SUPPLEMENTAL CREDIT FACILITY AGREEMENT
This Supplemental Credit Facility Agreement (the "Agreement") is
effective as of the 1st day of July, 1997 by and between Legacy Brands, Inc., a
California corporation (the "Company"), and DayStar, L.L.C. a _________ limited
liability company ("DayStar"). DayStar and the Company are collectively referred
to hereinafter as the "Parties".
RECITALS
WHEREAS, the Company is engaged in the production and marketing of
super premium branded frozen desserts and other food items;
WHEREAS, the Company is seeking funds to be used for working capital
purposes;
WHEREAS, the Company intends to raise up to $4,000,000 through an
offering of its securities in one or more private placements pursuant to one or
more exemptions from registration under applicable federal and state securities
laws and regulations (the "PPO") commencing in June 1997;
WHEREAS, the Company intends to repay the Loan from the proceeds of
the PPO;
WHEREAS, the Company and DayStar entered into a Credit Facility
Agreement in June 1997 pursuant to which DayStar agreed to provide a credit
facility of up to $440,000 to the Company in exchange for payment of certain
fees and issuance of warrants; and
WHEREAS, DayStar has agreed to provide the Company with an additional
credit facility of up to $400,000 on the terms and conditions described herein.
NOW, THEREFORE, in consideration of the mutual covenants and promises
set forth herein, the sufficiency of which is hereby acknowledged, the Parties
agree as follows:
1. CREDIT FACILITY AMOUNT.
Pursuant to this Agreement, DayStar has agreed to loan the Company a
principal amount of up to $400,000 (the "Loan").
2. PROMISSORY NOTE.
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Legacy Brands, Inc.
DayStar, LLC
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In consideration thereof, the Company will issue, cause to be executed
and deliver to DayStar, concurrent with its execution hereof, a promissory note
("Note") equal to the amount advanced hereunder, not expected to exceed
$400,000, plus the facility fee described in Section 4.1 below, upon the terms
and conditions specified herein and therein, and in the form attached hereto as
Exhibit A.
3. PAYMENTS.
3.1 All interest and principal outstanding shall be due and payable on
the Maturity Date as set forth in the Note.
3.2 The Company may, from time to time, in its sole discretion, make
one or more periodic payments to DayStar.
4. FEES; COSTS.
4.1 FACILITY FEE. The Company will pay to DayStar a facility fee of two
(2%) percent of the amounts advanced to the Company, which amount shall be added
to the amounts payable under the Note, but which shall not accrue interest.
4.2 LEGAL COSTS. All legal costs and expenses incurred by the Company
in connection with this Agreement shall be borne by the Company.
5. COVENANTS OF THE COMPANY.
The Company agrees and covenants as follows:
5.1 PAYMENT OF PRINCIPAL AND INTEREST.
The Company shall promptly pay when due the principal and
interest evidenced by the Note, and late charges provided in the Note, if any,
and all other sums secured by this Agreement and the Note.
5.2 CORPORATE EXISTENCE.
The Company is a corporation duly organized and existing under
the laws of the State of California and is duly qualified in every other state
in which it must qualify to do business.
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DayStar, LLC
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5.3 CORPORATE AUTHORITY.
The execution, delivery, and performance of this Agreement,
and the execution and payment of the Note is within the corporate powers of the
Company, has been duly authorized, is not in contravention of law or the terms
of the Company articles of incorporation and bylaws, or of any indenture,
agreement, or undertaking to which the Company is a party or by which it is
bound.
6. COVENANTS OF DAYSTAR.
DayStar warrants and represents that none of its members or
shareholders are affiliates of the Company or Capitol Bay Securities
7. DEFAULT PROVISIONS.
The occurrence of one or more of the following events shall constitute
an event of default of this entire Agreement:
7.1 Failure to pay amounts due, on or before the Maturity Date as
specified in the Note, which failure has not been cured pursuant to the
provisions of Note.
7.2 The institution by the Company of bankruptcy proceedings to be
adjudicated a bankrupt or insolvent or the consent by it to the institution of
bankruptcy or insolvency proceedings against it or the cessation of the primary
business activity of the Company which has not been cured within ten business
days.
8. NOTICES AND DELIVERY.
Any notice, request, consent, waiver or other communication required or
permitted under or in connection with this Agreement will be deemed
satisfactorily given if it is in writing and is delivered either personally to
the addressee thereof or by prepaid registered or certified U.S. mail (return
receipt requested), or by a nationally recognized commercial courier service
with next-day delivery charges prepaid, or by telegraph, or by facsimile (voice
confirmed), or by any other reasonable means of personal delivery to the Party
entitled thereto, with all such notices being given to the addressee at its
respective address set forth below. If any Party fails to insert an address
below, then such failure shall constitute a designation of its last known
address as the address for all notices. Any Party to this Agreement may change
its address or facsimile number for notice purposes by giving notice thereof to
the other Parties hereto in accordance with this Section, provided that such
change shall not be effective until two (2) calendar days after notice of such
CREDIT FACILITY AGREEMENT
Legacy Brands, Inc.
