Exhibit 10.14
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
This Agreement made as of the 1st day of November, 2001, by and between
XXXXXXX BANK, a federally chartered savings bank with an office at 000 Xxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxx 00000 (the "Lender") and VERMONT PURE HOLDINGS,
LTD, (f/k/a VP Merger Parent, Inc.), a Delaware corporation with an office at
Xxxxxxxxx Xxxxxxxxxx Xxxx, Xxxxx 00, Xxxxxxxx, Xxxxxxx 05060 ("Holdings"),
CRYSTAL ROCK SPRING WATER COMPANY, a Connecticut corporation with an office at
0000 Xxxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxx 00000 ("Crystal Rock"), PLATINUM
ACQUISITION CORP. (f/k/a Vermont Pure Holdings, Ltd.), a Delaware corporation
with an office at Xxxxxxxxx Xxxxxxxxxx Xxxx, Xxxxx 00, Xxxxxxxx, Xxxxxxx 00000
("Platinum") and VERMONT PURE SPRINGS, INC., a Delaware corporation with an
office at Xxxxxxxxx Xxxxxxxxxx Xxxx, Xxxxx 00, Xxxxxxxx, Xxxxxxx 00000 ("VPS",
and collectively with Holdings, Crystal Rock and Platinum, the "Obligors").
WHEREAS, the Lender and the Obligors entered into a Loan and Security
Agreement dated as of October 5, 2000, as modified by Modification Agreement
dated as of June 27, 2001 (as so modified, the "Original Loan and Security
Agreement") pursuant to which the Lender made loans or otherwise extended credit
to the Obligors and the Obligors granted a security interest in certain
collateral described therein to the Lender; and
WHEREAS, the Obligors have requested that the Lender provide an additional
term loan in the amount of $4,200,000 to fund the acquisition of assets from
Iceberg Springs Water, Inc.; and
WHEREAS, the Lender is willing to provide such an additional term loan on
the terms and conditions contained herein.
NOW, THEREFORE, in consideration of the promises contained herein and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:
SECTION 1. Definitions, Accounting Terms and Financial Covenants.
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1.1 Definitions. For purposes of this Agreement, the following terms
shall have the meanings specified below:
a. "Additional Collateral" means (i) all General Intangibles,
including Payment Intangibles and Software and all Supporting
Obligations related thereto, (as such terms are defined in the Uniform
Commercial Code as in effect in Connecticut from time to time) of
every kind and description of the Obligors, including without
limitation federal, state and local tax refund claims of all kinds,
whether now existing or hereafter arising; (ii) all of Obligors'
Deposit Accounts, Letter of Credit Rights and all Supporting
Obligations related thereto (as such terms are defined in the Uniform
Commercial Code as in effect in Connecticut from time to time),
whether now owned or hereafter created, wherever located, together
with the rights to withdraw from said Deposit Accounts and make
deposits to the same and the right to draw under Letters of Credit;
(iii) all monies, securities, instruments, cash and other property of
Obligors and the proceeds thereof, now or hereafter held or received
by, or in transit to, Lender from or for Obligors, whether for
safekeeping, pledge, custody, transmission, collection or otherwise,
and all of Obligors' deposits (general or special, balances, sums,
proceeds and credits of Obligors with Lender at any time existing);
(iv) all interests in real property held or owned by Obligors,
including all leasehold interests; (v) all rights under contracts and
license agreements for water; (vi) all books, records, customer lists,
ledger cards, computer programs, computer tapes, disks, printouts and
records, and other property and general intangibles at any time
evidencing or relating to any of the foregoing, whether now in
existence or hereafter created; (vii) all other personal property and
fixtures of the Obligors, whether now existing or hereafter arising or
created; and all proceeds of the foregoing and all proceeds of any
insurance on the foregoing.
b. "Adirondack" means Adirondack Coffee Service, Inc., a New York
corporation.
c. "Affiliate" means (i) any person or entity directly or indirectly
controlling or controlled by or under direct or indirect common
control with any Obligor or any other obligor of the Obligations, as
the case may be (including, without limitation, any respective
director or officer of any Obligor or any other obligor of the
Obligations, as the case may be), (ii) any spouse, immediate family
member or other relative who has the same principal residence of any
person described in clause (i) above, (iii) any trust in which any
such person or entity described in clauses (i) or (ii) above has a
beneficial interest and (iv) any corporation or other organization of
which any such persons or entities described in clauses (i) or (ii)
above collectively own more than ten percent (10%) of the voting
securities of such entity.
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d. "Capital Assets" means assets that, in accordance with GAAP, are
required or permitted to be depreciated or amortized on Holdings'
consolidated balance sheet.
e. "Capital Expenditures" mean expenditures for purchase, acquisition
or lease of Capital Assets.
f. "Capital Leases" means capital leases, conditional sales contracts
and other title retention agreements relating to the purchase or
acquisition of Capital Assets.
g. "Code" means the Internal Revenue Code of 1986, as amended, or any
successor federal tax code, and any reference to any provision shall
be deemed to include a reference to any successor provision or
provisions.
h. "Collateral" means Receivables, Inventory, Equipment, Patents,
Trademarks, Investment Property, Additional Collateral, and the
Premises.
i. "Current Assets" means current assets determined in accordance with
GAAP.
j. "Current Liabilities" means current liabilities determined in
accordance with GAAP.
k. "Current Maturities of Long Term Debt" means the current maturity
of long term Indebtedness paid or payable during the applicable
period.
l. "Current Ratio" means the ratio of Current Assets to Current
Liabilities.
m. "Date of Closing" means October 5, 2000, the date on which the
Original Loan and Security Agreement, the Term Note and the original
revolving line of credit note were executed by the Obligors.
n. "Debt Service Coverage Ratio" means, for the relevant period, the
ratio of (i) (A) net income from continuing operations (excluding
extraordinary items of income), plus (B) interest expense on
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Subordinated Debt, minus (C) interest expense paid on Subordinated
Debt, plus (D) depreciation, plus (E) amortization, plus or minus (F)
the net change in customer deposits, to (ii) (A) Current Maturities of
Long Term Debt, plus (B) the current portion of Capital Lease
payments, plus (C) Unfinanced Capital Expenditures plus (D) principal
payments of Subordinated Debt.
o. "Dividends" means the payment of any dividend or other distribution
in respect of the capital stock of any Obligor in cash or other
property (excepting distributions in the form of such stock) or the
redemption or acquisition of any such stock.
p. "EBITDA" means, for the relevant period, income from continuing
operations (excluding extraordinary items of income) before deduction
for interest and taxes, depreciation and amortization.
q. "Environmental Laws" means any and all applicable federal, state
and local environmental, health or safety statutes, laws, regulations,
rules, ordinances, guidances, policies and rules or common law
(whether now existing or hereafter enacted or promulgated), of all
governmental agencies, bureaus or departments which may now or
hereafter have jurisdiction over any of the Obligors or any of the
Obligors' property and all applicable judicial and administrative and
regulatory decrees, judgments and orders, including common law rulings
and determinations, relating to injury to, or the protection of, real
or personal property or human health or the environment, including,
without limitation, all requirements pertaining to reporting,
licensing, permitting, investigation, remediation and removal of
emissions, discharges, releases or threatened releases of Hazardous
Materials, chemical substances, pollutants or contaminants whether
solid, liquid or gaseous in nature, into the environment or relating
to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of such Hazardous Materials, chemical
substances, pollutants or contaminants.
r. "Equipment" means all Equipment, Farm Products and Fixtures (as
such terms are defined in the Uniform Commercial Code as in effect in
Connecticut on the date of this Agreement), including all machinery,
equipment, furniture, fixtures, tools, parts, supplies and motor
vehicles, now owned and hereafter acquired, by Obligors of whatsoever
name, nature, kind or description, wherever located, and all additions
and accessions thereto and replacements or substitutions therefor, and
all proceeds thereof and all proceeds of any insurance thereon.
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s. "ERISA" means the Employee Retirement Income Security Act of 1974
and all rules and regulations promulgated pursuant thereto, as the
same may from time to time be supplemented or amended.
t. "Event of Default" shall have the meaning assigned in Section 7
hereof.
u. "Excelsior" means Excelsior Spring Water Company, Inc., a New York
corporation.
v. "GAAP" means generally accepted accounting principles in the United
States of America, as from time to time in effect.
w. "Guaranties" means the Guaranty Agreements dated the Date of
Closing executed by the Guarantors in favor of Lender, as the same may
be amended, amended and restated or reaffirmed from time to time.
x. "Guarantors" means Adirondack and Excelsior.
y. "Hazardous Material" means any substance: (i) the presence of which
requires or may hereafter require notification, investigation,
monitoring or remediation under any Environmental Law; (ii) which is
or becomes defined as a "hazardous waste", "hazardous material" or
"hazardous substance" or "toxic substance" or "pollutant" or
"contaminant" under any present or future Environmental Law or
amendments thereto including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act (42 U.S.C.
Section 9601 et seq.) and any applicable local statutes -- --- and the
regulations promulgated thereunder; (iii) which is toxic, explosive,
corrosive, reactive, ignitable, infectious, radioactive, carcinogenic,
mutagenic or otherwise hazardous and is or becomes regulated by any
governmental authority, agency, department, commission, board, agency
or instrumentality of any foreign country, the United States, any
state of the United States, or any political subdivision thereof to
the extent any of the foregoing has or had jurisdiction over any
Obligor or any Obligor's property; or (iv) without limitation, which
contains gasoline, diesel fuel or other petroleum products, asbestos
or polychlorinated biphenyls.
z. "Indebtedness" means (i) obligations for borrowed money, (ii)
obligations representing the deferred purchase price of property other
than accounts payable arising in the ordinary course of Obligors'
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business on terms customary in the trade, (iii) obligations, whether
or not assumed, secured by a lien on, or payable out of the proceeds
or production from, property now or hereafter owned or acquired by
Obligors, (iv) obligations which are evidenced by bonds, debentures,
notes, acceptances, or other instruments, (v) Capital Lease
obligations, (vi) guaranties of the obligations of other parties,
other than in connection with the endorsement of negotiable
instruments in the ordinary course of business, (vii) obligations
under letters of credit and reimbursement agreements, and (viii) any
other contingent liabilities of Obligors.
aa. "Inventory" means all Inventory and Goods and all Supporting
Obligations related thereto (as such terms are defined in the Uniform
Commercial Code as in effect in Connecticut from time to time) of
whatsoever name, nature, kind or description now owned and hereafter
acquired by Obligors, wherever located, including without limitation
all contract rights with respect thereto and documents representing
the same, all goods held for sale or lease or to be furnished under
contracts of service, finished goods, raw materials, materials used or
consumed by Obligors, parts, supplies, and all wrapping, packaging,
advertising and shipping materials and any documents relating thereto,
and all labels and other devices, names and marks affixed or to be
affixed thereto for purposes of selling or of identifying the same or
the seller or manufacturer thereof, and all right, title and interest
of Obligors therein and thereto, and all proceeds of the foregoing and
all proceeds of any insurance on the foregoing.
bb. "Investment Property" means all investment property (as such term
is defined in the Uniform Commercial Code as adopted in Connecticut
from time to time) of whatever type or nature now owned or hereafter
acquired by the Obligors, including without limitation, all
certificated securities, all uncertificated securities, all security
entitlements, all security accounts, all commodity contracts, all
commodity accounts and all financial assets of every type and nature
and all rights thereto or therein, and all financial accounts of every
type and nature and all rights thereto or therein, and all Supporting
Obligations (as such term is defined in the Uniform Commercial Code as
adopted in Connecticut from time to time) related thereto and all
proceeds and products thereof, including without limitation, all
insurance proceeds and fidelity bond proceeds related thereto.
cc. "IRS" means the United States Internal Revenue Service.
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dd. "Loans" means the Term Loan, the Revolving Line of Credit and the
2001 Term Loan.
ee. "Loan Documents" means this Agreement, the Notes and all other
documents evidencing, securing and guarantying the Loans.
ff. "Mortgages" means the Open-End Mortgage Deeds and Security
Agreements dated the Date of Closing from the Obligors to Lender
covering the Premises, as the same may be amended or amended and
restated from time to time.
gg. "Net Income" means net income as determined in accordance with
GAAP.
hh. "Net Loss" means net loss as determined in accordance with GAAP.
ii. "Notes" means the Term Note, the Revolving Line of Credit Note and
the 2001 Term Note.
jj. "Obligations" means and includes all loans, advances, interest,
indebtedness, liabilities, obligations, guaranties, covenants and
duties at any time owing by Obligors to Lender of every kind and
description, whether or not evidenced by any note or other instrument,
whether or not for the payment of money, whether direct or indirect,
absolute or contingent, due or to become due, now existing or
hereafter arising, including, but not limited to, the Loans and all
other indebtedness, liabilities and obligations arising under this
Agreement and the other Loan Documents, all swap agreements and all
costs, expenses, fees, charges and attorneys', paralegals' and
professional fees incurred in connection with any of the foregoing, or
in any way connected with, involving or relating to the preservation,
enforcement, protection or defense of, or realization under this
Agreement, the Notes, any of the other Loan Documents, any related
agreement, document or instrument, the Collateral and the rights and
remedies hereunder or thereunder, including without limitation, all
costs and expenses incurred in inspecting or surveying the Premises,
or conducting environmental studies or tests, and in connection with
any "workout" or default resolution negotiations involving legal
counsel or other professionals and any re-negotiation or restructuring
of any of the Obligations.
