Document:

Exhibit
4.13

 

EXECUTION COPY

 

SUBSIDIARY
GUARANTY

 

THIS SUBSIDIARY GUARANTY
(this “Guaranty”) is made as of the 28th day of May, 2004, by Fast
Forward Solutions, LLC, an Ohio limited liability company (“Subsidiary
Guarantor”) in favor of the Administrative Agent, for the benefit of the
Lenders, the Swingline Lender and the LC Issuer under the Agreement referred to
below.

 

BACKGROUND
INFORMATION

 

A.                                   AirNet
Systems, Inc., an Ohio corporation (the “Borrower”), The Huntington National
Bank, a national banking association, as Administrative Agent (the
“Administrative Agent”) and as Swingline Lender and LC Issuer, and certain
other Lenders from time to time party thereto have entered into a certain
Amended and Restated Credit Agreement dated of even date herewith (as the same
may be amended, modified, supplemented, extended, restated or replaced from
time to time, the “Agreement”), providing, subject to the terms and conditions
thereof, for extensions of credit to be made by the Lenders, the LC Issuer, and
the Swingline Lender to and on behalf of the Borrower. 

 

B.                                     It is a condition precedent to any
extension of credit under the Agreement that the Subsidiary Guarantor execute
and deliver this Guaranty whereby the Subsidiary Guarantor shall guarantee the
payment when due of all Guaranteed Obligations, as defined in Section 3
below.

 

C.                                     The
execution of this Guaranty is in the interest, and to the direct financial
benefit of, the Subsidiary Guarantor.

 

PROVISIONS

 

NOW, THEREFORE, in
consideration of the premises and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

 

Section 1.1.  Terms in Agreement.  Each capitalized term used but not otherwise
defined herein shall have the meaning ascribed thereto in the Agreement.

 

Section 2.1.  Representations and Warranties.  The Subsidiary Guarantor represents and
warrants (which representations and warranties shall be deemed to have been
renewed upon each Borrowing Date under the Agreement and on each date that a
Facility LC is issued under the Agreement) that:

 

(a)                                  It
is a corporation or limited liability company, duly and properly incorporated
or organized, validly existing and (to the extent such concept applies to such
entity) in good standing under the laws of its jurisdiction of incorporation or
organization and has all requisite authority to conduct its business in each
jurisdiction in which its business is conducted.

 

(b)                                 It
has the power and authority and legal right to execute and deliver this
Guaranty and to perform its obligations hereunder.  The execution and delivery by it of this Guaranty and the
performance of its obligations hereunder have been duly authorized and this

 

 

Guaranty constitutes a
legal, valid and binding obligation of such Subsidiary Guarantor enforceable
against it in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency or similar laws affecting the enforcement of
creditors’ rights generally and general principles of equity.

 

(c)                                  Neither
the execution and delivery by it of this Guaranty, nor the consummation of the
transactions herein contemplated, nor compliance with the provisions hereof
will violate (i) any law, rule, regulation, order, writ, judgment, injunction,
decree or award binding on it or (ii) its articles or certificate of
incorporation or organization, by-laws or code of regulations, or operating
agreement as applicable, or (iii) the provisions of any indenture, instrument
or agreement to which it is a party or is subject, or by which it, or its
Property, is bound, or conflict with or constitute a default thereunder, or
result in, or require, the creation or imposition of any Lien in, of or on the
Property of such Subsidiary Guarantor pursuant to the terms of any such
indenture, instrument or agreement.  No
order, consent, adjudication, approval, license, authorization, or validation
of, or filing, recording or registration with, or exemption by, or other action
in respect of any governmental or public body or authority, or any subdivision
thereof, which has not been obtained by such Subsidiary Guarantor, is required
to be obtained by it in connection with the execution and delivery of this
Guaranty or the performance by it of its obligations hereunder or the legality,
validity, binding effect or enforceability of this Guaranty. 

 

Section 2.2.  Covenants. 
Subsidiary Guarantor covenants that, so long as any Commitment
remains outstanding under the Agreement, any Rate Management Transaction
remains in effect or any of the Guaranteed Obligations shall remain unpaid,
that it will, and, if necessary, will enable the Borrower to, fully comply with
the covenants and agreements applicable to it set forth in the Agreement.

