AMENDED AND RESTATED CREDIT AGREEMENT

 

This AMENDED AND RESTATED CREDIT AGREEMENT is made as of April 5, 2010, by and among Vermont Pure Holdings, Ltd. (“ Holdings ”), a Delaware corporation, having its principal place of business at 1050 Buckingham Street, Watertown, Connecticut 06795, Crystal Rock LLC (“ Crystal Rock LLC ”), a Delaware limited liability company, having its principal place of business at 1050 Buckingham Street, Watertown, Connecticut 06795, Crystal Rock Holdings, Inc. (“ Crystal Rock Holdings ”, and together with Holdings and Crystal Rock LLC, collectively, the “ Borrowers ”), a Delaware corporation, having its principal place of business at 1050 Buckingham Street, Watertown, Connecticut 06795, Bank of America, N.A., a national banking association (“ Bank of America ”), and the other lending institutions listed on Schedule 1 , and Bank of America as administrative agent for itself and such other lending institutions.

 

W I T N E S S E T H :

 

WHEREAS, Holdings, Crystal Rock LLC, the Lender that is a party to this Amended and Restated Credit Agreement as of the Effective Date (the “ Effective Date Lender ”), certain other lending institutions and the Administrative Agent are parties to a Credit Agreement dated as of April 5, 2005, as amended by a First Amendment Agreement dated as of September 1, 2005; a Second Amendment Agreement dated as of March 23, 2006; a Third Amendment Agreement dated as of July 5, 2007; and a Fourth Amendment Agreement dated as of May 22, 2008 (as the same has been amended to, but not including, the Effective Date, the “ Original Credit Agreement ”); and

 

WHEREAS, the Effective Date Lender has made loans to the Borrowers pursuant to the Original Credit Agreement and each other lender party to the Original Credit Agreement has assigned the entire remaining amount of such lender’s commitment and the loans owing to it under the Original Credit Agreement to the Effective Date Lender; and

 

WHEREAS, upon the occurrence of the Effective Date, the parties hereto have agreed to amend and restate the Original Credit Agreement as set forth herein.

 

NOW, THEREFORE, the parties hereto agree that the Original Credit Agreement shall be amended and restated in its entirety on the Effective Date as follows:

 

1.            DEFINITIONS AND RULES OF INTERPRETATION.

 

1.1.   Definitions .  The following terms shall have the meanings set forth in this §1 or elsewhere in the provisions of this Credit Agreement referred to below:

 

Accounts Receivable .  All rights of any Borrower or any of its Subsidiaries to payment for goods sold, leased or otherwise marketed and all rights of any Borrower or any of its Subsidiaries to payment for services rendered and all sums of money or other proceeds due thereon pursuant to transactions with account debtors, except for that portion of the sum of money or other proceeds due thereon that relate to sales, use or property taxes in conjunction with such transactions, recorded on books of account in accordance with GAAP.

 

Acquired Company EBITDA .  For any period, an amount equal to Consolidated EBITDA of the Person or assets acquired by Holdings or any of its Subsidiaries in a Permitted Acquisition for the portion of such period preceding the date of such acquisition, calculated on a Pro Forma Basis.

 

 

 

 

Adjustment Date .  The first day of the month immediately following the month in which a Compliance Certificate is to be delivered by the Borrowers pursuant to §9.4(c).

 

Administrative Agent .  Bank of America, N.A., acting as agent for the Lenders and each other Person appointed as the successor Administrative Agent in accordance with §15.9.

 

Administrative Agent’s Office .  The Administrative Agent’s office located at 777 Main Street, Hartford, Connecticut 06115, or at such other location as the Administrative Agent may designate from time to time.

 

Administrative Agent’s Special Counsel .  Bingham McCutchen LLP or such other counsel as may be approved by the Administrative Agent.

 

Administrative Questionnaire .  An Administrative Questionnaire in a form supplied by the Administrative Agent.

 

Affiliate .  Any Person that would be considered to be an affiliate of any other Person under Rule 144(a) of the Rules and Regulations of the Securities and Exchange Commission, as in effect on the date hereof, if such other Person were issuing securities.

 

Applicable Margin .  For each period commencing on an Adjustment Date through the date immediately preceding the next Adjustment Date (each a “ Rate Adjustment Period ”), the Applicable Margin shall be the applicable margin set forth below with respect to the Total Leverage Ratio, as determined for the Reference Period of Holdings and its Subsidiaries ending on the fiscal quarter ended immediately prior to the applicable Rate Adjustment Period.

 

 

 

 

Notwithstanding the foregoing, (a) for the  Loans outstanding and the Letter of Credit Fees payable during the period commencing on the Effective Date through the date immediately preceding the first Adjustment Date to occur after the fiscal quarter ending April 30,   2010, the Applicable Margin shall be the Applicable Margin set forth in Level III above, and (b) if the Borrowers fail to deliver any Compliance Certificate pursuant to §9.4(c) hereof then, for the period commencing on the next Adjustment Date to occur subsequent to such failure through the date immediately following the date on which such Compliance Certificate is delivered, the Applicable Margin shall be the highest Applicable Margin set forth above.

 

Approved Fund .  Any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

 

Asset Sale .  Any one or series of related transactions in which any Borrower or any of its Subsidiaries conveys, sells, leases, licenses or otherwise disposes of, directly or indirectly, any of its properties, businesses or assets (including the sale or issuance of Capital Stock of any Subsidiary other than to a Borrower or any Subsidiary of a Borrower but excluding any Excluded Assets) whether owned on the Effective Date or thereafter acquired.

 

Assignment and Acceptance .  An assignment and acceptance entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by §16.2), and accepted by the Administrative Agent, in substantially the form of Exhibit E or any other form approved by the Administrative Agent.

 

Bakers .  Collectively, John B. Baker, Peter K. Baker, Henry Baker and trusts holding Capital Stock of Holdings for the children of any of the foregoing persons and their heirs, executors, administrators, personal representatives and assigns.

 

Balance Sheet Date .  October 31, 2009.

 

Bank of America .  Bank of America, N.A., a national banking association, in its individual capacity.

 

Base Rate .  For any day a fluctuating rate per annum equal to the higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its “prime rate.”  The “prime rate” is a rate set by Bank of America based upon various factors including Bank of America’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate.  Any change in such rate announced by Bank of America shall take effect at the opening of business on the day specified in the public announcement of such change.

 

 

 

Base Rate Loans .  Revolving Credit Loans and all or any portion of the Term Loan, in each case bearing interest calculated by reference to the Base Rate.

 

Borrowers .  As defined in the preamble hereto.

 

Business Day .  Any day (a) other than a Saturday, Sunday or a day on which banking institutions in Hartford, Connecticut, are not authorized to transact banking business and (b) in the case of LIBOR Rate Loans, which is also a LIBOR Business Day.

 

Capital Assets .  Fixed assets, both tangible (such as land, buildings, fixtures, machinery and equipment) and intangible (such as patents, copyrights, trademarks, franchises and good will); provided that Capital Assets shall not include any item customarily charged directly to expense or depreciated over a useful life of twelve (12) months or less in accordance with GAAP.

 

Capital Expenditures .  Amounts paid or Indebtedness incurred by the Borrowers or any of their Subsidiaries in connection with (i) the purchase or lease by a Borrower or any of its Subsidiaries of Capital Assets that would be required to be capitalized and shown on the balance sheet of such Person in accordance with GAAP or (ii) the lease of any assets by a Borrower or any of its Subsidiaries as lessee under any Synthetic Lease to the extent that such assets would have been Capital Assets had the Synthetic Lease been treated for accounting purposes as a Capitalized Lease.

 

Capitalized Leases .  Leases under which a Borrower or any of its Subsidiaries is the lessee or obligor, the discounted future rental payment obligations under which are required to be capitalized on the balance sheet of the lessee or obligor in accordance with GAAP.

 

Capital Stock .  Any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all membership, partnership and other equivalent ownership interests in a Person (other than a corporation) and any and all warrants, rights or options to purchase any of the foregoing.

 

Cash Management Agreement .  Any agreement to provide cash management services, including treasury, depository, overdraft, credit or debit card, electronic funds transfer and other cash management arrangements that is entered into by and between any of the Borrowers and any Person that, at the time it enters into such agreement, is a Lender or an Affiliate of a Lender.

 

Casualty Event .  With respect to any property (including any interest in property) of any Borrower or any of its Subsidiaries, any loss of, damage to, or condemnation or other taking of, such property for which such Borrower or such Subsidiary receives insurance proceeds, proceeds of a condemnation award or other compensation.

 

CERCLA .  See §8.18(a).

 

 

 

Change of Control .  An event or series of events by which (a) any person or group of persons (within the meaning of Section 13 or 14 of the Securities Exchange Act of 1934) other than the Bakers shall have acquired beneficial ownership (within the meaning of Rule 13d-3 promulgated by the Securities and Exchange Commission under said Act) of twenty percent (20%) or more of the Capital Stock of Holdings; or, during any period of twelve consecutive calendar months, individuals who were directors of Holdings on the first day of such period shall cease to constitute a majority of the board of directors of Holdings unless any new directors were nominated by a majority of such existing directors or (b) Holdings owns of record or beneficially, directly or indirectly, less than one hundred percent (100%) of the Capital Stock of either Crystal Rock Holdings (while it is in existence) or Crystal Rock LLC or less than 100% of the Capital Stock of any other Person that may hereafter become a Subsidiary of any Borrower.

 

Closing Fees .  See §6.1.

 

Code .  The Internal Revenue Code of 1986, as amended from time to time.

 

Collateral .  All of the property, rights and interests of the Borrowers and their Subsidiaries that are or are intended to be subject to the Liens created by the Security Documents.

 

Collateral Assignment of Leases .  The Collateral Assignments of Leases, each dated as of April 5, 2005, between each of Holdings and Crystal Rock LLC and the Administrative Agent and in form and substance satisfactory to the Lenders and the Administrative Agent.

 

Commitment .  With respect to each Lender, the amount set forth on Schedule 1 hereto as the amount of such Lender’s commitment to make Revolving Credit Loans to, and to participate in the issuance, extension and renewal of Letters of Credit for the account of, the Borrowers, as the same may be reduced from time to time as the context may require; or if such commitment is terminated pursuant to the provisions hereof, zero.

 

Commitment Percentage .  With respect to each Lender (a) with respect to Revolving Credit Loans, the percentage set forth on Schedule 1 hereto as such Lender’s percentage of the aggregate Commitments of all of the Lenders in respect of Revolving Credit Loans and (b) with respect to the Term Loan, the percentage amount set forth on Schedule 1 reflecting such Lender’s commitment to make the Term Loan.

 

Compliance Certificate .  See §9.4(c).

 

Consolidated or consolidated .  With reference to any term defined herein, shall mean that term as applied to the accounts of Holdings and its Subsidiaries, consolidated in accordance with GAAP.

 

Consolidated Adjusted EBITDA .  For any period, an amount equal to the sum of (a) Consolidated EBITDA of Holdings and its Subsidiaries for such period (excluding the Consolidated EBITDA of any Subsidiary (or with respect to an asset acquisition, the acquired assets) for the period prior to the acquisition of such Subsidiary (or assets) by Holdings or any of its Subsidiaries), plus (b) an amount equal to seventy-five percent (75%) of Acquired Company EBITDA for such period.

 

 

 

Consolidated Adjusted Operating Cash Flow .  For any period, an amount equal to the sum of (a) Consolidated Operating Cash Flow for such period, plus (b) an amount equal to seventy-five percent (75%) of Acquired Company EBITDA for such period.

 

Consolidated EBITDA .  With respect to any Person for any period, an amount equal to Consolidated Net Income of such Person and its Subsidiaries for such fiscal period, plus (a) the following, in each case to the extent deducted in the calculation of such Person’s Consolidated Net Income and without duplication, (i) depreciation and amortization for such period, plus (ii) income tax expense for such period, plus (iii) Consolidated Total Interest Expense of such Person and its Subsidiaries required to be paid or accrued during such period, plus (iv) other noncash charges reducing Consolidated Net Income for such period, all as determined in accordance with GAAP, less (b) all noncash items increasing Consolidated Net Income for such period.

 

Consolidated Excess Cash Flow .  With respect to Holdings and its Subsidiaries for any particular period, an amount equal to (a) Consolidated Operating Cash Flow for such period less (b) the sum of (i) Consolidated Total Interest Expense of Holdings and its Subsidiaries paid in cash during such period, plus (ii) any mandatory repayments (whether scheduled or otherwise) of principal on any Indebtedness of Holdings or any of its Subsidiaries paid or due and payable during such period.

 

Consolidated Net Income (or Deficit) .  With respect to any Person for any period, the consolidated net income (or deficit) of such Person and its Subsidiaries, after deduction of all expenses, taxes, and other proper charges, determined in accordance with GAAP, after eliminating therefrom all extraordinary and nonrecurring items of income.

 

Consolidated Operating Cash Flow .  For any period, an amount equal to (a) Consolidated EBITDA of Holdings and its Subsidiaries for such period (excluding the Consolidated EBITDA of any Subsidiary (or with respect to an asset acquisition, the acquired assets) for the period prior to the acquisition of such Subsidiary (or assets) by Holdings or any of its Subsidiaries), less (b) the sum of (i) cash payments for all income taxes paid during such period, plus (ii) to the extent not already deducted in the determination of Consolidated EBITDA of Holdings and its Subsidiaries, Capital Expenditures made during such period (excluding Capital Expenditures made with the proceeds of Indebtedness during such period), plus (iii) the aggregate amount of Distributions made by Holdings during such period.

 

Consolidated Senior Interest Expense .  For any period, Consolidated Total Interest Expense of Holdings and its Subsidiaries less the aggregate amount of interest required to be paid or accrued by Holdings and its Subsidiaries during such period on Subordinated Debt.

 

Consolidated Senior Debt Service .  With respect to Holdings and its Subsidiaries and for any period, the sum, without duplication, of (a) Consolidated Senior Interest Expense for such period plus (b) any and all scheduled repayments of principal during such period in respect of Indebtedness (other than Subordinated Debt) that become due and payable during such period pursuant to any agreement or instrument to which Holdings or any of its Subsidiaries is a party.  Demand obligations shall be deemed to be due and payable during any fiscal period during which such obligations are outstanding.