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kk. "Patents" means all of Obligors' right, title and interest,
present and future, in and to (a) all letters patent of the United
States or any other country, all right, title and interest therein and
thereto, and all registrations and recordings thereof, including
without limitation applications, registrations and recordings in the
United States Patent and Trademark Office or in any similar office or
agency of the United States or any state thereof or any other country
or any political subdivision thereof, all whether now owned or
hereafter acquired by Obligors; and (b) all reissues, continuations,
continuations-in-part or extensions thereof and all licenses thereof;
and all proceeds of the foregoing and all proceeds of any insurance on
the foregoing.
ll. "PBGC" means the Pension Benefit Guaranty Corporation.
mm. "Permitted Encumbrances" means the liens and encumbrances listed
on Schedule 4.5; provided, however, that none of the Permitted
Encumbrances shall be amended or modified in any way without the prior
written consent of Lender.
nn. "Plan" means any employee benefit plan or other plan maintained
for employees of any of the Obligors or any related entity covered by
Title I of ERISA.
oo. "Pre-tax Earnings" means pre-tax earnings as determined in
accordance with GAAP.
pp. "Pre-tax Losses" means pre-tax losses as determined in accordance
with GAAP.
qq. "Premises" means the following real property owned by Obligors:
Xxxxxxx Drive, Randolph, VT
Xxxxx 00 Xxxxxxx, Xxxxxxxx, XX
Chase Road, Randolph, VT
North Xxxxxxxx Road, Randolph, VT
Xxxxx X. XxXxxxxx, Xxxxx 00, Xxxxxxxx, XX (approximately 20 acres)
Xxxx XxXxxxxx, Xxxxx 00, Xxxxxxxx, XX (approximately 5 acres)
rr. "Prior Encumbrances" means the mortgages, security interests,
pledges, liens, encumbrances or other charges listed in Section A of
Schedule 4.5.
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ss. Prime Rate" means the variable per annum rate of interest so
designated from time to time by Lender as its prime rate. The Prime
Rate is a reference rate and does not necessarily represent the lowest
or best rate being charged to any customer.
tt. "Property" means all property and assets of Obligors.
uu. "Receivables" means (i) all of Obligors' now owned and hereafter
acquired, present and future, Accounts, Chattel Paper, Documents,
Instruments and Supporting Obligations related thereto, (as such terms
are defined in the Uniform Commercial Code as in effect in Connecticut
from time to time) and contract rights, including without limitation
all obligations to Obligors for the payment of money, whether arising
out of Obligors' sale of goods or rendition of services or otherwise
(all hereinafter called "Accounts") and all proceeds of the foregoing
and all proceeds of any insurance on the foregoing; (ii) all of
Obligors' rights, remedies, security and liens, in, to and in respect
of the Accounts, present and future, including without limitation,
rights of stoppage in transit, replevin, repossession and reclamation
and other rights and remedies of an unpaid vendor, lienor or secured
party, guaranties or other contracts of suretyship with respect to the
Accounts, deposits or other security for the obligation of any debtor
or obligor in any way obligated on or in connection with any Accounts,
and credit and other insurance, and all proceeds of the foregoing and
all proceeds of any insurance on the foregoing; and (iii) all of
Obligors' right, title and interest, present and future, in, to and in
respect of all goods relating to, or which by sale have resulted in,
Accounts, including without limitation all goods described in invoices
or other documents or instruments with respect to, or otherwise
representing or evidencing any Accounts, and all returned, reclaimed
or repossessed goods, and all proceeds of the foregoing and all
proceeds of any insurance on the foregoing.
vv. "Revolving Line of Credit" means the $5,000,000 credit facility
evidenced by the Revolving Line of Credit Note.
ww. "Revolving Line of Credit Note" means the promissory note of
Obligors dated the Date of Closing in the original principal amount of
up to $5,000,000, as the same may be amended or amended and restated
from time to time.
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xx. "Senior Funded Debt" means all Indebtedness of Obligors other than
Subordinated Debt and the Convertible Debenture issued to Marcon
Capital Corporation as of September 30, 1999 in the original principal
amount of $975,000.
yy. "Standby Letter of Credit" means a standby letter of credit issued
by the Lender for the account of any Obligor in accordance with the
terms of this Agreement.
zz. "Subordinated Debt" means debt of any of the Obligors which has
been subordinated in payment to the Obligations pursuant to a
subordination agreement which is satisfactory in form and substance to
the Lender.
aaa. "Subordinated Encumbrances" means the mortgages, security
interests, pledges, liens, encumbrances or other charges listed in
Section B of Schedule 4.5.
bbb. "Subordinated Lenders" means (i) Xxxxx X. Xxxxx, (ii) Xxxx X.
Xxxxx, (iii) Xxxx X. Xxxxx, (iv) Xxxxx X. Xxxxx and (v) Xxxx X.
Xxxxxxxx, not individually but as Trustee of the Xxxxx X. Xxxxx Life
Insurance Trust, the Xxxx X. Xxxxx Insurance Trust and U/T/A/ dated
December 16, 1991 F/B/O Xxxx Xxxxx et al (the "Trustee").
ccc. "Subsidiary" means any corporation, limited liability company,
partnership or other entity, a majority of whose outstanding stock,
membership interests, partnership interests or other ownership
interests having voting power to elect the board of directors or other
governing body or person of such entity shall at any time be owned or
controlled by the Obligors.
ddd. "Term Loan" means the $31,000,000 loan evidenced by the Term
Note.
eee. "Term Note" means the promissory note of the Obligors dated the
Date of Closing in the original principal amount of $31,000,000.
fff. "Termination Date" means, with respect to any Loan or any Note,
the "Termination Date" as defined in the applicable Note.
ggg. "Total Assets" means total assets determined in accordance with
GAAP.
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hhh. "Total Liabilities" means total liabilities determined in
accordance with GAAP.
iii. "2001 Term Loan means the $4,200,000 Loan evidenced by the 2001
Term Note.
jjj. "2001 Term Note" means promissory note of the Obligors dated the
same date as this Agreement in the original principal amount of
$4,200,000.
kkk. "Trademarks" means all of Obligors' right, title and interest,
present and future, in and to (i) all trademarks, trade names, trade
styles, service marks, prints and labels on which said trademarks,
trade names, trade styles and service marks have appeared or appear,
designs and general intangibles of like nature, now existing or
hereafter adopted or acquired, all right, title and interest therein
and thereto, and all registrations and recordings thereof, including
without limitation applications, registrations and recordings in the
United States Patent and Trademark Office or in any similar office or
agency of the United States, any State thereof, or any other country
or any political subdivision thereof, all whether now owned or
hereafter acquired by Obligors; (ii) all reissues, extensions or
renewals thereof and all licenses thereof; and (iii) the goodwill of
the business symbolized by each of the Trademarks, and all customer
lists and other records of Obligors relating to the distribution of
products bearing the Trademarks; and all proceeds of the foregoing and
all proceeds of any insurance on the foregoing.
lll. "Unfinanced Capital Expenditures" means Capital Expenditures
financed with a party other than Lender.
1.2 Accounting Terms. Unless otherwise defined, all accounting terms shall
be construed, and all computations or classifications of assets and
liabilities and of income and expenses shall be made or determined in
accordance with GAAP.
1.3 Financial Covenants. All financial covenants in this Agreement shall
apply with respect to, and shall be measured in accordance with, the
consolidated financial statements of Holdings and Platinum, VPS and
Crystal Rock.
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SECTION 2. The Loan Transactions.
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2.1 The Term Loan. Lender shall loan to Obligors the sum of THIRTY ONE
MILLION DOLLARS ($31,000,000). Obligors' obligations to repay the Term
Note and the terms and conditions of the Term Loan are as contained in
this Agreement and the Term Note, a copy of which is attached to this
Agreement as EXHIBIT 2.1. The proceeds of the Term Loan shall be used
to fund the acquisition of Crystal Rock Spring Water Company and to
consolidate the existing debt of the Obligors.
2.2 The Revolving Line of Credit. Lender may loan to any of the Obligors,
and any Obligor may borrow from Lender, from time to time in
accordance with the terms of this Agreement, up to FIVE MILLION
DOLLARS ($5,000,000) less (a) the maximum amount available to be drawn
under all issued and outstanding Standby Letters of Credit (assuming
all conditions for drawing have been satisfied) at the time of such
borrowing under the Revolving Line of Credit, and (b) all amounts
drawn under issued Standby Letters of Credit for which the Lender has
not been reimbursed by the Obligors at the time of such borrowing
under the Revolving Letter of Credit. Obligors' obligations to repay
the Revolving Line of Credit Note and the terms and conditions of the
Revolving Line of Credit are as contained in this Agreement and the
Revolving Line of Credit Note, a copy of which is attached to this
Agreement as EXHIBIT 2.2. The proceeds of the Revolving Line of Credit
shall be used for general working capital purposes.
2.2A The 2001 Term Loan. Lender shall loan to Obligors the sum of FOUR
MILLION TWO HUNDRED THOUSAND DOLLARS ($4,200,000). Obligors'
obligations to repay the 2001 Term Note and the terms and conditions
of the 2001 Term Loan are as contained in this Agreement and the 2001
Term Note, a copy of which is attached to this Agreement as EXHIBIT
2.2A-1. The proceeds of the 2001 Term Loan shall be used to finance
the acquisition of assets of Iceberg Springs Water, Inc. Subject to
the provisions of Section 8.20, on the Effective Date, the Lender will
issue a Standby Letter of Credit in the amount of the $4,588,093.00
(the "Iceberg Letter of Credit"), the form of which is attached to
this Agreement as EXHIBIT 2.2A-2. The Standby Letter of Credit shall
be effective until January 30, 2002 (the "Letter of Credit Term"). At
or prior to the expiration of the Letter of Credit Term, upon delivery
of the Iceberg Letter of Credit to Lender for cancellation, Lender
shall fund the 2001 Term Loan. In the event of a draw on the Iceberg
Letter of Credit, any payments thereon made by Lender shall
automatically constitute advances by Lender to the Obligors under the
2001 Term Loan. Obligors shall pay Lender a Standby Letter of Credit
fee based on an annual fee of 2% of the amount of the Iceberg Letter
of Credit, prorated for the Letter of Credit Term. The Iceberg Letter
of Credit shall be governed by the terms of Section 2.3 of this
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Agreement with respect to Standby Letters of Credit except that
$4,200,000 of the sum of the amount available to be drawn under the
Iceberg Letter of Credit and the amounts drawn under the Iceberg
Letter of Credit shall not be included in the calculation of the
amount available under the Revolving Line of Credit under Section 2.2
of this Agreement or for Standby Letters of Credit under Section 2.3
of this Agreement.
2.3 Standby Letters of Credit. Subject to the terms and conditions
contained in this Agreement, Lender agrees to issue Standby Letters of
Credit for drawing in Dollars for the account of Obligors, from time
to time during the term of the Revolving Line of Credit in an amount
not to exceed the lesser of (i) $5,000,000, less (a) the aggregate
principal amount outstanding under the Revolving Line of Credit Note
at the time of issuance of the Standby Letter of Credit, (b) the
maximum amount available to be drawn under all previously issued and
outstanding Standby Letters of Credit (assuming all conditions for
drawing have been satisfied) at the time of issuance of the Standby
Letter of Credit, and (c) all amounts drawn under previously issued
Standby Letters of Credit for which the Lender has not been reimbursed
by the Obligors at the time of issuance of the Standby Letter of
Credit, or (ii) $750,000.
a. Notices of Issuance. Requests for the issuance of Standby Letters
of Credit (or to amend, renew or extend an outstanding Standby
Letter of Credit) may be made only once per business day and
shall be made on notice, given not later than 11:00 a.m.
(Hartford, Connecticut time) two (2) business days prior to the
date of the proposed issuance or amendment, renewal or extension,
by any Obligor to Lender. Each such notice (which notice shall be
irrevocable and binding on the Obligors) of issuance, amendment,
renewal or extension shall be by telephone, confirmed immediately
in writing, or by telex or telecopier, specifying therein the (i)
requested date of such issuance, amendment, renewal or extension
(which shall be a business day), (ii) requested principal amount
of such Standby Letter of Credit in Dollars, (iii) requested
expiration date of such Standby Letter of Credit (which shall
comply with subsection (c) below), (iv) whether such Standby
Letter of Credit is renewable, and (v) names and addresses of the
intended account party and the beneficiary of such Standby Letter
of Credit, and shall be accompanied by a fully executed
application and agreement for letter of credit as Lender may
require of Obligors for use in connection with such requested
Standby Letter of Credit (each a "Reimbursement Agreement") and
such Obligor's payment of the Lender's then current Standby
Letter of Credit fee. If the requested form of such Standby
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Letter of Credit is acceptable to Lender, Lender will make such
Standby Letter of Credit available to such Obligor at its office
referred to in the first paragraph of this Agreement or as
otherwise agreed with such Obligor in connection with such
issuance. In the event and to the extent that the provisions of
any Reimbursement Agreement shall conflict with this Agreement,
the provisions of this Agreement shall govern.
b. Form of Letter of Credit. Each Standby Letter of Credit shall,
among other things, (i) be in a form acceptable to Lender, and
(ii) be governed by, and shall be construed in accordance with,
the laws or rules designated in such Standby Letter of Credit, or
if no such laws or rules are designated, the Uniform Customs and,
as to matters not governed by the Uniform Customs, the laws of
the State of Connecticut (without regard to its conflict of laws
rules).
c. Expiry Dates. Each Standby Letter of Credit shall provide that it
expires no later than the close of business seven days prior to
the expiration date for the Revolving Line of Credit, unless such
Standby Letter of Credit expires by its terms on an earlier date.
d. Payment for Standby Letter of Credit Draws. Lender shall have the
right (but not the obligation), in its sole and absolute
discretion, to effect reimbursement by Obligors to Lender of any
payment made by Lender in connection with a drawing made under a
Standby Letter of Credit which is not reimbursed to Lender within
the time specified for reimbursement in the applicable
Reimbursement Agreement by making an advance on the Revolving
Line of Credit for the account of the Obligors. Each such advance
shall bear interest at the Lender's Prime Rate. Lender shall
endeavor to give Obligors forty-eight (48) hours prior notice
before making such an advance pursuant to this Section 2.3 d. but
failure to provide such notice shall not effect Lender's right to
make such an advance.
e. No Liability of Lender. Obligors assume all risks of the acts or
omissions of any beneficiary or transferee of any Standby Letter
of Credit with respect to the use of such Standby Letter of
Credit, and Obligors' obligations with respect to payments made
by Lender under any Standby Letter of Credit shall be absolute,
unconditional and irrevocable, irrespective of: (i) any lack of
14
validity or enforceability of any Standby Letter of Credit, or
any term or provision therein, alleged by a party other than
Lender; (ii) the existence of any dispute, claim, setoff, defense
or other right that Obligors or any other person may have against
the beneficiary under any Standby Letter of Credit, Lender or any
other person, whether in connection with this Agreement, any
other Loan Document or any other related or unrelated agreement
or transaction; (iii) any draft or other document presented under
a Standby Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein
being untrue or inaccurate in any respect; or (iv) any error,
omission, interruption or delay in any transmission, dispatch or
delivery of any message or advice, however transmitted, in
connection with any Standby Letter of Credit.
