EXHIBIT 10.29
LOAN AND SECURITY AGREEMENT
LOAN AND SECURITY AGREEMENT (the "Agreement"), dated October 9, 2003, (the
"Effective Date") by CREATIVE BAKERIES, INC., a New York corporation
("Creative") and X.X. SPECIALTIES, INC., A NEW JERSEY CORPORATION ("JMS")
(Creative and JMS are collectively referred to as the "Borrowers"), and
Fairfield Gourmet Food Corp. ("Lender"), a New Jersey corporation.
W I T N E S S E T H:
WHEREAS, pursuant to this Agreement, the Lender has agreed to make a
loan to the Borrowers upon the terms and subject to the conditions set forth
herein;
WHEREAS, Borrowers executed certain Secured Promissory Note in favor
of Lender, dated October 9, 2003 (the "Note"), in the principal amount of
$250,000; and
WHEREAS, it is a condition to the obligation of the Lender to make
the loan to the Borrowers under the Note, that the Borrowers shall have executed
and delivered this Agreement to the Lender.
NOW THEREFORE, in consideration of the premises and to induce the
Lender to accept the Note, and to make the loan to the Borrowers, the Borrowers
hereby agree with the Lender as follows:
ARTICLE I
THE LOAN
1.1. The Loan. Subject to the terms and conditions hereinafter
provided, Lender shall lend to Borrowers Two Hundred Fifty Thousand ($250,000)
Dollars (the "Loan"), for the purposes indicated below :
The Loan shall be used only for Borrowers operating requirements
and for no other purpose including but not limited to payment of debt not
incurred in ordinary course of Borrowers' business.
1.2. The Note. The Loan shall be evidenced by the Note substantially in
the form attached hereto as Exhibit 1.2, which Note shall be executed by the
Borrowers as of the Effective Date. Every term contained in the Note shall be
deemed incorporated into this Agreement. To the extent any provision of the Note
shall be deemed to be inconsistent with the provisions of this Agreement,
however, the provisions of this Agreement shall control.
1.3. Interest
1.3.1. The outstanding principal balance of the Loan and any
other obligations arising under this Agreement shall bear interest at the rate
of Thirteen percent (13%) per annum. Any unpaid interest shall be added to the
outstanding principal balance of the Loan and shall bear interest as well.
1.3.2. Interest on the Loan shall be payable by the Borrowers to
the Lender on December 31, 2003, March 31, 2004, June 30, 2004 and August 31,
2004.
1.3.3. The "Interest Rate Factor" shall be calculated by
dividing the annual interest rate of 13% by 360 days and then multiplying the
resulting quotient by the Number of Elapsed Days. The "Number of Elapsed Days"
for the Interest due on December 31, 2003, shall be determined by the number of
days from the date of this Agreement up until and including December 31, 2003.
For Interest due on March 31, 2004, June 30, 2004, and August 31, 2004, the
"Number of Elapsed Days" shall be determined respectively by the number of days
from the last day of the previous quarter (excluding such last day of the
previous quarter), up until and including the date upon which the Interest
Payment is due.
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1.3.4. The "Interest" shall be calculated by multiplying the
applicable Interest Rate Factor by the outstanding principal balance of the Loan
as of the date each Interest payment is due, unless there has been a
modification of the principal balance during such period, in which event
interest will be calculated based on outstanding balances from time to time.
1.3.3. Borrowers shall pay interest on any overdue installment
of principal and/or interest for the period for which such payment is overdue at
the rate of eighteen percent (18%) per annum. Nothing contained herein shall be
deemed to require the payment of interest at a rate in excess of the maximum
rate permitted by applicable law. In the event that the amount required to be
paid hereunder for any period exceeds the maximum rate permitted by law, such
amounts shall be automatically reduced for such period to the maximum rate
permitted by applicable law.
1.3.4. The Borrowers shall compensate the Lender, upon the
Lender's delivery of a written demand therefore to the Borrowers (which demand
shall, absent manifest error, be final and conclusive and binding upon all of
the parties hereto) for all reasonable losses, expenses and liabilities that the
Lender sustains as a consequence of any default by the Borrowers in repaying the
Loan or any other amounts owing hereunder when required by the terms of this
Agreement.
1.3.5. In addition to interest Borrowers shall pay to Lender a
fee of one-percent (1%) of the Loan, (Two Thousand Five Hundred [$2,500]
Dollars), in consideration for Lender making the Loan to Borrowers.
1.4. Repayment of Principal. Except as otherwise provided in this
Agreement, repayment of principal shall be due and payable in one lump sum on
August 31, 2004 (the "Due Date").
1.5. Prepayment. The Borrowers may prepay up to Sixty Two Thousand Five
Hundred ($62,500) Dollars in principal on each date that interest is due
pursuant to this Agreement, without penalty or premium in which case any such
prepayments shall be deducted from the outstanding principal balance of the Loan
for any Interest payments due thereafter. Borrowers may also prepay all of the
principal of the Loan at any time provided such prepayment shall include
interest calculated to the date of prepayment plus fifty (50%) percent of the
interest that would have been earned had the Loan not been prepaid from the date
of such prepayment to the Due Date (the "Yield Maintenance Payment"). It is
acknowledged that the Yield Maintenance Payment is intended to compensate Lender
for utilizing its credit in order to make the Loan to Borrowers and is not to be
deemed additional interest for any purpose. The Yield Maintenance Payment shall
also be due in the event of a prepayment as a result of acceleration of the Loan
as a result of an Event of Default (See Section 1.6).
1.6. Acceleration. Notwithstanding the other provisions of this
Agreement, immediately upon the occurrence of any Event of Default (as defined
in Section 5.1) and during any continuance thereof, the Lender may declare the
Loan, all interest thereon and all other amounts and obligations payable to be
forthwith due and payable to the Lender or may take any other action as provided
in Section 5.2 and 5.3 of this Agreement.
1.7. Payment Procedures. All payments made by Borrowers under this
Agreement shall be made to the Lender at its office at the address indicated in
Section 7.3 and shall be made in U.S. dollars. All payments received by the
Lender shall be applied first to fees and expenses (if any), then to accrued
interest, then to the Yield Maintenance Payment and lastly, to unpaid principal
in accordance with the terms of this Agreement. To the extent not previously
repaid, all principal and interest outstanding with respect to the Loan, plus
any accrued but unpaid expenses and fees or other obligations arising under this
Agreement, shall be due and payable in full on the "Due Date."