 

Consolidated Total Debt Service .  With respect to Holdings and its Subsidiaries and for any period, the sum, without duplication, of (a) Consolidated Total Interest Expense of Holdings and its Subsidiaries for such period plus (b) any and all scheduled repayments of principal during such period in respect of Indebtedness that become due and payable during such period pursuant to any agreement or instrument to which Holdings or any of its Subsidiaries is a party.  Demand obligations shall be deemed to be due and payable during any fiscal period during which such obligations are outstanding.

 

 

 

Consolidated Total Funded Debt .  With respect to Holdings and its Subsidiaries, the sum, without duplication, of (a) the aggregate amount of Indebtedness of Holdings and its Subsidiaries, on a consolidated basis, relating to (i) the borrowing of money or the obtaining of credit, including the issuance of notes or bonds, (ii) the deferred purchase price of assets (other than trade payables incurred in the ordinary course of business), (iii) any Synthetic Leases or any Capitalized Leases, and   (iv) the maximum drawing amount of all letters of credit outstanding, plus (b) Indebtedness of the type referred to in clause (a) of another Person guaranteed by Holdings or any of its Subsidiaries.

 

Consolidated Total Interest Expense .  With respect to any Person and for any period, the aggregate amount of interest required to be paid or accrued by such Person and its Subsidiaries during such period on all Indebtedness of such Person and its Subsidiaries outstanding during all or any part of such period, whether such interest was or is required to be reflected as an item of expense or capitalized, including payments consisting of interest in respect of any Capitalized Lease or any Synthetic Lease, and including commitment fees, agency fees, facility fees, balance deficiency fees and similar fees or expenses in connection with the borrowing of money.

 

Conversion Request .  A notice given by the Borrowers to the Administrative Agent of the Borrowers’ election to convert or continue a Loan in accordance with §2.7 or §4.5.2.

 

Credit Agreement .  This Amended and Restated Credit Agreement, including the Schedules and Exhibits hereto.

 

Default .  See §14.1.

 

Delinquent Lender .  See §15.5.3.

 

Distribution .  The declaration or payment of any dividend on or in respect of any Capital Stock of Holdings, other than dividends payable solely in shares of common stock of Holdings; the purchase, redemption, defeasance, retirement or other acquisition of any shares of any class of Capital Stock of Holdings, directly or indirectly through a Subsidiary of Holdings or otherwise (including the setting apart of assets for a sinking or other analogous fund to be used for such purpose); the return of capital by Holdings to its shareholders as such; or any other distribution on or in respect of any shares of any class of Capital Stock of Holdings.

 

Dollars or $ .  Dollars in lawful currency of the United States of America.

 

Domestic Lending Office .  Initially, the office of each Lender designated as such in Schedule 1 hereto; thereafter, such other office of such Lender, if any, located within the United States that will be making or maintaining Base Rate Loans.

 

Drawdown Date .  The date on which any Revolving Credit Loan or the Term Loan is made or is to be made, and the date on which any Revolving Credit Loan is converted or continued in accordance with §2.7 or all or any portion of the Term Loan is converted or continued in accordance with §4.5.2.

 

 

 

Effective Date .  See §17.19.

 

Effective Date Lender .  As defined in the preamble hereto.

 

Eligible Assignee .  Any of (a) a Lender, (b) an Affiliate of a Lender that has total assets in excess of $1,000,000,000, (c) an Approved Fund that has total assets in excess of $1,000,000,000 and (d) any other Person (other than a natural person) approved by (i) the Administrative Agent and (ii) unless a Default or an Event of Default has occurred and is continuing, the Borrowers (each such approval not to be unreasonably withheld or delayed).

 

Employee Benefit Plan .  Any employee benefit plan within the meaning of §3(3) of ERISA maintained or contributed to by any Borrower or any ERISA Affiliate, other than a Guaranteed Pension Plan or a Multiemployer Plan.

 

Environmental Laws .  See §8.18(a).

 

EPA .  See §8.18(b).

 

Equity Issuance .  The sale or issuance by any Borrower or any of its Subsidiaries of any of its Capital Stock.

 

ERISA .  The Employee Retirement Income Security Act of 1974, as amended from time to time.

 

ERISA Affiliate .  Any Person which is treated as a single employer with any Borrower under §414 of the Code.

 

ERISA Reportable Event .  A reportable event with respect to a Guaranteed Pension Plan within the meaning of §4043 of ERISA and the regulations promulgated thereunder, other than a reportable event as to which the requirement of 30 days notice has been waived.

 

Event of Default .  See §14.1.

 

Excluded Assets .  With respect to the Borrowers or any of their Subsidiaries (a) inventory sold in the ordinary course of business consistent with past practices and (b) equipment or other assets no longer used or useful in such Person’s business provided that such asset is not sold to an Affiliate of the seller and the aggregate fair market value of all such assets referred to in this clause (b) which are sold in any one calendar year which will be deemed to be Excluded Assets shall not exceed $250,000.

 

Excluded Indebtedness .  Indebtedness permitted to be incurred pursuant to the provisions of §10.1.

 

Existing Letters of Credit .  See §5.1.1.

 

Federal Funds Rate .  For any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to the Administrative Agent on such day on such transactions as determined by the Administrative Agent.

 

 

 

Fees .  Collectively, the Revolving Credit Commitment Fee, the Letter of Credit Fees and the Closing Fees.

 

Financial Affiliate .  A Subsidiary of the bank holding company controlling any Lender, which Subsidiary is engaging in any of the activities permitted by §4(e) of the Bank Holding Company Act of 1956 (12 U.S.C. §1843).

 

Fund .  Any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business.

 

GAAP or generally accepted accounting principles .  (a) When used in §11 (or any defined term used therein), or in the definition of Applicable Margin   whether directly or indirectly through reference to a capitalized term used therein, means (i) principles that are consistent with the principles promulgated or adopted by the Financial Accounting Standards Board and its predecessors, in effect for the fiscal year ended on the Balance Sheet Date, and (ii) to the extent consistent with such principles, the accounting practice of Holdings and its Subsidiaries reflected in its financial statements for the year ended on the Balance Sheet Date, and (b) when used in general, other than as provided above, means principles that are (i) consistent with the principles promulgated or adopted by the Financial Accounting Standards Board and its predecessors, as in effect from time to time, and (ii) consistently applied with past financial statements of Holdings adopting the same principles (except where otherwise required by such principles), provided that in each case referred to in this definition of “ GAAP ” a certified public accountant would, insofar as the use of such accounting principles is pertinent, be in a position to deliver an unqualified opinion (other than a qualification regarding changes in GAAP) as to financial statements in which such principles have been properly applied, and provided further that all financial statements delivered hereunder shall be prepared, and all financial covenants contained herein shall be calculated, without giving effect to any election under Statement of Financial Accounting Standards 159 (or any similar accounting principle) permitting a Person to value its financial liabilities at the fair value thereof.

 

Governing Documents .  With respect to any Person, its certificate or articles of incorporation, certificate of formation, or, as the case may be, certificate of limited partnership, its by-laws, operating agreement or, as the case may be, partnership agreement or other constitutive documents and all shareholder agreements, voting trusts and similar arrangements applicable to any of its Capital Stock.

 

Governmental Authority .  Any foreign, federal, state, regional, local, municipal or other government, or any department, commission, board, bureau, agency, public authority or instrumentality thereof, or any court or arbitrator.

 

Guaranteed Pension Plan .  Any employee pension benefit plan within the meaning of §3(2) of ERISA maintained or contributed to by any Borrower or any ERISA Affiliate the benefits of which are guaranteed on termination in full or in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer Plan.

 

 

 

Hazardous Substances .  See §8.18(b).

 

Hedging Agreement .  Any interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate futures contract, interest rate option agreement, interest rate exchange agreement, forward currency exchange agreement, forward rate currency agreement or other similar agreement or arrangement to which the Borrowers or any of their Subsidiaries and the Administrative Agent (or any Affiliate of the Administrative Agent) is a party, designed to protect the Borrowers or any of their Subsidiaries against fluctuations in interest rates, exchange rates or forward rates.

 

Holdings .  As defined in the preamble hereto.

 

Indebtedness .  As to any Person and whether recourse is secured by or is otherwise available against all or only a portion of the assets of such Person and whether or not contingent, but without duplication:

 

(a)   every obligation of such Person for money borrowed,

 

(b)   every obligation of such Person evidenced by bonds, debentures, notes or other similar instruments, including obligations incurred in connection with the acquisition of property, assets or businesses,

 

(c)   every reimbursement obligation of such Person with respect to letters of credit, bankers’ acceptances or similar facilities issued for the account of such Person,

 

(d)   every obligation of such Person issued or assumed as the deferred purchase price of property or services (including securities repurchase agreements but excluding trade accounts payable or accrued liabilities arising in the ordinary course of business),

 

(e)   every principal component of any Capitalized Lease of such Person,

 

(f)   every obligation of such Person under any Synthetic Lease,

 

(g)   all sales by such Person of (i) accounts or general intangibles for money due or to become due, (ii) chattel paper, instruments or documents creating or evidencing a right to payment of money or (iii) other receivables (collectively “ receivables ”), whether pursuant to a purchase facility or otherwise, other than in connection with the disposition of the business operations of such Person relating thereto or a disposition of defaulted receivables for collection and not as a financing arrangement, and together with any obligation of such Person to pay any discount, interest, fees, indemnities, penalties, recourse, expenses or other amounts in connection therewith,

 

(h)   every obligation of such Person (an “ equity related purchase obligation ”) to purchase, redeem, retire or otherwise acquire for value any shares of Capital Stock issued by such Person or any rights measured by the value of such Capital Stock,

 

(i)   every obligation of such Person under any forward contract, futures contract, swap, option or other financing agreement or arrangement (including, without limitation, caps, floors, collars and similar agreements), the value of which is dependent upon interest rates, currency exchange rates, commodities or other indices (a “ derivative contract ”),

 

 

 

(j)   every obligation in respect of Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent that such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent that the terms of such Indebtedness provide that such Person is not liable therefor and such terms are enforceable under applicable law,

 

(k)   every obligation, contingent or otherwise, of such Person guaranteeing, or having the economic effect of guarantying or otherwise acting as surety for, any obligation of a type described in any of clauses (a) through (j) (the “ primary obligation ”) of another Person (the “ primary obligor ”), in any manner, whether directly or indirectly, and including, without limitation, any obligation of such Person (i) to purchase or pay (or advance or supply funds for the purchase of) any security for the payment of such primary obligation, (ii) to purchase property, securities or services for the purpose of assuring the payment of such primary obligation, or (iii) to maintain working capital, equity capital or other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such primary obligation.

 

The “ amount ” or “ principal amount ” of any Indebtedness at any time of determination represented by (t) any Indebtedness, issued at a price that is less than the principal amount at maturity thereof, shall be the amount of the liability in respect thereof determined in accordance with GAAP, (u) any Capitalized Lease shall be the principal component of the aggregate of the rentals obligation under such Capitalized Lease payable over the term thereof that is not subject to termination by the lessee, (v) any sale of receivables shall be the amount of unrecovered capital or principal investment of the purchaser (other than the Borrowers or any of their wholly-owned Subsidiaries) thereof, excluding amounts representative of yield or interest earned on such investment, (w) any Synthetic Lease shall be the stipulated loss value, termination value or other equivalent amount, (x) any derivative contract shall be the maximum amount of any termination or loss payment required to be paid by such Person if such derivative contract were, at the time of determination, to be terminated by reason of any event of default or early termination event thereunder, whether or not such event of default or early termination event has in fact occurred, (y) any equity related purchase obligation shall be the maximum fixed redemption or purchase price thereof inclusive of any accrued and unpaid dividends to be comprised in such redemption or purchase price and (z) any guaranty or other contingent liability referred to in clause (k) shall be an amount equal to the stated or determinable amount of the primary obligation in respect of which such guaranty or other contingent obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder) as determined by such Person in good faith.

 

Indebtedness Issuance .  The issuance of any notes or other debt securities or the incurrence of any Indebtedness by any Borrower or any of its Subsidiaries.

 

Ineligible Securities .  Securities which may not be underwritten or dealt in by member banks of the Federal Reserve System under Section 16 of the Banking Act of 1933 (12 U.S.C. §24, Seventh), as amended.

 

Interest Payment Date .  (a) As to any Base Rate Loan, the last day of the calendar month with respect to interest accrued during such calendar month, including, without limitation, the calendar month which includes the Drawdown Date of such Base Rate Loan; and (b) as to any LIBOR Rate Loan in respect of which the Interest Period is (i) 3 months or less, the last day of such Interest Period and (ii) more than 3 months, the date that is 3 months from the first day of such Interest Period and, in addition, the last day of such Interest Period.

 

 

Interest Period .  With respect to each Revolving Credit Loan or all or any relevant portion of the Term Loan, (a) initially, the period commencing on the Drawdown Date of such Loan and ending on the last day of one of the periods set forth below, as selected by the Borrowers in a Loan Request or as otherwise required by the terms of this Credit Agreement: (i) for any Base Rate Loan, the last day of the calendar month; and (ii) for any LIBOR Rate Loan, 1, 2 or 3 months; and (b) thereafter, each period commencing on the last day of the next preceding Interest Period applicable to such Revolving Credit Loan or all or such portion of the Term Loan and ending on the last day of one of the periods set forth above, as selected by the Borrowers in a Conversion Request; provided that all of the foregoing provisions relating to Interest Periods are subject to the following:

 

(A)   if any Interest Period with respect to a LIBOR Rate Loan would otherwise end on a day that is not a LIBOR Business Day, that Interest Period shall be extended to the next succeeding LIBOR Business Day unless the result of such extension would be to carry such Interest Period into another calendar month, in which event such Interest Period shall end on the immediately preceding LIBOR Business Day;

 

(B)   if any Interest Period with respect to a Base Rate Loan would end on a day that is not a Business Day, that Interest Period shall end on the next succeeding Business Day;

 

(C)   if the Borrowers shall fail to give notice as provided in §2.7 or §4.5.2, the Borrowers shall be deemed to have requested a conversion of the affected LIBOR Rate Loan to a Base Rate Loan and the continuance of all Base Rate Loans as Base Rate Loans on the last day of the then current Interest Period with respect thereto;

 

(D)   any Interest Period relating to any LIBOR Rate Loan that begins on the last LIBOR Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last LIBOR Business Day of a calendar month; and

 

(E)   any Interest Period that would otherwise extend beyond the Revolving Credit Loan Maturity Date (if comprising a Revolving Credit Loan) or the Term Loan Maturity Date (if comprising the Term Loan or a portion thereof) shall end on the Revolving Credit Loan Maturity Date or the Term Loan Maturity Date (as the case may be).

