Exhibit 10.79

 

AMENDED AND RESTATED SECURITY AGREEMENT

(Blanket - All Business Assets)

 

This Amended and Restated Security Agreement (Blanket - All Business Assets) (as
the same may from time to time be extended, amended, restated, supplemented, or
otherwise modified, the “Agreement”) is dated for reference purposes as of
March 21, 2011 by INVENTURE FOODS, INC., a Delaware corporation f/k/a
THE INVENTURE GROUP, INC. (the “Borrower”), and LA COMETA PROPERTIES, INC., an
Arizona corporation (“La Cometa”), POORE BROTHERS - BLUFFTON, LLC, a Delaware
limited liability company (the “PBC”), TEJAS PB DISTRIBUTING, INC., an Arizona
corporation (“Tejas”), BOULDER NATURAL FOODS, INC., an Arizona corporation
(“Boulder”), BN FOODS INC., a Colorado corporation (“BN Foods”), RADER
FARMS, INC., a Delaware corporation f/k/a RADER FARMS ACQUISITION CORP.
(“Rader”) in favor of U.S. BANK NATIONAL ASSOCIATION, a national banking
association (the “Bank”).  For purposes hereof, “Obligated Group” and “Obligated
Group Parties” shall mean, collectively, (a) Borrower, (b) La Cometa, (c) PBC,
(d) Tejas, (e) Boulder, (f) BN Foods, and (g) Rader (each, individually, an
“Obligated Group Party”).  This Agreement amends and restates that certain
Amended and Restated Business Security Agreement (Blanket - All Business Assets)
dated May 16, 2007.

 

Borrower ‘s Organizational Identification Number is:  DE-2483575.

La Cometa’s Organizational Identification Number is:  AZ-08064380.

PBC’s Organizational Identification Number is:  DE-2867321.

Tejas’ Organizational Identification Number is:  AZ-08541660.

Boulder’s Organizational Identification Number is:  AZ-09522220.

BN Foods’ Organizational Identification Number is:  CO-19971102791.

Rader’s Organizational Identification Number is:  DE-4351069.

 

Unless defined elsewhere in this Agreement, defined terms used herein have the
meanings given them in the Definitions Section hereof.

 

Factual Background

 

A.            Bank is extending credit and/or other financial accommodations to
Borrower, now and/or in the future, including (i) a revolving line of credit
loan in the maximum principal amount of Twenty-Five Million and No/100 Dollars
($25,000,000.00), (ii) a term loan in the principal amount of Six Million and
No/100 Dollars ($6,000,000.00), and (iii) a term loan in the principal amount of
Four Million and No/100 Dollars ($4,000,000.00) (each, individually, a “Loan”
and collectively, the “Loans”).  The Loans are made under a loan agreement
(each, individually, a “Loan Agreement” and collectively, the “Loan Agreements”)
between Bank and Borrower.  Each Loan is evidenced by a promissory note (the
“Notes”) made payable to Bank in the principal amount of such Loan, is secured
by the collateral described below, and may also be secured by other collateral. 
Borrower is a holding company for several affiliated entities, and each of the
Obligated Group Parties (other than the Borrower) is an Affiliate of, and a
wholly owned subsidiary of Borrower.

 

B.            Each of the Obligated Group Parties other than the Borrower is a
Guarantor or the Loans.  It is intended (i) that each Obligated Group Party
shall be liable for the Credit Facilities, directly or indirectly, as a Borrower
or as a Guarantor, and (ii) that all business assets of each Obligated Group
Party shall be pledged to Bank as collateral for the Credit Facilities and other
Obligations.

 

C.            This Agreement, and all other documents which evidence, secure, or
otherwise pertain to any of the Obligations, including the Loans, collectively
constitute the “Loan Documents.” Capitalized terms used in this Agreement
without definition have the meanings given them in the Loan Agreement.

 

1

--------------------------------------------------------------------------------

 

All terms not defined herein or in the Loan Agreement shall have the meaning
given them in the Uniform Commercial Code, as enacted in the state of formation
of the Borrower and as enacted in the state of formation of each of the other
Obligated Group Parties, or under the Uniform Commercial Code in any other state
to the extent the same is applicable law (collectively, as amended, recodified,
and in effect from time to time, the “UCC”).  If a term is defined differently
in Article 9 of the UCC than in another Article, Article 9 shall control.

 

D.            As a material condition to Bank extending credit and/or other
financial accommodations to Borrower, including but not limited to the Loans,
Bank has required that Borrower and the other Obligated Group Parties pledge to
Bank, and create a security interest in favor of Bank, in and to all of the
Collateral described below, pursuant to the terms and conditions set forth
below.

 

NOW THEREFORE, in consideration of Bank’s agreement to extend credit and/or
other financial accommodations to Borrower, now and/or in the future, and for
other valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Borrower and the other Obligated Group Parties and Bank hereby
agree as follows:

 

AGREEMENT

 

Definitions:  The following capitalized words and terms shall have the meanings
set forth in the “Factual Background” section above, or if not defined therein,
shall have the following meanings when used in this Agreement.  All references
to dollar amounts shall mean amounts in lawful money of the United States of
America.  Words and terms used in the singular shall include the plural, and the
plural shall include the singular, as the context may require.

 

“Credit Facilities” means all extensions of credit from the Bank to Borrower or
any other Obligated Party, whether now existing or hereafter arising, including
but not limited to the Loans described in Recital A above.

 

“Insolvency Obligations” means all monetary obligations incurred or accrued
during the pendency of any Insolvency Proceeding regardless of whether allowed
or allowable in such proceeding.

 

“Insolvency Proceeding” means any bankruptcy, receivership, or other voluntary
or involuntary proceeding, in or out of court, for the adjustment of
debtor-creditor relationships

 

“Obligations” means, collectively, all obligations, indebtedness, and
liabilities of Borrower or any other Obligated Party to Bank, or any of Bank’s
Affiliates, successors or assigns, of every kind and nature, including but not
limited to all loans, advances, interest, costs, drafts, overdrafts, checks,
credit card indebtedness, lease obligations, obligations under any Rate
Management Agreement, and all other debts, liabilities, and obligations of every
kind owning by the Borrower or any other Obligated Party to the Bank, whether
direct or indirect, voluntary or involuntary, due or not due, absolute or
contingent, liquidated or unliquidated, of the same or a different nature,
whether now existing or hereafter incurred or created, or whether incurred
directly or acquired by Bank by assignment or otherwise, together with all
renewals, extensions, modifications, consolidations, and substitutions of any of
the them, including interest thereon and all costs, expenses, and reasonable
attorney’s fees paid or incurred by Bank at any time before or after judgment in
attempting to collect any of the foregoing, to realize on any collateral
securing any of the foregoing, to realize on any guaranty or indemnity executed
in connection with the foregoing, and to enforce this Agreement.  The
“Obligations” specifically include, but are not limited to, all indebtedness of
Borrower  to Bank under the Credit Facilities, and all advances made by Bank to
or for the benefit of Borrower thereunder.  The “Obligations” also specifically
include all Insolvency Obligations and all Surrendered Payments. .  Unless
Borrower or any other Obligated Party shall have otherwise agreed in writing,
for the

 

2

--------------------------------------------------------------------------------

 

purposes of this Agreement, “Obligations” shall not include “consumer credit”
subject to the disclosure requirements of the Federal Truth in Lending Act or
any regulations promulgated thereunder.

