EXHIBIT 10.3
SUBORDINATION AND PLEDGE AGREEMENT
This SUBORDINATION AND PLEDGE AGREEMENT is made as of April 5, 2005, by and
among Xxxx X. Xxxxxxxx, not individually, but as Trustee of the Xxxxx Xxxxx Life
Insurance Trust u/t/a dated July 7, 1992, the Xxxx Xxxxx Insurance Trust u/t/a
dated July 7, 1992 and the Xxxx Xxxxx and Xxxxx Xxxxx Irrevocable Trust u/t/a
dated December 16, 1991, as agent (together with his successors and assigns in
such capacity, the "SUBORDINATE LENDER'S AGENT") for and on behalf of
_________________ (together with his successors and assigns, the "SUBORDINATE
LENDER") pursuant to certain of the Subordinated Loan Documents (defined below),
the Subordinate Lender, BANK OF AMERICA, N.A., a national banking association,
as administrative agent (in such capacity, together with its successors and
assigns in such capacity, the "AGENT" ) on behalf of the lenders from time to
time party to the Credit Agreement (defined below) (the "LENDERS"), and the
Lenders.
RECITALS
WHEREAS, Vermont Pure Holdings, Ltd. a Delaware corporation (together with its
successors and assigns, "HOLDINGS") is indebted to the Subordinate Lender under
and pursuant to the terms of the Subordinated Loan Documents and may from time
to time hereafter become indebted to the Subordinate Lender in further amounts
as permitted by the terms of the Senior Loan Documents; and
WHEREAS, Holdings and Crystal Rock LLC, a Delaware limited liability company
(together with its successors and assigns, "CRYSTAL ROCK" and together with
Holdings, collectively, the "BORROWERS"), have requested, and may from time to
time hereafter request that the Lenders under the Credit Agreement make or agree
to make loans, extensions of credit or other financial accommodations to the
Borrowers (the "LOANS"); and
WHEREAS, the Lenders, as a condition to the making of the Loans, have required
that each of the Subordinate Creditors execute and deliver this Subordination
and Pledge Agreement (together with all schedules and any exhibits attached
hereto and amendments or modifications hereto in effect from time to time, this
"AGREEMENT").
NOW, THEREFORE, in order to induce the Lenders to make the Loans and in
consideration thereof, each of the Subordinate Creditors agrees as follows:
A. DEFINITIONS. As used herein, the following terms shall have the following
meanings:
1. AFFILIATE. The term "AFFILIATE" means, with respect to any Senior
Creditor, any person or entity controlling, controlled by or under
common control with, such Senior Creditor.
2. COLLATERAL. The term "COLLATERAL" means, collectively, the Senior
Collateral and the Subordinate Lenders' Collateral.
3. CREDIT AGREEMENT. The term "CREDIT AGREEMENT" means that certain
Credit Agreement among Holdings, Crystal Rock, the Lenders and Agent
dated the date hereof, as amended, supplemented, renewed, replaced,
extended or otherwise modified from time to time.
4. EVENT OF DEFAULT. The term "EVENT OF DEFAULT" shall mean an "Event
of Default" as defined under the Credit Agreement.
5. FINANCIAL COVENANT DEFAULT. The term "FINANCIAL COVENANT DEFAULT"
shall mean an Event of Default which results solely from the
violation of any now existing or hereafter arising financial
covenant contained in the Credit Agreement, including, by way of
illustration, those specific financial covenants set forth in
Section 12 of the Credit Agreement and any supplement, addition,
modification or amendment to those specific financial covenants.
6. INSOLVENCY PROCEEDING. The term "INSOLVENCY PROCEEDING" shall mean a
proceeding of the type described in paragraph 5 hereof.
7. LIABILITIES. The term "LIABILITIES" means any and all obligations
and indebtedness of every kind and description, now or hereafter
existing, whether such debts or obligations are primary or
secondary, direct or indirect, absolute or contingent, sole, joint
or several, secured or unsecured, due or to become due, contractual
or tortious, arising by operation of law, by overdraft, or
otherwise, including, without limitation, principal, interest, fees,
late fees, expenses and/or attorneys' fees and costs that have been
or may hereafter be contracted or incurred.
8. OBLIGOR. The term "OBLIGOR" means, collectively, Holdings and each
and every other maker (including, without limitation, Crystal Rock),
endorser, guarantor, or surety of or for the Senior Liabilities.
9. PAYMENT IN FULL. The terms "PRIOR PAYMENT IN FULL," "PAYMENT IN
FULL," "PAID IN FULL" and any other similar terms or phrases when
used herein with respect to the Senior Liabilities shall mean the
payment in full, in immediately available funds, of all of such
obligations (including, without limitation, the cancellation or cash
collateralization of all letters of credit or hedging arrangements)
and the termination or expiration of any commitments to extend any
financial accommodations to the Obligor under the documents
evidencing Senior Liabilities.
10. PROHIBITED ACTION. The term "PROHIBITED ACTION" means to (i)
exercise or enforce any rights or remedies or assert any claims
against the Senior Collateral or Subordinate Lenders' Collateral;
(ii) make any claim or commence or initiate any action, lawsuit,
case or proceeding against the Obligor or join together or with any
creditor other than, with its consent, the Agent in any action,
lawsuit, case or proceeding against the Obligor (including, but not
being limited to, proceedings under the United States Federal
Bankruptcy Code); (iii) contact any account of the Obligor or attach
or take possession of any Senior Collateral or Subordinate Lenders'
Collateral or exercise any right of foreclosure or any right or
remedy with respect to the Obligor or the Senior Collateral or
Subordinate Lenders' Collateral; or (iv) take any other action
prejudicial to or inconsistent with the Lenders' and Agent's rights
and first priority secured position with respect to the Obligor or
the Senior Collateral, including, without limitation, any action
that will impede, interfere with, restrict, or restrain the exercise
by the Agent or any of the Lenders of their rights and remedies
under the Senior Loan Documents or contest or support any other
person or entity in contesting in any manner the perfection,
priority, validity or enforceability of any security interest lien
held by the Agent in any of the Senior Collateral or any claims made
by the Senior Creditors pursuant to the terms of the Senior Loan
Documents.
11. SENIOR COLLATERAL. The term "SENIOR COLLATERAL" means the personal
property of the Obligor described in SCHEDULE A and any other real
or personal property of the Obligor in which the Agent, any Lender
or an Affiliate may hereafter be granted a security interest,
mortgage interest or other similar interest.
12. SENIOR CREDITORS. The term "SENIOR CREDITORS" shall mean,
collectively, the Agent and the Lenders.
