EXHIBIT 10.23
CREDIT AGREEMENT
between
MID-STATE BANK AND TRUST COMPANY,
as the Lender
and
THE AQUAPENN SPRING WATER COMPANY, INC.
as the Borrower
Dated: August 29, 1997
CREDIT AGREEMENT
THIS CREDIT AGREEMENT (the Credit Agreement and all amendments,
modifications and supplements hereto and any exhibits or schedules to any of the
foregoing, this "Agreement"), dated as of August __, 1997, between MID-STATE
BANK AND TRUST COMPANY, a Pennsylvania banking corporation having its principal
office at 0000 Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxxx 00000 (the "Lender"), and
AQUAPENN SPRING WATER COMPANY, INC., a Pennsylvania corporation having its
principal office at X.X. Xxx 000, Xxx XxxxXxxx Xxxxx, Xxxxxxxxx, Xxxxxxxxxxxx
00000 (the "Borrower").
W I T N E S S E T H:
WHEREAS, the Lender has loaned sums to the Borrower pursuant to that
certain Amended and Restated Credit Agreement (the "Amended Credit Agreement"),
dated as of April 5, 1995, as amended by that certain First Amendment to Amended
and Restated Credit Agreement, dated as of December 4, 1995, and as further
amended by that certain Second Amendment to Credit Agreement; and
WHEREAS, the Borrower has requested that the Lender (i) loan it
additional sums, (ii) amend the manner in which interest on sums borrowed is
calculated and (iii) release its security interests in the Borrower's assets and
the Lender, upon the Borrower agreeing to certain terms and conditions, is
willing to do so; and
WHEREAS, because of the extent to which the Amended Credit Agreement,
as amended, would have to be further modified, the Lender and the Borrower have
agreed to execute this Agreement to supersede in all respects the Amended Credit
Agreement, as amended.
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises contained herein and other valuable consideration, and with the intent
to be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
The capitalized terms defined below shall have the following respective
meanings when used herein:
Affiliate shall mean with respect to any Person (i) each Person that,
directly or indirectly, owns or controls, whether beneficially, or as a trustee,
guardian or other fiduciary, 5% or more of the Stock having ordinary voting
power in the election of directors, (ii) each Person that controls, is
controlled by or is under common control with such Person or any Affiliate of
such Person, or (iii) each of such Person's officers, directors, joint venturers
and
partners. For the purpose of this definition, "control" of a Person shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of its management or policies, whether through the ownership of voting
securities, by contract or otherwise.
Business Day shall mean any day on which the Lender is open for
business and on which commercial banks in London, England are open for dealings
in U.S. dollar deposits in the London Interbank Market; provided, however, that
during any period of time during which the entire Principal Balance is bearing
interest at the Floating Rate in accordance with the provisions of this
Agreement hereinafter set forth, the term "Business Day" shall mean any day on
which the Lender is open for business.
Capital Expenditures shall mean all payments, including, without
limitation, payments for capital lease obligations, for any fixed assets or
improvements, or replacements, substitutions or additions thereto, that have a
useful life of more than one year and which are required to be capitalized under
GAAP.
Capital Leases shall mean, with respect to any Person, any lease of any
property (whether real, personal or mixed) by such Person as lessee that, in
accordance with GAAP, either would be required to be classified and accounted
for as a capital lease on a balance sheet of such Person or otherwise be
disclosed as such in a note to such balance sheet, other than, in the case of
the Borrower, any such lease under which the Borrower is the lessor.
CERCLA shall mean the Federal Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended.
Charges shall mean all Federal, state, county, city, municipal, local,
governmental taxes at the time due and payable, levies, assessments or charge
upon or relating to (i) the Collateral, (ii) the Obligations, (iii) the
Borrower's employee payroll, income or gross receipts, (iv) the Borrower's
ownership or use of any of its assets, or (v) any other aspect of the Borrower's
business.
Commitment Termination Date shall mean February 28, 1999.
Default shall mean any event which, with the passage of time or notice
or both, would, unless cured or waived, become an Event of Default.
EBITDA shall mean net income before extraordinary items plus income tax
expense, interest expense, depreciation expense and amortization expense.
Environmental Laws shall mean all Federal, state and local laws,
including statutes, regulations, ordinances, codes, rules and other governmental
restrictions and requirements,
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relating to the discharge of air pollutants, water pollutants or process waste
water or otherwise relating to the environment or hazardous substances.
Financial Statement shall mean the Borrower's quarterly financial
statement, dated as of [date], as supplied to the Lender.
Fiscal Year shall mean the twelve month period (or shorter period with
respect to the first Fiscal Year within the term hereof) that ends on September
30. Subsequent changes of the fiscal year of the Borrower shall not change the
term "Fiscal Year" unless the Lender shall consent in writing to such changes.
Fixed Charges shall mean the sum of interest expense, scheduled
principal payments, payments under capital leases and income tax expense
(excluding any deferred portions, dividends and unfunded capital expenditures).
Floating Rate shall mean the rate per annum announced from time to time
by the Lender as its then prime rate.
GAAP shall mean generally accepted accounting principles as in effect
from time to time.
Governmental Person shall mean the government of the United States or
the government of any state or locality therein, any political subdivision or
any governmental, quasi-governmental, judicial, public or statutory
instrumentality, authority, body or entity, or other regulatory bureau,
authority, body or entity of the United States or any state or locality therein.
Guaranteed Indebtedness shall mean, as to any Person, any obligation of
such Person guaranteeing any indebtedness, lease, dividend or other obligation
of any other Person in any manner.
Indebtedness shall mean all liabilities, obligations and indebtedness
of any and every kind and nature, including, without limitation, all liabilities
and all obligations to trade creditors, whether now or hereafter owing, arising,
due or payable, from the Borrower to any Person and howsoever evidenced,
created, incurred, acquired or owing, whether primary, secondary, direct,
contingent, fixed or otherwise.
Interest Period shall mean the period of time during which a particular
LIBOR Rate will be applicable to all or any particular portion of the Principal
Balance in accordance with the provisions of this Agreement, it being agreed
that (a) each Interest Period shall commence and shall terminate on a Re-Set
Date, (b) each Interest Period shall be of a duration of either
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one month, two months, or six months, (c) no Interest Period shall extend beyond
the Maturity Date, and (d) the portion of the Principal Balance with respect to
which a particular Interest Period is applicable will bear interest at the LIBOR
Rate pertaining to such Interest Period from and including the first day of such
Interest Period to, but not including, the last day of such Interest Period.
Lien shall mean any mortgage or deed of trust pledge, hypothecation,
assignment, deposit arrangement, lien, security interest, easement or
encumbrance, or preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including, without limitation, any
lease intended as security or any title retention agreement, any financing lease
having substantially the same economic effect as any of the foregoing, and the
filing of, or agreement to give, any financing statement perfecting a security
interest under the Pennsylvania Uniform Commercial Code).
LIBOR Rate applicable to a particular Interest Period shall mean, as to
the Line of Credit Loans, a rate per annum equal to the Base LIBOR Rate
applicable to such Interest Period plus 1.20 percent and, as to the Revolving
Credit Loans, a rate per annum equal to the Base LIBOR Rate applicable to such
Interest Period plus 1.70 percent. The "Base LIBOR Rate" applicable to a
particular Interest Period shall mean a rate per annum equal to the rate of
interest at which U.S. dollar deposits in an amount approximately equal to the
portion of the Principal Balance which will bear interest at a particular LIBOR
Rate during such Interest Period, and with maturities comparable to the last day
of such Interest Period, are offered in immediately available funds in the
London Interbank Market to the Lender by leading banks in the Eurodollar market
at 11:00 a.m., London time, two (2) Business Days prior to the commencement of
such Interest Period. Each determination of the LIBOR Rate and the Base LIBOR
Rate applicable to a particular Interest Period shall be made by the Lender and
shall be conclusive and binding upon the Borrower absent manifest error.
Interest at the applicable LIBOR Rate or Rates from time to time shall be
calculated for the actual number of days elapsed on the basis of a 360-day year.
Line of Credit Accommodation shall mean the undertaking by the Lender
to establish a Six Million ($6,000,000) Dollar line of credit facility for the
Borrower as set forth in Paragraph 2.2(a) hereof.
Line of Credit Loans shall mean the aggregate Line of Credit Advances
outstanding at any time.
Loan Documents shall mean this Agreement, the Revolving Credit Note and
the Line of Credit Note.
Loans shall mean the amounts outstanding under the Revolving Credit
Note and the Line of Credit Note.
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Material Adverse Effect shall mean material adverse effect on (i) the
business, assets, operations or financial or other condition of the Borrower
taken as a whole, and (ii) the Borrower's ability to pay the Obligations in
accordance with the terms thereof.
Maturity Date shall mean either, as the context may require, (i) the
date the Line of Credit Advances must be repaid under this Agreement, or (ii)
the date on which the Term Loan must be repaid under this Agreement.
Net Worth shall mean, at any date of determination thereof, (i) the
amount of all assets of the Borrower as may be properly classified as such, less
(ii) the amount of all liabilities of the Borrower, all as determined in
accordance with GAAP.
Notes shall mean the Revolving Credit Note and the Line of Credit Note.
Obligations shall mean all loans, advances, debts, liabilities and
obligations for monetary amounts (whether or not such amounts are liquidated or
determinable) owing by the Borrower to the Lender and all covenants and duties
regarding such amounts, of any kind or nature, present or future, whether or not
evidenced by any note, agreement or other instrument, arising under any of the
Loan Documents.
