property to Buyer;
WHEREAS, Buyer desires to purchase the Assets and Seller's interest in
the Real Property on the terms and conditions set forth in this Agreement; and
WHEREAS, the Guarantor and the Children's Trust own an interest in
Buyer;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements, covenants, representations and warranties herein contained, and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
SALE AND PURCHASE OF THE ASSETS
1.1 Sale and Purchase of Assets. At the Closing (as hereinafter
defined), subject to the terms and conditions herein set forth, and on the basis
of the representations, warranties and agreements herein contained, Seller shall
sell to Buyer, and Buyer shall purchase from Seller, all of Seller's interest in
and to the following described assets and real property, free and clear of all
liens, claims, restrictions and encumbrances of any nature, except as otherwise
set forth in Section 1.2 hereof:
(a) All customer and vendor contracts, personal property
leases, licenses, permits and other agreements or commitments related
to the operation of the business of Seller as listed on Exhibit 1.1(a)
attached hereto;
(b) All tangible personal property, including without
limitation, all equipment, furniture, fixtures, machinery, vehicles,
spare parts, leasehold improvements, supplies, and
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other personal property used in the business of Seller as listed on
Exhibit 1.1(b) attached hereto; save and except, Seller's inventory
only part of which is being acquired by the Buyer in accordance with
Section 1.1(h) below;
(c) All books, documents and records relating to the business
of Seller excluding only the minute book, corporate seal and stock
records of Seller and including customer records and lists, marketing
and sales records and literature, employee records and information,
accounting books and records, and insurance records;
(d) All intangible or intellectual property of Seller,
including all rights in and to the name "Simply Fresh Fruit, Inc." and
all patents, copyrights, trade names, trademarks or service marks owned
by Seller as listed on Exhibit 1.1(d) hereto;
(e) All prepaid expenses, deposits, prepaid taxes and other
monies and securities, relating to the business of Seller as listed on
Exhibit 1.1(e) attached hereto;
(f) All insurance proceeds arising in connection with damage
to the Assets or relating to the business of Seller occurring prior to
the Closing;
(g) Seller's leasehold interest in that certain real property
and improvements in the name of Seller located at the address set forth
in Section 1.6, and more fully described on Exhibit 1.1(g) attached
hereto; and
(h) That portion of the Seller's inventory specifically listed
on Exhibit 1.1(h) attached hereto (the "Acquired Inventory").
1.2 Assumption of Liabilities. Buyer agrees to assume at Closing the
liabilities specifically listed on Exhibit 1.2 hereto and the liabilities known
to the shareholders of Buyer and not disclosed to, or known by Seller
(collectively, the "Assumed Liabilities"). Except for the Assumed Liabilities,
Buyer shall not assume, shall not be deemed to have assumed, and shall not be
liable for any liabilities and obligations (whether absolute, accrued,
contingent, direct, indirect, due or becoming due, or otherwise) of Seller
existing, arising out of or in any way connected with the conduct of its
business prior to the Closing Date (as defined in Section 7.1), or the sale by
Seller of the Assets to Buyer, including, without limitation, (i) any and all
claims of persons employed by Seller prior to the Closing Date, (ii) any and all
liability of Buyer arising as a result of the failure of Seller to file any tax
returns or to pay any income, sales, excise or other taxes, employment or
workers' compensation payments, and (iii) any and all losses, liabilities,
damages or expenses resulting from the assertion of claims made against the
Assets by creditors of Seller as a result of the failure to comply with any bulk
sales law.
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1.3 Purchase Price and Terms. The total purchase price for the Assets
and the Real Property (the "Purchase Price") shall be payable as follows:
(a) by delivering $666,667 in immediately available funds on the
Closing Date;
(b) by executing and delivering a 90 day non-interest bearing
secured note in the original principal amount of $1,569,001,
in substantially the same form as Exhibit 1.3(b)(i) hereto
(the "90 Day Note"). The note shall be secured by the Assets
in accordance with the terms of the security agreement in
substantially the same form as Exhibit 1.3(b)(ii) hereto (the
"Asset Security Agreement") The note shall be guaranteed by
the Guarantor in accordance with the guaranty agreement in
substantially the same form as Exhibit 1.3(b)(iii) hereto (the
"Guaranty Agreement"); and
(c) by executing and delivering a four year secured note in the
original principal amount of $1,100,000, in substantially the
same form as Exhibit 1.3(c) hereto (the "Four Year Note"). The
note shall bear interest at 8% per annum, with interest and
principal payable in quarterly installments during the first
year and in monthly installments during the second, third and
fourth years. The note shall be secured by the Assets in
accordance with the Asset Security Agreement. The note shall
be guaranteed by the Guarantor in accordance with the Guaranty
Agreement.
1.4 Transfer of UniMark Shares. At the Closing, 68,182 shares of Common
Stock, par value $.01 per share, of The UniMark Group, Inc., a Texas corporation
("UniMark"), shall be transferred by the Children's Trust to UniMark.
1.5 Assumption of Non-compete Payments. At the Closing, Buyer shall
assume all remaining non-compete payments to the Children's Trust under that
certain Non-compete Agreement among UniMark, the Guarantor and the Children's
Trust, the aggregate amounts of such payments attached hereto as Exhibit 1.5.
1.6 Release of Earthquake Retrofit Obligations. At the Closing, UniMark
shall pay to Douglas Weitman and Ellen Weitman, Trustees of The Weitman Family
Trust, Dated January 26, 1989, 3727 Serra Road, Malibu, CA, 90265 (the
"Landlord"), the landlord of Seller's facility located at 1995 E. 20th Street,
Los Angeles, California (the "Facility"), approximately $32,000 for earthquake
retrofit of such Facility in exchange for UniMark, Seller's and Buyer's full
release from all liabilities under that certain Lease Agreement between Landlord
and Seller. In addition, the Closing of the transaction shall be expressly
conditioned upon a release by Landlord of both Buyer and Seller of all further
earthquake retrofit obligations pertaining to the Facility.
1.7 Accounting Capability. Prior to Closing, Seller agreed to provided
Buyer with certain stand-alone accounting capability (including hardware and
software).
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1.8 Non-competition Agreement. At the Closing, Buyer and Seller will
enter into a non-competition agreement, in substantially the same form as
Exhibit 1.8 hereto (the "Non-competition Agreement").
1.9 Instruments of Conveyance and Transfer. At the Closing, Seller
shall execute and deliver to Buyer bills of sale and assignments and such other
instruments of conveyance and transfer, in form and substance satisfactory to
Buyer and its counsel, as shall be reasonably necessary or appropriate to vest
in Buyer good and indefeasible title to the Assets and to comply with the
purpose of this Agreement.
1.10 Transaction Taxes and Other Closing Costs. Any sales, use,
transfer or similar taxes and any assumption, recording and other similar fees,
arising in connection with the transfer of the Assets from Seller to Buyer shall
be borne solely by the Buyer.
1.11 Assumption of Non-compete Payments. At the Closing, Buyer shall
deliver to Seller an opinion of counsel in form acceptable to Seller and its
counsel.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF SELLER
In order to induce Buyer to enter into this Agreement and to consummate
the transactions contemplated herein, Seller and UniMark hereby represent and
warrant, as of the date hereof and as of the Closing Date as follows:
2.1 Corporate Existence and Authority. Seller is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and have all requisite corporate power, licenses,
permits and authority to own and lease its properties and assets and to carry on
its business as has been and is being conducted currently. Seller is qualified
to do business in every jurisdiction in which the character and location of the
assets owned or leased by Seller or the nature of the business transacted by
Seller makes such qualification necessary.
2.2 Authorization and Effect of Agreement. Seller has all requisite
power and authority to execute, deliver and perform their obligations under this
Agreement, and the Asset Security Agreement, and the Non-competition Agreement,
and the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all requisite corporate and shareholder action. The execution and delivery of
this Agreement and the consummation of the transactions contemplated herein do
not and will not:
(a) violate, conflict with, modify or cause any default under
or acceleration of (or give any party any right to declare any default
or acceleration upon notice or passage of time or both), in whole or in
part, of any articles of incorporation, bylaws, mortgage, lien, deed
of
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trust, lease, agreement, instrument, order, decree, judgment, law or
any other restriction of any kind to which Seller is a party or by
which it or any of its properties are bound;
(b) result in the creation of any security interest, lien,
encumbrance, adverse claim or restriction on any property or asset of
Seller; or
(c) violate any law, rule or regulation of any federal or
state regulatory agency.
2.3 Title; Leased Assets. Upon consummation of the transactions
contemplated hereby, Buyer shall receive good, valid and marketable title to the
Assets, and will be entitled to use, as Lessee, all leased assets used in
Seller's business, free and clear of all liens, claims and encumbrances other
than those securing the liabilities to be assumed pursuant to Section 1.2 above.
2.4 Brokers and Finders. There is no agent's, broker's or finder's fee
or commission payable in connection with the transaction contemplated hereby by
virtue of or resulting from any action or agreement by Seller.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER
In order to induce Seller to enter into this Agreement and to
consummate the transactions contemplated herein, Buyer hereby represents and
warrants to Seller as follows:
3.1 Organization and Capitalization of Buyer. Buyer is a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has all requisite corporate power and
authority to consummate the transactions contemplated hereby.
3.2 Authorization and Effect of Agreement. The execution and delivery
of this Agreement and the consummation of the transactions contemplated herein
have been duly authorized and approved by the Board of Directors and the
shareholders of Buyer. No further corporate approvals or authorizations on the
part of Buyer are necessary to authorize the consummation of the transactions
contemplated herein. This Agreement, the 90 Day Note, the Four Year Note and the
Asset Security Agreement, have been duly executed and delivered by Buyer and
constitutes the valid and binding obligation of Buyer, enforceable in accordance
with their respective terms.
3.3 Consents and Approvals. Except as shall have been obtained prior to
Closing, no filing with, and no permit, authorization, consent or approval of,
any public body or authority is necessary for the consummation by Buyer of the
transactions contemplated hereby. The execution and delivery of this Agreement,
and the consummation by Buyer of the transactions contemplated hereby, will not
conflict with any provisions of the Articles of Incorporation or Bylaws of
Buyer, and will not violate any order, writ, injunction, decree, statute, rule
or regulation applicable to Buyer.
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3.4 Brokers and Finders. Buyer represents and warrants that there is no
agent's, broker's or finder's fee or commission payable in connection with the
transactions contemplated herein by virtue of or resulting from any action or
agreement by Buyer.