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ARTICLE II
COLLATERAL
2.1. Collateral. Borrowers hereby pledge, assign and grant to Lender,
as security for the performance of this Agreement, the Note and any other
documents executed in connection herewith (the "Loan Documents"), and the
repayment of the Loan and for all other indebtedness, liabilities and
obligations of Borrowers (primary, secondary, direct, contingent, related,
unrelated, sole, joint or several) due or to become due to Lender or which may
be contracted for or acquired hereafter (collectively, the "Obligations"), a
security interest under the Uniform Commercial Code in effect in the States of
New Jersey and New York in all Accounts, Inventory, General Intangibles,
(including but not limited to trade names, brand names (such as Brooklyn
Cheesecake), recipes and customer lists), Chattel Paper, Instruments, Documents
and Equipment (whether or not constituting fixtures) and any other asset now
owned or hereafter acquired by Borrowers, together with all cash and non-cash
proceeds, products, distributions, additions, accessions, substitutions,
exchanges and replacements thereof, (collectively, the "Collateral").
2.2. Further Assurances. Borrowers shall from time to time promptly
take all actions (and execute, deliver and record all instruments and documents)
necessary or reasonably appropriate or requested by Lender, to perfect and
protect any security interest granted or purported to be granted hereby or to
enable Lender to exercise and enforce its rights and remedies hereunder with
respect to any of the Collateral.
2.3. Attorney-In-Fact. Borrowers hereby irrevocably appoint Lender as
its attorney-in-fact, in the name of Borrowers or otherwise, from time to time
in Lender's discretion and at Borrowers' expense, to take any action and to
execute, deliver and record any instruments or documents which Lender may deem
necessary or advisable in order to perfect and protect any security interest
granted or purported to be granted hereby or to enable Lender to exercise and
enforce its rights and remedies hereunder with respect to any of the Collateral
including, without limitation, financing or continuation statements under the
Uniform Commercial Code, and amendments thereto. Lender shall not, in its
capacity as such attorney-in-fact, be liable for any acts or omissions, nor for
any error of judgment or mistake of fact or law, but only for gross negligence
or willful misconduct. All authorizations and agencies herein contained with
respect to the collateral are irrevocable powers coupled with an interest.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Borrowers hereby make the following representations and warranties, which
shall be continuing in nature and remain in full force and effect until the
Obligations are satisfied in full:
3.1. Existence and Power. Creative and JMS are corporations duly
organized, validly existing and in good standing in all material respects under
the laws of the jurisdiction of their respective incorporation or organization
and have all requisite power and authority to own and operate their assets and
to conduct their business as now or proposed to be carried on, and are duly
qualified, licensed and in good standing to do business in all jurisdictions
where their ownership of property or the nature of their business requires such
qualification or licensing. Borrowers have the full power and authority to
execute, deliver and perform this Agreement, the Note, financing statements, and
all other agreements, instruments, and documents evidencing or securing the Loan
(collectively as "Loan Documents").
3.2. Authorization and Enforceability. Borrowers have been duly
authorized to execute, deliver and perform the Loan Documents by all appropriate
action of their respective Boards of Directors or otherwise as may be required
by law, charter or other organizational documents or agreements. Each of the
Loan Documents, when executed and delivered by Borrowers, will constitute the
legal, valid and binding obligation of Borrowers, enforceable in accordance with
their respective terms.
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3.3. No Defaults or Violations. There does not exist any Event of
Default (as that term is defined in Section 5.1) under this Agreement or any
material default or violation by Borrowers of or under any of the terms,
conditions or obligations of: (a) Creative and JMS articles or certificate of
incorporation, regulations or bylaws or other organizational documents as
applicable; (b) any indenture, mortgage, deed of trust, franchise, permit,
contract, agreement, or other instrument to which Creative and JMS are a party
or by which they or any of their properties may be bound; or (c) any law,
regulation, ruling, order, injunction, decree, condition or other requirement
applicable to or imposed upon Borrowers by any law, or by the action of any
court or other governmental authority or agency; and the execution, delivery and
performance of the Loan Documents will not result in any such default or
violation, nor are any approvals, authorizations, licenses, waivers or consents,
governmental (foreign, federal, state or local) or non-governmental, under the
terms of contracts or otherwise, required to be obtained by Borrowers by reason
of or in connection with their execution, delivery and performance of any of the
Loan Documents. Notwithstanding anything else to the contrary contained in this
Agreement or any Loan Document, Lender acknowledges that Borrowers have informed
Lender that (i) Borrowers may be in default of their lease and that they are
proceeding in good faith to renegotiate a new lease or amendments to the present
lease with its landlord, (ii) Borrowers pay their creditors on a 90 day basis,
and (iii) Creative is in default of a certain warrant for the issuance of shares
of stock of Creative. The existence of items (i), (ii), and (iii) above shall
not constitute a breach or an Event of Default with respect to this Agreement or
any of the Loan Documents, but anything resulting from the existence of these
items, including but not limited to the institution of litigation by Borrower's
landlord, a creditor or the beneficiary of the warrant may constitute a default
under this Agreement if provided for by Article V hereof.
3.4. Financial Statements. Borrowers have delivered or caused to be
delivered to Lender their most recent balance sheet, income statement and
statement of cash flows as of June 30, 2003 (the "Financial Statements"). The
Financial Statements are true, accurate and complete in all material respects
and fairly present the financial condition, cash flow and the results of
Borrowers' operations as of the respective dates thereof and for the periods
therein referred to, all in accordance with generally accepted accounting
principles in effect from time to time ("GAAP"), consistently applied from
period to period subject in the case of interim statements to normal year-end
adjustments and excluding disclosures normally required by XXXX. Borrowers do
not have any liabilities or obligations of any nature (whether or not of the
nature required to be reflected in a balance sheet prepared in accordance with
GAAP) that are not reflected on the Financial Statements (including, without
limitation, any liabilities relating to environmental, occupational and health
matters or ERISA) except for current liabilities (within the meaning of GAAP)
which have been incurred since the date thereof in the ordinary course of
business and consistent in nature and amount with Borrowers' operating history.
Notwithstanding anything else to the contrary contained in this Agreement or any
Loan Document, Lender acknowledges that Borrower has informed Lender that
Borrower has incurred liabilities as set forth on Schedule 4.2.1, and the
existence of such debt shall not constitute a breach or an Event of Default of
this Agreement or any of the Loan Documents.
3.5. No Material Adverse Change. Since the date of their most recent
Financial Statements, Borrowers have not suffered any damage, destruction or
loss, and no event or condition has occurred or exists, which has resulted or
could result in a material adverse change in its business, assets, operations,
financial condition or results of operation.