Without limiting the generality of the foregoing, it is expressly
understood and agreed that the absolute and unconditional
obligation of Obligors hereunder to reimburse Standby Letter of
Credit drawings will not be excused by the negligence of Lender.
However, the foregoing shall not be construed to excuse Lender
from liability to Obligors to the extent of any direct damages
(as opposed to consequential damages, claims in respect of which
are hereby waived by Obligors to the fullest extent permitted by
law) suffered by Obligors that are caused by (x) Lender's willful
misconduct or negligence in determining whether documents
presented under any Standby Letter of Credit comply with the
terms of the Standby Letter of Credit, or (y) Lender's willful
failure to make lawful payment under a Standby Letter of Credit
after presentation to it of a draft or documents strictly
complying with the terms and conditions of such Standby Letter of
Credit. It is understood that Lender may, subject to the standard
of negligence or willful misconduct, accept documents that appear
on their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the
contrary and, in making any payment under any Standby Letter of
Credit (1) Lender's exclusive reliance on the documents presented
to it under such Standby Letter of Credit as to any and all
matters set forth therein, including reliance on the amount of
any draft presented under such Standby Letter of Credit, whether
or not the amount due to the beneficiary thereunder equals the
amount of such draft and whether or not any document presented
pursuant to such Standby Letter of Credit proves to be
insufficient in any respect, if such document on its face appears
to be in order, and whether or not any other statement or any
other document presented pursuant to such Standby Letter of
Credit proves to be forged or invalid or any statement therein
15
proves to be inaccurate or untrue in any respect whatsoever, and
(2) any noncompliance in any immaterial respect of the documents
presented under such Standby Letter of Credit with the terms
thereof shall, in each case, be deemed not to constitute willful
misconduct or negligence of Lender.
f. Interim Interest. If Lender shall make any payment in respect of
a Standby Letter of Credit, then, unless Obligors shall reimburse
such payment in full on the date specified for reimbursement in
the applicable Reimbursement Agreement, the unpaid amount thereof
shall bear interest for each day from and including the date of
such payment to but excluding the date of payment, at the
Lender's Prime Rate.
2.4 Additional Payments. If Lender shall deem applicable to this
Agreement, the Loans or the Notes (including, in each case, the
borrowed and the unused portion thereof) any requirement of any law of
the United States of America, any regulation, order, interpretation,
ruling or official directive or guideline (whether or not having the
force of law) of the Board of Governors of the Federal Reserve System,
the Comptroller of the Currency, the Federal Deposit Insurance
Corporation or any other board or governmental or administrative
agency of the United States of America which shall impose, increase,
modify or make applicable thereto or cause to be included in, any
reserve, special deposit, calculation used in the computation of
regulatory capital standards, assessment or other requirement which
imposes on Lender any cost that is attributable to the maintenance
thereof, then, and in each such event, Obligors shall promptly pay
Lender, upon its demand, such amount as will compensate Lender for any
such cost, which determination may be based upon Lender's reasonable
allocation of the aggregate of such costs resulting from such events.
In the event any such cost is a continuing cost, a fee payable to
Lender may be imposed upon Obligors periodically for so long as any
such cost is deemed applicable by Lender, in an amount determined by
Lender to be necessary to compensate Lender for any such cost. The
determination by Lender of the existence and amount of any such cost
shall, in the absence of manifest error, be conclusive.
2.5 Direct Debit of Principal and Interest. Obligors agree that Lender may
directly debit any Obligor's accounts held by Lender for any principal
or interest payment on any Obligation when such Obligation becomes due
and payable.
2.6 Fees. The Obligors paid to Lender on the Date of Closing an
underwriting fee in the amount of One Hundred Eighty Thousand Dollars
($180,000), receipt of which is hereby acknowledged. The Obligors paid
16
to Lender on the Date of Closing a commitment fee in the amount of
Eighty-Seven Thousand Dollars ($87,000), receipt of which is hereby
acknowledged. The Obligors shall pay to the Lender on the Date of
Closing and on each anniversary thereof an annual agency fee in the
amount of Five Thousand Dollars ($5,000). The Obligors shall pay to
the Lender on the Effective Date (as hereinafter defined) a commitment
fee in the amount of Forty-Two Thousand Dollars ($42,000).
2.7 Interest Rate Hedge. The Obligors may hedge their interest rate
exposure on all or a portion of the Term Loan by entering into an
interest rate hedge agreement with Lender or another counterparty
acceptable to Lender. Any documentation relating to such hedge shall
contain standard provisions, including make whole provisions,
acceptable to Lender.
SECTION 3. Collateral.
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3.1 As security for the payment and performance of all Obligations,
Obligors hereby grant to Lender:
a. A first priority security interest in all of the Collateral,
subject only to the Prior Encumbrances.
b. A first priority security interest in all proceeds of any and all
insurance on the Collateral.
c. A first priority security interest in all proceeds and products
of any item or type of the Collateral.
3.2 Grant of Mortgages. Obligors shall grant to Lender the Mortgages.
3.3 Location of Collateral. All Collateral is and will be owned by
Obligors, free of all other liens and encumbrances other than
Permitted Encumbrances and shall be kept by Obligors at the Premises
and at the locations listed on Schedule 3.3 and Obligors will not,
without Lender's prior written approval, remove the Collateral
therefrom, except for the purposes of sale in the ordinary course of
business.
3.4 Defend Collateral. Obligors shall defend the Collateral against all
claims and demands of all persons at any time claiming the same or any
interest therein and, in the event the Lender's security interest in
the Collateral, or any part thereof, would be impaired by an adverse
17
decision, allow the Lender to contest or defend any such claim or
demand in the Obligors' names and Obligors agree to pay, upon demand,
the Lender's reasonable costs, charges and expenses, including,
without limitation, attorney's fees, in connection therewith.
3.5 Financing Statements. From time to time, at the request of the Lender,
Obligors shall execute, deliver and file one or more financing
statements on Form UCC-1 or other instruments, and do all other
reasonable acts as the Lender deems necessary or desirable to perfect
fully or to keep perfected its security interest in the Collateral and
pay, upon demand, all reasonable expenses, including, without
limitation, attorney's fees, incurred by the Lender in connection
therewith. The Obligors hereby irrevocably appoint the Lender their
attorney-in-fact to execute and file all such UCC-1 forms or other
instruments, documents or agreements deemed necessary or desirable to
fully perfect or keep perfected the Lender's security interest in the
Collateral.
3.6 Further Assurances Re Inventory. Obligors shall perform any and all
reasonable steps requested by Lender to perfect Lender's security
interest in the Inventory, such as leasing warehouses to Lender or
Lender's assignee, placing and maintaining signs, appointing
custodians, executing and filing financing, amendment or continuation
statements in form and substance satisfactory to Lender, maintaining
stock records and transferring Inventory to warehouses. If any
Inventory is in the possession or control of any of Obligors' agents
or processors, Obligors shall notify such agents or processors of
Lender's security interest therein, and, upon request, instruct them
to hold all such Inventory for Lender's account and subject to
Lender's instructions. A physical listing of all Inventory, wherever
located, shall be taken by Obligors at least annually and whenever
requested by Lender, and a copy of each such physical listing shall be
provided to Lender. Lender may examine and inspect the Inventory upon
reasonable notice during business hours.
3.7 Further Assurance Re Receivables. Obligors shall place notations upon
Obligors' books of account to disclose the assignment of all
Receivables to Lender or Lender's security interest therein and shall
perform all other reasonable steps requested by Lender to create and
maintain in Lender's favor a valid first priority security interest,
assignment or lien in, of or on all Receivables and all other security
held by or for Lender.
3.8 Guaranties. The Obligations shall be jointly and severally
unconditionally guarantied by the Guarantors as provided in the
Guaranties executed by each of them.
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3.9 Revised Article 9. In connection with the revised Article 9 of the
Uniform Commercial Code substantially in the form approved in 1998 by
the American Law Institute and the National Conference of
Commissioners on Uniform State Law ("Revised Article 9"), the Obligors
hereby acknowledge and agree with the Lender as follows:
a. In applying the law of any jurisdiction in which Revised Article
9 is in effect, the Collateral is all assets of the Obligors,
whether or not within the scope of Revised Article 9. The
Collateral shall also include, without limitation, the following
categories of assets as defined in Revised Article 9: goods
(including inventory, equipment and any accessions thereto),
instruments (including promissory notes), documents, accounts
(including health-care-insurance receivables), chattel paper
(whether tangible or electronic), deposit accounts,
letter-of-credit rights (whether or not the letter of credit is
evidenced by a writing), commercial tort claims, securities and
all other investment property, general intangibles (including
payment intangibles and software), supporting obligations and any
and all proceeds of any thereof, wherever located, whether now
owned and hereafter acquired. If the Obligors (or any of them)
shall at any time, whether or not Revised Article 9 is in effect
in any particular jurisdiction, acquire a commercial tort claim,
as defined in Revised Article 9, the Obligors shall immediately
notify the Lender in a writing signed by the Obligors of the
brief details thereof and grant to the Lender in such writing a
security interest therein and in the proceeds thereof, all upon
the terms of this Agreement, with such writing to be in form and
substance satisfactory to the Lender. The Lender may at any time
and from time to time, pursuant to the provisions of this
Agreement, file financing statements, continuation statements and
amendments thereto that describe the Collateral as "all assets of
the Obligors" or words of similar effect and which contain any
other information required by Part 5 of Revised Article 9 for the
sufficiency or filing office acceptance of any financing
statement, continuation statement or amendment, including whether
each Obligor is an organization, the type of organization and any
organization identification number issued to each of the
Obligors. The Obligors shall furnish any such information to the
Lender promptly upon request. Any such financing statements,
continuation statements or amendments may be signed by the Lender
on behalf of the Obligors (or any of them), as provided in this
Agreement, and may be filed at any time in any jurisdiction
whether or not Revised Article 9 is then in effect in that
jurisdiction.
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b. The Obligors shall at any time and from time to time, whether or
not Revised Article 9 is in effect in any particular
jurisdiction, take such steps as the Lender may reasonably
request for the Lender (a) to obtain an acknowledgement, in form
and substance satisfactory to the Lender, of any bailee having
possession of any of the Collateral that the bailee holds such
Collateral for the Lender, (b) to obtain "control" of any
investment property, deposit accounts, letter-of-credit rights or
electronic chattel paper (as such terms are defined in Revised
Article 9 with corresponding provisions inss.ss.9-104, 9-105,
9-106 and 9-107 relating to what constitutes "control" for such
items of Collateral), with any agreements establishing control to
be in form and substance satisfactory to the Lender, and (c)
otherwise to insure the continued perfection and priority of the
Lender's security interest in any of the Collateral and of the
preservation of its rights therein, whether in anticipation and
following the effectiveness of Revised Article 9 in any
jurisdiction.
c. Nothing contained herein shall be construed to narrow the scope
of the security interest granted hereby in any of the Collateral
or the perfection or priority thereof or to impair or otherwise
limit any of the rights, powers, privileges or remedies of the
Lender hereunder except as (and then only to the extent)
specifically mandated by Revised Article 9 to the extent then
applicable.
3.10 Security Interest and License re Intangibles. The Obligors hereby
grant to the Lender a security interest in and a non-exclusive
license and right to use any and all patents, copyrights,
tradenames, trademarks and all applications therefor, and
licenses to any patent, copyright, tradename or trademark that
the Obligors now owns, has the right to use or may hereafter own
or acquire the right to use. The Lender's security interest and
non-exclusive license, as set forth in this subparagraph, shall
specifically include all rights of the Obligors which may be
necessary in order for the Lender to exercise or get the full
benefit and value from the security interest set forth in this
Agreement.
SECTION 4. Representations, Warranties and General Covenants. On the date hereof
and in order to induce Lender to enter into this Agreement, Obligors represent,
warrant and covenant the following:
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4.1 Organization and Qualification. Each Obligor is and will continue to
be a corporation duly organized, validly existing and in good standing
under the laws of the state of its incorporation and is and will
continue to be duly qualified and licensed to do business in each
other state in which the nature of its business makes such
qualification necessary. Each Obligor has all requisite permits,
authorizations and licenses, without unusual restrictions or
limitations, to own, operate and lease its properties and to conduct
the business in which it is presently engaged, all of which are in
full force and effect.