 

“Rate Management Agreement” means any rate lock agreement or interest rate
protection agreement (such as any interest rate swap agreement, International
Swaps and Derivatives Association, Inc. Master Agreement, or similar agreement
or arrangements now existing or hereafter entered into by Borrower or any other
Obligated Party and Bank in connection with any Credit Facility to hedge the
risk of variable rate interest volatility or fluctuations in interest rates as
any such agreement or arrangement may be modified, supplemented and in effect
from time to time).

 

“Surrendered Payments” means, collectively, the amount of any payments made to
Bank or any other party on behalf of Borrower or any other Obligated Party
(including payments resulting from liquidation of collateral) which are
recovered from the Bank by a trustee, receiver, creditor, or other party
pursuant to applicable federal or state law.

 

1.             Assignment and Grant of Security.  For the purpose of securing
payment and performance of the Obligations, including the prompt payment and
performance of all obligations and indebtedness of Borrower to Bank under the
Loan Documents, and all renewals, extensions, modifications, amendments, and/or
supplements thereto, in such order of priority as Bank may determine in its sole
and absolute discretion, the Obligated Parties each hereby irrevocably and
unconditionally assign, grant, pledge, transfer, and set over to Bank, and there
is hereby created a security interest in favor of Bank, in and to all of each
Obligated Party’s right, title, and interest in, to, and under all of the
following, whether now or hereafter existing, or now owned or hereafter acquired
(all or any part of such property, or any interest in all or any part of it, as
the context may require, the “Collateral”):

 

1.1          All assets of each such Obligated Party, including all personal and
fixture property of every kind and nature including but not limited to those
specifically described below.

 

1.2          All of the following, whether now owned or hereafter acquired by
each such Obligated Party:  accounts (including health-care-insurance
receivables) and other rights of such Obligated Party to the payment of money no
matter how evidenced, including but not limited to accounts receivable, pledges
receivable, grants receivable, capital campaign receivables, and any other
receivables, contract rights, instruments, documents, promissory notes,
certificates of deposit, chattel paper (whether tangible or electronic), deposit
accounts, letter-of-credit rights (whether or not the letter of credit is
evidenced by a writing), supporting obligations, and general intangibles of
every nature, all permits, regulatory approvals, copyrights, copyright
applications, patents, trademarks, trademark applications, service marks, trade
names, software, symbols, mask works, engineering drawings, customer lists,
goodwill, licenses, permits, all agreements of any kind or nature by which such
Obligated Party possesses, uses, or has authority to possess or use property
(whether tangible or intangible) of others or others possess, use, or have
authority to possess or use property (whether tangible or intangible) of such
Obligated Party, all recorded data of any kind or nature (regardless of the
medium of recording) including but not limited to all software, writings, plans,
specifications, and schematics, and all other intellectual property owned by
such Obligated Party or used in such Obligated Party’s business.

 

1.3          All fixed assets, machinery, furniture, fixtures, and other
equipment of every type now owned or hereafter acquired by each such Obligated
Party.

 

1.4          All inventory now owned or hereafter acquired by each such
Obligated Party, including, without limitation, all raw materials, work in
process, materials used or consumed in such Obligated Party’s business, finished
goods, and supplies.

 

3

--------------------------------------------------------------------------------

 

1.5          All other property of each such Obligated Party now or hereafter in
the possession, custody, or control of Bank, including, without limitation, all
deposit accounts of each such Obligated Party with Bank, and all property of
each such Obligated Party in which Bank now has or hereafter acquires a security
interest.

 

1.6          All investment property, including all investment securities and
investment securities accounts (each, and “ISA”), now owned or hereafter
acquired, together with all assets and investment of any kind or nature now or
hereafter held in each ISA, including cash, certificated or uncertificated
securities, notes, instruments, documents, general intangibles, and commercial
paper, together with (a) all new substituted and additional documents,
instruments, and general intangibles issued with respect thereto, (b) all voting
and rights to and interest in all cash, non-cash dividends and all other
property now or hereafter distributable on account of or receivable with respect
thereto, (c) interest thereon, stock and subscription rights; dividends and
dividend rights; and new securities or other property such Obligated Party
receives in connection therewith, which such Obligated Party agrees to deliver
to the Bank immediately, and (d) all proceeds thereof, including, without
limitation, proceeds consisting of cash, dividends (including dividends
consisting of stock), stock splits, distributions, interest, certificated or
uncertificated securities, notes, instruments, documents, general intangibles,
commercial paper, and any other earnings of whatever nature.

 

1.7          All tort claims and insurance claims and proceeds, including
commercial tort claims.

 

1.8          All software embedded within or used in connection with any of the
above-described property.

 

1.9          All negotiable and nonnegotiable documents of title now owned or
hereafter acquired by each such Obligated Party covering any of the
above-described property.

 

1.10        All rights under contracts of insurance now owned or hereafter
acquired by each such Obligated Party covering any of the above-described
property.

 

1.11        All books and records now owned or hereafter acquired by each such
Obligated Party pertaining to any of the above-described property, including but
not limited to any computer-readable memory and any computer hardware or
software (including embedded software) necessary to process such memory
(collectively, the “Books and Records”).

 

1.12        All products, rents, and profits now owned or hereafter acquired by
each such Obligated Party of any of the above-described property.

 

1.13        All cash and non-cash proceeds of, additions and accretions to,
substitutions and replacements for, and changes in any of the above-described
property (collectively, “Proceeds”), including without limitation (i) all
interest and dividends earned on the Proceeds; (ii) all monies and other
tangible or intangible property received upon a sale or other disposition of any
of the Proceeds; (iii) all rights to payment in connection with any cause of
action with respect to any Proceeds and all proceeds of any voluntary or
involuntary disposition or claim respecting any of the foregoing (arising out of
any judgment or award, or otherwise arising) and (iv) all goods, documents,
general intangibles, chattel paper and accounts, wherever located, acquired with
cash proceeds of any of the foregoing or its proceeds, and all supporting
obligations ancillary to or arising in any way in connection with any of the
above-described property.

 

4

--------------------------------------------------------------------------------

 

2.             Further Assurances; Authorization to File Financing Statements;
Attorney-in-Fact.

 

2.1          Further Assurances.  Each Obligated Party agrees that, from time to
time, at its own expense, it will:

 

(a)           Protect and defend the Collateral against all claims and demands
of all persons at any time claiming the same or any interest therein, and
preserve and protect Bank’s security interest in the Collateral.

