Exhibit 99.11
FIRST AMENDMENT TO
SECURITIES PURCHASE AGREEMENT
THIS FIRST AMENDMENT TO SECURITIES PURCHASE AGREEMENT is dated as of
the 4/th/ day of April, 2003 (this "Amendment"), by and among OVERHILL FARMS,
INC., a Nevada corporation (the "Company"), the entities from time to time
parties thereto as Guarantors, and XXXXXX XXXXXXXXX CAPITAL PARTNERS II, L.P., a
California limited partnership (the "Purchaser").
R E C I T A L S
A. The Company, Overhill Ventures, as a Guarantor, and the Purchaser
are parties to that certain Amended and Restated Securities Purchase Agreement
dated as of October 29, 2002 (as amended from time to time, the "Securities
Purchase Agreement"), pursuant to which, among other things, on and as of the
Effective Date, (i) the parties amended and restated the Original Securities
Purchase Agreement, the Original Note, the Original Warrant and certain other
Original Investment Documents and (ii) the Purchaser consented to the Spin-Off
Related Matters, all on the terms and subject to the conditions set forth in the
Securities Purchase Agreement and the other Investment Documents. Unless
otherwise indicated, capitalized terms used and not otherwise defined herein
have the meanings ascribed to them in the Securities Purchase Agreement.
B. The Events of Default described in Exhibit A hereto
(collectively, the "Specified Events of Default") have occurred and are
continuing. The Company has requested that the Purchaser waive the Specified
Events of Default.
C. In addition, the Company has requested that the Purchaser provide
additional capital to the Company in the amount of $3,000,000 to assist it to
meet its short-term payment obligations. In this regard, the Company desires to
issue and sell to the Purchaser the Bridge Note (as defined below) and, to
induce the Purchaser to purchase the Bridge Note, the April 2003 Shares (as
defined below). The Purchaser is willing to purchase the Bridge Securities (as
defined below) from the Company, but only on the terms and subject to the
conditions set forth herein.
A G R E E M E N T
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants, conditions and provisions contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
1. Limited Waiver of Specified Events of Default. Effective on and
as of the First Amendment Effective Date (as defined below), at the request of
the Company, LLCP waives the Specified Events of Default pursuant to Section
11.5 of the Securities Purchase Agreement. The waiver provided for in this
Section 1 shall be limited solely to the Specified Events of Default and shall
not extend to any other Default or Event of Default,
whether past, present or future, shall not impair any right, power or remedy of
the Purchaser which may arise as a result of such other Default or Event of
Default and shall not give rise to any obligation whatsoever on the part of the
Purchaser to grant any waivers in the future.
2. Purchase and Sale of Bridge Securities.
(a) Authorization. The Company has authorized and approved the
issuance, sale and delivery to the Purchaser of (i) a Secured Senior
Subordinated Bridge Note in the principal amount of $3,000,000, in substantially
the form of Exhibit B attached hereto (the "Bridge Note") and (ii) 2,466,759
shares of Common Stock (the "April 2003 Shares" and, together with the Bridge
Note, the "Bridge Securities").
(b) Purchase and Sale. Subject to the terms and conditions
contained herein, and in reliance upon the representations, warranties,
covenants and agreements contained herein, (i) on the First Amendment Effective
Date, the Company shall issue, sell and deliver to the Purchaser, and the
Purchaser shall purchase from the Company, the Bridge Note, and (ii) on the
Share Issuance Date (as defined below), the Company shall issue, sell and
deliver to the Purchaser, and the Purchaser shall purchase from the Company, the
April 2003 Shares. The purchase price to be paid by the Purchaser for the Bridge
Note shall be $3,000,000 (the "Bridge Note Purchase Price") and the purchase
price to be paid by the Purchaser for the April 2003 Shares shall be $24,667.59
(the "April 2003 Share Purchase Price" and, together with the Bridge Note
Purchase Price, the "Bridge Securities Purchase Price"), all payable in
accordance with Section 2(c). The Company and the Purchaser agree that, for
purposes of Section 1271 et seq. of the Code, the original issue price of the
Bridge Note will be $1,347,271.47 and the original issue price of the April 2003
Shares will be $1,652,728.53, and that this agreement is intended to constitute
an agreement as to the issue prices of the Bridge Securities for all Tax
purposes.
(c) Closings. The closing of the issuance, sale and delivery of
the Bridge Note (the "Bridge Note Closing") shall take place at the offices of
Irell & Xxxxxxx LLP, 0000 Xxxxxx xx xxx Xxxxx, Xxxxx 000, Xxx Xxxxxxx,
Xxxxxxxxxx 00000, at 10:00 a.m. (Los Angeles time), on the First Amendment
Effective Date, and the closing of the issuance, sale and delivery of the April
2003 Shares (the "April 2003 Share Closing") shall take place at the offices of
Irell & Xxxxxxx LLP, 0000 Xxxxxx xx xxx Xxxxx, Xxxxx 000, Xxx Xxxxxxx,
Xxxxxxxxxx 00000, at 10:00 a.m. (Los Angeles time), on the Share Issuance Date.
At the Bridge Note Closing, the Company shall deliver the Bridge Note to the
Purchaser, duly executed by the Company, against delivery by the Purchaser of
the Bridge Note Purchase Price (net of amounts permitted to be withheld pursuant
to Sections 5(a)(v), (vi) and (xviii)) by wire transfer in immediately available
funds to such bank as the Company may request in writing for credit to the Trade
Payables Deposit Account. At the April 2003 Share Closing, the Company shall
deliver a certificate to the Purchaser representing the April 2003 Shares, duly
executed by the Company, against delivery by the Purchaser of the April 2003
Share Purchase Price.
(d) Use of Proceeds. The proceeds to be received by the Company
from the issuance and sale of the Bridge Securities hereunder, after payment of
all amounts described in Sections 5(a)(v), (vi) and (xviii), shall be deposited
into the Trade Payables
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Deposit Account and be used solely to reduce the outstanding balance of the
Company's trade payables in accordance with the Trade Payables Reduction Plan
(as defined below). The Company covenants and agrees to deposit such net
proceeds into the Trade Payables Deposit Account and to use the net proceeds
solely to reduce the outstanding balance of the Company's trade payables in
accordance with the Trade Payables Reduction Plan.
3. Amendments to Securities Purchase Agreement. Effective on and as
of the First Amendment Effective Date (as defined below), pursuant to Section
12.3 of the Securities Purchase Agreement, the Securities Purchase Agreement
shall be amended as follows:
(a) Section 1.1 of the Securities Purchase Agreement shall be
amended by adding the following new definitions to Section 1.1 in alphabetical
order:
"`Adjusted Current Assets' shall mean, collectively, (i)
cash, (ii) accounts receivable, net, (iii) inventory, net, and
(iv) prepaid expenses, in each case determined in accordance with
GAAP.
"`Adjusted Current Liabilities' shall mean, at any time,
'current liabilities' as defined by GAAP at such time, minus all
Indebtedness owed to the Purchaser at such time, if and only if
such Indebtedness is classified at such time as a current
liability in accordance with GAAP.
