MODIFICATION TO REVOLVING CREDIT LOAN & SECURITY AGREEMENT
This Third Modification to Loan & Security Agreement (this
"Modification") is entered into by and between XXXXXX BEVERAGE COMPANY
("Borrower") and COMERICA BANK - CALIFORNIA ("Bank") as of this 1st day of
December, 1998, at San Jose, California.
R E C I T A L S:
A. Bank and Borrower entered into a Revolving Credit Loan & Security
Agreement (Accounts & Inventory) dated May 15, 1997 as previously amended on May
11, 1998 and July 27, 1998 (as so amended, the "Agreement").
B. Borrower has requested, and Bank has agreed, to modify further
the Agreement as set forth below.
AGREEMENT
For good and valuable consideration, the parties agree as set forth
below:
1. Incorporation by Reference. The Agreement as modified hereby
and the Recitals are incorporated herein by this reference.
2. The Agreement is amended as follows:
a. Section 2.2 of the Agreement is amended to read as follows:
"2.2 As a sub-facility under the Revolving Loan, Bank
shall issue for the benefit of Borrower one or more
irrevocable standby letters of credit (each a "Standby L/C"
and collectively, the "Standby L/C's") and commercial letters
of credit ("Commercial L/C") and together with the Standby
L/C's collectively referred to as the "L/C's") under which the
aggregate of all amounts available to be drawn and all unpaid
reimbursement obligations shall not exceed $500,000, it being
understood that in no event shall the sum of (i) the face
amount of all L/C's plus (ii) the amount of all outstanding
letter of credit reimbursement obligations plus (iii) the
outstanding Revolving Loan advances exceed the Borrowing Base.
All Standby L/C's shall be drawn on such terms and conditions
as are acceptable to Bank and shall have an expiry date not
later than 365 days after the issuance thereof. All Commercial
L/C's shall be drawn on such terms and conditions as are
acceptable to Bank and shall have an expiry date not later
than 180 days after the issuance thereof. All L/C's shall be
governed by the terms of Bank's standard form letter of credit
applications and reimbursement agreements for commercial and
standby letters of credit, respectively, which applications
and reimbursement agreements Borrower hereby covenants and
agrees to execute and deliver to Bank. Bank shall be entitled
to receive a fee of 1.5% of the maximum amount available to be
drawn on each Standby L/C issued pursuant to this Section
2.2."
b. Section 2.3 of the Agreement is amended to read as follows:
"2.3 The Credit shall bear interest as set forth in
the Addendum to Revolving Credit & Loan Agreement dated as of
December 1, 1998, which is incorporated in this Agreement by
reference (the "Rate"); provided, however, the Credit shall
bear interest from and after an occurrence of a Event of
Default and without constituting a waiver of any such Event of
Default on the Daily Balance Owing at a rate three (3)
percentage points above the Rate otherwise in effect. All
interest chargeable under this Agreement that is based upon a
per annum calculation shall be computed on a basis of 360 day
year for the actual number of days elapsed. With respect to
any portion of the Credit which bears interest at the Base
Rate Option (as defined in the Addendum), in the event the
Base Rate is from time to time changed, adjustments in the
Base Rate Option shall be made based on the Base Rate in
effect on the date of such change. The Base Rate Option, as so
adjusted, shall apply to the Credit until the Base Rate is
adjusted again. The minimum interest payable by the Borrower
under this Agreement shall in no event be less than $500 per
month. All interest payable by Borrower under the Credit shall
be due and payable on the first day of each calendar month
during the term of this Agreement and Bank may, at its option,
elect to treat such interest and any and all Bank Expenses as
advances of the Credit, which amount shall thereupon
constitute Obligations and shall thereafter accrue interest at
the Rate applicable to the Credit under the terms of this
Agreement."
c. The first sentence of Section 3.1 of the Agreement is amended to
read as follows:
"This Agreement shall remain in full force and effect
until May 1, 2000, unless earlier terminated by notice by
Borrower."