 

(b)           Promptly execute and deliver to Bank all instruments and
documents, and take all further action necessary or desirable, as Bank may
reasonably request to (i) correct any defect, error, or omission which may be
discovered in the contents, execution, or acknowledgment of this Agreement;
(ii) continue, perfect, or protect any security interest granted or purported to
be granted hereby, and (iii)  enable Bank to exercise and enforce any of its
rights and remedies hereunder with respect to any Collateral.  Such actions may
include but not be limited to executing, authenticating, authorizing,
acknowledging, delivering, procuring, and recording and/or filing such further
documents (including, without limitation, further security agreements, financing
statements, financing statement amendments, and continuation statements), and
doing such further acts as may be necessary, desirable, or proper to (A) carry
out more effectively the purposes of this Agreement or (B) more fully identify
and subject to the liens and security interests hereof any property intended to
be covered hereby (including specifically, but without limitation, any renewals,
additions, substitutions, or replacements, of or to the Collateral), (C) protect
the lien or the security interest hereunder against the rights or interests of
third persons, and/or (D) enable Bank to exercise and enforce any of its rights
and remedies hereunder with respect to any Collateral.

 

(c)           Permit Bank’s representatives to inspect and make copies of all
Books and Records relating to the Collateral, wherever such Books and Records
are located, and to conduct an audit relating to the Collateral at any
reasonable time or times.

 

(d)           Provide, promptly on request of Bank, such certificates,
documents, reports, information, affidavits, and other instruments to Bank, and
do such further acts as may be necessary, desirable, or proper in the reasonable
determination of Bank, to enable Bank to comply with the requirements or
requests of any agency having jurisdiction over Bank, and/or any examiners of
such agencies, with respect to the Obligations, Borrower, each other Obligated
Party, or the Collateral.

 

2.2          Authorization to File Financing Statements.  Each Obligated Party
hereby irrevocably authorizes Bank at any time, and from time to time, to file
in any Uniform Commercial Code jurisdiction, any initial financing statements,
amendments thereto, and continuation statements with or without signature of
such Obligated Party as authorized by applicable law, as applicable to the
Collateral.  Except to the extent expressly prohibited by applicable law, a
carbon, photographic, facsimile, or other reproduction of this Agreement or any
financing statement shall be sufficient as a financing statement.  For purposes
of such filings, each Obligated Party agrees to furnish any information
requested by Bank promptly upon request by Bank.  Each Obligated Party also
ratifies its authorization for Bank to have filed any like initial financing
statements, amendments thereto, or continuation statements if filed prior to the
date of this Agreement.

 

2.3          Attorney-in-Fact; Exercise of Rights.  Each Obligated Party hereby
irrevocably constitutes and appoints Bank, including any officer or agent of
Bank, with full power of substitution, as its true and lawful attorney-in-fact
with full irrevocable power and authority in the place and stead of such
Obligated Party, or in such Obligated Party’s own name, to execute any such
documents and to otherwise carry out the purposes of this Agreement, to the
extent that such Obligated Party’s authorization above is not sufficient.  To
the extent not expressly prohibited by law, each Obligated Party hereby ratifies
and

 

5

--------------------------------------------------------------------------------

 

affirms all acts said attorneys-in-fact shall lawfully do, have done in the past
or cause to be done in the future by virtue hereof.  This power of attorney is a
power coupled with an interest and shall be irrevocable.  Additionally,
effective upon the occurrence of a Event of Default under this Agreement, each
Obligated Party hereby irrevocably appoints Bank as its attorney-in-fact, to
demand, receive, and enforce such Obligated Party’s rights with respect to the
Collateral, including the protection thereof, and to give appropriate receipts,
releases, and satisfactions for and on behalf of, and in the name of, such
Obligated Party.  Such powers are deemed to be coupled with an interest, and are
therefore irrevocable.  Any third party may rely on representations of Bank that
an Event of Default exists hereunder or that the power of attorney hereby
granted by each Obligated Party to Bank is effective, without further inquiry. 
In addition to the foregoing facilitate Bank’s exercise of the rights and
remedies set forth herein, each Obligated Party authorizes Bank to (a) enter any
premises where any Books or Records relating to the Collateral may be located,
at reasonable times and following reasonable notice, for the purpose of
inspecting, and/or copying any documents, files, and records relating to the
Collateral, and to use such supplies and space of such Obligated Party at its
places of business as may be reasonably necessary to administer and control the
Collateral or the handling of collections and realizations thereon, (b) give
notices to and to communicate with any party in possession or control of any of
the Collateral with respect to such Collateral, and (c) take all steps and to
institute (in Bank’s name or such Obligated Party’s name) all actions and
proceedings deemed necessary or advisable by Bank to effect the collection or
realization upon any of the Collateral.

 

3.             Obligated Party’s Representations and Warranties.  Each Obligated
Party promises that each representation and warranty set forth below is and will
be true, accurate, and correct:

 

3.1          Authority; Enforceability.  Each Obligated Party’s exact legal name
and correct organizational identification number is correctly set forth in the
introductory paragraph of this Agreement.  Each Obligated Party has complied
with any and all laws and regulations concerning its organization, existence,
and the transaction of its business.  Each Obligated Party has the right, power,
and authority to make this Agreement and to grant the security interests granted
hereunder.  When fully executed, this Agreement will create a valid and
enforceable first-priority security interest in the Collateral, excepting the
Approved Existing Lien Assets, which are subject only to the Approved Existing
Liens, and except to the extent previously disclosed in writing to Bank.

 

3.2          No Violation; Compliance With Law.  The execution and delivery of
this Agreement and performance by each Obligated Party of its obligations
hereunder will not result in a default under any other material agreement to
which such Obligated Party is a party. To the best of each Obligated Party’s
knowledge and belief, such Obligated Party is in full compliance with all
applicable federal, state, and local statutes, rules, and regulations pertaining
to the Collateral.

 

3.3          No Consent of Action Required.  To the best of each Obligated
Party’s knowledge and belief, no authorization, consent, approval, other action
by, notice to, or filing with, any governmental authority, regulatory body, or
any other person or entity is required for the execution of this Agreement or
the grant or perfection of the security interests granted herein, except any
written consent attached hereto or otherwise previously provided by such
Obligated Party to Bank.  There exist no restrictions on each Obligated Party’s
ability to pledge and assign such Collateral to Bank by virtue of any
arrangement or agreement with any other third party.

 

3.4          No Other Pledge.  Except as previously disclosed in writing to
Bank, and specifically excepting the Approved Existing Liens on the Approved
Existing Lien Assets, the Obligated Parties are collectively the sole legal and
equitable owners and holders of all right, title, and interest in and to all of
the Collateral, free and clear of any liens, encumbrances, or interests of third
parties, other than those in favor of Bank, specifically allowed pursuant to the
terms of the Loan Documents, or otherwise agreed to in writing by Bank.  The
Obligated Parties have not pledged or assigned any of its right, title, or
interest in or

 

6

--------------------------------------------------------------------------------

 

to all or any portion of the Collateral to any other person or entity, except
for the Approved Existing Liens on the Approved Existing Lien Assets.