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13. SENIOR LIABILITIES. The term "SENIOR LIABILITIES" means all
Liabilities of the Obligor to any of the Lenders, the Agent and/or
to any of the Affiliates including, without limitation, any and all
interest accruing on Senior Liabilities after the commencement of
any proceedings referred to in paragraph B.5. hereof,
notwithstanding any provision or rule of law which might restrict
the rights of the Lenders or Agent, as against the Obligor and/or
anyone else, to collect such interest. For purposes of this
Agreement, Senior Liabilities shall include all Liabilities of the
Obligor to the Lenders and the Agent, notwithstanding any right or
power of the Obligor and/or anyone else to assert any claim or
defense as to the invalidity or unenforceability of any such Senior
Liabilities.
14. SENIOR LOAN DOCUMENTS. The term "SENIOR LOAN DOCUMENTS" means the
Credit Agreement and all other credit accommodations, notes, loan
agreements, and any other agreements and documents, now or hereafter
existing, creating, evidencing, guarantying, securing or relating to
any or all of the Senior Liabilities, together with all amendments,
modifications, renewals, or extensions thereof.
15. SUBORDINATE CREDITORS. The term "SUBORDINATE CREDITORS" means,
collectively, the Subordinate Lender and the Subordinate Lender's
Agent.
16. SUBORDINATED LENDERS' COLLATERAL. The term "SUBORDINATED LENDERS'
COLLATERAL" means the personal property of Holdings more fully
described in SCHEDULE B attached hereto.
17. SUBORDINATED LENDING GROUP. The term "SUBORDINATED LENDING GROUP"
means Xxxxx X. Xxxxx, Xxxx X. Xxxxx, Xxxx X. Xxxxx and Xxxxx X.
Xxxxx, each as holder of a Second Amended and Restated Subordinated
Promissory Note of Holdings dated the date hereof, as such
Subordinated Promissory Notes may be amended, restated or replaced
from time to time in accordance with the terms of this Agreement,
and any successor holders of such Subordinated Promissory Notes
permitted by the terms of this Agreement, and Xxxx X. Xxxxxxxx, not
individually, but as Trustee of the Xxxxx Xxxxx Life Insurance Trust
u/t/a dated July 7, 1992, the Xxxx Xxxxx Insurance Trust u/t/a dated
July 7, 1992 and the Xxxx Xxxxx and Xxxxx Xxxxx Irrevocable Trust
u/t/a dated December 16, 1991, as agent for such holders.
18. SUBORDINATED LIABILITIES. The term "SUBORDINATED LIABILITIES" means
all Liabilities of the Obligor to the Subordinate Creditors,
including, without limitation, all payments of principal and
interest pursuant to that Second Amended and Restated Subordinated
Promissory Note dated the date hereof from Holdings payable to the
order of the Subordinate Lender in the original principal amount of
_______________ (the "SUBORDINATED NOTE") and that Amended and
Restated Security Agreement, dated as of the date hereof, by and
among Holdings, the Subordinate Lender's Agent and each of the
members of the Subordinated Lending Group (the "SUBORDINATED
SECURITY AGREEMENT"), but specifically excluding therefrom
compensation from Holdings to the Subordinate Lender presently
contemplated pursuant to the existing employment agreement between
Holdings and the Subordinate Lender for so long as such agreement
remains in effect, as the compensation clauses thereof may be
amended from time to time with the consent of the Agent, and the
normal reimbursement of expenses in the ordinary course of business
and indemnification of claims arising solely from the Subordinate
Lender's actions as an officer or director (or person holding a
similar position) of Holdings or Crystal Rock.
19. SUBORDINATED LOAN DOCUMENTS. The term "SUBORDINATED LOAN DOCUMENTS"
means the Subordinated Note, the Subordinated Security Agreement and
all other credit accommodations, notes, loan agreements and any
other agreements and documents, now or hereafter existing, creating,
evidencing, guarantying, securing or relating to any or all of the
Subordinated Liabilities, together with all amendments,
modifications, renewals or extensions thereof.
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B. SUBORDINATION AND PLEDGE.
1. SUBORDINATION TO SENIOR LIABILITIES.
(a) Except as hereinafter expressly set forth in this Agreement or
as the Agent and Lenders may hereafter otherwise expressly
consent in writing, the payment of all Subordinated
Liabilities shall be postponed and subordinated to the
indefeasible payment in full of all Senior Liabilities, and no
payments or other distributions whatsoever, including, without
limitation, payments of interest in respect of any
Subordinated Liabilities shall be made, nor shall any property
or assets of the Obligor be applied to the purchase or other
acquisition or retirement of any Subordinated Liabilities, nor
given as collateral security to secure repayment of same.
(b) Notwithstanding the provisions in paragraph B.1(a) above, and
subject to the other terms of this Agreement, the Subordinate
Lender's Agent may be granted a security interest in the
Subordinate Lenders' Collateral to secure the payments of
principal and interest and other amounts due pursuant to the
Subordinated Note.
(c) Notwithstanding the provisions of paragraph B.1(a) above, so
long as no Event of Default exists and is continuing, and so
long as no event exists and is continuing which, with the
giving of notice or the passage of time or both, would
constitute an Event of Default, Holdings may make regularly
scheduled quarterly payments of interest under the
Subordinated Note, at a rate not in excess of twelve per cent
(12%) per annum, and past due regularly scheduled quarterly
payments of interest under the Subordinated Note which were
not paid when scheduled to be paid because of the terms of
this Agreement, including interest at a rate not in excess of
twelve per cent (12%) per annum on such past due amounts, but
only to the extent that the making of such payments would not
result in a Financial Covenant Default.
(d) Notwithstanding the provisions in paragraph B.1(a) above, so
long as no Event of Default exists and is continuing or would
result therefrom, and so long as no event exists and is
continuing which, with the giving of notice or the passage of
time or both, would constitute an Event of Default or would
result therefrom, and provided that the terms of Section 11.8
of the Credit Agreement have been satisfied, at any time or
times after 18 months after the Closing Date (as defined in
the Credit Agreement) Holdings may make principal payments on
the Seller Subordinated Debt (as defined in the Credit
Agreement) to members of the Subordinated Lending Group which
principal payments in the aggregate do not exceed $3,000,000.
2. PLEDGE OF SUBORDINATED LOAN DOCUMENTS. In order to secure the due
and punctual payment and performance of the Senior Liabilities, the
Subordinate Creditors hereby pledge, transfer, assign, and grant to
the Agent a continuing security interest in and lien upon the
Subordinated Loan Documents, all income therefrom and proceeds
thereof. The Subordinate Creditors have endorsed and delivered to
the Agent physical possession of any of the Subordinated Loan
Documents which are instruments, including the Subordinated Note and
have executed Uniform Commercial Code financing statements and such
other documents and/or instruments as may be necessary or convenient
to perfect the security interests granted herein. Agent shall hold
the Subordinated Note and any other Subordinated Loan Documents
which are instruments delivered to the Agent as security for the due
and punctual payment and performance of the Senior Liabilities and
notwithstanding the possession of the Subordinated Note or such
other Subordinated Loan Documents by the Agent, the Subordinate
Lender shall be entitled to receive payments thereunder to the
extent expressly permitted under paragraph B.1 above. Upon payment
in full of the Senior Liabilities, the Agent will deliver to the
Subordinate Lender the Subordinated Note and any other Subordinated
Loan Documents in its possession.