4.2 Corporate Records. The Certificate of Incorporation and all amendments
thereto of each Obligor have been duly filed and are in proper order.
All capital stock issued by each Obligor and outstanding has been
properly issued and is fully paid and non-assessable, and all books
and records of each Obligor, including but not limited to its minute
books, bylaws, and books of account, are accurate and up to date and
will be so maintained.
4.3 Power and Authority. Each Obligor has the power to execute, deliver
and carry out the terms of the Loan Documents and to incur the
Obligations and has taken all necessary action to authorize the
execution, delivery and performance by it of the Loan Documents.
4.4 No Legal Bar. The execution and delivery of the Loan Documents and
compliance by Obligors with the terms and provisions thereof do not,
on the date hereof, violate any provision of any existing law or
regulation or any writ or decree of any court or governmental
instrumentality, or any agreement or instrument to which any of the
Obligors is a party or which is binding upon any of them or their
assets, and will not result in the creation or imposition of any lien,
security interest, charge or encumbrance of any nature whatsoever upon
or in any of their assets, except as contemplated by the Loan
Documents; no consent of any other party, and no consent, license,
approval or authorization of or registration or declaration with any
governmental bureau or agency, is required in connection with the
execution, delivery, performance, validity and enforceability of any
of the Loan Documents; and the Loan Documents, upon the execution and
delivery thereof and the execution or acceptance thereof by the
Lender, will be legal, valid, binding and enforceable obligations of
the Obligors in accordance with their respective terms.
21
4.5 Title; No Liens. Except as set forth on Schedule 4.5, each of the
Obligors has good and marketable title to all of its Property, subject
to no mortgage, security interest, pledge, lien, encumbrance or other
charge.
4.6 No Litigation. Except as set forth on Schedule 4.6, there is no
litigation, administrative proceeding, hearing or investigation of or
before any governmental body presently pending or, to the knowledge of
any of the Obligors, threatened against it or any of its Property and
if all of the matters set forth on Schedule 4.6 were determined
adversely to the Obligors, such adverse determinations, either
individually or in the aggregate, would not have a material adverse
effect on the Obligors, their businesses or their Property taken as a
whole.
4.7 No Default. None of the Obligors are, on the date hereof, in default
with respect to the payment or performance of any of their Obligations
or other Indebtedness or in the performance of any covenants or
conditions to be performed by any of them pursuant to the terms and
provisions of any indenture, agreement or instrument to which any of
them are a party or by which any of them are bound, including the Loan
Documents, and none of the Obligors has received a notice of default
thereunder.
4.8 Compliance with Laws. Each Obligor has complied with and will continue
to comply with all applicable laws, ordinances, rules and regulations
of the United States of America, and all states, counties,
municipalities and agencies of any governmental authority thereof.
4.9 Taxes. Each Obligor has filed or caused to be filed or obtained
extensions for the filing of, and will continue to file and cause to
be filed, all federal, state and local tax returns required by law to
be filed, and has paid and will continue to pay all taxes shown to be
due and payable on such returns or on any assessment made against it,
except if being contested in good faith, if adequate provision has
been made therefor on its books of account and if requested by Lender,
a reserve satisfactory to Lender has been set aside to pay such taxes,
interest, penalties and costs associated therewith. No claims are
being asserted with respect to such taxes which are not reflected in
the financial statements which have been furnished by Obligors to
Lender.
4.10 Financial Condition. The Obligors have submitted to Lender various
financial statements and information as of October 31, 2000 and
subsequent Form 10-Qs through the date hereof, and represent that all
of such financial information is true and correct; that such financial
information fairly presents the financial condition and results of
22
operations of each Obligor as of the dates thereof and for the periods
indicated therein; that such financial statements have been prepared
in accordance with GAAP and practices consistently maintained
throughout the periods involved; and that, as of the date of such
financial information, there were no material unrealized or
anticipated losses from any unfavorable commitments of any of the
Obligors and that there has been no material adverse change in the
business or Property or in the condition, financial or otherwise, of
any of the Obligors from that set forth in such financial statements.
4.11 Accuracy of Representations. To the best of the Obligors' knowledge,
after due inquiry, no representation or warranty by any of the
Obligors contained in any certificate or other document furnished or
to be furnished by it pursuant to this Agreement or in connection with
the transactions contemplated under this Agreement, contains, or at
the time of delivery will contain, any untrue statement of material
fact or omits or will omit to state a material fact necessary to make
it not misleading.
4.12 Trade Names and Chief Executive Offices. Each of the Obligors operates
its business under the trade names set forth for it on Schedule 4.12
and has not used within the last five years and does not currently use
any other trade names. The chief executive office of each Obligor and
its principal place of business is at the address set forth for that
Obligor at the beginning of this Agreement.
4.13 Parents, Affiliates or Subsidiaries. Holdings has no parent
corporation and none of the Obligors have any Affiliates or
Subsidiaries other than each other and Adirondack and Excelsior.
Platinum and Crystal Rock are wholly owned Subsidiaries of Holdings.
VPS is a wholly owned Subsidiary of Platinum. Adirondack and Excelsior
are wholly owned Subsidiaries of VPS.
4.14 Agreements Regarding Stock. None of the Obligors has any agreements
pertaining to the issuance, purchase or sale of its capital stock,
except as set forth on Schedule 4.14.
4.15 Collective Bargaining Agreements. None of the Obligors is a party to
any collective bargaining agreements.
4.16 Subsequent Advances Under the Loans. Each request by any Obligor for
an advance under the Revolving Line of Credit or for the issuance of a
Standby Letter of Credit shall constitute a representation by such
Obligor to Lender that (a) all of the representations and warranties
contained in this Agreement shall have continued to be true and
23
accurate to and including the date of such borrowing as though made on
and as of such date; (b) no event has occurred and is continuing, or
would exist as a result of the proposed borrowing, which constitutes
an Event of Default hereunder or would constitute such an Event of
Default but for the giving of notice or passage of time; (c) each
Obligor has performed all of the agreements on its part contained in
the Loan Documents and required to be performed by it on or prior to
the date of such borrowing; and (d) the corporate resolutions
authorizing the Loan Documents and the underlying transactions remain
in full force and effect and have not been modified or amended in any
respect.
4.17 Saleable Value of Assets. The fair saleable value of the assets of
each Obligor, after giving effect to the transactions contemplated by
the Loan Documents, will be in excess of its debts (including
contingent, subordinated, unmatured and unliquidated liabilities).
4.18 Sufficient Cash Flow. Each Obligor has, and after giving effect to the
transactions contemplated by the Loan Documents each Obligor will
have, sufficient cash flow to continue to operate its business in the
ordinary course as heretofore conducted, make the payments called for
by the Loan Documents and pay all other debts, including but not
limited to payments under the Notes, supplier payments, pension and
other employee benefit plan liabilities, business expenses and taxes,
as the same shall become due.
4.19 No Hindrance. None of the Obligors has any intent to hinder, delay or
defraud any entity to which it is or will become indebted.
4.20 Capitalization. None of the Obligors, after giving effect to the
transactions contemplated by the Loan Documents, will be engaged in
any business or transaction or is about to engage in any business or
transaction for which it has unreasonably small capital.
4.21 Ability to Pay Debts. None of the Obligors, after giving effect to the
transactions contemplated by the Loan Documents, intends to incur nor
does it believe that it will incur debts beyond its ability to pay as
they become due.
4.22 Ownership of Property. None of the Obligors has in its possession any
personal property of which it is not the actual owner, except as
described on Schedule 4.22.
24
4.23 Benefit of Loans. Each Obligor shall receive material direct and
indirect benefits from the making of any portion of the Loans to any
of the Obligors and a satisfactory financial condition and successful
business operations of each Obligor benefits, directly and indirectly,
each of the other Obligors.
4.24 Adirondack and Excelsior. Neither Adirondack nor Excelsior is an
operating entity or has any assets, liabilities or revenues.
4.25 Compliance with Land Use Permits. The Obligors are in material
compliance with all land use permits relating to the Premises.
4.26 Revised Article 9 Information. The type of organization of each
Obligor, the state of organization of each Obligor, the organizational
identification number of each Obligor for Revised Article 9 purposes
in each such state of organization and the Federal Employer
Identification number of each Obligor is set forth on Schedule 4.26.
4.27 New York Real Property. The Obligors sold for fair market value the
real property owned by any of them in Xxxxxx Springs, New York prior
to July 5, 2001.
SECTION 5. Affirmative Covenants. Obligors covenant and agree that, so long as
any of the Obligations shall remain outstanding, they will perform and observe
each and all of the covenants and agreements herein set forth.
5.1 Payments Under this Agreement and the other Loan Documents. Each
Obligor will make punctual payment of all monies and will faithfully
and fully keep and perform all of the terms, conditions, covenants and
agreements on its part to be paid, kept or performed hereunder, and
will be bound in all respects as obligor under this Agreement and the
other Loan Documents. All Obligations shall be direct and primary
obligations of each Obligor and each Obligor shall be jointly and
severally liable for all Obligations.
5.2 Information, Access to Books, and Inspection. Each Obligor will
furnish to Lender such information regarding the business affairs and
financial condition of the Obligors as Lender may reasonably request
and give any representative of Lender access during normal business
hours to, and permit him/her to examine and copy, make extracts from,
and audit any and all books, records and documents in the possession
of Obligors relating to their affairs and to inspect any of the
Property.
25
5.3 Payment of Liabilities. Each Obligor will pay and discharge at or
before their maturity all taxes, assessments, rents, claims, debts and
charges, except where the same may be contested in good faith, will
maintain, in accordance with GAAP, appropriate reserves for the
accrual of any of the same and if requested by Lender, will set aside
a reserve satisfactory to Lender to pay such contested amounts and all
taxes, interest, penalties and costs associated therewith.
5.4 Corporate Existence, Properties. Each Obligor will continue to conduct
its business as presently conducted; will do or cause to be done all
things necessary to preserve and keep in full force and effect its
corporate existence, rights and franchises, and will comply with all
laws applicable thereto; will maintain all licenses, patents and other
rights necessary for the operation of its business; will at all times
maintain, preserve and protect all franchises, patents, trademarks,
trade names and water rights and will preserve all of the remainder of
its Property used or useful in the conduct of its business and will
keep the same in good condition and repair (normal wear and tear and
obsolescence excepted), and from time to time will reasonably make, or
cause to be made, all needful and proper repairs, renewals,
replacements, betterments and improvements thereto, and will pay or
cause to be paid, except when the same may be contested in good faith,
all rent due on premises where any Property is held or may be held, so
that the business carried on in connection therewith may be
continuously conducted.
5.5 Insurance. Each Obligor will have and maintain insurance at all times
with respect to all Property and all Collateral against risks of fire
(including so-called extended coverage), theft and such risks as
Lender may reasonably require containing such terms, in such form, in
such amounts (including 100% of the full insurable value of buildings,
improvements and personal property with respect to casualty insurance)
and for such periods, and written by such companies as may reasonably
be satisfactory to Lender, such insurance to be payable to Lender and
Obligors as their interests may appear. Each policy of insurance shall
have a mortgagee and loss payee endorsement providing:
a. That loss or damage, if any under the policy, shall be payable to
Lender, as secured party, as its interests may appear;
b. That the insurance as to the interest of Lender shall not be
invalidated by any act or neglect of the insured or owner of the
property described in said policy, nor by any foreclosure, or
other proceeding, nor by any change in the title of ownership of
said property, nor by the occupation of the premises where the
property is located for purposes more hazardous than are
permitted by said policy;
26
c. That, if the policy is canceled at any time by the insurance
carrier, in such case the policy shall continue in force for the
benefit of Lender for not less than thirty (30) days after
written notice of cancellation to Lender from the insurance
carrier; and
d. That the policy will not be reduced or canceled at the request of
the insured nor will said loss payee endorsement be amended or
deleted without thirty (30) days' prior written notice to Lender
from the insurance carrier.
Upon the occurrence of any Event of Default, Lender may act as
attorney for the Obligors in obtaining, adjusting, settling, and
canceling such insurance and receiving and endorsing any drafts. Each
Obligor hereby assigns to Lender any and all monies which may become
due and payable under any policy insuring the Collateral covered by
this Agreement, including return of unearned premiums, and hereby
directs any insurance company issuing any such policy to make payment
directly to Lender and authorizes Lender, at its option: (i) to apply
such monies in payment on account of any Obligation hereunder, whether
or not due, and remit any surplus to Obligors; or (ii) to return said
funds to Obligors for the purpose of replacement of the Collateral.
Notwithstanding the foregoing, upon the damage, destruction or loss of
any personal property which constitutes Collateral in an aggregate
amount of $250,000 or less, Lender agrees that it will return said
funds to Obligors for the purpose of replacement of the Collateral
with new Collateral of the same value and utility if no event which
constitutes or which with notice or lapse of time, or both, would
constitute an Event of Default has occurred and the damage,
destruction or loss has not materially impaired the business
operations of any of the Obligors. If the damage, destruction or loss
of any personal property which constitutes Collateral exceeds an
aggregate amount of $250,000, Lender agrees that it will return said
funds to Obligors for the purpose of replacement of the Collateral
with new Collateral of the same value and utility but only on the
following conditions: (i) no event which constitutes or which with
notice or lapse of time, or both, would constitute an Event of Default
has occurred, (ii) the damage, destruction or loss has not materially
impaired the business operations of any of the Obligors, (iii) Lender
has approved the plans and specifications for the replacement
Collateral, (iv) funds are released to the Obligors as the replacement
progresses in accordance with Lender's customary procedures for
financings of property such as the replacement Collateral. Each
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Obligor will also at all times maintain necessary workers'
compensation insurance and such other insurance as may be required by
law or as may be reasonably required in writing by Lender.