 

3.5          Use of Secured Obligations.  The Obligations, including all loans
secured hereby, are solely for business and/or investment purposes, and are not
intended for personal, family, household, or agricultural purposes.  All loans
secured hereby are considered and construed for all purposes as commercial
loans.  The proceeds of the Obligations shall be used for commercial purposes.

 

3.6          Collateral Attributes.  Except as previously disclosed in writing
to Bank, (i) none of the account debtors or other persons obligated on any of
the Collateral is a governmental authority subject to the Federal Assignment of
Claims Act or any similar federal, state, or local law, rule, or regulation with
respect to such Collateral, and (ii) to the best of each Obligated Group Party’s
knowledge and belief, each Obligated Group Party holds no commercial tort
claims.  To the best of each Obligated Group Party’s knowledge and belief,
except as otherwise disclosed to Bank in writing prior to the execution of this
Agreement, each of the presently existing Collateral Documents (as such term is
defined below) is genuine, valid, in full force and effect, and enforceable
against all applicable parties in accordance with its terms (except to the
extent that enforceability is limited by bankruptcy, insolvency, or other laws
affecting the enforcement of creditors’ rights generally).

 

3.7          Obligated Party’s Location and Information.  Each Obligated Group
Party is an organization of the type and (if not an unregistered entity) is
incorporated in or organized under the laws of the state specified in the
introductory paragraph of this Agreement.  Each Obligated Group Party’s
principal place of business and chief executive office, and the place where such
Obligated Group Party keeps its books and records, has for the preceding four
(4) months (or, if less, the entire period of the existence of such Obligated
Group Party) been and will continue to be (unless such Obligated Group Party
notifies Bank of any change in writing at least thirty (30) days prior to the
date of such change) at the address or addresses specified on the signature
page of this Agreement, and (d) if such Obligated Group Party is an unregistered
entity (including, without limitation, a general partnership) it is organized
under the laws of the state specified in the introductory paragraph of this
Agreement.

 

4.             Obligated Party’s Covenants.  Each Obligated Group Party
covenants and warrants that unless compliance is waived by Bank in writing:

 

4.1          Collateral Preservation.  Each Obligated Group Party will properly
preserve the Collateral, keep the Collateral in good order and repair, keep
accurate Books and Records, protect and defend the Collateral against all claims
and demands of all persons at any time claiming the same or any interest
therein, and preserve and protect Bank’s security interest in the Collateral.

 

4.2          No Liens.  Each Obligated Group Party has not granted and will not
grant any security interest in any of the Collateral except to Bank and except
for any other security interests specifically allowed pursuant to the terms of
Loan Documents or otherwise agreed to in writing by Bank, and will keep the
Collateral free of all liens, claims, security interests, and encumbrances of
any kind or nature, except the security interest of Bank and other security
interests specifically allowed pursuant to the terms of Loan Documents or
otherwise agreed to in writing by Bank.

 

4.3          Restriction on Assignment or Transfer.  Each Obligated Group Party
will not sell, convey, lease, assign, encumber, pledge, or otherwise transfer or
dispose of all or any portion of the Collateral, or any interest therein,
whether such transfer is voluntary, involuntary, by operation of law, or
otherwise, except for (a) those transfers of Collateral, if any, specifically
allowed pursuant to the terms of Loan Documents or otherwise agreed to in
writing by Bank, and (b) so long as no Event of Default has occurred and is
continuing hereunder, inventory sold or supplies used in the ordinary course of
such Obligated Group Party’s business.  The foregoing restriction on transfer
specifically includes transfers to any

 

7

--------------------------------------------------------------------------------

 

trust.  Any attempted transfer of any Collateral, or any interest therein, which
is not specifically authorized pursuant to the terms of this Agreement or
otherwise consented to by Bank in writing shall be null and void and of no force
or effect for any purpose whatsoever.

 

4.4          Collateral Documents; Actions Without Consent.  Each Obligated
Group Party will not (i) amend, supplement, terminate, or otherwise modify any
contract or other document or instrument now or hereafter included in the
Collateral (each, a “Collateral Document” and collectively, the “Collateral
Documents”); (ii) release, relinquish, or waive any right, or grant any approval
or consent, with respect to any Collateral Document; (iii) enter into any new
agreement with respect to any Collateral; or (iv) take any other action with
respect to any Collateral which is inconsistent with this Agreement or which
could impair Bank’s interests hereunder, except as may be specifically allowed
pursuant to the terms of Loan Documents or otherwise agreed to in writing by
Bank.  Any such termination, modification, waiver, approval, or other action
taken which is not specifically authorized pursuant to the terms of this
Agreement shall, at Bank’s option, be null and void and of no force or effect
for any purpose whatsoever.

 

4.5          Defense of Proceedings; Payments of Taxes, Assessments, and
Charges. Each Obligated Group Party shall, at such Obligated Group Party’s sole
expense, defend all actions, proceedings and other claims affecting the
Collateral owned by it, including without limitation actions, proceedings, and
claims challenging such Obligated Group Party’s title to the Collateral or the
validity or priority of Bank’s rights hereunder.  Each Obligated Group Party
shall promptly pay all taxes and other governmental charges, and all license
fees, and other public and private charges, levied or assessed upon or against
any of the Collateral owned by it (if any) or upon or against the creation,
perfection or continuance of the Bank’s security interest created hereunder, as
well as all other claims of any kind against or with respect to the Collateral,
except to the extent (a) such taxes, charges or claims are being contested in
good faith by appropriate proceedings, (b) such proceedings do not involve any
material danger of the sale, forfeiture or loss of any of the Collateral or any
interest therein, and (c) such taxes, charges or claims are adequately reserved
against on such Obligated Group Party’s books in accordance with generally
accepted accounting principles.

 

4.6          Location and Identification.  Each Obligated Group Party will not
cause or permit any change to be made in (a) its name, identity, or corporate,
partnership, limited liability company, or other entity structure, (b) its
jurisdiction on organization (c) its organizational identification number,
(d) its place of business or, if more than one, its chief executive office, or
(e) its mailing address, or (f) any change in the location of any Collateral,
including the Books and Records, unless such Obligated Group Party shall have
notified Bank in writing of such change at least thirty (30) days prior to the
effective date of such change, and shall have first taken all action required by
Bank for the purpose of further perfecting or protecting the lien and security
interest of Bank in the Collateral.  If such Obligated Group Party does not have
an organizational identification number and later obtains one, such Obligated
Group Party shall promptly notify Bank of such organizational identification
number.

 

4.7          Books and Records; Collateral.  Each Obligated Group Party will
keep accurate and complete Books and Records with respect to the Collateral
owned by it, and shall, if required by Bank from time to time, promptly deliver
reports to Bank with respect to the Collateral in form and substance
satisfactory to Bank in its sole and absolute discretion.  Each Obligated Group
Party will permit Bank’s representatives to inspect the Collateral owned by it
and/or make copies of, and /or extracts from, all Books and Records, wherever
such Books and Records are located, and to conduct an audit relating to the
Collateral owned by it at any reasonable time or times.  Upon the request of
Bank, each Obligated Group Party will deliver to Bank (a) copies of or extracts
from the Books and Records, and (b) information on any matters affecting the
Collateral owned by it.