d. Section 6.8 (a) of the Agreement is amended to read
as follows:
"(a) [Reserved];"
e. Section 6.15.b of the Agreement is amended to read as follows:
"Borrower shall deliver to Bank (i) within
ninety-five (95) days after the end of each of Borrower's
fiscal years audited financial statements of the Borrower for
each such fiscal year, including, but not limited to, a
balance sheet and profit and loss statement, with an
unqualified opinion thereon from the Borrower's independent
accountant, (ii) within ninety-five (95) days after the end of
each of Borrower's fiscal years, the Borrower's Annual Report
on Form 10-K as filed with the U.S. Securities and Exchange
Commission, (iii) within sixty (60) days after the end of each
fiscal quarter of Borrower, the Borrower's Quarterly Report on
Form 10-Q as filed with the U.S. Securities and Exchange
Commission and any other report requested by Bank related to
the Collateral and financial condition of Borrower, (iv) at
the time of delivery of the items described in clause ii of
this paragraph, a certificate signed by an authorized employee
of Borrower to the effect that all reports, statements,
computer disks or tape files, computer printouts, computer
runs, or other computer prepared information of any kind or
nature relating to the foregoing or documents delivered or
caused to be delivered to Bank under this subparagraph are
complete, correct and fairly present the financial condition
of Borrower and (v) within sixty (60) days of each quarter end
of Borrower, a certificate signed by the Chief Executive
Officer and the Chief Financial Officer of the Borrower that
the representations and warranties of the Borrower set forth
herein are true and correct as of the date thereof, that the
Borrower has complied with all covenants of the Borrower set
forth herein and that no condition or event which constitutes
a breach or Event of Default under this Agreement is in
existence on the date thereof."
f. Section 6.16.a of the Agreement is amended to read as follows:
"a. Working Capital as of the end of each quarter in an amount
not less than $1,500,000."
g. Section 6.16.b of the Agreement is amended to read as follows:
"b. Net Worth in an amount not less than $9,650,000
for each fiscal quarter ending in calender year 1998; and in
an amount not less than an amount equal to the sum of
$9,650,000 plus 75% of Borrower's net profit after taxes (as
determined in accordance with GAAP) for the fiscal year ending
December 31, 1998."
h. Section 6.16.e of the Agreement is amended to read as follows:
"e. Borrower shall not, without Bank's prior written
consent, acquire or expend for or commit itself to acquire or
expend for fixed assets by lease, purchase or otherwise or
incur new long-term debt in any aggregate amount that exceeds
One Million Dollars ($1,000,000) in any fiscal year; and"
3. The Inventory Rider dated May 15, 1997 executed by Borrower in favor
of Bank and incorporated in this Agreement by reference is amended in its
entirety to read in the form annexed hereto, and such amended Inventory Rider is
incorporated by reference in the Agreement, as amended hereby.
4. Legal Effect. Except as specifically set forth in this Modification
and the Libor Addendum and the Inventory Rider annexed hereto, all of the terms
and conditions of the Agreement remain in full force and effect.
5. Integration. This is an integrated Modification and supersedes all
prior negotiations and agreements regarding the subject matter hereof. All
amendments hereto must be in writing and signed by the parties.
IN WITNESS WHEREOF, the parties have agreed as of the date first set
forth above.
COMERICA BANK-CALIFORNIA
By:_____________________
Its:____________________
XXXXXX BEVERAGE COMPANY
By:_______________________
Its:______________________
By:_______________________
Its:______________________
Acknowledged and accepted by the undersigned
Guarantors this ___ day of ______________, 1998
XXXXXX NATURAL CORPORATION
By:_________________________________
Its:_________________________________
XXXXXX BEVERAGE COMPANY (UK) LIMITED
By:__________________________________
Its:__________________________________
CVI VENTURES, INC.
By:__________________________________
Its:__________________________________
C:\WPDOCS\KOHDOC\7351.
Addendum to Revolving Credit Loan & Security Agreement
This Addendum to Revolving Credit Loan & Security Agreement (this
"Addendum") is entered into as of this 1st day of December, 1998, by and between
Comerica Bank-California ("Bank") and Xxxxxx Beverage Company ("Borrower"). This
Addendum supplements the terms of the Revolving Credit Loan & Security Agreement
dated May 15, 1997 as amended on May 11, 1998, July 7, 1998, and December 1,
1998.
Definitions.
1. Advance. As used herein, "Advance" means a borrowing requested
by Borrower and made by Bank under the Note, including a LIBOR
Option Advance and/or a Base Rate Option Advance.
2. Business Day. As used herein, "Business Day" means any day
except a Saturday, Sunday or any other day designated as a
holiday under Federal or California statute or regulation.
3. LIBOR. As used herein, "LIBOR" means the rate per annum
(rounded upward if necessary, to the nearest whole 1/8 of 1%)
and determined pursuant to the following formula:
LIBOR = Base LIBOR
100% - LIBOR Reserve Percentage
1. "Base LIBOR" means the rate per annum determined by
Bank at which deposits for the relevant LIBOR Period
would be offered to Bank in the approximate amount of
the relevant LIBOR Option Advance in the inter-bank
LIBOR market selected by Bank, upon request of Bank
at 10:00 a.m. California time, on the day that is the
first day of such LIBOR Period.
