Exhibit 10.13
LOAN AGREEMENT
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THIS AGREEMENT ("Agreement") made and entered into as of the
6th day of February, 1997, by and between THE LION BREWERY, INC.,
a Pennsylvania corporation with its principal office at 000 Xxxxx
Xxxxxxxxxxxx Xxxxxx, Xxxxxx-Xxxxx, Xxxxxxxxxxxx (the "Borrower");
and CORESTATES BANK, N.A., a banking corporation with offices
located at 000 Xxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxx Xxxxxx,
Xxxxxxxxxxxx 00000 (the "Bank")
W I T N E S S E T H:
WHEREAS, the Borrower is in the process of making capital
improvements to its production facility in Xxxxxx-Xxxxx,
Pennsylvania to increase its production capacity and efficiency
(the "Project"); and
WHEREAS, in connection with the Project, Borrower has
applied to the Bank for a revolving line of credit in the amount
of TWO MILLION FIVE HUNDRED THOUSAND and 00/100 ($2,500,000.00)
DOLLARS (the "Revolver") and further, has applied to the Bank for
a working capital line of credit in the amount of FIVE MILLION
and 00/100 ($5,000,000.00) DOLLARS (the "Line") (the Revolver and
the Line being hereinafter sometimes collectively referred to as
the "Loans"); and
WHEREAS, the Bank is willing to make the Loans to Borrower
pursuant to the terms and conditions of this Agreement and all
other loan documents referred to in this Agreement (all of which
are hereinafter sometimes collectively referred to as the "Loan
Documents" and are incorporated into this Agreement by
reference).
NOW, THEREFORE, in consideration of the premises and the
mutual covenants hereinafter set forth, and for other good and
valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:
SECTION 1. THE LOANS.
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(a) Revolver. The Bank shall make a credit facility
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available to Borrower in the principal amount of TWO MILLION FIVE
HUNDRED THOUSAND and 00/100 ($2,500,000.00) DOLLARS, the proceeds
of which will be used by Borrower for capital expenditures
related to increasing production capacity and efficiency at its
production facility in Xxxxxx-Xxxxx, Pennsylvania.
(b) The Line. The Bank shall make a credit facility
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available to Borrower in the principal amount of FIVE MILLION AND
00/100 ($5,000,000.00) DOLLARS which shall be used primarily for
working capital.
(c) Term and Interest.
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(i) Revolver. Unless terminated due to an Event
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of Default (hereinafter defined) or unless converted to a term
loan as hereinafter provided, the Revolver shall mature three (3)
years from the date hereof, at which time all outstanding
principal, accrued and unpaid interest and any and all other
costs associated with the Revolver shall be due and payable.
Interest on the outstanding principal balance of the Revolver
shall be paid monthly on all prime rate loans and on the earlier
of the last day of the applicable rate period or quarterly for
all LIBOR costs, whichever is sooner, based upon, and at
Borrower's option, either:
A) Bank's Prime Rate (hereinafter defined)
minus one-half (1/2%) percent; or
B) LIBOR Based Rate (hereinafter defined)
plus 75 basis points; or
C) Bank's Offered Rate (hereinafter
defined).
All rate requests shall be in writing on the Bank's Rate
Notification Form. Interest on all loans shall be computed on
actual/360 basis.
The Borrower shall have the option, at any time, to convert
the outstanding principal balance of the Revolver to a term loan
of either three (3) or five (5) years from the date of the
exercise of the option (the "Term Loan Option"). In the event
the Term Loan Option is exercised, Borrower shall repay the
outstanding principal balance under the Term Loan Option in equal
monthly payments of principal plus interest based upon the term
selected. Bank agrees to quote a fixed rate of interest option
to the Borrower upon request. Fixed rate loans may not be
prepaid without penalty. Bank shall advise Borrower of penalty
upon Borrower's request for fixed rate loan. All outstanding
Term Loans shall reduce the availability for borrowing under the
Revolver.
(ii) The Line. Unless terminated due to an Event
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of Default (hereinafter defined), the Line shall mature three (3)
years from the date hereof, at which time all outstanding
principal, accrued and unpaid interest and any and all other
costs associated with the Line shall be due and payable.
Interest on the outstanding principal balance of the Line shall
be paid monthly based upon and at Borrower's option, either:
A) Bank's Prime Rate (hereinafter defined)
minus one-half (1/2%) percent; or
B) LIBOR Based Rate (hereinafter defined)
plus 75 basis points; or
C) Bank's Offered Rate (hereinafter
defined).