"`April 2003 Shares' shall mean 2,466,759 shares of Common
Stock issued by the Company to the Purchaser under the First
Amendment."
"`Bridge Note' shall mean a Secured Senior Subordinated
Bridge Note in the principal amount of $3,000,000, in
substantially the form attached as Exhibit B to the First
Amendment, executed by the Company in favor of the Purchaser, as
amended from time to time."
"`Daily Reporting Package' shall have the meaning set forth
in Section 8.3(c)."
"`First Amendment' shall mean that certain First Amendment
to Amended and Restated Securities Purchase Agreement dated as of
April 4, 2003."
"`First Amendment Business Plans'" shall have the meaning
set forth in the First Amendment.
"`First Amendment Effective Date' shall have the meaning
set forth in the First Amendment."
"`Net Working Capital' shall mean, at any time, (i)
Adjusted Current Assets at such time, minus (ii) Adjusted Current
Liabilities at such time.
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"`November 1999 Note'" shall mean that certain Amended and
Restated Secured Senior Subordinated Note Due 2004 dated November
24, 1999, amended and restated October 29, 2002, in the principal
amount of $28,000,000, as amended by an Amendment dated as of
April 4, 2003, as further amended from time to time, which amends
and restates the Original Note.
"`Payables Turn' shall mean, at any time, (i) the Company's
accounts payable balance at such time, determined in accordance
with GAAP, divided by (ii) (A) the Company's "Total Sales" (or
words of similar import) as reported in the latest Monthly
Reporting Package delivered to the Purchaser pursuant to Section
8.3(b) for the three calendar months immediately preceding such
time, multiplied by (B) 0.66, multiplied by (C) 4, divided by (D)
365."
"`Trade Payables Deposit Account' shall have the meaning
set forth in the First Amendment."
"`Trade Payables Reduction Plan' shall have the meaning set
forth in the First Amendment."
(b) Section 1.1 of the Securities Purchase Agreement shall be
further amended by amending the following existing definitions to read in their
entirety as follows, respectively:
"Collateral Documents" shall mean the Intercreditor
Agreement, the Security Agreement, the Company Pledge Agreement,
the PTC Security Agreement, the Landlord Waivers, the Warehouse
Bailment Agreements, the Parent Termination Agreement, the
Deposit Account Control Agreements, the UCC financing statements
and all other agreements, instruments and documents executed by
or on behalf of any Person concurrently herewith or at any time
hereafter to guaranty or provide collateral security for or with
respect to any or all Obligations, in each case as amended from
time to time.
"Deposit Account Control Agreements" or "Control
Agreements" shall mean that certain Deposit Account Control
Agreement dated as of June 28, 2002, among the UBOC, the Company
and the Purchaser, as amended from time to time (as so amended,
the "UBOC Control Agreement"), the Restricted Account Agreement
dated as of April 4, 2003, among Xxxxx Fargo Bank, N.A., the
Company and the Purchaser, with respect to the Trade Payables
Deposit Account, as amended from time to time, and any other
control or similar agreements entered into from time to time, in
form and substance reasonably satisfactory to the Purchaser,
pursuant to which the Company or any other Company Party grants
control to the Purchaser, as secured party, over its
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or their deposit or similar accounts maintained with banks or
other institutions.
"`Fifth Amendment Warrant'" shall mean that certain Amended
and Restated Warrant (No. LL-4) to Purchase 100 Shares of Common
Stock, originally issued September 11, 2002, and restated upon
partial exercise as of December 13, 2002, as amended from time to
time, which evidences the number of unexercised Warrant Shares
under that certain Warrant No. LL-2 to Purchase 57.57 Shares of
Common Stock dated as of the Fifth Amendment Effective Date, and
shall also include any other warrant or warrants issued upon the
exercise or transfer of all or any portion thereof and the
transfer, division or combination of any such other warrant or
warrants."
"`Intercreditor Agreement'" shall mean (i) that certain
Amended and Restated Intercreditor and Subordination Agreement,
dated as of October 29, 2002, between UBOC and the Purchaser and
acknowledged by the Company and Overhill Ventures, as amended by
a First Amendment dated as of November 22, 2002, a Second
Amendment dated as of December 20, 2002, and a Third Amendment
dated as of April 4, 2003, as further amended from time to time
by UBOC and the Purchaser, or (ii) any other intercreditor or
subordination agreement entered into after the First Amendment
Effective Date by any other Senior Lender and the Purchaser, in
form and substance satisfactory to the Purchaser.
"`Investment Documents' shall mean, collectively, the
Original Securities Purchase Agreement and the other Original
Investment Documents, the SSE Assignment Agreement, this
Agreement, the Notes, the Warrants, the Registration Rights
Agreement, the Investor Rights Agreement, the Suretyship
Agreement, the Intercreditor Agreement and the other Collateral
Documents, the Equity Repurchase Option Agreement and all other
agreements, instruments, certificates, letters and other
documents executed and/or delivered in connection herewith or
therewith, in each case as amended from time to time."
"Leverage Ratio" shall mean:
(i) With respect to the Fiscal Quarter period
ending in June 2003, the ratio of (i) the sum of (A) total
Indebtedness of the Company and its Subsidiaries at the end
of such period and (B) all Capital Lease Obligations at the
end of such period to (ii) (A) EBITDA for such Fiscal
Quarter, multiplied by (B) 4;
(ii) With respect to the two (2) consecutive
Fiscal Quarter period ending in September 2003, the ratio
of (i) the sum of (A) total Indebtedness of the Company and
its Subsidiaries at the end of such period and (B) all
Capital Lease Obligations at the
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end of such period to (ii) (A) EBITDA for such two (2)
consecutive Fiscal Quarters, multiplied by (B) 2;
(iii) With respect to the three (3) consecutive
Fiscal Quarter period ending in December 2003, the ratio of
(i) the sum of (A) total Indebtedness of the Company and
its Subsidiaries at the end of such period and (B) all
Capital Lease Obligations at the end of such period to (ii)
(A) EBITDA for such three (3) consecutive Fiscal Quarters,
multiplied by (B) 4, divided by (C) 3; and
(iv) With respect to the four (4) consecutive
Fiscal Quarter period ending in March 2004 and thereafter,
the ratio of (i) the sum of (A) total Indebtedness of the
Company and its Subsidiaries at the end of such period and
(B) all Capital Lease Obligations at the end of such
period, to (ii) EBITDA for the four (4) consecutive Fiscal
Quarters ending at the end of such period.
"`Net Income (Loss)' shall mean, for any period, net
income (loss) after Taxes of the Company and its Subsidiaries on
a consolidated basis for such period taken as a single accounting
period, all computed in accordance with GAAP; provided, however,
that, for purposes of calculating minimum EBITDA under Section
9.14(a), the minimum Fixed Charge Coverage Ratio under Section
9.14(b) and the maximum Leverage Ratio under Section 9.14(c), the
costs incurred by the Company in connection with the restoration
required to be made at the manufacturing facilities located at
0000 Xxxxxxx Xxxxx xx Xxx Xxxxx, Xxxxxxxxxx, up to a maximum of
$250,000, shall be excluded from the calculation of Net Income
(Loss)."