2. "LIBOR Reserve Percentage" means the reserve
percentage prescribed by the Board of Governors of
the Federal Reserve System (or any successor) for
"Eurocurrency Liabilities" (as defined in Regulation
D of the Federal Reserve Board, as amended), adjusted
by Bank for expected changes in such reserve
percentage during the applicable LIBOR Period.
4. LIBOR Business Day. As used herein, "LIBOR Business Day" means
a Business day on which dealings in Dollar deposits may be
carried out in the interbank LIBOR market.
5. LIBOR Period. As used herein, "LIBOR Period" means, with respect to a LIBOR
Option Advance:
1. initially, the period commencing on, as the case may
be, the date the Advance is made or the date on which
the Advance is converted to a LIBOR Option Advance,
and continuing for, in every case, a period of 30,
60, 90, 120 or 180 days thereafter so long as the
LIBOR Option is quoted for such period in the
applicable interbank LIBOR market, as such period is
selected by Borrower in the notice of Advance as
provided in the Note or in the notice of conversion
as provided in this Addendum; and
2. thereafter, each period commencing on the last day of
the next preceding LIBOR Period applicable to such
LIBOR Option Advance and continuing for, in every
case, a period of 30, 60, 90, 120 or 180 days
thereafter so long as the LIBOR Option is quoted for
such period in the applicable interbank LIBOR market,
as such period is selected by Borrower in the notice
of continuation as provided in this Addendum.
6. Note. As used herein, "Note" means the Loan & Security Agreement
of even date herewith.
7. Regulation D. As used herein, "Regulation D" means Regulation
D of the Board of Governors of the Federal Reserve System as
amended or supplemented from time to time.
8. Regulatory Development. As used herein, "Regulatory
Development" means any or all of the following: (i) any change
in any law, regulation or interpretation thereof by any public
authority (whether or not having the force of law); (ii) the
application of any existing law, regulation or the
interpretation thereof by any public authority (whether or not
having the force of law); and (iii) compliance by Bank with
any request or directive (whether or not having the force of
law) of any public authority.
Interest Rate Options. Borrower shall have the following options regarding the
interest rate to be paid by Borrower on Advances under the Note:
1. A rate equal to two and one quarter percent (2.25%) above
Bank's LIBOR, (the "LIBOR Option"), which LIBOR Option shall
be in effect during the relevant LIBOR Period; or
2. A rate equal to one quarter of one percent (.25%) above the
"Base Rate" as defined in the Note and quoted from time to
time by Bank as such rate may change from time to time (the
"Base Rate Option").
LIBOR Option Advance. The minimum LIBOR Option Advance will not be less than
Five Hundred Thousand Dollars ($500,000) for any LIBOR Option Advance.
Payment of Interest on LIBOR Option Advances. Interest on each LIBOR Option
Advance shall be payable pursuant to the terms of the Note. Interest on
such LIBOR Option Advance shall be computed on the basis of a 360-day
year and shall be assessed for the actual number of days elapsed from
the first day of the LIBOR Period applicable thereto but not including
the last day thereof.
Bank's Records Re: LIBOR Option Advances. With respect to each LIBOR Option
Advance, Bank is hereby authorized to note the date, principal amount,
interest rate and LIBOR Period applicable thereto and any payments made
thereon on Bank's books and records (either manually or by electronic
entry) and/or on any schedule attached to the Note, which notations
shall be prima facie evidence of the accuracy of the information noted.
Selection/Conversion of Interest Rate Options. At the time any Advance is
requested under the Note and/or Borrower wishes to select the LIBOR
Option for all or a portion of the outstanding principal balance of the
Note, and at the end of each LIBOR Period, Borrower shall give Bank
notice specifying (a) the interest rate option selected by Borrower;
(b) the principal amount subject thereto; and (c) if the LIBOR Option
is selected, the length of the applicable LIBOR Period. Any such notice
may be given by telephone so long as, with respect to each LIBOR Option
selected by Borrower, (i) Bank receives written confirmation from
Borrower not later than three (3) LIBOR Business Days after such
telephone notice is given; and (ii) such notice is given to Bank prior
to 10:00 a.m., California time, on the first day of the LIBOR Period.