The Bank's Prime Rate is a floating rate of interest that is
designated from time to time by the Bank as the "Prime Rate" and
is used by the Bank as a reference rate with respect to different
interest rates charged to Borrower. The rate of interest payable
shall change simultaneously and automatically upon the Bank's
designation of any change in such Prime Rate. The Bank's
determination and designation from time to time of the Prime Rate
shall not in any way preclude the Bank from making loans to other
borrowers at a rate which is higher or lower than or different
from the Prime Rate.
LIBOR Based Rate means the rate per annum (rounded upward,
if necessary, to the nearest 1/16 of 1%) quoted at approximately
11:00 a.m. London time, to the principal London branch of the
Bank, two business days prior to the first day of the date on
which the quoted rate is to become effective for the offering by
leading banks in the London interbank market of dollar deposits
in immediately available funds for a one, two, three or six month
period as appropriate ("Interest Period"), and in an amount
comparable to the unpaid principal balance of the Applicable
Loan. Interest Periods with respect to the LIBOR Based Rate
means each 30, 60, 90 or 180 day period as elected by the
Borrower commencing of the date hereof and ending on the date
which is the numerically corresponding day in the first, second,
third or sixth calendar month thereafter, provided that if an
Interest Period would end on a day that is not a Business Day
(hereinafter defined), such Interest Period shall be extended to
the next succeeding Business Day, unless such Business Day would
fall in the next calendar month, in which case such Interest
Period shall end on the immediately preceding Business Day.
The Bank's Offered Rate is a rate of interest quoted by the
Bank, from time to time, as an interest rate that the Borrower
has the option of selecting with respect to advances under this
facility, the quotation and duration of which interest rate shall
be offered to the Borrower from time to time by the Bank in its
sole discretion.
Notwithstanding anything contained herein to the contrary,
upon and after the occurrence of an Event of Default which is not
cured to the satisfaction of the Bank, interest shall accrue at
an annual rate (before and after judgment) equal to the Prime
Rate plus three percent (3%) per annum.
Subject to the provisions of this Agreement, interest shall
be payable by the Borrower monthly, in arrears, on the first day
of each month, or as otherwise billed by the Bank.
"Business Day" means any day other than a Saturday, Sunday
or other day on which commercial banks in Philadelphia,
Pennsylvania are authorized or required to close under the laws
of the Commonwealth of Pennsylvania and a day on which dealings
in United States dollar deposits are also are also carried on in
the London interbank market and banks are open for business in
London, England.
No later than three (3) Business Days prior to the end of
each relevant Interest Period in the case of renewal of a LIBOR
Based Rate, the Borrower shall elect, in writing, the LIBOR Based
Rate and Interest Period, Bank's Prime Rate minus one-half (1/2%)
percent or Bank's Offered Rate. Such election in the case of the
LIBOR Based Rate, once made, shall be irrevocable and if no
election is made three (3) Business Days prior to the end of each
relevant Interest Period, the Borrower shall be deemed to have
elected to pay interest at the Prime Rate minus one-half (1/2%)
percent until such time as it elects by giving three (3) Business
Days prior notice to pay interest at the LIBOR Based Rate for an
Interest Period. LIBOR Rate Loans may not be added to or prepaid
prior to the expiration of their stated interest period without
penalty.
Upon prepayment of any LIBOR Rate Loan on a day other than
the last day of the applicable Interest Period (whether
voluntarily, involuntarily, by reason of acceleration, demand or
otherwise), the Borrower shall pay to the Bank within five (5)
Business Days after demand, an amount equal to the Bank's
"funding costs", which shall mean the sum of:
(i) the principal amount of the LIBOR Rate Loan
prepaid, multiplied by the number of days between the date of
prepayment and the last day of the applicable Interest Period,
divided by 360, multiplied by the applicable Interest
Differential (provided that the product of the foregoing formula
must be a positive number); plus
(ii) all reasonable out-of-pocket expenses
incurred by the Bank in connection with such payment, prepayment
or failure to borrow.
The Bank's determination of the amount of any "funding costs"
payable under this paragraph shall be conclusive in the absence
of manifest error.
If the adoption of any applicable law, rule or regulation,
or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the Bank with any
request or directive of any such authority, central bank or
comparable agency shall make it unlawful or impossible for any
Bank to make, maintain or fund its LIBOR Rate Loans, the Bank
shall give notice thereof to the Borrower, whereupon (until the
Bank notifies the Borrower that the circumstances giving rise to
such suspension no longer exist), the obligation of the Bank to
make LIBOR Rate Loans shall be suspended. If the Bank shall
determine that it may not lawfully continue to maintain and fund
any of its outstanding LIBOR Rate Loans to maturity and shall so
specify in such notice, the Borrower shall immediately prepay in
full the then outstanding principal amount of each such LIBOR
Rate Loan, together with accrued interest thereon and any
"funding costs" incurred by the Bank hereunder.