 

Section 3.   Guaranty.  Subject to Section 9 hereof, the Subsidiary Guarantor
hereby, jointly and severally together with all other Guarantors, absolutely
and unconditionally guarantees, as primary obligor and not as surety, the full
and punctual payment (whether at stated maturity, upon acceleration or early
termination or otherwise, and at all times thereafter) and performance of any
and all obligations and liabilities of Borrower to the Lenders, the Swingline
Lender, the LC Issuer and the Administrative Agent under the Agreement, any
other Loan Document or otherwise with respect to or in connection with the
Loans, including, without limitation, the Obligations and the Rate Management
Obligations, including, without limitation, any of the same which are incurred
or accrued during the pendency of any bankruptcy, insolvency, receivership or
other similar proceeding, whether or not allowed or allowable in such
proceeding (collectively the “Guaranteed Obligations”).  Upon failure by the Borrower to punctually
pay any such amount, the Subsidiary Guarantor agrees that it shall forthwith on
demand pay to the Administrative Agent for the benefit of the Lenders, the
Swingline Lender and the LC Issuer, and, if applicable, their Affiliates, any
such amount at the place and in the manner specified in the Agreement, any Note,
any Rate Management Transaction or the relevant Loan Document, as the case may
be. This Guaranty is a guaranty of payment and not of collection.  Subsidiary Guarantor waives any right to
require the Administrative Agent, Swingline Lender, LC Issuer or any Lender to
sue the Borrower, any other Guarantor, or any other person obligated for all or
any part of the Guaranteed Obligations, or otherwise to enforce its payment
against any collateral securing all or any part of the Guaranteed Obligations.

 

2

 

Section 4.  Guaranty Unconditional.  Subject to Section 9 hereof, the
obligations of Subsidiary Guarantor hereunder shall be unconditional and
absolute and, without limiting the generality of the foregoing, shall not be
released, discharged or otherwise affected by:

 

(i)                                     any
extension, renewal, settlement, compromise, waiver or release in respect of any
of the Guaranteed Obligations, by operation of law or otherwise, or of any
obligation of any other Guarantor, or any default, failure or delay, willful or
otherwise, in the payment or performance of the Guaranteed Obligations;

 

(ii)                                  any
modification or amendment of or supplement to the Agreement, any Note, any Rate
Management Transaction or any other Loan Document;

 

(iii)                               any
release, nonperfection or invalidity of any direct or indirect security for any
obligation of the Borrower under the Agreement, any Note, any Rate Management
Transaction, any other Loan Document, or any obligations of any other
Guarantor, or any action or failure to act by the Administrative Agent,
Swingline Lender, LC Issuer or any Lender or any Affiliate of any of them with
respect to any collateral securing all or any part of the Guaranteed
Obligations;

 

(iv)                              any
change in the corporate existence, structure or ownership of the Borrower or
any other Guarantor, or any insolvency, bankruptcy, reorganization or other
similar proceeding affecting the Borrower, or any Guarantor, or its assets or
any resulting release or discharge of any obligation of the Borrower, or any
other Guarantor;

 

(v)                                 the
existence of any claim, setoff or other rights which any of the Guarantors may
have at any time against the Borrower, any other Guarantor, the Administrative
Agent, Swingline Lender, LC Issuer or any Lender, any Affiliate of any of them,
or any other Person, whether in connection herewith or any unrelated
transactions;

 

(vi)                              any
invalidity or unenforceability relating to or against the Borrower, or any
other Guarantor of any of the Guaranteed Obligations, for any reason related to
the Agreement, any Rate Management Transaction, any other Loan Document, or any
provision of applicable law or regulation purporting to prohibit the payment by
the Borrower, or any other Guarantor, of the principal of or interest on any
Note or any other amount payable by the Borrower under the Agreement, any Note,
any Rate Management Transaction or any other Loan Document; or

 

(vii)                           any
other act or omission to act or delay of any kind by the Borrower, any other
Guarantor, the Administrative Agent, Swingline Lender, LC Issuer, any Lender,
any Affiliate of any of them, or any other Person or any other circumstance
whatsoever which might, but for the provisions of this paragraph, constitute a
legal or equitable discharge of any Subsidiary Guarantor’s obligations
hereunder.

 

Section 5.  Discharge Only Upon Payment In Full: Reinstatement In
Certain Circumstances. 
Subsidiary Guarantor’s obligations hereunder shall remain in full force
and effect until all Guaranteed Obligations shall have been indefeasibly paid
in full, the Commitments under the Agreement shall have terminated or expired
and all Rate Management Transactions have terminated or expired.  If at any time any payment of the principal
of or interest on any Note or any other amount payable by the Borrower or any
other party under the

 

3

 

Agreement, any Rate
Management Transaction or any other Loan Document is rescinded or must be
otherwise restored or returned upon the insolvency, bankruptcy or
reorganization of the Borrower or otherwise, the Subsidiary Guarantor’s
obligations hereunder with respect to such payment shall be reinstated as
though such payment had been due but not made at such time.

 

Section 6.  Waivers.  Subsidiary Guarantor irrevocably waives acceptance hereof,
presentment, demand, protest and, to the fullest extent permitted by law, any
notice to which it is otherwise entitled not provided for herein or in the
Agreement, as well as any requirement that at any time any action be taken by
any Person against the Borrower, any other Guarantor, or any other Person.