3.6. Title to Assets; Existing Liens. Borrowers have good and
marketable title to their assets, free and clear of all liens and encumbrances,
except for (a) current taxes and assessments not yet due and payable, (b) liens
and encumbrances, if any, reflected or noted in their most recent Financial
Statements, (c) assets disposed of by Borrowers since the date of their most
recent Financial Statements in the ordinary course of business, consistent with
past practice, and (d) the liens and encumbrances described on Schedule 3.6.
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3.7. Litigation. Except as set forth in Schedule 3.7, there are no
actions, suits, proceedings or governmental investigations pending or, to the
knowledge of Borrowers, threatened, against Borrowers or any of their properties
which could result in a material adverse change in Borrowers' business, assets,
operations, financial condition or results of operations and there is no basis
known to Borrowers for any action, suit, proceeding or investigation which could
result in such a material adverse change.
3.8. Tax Returns. Borrowers have filed all returns and reports that are
required to be filed by them in connection with any federal, state or local tax,
duty or charge levied, assessed or imposed upon them or any of their properties
or that they are required to withhold and pay over including, without
limitation, unemployment, social security and similar taxes, and all of such
taxes have been paid or adequate reserves therefore have been set aside or other
provisions therefore have been made.
3.9. Intellectual Property. Borrowers own or are licensed to use all
patents, patent rights, trademarks, trade names, service marks, copyrights,
intellectual property, technology, know-how and processes necessary for the
conduct of their business as currently conducted that are material to Borrowers'
condition (financial or otherwise), business or operations. Lender acknowledges
that the names "Brooklyn Cheesecake Company, Inc." and "Brooklyn Cheesecake and
Desserts Company" are not registered or protected under state or federal laws,
but Borrowers represent that they have instituted the process of registering and
trade marking said names, and Borrowers covenant that they will pursue said
process with diligence.
3.10. INTENTIONALLY LEFT BLANK.
3.11. Disclosure. None of the Loan Documents contain any untrue
statement of material fact or omit to state a material fact necessary in order
to make the statements contained in the Loan Documents not misleading. There is
no fact known to Borrowers which materially and adversely affects or, so far as
Borrowers can now foresee, might materially and adversely affect Borrowers'
business, assets, operations, financial condition or results of operation and
which have not otherwise been fully set forth in this Agreement or otherwise
disclosed in writing to Lender.
3.12. Places of Business. The locations of Borrowers' chief executive
office and other places of business are shown on Schedule 3.12. Borrowers
covenant not to establish any new, or discontinue any existing, place of
business without giving Lender at least 30 days' prior notice.
3.13. Capital Structure. Schedule 3.13 sets forth the respective
authorized capital stock of Borrowers, the issued and outstanding shares of such
stock, and the 5% or greater owners thereof. There are no options, warrants or
other rights outstanding to purchase any such shares except as indicated on
Schedule 3.13.
3.14. Subsidiaries, Affiliates, and Other Investments. Except as shown
on Schedule 3.14, Borrowers have no subsidiaries or affiliates (other than its
own shareholders); nor do Borrowers have any investment in any other person or
entity.
ARTICLE IV
COVENANTS
4.1. Affirmative Covenants. Borrowers agree that from the date of
execution of this Agreement until the Obligations are satisfied in full,
Borrowers shall (and shall cause each of its majority-owned subsidiaries, if
any, to):
4.1.1. Payments of Taxes and Other Charges. Pay and discharge
when due all taxes, assessments, charges, levies and other liabilities imposed
upon Borrowers, their income, profits, properties or business, except those
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which currently are being contested in good faith by appropriate proceedings and
for which Borrowers shall have set aside adequate reserves or made other
adequate provisions acceptable to Lender in its sole discretion.
4.1.2. Maintenance of Existence, Operation and Assets;
Inspection. Do all things necessary to maintain, renew and keep in full force
and effect their respective organizational existence and all rights, permits and
franchises necessary to enable them to continue their business; continue in
operation in substantially the same manner as at present; conduct business and
enter into transactions only in the ordinary course, consistent with past
practice; keep their properties in good operating condition and repair; make all
necessary and proper repairs, renewals, replacements, additions and improvements
thereto; and permit representatives of Lender to inspect Borrowers' properties
and its books and records and to make extracts therefrom at all reasonable times
during normal business hours.
4.1.3. Insurance. Keep their assets insured with responsible
insurance companies against those risks and in such amounts as are commonly
insured against by companies in similar businesses and owning similar assets. At
Lender's request, Borrowers shall have Lender named as loss payee on all hazard
insurance policies covering the Collateral and shall have Lender named as an
additional insured on liability policies. Borrowers shall deliver to Lender such
certificates, endorsements, and other evidence of such insurance as Lender may
reasonably request.
4.1.4. Compliance with Laws. Comply materially with all laws
applicable to Borrowers and to the operation of their respective business
(including, without limitation, any statute, rule or regulation relating to
employment practices and employee benefits and to environmental, occupational
and health standards and controls).
4.1.5. Financial Reports. Deliver promptly such financial
statements and reports as Lender may reasonably request including, without
limitation, annual financial statements audited or reviewed by independent
certified public accountants, quarterly interim financial statements prepared by
Borrowers' management and within ten (10) days after the end of each calendar
month, a monthly statement of cash flow and accounts receivable certified as
accurate by the CEO of Borrowers. All such financial data shall be true,
accurate and complete in all material respects and shall be prepared in
accordance with GAAP consistently applied, subject, in the case of interim
statements, to normal year-end adjustments and excluding disclosures normally
required by GAAP.
4.1.6. Additional Reports. Provide prompt notice to Lender of
the occurrence of any of the following (together with a description of the
action which Borrowers propose to take with respect thereto): (a) any Event of
Default or potential Event of Default hereunder or under any of the Loan
Documents, (b) any litigation filed by or against Borrowers, (c) any event which
might result in a material adverse change in Borrowers' business, assets,
operations, financial condition or results of operation; and provide to Lender
any other reports reasonably requested thereby.
4.1.7. Use of Proceeds. Use of the proceeds of the Loan only
for the purposes specified in Section 1.1 above.
