Amended and Restated
Security Agreement
THIS AGREEMENT is made this 28th day of January, 2000, between First Union
National Bank (successor by merger to CoreStates Bank, N.A.), for itself and as
administrative agent for the "Lenders" (the "Bank"), and Vermont Pure Holdings,
Ltd. (the "Debtor").
1. DEFINITIONS. As used herein and in any separate agreement between the
Bank and the Debtor in connection with this Agreement.
(a) "Account" means any right to payment for goods sold or leased or
for services rendered which is not evidenced by an Instrument or
Chattel Paper, whether or not it has been earned by performance
including all rights to payment under a charter or other contract
involving the use or hire of a vessel and all rights incident to
such charter or contract.
(b) "Qualified Account" means any Account meeting all the following
specifications: (i) it is lawfully owned by the Debtor and
subject to no lien, security interest or prior assignment, and
the Debtor has the right of assignment thereof and the power to
grant a security interest therein; (ii) it is a valid and
enforceable Account, representing the undisputed indebtedness of
an Account Debtor to the Debtor; (iii) it is not subject to any
defense, set-off, counter-claim, credit, allowance or adjustment;
(iv) no substantial part of any goods, the sale of which has
given rise to the Account, has been returned, rejected, lost or
damaged; (v) if it arises from the sale of goods by the Debtor,
such sale was an absolute sale and not on consignment or on
approval or on a sale or return basis nor subject to any other
repurchase or return agreement, and such goods have been shipped
to the Account Debtor; (vi) if it arises from the performance of
services, such services have actually been performed; (vii) it
arose in the ordinary course of the Debtor's business; (viii) no
notice of the Bankruptcy, receivership, reorganization,
insolvency, or financial embarrassment of the Account Debtor has
been received; (ix) the Account Debtor is not a subsidiary or
affiliate of the Debtor, does not control the Debtor, and is not
under the control of or under common control with the Debtor; and
(x) the Account meets such other specifications and requirements
which may from time to time be established by the Bank.
(c) "Account Debtor" means the Person who is obligated on an Account
or General Intangible.
(d) "Chattel Paper" means a writing or writings which evidence both a
monetary obligation and a security interest in or a lease of
specific goods.
(e) "Collateral" means (i) all of the Debtor's Inventory now owned or
hereafter acquired; (ii) all of the Debtor's Documents of Title
now owned or hereafter acquired; (iii) all of the Debtor's
Accounts now existing or hereafter arising; (iv) all of the
Debtor's Farm Products now existing or hereafter arising; (v) all
of the Debtor's Investment Property, General Intangibles, Chattel
Paper and Instruments now existing or hereafter acquired or
arising; (vi) all guarantees of the Debtor's existing and future
Accounts and General Intangibles and all other security held by
the Debtor for the payment or satisfaction thereof; (vii) the
goods or the services, the sale or lease or performance of which
gave rise to any Account or General Intangible of the Debtor,
including any returned goods; (viii) all of the Debtor's
Equipment now owned or hereafter acquired; (ix) any balance or
share belonging to the Debtor of any deposit, agency or other
account with any bank and any other amounts which may be owing
from time to time by any bank to the Debtor;(x) all property of
any nature whatsoever of the Debtor now or hereafter in the
possession of or assigned or hypothecated to the Bank for any
purpose; (xi) all of the Debtors rights, privileges and licenses
relating to springs, spring rights, water rights and rights to
extract water from any property; and (xii) all Proceeds of all of
the foregoing, including all Proceeds of other Proceeds.
(f) "Debtor" means the Person who executes this Agreement as such.
The Debtor may be either a borrower from the Bank or a guarantor
of the indebtedness of another to the Bank, and in either case is
the Person obligated to pay the Liabilities secured hereby.
(g) "Document of Title" means a xxxx of lading, dock warrant, dock
receipt, warehouse receipt or order for the delivery of goods,
and also any other document which in the regular course of
business or financing is treated as adequately evidencing that
the Person in possession of it is entitled to receive, hold and
dispose of the document and the goods it covers.