 

Section 7.  Subrogation.  Subsidiary Guarantor hereby agrees not to assert any right, claim
or cause of action, including, without limitation, a claim for subrogation,
reimbursement, indemnification or otherwise, against the Borrower or any other
Guarantor arising out of or by reason of this Guaranty or the obligations
hereunder, including, without limitation, the payment or securing or purchasing
of any of the Guaranteed Obligations by any of the Guarantors unless and until
the Guaranteed Obligations are indefeasibly paid in full, any commitment to
lend under the Agreement and any other Loan Documents is terminated and all
Rate Management Transactions have terminated or expired.

 

Section 8.  Stay of Acceleration.  If acceleration of the
time for payment of any of the Guaranteed Obligations is stayed upon the
insolvency, bankruptcy or reorganization of the Borrower, all such amounts
otherwise subject to acceleration under the terms of the Agreement, any Note,
any Rate Management Transaction or any other Loan Document shall nonetheless be
payable by each of the Guarantors hereunder or under any other Subsidiary
Guaranty forthwith on demand by the Administrative Agent.

 

Section 9.  Limitation on Obligations.  

 

(a) The provisions of
this Guaranty are severable, and in any action or proceeding involving any
state corporate law, or any state, federal or foreign bankruptcy, insolvency,
reorganization or other law affecting the rights of creditors generally, if the
obligations of Subsidiary Guarantor under this Guaranty would otherwise be held
or determined to be avoidable, invalid or unenforceable on account of the
amount of Subsidiary Guarantor’s liability under this Guaranty, then,
notwithstanding any other provision of this Guaranty to the contrary, the
amount of such liability shall, without any further action by the Subsidiary
Guarantor, the Administrative Agent, Swingline Lender, LC Issuer or any Lender
or Affiliate of any of them, be automatically limited and reduced to the
highest amount that is valid and enforceable as determined in such action or
proceeding (such highest amount determined hereunder being the relevant
Subsidiary Guarantor’s “Maximum Liability”). This Section 9(a) with
respect to the Maximum Liability of the Subsidiary Guarantor is intended solely
to preserve the rights of the Administrative Agent, Swingline Lender, LC Issuer
and the Lenders hereunder to the maximum extent not subject to avoidance under
applicable law, and neither the Subsidiary Guarantor nor any other person or
entity shall have any right or claim under this Section 9(a) with respect
to the Maximum Liability, except to the extent necessary so that the
obligations of Subsidiary Guarantor hereunder shall not be rendered voidable
under applicable law.

 

4

 

(b)                                 Subsidiary
Guarantor agrees that the Guaranteed Obligations may at any time and from time
to time exceed the Maximum Liability of Subsidiary Guarantor, and may exceed
the aggregate Maximum Liability of all Guarantors as defined in any other
contract of guaranty which constitutes a Loan Document, without impairing this
Guaranty or affecting the rights and remedies of the Administrative Agent,
Swingline Lender, LC Issuer, the Lenders, or any Affiliate of any of them
hereunder. Nothing in this Section 9(b) shall be construed to increase
Subsidiary Guarantor’s obligations hereunder beyond its Maximum Liability.

 

(c)                                  Nothing
in this Section 9 shall affect Subsidiary Guarantor’s or any other
Guarantor’s joint and several liability for the entire amount of the Guaranteed
Obligations (up to such Guarantor’s Maximum Liability). 

 

Section 10.  Application of Payments.  All payments received by the Administrative
Agent hereunder shall be applied by the Administrative Agent to payment of the
Guaranteed Obligations in accordance with the Agreement and in the following,
order unless a court of competent jurisdiction shall otherwise direct:

 

(a)                                  FIRST,
to payment of all reasonable costs and expenses of the Administrative Agent,
Swingline Lender, LC Issuer and the Lenders incurred in connection with the
collection and enforcement of the Guaranteed Obligations or of any security
interest granted to the Administrative Agent or any of them in connection with
any collateral securing the Guaranteed Obligations;

 

(b)                                 SECOND,
to payment of that portion of the Guaranteed Obligations constituting accrued
and unpaid interest and fees, pro rata among the Lenders, Swingline Lender, LC
Issuer and their respective Affiliates in accordance with the amount of such
accrued and unpaid interest and fees owing to each of them;

 

(c)                                  THIRD,
to payment of the principal of the Guaranteed Obligations and the net early
termination payments and any other Rate Management Obligations then due and
unpaid from the Borrower to any of the Lenders, the Swingline Lender, LC Issuer
or their respective Affiliates, pro rata among them in accordance with the
amount of such principal and such net early termination payments and other Rate
Management Obligations then due and unpaid owing to each of them; 

 

(d)                                 FOURTH,
to payment of any Guaranteed Obligations (other than those listed above) pro
rata among those parties to whom such Guaranteed Obligations are due in
accordance with the amounts owing to each of them; and

 

(e)                                  FIFTH,
the balance, if any, after all of the Guaranteed Obligations have been
indefeasibly satisfied, shall be paid to the Borrower, as agent for the
Subsidiary Guarantor.