For each LIBOR Option requested hereunder, Bank will quote the
applicable fixed LIBOR Rate to Borrower at approximately 10:00 a.m.,
California time, on the first day of the LIBOR Period. If Borrower does
not immediately accept the rate quoted by Bank, any subsequent
acceptance by Borrower shall be subject to a redetermination of the
rate by Bank; provided, however, that if Borrower fails to accept any
such quotation given, then the quoted rate shall expire and Bank shall
have no obligation to permit a LIBOR Option to be selected on such day.
If no specific designation of interest is made at the time any Advance
is requested under the Note or at the end of any LIBOR Period, Borrower
shall be deemed to have selected the Base Rate Option for such Advance
or the principal amount to which such LIBOR Period applied. At any time
the LIBOR Option is in effect, Borrower may, at the end of the
applicable LIBOR Period, convert to the Base Rate Option. At any time
the Base Rate Option is in effect, Borrower may convert to the LIBOR
Option, and shall designate a LIBOR Period.
Default Interest Rate. From and after the maturity date of the Note, or such
earlier date as all principal owing hereunder becomes due and payable
by acceleration or otherwise, the outstanding principal balance of the
Note shall bear interest until paid in full at an increased rate per
annum (computed on the basis of a 360-day year, actual days elapsed)
equal to three percent (3.00%) above the rate of interest from time to
time applicable to the Note.
Prepayment. Bank is not under any obligation to accept any prepayment of any
LIBOR Option Advance except as described below or as required under
applicable law. Borrower may prepay a Base Rate Option Advance at any
time, without paying any Prepayment Amount, as defined below. Borrower
may prepay an LIBOR Option Advance in increments of Five Hundred
Dollars ($500.00) prior to the end of the LIBOR Period, as long as (i)
Bank is provided written notice of such prepayment at least five (5)
LIBOR Business Days prior to the date thereof (the "Prepayment Date");
and (ii) Borrower pays the Prepayment Amount. The notice of prepayment
shall contain the following information: (a) the Prepayment Date; and
(b) the LIBOR Option Advance which will be prepaid. On the Prepayment
Date, Borrower shall pay to Bank, in addition to any other amount that
may then be due on the Note, the Prepayment Amount. Bank, in its sole
discretion, may accept any prepayment of a LIBOR Option Advance even if
not required to do so under the Note and may deduct from the amount to
be applied against the LIBOR Option Advance any other amounts required
to be paid as part of the Prepayment Amount.
The Prepaid Principal Amount (as defined below) will be
applied to the LIBOR Option Advance being prepaid as Bank shall
determine in its sole discretion.
If Bank exercises its right to accelerate the payment of the
Note prior to maturity based upon an Event of Default under the Note,
Borrower shall pay to Bank, in addition to any other amounts that may
then be due on the Note, on the date specified by Bank as the
Prepayment Date, the Prepayment Amount.
Bank's determination of the Prepayment Amount shall be
conclusive in the absence of obvious error or fraud. If requested in
writing by Borrower, Bank shall provide Borrower a written statement
specifying the Prepayment Amount.
The following (the "Prepayment Amount") shall be due and
payable in full on the Prepayment Date:
1. If the principal amount of the LIBOR Option Advance being prepaid exceeds
Seven Hundred Fifty Thousand Dollars ($750,000), then the Prepayment Amount
is the sum of: (i) the amount of the principal balance of the LIBOR Option
Advance which Borrower has elected to prepay or the amount of the principal
balance of the LIBOR Option Advance which Bank has required Borrower to
prepay because of acceleration, as the case may be (the "Prepaid Principal
Amount"); (ii) interest accruing on the Prepaid Principal Amount up to, but
not including, the Prepayment Date; (iii) Five Hundred Dollars ($500.00);
plus (iv) the present value, discounted at the Reinvestment Rates (as
defined below) of the positive amount by which (A) the interest Bank would
have earned had the Prepaid Principal Amount not been paid prior to the end
of the LIBOR Period at the Note's interest rate exceeds (B) the interest
Bank would earn by reinvesting the Prepaid Principal Amount at the
Reinvestment Rates.
2. If the principal amount of the LIBOR Option Advance being prepaid is Seven
Hundred Fifty Thousand Dollars ($750,000) or less, then the Prepayment
Amount is the sum of: (i) the principal amount of the LIBOR Option Advance
which Borrower has elected to prepay or the principal amount of the LIBOR
Option Advance which Bank has required Borrower to prepay because of
acceleration due to an Event of Default under the Note, as the case may be
(the "Prepaid Principal Amount"); (ii) interest accruing on the Prepaid
Principal Amount up to, but not including, the Prepayment Date; plus (iii)
an amount equal to two percent (2%) of the Prepaid Principal Amount.
