This agreement made as of the 5th day of October, 2000, by and between
XXXXXXX BANK, a federally chartered savings bank with an office at 000 Xxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxx 00000 (the "LENDER") and VERMONT PURE HOLDINGS,
LTD, (f/k/a VP Merger Parent, Inc.), a Delaware corporation with an office at
Xxxxxxxxx Xxxxxxxxxx Xxxx, Xxxxx 00, Xxxxxxxx, Xxxxxxx 05060 ("HOLDINGS"),
CRYSTAL ROCK SPRING WATER COMPANY, a Connecticut corporation with an office at
0000 Xxxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxx 00000 ("CRYSTAL ROCK"), PLATINUM
ACQUISITION CORP. (f/k/a Vermont Pure Holdings, Ltd.), a Delaware corporation
with an office at Xxxxxxxxx Xxxxxxxxxx Xxxx, Xxxxx 00, Xxxxxxxx, Xxxxxxx 00000
("PLATINUM") and VERMONT PURE SPRINGS, INC., a Delaware corporation with an
office at Xxxxxxxxx Xxxxxxxxxx Xxxx, Xxxxx 00, Xxxxxxxx, Xxxxxxx 00000 ("VPS",
and collectively with holdings, CRYSTAL ROCK AND PLATINUM, the "OBLIGORS ").
SECTION 1. DEFINITIONS, ACCOUNTING TERMS AND FINANCIAL COVENANTS.
1.1 DEFINITIONS. For purposes of this Agreement, the following
terms shall have the meanings specified below:
a. "Additional Collateral" means (i) all General
Intangibles (as such term is defined in the Uniform
Commercial Code as in effect in Connecticut on the date of
this Agreement) of every kind and description of the
Obligors, including without limitation federal, state and
local tax refund claims of all kinds, whether now existing
or hereafter arising; (ii) all of Obligors' deposit
accounts, whether now owned or hereafter created, wherever
located; (iii) all monies, securities, instruments, cash and
other property of Obligors and the proceeds thereof, now or
hereafter held or received by, or in transit to, Lender from
or for Obligors, whether for safekeeping, pledge, custody,
transmission, collection or otherwise, and all of Obligors'
deposits (general or special, balances, sums, proceeds and
credits of Obligors with Lender at any time existing); (iv)
all interests in real property held or owned by Obligors,
including all leasehold interests; (v) all rights under
contracts and license agreements for water; (vi) all books,
records, customer lists, ledger cards, computer programs,
computer tapes, disks, printouts and records, and other
property and general intangibles at any time evidencing or
relating to any of the foregoing, whether now in existence
or hereafter created; (vii) all other personal property and
fixtures of the Obligors, whether now existing or hereafter
arising or created; and all proceeds of the foregoing and
all proceeds of any insurance on the foregoing.
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b. "Adirondack" means Adirondack Coffee Service, Inc., a New
York corporation.
c. "Affiliate" means (i) any person or entity directly or
indirectly controlling or controlled by or under direct or
indirect common control with any Obligor or any other
obligor of the Obligations, as the case may be (including,
without limitation, any respective director or officer of
any Obligor or any other obligor of the Obligations, as the
case may be), (ii) any spouse, immediate family member or
other relative who has the same principal residence of any
person described in clause (i) above, (iii) any trust in
which any such person or entity described in clauses (i) or
(ii) above has a beneficial interest and (iv) any
corporation or other organization of which any such persons
or entities described in clauses (i) or (ii) above
collectively own more than ten percent (10%) of the voting
securities of such entity.
d. "Capital Assets" means assets that, in accordance with GAAP,
are required or permitted to be depreciated or amortized on
Holdings' consolidated balance sheet.
e. "Capital Expenditures" mean expenditures for purchase,
acquisition or lease of Capital Assets.
f. "Capital Leases" means capital leases, conditional sales
contracts and other title retention agreements relating to
the purchase or acquisition of Capital Assets.
g. "Code" means the Internal Revenue Code of 1986, as amended,
or any successor federal tax code, and any reference to any
provision shall be deemed to include a reference to any
successor provision or provisions.
h. "Collateral" means Receivables, Inventory, Equipment,
Patents, Trademarks, Investment Property, Additional
Collateral, and the Premises.
i. "Current Assets" means current assets determined in
accordance with GAAP.
j. "Current Liabilities" means current liabilities determined
in accordance with GAAP.
k. "Current Maturities of Long Term Debt" means the current
maturity of long term Indebtedness paid or payable during
the applicable period.
l. "Current Ratio" means the ratio of Current Assets to Current
Liabilities.
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m. "Date of Closing" means the date on which this Agreement and
the Notes are executed by the Obligors.
n. "Debt Service Coverage Ratio" means, for the relevant
period, the ratio of (i) (A) net income from continuing
operations (excluding extraordinary items of income), plus
(B) interest expense on Subordinated Debt, minus (C)
interest expense paid on Subordinated Debt, plus (D)
depreciation, plus (E) amortization, plus or minus (F) the
net change in customer deposits, to (ii) (A) Current
Maturities of Long Term Debt, plus (B) the current portion
of Capital Lease payments, plus (C) Unfinanced Capital
Expenditures plus (D) principal payments of Subordinated
Debt.
o. "Dividends" means the payment of any dividend or other
distribution in respect of the capital stock of any Obligor
in cash or other property (excepting distributions in the
form of such stock) or the redemption or acquisition of any
such stock.
p. "EBITDA" means, for the relevant period, income from
continuing operations (excluding extraordinary items of
income) before deduction for interest and taxes,
depreciation and amortization.
q. "Environmental Laws" means any and all applicable federal,
state and local environmental, health or safety statutes,
laws, regulations, rules, ordinances, guidances, policies
and rules or common law (whether now existing or hereafter
enacted or promulgated), of all governmental agencies,
bureaus or departments which may now or hereafter have
jurisdiction over any of the Obligors or any of the
Obligors' property and all applicable judicial and
administrative and regulatory decrees, judgments and orders,
including common law rulings and determinations, relating to
injury to, or the protection of, real or personal property
or human health or the environment, including, without
limitation, all requirements pertaining to reporting,
licensing, permitting, investigation, remediation and
removal of emissions, discharges, releases or threatened
releases of Hazardous Materials, chemical substances,
pollutants or contaminants whether solid, liquid or gaseous
in nature, into the environment or relating to the
manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of such Hazardous
Materials, chemical substances, pollutants or contaminants.
r. "Equipment" means all Equipment, Farm Products and Fixtures
(as such terms are defined in the Uniform Commercial Code as
in effect in Connecticut on the date of this Agreement),
including all machinery, equipment, furniture, fixtures,
tools, parts, supplies and motor vehicles,
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now owned and hereafter acquired, by Obligors of whatsoever
name, nature, kind or description, wherever located, and all
additions and accessions thereto and replacements or
substitutions therefor, and all proceeds thereof and all
proceeds of any insurance thereon.
s. "ERISA" means the Employee Retirement Income Security Act of
1974 and all rules and regulations promulgated pursuant
thereto, as the same may from time to time be supplemented
or amended.
t. "Event of Default" shall have the meaning assigned in
Section 7 hereof.
u. "Excelsior" means Excelsior Spring Water Company, Inc., a
New York corporation.
v. "GAAP" means generally accepted accounting principles in the
United States of America, as from time to time in effect.
w. "Guaranties" means the Guaranty Agreements dated the same
date as this Agreement executed by the Guarantors in favor
of Lender.
x. "Guarantors" means Adirondack and Excelsior.
y. "Hazardous Material" means any substance: (i) the presence
of which requires or may hereafter require notification,
investigation, monitoring or remediation under any
Environmental Law; (ii) which is or becomes defined as a
"hazardous waste", "hazardous material" or "hazardous
substance" or "toxic substance" or "pollutant" or
"contaminant" under any present or future Environmental Law
or amendments thereto including, without limitation, the
Comprehensive Environmental Response, COMPENSATION AND
LIABILITY ACT (42 U.S.C. SECTION 9601 ET SEQ.) and any --
--- applicable local statutes and the regulations
promulgated thereunder; (iii) which is toxic, explosive,
corrosive, reactive, ignitable, infectious, radioactive,
carcinogenic, mutagenic or otherwise hazardous and is or
becomes regulated by any governmental authority, agency,
department, commission, board, agency or instrumentality of
any foreign country, the United States, any state of the
United States, or any political subdivision thereof to the
extent any of the foregoing has or had jurisdiction over any
Obligor or any Obligor's property; or (iv) without
limitation, which contains gasoline, diesel fuel or other
petroleum products, asbestos or polychlorinated biphenyls.
z. "Indebtedness" means (i) obligations for borrowed money,
(ii) obligations representing the deferred purchase price of
property other than accounts
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payable arising in the ordinary course of Obligors' business
on terms customary in the trade, (iii) obligations, whether
or not assumed, secured by a lien on, or payable out of the
proceeds or production from, property now or hereafter owned
or acquired by Obligors, (iv) obligations which are
evidenced by bonds, debentures, notes, acceptances, or other
instruments, (v) Capital Lease obligations, (vi) guaranties
of the obligations of other parties, other than in
connection with the endorsement of negotiable instruments in
the ordinary course of business, (vii) obligations under
letters of credit and reimbursement agreements, and (viii)
any other contingent liabilities of Obligors.
aa. "Inventory" means all Inventory and Goods (as such terms are
defined in the Uniform Commercial Code as in effect in
Connecticut on the date of this Agreement) of whatsoever
name, nature, kind or description now owned and hereafter
acquired by Obligors, wherever located, including without
limitation all contract rights with respect thereto and
documents representing the same, all goods held for sale or
lease or to be furnished under contracts of service,
finished goods, raw materials, materials used or consumed by
Obligors, parts, supplies, and all wrapping, packaging,
advertising and shipping materials and any documents
relating thereto, and all labels and other devices, names
and marks affixed or to be affixed thereto for purposes of
selling or of identifying the same or the seller or
manufacturer thereof, and all right, title and interest of
Obligors therein and thereto, and all proceeds of the
foregoing and all proceeds of any insurance on the
foregoing.
bb. "Investment Property" means all investment property (as such
term is defined in the Uniform Commercial Code as adopted in
Connecticut on the date of this Agreement) of whatever type
or nature now owned or hereafter acquired by the Obligors,
including without limitation, all certificated securities,
all uncertificated securities, all security entitlements,
all security accounts, all commodity contracts, all
commodity accounts and all financial assets of every type
and nature and all rights thereto or therein, and all
financial accounts of every type and nature and all rights
thereto or therein, and all proceeds and products thereof,
including without limitation, all insurance proceeds and
fidelity bond proceeds related thereto.
cc. "IRS" means the United States Internal Revenue Service.
dd. "Loans" means the Term Loan and the Revolving Line of
Credit.
ee. "Loan Documents" means this Agreement, the Notes and all
other documents evidencing, securing and guarantying the
Loans.
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ff. "Mortgages" means the Open-End Mortgage Deeds and Security
Agreements from the Obligors to Lender covering the
Premises.
gg. "Net Income" means net income as determined in accordance
with GAAP.
hh. "Net Loss" means net loss as determined in accordance with
GAAP.
ii. "Notes" means the Term Note and the Revolving Line of Credit
Note.
jj. "Obligations" means and includes all loans, advances,
interest, indebtedness, liabilities, obligations,
guaranties, covenants and duties at any time owing by
Obligors to Lender of every kind and description, whether or
not evidenced by any note or other instrument, whether or
not for the payment of money, whether direct or indirect,
absolute or contingent, due or to become due, now existing
or hereafter arising, including, but not limited to, the
Loans and all other indebtedness, liabilities and
obligations arising under this Agreement and the other Loan
Documents, all swap agreements and all costs, expenses,
fees, charges and attorneys', paralegals' and professional
fees incurred in connection with any of the foregoing, or in
any way connected with, involving or relating to the
preservation, enforcement, protection or defense of, or
realization under this Agreement, the Notes, any of the
other Loan Documents, any related agreement, document or
instrument, the Collateral and the rights and remedies
hereunder or thereunder, including without limitation, all
costs and expenses incurred in inspecting or surveying the
Premises, or conducting environmental studies or tests, and
in connection with any "workout" or default resolution
negotiations involving legal counsel or other professionals
and any re-negotiation or restructuring of any of the
Obligations.
kk. "Patents" means all of Obligors' right, title and interest,
present and future, in and to (a) all letters patent of the
United States or any other country, all right, title and
interest therein and thereto, and all registrations and
recordings thereof, including without limitation
applications, registrations and recordings in the United
States Patent and Trademark Office or in any similar office
or agency of the United States or any state thereof or any
other country or any political subdivision thereof, all
whether now owned or hereafter acquired by Obligors; and (b)
all reissues, continuations, continuations-in-part or
extensions thereof and all licenses thereof; and all
proceeds of the foregoing and all proceeds of any insurance
on the foregoing.