 

Section 11.  Notices.  All notices, requests and other
communications to any party hereunder shall be given, and deemed given, when
made in accordance with the provisions of Section 12.14 of the Agreement.  The address or telecopier number to which
any such communication is to be given to each Subsidiary Guarantor is set forth
on the signature pages hereof.

 

5

 

Section 12.  No Waivers.  No failure or delay by the Administrative
Agent, Swingline Lender, LC Issuer or any Lender or any Affiliate of any of
them in exercising any right, power or privilege hereunder shall operate as a
waiver thereof nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege.  The rights and remedies
provided in this Guaranty, the Agreement, any Note, any Rate Management
Transaction and the other Loan Documents shall be cumulative and not exclusive
of any rights or remedies provided by law.

 

Section 13.  No Duty to Advise.  Subsidiary Guarantor assumes all
responsibility for being and keeping itself informed of the Borrower’s
financial condition and assets, and of all other circumstances bearing upon the
risk of nonpayment of the Guaranteed Obligations and the nature, scope and
extent of the risks that the Subsidiary Guarantor assumes and incurs under this
Guaranty, and agrees that neither the Administrative Agent, Swingline Lender,
LC Issuer, any Lender, nor any Affiliate of any of them, has any duty to advise
the Subsidiary Guarantor of information known to it regarding those
circumstances or risks.

 

Section 14.  Successors and Assigns.  This Guaranty is for the benefit of the
Administrative Agent, Swingline Lender, LC Issuer and the Lenders and their respective
Affiliates, successors and permitted assigns and in the event of an assignment
of any amounts payable under the Agreement, any Note, any Rate Management
Transaction, or the other Loan Documents, the rights hereunder, to the extent
applicable to the indebtedness so assigned, shall be transferred with such
indebtedness. This Guaranty shall be binding upon the Subsidiary Guarantor and
its respective successors and permitted assigns.

 

Section 15.  Changes in Writing.  Neither this Guaranty nor any provision
hereof may be changed, waived, discharged or terminated orally, but only in
writing signed by the Subsidiary Guarantor and the Administrative Agent with
the consent of the Lenders or the Required Lenders, to the extent the consent
of the Lenders or the Required Lenders is required under the Agreement.

 

Section 16.  Costs of Enforcement.  Subsidiary Guarantor agrees to pay all
reasonable costs and expenses including, without limitation, all court costs
and reasonable attorneys’ fees and expenses paid or incurred by the
Administrative Agent, Swingline Lender, LC Issuer or any Lender or any
Affiliate of any of them in its endeavor to collect all or any part of the
Guaranteed Obligations from, or in prosecuting any action against, the
Borrower, the Subsidiary Guarantor or any other Guarantor of all or any part of
the Guaranteed Obligations.

 

Section 17.  Consent To Jurisdiction.  Subsidiary Guarantor hereby irrevocably
submits to the non-exclusive jurisdiction of any United States federal or Ohio
state court sitting in Columbus, Ohio in any action or proceeding arising out
of or relating to any Loan Documents and the Subsidiary Guarantor hereby
irrevocably agrees that all claims in respect of such action or proceeding may
be heard and determined in any such court and irrevocably waives any objection
it may now or hereafter have as to the venue of any such suit, action or
proceeding brought in such a court or that such court is an inconvenient
forum.  Nothing herein shall limit the
right of the Administrative Agent, Swingline Lender, LC Issuer or any Lender to
bring proceedings against Subsidiary Guarantor in the courts of any other
jurisdiction.  Any judicial

 

6

 

proceeding by Subsidiary
Guarantor against the Administrative Agent, Swingline Lender, LC Issuer or any
Lender or any Affiliate of any of them involving, directly or indirectly, any
matter in any way arising out of, related to, or connected with any Loan
Document shall be brought only in a court in Columbus, Ohio.

 

Section 18.  WAIVER OF JURY TRIAL. SUBSIDIARY
GUARANTOR, THE ADMINISTRATIVE AGENT, SWINGLINE LENDER, LC ISSUER AND EACH
LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR
OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN
DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.