3.5 Commitments and Contracts. Buyer represents and warrants that (1)
Bill Sander and Jaxon Potter, two executive officers of Buyer, and Bruce Spiro,
Vice President -- Foodservice of UniMark Foods, Inc., have been the primary
operating officers of Seller, and as such, have superior knowledge of the
business and affairs of Seller, and (2) to the best of Buyer's knowledge, except
as described on Exhibit 3.5 attached hereto, as of the date hereof, Seller is
not a party to or bound by any oral or written (a) contract for the employment
of any officer or employee that is not terminable on notice of thirty (30) days
(or less) without payment of any amount on account of such termination; (b)
bonus, deferred compensation, savings, stock option, retirement, pension, profit
sharing or seve rance pay agreement, plan or arrangement; (c) agreement,
contract or indenture relating to the borrowing of money involving an aggregate
unpaid balance of one thousand dollars ($1,000) or more; (d) guaranty of any
obligation for the borrowing of money or otherwise, excluding endorsements made
for collection; (e) management agreement, consulting or other similar contract
or arrangement; (f) collective bargaining agreement; (g) agreement with any
present or former officer, director or shareholder; (h) license, whether as
licensor or licensee; (i) contract or commitment for the purchase of materials
or supplies or for the performance of services over a period of more than sixty
(60) days not in the ordinary course of business; (j) contract or commitment to
make capital expenditures in excess of $500 in the aggregate; (k) contract or
option to purchase or sell any real property; (l) consent decree; or (m) other
contract, agreement or other commitment that is material to the business,
operations, prospects, properties or assets or to the condition, financial or
otherwise, of Seller. Except as disclosed on Exhibit 3.5 attached hereto, to the
knowledge of Buyer as of the date hereof, Buyer is not aware of any basis for
the termination or cancellation of any such contracts other than the stated
expiration thereof. As of the date hereof, all of the contracts commitments and
agreements to which Seller is a party are in full force and effect without any
default or breach thereof in any material respect by Seller or any other party
thereto.
3.6 Litigation and Proceedings. Buyer represents and warrants that, to
the best of Buyer's knowledge, except as set forth on Exhibit 3.6 attached
hereto, (a) there are no actions, suits or pro ceedings pending or threatened
and there are no claims against or affecting Seller or its properties or assets,
at law or in equity or before or by any governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, or before any
arbitrator of any kind, that involve the possibility of any judgment or
liability that may result in any material adverse change in the operations,
properties, or assets or in the condition, financial or otherwise, of Seller
business, and (b) Seller is not in default under or in violation of any
judgment, order, writ, injunction, decree or award of any court, arbitrator or
governmental department, commission, board, bureau, agency or instrumentality.
3.7 Governmental Authorizations. Buyer represents and warrants, to the
best of Buyer's knowledge, that Seller has all licenses, franchises, permits and
other governmental authorizations that are legally required to enable it to
conduct its business in all respects as conducted on the date hereof.
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Buyer represents and warrants, to the best of Buyer's knowledge, that Seller is
in compliance with all applicable federal, state and local laws, rules and
regulations, including, without limitation, those imposing taxes; and the
execution, delivery and performance of this Agreement, and the consummation by
Seller of the transactions contemplated hereby, will not violate in any material
respect any provisions of, or constitute a default under, any applicable
judgment, order, writ, injunction, decree or award, of any court, arbitrator or
governmental department, commission, board, bureau, agency or instrumentality.
3.8 Liabilities. Buyer represents and warrants that, to the best of
Buyer's knowledge, except as reflected in the Financial Statements or disclosed
on Exhibit 3.8 attached hereto, Seller has no liabilities or obligations,
whether absolute, accrued, contingent, direct, indirect, due or becoming due, or
otherwise.
3.9 Full Disclosure. No representation or warranty made by Buyer in
this Agreement and no documentation or certification furnished or to be
furnished to Seller pursuant to this Agreement contains contain any untrue
statement of a material fact or omits or will omit to state a material fact
necessary to make the statements contained herein or therein not misleading.
3.10 Guarantor's Authorization and Effect of Agreement. The execution
and delivery of this Agreement and the consummation of the transactions
contemplated herein have been authorized and approved by the Guarantor. This
Agreement has been duly executed and delivered by the Guarantor and constitutes
the valid and binding obligation of the Guarantor, enforceable in accord ance
with its terms.
3.11 Authorization of Trust to Transfer Stock. The certificate or
certificates representing the 68,182 shares of UniMark Common Stock owned by the
Children's Trust are held by the Children's Trust free and clear of any liens or
encumbrances and have been duly endorsed, under the authority of the Trustee,
for transfer to UniMark.
ARTICLE IV
COVENANTS OF SELLER AND THE SHAREHOLDER
Seller hereby covenants and agrees with Buyer as follows:
4.1 Conduct of Business. Prior to the Closing Date, Seller shall
conduct its business only in the ordinary course consistent with present
business practices and policies and shall use all reasonable efforts to (a)
preserve intact its present business organization and relationships, (b)
maintain and keep the Assets and the Real Property in good repair and condition
except for deterioration due to ordinary wear and tear, (c) maintain in full
force and effect insurance comparable in amount and in scope of coverage to that
now maintained, (d) pay and perform, when due, all material obligations under
contracts, leases and documents relating to or affecting the assets, properties
and business of Seller, and (e) comply with and perform all material obligations
and duties
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imposed by federal, state and local laws, and all rules, regulations and orders
imposed by federal, state or local governmental authorities.
4.2 Access to Properties and Records. Between the date of this
Agreement and the Closing Date, Seller shall afford to the officers and
authorized representatives of Buyer full access during normal business hours to
the properties, books and records (including tax returns filed and those in
preparation) of Seller in order that Buyer may have full opportunity to make
such investigation as it shall desire of the affairs and business of Seller, and
Seller's officers shall furnish Buyer and its representatives with such
additional financial and operating data and other information relating to the
business and properties of Seller as Buyer shall from time to time reasonably
request.
ARTICLE V
COVENANTS OF BUYER
Buyer hereby covenants and agrees with Seller as follows:
5.1 Efforts. Buyer will use its best efforts to obtain from all third
parties approvals necessary for the consummation of the transactions
contemplated by this Agreement.
5.2 Approvals and Consents. Buyer will obtain all consents, approvals
and authorizations of, filings and registrations with, and notifications to, all
applicable governmental authorities, licensors or other parties required for the
consummation of the transactions contemplated by this Agreement shall have been
duly obtained or made in form and substance reasonably satisfactory to the
parties hereto and shall be in full force and effect.
5.3 Third Party Consents. Buyer shall have received all consents of
third parties requested by Buyer pursuant to this Agreement or required to
consummate the transactions in accordance with this Agreement, including without
limitation, the transfer and assignment to Buyer of the Assets and the Real
Property and all assumed liabilities with the modifications requested by the
Buyer.
ARTICLE VI
SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION
6.1 Survival of Representations and Warranties. The representations and
warranties of the parties contained in this Agreement shall survive beyond the
Closing Date for a period of one year.
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6.2 Indemnification by Seller.
(a) Seller hereby agrees to indemnify, defend and hold
harmless Buyer against and in respect of any and all claims, demands,
losses, costs (including court costs and attorneys' fees), expenses,
obligations, liabilities, damages, including interest and penalties
that it may incur or suffer as a result or arising out of any breach of
or failure by to perform any of their respective representations,
warranties or covenants contained in this Agreement or any exhibit or
other instrument furnished or to be furnished by Seller under this
Agreement.
(b) Seller hereby agrees to indemnify, defend and hold
harmless Buyer against and in respect of any and all claims, demands,
losses, costs (including court costs and attorneys' fees), expenses,
obligations, liabilities, damages, including interest and penalties
that Buyer may incur or suffer as a result of or arising out of any
act, omission, transaction, circumstance, sale of goods or services,
state of facts or other condition which occurred or existed on or prior
to the Closing, whether or not then known, due or payable.
6.3 Indemnification by Buyer. Buyer will indemnify, defend and hold
harmless Seller against and in respect of any and all claims demands, losses,
costs including court costs and attorneys fees), expenses, obligations,
liabilities, damages, including interest and penalties that they may incur or
suffer as a result of or arising out of any breach of or failure by Buyer to
perform any of its representations, warranties or covenants contained in this
Agreement or in any schedule, certificate, exhibit or other instrument furnished
or to be furnished by Buyer under this Agreement.
ARTICLE VII
GENERAL
7.1 Closing. The closing ("Closing") of the transactions contemplated
by this Agreement shall be held at 8:30 a.m., on the Closing Date at the offices
of Jakes Jordaan, 300 Crescent Court, Suite 1600, Dallas, Texas, or at such
other time and place as the parties hereto may mutually agree. The Closing Date
(herein so called) shall be as soon as practicable after the time each of the
conditions set forth in Article V have been satisfied or waived by the party or
parties entitled to the benefit of such conditions, but in no event later than
October 20, 1999.
7.2 Expenses. Each of Buyer and Seller shall be responsible for all
their respective costs and expenses incurred by them in connection with the
transactions contemplated by this Agreement.
7.3 Exhibits. All statements contained in the Exhibits hereto (and any
amendments or supplements to this Agreement) shall be deemed additional
representations and warranties of Seller and Buyer.
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7.4 Amendment. This Agreement may be amended at any time by written
agreement of the parties hereto. Any of the terms or conditions of this
Agreement may be waived in writing at any time or prior to the Closing Date by
the party that is entitled to the benefits thereof.
7.5 Termination. This Agreement may be terminated at any time prior to
the Closing:
(a) by the mutual consent in writing of Buyer and Seller;
(b) by either Buyer or Seller if the Closing Date shall not
have occurred by October 20, 1999, provided that the right to terminate
under this provision may not be asserted by a party if the failure to
consummate the transactions contemplated herein is attributable to a
breach by such party of any of its representations and warranties
contained in this Agreement or a failure of such party to fulfill its
obligations pursuant to this Agreement;
(c) by either Buyer or Seller if any court of competent
jurisdiction in the United States or other United States governmental
body shall have issued an order, decree or ruling or taken any other
action restraining, enjoining or otherwise prohibiting the transactions
contemplated by this Agreement and such order, decree, ruling or other
action shall have become final and non-appealable; or
(d) by Buyer if there has been a material misrepresentation or
material breach on the part of Seller in the representations,
warranties and covenants of Seller set forth herein or if there has
been any failure by Seller to comply with their respective obligations
here under, or by Seller if there has been a material misrepresentation
or material breach on the part of Buyer in the representations,
warranties or covenants of Buyer set forth herein or if there has been
any failure by Buyer to comply with its obligations hereunder.
In the event of the termination and abandonment of this Agreement
pursuant to this Section 7.5, this Agreement shall forthwith become void and
have no effect, without any liability on the part of any party or its directors,
officers or shareholders (except the liability of any party for any breach of
this Agreement).
7.6 Bulk Transfer Laws. Buyer hereby waives compliance by Seller with
the provisions of any applicable Bulk Transfer Laws of any state, and Seller
warrants and agrees to pay and discharge when due all claims of creditors
asserted against Buyer by reason of such noncompliance to the extent that such
liabilities are not specifically assumed by Buyer under this Agreement. Seller
hereby indemnifies and agrees to hold Buyer harmless from, against and in
respect of (and shall on demand reimburse Buyer for) any loss, liability, costs
or expenses, including, without limitation, attorneys' fees, suffered or
incurred by Buyer by reason of the failure of Seller to pay or discharge such
claims.