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3. SUBORDINATION OF SECURITY INTEREST OF SUBORDINATED LIABILITIES. Any
and every lien and security interest in the Collateral in favor of,
granted to or held for the benefit of the Senior Creditors, whether
now existing or hereafter arising have and shall have priority over
and be senior to any lien or security interest that the Subordinate
Lender's Agent or the Subordinate Lender now has or may hereafter
acquire in the Collateral (in any Insolvency Proceeding or
otherwise), whether by contract, operation or rule of law, court
order or otherwise, notwithstanding any statement or provision
contained in the Subordinated Loan Documents or otherwise to the
contrary and irrespective of (i) the time, order, or manner,
validity or effectiveness of the attachment or perfection of any
security interest or lien on the Collateral, (ii) the time or order
of filing or recording of financing statements, deeds of trust,
mortgages or other notices of security interests, liens or
assignments granted pursuant thereto, (iii) anything contained in
any filing or agreement to which any party hereto or its respective
successors and assigns may now or hereafter be a party, and (iv)
ordinary rules for determining priorities under the Uniform
Commercial Code of any jurisdiction or under any other law governing
the relative priorities of secured creditors. For the purpose of the
foregoing priorities, any claim of a right of setoff by either
Subordinate Creditor shall be treated as a security interest or lien
subordinated as described above and no claim to a right of setoff by
such Subordinate Creditor shall be asserted to defeat or diminish
the rights or priorities provided for herein in favor of the Senior
Creditors. The Subordinate Creditors agree to execute and deliver to
the Agent all instruments, including, without limitation, Uniform
Commercial Code amendments, subordinations of lien, and
subordinations of mortgage which, in the reasonable opinion of the
Agent, are necessary or convenient to effectuate the purposes of
this paragraph and this Agreement.
4. NO ADDITIONAL SUBORDINATED LIABILITIES; FURTHER ASSURANCES OF PLEDGE
OF SUBORDINATED LIABILITIES. The Subordinate Creditors will (i) not
create or permit to exist any principal amount of Subordinated
Liabilities in excess of the amount outstanding on the date hereof;
(ii) cause any Subordinated Liabilities which are not already
evidenced by a promissory note or other instrument of the Obligor to
be so evidenced; (iii) as collateral security for the Senior
Liabilities, endorse, deliver and pledge to the Agent any and all
promissory notes and/or other instruments evidencing Subordinated
Liabilities, and otherwise assign and/or pledge to the Agent any or
all Subordinated Liabilities and the Subordinated Loan Documents,
all in a manner satisfactory to the Agent in its sole discretion,
and (iv) promptly give the Agent written notice of any default by
Holdings under the Subordinated Note or any agreement securing such
Obligor's obligations under any of the other Subordinated Loan
Documents.
FURTHER ASSURANCES OF AGENT. Agent will endeavor to deliver to the
Subordinate Lender prompt notice of any Event of Default or
Financial Covenant Default under the Credit Agreement or any of the
other Senior Loan Documents of which the Agent becomes aware but the
failure of the Agent to promptly deliver any such notice will not
affect any of the rights or obligations of the parties under this
Agreement.
5. RIGHTS OF AGENT TO COLLECT SUBORDINATED LIABILITIES; RIGHTS IN
BANKRUPTCY.
(a) In the event of any dissolution, winding up, liquidation,
reorganization or other similar proceedings relating to the
Obligor, or to any of their property (whether voluntary or
involuntary, partial or complete, and whether in bankruptcy,
insolvency or receivership, or upon an assignment for the
benefit of creditors, or any other marshalling of the assets
and liabilities of the Obligor, or any sale of all or
substantially all of the assets of the Obligor, or otherwise),
the Senior Liabilities shall first be paid in full before the
Subordinate Creditors shall be entitled to receive and/or to
retain any payment or distribution in respect of the
Subordinated Liabilities; provided that the Subordinate Lender
shall be entitled to receive and retain any securities issued
in connection with reorganization proceedings which are junior
in
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right of repayment to the Senior Liabilities to the extent set
forth herein, are treated as Subordinated Liabilities
hereunder and are subject to all the provisions of this
Agreement, and, in order to implement the foregoing (i) all
payments and distributions of any kind or character in respect
of the Subordinated Liabilities to which any of the
Subordinate Creditors would be entitled but for the provisions
of this Agreement (other than such junior securities) will be
made directly to the Agent; (ii) the Subordinate Creditors
shall promptly file a claim or claims, in the form required in
such proceedings, for the full outstanding amount of the
Subordinated Liabilities, and shall cause said claim or claims
to be approved and all payments and other distributions in
respect thereof (other than such junior securities) to be made
directly to the Agent; (iii) the Subordinate Creditors hereby
irrevocably agree that the Agent may, in its sole discretion,
and the Subordinate Creditors may not, without the prior
written consent of the Agent, in the name of the Subordinate
Creditors or otherwise, demand, xxx for, collect and receive
any and all such payments or distributions, and file, prove,
and vote or consent in any such proceedings with respect to,
any and all claims of the Subordinate Creditors relating to
the Subordinated Liabilities; and (iv) the Subordinate
Creditors hereby ratify all of the foregoing acts or omissions
on the Agent's part or behalf and waive any claim,
counterclaim or defense of the Subordinate Creditors which may
be alleged to arise from such acts or omissions.
(b) Without impairing, abrogating or in any way affecting any
Senior Creditor's rights hereunder, including the relative
priorities established in paragraph B hereof, any Senior
Creditor may during any Insolvency Proceeding give or withhold
its consent to the Obligor's or any bankruptcy trustee's use
or consumption of any Senior Collateral (including cash
proceeds of Senior Collateral) or may provide financing or
otherwise extend credit to the Obligor or any of its
subsidiaries or any bankruptcy trustee secured by a senior
lien upon all of the Senior Collateral, whether created,
acquired or arising prior to or after the commencement of any
Insolvency Proceeding, and the Subordinate Creditors shall be
deemed to have consented to the Obligor's or any bankruptcy
trustee's use of Senior Collateral, if any, to the extent
consented to by the Senior Creditors and to all of the terms
of any financing proposed to be provided by any Senior
Creditor to the Obligor, any of its subsidiaries or any
bankruptcy trustee during the pendency of any such Insolvency
Proceeding.
(c) Without limiting the generality of the agreements set forth in
paragraph 5(a) above, if the Agent consents to the sale of any
or all of the Senior Collateral during any Insolvency
Proceeding (whether such sale is to be made pursuant to 11
U.S.C. Section 363, under a plan of reorganization or
otherwise), then the Subordinate Creditors shall be deemed to
have consented to any such sale and all of the terms
applicable thereto and shall, if requested to do so by the
Agent in connection with any such sale, promptly execute and
deliver to the Agent a release of the Subordinate Creditors'
liens and security interests with respect to the Senior
Collateral to be sold.