DayStar, LLC
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change. All such notices and other communications will be deemed given and
effective (a) if by mail, then upon actual receipt or five (5) calendar days
after mailing as provided above (whichever is earlier), or (b) if by facsimile,
then upon successful transmittal to such Party's designated number, or (c) if by
telegraph, then upon actual receipt or two business days after delivery to the
telegraph company (whichever is earlier), or (d) if by nationally recognized
commercial courier service, then upon actual receipt or two business days after
delivery to the courier service (whichever is earlier), or if otherwise
delivered, then upon actual receipt.
if to the Company
Xxxxxx X. Xxxx
President and Chief Executive Officer
Legacy Brands, Inc.
0000-X Xxxxxxx Xxxx., Xxxxx 000
Xxxxxxxxx, XX 00000
if to DayStar:
Xxxxx Xxxxx
DayStar, LLC
00000 X. Xx Xxxx Xxxx.
Xxxxxxxxx, XX 00000
9. ENTIRE AGREEMENT.
This Agreement, the Note, all exhibits and attachments hereto and other
related agreements, contain the entire understanding between and among the
Parties and supersedes any prior understandings and agreements among them
respecting the subject matter of this Agreement.
10. AGREEMENT BINDING.
This Agreement shall be binding upon the heirs, executors,
administrators, successors and assigns of the Parties hereto.
11. AMENDMENT AND MODIFICATION.
Subject to applicable law, this Agreement may be amended, modified, or
supplemented only
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DayStar, LLC
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by a written agreement signed by the Parties.
12. ATTORNEY FEES.
In the event arbitration, suit or action is brought by any party under
this Agreement to enforce any of its terms, and in any appeal therefrom, it is
agreed that the prevailing party shall be entitled to its reasonable attorneys
fees and to be fixed by the arbitrator, trial court, or appellate court.
13. ARBITRATION.
Any controversy or claim between or among the parties, including but
not limited to those arising out of or relating to this Agreement or any
agreements or instruments relating hereto or delivered in connection herewith
and based on or arising in contract or in tort, shall, at the request of any
party be determined by arbitration. The arbitration shall be conducted in Placer
County, California, United States of America, or such other place as the parties
may agree, in accordance with the United States Arbitration Act (Title 9, U.S.
Code), notwithstanding any choice of law provision in this Agreement, and under
the Commercial Rules of the American Arbitration Association ("AAA"). Any
controversy concerning whether an issue is arbitrable shall be determined by the
arbitrator. The arbitrator shall not have the authority to award punitive
damages. Judgement upon the arbitration award may be entered in any court having
jurisdiction. The institution and maintenance of an action for judicial relief
or pursuit of provisional or ancillary remedy shall not constitute a waiver of
the right of any party, including the plaintiff, to submit the controversy or
claim to arbitration if any other party contests such action for judicial
relief. The arbitrator shall determine the prevailing party for the purposes of
awarding payment of reasonable attorney's fees.
14. LAW GOVERNING.
This Agreement shall be governed by and construed in accordance with
the laws of the State of California.
15. SAVINGS CLAUSE.
If any provision of this Agreement, or the application of such
provision to any person or circumstance, shall be held invalid, the remainder of
this Agreement, or the application of such provision to persons or circumstances
other than those as to which it is held invalid, shall not be affected thereby.
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DayStar, LLC
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16. TITLES AND CAPTIONS.
All section titles or captions contained in this Agreement are for
convenience only and shall not be deemed part of the context nor effect the
interpretation of this Agreement.
17. FURTHER ACTION.
The Parties hereto shall execute and deliver all documents, provide all
information and take or forbear from all such action as may be necessary or
appropriate to achieve the purposes of the Agreement, including, but not limited
to, executing such financing statements, as the DayStar may deem necessary and
appropriate to protect its interests.
18. COUNTERPARTS.
The terms of the Agreement are contractual and not merely recital. The
Agreement may be signed in one or more counterparts, each of which shall be
deemed an original. Furthermore, facsimile copies shall be deemed the same as
originals. The Agreement shall be deemed fully executed and effective when all
Parties have executed at least one of the counterparts, even though no single
counterpart bears all such signatures.
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DayStar, LLC
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IN WITNESS WHEREOF, the Parties hereby execute this Agreement as of the
date first written above.
LEGACY BRANDS, INC.
_______________________________________
Xxxxxx X. Xxxx, Chief Executive Officer
DayStar,
a ___________ limited liability company
By: ___________________________________
Print Name: ___________________________
Title: ________________________________
EXHIBIT A
PROMISSORY NOTE