 

Investments .  All expenditures made and all liabilities incurred (contingently or otherwise) for the acquisition of stock or Indebtedness of, or for loans, advances, capital contributions or transfers of property to, or in respect of any guaranties (or other commitments as described under Indebtedness), or obligations of, any Person.  In determining the aggregate amount of Investments outstanding at any particular time: (a) the amount of any Investment represented by a guaranty shall be taken at not less than the principal amount of the obligations guaranteed and still outstanding; (b) there shall be included as an Investment all interest accrued with respect to Indebtedness constituting an Investment unless and until such interest is paid; (c) there shall be deducted in respect of each such Investment any amount received as a return of capital (but only by repurchase, redemption, retirement, repayment, liquidating dividend or liquidating distribution); (d) there shall not be deducted in respect of any Investment any amounts received as earnings on such Investment, whether as dividends, interest or otherwise, except that accrued interest included as provided in the foregoing clause (b) may be deducted when paid; and (e) there shall not be deducted from the aggregate amount of Investments any decrease in the value thereof.

 

 

 

Lender Affiliate .  With respect to any Lender, (a) an Affiliate of such Lender or (b) any Approved Fund.

 

Lenders .  Bank of America and the other lending institutions listed on Schedule 1 hereto and any other Person who becomes an assignee of any rights and obligations of a Lender pursuant to §16.

 

Letter of Credit .  See §5.1.1.

 

Letter of Credit Application .  See §5.1.1.

 

Letter of Credit Fee .  See §5.6.

 

Letter of Credit Participation .  See §5.1.4.

 

LIBOR Business Day .  Any day other than a Saturday, Sunday or a day on which banking institutions are not authorized to transact international banking business (including dealings in Dollar deposits) in London or such other eurodollar interbank market as may be selected by the Administrative Agent in its sole discretion acting in good faith.

 

LIBOR Lending Office .  Initially, the office of each Lender designated as such in Schedule 1 hereto; thereafter, such other office of such Lender, if any, that shall be making or maintaining LIBOR Rate Loans.

 

LIBOR Rate .  For any Interest Period with respect to a LIBOR Rate Loan, the rate per annum equal to the British Bankers Association LIBOR Rate (“BBA LIBOR”), as published by Reuters (or other commercially available source providing quotations of BBA LIBOR as designated by the Administrative Agent from time to time) at approximately 11:00 a.m., London time, two LIBOR Business Days prior to the commencement of such Interest Period, for Dollar deposits (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period.  If such rate is not available at such time for any reason, then the “LIBOR Rate” for such Interest Period shall be the rate per annum determined by the Administrative Agent to be the rate at which deposits in Dollars for delivery on the first day of such Interest Period in same day funds in the approximate amount of the LIBOR Rate Loan being made, continued or converted and with a term equivalent to such Interest Period would be offered by Bank of America’s London Branch to major banks in the London interbank eurodollar market at their request at approximately 11:00 a.m. (London time) two LIBOR Business Days prior to the commencement of such Interest Period.

 

 

 

LIBOR Rate Loans .  Revolving Credit Loans and all or any portion of the Term Loan bearing interest calculated by reference to the LIBOR Rate.

 

Lien .  Any mortgage, deed of trust, security interest, pledge, hypothecation, assignment, attachment, deposit arrangement, encumbrance, lien (statutory, judgment or otherwise), or other security agreement or preferential arrangement of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any Capitalized Lease, any Synthetic Lease, any financing lease involving substantially the same economic effect as any of the foregoing and the filing of any financing statement under the UCC or comparable law of any jurisdiction).

 

Loan Documents .  This Credit Agreement, the Notes, the Letter of Credit Applications, the Letters of Credit, the Existing Letters of Credit, the Hedging Agreements, the Subordination Agreements and the Security Documents.

 

Loan Request .  See §2.6.

 

Loans .  Collectively, the Revolving Credit Loans and the Term Loan.

 

Material Adverse Effect .  With respect to any event or occurrence of whatever nature (including any adverse determination in any litigation, arbitration or governmental investigation or proceeding):

 

(a)   a material adverse effect on the business, properties, prospects, condition (financial or otherwise), assets, operations or income of any Borrower, individually or the Borrowers and their Subsidiaries, taken as a whole;

 

(b)   an adverse effect on the ability of any Borrower or any of its Subsidiaries, individually and taken as a whole, to perform any of their respective Obligations under any of the Loan Documents to which it is a party; or

 

(c)   any impairment of the validity, binding effect or enforceability of this Credit Agreement or any of the other Loan Documents, any impairment of the rights, remedies or benefits available to the Administrative Agent or any Lender under any Loan Document or any impairment of the attachment, perfection or priority of any Lien of the Administrative Agent under the Security Documents.

 

In determining whether any individual event could have or result in a Material Adverse Effect, notwithstanding that such event does not of itself have such effect, a Material Adverse Effect shall be deemed to have occurred if the cumulative effect of such event and all other then existing events could have or result in a Material Adverse Effect.

 

Material Agreement .  Collectively, (a) (i) that certain Amended and Restated Spring Water License and Supply Agreement (the “Pristine Supply Agreement”), dated as of April 13, 1999, between Pristine Mountain Springs of Vermont, Inc. a Vermont corporation (“Pristine”), and AmSource LLC, a New Hampshire limited liability company (“AmSource”), (ii) that certain Addendum to Amended and Restated Spring Water License and Supply Agreement and Acknowledgement, dated as of December 15, 1999, by and among Holdings, Pristine, AmSource, Barton Lord and Ronald Colton, and (iii) that certain Settlement Agreement, dated December 1, 1999, among Holdings, Pristine, AmSource, Barton Lord and Ronald Colton, relating to the Pristine Supply Agreement and (b) that certain Contract, dated January 6, 2003, by and between Crystal Rock LLC (as successor in interest to Holdings, successor by merger to Vermont Pure Springs, Inc.) and the Town of Bennington.

 

 

 

Maximum Drawing Amount .  The maximum aggregate amount that the beneficiaries may at any time draw under outstanding Letters of Credit and the Existing Letters of Credit, as such aggregate amount may be reduced from time to time pursuant to the terms of the Letters of Credit and the Existing Letters of Credit.

 

Minimum One Month LIBOR Amount.   As of any date, an amount equal to seventy-five percent (75%) of the principal amount of the Term Loan outstanding on such date.

 

Moody’s .  Moody’s Investors Services, Inc.

 

Multiemployer Plan .  Any multiemployer plan within the meaning of §3(37) of ERISA maintained or contributed to by any Borrower or any ERISA Affiliate.

 

Net Cash Equity Issuance Proceeds .  With respect to any Equity Issuance by any Person, the excess of the gross cash proceeds received by such Person for such Equity Issuance after deduction of all reasonable and customary transaction expenses (including, without limitation, underwriting discounts and commissions) actually incurred in connection with such Equity Issuance.

 

Net Cash Indebtedness Issuance Proceeds .  With respect to any Indebtedness Issuance, the excess of the gross cash proceeds received by such Person for such Indebtedness Issuance after deduction of all reasonable and customary transaction expenses actually incurred in connection with such Indebtedness Issuance.

 

Net Cash Sale Proceeds .  The net cash proceeds received by a Person in respect of any Asset Sale, less the sum of (a) all reasonable out-of-pocket fees, commissions and other reasonable and customary direct expenses (including, without limitation, counsel fees) actually incurred in connection with such Asset Sale, including the amount of any transfer or documentary taxes required to be paid by such Person in connection with such Asset Sale, and (b) the aggregate amount of cash so received by such Person which is required to be used to retire (in whole or in part) any Indebtedness (other than under the Loan Documents) of such Person permitted by this Credit Agreement that was secured by a lien or security interest permitted by this Credit Agreement having priority over the liens and security interests (if any) of the Administrative Agent (for the benefit of the Administrative Agent and the Lenders) with respect to such assets transferred and which is required to be repaid in whole or in part (which repayment, in the case of any other revolving credit arrangement or multiple advance arrangement, reduces the commitment thereunder) in connection with such Asset Sale.

 

Notes .  The Term Notes and the Revolving Credit Notes.

 

Obligations .  All indebtedness, obligations and liabilities of any of the Borrowers and their Subsidiaries to any of the Lenders and the Administrative Agent, individually or collectively, existing on the date of this Credit Agreement or arising thereafter, direct or indirect, joint or several, absolute or contingent, matured or unmatured, liquidated or unliquidated, secured or unsecured, arising by contract, operation of law or otherwise, arising or incurred under this Credit Agreement or any of the other Loan Documents or any Hedging Agreement or in respect of any of the Loans made or Reimbursement Obligations incurred or any of the Notes, Letter of Credit Applications, Letters of Credit, the Existing Letters of Credit or other instruments at any time evidencing any thereof, and all indebtedness, obligations and liabilities of any of the Borrowers and their Subsidiaries arising under any Cash Management Agreement.

 

 

 

Operating Account .  See §2.6.2.

 

Original Credit Agreement .  As defined in the preamble hereto.

 

outstanding .  With respect to the Loans, the aggregate unpaid principal thereof as of any date of determination.

 

Participant .  See §16.4.

 

PBGC .  The Pension Benefit Guaranty Corporation created by §4002 of ERISA and any successor entity or entities having similar responsibilities.

 

Perfection Certificates .  The Perfection Certificates as defined in the Security Agreement.

 

Permitted Acquisition .  The acquisition of any Person, business, division, or specified group of assets by any Borrower or any of its Subsidiaries, provided that each of the following conditions is met with respect to any such acquisition:

 

(a)   immediately prior to and after giving effect to such acquisition, no Default or Event of Default shall then exist, and the Borrowers shall have delivered to the Administrative Agent a statement certified by the principal financial or accounting officer of the Borrowers to the effect that immediately prior to and after giving effect to such acquisition, (x) no Default or Event of Default exists and attaching, in reasonable detail, computations evidencing on a Pro Forma Basis compliance (on a consolidated basis) with the covenants contained in §11 as of the end of the most recently completed fiscal quarter, immediately prior to and after giving effect to such acquisition, and (y) for the twelve (12) month period immediately following such acquisition, each of which shall be acceptable to the Administrative Agent in its sole but reasonable discretion;

 

(b)   the aggregate consideration (including, without limitation, assumption of Indebtedness (including, without limitation, any Subordinated Debt) and any earn-out and/or non-compete payments) paid or to be paid by any Borrower or any of its Subsidiaries in connection with such acquisitions after the Effective Date, as to any individual acquisition or group of related (through common ownership) acquisitions, shall not, without the prior written consent of the Administrative Agent, exceed $2,000,000.

 

(c)   the consideration for such acquisition shall not include the assumption of Indebtedness by any Borrower or any of its Subsidiaries, other than Indebtedness (i) in existence prior to the date of such acquisition, (ii) which was not incurred in connection with or in contemplation of, such acquisition, (iii) which is permitted pursuant to §10.1(c) or §10.1(d) and (iv) which is otherwise on terms and conditions satisfactory to the Administrative Agent;

 

(d)   such acquisition shall have been approved by the board of directors (or other managing board) and, if required, shareholders or members (as the case may be) of the Person so acquired;

 

 

 

(e)   the aggregate amount of Revolving Credit Loans made to any Borrower in respect of any such acquisition shall not exceed the lower of (i) seventy-five percent (75%) of the aggregate consideration payable at the closing of such acquisition (including any permitted assumed Indebtedness) and (ii) the actual cash consideration to be paid at the closing by any Borrower or any of its Subsidiaries in connection with such acquisition;

 

(f)   not less than ten (10) Business Days prior to the closing of such acquisition, the Borrowers shall notify the Administrative Agent of the terms thereof and shall provide to the Administrative Agent such information and documents as may be deemed by the Administrative Agent to be necessary in order for the Administrative Agent to determine if the acquisition is a Permitted Acquisition;

 

(g)   no more than three (3) of such acquisitions shall be consummated in any twelve (12) month period, provided that additional acquisitions may be consummated during any such period so long as (i) no Borrower or any Subsidiary of a Borrower incurs or assumes any Indebtedness to finance any such acquisition and (ii) the aggregate consideration (including, without limitation, any earn-out and/or non-compete payments) paid or to be paid by any Borrower or any of its Subsidiaries in connection with all such acquisitions during such period does not exceed $100,000; and

 

(h)   either (i) such acquisition is the acquisition of assets only (for use in the same line of business as (or a line of business substantially similar to) the line of business of the Borrowers and their Subsidiaries and in which assets the Administrative Agent shall concurrently with the closing of the acquisition be granted, for the benefit of the Lenders and the Administrative Agent, a perfected, first priority security interest (subject only to Permitted Liens) or (ii) such acquisition involves the purchase of the Capital Stock of a Person and each of the following conditions is met:

 

(A)   such acquisition is the acquisition of one hundred percent (100%) of each of the Capital Stock and Voting Stock of such Person, and the structure of such acquisition is acceptable to the Administrative Agent and;

 

(B)   such Person is in the same line of business (or a substantially similar line of business) as the Borrowers and their Subsidiaries, and

 

(C)   contemporaneously with the occurrence of such acquisition, the Borrowers shall (I) cause such Person to guaranty all of the Obligations hereunder pursuant to a guaranty in form and substance reasonably satisfactory to the Administrative Agent, which such guaranty shall be a Security Document hereunder, (II) cause such Person to take all steps as may be necessary or advisable in the reasonable opinion of the Administrative Agent to grant to the Administrative Agent, for the benefit of the Lenders and the Administrative Agent, a first priority, perfected security interest in all of its assets (except that there may exist liens thereon permitted by §10.2 hereof and there may exist a prior lien on those assets which secure Indebtedness assumed by the Borrowers or any of their Subsidiaries in connection with such Permitted Acquisition, to the extent permitted under §10.1 hereof) as collateral security for such guaranty, pursuant to security documents, mortgages, pledges and other documents in form and substance reasonably satisfactory to the Administrative Agent, each of which documents shall be Security Documents hereunder, and (III) cause such Person to deliver to the Lenders and the Administrative Agent (aa) evidence of proper corporate authorization and (bb) if required by the Administrative Agent, legal opinions with respect to each of the matters and documents set forth in this clause (C), in each case, in form and substance reasonably satisfactory to the Administrative Agent.