(d) If any Senior Creditor returns, refunds or repays to the
Obligor or any trustee or committee appointed in the
Insolvency Proceeding any payment with respect to the Senior
Liabilities or proceeds of any Senior Collateral in connection
with any action, suit or proceeding alleging that such Senior
Creditor's receipt of such payment or proceeds was a transfer
voidable under state or federal law, then such Senior Creditor
shall not be deemed to have ever received such payment or
proceeds for purposes of this Agreement in determining whether
the Senior Liabilities have been paid in full.
6. PROTECTION OF AGENT'S RIGHTS IN SUBORDINATED LIABILITIES. In the
event that either Subordinate Creditor receives any payment or other
distribution of any kind or character from the Obligor or any
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other source whatsoever in respect of any of the Subordinated
Liabilities, other than as expressly permitted by the terms of this
Agreement, such payment or other distribution shall be received in
trust for the Lenders and the Agent and promptly turned over by such
Subordinate Creditor to the Agent. The Subordinate Creditors will
xxxx their books and records, and cause the Obligor to xxxx its
books and records, so as to clearly indicate that the Subordinated
Liabilities are subordinated in accordance with the terms of this
Agreement, and will cause to be clearly inserted in any promissory
note or other instrument which at any time evidences any of the
Subordinated Liabilities a statement to the effect that the payment
thereof is subordinated in accordance with the terms of this
Agreement. The Subordinate Creditors will execute such further
documents and instruments and take such further action as the Agent
may from time to time reasonably request to carry out the intent of
this Agreement. Each of the Subordinate Creditors hereby irrevocably
appoints the Agent its attorney in fact, said appointment being
coupled with an interest, to execute such further documents and
instruments and take such further action on behalf of the
Subordinate Creditors as the Agent may from time to time deem
reasonable to carry out the intent of this Agreement, including,
without limitation, the actions set forth in paragraph B.4. and
paragraph B.12 hereof.
7. TREATMENT OF PAYMENT OF SUBORDINATED LIABILITIES. All payments and
distributions received by the Agent or any Lender in respect of the
Subordinated Liabilities, to the extent received in or converted
into cash, may be applied by the Agent and Lenders first to the
payment of any and all fees, costs and expenses including, without
limitation, attorneys' fees and disbursements paid or incurred by
any Senior Creditor in enforcing this Agreement or in endeavoring to
collect or realize upon any of the Subordinated Liabilities, and any
balance thereof shall, solely as between the Subordinate Creditors
and the Senior Creditors, be applied by the Agent, in such order of
application as the Agent may from time to time select, toward the
payment of any of the Senior Liabilities remaining unpaid. As
between the Obligor and any of its creditors, no such payments or
distributions of any kind or character shall be deemed to be
payments or distributions in respect of the Senior Liabilities; and,
notwithstanding any such payments or distributions received by the
Agent or any Lender in respect of the Subordinated Liabilities and
so applied by the Agent and Lenders toward the payment of the Senior
Liabilities, the Subordinate Creditors shall be subrogated to the
then existing rights of the Agent and Lenders, if any, in respect of
the Senior Liabilities, only at such time as the Lenders and Agent
shall have received indefeasible payment in full of the Senior
Liabilities.
8. WAIVERS. Each of the Subordinate Creditors hereby waives (i) any and
all notice of the receipt and acceptance by the Agent or any Lender
of this Agreement; (ii) except as set forth in paragraph B.4, notice
of the existence, incurrence, or non-payment of all or any of the
Senior Liabilities; (iii) all diligence in collection or protection
of or realization upon any of the Senior Liabilities or any security
therefor; and (iv) any obligation with respect to the marshalling of
assets by the Agent or any Lender.
9. PROHIBITION ON CHANGES IN SUBORDINATED LIABILITIES.
(a) Except as herein set forth in paragraph B.9(b), neither
Subordinate Creditor will, without the prior written consent
of the Agent, (i) cancel, waive, forgive, amend, extend,
renew, replace, refinance, modify, transfer or assign, or
attempt to enforce or collect, or subordinate to any
Liabilities other than the Senior Liabilities, any
Subordinated Liabilities, the Subordinated Loan Documents or
any rights in respect thereof; (ii) convert any Subordinated
Liabilities into stock or other securities in the Obligor
except as permitted by this Agreement; (iii) take any
Prohibited Action; (iv) commence, or join with any other
creditor in commencing, any Insolvency Proceedings with
respect to the Obligor, or (v) take any other action
prejudicial to or inconsistent with the Agent's and Lenders'
rights and first priority secured position with respect to the
Obligor, the Senior Collateral and collateral for the Senior
Liabilities.
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(b) Notwithstanding the provisions of paragraph B.9(a), if any
default has occurred under any of the Subordinated Loan
Documents and such default has continued in existence for a
period of one hundred eighty (180) consecutive days after the
Subordinate Creditors have provided written notice of the
existence of such default to the Agent (the "STANDSTILL
PERIOD"), the Subordinate Creditors may proceed to take legal
action against Holdings for the sole purpose of obtaining a
judgment against Holdings; provided, however, at no time
either before or after the expiration of the Standstill Period
may either Subordinate Creditor take any action or Prohibited
Action to commence any Insolvency Proceeding or to enforce a
security interest in, liquidate or otherwise receive payment
from any Collateral, unless and until the Senior Liabilities
have been indefeasibly paid in full.
10. CONTINUING AGREEMENT. This Agreement shall in all respects be a
continuing agreement and shall remain in full force and effect
notwithstanding, without limitation, the death, incompetency or
dissolution of the Subordinate Creditors or that at any time or from
time to time all Senior Liabilities may have been paid in full if
any of the Senior Loan Documents have not been terminated.
11. PERMITTED CHANGES IN SENIOR LIABILITIES. The Agent or any Lender
may, from time to time, whether before or after any discontinuance
of this Agreement, at its sole discretion and without notice to the
Subordinate Creditors, take any action permitted under applicable
law with respect to the Senior Liabilities and the Senior Loan
Documents, including, without limitation, any or all of the
following actions: (i) retain or obtain a security interest in any
property to secure any of the Senior Liabilities; (ii) retain or
obtain the primary or secondary obligation of the Obligor with
respect to any of the Senior Liabilities; (iii) extend, renew
(whether or not longer than the original period), increase, alter or
exchange any of the Senior Liabilities; (iv) release or compromise
any obligation of any nature of the Obligor with respect to any of
the Senior Liabilities; and (v) release its security interest or
lien in, allow its security interest or lien to be unperfected,
surrender, release or permit any substitution or exchange for, all
or any part of any property securing any of the Senior Liabilities,
or extend or renew for one or more periods (whether or not longer
than the original period) or release, compromise, alter or exchange
any obligations of any nature of the Obligor with respect to any
such property.