10
<PAGE> 12
7.7 Notices. All notices, requests, demands and other communications
under this Agreement shall be in writing and shall be deemed to have been duly
given at the time either personally delivered or sent by certified mail, postage
prepaid, as follows:
(a) If to Seller, to:
The UniMark Group, Inc.
P.O. Box 229
Bartonville, Texas 76226
Attn: Soren Bjorn, Chief Executive Officer and President
With a copy to:
Jakes Jordaan
300 Crescent Court, Suite 1605
Dallas, Texas 75201
(b) If to Buyer, to:
SFFI Company, Inc.
1995 East 20th Street
Los Angeles, California 90058
Attention: William Sander
With a copy to:
Attention: ___, Esq.
7.8 Public Announcements. Seller may issue any press release or
otherwise make any public statement with respect to the transactions
contemplated hereby.
7.9 Assignment. This Agreement and all of the provisions hereof shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, but neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned by any of
the parties hereto without the prior written consent of the other parties;
provided, however, that Buyer shall have the right to assign to one (1) or more
direct or indirect wholly-owned subsidi aries of Buyer any and all of the rights
and obligations of Buyer under this Agreement (such subsidiary assuming all of
the obligations of Buyer in connection with the transactions contemplated herein
and making representations, warranties and covenants comparable to those made by
Buyer herein).
11
<PAGE> 13
7.10 Miscellaneous. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which
together shall constitute one agreement. Headings contained in this Agreement
are for reference purposes only and shall not affect in any manner the meaning
or interpretation of this Agreement. This Agreement and the documents and
instruments referred to herein constitute the entire Agreement between the
parties hereto and supersedes all other understandings with respect to the
subject matter hereof.
7.11 Severability. The provisions of this Agreement shall be deemed
independent and severable, and the invalidity or partial invalidity or
unenforceability of any one (1) provision shall not affect the validity or
enforceability of any other provision.
7.12 Effective Time. The closing of the transactions contemplated
hereby shall be effective as of October 2, 1999 (the "Effective Date").
7.13 Governing Law; Binding Arbitration. This Agreement shall be
construed in accordance with the laws of the State of California. The parties
hereto agree that any dispute pertaining to this Agreement and the transactions
contemplated hereby must be submitted for binding arbitration in Los Angeles,
California, to the exclusion of courts of law, in accordance with commercial
arbitration rules in force at the time of this Agreement.
12
<PAGE> 14
IN WITNESS WHEREOF, the undersigned have executed this Agreement to be
effective as of the date first above written.
BUYER:
SFFI COMPANY, INC.,
a California corporation
By:
---------------------------------------
William Sander
Title:
------------------------------
GUARANTOR:
------------------------------------------------
Sam Perricone
INTERESTED PARTY:
SAM PERRICONE CHILDREN'S TRUST - 1972
------------------------------------------------
Name: Paul Golub
Trustee
UNIMARK:
THE UNIMARK GROUP, INC.
a Texas corporation
By:
---------------------------------------
Soren Bjorn
President and Secretary
SELLER:
SIMPLY FRESH FRUIT, INC.
a California corporation
By:
---------------------------------------
Soren Bjorn
President and Secretary
<PAGE> 15
Exhibit 1.1(a) - LIST OF CONTRACTS, LEASES AND LICENSES
A. CONTRACTS:
1. Bill Sander Employment Contract (attached hereto)
2. Agreement dated effective as of May 9, 1996, by and among The
UniMark Group, Inc., a Texas corporation, UniMark Foods, Inc.,
a Texas corporation and wholly-owned subsidiary of UniMark,
Sam Perricone Children's Trust - 1972 and Mark Strongin
relating to royalty payments for fruit processed by Simply
Fresh Fruit, Inc. using the P.E.R.C. Machine. The term of the
agreement is 10 years.
3. Retail Installment Purchase Contracts as of November 30, 1996,
between Simply Fresh Fruit, Inc. and Toyota Motor Credit for
the:
(a) SF Forklift truck (two payments of $582.63 remaining at
October 2, 1999)
(b) SF Handtruck (two payments of $170.93 remaining at
October 2, 1999)
B. LEASES:
1. STANDARD INDUSTRIAL LEASE DATED MARCH 1, 1994 (produce warehouse)
Property: 1995 East 20th Street, Los Angeles, California
Lessor: Douglas Weitman and Ellen Weitman, Trustees of
The Weitman Family Trust, Dated January 26, 1989
Lease term: 10 years
2. LEASE FOR ONE (1) TOSHIBA COPIER
Lessor: Copelo Capital
Lease term: 9/1/98 to 9/1/2001
3. LEASE FOR MAILING SYSTEM
Lessor: Pitney Bowes Credit Corporation
Lease term: 11/1/98 to 2/1/2004
C. LICENSES:
PACA License
License term: 2/18/99 to 2/18/2000
<PAGE> 16
Exhibit 1.1(b) - LIST OF TANGIBLE PERSONAL PROPERTY
Please refer to the listing of Depreciable Assets attached hereto.
<PAGE> 17
Exhibit 1.1(d) - LIST OF INTANGIBLE AND INTELLECTUAL PROPERTY
Trade name and trademark: Simply Fresh Fruit
Reg. No. 877,847
<PAGE> 18
Exhibit 1.1(e) - LIST OF DEPOSITS AND PREPAID ITEMS
A. DEPOSITS
1. Petty Cash Bank Account Fund with a balance of $1,847.41 as of
October 1, 1999.
2. Rent deposit in the amount of $21,000 on Standard Industrial
Lease referenced in Exhibit 1.1(a).
3. Security deposit in the amount of $490 on Toshiba Copier
referenced in Exhibit 1.1(a).
B. PREPAID ITEMS
1. Rent payment for October 1999 in the amount of $9,156 on
Standard Industrial Lease referenced in Exhibit 1.1(a).
2. Payment for October 1999 in the amount of $12,500 to Sam
Perricone Children's Trust - 1972 pursuant to the
Non-competition Agreement dated as of May 9, 1996, between Sam
Perricone, in his individual capacity, the Sam Perricone
Children's Trust - 1972, and The UniMark Group, Inc. This
payment was made in September 1999.
3. Payment for "Unsecured Property Taxes" in the amount of $6,713
to Los Angeles County Taxes for the tax year from 7/1/99 to
6/30/2000. The amount of $8,851 was paid as estimated tax
prior to 10/2/99 (75% prepaid).
<PAGE> 19
Exhibit 1.1(g) - LIST OF REAL PROPERTY AND IMPROVEMENTS
A. REAL PROPERTY
Seller has a leasehold interest in the property related to the Standard
Industrial Lease referenced in Exhibit 1.1(a).
B. LEASEHOLD IMPROVEMENTS
Please refer to the Capitalized Leasehold Improvements included in the
listing of Depreciable Assets attached hereto as Exhibit 1.1(b).
<PAGE> 20
Exhibit 1.1(h) - LIST OF ACQUIRED INVENTORY
Please refer to the listing of Acquired Inventory attached hereto. The
inventory per price out physical at October 2, 1999 was $235,668.
<PAGE> 21
Exhibit 1.2 - LIST OF LIABILITIES ASSUMED
A. VACATION AND PROPERTY TAXES
<TABLE>
<S> <C>
1. Vacation Accrual as of October 2, 1999:
a) Employees with over one (1) year service $ 29,526
b) Employees with less than one (1) year service 10,021
TOTAL VACATION $ 39,547
2. Accrued "Secured Property Taxes" as of October 2, 1999 $ 4,975
(Tax year runs from 7/1/99 to 6/30/2000 -- Taxes are due
50% on 11/1/99 and 50% on 2/1/2000 -- Estimated tax is
$19,900 -- Sellers share is 25%)
TOTAL LIABILITIES ASSUMED $ 44,522
</TABLE>
B. ASSETS WITH LIENS, CLAIMS, RESTRICTIONS AND/OR ENCUMBRANCES
(As of September 30, 1999)
1. UCC Filing Number: 9700260970
Expires: 12/31/2001
Type: Financing Statement (UCC-1)
Secured Party: Toyota Motor Credit Corp.
POB 3457
Torrance, CA 90510
2. UCC Filing Number: 9705060490
Expires: 02/19/2002
Type: Financing Statement (UCC-1)
Secured Party: Cooperatieve Centrale Raiffeisen-Boerenleenbank
B.A., RaboBank
Nederland, New York Branch
245 Park Ave.
New York, NY 10167
Please refer to the Financing Statement for each Secured Party attached
hereto.
<PAGE> 22
Exhibit 1.3(b)(i) - 90 DAY NOTE
<PAGE> 23
Exhibit 1.3(b)(ii) - ASSET SECURITY AGREEMENT
<PAGE> 24
Exhibit 1.3(b)(iii) - GUARANTY AGREEMENT
<PAGE> 25
Exhibit 1.3(c) - FOUR YEAR NOTE
<PAGE> 26
Exhibit 1.5 - NON-COMPETE PAYMENTS
After Seller's October 1, 1999 payment to the Children's Trust, the
aggregate amount of all remaining non-compete payments to be paid to the
Children's Trust is $220,585.16.
<PAGE> 27
Exhibit 1.8 - NON-COMPETITION AGREEMENT
<PAGE> 28
Exhibit 3.5 - SELLER'S CONTRACTS
None.
<PAGE> 29
Exhibit 3.6 - LITIGATION
None.
<PAGE> 30
Exhibit 3.8 - ADDITIONAL LIABILITIES
None.
<PAGE> 1
EXHIBIT 99.3
BILL OF SALE, ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS BILL OF SALE, ASSIGNMENT AND ASSUMPTION AGREEMENT (this
"Agreement"), dated as of this 18th day of October 1999, is entered into by and
among SFFI Company, Inc., a California corporation (the "BUYER") and Simply
Fresh Fruit, Inc., a California corporation ("SELLER").
WHEREAS, pursuant to the terms and provisions of that certain Asset
Purchase Agreement dated of even date herewith, by and among Seller, The UniMark
Group, Inc., Buyer, Sam Perricone, and the Sam Perricone Children's Trust -
1972, Seller agreed to sell of the assets described on Exhibit A attached hereto
and incorporated herein by reference (the "ASSETS") and Buyer agreed to assume
those certain liabilities and obligations as listed on Exhibit B ") attached
hereto and incorporated herein by reference(the "LIABILITIES AND OBLIGATIONS");
NOW, THEREFORE, in consideration of the premises and the mutual
covenants set forth herein, the parties hereto agree as follows:
1. Seller, for receipt of good and valuable consideration by Buyer, the
receipt and sufficiency of which are hereby acknowledged, does hereby
sell, assign, transfer and convey unto Buyer all of the Assets.