(h) "Equipment" means tangible personal property held by the Debtor
for use primarily in business and includes equipment, machinery,
furniture, fixtures, dies, tools, and all accessories and parts
now or hereafter affixed thereto.
(i) "Farm Products" means crops or livestock or supplies used or
produced in farming operations or products of crops or livestock
in their unmanufactured states (such as ginned cotton, woolclip,
maple syrup, milk and eggs), if they are in the possession of a
Debtor engaged in raising, fattening, grazing or other farming
operations.
(j) "General Intangibles" means personal property of every kind and
description of Debtor other than goods, Accounts, Chattel Paper,
Documents of Title, Instruments and money, and includes without
limitation choses in action, books, records, customer lists, tax,
insurance and other kinds of refunds, patents, trademarks,
copyrights, trade names, plans, licenses and other rights in
personal property.
(k) "Instrument" means a negotiable instrument or a security or any
other writing which evidences a right to the payment of money and
is not itself a security agreement or lease and is of a type
which is, in ordinary course of business, transferred by delivery
with any necessary endorsement or assignment.
(l) "Inventory" means tangible personal property held by the Debtor
for sale or lease or to be furnished under contracts of service,
tangible personal property which the Debtor has so leased or
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furnished, and raw materials, work in process and materials used,
produced or consumed in Debtor's business, and shall include
tangible personal property represented by Documents of Title. All
equipment, accessories and parts at any time attached or added to
items of Inventory or used in connection therewith shall be
deemed to be part of the Inventory.
(m) "Investment Property" has the meaning given to that term in the
Pennsylvania Uniform Commercial Code.
(n) "Lenders" has the meaning given to that term in the Loan
Agreement and includes, as of the date of this Security
Agreement, First Union National Bank and KeyBank National
Association.
(o) "Liabilities" means the "Obligations", as defined in the Loan
Agreement.
(p) "Loan Agreement" means that certain Amended and Restated Credit
Agreement dated of even date between Vermont Pure Holdings, Ltd.
and Vermont Pure Springs, Inc., as Borrowers, and First Union
National Bank, as Lender and administrative agent for the
Lenders, as the foregoing agreement may be amended, restated,
modified or supplemented from time to time.
(q) "Person" means an individual, a corporation, a government or
governmental subdivision or agency or instrumentality, a business
trust, an estate, a trust, a partnership, a cooperative, an
association, two or more Persons having a joint or common
interest, or any other legal or commercial entity.
(r) "Proceeds means whatever is received when Collateral is sold,
exchanged, collected or otherwise disposed of, including without
limitation insurance proceeds.
2. SECURITY INTEREST IN COLLATERAL. As Security for the payment of the
Liabilities the Debtor hereby assigns to the Bank and grants to the
Bank, and confirms its prior assignment and granting of, a lien upon
and security interest in the Collateral. Without the written consent
of the Bank, the Debtor will not create, incur, assume or suffer to
exist any other liens or security interests in the Collateral, except
the liens and encumbrances disclosed in the financial statements
mentioned in Section 6.1(o) of the Loan Agreement, or set forth on the
schedule attached as Schedule 10.3 to the Loan Agreement.