"Reinvestment Rates" mean the per annum rates of interest
equal to one half percent (1/2%) above the rates of interest reasonably
determined by Bank to be in effect not more than seven (7) days prior
to the Prepayment Date in the secondary market for United States
Treasury Obligations in amount(s) and with maturity(ies) which
correspond (as closely as possible) to the LIBOR Option Advance being
prepaid.
BY INITIALING BELOW, BORROWER ACKNOWLEDGE(S) AND AGREE(S)
THAT: (A) THERE IS NO RIGHT TO PREPAY ANY LIBOR OPTION ADVANCE , IN
WHOLE OR IN PART, WITHOUT PAYING THE PREPAYMENT AMOUNT, EXCEPT AS
OTHERWISE REQUIRED UNDER APPLICABLE LAW; (B) BORROWER SHALL BE LIABLE
FOR PAYMENT OF THE PREPAYMENT AMOUNT IF BANK EXERCISES ITS RIGHT TO
ACCELERATE PAYMENT OF ANY LIBOR OPTION ADVANCE AS PART OR ALL OF THE
OBLIGATIONS OWING UNDER THE NOTE, INCLUDING WITHOUT LIMITATION,
ACCELERATION UNDER A DUE-ON-SALE PROVISION; (C) BORROWER WAIVES ANY
RIGHTS UNDER SUCCESSOR STATUTE; AND (D) BANK HAS MADE EACH LIBOR OPTION
ADVANCE PURSUANT TO THE NOTE IN RELIANCE ON THESE AGREEMENTS.
------------------
BORROWER'S INITIALS
Hold Harmless and Indemnification. Borrower agrees to indemnify Bank and to
hold Bank harmless from, and to reimburse Bank on demand for, all
losses and expenses which Bank sustains or incurs as a result of (i)
any payment of a LIBOR Option Advance prior to the last day of the
applicable LIBOR Period for any reason, including, without limitation,
termination of the Note, whether pursuant to this Addendum or the
occurrence of an Event of Default; (ii) any termination of a LIBOR
Period prior to the date it would otherwise end in accordance with this
Addendum; or (iii) any failure by Borrower, for any reason, to borrow
any portion of a LIBOR Option Advance.
Funding Losses. The indemnification and hold harmless provisions set forth in
this Addendum shall include, without limitation, all losses and
expenses arising from interest and fees that Bank pays to lenders of
funds it obtains in order to fund the loans to Borrower on the basis of
the LIBOR Option(s) and all losses incurred in liquidating or
re-deploying deposits from which such funds were obtained and loss of
profit for the period after termination. A written statement by Bank to
Borrower of such losses and expenses shall be conclusive and binding,
absent manifest error, for all purposes. This obligation shall survive
the termination of this Addendum and the payment of the Note.
Regulatory Developments Or Other Circumstances Relating To Illegality or
Impracticality of LIBOR. If any Regulatory Development or other
circumstances relating to the interbank Euro-dollar markets shall, at
any time, in Bank's reasonable determination , make it unlawful or
impractical for Bank to fund or maintain, during any LIBOR Period, to
determine or charge interest rates based upon LIBOR, Bank shall give
notice of such circumstances to Borrower and:
a. In the case of a LIBOR Period in progress, Borrower shall, if
requested by Bank, promptly pay any interest which had accrued
prior to such request and the date of such request shall be
deemed to be the last day of the term of the LIBOR Period; and
b. No LIBOR Period may be designated thereafter until Bank determines
that such would be practical.
Additional Costs. Borrower shall pay to Bank from time to time, upon Bank's
request, such amounts as Bank determines are needed to compensate Bank
for any costs it incurred which are attributable to Bank having made or
maintained a LIBOR Option Advance or to Bank's obligation to make a
LIBOR Option Advance, or any reduction in any amount receivable by Bank
hereunder with respect to any LIBOR Option or such obligation (such
increases in costs and reductions in amounts receivable being herein
called "Additional Costs"), resulting from any Regulatory Developments,
which (i) change the basis of taxation of any amounts payable to Bank
hereunder with respect to taxation of any amounts payable to Bank
hereunder with respect to any LIBOR Option Advance (other than taxes
imposed on the overall net income of Bank for any LIBOR Option Advance
by the jurisdiction where Bank is headquartered or the jurisdiction
where Bank extends the LIBOR Option Advance; (ii) impose or modify any
reserve, special deposit, or similar requirements relating to any
extensions of credit or other assets of, or any deposits with or other
liabilities of, Bank (including any LIBOR Option Advance or any
deposits referred to in the definition of LIBOR); or (iii) impose any
other condition affecting this Addendum (or any of such extension of
credit or liabilities). Bank shall notify Borrower of any event
occurring after the date hereof which entitles Bank to compensation
pursuant to this paragraph as promptly as practicable after it obtains
knowledge thereof and determines to request such compensation.