 

Section 19.  Taxes. etc.  All payments required to be made by
Subsidiary Guarantor hereunder shall be made without setoff or counterclaim and
free and clear of and without deduction or withholding for or on account of,
any present or future taxes, levies, imposts, duties or other charges of
whatsoever nature imposed by any government or any political or taxing
authority thereof (but excluding Excluded Taxes), provided, however, that if
the Subsidiary Guarantor is required by law to make such deduction or
withholding, Subsidiary Guarantor shall forthwith (i) pay to the Administrative
Agent, Swingline Lender, LC Issuer or any Lender, as applicable, such
additional amount as results in the net amount received by the Administrative
Agent, Swingline Lender, LC Issuer or any Lender, as applicable, which equals
the full amount which would have been received by the Administrative Agent,
Swingline Lender, LC Issuer or any Lender, as applicable, had no such deduction
or withholding been made, (ii) pay the full amount deducted to the relevant
authority in accordance with applicable law, and (iii) furnish to the Administrative
Agent, Swingline Lender, LC Issuer or any Lender, as applicable, certified
copies of official receipts evidencing payment of such withholding taxes within
30 days after such payment is made.

 

Section 20.  Warrant of Attorney.  Subsidiary Guarantor hereby irrevocably
authorizes any attorney-at-law, including any attorney-at-law employed or
retained by the Administrative Agent, Swingline Lender, LC Issuer or any
Lender, or any Affiliate of any of them, to appear for it in any action on this
Guaranty at any time after the amounts payable hereunder become due as herein
provided in any court of record situated in the county where this warrant was
signed (being Franklin County, Ohio), or in the county where the Subsidiary
Guarantor then resides or can be found, to waive the issuing and service of
process, and confess a judgment in favor of the holder of this Guaranty against
the Subsidiary Guarantor, for the amount that may then be due, with interest
thereon, together with the costs of suit, and to waive and release all errors
in said proceedings and the right to appeal from the judgment rendered.  Subsidiary Guarantor consents to the
jurisdiction and venue of such court. 
Subsidiary Guarantor waives any conflict of interest that any
attorney-at-law employed or retained by the Administrative Agent, Swingline
Lender, LC Issuer, any Lender or any Affiliate of any of them may have in
confessing judgment hereunder and consents to the payment of a legal fee to any
attorney-at-law confessing judgment hereunder.

 

7

 

IN WITNESS WHEREOF, the
Subsidiary Guarantor has caused this Guaranty to be duly executed, by its duly
authorized officer as of the day and year first above written.

 

	
   

  	
  Fast
  Forward Solutions, LLC,

  an Ohio limited liability company

  
	
  Address:

  	
   

  
	
  3939 International
  Gateway

  	
   

  	
   

  
	
  Columbus, Ohio 43219

  	
   

  	
  By:

  	
   

  	
  /s/ Gary W. Qualmann

  
	
   

  	
   

  	
  Gary W. Qualmann

  
	
   

  	
  Title:

  	
  Secretary

  
	
  Telephone:

  	
  614-237-2057

  	
   

  	
   

  	
   

  
	
  Facsimile:

  	
  614-237-7876

  	
   

  	
   

  	
   

  
							

 

 

WARNING
— BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT TRIAL.  IF YOU DO NOT PAY ON TIME A COURT JUDGMENT
MAY BE TAKEN AGAINST YOU WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT
CAN BE USED TO COLLECT FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST
THE CREDITOR WHETHER FOR RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO
COMPLY WITH THE AGREEMENT, OR ANY OTHER CAUSE.

 

8Exhibit 10.3
                                                                    ------------

                        ASSET PURCHASE AMENDING AGREEMENT
                        ---------------------------------

THIS AMENDING AGREEMENT made this 21st day of June, 2004.
-----------------------

B E T W E E N:
--------------

                            SWEET VALLEY FOODS INC.,
                            ------------------------
   a Corporation incorporated pursuant to the laws of the Province of Ontario

                           (hereinafter the "Seller")

                                      -and-

                                MG HOLDINGS INC.,
                                -----------------
   a Corporation incorporated pursuant to the laws of the Province of Ontario

                            (hereinafter the "Buyer")

                                      -and-

                               MONACO GROUP INC.,
                               ------------------
    a Corporation incorporated pursuant to the laws of the State of Delaware

                           (hereinafter the "Parent")

     AND WHEREAS the Seller agreed to sell to the Buyer and the Buyer has agreed
     -----------
to  purchase  from  the  Seller  substantially  all  the  assets,  property  and
undertaking of and pertaining to the business of the Seller pursuant to an asset
purchase agreement dated May 25, 2004 (the "Asset Purchase Agreement");

     AND WHEREAS the Buyer,  Seller and the Parent have agreed to amend  certain
     -----------
provisions of the Asset  Purchase  Agreement  and wish to evidence  their mutual
consent to such amendments.