Obligors will furnish Lender with certificates or other evidence
satisfactory to Lender of compliance with the foregoing insurance
provisions on the Date of Closing and thirty (30) days prior to each
anniversary of the Date of Closing.
5.6 Compliance with Laws. Each Obligor shall comply with all laws,
ordinances, rules or regulations, applicable to it, of all federal,
state or municipal governmental authorities, instrumentalities or
agencies including, without limitation, ERISA, the United States
Occupational Safety and Health Act of 1970, as amended, and all
federal, state, county and municipal laws, ordinances, rules and
regulations relating to the environment or the employment of labor, as
such may be amended.
5.7 Notices. Obligors will promptly give notice in writing to Lender of:
(a) the occurrence of any event which constitutes or which with notice
or lapse of time, or both, would constitute an Event of Default under
this Agreement or any of the other Loan Documents; (b) the occurrence
of any material adverse change in any business, properties or the
condition or operations, financial or otherwise, of any of the
Obligors, or the occurrence of any event which is reasonably likely to
result in such a material adverse change, in each case specifying such
change or event; (c) any court or governmental orders, notices,
claims, investigations, litigation and proceedings received by or
involving any of the Obligors in which the aggregate amount involved
is $100,000 or more and not covered by insurance; (d) any dispute
which may exist between any of the Obligors and any governmental
regulatory body or any other party; and (e) any proposed or actual
change in the names, identities or corporate structure of any of the
Obligors.
5.8 Financial Statements; Notice of Default. Obligors shall deliver or
cause to be delivered to Lender:
a. As soon as available and in any event within ninety (90) days
after the close of each fiscal year of Holdings, audited
consolidated and consolidating financial statements including a
balance sheet as of the close of such fiscal year and statements
of income and retained earnings and source and application of
funds for the year then ended, all on a comparative basis with
corresponding statements for the preceding fiscal year and
prepared in conformity with GAAP, applied on a basis consistent
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with that of the preceding year, and accompanied by a report
thereon, containing an opinion, unqualified as to scope, of a
firm of independent certified public accountants selected by
Holdings and acceptable to Lender, stating that the financial
statements fairly present the financial condition and results of
operation of Holdings and Platinum, VPS and Crystal Rock as of
their date and for the period then ended, and by a written
statement from such accountants stating that they have reviewed
such financial statements and the financial covenants set forth
herein and have found no evidence of an Event of Default having
occurred or of an event which with passage of time and/or giving
of notice would constitute an Event of Default having occurred.
b. As soon as available and in any event within forty-five (45) days
after the end of each fiscal quarter in each fiscal year,
Holdings' Form 10Q as filed with the Securities Exchange
Commission and a balance sheet of Holdings and Platinum, VPS and
Crystal Rock as of the close of such fiscal quarter and
statements of income and retained earnings for that portion of
the fiscal year-to-date then ended, all on a comparative basis
with the budget and prepared in conformity with GAAP, applied on
a basis consistent with that of the preceding period, and which
shall be certified by the President or Chief Financial Officer of
Holdings as being accurate and fairly presenting the financial
condition of Holdings and Platinum, VPS and Crystal Rock.
c. Together with the statements and reports referred to in
sub-paragraphs a. and b. above, a written statement from the
President, Chief Executive Officer or Chief Financial Officer of
Holdings certifying compliance with all financial covenants and
reflecting all computations in connection therewith and
certifying that there exists no Event of Default, or any event
but for the giving of notice or the passage of time would
constitute an Event of Default.
d. As soon as available and in any event at least thirty (30) days
prior to the commencement of any fiscal year, detailed budgets
and projections for the upcoming fiscal year of Holdings,
Platinum, VPS and Crystal Rock approved by the Board of Directors
of Holdings.
e. From time to time, promptly upon Lender's written request, such
other information about the financial condition and operations of
Obligors as Lender may reasonably request, in form and detail
satisfactory to Lender.
29
f.
Promptly on becoming aware of any Event of Default, or any event
but for the giving of notice or the passage of time would
constitute an Event of Default, notice thereof in writing.
5.9 Operating Accounts. Obligors shall maintain their primary operating
and disbursement accounts with Lender and shall utilize the cash
management services provided by the Lender or any Participant (as
defined below) as long as such entity remains a Participant,
including, at Obligors' option, automated "sweep" and investment
features. VPS may retain a local depository relationship for
collection and payroll purposes.
5.10 Pension Plans.
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a. No event, including but not limited to any "reportable event", as
that term is defined in Section 4043 of ERISA, exists in
connection with any of its Plans and any entities related to it
under Section 414(b), (c), (m), (n) or (o) of the Code has
occurred which might constitute grounds for termination of any
such Plan by the PBGC, or for the appointment by the appropriate
United States District Court of a trustee to administer any such
Plan. A list of all of the Obligors' Plans are attached hereto on
Schedule 5.10;
b. No "prohibited transaction" within the meaning of Section 406 of
ERISA or Section 4975 of the Code exists or will exist upon the
execution and delivery of this Agreement and the other Loan
Documents, or the performance by the parties hereto or thereto of
their respective duties and obligations hereunder and thereunder;
c. Each Obligor shall do all acts, including, but not limited to,
making all contributions necessary to maintain compliance with
ERISA and the Code, and agrees not to terminate any Plan in a
manner or do or fail to do any act which could result in the
imposition of a lien on any of its properties pursuant to Section
4068 of ERISA;
d. None of the Obligors sponsors or maintains, and has never
contributed to, and has not incurred any withdrawal liability
under a "multi employer plan" as defined in Section 3 of ERISA
and none has any written or verbal commitment of any kind to
establish, maintain or contribute to any "multi employer plan"
under the Multi Employer Pension Plan Amendments Act of 1980;
30
e. None of the Obligors has any unfunded liability in contravention
of ERISA and the Code;
f. Each of the Plans complies currently, and has complied in the
past, both as to form and operation, with its terms and with the
provisions of the Code and ERISA, and all applicable regulations
thereunder and all applicable rules issued by the Internal
Revenue Service, U.S. Department of Labor and the PBGC and as
such, is and remains a "qualified" plan under the Code;
g. No actions, suits or claims are pending (other than routine
claims for benefits) against any Plan or the assets of any Plan;
h. Each Obligor has performed all obligations required to be
performed by it under any Plan set forth in Schedule 5.10 and it
is not in default or in violation of any Plan, and has no
knowledge of any such default or violation by any other party to
any such Plans;
i. No liability has been incurred by any Obligor to the PBGC or to
participants or beneficiaries on account of any termination of a
Plan subject to Title IV of ERISA, no notice of intent to
terminate a Plan has been filed by (or on behalf of) it pursuant
to Section 4041 of ERISA and no proceeding has been commenced by
the PBGC pursuant to Section 4042 of ERISA;
j. The reporting and disclosure provisions of the Securities Act of
1933 and Securities Exchange Act of 1934 have been complied with
for all Plans.
5.11 Environmental Matters.
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a. Each Obligor has obtained all permits, licenses and other
authorizations which are required under all Environmental Laws.
Each Obligor is in compliance with the terms and conditions of
all such permits, licenses and authorizations, and is, to the
best of its knowledge, also in compliance with all other
limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules and timetables contained in
any applicable Environmental Law or in any regulation, code,
plan, order, decree, judgment, injunction, notice or demand
letter issued, entered, promulgated or approved thereunder.
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b. No notice, notification, demand, request for information,
citation, summons or order has been issued, no complaint has been
filed, no penalty has been assessed and no investigation or
review is pending or threatened by any governmental or other
entity with respect to any alleged failure by any Obligor to have
any permit, license or authorization required in connection with
the conduct of its business or with respect to any Environmental
Laws, including without limitation, Environmental Laws relating
to the generation, treatment, storage, recycling, transportation,
disposal or release of any Hazardous Materials.
c. No oral or written notification of a release of a Hazardous
Material has been filed by or against any Obligor and to the best
of each Obligor's knowledge, no property now or previously owned,
leased or used by it is listed or proposed for listing on the
Comprehensive Environmental Response, Compensation and Liability
Inventory of Sites or National Priorities List under the
Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended, or on any similar state or federal list
of sites requiring investigation or clean-up.
d. There are no liens or encumbrances arising under or pursuant to
any Environmental Laws on any of the property or properties owned
by any Obligor, and no governmental actions have been taken or
are in process which could subject any of such properties to such
liens or encumbrances or, as a result of which any Obligor would
be required to place any notice or restriction relating to the
presence of Hazardous Materials at any property owned by it in
any deed to such property.
e. Neither Obligors nor, to the best of their knowledge, any
previous owner, tenant, occupant or user of any property owned by
any of them, has (i) engaged in or permitted any operations or
activities upon or any use or occupancy of such property, or any
portion thereof, for the purpose of or in any way involving the
release, discharge, refining, dumping or disposal (whether legal
or illegal, accidental or intentional) of any Hazardous Materials
on, under, in or about such property, or (ii) transported or had
transported any Hazardous Materials to such property except to
the extent such Hazardous Materials are raw products commonly
used in day-to-day operations of such property and, in such case,
in compliance with, all Environmental Laws; (iii) engaged in or
permitted any operations or activities which would allow the
facility to be considered a treatment, storage or disposal
32
facility as that term is defined in 40 CFR 264 and 265, (iv)
engaged in or permitted any operations or activities which would
cause any property now owned, leased or used by it to become
subject to any state transfer act, or (v) constructed, stored or
otherwise located Hazardous Materials on, under, in or about any
property now owned, leased or used by it except to the extent
commonly used in day-to-day operations of such properties and, in
such case, in compliance with all Environmental Laws. Further, to
the best of Obligors' knowledge, no Hazardous Materials have
migrated from other properties upon, about or beneath any
property now owned, leased or used by any of them.
5.12 South Norwalk Property. One of the Obligors is assuming a lease for
property located at 000 Xxxxxx Xxxxxx in South Norwalk, Connecticut
(the "South Norwalk Property"). The Obligors agree that they will
remove all Collateral from the South Norwalk Property by November 15,
2001, they will not keep any Collateral at the South Norwalk Property
at any time after November 15, 2001, and they will not conduct any
business operations at the South Norwalk Property at any time.
SECTION 6. Negative Covenants. So long as any Obligations remain outstanding and
unpaid, Obligors covenant and agree that they will not without the express
written consent of Lender:
6.1 Limitation on Liens. Incur or permit to exist any lien, mortgage,
security interest, pledge, charge or other encumbrance against the
Property, whether now owned or hereafter acquired (including, without
limitation, any lien or encumbrance relating to any response, removal
or clean-up of any toxic substances or hazardous wastes), except: (a)
liens, mortgages, security interests, charges or other encumbrances in
favor of Lender or specifically permitted in writing by Lender; (b)
pledges or deposits in connection with or to secure workers'
compensation or unemployment insurance; (c) tax liens which are being
contested in good faith with the prior written consent of Lender and
against which, if requested by Lender, Obligors shall maintain
reserves in amounts and in form (book, cash, bond or otherwise)
satisfactory to Lender; (d) the liens existing on the Date of Closing
which are listed on Schedule 4.5; and (e) purchase money capital
leases pursuant to which the amount financed does not exceed $250,000
(less all amounts outstanding under the leases on Schedule 6.1) in any
one fiscal year.
6.2 Limitation on Other Borrowing. Incur, create, assume or permit to
exist any Indebtedness other than (a) Indebtedness to Lender pursuant
to this Agreement, (b) Indebtedness existing on the Date of Closing
which is listed on Schedule 6.2, (c) purchase money indebtedness under
33
capital leases pursuant to which the amount financed does not exceed
$250,000 (less all amounts outstanding under the leases on Schedule
6.1) in any one fiscal year, and (d) purchase money indebtedness
permitted pursuant to Section 6.4.
6.3 Limitation on Contingent Liabilities. Become liable as guarantor,
surety, endorser or otherwise for, or agree to purchase, repurchase or
assume, any obligation of any person, firm or corporation, except for
endorsement of commercial paper for deposit, collection, or discount
in the ordinary course of business.
6.4 Limitation on Advances and Investments. Make or suffer to exist any
advances or loans to, or any investments in (by transfers of property,
contributions to capital, purchase of stock or securities or evidence
of indebtedness, acquisition of assets or business or otherwise) any
person, firm or corporation, including officers or employees of
Obligors, other than capital expenditures permitted by Section 6.20
and acquisitions of all the stock or all or substantially all of the
assets of any entity (each an "Acquisition") funded by internally
generated cash, stock of Holdings or purchase money indebtedness owed
to the seller of the stock or assets of such entity being acquired for
which the total purchase price in any one Acquisition does not exceed
$500,000 and the total purchase price for all Acquisitions in any one
fiscal year does not exceed $1,000,000 and after giving effect to
which no Event of Default, or event which with the giving of notice or
the passage of time would constitute an Event of Default, shall have
occurred.
6.5 Limitation on Fundamental Changes. Merge or consolidate with or into
any other firm or corporation; dissolve or liquidate; change
substantially their lines of business; change their names; convey,
sell, lease or otherwise dispose of all or substantially all of their
property, assets or business.