"`Note' or `Notes' shall mean, individually or
collectively, the November 1999 Note or the Bridge Note or both,
and shall also include, where applicable, any additional note or
notes issued by the Company in connection with any Assignments
thereof. When used in this Agreement or any other Investment
Document, references to `the Note' shall mean `any Note' or `the
Notes', as applicable."
"`November 1999 Warrant'" shall mean that certain Amended
and Restated Warrant (No. LL-3) to Purchase 100 Shares of Common
Stock, originally issued November 24, 1999, amended and restated
as of October 29, 2002, and restated upon partial exercise as of
December 13, 2002, as amended from time to time, which evidences
the remaining unexercised Warrant Shares under the Original
Warrant, and shall also include any other warrant or warrants
issued upon the exercise or transfer of all or any portion
thereof and the transfer, division or combination of any such
other warrant or warrants.
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"`Obligations' or `Obligations to Purchaser' shall mean all
present and future loans, advances, Indebtedness, claims,
guarantees, liabilities or obligations of the Company Parties (or
any of them) or any of their Subsidiaries or other Affiliates
owing to the Purchaser, any Affiliate of the Purchaser or any
Indemnified Party (or any assignee or transferee thereof), of
whatever nature, type or description, arising under or in
connection with the Original Investment Documents, this
Agreement, the Notes, the Warrants, the Registration Rights
Agreement, the Investor Rights Agreement (including the
consulting fees payable thereunder), the Collateral Documents,
the Equity Repurchase Option Agreement, any other Investment
Documents or otherwise, any and all agreements, instruments or
other documents heretofore or hereafter executed or delivered in
connection with any of the foregoing, in each case whether due or
not due, direct or indirect, joint and/or several, absolute or
contingent, voluntary or involuntary, liquidated or unliquidated,
determined or undetermined, now or hereafter existing, amended,
renewed, extended, exchanged, restated, refinanced, refunded or
restructured, whether or not from time to time decreased or
extinguished and later increased, created or incurred, whether
for principal, interest (including post-judgment interest),
premiums, fees, costs, expenses (including attorneys',
accountants', appraisers', investment bankers', auctioneers' and
other professional fees and expenses, including court and other
procedural costs) or other amounts incurred for administration,
collection, enforcement or otherwise, whether or not arising
after the commencement of any proceeding under the Bankruptcy Law
(including post-petition interest) and whether or not allowed or
allowable as a claim in any such proceeding, and whether or not
recovery of any such obligation or liability may be barred by any
statute of limitations or such Indebtedness, claim, liability or
obligation may otherwise be unenforceable."
"`Senior Credit Agreement'" shall mean (i) that certain
Amended and Restated Loan and Security Agreement dated as of
October 29, 2002, (the "UBOC Credit Agreement"), among UBOC, the
Company and Overhill Ventures, as amended by a First Amendment
dated as of November 22, 2002, a Second Amendment dated as of
December 20, 2002, and a Third Amendment dated as of April 4,
2003, and as further amended from time to time, subject to the
terms of the Intercreditor Agreement (the "UBOC Credit
Agreement"), or (ii) such other loan or credit agreement entered
into by the Company and any other Senior Lender in connection
with a refinancing of the Senior Indebtedness owing to UBOC under
the UBOC Senior Credit Documents (the "Other Senior Credit
Agreement")."
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(c) Clause (v) of the definition of "Change in Control" in
Section 1.1 (Definitions) of the Securities Purchase Agreement shall be amended
to read in its entirety as follows:
"(v) [Intentionally Omitted];"
(d) Section 3.1 (Organization and Qualification) of the
Securities Purchase Agreement shall be amended to read in its entirety as
follows:
"3.1 Organization and Qualification. The Company is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Nevada, and has all requisite
power and authority to own or lease and operate its properties
and assets and to carry on its business as now conducted and as
proposed to be conducted. The Company is duly qualified or
licensed to do business as a foreign corporation in the States of
California, Texas and each other jurisdiction in which the
character of the properties or assets owned, leased or operated
or the nature of the activities conducted makes such
qualification or licensing necessary, except where the failure to
be so qualified or licensed in such other jurisdictions could not
have, individually or in the aggregate, a Material Adverse
Effect."
(e) Clause (a) of Section 3.7 (Capitalization) of the
Securities Purchase Agreement shall be amended to read in its entirety as
follows:
"(a) Schedule 3.7(a) sets forth, as of the First
Amendment Effective Date, (i) the authorized Capital Stock of the
Company, including classes and series of Capital Stock, (ii) the
number of shares of Capital Stock issued and outstanding,
including shares of Common Stock and of preferred stock, (iii)
the number of shares of Capital Stock reserved for issuance under
the Company Stock Plans, including the number of options to
purchase Capital Stock granted under each Company Stock Plan;
(iv) the number and type of shares of Capital Stock subject to
options granted under each Company Stock Plan, including the name
of the grantee, the exercise price and the expiration date; (v)
the aggregate number of shares of Common Stock reserved for
issuance upon conversion of the Series A Preferred Stock; (vi)
the number of shares of Common Stock reserved for issuance upon
exercise of each Warrant and (viii) the number of shares of
Capital Stock on a Fully Diluted Basis. All of the issued and
outstanding shares of Capital Stock of the Company have been duly
authorized and are validly issued, fully paid and non-assessable,
and are free and clear of any Liens and other restrictions
(including any restrictions on the right to vote, sell or
otherwise dispose of such Capital Stock) and of any preemptive or
other similar rights to subscribe for or to purchase any such
Capital Stock, other than those contained in the Investor Rights
Agreement. There are: (A) no outstanding Option Rights of the
Company other than the Warrants and
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the Series A Preferred Shares; (B) no voting trusts or other
agreements or undertakings with respect to the voting of the Capital
Stock of the Company other than the Investor Rights Agreement; (C)
except as provided for in the Equity Repurchase Option Agreement, no
obligations or rights (whether fixed or contingent) on the part of the
Company or any other Person to purchase, repurchase, redeem or "put"
any outstanding shares of the Capital Stock of the Company or Option
Rights of the Company; and (D) no agreements granting any Person
(other than the Purchaser) any rights of first offer or first refusal,
registration rights or "drag-along," "tag-along" or similar rights
with respect to any transfer of any Capital Stock or Option Rights of
the Company or any of its Subsidiaries. All shares of Capital Stock
and Option Rights of the Company that have been issued by the Company
have been issued and offered in compliance with all federal and
applicable state securities laws. No Capital Stock or Option Rights of
the Company will be issued or become issuable to any Person (other
than the Purchaser) pursuant to any "anti-dilution" provisions on
account of the issuance of any securities by the Company or the
exercise of any Option Rights (including the Warrants). The April 2003
Shares being issued to the Purchaser on and as of the First Amendment
Effective Date represents less than twenty percent (20.0%) of the
outstanding shares of Common Stock on and as of the First Amendment
Effective Date."