12. DISPOSITION OF ASSETS.
(a) Notwithstanding anything to the contrary contained in any
Subordinated Loan Document or otherwise, prior to the payment
in full of the Senior Liabilities, only the Senior Creditors
shall have the right while an Event of Default exists and is
continuing to dispose of any of the assets of the Obligor
constituting the Senior Collateral (whether or not also
constituting the Subordinate Lenders' Collateral), and the
Senior Creditors shall have the right to do so in any manner,
on any terms and for any price deemed appropriate by the
Senior Creditors, in their sole discretion, whether in a
public or private sale, without obtaining the consent or
agreement of, or giving notice to the Subordinate Creditors
(and the Subordinate Creditors hereby waive all right to
require that their agreement or consent be obtained or that
they be given notice), and the Subordinate Creditors shall not
contest any such disposition of the Senior Collateral on the
basis that such disposition is not commercially reasonable or
otherwise. In the event that under applicable law, despite the
foregoing waiver of notice, the Senior Creditors shall be
required to give notice to the Subordinate Creditors in
connection with Senior Creditors' disposition of any of the
Senior Collateral while an Event of Default exists and is
continuing, the Subordinate Creditors agree that ten (10) days
prior notice by the Senior Creditors of the time and place of
any public sale, or of the time after which a private sale may
take place, is reasonable notification of such matters.
Without limitation of the foregoing, the Senior Creditors may
do any of the following while an Event of Default exists and
is continuing: enter into such compromises with and give such
releases and acquittances to account debtors or other obligors
with respect to the Obligor's receivables as they determine in
their sole
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discretion, solicit bids from third parties to conduct the
liquidation of all or a material portion of the Senior
Collateral, engage or retain sales brokers, marketing agents,
investment bankers, accountants, appraisers, auctioneers or
other third parties for the purposes of valuing, marketing,
promoting and selling a material portion of the Senior
Collateral, commence any action to foreclose such liens and
security interests on all or any material portion of the
Senior Collateral, notify account debtors to make payments to
the Senior Creditors, to take possession of all or any
material portion of the Senior Collateral or commence any
legal proceedings or actions against or with respect to all or
any material portion of the Senior Collateral.
(b) The Subordinate Creditors agree, whether or not a default has
occurred in the payment of any indebtedness or the performance
of any other obligations to them, that any liens on and
security interests they have in the assets constituting the
Collateral or any portion thereof that they might have or
acquire shall automatically be fully released ipso facto if
and when the Agent releases its lien in and security interest
on such Collateral or any portion thereof. Provided that the
Senior Liabilities have not been paid in full, the Subordinate
Lender's Agent agrees to execute any Uniform Commercial Code
termination statements and/or partial releases, and any other
instruments or documents deemed necessary by the Agent in its
reasonable discretion to evidence the release of the
Subordinate Lender's Agent's lien on any assets constituting
Collateral in the event of any sale, transfer or other
disposition of the Collateral, whether such disposition is in
the ordinary course of business or is incidental to a
foreclosure proceeding or Insolvency Proceeding relating
thereto, and whether or not any proceeds therefrom will pay
any of the Subordinated Liabilities.
(c) If the Subordinate Lender's Agent shall fail or refuse to
execute, or delay in the execution of, any written release of
its liens or shall fail to provide such release in a form
reasonably acceptable to the Obligor or Agent, then the Agent
shall be deemed to be the agent and attorney-in-fact for the
Subordinate Lender's Agent for the purpose of executing and
recording any such release in accordance with the terms of
paragraph B.6.
13. PROVISIONS CONCERNING INSURANCE.
Proceeds of the Collateral include insurance proceeds, and therefore the
priorities set forth in this paragraph B govern the ultimate disposition
of casualty insurance proceeds. The Agent shall have the sole and
exclusive right, as against the Subordinate Creditors, to adjust
settlement of insurance claims in the event of any covered loss, theft or
destruction of the Collateral in accordance with the terms of the Credit
Agreement. All proceeds of such insurance shall inure to the Agent, for
the benefit of the Lenders, and the Subordinate Creditors shall cooperate
in a reasonably manner in effecting the payment of insurance proceeds to
the Agent. The Agent shall have the right (as between the parties hereto)
to determine whether such proceeds will be applied to the Senior
Liabilities or used to rebuild, replace or repair the affected Collateral.
C. REPRESENTATIONS AND WARRANTIES. The Subordinate Creditors hereby represent
and warrant that (i) each has the necessary power and capacity to make and
perform this Agreement and such making and performance have been duly
authorized by all necessary actions on the part of the Subordinate
Creditors; (ii) the making and performance by the Subordinate Creditors of
this Agreement does not and will not violate any provision of law or
regulation or result in the breach of, or constitute a default or require
any consent under, any indenture or other agreement or instrument to which
it is a party or by which any of its properties may be bound; (iii) this
Agreement is the legal, valid and binding obligation of each of the
Subordinate Creditors, enforceable against such Subordinate Creditors in
accordance with its terms and (iv) other than the Subordinated Note, the
Subordinated Security Agreement and the Uniform Commercial
9
Code financing statements executed in connection therewith, there are no
other documents or instruments evidencing any indebtedness, obligations or
liabilities of the Obligor to the Subordinate Creditors.
D. REMEDIES. Upon the occurrence and during the continuance of any Event of
Default, or upon the breach of any representation, covenant or agreement
in this Agreement by the Obligor or either Subordinate Creditor, or in the
event of the termination of this Agreement (other than as a result of
payment in full of the Subordinate Lender's Subordinated Note as permitted
by the Credit Agreement or with the consent of the Senior Creditors), all
of the Senior Liabilities shall, in accordance with the terms of the
Credit Agreement, become immediately due and payable at the option of the
Agent and the Agent may immediately, without further notice, resort to all
of its rights and remedies herein, in any document (including the Credit
Agreement and any of the Senior Loan Documents) by and between the Agent
or any Lender and the Obligor, or in any in any instrument evidencing any
obligation under any such document, at law or in equity. The Agent agrees
that it shall proceed, to the extent commercially reasonable, against all
the assets of the Obligor before liquidating the Subordinated Note. If the
Subordinate Creditors breach this Agreement (including, without
limitation, by taking any Prohibited Action or otherwise violating
paragraph B.9 hereof), the Senior Creditors shall be entitled, by virtue
of this Agreement, to specific performance of this Agreement and/or
injunctive relief, including an order restraining and enjoining the
Subordinate Creditors from taking the actions constituting such breach,
all without the necessity of joining any Senior Creditor, the Subordinate
Lender or the Subordinate Lender's Agent as a party to any action, suit or
other proceeding brought to enforce the provisions of this Agreement.