6.6 Limitation on Affiliates and Subsidiaries. Acquire, form or dispose of
any Subsidiary or Affiliate or acquire all, or substantially all or
any material portion of the stock or assets of any other person, firm,
corporation, corporate division or business entity other than (i)
Acquisitions permitted by Section 6.4, provided, however, that
Obligors have given prior written notice thereof to Lender and have
taken, at Obligors' sole cost and expense, all steps reasonably
required by Lender to perfect a Lender's security interest in the
stock or assets acquired, (ii) the dissolution of Adirondack or
Excelsior, and (iii) the merger of Platinum into Holdings with
Holdings being the surviving entity; provided, however, that Obligors
have given prior written notice thereof to Lender.
34
6.7 Limitation on Changes in Management. Make or consent to a material
change in the manner in which the business of the Obligors is
conducted or make or consent to a change in management so that any of
Xxxxxxx X. Xxxxxx, Xxxxx X. XxxXxxxxx, Xxxx Xxxxx or Xxxxx Xxxxx (the
"Managers") are no longer actively involved in the management of the
Obligors. Each Manager shall be a party to an employment contract that
is satisfactory to Lender.
6.8 Limitation on Disposition of Assets. Sell, exchange or otherwise
dispose of any Property, other than finished goods and inventory in
the ordinary course of business and obsolete equipment no longer used
or useful in the conduct of business which is replaced by equipment of
at least equivalent value which is subject to a valid perfected first
priority security interest in the Lender; provided, however, that
Obligors need not replace any such equipment if it is unnecessary to
do so in the business judgment of the Obligors and the proceeds
thereof are applied to the outstanding principal balance on the Term
Loan.
6.9 Limitation on Dividends and Distributions. Declare or pay any dividend
(unless payable in capital stock of Holdings) or authorize or make any
other distribution on or with respect to any shares of capital stock
of Holdings, whether now or hereafter outstanding.
6.10 Limitation on Acquisition of Stock of Holdings. Purchase, acquire,
redeem or retire, or make any commitment to purchase, acquire, redeem
or retire any of the capital stock of Holdings, whether now or
hereafter outstanding.
6.11 Limitation on Officer Compensation. Pay direct or indirect
compensation to any officer or director, whether salary, bonus,
commission, stock distribution, stock dividend, or otherwise, which
would, after giving effect thereto, constitute an Event of Default
hereunder.
35
6.12 Limitation on Transactions with Affiliates. Other than the
Subordinated Debt with the Subordinated Lenders and the Subordinated
Encumbrances related thereto, enter into, or be a party to, any
transaction with any Affiliate (including, without limitation,
transactions involving the purchase, sale or exchange of property, the
rendering of services or the sale of stock) except in the ordinary
course of business pursuant to the reasonable requirements of the
Obligors and upon fair and reasonable terms no less favorable to the
Obligors than Obligors would obtain in a comparable arm's-length
transaction with a person other than an Affiliate.
6.13 Limitation on Change of Name or Location. Change their corporate names
or conduct any of their business under any trade name or style other
than as set forth on Schedule 4.12 or change their chief executive
offices, principal places of business or other places of business or
the locations of the Collateral or records relating to the Collateral
from those locations set forth in Section 3.3 and Section 4.12;
provided, however, that Obligors may do any of the foregoing, other
than change their chief executive offices or principal places of
business, if Obligors give at least thirty (30) days prior written
notice thereof to Lender and take, prior to any such change, at
Obligors' sole cost and expense, all steps reasonably required by
Lender to maintain Lender's perfection of its first priority security
interest in the Collateral.
6.14 Mandatory Prepayment. Permit the outstanding principal amount of the
Revolving Line of Credit Note to exceed, at any time, five million
dollars ($5,000,000) less (a) the maximum amount available to be drawn
under all issued and outstanding Standby Letters of Credit (assuming
all conditions for drawing have been satisfied), and (b) all amounts
drawn under issued Standby Letters of Credit for which the Lender has
not been reimbursed by the Obligors and, in the event any advances are
outstanding in excess of such amount, prepay on any day so much of the
outstanding principal amount which is in excess thereof.
6.15 Limitation on Changes in Accounting Methods. Make or consent to a
material change in their method of accounting.
6.16 Senior Funded Debt to EBITDA. Permit the ratio of Senior Funded Debt
to EBITDA to be greater than 3.50 to 1.00 as of the end of the fiscal
quarter ending October 31, 2001 or to be greater than 3.00 to 1.00 as
of the end of any fiscal quarter thereafter. This ratio shall be
tested as of the end of each fiscal quarter, commencing with the
fiscal quarter ending October 31, 2001, for the fiscal quarter then
ended and the immediately preceding three fiscal quarters.
6.17 Debt Service Coverage Ratio. Permit its Debt Service Coverage Ratio to
be less than 1.2 to 1.0. This ratio shall be tested as of the end of
each fiscal quarter, commencing with the fiscal quarter ending October
31, 2001, for the fiscal quarter then ended and the immediately
preceding three fiscal quarters.
6.18 Current Ratio. Permit its Current Ratio to be less than 1.0 to 1.0.
This ratio shall be tested as of the end of each fiscal quarter.
36
6.19 Net Losses. Permit any Net Loss, excluding extraordinary expenses
incurred in conjunction with the acquisition of Crystal Rock by
Holdings and the Loans. This covenant shall be tested as of the end of
the second, third and fourth fiscal quarters, for the fiscal quarter
then ended, of each fiscal year.
6.20 Capital Expenditures. Permit Capital Expenditures in any fiscal year,
on a non cumulative basis, to exceed the lesser of (i) $3,000,000 plus
Net Income or (ii) $5,000,000; provided, however, that Capital
Expenditures incurred in the acquisition of the assets of Iceberg
Springs Water, Inc. shall be excluded from such calculation. This
covenant shall be tested as of the end of each fiscal year, commencing
with the fiscal year ending October 31, 2001.
6.21 Adirondack and Excelsior. Permit either of Adirondack or Excelsior to
conduct any business, acquire any assets or incur any liabilities.
SECTION 7. Default.
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7.1 The occurrence of any of the following events will constitute an Event
of Default under this Agreement:
a. The failure by Obligors to pay any installment of principal
and/or interest due under either of the Loans or any of the other
Obligations when due and payable.
b. The failure by Obligors to pay taxes, if any, due on any
indebtedness under the Loans or any tax or assessment upon any
collateral securing the Obligations, on or before the same shall
become due and payable.
c. The failure of Obligors (i) to observe or perform any affirmative
covenant contained in Section 5 of this Agreement other than
sections 5.5 and 5.7 and such failure continues for a period of
thirty (30) days, provided that Obligors at all times diligently
pursue the cure of such failure or (ii) to observe or perform any
other covenant contained in this Agreement, including sections
5.5 and 5.7, or in any of the other Loan Documents.
d. The occurrence of an Event of Default under any of the other Loan
Documents.
e. The filing by or against any Obligor of any petition,
arrangement, reorganization, or the like under any insolvency or
bankruptcy law, or the adjudication of any Obligor as a bankrupt
(and if such filing is involuntary, the failure to have same
dismissed within sixty (60) days from the date of filing), or the
making of an assignment for the benefit of creditors, or the
appointment of a receiver for any part of Obligors' properties or
the admission in writing by any Obligor of its inability to pay
debts as they become due.
37
f. The breach of any material warranty or the untruth or inaccuracy
of any material representation of any Obligor contained in the
Loan Documents.
g. The occurrence of a default beyond any applicable grace or cure
period under, or demand for the payment of, any other note or
obligation of any Obligor to Lender.
h. The failure by any Obligor to make payment on any Indebtedness
with an outstanding principal balance in excess of $25,000 due to
any party other than Lender, beyond any grace period provided
with respect thereto, or upon demand, or the failure to perform
any other term, condition, or covenant contained in any agreement
under which any such Indebtedness is created, the effect of which
failure is to cause such Indebtedness to become due and payable
prior to its date of maturity.
i. The dissolution, liquidation or termination of existence of any
Obligor.
j. The passage or enforcement of any federal, state, or local law or
the rendition of a final decision of any court (other than a law
or decision with respect to a tax upon the general revenues of
Lender) in any way directly changing or affecting either of the
Loans or lessening the net income thereon in a fashion which is
not corrected or reimbursed by Obligors.
k. The passage or enforcement of any federal, state, or local law or
the rendition of a final decision of any court in any way
impairing Lender's ability to charge and collect the interest
stated in the Notes, including without limitation, the ability to
vary the interest payable under the Notes in accordance with this
term.
l. A judgment or judgments for the payment of money shall be
rendered against any Obligor, any such judgment or judgments
shall remain unsatisfied and in effect for a period of thirty
(30) consecutive days without a stay of execution and either the
38
amount of such judgment or judgments is in excess of $25,000 or
any attachment or execution occurs on any property of any of the
Obligors with respect to such judgment or judgments..
m. The occurrence of a material adverse change to the Collateral or
in any business, properties, condition or operations, financial
or otherwise, of any Obligor.
7.2 No Further Advances. Upon the happening of any Event of Default
specified above, Obligors shall not be entitled to any further
advances under the Revolving Line of Credit or the issuance of any
Standby Letters of Credit and, at the option of the Lender, the entire
unpaid balance owed under the Loans, the Notes and the Loan Documents
and under any other note or other documents evidencing the same, plus
any other sums owed hereunder, shall become and shall thereafter be
immediately due and payable without presentment, demand, protest,
notice of protest, or other notice of dishonor of any kind, all of
which are hereby expressly waived by Obligors. Notwithstanding the
foregoing, upon an Event of Default pursuant to Section 7.1e., the
entire unpaid balance owed under the Loans, the Notes and the Loan
Documents and under any other note or other documents evidencing the
same, plus any other sums owed hereunder, shall automatically become
and shall thereafter be immediately due and payable. Failure to
exercise such option shall not constitute a waiver of the right to
exercise the same in the event of any subsequent default. Upon the
occurrence of any Event of Default, without in any way affecting
Lender's other rights and remedies, or after maturity or judgment, the
interest rate applicable to each of the Loans shall automatically
change without notice to a floating rate per annum equal to four
percentage points (4%) above the otherwise then applicable rate.
7.3 Rights of Lender. In the event of the occurrence of an Event of
Default (a) Lender will have the right to take possession of the
Collateral and to maintain such possession on Obligors' premises or to
remove the Collateral or any part thereof to such places as Lender may
desire. If Lender exercises its right to take possession of the
Collateral, Obligors will, upon Lender's demand, assemble the
Collateral and make it available to Lender at a place reasonably
convenient to both parties; (b) Lender shall have, in addition to all
other rights provided herein, the rights and remedies of a secured
party under the Uniform Commercial Code; (c) Lender may sell and
deliver any or all Receivables and any or all other security and
Collateral held by Lender or for Lender at public or private sale, for
cash, upon credit or otherwise, at such prices and upon such terms as
Lender deems advisable, at Lender's sole discretion; and (d) in
39
addition to all other sums due Lender, Obligors will pay to Lender all
costs and expenses incurred by Lender, including attorneys' fees, to
obtain or enforce payment of Receivables or the Obligations, or in the
prosecution or defense of any action or proceeding either against
Lender or against any Obligor concerning any matter arising out of or
connected with this Agreement or the Collateral or the Loan Documents
or otherwise due pursuant to the terms of this Agreement. Any
requirement of reasonable notice shall be met if such notice is mailed
postage prepaid to each Obligor at each Obligor's address as set forth
herein at least five (5) days before the time of sale or other
disposition. Lender may be the purchaser at any such sale, if it is
public, and, in the event Lender is the purchaser, Lender shall have
all the rights of a good faith, bona fide purchaser for value from a
secured party after default. The proceeds of sale shall be applied
first to all costs and expenses of sale, including attorneys' fees,
and second to the payment (in whatever order Lender elects) of all
Obligations, and any remaining proceeds shall be applied in accordance
with the provisions of Article 9 of the Uniform Commercial Code.
Obligors shall remain liable to Lender for any deficiency. Failure by
Lender to exercise any right, remedy or option under this Agreement or
any of the other Loan Documents or in any other agreement between any
Obligor and Lender, or delay by Lender in exercising the same will not
operate as a waiver by Lender unless it is in writing and signed by
Lender and then only to the extent specifically stated. Neither Lender
nor any party acting as Lender's attorney pursuant to this Agreement
shall be liable for any error of judgment or mistake of fact or law.
Lender's rights and remedies under this Agreement will be cumulative
and not exclusive of any other right or remedy which Lender may have.
Nothing in this Agreement shall be construed to modify or limit the
unconditional right of Lender in its sole discretion to demand full or
partial payment of the principal of, and interest on, any demand
Obligation. The right to make demand on any such demand Obligation
shall exist whether or not Obligors are in compliance with the
covenants or conditions contained in this Agreement or in any other
agreements between Obligors and Lender.
7.4 Collection of Receivables. Upon the occurrence of an Event of Default,
Lender or its designee may notify customers or account debtors of
Obligors at any time, that Receivables have been assigned to Lender or
of Lender's security interest therein and collect them directly and
charge the collection costs and expenses to Obligors' account.
7.5 Power of Attorney. Obligors appoint Lender, or any other person whom
Lender may designate as its attorney, with power following the
occurrence of an Event of Default: to endorse Obligors' names on any
checks, notes, acceptances, money orders, drafts or other forms of
40
payment or security that may come into Lender's possession; to sign
Obligors' names on any invoice or xxxx of lading relating to any
Receivables, on notices of assignment, financing statements, and other
public records, on verifications of accounts and on notices to
customers; to notify the post office authorities to change the address
for delivery of Obligors' mail to an address designated by Lender; to
send requests for verification of Receivables to customers or account
debtors; and to do all things necessary to carry out this Agreement.