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ll. "PBGC" means the Pension Benefit Guaranty Corporation.
mm. "Permitted Encumbrances" means the liens and encumbrances
listed on SCHEDULE 4.5; provided, however, that none of the
Permitted Encumbrances shall be amended or modified in any
way without the prior written consent of Lender.
nn. "Plan" means any employee benefit plan or other plan
maintained for employees of any of the Obligors or any
related entity covered by Title I of ERISA.
oo. "Pre-tax Earnings" means pre-tax earnings as determined in
accordance with GAAP.
pp. "Pre-tax Losses" means pre-tax losses as determined in
accordance with GAAP.
qq. "Premises" means the following real property owned by
Obligors:
Xxxxxxx Drive, Randolph, VT
Xxxxx 00 Xxxxxxx, Xxxxxxxx, XX
Chase Road, Randolph, VT
North Xxxxxxxx Road, Randolph, VT
Xxxxx X. XxXxxxxx, Xxxxx 00, Xxxxxxxx, XX
(approximately 20 acres) Xxxx XxXxxxxx, Xxxxx 00,
Xxxxxxxx, XX (approximately 5 acres)
rr. "Prior Encumbrances" means the mortgages, security
interests, pledges, liens, encumbrances or other charges
listed in section A of schedule 4.5.
ss. "Prime Rate" means the variable per annum rate of interest
so designated from time to time by Lender as its prime rate.
The Prime Rate is a reference rate and does not necessarily
represent the lowest or best rate being charged to any
customer.
tt. "Property" means all property and assets of Obligors.
uu. "Receivables" means (i) all of Obligors' now owned and
hereafter acquired, present and future, Accounts, Chattel
Paper, Documents, Instruments, (as such terms are defined in
the Uniform Commercial Code as in effect in Connecticut on
the date of this Agreement) and contract rights, including
without limitation all obligations to Obligors for the
payment of money, whether arising out of Obligors' sale of
goods or rendition of services or otherwise (all hereinafter
called "Accounts") and all proceeds of the
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foregoing and all proceeds of any insurance on the
foregoing; (ii) all of Obligors' rights, remedies, security
and liens, in, to and in respect of the Accounts, present
and future, including without limitation, rights of stoppage
in transit, replevin, repossession and reclamation and other
rights and remedies of an unpaid vendor, lienor or secured
party, guaranties or other contracts of suretyship with
respect to the Accounts, deposits or other security for the
obligation of any debtor or obligor in any way obligated on
or in connection with any Accounts, and credit and other
insurance, and all proceeds of the foregoing and all
proceeds of any insurance on the foregoing; and (iii) all of
Obligors' right, title and interest, present and future, in,
to and in respect of all goods relating to, or which by sale
have resulted in, Accounts, including without limitation all
goods described in invoices or other documents or
instruments with respect to, or otherwise representing or
evidencing any Accounts, and all returned, reclaimed or
repossessed goods, and all proceeds of the foregoing and all
proceeds of any insurance on the foregoing.
vv. "Revolving Line of Credit" means the $5,000,000 credit
facility evidenced by the Revolving Line of Credit Note.
ww. "Revolving Line of Credit Note" means the promissory note of
Obligors dated the same date as this Agreement in the
original principal amount of up to $5,000,000.
xx. "Senior Funded Debt" means all Indebtedness of Obligors
other than Subordinated Debt and the Convertible Debenture
issued to Marcon Capital Corporation as of September 30,
1999 in the original principal amount of $975,000.
yy. "Standby Letter of Credit" means a standby letter of credit
issued by the Lender for the account of any Obligor in
accordance with the terms of this Agreement.
zz. "Subordinated Debt" means debt of any of the Obligors which
has been subordinated in payment to the Obligations pursuant
to a subordination agreement which is satisfactory in form
and substance to the Lender.
aaa. "Subordinated Encumbrances" means the mortgages, security
interests, pledges, liens, encumbrances or other charges
listed in Section B of SCHEDULE 4.5.
bbb. "Subordinated Lenders" means (i) Xxxxx X. Xxxxx, (ii) Xxxx
X. Xxxxx, (iii) Xxxx X. Xxxxx, (iv) Xxxxx X. Xxxxx and (v)
Xxxx X. Xxxxxxxx, not
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individually but as Trustee of the Xxxxx X. Xxxxx Life
Insurance Trust, the Xxxx X. Xxxxx Insurance Trust and
U/T/A/ dated December 16, 1991 F/B/O Xxxx Xxxxx et al (the
"Trustee").
ccc. "Subsidiary" means any corporation, limited liability
company, partnership or other entity, a majority of whose
outstanding stock, membership interests, partnership
interests or other ownership interests having voting power
to elect the board of directors or other governing body or
person of such entity shall at any time be owned or
controlled by the Obligors.
ddd. "Term Loan" means the $31,000,000 loan evidenced by the Term
Note.
eee. "Term Note" means the promissory note of the Obligors dated
the same date as this Agreement in the original principal
amount of $31,000,000.
fff. "Termination Date" means, with respect to any Loan or any
Note, the "Termination Date" as defined in the applicable
Note.
ggg. "Total Assets" means total assets determined in accordance
with GAAP.
hhh. "Total Liabilities" means total liabilities determined in
accordance with GAAP.
iii. "Trademarks" means all of Obligors' right, title and
interest, present and future, in and to (i) all trademarks,
trade names, trade styles, service marks, prints and labels
on which said trademarks, trade names, trade styles and
service marks have appeared or appear, designs and general
intangibles of like nature, now existing or hereafter
adopted or acquired, all right, title and interest therein
and thereto, and all registrations and recordings thereof,
including without limitation applications, registrations and
recordings in the United States Patent and Trademark Office
or in any similar office or agency of the United States, any
State thereof, or any other country or any political
subdivision thereof, all whether now owned or hereafter
acquired by Obligors; (ii) all reissues, extensions or
renewals thereof and all licenses thereof; and (iii) the
goodwill of the business symbolized by each of the
Trademarks, and all customer lists and other records of
Obligors relating to the distribution of products bearing
the Trademarks; and all proceeds of the foregoing and all
proceeds of any insurance on the foregoing.
jjj. "Unfinanced Capital Expenditures" means Capital Expenditures
financed with a party other than Lender.
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1.2 ACCOUNTING TERMS. Unless otherwise defined, all accounting terms
shall be construed, and all computations or classifications of
assets and liabilities and of income and expenses shall be made
or determined in accordance with GAAP.
1.3 FINANCIAL COVENANTS. All financial covenants in this Agreement
shall apply with respect to, and shall be measured in accordance
with, the consolidated financial statements of Holdings and
Platinum, VPS and Crystal Rock.
SECTION 2. THE LOAN TRANSACTIONS.
2.1
THE TERM LOAN. Lender shall loan to Obligors the sum of THIRTY
ONE MILLION DOLLARS ($31,000,000). Obligors' obligations to repay
the Term Note and the terms and conditions of the Term Loan are
as contained in this Agreement and the Term Note, a copy of which
is attached to this Agreement as EXHIBIT 2.1. The proceeds of the
Term Loan shall be used to fund the acquisition of Crystal Rock
Spring Water Company and to consolidate the existing debt of the
Obligors.
2.2 THE REVOLVING LINE OF CREDIT. Lender may loan to any of the
Obligors, and any Obligor may borrow from Lender, from time to
time in accordance with the terms of this Agreement, up to FIVE
MILLION DOLLARS ($5,000,000) less (a) the maximum amount
available to be drawn under all issued and outstanding Standby
Letters of Credit (assuming all conditions for drawing have been
satisfied) at the time of such borrowing under the Revolving Line
of Credit, and (b) all amounts drawn under issued Standby Letters
of Credit for which the Lender has not been reimbursed by the
Obligors at the time of such borrowing under the Revolving Letter
of Credit. Obligors' obligations to repay the Revolving Line of
Credit Note and the terms and conditions of the Revolving Line of
Credit are as contained in this Agreement and the Revolving Line
of Credit Note, a copy of which is attached TO THIS AGREEMENT AS
EXHIBIT 2.2. The proceeds of the Revolving Line of Credit shall
be used for general working capital purposes.
2.3 STANDBY LETTERS OF CREDIT. Subject to the terms and conditions
contained in this Agreement, Lender agrees to issue Standby
Letters of Credit for drawing in Dollars for the account of
Obligors, from time to time during the term of the Revolving Line
of Credit in an amount not to exceed the lesser of (i)
$5,000,000, less (a) the aggregate principal amount outstanding
under the Revolving Line of Credit Note at the time of issuance
of the Standby Letter of Credit, (b) the maximum amount available
to be drawn under all previously issued and outstanding Standby
Letters of Credit (assuming all conditions for drawing have been
satisfied) at the time of issuance of the Standby Letter of
Credit, and (c) all amounts drawn under previously issued Standby
Letters of Credit for which the
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Lender has not been reimbursed by the Obligors at the time of
issuance of the Standby Letter of Credit, or (ii) $750,000.
a. NOTICES OF ISSUANCE. Requests for the issuance of Standby
Letters of Credit (or to amend, renew or extend an
outstanding Standby Letter of Credit) may be made only once
per business day and shall be made on notice, given not
later than 11:00 a.m. (Hartford, Connecticut time) two (2)
business days prior to the date of the proposed issuance or
amendment, renewal or extension, by any Obligor to Lender.
Each such notice (which notice shall be irrevocable and
binding on the Obligors) of issuance, amendment, renewal or
extension shall be by telephone, confirmed immediately in
writing, or by telex or telecopier, specifying therein the
(i) requested date of such issuance, amendment, renewal or
extension (which shall be a business day), (ii) requested
principal amount of such Standby Letter of Credit in
Dollars, (iii) requested expiration date of such Standby
Letter of Credit (which shall comply with subsection (c)
below), (iv) whether such Standby Letter of Credit is
renewable, and (v) names and addresses of the intended
account party and the beneficiary of such Standby Letter of
Credit, and shall be accompanied by a fully executed
application and agreement for letter of credit as Lender may
require of Obligors for use in connection with such
requested Standby Letter of Credit (each a "Reimbursement
Agreement") and such Obligor's payment of the Lender's then
current Standby Letter of Credit fee. If the requested form
of such Standby Letter of Credit is acceptable to Lender,
Lender will make such Standby Letter of Credit available to
such Obligor at its office referred to in the first
paragraph of this Agreement or as otherwise agreed with such
Obligor in connection with such issuance. In the event and
to the extent that the provisions of any Reimbursement
Agreement shall conflict with this Agreement, the provisions
of this Agreement shall govern.
b. FORM OF LETTER OF CREDIT. Each Standby Letter of Credit
shall, among other things, (i) be in a form acceptable to
Lender, and (ii) be governed by, and shall be construed in
accordance with, the laws or rules designated in such
Standby Letter of Credit, or if no such laws or rules are
designated, the Uniform Customs and, as to matters not
governed by the Uniform Customs, the laws of the State of
Connecticut (without regard to its conflict of laws rules).
c. EXPIRY DATES. Each Standby Letter of Credit shall provide
that it expires no later than the close of business seven
days prior to the expiration date for the Revolving Line of
Credit, unless such Standby Letter of Credit expires by its
terms on an earlier date.
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d. PAYMENT FOR STANDBY LETTER OF CREDIT DRAWS. Lender shall
have the right (but not the obligation), in its sole and
absolute discretion, to effect reimbursement by Obligors to
Lender of any payment made by Lender in connection with a
drawing made under a Standby Letter of Credit which is not
reimbursed to Lender within the time specified for
reimbursement in the applicable Reimbursement Agreement by
making an advance on the Revolving Line of Credit for the
account of the Obligors. Each such advance shall bear
interest at the Lender's Prime Rate. Lender shall endeavor
to give Obligors forty-eight (48) hours prior notice before
making such an advance pursuant to this Section 2.3 d. but
failure to provide such notice shall not effect Lender's
right to make such an advance.
e. NO LIABILITY OF LENDER. Obligors assume all risks of the
acts or omissions of any beneficiary or transferee of any
Standby Letter of Credit with respect to the use of such
Standby Letter of Credit, and Obligors' obligations with
respect to payments made by Lender under any Standby Letter
of Credit shall be absolute, unconditional and irrevocable,
irrespective of: (i) any lack of validity or enforceability
of any Standby Letter of Credit, or any term or provision
therein, alleged by a party other than Lender; (ii) the
existence of any dispute, claim, setoff, defense or other
right that Obligors or any other person may have against the
beneficiary under any Standby Letter of Credit, Lender or
any other person, whether in connection with this Agreement,
any other Loan Document or any other related or unrelated
agreement or transaction; (iii) any draft or other document
presented under a Standby Letter of Credit proving to be
forged, fraudulent, invalid or insufficient in any respect
or any statement therein being untrue or inaccurate in any
respect; or (iv) any error, omission, interruption or delay
in any transmission, dispatch or delivery of any message or
advice, however transmitted, in connection with any Standby
Letter of Credit.
