Exhibit 10.22
REAFFIRMATION OF SUBORDINATION
This Agreement, made as of this 1st day of November, 2001, is between XXXX
X. XXXXX (the "Subordinate Lender") and XXXXXXX BANK, a federally chartered
savings bank with a place of business at 000 Xxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxx
00000 (the "Bank").
B A C K G R O U N D
A. On the 5th day of October, 2001, Vermont Pure Holdings, Ltd., Crystal
Rock Spring Water Company, Platinum Acquisition Corp. and Vermont Pure Springs,
Inc. (collectively, the "Obligors") executed and delivered to the Bank a Term
Note in the amount of $31,000,000 (the "Term Note") and a Revolving Line of
Credit Note in the amount of $5,000,000 (the "Line of Credit Note").
B. The Subordinate Lender subordinated, among other things, the payment of
all Subordinated Liabilities (as defined in the Subordination) to the
indefeasible payment in full of all Senior Liabilities (as defined in the
Subordination) pursuant to a Subordination and Pledge Agreement executed by the
parties hereto and dated as of October 5, 2001 (the "Subordination Agreement").
X. Xxxx X. Xxxxxxxx, not 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. is acting as agent (the "Agent") for
Subordinate Lender pursuant to certain of the Subordinated Loan Documents.
D. The Obligors have requested that the Bank extend a $4,200,000 loan to
the Obligors (the "New Loan"), as evidenced by a Term Note dated as of the date
of this document (the "New Term Note") and that the Bank amend certain
provisions relating to advances and repayments under the Obligors' existing
Revolving Line of Credit Note, as evidenced by an Amended and Restated Revolving
Line of Credit Note dated as of the date of this document (the "Amended
Revolving Line of Credit Note") both pursuant to an Amended and Restated Loan
and Security Agreement between the Obligors and the Bank dated as of the date of
this document (the "Amended and Restated Loan and Security Agreement").
E. The Bank has agreed to extend the New Loan and modify the Obligors'
existing Revolving Line of Credit if, among other things, the Subordinate Lender
executes and delivers this Reaffirmation of Subordination.
NOW, THEREFORE, in consideration of the extension of the New Loan and
modification of the Obligors' existing Revolving Line of Credit, the Subordinate
Lender agrees as follows:
1. The Subordinate Lender reaffirms that the Subordination Agreement
remains in full force and effect, including the subordination of the
Subordinated Liabilities to the New Term Note, the Amended Revolving Line of
Credit Note, the Term Note and all other Senior Liabilities on the terms set
forth in the Subordination.
2. The Subordination Agreement is hereby amended to reflect the addition of
the New Term Note and the substitution of the Amended Revolving Line of Credit
Note. All of the terms and conditions of the Subordination Agreement shall be
deemed to reference and apply to the indebtedness evidenced by the New Term
Note, the Amended Revolving Line of Credit Note and the Term Note.
3. The term "Bank Collateral", as defined in the Subordination Agreement,
is hereby amended to include the Property of the Obligors described in Schedule
A attached hereto.
4. The term "Loan Agreement", as defined in the Subordination Agreement, is
hereby amended to refer to that certain Amended and Restated Loan and Security
Agreement among the Obligors and the Bank dated as of the date here, and any
subsequent supplement, modification, renewal, extension or amendment thereto.
5. The Subordinate Lender and Agent reaffirm that any security interest now
or hereafter held by or on behalf of the Subordinate Lender and granted by any
of the Obligors to secure any of the Subordinated Liabilities, is hereby
immediately made subordinate, junior and postponed in priority and effect to the
priority and effect of the security interest purported to be created by any of
the Loan Documents, as if (and whether or not) the Bank's security interest had
been perfected by possession, by timely filing of financing statements, or by
any other means prior to the time the security interest with respect to the
Subordinated Liabilities is perfected, and prior to the filing of any financing
statements in connection with the Subordinated Liabilities. The Subordinate
Lender and Agent agree to execute and deliver to the Bank all instruments,
including, without limitation, Forms UCC-3, subordinations of lien, and
subordinations of mortgage which, in the reasonable opinion of the Bank, are
necessary or convenient to effectuate the purposes of this paragraph and this
Agreement.
6. The Subordinate Lender hereby represents and warrants to the Bank that
no default exists under the Subordination Agreement or will exist with the
giving of notice, the passage of time or both. The Subordinate Lender further
hereby represents and warrants to the Bank that all of the terms, conditions,
obligations, agreements, warranties and representations contained in the
Subordination Agreement remain true and accurate and are hereby ratified and
confirmed in all respects. Nothing in this Agreement shall operate to release
the Subordinate Lender from its agreement to subordinate the Subordinated
Liabilities to the Senior Liabilities.
7. The Agent hereby agrees to be bound by the terms and provisions of this
Agreement and agrees not to make any payment or distribution or to otherwise
take any action which is contrary to the provisions of this Agreement or the
Subordination Agreement.
2
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
year first above written.
