EXHIBIT 10.24
$6,000,000 REVOLVING CREDIT FACILITY
$10,000,000 REDUCING REVOLVING CREDIT FACILITY
CREDIT AGREEMENT
by and among
AQUAPENN SPRING WATER COMPANY, INC.
and
PNC BANK, NATIONAL ASSOCIATION
Dated as of December 22, 1997
TABLE OF CONTENTS
Section Page
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1. CERTAIN DEFINITIONS................................................1
1.1 Certain Definitions...........................................1
1.2 Construction.................................................12
1.2.1 Number; Inclusion......................................12
1.2.2 Determination..........................................12
1.2.3 Bank's Discretion and Consent..........................13
1.2.4 Documents Taken as a Whole.............................13
1.2.5 Headings...............................................13
1.2.6 Implied References to this Agreement...................13
1.2.7 Persons................................................13
1.2.8 Modifications to Documents.............................13
1.2.9 From, To and Through...................................14
1.2.10 Shall: Will............................................14
1.3 Accounting Principles........................................14
2. REVOLVING CREDIT LINE.............................................14
2.1 Revolving Credit Commitment..................................14
2.1.1 Advances................................................14
2.2 Commitment Fees..............................................15
2.3 Revolving Credit Line Requests...............................15
2.3.1 Advance Requests........................................15
2.4 Making Revolving Line Advances...............................16
2.4.1 Making Advances.........................................16
2.5 Revolving Line Note..........................................17
2.6 Extension by Bank of the Revolving Line Expiration Date......17
2.6.1 Requests; Approval by Bank..............................17
2.7 Use of Proceeds..............................................17
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3. REDUCING REVOLVING LINE...........................................17
3.1 Reducing Revolving Credit Commitment.........................17
3.1.1 Advances................................................17
3.2 Commitment Fees..............................................18
3.3 Reducing Revolving Credit Line Requests......................19
3.3.1 Advance Requests........................................19
3.4 Making Reducing Revolving Line Advances......................19
3.4.1 Making Advances.........................................19
3.5 Reducing Revolving Line Note.................................20
3.6 Use of Proceeds..............................................20
4. INTEREST RATES....................................................20
4.1 Interest Rate Options........................................20
4.1.1 Revolving Line Interest Rate Options....................20
4.1.2 Reducing Revolving Line Interest Rate Options...........21
4.1.3 Rate Quotations.........................................21
4.1.4 Additional Interest.....................................22
4.1.5 Refund..................................................22
4.2 Interest Periods.............................................22
4.2.1 Ending Date and Business Day............................22
4.2.2 Amount of Borrowing Tranche.............................23
4.2.3 Termination Before Expiration Date......................23
4.2.4 Renewals................................................23
4.3 Interest After Default.......................................23
4.3.1 Interest Rate...........................................23
4.3.2 Acknowledgment..........................................23
4.4 Euro-Rate Unascertainable; Illegality: Increased Costs:
Deposits Not..................................................24
4.4.1 Unascertainable.........................................24
4.4.2 Illegality: Increased Costs: Deposits Not Available.....24
4.4.3 Bank's and Bank's Rights................................24
4.5 Selection of Interest Rate Options...........................25
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5. PAYMENTS..........................................................25
5.1 Payments.....................................................25
5.2 Interest Payment Dates: Maturity of Principal................26
5.2.1 Interest................................................26
5.2.2 Principal Maturity......................................26
5.3 Voluntary Prepayments........................................26
5.3.1 Right to Prepay.........................................26
5.3.2 Change of Lending Office................................27
5.4 Additional Compensation in Certain Circumstances.............28
5.4.1 Increased Costs or Reduced Return Resulting from Taxes,
Reserves, Capital Adequacy Requirements, Expenses. Etc........28
5.4.2 Indemnity...............................................29
5.4.3 Stamp Taxes.............................................29
5.4.4 Indemnification for Taxes Paid by a Bank................30
5.4.5 Survival................................................30
6. REPRESENTATIONS AND WARRANTIES....................................30
6.1 Representations and Warranties...............................30
6.1.1 Organization and Qualification.........................30
6.1.2 Capitalization and Ownership...........................30
6.1.3 Subsidiaries...........................................31
6.1.4 Power and Authority....................................31
6.1.5 Validity and Binding Effect............................31
6.1.6 No Conflict............................................32
6.1.7 Litigation.............................................32
6.1.8 Title to Properties....................................32
6.1.9 Financial Statements...................................33
6.1.10 Use of Proceeds: Margin Stock: Section 20 Subsidiaries.33
6.1.11 Full Disclosure........................................34
6.1.12 Taxes..................................................34
6.1.13 Consents and Approvals.................................35
6.1.14 No Event of Default: Compliance with Instruments.......35
6.1.15 Patents Trademarks. Copyrights. Licenses Etc...........35
6.1.16 Insurance..............................................35
6.1.17 Compliance with Laws...................................36
6.1.18 Material Contracts; Burdensome Restrictions ...........36
6.1.19 Investment Companies. Regulated Entities...............36
6.1.20 Plans and Benefit Arrangements.........................36
6.1.21 Employment Matters.....................................37
6.1.22 Environmental Matters..................................38
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6.1.23 Senior Debt Status.....................................39
6.2 Continuation of Representations..................................39
6.3 Updates to Schedules.............................................39
7. CONDITIONS OF LENDING.............................................39
7.1 First Advances Under Loans...................................40
7.1.1 Officer's Certificate..................................40
7.1.2 Secretary's Certificate................................40
7.1.3 Inter-Creditor Agreement; Other Financing Documents....41
7.1.4 Opinion of Counsel.....................................41
7.1.5 Legal Details..........................................41
7.1.6 Payment of Fees........................................41
7.1.7 Other Loan Documentation Review........................41
7.1.8 Material Consents......................................42
7.1.9 Officer's Certificate Regarding MACs...................42
7.1.10 No Violation of Laws...................................42
7.1.11 No Actions or Proceedings..............................42
7.1.12 Insurance Policies: Certificates of Insurance;
Endorsements...........................................42
7.2 Each Additional Advance......................................43
8. COVENANTS.........................................................43
8.1 Affirmative Covenants........................................43
8.1.1 Preservation of Existence Etc..........................43
8.1.2 Payment of Liabilities Including Taxes Etc.............43
8.1.3 Maintenance of Insurance...............................44
8.1.4 Maintenance of Properties and Leases...................44
8.1.5 Maintenance of Patents, Trademarks. Etc................44
8.1.6 Visitation Rights......................................45
8.1.7 Keeping of Records and Books of Account................45
8.1.8 Plans and Benefit Arrangements.........................45
8.1.9 Compliance with Laws...................................45
8.1.10 Use of Proceeds........................................46
8.1.11 Operating Accounts.....................................46
8.2 Negative Covenants...........................................46
8.2.1 Indebtedness............................................46
8.2.2 Liens...................................................47
8.2.3 Guaranties..............................................47
8.2.4 Loans and Investments...................................47
8.2.5 Dividends and Related Distributions.....................47
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8.2.6 Liquidations, Mergers, Consolidations, Acquisitions....48
8.2.7 Dispositions of Assets or Subsidiaries.................49
8.2.8 Affiliate Transactions.................................49
8.2.9 Subsidiaries. Partnerships and Joint Ventures..........50
8.2.10 Continuation of or Change in Business..................50
8.2.11 Plans and Benefit Arrangements.........................50
8.2.12 Fiscal Year............................................50
8.2.13 Changes in Organizational Documents....................50
8.2.14 Negative Covenants Prohibition.........................51
8.2.15 Minimum EBITDA to Fixed Charge Ratio...................51
8.2.16 Maximum Leverage Ratio.................................51
8.2.17 Minimum EBITDA Ratio...................................51
8.2.18 No Change in Control...................................51
8.3 Reporting Requirements.......................................52
8.3.1 Quarterly Financial Statements..........................52
8.3.2 Annual Financial Statements.............................52
8.3.3 Certificate of the Borrower.............................53
8.3.4 Notice of Default.......................................53
8.3.5 Notice of Litigation....................................53
8.3.6 Budgets. Forecasts. Other Reports and Information.......54
8.3.7 Notices Regarding Plans and Benefit Arrangements........54
9. DEFAULT...........................................................56
9.1 Events of Default............................................56
9.1.1 Payments Under Loan Documents..........................56
9.1.2 Breach of Warranty.....................................56
9.1.3 Breach of Negative Covenants or Visitation Rights......57
9.1.4 Breach of Other Covenants..............................57
9.1.5 Defaults in Other Agreements or Indebtedness...........57
9.1.6 Final Judgments or Orders..............................57
9.1.7 Loan Document Unenforceable............................57
9.1.8 Uninsured Losses: Proceedings Against Assets...........58
9.1.9 Notice of Lien or Assessment...........................58
9.1.10 Insolvency.............................................58
9.1.11 Events Relating to Plans and Benefit Arrangements......58
9.1.12 Cessation of Business..................................59
9.1.13 Change of Control......................................59
9.1.14 Involuntary Proceedings................................59
9.1.15 Voluntary Proceedings..................................60
9.2 Consequences of Event of Default.............................60
9.2.1 Events of Default Other Than Bankruptcy. Insolvency or
Reorganization Proceedings...............................60
9.2.2 Bankruptcy. Insolvency or Reorganization Proceedings....60
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9.2.3 Set-off.................................................61
9.2.4 Suits, Actions, Proceedings.............................61
9.2.5 Application of Proceeds.................................61
9.2.6 Other Rights and Remedies...............................62
10. THE BANK.........................................................62
10.1 Reimbursement and Indemnification of Bank by the Borrower...62
10.2 Exculpatory Provisions: Limitation of Liability.............63
10.3 Reliance by Bank............................................63
10.4 Notice of Default...........................................64
11. MISCELLANEOUS....................................................64
11.1 Modifications. Amendments or Waivers........................64
11.2 No Implied Waivers: Cumulative Remedies; Writing Required...64
11.3 Holidays....................................................64
11.4 Funding by Branch Subsidiary or Affiliate...................65
11.4.1 Notional Funding.......................................65
11.4.2 Actual Funding.........................................65
11.5 Notices: Lending Offices....................................66
11.6 Severability................................................66
11.7 Governing Law...............................................66
11.8 Prior Understandings........................................66
11.9 Duration; Survival..........................................67
11.10 Successors and Assigns.....................................67
11.11 Counterparts...............................................67
11.12 Bank's or Bank's Consent...................................68
11.13 Exceptions.................................................68
11.14 CONSENT TO FORUM...........................................68
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LIST OF SCHEDULES AND EXHIBITS
SCHEDULES
SCHEDULE 1.1 (A) - PRICING GRID
SCHEDULE l.l (B) - NOTICES
SCHEDULE l.l (P) - PERMITTED LIENS
SCHEDULE 6.1.2 - ISSUED AND OUTSTANDING STOCK
SCHEDULE 6.1.3 - SUBSIDIARIES AND AFFILIATES
SCHEDULE 6.1.13 - CONSENTS AND APPROVALS
SCHEDULE 6.1.16 - INSURANCE
SCHEDULE 8.2.1 - PERMITTED INDEBTEDNESS
EXHIBITS
EXHIBIT A - REDUCING REVOLVING LINE NOTE
EXHIBIT B - REVOLVING LINE NOTE
EXHIBIT C - LOAN REQUEST
EXHIBIT D - REDUCING LINE LOAN REQUEST
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT is dated as of December 22, 1997 and is made by and
between AQUAPENN SPRING WATER COMPANY, INC., a corporation, (the "Borrower"),
and PNC BANK, NATIONAL ASSOCIATION (the "Bank").
WITNESSETH:
WHEREAS, the Borrower has requested the Bank to provide to the Borrower (i)
a revolving credit facility in an aggregate principal amount not to exceed
$6,000,000 (the "Revolving Line") and (ii) a reducing revolving credit facility
in an initial aggregate principal amount not to exceed $10,000,000 (the
"Reducing Revolving Line") (the Revolving Line and the Reducing Revolving Line
are herein sometimes referred to individually as a "Loan" and jointly as the
"Loans"); and
WHEREAS, the Revolving Line shall be used for working capital and general
corporate financing needs of the Borrower and the Reducing Revolving Line will
be used for general corporate financing purposes, including, without limitation,
planned capital projects, general capital expenditures and acquisitions; and
WHEREAS, the Bank is willing to provide such credit upon the terms and
conditions hereinafter set forth;
NOW, THEREFORE, the parties hereto, in consideration of their mutual
covenants and agreements hereinafter set forth and intending to be legally bound
hereby, covenant and agree as follows:
1. CERTAIN DEFINITIONS
1.1 Certain Definitions.
In addition to words and terms defined elsewhere in this Agreement, the
following words and terms shall have the following meanings, respectively,
unless the context hereof clearly requires otherwise:
Affiliate as to any Person shall mean any other Person (i) which directly
or indirectly controls, is controlled by, or is under common control with such
Person, (ii) which beneficially owns or holds 10% or more of any class of the
voting or other equity interests of such Person, or
(iii) 10% or more of any class of voting interests or other equity interests of
which is beneficially owned or held, directly or indirectly, by such Person.
Control, as used in this definition, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise, including the power to elect a majority of the directors
or trustees of a corporation or trust, as the case may be.
Bank shall mean PNC Bank, National Association, and its successors and
assigns.
Agreement shall mean this Credit Agreement, as the same may be supplemented
or amended from time to time, including all schedules and exhibits.
Applicable Reducing Revolving Line Commitment Fee Rate shall mean the
percentage rate per annum at the indicated EBITDA Ratio (measured as of the end
of the Borrower's most recently ended fiscal quarter) in the pricing grid on
Schedule 1.1(A) below the heading "Commitment Fee." The Applicable Reducing
Revolving Line Commitment Fee Rate shall be computed in accordance with the
parameters set forth on Schedule 1.1(A).
Applicable Margin shall mean, as applicable:
(A) the applicable percentage spread to be added to Base Rate under the
Base Rate Option at the indicated EBITDA Ratio (measured as of the end of the
Borrower's most recently ended fiscal quarter) in the pricing grid on Schedule
1.1(A) below the heading "Base Rate Spread," or
(B) the percentage spread to be added to Euro-Rate under the EuroRate
Option at the indicated EBITDA Ratio (measured as of the end of the Borrower's
most recently ended fiscal quarter) in the pricing grid on Schedule 1.1(A)
below the heading "EuroRate Spread."
The Applicable Margin on the Loans shall be computed in accordance with the
parameters set forth on Schedule 1.1(A), provided, that any changes in the
Applicable Margin shall become effective from the fifth day after the Bank shall
have received the Applicable Margin Certificate in respect of such fiscal
quarter. In the event that the Applicable Margin Certificate required pursuant
to subsection 8.3.7.4 for any fiscal quarter is not timely delivered, then the
Applicable Margin Percentage shall be determined by reference to Level VI on the
pricing grid, commencing as of the date such certificate was required to be
delivered until the delivery of such certificate. In the event that the actual
EBITDA Ratio referred to in the pricing grid is subsequently determined to be
different than as shown on the Applicable Margin Certificate for any fiscal
quarter, the interest rate that was based on such Applicable Margin Certificate
shall be recalculated for the applicable period based on such actual EBITDA
Ratio.
Applicable Margin Certificate shall have the meaning set forth in Section
8.3.7.4.
Authorized Officer shall mean those individuals, designated by written
notice to the Bank from the Borrower, authorized to execute notices, reports and
other documents on behalf of
2
the Borrower required hereunder. The Borrower may amend such list of individuals
from time to time by giving written notice of such amendment to the Bank.
Base Rate shall mean the greater of (i) the interest rate per annum
announced from time to time by the Bank at its Principal Office as its then
prime rate, which rate may not be the lowest rate then being charged commercial
borrowers by the Bank, or (ii) the Federal Funds Effective Rate plus .5% per
annum.
Base Rate Option shall mean the option of the Borrower to have the Loans,
or either of them, bear interest at the rate and under the terms and conditions
set forth in Section 4.1.1(i).
Benefit Arrangement shall mean at any time an "employee benefit plan,"
within the meaning of Section 3(3) of ERISA, which is neither a Plan nor a
Multiemployer Plan and which is maintained, sponsored or otherwise contributed
to by any member of the ERISA Group.
Borrowing Date shall mean, with respect to any Loan, the date for the
making thereof or the renewal or conversion thereof at or to the same or a
different Interest Rate Option, which shall be a Business Day.
Borrowing Tranche shall mean specified portions or advances of Loans
outstanding as follows: (i) all advances under the Loans to which a Euro-Rate
Option applies which become subject to the same Interest Rate Option under the
same Loan Request by the Borrower and which have the same Interest Period shall
constitute one Borrowing Tranche, (ii) all advances under the Loans to which a
Base Rate Option applies shall constitute one Borrowing Tranche and (iii) all
advances under the Revolving Line to which an Offered Rate Option applies under
the same Loan Request and which have the same Interest Period shall constitute
one Borrowing Tranche.
Business Day shall mean any day other than a Saturday or Sunday or a legal
holiday on which commercial banks are authorized or required to be closed for
business in Pittsburgh, Pennsylvania; and if the applicable Business Day relates
to any Loan to which the Euro-Rate Option applies, such day must also be a day
on which dealings are carried on in the London interbank market
Closing Date shall mean the Business Day on which the first advance under
the Loans shall be made, which shall be December __, 1997 or, if all the
conditions specified in Article 7 have not been satisfied or waived by such
date, not later than January 15, 1997, as designated by the Borrower by at least
3 Business Days' advance notice to the Bank at its Principal Office, or such
other date as the parties agree. The closing shall take place at such time and
place as may be mutually acceptable to the parties hereto.
Consideration shall mean with respect to any Permitted Acquisition, the
aggregate of (i) the cash paid by the Borrower, directly or indirectly, to the
seller in connection therewith, (ii) the Indebtedness incurred or assumed by the
Borrower, whether in favor of the seller or otherwise and whether fixed or
contingent, (iii) any Guaranty given or incurred by Borrower in connection
3
therewith, and (iv) any other consideration given or obligation incurred by the
Borrower in connection therewith.
Consolidated Total Indebtedness shall mean as of any date of determination
all Indebtedness, as defined below in this Section 1.1, of the Borrower and its
Subsidiaries as of such date determined and consolidated in accordance with
GAAP.
Consolidated Tangible Net Worth shall mean as of any date of determination
total stockholders' equity less intangible assets of the Borrower and its
Subsidiaries as of such date determined and consolidated in accordance with
GAAP.
Dollar, Dollars, U.S. Dollars and the symbol $ shall mean lawful money of
the United States of America.
EBITDA shall mean for any period of determination Borrower's consolidated
net income (before extraordinary items) plus income tax expense, interest
expense, depreciation and amortization expense, all determined in accordance
with GAAP.
EBITDA Ratio shall mean as of any date of determination the ratio of
Borrower's (i) Consolidated Total Indebtedness as of such date to (ii) the sum
of EBITDA as of the end of each of Borrower's four (4) fiscal year quarters
immediately preceding the date of determination.
Environmental Complaint shall mean any written complaint setting forth a
cause of action for personal or property damage or natural resource damage or
equitable relief, order, notice of violation, citation, request for information
issued pursuant to any Environmental Laws by an Official Body, subpoena or other
written notice of any type relating to, arising out of, or issued pursuant to,
any of the Environmental Laws or any Environmental Conditions, as the case may
be.
Environmental Conditions shall mean any conditions of the environment,
including the workplace, the ocean, natural resources (including flora or
fauna), soil, surface water, groundwater, any actual or potential drinking water
supply sources, substrata or the ambient air, relating to or arising out of, or
caused by, the use, handling, storage, treatment, recycling, generation,
transportation, release, spilling, leaking, pumping, emptying, discharging,
injecting, escaping, leaching, disposal, dumping, threatened release or other
management or mismanagement of Regulated Substances resulting from the use of,
or operations on, any Property.
Environmental Laws shall mean all federal, state, local and foreign Laws
and regulations, including permits, licenses, authorizations, bonds, orders,
judgments, and consent decrees issued, or entered into, pursuant thereto,
relating to pollution or protection of human health or the environment or
employee safety in the workplace.
4
ERISA shall mean the Employee Retirement Income Security Act of 1974, as
the same may be amended or supplemented from time to time, and any successor
statute of similar import, and the rules and regulations thereunder, as from
time to time in effect.
ERISA Group shall mean, at any time, the Borrower and all members of a
controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control and all other entities which, together with
the Borrower, are treated as a single employer under Section 414 of the Internal
Revenue Code.
Euro-Rate shall mean, with respect to Loans comprising any Borrowing
Tranche to which the Euro-Rate Option applies for any Interest Period, the
interest rate per annum determined by the Bank by dividing (the resulting
quotient rounded upward to the nearest 1/100th of 1% per annum) (i) the rate of
interest determined by the Bank in accordance with its usual procedures (which
determination shall be conclusive absent manifest error) to be the average of
the London interbank offered rates of interest per annum for U.S. Dollars set
forth on Telerate display page 3750 or such other display page on the Telerate
System as may replace such page to evidence the average of rates quoted by banks
designated by the British Bankers' Association (or appropriate successor or, if
the British Bankers' Association or its successor ceases to provide such quotes,
a comparable replacement determined by the Bank) two (2) Business Days prior to
the first day of such Interest Period for an amount comparable to such Borrowing
Tranche and having a borrowing date and a maturity comparable to such Interest
Period by (ii) a number equal to 1.00 minus the Euro-Rate Reserve Percentage.
Euro-Rate may also be expressed by the following formula:
Telerate page 3750 quoted by British Bankers'
Euro-Rate = Association or appropriate successor
------------------------------------
1.00 - Euro-Rate Reserve Percentage
The Euro-Rate shall be adjusted with respect to any Euro-Rate Option outstanding
on the effective date of any change in the Euro-Rate Reserve Percentage as of
such effective date. The Bank shall give prompt notice to the Borrower of the
Euro-Rate as determined or adjusted in accordance herewith. which determination
shall be conclusive absent manifest error.
Euro-Rate Option shall mean the option of the Borrower to have Loans bear
interest at a Euro-Rate under the terms and conditions set forth in Section
4.1.1(ii) and Section 4.1.2(ii).
Euro-Rate Reserve Percentage shall mean the maximum percentage (expressed
as a decimal rounded upward to the nearest 1/100 of 1%) as determined by the
Bank which is in effect during any relevant period as prescribed by the Board of
Governors of the Federal Reserve System (or any successor) for determining the
reserve requirements (including supplemental, marginal and emergency reserve
requirements) with respect to eurocurrency funding (currently referred to as
"Eurocurrency Liabilities") of a member bank in such System.
Event of Default shall mean any of the events described in Section 9.1 and
referred to therein as an "Event of Default."
5
Federal Funds Effective Rate for any day shall mean the rate per annum
(based on a year of 360 days and actual days elapsed and rounded upward to the
nearest 1/100 of 1%) announced by the Federal Reserve Bank of New York (or any
successor) on such day as being the weighted average of the rates on overnight
federal funds transactions arranged by federal funds brokers on the previous
trading day, as computed and announced by such Federal Reserve Bank (or any
successor) in substantially the same manner as such Federal Reserve Bank
computes and announces the weighted average it refers to as the "Federal Funds
Effective Rate" as of the date of this Agreement; provided, if such Federal
Reserve Bank (or its successor) does not announce such rate on any day, the
"Federal Funds Effective Rate" for such day shall be the Federal Funds Effective
Rate for the last day on which such rate was announced.
Fixed Charges shall mean for any period of determination the sum of
interest expense, income taxes, scheduled principal installments on Indebtedness
(as adjusted for prepayments) and payments under capitalized leases, in each
case of the Borrower and its Subsidiaries for such period determined and
consolidated in accordance with GAAP.
GAAP shall mean generally accepted accounting principles as are in effect
in the United States from time to time, subject to the provisions of Section
1.3, and applied on a consistent basis both as to classification of items and
amounts.
Guaranty of any Person shall mean any obligation of such Person
guaranteeing or in effect guaranteeing any liability or obligation of any other
Person in any manner, whether directly or indirectly, including any agreement to
indemnify or hold harmless any other Person, any performance bond or other
suretyship arrangement and any other form of assurance against loss, except
endorsement of negotiable or other instruments for deposit or collection in the
ordinary course of business.
Indebtedness shall mean, as to any Person at any time, any and all
indebtedness, obligations or liabilities (whether matured or unmatured,
liquidated or unliquidated, direct or indirect, absolute or contingent, or joint
or several) of such Person for or in respect of: (i) borrowed money, (ii)
amounts raised under or liabilities in respect of any note purchase or
acceptance credit facility, (iii) reimbursement obligations (contingent or
otherwise) under any letter of credit, currency swap agreement, interest rate
swap, cap, collar or floor agreement or other interest rate management device,
(iv) any other transaction (including forward sale or purchase agreements,
capitalized leases and conditional sales agreements) having the commercial
effect of a borrowing of money entered into by such Person to finance its
operations or capital requirements (but not including trade payables and accrued
expenses incurred in the ordinary course of business which are not represented
by a promissory note or other evidence of indebtedness and which are not more
than thirty (30) days past due), or (v) any Guaranty of Indebtedness for
borrowed money.
Ineligible Security shall mean any security which may not be underwritten
or dealt in by member bank of the Federal Reserve System under Section 16 of the
Banking Act of 1933 (12 U.S.C. Section 24, Seventh), as amended.
6
Insolvency Proceeding shall mean, with respect to any Person, (a) a case,
action or proceeding with respect to such Person (i) before any court or any
other Official Body under any bankruptcy, insolvency, reorganization or other
similar Law now or hereafter in effect, or (ii) for the appointment of a
receiver, liquidator, assignee, custodian, trustee, sequestrator, conservator
(or similar official) of any Borrower or otherwise relating to the liquidation,
dissolution, winding-up or relief of such Person, or (b) any general assignment
for the benefit of creditors, composition, marshaling of assets for creditors,
or other, similar arrangement in respect of such Person's creditors generally or
any substantial portion of its creditors undertaken under any Law.
Inter-Creditor Agreement shall mean that Inter-Creditor Agreement between
Mid-State Bank and Trust Company and Bank required under Section 7.1.3 hereof.
Interest Rate Option shall mean (i) with respect to the Revolving Line, any
Euro-Rate Option, Offered Rate Option or Base Rate Option and (ii) with respect
to the Reducing Revolving Line, any Euro-Rate Option or Base Rate Option.
Internal Revenue Code shall mean the Internal Revenue Code of 1986, as the
same may be amended or supplemented from time to time, and any successor statute
of similar import, and the rules and regulations thereunder, as from time to
time in effect.
Labor Contracts shall mean all employment agreements, employment contracts,
collective bargaining agreements and other agreements among any Borrower or
Subsidiary of a Borrower and its employees.
Law shall mean any law (including common law), constitution, statute,
treaty, regulation, rule, ordinance, opinion, release, ruling, order,
injunction, writ, decree or award of any Official Body.
Lien shall mean any mortgage, deed of trust, pledge, lien, security
interest, charge or other encumbrance or security arrangement of any nature
whatsoever, whether voluntarily or involuntarily given, including any
conditional sale or title retention arrangement, and any assignment, deposit
arrangement or lease intended as, or having the effect of, security and any
filed financing statement or other notice of any of the foregoing (whether or
not a lien or other encumbrance is created or exists at the time of the filing).
Loan Documents shall mean this Agreement, the Notes, the Inter-Creditor
Agreement and any other instruments, certificates or documents delivered or
contemplated to be delivered hereunder or thereunder or in connection herewith
or therewith, as the same may be supplemented or amended from time to time in
accordance herewith or therewith, and Loan Document shall mean any of the Loan
Documents.
Material Adverse Change shall mean any set of circumstances or events which
(a) has or could reasonably be expected to have any material adverse effect
whatsoever upon the validity or enforceability of this Agreement or any other
Loan Document, (b) is or could reasonably be
7
expected to be material and adverse to the business, properties, assets,
financial condition, results of operations or prospects of the Borrower taken as
a whole, (c) impairs materially or could reasonably be expected to impair
materially the ability of the Borrower taken as a whole to duly and punctually
pay or perform its Indebtedness, or (d) impairs materially or could reasonably
be expected to impair materially the ability of the Bank, to the extent
permitted, to enforce its legal remedies pursuant to this Agreement or any other
Loan Document.
Month, with respect to an Interest Period under the Euro-Rate Option or the
Offered Rate Option, shall mean the interval between the days in consecutive
calendar months numerically corresponding to the first day of such Interest
Period. If any Euro-Rate Interest Period or Offered Rate Interest Period begins
on a day of a calendar month for which there is no numerically corresponding day
in the month in which such Interest Period is to end, the final month of such
Interest Period shall be deemed to end on the last Business Day of such final
month.
Multiemployer Plan shall mean any employee benefit plan which is a
"multiemployer plan" within the meaning of Section 4001(a)(3) of ERISA and to
which the Borrower or any member of the ERISA Group is then making or accruing
an obligation to make contributions or, within the preceding five Plan years,
has made or had an obligation to make such contributions.
Multiple Employer Plan shall mean a Plan which has two or more contributing
sponsors (including the Borrower or any member of the ERISA Group) at least two
of whom are not under common control, as such a plan is described in Sections
4063 and 4064 of ERISA.
Notes shall mean the Revolving Line Note and the Reducing Revolving Line
Note.
Obligation shall mean any obligation or liability of the Borrower to the
Bank, howsoever created, arising or evidenced, whether direct or indirect,
absolute or contingent, now or hereafter existing, or due or to become due,
under or in connection with this Agreement, the Notes, or any other Loan
Document.
Offered Rate shall mean the rate of interest offered by Bank for a stated
Offered Rate Interest Period in its sole discretion in connection with a
Borrowing Tranche.
Offered Rate Option shall mean the option of Borrower to have interest
accrue on a Borrowing Tranche under the Revolving Line at an Offered Rate
pursuant to Section 4.1.1 (iii) hereof.
Official Body shall mean any national, federal, state, local or other
government or political subdivision or any agency, authority, bureau, central
bank, commission, department or instrumentality of either, or any court,
tribunal, grand jury or arbitrator, in each case whether foreign or domestic.
PBGC shall mean the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA or any successor.
8
Permitted Investments shall mean:
(i) direct obligations of the United States of America or any agency or
instrumentality thereof or obligations backed by the full faith and credit of
the United States of America maturing in twelve (12) months or less from the
date of acquisition;
(ii) commercial paper maturing in 180 days or less rated not lower than A-1
by Standard & Poor's or P-1 by ▇▇▇▇▇'▇ Investor Service on the date of
acquisition; and
(iii) demand deposits, time deposits or certificates of deposit maturing
within one year in commercial Bank whose obligations are rated A-l, A or the
equivalent or better by Standard & Poor's on the date of acquisition.
Permitted Liens shall mean:
(i) Liens for taxes, assessments, or similar charges, incurred in the
ordinary course of business and which are not yet due and payable;
(ii) Pledges or deposits made in the ordinary course of business to secure
payment of workmen's compensation, or to participate in any fund in connection
with workmen's compensation, unemployment insurance, old-age pensions or other
social security programs;
(iii) Liens of mechanics, materialmen, warehousemen, carriers, or other
like Liens, securing obligations incurred in the ordinary course of business
that are not yet due and payable and Liens of landlords securing obligations to
pay lease payments that are not yet due and payable or in default;
(iv) Good-faith pledges or deposits made in the ordinary course of business
to secure performance of bids, tenders, contracts (other than for the repayment
of borrowed money) or leases, not in excess of the aggregate amount due
thereunder, or to secure statutory obligations, or surety, appeal, indemnity,
performance or other similar bonds required in the ordinary course of business;
(v) Encumbrances consisting of zoning restrictions, easements or other
restrictions on the use of real property, none of which materially impairs the
use of such property or the value thereof, and none of which is violated in any
material respect by existing or proposed structures or land use;
(vi) Liens, security interests and mortgages in favor of the Bank for the
benefit of the Bank;
(vii) Liens on property leased by the Borrower under capital and operating
leases permitted in Section 8.2.1 (iii) securing obligations of Borrower to the
lessor under such leases;
9
(viii) Any Lien existing on the date of this Agreement and described on
Schedule 1.1(P), provided that the principal amount secured thereby is not
hereafter increased, and no additional assets become subject to such Lien;
(ix) Purchase Money Security Interests permitted under Section 8.2.1 (iii)
hereof; and
(x) The following, (A) if the validity or amount thereof is being contested
in good faith by appropriate and lawful proceedings diligently conducted so long
as levy and execution thereon have been stayed and continue to be stayed or (B)
if a final judgment is entered and such judgment is discharged within thirty
(30) days of entry, and they do not, in the aggregate materially impair the
ability of any Borrower to perform its Obligations hereunder or under the other
Loan Documents:
(1) Claims or Liens for taxes, assessments or charges due and payable
and subject to interest or penalty, provided that Borrower maintains such
reserves or other appropriate provisions as shall be required by GAAP and pays
all such taxes, assessments or charges forthwith upon the commencement of
proceedings to foreclose any such Lien;
(2) Claims, Liens or encumbrances upon, and defects of title to, real or
personal property, including any attachment of personal or real property or
other legal process prior to adjudication of a dispute on the merits; or
(3) Claims or Liens of mechanics, materialmen, warehousemen, carriers,
or other statutory nonconsensual Liens.