Obligors ratify and approve all acts of the attorney. Neither Lender
nor the attorney will be liable for any acts or omissions nor for any
error of judgment or mistake of fact or law. This power, being coupled
with an interest, is irrevocable so long as any Receivables assigned
to Lender or in which Lender has a security interest remain unpaid or
until the Obligations have been fully satisfied. Lender may file one
or more financing statements disclosing Lender's security interest
without Obligors' signatures appearing thereon.
SECTION 8. Miscellaneous.
-------------
8.1 Indemnification. In consideration of Lender's execution and delivery
of this Agreement and Lender's making of the Loans hereunder and in
addition to all other obligations of Obligors under this Agreement,
each Obligor hereby agrees to defend, protect, indemnify and hold
harmless Lender, its successors, assigns, officers, directors,
employees and agents (including, without limitation, those retained in
connection with the transactions contemplated by this Agreement)
(collectively, the "Indemnitees") from and against any and all
actions, causes of action, suits, claims, losses, costs, penalties,
fees, liabilities and damages and expenses in connection therewith
(irrespective of whether any such Indemnitees are a party to any
action for which indemnification hereunder is sought), and including
reasonable attorneys' fees and disbursements (the "Indemnifiable
Liabilities") incurred by the Indemnitees or any of them as a result
of, or arising out of, or relating to (a) the execution, delivery,
performance or enforcement of this Agreement and the other Loan
Documents and any instrument, document or agreement executed pursuant
hereto to any of the Indemnitees; (b) Lender's status as lender to, or
creditor of, any of the Obligors; or (c) the operation of Obligors'
business from and after the date hereof, provided that Obligors shall
not be required to indemnify any of the Indemnitees for any
Indemnifiable Liabilities resulting from the gross negligence or
willful misconduct of Lender or any of the other Indemnitees. To the
extent that the foregoing undertaking by Obligors may be unenforceable
for any reason, each Obligor shall make the maximum contribution to
the payment and satisfaction of each of the Indemnifiable Liabilities
which is permissible under applicable law.
41
8.2 Setoff. All sums at any time standing to Obligors' credit on the books
of Lender, Manufacturers and Traders Trust Company, or any other
Participant (as defined below) or upon or in which Lender,
Manufacturers and Traders Trust Company or any other Participant has a
lien or security interest shall be security for all of the
Obligations. In addition to and not in limitation of the above, with
respect to any deposits or Property of any Obligor in the possession
or control of Lender, Manufacturers and Traders Trust Company or any
other Participant, now or in the future, such party shall have the
right, if an event which constitutes or which with notice or lapse of
time, or both, would constitute an Event of Default under this
Agreement or any of the other Loan Documents has occurred, to setoff
all or any portion thereof, at any time, against any Obligations
hereunder, even though unmatured, without prior notice or demand to
any Obligor. The Obligors acknowledge that Manufacturers and Traders
Trust Company is purchasing a participation interest in the Loans and
the provisions of this paragraph are for the benefit of Manufacturers
and Traders Trust Company, and as an inducement to Manufacturers and
Traders Trust Company to purchase such participation interest.
8.3 Sale of Participation Interests. Lender shall have the unrestricted
right at any time and from time to time, and without the consent of or
notice to Obligors, to grant to one or more banks or other financial
institutions (each, a "Participant") participating interests in
Lender's obligation to lend hereunder and/or any or all of the Loans.
In the event of any such grant by Lender of a participating interest
to a Participant, whether or not upon notice to Obligors, Lender shall
remain responsible for the performance of its obligations hereunder
and Obligors shall continue to deal solely and directly with Lender in
connection with Lender's rights and obligations under this Agreement
and the other Loan Documents. Lender may furnish any information
concerning Obligors in its possession from time to time to prospective
Participants, providing that Lender shall require any such prospective
Participant to agree in writing to maintain the confidentiality of
such information.
8.4 No Waiver. No course of dealing between Obligors and Lender and no
failure to exercise or delay in exercising on the part of Lender any
right, power or privilege under the terms of this Agreement or the
other Loan Documents shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, power or privilege hereunder
or thereunder preclude any other or further privilege. The Lender
shall not be deemed to have waived any of its rights upon or under
Obligations or the Collateral unless such waiver be in writing and
signed by the Lender. The rights and remedies provided herein or in
any other agreement are cumulative and not exclusive or in derogation
of any rights or remedies provided in and thereof, by law or
otherwise.
42
8.5 Cross-Collateralization. All collateral which Lender may at any time
acquire from Obligors or from any other source in connection with the
Obligations arising under this Agreement and the other Loan Documents
shall constitute collateral for each and every Obligation, without
apportionment or designation as to particular Obligations and all
Obligations, however and whenever incurred, shall be secured by all
collateral however and whenever acquired, and Lender shall have the
right, in its sole discretion, to determine the order in which
Lender's rights in or remedies against any collateral are to be
exercised and which type of collateral or which portions of collateral
are to be proceeded against and the order of application of proceeds
of collateral as against particular Obligations.
8.6 Cross-Default. Obligors acknowledge and agree that a default under any
one of the Loan Documents shall constitute a default under each of the
other Loan Documents.
8.7 Survival of Agreements. All agreements, representations and warranties
made herein, in any agreement and in any statements, notices,
invoices, certificates, schedules, documents or other instruments
delivered to Lender in connection with this Agreement or any other
agreement shall survive the making of the Loans and advances
hereunder.
8.8 Further Documents. Obligors agree that, at any time or from time to
time upon written request of Lender, Obligors will execute and deliver
such further documents and do such other acts and things as Lender may
reasonably request in order to fully effect the purposes of this
Agreement and the other Loan Documents.
8.9 Entire Agreement; Governing Law. This Agreement and the documents
referred to herein constitute the entire agreement of the parties and
may not be amended orally and they shall be construed and interpreted
in accordance with the laws of the State of Connecticut, including its
conflict of laws principles.
8.10 Consent to Jurisdiction. Each Obligor hereby acknowledges that the
underlying transactions to which this Agreement and the other Loan
Documents relate concern the making, now or in the future, of loans
and advances to the Obligors and that said obligations of the Obligors
are primarily to be performed in the State of Connecticut. The
Obligors agree that the execution of this Agreement and the other Loan
43
Documents and the rights and obligations of the parties hereunder and
thereunder shall be deemed to have a Connecticut situs and each
Obligor shall be subject to the personal jurisdiction of the courts of
the State of Connecticut with respect to any action the Lender, its
successors or assigns, may commence hereunder. Accordingly, each
Obligor hereby specifically and irrevocably consents to the
jurisdiction of the courts of the State of Connecticut with respect to
all matters concerning this Agreement, the other Loan Documents, the
Notes or the enforcement of any of the foregoing.
8.11 Joint and Several Liability. All obligations, covenants and agreements
of the Obligors pursuant to this Agreement or any of the other Loan
Documents shall be the joint and several obligations, covenants and
agreements of each of the Obligors.
8.12 Successors. All rights of Lender hereunder shall inure to the benefit
of its successors and assigns, and all Obligations of Obligors shall
bind their successors and assigns.
8.13 Expenses. Obligors will pay all expenses arising out of the
preparation, administration, amendment, protection, collection and/or
other enforcement of this Agreement, the other Loan Documents, the
Collateral or security interest granted hereunder or thereunder and
the Notes (including, without limitation, reasonable counsels' fees).
8.14 Payments. The acceptance of any check, draft or money order tendered
in full or partial payment of any Obligation hereunder is conditioned
upon and subject to the receipt of final payment in cash.
8.15 Exhibits and Schedules. All exhibits and schedules referred to herein
and annexed hereto are hereby incorporated into this Agreement and
made a part hereof.
8.16 Acknowledgment of Copy, Use of Proceeds. Obligors acknowledge receipt
of copies of the Notes and Guaranties and attest, represent and
warrant to Lender that advances made under the Loans are to be used
for general commercial purposes and that no part of such proceeds will
be used, in whole or in part, directly or indirectly, for the purpose
of purchasing or carrying any "margin security" or "margin stock" as
such terms are defined in Regulation U of the Board of Governors of
the Federal Reserve System.
44
8.17 Descriptive Headings. The descriptive headings of the several sections
of this Agreement are inserted for convenience only and shall not be
deemed to affect the meaning or construction of any of the provisions
hereof.
8.18 Notices. Any written notice required or permitted by this Agreement
may be delivered by depositing it in the U.S. mail, postage prepaid or
with a nationally recognized overnight courier service or by facsimile
addressed to the Obligors or Lender at the addresses set forth at the
beginning of this Agreement. If any notice is sent to Lender pursuant
to this paragraph, it should be sent to the attention of: Xxxxxx X.
Xxxxxxxxx, Vice President, Xxxxxxx Bank, 000 Xxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxxxxx 00000 and a copy thereof should be sent to Manufacturers
and Traders Trust Company, 000 Xxxx Xxxxxx, Xxxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxxxxxx, Vice President.
8.19 Severability. If any provision of this Agreement or application
thereof to any person or circumstance shall to any extent be invalid,
the remainder of this Agreement or the application of such provision
to persons, entities or circumstances other than those as to which it
is held invalid, shall not be affected thereby and each provision of
this Agreement shall be valid and enforceable to the fullest extent
permitted by law.
8.20 Amendment and Restatement; Effective Date. This Agreement is executed
in substitution for, and not in satisfaction of, the Original Loan and
Security Agreement and amends and restates the provisions thereof.
Nothing contained herein shall operate to release any Obligor from its
liability to pay all of the Obligations and to keep and perform the
terms, conditions, obligations and agreements contained herein and in
the Loan Documents. Each Obligor hereby acknowledges and agrees that
it has no defense, offset, recoupment or counterclaim with respect to
any of the indebtedness owing to Lender and each Obligor hereby
releases Lender from any and all liability arising directly or
indirectly with respect to any and all actions taken by Lender
relating to the Original Loan and Security Agreement and the
transactions contemplated therein. This Agreement is to become
effective as of the date in the first paragraph of this Agreement (the
"Effective Date") but only upon the simultaneous consummation of the
acquisition of the assets of Iceberg Springs Water, Inc. by the
Obligors. Notwithstanding anything herein to the contrary, if on the
Effective Date (i) for any reason the acquisition of the assets of
Iceberg Springs Water, Inc. by the Obligors does not take place, (ii)
any of the representations, warranties and general covenants contained
in this Agreement are no longer true and accurate, or (iii) any Event
45
of Default or event, which with the passage of time or the giving of
notice, or both, would constitute an Event of Default shall have
occurred, then this Agreement shall not become effective for any
purpose and the Original Loan and Security Agreement shall continue in
full force and effect without amendment.
8.21 WAIVER OF RIGHT TO PREJUDGMENT REMEDY NOTICE AND HEARING. OBLIGORS
ACKNOWLEDGE THAT LENDER MAY HAVE RIGHTS AGAINST THEM, NOW OR IN THE
FUTURE, IN ITS CAPACITY AS CREDITOR OR IN ANY OTHER CAPACITY. SUCH
RIGHTS MAY INCLUDE THE RIGHT TO DEPRIVE OBLIGORS OF OR AFFECT THE USE
OF OR POSSESSION OR ENJOYMENT OF THEIR PROPERTY; AND IN THE EVENT
LENDER DEEMS IT NECESSARY TO EXERCISE ANY OF SUCH RIGHTS PRIOR TO THE
RENDITION OF A FINAL JUDGMENT AGAINST ANY OBLIGOR, OR OTHERWISE, SUCH
OBLIGOR MAY BE ENTITLED TO NOTICE AND/OR HEARING UNDER THE
CONSTITUTION OF THE UNITED STATES AND/OR STATE OF CONNECTICUT,
CONNECTICUT STATUTES (TO DETERMINE WHETHER OR NOT LENDER HAS PROBABLE
CAUSE TO SUSTAIN THE VALIDITY OF LENDER'S CLAIM), OR THE RIGHT TO
NOTICE AND/OR HEARING UNDER OTHER APPLICABLE STATE OR FEDERAL LAWS
PERTAINING TO PREJUDGMENT REMEDIES, PRIOR TO THE EXERCISE BY LENDER OF
ANY SUCH RIGHTS. OBLIGORS EXPRESSLY WAIVE ANY SUCH RIGHT TO
PREJUDGMENT REMEDY NOTICE OR HEARING TO WHICH OBLIGORS MAY BE
ENTITLED. THIS SHALL BE A CONTINUING WAIVER AND REMAIN IN FULL FORCE
AND EFFECT SO LONG AS OBLIGORS ARE OBLIGATED TO LENDER.
8.22 Waivers. Each Obligor hereby waives presentment, demand, notice,
protest, notice of acceptance of this Agreement, notice of loans made,
credit extended, collateral received or delivered or other action
taken in reliance hereon and all other demands and notices of any
description. With respect to this Agreement, the other Loan Documents,
the Obligations and the Collateral, each Obligor assents to any
extension or postponement of the time of payment or any other
indulgence, to any substitution, exchange or release of the
Collateral, to the addition or release of any party or person
primarily or secondarily liable, to the acceptance of partial payments
thereon and the settlement, compromising or adjusting of any thereof,
all in such manner and at such time or times as the Lender may deem
advisable. The Lender shall have no duty as to the collection or
protection of the Collateral or any income thereon, nor as to the
preservation of rights against prior parties, nor as to the
preservation of any rights pertaining thereto beyond the safe custody
thereof. The Lender may exercise its rights with respect to the
46
Collateral without resorting or regard to other collateral or sources
of reimbursement for liability. Each Obligor waives all suretyship
defenses with respect to the Notes, the Loans, the Obligations and all
other matters arising from or relating to the Loans and the Loan
Documents.