Other Agreements shall mean all Loan Documents and all agreements,
instruments and documents, whether heretofore, now, or hereafter executed by or
on behalf of the Borrower and delivered to the Lender with respect to this
Agreement.
Permitted Encumbrances shall mean the following encumbrances: (i) Liens
for taxes or assessments or other governmental charges or levies, either not yet
due and payable or to the extent that nonpayment thereof is permitted by the
terms of this Agreement; (ii) pledges or deposits securing obligations under
workers' compensation, unemployment insurance, social security or public
liability laws or similar legislation; (iii) pledges or deposits securing bids,
tenders, contracts (other than contracts for the payment of money) or leases to
which the Borrower is a party as lessee made in the ordinary course of business;
(iv) deposits securing public or statutory obligations of the Borrower; (v)
workers', mechanics', suppliers', carriers', warehousemen's, landlords' or other
similar liens arising in the ordinary course of business; (vi) deposits securing
or in lieu of surety, appeal or customs bonds in proceedings to which the
Borrower is a party; (vii) any attachment or judgment Lien, unless the judgment
it secures shall not, within 30 days after the entry thereof, have been
discharged or execution thereof stayed pending appeal, or shall not have been
discharged within 5 days after the expiration of any such stay; (viii) liens on
fixtures granted to lessors pursuant to Leases; (ix) the Liens listed on
Schedule 1 hereto; and (x) purchase money liens.
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Person shall mean any individual, sole proprietorship, partnership,
joint venture, trust, unincorporated organization, association, corporation,
institution, public benefit corporation, entity or government.
Principal Balance shall mean the principal balance outstanding at any
time under the Notes.
Revolving Credit Loan shall mean the aggregate amount of Revolving
Credit Advances outstanding at any time.
Revolving Credit Loan Commitment shall mean the undertaking by the
Lender to establish a Ten Million ($10,000,000) Dollar revolving credit facility
for the Borrower as set forth in Paragraph 2.1(a) hereof.
Re-Set Date shall mean consecutive numerically corresponding dates
during the term of this Agreement, the first of which Re-Set Dates shall be
August __, 1997. Each subsequent Re-Set Date during the term of this Agreement
shall be the date in each subsequent calendar month during the term of this
Agreement which numerically corresponds to the first Re-Set Date during the term
of this Agreement; provided, however, that if the numerically corresponding date
in any such subsequent calendar month during the term of this Agreement shall
not be a Business Day, the Re-Set Date for such calendar month shall be the next
succeeding Business Day, unless the next such succeeding Business Day would fall
in the next calendar month, in which event the Re-Set Date for such calendar
month shall be the next preceding Business Day. For the purposes of this
Agreement, the period of time between any two consecutive Re-Set Dates during
the term of this Agreement shall be deemed to be a period of one month.
Roll Over Date applicable to a particular Interest Period shall mean
the last day of such Interest Period.
Tangible Net Worth shall mean the stockholders' equity in the Borrower
determined in accordance with generally accepted accounting principles
consistently applied, except that there shall be deducted therefrom all
intangible assets as reflected on the latest balance sheet of the Borrower, such
as organization costs, unamortized debt discount and expenses, good will,
patents, trademarks, copyrights, franchises, research and development expenses
and any amount reflected as treasury stock.
Term Loan shall mean the term loan into which the Revolving Credit Loan
is automatically converted as of the Commitment Termination Date.
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ARTICLE II
AMOUNT AND TERMS OF CREDIT
Section 2.1 Revolving Credit Advances; Conversion of Revolving Credit
Loan to Term Loan.
(a) The Lender hereby establishes, subject to the terms and conditions
hereof and relying upon the representations and warranties herein set forth, a
Revolving Credit Loan Commitment in favor of the Borrower in the maximum
aggregate principal amount of Ten Million ($10,000,000) Dollars. Upon and
subject to the terms and conditions hereof, the Lender agrees to make available,
from time to time on and after the date hereof and until the Commitment
Termination Date, for the Borrower's use and upon the request of the Borrower
therefor, advances of $100,000 or multiples thereof (each, a "Revolving Credit
Advance") in an aggregate amount outstanding which shall not exceed $10,000,000.
Subject to the provisions of this Section and until payment of all amounts
outstanding in respect of the Revolving Credit Loan has been demanded, whether
by declaration, acceleration or otherwise, the Borrower may from time to time
borrow, repay and reborrow under this Section 2.1(a).
(b) The Revolving Credit Loan shall be evidenced by a promissory note
(the "Revolving Credit Note") to be executed and delivered by the Borrower
immediately following its execution of this Agreement in form satisfactory to
the Lender. The Revolving Credit Note shall be payable to the order of the
Lender and shall represent the obligation of the Borrower to repay the amount of
the Revolving Credit Commitment or, if less, the aggregate unpaid principal
amount of all Revolving Credit Advances made by the Lender to the Borrower with
interest thereon as prescribed in Section 2.3 hereof. The date and amount of the
Revolving Credit Advance by the Lender and the payment of principal with respect
thereto shall be recorded on the books and records of the Lender, which books
and records shall constitute prima facie evidence of the accuracy of the
information therein recorded. The entire unpaid balance of the Revolving Credit
Loan shall be due and payable on the Commitment Termination Date.
(c) In the event that the outstanding balance of the Revolving Credit
Loan shall, at any time, exceed the Revolving Credit Commitment, the Borrower
shall, within 2 Business Days after notice of such determination by the Lender,
repay the Revolving Credit Loan in the amount of such excess. Any mandatory
prepayment pursuant to this Paragraph 2.2(c) shall be accompanied by the payment
of accrued and unpaid interest on the amount being prepaid through the date of
such prepayment. No prepayment fee shall be payable in respect of any mandatory
prepayment under this Paragraph 2.1(c) or under Section 2.4.
(d) As of the Termination Date, the Revolving Credit Loan shall
automatically convert to the Term Loan.
[Paragraph continued on following page.]
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Commencing on March 28, 1999 and on the last day of each month thereafter
through and including January 31, 2004, the principal balance of the Term Loan
shall be payable in equal payments computed on an amortization period of 120
months, with the entire unpaid principal balance of the Term Loan due and
payable on February 28, 2004. Interest on the Term Loan shall be payable in the
manner prescribed in Section 2.3 hereof.
(e) The Borrower's obligations under Paragraph 2.1(d) above shall be
evidenced by a term note (the "Term Note") to be executed and delivered by the
Borrower within two (2) Business Days of the Commitment Termination Date. The
Term Note shall be in form satisfactory to the Lender and shall represent the
obligation of the Borrower to repay the Term Loan with interest thereon as
prescribed in Section 2.3 hereof.
Section 2.2 Line of Credit Advances.
(a) The Lender hereby establishes, subject to the terms and conditions
hereof and relying upon the representations and warranties herein set forth, and
upon and subject to the terms and conditions hereof, the Lender agrees to make
from time to time on and after the date hereof and until February 28, 1998, upon
the request of the Borrower therefor, Line of Credit Loans (each, a "Line of
Credit Advance") as it in its sole and absolute discretion elects to make in an
aggregate amount outstanding, which shall not exceed $6,000,000. The Lender
forthwith shall inform the Borrower whether or not it elects to make such Line
of Credit Advance.
(b) The Line of Credit shall be evidenced by a promissory note (the
"Line of Credit Note") to be executed and delivered by the Borrower immediately
following its execution of this Agreement in form satisfactory to the Lender.
The Line of Credit Note shall be payable to the order of the Lender and shall
represent the obligation of the Borrower to repay the amount of the Line of
Credit or, if less, the aggregate unpaid principal amount of all Line of Credit
Advances made by the Lender to the Borrower with interest thereon as prescribed
in Section 2.3 hereof. The date and amount of each Line of Credit Advance by the
Lender and the payment of principal with respect thereto shall be recorded on
the books and records of the Lender, which books and records shall constitute
prima facie evidence of the accuracy of the information therein recorded.
(c) In the event that the outstanding balance of the Line of Credit
shall, at any time, exceed $6,000,000, the Borrower shall, within 2 Business
Days after notice of such determination by the Lender, repay the Line of Credit
in the amount of such excess. Any mandatory prepayment pursuant to this Section
2.2(c) shall be accompanied by the payment of accrued and unpaid interest on the
amount being prepaid through the date of such prepayment. No prepayment fee
shall be payable in respect of any mandatory prepayment under this Section
2.1(c).
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Section 2.3 Interest on the Revolving Credit Loan and the Line of
Credit.