3. COLLECTION OF ACCOUNTS. The Bank hereby authorizes the Debtor to
collect all Accounts from the Account Debtors. The Proceeds of
Accounts so collected b y the Debtor shall be received and held by the
Debtor in trust for the Bank. After a default hereunder, the Debtor
shall deliver to the Bank within one day of the receipt thereof by the
Debtor all Proceeds in the form of cash, checks, drafts, notes and
other remittances received in payment of or on account of any of the
Debtor's Accounts. Such proceeds shall be deposited in a special
non-interest bearing bank account (the "Cash Collateral Account")
maintained with the Bank over which the Bank alone shall have power of
withdrawal. All Proceeds other than cash shall be deposited in
precisely the form in which received, except for the addition thereto
of the endorsement of the Debtor when necessary to permit collection
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of the items, which endorsement the Debtor agrees to make. The Debtor
will not commingle any such Proceeds with any of the Debtor's other
funds or property but will hold them separate and apart from any other
funds or property and upon an express trust for the Bank until deposit
thereof is made in the Cash Collateral Account. Periodically, at the
Bank's discretion, the Bank will apply all or any part of the
collected Proceeds of Accounts on deposit in the Cash Collateral
Account to the payment in full or in part of such of the Liabilities
and in such order as the Bank may elect. The authority hereby given to
the Debtor to collect the Proceeds of Accounts in trust for the Bank
may be terminated by the Bank at any time. The Bank shall have the
right at any time, acting if it so chooses in the Debtor's name, to
collect the Debtor's accounts itself, to sell, assign, compromise,
discharge or extend the time for payment of any Account, to institute
legal action for the collection of any Account, and to do all acts and
things necessary or incidental thereto. The Debtor hereby ratifies all
that the Bank shall do by virtue hereof. The Bank may at any time,
after default hereunder, without notice to the Debtor, notify any
Account Debtor that the Account payable by such Account Debtor has
been assigned to the Bank and is to be paid directly to the Bank. At
the Bank's request the Debtor shall so notify Account Debtors and
shall indicate on all xxxxxxxx to Account Debtors that payments
thereon are to be made to the Bank. Without the written consent of the
Bank, the Debtor shall not compromise, discharge, extend the time for
payment of or otherwise grant any indulgence or allowance with respect
to any Account, except for immaterial discounts, credits, rebates or
reductions in the ordinary course of business consistent with past
practice.
4. PROCESSING AND SALES OF INVENTORY. So long as the Debtor is not in
default hereunder, the Debtor shall have the right, in the regular
course of its business, to process and sell its Inventory.
5. OTHER AGREEMENTS OR DEBTOR.
(a) The Debtor shall keep complete and accurate books and records and
make all necessary entries therein to reflect the quantities,
costs, values and location of its Inventory and Equipment, and
the transactions and facts giving rise to its Accounts and
General Intangibles and all payments, credits and adjustments
applicable thereto. The Debtor shall keep the Bank fully and
accurately informed as to the location of all such books and
records pertaining to the Collateral and shall permit the Bank's
agents to have access to the same extent as set forth in Section
8.11 of the Loan Agreement, to all such books and records and any
other records pertaining to the Debtor's business which the Bank
may request and, if deemed necessary by the Bank, after a default
hereunder, to remove them from the Debtor's place of business or
any other place where the same may be found for the purpose of
examining, auditing and copying the same. Any of the Debtor's
books and records so removed by the Bank's agents shall be
returned to the Debtor by the Bank as soon as the Bank shall have
completed its inspection, audit or copying thereof. The Bank
shall have the right to communicate with Account Debtors and
Debtor's accountant to the extent reasonably necessary to verify
account balances and any information provided by the Debtor. The
Bank's right to take possession of the Debtor's books and records
pertaining to the Collateral shall be enforceable at law by
action of replevin or by any other appropriate remedy at law or
in equity, and the Debtor consents to the entry of judicial
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orders or injunctions enforcing such right without any notice to
the Debtor or any opportunity to be heard.
(b) In the event that any lien, assessment or tax liability against
the Debtor shall arise, whether or not entitled to priority over
the security interest of the Bank created hereby, the Debtor
shall give prompt notice thereof in writing to the Bank. The Bank
shall have the right (but shall be under no obligation) to pay
nay tax or other liability of the Debtor deemed by the Bank to
affect its interest. The Debtor shall repay to the Bank any sums
which the Bank shall have so paid, together with interest thereon
at the rate payable by the Debtor, at the time of payment by the
Bank, with respect to the Liabilities (or the highest such rate,
if there be more than one), but in no event less than six percent
(6%) per annum and the Debtor's liability to the Bank for such
repayment with interest shall be included in the Liabilities. In
addition, the Bank shall be subrogated to the extent of the
payment made by it to all rights of the recipient of such payment
against the assets of the Debtor. The Debtor shall furnish to the
Bank at such times as the Bank may reasonably require proof
satisfactory to the Bank of the making of payments or deposits
required by applicable law with respect to amounts withheld by
the Debtor from wages and salaries of employees and amounts
contributed by the Debtor on account of federal and other income
or wage taxes and amounts due under the Federal Insurance
Contributions Act. The Debtor represents, warrants and agrees
that, in respect to all employee pension or other benefit plans
maintained by the Debtor or any of its subsidiaries, the Debtor
is in full compliance, and will continue to comply fully, with
the Employee Retirement Income Security Act of 1974, as amended
and all rules and regulations adopted thereunder or pursuant
thereto. The Debtor continuously represents and warrants to the
Bank that all Collateral consisting of goods has been and will
continue to be produced in compliance with the requirements of
the Fair Labor Standards Act, including Sections 206 and 207
thereof, and will immediately notify Bank if Debtor has any
reason to believe otherwise.