(d) Method of Payments. Borrower irrevocably
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authorizes Bank to debit its designated account for all payments
due under the Loans. The Bank shall furnish written verification
of each payment charged against the account. The Borrower shall
promptly pay Bank such amounts as may be due if the designated
account balance is insufficient.
(e) Notes. The Loans shall be evidenced by the
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Borrower's Notes of even date herewith (the "Notes"), the terms
of which are incorporated herein by reference thereto. If
Borrower shall have the privilege of prepaying (as herein
provided) the principal balance of the Notes, such prepayments
shall be applied to the installments of the Note in inverse order
of maturity and shall not postpone or interrupt the payment of
monthly or other installments as they shall become due.
SECTION 2. CLOSING DOCUMENTS.
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This Loan Agreement, the documents referenced herein
and those executed and exchanged at settlement are hereinafter
sometimes collectively referred to as the "Loan Documents" and
are incorporated herein by reference thereto.
SECTION 3. CLOSING AND DISBURSEMENTS.
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(a) The obligation of the Bank to close on the Loans
shall be conditioned upon:
(i) An opinion of counsel for the Borrower
satisfactory to the Bank and its counsel, providing, among other
things, that to the best of counsel's knowledge the
representations and warranties of the Borrower contained in the
Loan Documents are true and correct, that the Loan Documents
executed and delivered to the Bank by the Borrower are valid and
binding subject to appropriate reservation of creditors' rights
language;
(ii) Its receipt of fully executed original copies
of this Loan Agreement, the Loan Documents and any and all other
documents reasonably requested by the Bank and its counsel;
(iii) Its receipt of the tax identification
numbers of Borrower; and
(iv) Its receipt of the Articles of
Incorporation and By-Laws of Borrower.
SECTION 4. EVENTS OF DEFAULT. Each of the following
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shall constitute an Event of Default under the Loans ("Event of
Default"), whatever the reason for such event and whether it
shall be voluntary or involuntary, or within or without the
control of the Borrower, or be effected by operations of law or
pursuant to any judgment or order of any court or any order, rule
or regulation of any governmental or non-governmental body:
(a) Any payment of the principal, interest or other
charges under or in connection with any of the Loans shall not be
made within fifteen (15) days of their due date.
(b) Any Representation or Warranty in the Loan
Documents shall prove to have been incorrect or misleading when
made, in any material respect.
(c) Borrower shall (i) become insolvent, (ii) admit
its inability to pay its debts as they become due, (iii) make an
assignment for the benefit of its creditors, (iv) be adjudicated,
bankrupt or insolvent, (v) voluntarily initiate proceedings under
any present or future bankruptcy or reorganization law, or (vi)
become the subject of any involuntary proceedings under any
present or future bankruptcy or reorganization law that shall not
have been discharged within sixty (60) days after commencement of
such proceedings.
(d) The Borrower shall fail to observe or perform any
other agreement or covenant contained in any of the Loan
Documents not cured within thirty (30) days of written notice to
Borrower from Bank (such notice period being concurrent with and
not in addition to any other notice period that may be specified
in any of the other Loan Documents), provided, however, that Bank
may, in its sole discretion, allow Borrower to pursue a cure of
the default if it is incapable of being cured within the thirty
(30) day period and Borrower diligently pursues a cure.
(e) The Borrower or any Subsidiary of the Borrower
shall fail to pay any indebtedness for borrowed money (other than
the Notes) of the Borrower or such Subsidiary, as the case may
be, or any interest or premium thereon, when due (whether by
scheduled maturity, required prepayment, acceleration, demand or
otherwise) after the giving of any required notice or the
expiration of any grace or cure period, or any such indebtedness
shall be declared to be due and payable or required to be prepaid
(other than by a regularly scheduled required prepayment), prior
to the stated maturity thereof; or
(f) The entry of any judgment against the Borrower or
any Subsidiary thereof or the issuing of any attachment or
garnishment against any property of the Borrower or any
Subsidiary thereof in the aggregate amount of $250,000 which
judgment, attachment or garnishment shall continue unsatisfied
and in effect for a period of 20 consecutive days (following
notice from the creditor and/or Bank and/or any other reliable
party) without being vacated, discharged, satisfied or bonded
pending appeal; or
(g) The dissolution, merger, consolidation,
reorganization or change in control (as "control" is defined in
Rule 12b-2 under the Securities Exchange Act of 1934, as amended)
of the Borrower or any Subsidiary thereof or the sale or transfer
of any substantial portion of the Borrower's assets; or
(h) Any "Event of Default" shall occur under the terms
of any of the Loan Documents.
SECTION 5. CROSS-DEFAULT OF LOANS.