(4) Liens resulting from final judgments or orders described in Section
9.1.6.
Person shall mean any individual, corporation, partnership, limited
liability company, association, joint-stock company, trust, unincorporated
organization, joint venture, government or political subdivision or agency
thereof, or any other entity;
Plan shall mean at any time an employee pension benefit plan (including a
Multiple Employer Plan, but not a Multiemployer Plan) which is covered by Title
IV of ERISA or is subject to the minimum funding standards under Section 412 of
the Internal Revenue Code and either (i) is maintained by any member of the
ERISA Group for employees of any member of the ERISA Group or (ii) has at any
time within the preceding five years been maintained by any entity which was at
such time a member of the ERISA Group for employees of any entity which was at
such time a member of the ERISA Group.
Potential Default shall mean any event or condition which with notice,
passage of time or a determination by the Bank, or any combination of the
foregoing, would constitute an Event of Default.
Principal Office shall mean the main banking office of the Bank in
Pittsburgh, Pennsylvania.
10
Prohibited Transaction shall mean any prohibited transaction as defined in
Section 4975 of the Internal Revenue Code or Section 406 of ERISA for which
neither an individual nor a class exemption has been issued by the United States
Department of Labor.
Property shall mean all real property, both owned and leased, of the
Borrower or it Subsidiaries.
Purchase Money Security Interest shall mean Liens upon tangible personal
property securing loans to any Borrower or Subsidiary of a Borrower or deferred
payments by such Borrower or Subsidiary for the purchase of such tangible
personal property.
Regulated Substances shall mean any substance, including any solid, liquid,
semisolid, gaseous, thermal, thoriated or radioactive material, refuse, garbage,
wastes, chemicals, petroleum products, by-products, coproducts, impurities,
dust, scrap, heavy metals, defined as a "hazardous substance," "pollutant,"
"pollution," "contaminant," "hazardous or toxic substance," "extremely hazardous
substance," "toxic chemical," "toxic waste," "hazardous waste," "industrial
waste," "residual waste," "solid waste," "municipal waste," "mixed waste,"
"infectious waste," "chemotherapeutic waste," "medical waste," or "regulated
substance" or any related materials, substances or wastes as now or hereafter
defined pursuant to any Environmental Laws, ordinances, rules, regulations or
other directives of any Official Body, the generation, manufacture, extraction,
processing, distribution, treatment, storage, disposal, transport, recycling,
reclamation, use, reuse, spilling, leaking, dumping, injection, pumping,
leaching, emptying, discharge, escape, release or other management or
mismanagement of which is regulated by the Environmental Laws.
Regulation U shall mean Regulation U.T.G or X as promulgated by the Board
of Governors of the Federal Reserve System, as amended from time to time.
Reportable Event shall mean a reportable event described in Section 4043 of
ERISA and regulations thereunder with respect to a Plan or Multiemployer Plan.
Revolving Line Expiration Date shall mean November 30, 1998, unless
extended by Bank in accordance with the provisions of Section 2.6 hereof.
Reducing Revolving Line Expiration Date shall mean November 30, 2002.
Reducing Revolving Line Note shall mean that Line of Credit Note of
Borrower to Bank in the stated principal amount of the Reducing Revolving Line
in substantially the form attached hereto as Exhibit A, together with all
amendments, extensions, renewals, replacements, refinancings or refundings
thereof in whole or in part.
Revolving Line Note shall mean that Line of Credit Note of Borrower to Bank
in the stated principal amount of the Revolving Line in substantially the form
attached hereto as
11
Exhibit B, together with all amendments, extensions, renewals, replacements,
refinancings or refundings thereof in whole or in part.
Section 20 Subsidiary shall mean the Subsidiary of the bank holding company
controlling Bank, which Subsidiary has been granted authority by the Federal
Reserve Board to underwrite and deal in certain Ineligible Securities.
Subsidiary of any Person at any time shall mean (i) any corporation or
trust of which 50% or more (by number of shares or number of votes) of the
outstanding capital stock or shares of beneficial interest normally entitled to
vote for the election of one or more directors or trustees (regardless of any
contingency which does or may suspend or dilute the voting rights) is at such
time owned directly or indirectly by such Person or one or more of such Person's
Subsidiaries, (ii) any partnership of which such Person is a general partner or
of which 50% or more of the partnership interests is at the time directly or
indirectly owned by such Person or one or more of such Person's Subsidiaries,
(iii) any limited liability company of which such Person is a member or of which
50% or more of the limited liability company interests is at the time directly
or indirectly owned by such Person or one or more of such Person's Subsidiaries
or (iv) any corporation, trust, partnership, limited liability company or other
entity which is controlled or capable of being controlled by such Person or one
or more of such Person's Subsidiaries.
1.2 Construction.
Unless the context of this Agreement otherwise clearly requires, the
following rules of construction shall apply to this Agreement and each of the
other Loan Documents:
1.2.1 Number; Inclusion.
References to the plural include the singular, the plural, the part and
the whole; "or" has the inclusive meaning represented by the phrase
"and/or," and "including" has the meaning represented by the phrase "including
without limitation";
1.2.2 Determination.
References to "determination" of or by the Bank shall be deemed to
include good-faith estimates by the Bank (in the case of quantitative
determinations) and good faith beliefs by the Bank (in the case of qualitative
determinations) and such determination shall be conclusive absent manifest
error;
12
1.2.3 Bank's Discretion and Consent.
Whenever the Bank is granted the right herein to act in its sole
discretion or to grant or withhold consent such right shall be exercised in good
faith;
1.2.4 Documents Taken as a Whole.
The words "hereof," "herein," "hereunder," "hereto" and similar terms in
this Agreement or any other Loan Document refer to this Agreement or such other
Loan Document as a whole and not to any particular provision of this Agreement
or such other Loan Document;
1.2.5 Headings.
The section and other headings contained in this Agreement or such other
Loan Document and the Table of Contents (if any), preceding this Agreement or
such other Loan Document are for reference purposes only and shall not control
or affect the construction of this Agreement or such other Loan Document or the
interpretation thereof in any respect;
1.2.6 Implied References to this Agreement.
Article, section, subsection, clause, schedule and exhibit references
are to this Agreement or other Loan Document, as the case may be, unless
otherwise specified;
1.2.7 Persons.
Reference to any Person includes such Person's successors and assigns
but, if applicable, only if such successors and assigns are permitted by this
Agreement or such other Loan Document, as the case may be, and reference to a
Person in a particular capacity excludes such Person in any other capacity;
1.2.8 Modifications to Documents.
Reference to any agreement (including this Agreement and any other Loan
Document together with the schedules and exhibits hereto or thereto), document
or instrument means such agreement, document or instrument as amended, modified,
replaced, substituted for, superseded or restated;
13
1.2.9 From, To and Through.
Relative to the determination of any period of time, "from" means "from
and including," "to" means "to but excluding," and "through" means "through and
including"; and
1.2.10 Shall; Will.
References to "shall" and "will" are intended to have the same meaning.
1.3 Accounting Principles.
Except as otherwise provided in this Agreement, all computations and
determinations as to accounting or financial matters and all financial
statements to be delivered pursuant to this Agreement shall be made and prepared
in accordance with GAAP (including principles of consolidation where
appropriate), and all accounting or financial terms shall have the meanings
ascribed to such terms by GAAP; provided, however, that all accounting terms
used in Section 8.2 (and all defined terms used in the definition of any
accounting term used in Section 8.2) shall have the meaning given to such terms
(and defined terms) under GAAP as in effect on the date hereof applied on a
basis consistent with those used in preparing the Annual Statements referred to
in Section 6.1.9 (i). In the event of any change after the date hereof in GAAP,
and if such change would result in the inability to determine compliance with
the financial covenants set forth in Section 8.2 based upon the Borrower's
regularly prepared financial statements by reason of the preceding sentence,
then the parties hereto agree to endeavor, in good faith, to agree upon an
amendment to this Agreement that would adjust such financial covenants in a
manner that would not affect the substance thereof, but would allow compliance
therewith to be determined in accordance with the Borrower's financial
statements at that time.
2. REVOLVING CREDIT LINE
2.1 Revolving Credit Commitment.
2.1.1 Advances.
Subject to the terms and conditions hereof and relying upon the
representations and warranties herein set forth, the Bank agrees to make
advances under the Revolving Credit Line (collectively, the "Revolving Line
Advances" and individually, each a "Revolving Line Advance") to the Borrower at
any time or from time to time on or after the date hereof to the Revolving Line
Expiration Date, provided that after giving effect to any such Loan the
aggregate amount of outstanding Revolving Line Advances from such Bank shall not
exceed $6,000,000
14
(the "Revolving Line Limit"). Within such limits of time and amount and subject
to the other provisions of this Agreement, the Borrower may borrow, repay and
reborrow pursuant to this Section 2.1.
The Bank shall have no obligation to make Revolving Line Advances
hereunder on or after the Revolving Line Expiration Date. Further,
notwithstanding anything herein to the contrary, in no event may any Revolving
Line Advance be made that would cause such advance, together with all other then
outstanding Borrowing Tranches under the Loans (including all Interest Rate
Options) to exceed five (5) in number (the "Borrowing Tranche Limit").
2.2 Commitment Fees.
There shall be no commitment fee associated with the Revolving Line.
2.3 Revolving Credit Line Requests.
2.3.1 Advance Requests.
Except as otherwise provided herein, the Borrower may from time to time
prior to the Revolving Line Expiration Date request the Bank to make Revolving
Line Advances, or renew or convert the Interest Rate Option applicable to
existing Revolving Line Borrowing Tranches pursuant to Section 4.2, by
delivering to the Bank, not later than 10:00 a.m., State College, Pennsylvania
time, (i) three ( 3) Business Days prior to (A) the proposed Borrowing Date with
respect to the making of Revolving Line Advances to which the Euro-Rate Option
applies or (B) the end of the current Interest Period in the case of the
conversion to or the renewal of the Euro-Rate Option for any Borrowing Tranches,
(ii) on the same or one (1) Business Day prior to either the proposed Borrowing
Date with respect to the making of a Revolving Line Advance to which the Base
Rate Option applies or the last day of the preceding Interest Period with
respect to the conversion to the Base Rate Option for any Borrowing Tranche, or
(iii) three (3) (1) Business Days prior to (A) the proposed Borrowing Date with
respect to the making of Revolving Line Advances for which Borrower seeks the
Offered Rate Option or (B) the end of the current Interest Period in the case of
conversion to or the renewal of the Offered Rate Option for any Borrowing
Tranches, of a duly completed request therefor substantially in the form of
Exhibit C or a request by telephone immediately confirmed in writing by letter,
facsimile or telex in such for (each, a "Loan Request"), it being understood
that the Bank may rely on the authority of any individual making such a
telephonic request without the necessity of receipt of such written
confirmation. Each Loan Request shall be irrevocable and shall specify (i) the
proposed Borrowing Date; (ii) the aggregate amount of the proposed Revolving
Line Advance comprising each Borrowing Tranche; (iii) whether the EuroRate
Option or Base Rate Option shall apply to the proposed Revolving Line Advance
comprising the applicable Borrowing Tranche, or whether Borrower is requesting a
rate quote from Bank with respect to an Offered
15
Rate Option; and (iv) in the case of a Borrowing Tranche to which the Euro-Rate
Option or the Offered Rate Option applies, an appropriate Interest Period for
the Revolving Line Advance comprising such Borrowing Tranche.
2.4 Making Revolving Line Advances.
2.4.1 Making Advances.
2.4.1.1 Offered Rate Option Advances.
The Bank shall, promptly after receipt by it of a Loan Request pursuant
to Section 2.3.1 wherein an Offered Rate Option is requested, provide a rate
quote to the Borrower for the requested Interest Rate Period, which may be for
overnight, thirty (30), sixty (60) or ninety (90) day periods (the "Permitted
Offered Rate Interest Periods"). The Borrower shall, upon receipt of the rate
quote from the Bank, notify Bank not less than one Business Day prior to the
proposed Borrowing Date of its acceptance or non-acceptance of the offered rate.
In the event the Borrower does not accept the quoted rate, Borrower shall
indicate an alternative selection from another available Interest Rate Option,
failing which the applicable Revolving Rate Advance shall accrue interest under
the Base Rate Option.
Provided a timely Loan Request is received and all conditions precedent
to the making of advance hereunder are satisfied, the Bank shall, subject to the
Borrowing Tranche Limit, fund such Revolving Line Advances to the Borrower in
U.S. Dollars and immediately available funds at the Principal Office prior to
3:00 p.m., State College, Pennsylvania time, on the applicable Borrowing Date.
2.4.1.2 Other Advances.
Provided a timely Loan Request is received and all conditions precedent
to the making of advance hereunder are satisfied, the Bank shall, subject to the
Borrowing Tranche Limit, fund Revolving Line Advances for which the Euro-Rate
Option (for Permitted Euro-Rate Interest Periods, hereinafter defined) or the
Base Rate Option has been selected to the Borrower in U. S. Dollars and
immediately available funds at the Principal Office prior to 3:00 p m, State
College time, on the applicable Borrowing Date; provided, however, it is
understood that no more than four (4) Revolving Line Advances under the
Euro-Rate Option may be outstanding at any one time.
16
2.5 Revolving Line Note.
The Obligation of the Borrower to repay the aggregate unpaid principal
amount of the Revolving Line Advances made to it by Bank, together with interest
thereon, shall be evidenced by the Revolving Line Note dated the Closing Date
payable to the order of such Bank in a face amount equal to the Revolving Line
Limit.
2.6 Extension by Bank of the Revolving Line Expiration Date.
2.6.1 Requests; Approval by Bank.
Upon or promptly after delivery by the Borrower of the annual financial
statements to be provided under Section 8.3.2 for the fiscal year ending
September 30, 1998 or any subsequent fiscal year, the Borrower may request a
one-year extension of the Revolving Line Expiration Date by written notice to
the Bank, and the Bank agrees to respond to the Borrower's request for an
extension by the later of sixty (60) days following receipt of the request or of
such year; provided, however, that the failure of Bank to respond within such
time period shall not in any manner constitute an agreement by Bank to extend
the Revolving Line Expiration Date. If the Bank elects to extend, the Revolving
Line Expiration Date shall be extended for a period of one year.
2.7 Use of Proceeds.
The Revolving Line shall be used exclusively for Borrower's working
capital and general corporate financing needs.
3. REDUCING REVOLVING LINE
3.1 Reducing Revolving Credit Commitment.
3.1.1 Advances
Subject to the terms and conditions hereof and relying upon the
representations and warranties herein set forth, the Bank agrees to make
advances under the Reducing Revolving Credit Line (collectively, the "Reducing
Revolving Line Advances" and individually, each a "Reducing Revolving Line
Advance") to the Borrower at any time or from time to time on or after the date
hereof to the Reducing Revolving Line Expiration Date, provided that after
giving
17
effect to any such Reducing Revolving Line Advance the aggregate amount of
outstanding Revolving Line Advances from such Bank shall not exceed the
following schedule (as applicable, the "Reducing Revolving Line Limit"):
From the date hereof through
and including 10/31/99: $10,000,000
From 11/1/99 through and
including 10/31/00: 8,500,000
From 11/1/00 through and
including 10/31/01: 7,000,000
From 11/1/01 through and
including the Reducing Revolving
Line Expiration Date: 5,500,000
Within such limits of time and amount and subject to the other
provisions of this Agreement, the Borrower may borrow, repay and reborrow
pursuant to this Section 3.1.
The Bank shall have no obligation to make Reducing Revolving Line
Advances hereunder on or after the Reducing Revolving Line Expiration Date.
Further, notwithstanding anything herein to the contrary, in no event may any
Reducing Revolving Line Advance be made that would cause such advance, together
with all other then outstanding Borrowing Tranches under the Loans (including
all Interest Rate Options) to exceed the Borrowing Tranche Limit.
3.2 Commitment Fees.
Accruing from the date hereof until the Reducing Revolving Line
Expiration Date, the Borrower agrees to pay to the Bank a nonrefundable annual
commitment fee (the "Commitment Fee") equal to the Applicable Reducing Revolving
Commitment Fee Rate on the average daily difference during the immediately
preceding fiscal quarter between the amount of (i) the applicable Reducing
Revolving Line Limit and (ii) the outstanding principal amount of all Reducing
Revolving Line Advances. All Commitment Fees shall be payable quarterly in
arrears within ten (10) days of the end of each fiscal quarter of Borrower,
after the date hereof and on the Reducing Revolving Line Expiration Date or upon
acceleration of the Notes.
18
3.3 Reducing Revolving Credit Line Requests.
3.3.1 Advance Requests.
Except as otherwise provided herein, the Borrower may from time to time
prior to the Reducing Revolving Line Expiration Date request the Bank to make
Reducing Revolving Line Advances, or renew or convert the Interest Rate Option
applicable to existing Reducing Revolving Line Borrowing Tranches pursuant to
Section 4.2, by delivering to the Bank, not later than 10:00 a.m., State
College, Pennsylvania time, (i) three (3) Business Days prior to (A) the
proposed Borrowing Date with respect to the making of Reducing Revolving Line
Advances to which the Euro-Rate Option applies or(B) the end of the current
Interest Period in the case of the conversion to or the renewal of the Euro-Rate
Option for any Borrowing Tranches or (ii) on the same or one (1) Business Day
prior to either the proposed Borrowing Date with respect to the mating of a
Reducing Revolving Line Advance to which the Base Rate Option applies or the
last day of the preceding Interest Period with respect to the conversion to the
Base Rate Option for any Borrowing Tranche, of a duly completed request therefor
substantially in the form of Exhibit D or a request by telephone immediately
confirmed in writing by letter, facsimile or telex in such form (each, a
"Reducing Line Loan Request"), it being understood that the Bank may rely on the
authority of any individual making such a telephonic request without the
necessity of receipt of such written confirmation. Each Reducing Line Loan
Request shall be irrevocable and shall specify (i) the proposed Borrowing Date;
(ii) the aggregate amount of the proposed Reducing Revolving Line Advance
comprising each Borrowing Tranche; (iii) whether the EuroRate Option or Base
Rate Option shall apply to the proposed Revolving Line Advance comprising the
applicable Borrowing Tranche; and (iv) in the case of a Borrowing Tranche to
which the EuroRate Option applies, an appropriate Interest Period for the
Reducing Revolving Line Advance comprising such Borrowing Tranche.
3.4 Making Reducing Revolving Line Advances.
3.4.1 Making Advances.
Provided a timely Reducing Line Loan Request is received and all
conditions precedent to the making of advance hereunder are satisfied, the Bank
shall, subject to the Borrowing Tranche Limit, fund such Reducing Revolving
Advances Loans to the Borrower in U.S. Dollars and immediately available funds
at the Principal Office prior to 2:00 p m., State College time, on the
applicable Borrowing Date; provided, however, it is understood that no more than
four (4) Reducing Revolving Line Advances under the Euro-Rate Option may be
outstanding at any one time.
19
3.5 Reducing Revolving Line Note.
The Obligation of the Borrower to repay the aggregate unpaid principal
amount of the Reducing Revolving Line Advances made to it by Bank, together with
interest thereon, shall be evidenced by the Reducing Revolving Line Note dated
the Closing Date payable to the order of such Bank in a face amount equal to the
Reducing Revolving Line Limit on the date of this Agreement.
3.6 Use of Proceeds.
The Reducing Revolving Line shall be used exclusively for Borrower's
general corporate purposes, including planned capital projects, capital
expenditures and acquisitions.
4. INTEREST RATES
4.1 Interest Rate Options.
The Borrower shall pay interest in respect of the outstanding unpaid
principal amount of the Loans as selected by it from the Base Rate Option or
Euro-Rate Option, or, in the case of the Revolving Line, the Offered Rate
Option, set forth below applicable to the Loans, it being understood that,
subject to the provisions of this Agreement, the Borrower may select different
Interest Rate Options and different Interest Periods to apply simultaneously to
the Loans comprising different Borrowing Tranches and may convert to or renew
one or more applicable Interest Rate Options with respect to all or any portion
of the Loans comprising any Borrowing Tranche. If at any time the designated
rate applicable to any Borrowing Tranche made by Bank exceeds the Bank's highest
lawful rate, the rate of interest on such Borrowing Tranche shall be limited to
such Bank's highest lawful rate.
4.1.1 Revolving Line Interest Rate Options.
The Borrower shall have the right to select from the following Interest
Rate Options applicable to the Revolving Line:
(i) Base Rate Option:
A fluctuating rate per annum (computed on the basis of a year of 365
or 366 days, as the case may be, and actual days elapsed) equal to the
Base Rate plus the Applicable Margin set forth on the pricing grid attached
hereto as Schedule 1.1(A), such interest rate to
20
change automatically from time to time effective as of the effective date of
each change in the Base Rate;
(ii) Euro-Rate Option:
A rate per annum (computed on the basis of a year of 360 days and
actual days elapsed) equal to the Euro-Rate plus the Applicable Margin
set forth on the pricing grid attached hereto as Schedule l.l(A); or
(iii) Offered Rate Option:
A rate per annum for a Permitted Offered Rate Interest Period as may
be quoted and offered to Borrower by Bank from time to time at the Bank's sole
discretion and determination.
4.1.2 Reducing Revolving Line Interest Rate Options.
The Borrower shall have the right to select from the following Interest
Rate Options applicable to the Reducing Revolving Line:
(i) Base Rate Option:
A fluctuating rate per annum (computed on the basis of a year of 365
or 366 days, as the case may be, and actual days elapsed) equal to the Base Rate
plus the Applicable Margin set forth on the pricing grid attached hereto as
Schedule 1.1(A), such interest rate to change automatically from time to time
effective as of the effective date of each change in the Base Rate; or
(ii) Euro-Rate Option:
A rate per annum (computed on the basis of a year of 360 days and
actual days elapsed) equal to the Euro-Rate plus the Applicable Margin
set forth on the pricing grid attached hereto as Schedule 1.1(A).
4.1.3 Rate Quotations.
The Borrower may call the Bank on or before the date on which a Loan
Request or Reducing Line Loan Request is to be delivered to receive an
indication of the rates then in effect, but it is acknowledged that such
projection shall not be binding on the Bank nor affect the rate of interest
which thereafter is actually in effect when the election is made.
21
4.1.4 Additional Interest.
Any additional interest or Commitment Fee due from the Borrower shall be
paid to the Bank on the next date on which an interest or fee payment is due;
provided, however, that if there are no Loans outstanding or if the Loans are
due and payable, such additional interest or Commitment Fee shall be paid
promptly after receipt of written request for payment from the Bank.
4.1.5 Refund.
Any interest or Commitment Fee refund due to the Borrower shall be
credited against payments otherwise due from the Borrower on the next interest
or fee payment due date or, if the Loans have been repaid, the Bank shall pay
the Borrower such interest or Commitment Fee refund promptly after its
recalculation.
4.2 Interest Periods.
At any time when the Borrower shall select, convert to or renew a
Euro-Rate Option or shall elect to accept an interest rate quoted by Bank under
the Offered Rate Option (in the case of the Revolving Line), the Borrower shall
notify the Bank thereof three (3) Business Days prior to the effective date of
such Interest Rate Option by delivering a Loan Request or Reducing Line Loan
Request, as applicable. The notice shall specify an interest period (the
"Interest Period") during which such Interest Rate Option shall apply, such
Interest Period to be (i) overnight, or one, two or three Months if Borrower
selects the Offered Rate Option (with respect to Revolving Line Advances) and
(ii) one, two, three or six Months (the "Permitted Euro-Rate Interest Periods")
if Borrower selects the Euro-Rate Option. Notwithstanding the preceding
sentence, the following provisions shall apply to any selection of, renewal of,
or conversion to a Euro-Rate Option or an Offered Rate Option.
4.2.1 Ending Date and Business Day.
Any Interest Period which would otherwise end on a date which is not a
Business Day shall be extended to the next succeeding Business Day unless such
Business Day falls in the next calendar month, in which case such Interest
Period shall end on the next preceding Business Day;
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4.2.2 Amount of Borrowing Tranche.
Each Borrowing Tranche under the Euro-Rate Option shall be in integral
multiples of $100,000 and not less than $500,000; each Borrowing Tranche under
the Offered Rate Option shall be in integral multiples of $100,000 and not less
than $2,500,000.
4.2.3 Termination Before Expiration Date.
The Borrower shall not select, convert to or renew an Interest Period
for any portion of the Loans that would end after the Revolving Line Expiration
Date or the Reducing Revolving Line Expiration Date, as the case may be; and
4.2.4 Renewals.
In the case of the renewal of a Euro-Rate Option or Offered Rate Option
at the end of an Interest Period, the first day of the new Interest Period shall
be the last day of the preceding Interest Period, without duplication in payment
of interest for such day.
4.3 Interest After Default.
To the extent permitted by Law, upon the occurrence of an Event of
Default and until such time such Event of Default shall have been cured or
waived:
4.3.1 Interest Rate.
The rate of interest applicable to all outstanding amounts under all
Borrowing Tranches, as well as all other Obligations, shall automatically
increase to and accrue at interest at a rate per annum equal to the sum of the
rate of interest applicable under the Base Rate Option plus an additional 2% per
annum until all Obligations are paid in full.
4.3.2 Acknowledgment.
The Borrower acknowledges that the increase in rates referred to in this
Section 4.3 reflects, among other things, the fact that such outstanding
Borrowing Tranches or other amounts have become a substantially greater risk
given their default status and that the Bank is entitled to additional
compensation for such risk; and all such interest shall be payable by Borrower
upon demand by Bank.
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4.4 Euro-Rate Unascertainable: Illegality: Increased Costs: Deposits Not
Available.
4.4.1 Unascertainable.
If on any date on which a Euro-Rate would otherwise be determined the
Bank shall have determined that:
(i) adequate and reasonable means do not exist for ascertaining such
Euro-Rate, or
(ii) a contingency has occurred which materially and adversely affects
the London interbank eurodollar market relating to the Euro-Rate, the Bank shall
have the rights specified in Section 4.4.3.
4.4.2 Illegality: Increased Costs: Deposits Not Available.
If at any time the Bank shall have determined that:
(i) the making, maintenance or funding of any Borrowing Tranche to
which a Euro-Rate Option applies has been made impracticable or unlawful
by compliance by such Bank in good faith with any Law or any interpretation or
application thereof by any Official Body or with any request or directive of any
such Official Body (whether or not having the force of Law), or
(ii) such Euro-Rate Option will not adequately and fairly reflect the
cost to such Bank of the establishment or maintenance of any such Borrowing
Tranche, or
(iii) after making all reasonable efforts, deposits of the relevant
amount in Dollars for the relevant Interest Period for a Borrowing Tranche to
which a Euro-Rate Option applies are not available to the Bank with respect to
such Borrowing Tranche in the London interbank market,
then the Bank shall have the rights specified in Section 4.4 3.
4.4.3 Bank's and Bank's Rights.
In the case of any event specified in Section 4.4.1 or Section 4.4.2
above, the Bank shall promptly so notify the Borrower thereof. Upon such date as
shall be specified in such notice (which shall not be earlier than the date such
notice is given), the obligation of the Bank to
24
allow the Borrower to select, convert to or renew a Euro-Rate Option shall be
suspended until the Bank shall have later notified the Borrower of the Bank's
determination that the circumstances giving rise to such previous determination
no longer exist. If at any time the Bank makes a determination under Section
4.4.1 and the Borrower has previously notified the Bank of its selection of,
conversion to or renewal of a Euro-Rate Option and such Interest Rate Option has
not yet gone into effect, such notification shall be deemed to provide for
selection of, conversion to or renewal of the Base Rate Option otherwise
available with respect to such Borrowing Tranches. If the Bank notifies the
Borrower of a determination under Section 4.4.2, the Borrower shall, subject to
the Borrower's indemnification Obligations under Section 5.4.2, as to any
Borrowing Tranche to which a Euro-Rate Option applies, on the date specified in
such notice either convert such Borrowing Tranche to the Base Rate Option
otherwise available with respect to such Borrowing Tranche or prepay such Loan
in accordance with Section 5.3. Absent due notice from the Borrower of
conversion or prepayment, such Borrowing Tranche shall automatically be
converted to the Base Rate Option otherwise available with respect to such Loan
upon such specified date.
4.5 Selection of Interest Rate Options.
If the Borrower fails to select a new Interest Period to apply to any
Borrowing Tranche of Loans under the Offered Rate Option or the Euro-Rate Option
at the expiration of an existing Interest Period applicable to such Borrowing
Tranche in accordance with the provisions of Section 4.2, the Borrower shall be
deemed to have converted such Borrowing Tranche to the Base Rate Option
commencing upon the last day of the existing Interest Period.
5. PAYMENTS
5.1 Payments.
All payments and prepayments to be made in respect of principal, interest,
Commitment Fees, Facility Fees, or other fees or amounts due from the
Borrower hereunder shall be payable prior to 11:00 a.m., State College,
Pennsylvania time, on the date when due without presentment, demand, protest or
notice of any kind, all of which are hereby expressly waived by the Borrower,
and without set-off, counterclaim or other deduction of any nature, and an
action therefor shall immediately accrue. Such payments shall be made to the
Bank at the Principal Office in U. S. Dollars and in immediately available
funds. The Bank's statement of account, ledger or other relevant record shall,
in the absence of manifest error, be conclusive as the statement of the amount
of principal of and interest on the Loans and other amounts owing under this
Agreement and shall be deemed an "account stated."
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5.2 Interest Payment Dates: Maturity of Principal.
5.2.1 Interest.
Interest on Borrowing Tranches to which the Base Rate Option applies
shall be due and payable in arrears on the first Business Day of each January,
April, July and October (each such date a "Quarterly Interest Payment Date")
after the date hereof and on the Revolving Line Expiration Date or Reducing
Revolving Line Expiration Date, as the case may be, or upon acceleration of the
Notes. Interest on Borrowing Tranches to which the Euro-Rate Option or the
Offered Rate Option applies shall be due and payable on the earlier of (i) the
end of the applicable Interest Period or (ii) each Quarterly Interest Payment
Date occurring prior to the end of such Interest Period.
5.2.2 Principal Maturity.
Unless sooner prepaid in accordance with the terms hereof, or sooner
accelerated by Bank by virtue of an Event of Default hereunder, all principal
amounts outstanding under the Revolving Line shall be paid in full on the
Revolving Line Expiration Date and all principal amounts outstanding under the
Reducing Revolving Line shall be paid in full on the Reducing Resolving Line
Expiration Date.
5.3 Voluntary Prepayments.
5.3.1 Right to Prepay.
The Borrower shall have the right at its option from time to time to
prepay the Loans in whole or part without premium or penalty (except as provided
in Section 5.4):
(i) at any time with respect to any Borrowing Tranche to which the
Base Rate Option applies,
(ii) on the last day of the applicable Interest Period with respect
to Borrowing Tranches to which a Euro-Rate Option or an Offered Rate Option
applies,
(iii) on the date specified in a notice by Bank pursuant to Section
4.4 with respect to any Borrowing Tranche to which a Euro-Rate Option applies.
Whenever the Borrower desires to prepay any part of the Loans, it shall
provide a prepayment notice to the Bank by 1:00 p.m. at least one (1) Business
Day prior to the date of prepayment of Loans, setting forth the following
information:
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(x) the date, which shall be a Business Day, on which the proposed
prepayment is to be made;
(y) a statement indicating the application of the prepayment between the
Revolving Line and the Reducing Revolving Line; and
(z) the total principal amount of such prepayment, which shall not be
less than $100,000, in case of prepayment on the Revolving Line, and $500,000 in
case of prepayment on the Reducing Revolving Line.