 

 

 

Permitted Liens .  Liens permitted by §10.2.

 

Person .  Any individual, corporation, limited liability company, partnership, limited liability partnership, trust, other unincorporated association, business, or other legal entity, and any Governmental Authority.

 

Pledge Agreement .  The Amended and Restated Pledge Agreement, dated or to be dated on or prior to the Effective Date, between Holdings and the Administrative Agent and in form and substance satisfactory to the Lenders and the Administrative Agent.

 

Pro Forma Basis .  In connection with any Permitted Acquisition or proposed Permitted Acquisition, (a) the calculation of the financial covenants set forth in §11 hereof by the Borrowers and their Subsidiaries (including the Person or assets to be acquired) with reference to the audited historical financial results of such Person, if available, and if not so available, then with reference to such management certified financial results of such Person (or, if an acquisition of assets, the financial results attributable to such assets) as shall be acceptable to the Administrative Agent, in its sole but reasonable discretion, for the applicable period ending immediately prior to the date of such acquisition, after giving effect on a pro forma basis to such Permitted Acquisition in the manner described below, and (b) as at the end of each of the three fiscal quarters of the Borrowers immediately following such Permitted Acquisition, the calculation of compliance with the financial covenants set forth in §11 hereof by the Borrowers and their Subsidiaries (including the Person or assets(s) to be acquired) with reference to the audited historical financial results of such Person, if available, and if not so available, such management certified financial results of such Person (or, if an acquisition of assets, the financial results attributable to such assets) as shall be acceptable to the Administrative Agent, in its sole but reasonable discretion:

 

(i)   all Indebtedness (whether under this Credit Agreement or otherwise) and any other balance sheet adjustments incurred or made in connection with the Permitted Acquisition shall be deemed to have been incurred or made on the first day of the Test Period (or, with respect to the determination as to whether an acquisition is a Permitted Acquisition at the beginning of the applicable Reference Period), and all Indebtedness of the Person acquired or to be acquired in such Permitted Acquisition which was or will have been repaid in connection with the consummation of the Permitted Acquisition shall be deemed to have been repaid concurrently with the deemed incurrence of the Indebtedness incurred in connection with the Permitted Acquisition;

 

(ii)   all Indebtedness assumed to have been incurred pursuant to the preceding clause (i) shall be deemed to have borne interest at the arithmetic mean of (x) the LIBOR Rate for Revolving Credit Loans which are LIBOR Rate Loans having an Interest Period of one month in effect on the first day of the Test Period plus the Applicable Margin as in effect on the date of the consummation of such Permitted Acquisition and (y) the LIBOR Rate for Revolving Credit Loans which are LIBOR Rate Loans having an Interest Period of one month in effect on the last day of the Test Period plus the Applicable Margin as in effect on the date of the consummation of such Permitted Acquisition (after giving effect to the Permitted Acquisition on a Pro Forma Basis); and

 

 

 

(iii)   all adjustments resulting from due diligence and removal of “owner’s costs”, as documented and utilized in the financial analysis prepared by the Borrowers and all costs and adjustments relating to the inclusion of the acquired Person within the consolidated financial statements and tax returns of the Borrowers (including, but not limited to, income taxes, management fees, insurance and benefit costs, and professional service fees), all as shall be acceptable to the Administrative Agent, in its sole, but reasonable discretion.  In no event shall these adjustments exceed 20% of the acquired Person’s Consolidated EBITDA for the most recently ended Reference Period.

 

RCRA .  See §8.18(a).

 

Real Estate .  All real property at any time owned or leased (as lessee or sublessee) by any Borrower or any of its Subsidiaries.

 

Record .  The grid attached to a Note, or the continuation of such grid, or any other similar record, including computer records, maintained by any Lender with respect to any Loan referred to in such Note.

 

Reference Period .  As of any date of determination, the period of four (4) consecutive fiscal quarters of the Borrowers and their Subsidiaries ending on such date, or if such date is not a fiscal quarter end date, the period of four (4) consecutive fiscal quarters most recently ended (in each case treated as a single accounting period).

 

Register .  See §16.3.

 

Reimbursement Obligation .  The Borrowers’ joint and several obligation to reimburse the Administrative Agent and the Lenders on account of any drawing under any Letter of Credit or any Existing Letter of Credit as provided in §5.2.

 

Related Parties .  With respect to any specified Person, such Person’s Affiliates and the respective directors, officers, employees, agents and advisors of such Person and such Person’s Affiliates.

 

Required Lenders .  As of any date, the Lender or Lenders holding at least a majority of the outstanding principal amount of the Notes on such date; and if no such principal is outstanding, the Lender whose aggregate Commitments constitutes at least a majority of the Total Revolving Credit Commitments.

 

Restricted Payment .  In relation to the Borrowers and their Subsidiaries, any (a) Distribution, (b) payment or prepayment whether in cash, securities or other property by a Borrower or its Subsidiaries to such Borrower’s or any Subsidiary’s shareholders (or other equity holders), in each case, other than (u) to a Borrower, (v) to any Subsidiary of a Borrower, (w) payments or prepayments by a Subsidiary to any Borrower or another wholly-owned Subsidiary of a Borrower or by either Crystal Rock LLC or Crystal Rock Holdings to Holdings, (x) lease payments permitted under §10.12, (y) employment compensation payments made under the Senior Management Employment Agreements or to other employees who are shareholders of Holdings for services rendered or (z) payments made to shareholders other than the Bakers for services rendered or products sold as permitted by §10.12 (assuming, for purposes hereof, that any such shareholder is an Affiliate) or (c) derivatives or other transactions with any financial institution, commodities or stock exchange or clearinghouse (a “ Derivatives Counterparty ”) obligating a Borrower or any Subsidiary to make payments to such Derivatives Counterparty as a result of any change in market value of any Capital Stock of such Borrower or such Subsidiary.

 

 

 

Revolving Credit Commitment Fee .  See §2.2.

 

Revolving Credit Loan Maturity Date .  April 5, 2013.

 

Revolving Credit Loans .  Revolving credit loans made or to be made by the Lenders to the Borrowers pursuant to §2.

 

Revolving Credit Note Record .  A Record with respect to a Revolving Credit Note.

 

Revolving Credit Notes .  See §2.4.

 

SARA .  See §8.18(a).

 

Security Agreement .  The Amended and Restated Security Agreement, dated or to be dated on or prior to the Effective Date, between the Borrowers and the Administrative Agent and in form and substance satisfactory to the Lenders and the Administrative Agent.

 

Security Documents .  The Security Agreement, the Collateral Assignment of Leases, the Trademark Assignment, the Pledge Agreement and all other instruments and documents, including without limitation Uniform Commercial Code financing statements, required to be executed or delivered pursuant to any Security Document.

 

Seller Subordinated Debt .  Collectively, the Indebtedness of Holdings in the aggregate principal amount outstanding on the Effective Date of $13,500,000 as evidenced by the Seller Subordinated Notes.

 

Seller Subordinated Debt Holders .  Collectively, Henry E. Baker, John B. Baker and Peter K. Baker.

 

Seller Subordinated Notes .  Collectively, (a) the Subordinated Promissory Note, dated the Effective Date, in the original principal amount of $1,511,111, executed and delivered by Holdings in favor of Henry E. Baker and (b) the Second Amended and Restated Subordinated Promissory Notes, each dated April 5, 2005 and amended on the Effective Date, in the original aggregate principal amount of $12,488,889, with an aggregate outstanding principal balance on the Effective Date of $11,988,889, executed and delivered by Holdings in favor of the respective Seller Subordinated Debt Holders.

 

 

 

Senior Funded Debt .  At any time of determination, the sum of Consolidated Total Funded Debt minus Subordinated Debt.

 

Senior Management .  Collectively, Bruce S. MacDonald, John Baker and Peter Baker and any other person who may from time to time perform for Holdings or any of its Subsidiaries management services of the kind performed as of the Effective Date by any of the foregoing.

 

Senior Management Employment Agreements .  Collectively, the employment agreements between Holdings and each of the members of Senior Management.

 

Settlement .  The making or receiving of payments, in immediately available funds, by the Lenders, to the extent necessary to cause each Lender’s actual share of the outstanding amount of Revolving Credit Loans (after giving effect to any Loan Request) to be equal to such Lender’s Commitment Percentage of the outstanding amount of such Revolving Credit Loans (after giving effect to any Loan Request), in any case where, prior to such event or action, the actual share is not so equal.

 

Settlement Amount .  See §2.9.1.

 

Settlement Date .  (a) The Drawdown Date relating to any Loan Request, (b) Friday of each week, or if a Friday is not a Business Day, the Business Day immediately following such Friday, (c) at the option of the Administrative Agent, on any Business Day following a day on which the account officers of the Administrative Agent active upon the Borrowers’ account become aware of the existence of an Event of Default, (d) any Business Day on which the amount of Revolving Credit Loans outstanding from the Swing Line Lender plus the Swing Line Lender’s Commitment Percentage of the sum of the Maximum Drawing Amount and any Unpaid Reimbursement Obligations is equal to or greater than the Swing Line Lender’s Commitment Percentage of the Total Revolving Credit Commitment, (e) the Business Day immediately following any Business Day on which the amount of Revolving Credit Loans outstanding increases or decreases by more than $250,000 as compared to the previous Settlement Date, (f) any day on which any conversion of a Base Rate Loan to a LIBOR Rate Loan occurs, or (g) any Business Day on which (i) the amount of outstanding Revolving Credit Loans decreases and (ii) the amount of the Administrative Agent’s Revolving Credit Loans outstanding equals zero Dollars ($0).

 

Settling Lender .  See §2.9.1.

 

S&P .  Standard & Poor’s Ratings Group.

 

Subordinated Debt .  Collectively, (a) the Seller Subordinated Debt and (b) other Indebtedness of the Borrowers or any of their Subsidiaries that is unsecured and is expressly subordinated and made junior to the payment and performance in full of the Obligations, and evidenced as such by a written instrument containing subordination provisions in form and substance approved by the Required Lenders in writing, the incurrence or assumption of which has been approved by the Required Lenders (in their sole and absolute discretion) in writing and which is otherwise on terms and conditions satisfactory to the Required Lenders.

 

Subordination Agreements .  Collectively, (a) the Amended and Restated Subordination and Pledge Agreement, dated as of the Effective Date, among the Administrative Agent, the Lenders, Henry E. Baker and Ross S. Rapaport, not individually, but as Trustee of the Peter Baker Life Insurance Trust u/t/a dated July 7, 1992, the John Baker Insurance Trust u/t/a dated July 7, 1992 and the Joan Baker and Henry Baker Irrevocable Trust u/t/a dated December 16, 1991, as agent (the “ Subordinated Agent ”), in form and substance satisfactory to the Lenders and the Administrative Agent, (b) the Subordination and Pledge Agreements, each dated as of April 5, 2005, as amended on the Effective Date, among the Administrative Agent, the Lenders, each of John B. Baker and Peter K. Baker and the Subordinated Agent, each in form and substance satisfactory to the Lenders and the Administrative Agent and (b) the Amended and Restated Security Agreement, dated as of April 5, 2005, among Holdings, Henry E. Baker, Joan A. Baker, John B. Baker and Peter K. Baker and the Subordinated Agent.

 

 

 

Subordination Documents . Collectively, the Subordination Agreements and the Seller Subordinated Notes.

 

Subsidiary .  Any corporation, limited liability company, partnership, association, trust, or other business entity of which the designated parent shall at any time own directly or indirectly through a Subsidiary or Subsidiaries at least a majority (by number of votes) of the outstanding Voting Stock.

 

Swing Line Lender .  Bank of America, or any other Lender designated by the Administrative Agent as the Swing Line Lender which has accepted such designation.

 

Swing Line Sublimit .  An amount equal to the lesser of (a) $0.00 and (b) the Total Revolving Credit Commitment.  The Swing Line Sublimit is part of, and not in addition to, the Total Revolving Credit Commitment.

 

Synthetic Lease .  Any lease of goods or other property, whether real or personal, which is treated as an operating lease under GAAP and as a loan or financing for U.S. income tax purposes.

 

Term Loan .  The term loan made or to be made by the Lenders to the Borrowers on the Effective Date in the aggregate principal amount of $15,500,000 pursuant to §4.1.

 

Term Loan Maturity Date .  April 5, 2015.

 

Term Notes .  See §4.2.

 

Term Note Record .  A Record with respect to a Term Note.

 

Test Period .  In connection with the calculation of the financial covenants set forth in §11 hereof following any Permitted Acquisition, the period of all fiscal quarters (and any portion of a fiscal quarter) prior to the date of such Permitted Acquisition included in the calculation of such financial covenant (or any component thereof).

 

Total Leverage Ratio .  At any date of determination, the ratio of (a) Consolidated Total Funded Debt outstanding on such date to (b) Consolidated Adjusted EBITDA (determined on a Pro Forma Basis, if applicable) for the Reference Period ending on such date.

 

 

Total Revolving Credit Commitment .  The sum of the Commitments of the Lenders in respect of Revolving Credit Loans, as in effect from time to time.

 

Trademark Assignment .  The Trademark Collateral Security and Pledge Agreement, dated as of April 5, 2005, made by Crystal Rock LLC in favor of the Administrative Agent and the Assignment of Trademarks and Service Marks executed in connection therewith, all in form and substance satisfactory to the Lenders and the Administrative Agent.

 

Type .  As to any Loan, its nature as a Base Rate Loan or a LIBOR Rate Loan.

 

Unpaid Reimbursement Obligation .  Any Reimbursement Obligation for which the Borrowers do not reimburse the Administrative Agent and the Lenders on the date specified in, and in accordance with, §5.2.

 

Voting Stock .  Stock or other equity interests, of any class or classes (however designated), the holders of which are at the time entitled, as such holders, to vote for the election of a majority of the directors (or persons performing similar functions) of the corporation, limited liability company, partnership, association, trust or other business entity involved, whether or not the right so to vote exists by reason of the happening of a contingency.

 

1.2.   Rules of Interpretation .

 

(a)   A reference to any document or agreement shall include such document or agreement as amended, modified or supplemented from time to time in accordance with its terms and the terms of this Credit Agreement.

 

(b)   The singular includes the plural and the plural includes the singular.

 

(c)   A reference to any law includes any amendment or modification to such law.