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The Borrower agrees, covenants and represents that a
default under either of the Loans shall constitute a default
under all of the Loans and would allow Bank the right to exercise
any of its remedies with respect to any of the Loans.
SECTION 6. REMEDIES. Upon the occurrence and during the
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continuance of any Event of Default, and in every such event, the
Bank shall have the right, after the expiration of any applicable
notice and cure period, to:
(a) Declare the outstanding principal of, and all
unpaid and accrued interest on the Loans, and all other amounts
owed by the Borrower under this Agreement with respect to the
Loans or otherwise to the Bank (whenever or howsoever arising,
and whether or not then due) to be, and such principal, interest
and other amounts shall thereupon become immediately due and
payable;
(b) Exercise all rights and remedies specified in this
Agreement and/or the other Loan Documents; and
(c) Exercise all other rights and remedies available
at law or at equity.
Presentment, demand, promise or notice of any kind are
hereby expressly waived. The Bank's rights and remedies shall be
cumulative and not exclusive, may be exercised from time to time,
and need not be exercised in any given order.
The Bank shall further be entitled to be reimbursed for
any and all reasonable costs incurred by it in exercising its
remedies.
SECTION 7. WARRANTIES AND REPRESENTATIONS. The Borrower
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warrants and represents to the Bank and agree that:
(a) Borrower is a Pennsylvania corporation, duly
organized, validly existing and in good standing under the laws
of the Commonwealth of Pennsylvania and that Borrower has the
power and authority to own its property and assets, to carry on
its business as is now being conducted and is qualified to do
business in every jurisdiction in which it is required to qualify
to do business.
(b) no consent of any party is required in connection
with the Borrower's execution, delivery, performance, validity or
enforceability of the Loan Documents.
(c) the Borrower has the power to execute, deliver and
perform this Agreement and the other Loan Documents, and when
executed and delivered, this Agreement and the other Loan
Documents will be valid and binding obligations of the Borrower
enforceable in accordance with their respective terms.
(d) the execution, delivery and performance of this
Agreement and the other Loan Documents has been duly authorized
by all corporate and legal action required for the lawful
creation and issuance of such documents by the Borrower will not
violate any provision of any law, any order of any court or
governmental agency or the By-Laws of the Borrower.
(e) the execution, delivery and performance of this
Agreement and the other Loan Documents will not violate any
provision of any contract to which the Borrower's properties or
assets are bound, and will not be in conflict with, result in a
breach of, or constitute (with due notice and/or lapse of time) a
default under any such Contract or result in the creation or
imposition of any lien, charge, or encumbrance of any nature
whatsoever upon any of the properties or assets of the Borrower.
(f) except as disclosed in the Schedule attached
hereto, there are no actions, suits or proceedings before any
court or governmental department or agency pending, or to the
knowledge of the Borrower, threatened (i) with respect to any of
the transactions contemplated by the Loan Documents or (ii)
against or affecting the Borrower or any of its properties which,
if adversely determined, would have a material adverse affect on
the financial condition, business or operations of the Borrower
or upon its ability to perform any of its obligations under the
Loan Documents. The Borrower is not in default with respect to
any judgment, order, writ, injunction, decree, rule or regulation
of any court or federal, state, municipal or other governmental
department or agency, which default would have a material adverse
affect on the financial condition, business operations of the
Borrower or upon its ability to perform any of its obligations
under the Loan Documents.
(g) the Borrower is not in default under any material
existing agreement, and no event has occurred which, with the
giving of notice or passage of time, or both, would constitute an
Event of Default hereunder as of the date hereof.
(h) the Borrower has filed or caused to be filed all
tax returns and reports required by law and have paid all taxes
shown to be due and payable on said returns or reports or on any
assessments made against it. No tax liens have been filed
against any asset of the Borrower and no claims are being
asserted with respect to such taxes which could have a material
adverse affect on the financial condition, business or operations
of the Borrower.
(i) the Borrower is in compliance with, and has
received no notice of non-compliance with respect to all federal,
state and local laws relating to the conduct of its business.
(j) all financial information regarding the Borrower
which has been or will be furnished to the Bank is, or will be
when furnished, true and correct and does or will when furnished
represent fairly, accurately and completely, the financial
condition of the Borrower and the results of its operations as of
the dates and for the periods for which the same were furnished.
All such financial statements of the Borrower will have been
prepared in accordance with the generally accepted accounting
principals ("GAAP"). There are no liabilities, direct or
indirect, fixed or contingent, of the Borrower of a character
which under GAAP should have been but were not reflected in such
financial statements or in the notes thereto.
(k) the proceeds of the Loans shall be used solely and
exclusively as provided in Section 1 hereof.