(c) If any of the Debtor's Accounts or General Intangibles arises out
of a contract with the United States or any department, agency or
instrumentality thereof, the Debtor will immediately notify the
Bank thereof in writing and execute any instruments and take any
steps required by the Bank in order that the security interest of
the Bank hereunder in the Debtor's General Intangibles under such
contract and in all Accounts arising thereunder and in the
Proceeds thereof shall be perfected under the provisions of the
Federal Assignment of Claims Act.
(d) If any of the Debtor's Accounts is or becomes evidenced by a
promissory note, a trade acceptance or any other instrument for
the payment of money, the Debtor will promptly deliver such
instrument to the Bank appropriately endorsed to the Bank's
order. Regardless of the form of such endorsement, the Debtor
hereby waives presentment, demand, notice of dishonor, protest
and notice of protest and all other notices with respect thereto.
(e) The Debtor will keep its Inventory and Equipment insured against
such casualties and in such amounts as the Bank shall reasonably
require. All insurance policies shall be written for the benefit
of the Debtor as the insured, and shall name the Bank as loss
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payee, and such policies shall be delivered to and held by the
Bank. All such policies of insurance shall provide for at least
ten days' advance notice in writing to the Bank of any
cancellation thereof, and shall insure Bank notwithstanding the
act or neglect to act of Debtor. If the Debtor fails to pay the
premiums on any such insurance, the Bank shall have the right
(but shall be under no obligation) to pay such premiums for the
Debtor's account. The Debtor shall repay to the bank any sums
which the Bank shall have so paid, together with interest thereon
at the rate payable by the Debtor, at the time of payment by the
Bank, with respect to the Liabilities (or the highest such rate,
if there be more than one), but in no event less than six percent
(6%) per annum and the Debtor's liability to the Bank for such
repayment with interest shall be included in the Liabilities. The
Debtor hereby assigns to the Bank any return or unearned premium
which may be due upon cancellation of any such policies for any
reason whatsoever and directs the insurers to pay to the Bank any
amounts so due. The Debtor's rights to receive payment of such
return or unearned premiums and the proceeds of any such
insurance are included in the Liabilities. The Debtor hereby
assigns to the Bank any return or unearned premium which may be
due upon cancellation of any such policies for any reason
whatsoever and directs the insurers to pay to the Bank any
amounts so due. The Debtor's rights to receive payment of such
return or unearned premiums and the proceeds of any such
insurance are included in the Accounts and General Intangibles
which are hereby subjected to a security interest.
(f) The Debtor will maintain the equipment in good condition and
repair (subject to ordinary wear and tear) and will pay the cost
of repairs to or maintenance of the same and will not permit
anything to be done that may impair the value of the Equipment.
(g) Upon default hereunder, the Bank shall have the right to take
possession of any Inventory and the Debtor hereby assigns tot he
Bank its right of stoppage in transit with respect to any
Inventory. All costs of transportation, packing, storage and
insurance of any Inventory which the Bank may take into its
possession shall be promptly repaid to the Bank by the Debtor,
together with interest thereon at the rate payable by the Debtor,
at the time of payment by the Bank, with respect to the
Liabilities (or the highest such rate, if there be more than
one), but in no event less than six percent (6%) per annum and
the Debtor's liability to the Bank for such repayment with
interest shall be included in the Liabilities. If any oft he
Debtor" Inventory is or becomes represented by a Document of
Title, the Bank may require that such Document of Title be in
such form as to permit the Bank or anyone to whom the Bank may
negotiate the same to obtain delivery of the Inventory
represented thereby, and that it b delivered into the possession
of the Bank.
