E X H I B I T 10.27
Acknowledgement of Default; Waiver; and Agreement
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ACKNOWLEDGEMENT OF DEFAULT; WAIVER; AND AGREEMENT
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TO: Foothill Capital Corporation
00000 Xxxxx Xxxxxx Xxxxxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
("Secured Creditor")
FROM: Action Industries, Inc.
000 Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxxx 00000
("Debtor")
1. Debtor acknowledges that it is currently indebted to Secured
Creditor, which indebtedness arose under and pursuant to that
certain Amended and Restated Loan and Security Agreement, dated
as of October 20, 1995, between Debtor and Secured Party (the
"Loan Agreement"), and other documents executed in connection
with the Loan Agreement, together with any and all changes,
alterations, modifications, or amendments to any of the foregoing
(collectively, the "Loan Documents"), between Secured Creditor
and Debtor. Debtor further acknowledges that it is now in
default under the Loan Documents, acknowledges that the amount of
the indebtedness owing to Secured Creditor thereunder is
approximately $816,935 plus interest and fees from February 1,
1997 and out-of-pocket expenses incurred by Secured Creditor, and
that such indebtedness is now wholly due and owing.
2. Debtor unconditionally, forthwith, and effective
immediately, consents to Secured Creditor's exercising its rights
and remedies (including the right to sell in a foreclosure sale)
with respect to all of Debtor's inventory, (the "Inventory"),
general intangibles ("General Intangibles") and all other
Collateral as provided for in the Loan Documents and in
accordance with the California Uniform Commercial Code ("Code").
3. Debtor, being in default as aforesaid, and pursuant to
Section 9504(3) of the Code, hereby unconditionally and forever
waives and renounces all rights that it may have to notification
of the disposition of the Inventory, the General Intangibles or
any other Collateral (as defined in the Loan Agreement) or any
portion thereof.
4. Debtor acknowledges and agrees that any sale by Secured
Creditor of the Inventory, the General Intangibles and the other
Collateral to Mazel Stores, Inc. on the same economic terms as
are set forth in the Asset Purchase Agreement dated October 18,
1996 between Mazel Stores, Inc. (by assignment from Mazel
Company, L.P.) and Debtor is commercially reasonable and in the
best interests of Debtor's creditors and shareholders. In
connection with any sale to Mazel Stores, Inc. on such terms,
Debtor agrees to take any and all actions and to execute and
deliver all agreements and instruments necessary to ensure,
confirm or perfect the transfer of the Inventory, General
Intangibles and other Collateral to Mazel Stores, Inc., including
without limitation making any required filings in the Federal
Patent and Trademark Office.
5. Debtor hereby represents, declares, and affirms to Secured
Creditor that it has had the opportunity to be represented by
counsel of its choice throughout the negotiations which led to
the execution of this instrument.
IN WITNESS WHEREOF, the undersigned has executed this
Acknowledgement of Default; Surrender of Possession; Waiver; and
Agreement as of the 7th day of February, 1997.
ACTION INDUSTRIES, INC.
a Pennsylvania corporation
By: /s/ T. Xxxxxx Xxxxxx
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Title: President
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The undersigned, a guarantor of all of the obligations of Action
Industries, Inc. ("Debtor") owing to Foothill Capital Corporation
("Secured Party"), hereunder acknowledges Debtor's execution of
the attached Acknowledgement of Default; Surrender of Possession;
Waiver; and Agreement. The undersigned hereby unconditionally
and forever waives and renounces any rights that it may have to
notification of the disposition of any collateral by Secured
Party.
ACTION INVESTMENT COMPANY,
a Delaware corporation
By: /s/ T. Xxxxxx Xxxxxx
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Title: President
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