(f) The first sentence of Section 3.10 (SEC Documents) of the
Securities Purchase Agreement shall be amended to read in its entirety as
follows:
"The Company has filed with the Commission all SEC Documents
(including the Form 10 Registration Statement) that have been required
to be filed by it with the Commission and the AMEX."
(g) Clause (c) of Section 8.3 (Information Reporting Requirements) of
the Securities Purchase Agreement shall be amended to read in its entirety as
follows:
"(c) (A) On Wednesday of each week (which may be furnished via
telecopier), a package of information (the "Weekly Reporting
Package"), including: (i) the weekly internal sales report of the
Company and its Subsidiaries with respect to the prior week; (ii) the
consolidated accounts receivables of the Company and its Subsidiaries
as of the end of such prior week; (iii) the 90-Day Receivables as of
the end of such prior week; (iv) the consolidated accounts payables of
the Company and its Subsidiaries as of the end of such prior week; (v)
the 60-Day Payables as of the end of such prior week; (vi) a copy of
the borrowing base certificate, if any, delivered to the Senior Lender
during the prior week; (vii) a cash flow analysis for the twelve (12)
week period commencing at the end of the prior week; (viii) a
revolving credit facility availability analysis for the twelve (12)
week period commencing at the end of the prior week showing, among
other things, a minimum of
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$500,000 of Senior Availability at any time (including at any time the
Company is required to make payments to the Purchaser under this
Agreement or any other Investment Document during such period); (ix) a
written "new business" report updating the Company's business
generation activities during the prior week, in form and substance
satisfactory to the Purchaser; (x) a written "yield report" of the
Company, in form and substance satisfactory to the Purchaser; (xi) a
written report detailing the Company's progress with respect to each
First Amendment Business Plan; and (xii) such additional information
as may be mutually agreed upon by the Company and the Purchaser; and
(B) on a daily basis (to be received via telecopier not later than
12:00 noon (Los Angeles time) a package of information (the "Daily
Reporting Package") consisting of (i) a certificate setting forth the
Company's borrowing base under the Senior Credit Agreement and Senior
Availability, in each case at the end of the immediately preceding
Business Day; and (ii) such additional information as may be requested
by the Purchaser;"
(h) Section 8.4 (Landlord Waivers; Warehouse Bailment Agreements) of
the Securities Purchase Agreement shall be amended to read in its entirety as
follows:
8.24 Landlord Waivers; Warehouse Bailment Agreements. On or
before April 30, 2003, the Company shall obtain Landlord Waivers and
Warehouse Bailment Agreements, as applicable, from the lessor of each
leased real property, mortgagee of owned real property or bailee with
respect to any warehouse, processor or converter facility or other
location where Collateral is stored or located as of such date (other
than with respect to those locations for which the Company has
previously delivered Landlord Waivers or Warehouse Bailment
Agreements, as the case may be).
(i) Article 8 (Affirmative Covenants) of the Securities Purchase
Agreement shall be amended by adding the following new Section 8.25 at the end
of such Article:
"8.25 Permanent Chief Financial Officer and Audit Committee
Financial Expert. On or before April 30, 2003, the Company shall have
employed a qualified individual to serve as the Company's Chief
Financial Officer, which employment shall have been approved by the
Company's Board of Directors. On or before May 30, 2003, the Company
shall have elected or appointed an individual who qualifies as an
"audit committee financial expert" (within the meaning of the rules
implementing Section 407 of the Xxxxxxxx-Xxxxx Act of 2002) to serve
on the Company's Board of Directors."
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(j) Article 8 (Affirmative Covenants) of the Securities Purchase
Agreement shall be amended by adding the following new Section 8.26 immediately
following new Section 8.25 at the end of such Article:
"8.26 First Amendment Business Plans. The Company shall comply
with and perform the terms and other provisions of each of the First
Amendment Business Plans and implement the procedures and other
requirements contained therein."
(k) Clause (d) of Section 9.1 (Limitations on Indebtedness) of the
Securities Purchase Agreement shall be amended to read in its entirety as
follows:
"(d) Trade accounts payable arising in the ordinary course of
business that are more than sixty (60) days past their due dates and
do not exceed in the aggregate (i) at any time from the First
Amendment Effective Date to and including June 30, 2003 (during which
period the Company shall have complied with the Trade Payables
Reduction Plan), the amount of such trade accounts payable on the
First Amendment Effective Date, (ii) $650,000 at any time during the
period commencing on July 1, 2003, and ending on the last day of the
Company's fiscal year ending in September 2003, and (iii) $200,000 at
any time thereafter; provided, however, that if during any of such
periods the aggregate amount of any such trade accounts payable
exceeds the applicable amount for such period at any one time, then
the Company shall not be deemed to be in violation of this clause (d)
if the amount in excess of such applicable amount is being disputed or
contested in good faith by appropriate proceedings in a commercially
reasonable manner; or"
(l) Section 9.14 (Financial Covenants) of the Securities Purchase
Agreement shall be amended to read in its entirety as follows:
"(a) Minimum EBITDA. For each of the periods listed in the table
below, EBITDA shall not be less than the total amount set forth
opposite each such period in the table:
Minimum
Period EBITDA
------ ------
Trailing Fiscal Quarter ending in
March 2003 ............................................ $(1,200,000)
Trailing Fiscal Quarter ending in
June 2003 ............................................. 1,066,000
Trailing two consecutive Fiscal Quarters ending in
September 2003 ........................................ 2,809,000
Trailing three consecutive Fiscal Quarters ending in
December 2003 ......................................... 5,054,000
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Trailing four consecutive Fiscal Quarters ending in
March 2004 ............................................... 7,174,000
Trailing four consecutive Fiscal Quarters ending in
June 2004 ................................................ 8,183,000
Trailing four consecutive Fiscal Quarters ending in
September 2004 ........................................... 8,385,000
"(b) Minimum Fixed Charge Coverage Ratio. For each of the periods
listed in the table below, the Fixed Charge Coverage Ratio shall not
be less than the ratio set forth opposite each such period in the
table:
Minimum Fixed
Charge
Period Coverage Ratio
------ --------------
Trailing Fiscal Quarter ending in
June 2003 ................................................ 0.68
Trailing two consecutive Fiscal Quarters ending in
September 2003 ........................................... 0.89
Trailing three consecutive Fiscal Quarters ending in
December 2003 ............................................ 1.04
Trailing four consecutive Fiscal Quarters ending in
March 2004 ............................................... 1.09
Trailing four consecutive Fiscal Quarters ending in
June 2004 ................................................ 1.21
Trailing four consecutive Fiscal Quarters ending in
September 2004 ........................................... 1.22
"(c) Maximum Leverage Ratio. As of the last day of each of the
periods listed in the table below, the Leverage Ratio shall not exceed
the ratio set forth opposite each such period in the table:
Maximum
Leverage
Period Ratio
------ -----
Trailing Fiscal Quarter ending in June 2003 .............. 9.97
Trailing two consecutive Fiscal Quarters ending in
September 2003 ........................................... 7.50
Trailing three consecutive Fiscal Quarters ending in
December 2003 ............................................ 6.34
Trailing four consecutive Fiscal Quarters ending in
March 2004 ............................................... 5.89
Trailing four consecutive Fiscal Quarters ending in
June 2004 ................................................ 5.17
Trailing four consecutive Fiscal Quarters ending in
September 2004 ........................................... 5.02
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"(d) Maximum Capital Expenditures. (i) Capital Expenditures
(other than Capital Expenditures related primarily to the
consolidation of the Company's manufacturing operations into the
Xxxxxx Facilities)shall not exceed $150,000 with respect to any Fiscal
Quarter; provided, however, that if (A) the Company prepares and
furnishes to the Purchaser a "payback" analysis of Capital
Expenditures it proposes to make or incur in excess of such amounts,
(B) the Purchaser has at least five (5) Business Days to review such
analysis and (C) if satisfied with such analysis in its sole
discretion, the Purchaser consents in writing to such excess amount(s)
prior to the incurrence thereof, then the Company may make or incur
such excess Capital Expenditures; and (ii) Capital Expenditures
related primarily to the consolidation of the Company's manufacturing
operations into the Xxxxxx Facilities in any of the periods set forth
in the following table shall not exceed the amounts set forth opposite
such periods:
Maximum Capital
Period Expenditures
------ ------------
Trailing Fiscal Quarter ending in March 2003 .... $ 1,650,000
Trailing Fiscal Quarter ending in June 2003 ..... 500,000
Trailing Fiscal Quarter ending in
September 2003 and thereafter ................... 0
"(e) [Intentionally Omitted.]"