(h) At such intervals as the Bank may require, the Debtor shall
submit to the Bank a schedule reflecting in form and detail
reasonably satisfactory to the Bank the quantities, cost and
value of its Inventory and Equipment, and the amounts of all its
outstanding Accounts and the amount of the Accounts which are
Qualified Accounts and the value of all its General Intangibles.
The Bank may also require the Debtor to submit to the Bank copies
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of the invoices pertaining to all or any of its Accounts and
evidence of shipment of the Inventory the sale or leasing of
which have given rise to such Accounts.
(i) The Debtor shall promptly notify the Bank of any event causing
deterioration, loss or depreciation in value of any substantial
portion of the Debtor's Inventory and Equipment and the amount of
such loss or depreciation. The Debtor shall permit the Bank's
agents to have access to its Inventory and Equipment from time to
time, as reasonably requested by the Bank, or at any time after a
default hereunder, for purposes of examination, inspection, and
appraisal thereof and verification of the Debtor's records
pertaining thereto. Upon default by the Debtor, the Debtor shall
assemble the Inventory and Equipment and make them available to
the Bank at such place as may be designated by the Bank which is
reasonably convenient to both parties. At the request of the
Bank, the Debtor shall lease warehousing space in the Debtor's
own premises to the Bank for the purpose of taking any Inventory
into the custody of the Bank without removal thereof from such
premises and will erect such structures and post such signs as
the Bank may require in order to place such Inventory under the
exclusive control of the Bank.
(j) The Debtor will promptly notify the Bank (i) of any material
adverse change in the Debtor's financial condition or in the
financial condition of any Account Debtor or in the
collectibility of any of its Accounts, (ii) of all claims,
rejections, returns and adjustments which may result in a
reduction of the liability of any Account Debtor on an Account,
and which have a material adverse effect on Debtor's financial
condition, and (iii) of any Qualified Account which shall cease
for any reason to meet the specifications fixed hereby for
Qualified Accounts.
(k) The Debtor warrants that the Debtor's chief executive office and
all of its offices where it keeps its records concerning the
Collateral, all locations at which it keeps its Inventory and
Equipment and all locations at which it maintains a place of
business are listed in Section 18 hereof. Debtor further warrants
that Debtor has no plans for the removal of the Collateral to any
location not set forth in Section 18. The Debtor shall promptly
notify the Bank in writing of any change in the Debtor's name,
chief executive office or the location of the Debtor's records,
of any change in the location of the Collateral, of any change in
the location of any place of business and of the establishment of
any new place of business. If any of the Collateral or any of the
Debtor's records concerning the Collateral are at any time to be
located on premises leased by the Debtor or on premises owned by
the Debtor, subject to a mortgage or other lien, the Debtor shall
obtain and deliver to the Bank, prior to the delivery of any
Collateral or records concerning the Collateral to said premises,
an agreement in form satisfactory to the Bank, waiving the
landlord's or mortgagee's or lienholder's rights to enforce any
claim against the Debtor for moneys due under the lease, mortgage
or other lien by levy of distraint or other similar proceedings
against the Collateral or the Debtor's records concerning the
Collateral and assuring the Bank's ability to have access to the
Collateral and the Debtor's records concerning the Collateral in
order to exercise its rights hereunder to take possession
thereof.
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(l) The Debtor shall pay to the Bank on demand, with interest at the
rate payable by the Debtor, at the time of payment by the Bank,
with respect to the Liabilities (or the highest such rate, if
there be more than one), but in no event less than six percent
(6%) per annum, any and all expenses (including reasonable
attorney's fees and legal expenses, filing fees, searches and
termination costs), which may have been incurred by the Bank (i)
to enforce payment of any Account or to enforce any General
Intangibles or to enforce any of the Liabilities, whether as
against an Account Debtor, the Debtor or any guarantor or surety
of any Account Debtor or of the Debtor; or (ii) in the
enforcement, prosecution or defense of any action growing out of
or connected with the subject matter of this Agreement, the
Liabilities, the Collateral or any of the Bank's rights therein
or thereto; (iii) in connection with the custody, preservation,
use, operation, preparation for sale or sale of any Collateral;
or (iv) in connection with preparation and completion of this
Agreement and any and all related agreements and consummation of
the financing arrangements described herein and any modification
or extension hereof; or (v) with respect to the enforcement,
protection or preservation from time to time of the Bank's rights
under this Agreement or with respect the Collateral. The Debtor's
liability to the Bank for such repayment with interest shall be
included in the Liabilities and is secured by the Collateral.
