EXTENSION AGREEMENT
Agreement made this 1 day of June, 1999 by and between THE VENEZUELA RECOVERY
FUND N.V. as "Lender" and NEW ERA FOODS, INC. as "Borrower".
WHEREAS, Reference is made to that certain Promissory Note and Security
Agreement (together referred to herein as the "Financing Agreement") entered
between the above referenced parties dated on or about July 22, 1998 wherein the
Lender established a $1,000,000 line of credit (the "Original Loan") for Lender
to provide financing for the Borrower's inventory of groceries and squid to be
sold to and distributed by and on behalf of Synergy Brands Inc. ("Synergy") for
which financing Synergy acts as guarantor (the "Guarantor"); and
WHEREAS, The parties hereto wish to extend the credit facility provided under
such Financing Agreement to $1,500,000 and replenish the amount presently
available under such credit facility to the full amount of $1,500,000 ("Loan
Balance") and to extend the maturity date to January 10, 2001 with certain
changes as provided herein and as otherwise authorized and provided in the
Financing Agreement.
NOW THEREFOR WITNESSETH: In consideration of fulfillment of the covenants and
obligations of the parties set forth herein it is agreed as follows:
Repayment of the Loan Balance shall be made and it shall be the obligation of
the Borrower to make such repayment on the same terms and conditions as provided
for any and all funds advanced under the Loan as set forth in the original
Financing Agreement except that no fees or other costs shall be assessed to
Borrower other than periodic interest at interest rates set forth in the
Financing Agreement and the monthly servicing fee of $750 shall continue, the
terms of the Financing Agreement remain the same except that (i) the Loan
Balance is increased to $1,500,000, (ii) the maturity date for repayment of all
funds due in connection with Loan is extended (the "Extension") to January 10,
2001 (iii) as shall otherwise be specifically changed by the terms and
provisions hereof and in the Subordinated Convertible Debenture made an integral
part of this transaction, such in form and content as attached to and made a
part hereof, and (iv) such extension of the Loan shall be guaranteed by Synergy
as Guarantor on the same terms and conditions as agreed to in the applicable
Guaranty executed by same contemporaneous with the execution of the original
Financing Agreement limited as was the prior Guaranty to the principal amount of
the $1,500,000 outstanding at any given time. In addition the default provisions
of the Loan shall be made consistent with the default terms of the Security
Agreement from Borrower given to the evidence the collateral security given by
Borrower for the Loan.
Promptly upon full execution of this Agreement and applicable ancillary
documents all outstanding balances on the Original Loan shall be considered paid
and satisfied and shall be subtracted from the Loan Balance so that only the
difference shall be considered still available for draw down by the Borrower.
The interest rate on the principal outstanding on such Loan Balance shall be
reduced to 9% and the $1,500,000 of the Loan Balance (the "Convertible Loan
Portion") shall be evidenced by and repayable on a convertible debenture basis
on terms and in format as provided in the form of 9% Subordinated Convertible
Debenture attached as an Exhibit to and made part of this Agreement convertible
into legended restricted common stock of Synergy (as allowed by Synergy in
furtherance of its guaranty and as consideration of its business relationship
with Borrower). The balance of the Loan balance shall remain non-convertible
unless otherwise agreed in writing by Synergy.
The total Loan Balance shall be secured as in the Original Loan except as the
Convertible Loan Portion may be subordinated or collateral security therefor
otherwise conditioned as set forth in the Convertible Debenture form agreement
as attached as an Exhibit to and made a part of this Agreement
As security for the Loan as extended the same collateral as was made security
for the Loan shall be considered security for the Loan as extended and for
purposes of UCC filings and other existing written evidences of such existing
security (the "Evidence of Security"), reference to the Loan shall also
incorporate the Extension, which extension shall and is hereby made an integral
part of the Loan as referenced in such Evidences of Security as though such
extension were part of and were executed as of the date of such original Loan
specified by the original Financing Agreement.
All representatives and warranties, and all covenants of the Borrower as set
forth in the original Financing Agreement are hereby affirmed and continued.
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Except as specifically amended herein, the terms, conditions and provisions of
the Financing Agreement are hereby reaffirmed, and continued in full force and
effect.
AGREED: THE VENEZUELA RECOVERY FUND N.V.
By:______________________________
By:______________________________
Agreed and accepted as of the date first above written:
NEW ERA FOODS INC.
By:________________________ By:______________________
Title:_____________________ Title:___________________
(Authorized Signatory) (Authorized Signatory)
Date:______________________ Date:____________________
We also acknowledge receipt of the above extension agreement, agree to its terms
and conditions and each agrees to be bound by those provisions which pertain to
each one of our respective corporations.
SYNERGY BRANDS INC.
By:___________________________
Title:________________________
(Authorized Signatory)
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