(a) From and including the date hereof, but not including, the first
Re-Set Date during the term of this Agreement, the entire Principal Balance
shall bear interest at the Floating Rate. From and including the first Re-Set
Date during the term of this Agreement to, but not including, the last Re-Set
Date during the term of this Agreement, the entire Principal Balance shall,
unless and to the extent that the Borrower shall select one or more of the
available LIBOR Rates, bear interest at the Floating Rate. The available LIBOR
Rates shall consist of a two-month LIBOR Rate, a three-month LIBOR Rate and a
six-month LIBOR Rate determined in accordance with the provisions of this
Agreement, it being agreed that (i) the Borrower shall have the right to select
the LIBOR Rate or Rates from time to time applicable to the Principal Balance
and (ii) each LIBOR Rate from time to time so selected by the Borrower shall
take effect and shall end on a Re-Set Date. The Borrower shall not have the
right to select more than three (3) LIBOR Rates to take effect on any given
Re-Set Date. If the Borrower shall not select a LIBOR Rate by written notice
given to the Lender at least three (3) Business Days prior to a particular
Re-Set Date, the interest rate applicable to the Principal Balance for such
Re-Set Date shall be the Floating Rate. The LIBOR Rate or Rates selected by the
Borrower or otherwise designated for a particular Re-Set Date in accordance with
the foregoing provisions of this Paragraph shall be in effect from and including
the first day of the Interest Period to which such LIBOR Rate pertains to, but
not including, the Roll Over Date applicable to such Interest Period and shall
(subject to the following provisions of this Paragraph) be applicable to the
portion of the Principal Balance with respect to which a LIBOR Rate or Rates are
due to be re-set on such Re-Set Date, as well as to any portion of the Principal
Balance bearing interest at a Floating Rate and any advance of the Loans
scheduled to be made on such Re-Set Date. Notwithstanding the foregoing
provisions of this Paragraph, any advance or advances of the Loans which are
drawn down and which in the aggregate are less than $100,000.00, or which are
drawn down other than on a Re-Set Xxxx, will bear interest at the Floating Rate
from and including the date upon which the same are drawn down to, but not
including, the earlier to occur of (i) the first Re-Set Date on which a LIBOR
Rate applicable to the outstanding Principal Balance due to be Re-Set is
selected, or (ii) the first Re-Set Date on which the aggregate portion of the
Principal Balance bearing interest at the Floating Rate is equal to or is in
excess of $100,000.00, whereupon the interest rate applicable to such advance or
advances or such portion of the Principal Balance bearing interest at the
Floating Rate may be converted to a LIBOR Rate in accordance with the provisions
of this Paragraph. If the Maturity Date is not a Re-Set Date, the entire
Principal Balance shall at the election of the Lender either bear interest at
the Floating Rate or at a one-month LIBOR Rate determined in accordance with the
provisions of this Agreement from and including the last Re-Set Date prior to
the Maturity Date to, but not including, the Maturity Date, it being agreed that
any such one-month LIBOR Rate shall be determined on the basis of an assumed
Interest Period of one month.
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(b) Each advance of the Loans subsequent to the initial advances of the
Loans shall be made on a Re-Set Date during the term of this Agreement.
Notwithstanding anything to the contrary set forth in this Agreement, the Lender
shall not be obligated to authorize an advance of the Loans unless the Borrower
has delivered to the Lender a request for such advance at least five (5) days
prior to the date upon which such advance is requested accompanied by all back
up materials which are required to enable the Lender to determine whether the
conditions precedent for the making of such advance as set forth in the
Agreement have been satisfied.
(c) The Lender shall, as soon as practicable after 9:00 a.m.,
prevailing time, two (2) Business Days prior to the commencement of a particular
Interest Period, determine the LIBOR Rate which will be in effect during such
Interest Period and inform the Borrower of the LIBOR Rate so determined (which
determination shall be conclusive and binding upon the Borrower absent manifest
error). In the event, and on each occasion, that on the day two (2) Business
Days prior to the commencement of a particular Interest Period, the Lender shall
have determined in good faith (which determination shall be conclusive and
binding upon the Borrower absent manifest error) that U.S. dollar deposits in an
amount approximately equal to the portion of the Principal Balance which is to
bear interest at a particular LIBOR Rate during such particular Interest Period
in accordance with the provisions of this Agreement are not generally available
at such time in the London Interbank Market, or reasonable means do not exist
for ascertaining a LIBOR Rate for such particular Interest Period, the Lender
shall so notify the Borrower and the interest rate applicable to the portion of
the Principal Balance with respect to which such LIBOR Rate was to pertain shall
automatically be converted to the Floating Rate as of the next occurring Re-Set
Date, it being agreed that the Floating Rate shall remain in effect thereafter
with respect to such portion of the Principal Balance unless and until the
Lender shall have determined in good faith (which determination shall be
conclusive and binding upon the Borrower absent manifest error) that the
aforesaid circumstances no longer exist, whereupon the interest rate applicable
to such portion of the Principal Balance may upon request of the Borrower be
converted back to a LIBOR Rate determined in the manner hereinabove set forth in
this Agreement effective as of the first Re-Set Date which occurs ten (10)
Business Days or more after such good faith determination by the Lender. If any
change in any law or regulation or in the interpretation thereof by any
governmental authority charged with the administration or interpretation thereof
shall make it unlawful for the Lender to make or maintain LIBOR Rates with
respect to the Principal Balance of any portion thereof or to fund the Principal
Balance or any portion thereof at LIBOR Rates in the London Interbank Market or
to give effect to its obligations as contemplated by this Agreement, then, upon
notice by the Lender to the Borrower, the interest rate applicable to the entire
Principal Balance shall be automatically converted to the Floating Rate, it
being agreed that any notice given by the Lender to the Borrower, pursuant to
this sentence shall, if lawful, be effective insofar as it pertains to any
particular portion of the Principal Balance bearing interest at a particular
LIBOR Rate on the last day of then existing Interest Period
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pertaining to such particular portion of the Principal Balance, or if not
lawful, shall be effective immediately upon being given by the Lender to the
Borrower, and that the Floating Rate shall remain in effect thereafter with
respect to such particular portion of the Principal Balance unless and until the
Lender shall have determined in good faith (which determination shall be
conclusive and binding upon the Borrower absent manifest error) that the
aforesaid circumstances no longer exist, whereupon the interest rate applicable
to such portion of the Principal Balance may upon request of the Borrower be
converted to a LIBOR Rate determined in the manner hereinabove set forth in this
Agreement effective as of the first Re-Set Date which occurs ten (10) Business
Days or more after such good faith determination by the Lender. If the interest
rate applicable to any particular portion of the Principal Balance is converted
from a LIBOR Rate to the Floating Rate on a date other than a Roll Over Date in
accordance with the provision of the preceding sentence, the Borrower shall pay
to the Lender on demand an amount equal to the prepayment premium, if any, which
would have been due pursuant to the provision of this Agreement hereinafter set
forth if the portion of the Principal Balance bearing interest at such LIBOR
Rate was prepaid in full on the date of such conversion.
(d) Subject to the following provisions of this Paragraph, the Borrower
shall have the right to prepay the Principal Balance in whole, or in part, upon
no less than five (5) Business Days' prior written notice to the Lender
specifying the intended date of prepayment, which date of prepayment shall not
be more than forty-five (45) days after the date of such notice, and the amount
to be prepaid and subject to payment of all interest and other sums then due and
payable pursuant to the provisions of this Agreement. No prepayment premium
shall be payable if the portion of the Principal Balance being prepaid is
bearing interest on the date of prepayment at the Floating Rate in accordance
with the provisions of this Agreement, or if such prepayment occurs on the Roll
Over Date pertaining to the portion of the Principal Balance being prepaid. If
any particular portion of the Principal Balance being prepaid is bearing
interest at a particular LIBOR Rate and such prepayment does not occur on the
Roll Over Date pertaining to the portion of the Principal Balance being prepaid,
the Borrower shall pay to the Lender contemporaneously with such prepayment a
prepayment premium equal to the portion of the Principal Balance being prepaid,
multiplied by a per annum interest rate equal to the difference between the Base
LIBOR Rate applicable to the portion of the Principal Balance being prepaid and
the 360-day equivalent interest yield, as adjusted to reflect interest payments
on a monthly basis (hereinafter called the "Reinvestment Rate"), on any current
U.S. Government Treasury Obligations selected by the Lender, in its sole and
absolute discretion, in an aggregate amount comparable to the portion of the
Principal Balance being prepaid, and with maturities comparable to the Roll Over
Date applicable to the portion of the Principal Balance being prepaid,
calculated over a period of time from and including the date of prepayment to,
but not including, the Roll Over Date applicable to the portion of the Principal
balance being prepaid as discounted in good faith to present value in a manner
satisfactory to the Lender. If the Base LIBOR Rate applicable to the portion of
the
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Principal Balance being prepaid is equal to or less than the Reinvestment Rate,
no prepayment premium shall be due. No prepayment premium payable under this
Paragraph shall in any event or under any circumstances be deemed or construed
to be a penalty. If a portion of the Principal Balance is bearing interest at a
LIBOR Rate or Rates and a portion of the Principal Balance is bearing interest
at the Floating Rate in accordance with the provisions of this Agreement on the
date of a partial prepayment of the Principal Balance in accordance with the
provisions of this Paragraph, such partial prepayment shall be applied to the
respective portions of the Principal Balance bearing interest at such LIBOR Rate
or Rates and the Floating Rate in such order and manner so as to minimize the
prepayment premium due with respect thereto as calculated pursuant to the
provisions of this Paragraph. Any payment of the Principal Balance after the
Lender shall have declared the Obligations immediately due and payable in
accordance with the provisions of this Agreement shall be deemed to be a
voluntary prepayment for all purposes of this Paragraph and a prepayment premium
calculated pursuant to the provisions of this Paragraph shall be payable with
respect thereto based upon the Base LIBOR Rate or Rates applicable to the
Principal Balance immediately prior to such declaration. The Lender shall
deliver to the Borrower a statement setting forth the amount and basis of
determination of the prepayment premium, if any, due in connection with a
prepayment of the Principal Balance in accordance with the provisions of this
Paragraph, it being agreed that (a) the calculation of such prepayment premium
shall be made in good faith and may be based on any current U.S. Government
Treasury Obligations selected by the Lender, in its sole and absolute
discretion, (b) the Lender shall not be obligated or required to have actually
reinvested the prepaid portion of the Principal Balance in any such U.S.