8.23 WAIVER OF RIGHT TO JURY TRIAL. EACH OBLIGOR AND LENDER HEREBY WAIVE
TRIAL BY JURY AND THE RIGHT TO TRIAL BY JURY IN ALL ACTIONS OR
PROCEEDINGS BETWEEN THEM IN ANY COURT ARISING OUT OF OR RELATING TO
THIS AGREEMENT, ITS VALIDITY OR INTERPRETATION. THIS SHALL BE A
CONTINUING WAIVER AND REMAIN IN FULL FORCE AND EFFECT SO LONG AS
OBLIGORS ARE OBLIGATED TO LENDER.
In Witness Whereof, the parties have caused this Agreement to be duly
executed and delivered by the proper and duly authorized officers as of the date
and year first above written.
WITNESS:
__________________________ VERMONT PURE HOLDINGS, LTD.
__________________________ By:____________________________
Name: Xxxxx X. Xxxxx
Title: President
__________________________ CRYSTAL ROCK SPRING WATER COMPANY
__________________________ By:____________________________
Name: Xxxxx X. Xxxxx
Title: President
47
__________________________ PLATINUM ACQUISITION CORP.
__________________________ By:____________________________
Name: Xxxxx X. Xxxxx
Title: President
__________________________ VERMONT PURE SPRINGS, INC.
__________________________ By:____________________________
Name: Xxxxx X. Xxxxx
Title: President
__________________________ XXXXXXX BANK
__________________________ By:____________________________
Name: Xxxxxx X. Xxxxxxxxx
Title: Vice President
48
EXHIBIT 2.1
Term Note
EXHIBIT 2.2
Revolving Line of Credit Note
EXHIBIT 2.2A-1
2001 Term Note
EXHIBIT 2.2A-2
Iceberg Letter of Credit
Schedule 3.3
Locations of Collateral other than Premises
00 XXXX XXX XXX XXXX 000 XXXXXXXXXX XXXXXX
XXXXX XXXXXX, XX 00000-0000 XXXXXXXXX, XX 00000
(000) 000-0000
00 XXXXXXX'X XXXX, XXXXX 000
XXXXXXXXXXX, XX 00000
(518) 566-8113
00 XXXXX XXXXX
XXXXXXXXX, XX 00000
(800) 639-3047
0000 XXXXXXXXXX XXX PUBLIC XXXXXXXXX XXXXXXXXX
XXXXX 0000
XXXXXXXXX, XX 00000 RSD WAREHOUSE SERVICES, INC
(000) 000-0000 000 XXX XXXXX XXXX
XXXXX XXXXX XXX, XX 00000
00 XXXXX XXXXX, XXXX X (000) 000-0000
XXXXXXXXXX, XX 00000
(000) 000-0000 JCT ASSOCIATES, INC
00 XXXXXXX XXXXXX
0000 XXXXXXXXXX XX XXXX XXXXXXXX, XX 00000
XXXXXXXXX, XX 00000 (000) 000-0000
(860) 945-0661
000 XXXX XXXXX XXXX
XXXXXXXX, XX
(000) 000-0000
00 XXXXXXXXX XXXXX
XXXXXXXX, XX 00000
(518) 373-2972
000 XXXX XXXXX
XXXXXXX, XX 00000
(716) 683-2365
0000 XXXXXXX XXXX
XXXXXXXX, XX 00000
(000) 000-0000
Schedule 4.5
Section A
The following mortgages, security interests, pledges, liens, encumbrances, or
other charges listed in this Section A (the "Prior Encumbrances") are prior in
right and priority to the mortgages and security interests of the Bank:
1. Mortgage given to Xxxxx Xxxxxxx on October 8, 1991 on the premises at Chase
Road in Randolph, Vermont maturing December 1, 2006. Secured by the
property.
2. Lease with The CIT Group n/k/a Lease Plan in connection with the lease of
two trucks. The amount due through October 18, 2001 is $11,296. Secured by
a UCC-1 Financing Statement filed with the Vermont Secretary of State as
filing number 98-99831.
3. Truck Lease Agreement with Associates Leasing, Inc. n/k/a CitiCapital. The
amount outstanding on October 18, 2001 is $46,604. Secured by a UCC-1
Financing Statement filed with the Vermont Secretary of State as filing
number 99-110951.
4. Lease with Xxxxx Fargo Financial Leasing Inc., successor to Norwest
Leasing. The amount outstanding on October 18, 2001 is approximately
$5,094. Secured by a UCC-1 Financing Statement filed with the Vermont
Secretary of State as filing number 99-115271.
Section B
The following mortgages, security interests, pledges, liens, encumbrances,
or other charges listed in this Section B (the "Subordinated Encumbrances")
are subordinate in right and priority to the mortgages and security
interests of the Bank:
Loan from the Town of Xxxxxxxx through a Community Development Block Grant
in October, 1993 secured by real and personal property in Randolph, Vermont
and subordinated to the Bank in an agreement agreed to on October 3, 2000.
The amount outstanding as of September 30, 2001 was $257,498.
The security interests granted to the Subordinated Lenders in the
Subordinated Lenders' Collateral, as defined in those certain Subordination
and Pledge Agreements dated October 5, 2000 among the Bank and the
Subordinated Lenders.
Schedule 4.6
Litigation
1. Xxxxxxxx X. Xxxxxxxx v. Vermont Pure Springs, Inc. and Xxxxx X. Xxxx
Supreme Court of New York, Index No. 9902642, filed September 21, 1999
Judgment in the amount of $325,000 against Vermont Pure Springs, Inc. is
insured and is under appeal.
2. New York State Department of Finance and Taxation Routine audit related to
sales tax for the period 3/1/97-2/28/00, pending Crystal Rock Spring Water
Company franchise tax audit for period 11/97 through 10/00
3. Vermont Pure Holdings, Ltd. v. DesCartes Systems Group, Inc. and Endgame
Solutions, Inc., United States District Court, Burlington, VT There is an
agreement to enter binding arbitration which is to be conducted in the
Winter of 2002
4. Connecticut Department of Revenue Services Routine sales tax audit -
Vermont Pure Springs, Inc.
5. Connecticut Department of Labor Discrimination Claim, Complaint No.
FM2001-38
Schedule 4.12
Trade names for each Obligor
None
Schedule 4.14
Agreements pertaining to purchase or sale of stock
1. See attached list of outstanding Options and Warrants.
2. Common Stock Warrant issued to CoreStates Bank as of April 8, 1998 to
purchase a variable number of shares at a variable purchase price, each as
determined by the formula set forth therein.
3. Non-Incentive Stock Option Agreement between Holdings and The Greatwater
Company dated March 10, 1997 to purchase 42,187 shares of Holding's Common Stock
at $2.8125/ea.
4. Registration Rights Agreement between Holdings and CoreStates Bank, dated
April 8, 1998.
5. Stock Issuance and Registration Rights Agreement between Holdings and
Vermont Coffee Time, Inc. dated January 5, 1998.
Schedule 4.22
Property not owned by Obligors
Vermont Pure:
1999 Chevy Suburban, Smartlease by GMAC
VIN 0XXXX00X0XX000000
1999 Chevy Blazer, Smartlease by GMAC
VIN 0XXXX00X0X0000000
1999 Chevy Lumina, Smartlease by GMAC
VIN 0X0XX00X0X0000000
2000 Chevy Blazer, Smartlease by GMAC
VIN 0XXXX00X0X0000000
1999 Chevy Blazer, Smartlease by GMAC
VIN 0XXXX00X0X0000000
1999 Chevy Lumina, Smartlease
VIN 0X0XX00X0X0000000
1999 Chevy Blazer, Smartlease by GMAC
VIN 0XXXX00X0X0000000
1999 Chevy Blazer, Smartlease by GMAC
VIN 0XXXX00X0X0000000
1999 Chevy Lumina, Smartlease by GMAC
VIN 0X0XX00X0X0000000
1999 Chevy Malibu, Smartlease
VIN 0X0XX00XXX0000000
2000 Chevy Malibu, Smartlease
VIN 0X0XX00X0X0000000
0000 Xxx'x , Xxxxxxx, XX
VIN 1HTSCAANOYH233179
Baler, Pet Plant
Gateway Computers, RT66 Randolph, VT
Software, Hardware, & Svcs, Descartes
Softech Financial, various locations
Delivery Vehicles Acquired from Perrier
Citicorp Leasing, Inc. - Ryder trucks (12)
XxXxxxxxx Truck Rental, vehicle #0000
Xxxxxxx Xxxx:
--------------------------------------------------------------------------------
Pitney Xxxxx Postage Machine & Scale
--------------------------------------------------------------------------------
Pitney Xxxxx Copier
--------------------------------------------------------------------------------
InPaco/Liqui-Box 1000 XX Xxxxxx
--------------------------------------------------------------------------------
InPaco/Liqui-Box 350 HT Filler
--------------------------------------------------------------------------------
Archives Mgmt Warehouse Space
--------------------------------------------------------------------------------
Chase Lincoln Navigator
--------------------------------------------------------------------------------
Xxxx Xxxx Contour LX
--------------------------------------------------------------------------------
GMAC Cadillac DeVille
--------------------------------------------------------------------------------
Ford Lincoln Continental
--------------------------------------------------------------------------------
Schedule 4.26
VERMONT PURE HOLDINGS, LTD
Type of organization: corporation
State of organization: Delaware
Organizational identification number: 3215737
Federal Employer Identification number: 00-0000000
CRYSTAL ROCK SPRING WATER COMPANY
Type of organization: corporation
State of organization: Connecticut
Organizational identification number: 0011840
Federal Employer Identification number: 00-0000000
PLATINUM ACQUISITION CORP.
Type of organization: corporation
State of organization: Delaware
Organizational identification number: 2219226
Federal Employer Identification number: 00-0000000
VERMONT PURE SPRINGS, INC.
Type of organization: corporation
State of organization: Delaware
Organizational identification number: 2268977
Federal Employer Identification number: 00-0000000
Schedule 5.10
Plans of the Obligors
1. Vermont Pure Holdings Health and Welfare Plan
2. Vermont Pure Holdings Retirement and Profit Sharing Plan
3. 1998 Incentive and Non-Statutory Stock Option Plan
4. Vermont Pure Holdings, Ltd. 1999 Employee Stock Purchase Plan
5. 1993 Performance Equity Plan
Schedule 6.1
Existing Capital Leases
1. Lease with The CIT Group n/k/a Lease Plan in connection with the lease
of two trucks. The amount due through October 18, 2001 is $11,296.
Secured by a UCC-1 Financing Statement filed with the Vermont
Secretary of State as filing number 98-99831.
See attached documentation.
2 Truck Lease Agreement with Associates Leasing, Inc. n/k/a CitiCapital.
The amount outstanding on October 18, 2001 is $46,604. Secured by a
UCC-1 Financing Statement filed with the Vermont Secretary of State as
filing number 99-110951.
See attached documentation.
3 Lease with Xxxxx Fargo Financial Leasing Inc., successor to Norwest
Leasing. The amount outstanding on October 18, 2001 is approximately
$5,094. Secured by a UCC-1 Financing Statement filed with the Vermont
Secretary of State as filing number 99-115271.
See attached documentation.
Schedule 6.2
Permitted Indebtedness
1. Mortgage to Xxxxx Xxxxxxx dated October 8, 1991 on the premises at Chase Road
in Randolph, Vermont maturing December 1, 2006. The amount outstanding on July
31, 2000 was $42,621. Secured by the property.
2. Note to Xxxxxxxx Xxxxx dated August 27,1997, maturing August 31, 2002, in
conjunction with the acquisition of Excelsior Springs Water Co.. The amount
outstanding on July 31, 2000 was $3,949. Unsecured.
3. Note to Xxxxx Xxxxxx dated August 27,1997, maturing August 31, 2002, in
conjunction with the acquisition of Excelsior Springs Water Co. The amount
outstanding on July 31, 2000 was $11,846. Unsecured.
4. Note to Xxxx Xxxxxx dated August 27,1997, maturing August 31, 2002, in
conjunction with the acquisition of Excelsior Springs Water Co. The amount
outstanding on July 31, 2000 was $7,897. Unsecured.
5. Notes to Xxxxx, Joan, John, Xxxxx Xxxxx and a Xxxxx family trust totaling
$22,600,000, maturing October 5, 2007. Subordinated to Xxxxxxx Bank.
6. Loan from the Town of Xxxxxxxx through a Community Development Block Grant in
October, 1993 secured by real and personal property in Randolph, Vermont and
subordinated to the Bank in an agreement agreed to on October 3, 2000. The
amount outstanding as of September 30, 2001 was $257,498.
7. Lease with The CIT Group n/k/a Lease Plan in connection with the lease of two
trucks. The amount due through October 18, 2001 is $11,296. Secured by a UCC-1
Financing Statement filed with the Vermont Secretary of State as filing number
98-99831.
8. Truck Lease Agreement with Associates Leasing, Inc. n/k/a CitiCapital. The
amount outstanding on October 18, 2001 is $46,604. Secured by a UCC-1 Financing
Statement filed with the Vermont Secretary of State as filing number 99-110951.
9. Lease with Xxxxx Fargo Financial Leasing Inc., successor to Norwest Leasing.
The amount outstanding on October 18, 2001 is approximately $5,094. Secured by a
UCC-1 Financing Statement filed with the Vermont Secretary of State as filing
number 99-115271.