Without limiting the generality of the foregoing, it is
expressly understood and agreed that the absolute and
unconditional obligation of Obligors hereunder to reimburse
Standby Letter of Credit drawings will not be excused by the
negligence of Lender. However, the foregoing shall not be
construed to excuse Lender from liability to Obligors to the
extent of any direct damages (as opposed to consequential
damages, claims in respect of which are hereby waived by
Obligors to the fullest extent permitted by law) suffered by
Obligors that are caused by (x) Lender's willful misconduct
or negligence in determining whether documents presented
under any Standby Letter of Credit comply with the terms of
the
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Standby Letter of Credit, or (y) Lender's willful failure to
make lawful payment under a Standby Letter of Credit after
presentation to it of a draft or documents strictly
complying with the terms and conditions of such Standby
Letter of Credit. It is understood that Lender may, subject
to the standard of negligence or willful misconduct, accept
documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any
notice or information to the contrary and, in making any
payment under any Standby Letter of Credit (1) Lender's
exclusive reliance on the documents presented to it under
such Standby Letter of Credit as to any and all matters set
forth therein, including reliance on the amount of any draft
presented under such Standby Letter of Credit, whether or
not the amount due to the beneficiary thereunder equals the
amount of such draft and whether or not any document
presented pursuant to such Standby Letter of Credit proves
to be insufficient in any respect, if such document on its
face appears to be in order, and whether or not any other
statement or any other document presented pursuant to such
Standby Letter of Credit proves to be forged or invalid or
any statement therein proves to be inaccurate or untrue in
any respect whatsoever, and (2) any noncompliance in any
immaterial respect of the documents presented under such
Standby Letter of Credit with the terms thereof shall, in
each case, be deemed not to constitute willful misconduct or
negligence of Lender.
f. INTERIM INTEREST. If Lender shall make any payment in
respect of a Standby Letter of Credit, then, unless Obligors
shall reimburse such payment in full on the date specified
for reimbursement in the applicable Reimbursement Agreement,
the unpaid amount thereof shall bear interest for each day
from and including the date of such payment to but excluding
the date of payment, at the Lender's Prime Rate.
2.4 ADDITIONAL PAYMENTS. If Lender shall deem applicable to this
Agreement, the Loans or the Notes (including, in each case, the
borrowed and the unused portion thereof) any requirement of any
law of the United States of America, any regulation, order,
interpretation, ruling or official directive or guideline
(whether or not having the force of law) of the Board of
Governors of the Federal Reserve System, the Comptroller of the
Currency, the Federal Deposit Insurance Corporation or any other
board or governmental or administrative agency of the United
States of America which shall impose, increase, modify or make
applicable thereto or cause to be included in, any reserve,
special deposit, calculation used in the computation of
regulatory capital standards, assessment or other requirement
which imposes on Lender any cost that is attributable to the
maintenance thereof, then, and in each such event, Obligors shall
promptly pay Lender, upon its demand, such amount as will
compensate Lender for any such cost, which
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determination may be based upon Lender's reasonable allocation of
the aggregate of such costs resulting from such events. In the
event any such cost is a continuing cost, a fee payable to Lender
may be imposed upon Obligors periodically for so long as any such
cost is deemed applicable by Lender, in an amount determined by
Lender to be necessary to compensate Lender for any such cost.
The determination by Lender of the existence and amount of any
such cost shall, in the absence of manifest error, be conclusive.
2.5 DIRECT DEBIT OF PRINCIPAL AND INTEREST. Obligors agree that
Lender may directly debit any Obligor's accounts held by Lender
for any principal or interest payment on any Obligation when such
Obligation becomes due and payable.
2.6 FEES. The Obligors shall pay to Lender on the Date of Closing an
underwriting fee in the amount of One Hundred Eighty Thousand
Dollars ($180,000). The Obligors shall pay to Lender on the Date
of Closing a commitment fee in the amount of Eighty-Seven
Thousand Dollars ($87,000). The Obligors shall pay to the Lender
on the Date of Closing and on each anniversary thereof an annual
agency fee in the amount of Five Thousand Dollars ($5,000).
2.7 INTEREST RATE HEDGE. The Obligors may hedge their interest rate
exposure on all or a portion of the Term Loan by entering into an
interest rate hedge agreement with Lender or another counterparty
acceptable to Lender. Any documentation relating to such hedge
shall contain standard provisions, including make whole
provisions, acceptable to Lender.
SECTION 3. COLLATERAL.
3.1 As security for the payment and performance of all Obligations,
Obligors hereby grant to Lender:
a. A first priority security interest in all of the Collateral,
subject only to the Prior Encumbrances.
b. A first priority security interest in all proceeds of any
and all insurance on the Collateral.
c. A first priority security interest in all proceeds and
products of any item or type of the Collateral.
3.2 GRANT OF MORTGAGES. Obligors shall grant to Lender the Mortgages.
3.3 LOCATION OF COLLATERAL. All Collateral is and will be owned by
Obligors, free of all other liens and encumbrances other than
Permitted Encumbrances and shall be
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KEPT BY OBLIGORS AT THE PREMISES AND AT THE LOCATIONS LISTED ON
SCHEDULE 3.3 and Obligors will not, without Lender's prior
written approval, remove the Collateral therefrom, except for the
purposes of sale in the ordinary course of business.
3.4 DEFEND COLLATERAL. Obligors shall defend the Collateral
against all claims and demands of all persons at any time
claiming the same or any interest therein and, in the event
the Lender's security interest in the Collateral, or any part
thereof, would be impaired by an adverse decision, allow the
Lender to contest or defend any such claim or demand in the
Obligors' names and Obligors agree to pay, upon demand, the
Lender's reasonable costs, charges and expenses, including,
without limitation, attorney's fees, in connection therewith.
3.5 FINANCING STATEMENTS. From time to time, at the request of the
Lender, Obligors shall execute, deliver and file one or more
financing statements on Form UCC-1 or other instruments, and
do all other reasonable acts as the Lender deems necessary or
desirable to perfect fully or to keep perfected its security
interest in the Collateral and pay, upon demand, all
reasonable expenses, including, without limitation, attorney's
fees, incurred by the Lender in connection therewith. The
Obligors hereby irrevocably appoint the Lender their
attorney-in-fact to execute and file all such UCC-1 forms or
other instruments, documents or agreements deemed necessary or
desirable to fully perfect or keep perfected the Lender's
security interest in the Collateral.
3.6 FURTHER ASSURANCES RE INVENTORY. Obligors shall perform any
and all reasonable steps requested by Lender to perfect
Lender's security interest in the Inventory, such as leasing
warehouses to Lender or Lender's assignee, placing and
maintaining signs, appointing custodians, executing and filing
financing, amendment or continuation statements in form and
substance satisfactory to Lender, maintaining stock records
and transferring Inventory to warehouses. If any Inventory is
in the possession or control of any of Obligors' agents or
processors, Obligors shall notify such agents or processors of
Lender's security interest therein, and, upon request,
instruct them to hold all such Inventory for Lender's account
and subject to Lender's instructions. A physical listing of
all Inventory, wherever located, shall be taken by Obligors at
least annually and whenever requested by Lender, and a copy of
each such physical listing shall be provided to Lender. Lender
may examine and inspect the Inventory upon reasonable notice
during business hours.
3.7 FURTHER ASSURANCE RE RECEIVABLES. Obligors shall place
notations upon Obligors' books of account to disclose the
assignment of all Receivables to Lender or Lender's security
interest therein and shall perform all other reasonable steps
requested by Lender to create and maintain in Lender's favor a
valid first priority
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security interest, assignment or lien in, of or on all
Receivables and all other security held by or for Lender.
3.8
GUARANTIES. The Obligations shall be jointly and severally
unconditionally guarantied by the Guarantors as provided in
the Guaranties executed by each of them.
SECTION 4. REPRESENTATIONS, WARRANTIES AND GENERAL COVENANTS. On the
date hereof and in order to induce Lender to enter into this
Agreement, Obligors represent, warrant and covenant the
following:
4.1 ORGANIZATION AND QUALIFICATION. Each Obligor is and will
continue to be a corporation duly organized, validly existing
and in good standing under the laws of the state of its
incorporation and is and will continue to be duly qualified
and licensed to do business in each other state in which the
nature of its business makes such qualification necessary.
Each Obligor has all requisite permits, authorizations and
licenses, without unusual restrictions or limitations, to own,
operate and lease its properties and to conduct the business
in which it is presently engaged, all of which are in full
force and effect.
4.2 CORPORATE RECORDS. The Certificate of Incorporation and all
amendments thereto of each Obligor have been duly filed and
are in proper order. All capital stock issued by each Obligor
and outstanding has been properly issued and is fully paid and
non-assessable, and all books and records of each Obligor,
including but not limited to its minute books, bylaws, and
books of account, are accurate and up to date and will be so
maintained.
4.3 POWER AND AUTHORITY. Each Obligor has the power to execute,
deliver and carry out the terms of the Loan Documents and to
incur the Obligations and has taken all necessary action to
authorize the execution, delivery and performance by it of the
Loan Documents.
4.4 NO LEGAL BAR. The execution and delivery of the Loan Documents
and compliance by Obligors with the terms and provisions
thereof do not, on the date hereof, violate any provision of
any existing law or regulation or any writ or decree of any
court or governmental instrumentality, or any agreement or
instrument to which any of the Obligors is a party or which is
binding upon any of them or their assets, and will not result
in the creation or imposition of any lien, security interest,
charge or encumbrance of any nature whatsoever upon or in any
of their assets, except as contemplated by the Loan Documents;
no consent of any other party, and no consent, license,
approval or authorization of or registration or declaration
with any governmental bureau or agency, is required in
connection with the execution,
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delivery, performance, validity and enforceability of any of
the Loan Documents; and the Loan Documents, upon the execution
and delivery thereof and the execution or acceptance thereof
by the Lender, will be legal, valid, binding and enforceable
obligations of the Obligors in accordance with their
respective terms.
4.5
TITLE; NO LIENS. EXCEPT AS SET FORTH ON SCHEDULE 4.5, each
of the Obligors has good and marketable title to all of its
Property, subject to no mortgage, security interest, pledge,
lien, encumbrance or other charge.
4.6
NO LITIGATION. EXCEPT AS SET FORTH ON SCHEDULE 4.6, there is
no litigation, administrative proceeding, hearing or
investigation of or before any governmental body presently
pending or, to the knowledge of any of the Obligors,
threatened AGAINST IT OR ANY OF ITS PROPERTY AND IF ALL OF
THE MATTERS SET FORTH ON SCHEDULE 4.6 were determined
adversely to the Obligors, such adverse determinations,
either individually or in the aggregate, would not have a
material adverse effect on the Obligors, their businesses or
their Property taken as a whole.
4.7 NO DEFAULT. None of the Obligors are, on the date hereof, in
default with respect to the payment or performance of any of
their Obligations or other Indebtedness or in the performance
of any covenants or conditions to be performed by any of them
pursuant to the terms and provisions of any indenture,
agreement or instrument to which any of them are a party or by
which any of them are bound, including the Loan Documents, and
none of the Obligors has received a notice of default
thereunder.
4.8 COMPLIANCE WITH LAWS. Each Obligor has complied with and will
continue to comply with all applicable laws, ordinances, rules
and regulations of the United States of America, and all
states, counties, municipalities and agencies of any
governmental authority thereof.
4.9 TAXES. Each Obligor has filed or caused to be filed or
obtained extensions for the filing of, and will continue to
file and cause to be filed, all federal, state and local tax
returns required by law to be filed, and has paid and will
continue to pay all taxes shown to be due and payable on such
returns or on any assessment made against it, except if being
contested in good faith, if adequate provision has been made
therefor on its books of account and if requested by Lender, a
reserve satisfactory to Lender has been set aside to pay such
taxes, interest, penalties and costs associated therewith. No
claims are being asserted with respect to such taxes which are
not reflected in the financial statements which have been
furnished by Obligors to Lender.
4.10 FINANCIAL CONDITION. The Obligors have submitted to Lender
various financial statements and information as of October 31,
1999, and represent that all of such financial information is
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true and correct; that such financial information fairly presents
the financial condition and results of operations of each Obligor
as of the dates thereof and for the periods indicated therein;
that such financial statements have been prepared in accordance
with GAAP and practices consistently maintained throughout the
periods involved; and that, as of the date of such financial
information, there were no material unrealized or anticipated
losses from any unfavorable commitments of any of the Obligors
and that there has been no material adverse change in the
business or Property or in the condition, financial or otherwise,
of any of the Obligors from that set forth in such financial
statements.
4.11 ACCURACY OF REPRESENTATIONS. To the best of the Obligors'
knowledge, after due inquiry, no representation or warranty by
any of the Obligors contained in any certificate or other
document furnished or to be furnished by it pursuant to this
Agreement or in connection with the transactions contemplated
under this Agreement, contains, or at the time of delivery will
contain, any untrue statement of material fact or omits or will
omit to state a material fact necessary to make it not
misleading.