E. MISCELLANEOUS.
1. REMEDIES CUMULATIVE; NO WAIVER. The rights, powers and remedies of
the Senior Creditors provided in this Agreement and any of the
Senior Loan Documents are cumulative and not exclusive of any right,
power or remedy provided by law or equity. No failure or delay on
the part of any Senior Creditor in the exercise of any right, power
or remedy shall operate as a waiver thereof, nor shall any single or
partial exercise preclude any other or further exercise thereof, or
the exercise of any other right, power or remedy.
2. NOTICES. Notices and communications under this Agreement shall be in
writing and shall be given by (i) hand-delivery, (ii) first class
mail (postage prepaid), or (iii) reliable overnight commercial
courier (charges prepaid) to the addresses listed in this Agreement.
Notice by overnight courier shall be deemed to have been given and
received on the date scheduled for delivery. Notice by mail shall be
deemed to have been given and received three (3) calendar days after
the date first deposited in the United States Mail. Notice by
hand-delivery shall be deemed to have been given and received upon
delivery. A party may change its address by giving written notice to
the other party as specified herein.
3. COSTS AND EXPENSES. Whether or not the transactions contemplated by
this Agreement or the Senior Loan Documents are fully consummated,
the Obligor shall promptly pay (or reimburse, as the Agent may
elect) all costs and expenses which the Agent has incurred or may
hereafter incur in connection with the negotiation, preparation,
reproduction, interpretation, perfection, protection of collateral,
administration and enforcement of this Agreement and the other
Senior Loan Documents, the collection of all amounts due under this
Agreement and the other Senior Loan Documents, and all amendments,
modifications, consents or waivers, if any, to the Senior Loan
Documents. The Obligor's reimbursement obligations under this
Paragraph shall survive any termination of this Agreement or any
other Loan Document and are deemed part of the Senior Liabilities.
4. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY THE INTERNAL SUBSTANTIVE LAWS OF THE STATE OF NEW
YORK WITHOUT GIVING EFFECT TO ANY PROVISION THEREOF THAT WOULD
10
PERMIT OR REQUIRE THE APPLICATION OF THE LAWS OF ANY OTHER
JURISDICTION.
5. INTEGRATION; AMENDMENT. This Agreement constitutes the sole
agreement of the parties with respect to the subject matter hereof
and supersedes all oral negotiations and prior writings with respect
to the subject matter hereof. No amendment of this Agreement, and no
waiver of any one or more of the provisions hereof shall be
effective unless set forth in writing and signed by the parties
hereto.
6. SUCCESSORS AND ASSIGNS. This Agreement (i) shall be binding upon the
Subordinate Creditors, the Obligor executing this Agreement and the
Senior Creditors and, where applicable, their respective heirs,
executors, administrators, successors and assigns, and (ii) shall
inure to the benefit of the Subordinate Creditors, the Obligor, and
the Senior Creditors and, where applicable, their respective heirs,
executors, administrators, successors and permitted assigns;
provided, however, that the Subordinate Creditors and the Obligor
may not assign their rights or obligations hereunder or any interest
herein without the prior written consent of the Agent, and any such
assignment or attempted assignment by the Subordinate Creditors
and/or the Obligor shall be void and of no effect with respect to
the Senior Creditors. The Lenders may from time to time sell or
assign, in whole or in part, or grant participations in the Loans
and/or the Credit Agreement and/or the obligations evidenced
thereby. The Subordinate Creditors authorize the Senior Creditors to
provide information concerning the Subordinate Creditors and the
Obligor to any prospective purchaser, assignee or participant in the
Loans.
7. SEVERABILITY AND CONSISTENCY. The illegality, unenforceability or
inconsistency of any provision of this Agreement or any instrument
or agreement required hereunder shall not in any way affect or
impair the legality, enforceability or consistency of the remaining
provisions of this Agreement or any instrument or agreement required
hereunder. The Senior Loan Documents and this Agreement are intended
to be consistent. However, in the event of any inconsistencies
between and/or among this Agreement and any of the Senior Loan
Documents, such inconsistency shall not affect the validity or
enforceability of this Agreement or any of the Senior Loan
Documents. In the event of any inconsistency or ambiguity in this
Agreement or any of the Senior Loan Documents, this Agreement and
the Senior Loan Documents shall not be construed against any one
party but shall be interpreted consistent with the Agent's policies
and procedures.
8. CONSENT TO JURISDICTION AND SERVICE OF PROCESS. The Subordinate
Creditors irrevocably appoint Xxxx Xxxxxxxx, c/x Xxxx & Hazard, 00
Xxxxxx Xxxx, Xxxxxxxxx, XX 00000-0000 as their attorney upon whom
may be served any notice, process or pleading in any action or
proceeding against them arising out of or in connection with this
Agreement. If service of process cannot be delivered to the
Subordinate Creditors as specified by statute, the Subordinate
Creditors agree that, with court approval, each may be served by
regular or certified mail at the address set forth herein. The
Subordinate Creditors hereby consent and agree that (i) any action
or proceeding against it may be commenced and maintained in any
state or federal court within the State of Connecticut by service of
process on Xxxx Xxxxxxxx and (ii) such courts shall have
jurisdiction with respect to the subject matter hereof and the
persons of the Subordinate Creditors and the Subordinated
Liabilities. The Subordinate Creditors agree that any action brought
by the Subordinate Creditors on account of this Agreement shall be
commenced and maintained only in a federal court in the State of
Connecticut.
9. PREJUDGMENT REMEDIES. THE SUBORDINATE LENDER AND THE SUBORDINATE
LENDER'S AGENT HEREBY REPRESENT, COVENANT AND AGREE THAT THE
PROCEEDS OF THE SENIOR LIABILITIES AND SUBORDINATED LIABILITIES
SHALL BE USED FOR GENERAL COMMERCIAL PURPOSES AND THAT THE
TRANSACTIONS CONTEMPLATED HEREBY ARE PART OF A "COMMERCIAL
TRANSACTION" AS
11
DEFINED BY THE STATUTES OF THE STATE OF CONNECTICUT. SUBORDINATE
LENDER AND SUBORDINATE LENDER'S AGENT HEREBY WAIVE ALL RIGHTS TO
NOTICE AND PRIOR COURT HEARING OR COURT ORDER UNDER CONNECTICUT
GENERAL STATUTES SECTIONS 52-278A ET. SEQ. AS AMENDED OR UNDER ANY
OTHER STATE OR FEDERAL LAW WITH RESPECT TO ANY AND ALL PREJUDGMENT
REMEDIES THE SENIOR CREDITORS MAY EMPLOY TO ENFORCE THEIR RIGHTS AND
REMEDIES HEREUNDER AND UNDER THE OTHER LOAN DOCUMENTS. MORE
SPECIFICALLY, THE SUBORDINATE LENDER AND THE SUBORDINATE LENDER'S
AGENT ACKNOWLEDGE THAT THE AGENT'S ATTORNEY AND/OR ANY LENDER'S
ATTORNEY MAY, PURSUANT TO CONNECTICUT GENERAL STATUES, SECTION
52-278F, ISSUE A WRIT FOR A PREJUDGMENT REMEDY WITHOUT SECURING A
COURT ORDER. THE SUBORDINATE LENDER AND THE SUBORDINATE LENDER'S
AGENT ACKNOWLEDGE AND RESERVE THEIR RESPECTIVE RIGHTS TO NOTICE AND
A HEARING SUBSEQUENT TO THE ISSUANCE OF A WRIT FOR PREJUDGMENT
REMEDY AS AFORESAID AND THE AGENT ACKNOWLEDGES THE RIGHT OF THE
SUBORDINATE LENDER AND THE SUBORDINATE LENDER'S AGENT TO SAID
HEARING SUBSEQUENT TO THE ISSUANCE OF SAID WRIT. THE SUBORDINATE
LENDER AND THE SUBORDINATE LENDER'S AGENT FURTHER WAIVE THEIR RIGHTS
TO REQUEST THAT THE SENIOR CREDITORS POST A BOND, WITH OR WITHOUT
SURETY, TO PROTECT THE SUBORDINATE LENDER AND THE SUBORDINATE
LENDER'S AGENT AGAINST DAMAGES THAT MAY BE CAUSED BY ANY PREJUDGMENT
REMEDY SOUGHT OR OBTAINED BY THE SENIOR CREDITORS.