4.1.8. Indemnification. Borrowers agree to pay, and to hold
Lender harmless from, any and all liabilities, costs and expenses (including,
without limitation, reasonable legal fees and expenses) (i) with respect to, or
resulting from, any delay in paying any and all excise, sales or other taxes
which may be payable or determined to be payable with respect to any of the
Collateral, (ii) with respect to, or resulting from, any delay in complying with
any requirement of law applicable to any of the Collateral or (iii) in
connection with any of the transactions contemplated by this Agreement or the
Loan Documents. In any suit, proceeding or action brought by Lender to enforce
the provisions of this Agreement, Borrowers will save, indemnify and keep Lender
harmless from and against all expense, loss or damage suffered by reason of any
defense, set off, counterclaim, recoupment or reduction or liability whatsoever
of the account of Borrowers or obligor thereunder, arising out of a breach by
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Borrowers of any obligation thereunder or arising out of any other agreement,
indebtedness or liability at any time owing to or in favor of such account of
Borrowers or obligor or its successors.
4.1.9. Further Identification of Collateral. Borrowers will
furnish to Lender from time to time statements and schedules further identifying
and describing the Collateral and such other reports in connection with the
Collateral as Lender may reasonably request, all in reasonable detail.
4.1.10 Notices. Borrowers will advise Lender, in reasonable
detail, at its address set forth below, (i) of any encumbrance on, or claim
asserted against, any of the Collateral and (ii) of the occurrence of any other
event which could reasonably be expected to have a material adverse effect on
the aggregate value of the Collateral or on the encumbrances created hereunder.
4.2. Negative Covenants. Borrowers covenant and agree that from the
date of execution of this Agreement until the Obligations are satisfied in full,
Borrowers shall not (and shall cause each of its majority-owned subsidiaries, if
any, not to), without Lender's prior written consent:
4.2.1. Indebtedness. Except as provided in Schedule 4.2.1 of
this Agreement, maintain, create or incur any indebtedness for borrowed money
other than the Loan and any subsequent indebtedness to Lender,
4.2.2. Liens and Encumbrances. Except for liens in favor of
Lender create, assume or permit to exist any mortgage, pledge, encumbrance or
other security interest or lien upon any assets now owned or hereafter acquired
by Borrower. Notwithstanding anything else to the contrary contained in this
Agreement or any of the Loan Documents, (i) Borrowers may lease equipment under
which the lessor of such equipment may maintain a security interest in the
equipment leased, and (ii) Borrowers may purchase equipment under which the
seller of such equipment may maintain a security interest in the equipment
purchased by the Borrowers, provided that for purchases of equipment in an
amount greater than Ten Thousand ($10,000) Dollars, Borrowers must obtain the
prior written consent of the Lender, which consent shall not be unreasonably
withheld.
4.2.3. Guarantees. Guarantee, endorse or become contingently
liable for the obligations of any person or entity, except in connection with
the endorsement and deposit of checks in the ordinary course of business for
collection.
4.2.4. Merger; Disposition of Assets. Merge or consolidate
with or into any person or entity or lease, sell, transfer or otherwise dispose
of any material assets, whether now owned or hereafter acquired, other than in
the normal course of business and consistent with past practices.
4.2.5. Change in Business, Management or Ownership. Make or
permit any material change in the nature of Borrower's business as carried on as
of the date hereof or make any other major decisions which effect the business
of Borrower other than day to day operation decisions.
4.2.6. Dividends and Other Distributions. Declare or pay any dividends on or
make any distribution with respect to any class of its capital stock or equity
or ownership interest, or repurchase, redeem, retire or otherwise acquire any of
its capital stock or equity.
4.2.7. Investments. Purchase or hold beneficially any stock,
other securities or evidence of indebtedness or make any loans or advances to,
or make any investment or acquire any interests in, any other person or entity
4.2.8. Related Party Loans. Repay any loans payable to
officers, shareholders or directors of Borrowers.
For so long as no Event of Default has occurred, notwithstanding anything else
to the contrary contained in this Agreement or any of the Loan Documents, the
Borrower may pay to (i) Xxxxxx X. Xxxxxxx the "Minimum Amount Due," or past due
amounts thereof, as required under the American Express Business Capital Line
and in connection with the Revolving Credit Note to Xxxxxx X. Xxxxxxx listed in
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Schedule 4.2.1 and (ii) Xxxxxxx Xxxxxxx the "Minimum Payment Due," or past due
amounts thereof, as required under the Fleet Business Credit Express and in
connection with the Revolving Credit Note to Xxxxxxx Xxxxxxx listed in Schedule
4.2.1.
ARTICLE V
DEFAULT
5.1. Events of Default. Events of default (an "Event of Default") are
as follows:
5.1.1. Any material default in the Note or any of the other
Loan Documents.
5.1.2 (a) Borrowers fail to make any payment of principal or
interest payable under this Agreement or Loan Documents when
due; or
(b) Borrowers fail to fully perform any material term,
condition or obligation as provided in this Agreement or Loan
Documents that remains uncured for five (5) business days
after notice from Lender of such default; or
(c) Creative or JMS file for bankruptcy or
reorganization, are generally not paying their debts in
accordance with past business practice, make an assignment for
the benefit of creditors, a trustee or receiver is appointed
over Creative or JMS or any of their property, bankruptcy,
liquidation or other similar proceedings is commenced against
Creative or JMS, or a writ or warrant or similar process is
issued against Creative or JMS or their property; or
(d) Creative or JMS no longer remain a corporation in
good standing in the State of its organization, or
(e) The death, disability, resignation or removal of
Xxxxxx X. Xxxxxxx ("Xxxxxxx"), as CEO of Borrowers, unless in
the case of death or disability there exists "Key Man" or
disability insurance policies with proceeds utilized to pay
all amounts due the Lender within a reasonable period of time.
In addition, the Lender must be named as an additional insured
and/or beneficiary on such policies, or
(f) The inability of Borrowers to pay any of their
debts (in accordance with past business practice) or taxes as
they become due, or
(g) The filing of a summary proceeding by Borrowers'
landlord or of any lawsuit in excess of $20,000 against
Creative and/or JMS that is not removed or bonded within 15
days of institution of such lawsuit, or
(h) Sales fall below $600,000 in any calendar quarter,
or (i) Cash and accounts receivable are below $125,000.