WITNESSED BY:
----------------------- --------------------------------
Xxxx X. Xxxxx
Address: 0000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
-----------------------
---------------------- --------------------------------
Xxxx X. Xxxxxxxx, not 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., as Agent
---------------------- Address: 0000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
XXXXXXX BANK
---------------------- By:-----------------------------
Xxxxxx X. Xxxxxxxxx
Its Vice President
---------------------- Address: 000 Xxxx Xxxxxx
Xxxxxxxxx, XX 00000
STATE OF CONNECTICUT)
) ss: _______ October __, 2001
COUNTY OF HARTFORD )
Personally appeared Xxxx X. Xxxxx, signer and sealer of the foregoing instrument
and acknowledged the same to be her free act and deed, before me.
Commissioner of the Superior Court
Notary Public
My Commission expires:
-------------
3
STATE OF CONNECTICUT )
) ss: Hartford October 22, 2001
COUNTY OF HARTFORD )
Personally appeared Xxxx X. Xxxxxxxx, not 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, as Agent, signer and sealer of
the foregoing instrument and acknowledged the same to be his free act and deed
as Trustee and Agent, before me.
Commissioner of the Superior Court
Notary Public
My Commission expires:
-------------
STATE OF CONNECTICUT )
) ss: Hartford October 22, 2001
COUNTY OF HARTFORD )
Personally appeared Xxxxxx X. Xxxxxxxxx, Vice President of Xxxxxxx Bank, signer
and sealer of the foregoing instrument and acknowledged the same to be his free
act and deed as such officer and the free act and deed of Xxxxxxx Bank, before
me.
Commissioner of the Superior Court
Notary Public
My Commission expires:
-------------
4
The Obligors signing below hereby acknowledge receipt of a copy of the foregoing
Agreement, waive notice of acceptance thereof by the Bank, and agree to be bound
by the terms and provisions thereof. The Obligors signing below further agree to
make no payments or distributions, or grant any security interest, contrary to
the terms and provisions of this Agreement and the Subordination Agreement and
to do every other act and thing necessary or appropriate to carry out such terms
and provisions. Upon the occurrence of any Event of Default, or upon the breach
of any representation, covenant or agreement in this Agreement or the
Subordination Agreement by any of the Obligors or the Subordinated Lender, or in
the event of the termination of the Subordination Agreement, all of the Senior
Liabilities shall, without notice or demand, become immediately due and payable
at the option of the Bank and the Bank may immediately, without further notice,
resort to all of its rights and remedies herein and in the Subordination
Agreement, in any document (including the Loan Agreement, as amended and
restated as of the date hereof, and any of the Loan Documents, as the same may
be amended or amended and restated) by and between the Bank and any Obligor, or
in any in any instrument evidencing any obligation under any such document, at
law or in equity.
Dated: As of the 1st day of November, 2001
VERMONT PURE HOLDINGS, LTD.
By:______________________
Name: Xxxxx X. Xxxxx
Title: President
Address: Xxxxxxxxx Xxxxxxxxxx Xxxx
Xxxxx 00
Xxxxxxxx, XX 00000
CRYSTAL ROCK SPRING WATER COMPANY
By:______________________
Name: Xxxxx X. Xxxxx
Title: President
Address: 0000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
PLATINUM ACQUISITION CORP.
By:______________________
Name: Xxxxx X. Xxxxx
Title: President
Address:Catamount Industrial Park
Xxxxx 00
Xxxxxxxx, XX 00000
5
VERMONT PURE SPRINGS, INC.
By:______________________
Name: Xxxxx X. Xxxxx
Title: President
Address: Xxxxxxxxx Xxxxxxxxxx Xxxx
Xxxxx 00
Xxxxxxxx, XX 00000
6
SCHEDULE A
Property of the Obligors
"Collateral" means all assets of the Obligors now or hereafter owned by the
Obligors, including but not limited to, Receivables, Inventory, Equipment,
Patents, Trademarks, Investment Property, Additional Collateral, and the
Premises.
"Receivables" means (i) all of Obligors' now owned and hereafter acquired,
present and future, Accounts, Chattel Paper, Documents, Instruments and
Supporting Obligations related thereto, (as such terms are defined in the
Uniform Commercial Code as in effect in Connecticut from time to time) 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 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.
"Inventory" means all Inventory and Goods and all Supporting Obligations related
thereto (as such terms are defined in the Uniform Commercial Code as in effect
in Connecticut from time to time) 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.
"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, 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.
"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
2
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.
"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.
"Investment Property" means all investment property (as such term is defined in
the Uniform Commercial Code as adopted in Connecticut from time to time) 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 Supporting
Obligations (as such term is defined in the Uniform Commercial Code as adopted
in Connecticut from time to time) related thereto and all proceeds and products
thereof, including without limitation, all insurance proceeds and fidelity bond
proceeds related thereto.
"Additional Collateral" means (i) all General Intangibles, including Payment
Intangibles and Software and all Supporting Obligations related thereto, (as
such terms are defined in the Uniform Commercial Code as in effect in
Connecticut from time to time) 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, Letter of Credit Rights and all Supporting Obligations related thereto
(as such terms are defined in the Uniform Commercial Code as in effect in
Connecticut from time to time), whether now owned or hereafter created, wherever
located, together with the rights to withdraw from said Deposit Accounts and
make deposits to the same and the right to draw under Letters of Credit; (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,
Secured Party 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 Secured Party 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
3
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.
"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)
4