 

4.8          Compliance With Law; Notice of Material Events.  Each Obligated
Group Party will not use any of the Collateral in violation of any applicable
law or regulation, or in violation of any policy of

 

8

--------------------------------------------------------------------------------

 

insurance thereon.  Each Obligated Group Party will promptly notify Bank in
writing of any event which affects the value of the Collateral, the ability of
such Obligated Group Party or Bank to dispose of the Collateral, or the rights
and remedies of Bank in relation thereto, including but not limited to, the levy
of any legal process against any Collateral and the adoption of any marketing
order, arrangement, or procedure affecting the Collateral, whether governmental
or otherwise.

 

4.9          Attachment.  Each Obligated Group Party will not attach any
Collateral to any real property or fixture in a manner which might cause such
Collateral to become a part thereof unless such Obligated Group Party first
obtains the written consent of any owner, holder of any lien on the real
property or fixture, or other person having an interest in such property to the
removal by Bank of the Collateral from such real property or fixture.  Such
written consent shall be in form and substance acceptable to Bank and shall
provide that Bank has no liability to such owner, holder of any lien, or any
other person.

 

4.10        Insurance.  Each Obligated Group Party will maintain and keep in
force insurance covering Collateral owned by it designated by Bank against fire
and extended coverages.  Such insurance shall require losses to be paid on a
replacement cost basis, be issued by insurance companies acceptable to Bank and
include Bank’s standard form Certification and Material Change Endorsement and
Commodity Loss Payable Endorsement, or such other material change and/or loss
payable endorsements in favor of Bank requested by Bank, all in a form and
substance acceptable to Bank in its sole and absolute discretion.

 

4.11        Delivery of Documents; Collection.  If any Collateral is or becomes
the subject of any registration certificate or negotiable document of title
including any warehouse receipt or bill of lading, the applicable Obligated
Group Party shall immediately deliver such document to Bank.  If requested by
Bank, each Obligated Group Party will deliver to Bank any instruments,
certificates of deposit, or chattel paper.  If requested by Bank, each Obligated
Group Party will segregate all collections and proceeds of the Collateral so
that they are capable of identification and deliver daily such collections and
proceeds to Bank in kind, and/or direct all account debtors to forward all
payments and proceeds of the Collateral to a post office box under Bank’s
exclusive control.  To the extent that any of the Collateral consists of
accounts, promissory notes, instruments, or other items for which payments are
due or coming due, unless otherwise agreed in writing by Bank, until Bank
exercises its rights to make collection, the applicable Obligated Group Party
will diligently collect such Collateral.

 

5.             Obligations of Bank with Respect to Collateral.  Neither Bank’s
acceptance of the assignment and security interests granted hereunder nor any
exercise by Bank of its rights and remedies hereunder shall be deemed to be an
assumption by Bank of any obligation or liability of any Obligated Group Party
with respect to any Collateral or under the terms of any Collateral Document,
and each Obligated Group Party shall indemnify, defend, and hold Bank harmless
for, from, and against any and all actions, suits, claims, demands, liabilities,
losses, damages, obligations, and costs or expenses, including litigation costs
and reasonable attorneys’ fees, arising from or in any way connected with any
such obligation or liability.  Bank’s obligations with respect to Collateral in
its possession shall be limited to the duty to exercise reasonable care in the
custody and preservation of such Collateral; provided, however, that Bank shall
have no duty to take any steps to preserve the rights of any Obligated Group
Party against other persons, or to initiate any action to protect any
Collateral.  Upon any transfer by Bank of any or all of the Obligations, Bank
may transfer any or all of the Collateral and shall thereupon be fully
discharged of liability and responsibility with respect to the Obligations
and/or Collateral so transferred; but Bank shall retain all applicable rights
and interest hereunder with respect to any Obligations and/or Collateral not
then transferred.

 

9

--------------------------------------------------------------------------------

 

6.             Defaults and Remedies.

 

6.1          Events of Default.   Each Obligated Group Party will be in default
under this Agreement upon the occurrence of any one or more of the following
events (each an “Event of Default”):

 

(a)           A default or Event of Default occurs under any of the Loan
Documents (as defined in the applicable document, subject to applicable notice
and cure periods).

 

(b)           Any Obligated Group Party fails to comply with any of the terms
and conditions of this Agreement within ten (10) days after Bank’s written
demand.

 

(c)           Any representation or warranty made or given by any Obligated
Group Party in this Agreement proves to be false or misleading in any material
respect.

 

(d)           Any involuntary lien of any kind or character attaches to any
Collateral.

 

(e)           Any Obligated Group Party becomes insolvent or the subject of any
bankruptcy or other voluntary or involuntary proceeding, in or out of court, for
the adjustment of debtor-creditor relationships (an “Insolvency Proceeding”), or
any Obligated Group Party consents to the appointment or taking of possession by
a receiver (or similar official) of any Obligated Group Party, or its property,
or any Obligated Group Party makes an assignment for the benefit of creditors;
provided, however, that an involuntary Insolvency Proceeding shall not be
considered an Event of Default hereunder if it is either (i) consented to in
writing by Bank, or (ii) has been dismissed within ninety (90) days of the
filing thereof.

 

6.2          Remedies.  If an Event of Default occurs under this Agreement, Bank
may exercise any right or remedy available at law or in equity or by statute,
including but not limited to all rights, powers and remedies of an owner and as
a secured party under the UCC, and all of Bank’s rights and remedies shall be
cumulative.  Bank’s rights and remedies, each of which may be exercised with or
without further notice to any Obligated Group Party, shall specifically include,
without limitation, the right to: (a) exercise all rights and remedies available
upon the occurrence of an Event of Default under any Loan Document, including
without limitation the right to declare any and/or all Obligations immediately
due and payable and to foreclose Bank’s security interests in any and/or all
Collateral by any means allowed by law, with or without judicial process;
(b) notify any person obligated with respect to any Collateral that the same has
been assigned to Bank and that all payments thereon are to be made to Bank, and
(c) renew, extend, amend, or otherwise modify any Collateral Document (subject
to any required consents of third parties required pursuant to the terms
thereof) and to otherwise exercise rights and remedies and act with respect to
any Collateral as if it were the owner thereof.

 

Without limiting the foregoing, Bank’s rights after an Event of Default
hereunder specifically include it’s right, at its option to: (i) declare any
Obligations, including any Credit Facility, immediately due and payable, without
notice or demand, (ii) enforce the security interest given hereunder pursuant to
the UCC and/or any other applicable law, (iii) enforce the security interest of
Bank, or exercise any right of setoff, in any deposit account of any Obligated
Group Party by applying such account to the Obligations in such order and manner
as Bank shall determine, (iv) grant extensions and compromise or settle claims
with respect to the Collateral for less than face value, all without prior
notice to any Obligated Group Party, (v) have a receiver appointed by any court
of competent jurisdiction to take possession of all or any portion of the
Collateral, and/or (vi) take such measures as Bank may deem necessary or
advisable to take possession of, hold, preserve, process, assemble, insure,
prepare for sale or lease, market for sale or lease, sell or lease, or otherwise
dispose of any Collateral (each a “Collateral Disposition”).

