Exhibit 10.20
AMENDMENT TO
SECURED SENIOR SUBORDINATED NOTE DUE 2004
THIS AMENDMENT TO SECURED SENIOR SUBORDINATED NOTE DUE 2004 is effective as
of the 1/st/ day of May 2001 (this "Amendment"), by and between OVERHILL FARMS,
INC., a Nevada corporation (the "Borrower" or the "Company"), and ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ CAPITAL PARTNERS II, L.P., a California limited partnership (the
"Purchaser").
R E C I T A L S
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A. In connection with the closing of the transactions contemplated by
that certain Securities Purchase Agreement dated as of November 24, 1999, as
amended by a Consent and First Amendment to Securities Purchase Agreement dated
as of August 23, 2000 (as so amended, the "Securities Purchase Agreement"), by
and among the Company, OVERHILL CORPORATION (formerly known as Polyphase
Corporation), a Nevada corporation, OVERHILL L.C. VENTURES, INC., a California
corporation, and the Purchaser, the Company issued to the Purchaser a Secured
Senior Subordinated Note Due 2004 dated November 24, 1999, made payable to the
Purchaser in the original principal amount of $28,000,000 (the "Note"). Unless
otherwise indicated, all capitalized terms used and not otherwise defined herein
have the meanings specified in the Securities Purchase Agreement.
B. On or about January 12, 2001, the Company delivered to the Purchaser,
pursuant to Section 5(b) of the Note, an Excess Cash Flow Calculation
Certificate dated January 12, 2001, with respect to the Fiscal Year ended
October 1, 2000 (the "2000 ECF Certificate"). Under the 2000 ECF Certificate,
the Company was required to pay to the Purchaser, on or before January 15, 2001,
a total Excess Cash Flow payment with respect to such Fiscal Year (the "ECF
Payment") of $3,092,000. Prior to the delivery of the 2000 ECF certificate, the
Company had delivered to the Purchaser a preliminary, unexecuted Excess Flow
Calculation Certificate which demonstrated the amount due the Fiscal Year ended
October 1,2000 to be $2,020,000.
▇. ▇▇▇▇▇▇▇ claims and disputes have arisen regarding the correct amount
of the ECF Payment due to the Purchaser with respect to the Fiscal Year ended
October 1, 2000. As of January 15, 2001, the Company was ready, willing and able
to pay to the Purchaser the ECF Payment calculated under either of the ECF
Certificates. The Company attempted to pay the Purchaser the sum of $3,092,000
for the ECF Payment for the Fiscal Year ended October 1, 2000, but was precluded
from making such payment by the Senior Lender. As of the date hereof, the
Company has paid to the Purchaser the amount of $2,020,000 in respect of the ECF
Payment. The parties have agreed to settle such claims and disputes with respect
to such matters by amending the Note to increase the interest rates payable
thereunder as provided for herein. Such amendment is permitted under Section
8(b) of the Intercreditor and Subordination Agreement dated as of November 24,
1999, as amended by the First
Amendment to Intercreditor and Subordination Agreement dated as of August 23,
2000, between the Purchaser and the Senior Lender.
A G R E E M E N T
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants,
conditions and provisions contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
1. Amendment of Section 2 (Payment of Interest; Default Rate). Section 2
of the Note is hereby amended by adding the following paragraph to the end of
such Section:
"Notwithstanding the foregoing, (A) interest on the unpaid principal
balance of this Note shall accrue from May 1, 2001 through May 31, 2001,
at a Base Rate equal to 14.50%, and (B) until the Purchaser receives from
the Company an optional prepayment of principal of $1,072,000 in
accordance with Section 4 of this Note (provided that such prepayment
shall be made exclusive of any mandatory prepayments required to be made
by the Company pursuant to Sections 5 or 6 of this Note or otherwise),
effective on and as of June 1, 2001, each of the Base Rates stated in
clauses (b), (c) and (d) of this Section 2 and the initial Default Rate
stated in the immediately preceding paragraph shall be increased by .127%
per annum. Effective as of the date that the Purchaser receives the
optional prepayment referred to in clause (B) above, the increase in the
Base Rates and the initial Default Rate provided for in clause (B) shall
no longer apply."
2. No Default Conditional. So long as the Company performs its
obligations under Section 2 of the Note as amended by the amendment thereto
provided for in Section 1 of this Amendment, no Default or Event of Default
shall be deemed to have occurred as a result of the Company's failure to pay to
the Purchaser the balance of the ECF Payment due under the 2000 ECF Certificate;
provided, however, that if the Company fails to perform any such obligations,
the Company's failure to make such payment to the Purchaser shall be deemed to
be an Event of Default ab initio and the Purchaser shall be free to exercise any
or all rights, powers and remedies under the Securities Purchase Agreement, the
other Investment Documents and Applicable Law with respect thereto. The
Purchaser reserves all rights, powers and remedies available to it under the
Securities Purchase Agreement, the other Investment Documents and Applicable
Laws with respect to, and in connection with, the matters described herein.