4.12 TRADE NAMES AND CHIEF EXECUTIVE OFFICES. Each of the Obligors
operates its BUSINESS UNDER THE TRADE NAMES SET FORTH FOR IT ON
SCHEDULE 4.12 and has not used within the last five years and
does not currently use any other trade names. The chief executive
office of each Obligor and its principal place of business is at
the address set forth for that Obligor at the beginning of this
Agreement.
4.13 PARENTS, AFFILIATES OR SUBSIDIARIES. Holdings has no parent
corporation and none of the Obligors have any Affiliates or
Subsidiaries other than each other and Adirondack and Excelsior.
Platinum and Crystal Rock are wholly owned Subsidiaries of
Holdings. VPS is a wholly owned Subsidiary of Platinum.
Adirondack and Excelsior are wholly owned Subsidiaries of VPS.
4.14 AGREEMENTS REGARDING STOCK. None of the Obligors has any
agreements pertaining to the issuance, purchase or sale of its
capital stock, except as set forth ON SCHEDULE 4.14.
4.15 COLLECTIVE BARGAINING AGREEMENTS. None of the Obligors is a party
to any collective bargaining agreements.
4.16 SUBSEQUENT ADVANCES UNDER THE LOANS. Each request by any Obligor
for an advance under the Revolving Line of Credit or for the
issuance of a Standby Letter of Credit shall constitute a
representation by such Obligor to Lender that (a) all of the
representations and warranties contained in this Agreement shall
have continued to be true and accurate to and including the date
of such borrowing as though made on and as of such date; (b) no
event has occurred and is continuing,
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or would exist as a result of the proposed borrowing, which
constitutes an Event of Default hereunder or would constitute
such an Event of Default but for the giving of notice or passage
of time; (c) each Obligor has performed all of the agreements on
its part contained in the Loan Documents and required to be
performed by it on or prior to the date of such borrowing; and
(d) the corporate resolutions authorizing the Loan Documents and
the underlying transactions remain in full force and effect and
have not been modified or amended in any respect.
4.17
SALEABLE VALUE OF ASSETS. The fair saleable value of the assets
of each Obligor, after giving effect to the transactions
contemplated by the Loan Documents, will be in excess of its
debts (including contingent, subordinated, unmatured and
unliquidated liabilities).
4.18
SUFFICIENT CASH FLOW. Each Obligor has, and after giving effect
to the transactions contemplated by the Loan Documents each
Obligor will have, sufficient cash flow to continue to operate
its business in the ordinary course as heretofore conducted, make
the payments called for by the Loan Documents and pay all other
debts, including but not limited to payments under the Notes,
supplier payments, pension and other employee benefit plan
liabilities, business expenses and taxes, as the same shall
become due.
4.19 NO HINDRANCE. None of the Obligors has any intent to hinder,
delay or defraud any entity to which it is or will become
indebted.
4.20 CAPITALIZATION. None of the Obligors, after giving effect to the
transactions contemplated by the Loan Documents, will be engaged
in any business or transaction or is about to engage in any
business or transaction for which it has unreasonably small
capital.
4.21 ABILITY TO PAY DEBTS. None of the Obligors, after giving effect
to the transactions contemplated by the Loan Documents, intends
to incur nor does it believe that it will incur debts beyond its
ability to pay as they become due.
4.22 OWNERSHIP OF PROPERTY. None of the Obligors has in its possession
any personal PROPERTY OF WHICH IT IS NOT THE ACTUAL OWNER, EXCEPT
AS DESCRIBED ON EXHIBIT 4.22.
4.23 BENEFIT OF LOANS. Each Obligor shall receive material direct and
indirect benefits from the making of any portion of the Loans to
any of the Obligors and a satisfactory financial condition and
successful business operations of each Obligor benefits, directly
and indirectly, each of the other Obligors.
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4.24 ADIRONDACK AND EXCELSIOR. Neither Adirondack nor Excelsior is an
operating entity or has any assets, liabilities or revenues.
4.25 COMPLIANCE WITH LAND USE PERMITS. The Obligors are in material
compliance with all land use permits relating to the Premises.
SECTION 5. AFFIRMATIVE COVENANTS. Obligors covenant and agree that, so long as
any of the Obligations shall remain outstanding, they will perform and observe
each and all of the covenants and agreements herein set forth.
5.1 PAYMENTS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS. Each
Obligor will make punctual payment of all monies and will
faithfully and fully keep and perform all of the terms,
conditions, covenants and agreements on its part to be paid, kept
or performed hereunder, and will be bound in all respects as
obligor under this Agreement and the other Loan Documents. All
Obligations shall be direct and primary obligations of each
Obligor and each Obligor shall be jointly and severally liable
for all Obligations.
5.2 INFORMATION, ACCESS TO BOOKS, AND INSPECTION. Each Obligor will
furnish to Lender such information regarding the business affairs
and financial condition of the Obligors as Lender may reasonably
request and give any representative of Lender access during
normal business hours to, and permit him/her to examine and copy,
make extracts from, and audit any and all books, records and
documents in the possession of Obligors relating to their affairs
and to inspect any of the Property.
5.3 PAYMENT OF LIABILITIES. Each Obligor will pay and discharge at or
before their maturity all taxes, assessments, rents, claims,
debts and charges, except where the same may be contested in good
faith, will maintain, in accordance with GAAP, appropriate
reserves for the accrual of any of the same and if requested by
Lender, will set aside a reserve satisfactory to Lender to pay
such contested amounts and all taxes, interest, penalties and
costs associated therewith.
5.4
CORPORATE EXISTENCE, PROPERTIES. Each Obligor will continue to
conduct its business as presently conducted; will do or cause to
be done all things necessary to preserve and keep in full force
and effect its corporate existence, rights and franchises, and
will comply with all laws applicable thereto; will maintain all
licenses, patents and other rights necessary for the operation of
its business; will at all times maintain, preserve and protect
all franchises, patents, trademarks, trade names and water rights
and will preserve all of the remainder of its Property used or
useful in the conduct of its business and will keep the same in
good condition and repair (normal wear and tear and obsolescence
excepted), and from time to time will reasonably make, or cause
to be made, all needful and proper repairs, renewals,
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replacements, betterments and improvements thereto, and will pay
or cause to be paid, except when the same may be contested in
good faith, all rent due on premises where any Property is held
or may be held, so that the business carried on in connection
therewith may be continuously conducted.
5.5
INSURANCE. Each Obligor will have and maintain insurance at all
times with respect to all Property and all Collateral against
risks of fire (including so-called extended coverage), theft and
such risks as Lender may reasonably require containing such
terms, in such form, in such amounts (including 100% of the full
insurable value of buildings, improvements and personal property
with respect to casualty insurance) and for such periods, and
written by such companies as may reasonably be satisfactory to
Lender, such insurance to be payable to Lender and Obligors as
their interests may appear. Each policy of insurance shall have a
mortgagee and loss payee endorsement providing:
a. That loss or damage, if any under the policy, shall be
payable to Lender, as secured party, as its interests may
appear;
b. That the insurance as to the interest of Lender shall not be
invalidated by any act or neglect of the insured or owner of
the property described in said policy, nor by any
foreclosure, or other proceeding, nor by any change in the
title of ownership of said property, nor by the occupation
of the premises where the property is located for purposes
more hazardous than are permitted by said policy;
c. That, if the policy is canceled at any time by the insurance
carrier, in such case the policy shall continue in force for
the benefit of Lender for not less than thirty (30) days
after written notice of cancellation to Lender from the
insurance carrier; and
d. That the policy will not be reduced or canceled at the
request of the insured nor will said loss payee endorsement
be amended or deleted without thirty (30) days' prior
written notice to Lender from the insurance carrier.
Upon the occurrence of any Event of Default, Lender may act as
attorney for the Obligors in obtaining, adjusting, settling, and
canceling such insurance and receiving and endorsing any drafts.
Each Obligor hereby assigns to Lender any and all monies which
may become due and payable under any policy insuring the
Collateral covered by this Agreement, including return of
unearned premiums, and hereby directs any insurance company
issuing any such policy to make payment directly to Lender and
authorizes Lender, at its option: (i) to apply such monies in
payment on account of any Obligation hereunder, whether or not
due, and remit any surplus to Obligors; or (ii) to return said
funds to Obligors for the purpose of replacement of
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the Collateral. Notwithstanding the foregoing, upon the damage,
destruction or loss of any personal property which constitutes
Collateral in an aggregate amount of $250,000 or less, Lender
agrees that it will return said funds to Obligors for the purpose
of replacement of the Collateral with new Collateral of the same
value and utility if no event which constitutes or which with
notice or lapse of time, or both, would constitute an Event of
Default has occurred and the damage, destruction or loss has not
materially impaired the business operations of any of the
Obligors. If the damage, destruction or loss of any personal
property which constitutes Collateral exceeds an aggregate amount
of $250,000, Lender agrees that it will return said funds to
Obligors for the purpose of replacement of the Collateral with
new Collateral of the same value and utility but only on the
following conditions: (i) no event which constitutes or which
with notice or lapse of time, or both, would constitute an Event
of Default has occurred, (ii) the damage, destruction or loss has
not materially impaired the business operations of any of the
Obligors, (iii) Lender has approved the plans and specifications
for the replacement Collateral, (iv) funds are released to the
Obligors as the replacement progresses in accordance with
Lender's customary procedures for financings of property such as
the replacement Collateral. Each Obligor will also at all times
maintain necessary workers' compensation insurance and such other
insurance as may be required by law or as may be reasonably
required in writing by Lender.
Obligors will furnish Lender with certificates or other evidence
satisfactory to Lender of compliance with the foregoing insurance
provisions on the Date of Closing and thirty (30) days prior to
each anniversary of the Date of Closing.
5.6 COMPLIANCE WITH LAWS. Each Obligor shall comply with all laws,
ordinances, rules or regulations, applicable to it, of all
federal, state or municipal governmental authorities,
instrumentalities or agencies including, without limitation,
ERISA, the United States Occupational Safety and Health Act of
1970, as amended, and all federal, state, county and municipal
laws, ordinances, rules and regulations relating to the
environment or the employment of labor, as such may be amended.
5.7 NOTICES. Obligors will promptly give notice in writing to Lender
of: (a) the occurrence of any event which constitutes or which
with notice or lapse of time, or both, would constitute an Event
of Default under this Agreement or any of the other Loan
Documents; (b) the occurrence of any material adverse change in
any business, properties or the condition or operations,
financial or otherwise, of any of the Obligors, or the occurrence
of any event which is reasonably likely to result in such a
material adverse change, in each case specifying such change or
event; (c) any court or governmental orders, notices, claims,
investigations, litigation and proceedings received by or
involving any of the Obligors in which the aggregate amount
involved is $100,000 or more and not covered by insurance; (d)
any dispute which may exist between any of the Obligors and any
governmental regulatory body
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or any other party; and (e) any proposed or actual change in the
names, identities or corporate structure of any of the Obligors.
5.8
FINANCIAL STATEMENTS; NOTICE OF DEFAULT. Obligors shall deliver
or cause to be delivered to Lender:
a. As soon as available and in any event within ninety (90)
days after the close of each fiscal year of Holdings,
audited consolidated and consolidating financial statements
including a balance sheet as of the close of such fiscal
year and statements of income and retained earnings and
source and application of funds for the year then ended, all
on a comparative basis with corresponding statements for the
preceding fiscal year and prepared in conformity with GAAP,
applied on a basis consistent with that of the preceding
year, and accompanied by a report thereon, containing an
opinion, unqualified as to scope, of a firm of independent
certified public accountants selected by Holdings and
acceptable to Lender, stating that the financial statements
fairly present the financial condition and results of
operation of Holdings and Platinum, VPS and Crystal Rock as
of their date and for the period then ended, and by a
written statement from such accountants stating that they
have reviewed such financial statements and the financial
covenants set forth herein and have found no evidence of an
Event of Default having occurred or of an event which with
passage of time and/or giving of notice would constitute an
Event of Default having occurred.
b. As soon as available and in any event within forty-five (45)
days after the end of each fiscal quarter in each fiscal
year, Holdings' Form 10Q as filed with the Securities
Exchange Commission and a balance sheet of Holdings and
Platinum, VPS and Crystal Rock as of the close of such
fiscal quarter and statements of income and retained
earnings for that portion of the fiscal year-to-date then
ended, all on a comparative basis with the budget and
prepared in conformity with GAAP, applied on a basis
consistent with that of the preceding period, and which
shall be certified by the President or Chief Financial
Officer of Holdings as being accurate and fairly presenting
the financial condition of Holdings and Platinum, VPS and
Crystal Rock.
c. Together with the statements and reports referred to in
sub-paragraphs a. and b. above, a written statement from the
President, Chief Executive Officer or Chief Financial
Officer of Holdings certifying compliance with all financial
covenants and reflecting all computations in connection
therewith and certifying that there exists no Event of
Default, or any event but for the giving of notice or the
passage of time would constitute an Event of Default.