All prepayment notices shall be irrevocable. The principal amount of the
Loans for which a prepayment notice is given, together with interest on such
principal amount except with respect to Borrowing Tranches to which the Base
Rate Option applies, shall be due and payable on the date specified in such
prepayment notice as the date on which the proposed prepayment is to be made.
Except as provided in Section 4.4.3, if the Borrower prepays a Loan but fails to
specify the applicable Borrowing Tranche which the Borrower is prepaying, the
prepayment shall be applied (i) first to the Revolving Line and then to the
Reducing Revolving Line; and (ii) after giving effect to the allocations in
clause (i) above and in the preceding sentence, first to Borrowing Tranches to
which the Base Rate Option applies, then to Borrowing Tranches to which the
Offered Rate Option applies and next to Borrowing Tranches to which Euro-Rate
Option applies. Any prepayment hereunder shall be subject to the Borrower's
Obligation to indemnify the Bank under Section 5.4.2.
5.3.2 Change of Lending Office.
Bank agrees that upon the occurrence of any event giving rise to
increased costs or other special payments under Section 4.4.2 or 5.4.1 with
respect to Bank, it will if requested by the Borrower, use reasonable efforts
(subject to overall policy considerations of such Bank) to designate another
lending office for any Borrowing Tranches affected by such event, provided that
such designation is made on such terms that Bank and its lending office suffer
no economic, legal or regulatory disadvantage, with the object of avoiding the
consequence of the event giving rise to the operation of such Section. Nothing
is this Section 5.3.2 shall affect or postpone any of the Obligations of the
Borrower or any other Borrower or the rights of the Bank provided in this
Agreement.
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5.4 Additional Compensation in Certain Circumstances.
5.4.1 Increased Costs or Reduced Return Resulting from Taxes, Reserves,
Capital Adequacy Requirements, Expenses. Etc.
If any Law, guideline or interpretation or any change in any Law,
guideline or interpretation or application thereof by any Official Body charged
with the interpretation or administration thereof or compliance with any request
or directive (whether or not having the force of Law) of any central bank or
other Official Body:
(i) subjects Bank to any tax, levy, impost, duty, deduction, charge
or withholding (each, a "Tax") or changes the basis of taxation with respect to
this Agreement, the Notes, the Loans or payments by the Borrower of principal,
interest, Commitment Fees, or other amounts due from the Borrower hereunder or
under the Notes (except for taxes on the overall net income of Bank),
(ii) imposes, modifies or deems applicable any reserve, special
deposit or similar requirement against credits or commitments to extend
credit extended by, or assets (funded or contingent) of, deposits with or for
the account of, or other acquisitions of funds by, Bank, or
(iii) imposes, modifies or deems applicable any capital adequacy or
similar requirement (A) against assets (funded or contingent) of, or commitments
to extend credit extended by, the Bank, or (B) otherwise applicable to the
obligations of the Bank under this Agreement,
and the result of any of the foregoing is to increase the cost to,
reduce the income receivable by, or impose any expense (including loss of
margin) upon the Bank with respect to this Agreement, the Notes or the making,
maintenance or funding of any part of the Loans (or, in the case of any capital
adequacy or similar requirement, to have the effect of reducing the rate of
return on the Bank's capital, taking into consideration the Bank's customary
policies with respect to capital adequacy) by an amount which the Bank in its
sole discretion deems to be material, the Bank shall from time to time notify
the Borrower of the amount determined in good faith (using any averaging and
attribution methods employed in good faith) by the Bank to be necessary to
compensate the Bank for such increase in cost, reduction of income, additional
expense or reduced rate of return. Such notice shall set forth in reasonable
detail the basis for such determination. Such amount shall be due and payable by
the Borrower to the Bank ten (10) Business Days after such notice is given.
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5.4.2 Indemnity.
In addition to the compensation required by Section 5.4.1, the Borrower
shall indemnify the Bank against all liabilities, losses or expenses (including
loss of margin, any loss or expense incurred in liquidating or employing
deposits from third parties and any loss or expense incurred in connection with
funds acquired by the Bank to fund or maintain Borrowing Tranches subject to a
Euro-Rate Option or an Offered Rate Option) which such Bank sustains or incurs
as a consequence of any
(i) payment, prepayment, conversion or renewal of any Borrowing
Tranche to which a Euro-Rate Option or an Offered Rate Option applies on
a day other than the last day of the corresponding Interest Period (whether or
not such payment or prepayment is mandatory, voluntary or automatic and whether
or not such payment or prepayment is then due),
(ii) attempt by the Borrower to revoke (expressly, by later
inconsistent notices or otherwise) in whole or part any Loan Requests
under Section 2.3 or Section 4.2 or, Revolving Line Loan Requests under Section
3.3 or Section 4.2 or notice relating to prepayments under Section 5.3, or
(iii) default by the Borrower in the performance or observance of any
covenant or condition contained in this Agreement or any other Loan Document,
including any failure of the Borrower to pay when due (by acceleration or
otherwise) any principal, interest, Commitment Fee or any other amount due
hereunder.
If the Bank sustains or incurs any such loss or expense, it shall from
time to time notify the Borrower of the amount determined in good faith by the
Bank (which determination may include such assumptions, allocations of costs and
expenses and averaging or attribution methods as such Bank shall deem
reasonable) to be necessary to indemnify the Bank for such loss or expense. Such
notice shall set forth in reasonable detail the basis for such determination.
Such amount shall be due and payable by the Borrower to the Bank ten (10)
Business Days after such notice is given.
5.4.3 Stamp Taxes.
In addition, Borrower agrees to pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges, or similar
levies which arise from any payment made hereunder or from the execution,
delivery, or registration of, or otherwise with respect to, this Agreement or
any Note (hereinafter referred to as "Other Taxes").
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5.4.4 Indemnification for Taxes Paid by a Bank.
Borrower shall indemnify the Bank for the full amount of Taxes or Other
Taxes (including, without limitation, any Taxes or Other Taxes imposed by any
jurisdiction on amounts payable under this Section 5.4.4) paid by the Bank and
any liability (including penalties, interest, and expenses) arising therefrom or
with respect thereto, whether or not such Taxes or Other Taxes were correctly or
legally asserted. This indemnification shall be made within 30 days from the
date Bank makes written demand therefor.
5.4.5 Survival.
Without prejudice to the survival of any other agreement of Borrower
hereunder, the agreements and obligations of Borrower contained in Sections
5.4.1 through 5.4.4 shall survive the payment in full of principal and interest
hereunder and under any instrument delivered hereunder
6. REPRESENTATIONS AND WARRANTIES
6.1 Representations and Warranties.
The Borrower, in order to induce the Bank to extend the Loans to the
Borrower hereunder, represents and warrants to the Bank as follows:
6.1.1 Organization and Qualification.
Borrower and each Subsidiary of Borrower is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization. Borrower and each Subsidiary of Borrower has the
lawful power to own or lease its properties and to engage in the business it
presently conducts or proposes to conduct. Borrower and each Subsidiary of
Borrower is duly licensed or qualified and in good standing in each jurisdiction
where the property owned or leased by it or the nature of the business
transacted by it or both makes such licensing or qualification necessary.
6.1.2 Capitalization and Ownership.
The authorized capital stock of the Borrower consists of 100,000,000
shares of Common Stock, no par value, of which 7,672,118 shares are issued and
outstanding, and 2,000,000 shares of Preferred Stock,one dollar ($1.00) par
value, of which 1,702,500 shares (the
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issued and outstanding Common shares and issued and outstanding Preferred
shares, collectively, referred to herein as the "Shares") are issued and
outstanding Persons or entities owning 5% or more of the Borrower's outstanding
Shares are listed on Schedule 6.1.2. All of the Shares have been validly issued
and are fully paid and nonassessable. There are no options, warrants or other
rights outstanding to purchase any such shares except as indicated on Schedule
6.1.2.
6.1.3 Subsidiaries.
Schedule 6.1.3 states the name of each of the Borrower's Subsidiaries,
its jurisdiction of incorporation, its authorized capital stock, the issued and
outstanding shares (referred to herein as the "Subsidiary Shares") and the
owners thereof if it is a corporation, its outstanding partnership interests
(the "Partnership Interests") if it is a partnership and its outstanding limited
liability company interests, interests assigned to managers thereof and the
voting rights associated therewith (the "LLC Interests") if it is a limited
liability company. The Borrower and each Subsidiary of the Borrower has good and
marketable title to all of the Subsidiary Shares, Partnership Interests and LLC
Interests it purports to own, free and clear in each case of any Lien. All
Subsidiary Shares, Partnership Interests and LLC Interests have been validly
issued, and all Subsidiary Shares are fully paid and nonassessable. All capital
contributions and other consideration required to be made or paid in connection
with the issuance of the Partnership Interests and LLC Interests have been made
or paid, as the case may be. There are no options, warrants or other rights
outstanding to purchase any such Subsidiary Shares, Partnership Interests or LLC
Interests except as indicated on Schedule 6.1.3.
6.1.4 Power and Authority.
Borrower has full power to enter into, execute, deliver and carry out
this Agreement and the other Loan Documents to which it is a party, to incur the
Indebtedness contemplated by the Loan Documents and to perform its Obligations
under the Loan Documents to which it is a party, and all such actions have been
duly authorized by all necessary proceedings on its part.
6.1.5 Validity and Binding Effect.
This Agreement has been duly and validly executed and delivered by the
Borrower, and each other Loan Document which Borrower is required to execute and
deliver on or after the date hereof will have been duly executed and delivered
by Borrower on the required date of delivery of such Loan Document. This
Agreement and each other Loan Document constitutes, or will constitute, legal,
valid and binding obligations of the Borrower to which is or will be a party
thereto on and after its date of delivery thereof, enforceable against such
Borrower in accordance with its terms, except to the extent that enforceability
of any of such Loan Document may be limited by bankruptcy, insolvency,
reorganization, moratorium or other
31
similar laws affecting the enforceability of creditors' rights generally or
limiting the right of specific performance.
6.1.6 No Conflict.
Neither the execution and delivery of this Agreement or the other Loan
Documents by Borrower nor the consummation of the transactions herein or therein
contemplated or compliance with the terms and provisions hereof or thereof by
any of them will conflict with, constitute a default under or result in any
breach of (i) the teens and conditions of the certificate of incorporation,
bylaws, certificate of limited partnership, partnership agreement, certificate
of formation, limited liability company agreement or other organizational
documents of Borrower or (ii) any Law or any material agreement or instrument or
order, writ, judgment, injunction or decree to which Borrower or any of its
Subsidiaries is a party or by which it or any of its Subsidiaries is bound or to
which it is subject, or result in the creation or enforcement of any Lien,
charge or encumbrance whatsoever upon any property (now or hereafter acquired)
of Borrower or any of its Subsidiaries (other than Liens granted under the Loan
Documents).
6.1.7 Litigation.
There are no actions, suits, proceedings or investigations pending or,
to the knowledge of Borrower, threatened against Borrower or any Subsidiary of
Borrower at law or equity before any Official Body which individually or in the
aggregate may result in any Material Adverse Change. None of the Borrower or any
Subsidiaries of Borrower is in violation of any order, writ, injunction or any
decree of any Official Body which may result in any Material Adverse Change.
6.1.8 Title to Properties.
Borrower and each Subsidiary of Borrower has good and marketable title
to or valid leasehold interest in all properties, assets and other rights which
it purports to own or lease or which are reflected as owned or leased on its
books and records,free and clear of all Liens and encumbrances except Permitted
Liens, and subject to the terms and conditions of the applicable leases. All
leases of property are in full force and effect without the necessity for any
consent which has not previously been obtained upon consummation of the
transactions contemplated hereby.
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6.1.9 Financial Statements.
(i) Historical Statements.
The Borrower has delivered to the Bank copies of its audited
consolidated year-end financial statements for and as of the end of the five
fiscal years ended September 30, 1992, 1993, 1994, 1995 and 1996 (the "Annual
Statements"). In addition, the Borrower has delivered to the Bank copies of its
unaudited consolidated interim financial statements for the fiscal year to date
and as of the end of the fiscal quarter ended December 31, 1996, (the "Interim
Statements") (the Annual and Interim Statements being collectively referred to
as the "Historical Statements"). The Historical Statements were compiled from
the books and records maintained by the Borrower's management, are correct and
complete and fairly represent the consolidated financial condition of the
Borrower and its Subsidiaries as of their dates and the results of operations
for the fiscal periods then ended and have been prepared in accordance with GAAP
consistently applied, subject (in the case of the Interim Statements) to normal
year-end audit adjustments.
(ii) Accuracy of Financial Statements.
Neither the Borrower nor any Subsidiary of the Borrower has any
liabilities, contingent or otherwise, or forward or long-term commitments that
are not disclosed in the Historical Statements or in the notes thereto, and
except as disclosed therein there are no unrealized or anticipated losses from
any commitments of the Borrower or any Subsidiary of the Borrower which may
cause a Material Adverse Change. Since September 30, 1996, no Material Adverse
Change has occurred.
6.1.10 Use of Proceeds; Margin Stock: Section 20 Subsidiaries.
6.1.10.1 General.
The Borrower intends to use the proceeds of the Loans in accordance
with Sections 2.7 and 3.6 and 8.1.10.
6.1.10.2 Margin Stock.
None of the Borrower or any Subsidiaries of the Borrower engages or
intends to engage principally, or as one of its important activities, in the
business of extending credit for the purpose, immediately, incidentally or
ultimately, of purchasing or carrying margin stock (within the meaning of
Regulation U). No part of the proceeds of any Loan has been or will be used,
immediately, incidentally or ultimately, to purchase or carry any margin stock
or to extend credit to others for the purpose of purchasing or carrying any
margin stock or to refund Indebtedness originally incurred for such purpose, or
for any purpose which entails a violation of
33
or which is inconsistent with the provisions of the regulations of the Board of
Governors of the Federal Reserve System. Neither the Borrower nor any Subsidiary
of any Borrower holds or intends to hold margin stock in such amounts that more
than 25% of the reasonable value of the assets of any Borrower or Subsidiary of
any Borrower are or will be represented by margin stock.
6.1.10.3 Section 20 Subsidiaries.
The Borrower does not intend to use and shall not use any portion of
the proceeds of the Loans, directly or indirectly (i) knowingly to
purchase any Ineligible Securities from a Section 20 Subsidiary during any
period in which such Section 20 Subsidiary makes a market in such Ineligible
Securities, (ii) knowingly to purchase during the underwriting or placement
period Ineligible Securities being underwritten or privately placed by a Section
20 Subsidiary, or (iii) to make payments of principal or interest on Ineligible
Securities underwritten or privately placed by as Section 20 Subsidiary and
issued by or for the benefit of Borrower or any Subsidiary of Borrower.
6.1.11 Full Disclosure.
Neither this Agreement nor any other Loan Document, nor any certificate,
statement, agreement or other documents furnished to the Bank in connection
herewith or therewith, contains any untrue statement of a material fact or omits
to state a material fact necessary in order to make the statements contained
herein and therein, in light of the circumstances under which they were made,
not misleading. There is no fact known to Borrower which materially adversely
affects the business, property, assets, financial condition, results of
operations or prospects of Borrower or Subsidiary of Borrower which has not been
set forth in this Agreement or in the certificates, statements, agreements or
other documents furnished in writing to the Bank prior to or at the date hereof
in connection with the transactions contemplated hereby.
6.1.12 Taxes.
All federal, state, local and other tax returns required to have been
filed with respect to Borrower and each Subsidiary of Borrower have been filed,
and payment or adequate provision has been made for the payment of all taxes,
fees, assessments and other governmental charges which have or may become due
pursuant to said returns or to assessments received, except to the extent that
such taxes, fees, assessments and other charges are being contested in good
faith by appropriate proceedings diligently conducted and for which such
reserves or other appropriate provisions, if any, as shall be required by GAAP
shall have been made. There are no agreements or waivers extending the statutory
period of limitations applicable to any federal income tax return of Borrower or
Subsidiary of Borrower for any period.
34
6.1.13 Consents and Approvals.
No consent, approval, exemption, order or authorization-of, or a
registration or filing with, any Official Body or any other Person is required
by any Law or any agreement in connection with the execution, delivery and
carrying out of this Agreement and the other Loan Documents by any Borrower,
except as listed on Schedule 6.1.13, all of which shall have been obtained or
made on or prior to the Closing Date except as otherwise indicated on Schedule
6.1.13.
6.1.14 No Event of Default: Compliance with Instruments.
No event has occurred and is continuing and no condition exists or will
exist after giving effect to the borrowings or other extensions of credit to be
made on the Closing Date under or pursuant to the Loan Documents which
constitutes an Event of Default or Potential Default. None of the Borrower or
any Subsidiaries of the Borrower is in violation of (i) any term of its
certificate of incorporation, bylaws, certificate of limited partnership,
partnership agreement, certificate of formation, limited liability company
agreement or other organizational documents or (ii) any material agreement or
instrument to which it is a party or by which it or any of its properties may be
subject or bound where such violation would constitute a Material Adverse
Change.
6.1.15 Patents Trademarks, Copyrights. Licenses Etc.
Borrower and each Subsidiary of Borrower owns or possesses all the
material patents, trademarks, service marks, trade names, copyrights, licenses,
registrations, franchises, permits and rights necessary to own and operate its
properties and to carry on its business as presently conducted and planned to be
conducted by Borrower or its Subsidiary, without known possible, alleged or
actual conflict with the rights of others.
6.1.16 Insurance.
Schedule 6.1.16 lists all insurance policies and other bonds to which
the Borrower or Subsidiary of the Borrower is a party, all of which are valid
and in full force and effect. No notice has been given or claim made and no
grounds exist to cancel or avoid any of such policies or bonds or to reduce the
coverage provided thereby. Such policies and bonds provide adequate coverage
from reputable and financially sound insurers in amounts sufficient to insure
the assets and risks of Borrower and each Subsidiary of Borrower in accordance
with prudent business practice in the industry of the Borrower and its
Subsidiaries.
35
6.1.17 Compliance with Laws.
The Borrower and its Subsidiaries are in compliance in all material
respects with all applicable Laws (other than Environmental Laws which are
specifically addressed in Section 6.1.22) in all jurisdictions in which the
Borrower or any Subsidiary of Borrower is presently or will be doing business
except where the failure to do so would not constitute a Material Adverse
Change.
6.1.18 Material Contracts; Burdensome Restrictions.
All material contracts relating to the business operations of Borrower
and each Subsidiary of Borrower, including all employee benefit plans and Labor
Contracts, are valid, binding and enforceable upon Borrower or its Subsidiary
and each of the other parties thereto in accordance with their respective terms,
and there is no default thereunder, to the Borrower's knowledge, with respect to
parties other than such Borrower or its Subsidiary. None of the Borrower or its
Subsidiaries is bound by any contractual obligation, or subject to any
restriction in any organization document, or any requirement of Law which could
result in a Material Adverse Change.
6.1.19 Investment Companies, Regulated Entities.
None of the Borrower or any of its Subsidiaries is an "investment
company" registered or required to be registered under the Investment Company
Act of 1940 or under the "control" of an "investment company" as such terms are
defined in the Investment Company Act of l 940 and shall not become such an
"investment company" or under such "control." None of the Borrower or any of its
Subsidiaries is subject to any other Federal or state statute or regulation
limiting its ability to incur Indebtedness for borrowed money.
6.1.20 Plans and Benefit Arrangements.
(i) The Borrower and each other member of the ERISA Group are in
compliance in all material respects with any applicable provisions of ERISA with
respect to all Benefit Arrangements, Plans and Multiemployer Plans. There has
been no Prohibited Transaction with respect to any Benefit Arrangement or any
Plan or, to the best knowledge of the Borrower, with respect to any
Multiemployer Plan or Multiple Employer Plan, which could result in any material
liability of the Borrower or any other member of the ERISA Group. The Borrower
and all other members of the ERISA Group have made when due any and all payments
required to be made under any agreement relating to a Multiemployer Plan or a
Multiple Employer Plan or any Law pertaining thereto. With respect to each Plan
and Multiemployer Plan, the Borrower and each other member of the ERISA Group
(i) have fulfilled in all material respects their obligations under the minimum
funding standards of ERISA, (ii) have not incurred
36
any liability to the PBGC, and (iii) have not had asserted against them any
penalty for failure to fulfill the minimum funding requirements of ERISA. All
Plans, Benefit Arrangements and Multiemployer Plans have been administered in
accordance with their terms and applicable Law
(ii) To the best of the Borrower's knowledge, each Multiemployer Plan
and Multiple Employer Plan is able to pay benefits thereunder when due.
(iii) Neither the Borrower nor any other member of the ERISA Group
has instituted or intends to institute proceedings to terminate any Plan.
(iv) No event requiring notice to the PBGC under Section 302(f)(4)(A)
of ERISA has occurred or is reasonably expected to occur with respect to any
Plan, and no amendment with respect to which security is required under Section
307 of ERISA has been made or is reasonably expected to be made to any Plan.
(v) The aggregate actuarial present value of all benefit liabilities
(whether or not vested) under each Plan, determined on a plan termination basis,
as disclosed in, and as of the date of, the most recent actuarial report for
such Plan, does not exceed the aggregate fair market value of the assets of such
Plan.
(vi) Neither the Borrower nor any other member of the ERISA Group has
incurred or reasonably expects to incur any material withdrawal liability under
ERISA to any Multiemployer Plan or Multiple Employer Plan. Neither the Borrower
nor any other member of the ERISA Group has been notified by any Multiemployer
Plan or Multiple Employer Plan that such Multiemployer Plan or Multiple Employer
Plan has been terminated within the meaning of Title IV of ERISA and, to the
best knowledge of the Borrower, no Multiemployer Plan or Multiple Employer Plan
is reasonably expected to be reorganized or terminated, within the meaning of
Title IV of ERISA.
6.1.21 Employment Matters.
Borrower and each of its Subsidiaries is in compliance with the Labor
Contracts and all applicable federal, state and local labor and employment Laws
including those related to equal employment opportunity and affirmative action,
labor relations, minimum wage, overtime, child labor, medical insurance
continuation, worker adjustment and relocation notices, immigration controls and
worker and unemployment compensation, where the failure to comply would
constitute a Material Adverse Change. There are no outstanding grievances,
arbitration awards or appeals therefrom arising out of the Labor Contracts or
current or threatened strikes, picketing, handbilling or other work stoppages or
slowdowns at facilities of Borrower or any of Subsidiaries which in any case
would constitute a Material Adverse Change. The Borrower has delivered to the
Bank true and correct copies of each of the Labor Contracts.
37
6.1.22 Environmental Matters.
None of the Borrower or any of its Subsidiaries has received any
Environmental Complaint from any Official Body or private Person alleging that
Borrower or any Subsidiary or any prior or subsequent owner of any of the
Property is a potentially responsible party under the Comprehensive
Environmental Response, Cleanup and Liability Act, 42 U.S.C. ss. 9601, et seq.
and Borrower has no reason to believe that such an Environmental Complaint might
be received. There are no pending or, to any Borrower's knowledge, threatened
Environmental Complaints relating to Borrower or Subsidiary of Borrower or, to
Borrower's knowledge, any prior or subsequent owner of any of the Property
pertaining to, or arising out of, any Environmental Conditions.
(i) There are no circumstances at, on or under any of the Property
that constitute a breach of or non-compliance with any of the Environmental
Laws, and there are no past or present Environmental Conditions at, on
or under any of the Property or, to any Borrower's knowledge, at, on or under
adjacent property, that prevent compliance with the Environmental Laws at any of
the Property.
(ii) Neither any of the Property nor any structures, improvements,
equipment, fixtures, activities or facilities thereon or thereunder contain or
use Regulated Substances except in compliance with Environmental Laws. There are
no processes, facilities, operations, equipment or other activities at, on or
under any of the Property, or, to any Borrower's knowledge, at, on or under
adjacent property, that currently result in the release or threatened release of
Regulated Substances onto any of the Property, except to the extent that such
releases or threatened releases are not a breach of or otherwise not a violation
of the Environmental laws.
(iii) There are no aboveground storage tanks, underground storage
tanks or underground piping associated with such tanks, used for the
management of Regulated Substances at, on or under any of the Property that (a)
do not have, to the extent required by Environmental Laws, a full operational
secondary containment system in place, and (b) are not otherwise in compliance
with all Environmental Laws. There are no abandoned underground storage tanks or
underground piping associated with such tanks, previously used for the
management of Regulated Substances at, on or under any of the Property that have
not either been closed in place in accordance with Environmental Laws or removed
in compliance with all applicable Environmental Laws and no contamination
associated with the use of such tanks exists on any of the Property that is not
in compliance with Environmental Laws.
(iv) Borrower and each Subsidiary of Borrower has all material
permits, licenses, authorizations, plans and approvals necessary under
the Environmental Laws for the conduct of the business of such Borrower or
Subsidiary as presently conducted. Borrower and each Subsidiary of Borrower has
submitted all material notices, reports and other filings required by the
Environmental Laws to be submitted to an Official Body which pertain to past and
current operations on any of the Property.
38
(v) All past and present on-site generation, storage, processing,
treatment, recycling, reclamation, disposal or other use or management of
Regulated Substances at, on, or under any of the Property and all off-site
transportation, storage, processing, treatment, recycling, reclamation, disposal
or other use or management of Regulated Substances have been done in accordance
with the Environmental Laws.
6.1.23 Senior Debt Status.
The Obligations of Borrower under this Agreement, the Notes and each of
the other Loan Documents to which it is a party do rank and will rank at least
pari passau in priority of payment with all other Indebtedness of Borrower
except Indebtedness of such Borrower to the extent secured by Permitted Liens.
There is no Lien upon or with respect to any of the properties or income of any
Borrower or Subsidiary of any Borrower which secures indebtedness or other
obligations of any Person except for Permitted Liens.
6.2 Continuation of Representations.
The Borrower makes the representations and warranties in this Article 6
on the date hereof and on the Closing Date and each date thereafter on which a
Borrowing Tranche is made under the Loans as provided in and subject to Sections
7.1 and 7.2.
6.3 Updates to Schedules.
Should any of the information or disclosures provided on any of the
Schedules attached hereto become outdated or incorrect in any material respect,
the Borrower shall promptly provide the Bar in writing with such revisions or
updates to such Schedule as may be necessary or appropriate to update or correct
same; provided, however, that no Schedule shall be deemed to have been amended,
modified or superseded by any such correction or update, nor shall any breach of
warranty or representation resulting from the inaccuracy or incompleteness of
any such Schedule be deemed to have been cured thereby, unless and until the
Bank, in its sole and absolute discretion, shall have accepted in writing such
revisions or updates to such Schedule.
7. CONDITIONS OF LENDING
The obligation of Bank to make advances under the Loans hereunder is
subject to the performance by Borrower of its Obligations to be performed
hereunder at or prior to the making of any such advances and to the satisfaction
of the following further conditions:
39
7.1 First Advances Under Loans.
On the Closing Date:
7.1.1 Officer's Certificate.
The representations and warranties of the Borrower contained in Article
6 and in each of the other Loan Documents shall be true and accurate on and as
of the Closing Date with the same effect as though such representations and
warranties had been made on and as of such date (except representations and
warranties which relate solely to an earlier date or time, which representations
and warranties shall be true and correct on and as of the specific dates or
times referred to therein), and Borrower shall have performed and complied with
all covenants and conditions hereof and thereof; no Event of Default or
Potential Default shall have occurred and be continuing or shall exist; and
there shall be delivered to the Bank for the benefit of Bank a certificate of
the Borrower, dated the Closing Date and signed by the Chief Executive Officer,
President or Chief Financial Officer of the Borrower to such effect.
7.1.2 Secretary's Certificate.
There shall be delivered to the Bank for the benefit of Bank a
certificate dated the Closing Date and signed by the Secretary or an Assistant
Secretary of the Borrower, certifying as appropriate as to:
(i) all action taken by Borrower in connection with this Agreement
and the other Loan Documents;
(ii) the names of the officer or officers authorized to sign this
Agreement and the other Loan Documents and the true signatures of such officer
or officers and specifying the Authorized Officers permitted to act on behalf of
Borrower for purposes of this Agreement and the true signatures of such
officers, on which the Bank may conclusively rely; and
(iii) copies of its organizational documents, including its
certificate of incorporation, bylaws, certificate of limited partnership,
partnership agreement, certificate of formation, and limited liability
company agreement as in effect on the Closing Date certified by the appropriate
state official where such documents are filed in a state office together with
certificates from the appropriate state officials as to the continued existence
and good standing of Borrower in each state where organized or qualified to do
business and a bring-down certificate by facsimile dated the Closing Date.
40
7.1.3 Inter-Creditor Agreement; Other Financing Documents.
There shall be executed and delivered to the Bank an Inter-Creditor
Agreement with Mid-State Bank and Trust Company containing such terms,
conditions, agreements and provisions, and in form and substance, acceptable to
the Bank in its sole discretion. There shall also be delivered to the Bank fully
executed originals of the Notes and all other documents, instruments and
agreements required or contemplated hereunder, all in form and substance
acceptable to the Bank in its sole discretion.
7.1.4 Opinion of Counsel.
There shall be delivered to the Bank for the benefit of the Bank a
written opinion of McQuaide, Blasko, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, Inc. counsel
for the Borrower (who may rely on the opinions of such other counsel as may be
acceptable to the Bank), dated the Closing Date and in form and substance
satisfactory to the Bank and its counsel as to such other matters incident to
the transactions contemplated herein as the Bank may reasonably request.
7.1.5 Legal Details.
All legal details and proceedings in connection with the transactions
contemplated by this Agreement and the other Loan Documents shall be in form and
substance satisfactory to the Bank and counsel for the Bank, and the Bank shall
have received all such other counterpart originals or certified or other copies
of such documents and proceedings in connection with such transactions, in form
and substance satisfactory to the Bank and said counsel, as the Bank or said
counsel may reasonably request.
7.1.6 Payment of Fees.
The Borrower shall have paid or caused to be paid to the Bank, to the
extent not previously paid, all commitment and other fees accrued through the
Closing Date and all costs and expenses of Bank, including, without limitation,
legal fees, incurred by Bank in connection with negotiation documentation.
review or enforcement of the Loans.
7.1.7 Other Loan Documentation Review.
All existing agreements, instruments and other documentation evidencing,
securing or relating in any way to Indebtedness of the Borrower to any Person
other than the Bank shall be in form and substance acceptable to the Bank and
its counsel.
41
7.1.8 Material Consents.
All material consents required to effectuate the transactions
contemplated hereby shall have been obtained.
7.1.9 Officer's Certificate Regarding MACs.
Since September 30, 1996, no Material Adverse Change shall have
occurred; prior to the Closing Date, there shall have been no material change in
the management of Borrower or Subsidiary or other Subsidiary of Borrower; and
there shall have been delivered to the Bank a certificate dated the Closing Date
and signed by the Chief Executive Officer, President or Chief Financial Officer
of the Borrower to each such effect.
7.1.10 No Violation of Laws.
The making of the Loans and the making of advances thereunder shall not
contravene any Law applicable to Borrower or the Bank.
7.1.11 No Actions or Proceedings.
No action, proceeding, investigation, regulation or legislation shall
have been instituted, threatened or proposed before any court, governmental
agency or legislative body to enjoin, restrain or prohibit, or to obtain damages
in respect of, this Agreement, the other Loan Documents or the consummation of
the transactions contemplated hereby or thereby or which, in the Bank's sole
discretion, would make it inadvisable to consummate the transactions
contemplated by this Agreement or any of the other Loan Documents.
7.1.12 Insurance Policies: Certificates of Insurance; Endorsements.
The Borrower shall have delivered evidence acceptable to the Bank that
adequate insurance in compliance with Section 8.1.3 is in full force and effect
and that all premiums then due thereon have been paid, together with a certified
copy of Borrower's casualty insurance policy or policies evidencing coverage
satisfactory to the Bank, with additional insured, mortgagee and lender loss
payable special endorsements attached thereto in form and substance satisfactory
to the Bank and its counsel naming the Bank as additional insured, mortgagee and
lender loss payee.