"(f) Maximum Payables Turn. For each of the "fiscal months"
listed in the table below, the Payables Turn (expressed in a number of
days) at the end of such month shall not be greater than the number of
days set forth opposite each such month in the table:
"Fiscal Month(s)" Payables Turn
--------------- -------------
April, May, June, July and August 2003 ............... 62
September and October 2003 ........................... 61
November 2003 ........................................ 59
December 2003 and January 2004 ....................... 58
February 2004 ........................................ 61
March 2004 ........................................... 60
April and May 2004 ................................... 59
June, July and August 2004 ........................... 58
September 2004 and thereafter ........................ 56
-13-
"(g) Minimum Net Working Capital. For each of the "fiscal months"
listed in the table below, Net Working Capital shall not be less than
the amount set forth opposite each such month in the table:
Minimum
"Fiscal Month(s)" Net Working Capital
--------------- -------------------
April 2003 ..................................... $(2,700,000)
May, June, July and August 2003 ................ (2,950,000)
September 2003 ................................. (2,700,000)
October 2003 ................................... (2,600,000)
November 2003 .................................. (2,350,000)
December 2003 and January 2004 ................. (2,000,000)
February 2004 .................................. (1,850,000)
March and April 2004 ........................... (1,500,000)
May 2004 ....................................... (1,250,000)
June, July and August 2004 ..................... (1,000,000)
September 2004 and thereafter .................. (750,000)
"(h) Minimum Senior Availability. Minimum Senior Availability
shall not, at any time on or after April 24, 2003, be less than
$500,000, based upon financial information furnished by the Company at
or prior to such time."
4. Amendments to Disclosure Schedules. Effective on and as of the First
Amendment Effective Date, pursuant to Section 12.3 of the Securities Purchase
Agreement, each of the Disclosure Schedules included in Exhibit C attached
hereto shall amend the corresponding Disclosure Schedule currently attached to
the Securities Purchase Agreement as provided for in such amended Disclosure
Schedule (it being understood that such amended Disclosure Schedules shall
update such existing Disclosure Schedules through and including the First
Amendment Effective Date).
5. Closing; Conditions Precedent.
(a) Conditions to Purchaser's Obligations. The effectiveness of the
Purchaser's waiver of the Specified Events of Default as provided in Section 1,
the obligation of the Purchaser to purchase the Bridge Securities as provided in
Section 2 and the amendments set forth in Sections 3 and 4 shall be subject to
the satisfaction, in the Purchaser's sole discretion, of each of the following
conditions precedent (the date upon which the last of such conditions precedent
to be so satisfied shall be referred to herein as the "First Amendment Effective
Date"):
(i) First Amendment Effective Date. All of the conditions
precedent set forth in this Section 5(a) shall be satisfied on April 4, 2003.
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(ii) Representations and Warranties. The Purchaser shall have
received an Officers' Certificate, in form and substance satisfactory to the
Purchaser, dated as of the First Amendment Effective Date and duly executed by
the President and Chief Executive Officer and the Chief Financial Officer of the
Company, to the effect that (A) after giving effect to this Amendment (including
the amendments to the Disclosure Schedules attached as Exhibit C hereto), each
of the representations and warranties of the Company contained in the Securities
Purchase Agreement and this Amendment was true and correct on and as of the date
hereof and is true and correct on and as of the First Amendment Effective Date,
with the same effect as if made on and as of the First Amendment Effective Date;
(B) each of the covenants and agreements of the Company required to be performed
or satisfied under this Amendment on or before the First Amendment Effective
Date has been performed or satisfied on or before the First Amendment Effective
Date; (C) the Company has satisfied or fulfilled each of the conditions
precedent set forth in this Section 5(a); (D) no Default or Event of Default has
occurred and is continuing other than the Specified Events of Default or will
result from the execution, delivery or performance of this Amendment, the
issuance, sale or delivery of the Bridge Note or the consummation of the other
transactions contemplated hereby; and (E) since September 29, 2002, no Material
Adverse Change has occurred other than as previously disclosed in the Company's
SEC Documents.
(iii) No Legal Prohibitions. The consummation of the transactions
contemplated by this Amendment shall not be prohibited by or violate any
Applicable Laws and shall not subject any party to any Tax, penalty or
liability, under or pursuant to any Applicable Laws. Without limiting the
generality of the foregoing, the consummation of the transactions contemplated
hereby shall otherwise comply with all applicable requirements of federal
securities and state securities or "blue sky" laws.
(iv) Principal Closing Documents. The Purchaser shall have
received the following closing documents, each dated as of the First Amendment
Effective Date (the documents referred to in clauses (A), (C), (F) and (G)
below, together with this Amendment, are collectively referred to herein as the
"Bridge Financing Documents"):
(A) Bridge Note. The Bridge Note, duly executed by the
Company and acknowledged and consented to by the Guarantor.
(B) [Intentionally Omitted.]
(C) Amendment to Note. An amendment to the Amended and
Restated Secured Senior Subordinated Note Due 2004, in form and substance
satisfactory to the Purchaser, duly executed by the Company and
acknowledged and consented to by the Guarantor.
(D) Amendment to Intercreditor Agreement. A Third Amendment
to Intercreditor and Subordination Agreement, in form and substance
satisfactory to the Purchaser, duly executed by the Senior Lender and
acknowledged by the Company and the Guarantor.
