Exhibit 10.40
SEVENTH AMENDMENT TO AMENDED AND RESTATED REDEMPTION AGREEMENT
This SEVENTH AMENDMENT to the REDEMPTION AGREEMENT dated November 1, 1996,
originally by and between XXXXXX XXXXXXXXXX XXXXXXXX and SPECTRUM NATURALS INC.,
a California corporation ("Spectrum"), and amended as provided in that FIRST
AMENDMENT TO REDEMPTION AGREEMENT dated September 11, 1998, that SECOND
AMENDMENT TO REDEMPTION AGREEMENT dated June 29, 1999, that THIRD AMENDMENT TO
REDEMPTION AGREEMENT dated July 9, 1999, that FOURTH AMENDMENT TO REDEMPTION
AGREEMENT dated July 12, 1999, that FIFTH AMENDMENT TO REDEMPTION AGREEMENT
dated October 6, 1999, and that SIXTH AMENDMENT TO REDEMPTION AGREEMENT dated
June 13, 2001, is hereby made by and between Xxxxxx Xxxxxxxxxx Xxxxxxxx, Trustee
("Seller"), Spectrum Organic Products, Inc., a California corporation (the
"Company") and Xxxxxxx X. Xxxxxxxx ("Guarantor") effective November 1, 2002.
WHEREAS, the Amended and Restated Promissory Note dated June 13, 2001
called for monthly interest payments on or before the 5th day of each month at
12% per annum on the then outstanding principal balance and monthly principal
payments of $31,250 on or before the 20th day of each month commencing July 20,
2002 until all principal is paid in full;
WHEREAS FURTHER, the parties desire to further revise the interest
rate and payment schedule hereunder;
NOW THEREFORE, the parties agree as follows:
1. The Company, as successor to Spectrum, shall deliver to Seller an
Amended and Restated Promissory Note made by the Company, and dated as
of the date hereof, in the form of Exhibit A attached hereto and by
this reference incorporated herein, in replacement of all Notes
previously issued pursuant to the REDEMPTION AGREEMENT, which previous
Notes shall be marked "Cancelled and Reissued" and returned to the
Company.
2. The interest rate shall be reduced to 9% per annum effective November
1, 2002.
3. Monthly principal payments shall be reduced to $15,625 effective
November 20, 2002 until all principal is paid in full.
4. Seller, at its sole option, shall have the right at all times, upon 60
days prior written notice to Company, to monthly principal payments of
$31,250 until all principal is paid in full.
5. All other terms and conditions of the REDEMPTION AGREEMENT not
specifically modified by this SEVENTH AMENDMENT remain in full force
and effect.
Executed as of this 17 day of November 2002 at Santa Rosa, California.
Spectrum Organic Products, Inc.
a California corporation
/S/ XXXXXXX X. XXXXXXXX
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XXXXXXX X. XXXXXXXX
Chairman of the Board
"Company"
/S/ XXXXXX XXXXXXXXXX XXXXXXXX, TRUSTEE
----------------------------------------
XXXXXX XXXXXXXXXX XXXXXXXX, TRUSTEE
"Seller"
/S/ XXXXXXX X. XXXXXXXX
----------------------------------------
XXXXXXX X. XXXXXXXX
"Guarantor"
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AMENDED AND RESTATED PROMISSORY NOTE
November 17, 0000
Xxxxx Xxxx, Xxxxxxxxxx
For value received, receipt of which is hereby acknowledged, Spectrum Organic
Products, Inc., a California corporation, ("the Company") hereby promises to pay
to Xxxxxx Xxxxxxxxxx Xxxxxxxx, Trustee, or order, at such place as designated by
the holder hereunder, the principal sum of $609,375.00, together with interest
thereon as hereinafter provided and in installments as hereinafter provided.
This Amended and Restated Promissory Note has been issued pursuant to the
Redemption Agreement dated November 1, 1996, as amended through the date hereof,
and represents the unpaid principal due under the Promissory Note called for
under such Agreement. The outstanding principal balance hereunder shall bear
interest at the rate of 9% per annum. Interest on the principal balance
outstanding from time to time shall be paid in monthly installments of interest
only on or before the 5th day of each month. In addition to said interest
payments, principal payments shall be paid in monthly installments of $15,625.00
on or before the 20th day of each month commencing November 20, 2002 until all
such principal has been paid in full.
The holder hereunder, at its sole option, shall have the right at all times,
upon 60 days prior written notice to the Company, to monthly principal payments
of $31,250 until all such principal has been paid in full.
In the event that any payment of principal or interest shall not be made within
five (5) days of its due date, there shall also be due a late payment fee equal
to one percent of the payment of principal or interest not made when due. This
Promissory Note may be prepaid in whole or in part at any time without penalty.
Presentment and demand for payment, notice of dishonor, protest and notice of
protest are hereby waived by the Company.
All payments shall be made in lawful money of the United States. Any payment
received shall be applied first to interest outstanding and then to reduction of
principal. In the event that (i) any payment of principal or interest shall not
be made when due and a period of ten (10) days shall have passed from written
notice of such non-payment without cure, or (ii) the Company or the Guarantor
shall fail to comply with any material non-monetary terms and conditions of the
Redemption Agreement or the Guaranty and a period of 30 days shall have passed
from written notice of such failure without cure, then the holder of this Note
may, without further notice, declare the entire unpaid principal and interest
due and payable.
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In the event that any action is initiated to enforce or interpret the terms of
this Agreement, the prevailing party of such litigation shall be entitled to
recover, as an element of cost of such litigation, the reasonable attorney's
fees.
This Note is personally guaranteed by Xxxxxxx Xxxxxxxx.
Any default under the terms of the Redemption Agreement dated November 1, 1996,
as amended through November 17, 2002, pursuant to which this Note is issued or
the personal Guaranty of Xxxxxxx Xxxxxxxx shall also constitute a default under
this Promissory Note, and a default hereunder shall, likewise, constitute a
default under said agreements.
This Promissory Note is a medium for investment and a "security" within the
meaning of the California Commercial Code Section 8102 and is governed by
Division 8 of the California Commercial Code.
This Promissory Note is divisible into a class or series of obligations at the
request of the holder.
The transfer of this Promissory Note may be registered upon the books of the
issuer.
This Promissory Note is subject to a Subordination Agreement in favor of Xxxxx
Fargo Business Credit, Inc.
Any notice to be given hereunder shall be deemed to be effective on the third
day following deposit of such notice in the United States mail, first-class
postage prepaid, return receipt requested, and directed to the parties at the
addresses set forth below:
Xxxxxx Xxxxxxxxxx Xxxxxxxx, Trustee Spectrum Organic Products, Inc.
0000 Xxxxxxxx Xxxx Attn: Chief Financial Officer
Xxxxx Xxxx, XX 00000 000 Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Spectrum Organic Products, Inc.
By: /s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx
Chairman of the Board
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