42
7.2 Each Additional Advance.
At the time of making any advances under the Loans other than advances
made on the Closing Date and after giving effect to the proposed extensions of
credit; the representations and warranties of the Borrower contained in Article
6 and in the other Loan Documents shall be true on and as of the date of such
additional advance with the same effect as though such representations and
warranties had been made on and as of such date (except representations and
warranties which expressly relate solely to an earlier date or time, which
representations and warranties shall be true and correct on and as of the
specific dates or times referred to therein) and the Borrower shall have
performed and complied with all covenants and conditions hereof; no Event of
Default or Potential Default shall have occurred and be continuing or shall
exist; the making of the requested advances shall not contravene any Law
applicable to Borrower or Subsidiary of Borrower or the Bank; and the Borrower
shall have delivered to the Bank a duly executed and completed Loan Request or
Reducing Revolving Line Loan Request as the case may be.
8. COVENANTS
8.1 Affirmative Covenants.
The Borrower covenants and agrees that until payment in full of the
Loans and satisfaction of all of the Borrower's other Obligations under the Loan
Documents, the Borrower shall comply at all times with the following affirmative
covenants:
8.1.1 Preservation of Existence. Etc.
Borrower shall, and shall cause each of its Subsidiaries to, maintain
its legal existence as a corporation, limited partnership or limited liability
company and its license or qualification and good standing in each jurisdiction
in which its ownership or lease of property or the nature of its business makes
such license or qualification necessary, except as otherwise expressly permitted
in Section 8.2.6.
8.1.2 Payment of Liabilities Including Taxes Etc.
Borrower shall, and shall cause each of its Subsidiaries to, duly pay
and discharge all liabilities to which it is subject or which are asserted
against it, promptly as and when the same shall become due and payable,
including all taxes, assessments and governmental charges upon it or any of its
properties, assets, income or profits, prior to the date on which penalties
attach thereto, except to the extent that such liabilities, including taxes,
assessments or charges,
43
are being contested in good faith and by appropriate and lawful proceedings
diligently conducted and for which such reserve or other appropriate provisions,
if any, as shall be required by GAAP shall have been made, but only to the
extent that failure to discharge any such liabilities would not result in any
additional liability which would adversely affect to a material extent the
financial condition of Borrower or Subsidiary of Borrower, provided that the
Borrower and its Subsidiaries will pay all such liabilities forthwith upon the
commencement of proceedings to foreclose any Lien which may have attached as
security therefor.
8.1.3 Maintenance of Insurance.
Borrower shall, and shall cause each of its Subsidiaries to, insure its
properties and assets against loss or damage by fire and such other insurable
hazards as such assets are commonly insured (including fire, extended coverage,
property damage, workers' compensation, public liability and business
interruption insurance) and against other risks (including errors and omissions)
in such amounts as similar properties and assets are insured by prudent
companies in similar circumstances carrying on similar businesses, and with
reputable and financially sound insurers, including self-insurance to the extent
customary, all as reasonably determined by the Bank. At the request of the Bank,
the Borrower shall deliver to the Bank (x) on the Closing Date and annually
thereafter an original certificate of insurance signed by the Borrower's
independent insurance broker describing and certifying as to the existence of
the insurance required to be maintained by this Agreement and the other Loan
Documents, together with a copy of the endorsement described in the next
sentence attached to such certificate and (y) from time to time a summary
schedule indicating all insurance then in force with respect to Borrower. Such
policies of insurance shall contain special endorsements, in form and substance
acceptable to the Bank, which shall specify the Bank as an additional insured,
and, in the event the Bank acquires collateral security rights in any of
Borrower's Property, mortgagee and lender loss payee as its interests may
appear.
8.1.4 Maintenance of Properties and Leases.
Borrower shall, and shall cause each of its Subsidiaries to, maintain in
good repair, working order and condition (ordinary wear and tear excepted) in
accordance with the general practice of other businesses of similar character
and size, all of those properties useful or necessary to its business, and from
time to time, Borrower will make or cause to be made all appropriate repairs,
renewals or replacements thereof.
8.1.5 Maintenance of Patents, Trademarks Etc.
Borrower shall, and shall cause each of its Subsidiaries to, maintain in
full force and effect all patents, trademarks, service marks, trade names,
copyrights, licenses, franchises,
44
permits and other authorizations necessary for the ownership and operation of
its properties and business if the failure so to maintain the same would
constitute a Material Adverse Change.
8.1.6 Visitation Rights.
Borrower shall, and shall cause each of its Subsidiaries to, permit any
of the officers or authorized employees or representatives of the Bank to visit
and inspect any of its properties and to audit and examine and make excerpts
from its books and records and discuss its business affairs, finances and
accounts with its officers, all in such detail and at such times and as often as
the Bank may reasonably request, provided that Bank shall provide the Borrower
with reasonable notice prior to any visit or inspection.
8.1.7 Keeping of Records and Books of Account.
The Borrower shall, and shall cause each Subsidiary of the Borrower to,
maintain and keep proper books of record and account which enable the Borrower
and its Subsidiaries to issue financial statements in accordance with GAAP and
as otherwise required by applicable Laws of any Official Body having
jurisdiction over the Borrower or any Subsidiary of the Borrower, and in which
full, true and correct entries shall be made in all material respects of all its
dealings and business and financial affairs.
8.1.8 Plans and Benefit Arrangements.
The Borrower shall, and shall cause each other member of the ERISA Group
to, comply with ERISA, the Internal Revenue Code and other applicable Laws
applicable to Plans and Benefit Arrangements except where such failure, alone or
in conjunction with any other failure, would not result in a Material Adverse
Change. Without limiting the generality of the foregoing, the Borrower shall
cause all of its Plans and all Plans maintained by any member of the ERISA Group
to be funded in accordance with the minimum funding requirements of ERISA and
shall make, and cause each member of the ERISA Group to make, in a timely
manner, all contributions due to Plans, Benefit Arrangements and Multiemployer
Plans.
8.1.9 Compliance with Laws.
The Borrower shall, and shall cause each of its Subsidiaries to, comply
with all applicable Laws, including all Environmental Laws, in all respects,
provided that it shall not be deemed to be a violation of this Section 8.1.9 if
any failure to comply with any Law would not result in fines, penalties,
remediation costs, other similar liabilities or injunctive relief which in the
aggregate would constitute a Material Adverse Change.
45
8.1.10 Use of Proceeds.
The Borrower will use the proceeds of the Loans only for the purposes
identified in Section 2.7 and Section 3.6 hereof.
8.1.11 Operating Accounts.
The Borrower will maintain checking and depository operating accounts
with the Bank.
8.2 Negative Covenants.
The Borrower covenants and agrees that until payment in full of the
Loans, including interest thereon, and satisfaction of all of the Borrower's
other Obligations hereunder, the Borrower shall comply with the following
negative covenants:
8.2.1 Indebtedness.
Borrower shall not, and shall not permit any of its Subsidiaries to, at
any time create, incur, assume or suffer to exist any Indebtedness, except:
(i) Indebtedness under the Loan Documents;
(ii) Existing Indebtedness in favor of each Person who has executed
the Inter-Creditor Agreement as set forth on Schedule 8.2.1 (including any
extensions or renewals thereof), provided there is no increase in the amount
thereof or other significant change in the terms therefor specified on Schedule
8.2.1;
(iii) Indebtedness secured by Purchase Money Security Interests and
Indebtedness arising out of operating or capital leases not exceeding $1,000,000
in the aggregate:
(iv) Indebtedness to any Subsidiary of the Borrower which has not
guaranteed or otherwise become a co-obligor of the Indebtedness of Borrower
under the Loans, in form and substance acceptable to the Bank, in an amount not
to exceed $1,000,000 in the aggregate; and
(v) Other unsecured Indebtedness to any Person in an amount not to
exceed $2,000,000 in the aggregate.
46
8.2.2 Liens.
Borrower shall not, and shall not permit any of its Subsidiaries to, at
any time create, incur, assume or suffer to exist any Lien on any of its
property or assets, tangible or intangible, now owned or hereafter acquired, or
agree or become liable to do so, except Permitted Liens.
8.2.3 Guaranties.
Borrower shall not, and shall not permit any of its Subsidiaries to, at
any time, directly or indirectly, become or be liable in respect of any
Guaranty, or assume, guarantee, become surety for, endorse or otherwise agree,
become or remain directly or contingently liable upon or with respect to any
obligation or liability of any other Person, except for Indebtedness of the
Borrower with respect to its Subsidiaries permitted under Section 8.2.1
hereunder.
8.2.4 Loans and Investments.
The Borrower shall not, and shall not permit any of its Subsidiaries to,
at any time make or suffer to remain outstanding any loan or advance to, or
purchase, acquire or own (other than in connection with Permitted Acquisitions,
as defined in Section 8.2.6) any stock, bonds, notes or securities of, or any
partnership interest (whether general or limited) or limited liability company
interest in, or any other investment or interest in, or make any capital
contribution to, any other Person, or agree, become or remain liable to do any
of the foregoing, except:
(i) trade credit extended on usual and customary terms in the
ordinary course of business;
(ii) advances to employees to meet expenses incurred by such
employees in the ordinary course of business;
(iii) Permitted Investments;
(iv) loans to Subsidiaries which have guaranteed or otherwise become
a co-obligor of the Indebtedness of Borrower under the Loans, in form and
substance acceptable to the Bank.
8.2.5 Dividends and Related Distributions.
The Borrower shall not, and shall not permit any of its Subsidiaries to,
make or pay, or agree to become or remain liable to make or pay, any dividend or
other distribution of any nature (whether in cash, property, securities or
otherwise) on account of or in respect of its shares of capital stock,
partnership interests or limited liability company interests on account of
47
the purchase, redemption, retirement or acquisition of its shares of capital
stock (or warrants, options or rights therefor), partnership interests or
limited liability company interests.
8.2.6 Liquidations, Mergers, Consolidations, Acquisitions.
The Borrower shall not, and shall not permit any of its Subsidiaries to,
dissolve, liquidate or wind-up its affairs, or become a party to any merger or
consolidation, or acquire by purchase, lease or otherwise all or substantially
all of the assets or capital stock of any other Person, provided that
(1) The Borrower may acquire, whether by purchase or by merger, (A) all
of the ownership interests of another Person or (B) substantially all of assets
of another Person or of a business or division of another Person (each a
"Permitted Acquisition"), provided that each of the following requirements is
met:
(i) if the Borrower acquiring the ownership interests in such Person,
such Person shall, if required by Bank, join this Agreement as a Guarantor or
execute such guaranty agreements as the Bank may require on or before the date
of such Permitted Acquisition;
(ii) the board of directors or other equivalent governing body of
such Person shall have approved such Permitted Acquisition and, if the
Borrower shall use any portion of the Loans to fund such Permitted Acquisition,
the Borrower also shall have delivered to the Bank written evidence of the
approval of the board of directors (or equivalent body) of such Person for such
Permitted Acquisition;
(iii) the business acquired, or the business conducted by the Person
whose ownership interests are being acquired, as applicable, shall be
substantially the same as one or more line or lines of business conducted by the
Borrower and shall comply with Section 8.2.10;
(iv) no Potential Default or Event of Default shall exist immediately
prior to and after giving effect to such Permitted Acquisition;
(v) the Borrower shall demonstrate that it shall be in compliance
with the covenants contained in Sections 8.2.15, 8.2.16 and 8.2.17 after
giving effect to such Permitted Acquisition (including in such computation
Indebtedness or other liabilities assumed or incurred in connection with such
Permitted Acquisition but excluding income earned or expenses incurred by the
Person, business or assets to be acquired prior to the date of such Permitted
Acquisition) by delivering at least five (5) Business Days prior to such
Permitted Acquisition a certificate in the form and substance acceptable to the
Bank evidencing such compliance;
(vi) the Consideration paid by the Borrower for all Permitted
Acquisitions made between the Closing Date and the date of such Permitted
Acquisition shall not exceed the
48
lesser of one-half of the Borrower's Consolidated Tangible Net Worth
(measured at the time of each Permitted Acquisition) or $15,000,000; and
(vii) the Borrower shall deliver to the Bank at least five (5)
Business Days before such Permitted Acquisition copies of any agreements
entered into or proposed to be entered into by such Borrower in connection with
such Permitted Acquisition and shall deliver to the Bank such other information
about such Person or its assets as the Bank may reasonably require.
8.2.7 Dispositions of Assets or Subsidiaries.
The Borrower shall not, and shall not permit any of its Subsidiaries to,
sell, convey, assign, lease, abandon or otherwise transfer or dispose of,
voluntarily or involuntarily, any of its properties or assets, tangible or
intangible (including sale, assignment, discount or other disposition of
accounts, contract rights, chattel paper, equipment or general intangibles with
or without recourse or of capital stock, shares of beneficial interest,
partnership interests or limited liability company interests of a Subsidiary of
Borrower), except:
(i) transactions involving the sale of inventory in the ordinary
course of business;
(ii) any sale, transfer or lease of assets in the ordinary course of
business which are no longer necessary or required in the conduct of Borrower's
or such Subsidiary's business,
(iii) any sale, transfer or lease of assets by any wholly owned
Subsidiary of Borrower to any such wholly-owned subsidiary;
(iv) any sale, transfer or lease of assets in the ordinary course of
business which are replaced by substitute assets acquired or leased within the
parameters of Section 8.2.1; and
(v) any sale, transfer or lease of assets, other than those
specifically excepted pursuant to clauses (i) through (v) above,
provided that (i) at the time of any disposition, no Event of Default shall
exist or shall result from such disposition, and (ii) the aggregate value of all
assets so sold by the Borrower and their Subsidiaries shall not exceed in any
fiscal Year $5,000,000.
8.2.8 Affiliate Transactions.
The Borrower shall not, and shall not permit any of its Subsidiaries to,
enter into or carry out any transaction (including purchasing property or
services from or selling property
49
or services to any Affiliate of any Borrower or other Person) unless such
transaction is not otherwise prohibited by this Agreement, is entered into in
the ordinary course of business upon fair and reasonable arm's length terms and
conditions which are fully disclosed to the Bank and is in accordance with all
applicable Law.
8.2.9 Subsidiaries, Partnerships and Joint Ventures.
The Borrower shall not, and shall not permit any of its Subsidiaries to,
own or create directly or indirectly any Subsidiaries after the date of this
Agreement other than those created pursuant to a Permitted Acquisition. The
Borrower shall not become or agree to (1) become a general or limited partner in
any general or limited partnership, (2) become a member or manager of, or hold a
limited liability company interest in, a limited liability company, or (3)
become a joint venture or hold a joint venture interest in any joint venture.
8.2.10 Continuation of or Change in Business.
The Borrower shall not, and shall not permit any of its Subsidiaries to,
engage in any business other than the spring water and beverage production,
manufacturing and distribution business, substantially as conducted and operated
by the Borrower or Subsidiary during the present fiscal year, or any other
business venture that is reasonably related thereto, and the Borrower or
Subsidiaries shall not permit any material change in such business.
8.2.11 Plans and Benefit Arrangements.
The Borrower shall not, and shall not permit any of its Subsidiaries to
engage in a Prohibited Transaction with any Plan, Benefit Arrangement or
Multiemployer Plan which, alone or in conjunction with any other circumstances
or set of circumstances resulting in liability under ERISA or otherwise violate
ERISA.
8.2.12 Fiscal Year.
The Borrower shall not, and shall not permit any Subsidiary of the
Borrower to, change its fiscal year from the twelve-month period beginning
October 1 and ending September 30.
8.2.13 Changes in Organizational Documents.
The Borrower shall not, and shall not permit any of its Subsidiaries to,
amend in any respect its certificate of incorporation (including any provisions
or resolutions relating to
50
capital stock), by-laws, certificate of limited partnership, partnership
agreement, certificate of formation, limited liability company agreement or
other organizational documents without providing at least sixty (60) calendar
days' prior written notice to the Bank, and, in the event such change would be
adverse to the Bank as determined by the Bank in its sole discretion, obtaining
the prior written consent of the Bank.
8.2.14 Negative Covenants Prohibition.
The Borrower shall not, and shall not permit any of its Subsidiaries to,
make any negative covenant in favor of any Person not a party to the
Inter-Creditor Agreement with respect to incurring Indebtedness (whether secured
or unsecured), pledging assets or otherwise granting any liens on, or security
interests in, any Property or other assets of the Borrower or any of its
Subsidiaries.
8.2.15 Minimum EBITDA to Fixed Charge Ratio.
The Borrower shall not at any time permit the ratio of Borrower's
consolidated EBITDA to Fixed Charges, calculated as of the end of each fiscal
year of Borrower, to be less than 1.4 to 1.0.
8.2.16 Maximum Leverage Ratio.
The Borrower shall not at any time permit the ratio of consolidated
total liabilities of the Borrower and its Subsidiaries to Consolidated Tangible
Net Worth, calculated as of the end of each quarter of each fiscal year of the
Borrower, to exceed 2.0 to 1.0
8.2.17 Minimum EBITDA Ratio.
The Borrower shall not permit the Borrower's consolidated EBITDA Ratio,
determined at the end of each quarter of each fiscal year of the Borrower, to
exceed (i) 4.0 to 1.0 for fiscal quarters ending September 30, 1997, December
31, 1997 and March 31, 1998 and (ii) 3.5 to 1.0 for each fiscal quarter ending
thereafter.
8.2.18 No Change in Control.
The Borrower shall not, nor permit any of its Subsidiaries to, suffer,
cause or permit a change in any controlling stock or other equity ownership
interest (which, for purposes of this Agreement shall mean an interest
comprising (i) 10% or more of the voting capital stock or other equity interests
in Borrower, excluding sales, but not acquisitions, of voting capital stock or
other equity interests by existing shareholders of Borrower as of the date
hereof in
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connection with an initial public offering of such class of stock or other
equity interests by Borrower or (ii) 20% or more of the voting capital stock or
other equity interests in Borrower in connection with or following sale of a
class of voting securities comprising a majority of the voting rights in
Borrower through an initial public offering, or a change in senior management
from that existing as of the date of this Agreement.
8.3 Reporting Requirements.
The Borrower covenants and agrees that until payment in full of the
Loans, including interest thereon, and satisfaction of all of the Borrower'
other Obligations hereunder and under the other Loan Documents, the Borrower
will furnish or cause to be furnished to the Bank:
8.3.1 Quarterly Financial Statements.
As soon as available and in any event within forty-five (45) calendar
days after the end of each of the first three fiscal quarters in each fiscal
year, financial statements of the Borrower, consisting of a consolidated and
consolidating balance sheet as of the end of such fiscal quarter and related
consolidated and consolidating statements of income, retained earnings,
stockholders' equity and cash flows for the fiscal quarter then ended and the
fiscal year through that date, all in reasonable detail and certified (subject
to normal year-end audit adjustments) by the Chief Executive Officer, President
or Chief Financial Officer of the Borrower as having been prepared in accordance
with GAAP, consistently applied, and setting forth in comparative form the
respective financial statements for the corresponding date and period in the
previous fiscal year.
8.3.2 Annual Financial Statements.
As soon as available and in any event within ninety (90) days after the
end of each fiscal year of the Borrower, financial statements of the Borrower
consisting of a consolidated and consolidating balance sheet as of the end of
such fiscal year, and related consolidated and consolidating statements of
income, retained earnings, stockholders' equity and cash flows for the fiscal
year then ended, all in reasonable detail and setting forth in comparative form
the financial statements as of the end of and for the preceding fiscal year, and
certified by independent certified public accountants of nationally recognized
standing satisfactory to the Bank. The certificate or report of accountants
shall be free of qualifications (other than any consistency qualification that
may result from a change in the method used to prepare the financial statements
as to which such accountants concur or any qualification that the Bank may, its
sole discretion, waive as not being material to the financial condition,
management or accounting capabilities or business operations of the Borrower)
and shall not indicate the occurrence or existence of any event, condition or
contingency which would materially impair the prospect of payment or performance
of any covenant, agreement or duty of any Borrower
52
under any of the Loan Documents. The Borrower shall deliver with such financial
statements and certification by its accountants a letter of such accountants to
the Bank substantially (i) to the effect that, based upon their ordinary and
customary examination of the affairs of the Borrower, performed in connection
with the preparation of such consolidated financial statements, and in
accordance with generally accepted auditing standards, they are not aware of the
existence of any condition or event which constitutes an Event of Default or
Potential Default or, if they are aware of such condition or event, stating the
nature thereof and confirming the Borrower's calculations with respect to the
certificate to be delivered pursuant to Section 8.3.3 with respect to such
financial statements and (ii) to the effect that the Bank is intended to rely
upon such accountant's certification of the annual financial statements and that
such accountants authorize the Borrower to deliver such reports and certificate
to the Bank on such accountant's behalf.
8.3.3 Certificate of the Borrower.
Concurrently with the financial statements of the Borrower furnished to
the Bank pursuant to Sections 8.3.1 and 8.3.2, a certificate of the Borrower
signed by the Chief Executive Officer, President or Chief Financial Officer of
the Borrower, in form acceptable to the Bank, to the effect that, except as
described pursuant to Section 8.3.4, (i) the representations and warranties of
the Borrower contained in Article 6 and in the other Loan Documents are true on
and as of the date of such certificate with the same effect as though such
representations and warranties had been made on and as of such date (except
representations and warranties which expressly relate solely to an earlier date
or time) and the Borrower has performed and complied with all covenants and
conditions hereof, (ii) no Event of Default or Potential Default exists and is
continuing on the date of such certificate and (iii) containing calculations in
sufficient detail to demonstrate compliance as of the date of such financial
statements with all financial covenants contained in Section 8.2.
8.3.4 Notice of Default.
Promptly after any officer of any Borrower has learned of the occurrence
of an Event of Default or Potential Default, a certificate signed by the Chief
Executive Officer, President or Chief Financial Officer of such Borrower setting
forth the details of such Event of Default or Potential Default and the action
which the such Borrower proposes to take with respect thereto.
8.3.5 Notice of Litigation.
Promptly after the commencement thereof, notice of all actions, suits,
proceedings or investigations before or by any Official Body or any other Person
against any Borrower or Subsidiary of any Borrower, involve a claim or series of
claims in excess of $500,000 or, which if adversely determined, would constitute
a Material Adverse Change.
53
8.3.6 Budgets, Forecasts, Other Reports and Information.
Promptly upon their becoming available to the Borrower:
(i) the annual budget and any forecasts or projections of the
Borrower, to be supplied not later than thirty (30) days prior to commencement
of the fiscal year to which any of the foregoing may be applicable,
(ii) any reports including management letters submitted to the
Borrower by independent accountants in connection with any annual,
interim or special audit,
(iii) any reports, notices or proxy statements generally distributed
by the Borrower to its stockholders on a date no later than the date
supplied to such stockholders,
(iv) regular or periodic reports, including Forms 10-K, 10-Q and 8-K,
registration statements and prospectuses, filed by the Borrower with the
Securities and Exchange Commission,
(v) a copy of any order in any proceeding to which the Borrower or
any of its Subsidiaries is a party issued by any Official Body, and
(vi) such other reports and information as any of the Bank may from
time to time reasonably request. The Borrower shall also notify the Bank
promptly of the enactment or adoption of any Law which may result in a Material
Adverse Change.
8.3.7 Notices Regarding Plans and Benefit Arrangements.
8.3.7.1 Certain Events.
Promptly upon becoming aware of the occurrence thereof, notice
(including the nature of the event and, when known, any action taken or
threatened by the Internal Revenue Service or the PBGC with respect thereto) of:
(i) any Reportable Event with respect to the Borrower or any other
member of the ERISA Group (regardless of whether the obligation to report said
Reportable Event to the PBGC has been waived),
(ii) any Prohibited Transaction which could subject the Borrower or
any other member of the ERISA Group to a civil penalty assessed pursuant
to Section 502(i) of ERISA or a tax imposed by Section 4975 of the Internal
Revenue Code in connection with any Plan, any Benefit Arrangement or any trust
created thereunder,
54
(iii) any assertion of material withdrawal liability with respect to
any Multiemployer Plan,
(iv) any partial or complete withdrawal from a Multiemployer Plan by
the Borrower or any other member of the ERISA Group under Title IV of ERISA (or
assertion thereof), where such withdrawal is likely to result in material
withdrawal liability,
(v) any cessation of operations (by the Borrower or any other member
of the ERISA Group) at a facility in the circumstances described in Section
4062(e) of ERISA,
(vi) withdrawal by the Borrower or any other member of the ERISA
Group from a Multiple Employer Plan,
(vii) a failure by the Borrower or any other member of the ERISA
Group to make a payment to a Plan required to avoid imposition of a Lien under
Section 302(f) of ERISA,
(viii) the adoption of an amendment to a Plan requiring the provision
of security to such Plan pursuant to Section 307 of ERISA, or
(ix) any change in the actuarial assumptions or funding methods used
for any Plan, where the effect of such change is to materially increase or
materially reduce the unfunded benefit liability or obligation to make periodic
contributions.
8.3.7.2. Notices of Involuntary Termination and Annual Reports.
Promptly a receipt thereof, copies of (a) all notices received by the
Borrower or any other member of the ERISA Group of the PBGC's intent to
terminate any Plan administered or maintained by the Borrower or any member of
the ERISA Group, or to have a trustee appointed to administer any such Plan; and
(b) at the request of the Bank each annual report (IRS Form 5500 series) and all
accompanying schedules, the most recent actuarial reports, the most recent
financial information concerning the financial status of each Plan administered
or maintained by the Borrower or any other member of the ERISA Group, and
schedules showing the amounts contributed to each such Plan by or on behalf of
the Borrower or any other member of the ERISA Group in which any of their
personnel participate or from which such personnel may derive a benefit, and
each Schedule B (Actuarial Information) to the annual report filed by the
Borrower or any other member of the ERISA Group with the Internal Revenue
Service with respect to each such Plan.
55
8.3.7.3 Notice of Voluntary Termination.
Promptly upon the filing thereof, copies of any Form 5310, or any
successor or equivalent form to Form 5310, filed with the PBGC in connection
with the termination of any Plan.
8.3.7.4 Applicable Margin Certificate
For purposes of calculation of the Applicable Margin for the Euro-
Rate Option pursuant to Sections 4.1.1 and 4. 1.2, Borrower shall provide
to Bank a certificate, in form and content acceptable to the Bank, within thirty
(30) days from the end of each fiscal quarter of Borrower (the "Applicable
Margin Certificate") showing Borrower's calculation of the EBITDA Ratio as of
the end of such fiscal quarter. Such calculation shall be subject to
verification by Bank, and Bank's verifying calculation of the EBITDA Ratio shall
be final and conclusive.
9. DEFAULT
9.1 Events of Default.
An Event of Default shall mean the occurrence or existence of any one or
more of the following events or conditions (whatever the reason therefor and
whether voluntary, involuntary or effected by operation of Law):
9.1.1 Payments Under Loan Documents.
The Borrower shall fail to pay (i) any principal of any Loan (including
scheduled installments, mandatory prepayments or the payment due at maturity),
when such principal is due hereunder or (ii) any interest on any Loan, Borrowing
Tranche or any other amount owing hereunder or under the other Loan Documents
after such interest or other amount becomes due in accordance with the terms
hereof or thereof;
9.1.2 Breach of Warranty.
Any representation or warranty made at any time by the Borrower herein
or by the Borrower in any other Loan Document, or in any certificate, other
instrument or statement furnished pursuant to the provisions hereof or thereof,
shall prove to have been false or misleading in any material respect as of the
time it was made or furnished;
56
9.1.3 Breach of Negative Covenants or Visitation Rights.
The Borrower shall default in the observance or performance of any
covenant contained in Section 8.1.6 or Section 8.2;
9.1.4 Breach of Other Covenants.
The Borrower shall default in the observance or performance of any other
covenant, condition or provision hereof or of any other Loan Document and such
default shall continue unremedied for a period of ten (10) Business Days after
any officer of Borrower becomes aware of the occurrence thereof (such grace
period to be applicable only in the event such default can be remedied by
corrective action of the Borrower as determined by the Bank in its sole
discretion);
9.1.5 Defaults in Other Agreements or Indebtedness.
A default or event of default shall occur at any time under the terms of
any other agreement involving borrowed money or the extension of credit or any
other Indebtedness under which any Borrower or Subsidiary of any Borrower may be
obligated as a borrower or guarantor in excess of $500,000 in the aggregate, and
such breach, default or event of default consists of the failure to pay (beyond
any period of grace permitted with respect thereto, whether waived or not) any
indebtedness when due (whether at stated maturity, by acceleration or otherwise)
or if such breach or default permits or causes the acceleration of any
indebtedness (whether or not such right shall have been waived) or the
termination of any commitment to lend;
9.1.6 Final Judgments or Orders.
Any final judgments or orders for the payment of money in excess of
$500,000 in the aggregate shall be entered against any Borrower by a court
having jurisdiction in the premises, which judgment is not discharged, vacated,
bonded or stayed pending appeal within a period of thirty (30) days from the
date of entry;
9.1.7 Loan Document Unenforceable.
Any of the Loan Documents shall cease to be legal, valid and binding
agreements enforceable against the party executing the same or such party's
successors and assigns (as permitted under the Loan Documents) in accordance
with the respective terms thereof or shall in any way be terminated (except in
accordance with its terms) or become or be declared ineffective or inoperative
or shall in any way be challenged or contested or cease to give or provide the
57
respective Liens, security interests, rights, titles, interests,
remedies, powers or privileges intended to be created thereby;
9.1.8 Uninsured Losses: Proceedings Against Assets.
There shall occur any material uninsured damage to or loss, theft or
destruction of any of the Borrower's or any Subsidiary's Property in excess of
$500,000 or any of the Borrower's or any of its Subsidiaries assets are
attached, seized, levied upon or subjected to a writ or distress warrant; or
such come within the possession of any receiver, trustee, custodian or assignee
for the benefit of creditors and the same is not cured within thirty (30) days
thereafter;
9.1.9 Notice of Lien or Assessment.
A notice of Lien or assessment which is not a Permitted Lien is filed of
record with respect to all or any part of any of the Borrower's or any of its
Subsidiaries' assets by the United States, or any department, agency or
instrumentality thereof, or by any state, county, municipal or other
governmental agency, including the PBGC, or any taxes or debts owing at any time
or times hereafter to any one of these becomes payable and the same is not paid
within thirty (30) days after the same becomes payable;
9.1.10 Insolvency.
The Borrower or any Subsidiary of the Borrower ceases to be solvent or
admits in writing its inability to pay its debts as they mature;
9.1.11 Events Relating to Plans and Benefit Arrangements.
Any of the following occurs: (i) any Reportable Event, which the Bank
determines in good faith constitutes grounds for the termination of any Plan by
the PBGC or the appointment of a trustee to administer or liquidate any Plan,
shall have occurred and be continuing; (ii) proceedings shall have been
instituted or other action taken to terminate any Plan, or a termination notice
shall have been fled with respect to any Plan; (iii) a trustee shall be
appointed to administer or liquidate any Plan; (iv) the PBGC shall give notice
of its intent to institute proceedings to terminate any Plan or Plans or to
appoint a trustee to administer or liquidate any Plan; and, in the case of the
occurrence of (i), (ii), (iii) or (iv) above, the Bank determines in good faith
that the amount of the Borrower's liability is likely to exceed 10% of its
Consolidated Tangible Net Worth; (v) the Borrower or any member of the ERISA
Group shall fail to make any contributions when due to a Plan or a Multiemployer
Plan; (vi) the Borrower or any other member of the ERISA Group shall make any
amendment to a Plan with respect to which security is required under Section 307
of ERISA; (vii) the Borrower or any other member
58
of the ERISA Group shall withdraw completely or partially from a Multiemployer
Plan, (viii) the Borrower or any other member of the ERISA Group shall withdraw
(or shall be deemed under Section 4062(e) of ERISA to withdraw) from a Multiple
Employer Plan; or (ix) any applicable Law is adopted, changed or interpreted by
any Official Body with respect to or otherwise affecting one or more Plans,
Multiemployer Plans or Benefit Arrangements and, with respect to any of the
events specified in (v), (vi), (vii), (viii) or (ix), the Bank determines in
good faith that any such occurrence would be reasonably likely to materially and
adversely affect the total enterprise represented by the Borrower and the other
members of the ERISA Group;
9.1.12 Cessation of Business.
The Borrower or any Subsidiary of the Borrower ceases to conduct its
business as contemplated, except as expressly permitted under Section 8.2.6 or
8.2.7 or the Borrower or Subsidiary of the Borrower is enjoined, restrained or
in any way prevented by court order from conducting all or any material part of
its business and such injunction, restraint or other preventive order is not
dismissed within thirty (30) days after the entry thereof;
9.1.13 Change of Control.
(i) Any person or group of persons (within the meaning of Sections 13(d)
or 14(a) of the Securities Exchange Act of 1934, as amended) shall have acquired
beneficial ownership of (within the meaning of Rule 13d-3 promulgated by the
Securities and Exchange Commission under said Act) (A) 10% or more of the voting
capital stock or other equity interests in the Borrower, excluding, however,
such beneficial ownership, if any, by existing shareholders of Borrower as of
the date hereof or (B) 20% or more of the voting capital stock or other equity
interests in Borrower in connection with or following sale of a class of voting
securities comprising a majority of the voting rights in Borrower through an
initial public offering, or (ii) within a period of twelve (12) consecutive
calendar months, individuals comprising 25% or more of the Board of Directors of
the Borrower on the first day of such period shall cease to be directors of the
Borrower;
9.1.14 Involuntary Proceedings.
A proceeding shall have been instituted in a court having jurisdiction
in the premises seeking a decree or order for relief in respect of the Borrower
or Subsidiary of the Borrower in an involuntary case under any applicable
bankruptcy, insolvency, reorganization or other similar law now or hereafter in
effect, or for the appointment of a receiver, liquidator, assignee, custodian,
trustee, sequestrator, conservator (or similar official) of the Borrower or
Subsidiary of the Borrower for any substantial part of its property, or for the
winding-up or liquidation of its affairs, and such proceeding shall remain
undismissed or unstayed and in effect for a period of thirty (30) consecutive
days or such court shall enter a decree or order granting any of the relief
sought in such proceeding; or
59
9.1.15 Voluntary Proceedings.
The Borrower or Subsidiary of the Borrower shall commence a voluntary
case under any applicable bankruptcy, insolvency, reorganization or other
similar law now or hereafter in effect, shall consent to the entry of an order
for relief in an involuntary case under any such law, or shall consent to the
appointment or taking possession by a receiver, liquidator, assignee, custodian,
trustee, sequestrator, conservator (or other similar official) of itself or for
any substantial part of its property or shall make a general assignment for the
benefit of creditors, or shall fail generally to pay its debts as they become
due, or shall take any action in furtherance of any of the foregoing.