SECTION 8. AFFIRMATIVE COVENANTS. Borrower hereby
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covenants and agrees that:
(a) Borrower shall furnish to the Bank, within ninety-
one (91) days after the close of each fiscal year, audited
financial statements, together with its annual 10-K financial
reports, all supporting schedules and notes, and accompanied by
an opinion thereon to the Bank by an independent certified public
accountant satisfactory to the Bank. The statements will be
prepared in accordance with GAAP.
(b) Borrower shall furnish to the Bank, within forty-
five (45) days of the close of each fiscal quarter, its 10-Q
quarterly financial reports, certified by the Chief Financial
Officer of the Borrower as having been prepared in accordance
with GAAP.
(c) Borrower shall provide the Bank within thirty (30)
days after the end of each fiscal year, with its annual
projection and budget for the immediately succeeding fiscal year.
(d) Borrower shall maintain and keep all of its
property in good repair, working order and condition or make or
cause to be made all necessary or appropriate repairs, renewals,
replacements, substitutions, additions, betterments and
improvements thereto so that the efficiency of all such property
shall at all times be properly preserved and maintained.
(e) Borrower shall duly pay and discharge all taxes,
assessments and governmental charges levied upon or assessed
against it or against its properties or income prior to the date
on which penalties are attached thereto, unless and except to the
extent only that such taxes and assessments and charges shall be
contested in good faith and by appropriate proceedings diligently
conducted by it (unless and until foreclosure, distraint, sale or
other similar proceedings shall have been commenced) and provided
that such reserve or other appropriate provisions, if any, as
shall be required by GAAP shall have been made therefore.
(f) Borrower shall promptly give notice, in writing,
to the Bank of the occurrence of any material litigation,
arbitration or governmental proceeding affecting it and of any
governmental investigation or labor dispute pending or, to its
knowledge, threatened, which could reasonably be expected to
interfere substantially with its normal operations or materially
adversely affect its financial condition.
(g) Borrower shall maintain and keep proper records
and books of account in conformance with GAAP applied on a
consistent basis and to which full, true and correct entries
shall be made of all of its dealings and business affairs.
(h) Borrower shall permit any of the officers,
employees or representatives of the Bank to visit and to examine
and copy the books and records and discuss their affairs,
finances and accounts during normal business hours, and as often
as the Bank may reasonably request subject to reasonable prior
notice to Borrower and opportunity to be present and participate
in any such examination and/or discussions. The Bank shall
exercise its customary care in maintaining the confidentiality of
such information.
(i) Borrower shall keep all insurable property, real
and personal, now owned or hereinafter acquired, insured at all
times against loss or damage by fire and extended coverage risks
and other hazards of the kinds customarily insured against and in
amounts customarily carried by businesses engaged in comparable
businesses and comparably situated and promptly from time to time
upon request of the Bank, deliver to the Bank a summary schedule
indicating all insurance then in effect, together with all such
policies, certificates of insurance and such other information
relating thereto as the Bank may, from time to time, request.
(j) Borrower shall preserve and protect each of its
patents, franchises, licenses, trademarks and trademark rights,
trade name, trade name rights, and copyrights used or useful in
the conduct of its business. Changes to brands and/or labels in
the ordinary course of Borrower's business shall be excluded from
this provision.
(k) Borrower shall maintain, obtain (to the extent
necessary) and comply, in all material respects, with all
required permits, licenses, registrations, and approvals relating
to its operations.
(l) Borrower shall comply, in all material respects,
with all laws, rules, regulations and governmental orders and
directives relating to the generation, treatment, storage,
transportation, disposal and release into the environment and
clean up of any hazardous or toxic waste or substance which is
subject to the provisions of any federal, state or local
environmental statute or regulation.
(m) Borrower shall notify the Bank if it receives (i)
any notice from any governmental agency that it is a potentially
responsible party in any proceeding under federal, state or local
environmental statutes or regulations, (ii) any notice of any
claim, proceeding, litigation, order, directive, citation or
request for information concerning environmental condition, or
notice of any alleged violation of any environmental statute,
ordinance, regulation or permanent condition, or (iii) any
information concerning any potentially adverse environmental
condition, including but not limited to, any spilling, leaking,
discharge, release or threat of release of any hazardous or toxic
waste or substance.
(n) Borrower shall promptly give notice, in writing,
to the Bank, of the occurrence of any Event of Default and of any
condition, event, act or omission which, with the given of notice
or the lapse of time or both, would constitute an Event of
Default hereunder or under the other Loan Documents, or under any
agreement or document securing, evidencing or relating to the
Loan Documents.
(o) Except as set forth herein, all other lines of
credit of the Borrower shall be cancelled or terminated.