Government Treasury Obligations as a condition precedent to the Borrower being
obligated to pay a prepayment premium calculated in accordance with the
provisions of this Paragraph, and (c) the Borrower shall not have the right to
question the correctness of any such statement or the method of calculation set
forth therein in the absence of manifest error. The Borrower shall, upon receipt
of such statement and contemporaneously with any such prepayment of the
Principal Balance, remit to the Lender the prepayment premium, if any, due in
connection therewith, as calculated pursuant to the provisions of this
Paragraph. The Lender shall not be obligated to accept any prepayment of the
Principal Balance unless it is accompanied by the prepayment premium, if any,
due in connection therewith as calculated pursuant to the provisions of this
Paragraph. Any partial prepayment of the Principal Balance in accordance with
the provisions of this Paragraph shall be in a minimum amount of at least
$250,000.00. No partial payment of the Principal Balance shall be permitted in
accordance with the provisions of this Paragraph if such a partial prepayment
would reduce the principal balance below $500,000.00. The provisions of this
Paragraph shall be applicable to any prepayment of the Principal Balance in
whole or in part.
(e) All sums which may or shall become due and payable by the Borrower
in accordance with the foregoing provisions shall be, and shall under all
circumstances be deemed to, constitute additional interest on, and shall
constitute part of, the Obligations.
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Section 2.4 Set-Off. To secure the prompt payment to the Lender of the
Obligations, the Borrower hereby gives to the Lender a lien and security
interest upon and in any property, credits, securities or monies which may at
any time be delivered to, or be in the possession of, or owned by the Lender in
any capacity whatever including the balance of any deposit account maintained by
the Borrower with the Lender. The Borrower hereby authorizes the Lender in case
of an Event of Default, at the Lender's option and at any time and from time to
time, to apply, at the discretion of the Lender, to the payment of the
Obligations any and all such property, credits, securities or monies now or
hereafter in the possession or control of the Lender belonging or owed to the
Borrower irrespective of whether or not the Lender shall have made any demand
under this Agreement or any Note and although all or a portion of the
Obligations may be unmatured. The rights of the Lender under this Section 2.4
are in addition to other rights and remedies (including, without limitation,
other rights of set-of), which the Lender may have.
ARTICLE III
CONDITIONS PRECEDENT
This Agreement shall become effective upon the satisfaction of the
following conditions precedent set forth in Sections 3.1, 3.2, 3.3, and 3.4:
Section 3.1 Execution and Delivery of Agreement. This Agreement or
counterparts thereof shall have been duly executed by, and delivered to, the
Borrower and the Lender.
Section 3.2 Documents and Other Agreements. The Lender shall have
received all of the following, each in form and substance satisfactory to the
Lender:
A. the Revolving Credit Note payable to the Lender as required
by Section 2.1(b);
B. the Line of Credit Note payable to the Lender as required
by Section 2.2(b); and
C. a Certificate of the Secretary of the Borrower that sets
forth the true and correct copies of the Articles of Incorporation and Bylaws of
the Borrower and all amendments thereto (if different than those provided to the
Lender pursuant to the Amended Credit Agreement), true and correct copies of the
resolutions of the Board of Directors of the Borrower authorizing or ratifying
the execution, delivery and performance of the Loan Documents and the Other
Agreements and the names of the officer or officers of the Borrower authorized
to sign the Loan Documents and the Other Agreements (if different than
individuals identified to the Lender at the time of the Borrower's execution of
this Agreement), together with a sample of the true signature of each such
officer.
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Section 3.3 Absence of Material Adverse Change. No material and adverse
change in the business, operations or condition, financial or otherwise, of the
Borrower shall have occurred or be continuing.
Section 3.4 Conditions to Each Loan Advance. It shall be a further
condition to the funding of the initial advance of each of the Loans and each
subsequent advance thereafter that the following statements shall be true on the
date of each such funding or advance:
(a) all of the representations and warranties of the Borrower contained
in any of the Loan Documents shall be correct in all material respects as to the
Borrower and as of the date of each such advance as though made on and as of
such date, except (i) to the extent that any such representation or warranty
expressly relates to an earlier date, and (ii) for changes therein permitted or
contemplated by this Agreement.
(b) no event shall have occurred and be continuing, or would result
from the funding of such advance, which constitutes or would constitute a
Default or an Event of Default.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
To induce the Lender to enter into this Agreement, the Borrower makes
the following representations and warranties to the Lender:
Section 4.1 Corporate Existence; Compliance with Law. The Borrower (i)
is a corporation duly organized, validly existing and in good standing under the
laws of the state of its incorporation; (ii) is duly qualified as a foreign
corporation and in good standing under the laws of each jurisdiction where its
ownership or lease of property or the conduct of its business requires such
qualification (except for jurisdictions in which such failure to so qualify or
to be in good standing could not reasonably be expected to have a Material
Adverse Effect); (iii) has the requisite corporate power and authority and the
legal right to own and operate its properties, to lease the property it operates
under lease and to conduct its business as now, heretofore, and proposed to be
conducted; and (iv) is in compliance with its articles of incorporation and
by-laws.
Section 4.2 Corporate Power Authorization; Enforceable Obligations. The
execution, delivery and performance by the Borrower of the Loan Documents and
the Other Agreements: (i) are within the Borrower's corporate power; (ii) have
been and will be duly authorized by all necessary or proper corporate action;
(iii) are not in contravention of any provision of the Borrower's articles of
incorporation or bylaws; (iv) will not violate any law, regulation or any order
or decree of any court or governmental instrumentality; (v) will not
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conflict with or result in the breach or termination of, constitute a default
under, or accelerate any performance required by, an indenture, mortgage, deed
of trust, lease, agreement or other instrument to which the Borrower is a party
or by which the Borrower or any of its property is bound (except for such
conflict, breach, termination, default or acceleration as could not reasonably
be expected to have a Material Adverse Effect); and (vi) do not require the
consent or approval of any Governmental Person or any other Person. Each of the
Loan Documents to be delivered for the benefit of or on behalf of the Borrower
constitute a legal, valid and binding obligation of the Borrower, enforceable
against it in accordance with its terms.
Section 4.3 Financial Statements. To the best knowledge of the Borrower
and except as disclosed on Schedule 4.3, the Borrower does not have any known
liabilities or obligations (whether absolute, accrued, contingent or otherwise),
the existence of which would have a Material Adverse Effect on the business,
results of operations or financial condition of the Borrower, except (i)
liabilities, obligations, or contingencies which are accrued or reserved against
in the Financial Statement and (ii) normally recurring liabilities incurred
after the date of the Financial Statement in the ordinary course of business and
consistent with past practice.
Section 4.4 Other Ventures. Except as disclosed on Schedule 4.4, the
Borrower is not engaged in any joint venture or partnership with any other
Person.
Section 4.5 Taxes. All Federal, state and local tax returns, reports
and statements required to be filed by the Borrower (other than immaterial state
and local filings) have been filed with the appropriate governmental agencies
and all Charges and other impositions shown thereon to be due and payable have
been paid. The Borrower has paid when due and payable all requisite Charges,
except such Charges being contested pursuant to Section 6.2(b) hereof.
Section 4.6 No Litigation. Except as set forth on Schedule 4.6 hereto,
no action, suit or arbitration is now pending or, to the actual knowledge of the
Borrower, threatened against the Borrower at law, in equity or otherwise which,
if determined adversely, could reasonably be expected to have a Material Adverse
Effect.
Section 4.7 Employment and Labor Agreements. Except as set forth on
Schedule 4.7, there are no employment agreements covering management of the
Borrower, and there are no collective bargaining agreements or other labor
agreements covering any employees of the Borrower. A true and complete copy of
each such agreement will be furnished to the Lender upon its request.
Section 4.8 Full Disclosure. No information contained in this
Agreement, the other Loan Documents, the Financial Statement or any written
statement furnished by or on behalf of the Borrower pursuant to the terms of
this Agreement contains any untrue statement of a
15
material fact or omits to state a material fact necessary to make the statements
contained herein or therein not misleading at the time and in light of the
circumstances under which made.
Section 4.9 Environmental Matters. To the best knowledge of the
Borrower and except as disclosed on Schedule 4.9, the Borrower is in compliance
with all Environmental Laws to the extent that any non-compliance with such laws
would not have a Material Adverse Effect on the Borrower's business.
ARTICLE V
FINANCIAL STATEMENTS AND INFORMATION
Section 5.1 Reports and Notices. The Borrower covenants and agrees that
from the date hereof and until the Obligations are paid in full, it shall
deliver to the Lender:
(a) Within forty-five (45) days after the end of each fiscal quarter,
copies of its unaudited balance sheets as of the end of such quarter and the
related statements of income for that portion of the Fiscal Year ending as of
the end of such quarter, prepared in accordance with GAAP (subject to normal
year end adjustments) setting forth in comparative form in each case the
projected figures for such period and accompanied by the certification of the
chief executive officers or chief financial officers of the Borrower that all
such financial statements present fairly in accordance with GAAP (subject to
normal year end adjustments) the financial position and results of operations of
the Borrower as at the end of such quarter and for the period then ended and
that there was no Default or Event of Default in existence as of such time or,
if there was any Default or Event of Default in existence as of such time,
setting forth a description of such Default or Event of Default and specifying
the action, if any, taken by the Borrower to remedy the same.