9.2 Consequences of Event of Default.
9.2.1 Events of Default Other Than Bankruptcy, Insolvency or
Reorganization Proceedings.
If an Event of Default specified under Sections 9.1.1 through 9.1.13
shall occur and be continuing, the Bank shall be under no further obligation to
make Revolving Line Advances or Reducing Revolving Line Advances, as the case
may be, and the Bank may, in addition to all other rights and remedies available
to Bank under the other Loan Documents or at law or in equity, by written notice
to the Borrower, declare the unpaid principal amount of the Notes then
outstanding and all interest accrued thereon, any unpaid fees and all other
Indebtedness of the Borrower to the Bank hereunder and thereunder to be
forthwith due and payable, and the same shall thereupon become and be
immediately due and payable to the Bank without presentment, demand, protest or
any other notice of any kind, all of which are hereby expressly waived; and
9.2.2 Bankruptcy, Insolvency or Reorganization Proceedings.
If an Event of Default specified under Section 9.1.14 or 9.1.15 shall
occur, the Bank shall be under no further obligations to make Revolving Line
Advances or Reducing Revolving Line Advances under the Loans hereunder and the
unpaid principal amount of the Loans then outstanding and all interest accrued
thereon, any unpaid fees and all other Indebtedness of the Borrower to the Bank
hereunder and thereunder shall be immediately due and payable, without
presentment, demand, protest or notice of any kind, all of which are hereby
expressly waived; and
60
9.2.3 Set-off.
If an Event of Default shall occur and be continuing, the Bank shall
have the right, in addition to all other rights and remedies available to it,
without notice to such Borrower, to set-off against and apply to the then unpaid
balance of all the Loans and all other Obligations of the Borrower hereunder or
under any other Loan Document any debt owing to, and any other funds held in any
manner for the account of, the Borrower including all funds in all deposit
accounts (whether time or demand, general or special, provisionally credited or
finally credited, or otherwise) now or hereafter maintained by the Borrower for
its own account (but not including funds held in custodian or trust accounts)
with the Bank. Such right shall exist whether or not the Bank shall have made
any demand under this Agreement or any other Loan Document, whether or not such
debt owing to or funds held for the account of the Borrower is or are matured or
unmatured and regardless of the existence or adequacy of any Guaranty or any
other security, right or remedy available to the Bank; and
9.2.4 Suits, Actions, Proceedings.
If an Event of Default shall occur and be continuing, and whether or not
the Bank shall have accelerated the maturity of the Loans pursuant to any of the
foregoing provisions of this Section 9.2, the Bank may proceed to protect and
enforce its rights by suit in equity, action at law and/or other appropriate
proceeding, whether for the specific performance of any covenant or agreement
contained in this Agreement or the other Loan Documents, including as permitted
by applicable Law the obtaining of the exparte appointment of a receiver, and,
if such amount shall have become due, by declaration or otherwise, proceed to
enforce the payment thereof or any other legal or equitable right of the Bank;
and
9.2.5 Application of Proceeds.
From and after the date on which the Bank has taken any action pursuant
to this Section 9.2 and until all Obligations of the Borrower have been paid in
full, any and all proceeds received by the Bank from the exercise of any remedy
by the Bank, shall be applied as follows:
(i) first, to reimburse the Bank for out-of-pocket costs, expenses
and disbursements, including reasonable attorneys' and paralegals' fees
and legal expenses, incurred by the Bank in connection with collection of any
Obligations of the Borrower under any of the Loan Documents, including advances
made by the Bank for the reasonable maintenance, preservation, protection or
enforcement of, or realization upon, any Property of the Borrower seized by the
Bank in execution or given as collateral, including advances for taxes,
insurance, repairs and the like and reasonable expenses incurred to sell or
otherwise realize on, or prepare for sale or other realization on, any Property;
61
(ii) second, to the repayment of all Indebtedness then due and unpaid
of the Borrower to the Bank incurred under this Agreement or any of the
other Loan Documents, whether of principal, interest, fees, expenses or
otherwise, in such manner as the Bank may determine in its discretion; and
(iii) the balance, if any, as required by Law.
9.2.6 Other Rights and Remedies.
In addition to all of the rights and remedies contained in this
Agreement or in any of the other Loan Documents, the Bank shall have all of the
rights and remedies under applicable Law, all of which rights and remedies shall
be cumulative and nonexclusive, to the extent permitted by Law. The Bank may
exercise all post-default rights granted to the Bank under the Loan Documents or
applicable Law.
10. THE BANK
10.1 Reimbursement and Indemnification of Bank by the Borrower.
The Borrower unconditionally agrees to pay or reimburse the Bank and hold
the Bank harmless against (a) liability for the payment of all reasonable
out-of-pocket costs, expenses and disbursements, including fees and expenses of
counsel (including the allocated costs of staff counsel), appraisers and
environmental consultants, incurred by the Bank (i) in connection with the
development, negotiation, preparation, printing, execution, administration,
interpretation and performance of this Agreement and the other Loan Documents,
(ii) relating to any requested amendments, waivers or consents pursuant to the
provisions hereof, (iii) in connection with the enforcement of this Agreement or
any other Loan Document or collection of amounts due hereunder or thereunder or
the proof and allowability of any claim arising under this Agreement or any
other Loan Document, whether in bankruptcy or receivership proceedings or
otherwise, and (iv) in any workout or restructuring or in connection with the
protection, preservation, exercise or enforcement of any of the terms hereof or
of any rights hereunder or under any other Loan Document or in connection with
any foreclosure, collection or bankruptcy proceedings, and (b) all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by or asserted against the Bank, in its capacity as such, in any
way relating to or arising out of this Agreement or any other Loan Documents or
any action taken or omitted by the Bank hereunder or thereunder, provided that
the Borrower shall not be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements if the same results from the Bank's gross negligence
or willful misconduct, or if the Borrower was not given notice of the subject
claim and the opportunity to participate in the
62
defense thereof, at its expense (except that the Borrower shall remain liable to
the extent such failure to give notice does not result in a loss to the
Borrower), or if the same results from a compromise or settlement agreement
entered into without the consent of the Borrower, which shall not be
unreasonably withheld. In addition, the Borrower agrees to reimburse and pay all
reasonable out-of-pocket expenses of the Bank's regular employees and outside
accountants of Bank engaged following an Event of Default to perform audits of
the Borrower's books, records and business properties.
10.2 Exculpatory Provisions: Limitation of Liability.
Neither the Bank nor any of its directors, officers, employees, agents,
attorneys or Subsidiaries shall (a) be liable to Borrower for any action taken
or omitted to be taken by it or them hereunder, or in connection herewith
including pursuant to any Loan Document, unless caused by its or their own gross
negligence or willful misconduct, or (b) be responsible in any manner to any of
the Borrower for the effectiveness, enforceability, genuineness, validity or the
due execution of this Agreement or any other Loan Documents or for any recital,
representation, warranty, document, certificate, report or statement herein or
made or furnished under or in connection with this Agreement or any other Loan
Documents. No claim may be made by any of the Borrower, or any Subsidiary
against the Bank, or any of their respective directors, officers, employees,
agents, attorneys or Subsidiaries, or any of them, for any special, indirect or
consequential damages or, to the fullest extent permitted by Law, for any
punitive damages in respect of any claim or cause of action (whether based on
contract, tort, statutory liability, or any other ground) based on, arising out
of or related to any Loan Document or the transactions contemplated hereby or
any act, omission or event occurring in connection therewith, including the
negotiation, documentation, administration or collection of the Loans, and the
Borrower, (for itself and on behalf of each of its Subsidiaries) hereby waives,
releases and agrees never to ▇▇▇ upon any claim for any such damages, whether
such claim now exists or hereafter arises and whether or not it is now known or
suspected to exist in its favor.
10.3 Reliance by Bank.
The Bank shall be entitled to rely upon any writing, telegram, telex or
teletype message, resolution, notice, consent, certificate, letter, cablegram,
statement, order or other document or conversation by telephone or otherwise
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person or Persons, and upon the advice and opinions of counsel and
other professional advisers selected by the Bank. The Bank shall be fully
justified in failing or refusing to take any action hereunder unless it shall
first be indemnified to its satisfaction by the Bank against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action.
63
10.4 Notice of Default.
The Bank shall not be deemed to have knowledge or notice of the
occurrence of any Potential Default or Event of Default unless the Bank has
received written notice from the Borrower referring to this Agreement,
describing such Potential Default or Event of Default and stating that such
notice is a "notice of default."
11. MISCELLANEOUS
11.1 Modifications. Amendments or Waivers.
The Bank and the Borrower may from time to time enter into written
agreements amending or changing any provision of this Agreement or any other
Loan Document or the rights of the Bank or the Borrower hereunder or thereunder,
or may grant written waivers or consents to a departure from the due performance
of the Obligations of the Borrower hereunder or thereunder. Any such agreement,
waiver or consent made with such written consent shall be effective to bind all
the Bank and the Borrower.
11.2 No Implied Waivers; Cumulative Remedies; Writing Required.
No course of dealing and no delay or failure of the Bank in exercising
any right, power, remedy or privilege under this Agreement or any other Loan
Document shall affect any other or future exercise thereof or operate as a
waiver thereof, nor shall any single or partial exercise thereof or any
abandonment or discontinuance of steps to enforce such a right, power, remedy or
privilege preclude any further exercise thereof or of any other right, power,
remedy or privilege. The rights and remedies of the Bank under this Agreement
and any other Loan Documents are cumulative and not exclusive of any rights or
remedies which they would otherwise have. Any waiver, permit, consent or
approval of any kind or character on the part of the Bank of any breach or
default under this Agreement or any such waiver of any provision or condition of
this Agreement must be in writing and shall be effective only to the extent
specifically set forth in such writing.
11.3 Holidays.
Whenever payment of a Loan to be made or taken hereunder shall be due on
a day which is not a Business Day such payment shall be due on the next Business
Day and such extension of time shall be included in computing interest and fees,
except that the Loans shall be due on the Business Day preceding the Expiration
Date if the Expiration Date is not a Business Day. Whenever any payment or
action to be made or taken hereunder (other than payment of the
64
Loans) shall be stated to be due on a day which is not a Business Day, such
payment or action shall be made or taken on the next following Business Day
(except as provided in Section 4.2 with respect to Interest Periods under the
Euro-Rate Option), and such extension of time shall not be included in computing
interest or fees, if any, in connection with such payment or action.
11.4 Funding by Branch Subsidiary or Affiliate.
11.4.1 Notional Funding.
Bank shall have the right from time to time, without notice to the
Borrower, to deem any branch, Subsidiary or Affiliate (which for the purposes of
this Section 11.4 shall mean any corporation or association which is directly or
indirectly controlled by or is under direct or indirect common control with any
corporation or association which directly or indirectly controls such Bank) of
such Bank to have made, maintained or funded any Loan to which the Euro-Rate
Option applies at any time, provided that immediately following (on the
assumption that a payment were then due from the Borrower to such other office),
and as a result of such change, the Borrower would not be under any greater
financial obligation pursuant to Section 5.4 than it would have been in the
absence of such change. Notional funding offices may be selected by each Bank
without regard to such Bank's actual methods of making, maintaining or funding
the Loans or any sources of funding actually used by or available to such Bank.
11.4.2 Actual Funding.
Bank shall have the right from time to time to make or maintain any Loan
by arranging for a branch, Subsidiary or Affiliate of Bank to make or maintain
such Loan subject to the last sentence of this Section 11.4.2. If Bank causes a
branch, Subsidiary or Affiliate to make or maintain any part of the Loans
hereunder, all terms and conditions of this Agreement shall, except where the
context clearly requires otherwise, be applicable to such part of the Loans to
the same extent as if such Loans were made or maintained by Bank, but in no
event shall Bank's use of such a branch, Subsidiary or Affiliate to make or
maintain any part of the Loans hereunder cause Bank or such branch, Subsidiary
or Affiliate to incur any cost or expenses payable by the Borrower hereunder or
require the Borrower to pay any other compensation to Bank (including any
expenses incurred or payable pursuant to Section 5.4) which would otherwise not
be incurred.
65
11.5 Notices: Lending Offices.
All notices, requests, demands, directions and other communications (as
used in this Section 11.5, collectively referred to as "notices") given to or
made upon any party hereto under the provisions of this Agreement shall be by
telephone or in writing (including telex or facsimile communication) unless
otherwise expressly permitted hereunder and shall be delivered or sent by telex
or facsimile to the respective parties at the addresses and numbers set forth
under their respective names on Schedule 1.1(B) hereof or in accordance with
any subsequent unrevoked written direction from any party to the others. All
notices shall, except as otherwise expressly herein provided, be effective (a)
in the case of telex or facsimile, when received, (b) in the case of
hand-delivered notice, when hand-delivered, (c) in the case of telephone, when
telephoned, provided, however, that in order to be effective, telephonic notices
must be confirmed in writing no later than the next day by letter, facsimile or
telex, (d) if given by mail, four (4) days after such communication is deposited
in the mail with first-class postage prepaid, return receipt requested, and (e)
if given by any other means (including by air courier), when delivered;
provided, that notices to the Bank shall not be effective until received.
11.6 Severability.
The provisions of this Agreement are intended to be severable. If any
provision of this Agreement shall be held invalid or unenforceable in whole or
in part in any jurisdiction, such provision shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without in any
manner affecting the validity or enforceability thereof in any other
jurisdiction or the remaining provisions hereof in any jurisdiction.
11.7 Governing Law.
This Agreement shall be deemed to be a contract under the Laws of the
Commonwealth of Pennsylvania and for all purposes shall be governed by and
construed and enforced in accordance with the internal laws of the Commonwealth
of Pennsylvania without regard to its conflict of laws principles.
11.8 Prior Understandings.
This Agreement and the other Loan Documents supersede all prior
understandings and agreements, whether written or oral, between the parties
hereto and thereto relating to the transactions provided for herein and therein.
66
11.9 Duration: Survival.
All representations and warranties of the Borrower contained herein or
made in connection herewith shall survive the making of Loans and shall not be
waived by the execution and delivery of this Agreement, any investigation by the
Bank or the Bank, the making of Loans, or payment in full of the Loans. All
covenants and agreements of the Borrower contained in Sections 8.1 [Affirmative
Covenants], 8.2 [Negative Covenants] and 8.3 [Reporting Requirements] herein
shall continue in full force and effect from and after the date hereof so long
as the Borrower may borrow hereunder and payment in full of the Loans. All
covenants and agreements of the Borrower contained herein relating to the
payment of principal, interest, premiums, additional compensation or expenses
and indemnification, including those set forth in the Notes, Section 5
[Payments] and Sections 10.1 [Reimbursement of Bank by Borrower, Etc.], shall
survive payment in full of the Loans.
11.10 Successors and Assigns.
(i) This Agreement shall be binding upon and shall inure to the benefit
of the Bank, the Borrower and their respective successors and assigns, except
that the Borrower may not assign or transfer any of its rights and Obligations
hereunder or any interest herein. Bank may, at its own cost, make assignments of
or sell participations in all or any part of the Loans or Borrowing Tranches
made by it to one or more banks or other entities. In the case of a
participation, the participant shall only have the rights specified in Section
9.2.3 (the participant's rights against Bank in respect of such participation to
be those set forth in the agreement executed by such Bank in favor of the
participant relating thereto), all of Bank's obligations under this Agreement or
any other Loan Document shall remain unchanged, and all amounts payable by
Borrower hereunder or thereunder shall be determined as if Bank had not sold
such participation.
(ii) Notwithstanding any other provision in this Agreement, the Bank may
at any time pledge or grant a security interest in all or any portion of its
rights under this Agreement, the Notes and the other Loan Documents to any
Federal Reserve Bank in accordance with Regulation A of the FRB or U.S. Treasury
Regulation 31 CFR Section 203.14 without notice to or consent of the Borrower.
No such pledge or grant of a security interest shall release the transferor Bank
of its obligations hereunder or under any other Loan Document.
11.11 Counterparts.
This Agreement may be executed by different parties hereto on any number
of separate counterparts, each of which, when so executed and delivered, shall
be an original, and all such counterparts shall together constitute one and the
same instrument.
67
11.12 Bank's or Bank's Consent.
Whenever the Bank's consent is required to be obtained under this
Agreement or any of the other Loan Documents as a condition to any action,
inaction, condition or event, the Bank shall be authorized to give or withhold
such consent in its sole and absolute discretion and to condition its consent
upon the giving of additional collateral, the payment of money or any other
matter.
11.13 Exceptions.
The representations, warranties and covenants contained herein shall be
independent of each other, and no exception to any representation, warranty or
covenant shall be deemed to be an exception to any other representation,
warranty or covenant contained herein unless expressly provided, nor shall any
such exceptions be deemed to permit any action or omission that would be in
contravention of applicable Law.
11.14 CONSENT TO FORUM.
BORROWER HEREBY IRREVOCABLY CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF THE
COURT OF COMMON PLEAS OF CENTRE COUNTY, PENNSYLVANIA AND THE UNITED STATES
DISTRICT COURT FOR THE MIDDLE DISTRICT OF PENNSYLVANIA, AND WAIVES PERSONAL
SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF
PROCESS BE MADE BY CERTIFIED OR REGISTERED MAIL DIRECTED TO SUCH BORROWER AT
THE ADDRESSES PROVIDED FOR IN SECTION 11.5 AND SERVICE SO MADE SHALL BE DEEMED
TO BE COMPLETED UPON ACTUAL RECEIPT THEREOF. BORROWER WAIVES ANY OBJECTION TO
JURISDICTION AND VENUE OF ANY ACTION INSTITUTED AGAINST IT AS PROVIDED HEREIN
AND AGREES NOT TO ASSERT ANY DEFENSE BASED ON LACK OF JURISDICTION OR VENUE.
68
IN WITNESS WHEREOF the parties hereto, by their officers thereunto duly
authorized, have executed this Agreement as of the day and year first above
written.
ATTEST: AQUAPENN SPRING WATER
COMPANY, INC.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------------ --------------------------------
Title: Chief Operating Officer
[Seal]
PNC BANK, NATIONAL ASSOCIATION
By: (Signature illegible)
--------------------------------
Title: Senior Vice President
69
SCHEDULE 1.1(A)
PRICING GRID
SCHEDULE l.l(A)
EXHIBIT I
December 22, 1997
PNC Bank, N.A.
Pricing Grid
AquaPenn Spring Water Company, Inc.
-----------------------------------------------------------------------------------------------
▇▇▇▇▇ ▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇
-----------------------------------------------------------------------------------------------
Basis for Total Indebtedness/ Total Indebtedness/ Total Indebtedness/ Total Indebtedness/
Pricing EBITDA ratio is EBITDA ratio is EBITDA ratio is EBITDA ratio is
less than or equal less than or equal less than or equal less than or equal
to 1.00 to 1.00. to 1.50 to 1.00. to 2.00 to 1.00. to 2.50 to 1.00.
-----------------------------------------------------------------------------------------------
Commitment 20 25 30 35
Fee (bps)
-----------------------------------------------------------------------------------------------
LIBOR plus 75 95 115 135
(bps)
-----------------------------------------------------------------------------------------------
Base Rate plus 0 0 0 0
(bps)
-----------------------------------------------------------------------------------------------
----------------------------------------
LEVEL V LEVEL VI
----------------------------------------
Total Indebtedness/ Total Indebtedness/
EBITDA ratio is EBITDA ratio is
less than or equal less than or equal
to 3.00 to 1.00. to 4.00 to 1.00.
----------------------------------------
40 45
----------------------------------------
150 165
----------------------------------------
0 15
----------------------------------------
If the ratio of Total Liabilities to Tangible New Worth is 1.0 to 1.0 or
less, the applicable rate at Levels IV, V, and VI will be reduced by 10 basis
points.
Total Indebtedness = Company's consolidated long and short term indebtedness for
borrowed money including subordinated indebtedness in which cash interest in
contractually payable, capital leases, guarantees, and letters of credit issued.
EBITDA=net income (before extraordinary items) plus income tax expense, interest
expense, depreciation and amortization expense.
Base Rate=PNC prime rate or fed funds plus 1/2 %.
SCHEDULE 1.1(B)
NOTICES
SCHEDULE 1.1(B)
NOTICES
Bank: PNC Bank, National Association
Central PA Market
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esquire
▇▇▇▇▇▇▇▇ Ingersoll
▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Borrower: AquaPenn Spring Water Company, Inc.
▇.▇. ▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esquire
McQuaide, Blasko, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
SCHEDULE 1.1(P)
PERMITTED LIENS
SCHEDULE 1.1(P)
PERMITTED LIENS
Number 92-812 Filed 7/2/92
Secured Party: E.N. ▇▇▇▇▇▇, Inc.
Debtor: AquaPenn Spring Water Company, Inc.
Covers: Copier, cabinet, etc.
Number 92-968 Filed 8/11/92
Secured Party: ▇▇▇▇▇ Credit Corp.
Debtor AquaPenn Spring Water Company, Inc.
Covers: ▇▇▇▇▇ model TM 25, etc.
Number 93-519 Filed 8/3/93
Secured Party: Siemens Credit Corp.
Debtor AquaPenn Spring Water Company, Inc.
Covers: Equipment, etc.
Number 94-803 Filed 9/10/96
Secured Party: Farmers National
Debtor AquaPenn Spring Water Company, Inc.
Covers: Powerworker, etc.
Number 94-977 Filed 11/7/94
Secured Party: Forklifts, Inc.
Debtor AquaPenn Spring Water Company, Inc.
Covers: Equipment, etc.
SCHEDULE 6.1.2
ISSUED AND OUTSTANDING STOCK
AquaPenn Spring Water Company, Inc.
COMMON SHAREHOLDERS
--------------------------------------------------------------------------------
Shareholder Name/Address No. of Shares
--------------------------------------------------------------------------------
Adicus, L.P. 15,000
c/o ▇▇▇▇▇▇▇ ▇. & ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
PERSONAL AND CONFIDENTIAL
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 1,770(pledged)
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇. ▇. ▇▇▇▇▇▇▇▇ & Sons, Inc. 36,000
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. Arbor 36,000
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ASW Investors 190,600
c/o ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, III
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Aqua Works, Inc. 2,870,000
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 2,400
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 36,000
c/o B E G Enterprises
▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 4,500
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Family Trust 36,000
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇ 26,000
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 4,291(pledged)
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ 9,397(pledged)
▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Booth & Co. (▇▇▇▇ ▇▇▇▇▇) 36,000
TI #▇▇-▇▇▇▇▇▇▇
c/o The Northern Trust Company
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
C. ▇▇▇▇ ▇▇▇▇▇▇ 3,164
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 5,000
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇ ▇▇▇▇▇▇▇, husband and wife 3,000
▇▇-▇▇ ▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ 3,000
▇/▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ 8,280(pledged)
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ 6,000
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
CDW Co. Partnership 36,000
c/o ▇▇▇▇▇▇▇ ▇▇▇▇, Partner
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Centre Lime & Stone 18,000
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 300
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ Family Fund 36,000
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇. ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Trustee of the ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Trust U/A dtd 6/13/96 65,470
▇▇▇▇▇▇▇▇ Management Company
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
C/E ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 18,000
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ 18,000
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 1,802 (pledged)
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 2,356(pledged)
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ #▇
▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ 15,700
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
AquaPenn Spring Water Company, Inc. Rabbi Trust
FBO ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ 18,000
Post ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Custodian for 200
▇. ▇▇▇▇▇▇▇▇▇ Feidelberg under the Uniform
Transfers to Minors Act
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Custodian for 50
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ under the Uniform
Transfers to Minors Act
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Custodian for 50
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ under the Uniform
Transfers to Minors Act
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 4,916(pledged)
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 54,000
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇▇ Trust, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Trustee 14,000
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇; ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 8,000
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 20,000
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ 7,500
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 36,000
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 36,000
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇ 3,000
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇ 5,553(pledged)
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇ 36,000
▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 18,000
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 39,000
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 36,000
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇▇ ▇. & ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 7,875
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 6,000
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ 5,443(pledged)
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 24,000
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇ 24,000
▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇. 1,317
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 4,629(pledged)
R.D. #1, ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 10,000
▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 18,000
l ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 36,000
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇ 5,000
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 10,000
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇ 105,000
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, 29,929
as Trustees of The Ray and ▇▇▇▇▇▇ ▇▇▇▇▇▇ Family Trust
dated July 15, 1993
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Trust
▇▇▇ ▇▇▇▇▇▇ TTEE ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
TTEE U/A DTD 9/13/85 24,000
c/o ▇▇▇ ▇▇▇▇▇▇▇▇ Singer
▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 32,400
▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 9,000
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 36,000
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
L.B. Water Partnership 36,000
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. Lake 18,000
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, III 1,541,510
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
AquaPenn Spring Water Company, Inc. Rabbi Trust
FBO ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, III 21,750
Post ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ Family Limited Partnership 51,020
c/o ▇▇▇▇▇▇ ▇. ▇▇▇▇, CPA
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇ 7,609(pledged)
R.D. #3, ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
R. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 18,000
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇ 8,000
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 105,000
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and Gemith ▇.▇. ▇▇▇▇▇▇▇, Trustees 29,929
of The ▇▇▇▇▇▇▇ Trust dated July 1, 1983 and Amended
June 25, 1987
▇▇-▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇ Revocable Trust UAD 12/19/89 72,000
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇ Loose 1,641(pledged)
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇ 36,000
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇. ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ 18,000
▇/▇ ▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ #▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Revocable Trust 18,000
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 2,145(pledged)
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
MAC Water Co. Partnership 36,000
▇▇▇▇▇▇▇ ▇▇▇▇, Co-Partner
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇ 36,000
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ #▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 4,211(pledged)
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
McQuaide, Blasko, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, Inc.
Profit-Sharing Plan UAD 12/1/83 FBO ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 5,000
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇ 6,406(pledged)
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇
▇.▇. ▇, ▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 36,000
▇▇▇ ▇▇▇ ▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ 3,000
▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esquire 5,000
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇ 2,500
▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 10,000(pledged)
R.D. #4, ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 2,829(pledged)
R.D. #4, ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
CEDE & CO. FBO 36,000
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
M-S Capital Fund 18,000
c/o ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 8,758(pledged)
▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
N.S. Associates 54,000
▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇ 10,500
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇'▇▇▇▇ 2,625
▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇, ▇▇. and ▇▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇, 15,000
Joint Tenants With Right of Survivorship
▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇, III 100
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 36,000
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 170,000
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇
▇.▇. #▇, ▇▇▇ ▇▇▇ 2,145(pledged)
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. 18,000
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, as Trustee of the
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Revocable Trust UIAID 5/5/94 72,000
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. & ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 18,000
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 6,000
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇. and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, 2,000
Joint Tenants With Right of Survivorship
9 Hand Avenue, ▇.▇. ▇▇▇ ▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 3,600
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇ 13,500
c/o Weis Markets, Inc.
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 25
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ #▇ ▇,▇▇▇(▇▇▇▇▇▇▇)
▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 1,943
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ Sage 36,000
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 18,000
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
▇. ▇. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 36,000
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ 36,000
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 10,000(pledged)
▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 36,000
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 36,000
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 5,000
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ 10,000(pledged)
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇ - ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
SF Partners I, L.P. 18,000
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 5,000
▇.▇. ▇▇▇ ▇▇▇-▇, ▇.▇. #▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 98,500
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
SHER Partnership 20,500
(c/o ▇▇▇▇▇▇▇ ▇▇▇▇)
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇. ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 18,000
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. Sky and ▇▇▇▇▇▇▇▇ Sky 27,000
R.D. #2, ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇ 36,000
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ 10,000(pledged)
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ 5,370(pledged)
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Money Purchase Pension Plan 18,000
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 15,000
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 9,000
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇ 72,000
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 32,000
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇. and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 300
Joint Tenants With Right of Survivorship
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Valassis Enterprises, L.P. 36,000
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ 36,000
▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ 1,672(pledged)
▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ 5,430(pledged)
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ 2,677(pledged)
RD. #1, ▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ 144
l55 Sunset Avenue 3,920(pledged)
▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 36,000
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ 2,691(pledged)
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 40,000
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ 4,697(pledged)
▇▇▇ ▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ 2,475(pledged)
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
--------------
Total Common Issued 12/10/97 7,672,945
] (included pledged shares)
SCHEDULE 6.1.2
ISSUED AND OUTSTANDING STOCK
(Continued)
AquaPenn Spring Water Company, Inc.
PREFERRED SHAREHOLDERS
--------------------------------------------------------------------------------
Shareholder Name/Address No. of Shares
--------------------------------------------------------------------------------
Adicus, L.P. 45,000
c/o ▇▇▇▇▇▇▇ ▇. & ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
PERSONAL AND CONFIDENTIAL
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 45,000
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 6,750
▇.▇. ▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇, D.D.S. Profit-Sharing Plan 11,250
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 45,000
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Trustee of the ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ Trust U/A dtd 6/13/96 315,000
▇▇▇▇▇▇▇▇ Management Company
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, Trustee of the ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ Trust U/A dtd 7/18/95 45,000
▇▇▇▇▇▇▇▇ Management Company
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, Trustee of the ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ Trust U/A dtd 6/21/96 45,000
▇▇▇▇▇▇▇▇ Management Company
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ 15,000
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esquire 6,750
PERSONAL AND CONFIDENTIAL
▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇
One Plymouth Meeting
Plymouth Meeting, PA 19462
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, D.O. ▇▇▇ Rollover Account 28,417
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Money Purchase Pension Plan 22,500
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 17,000
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
CEDE & CO. FBO
▇▇▇▇▇▇ ▇. Friday, M.D., P.C. Profit-Sharing Plan 22,500
▇▇▇▇▇▇ ▇. Friday, M.D., P.C.
▇.▇. ▇▇▇ ▇, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇ 9,000
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ 45,000
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. Gurrnan, M.D. 45,000
▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. & ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 11,250
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 11,250
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 11,250
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 11,250
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇ 45,000
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 10,500
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 10,500
PERSONAL AND CONFIDENTIAL
c/o The JPM Company
▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 10,500
PERSONAL AND CONFIDENTIAL
c/o The JPM Company
▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
McQuaide, Blasko, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, Inc.
Salary Reduction Plan UAD 12/1/83 FBO ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 2,500
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ IRRA FBO ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 2,500
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
McQuaide, Blasko, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, Inc.
Profit-Sharing Plan UAD 12/1/83 FBO ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 2,500
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
McQuaide, Blasko, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, Inc.
Profit-Sharing Plan UAD 12/1/83 FBO ▇▇▇▇ ▇. ▇▇▇▇▇▇ 2,500
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
McQuaide, Blasko, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, Inc.