(m) The Debtor shall provide the Bank with all financial statements
or other financial documents as and when required under this Loan
Agreement. The Debtor further covenants and agrees to execute
from time to time any and all agreements and documents (including
financing statements) which the Bank may request in order to
perfect its lien on the Collateral and otherwise carry out the
provisions of this Agreement. The Debtor further authorizes the
Bank to file a carbon, photographic or other reproduction of this
Agreement or a financing statement previously filed under this
Agreement as a financing statement in any jurisdiction. If
certificates of title are issued or outstanding with respect to
any of the Collateral, the Debtor will cause the security
interest of the Bank to be properly noted thereon and will
promptly deliver such certificates to the Bank.
(n) Without the prior written consent of the Bank, the Debtor shall
not sell or otherwise dispose of its Equipment, other than
dispositions made in the ordinary course of business of obsolete
or worn out equipment, and, except in the ordinary course of
business, the Debtor shall not sell or dispose of its Inventory.
6. ENVIRONMENTAL MATTERS.
(a) As used in this Agreement, the following terms shall have the
following meanings: (i) "Environmental Laws" means any and all
applicable federal, state and local environmental laws, rules and
regulations whether now or existing or hereafter enacted together
with all amendments, modifications and supplements thereof; and
(ii) "Hazardous Materials" means any contaminants, hazardous
substances, regulated substances, or hazardous wastes which may
be the subject of liability pursuant to any Environmental Law.
(b) The Debtor represents and warrants that to the best of its
knowledge, no property owned or leased by the Debtor or any
subsidiary of the Debtor is in violation of any Environmental
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Laws, no Hazardous Materials are present on said property in
violation of any Environmental Law and neither the Debtor nor nay
subsidiary of the Debtor has been identified in any litigation,
administrative proceedings or investigation as a responsible
party for any liability under and Environmental Laws.
(c) The Debtor shall not use, generate, treat, store, dispose of or
otherwise introduce, or permit any subsidiary to use, generate,
treat, store, dispose of or otherwise introduce, any Hazardous
Materials into or on any property owned or leased by the Debtor,
and will not, and will not permit any subsidiary to, cause,
suffer, allow or permit anyone else to do so, except in an
environmentally safe manner through methods which have been
approved by and meet all of the standards of the federal
Environmental Protection Agency and any other federal, state or
local agency with authority to enforce Environmental Laws. The
Debtor hereby agrees to indemnify, reimburse, defend and hold
harmless the Bank and its directors, officers, agents and
employees ("Indemnified Parties") for, from and against all
demands, liabilities, damages, costs, claims, suits, actions,
legal or administrative proceedings, interest, losses, expenses
and reasonable attorney's fees (including any such fees and
expenses incurred in enforcing this indemnity) asserted against,
imposed on or incurred by any of the Indemnified Parties,
directly or indirectly pursuant to or in connection with the
application of any Environmental Law, to acts or omissions
occurring at any time on or in connection with any property owned
or leased by the Debtor or any subsidiary of the Debtor or any
business conducted thereon.
7. DEFAULT. The Debtor shall be in default hereunder upon the occurrence
of any "Event of Default" as defined in the Loan Agreement (after the
expiration of any applicable notice and cure periods).