 

(d)   A reference to any Person includes its permitted successors and permitted assigns.

 

(e)   Accounting terms not otherwise defined herein have the meanings assigned to them by GAAP applied on a consistent basis by the accounting entity to which they refer.

 

(f)   The words “include”, “includes” and “including” are not limiting.

 

(g)   All terms not specifically defined herein or by GAAP, which terms are defined in the Uniform Commercial Code as in effect in the State of New York, have the meanings assigned to them therein, with the term “ instrument ” being that defined under Article 9 of the Uniform Commercial Code.

 

(h)   Reference to a particular “§” refers to that section of this Credit Agreement unless otherwise indicated.

 

 

 

(i)   The words “herein”, “hereof”, “hereunder” and words of like import shall refer to this Credit Agreement as a whole and not to any particular section or subdivision of this Credit Agreement.

 

(j)   Unless otherwise expressly indicated, in the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including,” the words “to” and “until” each mean “to but excluding,” and the word “through” means “to and including.”

 

(k)   This Credit Agreement and the other Loan Documents may use several different limitations, tests or measurements to regulate the same or similar matters.  All such limitations, tests and measurements are, however, cumulative and are to be performed in accordance with the terms thereof.

 

(l)   This Credit Agreement and the other Loan Documents are the result of negotiation among, and have been reviewed by counsel to, among others, the Administrative Agent and the Borrowers and are the product of discussions and negotiations among all parties.  Accordingly, this Credit Agreement and the other Loan Documents are not intended to be construed against the Administrative Agent or any of the Lenders merely on account of the Administrative Agent’s or any Lender’s involvement in the preparation of such documents.

 

2.            THE REVOLVING CREDIT FACILITY.

 

2.1.   Commitment to Lend .  Subject to the terms and conditions set forth in this Credit Agreement, each of the Lenders severally agrees to lend to the Borrowers and each Borrower may borrow, repay, and reborrow from time to time from the Effective Date up to but not including the Revolving Credit Loan Maturity Date upon notice by a Borrower to the Administrative Agent given in accordance with §2.6, such sums as are requested by such Borrower up to a maximum aggregate amount outstanding (after giving effect to all amounts requested) at any one time equal to such Lender’s Commitment minus such Lender’s Commitment Percentage of the sum of the Maximum Drawing Amount and all Unpaid Reimbursement Obligations, provided that the sum of the outstanding amount of the Revolving Credit Loans (after giving effect to all amounts requested) plus the Maximum Drawing Amount and all Unpaid Reimbursement Obligations shall not at any time exceed the Total Revolving Credit Commitment at such time.  The Revolving Credit Loans shall be made pro rata in accordance with each Lender’s Commitment Percentage.  Each request for a Revolving Credit Loan hereunder shall constitute a representation and warranty by the Borrowers that the conditions set forth in §12 and §13, in the case of any initial Revolving Credit Loans to be made on the Effective Date, and §13, in the case of all other Revolving Credit Loans, have been satisfied on the date of such request.

 

2.2.   Revolving Credit Commitment Fee .  The Borrowers agree to pay to the Administrative Agent for the accounts of the Lenders in accordance with their respective Commitment Percentages a commitment fee (the “ Revolving Credit Commitment Fee ”) calculated at the rate of one-quarter of one percent (0.25%) per annum on the average daily amount during each calendar quarter or portion thereof from the date hereof to the Revolving Credit Loan Maturity Date by which the Total Revolving Credit Commitment minus the sum of the Maximum Drawing Amount and all Unpaid Reimbursement Obligations exceeds the outstanding amount of Revolving Credit Loans (excluding the outstanding amount of Revolving Credit Loans made under §2.6.2) during such calendar quarter.  The Revolving Credit Commitment Fee shall be payable quarterly in arrears on the first day of each calendar quarter for the immediately preceding calendar quarter commencing on the first such date following the date hereof, with a final payment on the Revolving Credit Loan Maturity Date or any earlier date on which the Commitments in respect of Revolving Credit Loans shall terminate.

 

 

 

2.3.   Reduction of Total Revolving Credit Commitment .  The Borrowers shall have the right at any time and from time to time upon five (5) Business Days prior written notice to the Administrative Agent to reduce by $250,000 or an integral multiple thereof or to terminate entirely the Total Revolving Credit Commitment, whereupon the Commitments of the Lenders in respect of Revolving Credit Loans shall be reduced pro rata in accordance with their respective Commitment Percentages of the amount specified in such notice or, as the case may be, terminated.  Promptly after receiving any notice of the Borrowers delivered pursuant to this §2.3, the Administrative Agent will notify the Lenders of the substance thereof.  Upon the effective date of any such reduction or termination, the Borrowers shall pay to the Administrative Agent for the respective accounts of the Lenders the full amount of any Revolving Credit Commitment Fee then accrued on the amount of the reduction.  No reduction or termination of the Commitments in respect of Revolving Credit Loans may be reinstated.  In addition, the Total Revolving Credit Commitment shall be reduced in accordance with §4.3.4.

 

2.4.   The Revolving Credit Notes .  The Revolving Credit Loans shall be evidenced by separate promissory notes of the Borrowers in substantially the form of Exhibit A hereto (each a “ Revolving Credit Note ”), dated as of the Effective Date (or such other date on which a Lender may become a party hereto in accordance with §16 hereof) and completed with appropriate insertions.  One Revolving Credit Note shall be payable to the order of each Lender in a principal amount equal to such Lender’s Commitment in respect of Revolving Credit Loans or, if less, the outstanding amount of all Revolving Credit Loans made by such Lender, plus interest accrued thereon, as set forth below.  The Borrowers irrevocably authorize each Lender to make or cause to be made, at or about the time of the Drawdown Date of any Revolving Credit Loan or at the time of receipt of any payment of principal on such Lender’s Revolving Credit Note, an appropriate notation on such Lender’s Revolving Credit Note Record reflecting the making of such Revolving Credit Loan or (as the case may be) the receipt of such payment.  The outstanding amount of the Revolving Credit Loans set forth on such Lender’s Revolving Credit Note Record shall be prima facie evidence of the principal amount thereof owing and unpaid to such Lender, but the failure to record, or any error in so recording, any such amount on such Lender’s Revolving Credit Note Record shall not limit or otherwise affect the joint and several obligations of the Borrowers hereunder or under any Revolving Credit Note to make payments of principal of or interest on any Revolving Credit Note when due.

 

2.5.   Interest on Revolving Credit Loans .  Except as otherwise provided in §6.10:

 

(a)   Each Revolving Credit Loan which is a Base Rate Loan shall bear interest for the period commencing with the Drawdown Date thereof and ending on the last day of the Interest Period with respect thereto at the rate per annum equal to the Base Rate plus the Applicable Margin with respect to Base Rate Loans as in effect from time to time.

 

(b)   Each Revolving Credit Loan which is a LIBOR Rate Loan shall bear interest for the period commencing with the Drawdown Date thereof and ending on the last day of the Interest Period with respect thereto at the rate per annum equal to the LIBOR Rate determined for such Interest Period plus the Applicable Margin with respect to LIBOR Rate Loans as in effect from time to time.

 

 

 

The Borrowers promise to pay interest on each Revolving Credit Loan in arrears on each Interest Payment Date with respect thereto.

 

2.6.   Requests for Revolving Credit Loans .

 

2.6.1.   General .  The Borrowers shall give to the Administrative Agent written notice in the form of Exhibit B hereto (or telephonic notice confirmed in a writing in the form of Exhibit B hereto) of each Revolving Credit Loan requested hereunder (a “ Loan Request ”) (a) no later than 11:00 a.m. (Hartford time) on the proposed Drawdown Date of any Base Rate Loan and (b) no less than three (3) LIBOR Business Days prior to the proposed Drawdown Date of any LIBOR Rate Loan.  Each such notice shall specify (i) the principal amount of the Revolving Credit Loan requested, (ii) the proposed Drawdown Date of such Revolving Credit Loan, (iii) the Interest Period for such Revolving Credit Loan and (iv) the Type of such Revolving Credit Loan.  Promptly upon receipt of any such notice, the Administrative Agent shall notify each of the Lenders thereof. Each Loan Request shall be irrevocable and binding on the Borrowers and shall obligate the Borrowers to accept the Revolving Credit Loan requested from the Lenders on the proposed Drawdown Date.  Each Loan Request shall be in a minimum aggregate amount of $100,000 or an integral multiple thereof.

 

2.6.2.   Swing Line .  Notwithstanding the notice and minimum amount requirements set forth in §2.6.1 but otherwise in accordance with the terms and conditions of this Credit Agreement, the Administrative Agent may, in its sole discretion and without conferring with the Lenders, make Revolving Credit Loans to the Borrowers (a) by entry of credits to the Borrowers’ operating account (the “ Operating Account ”) with the Administrative Agent to cover checks or other charges which the Borrowers have drawn or made against such account or (b) in an amount as otherwise requested by a Borrower, in each case up to an aggregate amount outstanding (after giving effect to all amounts requested) at any one time not to exceed the Swing Line Sublimit.  The Borrowers hereby request and authorize the Administrative Agent to make from time to time such Revolving Credit Loans by means of appropriate entries of such credits sufficient to cover checks and other charges then presented for payment from the Operating Account or as otherwise so requested.  The Borrowers acknowledge and agree that the making of such Revolving Credit Loans shall, in each case, be subject in all respects to the provisions of this Credit Agreement as if they were Revolving Credit Loans covered by a Loan Request including, without limitation, the limitations set forth in §2.1 and the requirements that the applicable provisions of §12 (in the case of Revolving Credit Loans made on the Effective Date) and §13 be satisfied.  All actions taken by the Administrative Agent pursuant to the provisions of this §2.6.2 shall be conclusive and binding on the Borrowers and the Lenders absent the Administrative Agent’s gross negligence or willful misconduct.  Revolving Credit Loans made pursuant to this §2.6.2 shall be Base Rate Loans until converted in accordance with the provisions of the Credit Agreement and, prior to a Settlement, such interest shall be for the account of the Administrative Agent.  Each Revolving Credit Loan made by the Administrative Agent to the Borrowers under this §2.6 shall be in a minimum aggregate amount of $100,000.  Each Lender severally agrees that it shall be absolutely liable, without regard to the occurrence of any Default or Event of Default or any other condition precedent whatsoever, to the extent of such Lender’s Commitment Percentage of any Revolving Credit Loan made by the Administrative Agent under this §2.6.2.

 

 

 

2.7.   Conversion Options .

 

2.7.1.   Conversion to Different Type of Revolving Credit Loan .  The Borrowers may elect from time to time to convert any outstanding Revolving Credit Loan to a Revolving Credit Loan of another Type, provided that (a) with respect to any such conversion of a LIBOR Rate Loan to a Base Rate Loan, the Borrowers shall give the Administrative Agent at least three (3) Business Days prior written notice of such election; (b) with respect to any such conversion of a Base Rate Loan to a LIBOR Rate Loan, the Borrowers shall give the Administrative Agent at least three (3) LIBOR Business Days prior written notice of such election; (c) with respect to any such conversion of a LIBOR Rate Loan into a Base Rate Loan, such conversion shall only be made on the last day of the Interest Period with respect thereto and (d) no Revolving Credit Loan may be converted into a LIBOR Rate Loan when any Default or Event of Default has occurred and is continuing.  On the date on which such conversion is being made each Lender shall take such action as is necessary to transfer its Commitment Percentage of such Revolving Credit Loans to its Domestic Lending Office or its LIBOR Lending Office, as the case may be.  All or any part of outstanding Revolving Credit Loans of any Type may be converted into a Revolving Credit Loan of another Type as provided herein, provided that any partial conversion shall be in an aggregate principal amount of $250,000 or a whole multiple thereof.  Each Conversion Request relating to the conversion of a Revolving Credit Loan to a LIBOR Rate Loan shall be irrevocable by the Borrowers.

 

2.7.2.   Continuation of Type of Revolving Credit Loan .  Any Revolving Credit Loan of any Type may be continued as a Revolving Credit Loan of the same Type upon the expiration of an Interest Period with respect thereto by compliance by the Borrowers with the notice provisions contained in §2.7.1; provided that no LIBOR Rate Loan may be continued as such when any Default or Event of Default has occurred and is continuing, but shall be automatically converted to a Base Rate Loan on the last day of the first Interest Period relating thereto ending during the continuance of any Default or Event of Default of which officers of the Administrative Agent active upon the Borrowers’ account have actual knowledge.  In the event that the Borrowers fail to provide any such notice with respect to the continuation of any LIBOR Rate Loan as such, then such LIBOR Rate Loan shall be automatically converted to a Base Rate Loan on the last day of the first Interest Period relating thereto.  The Administrative Agent shall notify the Lenders promptly (and in any event prior to taking effect) when any such conversion or continuation contemplated by this §2.7 is scheduled to occur.

 

2.7.3.   LIBOR Rate Loans .  Any conversion to or from LIBOR Rate Loans shall be in such amounts and be made pursuant to such elections so that, after giving effect thereto, the aggregate principal amount of all LIBOR Rate Loans having the same Interest Period shall not be less than $250,000 or a whole multiple of $100,000 in excess thereof.  No more than four (4) LIBOR Rate Loans (including any portion of the Term Loan, in addition to Revolving Credit Loans for the purposes of this section) having different Interest Periods may be outstanding at any time.

 

2.8.   Funds for Revolving Credit Loans .

 

 

 

2.8.1.   Funding Procedures .  Not later than the later of (a) 11:00 a.m. (Hartford time) on the proposed Drawdown Date of any Revolving Credit Loans or (b) one hour after receipt by the Lenders of the required notification from the Administrative Agent, each of the Lenders will make available to the Administrative Agent, at the Administrative Agent’s Office, in immediately available funds, the amount of such Lender’s Commitment Percentage of the amount of the requested Revolving Credit Loans.  Upon receipt from each Lender of such amount, and upon receipt of the documents required by §§12 and 13 and the satisfaction of the other conditions set forth therein, to the extent applicable, the Administrative Agent will make available to the Borrowers the aggregate amount of such Revolving Credit Loans made available to the Administrative Agent by the Lenders.  The failure or refusal of any Lender to make available to the Administrative Agent at the aforesaid time and place on any Drawdown Date the amount of its Commitment Percentage of the requested Revolving Credit Loans shall not relieve any other Lender from its several obligation hereunder to make available to the Administrative Agent the amount of such other Lender’s Commitment Percentage of any requested Revolving Credit Loans.