2. Buyer, for receipt of good and valuable consideration by Buyer, the
receipt and sufficiency of which are hereby acknowledged, does hereby
assume and accept from the Seller the Liabilities and Obligations and
Buyer hereby covenants and agrees to pay, keep and perform all of the
Liabilities and Obligations assigned hereunder. Buyer hereby agrees to
indemnify and hold Seller free and harmless from any Liabilities and
Obligations and from any suits, actions or legal proceedings brought to
enforce or collect the Liabilities and Obligations.
The parties hereto agree that this Bill of Sale, Assignment and
Assumption Agreement shall be governed by and construed in accordance with the
laws of the State of California.
<PAGE> 2
EXECUTED effective as of this 2nd day of October, 1999.
BUYER:
SFFI COMPANY, INC.
By:
-----------------------------
Name:
-----------------------
Title
-----------------------
SELLER:
SIMPLY FRESH FRUIT, INC.
A California corporation
By:
-----------------------------
Soren Bjorn
President and Secretary
2
<PAGE> 3
Exhibit A
LIST OF ASSETS
3
<PAGE> 4
Exhibit B
LIABILITIES AND OBLIGATIONS
4
<PAGE> 1
EXHIBIT 99.4
90 DAY SECURED NOTE
$1,569,001 Dallas, Texas October 2, 1999
FOR VALUE RECEIVED, the undersigned, SFFI Company, Inc., a California
corporation ("MAKER"), promises to pay to the order of The UniMark Group, Inc.,
a Texas corporation ("PAYEE"), whose principal office is located at 124 McMakin
Road, Bartonville, Texas 76226, the principal sum of One Million Five Hundred
Sixty-nine Thousand One Dollars ($1,569,001), payable as provided herein,
without interest.
The principal shall be due and payable by the Maker to the Payee on
December 31, 1999. Principal under this Note, or any portion thereof, may be
prepaid without penalty.
This Note is issued and delivered under and in subject to the terms
and provisions of that certain Asset Purchase Agreement dated of even date
herewith, by and among Maker, Payee, Simply Fresh Fruit, Inc., a California
corporation, Sam Perricone (the "GUARANTOR"), and the Sam Perricone Children's
Trust - 1972 (the "ASSET PURCHASE AGREEMENT"). This Note is secured by a
Security Agreement (the "Security Agreement"), dated of even date herewith,
executed by the undersigned in favor of the holder hereto, and guaranteed by a
Guaranty, dated of even date herewith, executed by the Guarantor (the
"GUARANTY"). Reference is made to the Security Agreement and Guaranty for a
statement of the rights and obligations of the Maker, Payee and Guarantor, a
description of the nature and extent of the security and the rights of the
parties in respect to such security. Any capitalized terms in this Note that
are not otherwise defined herein shall have the meaning as specified in the
Asset Purchase Agreement.
Maker and Guarantor hereby severally (a) waive grace, demand,
presentment for payment, notice of nonpayment, protest, notice of protest,
non-payment or dishonor, notice of intent to accelerate, notice of acceleration
and all other notices (except as explicitly provided herein), filing of suit
and diligence in collecting this Note or enforcing any other security with
respect to same, (b) agree to any substitution, surrender, subordination,
waiver, modification, change, exchange or release of any security or of the
liability of any parties primarily or secondarily liable hereon, (c) agree that
the Payee is not required first to institute suit or exhaust its remedies
hereon against the Maker, any Guarantor or others liable or to become liable
hereon or to enforce its rights against them or any security with respect to
same, and (d) consent to any extension or postponement of time of payment of
this Note and to any other indulgence with respect hereto without notice
thereof to any of them. No failure or delay on the part of the Payee in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof.
If this Note is not paid at maturity, regardless of how such maturity
may be brought about, or is collected or attempted to be collected through the
initiation or prosecution of any suit or through any bankruptcy or other
judicial proceedings, or is placed in the hands of an attorney for collection,
the Maker shall pay, in addition to all other amounts owing hereunder, all
actual expenses of collection, all court costs and reasonable attorney's fees
incurred by the holder hereof.
<PAGE> 2
The following shall constitute Events of Default ("Event(s) of
Default"):
(a) default in the due and punctual payment of the principal
of the Note, when and as such payment shall become due and payable,
whether at maturity or by acceleration or otherwise if such payment is
not made within ten (10) days of written notice mailed by Payee to
Maker; or
(b) default in the performance or observance of any covenant
or agreement of Maker in this Note or the Security Agreement other
than as described in paragraph (a) above and the continuance of such
default for a period of seven (7) days after the Payee has sent Maker
written notice specifying such default and requiring that it be
remedied, provided that no such default shall be deemed to occur if
such default may not be cured within seven (7) days, if within said
period the Maker has commenced and thereafter diligently and
continuously pursues to cure such default, and the default is cured,
in any event, within fourteen (14) days; or
(c) the filing by the Maker of a petition instituting any
state or federal insolvency, bankruptcy, reorganization, arrangement,
composition, or other debtor relief proceeding; the petition of or
application to any tribunal for a receiver or trustee for itself or
for any substantial part of any of its property; or
(d) the sale or transfer of all or substantially all of the
assets of Maker or the transfer or sale of 51 percent of the voting
securities of Maker, provided that Guarantor may transfer his shares
to an entity of whom the beneficial owner shall be Guarantor and/or
Guarantor's children, provided that prior to such transfer such entity
shall execute a guaranty substantially in the same form as the
Guaranty guaranteeing this Note; or
(e) the occurrence of an Event of Default under the Four Year
Note.
If an Event of Default occurs, then and in any such case Payee may
declare the outstanding principal amount of the Note to be due and payable
immediately, upon written notice to the Maker, and, upon any such declaration,
the outstanding principal amount of the Note, together with all costs of
collection, including reasonable attorneys' fees if collected by law or through
an attorney at law, shall immediately become due and payable.
All principal and/or interest hereon that is past due for more than 10
calendar days shall bear interest at a rate equal to the lesser of (i) eighteen
percent (18%) per annum or (ii) the maximum rate permitted by applicable law.
If any payment of principal or interest on this Note shall become due on a
Saturday, Sunday or any other day on which Payee is not open for business, such
payment shall be made on the next succeeding day on which Payee is open for
business; and such extension of time shall in such case be included in
computing interest in connection with such payment.
Notwithstanding anything to the contrary contained herein, no
provisions of this Note shall require the payment or permit the collection of
interest in excess of the maximum rate permitted by applicable law. If any
interest in excess of such maximum rate is herein provided for, or shall be
adjudicated to be so provided, in this Note or otherwise in connection with
this transaction giving rise to the execution hereof, the provisions of this
paragraph shall govern and prevail, and neither Maker nor the sureties,
guarantors, successors or assigns of the Maker shall be obligated to pay the
excess
<PAGE> 3
amount of such interest or any other excess sum paid for the use, forbearance
or detention of sums loaned pursuant hereto. If for any reason interest in
excess of the maximum rate of interest permitted by applicable law shall be
deemed, charged, required or permitted by a court of competent jurisdiction,
any such excess shall be applied as a payment and reduction of the principal of
indebtedness evidenced by this Note; and, if the principal amount hereof has
been paid in full, any remaining excess shall forthwith be paid to Maker.
This note is made and is performable in Bartonville, Denton County,
Texas, and Maker waives the right to be sued hereon elsewhere. This Note shall
be governed by and construed in accordance with the laws of the State of Texas
and the applicable laws of the United States of America.
IN WITNESS WHEREOF, the undersigned has executed this Note as of the
2nd day of October, 1999.
MAKER:
SFFI COMPANY, INC.
------------------------------------
Name:
--------------------
Title:
-------------------
GUARANTOR:
------------------------------------
Sam Perricone
<PAGE> 1
EXHIBIT 99.5
FOUR YEAR SECURED NOTE
$1,100,000 Dallas, Texas October 2, 1999
FOR VALUE RECEIVED, the undersigned, SFFI Company, Inc., a California
corporation ("MAKER"), promises to pay to the order of The UniMark Group, Inc.,
a Texas corporation ("PAYEE"), whose principal office is located at 124 McMakin
Road, Bartonville, Texas 76226, the principal sum of One Million One Hundred
Thousand Dollars ($1,100,000), payable as provided herein, plus accrued
interest on the outstanding principal balance, at a rate of 8% per annum as
herein specified.
The principal plus accrued interest thereon shall be due and payable
by the Maker to the Payee as over four years as follows:
(1) During the first year, in four (4) consecutive, equal
quarterly installments of approximately $80,675 on January 2,
2000, April 2, 2000, July 2, 2000 and October 2, 2000; and
(2) During the second, third and fourth years, in thirty six (36)
equal monthly installments of approximately $26,892) on the
2nd day of each month, beginning on November 2, 2000.
Principal and accrued interest under this Note, or any portion
thereof, may be prepaid without penalty. All payments and prepayments shall be
applied first to accrued and unpaid interest, and the balance of any such
payments or prepayments shall be applied to outstanding principal in the order
of maturity.
This Note is issued and delivered under and in subject to the terms
and provisions of that certain Asset Purchase Agreement dated of even date
herewith, by and among Maker, Payee, Simply Fresh Fruit, Inc., a California
corporation, Sam Perricone (the "GUARANTOR"), and the Sam Perricone Children's
Trust - 1972 (the "ASSET PURCHASE AGREEMENT"). This Note is secured by a
Security Agreement (the "Security Agreement"), dated of even date herewith,
executed by the undersigned in favor of the holder hereto, and guaranteed by a
Guaranty, dated of even date herewith, executed by the Guarantor (the
"GUARANTY"). Reference is made to the Security Agreement and Guaranty for a
statement of the rights and obligations of the Maker, Payee and Guarantor, a
description of the nature and extent of the security and the rights of the
parties in respect to such security. Any capitalized terms in this Note that
are not otherwise defined herein shall have the meaning as specified in the
Asset Purchase Agreement.
Maker and Guarantor hereby severally (a) waive grace, demand,
presentment for payment, notice of nonpayment, protest, notice of protest,
non-payment or dishonor, notice of intent to accelerate, notice of acceleration
and all other notices (except as explicitly provided herein), filing of suit
and diligence in collecting this Note or enforcing any other security with
respect to same, (b) agree to any substitution, surrender, subordination,
waiver, modification, change, exchange or release
<PAGE> 2
of any security or of the liability of any parties primarily or secondarily
liable hereon, (c) agree that the Payee is not required first to institute suit
or exhaust its remedies hereon against the Maker, any Guarantor or others
liable or to become liable hereon or to enforce its rights against them or any
security with respect to same, and (d) consent to any extension or postponement
of time of payment of this Note and to any other indulgence with respect hereto
without notice thereof to any of them. No failure or delay on the part of the
Payee in exercising any right, power or privilege hereunder shall operate as a
waiver thereof.