5.2. Remedies on Default:
5.2.1. Proceeds. If an Event of Default under this Agreement
shall occur and be continuing or if any portion of the Obligations has become
due and remain unpaid and if so requested by Lender (a) all proceeds received by
Borrowers consisting of cash, checks and other near-cash items shall be held by
Borrowers in trust for Lender, and shall, forthwith upon receipt by Borrowers,
be turned over to Lender in the exact form received by Borrowers (duly endorsed
by Borrowers to Lender, if required), and (b) any and all such proceeds received
by Lender (whether from Borrowers or otherwise) may, in the sole discretion of
Lender, be held by Lender for its own benefit as collateral security for, and/or
then or at any time thereafter may be applied by Lender against the Obligations
(whether matured or unmatured), such application to be in such manner as set
forth in the Note and Borrowers waive any right of offset they may otherwise
have. Any balance of such proceeds remaining after the Obligations shall have
been paid in full and Lender shall have no further obligations or commitments
under the Note shall be paid over to Borrowers or to whomsoever may be lawfully
entitled to receive the same.
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5.2.2. Remedies. If any Event of Default under this Agreement
shall have occurred and be continuing or from and after the date that any
portion of the Obligations has become due and remains unpaid, Lender may
exercise in addition to all other rights and remedies granted to them in this
Agreement and in any Loan Documents, evidencing or relating to the Obligations,
all rights and remedies of a secured party under the UCC. Without limiting the
generality of the foregoing, in the event of such an Event of Default as
described in the preceding sentence, Lender, without demand of performance or
other demand, presentment, protest, advertisement or notice of any kind (except
any notice required by law referred to below) to or upon Borrowers or any other
person (all and each of which demands, defenses, advertisements and notices are
hereby waived) may in such circumstances forthwith collect, receive, appropriate
and realize upon the Collateral, or any part thereof, and/or may forthwith sell,
lease, assign, give option or options to purchase, or otherwise dispose of and
deliver the Collateral or any part thereof (or contract to do any of the
foregoing) in one or more parcels at public or private sale or sales, at any
exchange, broker's board or office of Lender or elsewhere upon such terms and
conditions as it may deem advisable and at such prices as it may deem best, for
cash or on credit or for future delivery without assumption of any credit risk.
Lender shall have the right upon any such public sale or sales, and, to the
extent permitted by law, upon any such private sale or sales, to purchase the
whole or any part of the Collateral so sold, free of any right or equity of
redemption which right or equity is hereby waived or released. Borrowers further
agree, at Lender's request, and to the extent that Borrowers are able to do so,
to assemble the Collateral and make it available to Lender at places which
Lender shall reasonably select, whether at Borrowers' premises or elsewhere.
Lender shall apply the net proceeds of any such collection, recovery, receipt,
appropriation, realization or sale, after deducting all reasonable costs and
expenses of every kind incurred therein or incidental to the care or safekeeping
of any of the Collateral or in any way relating to the Collateral or the rights
of Lender hereunder, including, without limitation, reasonable attorneys' fees
and disbursements, to the payment in whole or in part of the obligations, in
such manner as is set forth in the Note and only after such application and
after the payment by Lender of any other amount required by any provision of
law, including, without limitation, Section 9-504(1)(c) of the UCC, need Lender
account for surplus, if any, to Borrowers. To the extent permitted by applicable
law, Borrowers waive all claims, damages and demands it may acquire against
Lender arising out of the exercise by them of any rights hereunder. If any
notice of a proposed sale or other disposition of Collateral shall be required
by law, such notice shall be deemed reasonable and proper if given at least ten
(10) days before such sale or other disposition. Borrowers shall remain liable
for any deficiency if the proceeds of any sale or other disposition of the
Collateral are insufficient to pay the obligations and the fees and
disbursements of any attorneys employed by Lender to collect such deficiency.
5.2.3. No Subrogation. Notwithstanding any payment or payments
made by Borrowers hereunder, or any set off or application of funds of Borrowers
by Lender, or the receipt of any amounts by Lender with respect to any of the
Collateral, Borrowers shall not be entitled to be subrogated to any of the
rights of Lender against any other collateral security held by Lender for the
payment of the Obligations until all amounts owing to Lender on account of the
Obligations or commitments under the Note have been paid in full. If any amount
shall be paid to Lender on account of such subrogation rights at any time when
all of the Obligations shall not have been paid in full, such amount shall be
held by Borrowers in trust for Lender, and shall, forthwith upon receipt by
Borrowers, be turned over to Lender in the exact form received by Borrowers
(duly endorsed by Borrowers to Lender, if required) to be applied against the
Obligations, whether matured or unmatured, in such manner as set forth in the
Note, this Agreement and the Loan Documents.
5.2.4. Appointment to Borrowers Board of Directors. Within 10
days after a default under the Loan Documents, Creative and JMS shall take
actions to cause the removal and/or resignation of a sufficient number of
directors and to replace such directors with directors nominated by the Lender
in order that there shall be a majority of directors on their respective Boards
of Directors that are nominated by the Lender, provided that nominees of the
Lender are qualified to serve as directors and there remains on the Boards of
Directors a sufficient number of independent directors in order to be in
compliance with law. It is acknowledged that this provision is intended to
facilitate Lender's execution on the Collateral if an Event of Default occurs.
9
ARTICLE VI
DISPUTE RESOLUTION
6.1. Resolution of Disputes.
6.1.1. Jurisdiction; Process. The parties hereto irrevocably
submit to the non-exclusive jurisdiction of any New Jersey state or United
States Federal Court sitting in New Jersey over any suit, action or proceeding
arising out of or relating to this Agreement.
The parties hereto further consent to process being served in any such
suit, action or proceeding by mailing a certified copy thereof, return receipt
requested, to said party at its respective address referred to in Section 7.3.
Each party agrees that such service shall be deemed in every respect effective
service of process upon it in any such suit, action or proceeding and shall, to
the full extent permitted by law, be taken and held to be valid personal service
upon and personal delivery to it. Nothing in this paragraph shall affect or
limit any right to serve process in any manner permitted by law, to bring
proceedings in the courts of any jurisdiction or to enforce in any lawful manner
a judgment obtained in any other jurisdiction.
Borrowers irrevocably waive, to the full extent permitted by law, any
objection which it may have to the laying of venue of any such suit, action or
proceeding brought in any such court any claim that any such suit, action or
proceeding has been brought in an inconvenient forum. So long as this Agreement
remains in effect, Borrowers will at all times have an authorized agent in New
Jersey upon whom process may be served in any action or proceeding arising out
of or relating to this Agreement.
6.1.2. Performance Pending Resolution. Each party shall be
required to continue to perform its respective obligations under the Loan
Documents pending final resolution of any Dispute, unless to do so would be
impossible or impracticable under the circumstances.