     THIS AMENDING  AGREEMENT  WITNESSES THAT in consideration of the respective
     ----------------------------------------
conditions, covenants, agreements,  representations,  warranties and indemnities
herein contained and for other good and valuable  consideration (the receipt and
sufficiency of which are  acknowledged by each party),  the parties covenant and
agree as follows:

                                    ARTICLE I
                                    ---------
                  DEFINITIONS AND PRINCIPLES OF INTERPRETATION
                  --------------------------------------------

1.01   Definitions

       Whenever  used in this Amending  Agreement,  unless there is something in
the subject matter or context  inconsistent  therewith,  the following words and
terms shall have the respective meanings ascribed to them as follows:

       (a)    "Act" means the Income Tax Act,  S.C.  1970-71-72,  chapter 63, as
               ---
              amended.

       (b)    "Exchangeable  Shares" means the proposed  Exchangeable  Shares of
               --------------------
              the Buyer that do not exist as of the date  hereof,  but which the

<PAGE>

              Parent shall,  as the sole  shareholder  of the Buyer sanction and
              approve as necessary and in respect of which Articles of Amendment
              of the Buyer shall be  approved by the Parent as sole  shareholder
              of the Buyer and by the Board of  Directors of the Buyer and filed
              by the Buyer to allow for such  shares to be issued to the Seller,
              which shares shall have the  following  characteristics:  (i) they
              shall entitle the Seller,  at its option,  and for a period of ten
              (10) years from the date of  issuance  thereof to the  Seller,  to
              exchange such shares for shares of common stock of the Parent at a
              ratio of two (2)  shares of common  stock of the  Parent  for each
              such  exchangeable   share  of  the  Buyer;  (ii)  they  shall  be
              non-voting;  (iii) no dividends shall be payable thereon; and (iv)
              they shall be  redeemable in whole or from time to time in part at
              the option of the Buyer,  upon not less than 30 days prior written
              notice at a price of U.S.$1.25  per share.  In the event the Buyer
              provides a notice of  redemption  as  aforesaid,  the Seller shall
              have 15 days to notify both the Buyer and the Parent in writing of
              the  Sellers'  wish to exercise the  aforesaid  rights of exchange
              notwithstanding  such  notice  of  redemption,  failing  which the
              rights of the Seller to exchange  such shares shall  terminate and
              the Buyer may proceed to effect the redemption of such shares.

Capitalized words not defined in this Amending Agreement shall have the meanings
given thereto in the Asset Purchase Agreement.

1.02   Gender and Number
------------------------

       Words importing the singular shall be construed to include the plural and
vice versa; and words importing gender shall include all genders.

1.03   Entire Agreement
-----------------------

(a)    Except as modified  and  amended by this  Amending  Agreement,  the Asset
       Purchase  Agreement,  including the Schedules thereto,  together with the
       agreements  and  other  documents  to  be  delivered   pursuant  thereto,
       constitute  the entire  agreement  between the Parties  pertaining to the
       subject matter hereof and supersede all prior agreements,  understanding,
       negotiations and discussions, whether oral or written, of the Parties and
       there are no warranties,  representations or other agreements between the
       Parties  in  connection   with  the  subject  matter  thereof  except  as
       specifically set forth therein and in this Amending Agreement. No further
       supplement,  modification  or waiver or termination of the Asset Purchase
       Agreement,  as amended by this Amending Agreement shall be binding unless
       executed in writing by the Party to be bound thereby. No waiver of any of
       the  provisions  of the Asset  Purchase  Agreement,  as  amended  by this
       Amending  Agreement  shall be deemed or shall  constitute a waiver of any
       other  provisions   (whether  or  not  similar)  nor  shall  such  waiver
       constitute a continuing waiver unless other wise expressly provided.

1.04   Index and Headings
-------------------------

       The  Index to this  Amending  Agreement,  Article  and  Section  headings
contained  herein are included  solely for  convenience,  are not intended to be

                                                                               2
<PAGE>

full or accurate  description of the content thereof and shall not be considered
part of this Amending Agreement

1.05   Applicable Law
---------------------

       This Amending Agreement shall be construed in accordance with the laws of
the Province of Ontario and the laws of Canada  applicable  therein and shall be
treated,  in all respects,  as an Ontario contract.  The Parties shall attorn to
the jurisdiction of the courts in Province of Ontario.

1.06   Currency
---------------

       Unless  otherwise  indicated,  all  dollar  amounts  referred  to in this
Amending Agreement are in Canadian funds.