(b) Within 120 days after the close of each Fiscal Year, a copy of its
annual audited financial statements consisting of balance sheets and statements
of income and retained earnings and statements of cash flows, setting forth in
comparative form in each case the figures for the previous fiscal year, which
financial statements shall be prepared in accordance with GAAP, certified (only
with respect to the financial statements) without qualification as to its scope
of audit or the financial condition of the Borrower as a going concern by a firm
of independent certified public accountants selected by the Borrower and
acceptable to the Lender and accompanied by (i) a statement in reasonable detail
showing the calculations used in determining the financial covenants under
Sections 6.3 hereof, and (ii) a certification of the chief executive officers or
chief financial officers of the Borrower that all such financial statements
present fairly in accordance with GAAP the financial position and results of
operations and the statements of cash flows of the Borrower as at the end of
such year and for
16
the period then ended, and that there was no Default or Event of Default in
existence as of such time or, if there was any Default or Event of Default in
existence as of such time, setting forth a description of such Default or Event
of Default and specifying the action, if any, taken by the Borrower to remedy
the same.
(c) As soon as practicable, but in any event within 2 Business Days
after any officer of the Borrower becomes aware of the existence of any Default
or Event of Default, or any development or other information which could
reasonably be expected to have a Material Adverse Effect, telephonic or
telecopier notice specifying the nature of such Default or Event of Default or
development or information, including the anticipated effect thereof, which
notice shall be promptly confirmed in writing within 5 days.
(d) If requested by the Lender, copies of all Federal, state and local
tax returns and reports in respect of income, franchise or other taxes on or
measured by income (excluding sales, use or like taxes) filed by the Borrower.
(e) Such other information respecting the Borrower's business,
financial condition or prospects as the Lender may, from time to time,
reasonably request.
ARTICLE VI
AFFIRMATIVE COVENANTS
The Borrower covenants and agrees that until the Obligations are paid
in full:
Section 6.1 Maintenance of Existence and Conduct of Business. The
Borrower shall (i) do, or cause to be done, all things necessary to preserve and
keep in full force and effect its corporate existence, rights and franchises;
(ii) continue to conduct its business substantially as now conducted or as
otherwise permitted hereunder; and (iii) at all times maintain, preserve and
protect its property in use or useful in the conduct of its business and keep
the same in good operating condition (taking into consideration ordinary wear
and tear) and from time to time make, or cause to be made, all needful and
proper repairs, renewals and replacements, betterments and improvements thereto
consistent with industry practices, so that the business carried on in
connection therewith may be properly conducted at all times.
Section 6.2 Payment of Obligations.
(a) Subject to Paragraph (b) of this Section 6.2, the Borrower shall
(i) pay and discharge, or cause to be paid and discharged, all its Indebtedness
as and when due and payable, and (ii) pay and discharge, or cause to be paid and
discharged, promptly all (A) Charges imposed upon it, its income and profits or
any of its property, and (B) lawful claims
17
for labor, materials, supplies and services or otherwise before any thereof
shall become in default.
(b) The Borrower may in good faith contest, by proper legal actions or
proceedings, the validity or amount of any Charges, Liens or claims arising
under Section 6.2(a)(ii); provided that the Borrower gives the Lender advance
written notice of its intention to contest the validity or amount of any such
Charge, Lien or claim and that at the time of commencement of any such action or
proceeding and during the pendency thereof (i) no Default or Event of Default
shall have occurred; (ii) adequate reserves with respect thereto are maintained
on the books of the Borrower in accordance with GAAP; (iii) such contest
operates to suspend collection of the contested Charges or claims and is
maintained and prosecuted continuously with diligence; (iv) no Lien shall exist
for such Charges or claims during an action or proceeding; (v) the Borrower
shall promptly pay or discharge such contested Charges and all additional
charges, interest, penalties and expenses, if any, and shall deliver to the
Lender evidence acceptable to the Lender of such compliance, payment or
discharge if such contest is terminated or discontinued adversely to the
Borrower; and (vi) the Lender has not advised the Borrower in writing that the
Lender reasonably believes that nonpayment or nondischarge thereof would have a
Material Adverse Effect.
Section 6.3 Financial Covenants.
(a) EBITDA/Fix Charges shall be equal to at least 1.15 to 1.0,
determined as of the end of each Fiscal Year.
(b) The ratio of total liabilities to Tangible Net Worth shall not be
greater than 2.0 to 1.0 as of the end of each Fiscal Year.
Section 6.4 Books and Records. The Borrower shall keep adequate records
and books of account with respect to its business activities in which proper
entries, reflecting all of its financial transactions, are made in accordance
with GAAP.
Section 6.5 Litigation. The Borrower shall notify the Lender in writing
promptly of any suit or administrative proceeding that could reasonably be
expected to involve an amount in excess of $100,000 in any one instance or in
excess of $500,000 in the aggregate or could reasonably be expected to have a
Material Adverse Effect.
Section 6.6 Insurance. The Borrower shall, at its sole cost and
expense, maintain "all risk" physical damage insurance on all personal property,
by insuring against all hazards and risks ordinarily insured against owners or
users of such properties in similar businesses.
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The Borrower shall, at its sole cost and expense, maintain
comprehensive general liability insurance on an "occurrence basis" (unless such
insurance cannot be reasonably obtained at commercially reasonable rates in
which case such insurance shall be on a "claims made" basis) against claims for
personal injury, bodily injury and property damage with a minimum limit of
$1,000,000 per occurrence and $3,000,000 in the aggregate. Such coverage shall
include, but not be limited to, all risks customarily insured against by owners
engaged in similar businesses.
The Borrower shall, at its sole cost and expense, maintain workers'
compensation insurance to the extent required by law.
All policies of insurance required to be maintained under this
Agreement shall be in form and with insurers recognized as adequate by the
Lender, and all such policies shall be in such amounts as may from time to time
be satisfactory to the Lender. The Lender reserves the right at any time, upon
review of the Borrower's risk profile, to require additional forms and limits of
insurance to, in the Lender's reasonable discretion, adequately protect the
Collateral. Schedule 6.6 hereto lists all insurance maintained by the Borrower.
Section 6.7 Compliance with Law and Agreements. The Borrower shall
comply with all federal, state and local laws and regulations applicable to it.
The Borrower shall perform within any required time period (after
giving effect to applicable grace periods) all of its obligations and enforce
all of its rights under each agreement to which it is a party. The Borrower
shall not modify in any manner adverse to it any provision of any agreement to
which it is a party which termination or modification could reasonably be
expected to have a Material Adverse Effect.
Section 6.8 Supplemental Disclosure. From time to time as may be
necessary (in the event that such information is not otherwise delivered by the
Borrower to the Lender pursuant to this Agreement) so long as there are
Obligations outstanding hereunder, the Borrower will, as promptly as is
reasonable under the circumstances after any officer of the Borrower has
knowledge with respect thereto, and at least semi-annually, supplement or amend
and deliver to the Lender each Schedule or representation herein with respect to
any matter hereafter arising which, if existing or occurring at the date of this
Agreement, would have been required to be set forth or described in such
Schedule or as an exception to such representation or which is necessary to
correct any information in such Schedule or representation which has been
rendered inaccurate thereby.
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ARTICLE VII
NEGATIVE COVENANTS
The Borrower covenants and agrees that until the Obligations
are paid in full:
Section 7.1 Mergers, etc. As long as the Borrower is in compliance
with Section 6.3 hereof, the Borrower may merge or consolidate with or into,
acquire all or substantially all of the assets or capital stock of, or otherwise
combine with, any other entity; provided, however; that following such action,
the Borrower or its successor is also in compliance with Section 6.3 hereof and
provided, further, that the Borrower shall give notice to the Lender of its
intentions to act as permitted in this Section at least ten (10) business days
prior to the closing date of any such transaction.
Section 7.2 Transactions with Affiliates. The Borrower shall not enter
into or be a party to any transaction with any Affiliate of the Borrower except
as otherwise provided herein or in the ordinary course of and pursuant to the
reasonable requirements of the Borrower's business and upon fair and reasonable
terms that are no less favorable to the Borrower than what the Borrower would
obtain in a comparable arm's-length transaction with a person or entity that is
not an Affiliate.
Section 7.3 Guaranteed Indebtedness. The Borrower shall not incur any
Guaranteed Indebtedness except (i) by endorsement of instruments of items of
payment for deposit to the general account of the Borrower, and (ii) for
Guaranteed Indebtedness incurred for the benefit of the Borrower if the primary
obligation is permitted by this Agreement.
Section 7.4 Loans and Investments. The Borrower will not at any time
make or suffer to remain outstanding any loan or advances to any person or
entity, or become or remain liable to such person or entity, except:
(a) loans and investments existing on the date hereof and listed in
Schedule 7.4 (including any extensions or renewals thereof);
(b) trade credit extended, and loans and advances extended to
suppliers, under usual and customary terms in the ordinary course of business;
(c) demand deposits, time deposits or certificates of deposit in United
States commercial banks and maturing not in excess of one year from the date of
acquisition; and
(d) obligations backed by the full faith and credit of the United
States of America maturing not in excess of one year from the date of
acquisition, commercial paper maturing, not in excess of one year from the date
of acquisition and rated P-1 by Moody's Investor
20
Services, Inc. or A-1 by Standard and Poor's Corporation on the date of
acquisition, and preferred stock or indebtedness which is (i) traded in a
national securities exchange and (ii) rated A or better by Xxxxx'x Investors
Service, Inc. or Standard Poor's Corporation on the date of acquisition.