Salary Reduction Plan UAD 12/1/83 FBO ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 2,500
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
McQuaide, Blasko, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, Inc.
Profit-Sharing Plan UAD 12/1/83 FBO ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 6,500
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ 9,000
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, D.M.D. 45,000
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ 45,000
▇.▇. ▇▇▇ ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇ 11,250
Contemporary Marketing, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇., Jr. and ▇▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇ 25,000
Joint Tenants With Right of Survivorship
▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 45,000
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
CEDE & CO. FBO
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, M.D., Inc. Defined Benefit Plan 45,000
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, M.D., Inc.
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 45,000
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. & ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 40,000
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 8,000
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 45,000
CEO of SMS
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, D.O. Rollover Account 16,583
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇ 25,000
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ & ▇▇▇▇▇▇▇ Urological Assoc. 0% MPPP 45,000
UA 07/01/97 ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇, Trustees
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 17,000
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 22,500
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇. 27,500
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 45,000
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇ 45,000
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 11,250
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 11,250
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 10,000
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. 21,000
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
H. ▇▇▇▇▇▇▇ ▇▇▇▇, M.D.
H. ▇▇▇▇▇▇▇ ▇▇▇▇, M.D., P.C. Profit-Sharing Plan 42,500
R.D. #1, ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. & ▇▇▇▇▇ ▇▇▇▇ 45,000
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. & ▇▇▇▇▇ ▇▇▇▇▇ 45,000
2()5 ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
-----------
Total Preferred Issued 12/10/97 1,702,500
SCHEDULE 6.1.3
SUBSIDIARIES AND AFFILIATES
SCHEDULE 6.1.3
SUBSIDIARIES AND AFFILIATES
AquaPenn Spring Water Company South, Inc. (Pennsylvania Corporation)
(Formerly known as Great American Spring Water Ice Company, Inc.)
Authorized Capital Stock: 5,000 Common Shares
Issued and Outstanding Shares: 100 Shares issued to AquaPenn Spring Water
Company, Inc.
Pure American, Inc. (Pennsylvania Corporation)
(Formerly known as S C Acquisition Company, Inc.)
Authorized Capital Stock: 5,000 Common Shares
Issued and Outstanding Shares: 100 Shares issued to AquaPenn Spring Water
Company, Inc.
AquaPenn Spring Water Industries, Inc. (Pennsylvania Corporation)
Authorized Capital Stock: 5,000 Common Shares
Issued and Outstanding Shares: 100 Shares issued to AquaPenn Spring Water
Company, Inc.
The Eight (8) Ounce Company, Inc. (Pennsylvania Corporation)
Authorized Capital Stock: 10,000 Common Shares
Issued and Outstanding Shares: 1 Share issued to AquaPenn Spring Water
Company, Inc.
IAPSW, Inc. (Delaware Corporation)
Authorized Capital Stock: 10 Common Shares
Issued and Outstanding Shares: 1 Share issued to AquaPenn Spring Water
Company, Inc.
RAPSW, Inc. (Delaware Corporation)
Authorized Capital Stock: 10 Common Shares
Issued and Outstanding Shares: 1 Share issued to IAPSW, Inc.
Castle Rock Spring Water Company, Inc. (California Corporation)
Authorized Capital Stock: 100 Common Shares
Issued and Outstanding Shares: 100 Shares issued to AquaPenn Spring Water
Company, Inc.
AquaPenn Spring Water Company West. Inc. (California Corporation)
Authorized Capital Stock: 100 Common Shares
Issued and Outstanding Shares: 100 Shares issued to AquaPenn Spring Water
Company, Inc.
SCHEDULE 6.1.13
CONSENTS AND APPROVALS
SCHEDULE 6.1.13
CONSENTS AND APPROVALS
NONE
SCHEDULE 6.1.16
INSURANCE
SCHEDULE 8.2.1
PERMITTED INDEBTEDNESS
SCHEDULE 8.2.1
PERMITTED INDEBTEDNESS
CoreStates Bank, N.A. $6,000,000 Line of Credit
Mid-State Bank and Trust Company $6,000,000 Line of Credit
Note
$10,000,000 Revolving Credit
Note
REDUCING REVOLVING LINE
OF CREDIT NOTE
$10,000,000 December 22, 1997
FOR VALUE RECEIVED, AQUAPENN SPRING WATER COMPANY, INC. (the "Borrower"),
with an address at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, promises
to pay to the order of PNC BANK, (the "Bank"), in lawful money of the United
States of America in immediately available funds at its offices located at ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, or at such other location as the Bank may
designate from time to time, the principal sum of TEN MILLION DOLLARS
($10,000,000) (the "Reducing Revolving Line") or such lesser amount as may be
advanced to or for the benefit of the Borrower hereunder, together with interest
accruing on the outstanding principal balance from the date hereof, all as
provided below:
1. Advances. The Borrower may request advances, repay and request
additional advances hereunder, subject to the terms and conditions of this Note
and the Loan Documents (as defined in the Credit Agreement). The Borrower may
request advances hereunder upon delivering to the Bank by 10:00 a.m. State
College, Pennsylvania time, (i) three (3) business days prior to (A) the
proposed Borrowing Date with respect to the making of Reducing Revolving Line
Advances to which the Euro-Rate Option applies, or (B) the end of the current
Interest Period in the case of the conversion to or the renewal of the Euro-Rate
Option; or (ii) on the same or one (l) Business Day prior to either the proposed
Borrowing Date with respect to the making of a Reducing Revolving Line Advance
to which the Base Rate Option applies or the last day of the preceding Interest
Period with respect to the conversion to the Base Rate Option. a duly completed
Loan Request as more fully set forth in the Credit Agreement. In no event shall
the aggregate unpaid principal amount of advances under this Note exceed the
face amount of this Note or the Reducing Revolving Line Limit under Section
3.1.1 of the Credit Agreement.
2. Rate of Interest. Each advance outstanding under this Note will bear
interest at a rate or rates per annum as may be selected by the Borrower from
the interest rate options set forth below (the "Interest Rate Options"):
(i) Base Rate Option. A fluctuating rate per annum (computed on the
basis of a year of 365 or 366 days, as the case may be, and actual days
elapsed) equal to the Base Rate plus the Applicable Margin set forth on the
pricing grid attached hereto as Exhibit l, such interest rate to change
automatically from time to time effective as of the effective date of each
change in the Base Rate. If and when the Base Rate changes, the rate of interest
with respect to any advances to which the Base Rate Option applies will change
automatically without notice to the Borrower.
(ii) Euro-Rate Option. A rate per annum (computed on the basis of a year
of 360 days and actual days elapsed) equal to the Euro-Rate plus the
Applicable Margin set forth on the pricing grid attached hereto as Exhibit 1,
subject to Section 4.4 of the Credit Agreement.
The foregoing notwithstanding, it is understood that no more than four (4)
borrowings under the Euro-Rate Option may be outstanding at any one time.
Interest will be calculated on the basis of a year of 360 days for the actual
number of days in each interest period. In no event will the rate of interest
hereunder exceed the maximum rate allowed by law.
3. Definitions. For the purpose hereof, the following terms shall have the
following meanings:
"Base Rate" shall mean the greater of (i) the interest rate per annum
announced from time to time by the Bank at its Principal Office as its then
prime rate, which rate may not be the lowest rate then being charged commercial
borrowers by the Bank, or (ii) the Federal Funds Effective Rate plus .5% per
annum.
"Business Day" shall mean any day other than a Saturday or Sunday or a
legal holiday on which commercial banks are authorized or required to be closed
for business in Pittsburgh, Pennsylvania; and if the applicable Business Day
relates to any Loan to which the Euro-Rate Option applies, such day must also be
a day on which dealings are carried on in the London interbank market.
"Credit Agreement" shall mean that certain Credit Agreement between the
Bank and Borrower dated as of December 22, 1997.
"Euro-Rate" shall mean, with respect to any advance to which the Euro-Rate
Option applies for the applicable Permitted Euro-Rate Interest Period, the
interest rate per annum determined by the Bank by dividing (the resulting
quotient rounded upwards, if necessary, to the nearest 1/l00th of 1% per annum)
(i) the rate of interest determined by the Bank in accordance with its usual
procedures (which determination shall be conclusive absent manifest error) to be
the average of the London interbank offered rates of interest per annum for U.S.
Dollars set forth on Telerate display page 3750 or such other display page on
the Telerate System as may replace such page to evidence the average of rates
quoted by banks designated by the British Bankers' Association (or appropriate
successor or, if the British Bankers' Association or its successor ceases to
provide such quotes, a comparable replacement determined by the Bank) two (2)
Business Days prior to the first day of such Interest Period for an amount
comparable to such Borrowing Tranche and having a borrowing date and maturity
comparable to such Interest Period by (ii) a number equal to 1.00 minus the
Euro-Rate Reserve Percentage. The Euro-Rate shall be adjusted with respect to
any Euro-Rate Option outstanding on the effective date of any change in the
Euro-Rate Reserve Percentage as of such effective date. The Bank shall give
prompt notice to the Borrower of the Euro-Rate as determined or adjusted in
accordance herewith, which determination shall be conclusive absent manifest
error.
2
"Euro-Rate Reserve Percentage" shall mean the maximum percentage (expressed
as a decimal rounded upward to the nearest 1/100 of 1%) as determined by the
Bank which is in effect on such day as prescribed by the Board of Governors of
the Federal Reserve System (or any successor) for determining the reserve
requirements (including, without limitation, supplemental, marginal and
emergency reserve requirements) with respect to eurocurrency funding (currently
referred to as "Eurocurrency Liabilities") of a member bank in such System.
"Federal Funds Effective Rate" for any day shall mean the rate per annum
(based on a year of 360 days and actual days elapsed and rounded upward to the
nearest 1/100 of 1%) announced by the Federal Reserve Bank of New York (or any
successor) on such day as being the weighted average of the rates on overnight
federal funds transactions arranged by federal funds brokers on the previous
trading day, as computed and announced by such Federal Reserve Bank (or any
successor) in substantially the same manner as such Federal Reserve Bank
computes and announces the weighted average it refers to as the "Federal Funds
Effective Rate" as of the date of this Agreement; provided, if such Federal
Reserve Bank (or its successor) does not announce such rate on any day, the
"Federal Funds Effective Rate" for such day shall be the Federal Funds Effective
Rate for the last day on which such rate was announced.
"Interest Rate Option" shall mean any Euro-Rate Option or Base Rate Option.
"Permitted Euro-Rate Interest Period" shall mean a period of one (1), two,
(2), three (3) or six (6) months selected by the Borrower commencing on the date
of disbursement of an advance and each successive period selected by the
Borrower thereafter; provided, that if a Permitted Euro-Rate Interest Period
would end on a day which is not a Business Day, it shall end on the next
succeeding Business Day, unless such day falls in the succeeding calendar month
in which Case the Permitted Euro-Rate Interest Period shall end on the next
preceding Business Day. In no event shall any Euro-Rate Interest Period end on a
day after the Revolving Line Expiration Date (as such term is defined in the
Loan Documents).
Other capitalized terms used herein and not otherwise defined shall have
the meanings as set forth in the Credit Agreement.
4. Interest Rate Election. Subject to the terms and conditions of this Note
and the Credit Agreement, at the end of each Interest Period applicable to any
advance, the Borrower may renew the Interest Rate Option applicable to such
advance or convert such advance to a different Interest Rate Option by
delivering a Loan Request to the Bank at the times, and in the manner, set forth
herein and in the Credit Agreement. Within the time period prescribed in the
Credit Agreement prior to the end of each Permitted Euro-Rate Interest Period in
the case of a renewal of such Permitted Euro-Rate Interest Period or prior to
the proposed beginning of a new Permitted Euro-Rate Interest Period in the case
of a conversion from the Base Rate Option to the Euro-Rate Option, the Borrower
shall notify (via the Loan Request as defined in Credit Agreement) the Bank of
each election of an Interest Rate Option, each conversion from one Interest Rate
Option to another, the amount of the advances then outstanding to be allocated
to
3
each Interest Rate Option and, where relevant, the Interest Period during which
such Interest Rate Option shall apply. If no notice of conversion or renewal is
received by the Bank, the Borrower shall be deemed to have converted such
advance to the Base Rate Option.
5. Payment Terms. The Borrower shall pay accrued interest on, and principal
of, this Note as follows:
(a) Interest Payments. Interest on the principal balance hereof
comprising Borrowing Tranches to which the Base Rate Option applies shall
be due and payable in arrears on the first Business Day of each January, April,
July and October (each such date a "Quarterly Interest Payment Date") after the
date hereof and on November 30, 2002 (the "Reducing Revolving Line Expiration
Date") or upon acceleration of this Note. Interest on the principal balance
hereof comprising Borrowing Tranches to which the Euro-Rate Option applies shall
be due and payable on the earlier of (i) the end of the applicable Interest
Period or (ii) each Quarterly Interest Payment Date occurring prior to the end
of such Interest Period.
(b) Principal Payments. Unless sooner prepaid in accordance with the
terms hereof, or sooner accelerated by Bank by virtue of an Event of
Default hereunder, all principal amounts outstanding hereunder shall be paid in
full on the Reducing Revolving Line Expiration Date. The Borrower shall also
make such principal payments from time to time as may be necessary to maintain
the outstanding principal balance hereof at or below the Reducing Revolving Line
Limit under Section 3.1.1 of the Credit Agreement.
If any payment under this Note shall become due on a Saturday, Sunday or public
holiday under the laws of the State where the Bank's office indicated above is
located, such payment shall be made on the next succeeding business day and such
extension of time shall be included in computing interest in connection with
such payment. The Borrower hereby authorizes the Bank to charge the Borrower's
deposit account at the Bank for any payment when due hereunder. Payments
received will be applied to charges, fees and expenses (including attorneys'
fees), accrued interest and principal in any order the Bank may choose, in its
sole discretion.
6. Late Payments: Default Rate. If the Borrower fails to make any payment
of principal, interest or other amount coming due pursuant to the provisions of
this Note within fifteen (15) calendar days of the date due and payable, the
Borrower also shall pay to the Bank a late charge equal to the lesser of five
percent (5%) of the amount of such payment or $100.00. Such 15 day period shall
not be construed in any way to extend the due date of any such payment. The late
charge is imposed for the purpose of defraying the Bank's expenses incident to
the handling of delinquent payments and is in addition to, and not in lieu of,
the exercise by the Bank of any rights and remedies hereunder, under the other
Loan Documents or under applicable laws, and any fees and expenses of any agents
or attorneys which the Bank may employ.
Upon the occurrence of an Event of Default hereunder, the rate of interest
applicable to all of the outstanding principal balance hereunder shall
automatically increase to and accrue at an interest rate per anum equal to the
sum of the variable rate of interest applicable under the Base Rate Option plus
an additional 2% per annum (the "Default Rate") until all amounts due
4
hereunder and under the Loan Documents have been paid in full. The Borrower
acknowledges that the Default Rate reflects, among other things, the fact that
such outstanding Borrowing Tranches or other amounts have become a substantially
greater risk given their default status and that the Bank is entitled to
additional compensation for such risk; and all such interest shall be payable by
Borrower upon demand by Bank. The Default Rate shall continue to apply whether
or not judgment shall be entered on this Note.
7. Prepayment. The Borrower shall have the right at its option from time to
time to prepay the principal balance outstanding hereunder in whole or part
without premium or penalty (except as provided in Section 5.4 of the Credit
Agreement), as follows:
(i) at any time with respect to any Borrowing Tranche to which the Base
Rate Option applies,
(ii) on the last day of the applicable Interest Period with respect to
Borrowing Tranches to which a Euro-Rate Option applies,
(iii) on the date specified in a notice by any Bank pursuant to Section
4.4 of the Credit Agreement with respect to any advance under the Revolving
Line to which a Euro-Rate Option applies.
Whenever the Borrower desires to prepay any part of the outstanding
principal hereunder, it shall provide a prepayment notice to the Bank by 1:00
p.m. at least one (1) Business Day prior to the date of prepayment, setting
forth the following information:
(x) the date, which shall be a Business Day, on which the proposed
prepayment is to be made;
(y) a statement indicating the application of the prepayment to the
Reducing Revolving Line; and
(z) the total principal amount of such prepayment, which shall not be less
than $500,000.
All prepayment notices shall be irrevocable. The principal amount of the
principal balance for which a prepayment notice is given, together with interest
on such principal amount except with respect to Borrowing Tranches to which the
Base Rate Option applies, shall be due and payable on the date specified in such
prepayment notice as the date on which the proposed prepayment is to be made.
Except as provided in Section 4.4.3 of the Credit Agreement, if the Borrower
makes a prepayment of principal but fails to specify the applicable Borrowing
Tranche which the Borrower is prepaying, the prepayment shall be applied first
to Loans to which the Base Rate Option applies, then to Loans to which the
Euro-Rate Option applies. Any prepayment hereunder shall be subject to the
Borrower's obligation to indemnify the Bank under Section 5.4.2 of the Credit
Agreement.
5
8. Yield Protection. The Borrower shall pay to the Bank, on written demand
therefor, together with the written evidence of the justification therefor, all
direct costs incurred, losses suffered or payments made by Bank by reason of any
change in law or regulation or its interpretation imposing any reserve, deposit,
allocation of capital, or similar requirement (including without limitation,
Regulation D of the Board of Governors of the Federal Reserve System) on the
Bank, its holding company or any of their respective assets. In addition, the
Borrower agrees to indemnify the Bank against any liabilities, losses or
expenses (including loss of margin, any loss or expense sustained or incurred in
liquidating or employing deposits from third parties acquired to effect, fund or
maintain any Loan bearing interest under the Euro-Rate Option or any part
thereof) which the Bank sustains or incurs as a consequence of either (i) the
Borrower's failure to make a payment on the due date thereof or (ii) the
Borrower's payment, prepayment or conversion of any Loan bearing interest under
the Euro-Rate Option on a day other than the last day of the applicable
Euro-Rate Interest Period including but not limited to the Cost of Prepayment.
"Cost of Prepayment" means an amount equal to the present value, if positive, of
the product of (a) the difference between (i) the yield, on the beginning date
of the applicable interest period, of a U.S. Treasury obligation with a maturity
similar to the applicable interest period minus (ii) the yield, on the
prepayment date, of a U.S. Treasury obligation with a maturity similar to the
remaining maturity of the applicable interest period, and (b) the principal
amount to be prepaid, and (c) the number of years, including fractional years
from the prepayment date to the end of the applicable interest period. The yield
on any U.S. Treasury obligation shall be determined by reference to Federal
Reserve Statistical Release H.15(519) "Selected Interest Rates". For purposes of
making present value calculations, the yield to maturity of a similar maturity
U.S. Treasury obligation on the prepayment date shall be deemed the discount
rate. The Cost of Prepayment shall also apply to any payments made after
acceleration of the maturity of this Note. The Bank's determination of an amount
payable under this paragraph shall, in the absence of manifest error, be
conclusive and shall be payable on demand.
9. Other Loan Documents. This Note is issued pursuant to the Credit
Agreement and the other documents referred to therein, the terms of which are
incorporated herein by reference (collectively, the "Loan Documents").
10. Events of Default. The occurrence of any of the following events will
be deemed to be an "Event of Default" under this Note: (i) the nonpayment of any
principal, interest or other indebtedness under this Note when due; (ii) the
occurrence of any event of default or default and the lapse of any notice or
cure period under any Loan Document or any other debt, liability or obligation
to the Bank of any Obligor; (iii) the filing by or against the Borrower of any
proceeding in bankruptcy, receivership, insolvency, reorganization, liquidation,
conservatorship or similar proceeding (and, in the case of any such proceeding
instituted against the Borrower, such proceeding is not dismissed or stayed
within thirty (30) days of the commencement thereof); (iv) any assignment by the
Borrower for the benefit of creditors, or any levy, garnishment, attachment or
similar proceeding is instituted against any property of the Borrower held by or
deposited with the Bank; (v) a default with respect to any other indebtedness of
any Obligor for borrowed money, if the effect of such default is to cause or
permit the acceleration of such debt; (vi) the commencement of any foreclosure
or forfeiture proceeding, execution or
6
attachment against any collateral securing the obligations of any Obligor to the
Bank; (vii) the entry of a final judgment against any Obligor and the failure of
such Obligor to discharge the judgment within ten days of the entry thereof;
(viii) in the event that this Note or any guarantee executed by any Guarantor is
secured, the failure of any Obligor to provide the Bank with additional
collateral if in the opinion of the Bank at any time or times, the market value
of any of the collateral securing this Note or any guarantee has depreciated;
(ix) any material adverse change in the business, assets, operations, financial
condition or results of operations of any Obligor; (x) the revocation or
attempted revocation, in whole or in part, of any guarantee by any Guarantor;
(xi) any representation or warranty made by any Obligor to the Bank in any Loan
Document, or any other documents now or in the future securing the obligations
of any Obligor to the Bank, is false, erroneous or misleading in any material
respect; or (xii) the failure of any Obligor to observe or perform any covenant
or other agreement with the Bank contained in any Loan Document or any other
documents now or in the future securing the obligations of any Obligor to the
Bank.
As used herein, the term "Obligor" means any Borrower and any Guarantor, and the
term "Guarantor" means any guarantor of the obligations of the Borrower to the
Bank existing on the date of this Note or arising in the future.
Upon the occurrence of an Event of Default: (a) the Bank shall continue to have
no obligation to make advances hereunder; (b) if an Event of Default specified
in clause (iii) or (iv) above shall occur, the outstanding principal balance and
accrued interest hereunder together with any additional amounts payable
hereunder shall be immediately due and payable without demand or notice of any
kind; (c) if any other Event of Default shall occur the outstanding principal
balance and accrued interest hereunder together with any additional amounts
payable hereunder, at the option of the Bank and without demand or notice of any
kind, may be accelerated and become immediately due and payable; (d) at the
option of the Bank, this Note will bear interest at the Default Rate from the
date of the occurrence of the Event of Default; and (e) the Bank may exercise
from time to time any of the rights and remedies available to the Bank under the
Loan Documents or under applicable law.
11. Right of Setoff. In addition to all liens upon and rights of setoff
against the money, securities or other property of the Borrower given to the
Bank by law, the Bank shall have, with respect to the Borrower's Obligations to
the Bank under this Note and to the extent permitted by law, a contractual
possessory security interest in and a contractual right of setoff against, and
the Borrower hereby assigns, conveys, delivers, pledges and transfers to the
Bank all of the Borrower's right, title and interest in and to, all deposits,
moneys, securities and other property of the Borrower now or hereafter in the
possession of or on deposit with, or in transit to, the Bank whether held in a
general or special account or deposit, whether held jointly with someone else,
or whether held for safekeeping or otherwise, excluding, however, all ▇▇▇,
▇▇▇▇▇, and trust accounts. Every such security interest and right of setoff may
be exercised without demand upon or notice to the Borrower. Every such right of
setoff shall be deemed to have been exercised immediately upon the occurrence of
an Event of Default hereunder without any action of the Bank, although the Bank
may enter such setoff on its books and records at a later time.
7
12. Miscellaneous. No delay or omission of the Bank to exercise any right
or power arising hereunder shall impair any such right or power or be considered
to be a waiver of any such right or power nor shall the Bank's action or
inaction impair any such right or power. The Borrower agrees to pay on demand,
to the extent permitted by law, all costs and expenses incurred by the Bank in
the enforcement of its rights in this Note and in any security therefor,
including without limitation reasonable fees and expenses of the Bank's counsel.
If any provision of this Note is found to be invalid by a court, all the other
provisions of this Note will remain in full force and effect.
The Borrower and all other makers and endorsers of this Note hereby forever
waive presentment, protest, notice of dishonor and notice of non-payment. The
Borrower also waives all defenses based on suretyship or impairment of
collateral.
This Note shall bind the Borrower and its heirs, executors, administrators,
successors and assigns, and the benefits hereof shall inure to the benefit of
Bank and its successors and assigns.
This Note has been delivered to and accepted by the Bank and will be deemed
to be made in the State where the Bank's office indicated above is located. THIS
NOTE WILL BE INTERPRETED AND THE RIGHTS AND LIABILITIES OF THE BANK AND THE
BORROWER DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE WHERE THE BANK'S
OFFICE INDICATED ABOVE IS LOCATED, EXCLUDING ITS CONFLICT OF LAWS RULES. The
Borrower hereby irrevocably consents to the exclusive jurisdiction of any state
or federal court located for the county or judicial district where the Bank's
office indicated above is located, and consents that all service of process be
sent by nationally recognized overnight courier service directed to the Borrower
at the Borrower's address set forth herein and service so made will be deemed to
be completed on the business day after deposit with such courier; provided that
nothing contained in this Note will prevent the Bank from bringing any action,
enforcing any award or judgment or exercising any rights against the Borrower
individually, against any security or against any property of the Borrower
within any other county, state or other foreign or domestic jurisdiction. The
Borrower acknowledges and agrees that the venue provided above is the most
convenient forum for both the Bank and the Borrower. The Borrower waives any
objection to venue and any objection based on a more convenient forum in any
action instituted under this Note.
The Borrower acknowledges that it has read and understood all the provisions of
this Note, and has been advised by counsel as necessary or appropriate.
8
WITNESS the due execution hereof as a document under seal, as of the date
first written above, with the intent to be legally bound hereby.
WITNESS/ATTEST: AQUAPENN SPRING WATER
COMPANY, INC.
_____________________ By:_________________________
Name:
Title:
[Seal]
9
EXHIBIT 1
PRICING GRID
------------
REVOLVING LINE OF CREDIT NOTE
$6,000,000 December 22, 1997
FOR VALUE RECEIVED, AQUAPENN SPRING WATER COMPANY, INC. (the
"Borrower"), with an address at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, promises to pay to the order of PNC BANK, (the "Bank"), in lawful money
of the United States of America in immediately available funds at its offices
located at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, or at such other location as
the Bank may designate from time to time, the principal sum of SIX MILLION
DOLLARS ($6,000,000) (the "Revolving Line") or such lesser amount as may be
advanced to or for the benefit of the Borrower hereunder, together with interest
accruing on the outstanding principal balance from the date hereof, all as
provided below:
1. Advances. The Borrower may request advances, repay and request
additional advances hereunder, subject to the terms and conditions of this Note
and the Loan Documents (as defined in the Credit Agreement). The Borrower may
request advances hereunder upon delivering to the Bank by 10:00 a.m. State
College, Pennsylvania time, (i) three (3) business days prior to (A) the
proposed Borrowing Date with respect to the making of Revolving Line Advances to
which the Euro-Rate Option applies, or (B) the end of the current Interest
Period in the case of the conversion to or the renewal of the Euro-Rate Option;
(ii) on the same or one (1) Business Day prior to either the proposed Borrowing
Date with respect to the making of a Revolving Line Advance to which the Base
Rate Option applies or the last day of the preceding Interest Period with
respect to the conversion to the Base Rate Option; or (iii) three (3) Business
Day prior to (A) the proposed Borrowing Date with respect to the making of
revolving Line Advances for which the Borrower seeks the Offered Rate Option or
(B) the end of the current Interest Period in the case of conversion to or the
renewal of the Offered Rate Option of a duly completed request as more fully set
forth in the Credit Agreement. In no event shall the aggregate unpaid principal
amount of advances under this Note exceed the face amount of this Note.
2. Rate of Interest. Each advance outstanding under this Note will
bear interest at a rate or rates per annum as may be selected by the Borrower
from the interest rate options set forth below (the "Interest Rate Options"):
(i) Base Rate Option. A fluctuating rate per annum (computed on the
basis of a year of 365 or 366 days, as the case may be, and actual days elapsed)
equal to the Base Rate plus the Applicable Margin set forth on the pricing grid
attached hereto as Exhibit l, such interest rate to change automatically from
time to time effective as of the effective date of each change in the Base Rate.
If and when the Base Rate changes, the rate of interest with respect to any
advances to which the Base Rate Option applies will change automatically without
notice to the Borrower.
(ii) Euro-Rate Option. A rate per annum (computed on the basis of a
year of 360 days and actual days elapsed) equal to the Euro-Rate plus the
Applicable Margin set forth on the pricing grid attached hereto as Exhibit 1,
subject to Section 4.4 of the Credit Agreement.
(iii) Offered Rate Option. A rate per annum for a Permitted Offered
Rate Interest Period as may be quoted and offered to Borrower by Bank from time
to time at the Bank's sole discretion and determination.
The foregoing notwithstanding, it is understood that no more than four (4)
borrowings under the Euro-Rate Option may be outstanding at any one time.
Interest will be calculated on the basis of a year of 360 days for the actual
number of days in each interest period. In no event will the rate of interest
hereunder exceed the maximum rate allowed by law.
3. Definitions. For the purpose hereof, the following terms shall have
the following meanings:
"Base Rate" shall mean the greater of (i) the interest rate per annum
announced from time to time by the Bank at its Principal Office as its then
prime rate, which rate may not be the lowest rate then being charged commercial
borrowers by the Bank, or (ii) the Federal Funds Effective Rate plus .5% per
annum.
"Business Day" shall mean any day other than a Saturday or Sunday or a
legal holiday on which commercial banks are authorized or required to be closed
for business in Pittsburgh, Pennsylvania; and if the applicable Business Day
relates to any Loan to which the Euro-Rate Option applies, such day must also be
a day on which dealings are carried on in the London interbank market.
"Credit Agreement" shall mean that certain Credit Agreement between the
Bank and Borrower dated as of December 22, 1997.
"Euro-Rate" shall mean, with respect to any advance to which the
Euro-Rate Option applies for the applicable Permitted Euro-Rate Interest Period,
the interest rate per annum determined by the Bank by dividing (the resulting
quotient rounded upwards, if necessary, to the nearest l/l00th of 1% per annum)
(i) the rate of interest determined by the Bank in accordance with its usual
procedures (which determination shall be conclusive absent manifest error) to be
the average of the London interbank offered rates of interest per annum for U.S.
Dollars set forth on Telerate display page 3750 or such other display page on
the Telerate System as may replace such page to evidence the average of rates
quoted by banks designated by the British Bankers' Association (or appropriate
successor or, if the British Bankers' Association or its successor ceases to
provide such quotes, a comparable replacement determined by the Bank) two (2)
Business Days prior to the first day of such Interest Period for an amount
comparable to such Borrowing Tranche and having a borrowing date and maturity
comparable to such Interest Period by (ii) a number equal to 1.00 minus the
Euro-Rate Reserve Percentage. The Euro-Rate shall be
2
the Euro-Rate Reserve Percentage as of such effective date. The Bank shall give
prompt notice to the Borrower of the Euro-Rate as determined or adjusted in
accordance herewith, which determination shall be conclusive absent manifest
error.
"Euro-Rate Reserve Percentage" shall mean the maximum percentage
(expressed as a decimal rounded upward to the nearest 1/100 of 1%) as determined
by the Bank which is in effect on such day as prescribed by the Board of
Governors of the Federal Reserve System (or any successor) for determining the
reserve requirements (including, without limitation, supplemental, marginal and
emergency reserve requirements) with respect to eurocurrency funding (currently
referred to as "Eurocurrency Liabilities") of a member bank in such System.
"Federal Funds Effective Rate" for any day shall mean the rate per
annum (based on a year of 360 days and actual days elapsed and rounded upward to
the nearest 1/100 of 1%) announced by the Federal Reserve Bank of New York (or
any successor) on such day as being the weighted average of the rates on
overnight federal funds transactions arranged by federal funds brokers on the
previous trading day, as computed and announced by such Federal Reserve Bank (or
any successor) in substantially the same manner as such Federal Reserve Bank
computes and announces the weighted average it refers to as the "Federal Funds
Effective Rate" as of the date of this Agreement; provided, if such Federal
Reserve Bank (or its successor) does not announce such rate on any day, the
"Federal Funds Effective Rate" for such day shall be the Federal Funds Effective
Rate for the last day on which such rate was announced.
"Interest Rate Option" shall mean any Euro-Rate Option, Offered Rate
Option or Base Rate Option.
"Permitted Euro-Rate Interest Period" shall mean a period of one (1),
two, (2), three (3) or six (6) months selected by the Borrower commencing on the
date of disbursement of an advance and each successive period selected by the
Borrower thereafter; provided, that if a Permitted Euro-Rate Interest Period
would end on a day which is not a Business Day, it shall end on the next
succeeding Business Day, unless such day falls in the succeeding calendar month
in which Case the Permitted Euro-Rate Interest Period shall end on the next
preceding Business Day. In no event shall any Euro-Rate Interest Period end on a
day after the Revolving Line Expiration Date (as such term is defined in the
Loan Documents).