Determinations by Bank for purposes of this paragraph, shall be
conclusive, provided that such determinations are made on a reasonable
basis.
Legal Effect. Except as specifically modified hereby, all of the terms
and conditions of the Note remain in full force and effect.
IN WITNESS WHEREOF, the parties have agreed to the foregoing as of the
date first set forth above.
XXXXXX BEVERAGE COMPANY COMERICA BANK-CALIFORNIA
By:______________________________ By:________________________________
Title:____________________________ Title:______________________________
By:______________________________
Title:____________________________
C:\WPDOCS\KOHDOC\7351.
INVENTORY RIDER
TO
REVOLVING CREDIT LOAN AND SECURITY AGREEMENT
This Inventory Rider dated December 1, 1998, by and between Xxxxxx
Beverage Company ("Borrower") and Comerica Bank-California ("Bank").
R E C I T A L S:
A. Borrower and Bank entered into a Revolving Credit Loan & Security
Agreement (Accounts and Inventory) ("Agreement") dated May 15, 1997, as amended.
B. Borrower executed an Inventory Rider dated May 15, 1997 which was
incorporated by reference in the Agreement ("Prior Inventory Rider").
C. Borrower and Bank desire to amend the Prior Inventory Rider in its
entirety.
The parties agree that the prior Inventory Rider is amended in its
entirety to read as follows:
1. At the request of Borrower, made at any time and from time to time
during the term of the Agreement, and so long as no Event of Default under the
Agreement has occurred and Borrower is in full, faithful and timely compliance
with each and all of the covenants, conditions, warranties and representations
contained in the Agreement, this Rider and/or any other agreement between Bank
and Borrower, Bank agrees to lend Borrower fifty five percent (55%) of the lower
of cost or market value of Borrower's finished goods Inventory and Inventory
consisting of apple juice concentrate ("Eligible Inventory"), and as may be
adjusted by Bank, in Bank's discretion, for age and seasonality or other factors
affecting the value of the Inventory, up to a maximum advance outstanding at any
one time of One Million, Five Hundred Thousand Dollars ($1,500,000), upon
Borrower's concurrent execution and delivery to Bank of a Designation of
Eligible Inventory, or Certification of Borrowing Base, in form customarily used
by Bank; provided, however, that for a period of sixty consecutive days during
each calendar year, which period shall commence no later than October 1 of each
such year, such Inventory Borrowing Base shall be reduced to zero and the
Borrower shall be required, immediately upon the commencement of such period
shall to pay down and maintain at zero the amount of the Credit attributable to
the Inventory Borrowing Base. All advances made and to be made pursuant to this
Rider are solely and exclusively for working capital purposes including enabling
Borrower to acquire rights in and purchase new Inventory, and Borrower
represents and warrants that all advances by Bank pursuant to this Rider will be
used solely and exclusively for such purpose; and since such advances will be
used for the foregoing purposes, Bank's security interest in Borrower's
Inventory is and shall be at all times a purchase money security interest as
that term is described in Section 9107 of the California Uniform Commercial
Code.
2
2. Advances made by Bank to Borrower pursuant to this Rider shall be
included as part of the Obligations of Borrower to Bank as the term
"Obligations" is defined in the Agreement; and at Bank's option, advances
pursuant to this Rider may be evidenced by promissory note(s), in form and on
terms satisfactory to Bank. all such advances shall bear interest at the rate
and be payable in the manner specified in said promissory note(s) in the event
Bank exercises the aforementioned option, and in the event Bank does not, such
advances shall bear interest at the rate and be payable in the manner specified
in the Agreement.
3. All of the terms, covenants, warranties, conditions, agreements and
representations of the Agreement are incorporated herein as though set forth in
their entirety and are hereby reaffirmed by Borrower and Bank as though fully
set forth here at.
XXXXXX BEVERAGE COMPANY
By:________________________
Its:_______________________
By:________________________
Its:_______________________
COMERICA BANK- CALIFORNIA
By:________________________
Its:_______________________