Section 7.5 Saleleaseback Transaction. Except for (i) sales or
transfers by the Borrower in the ordinary course of business, and (ii) sales or
transfers, the net proceeds of which are (A) applied to the repayment of the
Notes and (B) reinvested in a comparable line of business to be owned and
operated by the Borrower, the Borrower shall not abandon, sell, lease or
otherwise dispose of any part of its respective assets or directly or indirectly
enter into an agreement or arrangement whereby the Borrower shall sell or
transfer any part of its assets and thereafter rent or lease such property.
ARTICLE VIII
EVENTS OF DEFAULT; RIGHTS AND REMEDIES
Section 8.1 Events of Default. The occurrence of any one or more of the
following events shall constitute an "Event of Default" hereunder:
(a) The Borrower shall fail to make any payment of principal of, or
interest on, or any other amount owing in respect of any of the Obligations when
due and payable or declared due and payable, and such failure shall have
remained unremedied for a period of ten (10) days after the Borrower has
received notice of such failure from the Lender.
(b) The Borrower shall fail or neglect (i) to deliver the Term Note as
required by Paragraph 2.1(e), or (ii) to perform, keep or observe any of the
provisions of Section 7.3 (the "Financial Covenants") or Article VIII of this
Agreement.
(c) The Borrower shall fail or neglect to perform, keep or observe any
other provision of this Agreement or of any of the other Loan Documents and the
same shall remain unremedied for a period ending on the first to occur of 20
days after the Borrower shall receive written notice of any such failure from
the Lender or 30 days after the Borrower shall become aware thereof; provided,
however, that if such failure cannot be remedied during such 20 or 30 day period
despite all reasonable efforts of the Borrower, then such 20 or 30 day period,
as the case may be, shall be extended by an additional 30 days or such longer
period of time (but not more than 60 days without the consent of the Lender,
which shall not be unreasonably withheld) as is necessary to cure such failure
as long as the Borrower is proceeding diligently to cure such failure and the
delay could not reasonably be expected to have a Material Adverse Effect.
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(d) A default shall occur under any other agreement, document or
instrument to which the Borrower is a party or by which the Borrower or the
Borrower's property is bound and such default is not cured within any applicable
grace period or waived in writing, or being contested pursuant to the provisions
of Section 6.2 and such default either (i) involves the failure to make any
payment when due of an amount in excess of $100,000 (whether of principal,
interest or otherwise and whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise) in respect of any Indebtedness, or (ii)
causes (or permits any holder of such Indebtedness or a trustee to cause) such
Indebtedness or a portion thereof in an aggregate amount exceeding $100,000 to
become due prior to its stated maturity or prior to its regularly scheduled
dates of payment.
(e) Any representation or warranty herein or in any Loan Document or in
any written statement pursuant thereto or hereto shall be untrue or incorrect in
any material respect as to the Borrower as of the date when made or deemed made.
(f) Any of the assets of the Borrower shall be attached, seized, levied
upon or subjected to a writ or distress warrant or come within the possession of
any receiver, trustee, custodian or assignee for the benefit of creditors of the
Borrower and shall remain unstayed or undismissed for 45 consecutive days; or
any person or entity shall apply for the appointment of a receiver, trustee or
custodian for any of the assets of the Borrower and such application shall
remain unstayed or undismissed for 45 consecutive days.
(g) A case or proceeding shall have been commenced against the Borrower
in a court having competent jurisdiction seeking relief (i) under title 11 of
the United States Code, as now constituted or hereafter amended, or any other
applicable Federal, state or foreign bankruptcy or other similar law, (ii)
appointing a custodian, receiver, liquidator, assignee, trustee or sequestrator
(or similar official) of the Borrower or of any substantial part of their
respective properties, or (iii) ordering the winding-up of liquidation of the
affairs of the Borrower, and such case or proceeding shall remain undismissed or
unstayed for 45 consecutive days or such court shall enter an order granting the
relief sought in such proceeding.
(h) The Borrower shall (i) file a petition seeking relief under title
11 of the United States Code, as now constituted or hereafter amended, or any
other applicable Federal, state or foreign bankruptcy or other similar law, (ii)
consent to the institution of proceedings thereunder or to the filing of any
such petition or to the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee or sequestrator (or similar official) of
the Borrower or of any substantial part of their respective properties, (iii)
fail generally to pay its debts as such debts become due, or (iv) take any
corporate action in furtherance of any such action.
22
(i) Final judgment or judgments for the payment of money in excess of
$250,000 in the aggregate shall be rendered against the Borrower and the same
shall not (i) be fully covered by insurance in accordance with Section 6.6
hereof, or (ii) within thirty days after the entry thereof, have been discharged
or execution thereof stayed pending appeal or shall not have been discharged
within five days after the expiration of any such stay.
Section 8.2 Remedies. If any Event of Default shall have occurred and
be continuing, the Lender may without notice (i) terminate the Revolving Credit
Loan Commitment with respect to further Revolving Credit Advances, whereupon no
Revolving Credit Advances may be made hereunder, and/or (ii) declare all
Obligations to be forthwith due and payable, whereupon all Obligations shall
become and be due and payable, without presentment, demand, protest of further
notice of any kind; provided, however, that upon the occurrence of an Event of
Default specified in Section 8.1(h) or (i) hereof, the Obligations shall become
due and payable without declaration, notice or demand by the Lender.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Complete Agreement; Modification of Agreement; Sale of
Interest. The Loan Documents constitute the complete agreement between the
parties with respect to the subject matter hereof and may not be modified,
altered or amended except by an agreement in writing signed by the Borrower and
the Lender. The Borrower hereby consents to the Lender's sale of participations,
assignment, transfer or other disposition, at any time or times, of any of the
Loan Documents or of any portion thereof or interest therein. In the event the
Lender assigns or otherwise transfers all or any part of the Revolving Credit
Note and/or the Line of Credit Note, the Lender shall so notify the Borrower,
and the Borrower shall, upon the request of the Lender, issue a new Revolving
Credit Note or a new Line of Credit Note in exchange for the old Revolving
Credit Note or the old Line of Credit Note, as the case may be.
Section 9.2 Fees and Expenses. The Borrower shall pay all reasonable
out-of-pocket expenses of the Lender in connection with the negotiation,
preparation and execution of the Loan Documents (including the reasonable fees
and expenses of all of its counsel retained in connection with the Loan
Documents and the transactions contemplated thereby). If, at any time,
regardless of the existence of any Event of Default, the Lender shall employ
counsel for advice or other representation in connection with or shall incur
reasonable legal or other costs and expenses in connection with:
(i) any amendment, modification, termination, waiver, or consent
with respect to, any of the Loan Documents.
23
(ii) any litigation, contest, dispute, suit, proceeding or action
(whether instituted by the Lender, the Borrower, or any other person or
entity) in any way relating to any of the Loan Documents or any other
agreements to be executed or delivered in connection herewith in which
the Lender is the prevailing party; or
(iii) any enforcement of any rights of the Lender against the
Borrower or any other person or entity that may be obligated to the
Lender by virtue of any of the Loan Documents;
then, the reasonable attorneys' fees arising from such services, and all
reasonable expenses incurred by such counsel in any way or respect arising in
connection with or relating to any of the events or actions described in this
Section 9.2 shall be payable, on demand, by the Borrower to the Lender and shall
be additional Obligations secured under this Agreement and the other Loan
Documents.
Section 9.3 No Waiver by the Lender. The Lender's failure, at any time
or times, to require strict performance by the Borrower of any provisions of
this Agreement and any of the other Loan Documents shall not waiver, affect or
diminish any right to the Lender thereafter to demand strict compliance and
performance therewith. Any suspension or waiver by the Lender of an Event of
Default by the Borrower under the Loan Documents shall not suspend, waive or
affect any other Event of Default by the Borrower under this Agreement and any
of the other Loan Documents whether the same is prior or subsequent thereto and
whether of the same or of a different type. None of the undertakings,
agreements, warranties, covenants and representations of the Borrower contained
in this Agreement or any of the other Loan Documents and no Event of Default by
the Borrower under this Agreement and no defaults by the Borrower under any of
the other Loan Documents shall be deemed to have been suspended or waived by the
Lender unless such suspension or waiver is by an instrument in writing signed by
an officer of the Lender and directed to the Borrower specifying such suspension
or waiver.
Section 9.4 Remedies. The Lender's rights and remedies under this
Agreement shall be cumulative and nonexclusive of any other rights and remedies
which the Lender may have under any other agreement, by operation of law or
otherwise.
Section 9.5 Severability. Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
24
Section 9.6 Parties. This Agreement and the other Loan Documents shall
be binding upon, and inure to the benefit of, the respective successors of the
Borrower and the Lender and the assigns, transferees and endorsees of the
Lender.
Section 9.7 Conflict of Terms. Except as otherwise provided in this
Agreement or any of the other Loan Documents by specific reference to the
applicable provisions of this Agreement, if any provision contained in this
Agreement is in conflict with, or inconsistent with, any provision in any of the
other Loan Documents, the provision contained in this Agreement shall govern and
control.
Section 9.8 Governing Law. Except as otherwise expressly provided in
any of the Loan Documents, in all respects, including all matters of
construction, validity and performance, this Agreement and the obligations
arising hereunder shall be governed by, and construed and enforced in accordance
with, the laws of the Commonwealth of Pennsylvania applicable to contracts made
and performed in such state, without regard to the principles thereof regarding
conflict of laws, and any applicable laws of the United States of America.