 

10

--------------------------------------------------------------------------------

 

6.3          Other Rights of Bank.

 

(a)           The remedies provided herein in favor of Bank are not exclusive,
but are cumulative and in addition to all other remedies in favor of Bank
existing under the Loan Documents, and at law or in equity.  Without limiting
the foregoing, Bank may exercise its rights with respect to a portion of the
Collateral without exercising its rights with respect to any other portion of
the Collateral, and may exercise any of its rights under this Agreement without
any obligation to enforce any of its rights to any other security for the
Obligations.

 

(b)           Bank may comply with any applicable federal, state, or local law
or regulatory requirements in connection with a disposition of the Collateral,
and such compliance will not be considered to affect adversely the commercial
reasonableness of any sale of the Collateral.  Bank may sell the Collateral
without giving any warranties as to the Collateral, and specifically disclaim
any warranties of title, merchantability, fitness for a specific purpose or the
like, and this procedure will not be considered to affect adversely the
commercial reasonableness of any sale of the.  Each Obligated Group Party
acknowledges that a private sale of the Collateral may result in less proceeds
than a public sale.  Each Obligated Group Party acknowledges that the Collateral
may be sold at a loss to such Obligated Group Party, and that, in such event,
Bank shall have no liability or responsibility to such Obligated Group Party or
any other Obligated Group Party for such loss.

 

(c)           Upon any public or private sale of all or any portion of the
Collateral, (i) Bank may bid for and purchase the Collateral being sold, and,
upon compliance with the terms of sale, may hold, retain, possess, and dispose
of such Collateral in its own absolute right without further accountability, and
(i) all rights, title, interests, claims, and demands whatsoever, either at law
or in equity, of any Obligated Group Party of, in, and to the property so sold
will be divested; such sale will be a perpetual bar both at law and in equity
against each Obligated Group Party and its respective successors and assigns. 
Each Obligated Group Party shall make and deliver to the purchaser or purchasers
a good and sufficient deed, certificate, bill of sale, and instrument of
assignment and transfer of the Collateral sold.  To the extent it may do so
lawfully, Each Obligated Group Party agrees not to insist upon, plead, claim, or
take the benefit or advantage of, at any time, or in any manner whatsoever, any
appraisement, valuation, stay, extension, or redemption laws, or any law
permitting them to direct the order in which the Collateral or any portion
thereof will be sold, now or at any time hereafter in force, which may delay,
prevent, or otherwise affect the performance or enforcement of the this
Agreement, and each Obligated Group Party hereby expressly waives all benefit or
advantage of any such laws, and covenant that it will not hinder, delay, or
impede the execution of any power granted or delegated to Bank in this
Agreement, but will suffer and permit the execution of every such power as
though no such laws were in force.

 

(d)           Following an Event of Default, Bank is expressly granted the
right, at its option, to transfer the Collateral, or any part thereof, to
itself, or its nominee, and to receive the payments, collections, monies,
income, proceeds, attributable or accruing thereto, and to hold same as security
for the Obligations, or to apply same to the Obligations secured by this
Agreement in such order and manner as Bank shall determine in its sole and
absolute discretion.  Except to the extent expressly prohibited by law, the
right of Bank to take possession of the Collateral following an Event of Default
hereunder may be exercised without resort to any court proceeding or judicial
process, and without any hearing, whatsoever.  Each Obligated Group Party
expressly waives any and all rights (i) with regard to judicial process or
hearing prior to the exercise of Bank’s right to take possession and control of
the Collateral after an Event of Default, and (ii) to marshalling of assets,
including such right with respect to the Collateral.

 

(e)           Each Obligated Group Party agrees that Bank may at its option at
any time, whether or not any Obligated Group Party is in default, notify any
account debtors, any buyers of the Collateral, or any other persons of Bank’s
interest in the Collateral.  Bank is expressly granted the right, at its option,
following an Event of Default, to demand and collect any payments and proceeds
of the

 

11

--------------------------------------------------------------------------------

 

Collateral.  In connection with the foregoing, each Obligated Group Party
irrevocably authorizes Bank, and irrevocably appoints Bank as such Obligated
Group Party’s attorney-in-fact, with full power of substitution, to endorse or
sign such Obligated Group Party’s name on all checks, drafts, collections,
receipts, and other documents, and to take possession of and open the mail
addressed to such Obligated Group Party and remove therefrom any payments and
proceeds of the Collateral, such appointment being a power coupled with an
interest.

 

(f)            In connection with any Collateral Disposition, Bank may
(A) require the applicable Obligated Group Party to assemble all of any portion
of the Collateral and make it available to Bank at a place designated by Bank,
and/or enter upon the property where any such Collateral is located and take
possession of such Collateral, and use such property (including any buildings
and facilities) and any of such Obligated Group Party ‘s equipment, if Bank
deems such use necessary or advisable for or in connection with such Collateral
Disposition, and/or (B) use or transfer, without any additional consideration to
any Obligated Group Party, any of such Obligated Group Party’s rights and
interests in any Intellectual Property now owned or hereafter acquired by such
Obligated Group Party, including, but not limited to, all trade secrets,
computer software, service marks, trademarks, trade names, trade styles,
copyrights, patents, applications for any of the foregoing, customer lists,
working drawings, instructional manuals, and rights in processes for technical
manufacturing, packaging and labeling in which such Obligated Group Party has
any right or interest, whether by ownership, license, contract or otherwise, if
Bank deems such use or transfer necessary or advisable for or in connection with
such Collateral Disposition.  Each Obligated Group Party hereby irrevocably
constitutes and appoints Bank as such Obligated Group Party’s attorney-in-fact,
with full power of substitution, to perform all acts and execute all documents
in connection with any Collateral Disposition, such appointment being a power
coupled with an interest.

 

(g)           Each Obligated Group Party agrees to take all steps necessary to
avoid the violation of any current and future securities laws, and consents to
any steps Bank takes to avoid violation of the same.  Each Obligated Group Party
further agrees to enter into any amendments hereto that Bank may reasonably
request to avoid the violation of such laws.  Each Obligated Group Party
recognizes that, due to certain prohibitions contained in the Securities Act of
1933, as amended, or other applicable securities laws, Bank may, with respect to
any securities, consider it advisable to resort to one or more private sales to
a restricted group of purchasers who will agree to acquire any securities for
their own accounts for investment and not to engage in a distribution of resale
thereof, and that private sales so made may be at prices and on other terms less
favorable to the seller than if such securities were sold at public sale.  Each
Obligated Group Party acknowledges that the price received for the purchase of
such Collateral may be substantially lower than such Obligated Group Party might
have negotiated under other circumstances, and each Obligated Group Party agrees
that such procedures are commercially reasonable.  If a deficiency remains due,
the Borrower or applicable Obligated Group Party, as the case may be, must pay
the same promptly to Bank.