If this Note is not paid at maturity, regardless of how such maturity
may be brought about, or is collected or attempted to be collected through the
initiation or prosecution of any suit or through any bankruptcy or other
judicial proceedings, or is placed in the hands of an attorney for collection,
the Maker shall pay, in addition to all other amounts owing hereunder, all
actual expenses of collection, all court costs and reasonable attorney's fees
incurred by the holder hereof.
The following shall constitute Events of Default ("Event(s) of
Default"):
(a) default in the due and punctual payment of the principal
of the Note, when and as such payment shall become due and payable,
whether at maturity or by acceleration or otherwise if such payment is
not made within ten (10) days of written notice mailed by Payee to
Maker; or
(b) default in the performance or observance of any covenant
or agreement of Maker in this Note or the Security Agreement other
than as described in paragraph (a) above and the continuance of such
default for a period of seven (7) days after the Payee has sent Maker
written notice specifying such default and requiring that it be
remedied, provided that no such default shall be deemed to occur if
such default may not be cured within seven (7) days, if within said
period the Maker has commenced and thereafter diligently and
continuously pursues to cure such default, and the default is cured,
in any event, within fourteen (14) days; or
(c) the filing by the Maker of a petition instituting any
state or federal insolvency, bankruptcy, reorganization, arrangement,
composition, or other debtor relief proceeding; the petition of or
application to any tribunal for a receiver or trustee for itself or
for any substantial part of any of its property; or
(d) the sale or transfer of all or substantially all of the
assets of Maker or the transfer or sale of 51 percent of the voting
securities of Maker, provided that Guarantor may transfer his shares
to an entity of whom the beneficial owner shall be Guarantor and/or
Guarantor's children, provided that prior to such transfer such entity
shall execute a guaranty substantially in the same form as the
Guaranty guaranteeing this Note; or
(e) the occurrence of an Event of Default under the 90 Day
Note.
If an Event of Default occurs, then and in any such case Payee may
declare the outstanding principal amount of the Note to be due and payable
immediately, upon written notice to the Maker, and, upon any such declaration,
the outstanding principal amount of the Note, together with all costs of
collection, including reasonable attorneys' fees if collected by law or through
an attorney at law, shall immediately become due and payable.
<PAGE> 3
All principal and/or interest hereon that remains past due for more
than 10 calendar days shall bear interest at a rate equal to the lesser of (i)
eighteen percent (18%) per annum or (ii) the maximum rate permitted by
applicable law. If any payment of principal or interest on this Note shall
become due on a Saturday, Sunday or any other day on which Payee is not open
for business, such payment shall be made on the next succeeding day on which
Payee is open for business; and such extension of time shall in such case be
included in computing interest in connection with such payment.
Notwithstanding anything to the contrary contained herein, no
provisions of this Note shall require the payment or permit the collection of
interest in excess of the maximum rate permitted by applicable law. If any
interest in excess of such maximum rate is herein provided for, or shall be
adjudicated to be so provided, in this Note or otherwise in connection with
this transaction giving rise to the execution hereof, the provisions of this
paragraph shall govern and prevail, and neither Maker nor the sureties,
guarantors, successors or assigns of the Maker shall be obligated to pay the
excess amount of such interest or any other excess sum paid for the use,
forbearance or detention of sums loaned pursuant hereto. If for any reason
interest in excess of the maximum rate of interest permitted by applicable law
shall be deemed, charged, required or permitted by a court of competent
jurisdiction, any such excess shall be applied as a payment and reduction of
the principal of indebtedness evidenced by this Note; and, if the principal
amount hereof has been paid in full, any remaining excess shall forthwith be
paid to Maker.
This note is made and is performable in Bartonville, Denton County,
Texas, and Maker waives the right to be sued hereon elsewhere. This Note shall
be governed by and construed in accordance with the laws of the State of Texas
and the applicable laws of the United States of America.
IN WITNESS WHEREOF, the undersigned has executed this Note as of the
2nd day of October, 1999.
MAKER:
SFFI COMPANY, INC.
------------------------------------
Name:
--------------------
Title:
-------------------
GUARANTOR:
------------------------------------
Sam Perricone
<PAGE> 1
EXHIBIT 99.6
SECURITY AGREEMENT
(Assets)
This Security Agreement (the "Security Agreement") is entered into this
18th day of October, 1999, by SFFI Company, Inc., a California corporation, the
address for which is 1995 E. 20th Street, Los Angeles, California ("Debtor"), in
favor of The UniMark Group, Inc., a Texas corporation ("Secured Party"), the
mailing address for which is P.O. Box 229, Bartonville, Texas, 76226.
1.0 TERMS. Terms defined in the Asset Purchase Agreement (the
"Agreement") dated of even date herewith, among Debtor, Secured Party, and
Simply Fresh Fruit, Inc., a California corporation, Sam Perricone and the Sam
Perricone Children's Trust - 1972, when used herein have the same meanings as
provided therefor in the Agreement unless otherwise defined herein (including
Appendix I hereto) or unless the context hereof otherwise requires. Terms not
defined herein (including Appendix I hereto) or in the Agreement which are
defined in the Texas Uniform Commercial Code (the "UCC") have the meanings
specified in the UCC, and the definitions specified in Article 9 of the UCC
control in the case of any conflicting definitions in the UCC. The singular
number includes the plural and vice versa. Captions of Sections do not limit the
terms of such Sections.
2.0 SECURITY.
2.1 Security Interest. To secure the payment and performance
of that certain 90 Day Secured Note dated of even date herewith in the original
principal amount of $1,569,001 (the "90 Day Note") in favor of Secured Party and
that certain Four Year Secured Note dated of even date herewith in the original
principal amount of $1,100,000 (the "Four Year Note") in favor of Secured Party,
and all of the obligations of Debtor, Debtor grants to Secured Party a security
interest in the following described property (the "Collateral") of Debtor,
wherever located, whether now owned or existing or hereafter acquired, arising,
or existing:
(a) all properties, rights, and interests of Debtor
which are at any time in the possession, custody, or control of Debtor or any of
its agents, affiliates, or correspondents, for any purpose, including those
assets set forth in Exhibit A as attached hereto;
(b) all furniture, fixtures, machinery, equipment and
similar goods, together with all attachments, accessions, tools, parts,
accessories, supplies, increases and additions thereto and all replacements or
substitutions thereof;
(c) all rents, payments, monies, and all other rights
arising out of the sale, lease, or other disposition of the Collateral;
(d) all money and other property now or at any time
in the possession or under the control of, or in transit to Secured Party;
(e) all proceeds, products, additions to,
substitutions and replacements for, and accessions of, any and all Collateral
described in this Section 2.1; "proceeds" includes, without
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<PAGE> 2
limitation, (i) all proceeds of any insurance (including any surrender value
therefor, any right to return, or unearned premiums), causes and rights of
action, remedies, privileges, settlements, judicial and arbitration judgments
and awards, indemnities, liens, warranties, or guaranties payable from time to
time with respect to or security for any of the Collateral; (ii) all payments
(in any form) made or due and payable to Debtor from time to time in connection
with any requisition, confiscation, condemnation, seizure, or forfeiture of all
or any part of the Collateral by any governmental authority; (iii) any equipment
provided in substitution for or payment of any Collateral; and (iv) all other
amounts from time to time paid or payable under or in connection with any of the
Collateral; and
(f) all books, records and data relating to the
Collateral, in any form whatsoever, including any form of writing, photograph,
microfilm, microfiche, or electronic media, together with all of Debtor's right,
title and interest in and to all computer software required to create, maintain,
process or otherwise utilize any such books, records or data.
2.2 Debtor to Remain Liable. Debtor shall remain liable under
and shall preserve the liability of all other parties to each agreement
constituting part of the Collateral and shall perform all of its obligations
thereunder. The exercise by Secured Party of any of its rights hereunder shall
not release Debtor from any duties under any agreement. Secured Party has no
obligation or liability with respect to any of the Collateral under any
agreement by reason or arising out of the assignment thereof to Secured Party or
the granting to Secured Party of a security interest therein or the receipt by
Secured Party of any payment relating to any such agreement.
3.0 REPRESENTATIONS. Debtor makes the following representations to
Secured Party:
3.1 Enforceability. Debtor has all requisite authority to
execute, deliver, and perform its duties under, and has duly authorized,
executed, and delivered, this Security Agreement, and this Security Agreement is
enforceable against Debtor in accordance with its terms. This Security Agreement
creates in favor of Secured Party an enforceable security interest, and all
filings, registrations, recordings, and transfers necessary or appropriate to
create, preserve, and perfect the Security Interest have been, or will be,
accomplished and the Security Interests in the Collateral constitute, or upon
such filings will constitute, perfected security interests therein which are
prior in right to all other security interests.
3.2 Accuracy of Information. All information provided by
Debtor herein or pursuant hereto is true, correct, and complete in all material
respects as of the date provided.
3.3 Title to Collateral. None of the Collateral is an
accession to goods other than goods constituting part of the Collateral.
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4.0 COVENANTS. Debtor covenants as follows:
4.1 In General. Debtor will (a) perform fully and promptly all
agreements contained herein and in the Agreement; and (b) at its cost expense,
defend any action which may affect the Security Interest or Debtor's title to
the Collateral.
4.2 Notices. Debtor promptly will notify Secured Party of any
claim, action, or proceeding which could materially and adversely affect the
value of, or Debtor's title to, any of the Collateral, or the effectiveness of
the Security Interest.
4.3 Processing, Sale, Collections, Etc.
(a) Debtor will not waste or destroy any part of the
Collateral nor use any of the Collateral in violation of any statute or
ordinance.
(b) Except as permitted by Section 4.3(c), Debtor
will not sell, lease, assign, license, transfer, or otherwise dispose of or in
any manner alter, modify, manufacture, process, or assemble the Collateral or
any part thereof, other than in the ordinary course of business. If Debtor with
or without the consent of Secured Party disposes of any of the Collateral other
than in the ordinary course of business, Debtor will notify Secured Party of
such disposition.
(c) If upon the occurrence of an Event of Default (as
defined herein), Debtor holds any proceeds of the Collateral, Debtor will hold
same separate and apart from any other property of Debtor and in trust for
Secured Party and shall not commingle the proceeds of Collateral with any of
Debtor's funds or property.
4.4 Further Assurances. Debtor will, at its own expense, take
all action as Secured Party may at any time reasonably request to protect,
assure or enforce Secured Party's interests, rights and remedies created by,
provided in or emanating from this Security Agreement. Debtor will execute and
deliver to Secured Party, in due form for filing or recording (and pay the cost
of filing or recording the same in all public offices deemed necessary or
advisable by Secured Party) such assignments, security agreements, pledge
agreements, consents, waivers, financing statements (and amendments thereof),
and other documents, and do such other acts and things, all as may from time to
time in the opinion of Secured Party be necessary or desirable to establish and
maintain a valid perfected first priority security interest in the Collateral
free of all liens.