-15-
(E) [Intentionally Omitted.]
(F) Deposit Account Control Agreement. A Deposit Account
Control Agreement, in form and substance satisfactory to the Purchaser,
duly executed by the Company and the Depository (as defined below), with
respect to the Trade Payables Deposit Account.
(G) Amendment to Security Agreement. An amendment to the
Security Agreement, in form and substance satisfactory to the Purchaser,
duly executed by the Company and the Purchaser.
(v) Accrued and Unpaid Interest. The Purchaser shall have
received, by wire transfer in immediately available funds, all accrued and
unpaid interest under the Amended and Restated Secured Senior Subordinated Note
Due 2004 through and including the First Amendment Effective Date (including
unpaid interest accruing at the Default Rate (as defined in the Amended and
Restated Secured Senior Subordinated Note Due 2004) from December 29, 2002,
through and including the First Amendment Effective Date), provided that such
interest may be withheld by the Purchaser from payment of the Bridge Securities
Purchase Price.
(vi) Payments Past Due. (A) The Purchaser shall have received
the amount of $223,000 representing the last installment of the Fifth Amendment
Restructuring Fee payable under Section 8.23(c) of the Securities Purchase
Agreement and (B) LLCP Inc. shall have received the amount of $24,000
representing accrued and unpaid monthly consulting fees under Section 1.6(d) of
the Investor Rights Agreement for the months of March and April 2003, provided
that such aggregate amount may be withheld by the Purchaser from payment of the
Bridge Securities Purchase Price.
(vii) Consents. The Company shall have obtained all Consents
required to be obtained from all Governmental Authorities and other Persons in
connection with the transactions contemplated by this Amendment, and the
Purchaser shall have approved the terms and conditions thereof.
(viii) Opinion of Counsel. The Purchaser shall have received
opinion letters of Jenkens & Xxxxxxxxx, special counsel the Company and Overhill
Ventures, and Xxxxxx Xxxxxxxx Xxxxxx & Xxxxxxx, Nevada counsel to the Company,
each dated the First Amendment Effective Date and addressed to the Purchaser, in
form and substance satisfactory to the Purchaser and its legal counsel, copies
of which shall be delivered to the Purchaser.
(ix) Financial Projections. The Purchaser shall have received
from the Company, and the Purchaser shall have approved, revised consolidated
financial projections of the Company and its Subsidiaries for the period
commencing February 1, 2003 through and including September 30, 2004. Such
financial projections shall specify the assumptions on which they are based,
which assumptions shall be prepared in good faith by management and shall be
reasonable. The financial projections shall be accompanied by an Officers'
Certificate, in form and substance satisfactory to the
-16-
Purchaser, duly executed by the President and Chief Executive Officer and the
Chief Financial Officer of the Company.
(x) Other Financial Information. The Purchaser shall have
received from the Company a Weekly Reporting Package (as amended by this
Amendment) for the full week immediately preceding the week in which the First
Amendment Effective Date occurs. Such Weekly Reporting Package shall be
accompanied by an Officers' Certificate, in form and substance satisfactory to
the Purchaser, duly executed by the President and Chief Executive Officer and
the Chief Financial Officer of the Company.
(xi) Trade Payables Deposit Account. The Company shall have
established at a bank or other financial institution selected by the Company
(the "Depository") a separate, interest-bearing deposit account (the "Trade
Payables Deposit Account") into which the net proceeds from the issuance and
sale of the Bridge Securities shall be deposited and which shall be subject to
the terms of the Deposit Account Control Agreement described in Section
5(a)(iv)(F) above.
(xii) First Amendment Business Plans. The Purchaser shall have
received from the Company an Officers' Certificate, in form and substance
satisfactory to the Purchaser, dated as of the First Amendment Effective Date
and duly executed by the President and Chief Executive Officer and the Chief
Financial Officer of the Company, accompanied by the following business plans,
each prepared in good faith by the Company's management (collectively, the
"First Amendment Business Plans"):
(A) A plan to pay in full the Company's entire outstanding
balance of trade payables over 30 days past due as reported in the
Company's March 29, 2003 accounts payable aging report (the "Trade Payables
Reduction Plan");
(B) A plan to complete the Consolidation on a specified
time table; and
(C) A plan to restructure the Company's sales division
(which plan shall include, among other things, the Company's plan to hire a
new sales manager by June 30, 2003 and to implement an incentive-based
compensation plan for the Company's sales division).
(xiii) UBOC Credit Document Waivers and Amendments. The Purchaser
shall have received true, correct and complete copies of (A) waivers by the
Senior Lender of defaults and events of default under the Senior Credit
Documents with UBOC through the First Amendment Effective Date and (B) a Third
Amendment to the UBOC Credit Agreement and such other amendments to the other
Senior Credit Documents with UBOC, in form and substance satisfactory to the
Purchaser, duly executed by the Company, Overhill Ventures and UBOC.
(xiv) [Intentionally Omitted.]
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(xv) Solvency Certificate. The Purchaser shall have received a
Solvency Certificate, in form and substance satisfactory to the Purchaser, duly
executed by the President and Chief Executive Officer and the Chief Financial
Officer of the Company, certifying as to the matters described therein.
(xvi) No Material Adverse Change. Since September 29, 2002,
there shall not have occurred any Material Adverse Change other than as
previously disclosed in the Company's SEC Documents.
(xvii) Certified Board Resolutions. The Purchaser shall have
received a Secretary's Certificate from the Company and Overhill Ventures, in
form and substance satisfactory to the Purchaser, duly executed by the Secretary
of the Company or Overhill Ventures, as the case may be, certifying as to the
resolutions of the Board of Directors of the Company or Overhill Ventures, as
the case may be, approving the execution and delivery of this Amendment, the
issuance, sale and delivery of the Bridge Securities and the other transactions
contemplated by this Amendment.
(xviii) Fees and Expenses. The Company shall have reimbursed the
Purchaser for all actual and estimated fees, costs and expenses, including
attorneys' fees and expenses, expended or incurred by the Purchaser in
connection with the negotiation, preparation, execution and performance of this
Amendment and the transactions contemplated hereby or that otherwise remain
unreimbursed as of the First Amendment Effective Date, provided that such fees,
costs and expenses may be withheld by the Purchaser from the payment of the
Bridge Securities Purchase Price.
(xix) Good Standing Certificates. The Purchaser shall have
received a domestic good standing certificate of each of the Company and
Overhill Ventures issued by the Secretary of State of its state of
incorporation, a foreign good standing certificate of the Company, issued by the
Secretary of State of the State of California and a good standing tax
certificate of each of the Company and Overhill Ventures issued by the
California Franchise Tax Board, in each case dated as of a recent practicable
date prior to the First Amendment Effective Date.
(xx) Insurance Certificates. The Purchaser shall have received
certificates of insurance with respect to the insurance policies required to be
maintained by the Company pursuant to Section 8.9 of the Securities Purchase
Agreement (including the directors and officers liability insurance and the key
man life insurance policy on the life of Xxxxx Xxxxx), together with additional
insured and lender's loss payable endorsements in favor of the Purchaser, all in
form and substance satisfactory to the Purchaser.