 

6.4          Setoff.  As additional security for the Obligations, including the
payment and performance of all obligations of Borrower under the Loan Documents,
each Obligated Group Party hereby grants Bank a security interest in, a lien on,
and an express contractual right to set off against each account (including all
deposit accounts), including all depository account balances, cash, and any
other property of such Obligated Group Party, now or hereafter in the possession
of Bank and the right to refuse to allow withdrawals from any account.  Bank
may, at any time upon the occurrence of any default or Event of Default, or an
event that, with notice or the passage of time, or both, could become an Event
of Default, under this Agreement or any other Loan Document, setoff against any
amounts outstanding under the Obligations, whether or not any of the Obligations
are then due or have been accelerated, all without any advance or
contemporaneous notice of demand of any kind to any Obligated Group Party, such
notice and demand being expressly waived.

 

12

--------------------------------------------------------------------------------

 

6.5          Surrendered Payments.  In the event that Bank makes any Surrendered
Payment, including pursuant to a negotiated settlement, the Surrendered
Payments, the Surrendered Payments shall immediately and automatically without
any further action required on behalf of Bank or any other party, be reinstated
as Obligations, regardless of whether this Agreement has been terminated,
cancelled, or released pursuant to its terms or otherwise and regardless of
whether Bank has surrendered, terminated, cancelled, or released this Agreement
prior to returning any Surrendered Payments

 

7.             Miscellaneous Provisions.

 

7.1          No Waiver; Consents.  Each waiver by Bank shall be in writing, and
no waiver may be construed as a continuing waiver.  No waiver will be implied
from Bank’s delay in exercising or failure to exercise any right or remedy
against any party or any security.  Bank’s consent to any act or omission by any
Obligated Group Party may not be construed as a consent to any other or
subsequent act or omission or as a waiver of the requirement for Bank’s consent
to be obtained in any future or other instance.

 

7.2          Purpose and Effect of Bank Approval.  Bank’s approval of any matter
in connection with this Agreement is for the sole purpose of protecting Bank’s
security and rights.  No such approval will result in a waiver of any default of
any Obligated Group Party.  In no event may Bank’s approval be a representation
of any kind with regard to the matter being approved.

 

7.3          Notices.  All notices given under this Agreement shall be in
writing and be given by personal delivery, overnight receipted courier (such as
Airborne or Federal Express) or by registered or certified United States mail,
postage prepaid, sent to the party at its address appearing below its
signature.  Notices shall be effective upon the first to occur of receipt, when
proper delivery is refused, or the expiration of forty-eight (48) hours after
deposit in registered or certified United States mail as described above. 
Addresses for notice may be changed by any party by notice to any other party in
accordance with this Section.

 

7.4          Actions.  If any Obligated Group Party fails to perform any
agreement contained herein, Bank may itself perform, or cause the performance
of, such agreement, and the reasonable expenses of Bank incurred in connection
therewith shall be payable by the applicable non-performing party.  Bank also
shall have the right, but not the obligation, to commence, appear in, and defend
any action or proceeding that might affect its security hereunder.  The
applicable Obligated Group Party shall pay promptly on demand all of Bank’s
reasonable out-of-pocket costs, expenses and legal fees and expenses of Bank’s
counsel incurred in those actions or proceedings.

 

7.5          Dispute Resolution.  Disputes under this Agreement shall be
resolved in the manner specified in the Loan Agreement.

 

7.6          Attorneys’ Fees.  In any lawsuit or arbitration arising out of or
relating to this Agreement, the Loan Documents, or the Loans, the prevailing
party will be entitled to recover from each other party such sums as the court
or arbitrator adjudges to be reasonable attorneys’ fees in the action or
arbitration, in addition to costs and expenses otherwise allowed by law.  In all
other actions or proceedings, including any matter arising out of or relating to
any Insolvency Proceeding, Borrower and each other applicable Obligated Party
agrees to pay all of Bank’s costs and expenses, including reasonable attorneys’
fees, incurred in enforcing or protecting Bank’s rights or interests.  From the
time(s) incurred until paid in full to Bank, all such sums shall bear interest
at the Default Rate.  Whenever any Obligated Group Party is obligated to pay or
reimburse Bank for any attorneys’ fees, those fees include the allocated costs
for services of in-house counsel, to the extent not prohibited by applicable
law.

 

7.7          Governing Law.  This Agreement shall be governed by and construed
according to the laws of the State of Arizona, without regards to the choice of
law rules of that state, except (a) to the

 

13

--------------------------------------------------------------------------------

 

extent that any of such laws may now or hereafter be preempted by Federal law,
and (a) as otherwise required by mandatory provisions of law, and (c) to the
extent that remedies provided by the laws of any jurisdiction other than the
such state are governed by the laws of such other jurisdiction.  Each Obligated
Group Party consents to the jurisdiction of any Federal or State court within
such state, submits to venue in such state, and also consents to service of
process by any means authorized by Federal law or the law of such state. 
Without limiting the generality of the foregoing, each Obligated Group Party
hereby waives and agrees not to assert by way of motion, defense, or otherwise
in such suit, action, or proceeding, any claim that (i) such Obligated Group
Party is not subject to the jurisdiction of the courts of the above-referenced
state or the United States District Court for such state, or (ii) such suit,
action, or proceeding is brought in an inconvenient forum, or (iii) the venue of
such suit, action, or proceeding is improper.

 

7.8          Heirs, Successors and Assigns.  The terms of this Agreement will
bind and benefit the heirs, legal representatives, successors and assigns of the
parties; provided, however, that no Obligated Group Party may assign this
Agreement, or assign or delegate any of their rights or obligations, without the
prior written consent of Bank in each instance.

 

7.9          Severability.  The invalidity or unenforceability of any one or
more provisions of this Agreement in no way affects any other provision.

 

7.10        Interpretation.  Whenever the context requires, all words used in
the singular will be construed to have been used in the plural, and vice versa,
and each gender will include any other gender.  The captions of the sections of
this Agreement are for convenience only and do not define or limit any terms or
provisions.  The word “include(s)” means “include(s), without limitation,” and
the word “including” means “including, but not limited to.”  No listing of
specific instances, items or matters in any way limits the scope or generality
of any language of this Agreement.

 

7.11        Amendments.  This Agreement may not be modified or amended except by
a written agreement signed by the parties.

 

7.12        Counterparts.  This Agreement and any attached consents or exhibits
requiring signatures may be executed in counterparts, and all counterparts
constitute but one and the same document.

 

7.13        Language of Agreement.  The language of this Agreement will be
construed as a whole according to its fair meaning and not strictly for or
against any party.

 

7.14        Exchange of Information.  Each Obligated Group Party agrees that the
Bank may exchange or disclose financial information and other information about
Borrower and any other Obligated Party with or to any of Bank’s affiliates or
other related entities and with any party that acquires a participation or other
interest in all or part of any Credit Facility..