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d. As soon as available and in any event at least thirty (30)
days prior to the commencement of any fiscal year, detailed
budgets and projections for the upcoming fiscal year of
Holdings, Platinum, VPS and Crystal Rock approved by the
Board of Directors of Holdings.
e. From time to time, promptly upon Lender's written request,
such other information about the financial condition and
operations of Obligors as Lender may reasonably request, in
form and detail satisfactory to Lender.
f. Promptly on becoming aware of any Event of Default, or any
event but for the giving of notice or the passage of time
would constitute an Event of Default, notice thereof in
writing.
5.9
OPERATING ACCOUNTS. Obligors shall maintain their primary
operating and disbursement accounts with Lender and shall utilize
the cash management services provided by the Lender or any
Participant (as defined below) as long as such entity remains a
Participant, including, at Obligors' option, automated "sweep"
and investment features. VPS may retain a local depository
relationship for collection and payroll purposes.
5.10 PENSION PLANS.
a. No event, including but not limited to any "reportable
event", as that term is defined in Section 4043 of ERISA,
exists in connection with any of its Plans and any entities
related to it under Section 414(b), (c), (m), (n) or (o) of
the Code has occurred which might constitute grounds for
termination of any such Plan by the PBGC, or for the
appointment by the appropriate United States District Court
of a trustee to administer any such Plan. A list OF ALL OF
THE OBLIGORS' PLANS ARE ATTACHED HERETO ON SCHEDULE 5.10;
b. No "prohibited transaction" within the meaning of Section
406 of ERISA or Section 4975 of the Code exists or will
exist upon the execution and delivery of this Agreement and
the other Loan Documents, or the performance by the parties
hereto or thereto of their respective duties and obligations
hereunder and thereunder;
c. Each Obligor shall do all acts, including, but not limited
to, making all contributions necessary to maintain
compliance with ERISA and the Code, and agrees not to
terminate any Plan in a manner or do or fail to do any act
which could result in the imposition of a lien on any of its
properties pursuant to Section 4068 of ERISA;
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d. None of the Obligors sponsors or maintains, and has never
contributed to, and has not incurred any withdrawal
liability under a "multi employer plan" as defined in
Section 3 of ERISA and none has any written or verbal
commitment of any kind to establish, maintain or contribute
to any "multi employer plan" under the Multi Employer
Pension Plan Amendments Act of 1980;
e. None of the Obligors has any unfunded liability in
contravention of ERISA and the Code;
f. Each of the Plans complies currently, and has complied in
the past, both as to form and operation, with its terms and
with the provisions of the Code and ERISA, and all
applicable regulations thereunder and all applicable rules
issued by the Internal Revenue Service, U.S. Department of
Labor and the PBGC and as such, is and remains a "qualified"
plan under the Code;
g. No actions, suits or claims are pending (other than routine
claims for benefits) against any Plan or the assets of any
Plan;
h. Each Obligor has performed all obligations required to be
performed by it UNDER ANY PLAN SET FORTH IN SCHEDULE 5.10
and it is not in default or in violation of any Plan, and
has no knowledge of any such default or violation by any
other party to any such Plans;
i. No liability has been incurred by any Obligor to the PBGC or
to participants or beneficiaries on account of any
termination of a Plan subject to Title IV of ERISA, no
notice of intent to terminate a Plan has been filed by (or
on behalf of) it pursuant to Section 4041 of ERISA and no
proceeding has been commenced by the PBGC pursuant to
Section 4042 of ERISA;
j. The reporting and disclosure provisions of the Securities
Act of 1933 and Securities Exchange Act of 1934 have been
complied with for all Plans.
5.11 ENVIRONMENTAL MATTERS.
a. Each Obligor has obtained all permits, licenses and other
authorizations which are required under all Environmental
Laws. Each Obligor is in compliance with the terms and
conditions of all such permits, licenses and authorizations,
and is, to the best of its knowledge, also in compliance
with all other limitations, restrictions, conditions,
standards, prohibitions, requirements, obligations,
schedules and timetables contained in any applicable
Environmental Law or in any regulation, code, plan, order,
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decree, judgment, injunction, notice or demand letter
issued, entered, promulgated or approved thereunder.
b. No notice, notification, demand, request for information,
citation, summons or order has been issued, no complaint has
been filed, no penalty has been assessed and no
investigation or review is pending or threatened by any
governmental or other entity with respect to any alleged
failure by any Obligor to have any permit, license or
authorization required in connection with the conduct of its
business or with respect to any Environmental Laws,
including without limitation, Environmental Laws relating to
the generation, treatment, storage, recycling,
transportation, disposal or release of any Hazardous
Materials.
c. No oral or written notification of a release of a Hazardous
Material has been filed by or against any Obligor and to the
best of each Obligor's knowledge, no property now or
previously owned, leased or used by it is listed or proposed
for listing on the Comprehensive Environmental Response,
Compensation and Liability Inventory of Sites or National
Priorities List under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as
amended, or on any similar state or federal list of sites
requiring investigation or clean-up.
d. There are no liens or encumbrances arising under or pursuant
to any Environmental Laws on any of the property or
properties owned by any Obligor, and no governmental actions
have been taken or are in process which could subject any of
such properties to such liens or encumbrances or, as a
result of which any Obligor would be required to place any
notice or restriction relating to the presence of Hazardous
Materials at any property owned by it in any deed to such
property.
e.
Neither Obligors nor, to the best of their knowledge, any
previous owner, tenant, occupant or user of any property
owned by any of them, has (i) engaged in or permitted any
operations or activities upon or any use or occupancy of
such property, or any portion thereof, for the purpose of or
in any way involving the release, discharge, refining,
dumping or disposal (whether legal or illegal, accidental or
intentional) of any Hazardous Materials on, under, in or
about such property, or (ii) transported or had transported
any Hazardous Materials to such property except to the
extent such Hazardous Materials are raw products commonly
used in day-to-day operations of such property and, in such
case, in compliance with, all Environmental Laws; (iii)
engaged in or permitted any operations or activities which
would allow the facility to be considered a treatment,
storage or disposal facility as that term is defined in 40
CFR 264 and 265,
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(iv) engaged in or permitted any operations or activities
which would cause any property now owned, leased or used by
it to become subject to any state transfer act, or (v)
constructed, stored or otherwise located Hazardous Materials
on, under, in or about any property now owned, leased or
used by it except to the extent commonly used in day-to-day
operations of such properties and, in such case, in
compliance with all Environmental Laws. Further, to the best
of Obligors' knowledge, no Hazardous Materials have migrated
from other properties upon, about or beneath any property
now owned, leased or used by any of them.
5.12 NEW YORK MORTGAGE. In the event that the real property owned
by any of the Obligors in Xxxxxx Springs, New York (the "New
York Real Property") is not sold within nine (9) months of the
date of this Agreement, the Obligors shall immediately grant
to Lender a mortgage on the New York Real Property in form and
substance satisfactory to Lender and at such time shall also
provide to Lender such title insurance policies, environmental
site assessments, surveys and other items as Lender shall
require in connection with the mortgage of the New York Real
Estate.
SECTION 6. NEGATIVE COVENANTS. So long as any Obligations remain outstanding and
unpaid, Obligors covenant and agree that they will not without the express
written consent of Lender:
6.1 LIMITATION ON LIENS. Incur or permit to exist any lien,
mortgage, security interest, pledge, charge or other
encumbrance against the Property, whether now owned or
hereafter acquired (including, without limitation, any lien or
encumbrance relating to any response, removal or clean-up of
any toxic substances or hazardous wastes), except: (a) liens,
mortgages, security interests, charges or other encumbrances
in favor of Lender or specifically permitted in writing by
Lender; (b) pledges or deposits in connection with or to
secure workers' compensation or unemployment insurance; (c)
tax liens which are being contested in good faith with the
prior written consent of Lender and against which, if
requested by Lender, Obligors shall maintain reserves in
amounts and in form (book, cash, bond or otherwise)
satisfactory to Lender; (d) the liens existing on the Date of
Closing which are listed ON SCHEDULE 4.5; and (e) purchase
money capital leases pursuant to which the amount financed
does not exceed $250,000 (less all amounts outstanding under
the LEASES ON SCHEDULE 6.1) in any one fiscal year.
6.2 LIMITATION ON OTHER BORROWING. Incur, create, assume or permit
to exist any Indebtedness other than (a) Indebtedness to
Lender pursuant to this Agreement, (B) INDEBTEDNESS EXISTING
ON THE DATE OF CLOSING WHICH IS LISTED ON SCHEDULE 6.2, (c)
purchase money indebtedness under capital leases pursuant to
which the amount financed does not exceed $250,000 (less all
amounts outstanding under the LEASES ON SCHEDULE 6.1) in any
one fiscal year, and (d) purchase money indebtedness permitted
pursuant to Section 6.4.
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6.3 LIMITATION ON CONTINGENT LIABILITIES. Become liable as
guarantor, surety, endorser or otherwise for, or agree to
purchase, repurchase or assume, any obligation of any person,
firm or corporation, except for endorsement of commercial
paper for deposit, collection, or discount in the ordinary
course of business.
6.4 LIMITATION ON ADVANCES AND INVESTMENTS. Make or suffer to
exist any advances or loans to, or any investments in (by
transfers of property, contributions to capital, purchase of
stock or securities or evidence of indebtedness, acquisition
of assets or business or otherwise) any person, firm or
corporation, including officers or employees of Obligors,
other than capital expenditures permitted by Section 6.20 and
acquisitions of all the stock or all or substantially all of
the assets of any entity (each an "Acquisition") funded by
internally generated cash, stock of Holdings or purchase money
indebtedness owed to the seller of the stock or assets of such
entity being acquired for which the total purchase price in
any one Acquisition does not exceed $500,000 and the total
purchase price for all Acquisitions in any one fiscal year
does not exceed $1,000,000 and after giving effect to which no
Event of Default, or event which with the giving of notice or
the passage of time would constitute an Event of Default,
shall have occurred.
6.5 LIMITATION ON FUNDAMENTAL CHANGES. Merge or consolidate with
or into any other firm or corporation; dissolve or liquidate;
change substantially their lines of business; change their
names; convey, sell, lease or otherwise dispose of all or
substantially all of their property, assets or business.
6.6 LIMITATION ON AFFILIATES AND SUBSIDIARIES. Acquire, form or
dispose of any Subsidiary or Affiliate or acquire all, or
substantially all or any material portion of the stock or
assets of any other person, firm, corporation, corporate
division or business entity other than (i) Acquisitions
permitted by Section 6.4, provided, however, that Obligors
have given prior written notice thereof to Lender and have
taken, at Obligors' sole cost and expense, all steps
reasonably required by Lender to perfect a Lender's security
interest in the stock or assets acquired, (ii) the dissolution
of Adirondack or Excelsior, and (iii) the merger of Platinum
into Holdings with Holdings being the surviving entity;
provided, however, that Obligors have given prior written
notice thereof to Lender.
6.7 LIMITATION ON CHANGES IN MANAGEMENT. Make or consent to a
material change in the manner in which the business of the
Obligors is conducted or make or consent to a change in
management so that any of Xxxxxxx X. Xxxxxx, Xxxxx X.
XxxXxxxxx, Xxxx Xxxxx or Xxxxx Xxxxx are no longer actively
involved in the management of the Obligors.
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6.8 LIMITATION ON DISPOSITION OF ASSETS. Sell, exchange or
otherwise dispose of any Property, other than finished goods
and inventory in the ordinary course of business and obsolete
equipment no longer used or useful in the conduct of business
which is replaced by equipment of at least equivalent value
which is subject to a valid perfected first priority security
interest in the Lender; provided, however, that Obligors need
not replace any such equipment if it is unnecessary to do so
in the business judgment of the Obligors and the proceeds
thereof are applied to the outstanding principal balance on
the Term Loan.
6.9 LIMITATION ON DIVIDENDS AND DISTRIBUTIONS. Declare or pay any
dividend (unless payable in capital stock of Holdings) or
authorize or make any other distribution on or with respect to
any shares of capital stock of Holdings, whether now or
hereafter outstanding.
6.10 LIMITATION ON ACQUISITION OF STOCK OF HOLDINGS. Purchase,
acquire, redeem or retire, or make any commitment to purchase,
acquire, redeem or retire any of the capital stock of
Holdings, whether now or hereafter outstanding.
6.11 LIMITATION ON OFFICER COMPENSATION. Pay direct or indirect
compensation to any officer or director, whether salary,
bonus, commission, stock distribution, stock dividend, or
otherwise, which would, after giving effect thereto,
constitute an Event of Default hereunder.
6.12 LIMITATION ON TRANSACTIONS WITH AFFILIATES. Other than the
Subordinated Debt with the Subordinated Lenders and the
Subordinated Encumbrances related thereto, enter into, or be a
party to, any transaction with any Affiliate (including,
without limitation, transactions involving the purchase, sale
or exchange of property, the rendering of services or the sale
of stock) except in the ordinary course of business pursuant
to the reasonable requirements of the Obligors and upon fair
and reasonable terms no less favorable to the Obligors than
Obligors would obtain in a comparable arm's-length transaction
with a person other than an Affiliate.