ARTICLE VII
MISCELLANEOUS
7.1. Expenses. Borrowers shall pay to Lender or at Lender's direction,
upon execution of this Agreement, and otherwise on demand, all costs and
expenses incurred by Lender in connection with (a) the preparation, negotiation
and closing of this Agreement, Loan Documents and any related documents, and any
modifications hereto or thereto, it being agreed that reimbursement for said
legal fees incurred by Lender exclusive of disbursements shall not exceed
$5,000, and (b) instituting, maintaining, preserving, enforcing and foreclosing
the security interest in any of the Collateral, whether through judicial
proceedings, arbitration or otherwise, or in defending or prosecuting any
actions, arbitrations or proceedings arising out of or relating to this
Agreement or the Loan Documents including, without limitation, reasonable fees
and expenses of counsel, expenses for auditors, appraisers and environmental
consultants, lien searches, recording and filing fees and taxes.
7.2. Amendments, Indulgences, Etc. No amendment or waiver of any
provision of this Agreement nor consent to any departure by Borrower herefrom
shall in any event be effective unless the same shall be in writing and signed
by Lender, and then such amendment, waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given. No failure
or delay on the part of Lender in the exercise of any right, power, or remedy
under this Agreement or any of the other Loan Documents shall under any
circumstances constitute or be deemed to be a waiver thereof, or prevent the
exercise thereof in that or any other instance.
7.3. Notices. All notices given hereunder shall be in writing and
deemed validly given (a) three (3) business days after sent, postage prepaid, by
10
certified mail, return receipt requested, (b) one (1) business day after sent,
charges paid by the sender, by Federal Express Next Day Delivery or other
guaranteed delivery service, (c) when confirmation of transmission by facsimile
during normal business hours is received, or (d) when delivered by hand, upon
delivery, in each case to the intended recipient at its address shown below or
to such other address, or in care of such other person, as either party shall
hereafter specify to the other from time to time by due notice:
If to Borrowers
X.X. Specialties, Inc. Creative Bakeries, Inc.
00 Xxxxxxx Xxxxxx Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxx Xxxxxxx
Fax No.: (000) 000-0000
cc: Xxxxxxx XxXxxx, Esq.
0000 Xxxxxxxx Xxxxxx
Xxxxx, XX 00000-0000
Fax No.: (000) 000-0000
If to Lender:
Fairfield Gourmet Food Corp.
00 Xxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attn: Xxx Xxxxxxxxx
Fax No.: (000) 000-0000
cc: Xxxxx Xxxxxxx, Esq.
00 Xxxxxxxx Xxxxx
Xxxxxx Xxxxx, XX 00000
Fax (000) 000-0000
7.4. Interpretation. Except as otherwise indicated, all agreements
defined herein refer to the same as from time to time amended or supplemented or
the terms thereof waived or modified in accordance herewith and therewith. Any
provision hereof found to be illegal, invalid or unenforceable for any reason
whatsoever shall not affect the legality, validity or enforceability of the
remainder hereof. In this Agreement, in the computation of a period of time from
a specified date to a later specified date, the word "from" means "from and
including" and the words "to" and "until" each means "to but excluding." Unless
otherwise expressly provided, the word "including" does not limit the preceding
words or terms.
7.5. Entire Agreement. This Agreement, and all agreements and
instruments to be delivered by the parties pursuant hereto or in connection
herewith, represent the entire understanding of the parties with respect to the
subject matter hereof, and supersede all other prior and contemporaneous
agreements and understandings, both written and oral, between the parties with
respect to the subject matter hereof.
7.6. Governing Law. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors and
assigns, and construed and interpreted according to the laws of the State of New
Jersey.
7.7. Counterparts. This Agreement may be executed in one or more
counterparts, all of which taken together shall constitute one and the same
instrument.
7.8. Continuing Security Interest. This Agreement shall create a
continuing security interest in the Collateral and shall remain in full force
and effect until the payment in full of the obligations and all other amounts
payable under this Agreement and the Loan Documents. Upon any assignment or
transfer by Lender, the transferee shall thereupon become vested with all the
benefits in respect thereof granted to Lender herein or otherwise. Upon the
payment in full of the Obligations and all other amounts payable under this
Agreement, the security interest granted hereby shall terminate and all rights
to the Collateral shall revert to Borrowers. Upon any such termination, Lender
will, at Borrowers' expense, execute and delivery to Borrowers such documents as
Borrowers shall reasonably request to evidence such termination.
11
7.9 Limitation on Duties Regarding Preservation of Collateral. Lender's
sole duty with respect to the custody, safekeeping and physical preservation of
the Collateral in its possession, under Section 9-207 of the UCC or otherwise,
shall be to deal with it in the same manner as Lender deals with similar
property for its own account. Neither Lender, nor any of their respective
directors, officers, employees or agents shall be liable for failure to demand,
collect or realize upon all or any part of the collateral or for any delay in
doing so or shall be under any obligation to sell or otherwise dispose of any
Collateral upon the request of Borrowers or otherwise.
7.10. Paragraph Headings. The paragraph headings used in this Agreement
are for convenience of reference only and are not to affect the construction
hereof or be taken into consideration in the interpretation hereof.
IN WITNESS WHEREOF, the parties have executed or caused to be executed this
Agreement as of the day and year first above written.
Borrowers:
X.X. Specialties, Inc., A New Jersey Corporation
By:
---------------------------------------
Xxxxxx X. Xxxxxxx
Title: Chief Executive Officer & President
Creative Bakeries, Inc.
By:
---------------------------------------
Xxxxxx X. Xxxxxxx
Title: Chief Executive Officer
Lender:
Fairfield Gourmet Food Corp.
By:
---------------------------------------
Xxx Xxxxxxxxx
Title: President
STATE OF NEW JERSEY, COUNTY OF S S :
On the day of in the year
before me, the undersigned, personally appeared Xxxxxx X. Xxxxxxx
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual(s) whose name(s) is (are) subscribed to the within instrument
and acknowledged to me that he/she/they executed the same in his/her/their
capacity(ies), and that by his/her/their signature(s) on the instrument, the
individual(s), or the person upon behalf of which the individual(s) acted,
executed the instrument.