SECTION 9. NEGATIVE COVENANTS. Borrower hereby
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covenants and agrees that:
(a) Borrower will not undergo a change in control or
ownership absent the written consent of the Bank.
(b) Borrower shall not violate any applicable law to
the extent that the consequences of any such violation may have a
material adverse affect on its financial condition or operations
or may impair its ability to perform its obligations under the
Loan Documents.
(c) Borrower shall not, except for sales or other
dispositions of inventory in the ordinary course of business,
sell, lease, transfer, or otherwise dispose of in a single
transaction, or a series of related transactions, all or any
material part of its property or assets, whether now owned or
hereinafter acquired, to any person, firm or corporation; nor
sell, assign or discount any of its accounts receivable or any
promissory note held by it, with or without recourse.
(d) Borrower shall not, in the aggregate, incur
additional indebtedness (including capital leases) and/or pledge
its assets in excess of $250,000.00 per year without the Bank's
prior written consent.
SECTION 10. FINANCIAL COVENANTS. Borrower hereby
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covenants and agrees that:
(a) The Borrower will maintain a ratio of current
assets to current liabilities of not less than 1.50 to 1.00 as of
the end of each fiscal quarter during the term of this Agreement
commencing with the Borrower's fiscal year beginning October 1,
1996. The outstanding balances under the revolver and line of
credit facility referred to herein shall be excluded from this
ratio.
(b) The Borrower will maintain at the end of each
fiscal quarter a combined ratio of total debt to Tangible Net
Worth of no greater than .75 to 1.00.
(c) The Borrower will maintain on a rolling four
quarter basis a combined Debt Service Coverage Ratio of at least
1.50 to 1.00. As used herein, "Debt Service Coverage Ratio"
shall be calculated as follows: the sum of (1) net income after
taxes plus depreciation and amortization minus dividends and
unfunded capital expenditures paid of the Borrower; divided by
(2) the combined current maturities of long term debt plus
capital leases of the Borrower for that period. The outstanding
balances under the revolver and line of credit facility referred
to herein shall be excluded from this ratio.
SECTION 11. DEPOSIT RELATIONSHIP. The Borrower agrees
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that all operating and cash management accounts will be
maintained at the Bank.
SECTION 12. DISCLAIMER OF RELATIONSHIPS. The Borrower
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acknowledges that nothing contained in this Agreement or in the
other Loan Documents, or any act of the Bank, shall be deemed or
construed to create any relationship of a third-party
beneficiary, or of principal or agent, or of limited or general
partnership, or of joint venture, or of any association or
relationship between the Borrower and the Bank other than that of
debtor and creditor.
SECTION 13. NOTICES. All notices to be given by any
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party as required hereunder shall be in writing and shall be
addressed as follows:
Bank: Corestates Bank, N.A.
000 Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxx,
Assistant Vice President
With a copy to: Xxxxxx X. Xxxxxxx, Esquire
Rosenn, Xxxxxxx & Xxxxxxxxx, L.L.P.
00 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxx-Xxxxx, XX 00000
Borrower: The Lion Brewery, Inc.
000 Xxxxx Xxxxxxxxxxxx Xxxxxx
Xxxxxx-Xxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxx,
Vice-President
With a copy to: Xxxx Xxxxxx, Esquire
Hourigan, Kluger, Xxxxxxx & Xxxxx
Xxxxx 000, Xxxxxx Xxxx Center
0 Xxxx Xxxxxx Xxxxxx
Xxxxxx-Xxxxx, XX 00000
Notices shall be delivered by either an independent
courier service that obtains a receipt for delivery or certified
or registered United States Postal Service mail, return receipt
requested. Any party hereto may change their address for notices
by written notice to the other parties as aforesaid.
SECTION 14. EXPENSES. The Borrower shall pay, or
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reimburse the Bank for (i) out-of-pocket expenses in connection
with the preparation, execution and delivery of any waiver,
amendment or consent by the Bank relating to the Loan Documents
and (ii) all costs of obtaining performance under the Loan
Documents by the Borrower, and all costs of collection if Default
is made in the payment of the Loan or any other amount payable
hereunder and all costs of realizing upon any security for any
obligation hereunder, which costs shall include reasonable
counsel fees and expenses.
SECTION 15. RIGHTS CUMULATIVE: NO IMPLIED WAIVERS OF
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RIGHTS. The rights and remedies of the Bank under this Agreement
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and under the other Loan Documents shall be cumulative and not
exclusive of any rights or remedies that it would otherwise have,
and no failure or delay by the Bank in exercising any right shall
operate as a waiver of such right, nor shall any single or
partial exercise of any power or right preclude its other or
further exercise or the exercise of any other power or right.