6.13 LIMITATION ON CHANGE OF NAME OR LOCATION. Change their
corporate names or conduct any of their business under any
trade name or style other than as set forth ON SCHEDULE 4.12
or change their chief executive offices, principal places of
business or other places of business or the locations of the
Collateral or records relating to the Collateral from those
locations set forth in Section 3.3 and Section 4.12; provided,
however, that Obligors may do any of the foregoing, other than
change their chief executive offices or principal places of
business, if Obligors give at least thirty (30) days prior
written notice thereof to Lender and take, prior to any such
change, at Obligors' sole cost and expense, all steps
reasonably required by Lender to maintain Lender's perfection
of its first priority security interest in the Collateral.
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6.14 MANDATORY PREPAYMENT. Permit the outstanding principal amount
of the Revolving Line of Credit Note to exceed, at any time,
five million dollars ($5,000,000) less (a) the maximum amount
available to be drawn under all issued and outstanding Standby
Letters of Credit (assuming all conditions for drawing have
been satisfied), and (b) all amounts drawn under issued
Standby Letters of Credit for which the Lender has not been
reimbursed by the Obligors and, in the event any advances are
outstanding in excess of such amount, prepay on any day so
much of the outstanding principal amount which is in excess
thereof.
6.15 LIMITATION ON CHANGES IN ACCOUNTING METHODS. Make or consent
to a material change in their method of accounting.
6.16 SENIOR FUNDED DEBT TO EBITDA. Permit the ratio of Senior
Funded Debt to EBITDA to be greater than 3.50 to 1.00 as of
the end of the fiscal quarter ending July 31, 2001 or to be
greater than 3.00 to 1.00 as of the end of any fiscal quarter
thereafter. This ratio shall be tested as of the end of each
fiscal quarter, commencing with the fiscal quarter ending July
31, 2001, for the fiscal quarter then ended and the
immediately preceding three fiscal quarters.
6.17 DEBT SERVICE COVERAGE RATIO. Permit its Debt Service Coverage
Ratio to be less than 1.2 to 1.0. This ratio shall be tested
as of the end of each fiscal quarter, commencing with the
fiscal quarter ending April 30, 2001, for the fiscal quarter
then ended and the immediately preceding three fiscal
quarters.
6.18 CURRENT RATIO. Permit its Current Ratio to be less than 1.0 to
1.0. This ratio shall be tested as of the end of each fiscal
quarter.
6.19 NET LOSSES. Permit any Net Loss, excluding extraordinary
expenses incurred in conjunction with the acquisition of
Crystal Rock by Holdings and the Loans. This covenant shall be
tested for the period from the Date of Closing through January
31, 2001, for the period from the Date of Closing through
April 30, 2001 and as of the end of each fiscal quarter
thereafter for the fiscal quarter then ended.
6.20 CAPITAL EXPENDITURES. Permit Capital Expenditures in any
fiscal year, on a non cumulative basis, to exceed the lesser
of (i) $3,000,000 plus Net Income or (ii) $5,000,000. This
covenant shall be tested as of the end of each fiscal year,
commencing with the fiscal year ending October 31, 2001.
6.21 ADIRONDACK AND EXCELSIOR. Permit either of Adirondack or
Excelsior to conduct any business, acquire any assets or incur
any liabilities.
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SECTION 7. DEFAULT.
7.1 The occurrence of any of the following events will constitute
an Event of Default under this Agreement:
a.The failure by Obligors to pay any installment of principal
and/or interest due under either of the Loans or any of the
other Obligations when due and payable.
b.The failure by Obligors to pay taxes, if any, due on any
indebtedness under the Loans or any tax or assessment upon
any collateral securing the Obligations, on or before the
same shall become due and payable.
c.The failure of Obligors (i) to observe or perform any
affirmative covenant contained in Section 5 of this
Agreement other than sections 5.5 and 5.7 and such failure
continues for a period of thirty (30) days, provided that
Obligors at all times diligently pursue the cure of such
failure or (ii) to observe or perform any other covenant
contained in this Agreement, including sections 5.5 and 5.7,
or in any of the other Loan Documents.
d.The occurrence of an Event of Default under any of the other
Loan Documents.
e.The filing by or against any Obligor of any petition,
arrangement, reorganization, or the like under any
insolvency or bankruptcy law, or the adjudication of any
Obligor as a bankrupt (and if such filing is involuntary,
the failure to have same dismissed within sixty (60) days
from the date of filing), or the making of an assignment for
the benefit of creditors, or the appointment of a receiver
for any part of Obligors' properties or the admission in
writing by any Obligor of its inability to pay debts as they
become due.
f.The breach of any material warranty or the untruth or
inaccuracy of any material representation of any Obligor
contained in the Loan Documents.
g.The occurrence of a default beyond any applicable grace or
cure period under, or demand for the payment of, any other
note or obligation of any Obligor to Lender.
h.The failure by any Obligor to make payment on any
Indebtedness with an outstanding principal balance in excess
of $25,000 due to any party other than Lender, beyond any
grace period provided with respect thereto, or upon demand,
or the failure to perform any other term, condition, or
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covenant contained in any agreement under which any such
Indebtedness is created, the effect of which failure is to
cause such Indebtedness to become due and payable prior to
its date of maturity.
i.The dissolution, liquidation or termination of existence of
any Obligor.
j.The passage or enforcement of any federal, state, or local
law or the rendition of a final decision of any court (other
than a law or decision with respect to a tax upon the
general revenues of Lender) in any way directly changing or
affecting either of the Loans or lessening the net income
thereon in a fashion which is not corrected or reimbursed by
Obligors.
k.The passage or enforcement of any federal, state, or local
law or the rendition of a final decision of any court in any
way impairing Lender's ability to charge and collect the
interest stated in the Notes, including without limitation,
the ability to vary the interest payable under the Notes in
accordance with this term.
l.A judgment or judgments for the payment of money shall be
rendered against any Obligor, any such judgment or judgments
shall remain unsatisfied and in effect for a period of
thirty (30) consecutive days without a stay of execution and
either the amount of such judgment or judgments is in excess
of $25,000 or any attachment or execution occurs on any
property of any of the Obligors with respect to such
judgment or judgments..
m.The occurrence of a material adverse change to the
Collateral or in any business, properties, condition or
operations, financial or otherwise, of any Obligor.
7.2 NO FURTHER ADVANCES. Upon the happening of any Event of
Default specified above, Obligors shall not be entitled to any
further advances under the Revolving Line of Credit or the
issuance of any Standby Letters of Credit and, at the option
of the Lender, the entire unpaid balance owed under the Loans,
the Notes and the Loan Documents and under any other note or
other documents evidencing the same, plus any other sums owed
hereunder, shall become and shall thereafter be immediately
due and payable without presentment, demand, protest, notice
of protest, or other notice of dishonor of any kind, all of
which are hereby expressly waived by Obligors. Notwithstanding
the foregoing, upon an Event of Default pursuant to Section
7.1e., the entire unpaid balance owed under the Loans, the
Notes and the Loan Documents and under any other note or other
documents evidencing the same, plus any other sums owed
hereunder, shall automatically become and shall thereafter be
immediately due and payable. Failure to exercise
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such option shall not constitute a waiver of the right to
exercise the same in the event of any subsequent default. Upon
the occurrence of any Event of Default, without in any way
affecting Lender's other rights and remedies, or after
maturity or judgment, the interest rate applicable to each of
the Loans shall automatically change without notice to a
floating rate per annum equal to four percentage points (4%)
above the otherwise then applicable rate.
7.3 RIGHTS OF LENDER. In the event of the occurrence of an Event
of Default (a) Lender will have the right to take possession
of the Collateral and to maintain such possession on Obligors'
premises or to remove the Collateral or any part thereof to
such places as Lender may desire. If Lender exercises its
right to take possession of the Collateral, Obligors will,
upon Lender's demand, assemble the Collateral and make it
available to Lender at a place reasonably convenient to both
parties; (b) Lender shall have, in addition to all other
rights provided herein, the rights and remedies of a secured
party under the Uniform Commercial Code; (c) Lender may sell
and deliver any or all Receivables and any or all other
security and Collateral held by Lender or for Lender at public
or private sale, for cash, upon credit or otherwise, at such
prices and upon such terms as Lender deems advisable, at
Lender's sole discretion; and (d) in addition to all other
sums due Lender, Obligors will pay to Lender all costs and
expenses incurred by Lender, including attorneys' fees, to
obtain or enforce payment of Receivables or the Obligations,
or in the prosecution or defense of any action or proceeding
either against Lender or against any Obligor concerning any
matter arising out of or connected with this Agreement or the
Collateral or the Loan Documents or otherwise due pursuant to
the terms of this Agreement. Any requirement of reasonable
notice shall be met if such notice is mailed postage prepaid
to each Obligor at each Obligor's address as set forth herein
at least five (5) days before the time of sale or other
disposition. Lender may be the purchaser at any such sale, if
it is public, and, in the event Lender is the purchaser,
Lender shall have all the rights of a good faith, bona fide
purchaser for value from a secured party after default. The
proceeds of sale shall be applied first to all costs and
expenses of sale, including attorneys' fees, and second to the
payment (in whatever order Lender elects) of all Obligations,
and any remaining proceeds shall be applied in accordance with
the provisions of Article 9 of the Uniform Commercial Code.
Obligors shall remain liable to Lender for any deficiency.
Failure by Lender to exercise any right, remedy or option
under this Agreement or any of the other Loan Documents or in
any other agreement between any Obligor and Lender, or delay
by Lender in exercising the same will not operate as a waiver
by Lender unless it is in writing and signed by Lender and
then only to the extent specifically stated. Neither Lender
nor any party acting as Lender's attorney pursuant to this
Agreement shall be liable for any error of judgment or mistake
of fact or law. Lender's rights and remedies under this
Agreement will be cumulative and not exclusive of any other
right or remedy which Lender may have. Nothing in this
Agreement shall be construed to modify or limit the
unconditional right of
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Lender in its sole discretion to demand full or partial
payment of the principal of, and interest on, any demand
Obligation. The right to make demand on any such demand
Obligation shall exist whether or not Obligors are in
compliance with the covenants or conditions contained in this
Agreement or in any other agreements between Obligors and
Lender.
7.4 COLLECTION OF RECEIVABLES. Upon the occurrence of an Event of
Default, Lender or its designee may notify customers or
account debtors of Obligors at any time, that Receivables have
been assigned to Lender or of Lender's security interest
therein and collect them directly and charge the collection
costs and expenses to Obligors' account.
7.5 POWER OF ATTORNEY. Obligors appoint Lender, or any other
person whom Lender may designate as its attorney, with power
following the occurrence of an Event of Default: to endorse
Obligors' names on any checks, notes, acceptances, money
orders, drafts or other forms of payment or security that may
come into Lender's possession; to sign Obligors' names on any
invoice or xxxx of lading relating to any Receivables, on
notices of assignment, financing statements, and other public
records, on verifications of accounts and on notices to
customers; to notify the post office authorities to change the
address for delivery of Obligors' mail to an address
designated by Lender; to send requests for verification of
Receivables to customers or account debtors; and to do all
things necessary to carry out this Agreement. Obligors ratify
and approve all acts of the attorney. Neither Lender nor the
attorney will be liable for any acts or omissions nor for any
error of judgment or mistake of fact or law. This power, being
coupled with an interest, is irrevocable so long as any
Receivables assigned to Lender or in which Lender has a
security interest remain unpaid or until the Obligations have
been fully satisfied. Lender may file one or more financing
statements disclosing Lender's security interest without
Obligors' signatures appearing thereon.
SECTION 8. MISCELLANEOUS.
8.1 INDEMNIFICATION. In consideration of Lender's execution and
delivery of this Agreement and Lender's making of the Loans
hereunder and in addition to all other obligations of Obligors
under this Agreement, each Obligor hereby agrees to defend,
protect, indemnify and hold harmless Lender, its successors,
assigns, officers, directors, employees and agents (including,
without limitation, those retained in connection with the
transactions contemplated by this Agreement) (collectively,
the "Indemnitees") from and against any and all actions,
causes of action, suits, claims, losses, costs, penalties,
fees, liabilities and damages and expenses in connection
therewith (irrespective of whether any such Indemnitees are a
party to any action for which indemnification hereunder is
sought), and including reasonable attorneys' fees and
disbursements (the "Indemnifiable Liabilities")
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incurred by the Indemnitees or any of them as a result of, or
arising out of, or relating to (a) the execution, delivery,
performance or enforcement of this Agreement and the other
Loan Documents and any instrument, document or agreement
executed pursuant hereto to any of the Indemnitees; (b)
Lender's status as lender to, or creditor of, any of the
Obligors; or (c) the operation of Obligors' business from and
after the date hereof, provided that Obligors shall not be
required to indemnify any of the Indemnitees for any
Indemnifiable Liabilities resulting from the gross negligence
or willful misconduct of Lender or any of the other
Indemnitees. To the extent that the foregoing undertaking by
Obligors may be unenforceable for any reason, each Obligor
shall make the maximum contribution to the payment and
satisfaction of each of the Indemnifiable Liabilities which is
permissible under applicable law.