10. PROVISIONS SOLELY FOR THE BENEFIT OF THE SENIOR CREDITORS. The
provisions of this Agreement are solely to define the relative
rights and obligations of the Senior Creditors and the Subordinate
Creditors, and no other person or entity, including, without
limitation, the Obligor, shall have any rights hereunder or as a
result of the provisions hereof.
11. JUDICIAL PROCEEDINGS; WAIVERS. THE SUBORDINATE CREDITORS AND THE
AGENT ACKNOWLEDGE AND AGREE THAT (i) ANY SUIT, ACTION OR PROCEEDING,
WHETHER CLAIM OR COUNTERCLAIM, BROUGHT OR INSTITUTED BY THE AGENT,
THE SUBORDINATE CREDITORS OR ANY SUCCESSOR OR ASSIGN OF THE AGENT OR
THE SUBORDINATE CREDITORS, ON OR WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT OR THE DEALINGS OF THE PARTIES WITH RESPECT
HERETO, OR THERETO, SHALL BE TRIED ONLY BY A COURT AND NOT BY A JURY
AND EACH PARTY WAIVES THE RIGHT TO TRIAL BY JURY; (ii) EACH WAIVES
ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER, IN ANY SUCH SUIT, ACTION
OR PROCEEDING, ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL
DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL
DAMAGES; AND (iii) THIS SECTION IS A SPECIFIC AND MATERIAL ASPECT OF
THIS AGREEMENT AND THE LENDERS WOULD NOT EXTEND CREDIT IF THE
WAIVERS SET FORTH IN THIS SECTION WERE NOT A PART OF THIS AGREEMENT.
12. COUNTERPARTS. This Agreement may be executed and delivered in any
number of counterparts each of which shall constitute an original,
but all of which taken together shall constitute but one and the
same agreement. Delivery of an executed signature page to this
Agreement by facsimile transmission shall be effective as delivery
of a manually signed counterpart of this Agreement.
[remainder of page intentionally blank; next page is signature page]
12
IN WITNESS WHEREOF, the undersigned have executed and delivered this
Agreement as of the day and year first above written.
WITNESSED BY:
_______________________________ ______________________________
_______________________________ Subordinate Lender
Address:
STATE OF CONNECTICUT )
) ss: ________ ____________, 2005
COUNTY OF ____________ )
Personally appeared ___________, signer and sealer of the foregoing instrument
and acknowledged the same to be his free act and deed, before me.
______________________________________
Commissioner of the Superior Court
Notary Public
My Commission expires:________________
/s/ Daisy Ane By: /s/ Xxxx X. Xxxxxxxx
-------------------- --------------------
/s/ Xxxxx Xxxxxxxx Xxxx X. Xxxxxxxx, not
-------------------- individually, but as Trustee of
the Xxxxx Xxxxx Life Insurance
Trust u/t/a dated July 7, 1992,
the Xxxx Xxxxx Insurance Trust
u/t/a dated July 7, 1992 and the
Xxxx Xxxxx and Xxxxx Xxxxx
Irrevocable Trust u/t/a dated
December 16, 1991, as agent for
the Subordinate Lender
Address: 0000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
XXXXX XX XX )
) ss: Key Xxxxx Xxxxx 00, 0000
XXXXXX XX Xxxxxx )
Personally appeared Xxxx X. Xxxxxxxx, not individually, but as Trustee of the
Xxxxx Xxxxx Life Insurance Trust u/t/a dated July 7, 1992, the Xxxx Xxxxx
Insurance Trust u/t/a dated July 7, 1992 and the Xxxx Xxxxx and Xxxxx Xxxxx
Irrevocable Trust u/t/a dated December 16, 1991, as agent for the Subordinate
Lender, signer and sealer of the foregoing instrument and acknowledged the same
to be his free act and deed as Trustee and agent for the Subordinate Lender,
before me.
/s/ Daisy Ane
-------------------------------------
Commissioner of the Superior Court
Notary Public
My Commission expires: September 22, 0000
XXXX XX XXXXXXX, X.X.,
as a Lender
/s/ Xxxxx Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxx
----------------- ---------------------
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President
/s/ Xxxxxxxx Xxxxxxx Xxxxxxxx Address: 000 Xxxx Xxxxxx
----------------------------- CT2-102-24-02
Xxxxxxxx, XX 00000
STATE OF CONNECTICUT )
) ss: Hartford April 5, 2005
COUNTY OF HARTFORD )
Personally appeared Xxxxxxx X. Xxxxxx, the Senior Vice President of Bank of
America, N.A., signer and sealer of the foregoing instrument and acknowledged
the same to be his free act and deed as such officer and the free act and deed
of Bank of America, N.A., before me.
/s/ Xxxxxxxx Xxxxxxx Xxxxxxxx
-----------------------------------
Commissioner of the Superior Court
Notary Public
My Commission expires: September 30, 0000
XXXX XX XXXXXXX, X.X.,
as Administrative Agent
/s/ Xxxxx Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxx
----------------- ----------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President
/s/ Xxxxxxxx Xxxxxxx Xxxxxxxx Address: 000 Xxxx Xxxxxx
----------------------------- CT2-102-24-02
Xxxxxxxx, XX 00000
STATE OF CONNECTICUT )
) ss: Hartford April 5, 2005
COUNTY OF HARTFORD )
Personally appeared Xxxxxxx X. Xxxxxx, the Senior Vice President of Bank of
America, N.A., signer and sealer of the foregoing instrument and acknowledged
the same to be his free act and deed as such officer and the free act and deed
of Bank of America, N.A. before me.