4.5 Accessions and Fixtures. Debtor will not permit any of the
Collateral to become an accession to goods other than goods constituting the
Collateral.
5.0 SECURED PARTY'S RIGHTS. Secured Party has the following rights
without regard to the occurrence of an Event of Default:
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5.1 Information. Secured Party may at any time obtain from any
person any information concerning the Collateral, and neither Secured Party nor
the person furnishing such information shall be liable to Debtor in respect
thereof.
5.2 Right of Inspection. At any reasonable time and from time
to time, Secured Party or any of its representatives may inspect the Collateral
and the premises where the Collateral is located.
5.3 Performance by Secured Party. Secured Party may, but is
not obligated to, perform or attempt to perform any covenant, duty, or agreement
of Debtor contained herein. If any material part of the Collateral is or becomes
the subject of any proceeding and Debtor fails to defend fully such proceeding
and to protect Debtor's and Secured Party's rights in such Collateral in good
faith, Secured Party may, at its option but at Debtor's cost, elect to defend
and control the defense of such litigation or other proceeding, and may (a)
select and retain counsel, (b) determine whether settlement shall be offered or
accepted, and (c) determine and negotiate all settlement terms.
5.4 Preservation. Secured Party's duty with respect to any
Collateral in the possession of Secured Party is solely to use reasonable care
in the custody and preservation of the Collateral. Secured Party shall be deemed
to have exercised reasonable care in the custody and preservation of any
Collateral in its possession if it takes such action for that purpose as Debtor
may request in writing, but failure by Secured Party to comply with any such
request shall not of itself be deemed a failure to exercise such reasonable
care. Secured Party is not responsible for any shortage, discrepancy, damage,
loss, or destruction in or to the Collateral unless caused by the gross
negligence or willful misconduct of Secured Party nor, in any event, any
depreciation in the value of the Collateral. Secured Party is not required to
fulfill any of the obligations of Debtor with respect to any of the Collateral,
or to make any payment, or to make any inquiry as to the nature or sufficiency
of any payment received by it or the sufficiency of any performance of any party
under any of the Collateral, or to present or file any claim, or to take any
action to enforce any performance or the payment of any amounts which have been
assigned to it, in which it has been granted a security interest, or to which it
may be entitled at any time. Secured Party has no duty to maintain in force, to
prevent lapse or impairment of, or to exercise any rights with respect to any of
the Collateral or any insurance thereon, or to exercise any rights, options or
privileges respecting any of the Collateral or to take any steps necessary to
preserve rights against prior or other parties or to enforce collection of the
Collateral or any part thereof by legal proceedings or otherwise. The duties of
Secured Party are to account to Debtor for Collateral actually received by
Secured Party and to receive collections, remittances and payments on such
Collateral as and when made and received by Secured Party and hold same as
Collateral.
6.0 DEFAULT. Debtor is in default under this Security Agreement upon
the happening of any of the following events or conditions (each an "Event of
Default"): (a) the occurrence of an Event of Default under the 90 Day Note or
the Four Year Note; (b) any default in the timely performance by Debtor of any
covenant or agreement contained in or secured by this Security Agreement; or
(c) any guaranty or surety executed in connection with the Agreement is
terminated or revoked.
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7.0 REMEDIES. Upon the occurrence of an Event of Default, and at any
time thereafter, if any Event of Default is continuing, Secured Party has the
following rights and remedies to the full extent permitted by applicable law:
7.1 Acceleration.
(a) Upon the occurrence of an Event of Default and without the
necessity of any action, notice, or demand by the Secured Party, the 90 Day Note
and/or the Four Year Note, as the case may be, shall automatically terminate and
the unpaid principal and accrued interest shall be immediately due and payable.
Upon the occurrence of any Event of Default the Secured Party by written notice
to the Debtor may do any one or more of the following: (i) terminate the 90 Day
Note and/or the Four Year Note, as the case may be; (ii) declare the unpaid
principal and accrued interest constituting part of the 90 Day Note and/or the
Four Year Note, as the case may be, immediately due and payable; (iii) reduce
any claim to judgment; or (iv) enforce any of the rights of the Secured Party
under the Agreement or otherwise provided by applicable law or agreement.
(b) Demand, presentment for payment, protest and notice of
non-payment, or protest or dishonor, and all demands and notices of any action
taken by the Secured Party under this Security Agreement and the Agreement and
notice of intent to accelerate, and notice of acceleration of the 90 Day Note
and/or the Four Year Note, as the case may be, and any part thereof are hereby
expressly waived.
7.2 Removal and Possession. Secured Party may require Debtor
to assemble the Collateral and make it available to Secured Party at any place
designated by Secured Party which is reasonably convenient to both parties.
Secured Party is entitled to immediate possession of all books and records
pertaining to any of the Collateral. Secured Party may leave the Collateral on
Debtor's or any other party's premises but under Secured Party's control or may
remove the Collateral, including such books and records, from the premises of
Debtor or from wherever located, and, for purposes of removal and possession,
Secured Party or its representatives may enter any premises of Debtor without
legal process and thereafter hold or store same, and Debtor waives and releases
Secured Party from all claims in connection therewith or arising therefrom, and
Secured Party may maintain at Debtor's expense on Debtor's premises a custodian
who may exercise Secured Party's rights to protect the Collateral.
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7.3 Sale of Collateral.
(a) Secured Party may sell the Collateral, in one or
more sales or parcels, at such price as Secured Party deems adequate and for
cash or on credit or for future delivery, without assumption of any credit risk,
any portion of the Collateral, at any broker's board or at public or private
sale, without demand of performance or notice of intention to sell. The
purchaser of any Collateral sold shall thereafter hold the same free from any
claim or right, including any equity of redemption, of Debtor. Secured Party may
make any such sale subject to any limitation or restriction, including but not
limited to a limitation in the method of offering the Collateral or in the
number or identity of prospective bidders, which Secured Party may believe to be
necessary to comply with any requirement of applicable law or in order to obtain
any required approval of the purchase or the purchaser by any governmental
authority or officer. No such limitation or restriction shall cause such sale
not to be considered a commercially reasonable sale, nor shall Secured Party be
liable or accountable to Debtor, nor shall the 90 Day Note and/or the Four Year
Note, as the case may be, be subject to any reduction, by reason of the fact
that the proceeds of a sale subject to any such limitation or restriction are
less than otherwise might have been obtained. Without notice to or consent by
Debtor, Secured Party may exercise all rights as the insured, beneficiary, or
owner of any insurance policy and may surrender same and receive the surrender
value thereof or sell same pursuant to the terms thereof.
(b) Unless the Collateral is perishable or threatens
to decline speedily in value or is of a type customarily sold on a recognized
market, Secured Party will give Debtor commercially reasonable notice of the
time and place of any public sale thereof or of the time after which any private
sale or any other intended disposition thereof is to be made. The requirements
of commercially reasonable notice are met if such notice is given in accordance
with Section 9.1 at least five (5) days before the time of the sale or
disposition. Expenses of retaking, holding, preparing for sale, selling, leasing
or the like shall include Secured Party's attorneys' fees and legal expenses,
and all such expenses shall be borne by Debtor. Public or private sales, for
cash or on credit, to a wholesaler or retailer or investor, or use of Collateral
of the types subject to this Security Agreement, or public auction, are
commercially reasonable since differences in the sales prices generally realized
in the different kinds of sales are ordinarily offset by the differences in the
costs and the credit risks of such sales.
7.4 Retention of Collateral. Secured Party may retain the
Collateral in satisfaction of the 90 Day Note and/or the Four Year Note, as the
case may be, whenever the circumstances are such that Secured Party is entitled
to do so under applicable law.
7.5 Other Rights. Secured Party may exercise all other rights
it may have under this Security Agreement or any of the other agreements between
Debtor and Secured Party, or under applicable law. Secured Party is entitled to
the appointment of a receiver to take possession of all or any portion of the
Collateral and to exercise any such powers as the court confers upon the
receiver.
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7.6 Exercise of Rights. Secured Party may exercise its rights
with respect to the Collateral in such manner and in such order as Secured Party
determines, and Secured Party is not required to sell or license any part of the
Collateral or to collect, or attempt to collect, any sum payable by reason of
the Collateral before Secured Party may assert liability and collect the 90 Day
Note and/or the Four Year Note, as the case may be, nor is Secured Party
obligated to attempt to collect the 90 Day Note and/or the Four Year Note, as
the case may be, before selling or licensing any part of the Collateral. Secured
Party may, without foreclosing thereon, license, collect and otherwise enforce
all amounts owing on the Collateral or any proceeds or otherwise enforce all of
Debtor's or Secured Party's rights in any of the Collateral. Neither Debtor nor
any other party liable in respect of the 90 Day Note and/or the Four Year Note,
as the case may be, may direct the application of any proceeds received by
Secured Party, and Secured Party may apply any such proceeds as herein provided.
7.7 Proceeds of Sale. All proceeds of sale or other
disposition or collection of the Collateral (whether before or after default),
at Secured Party's discretion and to the extent permitted by applicable law,
shall be applied first to all costs and expenses of sale or other disposition or
collection, including reasonable attorneys' fees, and reasonable expenses for
holding, preparing for sale, and selling the property; second, in whatever order
Secured Party elects, to payment of the 90 Day Note and/or the Four Year Note,
as the case may be; third, to the settling of any other liens or claims against
the Collateral. If the 90 Day Note and/or the Four Year Note, as the case may
be, is fully satisfied and there are no other claims to any surplus, Debtor is
entitled to any surplus of the Collateral or the proceeds received therefrom,
but Debtor remains liable for any deficiency.
7.8 Non-judicial Remedies. Secured Party may enforce its
rights hereunder without prior judicial process or judicial hearing, and to the
extent permitted by law, Debtor expressly waives any and all legal rights which
might otherwise require Secured Party to enforce its rights by judicial process.
Debtor recognizes and concedes that such non-judicial remedies are consistent
with the usage of trade, are responsive to commercial necessity, and are the
result of a bargain at arm's length.
7.9 Payments on Account of Debtor. To the extent that Secured
Party has advanced or will advance funds to or for the account of Debtor to
enable Debtor to purchase or otherwise acquire specific types or items of
Collateral, Secured Party may at its option pay such funds (i) directly to the
person from whom Debtor will make such purchase or acquire such rights or (ii)
to Debtor, in which case Debtor covenants promptly to pay the same to such
person and forthwith furnish to Secured Party, on request, evidence satisfactory
to Secured Party that such payment has been made from the funds so provided by
Secured Party for such payment.