8.2 SETOFF. All sums at any time standing to Obligors' credit on
the books of Lender, Manufacturers and Traders Trust Company,
or any other Participant (as defined below) or upon or in
which Lender, Manufacturers and Traders Trust Company or any
other Participant has a lien or security interest shall be
security for all of the Obligations. In addition to and not in
limitation of the above, with respect to any deposits or
Property of any Obligor in the possession or control of
Lender, Manufacturers and Traders Trust Company or any other
Participant, now or in the future, such party shall have the
right, if an event which constitutes or which with notice or
lapse of time, or both, would constitute an Event of Default
under this Agreement or any of the other Loan Documents has
occurred, to setoff all or any portion thereof, at any time,
against any Obligations hereunder, even though unmatured,
without prior notice or demand to any Obligor. The Obligors
acknowledge that Manufacturers and Traders Trust Company is
purchasing a participation interest in the Loans and the
provisions of this paragraph are for the benefit of
Manufacturers and Traders Trust Company, and as an inducement
to Manufacturers and Traders Trust Company to purchase such
participation interest.
8.3 SALE OF PARTICIPATION INTERESTS. Lender shall have the
unrestricted right at any time and from time to time, and
without the consent of or notice to Obligors, to grant to one
or more banks or other financial institutions (each, a
"Participant") participating interests in Lender's obligation
to lend hereunder and/or any or all of the Loans. In the event
of any such grant by Lender of a participating interest to a
Participant, whether or not upon notice to Obligors, Lender
shall remain responsible for the performance of its
obligations hereunder and Obligors shall continue to deal
solely and directly with Lender in connection with Lender's
rights and obligations under this Agreement and the other Loan
Documents. Lender may furnish any information concerning
Obligors in its possession from time to time to prospective
Participants, providing that Lender shall require any such
prospective Participant to agree in writing to maintain the
confidentiality of such information.
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8.4 NO WAIVER. No course of dealing between Obligors and Lender
and no failure to exercise or delay in exercising on the part
of Lender any right, power or privilege under the terms of
this Agreement or the other Loan Documents shall operate as a
waiver thereof; nor shall any single or partial exercise of
any right, power or privilege hereunder or thereunder preclude
any other or further privilege. The Lender shall not be deemed
to have waived any of its rights upon or under Obligations or
the Collateral unless such waiver be in writing and signed by
the Lender. The rights and remedies provided herein or in any
other agreement are cumulative and not exclusive or in
derogation of any rights or remedies provided in and thereof,
by law or otherwise.
8.5 CROSS-COLLATERALIZATION. All collateral which Lender may at
any time acquire from Obligors or from any other source in
connection with the Obligations arising under this Agreement
and the other Loan Documents shall constitute collateral for
each and every Obligation, without apportionment or
designation as to particular Obligations and all Obligations,
however and whenever incurred, shall be secured by all
collateral however and whenever acquired, and Lender shall
have the right, in its sole discretion, to determine the order
in which Lender's rights in or remedies against any collateral
are to be exercised and which type of collateral or which
portions of collateral are to be proceeded against and the
order of application of proceeds of collateral as against
particular Obligations.
8.6 CROSS-DEFAULT. Obligors acknowledge and agree that a default
under any one of the Loan Documents shall constitute a default
under each of the other Loan Documents.
8.7 SURVIVAL OF AGREEMENTS. All agreements, representations and
warranties made herein, in any agreement and in any
statements, notices, invoices, certificates, schedules,
documents or other instruments delivered to Lender in
connection with this Agreement or any other agreement shall
survive the making of the Loans and advances hereunder.
8.8 FURTHER DOCUMENTS. Obligors agree that, at any time or from
time to time upon written request of Lender, Obligors will
execute and deliver such further documents and do such other
acts and things as Lender may reasonably request in order to
fully effect the purposes of this Agreement and the other Loan
Documents.
8.9 ENTIRE AGREEMENT; GOVERNING LAW. This Agreement and the
documents referred to herein constitute the entire agreement
of the parties and may not be amended orally and they shall be
construed and interpreted in accordance with the laws of the
State of Connecticut, including its conflict of laws
principles.
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8.10 CONSENT TO JURISDICTION. Each Obligor hereby acknowledges that
the underlying transactions to which this Agreement and the
other Loan Documents relate concern the making, now or in the
future, of loans and advances to the Obligors and that said
obligations of the Obligors are primarily to be performed in
the State of Connecticut. The Obligors agree that the
execution of this Agreement and the other Loan Documents and
the rights and obligations of the parties hereunder and
thereunder shall be deemed to have a Connecticut situs and
each Obligor shall be subject to the personal jurisdiction of
the courts of the State of Connecticut with respect to any
action the Lender, its successors or assigns, may commence
hereunder. Accordingly, each Obligor hereby specifically and
irrevocably consents to the jurisdiction of the courts of the
State of Connecticut with respect to all matters concerning
this Agreement, the other Loan Documents, the Notes or the
enforcement of any of the foregoing.
8.11 JOINT AND SEVERAL LIABILITY. All obligations, covenants and
agreements of the Obligors pursuant to this Agreement or any
of the other Loan Documents shall be the joint and several
obligations, covenants and agreements of each of the Obligors.
8.12 SUCCESSORS. All rights of Lender hereunder shall inure to the
benefit of its successors and assigns, and all Obligations of
Obligors shall bind their successors and assigns.
8.13 EXPENSES. Obligors will pay all expenses arising out of the
preparation, administration, amendment, protection, collection
and/or other enforcement of this Agreement, the other Loan
Documents, the Collateral or security interest granted
hereunder or thereunder and the Notes (including, without
limitation, reasonable counsels' fees).
8.14 PAYMENTS. The acceptance of any check, draft or money order
tendered in full or partial payment of any Obligation
hereunder is conditioned upon and subject to the receipt of
final payment in cash.
8.15 EXHIBITS. All exhibits referred to herein and annexed hereto
are hereby incorporated into this Agreement and made a part
hereof.
8.16 ACKNOWLEDGMENT OF COPY, USE OF PROCEEDS. Obligors acknowledge
receipt of copies of the Notes and Guaranties and attest,
represent and warrant to Lender that advances made under the
Loans are to be used for general commercial purposes and that
no part of such proceeds will be used, in whole or in part,
directly or indirectly, for the purpose of purchasing or
carrying any "margin security" or "margin stock" as such terms
are defined in Regulation U of the Board of Governors of the
Federal Reserve System.
-37-
8.17 DESCRIPTIVE HEADINGS. The descriptive headings of the several
sections of this Agreement are inserted for convenience only
and shall not be deemed to affect the meaning or construction
of any of the provisions hereof.
8.18 NOTICES. Any written notice required or permitted by this
Agreement may be delivered by depositing it in the U.S. mail,
postage prepaid or with a nationally recognized overnight
courier service or by facsimile addressed to the Obligors or
Lender at the addresses set forth at the beginning of this
Agreement. If any notice is sent to Lender pursuant to this
paragraph, it should be sent to the attention of: Xxxxxx X.
Xxxxxxxxx, Vice President, Xxxxxxx Bank, 000 Xxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxxxxx 00000 and a copy thereof should be sent
to Manufacturers and Traders Trust Company, 000 Xxxx Xxxxxx,
Xxxxx, Xxx Xxxx 00000 Attn: Xxxxxxx Xxxxxxxxx, Vice President.
8.19 SEVERABILITY. If any provision of this Agreement or
application thereof to any person or circumstance shall to any
extent be invalid, the remainder of this Agreement or the
application of such provision to persons, entities or
circumstances other than those as to which it is held invalid,
shall not be affected thereby and each provision of this
Agreement shall be valid and enforceable to the fullest extent
permitted by law.
8.20 WAIVER OF RIGHT TO PREJUDGMENT REMEDY NOTICE AND HEARING.
OBLIGORS ACKNOWLEDGE THAT LENDER MAY HAVE RIGHTS AGAINST THEM,
NOW OR IN THE FUTURE, IN ITS CAPACITY AS CREDITOR OR IN ANY
OTHER CAPACITY. SUCH RIGHTS MAY INCLUDE THE RIGHT TO DEPRIVE
OBLIGORS OF OR AFFECT THE USE OF OR POSSESSION OR ENJOYMENT OF
THEIR PROPERTY; AND IN THE EVENT LENDER DEEMS IT NECESSARY TO
EXERCISE ANY OF SUCH RIGHTS PRIOR TO THE RENDITION OF A FINAL
JUDGMENT AGAINST ANY OBLIGOR, OR OTHERWISE, SUCH OBLIGOR MAY
BE ENTITLED TO NOTICE AND/OR HEARING UNDER THE CONSTITUTION OF
THE UNITED STATES AND/OR STATE OF CONNECTICUT, CONNECTICUT
STATUTES (TO DETERMINE WHETHER OR NOT LENDER HAS PROBABLE
CAUSE TO SUSTAIN THE VALIDITY OF LENDER'S CLAIM), OR THE RIGHT
TO NOTICE AND/OR HEARING UNDER OTHER APPLICABLE STATE OR
FEDERAL LAWS PERTAINING TO PREJUDGMENT REMEDIES, PRIOR TO THE
EXERCISE BY LENDER OF ANY SUCH RIGHTS. OBLIGORS EXPRESSLY
WAIVE ANY SUCH RIGHT TO PREJUDGMENT REMEDY NOTICE OR HEARING
TO WHICH OBLIGORS MAY BE ENTITLED. THIS SHALL BE A CONTINUING
WAIVER AND REMAIN IN FULL FORCE AND EFFECT SO LONG AS OBLIGORS
ARE OBLIGATED TO LENDER.
-38-
8.21 WAIVERS. Each Obligor hereby waives presentment, demand,
notice, protest, notice of acceptance of this Agreement,
notice of loans made, credit extended, collateral received or
delivered or other action taken in reliance hereon and all
other demands and notices of any description. With respect to
this Agreement, the other Loan Documents, the Obligations and
the Collateral, each Obligor assents to any extension or
postponement of the time of payment or any other indulgence,
to any substitution, exchange or release of the Collateral, to
the addition or release of any party or person primarily or
secondarily liable, to the acceptance of partial payments
thereon and the settlement, compromising or adjusting of any
thereof, all in such manner and at such time or times as the
Lender may deem advisable. The Lender shall have no duty as to
the collection or protection of the Collateral or any income
thereon, nor as to the preservation of rights against prior
parties, nor as to the preservation of any rights pertaining
thereto beyond the safe custody thereof. The Lender may
exercise its rights with respect to the Collateral without
resorting or regard to other collateral or sources of
reimbursement for liability. Each Obligor waives all
suretyship defenses with respect to the Notes, the Loans, the
Obligations and all other matters arising from or relating to
the Loans and the Loan Documents.
8.22 WAIVER OF RIGHT TO JURY TRIAL. EACH OBLIGOR AND LENDER HEREBY
WAIVE TRIAL BY JURY AND THE RIGHT TO TRIAL BY JURY IN ALL
ACTIONS OR PROCEEDINGS BETWEEN THEM IN ANY COURT ARISING OUT
OF OR RELATING TO THIS AGREEMENT, ITS VALIDITY OR
INTERPRETATION. THIS SHALL BE A CONTINUING WAIVER AND REMAIN
IN FULL FORCE AND EFFECT SO LONG AS OBLIGORS ARE OBLIGATED TO
LENDER.
-39-
In Witness Whereof, the parties have caused this Agreement to be duly
executed and delivered by the proper and duly authorized officers as of the date
and year first above written.
WITNESS:
__________________________ VERMONT PURE HOLDINGS, LTD.
(f/ka VP Merger Parent, Inc.)
__________________________ By:____________________________
Name: Xxxxxxx X. Xxxxxx
Title: President
__________________________ CRYSTAL ROCK SPRING WATER COMPANY
__________________________ By:____________________________
Name: Xxxx X. Xxxxx
Title: President
__________________________ PLATINUM ACQUISITION CORP.
(f/k/a Vermont Pure Holdings, Ltd.)