                                   ARTICLE II
                                   ----------
                     AMENDMENTS TO ASSET PURCHASE AGREEMENT
                     --------------------------------------

2.01   Amendments Concerning Exchangeable Shares
------------------------------------------------

       The Asset Purchase Agreement is amended as follows:

       (a)    The  definition  of the word  "Convertible  Shares"  contained  in
              paragraph  1.01(i)  is  deleted  in  its  entirety  and  the  word
              "Deleted" inserted in its place;

       (b)    The definition of the word "Series A Preferred Stock" contained in
              paragraph  1.01(y)  is  deleted  in  its  entirety  and  the  word
              "Deleted" inserted in its place;

       (c)    The word  "Convertible"  in the last line of paragraph  3.01(c) is
              hereby deleted and replaced with the word "Exchangeable;

       (d)    Schedule "H" is hereby  deleted in its entirety and the  reference
              to  Schedule  "H" and its  contents  in  paragraph  1.03(b)  shall
              replaced with the following text: `Schedule "H" - Deleted';

       (e)    Paragraph  3.02  (b) and its  heading  is  hereby  deleted  in its
              entirety and replaced with the following:

              " 3.02 (b) Exchangeable  Shares. The Buyer and the Parent covenant
              and  agree  that on or  before  Closing,  they  shall  obtain  all
              necessary  approvals and take all such  necessary  steps as may be
              required  to  amend  the  Buyer's   Certificate  and  Articles  of
              Incorporation  to create the  Exchangeable  Shares  containing the
              provisions   described  in  paragraph  1.01(b)  of  this  Amending
              Agreement and  otherwise  consistent  with the  provisions of this
              Amending Agreement.  In addition,  the Parent covenants and agrees
              that on or before  Closing it shall (i) duly allot and reserve for
              issuance upon exercise of the Exchangeable Shares, an aggregate of
              1,500,000  shares of common stock in the capital of the Parent and
              (ii)  deliver  to the  Seller a  written,  enforceable  instrument
              acknowledging  the  Seller's  right to exchange  the  Exchangeable

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              Shares,  in whole or in part from  time to time for  shares of the
              common stock of Parent in accordance with their terms;

       (f)    Paragraph  3.02 (d) is hereby deleted in its entirety and replaced
              with the following:

              "3.02 (d) The board of  directors  of the Parent shall be composed
              of a minimum  of four (4)  members,  at least one of whom shall be
              Leo  Couprie or his  nominee  until such time the  majority of the
              Exchangeable  Shares issued in accordance  herewith are exchanged,
              in accordance with their terms, for common shares of the Parent".

       (g)    The references to the word "Convertible" in paragraph 4.01(aa) are
              hereby deleted and replaced with the word "Exchangeable";

       (h)    The references to the word "Convertible" in paragraph 4.01(bb) are
              hereby deleted and replaced with the word "Exchangeable";

       (i)    Paragraph 4.01 (cc) is hereby deleted in its entirety and replaced
              with the following:

              "4.01  (cc)  Exchangeable  Shares  are  Restricted  -  The  Seller
              represents and warrants that it understands  that the Exchangeable
              Shares and the common shares of the Parent  issuable upon exchange
              thereof are  characterized  as "restricted  securities"  under the
              Securities  Act inasmuch as they are being acquired from the Buyer
              and the Parent  respectively  in a  transaction  not  involving  a
              public  offering and that under the  Securities Act and applicable
              regulations  thereunder.  The  Seller  further  warrants  that  it
              understands   that  such   securities   may  be   resold   without
              registration  under the  Securities  Act only in  certain  limited
              circumstances.  In this connection,  the Seller represents that it
              is  familiar  with Rule 144 of the U.S.  Securities  and  Exchange
              Commission  as presently  in effect,  and  understands  the resale
              limitations  imposed thereby and by the Securities Act. The Seller
              understands that the Parent is under no obligation to register any
              of the securities sold hereunder";

       (j)    The first  paragraph  of  paragraph  4.01 (dd),  (and for  greater
              certainty,  this excludes the paragraph  indented  appearing below
              the  aforesaid  paragraph)  is hereby  deleted in its entirety and
              replaced with the following:

              "Legended  Security-The  Seller  acknowledges and understands that
              the Exchangeable Shares, and if exchanged in accordance with their
              terms for  common  shares of the  Parent,  acquired  by the Seller
              shall contain the legend set forth below and shall only be removed
              by the  Parent  upon  delivery  to the  Parent  of an  opinion  by
              counsel,   reasonably   satisfactory   to  the   Parent,   that  a
              registration statement under the Securities Act is at that time in
              effect with respect to the legended security or that such security
              can  be  freely  transferred  in a  public  sale  without  such  a
              registration statement being in effect and that such transfer will

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<PAGE>

              not  jeopardize  the  exemption or  exemptions  from  registration
              pursuant to which the Buyer issued the Exchangeable Shares";

       (k)    The word "Convertible" in the fifth last line of paragraph 5.01(j)
              is hereby deleted and replaced with the word "Exchangeable"; and

       (l)    Paragraph 5.01 (k) is hereby deleted in its entirety.