(xxi) Lien Searches. The Purchaser shall have received UCC, Tax
and judgment lien searches for the Company and Overhill Ventures in each state
or other jurisdiction in which the Company and Overhill Ventures is incorporated
or located, in each case dated as of a recent practicable date.
(xxii) [Intentionally Omitted.]
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(xxiii) Corporate Proceedings. All proceedings taken prior to or
at the closing in connection with the issuance and sale of the Bridge Securities
and the consummation of the other transactions contemplated hereby, and all
papers and other documents relating thereto, shall be in form and substance
satisfactory to the Purchaser and its legal counsel, and the Purchaser shall
have received copies of such documents and papers, all in form and substance
satisfactory to the Purchaser and its counsel, all such documents, where
appropriate, to be counterpart originals and/or certified by proper authorities,
corporate officials and other Persons.
(b) Conditions to Company's Obligations. The obligation of the
Company to issue and sell the Bridge Note to the Purchaser and the effectiveness
of the amendments set forth in Sections 3 and 4 as of the First Amendment
Effective Date shall be subject to the satisfaction of each of the following
conditions precedent:
(i) Representations and Warranties. The representations and
warranties of the Purchaser contained in Section 7 of this Amendment shall be
true and correct in all material respects on and as of the First Amendment
Effective Date.
(ii) Bridge Note Purchase Price. The Purchaser shall have
delivered to the Company the Bridge Note Purchase Price, less the fees, costs
and expenses to be reimbursed by the Company under Sections 5(a)(v), (vi) and
(xviii).
6. Representations and Warranties of the Company. In order to induce the
Purchaser to purchase the Bridge Securities, to waive the Specified Events of
Default and to amend the Securities Purchase Agreement as provided for herein,
the Company represents and warrants to the Purchaser as follows:
(a) Authorization; Binding Effect. Each of the Company and the
Guarantor has the full power and authority to enter into, deliver and perform
its obligations under this Amendment, the Bridge Securities and the other Bridge
Financing Documents to which it is a party, including the issuance, sale and
delivery of the Bridge Securities. The execution, delivery and performance by
the Company and the Guarantor of this Amendment, the Bridge Securities and the
other Bridge Financing Documents to which it is a party, the issuance, sale and
delivery of each of the Bridge Securities and the consummation of the other
transactions contemplated hereby and thereby have been duly and validly
authorized by all necessary action on the part of the Company and the Guarantor,
respectively. This Amendment has been duly executed and delivered by the Company
and the Guarantor and, on the First Amendment Effective Date, the Bridge Note
and the other Bridge Financing Documents will be duly executed and delivered by
the Company and the Guarantor. This Amendment is, and on the First Amendment
Effective Date each of the Bridge Securities and the other Bridge Financing
Documents will be, the legal, valid and binding obligations of the Company and
the Guarantor, enforceable against the Company and Overhill Ventures in
accordance with its terms, except as enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer or conveyance or
similar laws relating to or limiting creditors' rights generally or by equitable
principles relating to enforceability and except as rights of indemnity or
-19-
contribution may be limited by federal or state securities or other laws or the
public policy underlying such laws.
(b) No Conflict. The execution, delivery and performance by the
Company of this Amendment, the Bridge Securities and the other Bridge Financing
Documents, the issuance, sale and delivery of the Bridge Securities and the
consummation of the other transactions contemplated hereby do not and will not
violate or conflict with, or cause a default under, or give rise to a right of
termination under, (i) the charter or bylaws of the Company or any of its
Subsidiaries, as in effect on the date hereof; (ii) any Applicable Laws
(including the AMEX rules and provided the AMEX approves the Listing
Application); or (iii) any term of any Material Contract, indenture, note,
mortgage, instrument or other agreement to which the Company or any of its
Subsidiaries is a party or by which any of its or their properties or assets are
bound.
(c) Rank; Obligations. No Indebtedness of the Company ranks pari passu
with any Indebtedness evidenced by the Bridge Note other than the Indebtedness
under the November 1999 Note, and payment of principal of, premium, if any, and
interest on the Indebtedness evidenced by the Notes and the other Obligations is
subordinate only to the payment of the Senior Indebtedness. Immediately
following the Bridge Note Closing, there will be no agreement, indenture,
instrument or other document to which the Company or any of its Subsidiaries is
a party or by which it or they are bound that requires the subordination in
right of payment or rights upon liquidation of any Obligations to Purchaser
(including Indebtedness under the November 1999 Note and the Bridge Note) to the
repayment of any other existing or future Indebtedness of the Company or any of
its Subsidiaries.
(d) No Consents. Neither the Company nor any of its Subsidiaries or
other Affiliates is required to obtain any Consent in connection with execution,
delivery or performance of this Amendment, any Bridge Securities or any other
Bridge Financing Documents or the issuance, sale and delivery of the Bridge
Securities, or for the purpose of maintaining in full force and effect any
Licenses and Permits of the Company or any of its Subsidiaries, from (a) any
Governmental Authority or (b) any other Person, except where the failure to
obtain such consent or maintain any such License or Permit, as the case may be,
could not have a Material Adverse Effect.
(e) Representations and Warranties. After giving effect to the amended
the Disclosure Schedules attached as Exhibit C hereto, each of the
representations and warranties of the Company contained in Section 3 of the
Securities Purchase Agreement is true and correct in all material respects.
(f) April 2003 Shares. The April 2003 Shares have been duly authorized
and, when issued in accordance with the terms of this Amendment, will be validly
issued, fully paid and nonassessable, and will be free of any security
interests, liens or encumbrances.
(g) Securities Laws. The offer and sale of the Bridge Securities in
accordance with the terms hereof will be exempt from the registration
requirements of the
-20-
Securities Act and the registration or qualification requirements of any
applicable state securities or "blue sky" laws.
(h) No Default. No Default or Event of Default has occurred and is
continuing or will result from the execution, delivery or performance of this
Amendment, the Bridge Securities or the other Bridge Financing Documents, the
issuance, sale or delivery of the Bridge Securities or the consummation of the
other transactions contemplated hereby.
(i) Collateral Security. The Liens granted in favor of the Purchaser
under the Collateral Documents constitute valid, enforceable, perfected and
continuing security interests and liens in, on and to the Collateral to secure
the payment and performance in full of all Obligations, including all
Indebtedness and other Obligations under the Notes, and such security interests
and liens are subject, as to priority, only to the Senior Liens and Permitted
Liens to the extent entitled to priority under Applicable Law except with
respect to the security interests and liens of the Purchaser in and to the Trade
Payables Deposit Account, in which case the Purchaser shall have a first
priority security interest and lien.