"Permitted Offered Rate Interest Period" shall mean any of the
following periods: overnight, thirty (30) days, sixty (60) days or ninety (90)
days.
Other capitalized terms used herein and not otherwise deemed shall have
the meanings as set forth in the Credit Agreement.
3
4. Interest Rate Election. Subject to the terms and conditions of this
Note and the Credit Agreement, at the end of each Interest Period applicable to
any advance, the Borrower may renew the Interest Rate Option applicable to such
advance or convert such advance to a different Interest Rate Option by
delivering a Loan Request to the Bank at the times, and in the manner, set forth
herein and in the Credit Agreement. Within the time period prescribed in the
Credit Agreement prior to the end of each Permitted Euro-Rate Interest Period in
the case of a renewal of such Permitted Euro-Rate Interest Period or prior to
the proposed beginning of a new Permitted Euro-Rate Interest Period in the case
of a conversion from the Base Rate Option or the Offered Rate Option to the
Euro-Rate Option, the Borrower shall notify (via the Loan Request as defined in
Credit Agreement) the Bank of each election of an Interest Rate Option, each
conversion from one Interest Rate Option to another, the amount of the advances
then outstanding to be allocated to each Interest Rate Option and, where
relevant, the Interest Period during which such Interest Rate Option shall
apply. If no notice of conversion or renewal is received by the Bank, the
Borrower shall be deemed to have converted such advance to the Base Rate Option.
5. Payment Terms. The Borrower shall pay accrued interest on, and
principal of, this Note as follows:
(a) Interest Payments. Interest on the principal balance hereof
comprising Borrowing Tranches to which the Base Rate Option applies shall be due
and payable in arrears on the first Business Day of each January, April, July
and October (each such date a "Quarterly Interest Payment Date") after the date
hereof and on November 30, 1998 (the "Revolving Line Expiration Date") or upon
acceleration of this Note. Interest on the principal balance hereof comprising
Borrowing Tranches to which the Euro-Rate Option or the Offered Rate Option
applies shall be due and payable on the earlier of (i) the end of the applicable
Interest Period or (ii) each Quarterly Interest Payment Date occurring prior to
the end of such Interest Period.
(b) Principal Payments. Unless sooner prepaid in accordance with
the terms hereof, or sooner accelerated by Bank by virtue of an Event of Default
hereunder, all principal amounts outstanding hereunder shall be paid in full on
the Revolving Line Expiration Date.
If any payment under this Note shall become due on a Saturday, Sunday or public
holiday under the laws of the State where the Bank's office indicated above is
located, such payment shall be made on the next succeeding business day and such
extension of time shall be included in computing interest in connection with
such payment. The Borrower hereby authorizes the Bank to charge the Borrower's
deposit account at the Bank for any payment when due hereunder. Payments
received will be applied to charges, fees and expenses (including attorneys'
fees), accrued interest and principal in any order the Bank may choose, in its
sole discretion.
6. Late Payments: Default Rate. If the Borrower fails to make any
payment of principal, interest or other amount coming due pursuant to the
provisions of this Note within fifteen (15) calendar days of the date due and
payable, the Borrower also shall pay to the Bank a late charge equal to the
lesser of five percent (5%) of the amount of such payment or $100.00. Such 15
day period shall not be construed in any way to extend the due date of any such
4
payment. The late charge is imposed for the purpose of defraying the Bank's
expenses incident to the handling of delinquent payments and is in addition to,
and not in lieu of, the exercise by the Bank of any rights and remedies
hereunder, under the other Loan Documents or under applicable laws, and any fees
and expenses of any agents or attorneys which the Bank may employ.
Upon the occurrence of an Event of Default hereunder, the rate of
interest applicable to all of the outstanding principal balance hereunder shall
automatically increase to and accrue at an interest rate per anum equal to the
sum of the variable rate of interest applicable under the Base Rate Option plus
an additional 2% per annum (the "Default Rate") until all amounts due hereunder
and under the Loan Documents have been paid in full. The Borrower acknowledges
that the Default Rate reflects, among other things, the fact that such
outstanding Borrowing Tranches or other amounts have become a substantially
greater risk given their default status and that the Bank is entitled to
additional compensation for such risk; and all such interest shall be payable by
Borrower upon demand by Bank. The Default Rate shall continue to apply whether
or not judgment shall be entered on this Note.
7. Prepayment. The Borrower shall have the right at its option from
time to time to prepay the principal balance outstanding hereunder in whole or
part without premium or penalty (except as provided in Section 5.4 of the Credit
Agreement), as follows:
(i) at any time with respect to any Borrowing Tranche to which the
Base Rate Option applies,
(ii) on the last day of the applicable Interest Period with respect
to Borrowing Tranches to which a Euro-Rate Option or an Offered Rate Option
applies,
(iii) on the date specified in a notice by any Bank pursuant to
Section 4.4 of the Credit Agreement with respect to any advance under the
Revolving Line to which a Euro-Rate Option applies.
Whenever the Borrower desires to prepay any part of the outstanding
principal hereunder, it shall provide a prepayment notice to the Bank by 1:00
p.m. at least one (1) Business Day prior to the date of prepayment, setting
forth the following information:
(x) the date, which shall be a Business Day, on which the proposed
prepayment is to be made;
(y) a statement indicating the application of the prepayment to the
Revolving Line; and
(z) the total principal amount of such prepayment, which shall not be
less than $100,000.
All prepayment notices shall be irrevocable. The principal amount of
the principal balance for which a prepayment notice is given, together with
interest on such principal amount
5
except with respect to Borrowing Tranches to which the Base Rate Option applies,
shall be due and payable on the date specified in such prepayment notice as the
date on which the proposed prepayment is to be made. Except as provided in
Section 4.4.3 of the Credit Agreement, if the Borrower makes a prepayment of
principal but fails to specify the applicable Borrowing Tranche which the
Borrower is prepaying, the prepayment shall be applied first to Loans to which
the Base Rate Option applies, then to Loans to which the Offered Rate Option
applies and next to Loans to which Euro-Rate Option applies. Any prepayment
hereunder shall be subject to the Borrower's obligation to indemnify the Bank
under Section 5.4.2 of the Credit Agreement.
8. Yield Protection. The Borrower shall pay to the Bank, on written
demand therefor, together with the written evidence of the justification
therefor, all direct costs incurred, losses suffered or payments made by Bank by
reason of any change in law or regulation or its interpretation imposing any
reserve, deposit, allocation of capital, or similar requirement (including
without limitation, Regulation D of the Board of Governors of the Federal
Reserve System) on the Bank, its holding company or any of their respective
assets. In addition, the Borrower agrees to indemnify the Bank against any
liabilities, losses or expenses (including loss of margin, any loss or expense
sustained or incurred in liquidating or employing deposits from third parties
acquired to effect, fund or maintain any Loan bearing interest under the
Euro-Rate Option or any part thereof) which the Bank sustains or incurs as a
consequence of either (i) the Borrower's failure to make a payment on the due
date thereof or (ii) the Borrower's payment, prepayment or conversion of any
Loan bearing interest under the Euro-Rate Option on a day other than the last
day of the applicable Euro-Rate Interest Period including but not limited to the
Cost of Prepayment. "Cost of Prepayment" means an amount equal to the present
value, if positive, of the product of (a) the difference between (i) the yield,
on the beginning date of the applicable interest period, of a U.S. Treasury
obligation with a maturity similar to the applicable interest period minus (ii)
the yield, on the prepayment date, of a U.S. Treasury obligation with a maturity
similar to the remaining maturity of the applicable interest period, and (b) the
principal amount to be prepaid, and (c) the number of years, including
fractional years from the prepayment date to the end of the applicable interest
period. The yield on any U.S. Treasury obligation shall be determined by
reference to Federal Reserve Statistical Release H. 15(519) "Selected Interest
Rates". For purposes of making present value calculations, the yield to maturity
of a similar maturity U.S. Treasury obligation on the prepayment date shall be
deemed the discount rate. The Cost of Prepayment shall also apply to any
payments made after acceleration of the maturity of this Note. The Bank's
determination of an amount payable under this paragraph shall, in the absence of
manifest error, be conclusive and shall be payable on demand.
9. Other Loan Documents. This Note is issued pursuant to the Credit
Agreement and the other documents referred to therein, the terms of which are
incorporated herein by reference (collectively, the "Loan Documents").
10. Events of Default. The occurrence of any of the following events
will be deemed to be an "Event of Default" under this Note: (i) the nonpayment
of any principal, interest or other indebtedness under this Note when due; (ii)
the occurrence of any event of default or default and the lapse of any notice or
cure period under any Loan Document or any other debt liability or
6
obligation to the Bank of any Obligor; (iii) the filing by or against the
Borrower of any proceeding in bankruptcy, receivership, insolvency,
reorganization, liquidation, conservatorship or similar proceeding (and, in the
case of any such proceeding instituted against the Borrower, such proceeding is
not dismissed or stayed within thirty (30) days of the commencement thereof);
(iv) any assignment by the Borrower for the benefit of creditors, or any levy,
garnishment, attachment or similar proceeding is instituted against any property
of the Borrower held by or deposited with the Bank; (v) a default with respect
to any other indebtedness of any Obligor for borrowed money, if the effect of
such default is to cause or permit the acceleration of such debt; (vi) the
commencement of any foreclosure or forfeiture proceeding, execution or
attachment against any collateral securing the obligations of any Obligor to the
Bank; (vii) the entry of a final judgment against any Obligor and the failure of
such Obligor to discharge the judgment within ten days of the entry thereof;
(viii) in the event that this Note or any guarantee executed by any Guarantor is
secured, the failure of any Obligor to provide the Bank with additional
collateral if in the opinion of the Bank at any time or times, the market value
of any of the collateral securing this Note or any guarantee has depreciated;
(ix) any material adverse change in the business, assets, operations, financial
condition or results of operations of any Obligor; (x) the revocation or
attempted revocation, in whole or in part, of any guarantee by any Guarantor;
(xi) any representation or warranty made by any Obligor to the Bank in any Loan
Document, or any other documents now or in the future securing the obligations
of any Obligor to the Bank, is false, erroneous or misleading in any material
respect; or (xii) the failure of any Obligor to observe or perform any covenant
or other agreement with the Bank contained in any Loan Document or any other
documents now or in the future securing the obligations of any Obligor to the
Bank.
As used herein, the term "Obligor" means any Borrower and any Guarantor, and the
term "Guarantor" means any guarantor of the obligations of the Borrower to the
Bank existing on the date of this Note or arising in the future.
Upon the occurrence of an Event of Default: (a) the Bank shall continue to have
no obligation to make advances hereunder; (b) if an Event of Default specified
in clause (iii) or (iv) above shall occur, the outstanding principal balance and
accrued interest hereunder together with any additional amounts payable
hereunder shall be immediately due and payable without demand or notice of any
kind; (c) if any other Event of Default shall occur the outstanding principal
balance and accrued interest hereunder together with any additional amounts
payable hereunder, at the option of the Bank and without demand or notice of any
kind, may be accelerated and become immediately due and payable; (d) at the
option of the Bank, this Note will bear interest at the Default Rate from the
date of the occurrence of the Event of Default; and (e) the Bank may exercise
from time to time any of the rights and remedies available to the Bank under the
Loan Documents or under applicable law.
11. Right of Setoff. In addition to all liens upon and rights of setoff
against the money, securities or other property of the Borrower given to the
Bank by law, the Bank shall have, with respect to the Borrower's Obligations to
the Bank under this Note and to the extent permitted by law, a contractual
possessory security interest in and a contractual right of setoff against, and
the Borrower hereby assigns, conveys, delivers, pledges and transfers to the
Bank all of the
7
Borrower's right, title and interest in and to, all deposits, moneys, securities
and other property of the Borrower now or hereafter in the possession of or on
deposit with, or in transit to, the Bank whether held in a general or special
account or deposit, whether held jointly with someone else, or whether held for
safekeeping or otherwise, excluding, however, all ▇▇▇, ▇▇▇▇▇, and trust
accounts. Every such security interest and right of setoff may be exercised
without demand upon or notice to the Borrower. Every such right of setoff shall
be deemed to have been exercised immediately upon the occurrence of an Event of
Default hereunder without any action of the Bank, although the Bank may enter
such setoff on its books and records at a later time.
12. Miscellaneous. No delay or omission of the Bank to exercise any
right or power arising hereunder shall impair any such right or power or be
considered to be a waiver of any such right or power nor shall the Bank's action
or inaction impair any such right or power. The Borrower agrees to pay on
demand, to the extent permitted by law, all costs and expenses incurred by the
Bank in the enforcement of its rights in this Note and in any security therefor,
including without limitation reasonable fees and expenses of the Bank's counsel.
If any provision of this Note is found to be invalid by a court, all the other
provisions of this Note will remain in full force and effect.
The Borrower and all other makers and endorsers of this Note hereby forever
waive presentment, protest, notice of dishonor and notice of non-payment. The
Borrower also waives all defenses based on suretyship or impairment of
collateral.
This Note shall bind the Borrower and its heirs, executors, administrators,
successors and assigns, and the benefits hereof shall inure to the benefit of
Bank and its successors and assigns.
This Note has been delivered to and accepted by the Bank and will be deemed to
be made in the State where the Bank's office indicated above is located. THIS
NOTE WILL BE INTERPRETED AND THE RIGHTS AND LIABILITIES OF THE BANK AND THE
BORROWER DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE WHERE T HE BANK'S
OFFICE INDICATED ABOVE IS LOCATED, EXCLUDING ITS CONFLICT OF LAWS RULES. The
Borrower hereby irrevocably consents to the exclusive jurisdiction of any state
or federal court located for the county or judicial district where the Bank's
office indicated above is located, and consents that all service of process be
sent by nationally recognized overnight courier service directed to the Borrower
at the Borrower's address set forth herein and service so made will be deemed to
be completed on the business day after deposit with such courier; provided that
nothing contained in this Note will prevent the Bank from bringing any action,
enforcing any award or judgment or exercising any rights against the Borrower
individually, against any security or against any property of the Borrower
within any other county, state or other foreign or domestic jurisdiction. The
Borrower acknowledges and agrees that the venue provided above is the most
convenient forum for both the Bank and the Borrower. The Borrower waives any
objection to venue and any objection based on a more convenient forum in any
action instituted under this Note.
The Borrower acknowledges that it has read and understood all the provisions of
this Note, and has been advised by counsel as necessary or appropriate.
8
WITNESS the due execution hereof as a document under seal, as of the
date first written above, with the intent to be legally bound hereby.
WITNESS/ATTEST: AQUAPENN SPRING WATER
--------------- COMPANY, INC.
By:
------------------------ -------------------------
Name:
Title:
[Seal]
9
EXHIBIT 1
PRICING GRID
------------
EXHIBIT C
FORM OF REVOLVING CREDIT LINE REQUEST
TO: PNC BANK, NATIONAL ASSOCIATION
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
FROM: AquaPenn Spring Water Company, Inc.
RE: Credit Agreement (the "Agreement") dated as of December
22, 1997 by and between AquaPenn Spring Water (the
"Borrower") and PNC Bank, National Association (the
"Bank")
A. Pursuant to Section 2.3 of the Agreement, the undersigned
hereby makes the following Loan Request for a Revolving Line
Advance:
1. Principal Amount of Advance U.S. $ __________
2. Proposed Borrowing Date: _________________
3. Requested Interest Rate:
(i) Base Rate Option _____
(ii) EuroRate Option _____
(iii) Offered Rate Option _____
4. Requested Term (EuroRate and Offered Rate Options only):
(i) EuroRate:
_____ One Month
_____ Two Months
_____ Three Months
_____ Six Months
(ii) Offered Rate:
_____ Overnight
_____ One Month
_____ Two Months
_____ Three Months
B. As of the date hereof and the date of making of the Revolving Line
Advance: the representations and warranties contained in Article VI of the
Agreement are and will be true (except representations and warranties that
expressly relate solely to an earlier date or time, which representations and
warranties were true on and as of the specific date referred to therein); the
Borrower has performed and complied with all covenants and conditions of the
Agreement; no Event of Default or Potential Default has occurred and is
continuing or shall exist; and the making of the Revolving Line Advance shall
not contravene any Law applicable to the Borrower.
Capitalized terms used but not defined herein shall have the meanings
given to them in the Agreement.
The undersigned certifies to the accuracy of the foregoing.
AQUAPENN SPRING WATER
COMPANY, INC.
Date: By:
----------------- -------------------------
Name:
Title:
EXHIBIT D
FORM OF REDUCING
REVOLVING LINE LOAN REQUEST
TO: PNC BANK, NATIONAL ASSOCIATION
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
FROM: AquaPenn Spring Water Company, Inc.
RE: Credit Agreement (the"Agreement") dated as of December
22, 1997 by and between AquaPenn Spring Water (the
"Borrower") and PNC Bank National Association (the
"Bank")
A. Pursuant to Section 3.3 of the Agreement, the undersigned
hereby makes the following Reducing Line Loan Request for a
Reducing Revolving Line Advance:
1. Principal Amount of Advance U.S. $ _________
2. Proposed Borrowing Date: ________________
3. Requested Interest Rate:
(i) Base Rate Option _____
(ii) EuroRate Option _____
4. Requested Term (EuroRate Option only):
(i) EuroRate:
_____ One Month
_____ Two Months
_____ Three Months
_____ Six Months
B. As of the date hereof and the date of making of the Reducing
Revolving Line Advance: the representations and warranties contained in Article
VI of the Agreement are and will be true (except representations and warranties
that expressly relate solely to an earlier date or time, which representations
and warranties were true on and as of the specific date referred to therein);
the Borrower has performed and complied with all covenants and conditions of the
Agreement; no Event of Default or Potential Default has occurred and is
continuing or shall exist; and the making of the Reducing Revolving Line Advance
shall not contravene any Law applicable to the Borrower.
Capitalized terms used but not defined herein shall have the meanings
given to them in the Agreement.
The undersigned certifies to the accuracy of the foregoing.
AQUAPENN SPRING WATER
COMPANY, INC.
Date: By:
----------------- -------------------------
Name:
Title:
REDUCING REVOLVING LINE
OF CREDIT NOTE
$10,000,000 December 22, 1997
FOR VALUE RECEIVED, AQUAPENN SPRING WATER COMPANY, INC. (the
"Borrower"), with an address at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, promises to pay to the order of PNC BANK, (the "Bank"), in lawful money
of the United States of America in immediately available funds at its offices
located at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, or at such other location as
the Bank may designate from time to time, the principal sum of TEN MILLION
DOLLARS ($10,000,000) (the "Reducing Revolving Line") or such lesser amount as
may be advanced to or for the benefit of the Borrower hereunder, together with
interest accruing on the outstanding principal balance from the date hereof, all
as provided below:
1. Advances. The Borrower may request advances, repay and request
additional advances hereunder, subject to the terms and conditions of this Note
and the Loan Documents (as defined in the Credit Agreement). The Borrower may
request advances hereunder upon delivering to the Bank by 10:00 a.m. State
College, Pennsylvania time, (i) three (3) business days prior to (A) the
proposed Borrowing Date with respect to the making of Reducing Revolving Line
Advances to which the Euro-Rate Option applies, or (B) the end of the current
Interest Period in the case of the conversion to or the renewal of the Euro-Rate
Option; or (ii) on the same or one (l) Business Day prior to either the proposed
Borrowing Date with respect to the making of a Reducing Revolving Line Advance
to which the Base Rate Option applies or the last day of the preceding Interest
Period with respect to the conversion to the Base Rate Option. a duly completed
Loan Request as more fully set forth in the Credit Agreement. In no event shall
the aggregate unpaid principal amount of advances under this Note exceed the
face amount of this Note or the Reducing Revolving Line Limit under Section
3.1.1 of the Credit Agreement.
2. Rate of Interest. Each advance outstanding under this Note will bear
interest at a rate or rates per annum as may be selected by the Borrower from
the interest rate options set forth below (the "Interest Rate Options"):
(i) Base Rate Option. A fluctuating rate per annum (computed on the
basis of a year of 365 or 366 days, as the case may be, and actual days elapsed)
equal to the Base Rate plus the Applicable Margin set forth on the pricing grid
attached hereto as Exhibit l, such interest rate to change automatically from
time to time effective as of the effective date of each change in the Base Rate.
If and when the Base Rate changes, the rate of interest with respect to any
advances to which the Base Rate Option applies will change automatically without
notice to the Borrower.
(ii) Euro-Rate Option. A rate per annum (computed on the basis of a
year of 360 days and actual days elapsed) equal to the Euro-Rate plus the
Applicable Margin set forth on the pricing grid attached hereto as Exhibit 1,
subject to Section 4.4 of the Credit Agreement.
The foregoing notwithstanding, it is understood that no more than four (4)
borrowings under the Euro-Rate Option may be outstanding at any one time.
Interest will be calculated on the basis of a year of 360 days for the actual
number of days in each interest period. In no event will the rate of interest
hereunder exceed the maximum rate allowed by law.
3. Definitions. For the purpose hereof, the following terms shall have
the following meanings:
"Base Rate" shall mean the greater of (i) the interest rate per annum
announced from time to time by the Bank at its Principal Office as its then
prime rate, which rate may not be the lowest rate then being charged commercial
borrowers by the Bank, or (ii) the Federal Funds Effective Rate plus .5% per
annum.
"Business Day" shall mean any day other than a Saturday or Sunday or a
legal holiday on which commercial banks are authorized or required to be closed
for business in Pittsburgh, Pennsylvania; and if the applicable Business Day
relates to any Loan to which the Euro-Rate Option applies, such day must also be
a day on which dealings are carried on in the London interbank market.
"Credit Agreement" shall mean that certain Credit Agreement between the
Bank and Borrower dated as of December 22, 1997.
"Euro-Rate" shall mean, with respect to any advance to which the
Euro-Rate Option applies for the applicable Permitted Euro-Rate Interest Period,
the interest rate per annum determined by the Bank by dividing (the resulting
quotient rounded upwards, if necessary, to the nearest 1/l00th of 1% per annum)
(i) the rate of interest determined by the Bank in accordance with its usual
procedures (which determination shall be conclusive absent manifest error) to be
the average of the London interbank offered rates of interest per annum for U.S.
Dollars set forth on Telerate display page 3750 or such other display page on
the Telerate System as may replace such page to evidence the average of rates
quoted by banks designated by the British Bankers' Association (or appropriate
successor or, if the British Bankers' Association or its successor ceases to
provide such quotes, a comparable replacement determined by the Bank) two (2)
Business Days prior to the first day of such Interest Period for an amount
comparable to such Borrowing Tranche and having a borrowing date and maturity
comparable to such Interest Period by (ii) a number equal to 1.00 minus the
Euro-Rate Reserve Percentage. The Euro-Rate shall be adjusted with respect to
any Euro-Rate Option outstanding on the effective date of any change in the
Euro-Rate Reserve Percentage as of such effective date. The Bank shall give
prompt notice to the Borrower of the Euro-Rate as determined or adjusted in
accordance herewith, which determination shall be conclusive absent manifest
error.
2
"Euro-Rate Reserve Percentage" shall mean the maximum percentage
(expressed as a decimal rounded upward to the nearest 1/100 of 1%) as determined
by the Bank which is in effect on such day as prescribed by the Board of
Governors of the Federal Reserve System (or any successor) for determining the
reserve requirements (including, without limitation, supplemental, marginal and
emergency reserve requirements) with respect to eurocurrency funding (currently
referred to as "Eurocurrency Liabilities") of a member bank in such System.
"Federal Funds Effective Rate" for any day shall mean the rate per
annum (based on a year of 360 days and actual days elapsed and rounded upward to
the nearest 1/100 of 1%) announced by the Federal Reserve Bank of New York (or
any successor) on such day as being the weighted average of the rates on
overnight federal funds transactions arranged by federal funds brokers on the
previous trading day, as computed and announced by such Federal Reserve Bank (or
any successor) in substantially the same manner as such Federal Reserve Bank
computes and announces the weighted average it refers to as the "Federal Funds
Effective Rate" as of the date of this Agreement; provided, if such Federal
Reserve Bank (or its successor) does not announce such rate on any day, the
"Federal Funds Effective Rate" for such day shall be the Federal Funds Effective
Rate for the last day on which such rate was announced.
"Interest Rate Option" shall mean any Euro-Rate Option or Base Rate
Option.
"Permitted Euro-Rate Interest Period" shall mean a period of one (1),
two, (2), three (3) or six (6) months selected by the Borrower commencing on the
date of disbursement of an advance and each successive period selected by the
Borrower thereafter; provided, that if a Permitted Euro-Rate Interest Period
would end on a day which is not a Business Day, it shall end on the next
succeeding Business Day, unless such day falls in the succeeding calendar month
in which Case the Permitted Euro-Rate Interest Period shall end on the next
preceding Business Day. In no event shall any Euro-Rate Interest Period end on a
day after the Revolving Line Expiration Date (as such term is defined in the
Loan Documents).
Other capitalized terms used herein and not otherwise defined shall
have the meanings as set forth in the Credit Agreement.
4. Interest Rate Election. Subject to the terms and conditions of this
Note and the Credit Agreement, at the end of each Interest Period applicable to
any advance, the Borrower may renew the Interest Rate Option applicable to such
advance or convert such advance to a different Interest Rate Option by
delivering a Loan Request to the Bank at the times, and in the manner, set forth
herein and in the Credit Agreement. Within the time period prescribed in the
Credit Agreement prior to the end of each Permitted Euro-Rate Interest Period in
the case of a renewal of such Permitted Euro-Rate Interest Period or prior to
the proposed beginning of a new Permitted Euro-Rate Interest Period in the case
of a conversion from the Base Rate Option to the Euro-Rate Option, the Borrower
shall notify (via the Loan Request as defined in Credit Agreement) the Bank of
each election of an Interest Rate Option, each conversion from one Interest Rate
Option to another, the amount of the advances then outstanding to be allocated
to
3
each Interest Rate Option and, where relevant, the Interest Period during which
such Interest Rate Option shall apply. If no notice of conversion or renewal is
received by the Bank, the Borrower shall be deemed to have converted such
advance to the Base Rate Option.
5. Payment Terms. The Borrower shall pay accrued interest on, and
principal of, this Note as follows:
(a) Interest Payments. Interest on the principal balance hereof
comprising Borrowing Tranches to which the Base Rate Option applies shall be due
and payable in arrears on the first Business Day of each January, April, July
and October (each such date a "Quarterly Interest Payment Date") after the date
hereof and on November 30, 2002 (the "Reducing Revolving Line Expiration Date")
or upon acceleration of this Note. Interest on the principal balance hereof
comprising Borrowing Tranches to which the Euro-Rate Option applies shall be due
and payable on the earlier of (i) the end of the applicable Interest Period or
(ii) each Quarterly Interest Payment Date occurring prior to the end of such
Interest Period.
(b) Principal Payments. Unless sooner prepaid in accordance with
the terms hereof, or sooner accelerated by Bank by virtue of an Event of Default
hereunder, all principal amounts outstanding hereunder shall be paid in full on
the Reducing Revolving Line Expiration Date. The Borrower shall also make such
principal payments from time to time as may be necessary to maintain the
outstanding principal balance hereof at or below the Reducing Revolving Line
Limit under Section 3.1.1 of the Credit Agreement.
If any payment under this Note shall become due on a Saturday, Sunday or public
holiday under the laws of the State where the Bank's office indicated above is
located, such payment shall be made on the next succeeding business day and such
extension of time shall be included in computing interest in connection with
such payment. The Borrower hereby authorizes the Bank to charge the Borrower's
deposit account at the Bank for any payment when due hereunder. Payments
received will be applied to charges, fees and expenses (including attorneys'
fees), accrued interest and principal in any order the Bank may choose, in its
sole discretion.
6. Late Payments: Default Rate. If the Borrower fails to make any
payment of principal, interest or other amount coming due pursuant to the
provisions of this Note within fifteen (15) calendar days of the date due and
payable, the Borrower also shall pay to the Bank a late charge equal to the
lesser of five percent (5%) of the amount of such payment or $100.00. Such 15
day period shall not be construed in any way to extend the due date of any such
payment. The late charge is imposed for the purpose of defraying the Bank's
expenses incident to the handling of delinquent payments and is in addition to,
and not in lieu of, the exercise by the Bank of any rights and remedies
hereunder, under the other Loan Documents or under applicable laws, and any fees
and expenses of any agents or attorneys which the Bank may employ.
Upon the occurrence of an Event of Default hereunder, the rate of
interest applicable to all of the outstanding principal balance hereunder shall
automatically increase to and accrue at an interest rate per anum equal to the
sum of the variable rate of interest applicable under the Base Rate Option plus
an additional 2% per annum (the "Default Rate") until all amounts due
4
hereunder and under the Loan Documents have been paid in full. The Borrower
acknowledges that the Default Rate reflects, among other things, the fact that
such outstanding Borrowing Tranches or other amounts have become a substantially
greater risk given their default status and that the Bank is entitled to
additional compensation for such risk; and all such interest shall be payable by
Borrower upon demand by Bank. The Default Rate shall continue to apply whether
or not judgment shall be entered on this Note.
7. Prepayment. The Borrower shall have the right at its option from
time to time to prepay the principal balance outstanding hereunder in whole or
part without premium or penalty (except as provided in Section 5.4 of the Credit
Agreement), as follows:
(i) at any time with respect to any Borrowing Tranche to which the
Base Rate Option applies,
(ii) on the last day of the applicable Interest Period with respect
to Borrowing Tranches to which a Euro-Rate Option applies,
(iii) on the date specified in a notice by any Bank pursuant to
Section 4.4 of the Credit Agreement with respect to any advance under the
Revolving Line to which a Euro-Rate Option applies.
Whenever the Borrower desires to prepay any part of the outstanding
principal hereunder, it shall provide a prepayment notice to the Bank by 1:00
p.m. at least one (1) Business Day prior to the date of prepayment, setting
forth the following information:
(x) the date, which shall be a Business Day, on which the proposed
prepayment is to be made;
(y) a statement indicating the application of the prepayment to the
Reducing Revolving Line; and
(z) the total principal amount of such prepayment, which shall not be
less than $500,000.
All prepayment notices shall be irrevocable. The principal amount of
the principal balance for which a prepayment notice is given, together with
interest on such principal amount except with respect to Borrowing Tranches to
which the Base Rate Option applies, shall be due and payable on the date
specified in such prepayment notice as the date on which the proposed prepayment
is to be made. Except as provided in Section 4.4.3 of the Credit Agreement, if
the Borrower makes a prepayment of principal but fails to specify the applicable
Borrowing Tranche which the Borrower is prepaying, the prepayment shall be
applied first to Loans to which the Base Rate Option applies, then to Loans to
which the Euro-Rate Option applies. Any prepayment hereunder shall be subject to
the Borrower's obligation to indemnify the Bank under Section 5.4.2 of the
Credit Agreement.
5
8. Yield Protection. The Borrower shall pay to the Bank, on written
demand therefor, together with the written evidence of the justification
therefor, all direct costs incurred, losses suffered or payments made by Bank by
reason of any change in law or regulation or its interpretation imposing any
reserve, deposit, allocation of capital, or similar requirement (including
without limitation, Regulation D of the Board of Governors of the Federal
Reserve System) on the Bank, its holding company or any of their respective
assets. In addition, the Borrower agrees to indemnify the Bank against any
liabilities, losses or expenses (including loss of margin, any loss or expense
sustained or incurred in liquidating or employing deposits from third parties
acquired to effect, fund or maintain any Loan bearing interest under the
Euro-Rate Option or any part thereof) which the Bank sustains or incurs as a
consequence of either (i) the Borrower's failure to make a payment on the due
date thereof or (ii) the Borrower's payment, prepayment or conversion of any
Loan bearing interest under the Euro-Rate Option on a day other than the last
day of the applicable Euro-Rate Interest Period including but not limited to the
Cost of Prepayment. "Cost of Prepayment" means an amount equal to the present
value, if positive, of the product of (a) the difference between (i) the yield,
on the beginning date of the applicable interest period, of a U.S. Treasury
obligation with a maturity similar to the applicable interest period minus (ii)
the yield, on the prepayment date, of a U.S. Treasury obligation with a maturity
similar to the remaining maturity of the applicable interest period, and (b) the
principal amount to be prepaid, and (c) the number of years, including
fractional years from the prepayment date to the end of the applicable interest
period. The yield on any U.S. Treasury obligation shall be determined by
reference to Federal Reserve Statistical Release H.15(519) "Selected Interest
Rates". For purposes of making present value calculations, the yield to maturity
of a similar maturity U.S. Treasury obligation on the prepayment date shall be
deemed the discount rate. The Cost of Prepayment shall also apply to any
payments made after acceleration of the maturity of this Note. The Bank's
determination of an amount payable under this paragraph shall, in the absence of
manifest error, be conclusive and shall be payable on demand.