 

7.15        Survival.  The representations, warranties, acknowledgments, and
agreements set forth herein shall survive the date of this Agreement.

 

7.16        Time is of the Essence.  Time is of the essence in the performance
of this Agreement, and each and every term thereof, by each Obligated Group
Party.

 

7.17        Relationship of Parties.  This Agreement is intended to be and is
deemed for all purposes to constitute additional security granted to Bank for
the repayment of the Loan.  The execution and delivery of this Agreement and the
enforcement of this Agreement by Bank does not alter or expand

 

14

--------------------------------------------------------------------------------

 

upon the debtor and creditor relationship between any Obligated Group Party and
Bank, and nothing contained herein is to be construed to constitute Bank a
partner of or a joint venturer with any party.

 

7.18        Continuing Agreement.  This is a continuing agreement and all the
rights, powers and remedies hereunder shall apply to all past, present, and
future Obligations of Borrower and the other Obligated Group Parties, including
those arising under successive transactions which shall either continue some or
all the Obligations, increase or decrease any of them, or from time to time
create new Obligations after all or any prior Obligations have been satisfied,
and notwithstanding the bankruptcy of any Obligated Group Party, or any other
event or proceeding affecting any Obligated Group Party.

 

7.19        Recitals; Exhibits.  The Recitals to this Agreement set forth above
are true, complete, accurate, and correct, and such recitals are incorporated
hereby by reference.  The exhibits to this Agreement are incorporated hereby by
reference.

 

7.20        Integration.  This Agreement integrates all the terms and conditions
mentioned in or incidental to the subject matter contained herein, supersede all
oral negotiations and prior writings with respect to such subject matter, and is
intended by the parties as the final expression of their agreement with respect
to the terms and conditions set forth in herein.

 

7.21        Patriot Act Provisions.  The following notification is provided to
each Obligated Group Party pursuant to Section 326 of the USA Patriot Act of
2001, 31 U.S.C. Section 5318 (as such maybe amended or recodified from time to
time, the “Patriot Act”):

 

(a)           Important Information About Procedures for Opening a New Account. 
To help the government fight the funding of terrorism and money laundering
activities, federal law requires all financial institutions to obtain, verify,
and record information that identifies each person or entity that opens an
account, including any deposit account, treasury management account, loan, other
extension of credit, or other financial services product.  Each Obligated Group
Party is hereby notified that when such party opens an account, including but
not limited to any deposit account or other account that may be required
pursuant to the terms of this Agreement, (i) if such party is not an individual,
Bank will ask for such party’s name, taxpayer identification number, business
address, and other information that will allow Bank to identify such party, and
may also ask to see such party’s legal organizational documents or other
identifying documents, and (ii) if such party is an individual, Bank will ask
for such party’s name, taxpayer identification number, residential address, date
of birth, and other information that will allow Bank to identify Borrower, and
may also ask to see such party’s driver’s license or other identifying
documents.

 

(b)           Government Regulation.  Each Obligated Group Party shall not
(a) be or become subject at any time to any law, regulation, or list of any
government agency (including, without limitation, the U.S. Office of Foreign
Asset Control list) that prohibits or limits Bank from making any advance or
extension of credit to such party or from otherwise conducting business with
such party, or (b) fail to provide documentary and other evidence of such
party’s identity as may be requested by Bank at any time to enable Bank to
verify such party’s identity or to comply with any applicable law or regulation,
including, without limitation, Section 326 of the Patriot Act.

 

[REMAINDER OF PAGE BLANK.]

 

15

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

 

“BORROWER”

 

INVENTURE FOODS, INC.,

 

Address for notices to Borrower:

a Delaware corporation

 

 

 

 

Inventure Foods, Inc.

 

 

5415 East High Street, Suite 350

By:

/s/ Steve Weinberger

 

Phoenix, AZ 85054

 

Steve Weinberger, Chief Financial Officer

 

Attention: Steve Weinberger

 

 

 

 

 

 

“OBLIGATED GROUP”

 

 

 

 

 

BN FOODS, INC., a Colorado corporation

 

Address for notices to PBC:

 

 

 

 

 

BN Foods, Inc.

By:

/s/ Steve Weinberger

 

c/o Inventure Foods, Inc.

 

Steve Weinberger, Chief Financial Officer

 

5415 East High Street, Suite 350

 

 

Phoenix, AZ  85054

 

 

Attention:  Steve Weinberger

 

 

 

BOULDER NATURAL FOODS, INC.,

 

Address for notices to Boulder:

an Arizona corporation

 

 

 

 

Boulder Natural Foods, Inc.

 

 

c/o Inventure Foods, Inc.

By:

/s/ Steve Weinberger

 

5415 East High Street, Suite 350

 

Steve Weinberger, Chief Financial Officer

 

Phoenix, AZ  85054

 

 

Attention:  Steve Weinberger

 

 

 

LA COMETA PROPERTIES, INC., an Arizona corporation

 

Address for notices to La Cometa:

 

 

Poore Brothers - Bluffton, LLC

 

 

c/o Inventure Foods, Inc.

By:

/s/ Steve Weinberger

 

5415 East High Street, Suite 350

 

Steve Weinberger, Chief Financial Officer

 

Phoenix, AZ  85054

 

 

Attention:  Steve Weinberger

 

 

 

POORE BROTHERS - BLUFFTON, LLC,

 

Address for notices to PBC:

a Delaware limited liability company

 

 

 

 

Poore Brothers - Bluffton, LLC

 

 

c/o Inventure Foods, Inc.

By:

/s/ Steve Weinberger

 

5415 East High Street, Suite 350

 

Steve Weinberger, Chief Financial Officer

 

Phoenix, AZ  85054

 

 

Attention:  Steve Weinberger

 

16

--------------------------------------------------------------------------------

 

“OBLIGATED GROUP” (continued)

 

RADER FARMS, INC., a Delaware corporation

 

Address for notices to Rader:

f/k/a RADER FARMS ACQUISITION CORP.

 

 

 

 

Rader Farms, Inc.

 

 

c/o Inventure Foods, Inc.

By:

/s/ Steve Weinberger

 

5415 East High Street, Suite 350

 

Steve Weinberger, Chief Financial Officer

 

Phoenix, AZ  85054

 

 

Attention:  Steve Weinberger

 

 

 

TEJAS PB DISTRIBUTING, INC.,

 

Address for notices to Tejas:

an Arizona corporation

 

 

 

 

Tejas PB Distributing, Inc.

 

 

c/o Inventure Foods, Inc.

By:

/s/ Steve Weinberger

 

5415 East High Street, Suite 350

 

Steve Weinberger, Chief Financial Officer

 

Phoenix, AZ  85054

 

 

Attention:  Steve Weinberger

 

 

 

 

 

Address for notices to Bank:

 

 

 

 

 

U.S. Bank National Association

 

 

101 North First Avenue, Suite 1600

 

 

Phoenix, AZ  85003

 

 

Attention:  Commercial Banking

 

17

--------------------------------------------------------------------------------