7. Representations and Warranties of the Purchaser. The Purchaser hereby
represents and warrants to the Company that:
(a) The Purchaser is acquiring the Bridge Securities for its own
account, for investment purposes, and not with a view to or for sale in
connection with any distribution thereof. The Purchaser understands that the
Bridge Securities have not been registered under the Securities Act or
registered or qualified under any state securities law in reliance upon specific
exemptions therefrom, which exemptions may depend upon, among other things, the
bona fide nature of the Purchaser's investment intent as expressed herein; and
(b) The Purchaser is an "accredited investor" (as such term is defined
in Rule 501 of Regulation D promulgated under the Securities Act). By reason of
its business and financial experience, the Purchaser has such knowledge,
sophistication and experience in business and financial matters so as to be
capable of evaluating the merits and risks of the investment in the Bridge
Securities, has the capacity to protect its own interests and is able to bear
the economic risk of such investment.
8. Post-Closing Fees. As additional consideration for the Purchaser's
agreement to waive the Specified Events of Default, purchase the Bridge Note and
amend the Securities Purchase Agreement as provided for herein, on April 16,
2003, the Company shall pay to the Purchaser, by wire transfer in immediately
available funds, the aggregate amount of $724,667.59, consisting of (A) a
non-refundable Bridge Note closing fee, by wire transfer in immediately
available funds, in the amount of $224,667.59 and (B) a non-refundable
restructuring fee related to the transactions contemplated herein in the amount
of $500,000.
-21-
9. Listing Application; Issuance of April 2003 Shares.
(a) Not later than April 4, 2003, the Company shall file with the AMEX
an application with AMEX to obtain the approval by AMEX of the listing of the
April 2003 Shares with the AMEX (the "Listing Application") to issue the April
2003 Shares to the Purchaser, and the Purchaser shall have received a true,
correct and complete copy of the Listing Application and all attachments thereto
and correspondence relating thereto.
(b) On the Business Day (the "Share Issuance Date") immediately
following the date upon which the AMEX shall have approved the Listing
Application, but not later than April 16, 2003, the Company shall issue, sell
and deliver to the Purchaser a certificate representing or evidencing the April
2003 Shares, duly executed by the Company, against delivery of the April 2003
Share Purchase Price in accordance with Section 2(c). The Company shall use its
best efforts to obtain as soon as possible the approval by AMEX of the Listing
Application.
10. Confirmation; Full Force and Effect. The amendments set forth in
Sections 3 and 4 above shall amend the Securities Purchase Agreement on and as
of the First Amendment Effective Date, and the Securities Purchase Agreement
shall otherwise remain in full force and effect, as amended thereby, from and
after the First Amendment Effective Date in accordance with its terms. The
Company hereby ratifies, approves and affirms in all respects each of the
Securities Purchase Agreement, as amended hereby, the Notes (including the
November 1999 Note and the Bridge Note), the Collateral Documents (including the
Liens granted in favor of the Purchaser under the Collateral Documents) and each
of the other Investment Document, the terms and other provisions hereof and
thereof and the Obligations hereunder and thereunder.
11. Confirmation of Guaranty. The Guarantor hereby acknowledges that it has
read this Amendment and the other Bridge Financing Documents and consents to
their terms, including the issuance, sale and delivery of the Bridge Securities.
Further, the undersigned hereby (a) confirms that it is a party to the Guaranty
and that, among other things, the payment and performance of the Bridge
Securities is guarantied by it under the Guaranty, (b) ratifies, approves and
reaffirms in all respects the terms and other provisions of, and its obligations
under, the Guaranty, the Collateral Documents and the other Investment Documents
to which it is a party or which it has consented to or acknowledged and (c)
confirms that the Guaranty, the Collateral Documents and the other Investment
Documents to which it is a party remain in full force and effect in accordance
with their respective terms.
12. No Other Amendments. This Amendment is being delivered without
prejudice to the rights, remedies or powers of the Purchaser in connection with
or under the Securities Purchase Agreement, the Notes, the Collateral Documents
and the other Investment Documents, Applicable Laws or otherwise and, except as
expressly provided in Sections 3 and 4 above, shall not constitute or be deemed
to constitute an amendment or other modification of, or a supplement to, the
Securities Purchase Agreement or any Investment Document. In addition, nothing
contained in this Amendment is intended to limit or impair any right, power or
remedy of the Purchaser under the Securities Purchase
-22-
Agreement or any Investment Document or, except as provided in Section 1 with
respect to the Specified Events of Default, shall be construed as a waiver of
any breach, violation, Default or Events of Default, whether past, present or
future, under the Securities Purchase Agreement or any Investment Document, or a
forbearance by the Purchaser of any of its rights, remedies or powers against
the Company or the Collateral. The Purchaser hereby expressly reserves all of
its rights, powers and remedies under or in connection with the Securities
Purchase Agreement, the Notes, the Collateral Documents and the Investment
Documents, whether at law or in equity, including, without limitation, the right
to declare all Obligations to be due and payable.
13. Miscellaneous Provisions.
(a) No Repurchase Option Trigger Event. The parties acknowledge and
agree that nothing contained in this Amendment or any agreement, instrument or
other document contemplated hereby or related hereto shall constitute a
Repurchase Option Trigger Event (as defined in the Equity Repurchase Option
Agreement).
(b) Entire Agreement; Successors and Assigns. This Amendment, together
with the other Bridge Financing Documents, constitute the entire understanding
and agreement with respect to the subject matter hereof and supersede all prior
oral and written, and all contemporaneous oral, agreements and understandings
with respect thereto (including the letter agreement dated March 14, 2003,
between the Company and the Purchaser). This Amendment shall inure to the
benefit of, and be binding upon, the parties and their respective successors and
permitted assigns.
(c) Governing Law. IN ALL RESPECTS, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
CALIFORNIA APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE (WITHOUT
REGARD TO THE CHOICE OF LAW OR CONFLICTS OF LAW PROVISIONS THEREOF).
(d) Counterparts. This Amendment may be executed in any number of
counterparts and by facsimile transmission, each of which shall be deemed an
original and all of which taken together shall constitute one and the same
instrument.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed and delivered by their duly authorized representatives as of the date
first written above.
COMPANY
OVERHILL FARMS, INC., a Nevada corporation
By: /s/Xxxxx Xxxxx
-----------------------------------------
Xxxxx Xxxxx
President and Chief Executive Officer
By: /s/Xxxx Steinbrun
-----------------------------------------
Xxxx Steinbrun
Senior Vice President and
Chief Financial Officer
GUARANTOR
OVERHILL L.C. VENTURES, INC., a California
corporation
By: /s/Xxxxx Xxxxx
-----------------------------------------
Xxxxx Xxxxx
President
By: /s/Xxxxxxx X. Xxxxxxx
-----------------------------------------
Xxxxxxx X. Xxxxxxx
Chief Financial Officer
PURCHASER
XXXXXX XXXXXXXXX CAPITAL PARTNERS II, L.P., a
California limited partnership
By: LLCP California Equity Partners II, L.P., a
California limited partnership, its General
Partner
By: Xxxxxx Xxxxxxxxx Capital Partners,
Inc., a California corporation, its
General Partner
By: /s/Xxxxxx X. Xxxxxxx
---------------------------------
Xxxxxx X. Xxxxxxx
Vice President
-24-