SECTION 16. SET-OFF. Upon and after the occurrence of
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any Event of Default by the Borrower, the Bank is hereby
authorized by the Borrower, at any time and from time to time,
without notice, (i) to set-off against, and to appropriate and
apply to the payment of the obligations and liabilities of the
Borrower under the Loan Documents (whether matured or unmatured,
fixed or contingent or liquidated or unliquidated), any and all
amounts owing by the Bank to the Borrower (whether payable in
Dollars or any other currency, whether matured or unmatured, and,
in the case of deposits, whether general or special, time or
demand and however evidenced) and (ii) pending any such action,
to the extent necessary, to hold such amounts as collected to
secure such obligations and liabilities and to return as unpaid
for insufficient funds any and all checks and other items drawn
against and deposits so held as the Bank in its sole discretion
may elect.
SECTION 17. INDEMNIFICATION. Borrower shall, and does
---------------
hereby, indemnify the Bank, its successors and assigns, and hold
them harmless, of and from any and all claims, demands and
liabilities whatsoever (except to the extent the same was the
result of Bank's negligence, willful misconduct or knowing
violations of law), including the reasonable costs of attorney's
fees and other defense costs, fines or other penalties or
payments, arising from the making of the Loans by the Bank, or
any other relationship, real or asserted, between the Bank and
the Borrower especially including, but specifically not limited
to any claims, demands or liabilities, asserted or arising under
any federal, state or local environmental law and any other
failure to comply in all respects with all environmental laws,
regulations, ordinances or administrative orders which may effect
the same, now or in the future. This indemnification is intended
to, and shall, survive payment in full of the Loans.
SECTION 18. ACKNOWLEDGEMENT OF CONFESSION OF JUDGMENT
-----------------------------------------
PROVISIONS.
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THE BORROWER ACKNOWLEDGES AND AGREES THAT THE LOAN DOCUMENTS
CONTAIN PROVISIONS WHEREBY THE BANK MAY UPON CERTAIN
CIRCUMSTANCES ENTER JUDGMENT BY CONFESSION AGAINST THE BORROWER,
BEING FULLY AWARE OF THE BORROWER'S WAIVER OF RIGHTS TO PRIOR
NOTICE AND HEARING ON THE QUESTION OF THE VALIDITY OF ANY CLAIMS
THAT MAY BE ASSERTED AGAINST THE BORROWER BY THE BANK UNDER THE
LOAN DOCUMENTS, BEFORE JUDGMENT CAN BE ENTERED. THE BORROWER
HEREBY CONSENTS TO THE BANK ENTERING JUDGMENT AGAINST THE
BORROWER BY CONFESSION AS PROVIDED IN THE LOAN DOCUMENTS. ANY
PROVISION IN A CONFESSION OF JUDGMENT IN ANY OF THE LOAN
DOCUMENTS FOR AN ATTORNEY'S COLLECTION COMMISSION SHALL IN NO WAY
LIMIT ANY OF THE BORROWER'S LIABILITY TO REIMBURSE THE BANK FOR
ALL LEGAL FEES ACTUALLY INCURRED BY THE BANK, EVEN IF SUCH FEES
ARE IN EXCESS OF THE ATTORNEY'S COLLECTED COMMISSION PROVIDED FOR
IN SUCH CONFESSION OF JUDGMENT.
THE BORROWER HEREBY KNOWINGLY AND INTELLIGENTLY, IRREVOCABLY
WAIVES ANY RIGHT WHICH THE BORROWER HAS OR MAY HAVE TO A HEARING
PRIOR TO THE ISSUANCE OF EXECUTION PROCESS AGAINST THE BORROWER
PURSUANT TO A JUDGMENT OBTAINED BY THE BANK (WHETHER BY
CONFESSION OR OTHERWISE), AND AGREES TO INDEMNIFY AND HOLD
HARMLESS THE BANK, ITS AGENTS, ATTORNEYS, EMPLOYEES, SUCCESSORS
AND ASSIGNS FROM AND AGAINST ANY AND ALL LIABILITY ASSOCIATED
WITH SUCH EXECUTION PROCESS.