 

2.8.2.   Advances of Revolving Credit Loans by Administrative Agent .  The Administrative Agent may, unless notified to the contrary by any Lender prior to a Drawdown Date, assume that such Lender has made available to the Administrative Agent on such Drawdown Date the amount of such Lender’s Commitment Percentage of the Revolving Credit Loans to be made on such Drawdown Date, and the Administrative Agent may (but it shall not be required to), in reliance upon such assumption, make available to the Borrowers a corresponding amount.  If any Lender makes available to the Administrative Agent such amount on a date after such Drawdown Date and the Administrative Agent shall have made such amount available to Borrowers, such Lender shall pay to the Administrative Agent on demand an amount equal to the product of (a) the average computed for the period referred to in clause (c) below, of the weighted average interest rate paid by the Administrative Agent for federal funds acquired by the Administrative Agent during each day included in such period, times (b) the amount of such Lender’s Commitment Percentage of such Revolving Credit Loans, times (c) a fraction, the numerator of which is the number of days that elapse from and including such Drawdown Date or such later date that the Administrative Agent shall have made such amount available to Borrowers to the date on which the amount of such Lender’s Commitment Percentage of such Revolving Credit Loans shall become immediately available to the Administrative Agent, and the denominator of which is 360.  A statement of the Administrative Agent submitted to such Lender with respect to any amounts owing under this paragraph shall be prima facie evidence of the amount due and owing to the Administrative Agent by such Lender.  If the amount of such Lender’s Commitment Percentage of such Revolving Credit Loans is not made available to the Administrative Agent by such Lender within three (3) Business Days following such Drawdown Date, the Administrative Agent shall be entitled to recover such amount from the Borrowers on demand, with interest thereon at the rate per annum applicable to the Revolving Credit Loans made on such Drawdown Date.

 

2.9.   Settlements .

 

2.9.1.   General .  On each Settlement Date, the Administrative Agent shall, not later than 11:00 a.m. (Hartford time), give telephonic or facsimile notice (a) to the Lenders and the Borrowers of the respective outstanding amount of Revolving Credit Loans made by the Administrative Agent on behalf of the Lenders from the immediately preceding Settlement Date through the close of business on the prior day and the amount of any LIBOR Rate Loans to be made (following the giving of notice pursuant to §2.6.1(b)) on such date pursuant to a Loan Request and (b) to the Lenders of the amount (a “ Settlement Amount ”) that each Lender (a “ Settling Lender ”) shall pay to effect a Settlement of

 

 

 

 

2.9.2.   Failure to Make Funds Available .  The Administrative Agent may, unless notified to the contrary by any Settling Lender prior to a Settlement Date, assume that such Settling Lender has made or will make available to the Administrative Agent on such Settlement Date the amount of such Settling Lender’s Settlement Amount, and the Administrative Agent may (but it shall not be required to), in reliance upon such assumption, make available to the Borrowers a corresponding amount.  If any Settling Lender makes available to the Administrative Agent such amount on a date after such Settlement Date, such Settling Lender shall pay to the Administrative Agent on demand an amount equal to the product of (a) the average computed for the period referred to in clause (c) below, of the weighted average interest rate paid by the Administrative Agent for federal funds acquired by the Administrative Agent during each day included in such period, times (b) the amount of such Settlement Amount, times (c) a fraction, the numerator of which is the number of days that elapse from and including such Settlement Date to the date on which the amount of such Settlement Amount shall become immediately available to the Administrative Agent, and the denominator of which is 360.  A statement of the Administrative Agent submitted to such Settling Lender with respect to any amounts owing under this §2.9.2 shall be prima facie evidence of the amount due and owing to the Administrative Agent by such Settling Lender.  If such Settling Lender’s Settlement Amount is not made available to the Administrative Agent by such Settling Lender within three (3) Business Days following such Settlement Date, the Administrative Agent shall be entitled to recover such amount from the Borrowers on demand, with interest thereon at the rate per annum applicable to the Revolving Credit Loans as of such Settlement Date.

 

 

 

2.9.3.   No Effect on Other Lenders .  The failure or refusal of any Settling Lender to make available to the Administrative Agent at the aforesaid time and place on any Settlement Date the amount of such Settling Lender’s Settlement Amount shall not (a) relieve any other Settling Lender from its several obligations hereunder to make available to the Administrative Agent the amount of such other Settling Lender’s Settlement Amount or (b) impose upon any Lender, other than the Settling Lender so failing or refusing, any liability with respect to such failure or refusal or otherwise increase the Commitment of such other Lender.

 

3.            REPAYMENT OF THE REVOLVING CREDIT LOANS.

 

3.1.   Maturity .  The Borrowers promise to pay on the Revolving Credit Loan Maturity Date, and there shall become absolutely due and payable on the Revolving Credit Loan Maturity Date, all of the Revolving Credit Loans outstanding on such date, together with any and all accrued and unpaid interest thereon.

 

3.2.   Mandatory Repayments of Revolving Credit Loans .  If at any time the sum of the outstanding amount of the Revolving Credit Loans, the Maximum Drawing Amount and all Unpaid Reimbursement Obligations exceeds the Total Revolving Credit Commitment at such time, then the Borrowers shall immediately pay the amount of such excess to the Administrative Agent for the respective accounts of the Lenders for application:  first, to any Unpaid Reimbursement Obligations; second, to the Revolving Credit Loans made pursuant to §2.6.2; third, to the other Revolving Credit Loans; and fourth, to provide to the Administrative Agent cash collateral for Reimbursement Obligations pursuant to §5.2(b) and (c).  Each payment of any Unpaid Reimbursement Obligations or prepayment of Revolving Credit Loans shall be allocated among the Lenders, in proportion, as nearly as practicable, to each Unpaid Reimbursement Obligation or (as the case may be) the respective unpaid principal amount of each Lender’s Revolving Credit Note, with adjustments to the extent practicable to equalize any prior payments or repayments not exactly in proportion.  In addition, the Borrowers shall repay the Revolving Credit Loans in accordance with §4.3.4.

 

3.3.   Optional Repayments of Revolving Credit Loans .  The Borrowers shall have the right, at their election, to repay the outstanding amount of the Revolving Credit Loans, as a whole or in part, at any time without penalty or premium, provided that any full or partial prepayment of the outstanding amount of any LIBOR Rate Loans pursuant to this §3.3 may be made only on the last day of the Interest Period relating thereto.  The Borrowers shall give the Administrative Agent, (a) no later than 11:00 a.m., Hartford time, on the date of any proposed prepayment of Base Rate Loans pursuant to this §3.3 and (b) not less than three (3) LIBOR Business Days prior to any proposed prepayment of any LIBOR Rate Loans pursuant to this §3.3, prior written notice of such proposed prepayment, in each case specifying the proposed date of prepayment of Revolving Credit Loans and the principal amount to be prepaid.  Each such partial prepayment of the Revolving Credit Loans shall be in an integral multiple of $100,000, shall be accompanied by the payment of accrued interest on the principal prepaid to the date of prepayment and shall be applied, in the absence of instruction by the Borrowers, first to the principal of Base Rate Loans and then to the principal of LIBOR Rate Loans.  Each partial prepayment shall be allocated among the Lenders, in proportion, as nearly as practicable, to the respective unpaid principal amount of each Lender’s Revolving Credit Note, with adjustments to the extent practicable to equalize any prior repayments not exactly in proportion.

 

 

 

4.            THE TERM LOAN.

 

4.1.   Commitment to Lend .  Subject to the terms and conditions set forth in this Credit Agreement, each Lender agrees to lend to the Borrowers on the Effective Date the amount of its Commitment Percentage of the principal amount of $15,500,000.

 

4.2.   The Term Notes .  The Term Loan shall be evidenced by separate promissory notes of the Borrowers in substantially the form of Exhibit C hereto (each a “ Term Note ”), dated the Effective Date (or such other date on which a Lender may become a party hereto in accordance with §16 hereof) and completed with appropriate insertions.  One Term Note shall be payable to the order of each Lender in a principal amount equal to such Lender’s Commitment Percentage of the Term Loan and representing the joint and several obligations of the Borrowers to pay to such Lender such principal amount or, if less, the then outstanding amount of such Lender’s Commitment Percentage of the Term Loan, plus interest accrued thereon, as set forth below.  The Borrowers irrevocably authorize each Lender to make or cause to be made a notation on such Lender’s Term Note Record reflecting the original principal amount of such Lender’s Commitment Percentage of the Term Loan and, at or about the time of such Lender’s receipt of any principal payment on such Lender’s Term Note, an appropriate notation on such Lender’s Term Note Record reflecting such payment.  The aggregate unpaid amount set forth on such Lender’s Term Note Record shall be prima facie evidence of the principal amount thereof owing and unpaid to such Lender, but the failure to record, or any error in so recording, any such amount on such Lender’s Term Note Record shall not affect the obligations of the Borrowers hereunder or under any Term Note to make payments of principal of and interest on any Term Note when due.

 

4.3.   Mandatory Prepayment of Term Loan .

 

4.3.1.   Schedule of Installment Payments of Principal of Term Loan .  On April 5, 2005, the lenders party to the Original Credit Agreement made a Term Loan (as defined in the Original Credit Agreement) to Holdings and Crystal Rock LLC in the principal amount of $28,000,000.00.  After such date, Holdings and Crystal Rock LLC made principal payments in the aggregate amount of $15,812,499.85.  As a result, on the Effective Date, the outstanding principal amount of such Term Loan (as defined in the Original Credit Agreement) was $12,187,500.15.  Pursuant to the terms hereof, the Lenders have agreed to make the Term Loan to the Borrowers on the Effective Date in the principal amount of $15,500,000 to be used in accordance with §8.17.  The Borrowers jointly and severally promise to pay to the Administrative Agent for the account of the Lenders the principal amount of the Term Loan in fifty-nine (59) consecutive monthly payments in the amount of $184,500, such payments to be due and payable on the 5th day of each month commencing on May 5, 2010, with a final payment on the Term Loan Maturity Date in an amount equal to the unpaid balance of the Term Loan.

 

4.3.2.   Excess Cash Flow Recapture .  For each fiscal year of the Borrowers, the Borrowers shall make a prepayment of the Term Loan in an amount equal to fifty percent (50%) of Consolidated Excess Cash Flow for such fiscal year, such mandatory prepayment to be due and payable on the date one hundred (100) days after the end of each such fiscal year and to be applied against the remaining scheduled installments of principal on the Term Loan in the inverse order of maturity, provided that the amount of such prepayment shall not exceed $500,000 for any fiscal year.

 

 

4.3.3.   Proceeds of Certain Events .  Concurrently with the receipt by any Borrower or any Subsidiary of:

 

(a)   Net Cash Sale Proceeds from Asset Sales;

 

(b)   Net Cash Equity Issuance Proceeds with respect to any Equity Issuance by any Borrower or any of its Subsidiaries;

 

(c)   Net Cash Indebtedness Issuance Proceeds (other than Excluded Indebtedness) with respect to any Indebtedness Issuance by any Borrower or any of its Subsidiaries; or

 

(d)   proceeds in excess of $250,000 in the aggregate received from Casualty Events by any Borrower or any of its Subsidiaries which have not been committed (as evidenced by a binding written contract) by such Borrower or such Subsidiary within ninety (90) days of receipt of such proceeds to the repair or replacement of the property so damaged, destroyed or taken, or, if so committed, such repair or replacement of the property so damaged, destroyed or taken shall have not commenced within ninety (90) days of receipt of such proceeds pursuant to such binding written contract ( provided , however , if a Default or Event of Default has occurred and is continuing, such proceeds shall be immediately paid to the Administrative Agent);

 

the Borrowers shall pay to the Administrative Agent for the respective accounts of the Lenders an amount equal to one hundred percent (100%) of such proceeds, to be applied in the manner set forth in §4.3.4.

 

4.3.4.   Application of Payments .  All payments made pursuant to §4.3.3 shall be applied first against the remaining scheduled installments of principal on the Term Loan in the inverse order of maturity, second to reduce the outstanding amount of the Revolving Credit Loans made pursuant to §2.6.2 (which shall permanently reduce the Total Revolving Credit Commitment by such amount) and third to reduce the outstanding amount of all other Revolving Credit Loans (which shall permanently reduce the Total Revolving Credit Commitment by such amount).  Such mandatory prepayments shall be allocated among the Lenders in proportion, as nearly as practicable, to the respective outstanding amounts of each Lender’s Notes, with adjustments to the extent practicable to equalize any prior prepayments not exactly in proportion.  No amounts repaid pursuant to this §4.3 may be reborrowed.

 

4.4.   Optional Prepayment of Term Loan .  The Borrowers shall have the right at any time to prepay the Term Notes on or before the Term Loan Maturity Date, as a whole, or in part, upon not less than three (3) Business Days prior written notice to the Administrative Agent, without premium or penalty, provided that (a) each partial prepayment shall be in the principal amount of $250,000 or an integral multiple thereof, (b) no portion of the Term Loan bearing interest with reference to the LIBOR Rate may be prepaid pursuant to this §4.4 except on the last day of the Interest Period relating thereto, and (c) each partial prepayment shall be allocated among the Lenders, in proportion, as nearly as practicable, to the respective outstanding amount of each Lender’s Term Note, with adjustments to the extent practicable to equalize any prior prepayments not exactly in proportion.  Any prepayment of principal of the Term Loan shall include all interest accrued to the date of prepayment and shall be applied against the scheduled installments of principal due on the Term Loan in the inverse order of maturity.  No amount repaid with respect to the Term Loan may be reborrowed.

 

 

 

4.5.   Interest on Term Loan .

 

4.5.1.   Interest Rates .  Except as otherwise provided in §6.10, the Term Loan shall bear interest during each Interest Period relating to all or any portion of the Term Loan at the following rates:

 

(a)   To the extent that all or any portion of the Term Loan bears interest during such Interest Period at the Base Rate, the Term Loan or such portion shall bear interest during such Interest Period at the rate per annum equal to the Base Rate plus the Applicable Margin with respect to Base Rate Loans as in effect from time to time.

 

(b)   To the extent that all or any portion of the Term Loan bears interest during such Interest Period with reference to the LIBOR Rate, the Term Loan or such portion shall bear interest during such Interest Period at the rate per annum equal to the LIBOR Rate determined for such Interest Period plus the Applicable Margin with respect to LIBOR Rate Loans as in effect from time to time.