2.02   Amendments Concerning Determination and Payment of Purchase Price
------------------------------------------------------------------------

       The Asset Purchase Agreement is further amended as follows:

       (a)    Paragraph 2.01 is hereby deleted in its entirety and replaced with
              the following:

              "2.01 Purchase Price.  Subject to the terms and conditions of this
               --------------------
              Agreement  and to any  adjustments  provided  for as  provided  in
              paragraph  2.02,  the Purchase  Price payable by the Buyer and the
              Parent hereunder for the Purchased Assets shall be the fair market
              value thereof;

       (b)    Paragraph 2.03 is hereby deleted in its entirety and replaced with
              the following:

              "2.03  Satisfaction  of Purchase  Price.  Subject to the terms and
               ---------------------------------------
              conditions of this Agreement and to any  adjustments  provided for
              as provided in paragraph  2.02,  the Purchase Price payable by the
              Buyer and the Parent  hereunder for the Purchased  Assets shall be
              satisfied:

              (i)    by  delivery  of a  certified  cheque for  Eighty  Thousand
                     Dollars  (CAN  $80,000.00)  on the  Closing  Date,  payable
                     according to the Seller's direction; and

              (ii)   Seven  Hundred and Fifty  Thousand  (750,000)  Exchangeable
                     Shares,  issued in accordance with the Seller's  direction;
                     and

              (iii)  with respect to Inventories, a cash payment (the "Inventory
                     Payment"), valued by independent accountants on the Closing
                     Date  at  the  lower  of  cost  or  net  realizable   value
                     (calculated  in  accordance   with   generally   acceptance
                     accounting  principals as defined by the Canadian Institute
                     of Chartered Accountants) less one dollar ($1.00)";

       (c)    Paragraph 2.05 is hereby added as follows:

              "2.05  Allocation of Purchase  Price.  The portion of the Purchase
               ------------------------------------
              Price  attributable  to the Purchased  Assets shall be payable and
              allocated by the Parties so that the Seller's  deemed  proceeds of
              disposition  of the  Purchased  Assets shall be the greater of (i)
              the tax cost  thereof or (ii) the  aggregate of (a) the amount set
              out in paragraph  2.03(i) plus (b) the amount set out in paragraph

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<PAGE>

              2.03(iii) plus (c) the small business loan included in the Assumed
              Liabilities, all as at the Closing Date"; and

       (d)    Paragraph 2.06 is hereby added as follows:

              "2.06  Filing of  Election.  The  Seller  and the  Buyer  agree to
               --------------------------
              jointly  elect under  Subsection  85(1) of the Act in the form, at
              the time and in the manner  required  therein that the proceeds of
              disposition  of the  Seller  and  the  cost  to the  Buyer  of the
              Purchased  Assets  is  equal  to the  greater  of (i) the tax cost
              thereof  or  (ii)  the  aggregate  of (a)  the  amount  set out in
              paragraph  2.03(i)  plus  (b)  the  amount  set  out in  paragraph
              2.03(iii) plus (c) the small business loan included in the Assumed
              Liabilities, all as at the Closing Date.

2.03   Concerning GST Election
------------------------------

       The Asset Purchase Agreement is further amended as follows:

       (a)    Paragraph 2.04 (a) is deleted and replaced with the following:

              "2.04(a)  The Seller  and the Buyer  shall  jointly  elect and the
               -------
              Buyer will file with Canada  Customs and Revenue Agency within the
              required  time, an election under Section 167(1) of the Excise Tax
              Act (Canada), as amended, that no tax be payable in respect of the
              conveyance or transfer of the Purchased Assets hereunder".

                                   ARTICLE III
                                   -----------
                                     GENERAL
                                     -------

3.01   Counterparts
-------------------

       This  Amending  Agreement  may be  executed  by the  Parties in  separate
counterparts  each of which when so executed and delivered shall be an original,
but all such counterparts shall together constitute one and the same instrument.

       IN WITNESS  WHEREOF the Parties have hereunto duly executed this Amending
       -------------------
Agreement.

                                           SWEET VALLEY FOODS INC.
                                           -----------------------

                                           Per: /s/ Tyrone Ganpaul
                                               -----------------------------
                                                    Tyrone Ganpaul

                                           Per: /s/ Leo Couprie
                                               -----------------------------
                                                    Leo Couprie

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<PAGE>

                                           MG HOLDINGS INC.
                                           ----------------

                                           Per: /s/ Suzanne Lilly
                                               -----------------------------

                                           MONACO GROUP INC.
                                           -----------------

                                           Per: /s/ Suzanne Lilly
                                               -----------------------------

                                                                               7

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