Section 9.9 Notices. (a) All communications required to be sent to the
Lender shall be sent to the following address by hand delivery, courier,
telecopier or by the United States Mail first class postage prepaid:
Xx. Xxxxxx X. Xxxxxxx
Senior Vice President
Mid-State Bank and Trust Company
X.X. Xxx 0
0000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxx Xxxxxxx, XX 00000-0000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Such communication shall be effective 5 days after mailing or when received,
whichever is earlier.
(b) All communications required to be sent to the Borrower shall be
sent to the following address, by hand delivery, courier, telecopier or by the
United States Mail first class postage prepaid:
Xxxxxxxx X. Xxxxxxxxxx
Chief Operating Officer
25
AquaPenn Spring Water Company, Inc.
X.X. Xxx 000
Xxx XxxxXxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Such communication shall be effective 5 days after mailing or when received,
whichever is earlier.
Section 9.10 Section Titles. The Section titles and Table of Contents
contained in this Agreement are and shall be without substantive meaning or
content of any kind whatsoever and are not a part of the agreement between the
parties hereto.
Section 9.11 Counterparts. This Agreement may be executed in any number
of separate counterparts, each of which shall, collectively and separately,
constitute one agreement.
IN WITNESS WHEREOF, this Agreement has been duly executed as of the
date first written above.
MID-STATE BANK AND TRUST COMPANY
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------
Xxxxxx X. Xxxxxxx
Senior Vice President
ATTEST: AQUAPENN SPRING WATER COMPANY, INC.
By: /s/ Xxxxxx X. Xxxxxxxxxx By: /s/ Xxxxxxxx X. Xxxxxxxxxx
------------------------- ------------------------------
Name: Xxxxxx X. Xxxxxxxxxx Name: Xxxxxxxx X. Xxxxxxxxxx
----------------------- ------------------------------
Title: Assistant Secretary Title: COO/CFO
---------------------- -----------------------------
26
Schedules
Schedule 4.3 Financial Statements
Schedule 4.6 Litigation
Schedule 4.7 Employment and Labor Agreement
Schedule 4.9 Environmental Matters
Schedule 6.6 Insurance
Schedule 7.2 Liens
Schedule 7.4 Loans and Investments
27
REVOLVING CREDIT NOTE
$10,000,000 Altoona, Pennsylvania
August 29, 1997
FOR VALUE RECEIVED, the undersigned, The AquaPenn Spring Water Company,
Inc. (the "Maker"), a Pennsylvania corporation having its principal office at
X.X. Xxx 000, Xxx XxxxXxxx Xxxxx, Xxxxxxxxx, Xxxxxxxxxxxx 00000, promises to pay
to the order of Mid-State Bank and Trust Company (the Lender") in immediately
available funds at the principal office of the Lender at Mid-State Bank and
Trust Company, 0000 Xxxxxxx Xxxxxx, Xxx 0000, Xxxxxxx, Xxxxxxxxxxxx 00000, or at
such other location as the holder hereof may designate from time to time, the
lesser of (i) the principal sum of Ten Million ($10,000,000) Dollars, or (ii)
the aggregate unpaid principal amount of all loans made by the Lender to the
Maker pursuant to Section 2.1 of the credit agreement (the "Credit Agreement")
dated of even date herewith between the Lender and the Maker on February 28,
1999, together with interest from the date hereof on the unpaid balance of the
principal hereof calculated as provided in Section 2.3 of the Credit Agreement.
If any payment of principal or interest on this Note shall become due
on a Saturday, Sunday or any other day on which the Lender is not open for
business, such payment shall be made on the next succeeding business day, and
such extension of time shall in such case be included in computing interest in
connection with such payment. The Lender hereby acknowledges that all payments
due under this Note shall, to the extent funds are available, be automatically
deducted on the payment due date (or if that date is not a date on which the
Lender is open for business, on the Lender's next business day) from an account
designated in writing by the Maker for that purpose.
This Note is one of the Notes referred to in and issued pursuant to the
Credit Agreement. This Credit Agreement contains provisions, among other things,
for the acceleration of the stated maturity of this Note upon the happening of
certain stated events recited therein and also for prepayments on account of the
principal hereof prior to maturity as provided therein.
The Maker hereby waives presentment, demand, protest or notice of any
kind in connection with this Note.
This Note shall bind the Maker and its successors and assigns, and the
benefits hereof shall inure to the benefit of the Lender and its successors and
assigns. All references herein to the "Maker" and the "Lender" shall be deemed
to apply to the Maker and the Lender, respectively, and their respective
successors and assigns.
THE FOLLOWING PARAGRAPHS SET FORTH WARRANTS OF AUTHORITY FOR AN
ATTORNEY TO CONFESS JUDGMENT AGAINST THE
MAKER. IN GRANTING THIS WARRANT OF ATTORNEY TO CONFESS JUDGMENT AGAINST THE
MAKER, THE MAKER HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY, AND, ON THE
ADVICE OF THE SEPARATE COUNSEL OF THE MAKER, UNCONDITIONALLY WAIVES ANY AND ALL
RIGHTS THE MAKER HAS OR MAY HAVE TO PRIOR NOTICE AND AN OPPORTUNITY TO HEARING
UNDER THE RESPECTIVE CONSTITUTIONS AND LAWS OF THE UNITED STATES, THE
COMMONWEALTH OF PENNSYLVANIA AND THE STATE OF FLORIDA, EXCEPT AS EXPRESSLY SET
FORTH HEREIN AND IN THE RULES OF THE PENNSYLVANIA RULES OF CIVIL PROCEDURE
PERTAINING TO CONFESSED JUDGMENTS, AS FROM TIME TO TIME IN EFFECT.
IF FOR ANY REASON AFTER ANY SUCH ACTION HAS BEEN COMMENCED THE SAME
SHALL BE DISCONTINUED OR IF ANY JUDGMENT ENTERED PURSUANT TO THE WARRANT IS
OPENED OR STRICKEN, THE LENDER SHALL HAVE THE RIGHT FOR THE SAME DEFAULT OR ANY
SUBSEQUENT DEFAULT TO BRING ONE OR MORE FURTHER AMICABLE ACTIONS AS ABOVE
PROVIDED TO COLLECT ALL SUMS DUE.
IF THE MAKER WISHES TO CHALLENGE ANY JUDGMENT CONFESSED PURSUANT TO
THIS SECTION, IT SHALL DO SO ONLY BY FILING A PETITION TO OPEN THE JUDGMENT
PURSUANT TO PENNSYLVANIA RULES OF CIVIL PROCEDURE RULE 2959, AS IN EFFECT FROM
TIME TO TIME ("RULE 2959") AND SHALL NOT OTHERWISE INTERFERE (BY FILING ANY
CIVIL ACTION XXXX IN EQUITY, OR OTHERWISE) WITH THE OPERATION OF THIS JUDGMENT
GRANTED PURSUANT TO THIS SECTION. MAKER EXPRESSLY ACKNOWLEDGES THAT THE
PROCEDURE AVAILABLE TO IT THROUGH RULE 2959 WILL PROVIDE IT WITH A FULL AND FAIR
OPPORTUNITY TO BE HEARD AS TO ANY REASON WHY JUDGMENT SHOULD NOT BE ENTERED
AGAINST IT.
UPON AN EVENT OF DEFAULT (AS THAT TERM IS DEFINED IN THE CREDIT
AGREEMENT), THE MAKER DOES HEREBY EMPOWER THE PROTHONOTARY OR ANY ATTORNEY OF
ANY COURT OF RECORD WITHIN THE COMMONWEALTH OF PENNSYLVANIA TO APPEAR FOR THE
MAKER AND, WITH OR WITHOUT ONE OR MORE COMPLAINTS FILED, CONFESS JUDGMENT OR
JUDGMENTS AGAINST THE MAKER IN ANY COURT OF RECORD WITHIN THE COMMONWEALTH OF
PENNSYLVANIA, IN FAVOR OF THE LENDER, ITS SUCCESSORS AND ASSIGNS, FOR THE UNPAID
PRINCIPAL BALANCE OF THIS NOTE AND ALL INTEREST ACCRUED HEREON, TOGETHER WITH
COSTS OF SUIT AND AN ATTORNEY'S COMMISSION OF 10% FOR COLLECTION OF SUCH SUMS,
AND THE MAKER HEREBY FOREVER WAIVES AND RELEASES ANY AND ALL ERRORS IN SAID
PROCEEDINGS AND WAIVES STAY OF EXECUTION AND STAY, CONTINUANCE OR
ADJOURNMENT OF SALE ON EXECUTION. THE AUTHORITY AND POWER TO APPEAR FOR AND
ENTER JUDGMENT AGAINST THE MAKER SHALL NOT BE EXHAUSTED BY ONE OR MORE EXERCISES
THEREOF AND MAY BE EXERCISED FROM TIME TO TIME AND AS OFTEN AS THE LENDER OR ITS
SUCCESSORS AND ASSIGNS SHALL DEEM NECESSARY OR DESIRABLE.
THE MAKER ACKNOWLEDGES THAT IT UNDERSTANDS THE MEANING AND EFFECT OF
THE CONFESSION CONTAINED IN THE FOREGOING PARAGRAPHS, SPECIFICALLY, THE MAKER
UNDERSTANDS, AMONG OTHER THINGS, THAT (1) IT IS RELINQUISHING THE RIGHT TO HAVE
THE BURDEN OF PROOF OF DEFAULT REST ON THE LENDER PRIOR TO THE ENTRY OF
JUDGMENT, (2) THE ENTRY OF JUDGMENT MAY RESULT IN A LIEN ON ITS PROPERTY, (3) IT
WILL BEAR THE BURDEN AND EXPENSE OF ATTACKING THE JUDGMENT AND CHALLENGING
EXECUTION ON THE LIEN AND SALE OF THE PROPERTY COVERED THEREBY, AND (4) ENOUGH
OF ITS PROPERTY MAY BE TAKEN TO PAY THE PRINCIPAL AMOUNT, INTEREST, COSTS AND
ATTORNEY'S FEES.