7.10 Attorney-In-Fact. Debtor hereby appoints Secured Party as
Debtor's attorney-in-fact (without requiring it to act as such) to do any act
which Debtor is obligated by this Security Agreement to do, and (a) to receive
cash and to receive and to endorse the name of Debtor on all checks, drafts,
money orders, or other instruments for the payment of monies that are payable to
Debtor and constitute collections of the Collateral, (b) to execute in the name
of Debtor any schedules, assignments, instruments, documents, financing
statements, amendments of financing
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statements, continuation statements, termination statements, statements of
assignment, applications for registration, or like papers to perfect, preserve,
or release the Security Interest, (c) to exercise all rights of Debtor in the
Collateral, (d) to make extension agreements with respect to Collateral, (e) to
release any party liable on or any security for the Collateral and to give
receipts and acquittances and compromise disputes in connection therewith, (f)
to give notice of Secured Party's rights under this Security Agreement, (g) to
enter onto Debtor's premises to inspect the Collateral, (h) to receive, open,
and read mail addressed to Debtor, (i) to verify facts concerning the Collateral
by inquiry of obligors thereon, or otherwise, in its own name or a fictitious
name, (j) to prepare, adjust, execute, deliver, and receive payment under
insurance claims and to collect and receive payment of and endorse any
instrument in payment of loss or return premiums on any other insurance refund
or return and to apply such amounts as received by Secured Party, at Secured
Party's sole option, toward repayment of the 90 Day Note and/or the Four Year
Note, as the case may be, or replacement of the Collateral, and (k) to do all
acts and things and execute all documents in the name of Debtor or otherwise,
reasonably deemed necessary, proper, or convenient by Secured Party in
connection with the preservation, perfection, and enforcement of its rights
hereunder. The powers and authorities herein conferred upon Secured Party may be
exercised by Secured Party through any person who, at the time of the execution
of the particular instrument, is an officer of Secured Party. The power of
attorney herein conferred is granted for valuable consideration, is coupled with
an interest, and is irrevocable so long as any of the 90 Day Note and/or the
Four Year Note, as the case may be, remains unpaid. All persons dealing with
Secured Party, or any substitute, shall be fully protected in treating the
powers and authorities conferred by this paragraph as continuing in full force
and effect until advised by Secured Party that the 90 Day Note and/or the Four
Year Note, as the case may be, is finally paid.
8.0 RIGHT OF SETOFF. In addition to any rights now or hereafter granted
under applicable law, upon the occurrence of an Event of Default, Secured Party
is authorized at any time and from time to time, without notice to Debtor or to
any other person, any such notice being hereby expressly waived, to set off and
to appropriate and to apply any and all deposits (general or special) and any
other indebtedness at any time held or owing by Secured Party to or for the
credit or the account of Debtor against and on account of the liabilities of
Debtor to Secured Party under this Security Agreement or any other agreement
between Debtor and Secured Party, including, without limiting the generality of
the foregoing, all claims of any nature or description, whether or not Secured
Party has made any demand hereunder and although said liabilities or claims, or
any of them, are contingent or unmatured and whether or not other security held
by Secured Party is considered by Secured Party to be adequate.
9.0 MISCELLANEOUS.
9.1 Notices. All notices, requests, demands, or other
communications to or upon the parties hereto shall be deemed to have been given
or made if given or made by certified mail to the last known address for each
party
9.2 Assignment of Collateral. Secured Party may assign all or
any part of the 90 Day Note and/or the Four Year Note, as the case may be, and
may assign, transfer, or deliver to
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any transferee of any of the 90 Day Note and/or the Four Year Note, as the case
may be, any or all of the rights of Secured Party in the Collateral, and
thereafter Secured Party shall be fully discharged from all responsibility with
respect to the Collateral so assigned, transferred, or delivered. Such
transferee shall be vested with all the powers, rights obligations and
restrictions of Secured Party hereunder with respect to such Collateral, but
Secured Party shall retain all rights and powers hereby given with respect to
any of the Collateral not so assigned or transferred.
9.3 Alteration, Etc. No waiver, amendment, modification, or
alteration of any provision of this Security Agreement (individually, an
"Alteration"), nor consent to any departure by Debtor from the terms hereof, or
from the terms of any other document, is effective unless such is in writing and
signed by Secured Party, and any such Alteration is effective only for the
specific purpose and in the specific instance given. No waiver by Secured Party
of any Event of Default shall be deemed to be a waiver of any other or
subsequent Event of Default nor shall such waiver be deemed to be a continuing
waiver. No delay of Secured Party in exercising any right shall be deemed to be
a waiver thereof, nor shall one exercise of any right affect or impair the
exercise of any other right. Time is of the essence in Debtor's performance
hereof.
9.4 Parties Bound. The rights of Secured Party hereunder inure
to the benefit of its successors and assigns. The terms of this Security
Agreement bind the successors and assigns of the parties hereto, but Debtor may
not assign any of its rights or obligations hereunder without the prior written
consent of Secured Party. All representations, warranties, and covenants of
Debtor survive the execution and delivery hereof. All indemnities by Debtor in
favor of Secured Party survive payment of the 90 Day Note and/or the Four Year
Note, as the case may be, and termination or release of this Security Agreement.
This Security Agreement constitutes a continuing agreement, and applies to all
future transactions, whether or not contemplated at the date hereof, and all
renewals, modifications, and extensions thereof.
9.5 Remedies Cumulative, Etc. All rights and remedies of
Secured Party hereunder are cumulative of each other and of every other right or
remedy which Secured Party may otherwise have at law or in equity or under any
other document for the enforcement of the Security Interest or the enforcement
of any duties of Debtor or any other party liable in respect of the 90 Day Note
and/or the Four Year Note, as the case may be. The exercise by Secured Party of
one or more rights or remedies shall not prejudice or impair the concurrent or
subsequent exercise of other rights or remedies.
9.6 Copy as Financing Statement. A carbon, photographic, or
other reproduction of this Security Agreement or a financing statement
describing the Collateral is sufficient as a financing statement to the full
extent permitted by applicable law.
9.7 Severability. If any portion of the 90 Day Note and/or the
Four Year Note, as the case may be, or if any provision of this Security
Agreement is held to be invalid or unenforceable for any reason, such holding
shall not affect any other portion of the 90 Day Note and/or the Four Year Note,
as the case may be, or any other provision contained herein or contained
SECURITY AGREEMENT (Assets) - Page 9
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in any other agreement between Debtor and Secured Party, and the same shall
continue in full force and effect according to their terms.
9.8 Applicable Law. This Security Agreement and each issue
related hereto, including the validity and enforceability hereof, shall be
governed and construed according to and determined under the laws of the State
of Texas and is performable in Dallas, Texas.
9.9 Entire Agreement. THIS SECURITY AGREEMENT TOGETHER WITH
THE AGREEMENT AND THE 90 DAY NOTE AND/OR THE FOUR YEAR NOTE, AS THE CASE MAY BE,
EMBODIES THE ENTIRE AGREEMENT BETWEEN THE PARTIES WITH RESPECT TO THE SUBJECT
MATTER HEREOF AND SUPERSEDES ALL PRIOR AGREEMENTS AND UNDERSTANDINGS RELATING TO
THE SUBJECT MATTER HEREOF.
9.10 Usury Savings Clause. The parties hereto intend to
conform strictly to the usury laws applicable to Secured Party. Accordingly, if
the transactions contemplated hereby would be usurious under applicable state or
federal law, then, notwithstanding anything to the contrary in this Security
Agreement or in any other agreement entered into in connection with or as
security for the 90 Day Note and/or the Four Year Note, as the case may be, it
is agreed as follows: (a) the aggregate of all consideration which constitutes
interest under law applicable to Secured Party that is contracted for, taken,
reserved, charged or received under the 90 Day Note and/or the Four Year Note,
as the case may be, this Security Agreement or under any of such other
agreements or otherwise in connection with the 90 Day Note and/or the Four Year
Note, as the case may be, shall under no circumstances exceed the maximum amount
allowed by such applicable law, and any excess shall be credited by Secured
Party on the principal amount of the 90 Day Note and/or the Four Year Note, as
the case may be, (or, to the extent that the principal amount of the 90 Day Note
and/or the Four Year Note, as the case may be, has been or would thereby be paid
in full, refunded by Secured Party to Debtor); and (b) if the maturity of the 90
Day Note and/or the Four Year Note, as the case may be, is accelerated by reason
of an election of Secured Party resulting from any Event of Default under this
Security Agreement or otherwise, or in the event of any required or permitted
prepayment, then such consideration that constitutes interest under law
applicable to Secured Party may never include more than the maximum amount
allowed by such applicable law, and excess interest, if any, provided for in
this Security Agreement or otherwise shall be canceled automatically as of the
date of such acceleration or prepayment and, if theretofore paid, shall be
credited by Secured Party on the principal amount of the 90 Day Note and/or the
Four Year Note, as the case may be (or, to the extent that the principal amount
of the 90 Day Note and/or the Four Year Note, as the case may be, has been or
would thereby be paid in full, refunded by Secured Party to Debtor). To the
extent that Article 5069-1.04 of the Texas Revised Civil Statutes is relevant to
Secured Party for the purpose of determining the highest lawful rate of interest
allowed from time to time by applicable law, Secured Party hereby elects to
determine the applicable rate ceiling under such Article by the indicated
(weekly) rate ceiling from time to time in effect, subject to Secured Party's
right subsequently to change such method in accordance with applicable law.
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9.11 Reinstatement. If any payment received by Secured Party
is or must be rescinded or returned, the 90 Day Note and/or the Four Year Note,
as the case may be, shall, to the extent that such payment is or must be
rescinded or returned, be deemed to have continued in existence, notwithstanding
such payment, and the Security Interest shall continue to be effective or be
reinstated.
9.12 Conflicts. If any term hereof conflicts with any
provision of the Agreement, the terms of the Agreement shall control. If any
item of Collateral hereunder also constitutes Collateral granted to Secured
Party under the Agreement executed by Debtor, in the event of any conflict
between the provisions under this Security Agreement and those under such
Agreement, the provision or provisions selected by Secured Party shall control
with respect to such Collateral.
9.13 Security Interest Absolute. All rights of Secured Party
and the Security Interest, and all obligations of Debtor hereunder, are absolute
and unconditional in all respects and shall not be released, diminished,
impaired, or affected for any reason, including, without limitation, the
occurrence of any one or more of the following events:
(a) the acceptance of any other security or assurance
for any or all of the 90 Day Note and/or the Four Year Note, as the case may be;
(b) the invalidity or unenforceability of any
provision hereof or of the Agreement;
(c) any change in the time, manner, place of payment
or other term of any of the 90 Day Note and/or the Four Year Note, as the case
may be, or any other amendment or waiver of or any consent to any departure from
the terms hereof or of the Agreement;
(d) any exchange, release, subordination, surrender,
loss, or non- perfection of any other collateral at any time existing in
connection with any or all of the 90 Day Note and/or the Four Year Note, as the
case may be, or any release or amendment or waiver of or consent to departure
from any guaranty, or other security, for all or any of the 90 Day Note and/or
the Four Year Note, as the case may be;
(e) any neglect, delay, omission, failure, or refusal
of Secured Party to take or prosecute any action in connection with this
Security Agreement or the Agreement;
(f) the insolvency, bankruptcy, or lack of power of
any party obligated with respect to the 90 Day Note and/or the Four Year Note,
as the case may be; or
(g) any other circumstance which might otherwise
constitute a defense available to a discharge of Debtor in respect of the 90 Day
Note and/or the Four Year Note, as the case may be, or in respect of this
Security Agreement.