---------------------------------------------------
(signature and office of individual taking acknowledgment)
12
SECURED PROMISSORY NOTE
(THE "NOTE")
October 9, 2003
$250,000
A. TERMS OF LOAN
FOR VALUE RECEIVED, CREATIVE BAKERIES, INC., A NEW YORK CORPORATION
("CREATIVE") AND X.X. SPECIALTIES, INC., A NEW JERSEY
CORPORATION ("JMS") (CREATIVE AND JMS ARE COLLECTIVELY REFERRED
TO AS THE "BORROWERS"), with offices at 00 Xxxxxxx Xxxxxx,
Xxxxxxxxx, Xxx Xxxxxx 00000, jointly and severally promises to
pay to the order of FAIRFIELD GOURMET FOOD CORP., a New Jersey
Corporation (the "LENDER"), at 00 Xxxxxxxx Xxxx, Xxxxxxxxx, Xxx
Xxxxxx 00000, or at such other place as the Lender may designate
in writing, the principal sum of TWO HUNDRED FIFTY THOUSAND
DOLLARS ($250,000), (the "Loan").
1. INTEREST; PREPAYMENT.
(a) Borrower will pay interest on the unpaid principal amount
hereof, computed on the basis of the actual number of days
elapsed in a 360-day year, at a rate which shall be equal to
thirteen percent (13.00%) per annum (the "Interest Rate").
(b) The "Interest Rate Factor" shall be calculated by dividing the
annual interest rate of 13% by 360 days and then multiplying the
resulting quotient by the Number of Elapsed Days. The "Number of
Elapsed Days" for the Interest due on December 31, 2003, shall
be determined by the number of days from the date of this
Agreement up until and including December 31, 2003. For Interest
due on March 31, 2004, June 30, 2004, and August 31, 2004, the
"Number of Elapsed Days" shall be determined respectively by the
number of days from the last day of the previous quarter
(excluding such last day of the previous quarter) up until and
including the date upon which the Interest Payment is due. The
"Interest" shall be calculated by multiplying the applicable
Interest Rate Factor by the outstanding principal balance of the
Loan as of the date each Interest payment is due unless there
has been a modification of the principal balance during such
period (such as by a payment) in which event interest will be
calculated based on the outstanding balances from time to time.
Interest on the Loan shall be due and payable on December 31,
2003, March 31, 2004, June 30, 2004 and August 31, 2004 provided
such day is a Business Day ("Business Day"). Business Day shall
mean any day other than Saturday, Sunday, or any other day on
which commercial banks located in the State of New Jersey are
required or authorized by law to be closed for business.
Borrower will pay interest on any overdue installment of
principal or interest for the period for which overdue, on
demand, at a rate equal to eighteen percent (18.00%) per annum.
In no event shall interest exceed the maximum legal rate
permitted by law. All payments, including insufficient payments,
shall be credited, regardless of their designation by Borrowers,
first to collection expenses due hereunder, then to outstanding
late charges, then to interest due and payable but not yet paid,
then to the Yield Maintenance Payment (if any) and the
remainder, if any, to principal. All payments by Borrowers or
any endorser of this Note on account of principal, interest or
fees hereunder shall be made in lawful money of the United
States of America.
13
(c) Prepayment. The Borrowers may prepay up to (Sixty Two Thousand
Five Hundred ($62,500) Dollars in principal on each date that
interest is due pursuant to this Agreement, without penalty or
premium. Borrowers may also prepay all of the principal of the
Loan at any time provided such prepayment shall include interest
calculated to the date of prepayment plus fifty (50%) percent of
the interest that would have been earned had the Loan not been
prepaid from the date of such prepayment to the Due Date of the
Loan (the "Yield Maintenance Payment"). It is acknowledged that
the Yield Maintenance Payment is intended to compensate Lender
for utilizing its credit in order to make the Loan to Borrowers
and is not to be deemed additional interest for any purpose. The
Yield Maintenance Payment shall also be due in the event of a
prepayment as a result of acceleration of the Loan as a result
of an Event of Default.
2. DUE DATE. The Loan together with interest as provided herein shall
be due on August 31, 2004 (the "Due Date").
B. REPRESENTATIONS AND WARRANTIES
3. Borrowers represents and warrant to the Lender that:
(a) The Note is legal, valid, and contains binding obligations of
Borrowers enforceable against Borrowers in accordance with its
terms, except as enforcement may be limited by bankruptcy,
insolvency, moratorium or other similar laws relating to
creditors' rights generally and except that the availability of
equitable remedies, including specific performance, is subject
to the discretion of the court before which any proceeding
therefor may be brought.
(b) Borrowers are not in default in the performance, observance or
fulfillment of any of the obligations, covenants, or conditions
contained in any agreement or instrument to which it is a party,
except where such default would not have a material adverse
effect on the assets, liabilities or financial condition of
Borrowers (a "Material Adverse Effect").
(c) There is no pending or threatened action or proceeding against
or affecting Borrowers before any court, governmental agency, or
arbitrator which is reasonably likely to , in any one case or in
the aggregate, have a Material Adverse Effect or materially and
adversely affect the ability of Borrowers to perform their
obligations under this Note.
C. EVENTS OF DEFAULT
4. If any of the following events shall occur and be continuing:
(a) Borrowers shall fail to make any payment of principal or
interest on this Note when due;
(b) Borrowers shall be in material default in the performance or
observance of any covenant or agreement contained herein or in
the Loan and Security Agreement securing this Loan following
five (5) business days' written notice thereof;
14
(c) Any representation or warranty made by or on behalf of Borrowers
in this Note, or in the Loan and Security Agreement or in any
other agreement, instrument, or statement delivered to the
Lender by or on behalf of Borrowers shall at any time prove to
have been incorrect when made in any material respect;
(d) Creative or JMS no longer remain corporations in good standing
in the state of their respective organization;
(e) The death, disability, resignation or removal of Xxxxxx X.
Xxxxxxx ("Xxxxxxx"), as CEO of Borrowers, unless in the case of
death or disability there exists "Key Man" or disability
insurance policies with proceeds utilized to pay all amounts due
the Lender within a reasonable period of time. In addition, the
Lender must be named as an additional insured and/or beneficiary
on such policies;
(f) The inability of Borrowers to pay any of their debts in
accordance with past business practice or taxes as they become
due;
(g) The filing of any lawsuit in excess of $20,000 against Creative
and/or JMS that is not removed or bonded within 15 days of
institution of such lawsuit;
(h) Sales fall below $600,000 in any calendar quarter;
(i) Cash and accounts receivable are below $125,000;
(j) Any judgment against Creative or JMS or any attachment, levy or
execution against any of their properties for any material
amount shall remain unpaid, or shall not be released,
discharged, dismissed, stayed or fully bonded for a period of
fifteen (15) days or more after its entry, issue or levy, as the
case may be;
(k) Creative or JMS shall make an assignment for the benefit of
creditors, a trustee, receiver or liquidator shall be appointed
for either of them or for any of their property; or
(l) The commencement of any proceedings by Creative or JMS under any
bankruptcy, reorganization, arrangement of debt, insolvency,
readjustment of debt, receivership, liquidation or dissolution
law or statute or the commencement of any such proceedings
without the consent of Borrower and such involuntary proceedings
shall continue undischarged for a period of sixty (60) days;
then, and in any such event, (with each of the foregoing events to
constitute an "EVENT OF DEFAULT"), the Lender may declare the entire
unpaid principal amount of this Note and all interest and fees accrued
and unpaid hereon to be immediately due and payable, whereupon the same
shall become and be forthwith due and payable, without presentment,
demand, offset, protest or notice of any kind, all of which are hereby
expressly waived by Borrowers.