WITNESS the due execution hereof on the date first above written with
intention that this Note shall constitute a sealed instrument.
ATTEST: AQUAPENN SPRING WATER COMPANY, INC.
By: /s/ Xxxxxx X. Xxxxxxxxxx By: /s/ Xxxxxxxx X. Xxxxxxxxxx
--------------------------------- ------------------------------
Name: Xxxxxx X. Xxxxxxxxxx Name: Xxxxxxxx X. Xxxxxxxxxx
------------------------------- ---------------------------
Title: Assistant Secretary Title: COO/CFO
------------------------------ --------------------------
LINE OF CREDIT NOTE
$6,000,000 Altoona, Pennsylvania
August 29, 1997
FOR VALUE RECEIVED, the undersigned, The AquaPenn Spring Water Company,
Inc. (the "Maker"), a Pennsylvania corporation having its principal office at
X.X. Xxx 000, Xxx XxxxXxxx Xxxxx, Xxxxxxxxx, Xxxxxxxxxxxx 00000, promises to pay
to the order of Mid-State Bank and Trust Company (the "Lender") on demand in
immediately available funds at the principal office of the Lender at Mid-State
Bank and Trust Company, 0000 Xxxxxxx Xxxxxx, Xxx 0000, Xxxxxxx, Xxxxxxxxxxxx
00000, or at such other location as the holder hereof may designate from time to
time, the lesser of (i) the principal sum of Six Million ($6,000,000) Dollars,
or (ii) the aggregate unpaid principal amount of all line of credit loans made
by the Lender to the Maker pursuant to Section 2.2 of the Credit Agreement (the
"Credit Agreement") dated of even date herewith between the Lender and the
Maker, together with interest calculated as provided in Section 2.3 of the
Credit Agreement from the date hereof on the unpaid balance of the principal
hereof.
If any payment of principal or interest on this Note shall become due
on a Saturday, Sunday or any other day on which the Lender is not open for
business, such payment shall be made on the next succeeding business day, and
such extension of time shall in such case be included in computing interest in
connection with such payment. The Lender hereby acknowledges that all payments
due under this Note shall, to the extent funds are available, be automatically
deducted on the payment due date (or if that date is not a date on which the
Lender is open for business, on the Lender's next business day) from an account
designated in writing by the Maker for that purpose.
This Note is the Note referred to in and issued pursuant to the Credit
Agreement. This Note by its very nature is due and payable commencing on the
date of its execution and delivery and without regard as to whether the Lender
has made any request for payment or presentment.
This Note shall bind the Maker and its successors and assigns, and the
benefits hereof shall inure to the benefit of the Lender and its successors and
assigns. All references herein to the "Maker" and the "Lender" shall be deemed
to apply to the Maker and the Lender, respectively, and their respective
successors and assigns.
THE FOLLOWING PARAGRAPHS SET FORTH WARRANTS OF AUTHORITY FOR AN
ATTORNEY TO CONFESS JUDGMENT AGAINST THE MAKER. IN GRANTING THIS WARRANT OF
ATTORNEY TO CONFESS JUDGMENT AGAINST THE MAKER, THE MAKER HEREBY KNOWINGLY,
INTENTIONALLY AND VOLUNTARILY, AND, ON THE ADVICE OF THE
SEPARATE COUNSEL OF THE MAKER, UNCONDITIONALLY WAIVES ANY AND ALL RIGHTS THE
MAKER HAS OR MAY HAVE TO PRIOR NOTICE AND AN OPPORTUNITY TO HEARING UNDER THE
RESPECTIVE CONSTITUTIONS AND LAWS OF THE UNITED STATES, THE COMMONWEALTH OF
PENNSYLVANIA AND THE STATE OF FLORIDA, EXCEPT AS EXPRESSLY SET FORTH HEREIN AND
IN THE RULES OF THE PENNSYLVANIA RULES OF CIVIL PROCEDURE PERTAINING TO
CONFESSED JUDGMENTS, AS FROM TIME TO TIME IN EFFECT.
IF FOR ANY REASON AFTER ANY SUCH ACTIONS HAS BEEN COMMENCED THE SAME
SHALL BE DISCONTINUED OR IF ANY JUDGMENT ENTERED PURSUANT TO THE WARRANT IS
OPENED OR STRICKEN, THE LENDER SHALL HAVE THE RIGHT FOR THE SAME DEFAULT OR ANY
SUBSEQUENT DEFAULT TO BRING ONE OR MORE FURTHER AMICABLE ACTIONS AS ABOVE
PROVIDED TO COLLECT ALL SUMS DUE.
IF THE MAKER WISHES TO CHALLENGE ANY JUDGMENT CONFESSED PURSUANT TO
THIS SECTION, IT SHALL DO SO ONLY BY FILING A PETITION TO OPEN THE JUDGMENT
PURSUANT TO PENNSYLVANIA RULES OF CIVIL PROCEDURE RULE 2959, AS IN EFFECT FROM
TIME TO TIME ("RULE 2959") AND SHALL NOT OTHERWISE INTERFERE (BY FILING ANY
CIVIL ACTION XXXX IN EQUITY, OR OTHERWISE) WITH THE OPERATION OF THIS JUDGMENT
GRANTED PURSUANT TO THIS SECTION. MAKER EXPRESSLY ACKNOWLEDGES THAT THE
PROCEDURE AVAILABLE TO IT THROUGH RULE 2959 WILL PROVIDE IT WITH A FULL AND FAIR
OPPORTUNITY TO BE HEARD AS TO ANY REASON WHY JUDGMENT SHOULD NOT BE ENTERED
AGAINST IT.
UPON AN EVENT OF DEFAULT (AS THAT TERM IS DEFINED IN THE CREDIT
AGREEMENT), THE MAKER DOES HEREBY EMPOWER THE PROTHONOTARY OR ANY ATTORNEY OF
ANY COURT OF RECORD WITHIN THE COMMONWEALTH OF PENNSYLVANIA TO APPEAR FOR THE
MAKER AND, WITH OR WITHOUT ONE OR MORE COMPLAINTS FILED, CONFESS JUDGMENT OR
JUDGMENTS AGAINST THE MAKER IN ANY COURT OF RECORD WITHIN THE COMMONWEALTH OF
PENNSYLVANIA, IN FAVOR OF THE LENDER, ITS SUCCESSORS AND ASSIGNS, FOR THE UNPAID
PRINCIPAL BALANCE OF THIS NOTE AND ALL INTEREST ACCRUED HEREON, TOGETHER WITH
COSTS OF SUIT AND AN ATTORNEY'S COMMISSION OF 10% FOR COLLECTION OF SUCH SUMS,
AND THE MAKER HEREBY FOREVER WAIVES AND RELEASES ANY AND ALL ERRORS IN SAID
PROCEEDINGS AND WAIVES STAY OF EXECUTION AND STAY, CONTINUANCE OR ADJOURNMENT OF
SALE ON EXECUTION. THE AUTHORITY AND POWER TO APPEAR FOR AND ENTER JUDGMENT
AGAINST THE MAKER SHALL NOT BE EXHAUSTED BY ONE OR MORE EXERCISES THEREOF AND
MAY BE
EXERCISED FROM TIME TO TIME AND AS OFTEN AS THE LENDER OR ITS SUCCESSORS AND
ASSIGNS SHALL DEEM NECESSARY OR DESIRABLE.
THE MAKER ACKNOWLEDGES THAT IT UNDERSTANDS THE MEANING AND EFFECT OF
THE CONFESSION CONTAINED IN THE FOREGOING PARAGRAPHS, SPECIFICALLY, THE MAKER
UNDERSTANDS, AMONG OTHER THINGS, THAT (1) IT IS RELINQUISHING THE RIGHT TO HAVE
THE BURDEN OF PROOF OF DEFAULT REST ON THE LENDER PRIOR TO THE ENTRY OF
JUDGMENT, (2) THE ENTRY OF JUDGMENT MAY RESULT IN A LIEN ON ITS PROPERTY, (3) IT
WILL BEAR THE BURDEN AND EXPENSE OF ATTACKING THE JUDGMENT AND CHALLENGING
EXECUTION ON THE LIEN AND SALE OF THE PROPERTY COVERED THEREBY, AND (4) ENOUGH
OF ITS PROPERTY MAY BE TAKEN TO PAY THE PRINCIPAL AMOUNT, INTEREST, COSTS AND
ATTORNEY'S FEES.
WITNESS the due execution hereof on the date first above written with
intention that this Note shall constitute a sealed instrument.
ATTEST: AQUAPENN SPRING WATER COMPANY, INC.
By: /s/ Xxxxxx X Xxxxxxxxxx By: /s/ Xxxxxxxx X. Xxxxxxxxxx
----------------------------- ------------------------------
Name: Xxxxxx X. Xxxxxxxxxx Name: Xxxxxxxx X. Xxxxxxxxxx
--------------------------- ----------------------------
Title: Assistant Secretary Title: COO/CFO
-------------------------- ---------------------------