 

The Borrowers promise to pay interest on the Term Loan or any portion thereof outstanding during each Interest Period in arrears on each Interest Payment Date applicable to such Interest Period.

 

4.5.2.   Notification by Borrowers .  The Borrowers shall notify the Administrative Agent, such notice to be irrevocable, at least four (4) LIBOR Business Days prior to the Drawdown Date of the Term Loan if all or any portion of the Term Loan in excess of the Minimum One Month LIBOR Amount is to bear interest with reference to the LIBOR Rate.  After the Term Loan has been made, the provisions of §2.7 shall apply mutatis mutandis with respect to all or any portion of the Term Loan so that the Borrowers may have the same interest rate options with respect to all or any portion of the Term Loan as it would be entitled to with respect to the Revolving Credit Loans (with the understanding that the interest rate with respect to the Term Loan shall be as set forth in §4.5.1); provided, that an amount equal to the Minimum One Month LIBOR Amount shall at all times be LIBOR Rate Loans with Interest Periods of one month, except to the extent that this Credit Agreement provides (other than by request of the Borrowers) for such Loans to become Base Rate Loans, and the Borrowers shall not have the right to request Interest Periods other than one month with respect to the Minimum One Month LIBOR Amount.

 

4.5.3.   Amounts, etc .  Any portion of the Term Loan bearing interest with reference to the LIBOR Rate relating to any Interest Period shall be in the amount of $250,000 or an integral multiple thereof.  No Interest Period relating to the Term Loan or any portion thereof bearing interest with reference to the LIBOR Rate shall extend beyond the date on which a regularly scheduled installment payment of the principal of the Term Loan is to be made unless a portion of the Term Loan at least equal to such installment payment has an Interest Period ending on such date or is then bearing interest at the Base Rate.

 

 

 

5.            LETTERS OF CREDIT.

 

5.1.   Letter of Credit Commitments .

 

5.1.1.   Commitment to Issue Letters of Credit .  Subject to the terms and conditions hereof and the execution and delivery by a Borrower of a letter of credit application on the Administrative Agent’s customary form (a “ Letter of Credit Application ”), the Administrative Agent on behalf of the Lenders and in reliance upon the agreement of the Lenders set forth in §5.1.4 and upon the representations and warranties of the Borrowers contained herein, agrees, in its individual capacity, to issue, extend and renew for the account of the Borrowers one or more standby letters of credit (individually, a “ Letter of Credit ”), in such form as may be requested from time to time by any Borrower and agreed to by the Administrative Agent; provided , however , that, after giving effect to such request, (a) the sum of the aggregate Maximum Drawing Amount and all Unpaid Reimbursement Obligations shall not exceed the Total Revolving Credit Commitment at any one time and (b) the sum of (i) the Maximum Drawing Amount on all Letters of Credit, (ii) all Unpaid Reimbursement Obligations, and (iii) the amount of all Revolving Credit Loans outstanding shall not exceed the Total Revolving Credit Commitment at such time.  The parties hereto hereby acknowledge and agree that the letters of credit issued by the Administrative Agent pursuant to the Original Credit Agreement and identified on Schedule 5.1.1 hereto (collectively, the “ Existing Letters of Credit ”) shall, on the Effective Date, become Letters of Credit hereunder and shall be subject to the conditions hereunder.

 

5.1.2.   Letter of Credit Applications .  Each Letter of Credit Application shall be completed to the satisfaction of the Administrative Agent.  In the event that any provision of any Letter of Credit Application shall be inconsistent with any provision of this Credit Agreement, then the provisions of this Credit Agreement shall, to the extent of any such inconsistency, govern.

 

5.1.3.   Terms of Letters of Credit .  Each Letter of Credit issued, extended or renewed hereunder shall, among other things, (a) provide for the payment of sight drafts for honor thereunder when presented in accordance with the terms thereof and when accompanied by the documents described therein, (b) have an expiry date (i) no later than the date which is three hundred sixty-five (365) days after the date of issuance and (ii) no later than the date which is three hundred sixty-five (365) days after the Revolving Credit Loan Maturity Date.  Each Letter of Credit so issued, extended or renewed shall be subject to the Uniform Customs and Practice for Documentary Credits (1993 Revision), International Chamber of Commerce Publication No. 500 or any successor version thereto adopted by the Administrative Agent in the ordinary course of its business as a letter of credit issuer and in effect at the time of issuance of such Letter of Credit (the “ Uniform Customs ”) or, in the case of a standby Letter of Credit, either the Uniform Customs or the International Standby Practices (ISP98), International Chamber of Commerce Publication No. 590, or any successor code of standby letter of credit practices among banks adopted by the Administrative Agent in the ordinary course of its business as a standby letter of credit issuer and in effect at the time of issuance of such Letter of Credit.

 

5.1.4.   Reimbursement Obligations of Lenders .  Each Lender severally agrees that it shall be absolutely liable, without regard to the occurrence of any Default or Event of Default or any other condition precedent whatsoever, to the extent of such Lender’s Commitment Percentage, to reimburse the Administrative Agent on demand for the amount of each draft paid by the Administrative Agent under each Letter of Credit to the extent that such amount is not reimbursed by the Borrowers pursuant to §5.2 (such agreement for a Lender being called herein the “ Letter of Credit Participation ” of such Lender).

 

 

5.1.5.   Participations of Lenders .  Each such payment made by a Lender shall be treated as the purchase by such Lender of a participating interest in the Borrowers’ Reimbursement Obligation under §5.2 in an amount equal to such payment.  Each Lender shall share in accordance with its participating interest in any interest which accrues pursuant to §5.2.

 

5.2.   Reimbursement Obligations of the Borrowers .  In order to induce the Administrative Agent to issue, extend and renew each Letter of Credit and the Lenders to participate therein, the Borrowers hereby jointly and severally agree to reimburse or pay to the Administrative Agent, for the account of the Administrative Agent or (as the case may be) the Lenders, with respect to each Letter of Credit issued, extended or renewed by the Administrative Agent hereunder,

 

(a)   except as otherwise expressly provided in §5.2(b) and (c), on each date that any draft presented under such Letter of Credit is honored by the Administrative Agent, or the Administrative Agent otherwise makes a payment with respect thereto, (i) the amount paid by the Administrative Agent under or with respect to such Letter of Credit, and (ii) the amount of any taxes, fees, charges or other costs and expenses whatsoever incurred by the Administrative Agent or any Lender in connection with any payment made by the Administrative Agent or any Lender under, or with respect to, such Letter of Credit,

 

(b)   upon the reduction (but not termination) of the Total Revolving Credit Commitment to an amount less than the Maximum Drawing Amount, an amount equal to such difference, which amount shall be held by the Administrative Agent for the benefit of the Lenders and the Administrative Agent as cash collateral for all Reimbursement Obligations, and

 

(c)   upon the termination of the Total Revolving Credit Commitment, or the acceleration of the Reimbursement Obligations with respect to all Letters of Credit in accordance with §14, an amount equal to the then Maximum Drawing Amount on all Letters of Credit, which amount shall be held by the Administrative Agent for the benefit of the Lenders and the Administrative Agent as cash collateral for all Reimbursement Obligations.

 

Each such payment shall be made to the Administrative Agent at the Administrative Agent’s Office in immediately available funds.  Interest on any and all amounts remaining unpaid by the Borrowers under this §5.2 at any time from the date such amounts become due and payable (whether as stated in this §5.2, by acceleration or otherwise) until payment in full (whether before or after judgment) shall be payable to the Administrative Agent on demand at the rate specified in §6.10 for overdue principal on the Revolving Credit Loans.

 

 

 

 

5.3.   Letter of Credit Payments .  If any draft shall be presented or other demand for payment shall be made under any Letter of Credit, the Administrative Agent shall notify the Borrowers of the date and amount of the draft presented or demand for payment and of the date and time when it expects to pay such draft or honor such demand for payment.  If the Borrowers fail to reimburse the Administrative Agent as provided in §5.2 on or before the date that such draft is paid or other payment is made by the Administrative Agent, the Administrative Agent may at any time thereafter notify the Lenders of the amount of any such Unpaid Reimbursement Obligation.  No later than 3:00 p.m. (Hartford time) on the Business Day next following the receipt of such notice, each Lender shall make available to the Administrative Agent, at the Administrative Agent’s Office, in immediately available funds, such Lender’s Commitment Percentage of such Unpaid Reimbursement Obligation, together with an amount equal to the product of (a) the average, computed for the period referred to in clause (c) below, of the weighted average interest rate paid by the Administrative Agent for federal funds acquired by the Administrative Agent during each day included in such period, times (b) the amount equal to such Lender’s Commitment Percentage of such Unpaid Reimbursement Obligation, times (c) a fraction, the numerator of which is the number of days that elapse from and including the date the Administrative Agent paid the draft presented for honor or otherwise made payment to the date on which such Lender’s Commitment Percentage of such Unpaid Reimbursement Obligation shall become immediately available to the Administrative Agent, and the denominator of which is 360.  The responsibility of the Administrative Agent to the Borrowers and the Lenders shall be only to determine that the documents (including each draft) delivered under each Letter of Credit in connection with such presentment shall be in conformity in all material respects with such Letter of Credit.

 

5.4.   Obligations Absolute .  The Borrowers’ joint and several obligations under this §5 shall be absolute and unconditional under any and all circumstances and irrespective of the occurrence of any Default or Event of Default or any condition precedent whatsoever or any setoff, counterclaim or defense to payment which the Borrowers may have or have had against the Administrative Agent, any Lender or any beneficiary of a Letter of Credit.  The Borrowers further agree with the Administrative Agent and the Lenders that  the Administrative Agent and the Lenders shall not be responsible for, and the Borrowers’ Reimbursement Obligations under §5.2 shall not be affected by, among other things, the validity or genuineness of documents or of any endorsements thereon, even if such documents should in fact prove to be in any or all respects invalid, fraudulent or forged, or any dispute between or among the Borrowers, the beneficiary of any Letter of Credit or any financing institution or other party to which any Letter of Credit may be transferred or any claims or defenses whatsoever of the Borrowers against the beneficiary of any Letter of Credit or any such transferee.  The Administrative Agent and the Lenders shall not be liable for any error, omission, interruption or delay in transmission, dispatch or delivery of any message or advice, however transmitted, in connection with any Letter of Credit.  The Borrowers agree that any action taken or omitted by the Administrative Agent or any Lender under or in connection with each Letter of Credit and the related drafts and documents, if done in good faith, shall be binding upon the Borrowers and shall not result in any liability on the part of the Administrative Agent or any Lender to the Borrowers.  However, the foregoing shall not excuse the Administrative Agent from liability to Borrowers to the extent of any damages suffered by Borrowers that are caused by Administrative Agent’s willful misconduct or gross negligence in determining whether documents presented under any Letter of Credit comply with the terms of such Letter of Credit.

 

5.5.   Reliance by Issuer .  To the extent not inconsistent with §5.4, the Administrative Agent shall be entitled to rely, and shall be fully protected in relying upon, any Letter of Credit, draft, writing, resolution, notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype message, statement, order or other document believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel, independent accountants and other experts selected by the Administrative Agent.  To the extent not inconsistent with this Credit Agreement, the Administrative Agent shall be fully justified in failing or refusing to take any action under this Credit Agreement with respect to any Letter of Credit unless it shall first have received such advice or concurrence of the Required Lenders as it reasonably deems appropriate or it shall first be indemnified to its reasonable satisfaction by the Lenders against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action.  The Administrative Agent shall in all cases be fully protected in so acting, or in refraining from so acting, under this Credit Agreement in accordance with a request of the Required Lenders, and such request and any action taken or failure to act pursuant thereto shall be binding upon the Lenders and all future holders of the Revolving Credit Notes or of a Letter of Credit Participation.

 

 

 

5.6.   Letter of Credit Fee .  The Borrowers shall pay a fee (a “ Letter of Credit Fee ”) to the Administrative Agent, for the accounts of the Lenders in accordance with their respective Commitment Percentages, in respect of each Letter of Credit, for the period from and including the date of issuance of such Letter of Credit to and including the date of termination or expiration of such Letter of Credit, computed at a rate per annum in an amount equal to the Applicable Margin for Letter of Credit Fees per annum with respect to Letter of Credit Fees   of the available amount of such Letter of Credit.  Accrued Letter of Credit Fees shall be due and payable quarterly in arrears on the first Business Day of each calendar quarter and on the first Business Day on or after the termination of the Total Revolving Credit Commitment upon which no Letters of Credit remain outstanding.  In respect of each Letter of Credit, the Borrowers shall also pay to the Administrative Agent for the Administrative Agent’s own account, at such other time or times as such charges are customarily made by the Administrative Agent, the Administrative Agent’s customary issuance, amendment, negotiation or document examination and other administrative fees as in effect from time to time.

 

6.            CERTAIN GENERAL PROVISIONS.

 

6.1.   Closing Fees .  The Borrowers agree to pay to Bank of America, N.A., for the account of the Lenders, on the Effective Date (a) a fee of one-quarter of one percent (0.25%) of the Total Revolving Credit Commitment and (b) one-half of one percent (0.50%) of the amount of the Term Loan (collectively, the “ Closing Fees ”).

 

6.2.   Funds for Payments .

 

6.2.1.   Payments to Administrative Agent .  All payments of principal, interest, Reimbursement Obligations, Fees and any other amounts due hereunder or under any of the other Loan Documents shall be made on the due date thereof to the Administrative Agent in Dollars, for the respective accounts of the Lenders and the Administrative Agent, at the Administrative Agent’s Office or at such other place that the Administrative Agent may from time to time designate, in each case at or about 11:00 a.m. (Hartford, Connecticut, time or other local time at the place of payment) and in immediately available funds.

 

6.2.2.   No Offset, etc .  All payments by the Borrowers hereunder and under any of the other Loan Documents shall be made without recoupment, setoff or counterclaim and free and clear of and without deduction for any taxes, levies, imposts, duties, charges, fees, deductions, withholdings, compulsory loans, restrictions or conditions of any nature now or hereafter imposed or levied by any jurisdiction or any political subdivision thereof or taxing or other authority therein unless the Borrowers are compelled by law to make such deduction or withholding.  If any such obligation is imposed upon the Borrowers with respect to any amount payable by it hereunder or under any of the other Loan Documents, the Borrowers will pay to the Administrative Agent, for the account of the Lenders or (as the case may be) the Administrative Agent, on the date on which such amount is due and payable hereunder or under such other Loan Document, such additional amount in Dollars as shall be necessary to enable the Lenders or the Administrative Agent to receive the same net amount which the Lenders or the Administrative Agent would have received on such due date had no such obligation been imposed upon the Borrowers.  The Borrowers will deliver promptly to the Administrative Agent certificates or other valid vouchers for all taxes or other charges deducted from or paid with respect to payments made by the Borrowers hereunder or under such other Loan Document.