__________________________ By:____________________________
Name: Xxxxxxx X. Xxxxxx
Title: President
__________________________ VERMONT PURE SPRINGS, INC.
__________________________ By:____________________________
Name: Xxxxxxx X. Xxxxxx
Title: President
-40-
__________________________ XXXXXXX BANK
__________________________ By:____________________________
Name: Xxxxxx X. Xxxxxxxxx
Title: Vice President
-41-
EXHIBIT 2.1
Term Note
EXHIBIT 2.2
Revolving Line of Credit Note
EXHIBIT 4.22
Property not owned by Obligors
VERMONT PURE:
1999 Chevy Suburban, Smartlease by GMAC
VIN 0XXXX00X0XX000000
1999 Chevy Blazer, Smartlease by GMAC
VIN 0XXXX00X0X0000000
1999 Chevy Lumina, Smartlease by GMAC
VIN 0X0XX00X0X0000000
2000 Chevy Blazer, Smartlease by GMAC
VIN 0XXXX00X0X0000000
1999 Chevy Blazer, Smartlease by GMAC
VIN 0XXXX00X0X0000000
1999 Chevy Lumina, Smartlease
VIN 0X0XX00X0X0000000
1999 Chevy Blazer, Smartlease by GMAC
VIN 0XXXX00X0X0000000
1999 Chevy Blazer, Smartlease by GMAC
VIN 0XXXX00X0X0000000
1999 Chevy Lumina, Smartlease by GMAC
VIN 0X0XX00X0X0000000
1999 Chevy Malibu, Smartlease
VIN 0X0XX00XXX0000000
2000 Chevy Malibu, Smartlease
VIN 0X0XX00X0X0000000
0000 Xxx'x , Xxxxxxx, XX
VIN 1HTSCAANOYH233179
Baler, Pet Plant
Gateway Computers, RT66 Randolph, VT
Software, Hardware, & Svcs, Descartes
Softech Financial, various locations
DeliveryVehicles Acquired from Perrier
Citicorp Leasing, Inc. - Ryder trucks (12)
XxXxxxxxx Truck Rental, vehicle #0000
XXXXXXX XXXX:
Pitney Xxxxx Postage Machine & Scale
Pitney Xxxxx Copier
InPaco/Liqui-Box 1000 XX Xxxxxx
InPaco/Liqui-Box 350 HT Filler
Archives Mgmt Warehouse Space
Chase Lincoln Navigator
Xxxx Xxxx Contour LX
GMAC Cadillac DeVille
Ford Lincoln Continental
SCHEDULE 3.3
Locations of Collateral other than Premises
00 XXXX XXX XXX XXXX 000 XXXXXXXXXX XXXXXX
XXXXX XXXXXX, XX 00000-0000 XXXXXXXXX, XX 00000
(000) 000-0000
00 XXXXXXX'X XXXX, XXXXX 000
XXXXXXXXXXX, XX 00000
(000) 000-0000
00 XXXXX XXXXX
XXXXXXXXX, XX 00000
(800) 639-3047
0000 XXXXXXXXXX XXX PUBLIC XXXXXXXXX XXXXXXXXX
XXXXX 0000
XXXXXXXXX, XX 00000 RSD WAREHOUSE SERVICES, INC
(000) 000-0000 000 XXX XXXXX XXXX
XXXXX XXXXX XXX, XX 00000
00 XXXXX XXXXX, XXXX X (000) 000-0000
XXXXXXXXXX, XX 00000
(000) 000-0000 JCT ASSOCIATES, INC
00 XXXXXXX XXXXXX
0000 XXXXXXXXXX XX XXXX XXXXXXXX, XX 00000
XXXXXXXXX, XX 00000 (000) 000-0000
(000) 000-0000
SCHOOLHOUSE WAREHOUSING
000 XXXX XXXXX XXXX XX XXXXXX X
XXXXXXXX, XX XXXXXXXX, XX 00000
(000) 000-0000 (000) 000-0000
00 XXXXXXXXX XXXXX
XXXXXXXX, XX 00000
(518) 373-2972
000 XXXX XXXXX
XXXXXXX, XX 00000
000 XXXXXXXX XXXX
XXXXXXXXX, XX 00000
(000) 000-0000
SCHEDULE 4.5
Section A
The following mortgages, security interests, pledges, liens, encumbrances, or
other charges listed in this Section A (the "Prior Encumbrances") are prior in
right and priority to the mortgages and security interests of the Bank:
1. Mortgage given to Xxxxx Xxxxxxx on October 8, 1991 on th premises at Chase
Road in Randolph, Vermont maturing December 1, 2006. Secured by the property.
2. Lease with CIT Group in connection with the lease of two trucks. The amount
due through October 24, 2000 is $48,386.12. Secured by a UCC-1 Financing
Statement filed with the Vermont Secretary of State as filing number
98-99831.
3. Truck Lease Agreement with Associates Lesing, Inc. The amount outstanding on
October 4, 2000 is $53,940.15. Secured by a UCC-1 Financing Statement filed
with the Vermont Secretary of State as filing number 99-110951.
4. Lease with Xxxxx Fargo Leasing Inc., successor to Norwest Leasing. The
amount outstanding on October 4, 2000 is approximately $10,000. Secured by
a UCC-1 Financing Statement filed with the Vermont Secretary of State as
filing number 99-115271.
Section B
The following mortgages, security interests, pledges, liens, encumbrances, or
other charges listed in this Section B (the "Subordinated Encumbrances") are
subordinate in right and priority to the mortgages and security interests of the
Bank: Loan from the Town of Xxxxxxxx through a Community Development Block Grant
in October, 1993 secured by real and personal property in Randolph, Vermont and
subordinated to the Bank in an agreement agreed to on October 3, 2000. The
amount outstanding as of July 31, 2000 was $295,154.
The security interests granted to the Subordinated Lenders in the Subordinated
Lenders' Collateral, as defined in those certain Subordination and Pledge
Agreements dated the date hereof among the Bank and the Subordinated Lenders.
SCHEDULE 4.6
Litigation
1. Xxxxxxxx Xxxxxx, Xx. vs. Vermont Pure Holdings, Ltd.
3:99 CV 2193 AHN (X. Xxxx.)
2. Xxxxxxxx X. Xxxxxxxx v. Vermont Pure Springs, Inc. and Xxxxx X. Xxxx
Supreme Court of New York, Index No. 9902642, filed September 21, 1999
3. Xxxxx Xxxxxxxxx v. Excelsior Springs Water Company
Case No. 4-#-S-89-134974-E, New York Division of Human Rights
4. Xxxxx Entertainment Services, Inc. v. Vermont Pure Springs, Inc.
Index No. 00-01699 filed February 8, 0000
Xxxxxxx Xxxxx xx xxx Xxxxx xx Xxx Xxxx, Xxxxxx of Westchester
5. Vermont Department of Taxes, Case ID 00001-12724 (Vermont Pure Springs,
Inc.) relates to a sales tax audit and subsequent appeals on the
classification of taxable v. nontaxable manufacturing equipment. Amount
of the dispute as of the interim financial date was in excess of
$250,000. There is a current settlement proposal from the Department
for approximately $53,000.
6. Xxxxxx Xxxxxxx v. Vermont Pure Springs, Inc.
File No. 98-147-cr, State of Vermont, Office of Attorney General
7. New York State Department of Finance and Taxation
Routine audit related to sales tax for the period 3/1/97-2/28/00,
pending
8. Vermont Pure Holdings, Ltd. v. DesCartes Systems Group, Inc. and
Endgame Solutions, Inc., United States District Court, Burlington, VT
SCHEDULE 4.12
Trade names for each Obligor
None
SCHEDULE 4.14
Agreements pertaining to purchase or sale of stock
1. See attached list of outstanding Options and Warrants.
2. Convertible Debenture issued to Marcon Capital Corporation as of 9/30/99 in
the principal amount of $975,000, convertible at 85% of the average per share
price of Holding's common stock for the 20 days immediately proceeding such
conversion.
3. Common Stock Warrant issued to CoreStates Bank as of April 8, 1998 to
purchase a variable number of shares at a variable purchase price, each as
determined by the formula set forth therein.
4. Non-Incentive Stock Option Agreement between Holdings and The Greatwater
Company dated March 10, 1997 to purchase 42,187 shares of Holding's Common Stock
at $2.8125/ea.
5. Registration Rights Agreement between Holdings and CoreStates Bank, dated
April 8, 1998.
6. Stock Issuance and Registration Rights Agreement between Holdings and Vermont
Coffee Time, Inc. dated January 5, 1998.
7. Stock options issued under the Employment Agreements dated May 5, 2000 in
conjunction with the Merger Agreement of the same date between Vermont Pure and
Crystal Rock. Pursuant to these agreements, the employees will have the right to
purchase (as an incentive stock option under the Company's 1998 Incentive and
Non-Statutory Stock Option Plan) the following amounts of Vermont Pure Holdings,
Ltd. Common Stock at the closing price on the date the transaction is
consummated, subject to the vesting provisions in the agreements. Issuance of
these options is contingent on shareholder approval on October 5, 2000 to amend
the 1998 plan to increase the number of shares.
Xxx Xxxxxx 500,000
Xxxxx XxxXxxxxx 100,000
Xxxxx Xxxxxxx 75,000
Xxxxxx Xxxxx 25,000
SCHEDULE 5.10
Plans of the Obligors
1. Vermont Pure Springs, Inc. Employee Benefit Plan
2. Vermont Pure Springs, Inc. Retirement Plan
3. Vermont Pure Springs, Inc. Profit Sharing Plan
4. 1998 Incentive and Non-Statutory Stock Option Plan
5. Vermont Pure Holdings, Ltd. 1999 Employee Stock Purchase Plan
6. 1993 Performance Equity Plan
SCHEDULE 6.1
Existing Capital Leases
1. Lease with The CIT Group in connection with the lease of two
trucks. The amount due through October 24, 2000 is $48,386.12.
Secured by a UCC-1 Financing Statement filed with the Vermont
Secretary of State as filing number 98- 99831.
See attached documentation.
2 Truck Lease Agreement with Associates Leasing, Inc. The amount
outstanding on October 4, 2000 is $53,940.15. Secured by a
UCC-1 Financing Statement filed with the Vermont Secretary of
State as filing number 99-110951.
See attached documentation.
3 Lease with Xxxxx Fargo Financial Leasing Inc., successor to
Norwest Leasing. The amount outstanding on October 4, 2000 is
approximately $10,000. Secured by a UCC-1 Financing Statement
filed with the Vermont Secretary of State as filing number
99-115271.
See attached documentation.
SCHEDULE 6.2
Permitted Indebtedness
1. Mortgage to Xxxxx Xxxxxxx dated October 8, 1991 on the premises at Chase Road
in Randolph, Vermont maturing December 1, 2006. The amount outstanding on July
31, 2000 was $42,621. Secured by the property.
2. Note to Xxxxxxxx Xxxxx dated August 27,1997, maturing August 31, 2002, in
conjunction with the acquisition of Excelsior Springs Water Co.. The amount
outstanding on July 31, 2000 was $3,949. Unsecured.
3. Note to Xxxxx Xxxxxx dated August 27,1997, maturing August 31, 2002, in
conjunction with the acquisition of Excelsior Springs Water Co. The amount
outstanding on July 31, 2000 was $11,846. Unsecured.
4. Note to Xxxx Xxxxxx dated August 27,1997, maturing August 31, 2002, in
conjunction with the acquisition of Excelsior Springs Water Co.. The amount
outstanding on July 31, 2000 was $7,897. Unsecured.
5. Note to Xxxxxxxxx Xxxxxxxx dated December 17,1999, maturing December 17,
2000, in conjunction with the acquisition of Coffee Magic. The amount
outstanding on July 31, 2000 was $50,000. Unsecured.
6. Note to Xxxxxxx Xxxxxxxx dated February 17, 2000, maturing February 17, 2001,
in conjunction with the acquisition of Sunrise Coffee.. The amount outstanding
on July 31, 2000 was $58,000. Unsecured.
7. Notes to Xxxxx, Joan, John, Xxxxx Xxxxx and a Xxxxx family trust totaling
22,600,000, maturing seven years from the date of the transaction herein.
Subordinated to Xxxxxxx Bank.
8. Loan from the Town of Xxxxxxxx through a Community Development Block Grant in
October, 1993 secured by real and personal property in Randolph, Vermont and
subordinated to the Bank in an agreement agreed to on October 3, 2000. The
amount outstanding as of July 31, 2000 was $295,154.
9. Note to All Natural Products of Vermont, Inc. d/b/a Vermont Naturals dated
May ___, 1998, maturing May 5, 2001, in conjunction with the acquisition of All
Natural Products of Vermont, Inc. The amount outstanding on July 31, 2000 was
$3,438.29. Unsecured.
10. Lease with The CIT Group in connection with the lease of two trucks. The
amount due through October 24, 2000 is $48,386.12. Secured by a UCC-1 Financing
Statement filed with the Vermont Secretary of State as filing number 98-99831.
11. Truck Lease Agreement with Associates Leasing, Inc. The amount outstanding
on October 4, 2000 is $53,940.15. Secured by a UCC-1 Financing Statement filed
with the Vermont Secretary of State as filing number 99-110951.
12. Lease with Xxxxx Fargo Financial Leasing Inc., successor to Norwest Leasing.
The amount outstanding on October 4, 2000 is approximately $10,000. Secured by a
UCC-1 Financing Statement filed with the Vermont Secretary of State as filing
number 99-115271.