/s/ Xxxxxxxx Xxxxxxx Xxxxxxxx
------------------------------------
Commissioner of the Superior Court
Notary Public
My Commission expires: September 30, 2005
XXXXXXX BANK, NATIONAL
ASSOCIATION
/s/ Xxxxx Xxxxxxx By: /s/ Xxxxxxx X. X'Xxxxx
----------------- ----------------------
Name: Xxxxxxx X. X'Xxxxx
Title: Senior Vice President
/s/ Xxxxxxxx Xxxxxxx Xxxxxxxx Address: 000 Xxxx Xxxxxx
----------------------------- Xxxxxxxxx, XX 00000
STATE OF CONNECTICUT )
) ss: Waterbury April 5, 2005
COUNTY OF NEW HAVEN )
Personally appeared Xxxxxxx X. X'Xxxxx, the Senior Vice President of Xxxxxxx
Bank, National Association, signer and sealer of the foregoing instrument and
acknowledged the same to be his free act and deed as such officer and the free
act and deed of Xxxxxxx Bank, National Association, before me.
/s/ Xxxxxxxx Xxxxxxx Xxxxxxxx
------------------------------------------
Notary Public
My Commission expires: September 30, 2005
The Obligor signing below hereby acknowledges receipt of a copy of the foregoing
Agreement, waives notice of acceptance thereof by the Senior Creditors, and
agrees to be bound by the terms and provisions thereof. The Obligor signing
below further agrees to make no payments or distributions, or grant any security
interest, contrary to the terms and provisions of this Agreement and to do every
other act and thing necessary or appropriate to carry out such terms and
provisions. Upon the occurrence and during the continuance of any Event of
Default, or upon the breach of any representation, covenant or agreement in this
Agreement by the Obligor or either Subordinate Creditor, or in the event of the
termination of this Agreement (other than as a result of payment in full of the
Subordinate Lender's Subordinated Note as permitted by the Credit Agreement or
with the consent of the Senior Creditors), all of the Senior Liabilities shall,
in accordance with the terms of the Credit Agreement, become immediately due and
payable at the option of the Senior Creditors and the Senior Creditors may
immediately resort to all of its rights and remedies herein, in any document
(including the Credit Agreement and any of the Senior Loan Documents) by and
between the Senior Creditors and the Obligor, or in any in any instrument
evidencing any obligation under any such document, at law or in equity.
[remainder of page intentionally blank; next page is signature page]
Dated: As of the 5th day of April, 2005
VERMONT PURE HOLDINGS, LTD.
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chief Executive Officer
Address: 00 Xxxxx Xxxxx
Xxxxxxxxx, XX 00000
STATE OF CONNECTICUT )
) ss. Hartford
COUNTY OF HARTFORD)
On this the 5th day of April, 2005, before me, the undersigned officer,
personally appeared Xxxxxxx X. Xxxxxx , who acknowledged himself to be the Chief
Executive Officer of Vermont Pure Holdings, Ltd., and that he as such Chief
Executive Officer, being authorized so to do, executed the foregoing instrument
for the purposes therein contained, by signing the name of said Vermont Pure
Holdings, Ltd. by himself as such Chief Executive Officer, and as his and its
free act and deed.
In witness whereof I hereunto set my hand.
/s/ Xxxxxxxx Xxxxxxx Xxxxxxxx
-----------------------------------------
Commissioner of the Superior Court
Notary Public
My Commission Expires: September 30, 2005
CRYSTAL ROCK LLC
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Manager
Address: 00 Xxxxx Xxxxx
Xxxxxxxxx, XX 00000
STATE OF CONNECTICUT )
) ss. Hartford
COUNTY OF HARTFORD)
On this the 5th day of April, 2005, before me, the undersigned officer,
personally appeared Xxxxxxx X. Xxxxxx , who acknowledged himself to be the
Manager of Crystal Rock LLC, and that he as such Manager, being authorized so to
do, executed the foregoing instrument for the purposes therein contained, by
signing the name of said Crystal Rock LLC by himself as such Manager; and as his
and its free act and deed.
In witness whereof I hereunto set my hand.
/s/ Xxxxxxxx Xxxxxxx Xxxxxxxx
-----------------------------------------
Commissioner of the Superior Court
Notary Public
My Commission Expires: September 30, 2005
SCHEDULE A
SENIOR COLLATERAL
The following properties, assets and rights of Holdings and Crystal Rock,
wherever located, whether now owned or hereafter acquired or arising, and all
proceeds and products thereof: all personal and fixture property of every kind
and nature including all goods (including inventory, equipment and any
accessions thereto), instruments (including promissory notes), documents
(including, if applicable, electronic 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, supporting obligations, any other contract
rights or rights to the payment of money, insurance claims and proceeds, and all
general intangibles (including all payment intangibles).
All terms defined in the Uniform Commercial Code of the State of New York and
used in this Schedule A shall have the same definitions herein as specified
therein. However, if a term is defined in Article 9 of the Uniform Commercial
Code of such State differently than in another Article of the Uniform Commercial
Code of such State, the term has the meaning specified in Article 9. The term
"electronic document" applies in the event that the 2003 revisions to Article 7,
with amendments to Article 9, of the Uniform Commercial Code of the State of New
York, in substantially the form approved by the American Law Institute and the
National Conference of Commissioners on Uniform State Laws, are now or hereafter
adopted and become effective in the State of New York or in any other relevant
jurisdiction.
SCHEDULE B
SUBORDINATE LENDERS' COLLATERAL
The following property, whether now existing or subsequently acquired, and all
additions, substitutions, accessions, replacements, proceeds, and products
thereof or thereto: all tangible and intangible assets and properties of
Holdings, including without limitation all furniture, fixtures, equipment, raw
materials, inventory, other goods, accounts, contract rights, rights to the
payment of money, insurance refund claims and all other insurance claims and
proceeds, tort claims, chattel paper, documents, instruments, securities and
other investment property, deposit accounts, rights to proceeds of letters of
credit and all general intangibles including, without limitation, all, tax
refund claims, license fees, patents, patent applications, trademarks, trademark
applications, trade names, copyrights, copyright applications, rights to xxx and
recover for past infringement of patents, trademarks and copyrights, computer
programs, computer software, engineering drawings, service marks, customer
lists, goodwill, and all licenses, permits, agreements of any kind or nature
pursuant to which Holdings possesses, uses or has authority to possess or use
property (whether tangible or intangible) of others or others possess, use or
have authority to possess or use property (whether tangible or intangible) of
Holdings, and all recorded data of any kind or nature, regardless of the medium
of recording including, without limitation, all software, writings, plans,
specifications and schematics (each of which terms has the meaning ascribed to
it in the Uniform Commercial Code, as in effect in the State of Connecticut);
provided that notwithstanding the foregoing, such grant of security interest
shall not extend to any cash and cash equivalents at any time owned by Holdings.