D. MISCELLANEOUS
5. GOVERNING LAW. This Note shall be governed by, and construed in
accordance with, the laws of the State of New Jersey, without regard to
its rules on conflicts of laws.
6. NOTICES, ETC. All notices and other communications provided for under
this Note shall be in writing (including telegraphic, telex, and
facsimile transmissions) and mailed or transmitted or delivered, if to
Borrowers, at Borrower's address indicated above (fax (000) 000-0000)
with a copy to Xxxxxxx XxXxxx, Esq. 0000 Xxxxxxxx Xxxxxx, Xxxxx, XX
00000-0000 (fax (000) 000-0000), and if to the Lender, at its address
indicated above (fax (000) 000-0000), with a copy to Xxxxx Xxxxxxx, Esq.,
00 Xxxxxxxx Xxxxx, Xxxxxx Xxxxx, Xxx Xxxx 00000, (fax (000) 000-0000) or,
as to each party, at such other address as shall be designated by such
15
party in a written notice to the other party complying as to delivery
with the terms of this paragraph. Except as otherwise provided in this
Note, all such notices and communications shall be effective either on
receipt if delivered by hand, telegraphic, telex and facsimile
transmissions, or three (3) Business Days following deposit, postage
fully paid, in the mails by certified mail.
7. NO WAIVER. No failure or delay on the part of the Lender in exercising
any right, power, or remedy hereunder shall operate as a waiver thereof;
nor shall any single or partial exercise of any such right, power, or
remedy preclude any other or further exercise thereof or the exercise of
any other right, power, or remedy hereunder. The rights and remedies
provided herein are cumulative, and are not exclusive of any other
rights, powers, privileges, or remedies, now or hereafter existing, at
law or in equity or otherwise.
8. COSTS AND EXPENSES. Borrowers shall reimburse the Lender for all costs
and expenses incurred by the Lender and shall pay the reasonable fees and
disbursements of counsel to the Lender in connection with the preparation
of this Secured Promissory Note and any documents related thereto with a
maximum amount of $5,000 plus disbursements, and shall also pay all costs
including reasonable fees incurred by Lender in enforcement of the
Lender's rights hereunder. Borrowers shall also pay any and all taxes
(other than taxes on or measured by net income of the holder of this
Note) incurred or payable in connection with the execution and delivery
of this Note.
9. AMENDMENTS. No amendment, modification, or waiver of any provision of
this Note nor consent to any departure by Borrowers therefrom shall be
effective unless the same shall be in writing and signed by the Lender
and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which it is given. Borrowers
hereby waive demand, presentment, notice of dishonor, and protest of
nonpayment and agree that any time and from time to time and with or
without consideration, Lender may, without notice to or further consent
of Borrowers, and without in any manner releasing, or affecting the
obligations of Borrowers: (a) release, surrender, waive, add, substitute,
settle, exchange, compromise, modify, extend, or grant indulgences with
respect to (i) this Note, and (ii) all or any part of any collateral or
security for this Note; and (b) grant any extension or other
postponements of the time of payment hereof.
10. SUCCESSORS AND ASSIGNS. This Note shall be binding upon Borrowers and its
heirs, legal representatives, successors and permitted assigns and the
terms hereof shall inure to the benefit of the Lender and its successors
and permitted assigns, including subsequent holders hereof. This Note is
freely transferable and assignable by the Lender and each subsequent
holder hereof and any reference to Lender herein shall be deemed to refer
to any subsequent transferee or assignee of this Note. Notwithstanding
the foregoing, Borrowers may not assign their rights or obligations under
this Note whether by voluntary assignment or transfer, operation of law,
or otherwise without the consent of Lender.
11. SEVERABILITY. The provisions of this Note are severable, and if any
provision shall be held invalid or unenforceable in whole or in part in
any jurisdiction, then such invalidity or unenforceability shall not in
any manner affect such provision in any other jurisdiction or any other
provision of this Note in any jurisdiction.
12. ENTIRE AGREEMENT. This Note sets forth the entire agreement of Borrowers
and the Lender with respect to this Note and may be modified only by a
written instrument executed by Borrower and the Lender.
13. HEADINGS. The headings herein are for convenience only and shall not
limit or define the meaning of the provisions of this Note.
16
14. JURISDICTION; SERVICE OF PROCESS. Borrowers agree that in any action or
proceeding brought on or in connection with this Note (i) the state
courts of the State of New Jersey, or (in a case involving diversity of
citizenship) the United States District Court in Newark, New Jersey,
shall have jurisdiction of any such action or proceeding, (ii) service of
any summons and complaint or other process in any such action or
proceeding may be made by the Lender upon Borrowers by registered or
certified mail directed to Borrowers at their address referenced herein,
Borrowers hereby waiving personal service thereof, and (iii) within
thirty (30) days after such mailing Borrowers shall appear or answer to
any summons and complaint or other process, and should Borrowers fail to
appear to answer within said thirty (30) day period, it shall be deemed
in default and judgment may be entered by the Lender against Borrowers
for the amount as demanded in any summons or complaint or other process
so served.
15. WAIVER OF THE RIGHT TO TRIAL BY JURY. Borrowers hereby irrevocably waive
the right to trial by jury in any action, proceeding, claim, or
counterclaim, whether in contract or tort, at law or in equity, in any
manner connected with this note or any transactions hereunder.
IN WITNESS WHEREOF, Borrowers have caused this Note to be executed and
delivered as of the day and year and at the place first above written.
CREATIVE BAKERIES, INC.
--------------------------------------------
By: Xxxxxx Xxxxxxx, Chief Executive Officer
X.X. SPECIALTIES, INC., A NEW JERSEY
CORPORATION
---------------------------------------
By: Xxxxxx X. Xxxxxxx, CEO & President
17