8. ACCELERATION AND ENFORCEMENT RIGHTS. Whenever the Debtor shall be in
default as aforesaid, (i) the Bank may declare the entire unpaid
amount of such of the Liabilities as are not then due and payable to
become immediately due and payable without notice to or demand on any
Obligor; and (ii) the Bank may at its option exercise from time to
time nay or all rights and remedies available to it under the Uniform
Commercial Code or otherwise available to it, including the right to
collect, receipt for, settle, compromise, adjust, xxx for, foreclose
or otherwise realize upon any of the Collateral and to dispose of any
of the Collateral at public or private sale(s) or other proceedings,
with or without advertisement, and the Debtor agrees that the Bank or
its nominee may become the purchaser at any such sale(s). Bank shall
have the unconditional right to retain and obtain the full benefit of
all Collateral until all Liabilities of the Debtor to the Bank are
paid and satisfied in full. If nay notification of intended
disposition of the Collateral is required by law, such notice shall be
deemed reasonable fi mailed at least 10 days before such disposition
addressed to the Debtor at its Address shown herein. If any Note
secured hereby is payable on demand, Bank's right to require payment
shall not be restricted or impaired by the absence, non-occurrence or
waiver of an Event of Default, and it is understood that if such Note
is payable on demand, the Bank may require payment at any time.
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9. APPLICATION OF COLLATERAL. The Proceeds of any Collateral received by
the Bank at any time before or after default, whether from sale or
Collateral or otherwise, may be applied to the payment in full or in
part of such of the Liabilities and in such order as the Bank may
elect. The Debtor, to the extent that it has any right, title or
interest in any of the Collateral, authorized Bank to proceed against
the Collateral in nay order that Bank may determine and waives and
releases any right to require the Bank to collect any of the
Liabilities from any source other than from the Collateral under any
theory of marshalling of assets, or otherwise, and specifically
authorizes the Bank to proceed against any of the Collateral in which
the Debtor has a right, title or interest with respect to any of the
Liabilities in any manner that the Bank may determine.
10. POWER OF ATTORNEY. The Debtor does hereby appoint any officer or agent
of the Bank as the Debtor's true and lawful attorney-in-fact, with
power to endorse the name of the Debtor upon any notes, checks,
drafts, money orders, or other instruments of payment or Collateral
that may come into possession of Bank; to sign and endorse the name of
the Debtor upon any invoices, freight or express bills, bills of
lading, storage or warehouse receipts, drafts against Account Debtors,
assignments, verifications and notices in connection with Accounts,
and any instruments or documents relating thereto or to the Debtor's
rights therein; and to give written notice to such office and
officials of the United States Postal Service to effect such change or
changes of address so that all mail addressed to the Debtor may be
delivered directly to Bank (Bank will return all mail not related to
the Liabilities or the Collateral); granting unto Debtor's said
attorney full power to do any and all things necessary to be done with
respect to the above transactions as fully and effectually as Debtor
might or could do, and hereby ratifying all that said attorney shall
lawfully do or cause to be done by virtue hereof. This power of
attorney shall be irrevocable for the term of this Agreement and all
transactions hereunder.
11. TERM. The term of this Agreement shall commence with the date hereof
and end upon the full and final payment of the Liabilities, and the
Bank shall deliver to Debtor, at the Debtor's request, such of the
Collateral as shall not have been sold or otherwise disposed of
pursuant to this Agreement or the Loan Agreement.
12. SUCCESSORS AND ASSIGNS. All provisions herein shall inure to, and
become binding upon, the heirs, executors, administrators, successors,
representatives, receivers, trustees and assigns of the parties,
provided, however, that this Agreement shall not be assignable by the
Debtor without the prior written approval of the Bank.
13. THE DEBTOR'S AUTHORITY AND CAPACITY, ETC. The Debtor represents and
warrants that the Bank is obtaining and shall maintain at all times a
first lien on all of the Collateral, except as disclosed by the
financial statements mentioned in Section 6.1(o) of the Loan Agreement
or as set forth on the Schedule attached as Schedule 10.3 to the Loan
Agreement. If the Debtor is a corporation, the Debtor further
represents and warrants that it is duly organized, validly in
existence and in good standing in its state of incorporation and any
other state where the nature or extent of its business requires
qualification, that the execution and performance by the Debtor of
this Agreement and any related agreements is authorized by the
Debtor's Board of Directors and does not violate the Articles of
Incorporation or By-Laws of the Debtor or any other Agreement or
contract by which the Debtor is bound. The Debtor represents and
warrants that this Agreement is the legal, valid and binding
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obligation of the Debtor enforceable against the Debtor in accordance
with its terms.