SECURITY AGREEMENT (Assets) - Page 11
<PAGE> 12
EXECUTED as of the day, month and year first above written.
DEBTOR: SFFI COMPANY, INC.,
a California corporation
By:
--------------------------------------
Name:
-----------------------------
Title:
----------------------------
SECURED PARTY: THE UNIMARK GROUP, INC.,
a Texas corporation
By:
--------------------------------------
Soren Bjorn
Chief Executive Officer, President
and Secretary
SECURITY AGREEMENT (Assets) - Page 12
<PAGE> 13
APPENDIX I
"COLLATERAL" has the meaning specified in Section 2.1.
"DOCUMENTS" means all of Debtor's documents.
"SECURITY AGREEMENT" means this Security Agreement and all amendment
hereof or supplements hereto.
"SECURITY INTEREST" means the security interest granted by Debtor to
Secured Party under this Security Agreement.
APPENDIX I - Page 1
<PAGE> 14
EXHIBIT A
<PAGE> 1
EXHIBIT 99.7
GUARANTY
Effective as of October 2, 1999
WHEREAS, Sam Perricone, a resident of Orange County, California
("Guarantor") desires that The UniMark Group, Inc., a Texas corporation
("UniMark") enter into that certain Asset Purchase Agreement (the "Asset
Purchase Agreement") by and among SFFI Company, Inc., a California corporation
("Debtor"), Guarantor, the Sam Perricone Children's Trust - 1972, UniMark and
Simply Fresh Fruit, Inc., a California corporation; and
WHEREAS, Guarantor deems it to be in its direct pecuniary interest that
Debtor be able to enter into the Asset Purchase Agreement; and
WHEREAS, Guarantor understands that UniMark is willing to enter into
the Asset Purchase Agreement only upon certain terms and conditions, one of
which is that Guarantor guarantees the obligations, covenants, representations,
warranties and promises of Debtor contained in :
(a) the 90 Day Secured Note attached hereto as Exhibit A (the "90
Day Note");
(b) the Four Year Secured Note attached hereto as Exhibit B (the
"Four Year Note")(the 90 Day Note and the Four Year Note are
collectively referred to herein as the "Notes"); and
(d) that certain Security Agreement dated of even date herewith by
and among Debtor and UniMark, attached hereto as Exhibit C.
The Notes and the Security Agreement are collectively referred to herein as the
"Loan Documents."
WHEREAS, Guarantor understands that this Guaranty is being executed and
delivered in consideration of the financial accommodations evidenced by the Loan
Documents;
NOW THEREFORE, the undersigned, hereby agrees as follows:
1. For the valuable considerations set forth above and intending to be
legally bound hereby, the undersigned hereby unconditionally and absolutely
guarantees to UniMark the faithful and prompt performance by Debtor of all
Debtor's obligations, covenants, representations, warranties and promises
contained in the Loan Documents.
2. In giving this Guaranty, the undersigned Guarantor here by binds and
obligates himself with said Debtor for the payment of the Notes, precisely as if
the same had been contracted and were due or owing by Guarantor, hereby agreeing
to, and binding himself by all the terms and conditions in any agreements to be
signed by Debtor making Debtor a party thereto; and waiving all notice and pleas
of discussion and division, Guarantor agrees to pay to UniMark, its transferees
or assigns, the full amount of said indebtedness, together with interest, fees
and charges, as set forth above, becom ing subrogated in the event (and only in
the event) of payment in full by Guarantor, to the claim of
<PAGE> 2
UniMark. Guarantor further declares that this continuing guaranty is absolute
and complete, and that notice of acceptance, thereof by UniMark, are therefore
unnecessary and they are hereby expressly waived. Guarantor further represents
and warrants to UniMark that his personal net worth is in excess of the
aggregate original principal amounts of the Notes.
3. Enforcement of UniMark's rights under the Security Agreement and any
other security document against Debtor or any other party shall not impair the
right of UniMark to enforce this Guaranty, the undersigned expressly agrees that
any such action by UniMark, including release of any collateral, shall not
operate as a release of Guarantor's liability under this Guaranty.
4. Whenever UniMark shall credit any payment to any debt, whatever the
source or form of payment, that credit shall be conditional as to the Guarantor
unless and until the payment shall be final and valid. Without limiting the
generality of the foregoing, Guarantor agrees that if any check or other
instrument so applied shall be dishonored by the drawer or any party there to,
or if the proceeds of security so applied shall thereafter be recovered by any
trustee in bankruptcy, then Guarantor shall remain liable therefor even if
UniMark may no longer have in its possession any evidence of the debt to which
the payment in question was applied. Guarantor further agrees that, to the
extent that Debtor makes a payment or payments to UniMark or UniMark received
any proceeds of collateral, which payment or payments or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
and/or required to be repaid to Debtor, its trustee, receiver or any other
party, including with limitation, Guarantor, under any bankruptcy law, state or
federal law, common law or equitable cause, then to the extent of such payment
or repayment, the obligation or part thereof which has been paid, reduced or
satisfied by such amount shall be reinstated and continued in full force and
effect as of the date such initial payment, reduction or satisfaction occurred.
5. UniMark may renew, extend, modify, change or waive the time of
payment and/or the manner, terms or place of payment, and any part of any
obligations referenced in this Guaranty without affecting the Guarantor's
liability under this Guaranty.
6. The undertakings and obligations of the undersigned shall be binding
upon the undersigned's heirs and legal representatives, provided that Guarantor
may not assign Guarantor's rights or obligations hereunder without the prior
written consent of UniMark. This Guaranty shall inure to the benefit of UniMark,
its successors and assigns.
7. This Guaranty shall be construed and enforced under the laws of the
State of Texas.
8. It is understood that UniMark may seek similar guarantees from other
persons or corporations. The existence of other guarantees relating to the
performance of Debtor pursuant to the Loan Documents shall in no way relieve
Guarantor of Guarantor's obligations hereunder, and UniMark may enforce this
Guaranty against Guarantor without any liability for foregoing similar
enforcement against other guarantors, if any.
2
<PAGE> 3
IN WITNESS WHEREOF, this Guaranty has been executed by the undersigned
to be effective as of the date first above written.
GUARANTOR:
------------------------------
Sam Perricone
ATTEST:
- -------------------------
Name:
---------------
3
<PAGE> 4
EXHIBIT A
<PAGE> 5
EXHIBIT B
<PAGE> 6
EXHIBIT C
<PAGE> 1
EXHIBIT 99.8
NON-COMPETITION AGREEMENT
THIS AGREEMENT, dated as of October ____, 1999, between The UniMark
Group, Inc. ("UNIMARK"), Simply Fresh Fruit, Inc. ("SIMPLY FRESH") and SFFI
Company, Inc., a California corporation (the "BUYER").
W I T N E S S E T H:
WHEREAS, UniMark has sold substantially all of the assets of Simply
Fresh to the Buyer, pursuant to that certain Asset Purchase Agreement dated
effective as of October 2, 1999 (the "ASSET PURCHASE AGREEMENT") by and among
Buyer, Sam Perricone, the Sam Perricone Children's Trust - 1972, UniMark and
Simply Fresh;
WHEREAS, pursuant to the terms of the Asset Purchase Agreement,
UniMark, Simply Fresh and Buyer have agreed to enter into this Agreement;
NOW, THEREFORE, in consideration of the agreements herein contained,
the parties hereto agree as follows:
1. Covenant Not to Compete. UniMark acknowledges and agrees that
for four (4) years from the effective date hereof (the
"TERM"), UniMark and Simply Fresh will not engage in a
Restricted Activity in the United States without the prior
written consent of Buyer. For the purposes of this Agreement,
a "RESTRICTED ACTIVITY" shall mean either:
(a) the marketing and sale of "Fresh-cut Fruit." For
purposes of this Agreement "Fresh-cut Fruit" shall
mean fruit that (i) has been cut and (ii) has not
been processed, treated or packaged in any manner
that extends the natural shelf life, appearance or
taste of the freshly cut fruit; and
(b) the marketing and sale of fruit packed in "pails" for
exclusive sale to "food service" customers.
2. Customer Standstill. For a period of one year from the
effective date of this Agreement, UniMark agrees to refrain
from soliciting business from any existing customers of Simply
Fresh, and likewise, Buyer agrees to refrain from soliciting
business from any existing customers of UniMark or its
subsidiaries.
3. Termination. Notwithstanding anything to the contrary herein,
this Agreement shall be null and void and shall have no
further force and effect with respect to the applicable
Restricted Activity, if:
(a) any person or entity (an "ACQUIRING PERSON") acquires,
directly or indirectly, a beneficial ownership position of 51%
of the voting securities of UniMark or all or substantially
all of the assets of UniMark (a "SALE TRANSACTION") and such
Acquiring
<PAGE> 2
Person is engaged, directly or indirectly, in a Restricted
Activity at the time of such Sale Transaction; or
(b) an Event of Default under either the 90 Day Note (as defined
in the Asset Purchase Agreement) or the Four Year Note (as
defined in the Asset Purchase Agreement) occurs.
4. General.
(a) It is the desire and intent of the parties that the provisions
of this Agreement shall be enforced to the fullest extent
permissible under the laws and public policies applied in each
jurisdiction in which enforcement is sought. If any particular
provisions or portion of this Agreement shall be adjudicated
to be invalid or unenforceable, this Agreement shall be deemed
amended to delete therefrom such provision or portion
adjudicated to be invalid or unenforceable, such amendment to
apply only with respect to the operation of this Agreement in
the particular jurisdiction in which such adjudication is
made.
(b) This Agreement is entered into under and in subject to the
terms and provisions of the Asset Purchase Agreement. The
obligations of the parties hereto are subject to their
obligations under the Asset Purchase Agreement.
(c) This Agreement shall be construed in accordance with the laws
of the State of California. The parties hereto agree that any
dispute pertaining to this Agreement and the transactions
contemplated hereby must be submitted for binding arbitration
in Los Angeles, California, to the exclusion of courts of law,
in accordance with commercial arbitration rules in force at
the time of this Agreement.
IN WITNESS WHEREOF, each of the undersigned has by its appropriate
officer signed this Agreement on and as of the date first above written.
THE UNIMARK GROUP, INC.,
A Texas corporation
By:
-----------------------------------
Soren Bjorn
President, Chief Executive Officer
and Secretary
2
<PAGE> 3
SIMPLY FRESH FRUIT, INC.,
A California corporation
By:
-----------------------------------
Soren Bjorn
President
SFFI COMPANY, INC.,
A California corporation
By:
-----------------------------------
Name:
-----------------------------
Title:
----------------------------
3