Further, this Amendment does not constitute a waiver of any breaches, Defaults,
Events of Default or, except as expressly provided above, any forbearance or
agreement to forbear by the Purchaser of the exercise of any such rights, powers
or remedies whatsoever.
3. Full Force and Effect. This Amendment amends the Note effective on and
as of May 1, 2001, and the Note shall remain in full force and effect in
accordance with its terms as amended hereby. The Note, as amended by this
Amendment, and all other Investment Documents are hereby ratified and affirmed
by the Company in all respects. The
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execution, delivery and performance of this Amendment shall not operate as a
waiver or limitation of or, except as expressly set forth herein, as an
amendment to any right, power or remedy of the Purchaser under the Note or any
other Investment Document.
4. Confirmation of Security. The Company hereby confirms that the
security interests granted to the Purchaser under the Security Agreement dated
as of November 24, 1999 (the "Company Security Agreement"), between the Company
and the Purchaser, and under the Patent, Trademark and Copyright Security
Agreement dated as of November 24, 1999, as amended by the First Amendment to
Patent, Trademark and Copyright Security Agreement dated as of August 23, 2000,
continue to constitute legal, valid, enforceable and perfected security
interests in the Collateral, prior in right to all other Liens (other than the
Liens in favor of the Senior Lender and Permitted Liens) and secure the due and
punctual payment, performance and observance of all Secured Obligations (as
defined in the Company Security Agreement), including, without limitation, the
obligations of the Company under the Note as amended hereby.
5. Governing Law; Reimbursement of Fees. In all respects, including all
matters of construction, validity and performance, this Amendment shall be
governed by, and construed and enforced in accordance with, the laws of the
State of California applicable to contracts made and performed in such state,
without regard to principles regarding choice of law or conflicts of laws. The
Company hereby confirms its obligations, including, without limitation, its
obligations under Section 8.6 of the Securities Purchase Agreement and Section
15 of the Note, to reimburse the Purchaser for all out-of-pocket costs and
expenses incurred in connection with this Amendment and certain other matters
between the Company and the Purchaser occurring prior to the execution of this
Amendment, provided that such out-of-pocket costs and expenses shall not exceed
$18,100.
6. Representations. The Company represents and warrants to the Purchaser
that (a) this Amendment has been duly authorized, executed and delivered by the
Company and constitutes a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, and (b) it has
obtained all consents, authorizations and approvals necessary or required to
enter into and deliver this Amendment and perform its obligations hereunder.
7. Change of Notice Address. Pursuant to Section 12.6 of the Securities
Purchase Agreement, this letter agreement shall constitute written notice from
one party to the other that all notices, requests, demands and other
communications under the Securities Purchase Agreement shall be given: (a) if to
the Purchaser, to the address set forth in clause (i) of such Section, with a
copy to Irell & ▇▇▇▇▇▇▇ LLP (rather than ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇), ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.,
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇, Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇; and (b) if to the Company
or Overhill Ventures, to the address set forth in clause (ii) of such Section,
with a copy to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., Esq. (rather than ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇, LLP), ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Telephone:
(▇▇▇) ▇▇▇-▇▇▇▇, Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇.
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8. Successors and Assigns. This Amendment shall inure to the benefit of,
and be binding upon, the parties hereto and their respective successors and
permitted assigns.
9. Counterparts. This Amendment may be executed in any number of
counterparts and by facsimile, each of which shall be deemed an original, but
all of which taken together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed and delivered by their duly authorized representatives as of the date
first written above.
BORROWER OR COMPANY
OVERHILL FARMS, INC., a Nevada corporation
By: ____________________________________________
▇▇▇▇▇ ▇▇▇▇▇
President and Chief Executive Officer
PURCHASER
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ CAPITAL PARTNERS II, L.P.,
a California limited partnership
By: LLCP California Equity Partners II, L.P., a
California limited partnership, its General Partner
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Capital Partners, Inc., a
California corporation, its General Partner
By: ___________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
President
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ACKNOWLEDGMENT AND CONSENT OF GUARANTORS
Each of the undersigned Guarantors hereby acknowledges that it has read the
foregoing Amendment to Secured Senior Subordinated Note Due 2004 and consents to
the amendments to the Note and the other matters contained in the Amendment.
Each of the undersigned further reaffirms its obligations under the Securities
Purchase Agreement (including, without limitation, the Guaranty) and the other
Investment Documents and agrees that all such Investment Documents, as
previously amended, remain in full force and effect in accordance with their
respective terms.
GUARANTORS
OVERHILL CORPORATION (formerly known as
Polyphase Corporation), a Nevada corporation
By:______________________________________
▇▇▇▇▇ ▇▇▇▇▇
President and Chief Executive Officer
OVERHILL L.C. VENTURES, INC., a California
corporation
By:______________________________________
▇▇▇▇▇ ▇▇▇▇▇
President and Chief Executive Officer
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