SECTION 19. WAIVER OF JURY TRIAL. THE BORROWER AND THE
--------------------
BANK WAIVE ANY RIGHT TO TRIAL BY JURY ON ANY CLAIM, DEMAND,
ACTION OR CAUSE OF ACTION (a) ARISING UNDER ANY OF THE LOAN
DOCUMENTS, OR (b) IN ANY WAY CONNECTED WITH OR RELATED OR
INCIDENTAL TO THE DEALINGS OF THE BORROWER OR THE BANK WITH
RESPECT TO ANY OF THE LOAN DOCUMENTS OR THE TRANSACTIONS RELATED
HERETO OR THERETO, IN EACH CASE WHETHER SOUNDING IN CONTRACT OR
TORT OR OTHERWISE. THE BORROWER AND THE BANK AGREE AND CONSENT
THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE
DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS
AGREEMENT MAY FILE AN ORIGINAL COUNTER PART OR A COPY OF THIS
SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
BORROWER AND THE BANK TO THE WAIVER OF THEIR RIGHTS TO TRIAL BY
JURY. THE BORROWER ACKNOWLEDGES THAT IT HAS HAD THE OPPORTUNITY
TO CONSULT WITH COUNSEL REGARDING THIS SECTION, THAT IT FULLY
UNDERSTAND ITS TERMS, CONTENT AND EFFECT, AND THAT IT VOLUNTARILY
AND KNOWINGLY AGREE TO THE TERMS OF THIS SECTION.
SECTION 20. SURVIVAL OF COVENANTS. All covenants,
---------------------
agreements, representations and warranties made by the Borrower
in the Loan Documents are made by or on its behalf in connection
with the transactions contemplated herein shall be true in all
material respects at all times this Agreement is in effect and
shall survive the execution and delivery of the Loan Documents,
any investigation at any time made by the Bank or on its behalf
in the making by the Bank of the Loans to the Borrower. All
statements contained in any certificate, statement or other
documents delivered by or on behalf of the Borrower pursuant
hereto or in connection with the transactions contemplated
hereunder shall be deemed representations and warranties by the
Borrower.
SECTION 21. NO ASSIGNMENT. The Borrower may not assign
-------------
any of its rights hereunder without the prior written consent of
the Bank and the Bank shall not be required to lend hereunder
except to the Borrower as it presently exists.
SECTION 22. PARTICIPATION. The Bank may sell, assign or
-------------
participate all or any portion of its interest in the Loan
Documents and in connection therewith may make available to any
prospective purchaser, assignee or participant any information
relative to the Borrower in its possession.
SECTION 23. NO THIRD PARTY RIGHTS. The rights and
---------------------
benefits of this Agreement and the other Loan Documents shall not
inure to the benefit of any third party.
SECTION 24. INTEGRATION. The Loan Documents shall be
-----------
construed as integrated and complementary of each other, and as
augmenting and not restricting the rights, powers, remedies and
security of the Bank. The Loan Documents contain the entire
understanding of the parties thereto with respect to the matters
contained therein and supersede all prior agreements and
understandings between the parties with respect to the subject
matter thereof and do not require parol or extrinsic evidence in
order to reflect the intent of the parties. In the event of any
inconsistency between the terms of this Agreement and the terms
of the other Loan Documents, the terms of this Agreement shall
prevail.
SECTION 25. WAIVERS. The provision of this Agreement
-------
may, from time to time, be waived in writing by the Bank in its
sole discretion. Any such waiver of any kind on the part of the
Bank of any breach or default under this Agreement or any waiver
of any provision or condition of this Agreement must be in
writing and shall be effective only to the extent set forth in
such writing. No delay by the Bank in exercising any right or
remedy hereunder shall operate as a waiver thereof.
SECTION 26. BINDING NATURE. The rights and privileges of
--------------
the Bank contained in this Agreement shall inure to the benefit
of its successors and assigns, and the duties of the Borrower
shall bind all of its successors and assigns.
SECTION 27. GOVERNING LAW. Time of performance hereunder
-------------
is of the essence of this Agreement. This Agreement and any
written supplement hereto executed by the Borrower in which
reference to this Agreement is made shall in all respects be
governed by the laws of the Commonwealth of Pennsylvania (except
to the extent that federal law governs).
SECTION 28. SEVERABILITY. If any provision hereof shall
------------
for any reason be held invalid or unenforceable, no other
provision shall be affected thereby, and this Agreement shall be
construed as if the invalid or unenforceable provision had never
been a part of it. The descriptive headings hereof are for
convenience only and shall not in any way affect the meaning or
construction of any provisions hereof.
SECTION 29. EXECUTION OF COUNTERPARTS. This Agreement may
-------------------------
be executed in as many counterparts as may be deemed necessary by
the parties, each of which, when so executed, shall be deemed an
original, but all such counterparts shall constitute one and the
same instrument.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, and intending to be legally bound
thereby, the parties hereto have hereunder set their respective
hands and seals the day and year first above written.
ATTEST: BANK:
CORESTATES BANK, N.A.
/s/ /s/
______________________ By: ______________________________
Its: _________________________
(Corporate Seal)
ATTEST: BORROWER:
THE LION BREWERY, INC.
/s/ /s/
______________________ By: ______________________________
Its: _________________________
(Corporate Seal)