9. Other Loan Documents. This Note is issued pursuant to the Credit
Agreement and the other documents referred to therein, the terms of which are
incorporated herein by reference (collectively, the "Loan Documents").
10. Events of Default. The occurrence of any of the following events
will be deemed to be an "Event of Default" under this Note: (i) the nonpayment
of any principal, interest or other indebtedness under this Note when due; (ii)
the occurrence of any event of default or default and the lapse of any notice or
cure period under any Loan Document or any other debt, liability or obligation
to the Bank of any Obligor; (iii) the filing by or against the Borrower of any
proceeding in bankruptcy, receivership, insolvency, reorganization, liquidation,
conservatorship or similar proceeding (and, in the case of any such proceeding
instituted against the Borrower, such proceeding is not dismissed or stayed
within thirty (30) days of the commencement thereof); (iv) any assignment by the
Borrower for the benefit of creditors, or any levy, garnishment, attachment or
similar proceeding is instituted against any property of the Borrower held by or
deposited with the Bank; (v) a default with respect to any other indebtedness of
any Obligor for borrowed money, if the effect of such default is to cause or
permit the acceleration of such debt; (vi) the commencement of any foreclosure
or forfeiture proceeding, execution or
6
attachment against any collateral securing the obligations of any Obligor to the
Bank; (vii) the entry of a final judgment against any Obligor and the failure of
such Obligor to discharge the judgment within ten days of the entry thereof;
(viii) in the event that this Note or any guarantee executed by any Guarantor is
secured, the failure of any Obligor to provide the Bank with additional
collateral if in the opinion of the Bank at any time or times, the market value
of any of the collateral securing this Note or any guarantee has depreciated;
(ix) any material adverse change in the business, assets, operations, financial
condition or results of operations of any Obligor; (x) the revocation or
attempted revocation, in whole or in part, of any guarantee by any Guarantor;
(xi) any representation or warranty made by any Obligor to the Bank in any Loan
Document, or any other documents now or in the future securing the obligations
of any Obligor to the Bank, is false, erroneous or misleading in any material
respect; or (xii) the failure of any Obligor to observe or perform any covenant
or other agreement with the Bank contained in any Loan Document or any other
documents now or in the future securing the obligations of any Obligor to the
Bank.
As used herein, the term "Obligor" means any Borrower and any Guarantor, and the
term "Guarantor" means any guarantor of the obligations of the Borrower to the
Bank existing on the date of this Note or arising in the future.
Upon the occurrence of an Event of Default: (a) the Bank shall continue to have
no obligation to make advances hereunder; (b) if an Event of Default specified
in clause (iii) or (iv) above shall occur, the outstanding principal balance and
accrued interest hereunder together with any additional amounts payable
hereunder shall be immediately due and payable without demand or notice of any
kind; (c) if any other Event of Default shall occur the outstanding principal
balance and accrued interest hereunder together with any additional amounts
payable hereunder, at the option of the Bank and without demand or notice of any
kind, may be accelerated and become immediately due and payable; (d) at the
option of the Bank, this Note will bear interest at the Default Rate from the
date of the occurrence of the Event of Default; and (e) the Bank may exercise
from time to time any of the rights and remedies available to the Bank under the
Loan Documents or under applicable law.
11. Right of Setoff. In addition to all liens upon and rights of setoff
against the money, securities or other property of the Borrower given to the
Bank by law, the Bank shall have, with respect to the Borrower's Obligations to
the Bank under this Note and to the extent permitted by law, a contractual
possessory security interest in and a contractual right of setoff against, and
the Borrower hereby assigns, conveys, delivers, pledges and transfers to the
Bank all of the Borrower's right, title and interest in and to, all deposits,
moneys, securities and other property of the Borrower now or hereafter in the
possession of or on deposit with, or in transit to, the Bank whether held in a
general or special account or deposit, whether held jointly with someone else,
or whether held for safekeeping or otherwise, excluding, however, all ▇▇▇,
▇▇▇▇▇, and trust accounts. Every such security interest and right of setoff may
be exercised without demand upon or notice to the Borrower. Every such right of
setoff shall be deemed to have been exercised immediately upon the occurrence of
an Event of Default hereunder without any action of the Bank, although the Bank
may enter such setoff on its books and records at a later time.
7
12. Miscellaneous. No delay or omission of the Bank to exercise any
right or power arising hereunder shall impair any such right or power or be
considered to be a waiver of any such right or power nor shall the Bank's action
or inaction impair any such right or power. The Borrower agrees to pay on
demand, to the extent permitted by law, all costs and expenses incurred by the
Bank in the enforcement of its rights in this Note and in any security therefor,
including without limitation reasonable fees and expenses of the Bank's counsel.
If any provision of this Note is found to be invalid by a court, all the other
provisions of this Note will remain in full force and effect.
The Borrower and all other makers and endorsers of this Note hereby forever
waive presentment, protest, notice of dishonor and notice of non-payment. The
Borrower also waives all defenses based on suretyship or impairment of
collateral.
This Note shall bind the Borrower and its heirs, executors, administrators,
successors and assigns, and the benefits hereof shall inure to the benefit of
Bank and its successors and assigns.
This Note has been delivered to and accepted by the Bank and will be deemed to
be made in the State where the Bank's office indicated above is located. THIS
NOTE WILL BE INTERPRETED AND THE RIGHTS AND LIABILITIES OF THE BANK AND THE
BORROWER DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE WHERE THE BANK'S
OFFICE INDICATED ABOVE IS LOCATED, EXCLUDING ITS CONFLICT OF LAWS RULES. The
Borrower hereby irrevocably consents to the exclusive jurisdiction of any state
or federal court located for the county or judicial district where the Bank's
office indicated above is located, and consents that all service of process be
sent by nationally recognized overnight courier service directed to the Borrower
at the Borrower's address set forth herein and service so made will be deemed to
be completed on the business day after deposit with such courier; provided that
nothing contained in this Note will prevent the Bank from bringing any action,
enforcing any award or judgment or exercising any rights against the Borrower
individually, against any security or against any property of the Borrower
within any other county, state or other foreign or domestic jurisdiction. The
Borrower acknowledges and agrees that the venue provided above is the most
convenient forum for both the Bank and the Borrower. The Borrower waives any
objection to venue and any objection based on a more convenient forum in any
action instituted under this Note.
The Borrower acknowledges that it has read and understood all the provisions of
this Note, and has been advised by counsel as necessary or appropriate.
8
WITNESS the due execution hereof as a document under seal, as of the
date first written above, with the intent to be legally bound hereby.
WITNESS/ATTEST: AQUAPENN SPRING WATER
--------------- COMPANY, INC.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------- ---------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Chief Operating Officer
[Seal]
9
EXHIBIT 1
PRICING GRID
------------
SCHEDULE 1.1(A)
EXHIBIT I
December 22, 1997
PNC Bank, N.A.
Pricing Grid
AquaPenn Spring Water Company, Inc.
------------------------------------------------------------------------------------------------------------------------------------
LEVEL I LEVEL II LEVEL III LEVEL IV LEVEL V LEVEL VI
------------------------------------------------------------------------------------------------------------------------------------
Total Total Total Total Total Total
Indebtedness/ Indebtedness/ Indebtedness/ Indebtedness/ Indebtedness/ Indebtedness/
EBITDA ratio EBITDA ratio EBITDA ratio EBITDA ratio EBITDA ratio EBITDA ratio
is less is less is less is less is less is less
Basis for than or equal than or equal than or equal than or equal than or equal than or equal
Pricing to 1.00 to 1.00. to 1.50 to 1.00. to 2.00 to 1.00. to 2.50 to 1.00. to 3.00 to 1.00. to 4.00 to 1.00.
------------------------------------------------------------------------------------------------------------------------------------
Commitment Fee (bps) 20 25 30 35 40 45
------------------------------------------------------------------------------------------------------------------------------------
LIBOR plus (bps) 75 95 115 135 150 165
------------------------------------------------------------------------------------------------------------------------------------
Base Rate plus (bps) 0 0 0 0 0 15
------------------------------------------------------------------------------------------------------------------------------------
If the ratio of Total Liabilities to Tangible New Worth is 1.0 to 1.0 or less,
the applicable rate at Levels IV, V, and VI will be reduced by 10 basis points.
Total Indebtedness = Company's consolidated long and short term indebtedness
for borrowed money including subordinated indebtedness in which cash interest
in contractually payable, capital leases, guarantees, and letters of credit
issued.
EBITDA = Net income (before extraordinary items) plus income tax expense,
interest expense, depreciation and amortization expense.
Base Rate = PNC prime rate or fed funds plus 1/2%
10
REVOLVING LINE OF CREDIT NOTE
$6,000,000 December 22, 1997
FOR VALUE RECEIVED, AQUAPENN SPRING WATER COMPANY, INC. (the
"Borrower"), with an address at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, promises to pay to the order of PNC BANK, (the "Bank"), in lawful money
of the United States of America in immediately available funds at its offices
located at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, or at such other location as
the Bank may designate from time to time, the principal sum of SIX MILLION
DOLLARS ($6,000,000) (the "Revolving Line") or such lesser amount as may be
advanced to or for the benefit of the Borrower hereunder, together with interest
accruing on the outstanding principal balance from the date hereof, all as
provided below:
1. Advances. The Borrower may request advances, repay and request
additional advances hereunder, subject to the terms and conditions of this Note
and the Loan Documents (as defined in the Credit Agreement). The Borrower may
request advances hereunder upon delivering to the Bank by 10:00 a.m. State
College, Pennsylvania time, (i) three (3) business days prior to (A) the
proposed Borrowing Date with respect to the making of Revolving Line Advances to
which the Euro-Rate Option applies, or (B) the end of the current Interest
Period in the case of the conversion to or the renewal of the Euro-Rate Option;
(ii) on the same or one (1) Business Day prior to either the proposed Borrowing
Date with respect to the making of a Revolving Line Advance to which the Base
Rate Option applies or the last day of the preceding Interest Period with
respect to the conversion to the Base Rate Option; or (iii) three (3) Business
Day prior to (A) the proposed Borrowing Date with respect to the making of
revolving Line Advances for which the Borrower seeks the Offered Rate Option or
(B) the end of the current Interest Period in the case of conversion to or the
renewal of the Offered Rate Option of a duly completed request as more fully set
forth in the Credit Agreement. In no event shall the aggregate unpaid principal
amount of advances under this Note exceed the face amount of this Note.
2. Rate of Interest. Each advance outstanding under this Note will bear
interest at a rate or rates per annum as may be selected by the Borrower from
the interest rate options set forth below (the "Interest Rate Options"):
(i) Base Rate Option. A fluctuating rate per annum (computed on the
basis of a year of 365 or 366 days, as the case may be, and actual days elapsed)
equal to the Base Rate plus the Applicable Margin set forth on the pricing grid
attached hereto as Exhibit l, such interest rate to change automatically from
time to time effective as of the effective date of each change in the Base Rate.
If and when the Base Rate changes, the rate of interest with respect to any
advances to which the Base Rate Option applies will change automatically without
notice to the Borrower.
(ii) Euro-Rate Option. A rate per annum (computed on the basis of a
year of 360 days and actual days elapsed) equal to the Euro-Rate plus the
Applicable Margin set forth on the pricing grid attached hereto as Exhibit 1,
subject to Section 4.4 of the Credit Agreement.
(iii) Offered Rate Option. A rate per annum for a Permitted Offered
Rate Interest Period as may be quoted and offered to Borrower by Bank from time
to time at the Bank's sole discretion and determination.
The foregoing notwithstanding, it is understood that no more than four (4)
borrowings under the Euro-Rate Option may be outstanding at any one time.
Interest will be calculated on the basis of a year of 360 days for the actual
number of days in each interest period. In no event will the rate of interest
hereunder exceed the maximum rate allowed by law.
3. Definitions. For the purpose hereof, the following terms shall have
the following meanings:
"Base Rate" shall mean the greater of (i) the interest rate per annum
announced from time to time by the Bank at its Principal Office as its then
prime rate, which rate may not be the lowest rate then being charged commercial
borrowers by the Bank, or (ii) the Federal Funds Effective Rate plus .5% per
annum.
"Business Day" shall mean any day other than a Saturday or Sunday or a
legal holiday on which commercial banks are authorized or required to be closed
for business in Pittsburgh, Pennsylvania; and if the applicable Business Day
relates to any Loan to which the Euro-Rate Option applies, such day must also be
a day on which dealings are carried on in the London interbank market.
"Credit Agreement" shall mean that certain Credit Agreement between the
Bank and Borrower dated as of December 22, 1997.
"Euro-Rate" shall mean, with respect to any advance to which the
Euro-Rate Option applies for the applicable Permitted Euro-Rate Interest Period,
the interest rate per annum determined by the Bank by dividing (the resulting
quotient rounded upwards, if necessary, to the nearest l/l00th of 1% per annum)
(i) the rate of interest determined by the Bank in accordance with its usual
procedures (which determination shall be conclusive absent manifest error) to be
the average of the London interbank offered rates of interest per annum for U.S.
Dollars set forth on Telerate display page 3750 or such other display page on
the Telerate System as may replace such page to evidence the average of rates
quoted by banks designated by the British Bankers' Association (or appropriate
successor or, if the British Bankers' Association or its successor ceases to
provide such quotes, a comparable replacement determined by the Bank) two (2)
Business Days prior to the first day of such Interest Period for an amount
comparable to such Borrowing Tranche and having a borrowing date and maturity
comparable to such Interest Period by (ii) a number equal to 1.00 minus the
Euro-Rate Reserve Percentage. The Euro-Rate shall be adjusted with respect to
any Euro-Rate Option outstanding on the effective date of any change in
2
the Euro-Rate Reserve Percentage as of such effective date. The Bank shall give
prompt notice to the Borrower of the Euro-Rate as determined or adjusted in
accordance herewith, which determination shall be conclusive absent manifest
error.
"Euro-Rate Reserve Percentage" shall mean the maximum percentage
(expressed as a decimal rounded upward to the nearest 1/100 of 1%) as determined
by the Bank which is in effect on such day as prescribed by the Board of
Governors of the Federal Reserve System (or any successor) for determining the
reserve requirements (including, without limitation, supplemental, marginal and
emergency reserve requirements) with respect to eurocurrency funding (currently
referred to as "Eurocurrency Liabilities") of a member bank in such System.
"Federal Funds Effective Rate" for any day shall mean the rate per
annum (based on a year of 360 days and actual days elapsed and rounded upward to
the nearest 1/100 of 1%) announced by the Federal Reserve Bank of New York (or
any successor) on such day as being the weighted average of the rates on
overnight federal funds transactions arranged by federal funds brokers on the
previous trading day, as computed and announced by such Federal Reserve Bank (or
any successor) in substantially the same manner as such Federal Reserve Bank
computes and announces the weighted average it refers to as the "Federal Funds
Effective Rate" as of the date of this Agreement; provided, if such Federal
Reserve Bank (or its successor) does not announce such rate on any day, the
"Federal Funds Effective Rate" for such day shall be the Federal Funds Effective
Rate for the last day on which such rate was announced.
"Interest Rate Option" shall mean any Euro-Rate Option, Offered Rate
Option or Base Rate Option.
"Permitted Euro-Rate Interest Period" shall mean a period of one (1),
two, (2), three (3) or six (6) months selected by the Borrower commencing on the
date of disbursement of an advance and each successive period selected by the
Borrower thereafter; provided, that if a Permitted Euro-Rate Interest Period
would end on a day which is not a Business Day, it shall end on the next
succeeding Business Day, unless such day falls in the succeeding calendar month
in which Case the Permitted Euro-Rate Interest Period shall end on the next
preceding Business Day. In no event shall any Euro-Rate Interest Period end on a
day after the Revolving Line Expiration Date (as such term is defined in the
Loan Documents).
"Permitted Offered Rate Interest Period" shall mean any of the
following periods: overnight, thirty (30) days, sixty (60) days or ninety (90)
days.
Other capitalized terms used herein and not otherwise deemed shall have
the meanings as set forth in the Credit Agreement.
3
4. Interest Rate Election. Subject to the terms and conditions of this
Note and the Credit Agreement, at the end of each Interest Period applicable to
any advance, the Borrower may renew the Interest Rate Option applicable to such
advance or convert such advance to a different Interest Rate Option by
delivering a Loan Request to the Bank at the times, and in the manner, set forth
herein and in the Credit Agreement. Within the time period prescribed in the
Credit Agreement prior to the end of each Permitted Euro-Rate Interest Period in
the case of a renewal of such Permitted Euro-Rate Interest Period or prior to
the proposed beginning of a new Permitted Euro-Rate Interest Period in the case
of a conversion from the Base Rate Option or the Offered Rate Option to the
Euro-Rate Option, the Borrower shall notify (via the Loan Request as defined in
Credit Agreement) the Bank of each election of an Interest Rate Option, each
conversion from one Interest Rate Option to another, the amount of the advances
then outstanding to be allocated to each Interest Rate Option and, where
relevant, the Interest Period during which such Interest Rate Option shall
apply. If no notice of conversion or renewal is received by the Bank, the
Borrower shall be deemed to have converted such advance to the Base Rate Option.
5. Payment Terms. The Borrower shall pay accrued interest on, and
principal of, this Note as follows:
(a) Interest Payments. Interest on the principal balance hereof
comprising Borrowing Tranches to which the Base Rate Option applies shall be due
and payable in arrears on the first Business Day of each January, April, July
and October (each such date a "Quarterly Interest Payment Date") after the date
hereof and on November 30, 1998 (the "Revolving Line Expiration Date") or upon
acceleration of this Note. Interest on the principal balance hereof comprising
Borrowing Tranches to which the Euro-Rate Option or the Offered Rate Option
applies shall be due and payable on the earlier of (i) the end of the applicable
Interest Period or (ii) each Quarterly Interest Payment Date occurring prior to
the end of such Interest Period.
(b) Principal Payments. Unless sooner prepaid in accordance with the
terms hereof, or sooner accelerated by Bank by virtue of an Event of Default
hereunder, all principal amounts outstanding hereunder shall be paid in full on
the Revolving Line Expiration Date.
If any payment under this Note shall become due on a Saturday, Sunday or public
holiday under the laws of the State where the Bank's office indicated above is
located, such payment shall be made on the next succeeding business day and such
extension of time shall be included in computing interest in connection with
such payment. The Borrower hereby authorizes the Bank to charge the Borrower's
deposit account at the Bank for any payment when due hereunder. Payments
received will be applied to charges, fees and expenses (including attorneys'
fees), accrued interest and principal in any order the Bank may choose, in its
sole discretion.
6. Late Payments: Default Rate. If the Borrower fails to make any
payment of principal, interest or other amount coming due pursuant to the
provisions of this Note within fifteen ( 15) calendar days of the date due and
payable, the Borrower also shall pay to the Bank a late charge equal to the
lesser of five percent (5%) of the amount of such payment or $100.00. Such 15
day period shall not be construed in any way to extend the due date of any such
4
payment. The late charge is imposed for the purpose of defraying the Bank's
expenses incident to the handling of delinquent payments and is in addition to,
and not in lieu of, the exercise by the Bank of any rights and remedies
hereunder, under the other Loan Documents or under applicable laws, and any fees
and expenses of any agents or attorneys which the Bank may employ.
Upon the occurrence of an Event of Default hereunder, the rate of
interest applicable to all of the outstanding principal balance hereunder shall
automatically increase to and accrue at an interest rate per anum equal to the
sum of the variable rate of interest applicable under the Base Rate Option plus
an additional 2% per annum (the "Default Rate") until all amounts due hereunder
and under the Loan Documents have been paid in full. The Borrower acknowledges
that the Default Rate reflects, among other things, the fact that such
outstanding Borrowing Tranches or other amounts have become a substantially
greater risk given their default status and that the Bank is entitled to
additional compensation for such risk; and all such interest shall be payable by
Borrower upon demand by Bank. The Default Rate shall continue to apply whether
or not judgment shall be entered on this Note.
7. Prepayment. The Borrower shall have the right at its option from
time to time to prepay the principal balance outstanding hereunder in whole or
part without premium or penalty (except as provided in Section 5.4 of the Credit
Agreement), as follows:
(i) at any time with respect to any Borrowing Tranche to which the
Base Rate Option applies,
(ii) on the last day of the applicable Interest Period with respect
to Borrowing Tranches to which a Euro-Rate Option or an Offered Rate Option
applies,
(iii) on the date specified in a notice by any Bank pursuant to
Section 4.4 of the Credit Agreement with respect to any advance under the
Revolving Line to which a Euro-Rate Option applies.
Whenever the Borrower desires to prepay any part of the outstanding
principal hereunder, it shall provide a prepayment notice to the Bank by 1:00
p.m. at least one (1) Business Day prior to the date of prepayment, setting
forth the following information:
(x) the date, which shall be a Business Day, on which the proposed
prepayment is to be made;
(y) a statement indicating the application of the prepayment to the
Revolving Line; and
(z) the total principal amount of such prepayment, which shall not be
less than $100,000.
All prepayment notices shall be irrevocable. The principal amount of
the principal balance for which a prepayment notice is given, together with
interest on such principal amount
5
except with respect to Borrowing Tranches to which the Base Rate Option applies,
shall be due and payable on the date specified in such prepayment notice as the
date on which the proposed prepayment is to be made. Except as provided in
Section 4.4.3 of the Credit Agreement, if the Borrower makes a prepayment of
principal but fails to specify the applicable Borrowing Tranche which the
Borrower is prepaying, the prepayment shall be applied first to Loans to which
the Base Rate Option applies, then to Loans to which the Offered Rate Option
applies and next to Loans to which Euro-Rate Option applies. Any prepayment
hereunder shall be subject to the Borrower's obligation to indemnify the Bank
under Section 5.4.2 of the Credit Agreement.
8. Yield Protection. The Borrower shall pay to the Bank, on written
demand therefor, together with the written evidence of the justification
therefor, all direct costs incurred, losses suffered or payments made by Bank by
reason of any change in law or regulation or its interpretation imposing any
reserve, deposit, allocation of capital, or similar requirement (including
without limitation, Regulation D of the Board of Governors of the Federal
Reserve System) on the Bank, its holding company or any of their respective
assets. In addition, the Borrower agrees to indemnify the Bank against any
liabilities, losses or expenses (including loss of margin, any loss or expense
sustained or incurred in liquidating or employing deposits from third parties
acquired to effect, fund or maintain any Loan bearing interest under the
Euro-Rate Option or any part thereof) which the Bank sustains or incurs as a
consequence of either (i) the Borrower's failure to make a payment on the due
date thereof or (ii) the Borrower's payment, prepayment or conversion of any
Loan bearing interest under the Euro-Rate Option on a day other than the last
day of the applicable Euro-Rate Interest Period including but not limited to the
Cost of Prepayment. "Cost of Prepayment" means an amount equal to the present
value, if positive, of the product of (a) the difference between (i) the yield,
on the beginning date of the applicable interest period, of a U.S. Treasury
obligation with a maturity similar to the applicable interest period minus (ii)
the yield, on the prepayment date, of a U.S. Treasury obligation with a maturity
similar to the remaining maturity of the applicable interest period, and (b) the
principal amount to be prepaid, and (c) the number of years, including
fractional years from the prepayment date to the end of the applicable interest
period. The yield on any U.S. Treasury obligation shall be determined by
reference to Federal Reserve Statistical Release H. 15(519) "Selected Interest
Rates". For purposes of making present value calculations, the yield to maturity
of a similar maturity U.S. Treasury obligation on the prepayment date shall be
deemed the discount rate. The Cost of Prepayment shall also apply to any
payments made after acceleration of the maturity of this Note. The Bank's
determination of an amount payable under this paragraph shall, in the absence of
manifest error, be conclusive and shall be payable on demand.
9. Other Loan Documents. This Note is issued pursuant to the Credit
Agreement and the other documents referred to therein, the terms of which are
incorporated herein by reference (collectively, the "Loan Documents").
10. Events of Default. The occurrence of any of the following events
will be deemed to be an "Event of Default" under this Note: (i) the nonpayment
of any principal, interest or other indebtedness under this Note when due; (ii)
the occurrence of any event of default or default and the lapse of any notice or
cure period under any Loan Document or any other debt liability or
6
obligation to the Bank of any Obligor; (iii) the filing by or against the
Borrower of any proceeding in bankruptcy, receivership, insolvency,
reorganization, liquidation, conservatorship or similar proceeding (and, in the
case of any such proceeding instituted against the Borrower, such proceeding is
not dismissed or stayed within thirty (30) days of the commencement thereof);
(iv) any assignment by the Borrower for the benefit of creditors, or any levy,
garnishment, attachment or similar proceeding is instituted against any property
of the Borrower held by or deposited with the Bank; (v) a default with respect
to any other indebtedness of any Obligor for borrowed money, if the effect of
such default is to cause or permit the acceleration of such debt; (vi) the
commencement of any foreclosure or forfeiture proceeding, execution or
attachment against any collateral securing the obligations of any Obligor to the
Bank; (vii) the entry of a final judgment against any Obligor and the failure of
such Obligor to discharge the judgment within ten days of the entry thereof;
(viii) in the event that this Note or any guarantee executed by any Guarantor is
secured, the failure of any Obligor to provide the Bank with additional
collateral if in the opinion of the Bank at any time or times, the market value
of any of the collateral securing this Note or any guarantee has depreciated;
(ix) any material adverse change in the business, assets, operations, financial
condition or results of operations of any Obligor; (x) the revocation or
attempted revocation, in whole or in part, of any guarantee by any Guarantor;
(xi) any representation or warranty made by any Obligor to the Bank in any Loan
Document, or any other documents now or in the future securing the obligations
of any Obligor to the Bank, is false, erroneous or misleading in any material
respect; or (xii) the failure of any Obligor to observe or perform any covenant
or other agreement with the Bank contained in any Loan Document or any other
documents now or in the future securing the obligations of any Obligor to the
Bank.
As used herein, the term "Obligor" means any Borrower and any Guarantor, and the
term "Guarantor" means any guarantor of the obligations of the Borrower to the
Bank existing on the date of this Note or arising in the future.
Upon the occurrence of an Event of Default: (a) the Bank shall continue to have
no obligation to make advances hereunder; (b) if an Event of Default specified
in clause (iii) or (iv) above shall occur, the outstanding principal balance and
accrued interest hereunder together with any additional amounts payable
hereunder shall be immediately due and payable without demand or notice of any
kind; (c) if any other Event of Default shall occur the outstanding principal
balance and accrued interest hereunder together with any additional amounts
payable hereunder, at the option of the Bank and without demand or notice of any
kind, may be accelerated and become immediately due and payable; (d) at the
option of the Bank, this Note will bear interest at the Default Rate from the
date of the occurrence of the Event of Default; and (e) the Bank may exercise
from time to time any of the rights and remedies available to the Bank under the
Loan Documents or under applicable law.
11. Right of Setoff. In addition to all liens upon and rights of setoff
against the money, securities or other property of the Borrower given to the
Bank by law, the Bank shall have, with respect to the Borrower's Obligations to
the Bank under this Note and to the extent permitted by law, a contractual
possessory security interest in and a contractual right of setoff against, and
the Borrower hereby assigns, conveys, delivers, pledges and transfers to the
Bank all of the
7
Borrower's right, title and interest in and to, all deposits, moneys, securities
and other property of the Borrower now or hereafter in the possession of or on
deposit with, or in transit to, the Bank whether held in a general or special
account or deposit, whether held jointly with someone else, or whether held for
safekeeping or otherwise, excluding, however, all ▇▇▇, ▇▇▇▇▇, and trust
accounts. Every such security interest and right of setoff may be exercised
without demand upon or notice to the Borrower. Every such right of setoff shall
be deemed to have been exercised immediately upon the occurrence of an Event of
Default hereunder without any action of the Bank, although the Bank may enter
such setoff on its books and records at a later time.
12. Miscellaneous. No delay or omission of the Bank to exercise any
right or power arising hereunder shall impair any such right or power or be
considered to be a waiver of any such right or power nor shall the Bank's action
or inaction impair any such right or power. The Borrower agrees to pay on
demand, to the extent permitted by law, all costs and expenses incurred by the
Bank in the enforcement of its rights in this Note and in any security therefor,
including without limitation reasonable fees and expenses of the Bank's counsel.
If any provision of this Note is found to be invalid by a court, all the other
provisions of this Note will remain in full force and effect.
The Borrower and all other makers and endorsers of this Note hereby forever
waive presentment, protest, notice of dishonor and notice of non-payment. The
Borrower also waives all defenses based on suretyship or impairment of
collateral.
This Note shall bind the Borrower and its heirs, executors, administrators,
successors and assigns, and the benefits hereof shall inure to the benefit of
Bank and its successors and assigns.
This Note has been delivered to and accepted by the Bank and will be deemed to
be made in the State where the Bank's office indicated above is located. THIS
NOTE WILL BE INTERPRETED AND THE RIGHTS AND LIABILITIES OF THE BANK AND THE
BORROWER DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE WHERE T HE BANK'S
OFFICE INDICATED ABOVE IS LOCATED, EXCLUDING ITS CONFLICT OF LAWS RULES. The
Borrower hereby irrevocably consents to the exclusive jurisdiction of any state
or federal court located for the county or judicial district where the Bank's
office indicated above is located, and consents that all service of process be
sent by nationally recognized overnight courier service directed to the Borrower
at the Borrower's address set forth herein and service so made will be deemed to
be completed on the business day after deposit with such courier; provided that
nothing contained in this Note will prevent the Bank from bringing any action,
enforcing any award or judgment or exercising any rights against the Borrower
individually, against any security or against any property of the Borrower
within any other county, state or other foreign or domestic jurisdiction. The
Borrower acknowledges and agrees that the venue provided above is the most
convenient forum for both the Bank and the Borrower. The Borrower waives any
objection to venue and any objection based on a more convenient forum in any
action instituted under this Note.
The Borrower acknowledges that it has read and understood all the provisions of
this Note, and has been advised by counsel as necessary or appropriate.
8
WITNESS the due execution hereof as a document under seal, as of the
date first written above, with the intent to be legally bound hereby.
WITNESS/ATTEST: AQUAPENN SPRING WATER
--------------- COMPANY, INC.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------ ----------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Chief Operating Officer
[Seal]
EXHIBIT 1
PRICING GRID
------------
SCHEDULE 1.1(A)
EXHIBIT I
December 22, 1997
PNC Bank, N.A.
Pricing Grid
AquaPenn Spring Water Company, Inc.
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LEVEL I LEVEL II LEVEL III LEVEL IV LEVEL V LEVEL VI
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Total Total Total Total Total Total
Indebtedness/ Indebtedness/ Indebtedness/ Indebtedness/ Indebtedness/ Indebtedness/
EBITDA ratio EBITDA ratio EBITDA ratio EBITDA ratio EBITDA ratio EBITDA ratio
is less is less is less is less is less is less
Basis for than or equal than or equal than or equal than or equal than or equal than or equal
Pricing to 1.00 to 1.00. to 1.50 to 1.00. to 2.00 to 1.00. to 2.50 to 1.00. to 3.00 to 1.00. to 4.00 to 1.00.
------------------------------------------------------------------------------------------------------------------------------------
Commitment Fee (bps) 20 25 30 35 40 45
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LIBOR plus (bps) 75 95 115 135 150 165
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Base Rate plus (bps) 0 0 0 0 0 15
------------------------------------------------------------------------------------------------------------------------------------
If the ratio of Total Liabilities to Tangible New Worth is 1.0 to 1.0 or less,
the applicable rate at Levels IV, V, and VI will be reduced by 10 basis points.
Total Indebtedness = Company's consolidated long and short term indebtedness
for borrowed money including subordinated indebtedness in which cash interest
in contractually payable, capital leases, guarantees, and letters of credit
issued.
EBITDA = Net income (before extraordinary items) plus income tax expense,
interest expense, depreciation and amortization expense.
Base Rate = PNC prime rate or fed funds plus 1/2%
10