14. CONSENT TO JURISDICTION AND VENUE. IN ANY LEGAL PROCEEDING INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER ARISING OUT OF OR RELATED TO THIS
AGREEMENT OR THE RELATIONSHIP ESTABLISHED HEREUNDER, EACH UNDERSIGNED
PARTY HEREBY IRREVOCABLY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF
ANY STATE OR FEDERAL COURT LOCATED IN ANY COUNTY IN THE COMMONWEALTH
OF PENNSYLVANIA WHERE THE BANK MAINTAINS AN OFFICE AND AGREES NOT TO
RAISE ANY OBJECTION TO SUCH JURISDICTION OR TO THE LAYING OR
MAINTAINING OF THE VENUE OF ANY SUCH PROCEEDING IN SUCH COUNTY. EACH
UNDERSIGNED PARTY AGREES THAT SERVICE OF PROCESS IN ANY SUCH
PROCEEDING MAY BE DULY EFFECTED UPON ITS BY MAILING A COPY THEREOF, BY
REGISTERED MAIL, POSTAGE PREPAID, TO EACH UNDERSIGNED PARTY.
15. WAIVER OF JURY TRIAL. EACH UNDERSIGNED PARTY HEREBY WAIVES, AND THE
BANK BY ITS ACCEPTANCE HEREOF THEREBY WAIVES, TRIAL BY JURY IN ANY
LEGAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER
(WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING
OUT OF OR RELATED TO THIS AGREEMENT OR THE RELATIONSHIP ESTABLISHED
HEREUNDER. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE BANK TO
ENTER INTO, ACCEPT OR RELY UPON THIS AGREEMENT.
16. MISCELLANEOUS. The construction and interpretation of this Agreement
and all agreements shall be governed by the laws of the Commonwealth
of Pennsylvania. No modification hereof shall be binding or
enforceable unless in writing and signed by the party against whom
enforcement is sought. If any provision of this Agreement is
determined to be unenforceable or invalid, such determination shall
not affect or impair the remaining provisions of the Agreement. No
rights are intended to be created hereunder for the benefit of any
third party beneficiary hereof. The individual signatory(ies) on
behalf of the Debtor represents that he(they) is(are) authorized to
execute this Agreement on behalf of the Debtor. This Agreement
supplements the Debtor's obligations under any promissory notes or
separate agreements with the Bank. This Security Agreement amends and
restates, but does not supercede the Liabilities or other obligations
of the Debtor under, that previous security agreement executed and
delivered by the Debtor to CoreStates Bank, N.A.,
predecessor-in-interest to First Union National Bank on or about April
8, 1998.
17. LOCATIONS OF DEBTOR. The Debtor represents and warrants that the
following addresses (together with any additional addresses which may
be shown on any attached schedule) correctly set forth all of the
locations where the Debtor maintains a place of business, its records
or the Collateral.
Chief Executive Office:
-00-
Xxxxx00, Xxxxxxxxx Xxxxxxxxxx Xxxx,
Xxxxxxxx, Xxxxxxx 00000
Other Locations: None.
18. NAME OF DEBTOR. The Debtor represents and warrants that the name of
the Debtor shown on this Agreement is the correct, full legal name of
the Debtor and that the Debtor has not at any time changed its name,
identity or corporate structure, been the surviving corporation in a
merger, acquired any other business, or engaged in business under an
assumed name or trade name except as set forth below.
IN WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto
under seal and intending to be legally bound on the day and year first above
written.
First Union National Bank (successor
by merger to CoreStates Bank, N.A.), for
itself and as administrative agent for
the "Lenders"
VERMONT PURE HOLDINGS, LTD.
------------------------------------- By--------------------------------------
(Name of Corporate or Partnership (Signature)
Debtor)
By----------------------------------- ----------------------------------------
Xxxxxxx Xxxxxx, Chief Executive Xxxxx X. Xxxxx, Vice President
Officer and President
------------------------------------- Address
Xxxxx XxxXxxxxx, Chief Financial
Officer and Secretary
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