 

 

 

6.3.   Computations .  All computations of interest for Base Rate Loans shall be made on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed.  All other computations of interest on the Loans and of Fees shall be based on a 360-day year and paid for the actual number of days elapsed.  Except as otherwise provided in the definition of the term “ Interest Period ” with respect to LIBOR Rate Loans, whenever a payment hereunder or under any of the other Loan Documents becomes due on a day that is not a Business Day, the due date for such payment shall be extended to the next succeeding Business Day, and interest shall accrue during such extension.  The outstanding amount of the Loans as reflected on the Revolving Credit Note Records and the Term Note Records from time to time shall be considered correct and binding on the Borrowers, absent manifest error.

 

6.4.   Inability to Determine LIBOR Rate .  In the event, prior to the commencement of any Interest Period relating to any LIBOR Rate Loan, the Administrative Agent shall determine that (a) adequate and reasonable methods do not exist for ascertaining the LIBOR Rate that would otherwise determine the rate of interest to be applicable to any LIBOR Rate Loan during any Interest Period or (b) the LIBOR Rate determined or to be determined for such Interest Period will not adequately and fairly reflect the cost to the Lenders of making or maintaining their LIBOR Rate Loans during such period, the Administrative Agent shall forthwith give notice of such determination (which shall be conclusive and binding on the Borrowers and the Lenders) to the Borrowers and the Lenders.  In such event (i) any Loan Request or Conversion Request with respect to LIBOR Rate Loans shall be automatically withdrawn and shall be deemed a request for Base Rate Loans, (ii) each LIBOR Rate Loan will automatically, on the last day of the then current Interest Period relating thereto, become a Base Rate Loan, and (iii) the obligations of the Lenders to make LIBOR Rate Loans shall be suspended until the Administrative Agent determines that the circumstances giving rise to such suspension no longer exist, whereupon the Administrative Agent shall so notify the Borrowers and the Lenders.

 

6.5.   Illegality .  Notwithstanding any other provisions herein, if any present or future law, regulation, treaty or directive or the interpretation or application thereof shall make it unlawful for any Lender to make or maintain LIBOR Rate Loans, such Lender shall forthwith give notice of such circumstances to the Borrowers and the other Lenders and thereupon (a) the commitment of such Lender to make LIBOR Rate Loans or convert Base Rate Loans to LIBOR Rate Loans shall forthwith be suspended and (b) such Lender’s Revolving Credit Loans then outstanding as LIBOR Rate Loans, if any, shall be converted automatically to Base Rate Loans on the last day of each Interest Period applicable to such LIBOR Rate Loans or within such earlier period as may be required by law.  The Borrowers hereby agree promptly to pay the Administrative Agent for the account of such Lender, upon demand by such Lender, any additional amounts necessary to compensate such Lender for any costs incurred by such Lender in making any conversion in accordance with this §6.5, including any interest or fees payable by such Lender to lenders of funds obtained by it in order to make or maintain its LIBOR Rate Loans hereunder.

 

 

 

 

6.6.   Additional Costs, etc .  If any present or future applicable law, which expression, as used herein, includes statutes, rules and regulations thereunder and applicable interpretations thereof by any competent court or by any governmental or other regulatory body or official charged with the administration or the interpretation thereof and requests, directives, instructions and notices at any time or from time to time hereafter made upon or otherwise issued to any Lender or the Administrative Agent by any central bank or other fiscal, monetary or other authority (whether or not having the force of law), shall:

 

(a)   subject any Lender or the Administrative Agent to any tax, levy, impost, duty, charge, fee, deduction or withholding of any nature with respect to this Credit Agreement, the other Loan Documents, any Letters of Credit, such Lender’s Commitment or the Loans (other than taxes based upon or measured by the income or profits of such Lender or the Administrative Agent), or

 

(b)   materially change the basis of taxation (except for changes in taxes on income or profits) of payments to any Lender of the principal of or the interest on any Loans or any other amounts payable to any Lender or the Administrative Agent under this Credit Agreement or any of the other Loan Documents, or

 

(c)   impose or increase or render applicable (other than to the extent specifically provided for elsewhere in this Credit Agreement) any special deposit, reserve, assessment, liquidity, capital adequacy or other similar requirements (whether or not having the force of law) against assets held by, or deposits in or for the account of, or loans by, or letters of credit issued by, or commitments of an office of any Lender, or

 

(d)   impose on any Lender or the Administrative Agent any other conditions or requirements with respect to this Credit Agreement, the other Loan Documents, any Letters of Credit, the Loans, such Lender’s Commitment, or any class of loans, letters of credit or commitments of which any of the Loans or such Lender’s Commitment forms a part, and the result of any of the foregoing is

 

(i)   to increase the cost to any Lender of making, funding, issuing, renewing, extending or maintaining any of the Loans or such Lender’s Commitment or any Letter of Credit, or

 

(ii)   to reduce the amount of principal, interest, Reimbursement Obligation or other amount payable to such Lender or the Administrative Agent hereunder on account of such Lender’s Commitment, any Letter of Credit or any of the Loans, or

 

 

 

(iii)   to require such Lender or the Administrative Agent to make any payment or to forego any interest or Reimbursement Obligation or other sum payable hereunder, the amount of which payment or foregone interest or Reimbursement Obligation or other sum is calculated by reference to the gross amount of any sum receivable or deemed received by such Lender or the Administrative Agent from the Borrowers hereunder,

 

then, and in each such case, the Borrowers will, upon demand made by such Lender or (as the case may be) the Administrative Agent at any time and from time to time and as often as the occasion therefor may arise, pay to such Lender or the Administrative Agent such additional amounts as will be sufficient to compensate such Lender or the Administrative Agent for such additional cost, reduction, payment or foregone interest or Reimbursement Obligation or other sum.

 

6.7.   Capital Adequacy .  If after the date hereof any Lender or the Administrative Agent determines that (a) the adoption of or change in any law, governmental rule, regulation, policy, guideline or directive (whether or not having the force of law) regarding capital requirements for banks or bank holding companies or any change in the interpretation or application thereof by a Governmental Authority with appropriate jurisdiction, or (b) compliance by such Lender or the Administrative Agent or any corporation controlling such Lender or the Administrative Agent with any law, governmental rule, regulation, policy, guideline or directive (whether or not having the force of law) of any such entity regarding capital adequacy, has the effect of reducing the return on such Lender’s or the Administrative Agent’s commitment with respect to any Loans to a level below that which such Lender or the Administrative Agent could have achieved but for such adoption, change or compliance (taking into consideration such Lender’s or the Administrative Agent’s then existing policies with respect to capital adequacy and assuming full utilization of such entity’s capital) by any amount deemed by such Lender or (as the case may be) the Administrative Agent to be material, then such Lender or the Administrative Agent may notify the Borrowers of such fact.  To the extent that the amount of such reduction in the return on capital is not reflected in the Base Rate, the Borrowers and such Lender shall thereafter attempt to negotiate in good faith, within thirty (30) days of the day on which the Borrowers receive such notice, an adjustment payable hereunder that will adequately compensate such Lender in light of these circumstances.  If the Borrowers and such Lender are unable to agree to such adjustment within thirty (30) days of the date on which the Borrowers receive such notice, then commencing on the date of such notice (but not earlier than the effective date of any such increased capital requirement), the fees payable hereunder shall increase by an amount that will, in such Lender’s reasonable determination, provide adequate compensation.  Each Lender shall allocate such cost increases among its customers in good faith and on an equitable basis.

 

6.8.   Certificate .  A certificate setting forth any additional amounts payable pursuant to §§6.6 or 6.7 and a brief explanation of such amounts which are due, submitted by any Lender or the Administrative Agent to the Borrowers, shall be conclusive, absent manifest error, that such amounts are due and owing.

 

6.9.   Indemnity .  Each of the Borrowers agree to jointly and severally indemnify each Lender and to hold each Lender harmless from and against any loss, cost or expense (including loss of anticipated profits) that such Lender may sustain or incur as a consequence of (a) default by the Borrowers in payment of the principal amount of or any interest on any LIBOR Rate Loans as and when due and payable, including any such loss or expense arising from interest or fees payable by such Lender to lenders of funds obtained by it in order to maintain its LIBOR Rate Loans, (b) default by the Borrowers in making a borrowing or conversion into a LIBOR Rate Loan after a Borrower has given (or is deemed to have given) a Loan Request, notice (in the case of all or any portion of the Term Loan pursuant to §4.5.2) or a Conversion Request relating thereto in accordance with §2.6, §2.7 or §4.5 or (c) the making of any payment of a LIBOR Rate Loan or the making of any conversion of any such Loan to a Base Rate Loan on a day that is not the last day of the applicable Interest Period with respect thereto, including interest or fees payable by such Lender to lenders of funds obtained by it in order to maintain any such Loans.

 

 

 

6.10.   Interest After Default .

 

6.10.1.   Overdue Amounts .  Overdue principal and (to the extent permitted by applicable law) overdue interest on the Loans and all other overdue amounts payable hereunder or under any of the other Loan Documents shall bear interest compounded monthly and payable on demand at a rate per annum equal to two percent (2.0%) above the rate of interest then applicable thereto (or, if no rate of interest is then applicable thereto, the Base Rate) until such amount shall be paid in full (after as well as before judgment).

 

6.10.2.   Amounts Not Overdue .  During the continuance of a Default or an Event of Default the principal of the Loans not overdue shall, until such Default or Event of Default has been cured or remedied or such Default or Event of Default has been waived by the Required Lenders pursuant to §17.12, bear interest at a rate per annum equal to the greater of (a) two percent (2.0%) above the rate of interest otherwise applicable to such   Loans and (b) the rate of interest applicable to overdue principal pursuant to §6.10.1.

 

6.11.   Concerning Joint and Several Liability of the Borrowers .

 

(a)   Each of the Borrowers is accepting joint and several liability hereunder with respect to the Loans, the Letters of Credit and the other Obligations in consideration of the financial accommodations to be provided by the Administrative Agent and Lenders under this Credit Agreement, for the mutual benefit, directly and indirectly, of each of the Borrowers and in consideration of the undertakings of each of the Borrowers to accept joint and several liability for the obligations of each of them in respect of such Obligations.

 

(b)   Each of the Borrowers, jointly and severally, hereby irrevocably and unconditionally accepts, not merely as a surety but also as a co-debtor, joint and several liability with each other Borrower, with respect to the payment and performance of all of the Obligations, it being the intention of the parties hereto that all of the Obligations shall be the joint and several obligations of the Borrowers without preferences or distinction among them, whether such Loans were made or Letters of Credit issued before, on or after the Effective Date.

 

(c)   If and to the extent that either of the Borrowers shall fail to make any payment with respect to any of the Obligations as and when due or shall fail to perform any of such Obligations in accordance with the terms thereof, then in each such event each other Borrower will make such payment with respect to, or perform, such Obligation.

 

 

 

(d)   The obligations of each Borrower under the provisions of this §6.11 constitute the absolute and unconditional obligations of such Borrower enforceable against it to the full extent permitted under the terms hereof, irrespective of the validity, regularity or enforceability of this Credit Agreement or any of the other Loan Documents or any other circumstance whatsoever

 

(e)   Each Borrower hereby waives notice of acceptance of its joint and several liability, notice of the Loans made under this Credit Agreement, notice of the issuance of any Letter of Credit, notice of the occurrence of any Default or Event of Default (except as otherwise expressly provided for herein), or of any demand for any payment under this Credit Agreement or any of the other Loan Documents, notice of any action (except as otherwise provided for herein) at any time taken or omitted by the Administrative Agent or any Lender under or in respect of any of the Obligations, any requirement of diligence or to mitigate damages and, generally, all demands, notices and other formalities of every kind (except as otherwise provided for herein) in connection with this Credit Agreement or any of the other Loan Documents.  Each Borrower hereby assents to, and waives notice of, any extension or postponement of the time for the payment of any of the Obligations, the acceptance of any partial payment thereon, any waiver, consent or other action or acquiescence by the Administrative Agent or any Lender at any time or times in respect of any default by any Borrower in the performance or satisfaction of any term, covenant, condition or provision of this Credit Agreement or any of the other Loan Documents, any and all other indulgences whatsoever by the Administrative Agent or any Lender in respect of any of the obligations hereunder or under the other Loan Documents, and the taking, addition, substitution or release, in whole or in part, at any time or times, of any security for any of such obligations or the addition, substitution or release, in whole or in part, of any Borrower.  Without limiting the generality of the foregoing, each Borrower assents to the extent permitted by applicable law to any other action or delay in acting or failure to act on the part of the Administrative Agent or any Lender including, without limitation, any failure strictly or diligently to assert any right or to pursue any remedy or to comply fully with applicable laws or regulations thereunder, which might, but for the provisions of this §6.11, afford grounds for terminating, discharging or relieving such Borrower, in whole or in part, from any of its Obligations hereunder, it being the intention of each Borrower that, so long as any of the Obligations remain unsatisfied, the Obligations of such Borrower hereunder shall not be discharged except by performance and then only to the extent of such performance.  The joint and several liability of the Borrowers hereunder shall continue in full force and effect notwithstanding any absorption, merger, amalgamation or any other change whatsoever in the name, membership, constitution or place of formation of any Borrower, the Administrative Agent or any Lender.  If at any time, any payment, or any part thereof, made in respect of any of the Obligations, is rescinded or must otherwise be restored or returned by the Administrative Agent or any Lender upon the insolvency, bankruptcy or reorganization of either of the Borrowers, or otherwise, the provisions of this §6.11 will forthwith be reinstated in effect, as though such payment had not been made.

 

7.            COLLATERAL SECURITY.

 

7.1.   Security of Borrowers .  The Obligations shall be secured by a perfected first priority security interest (subject only to Permitted Liens entitled to priority under applicable law) in all of the assets of the Borrowers (other than those assets excluded under §2.3 of the Security Agreement), whether now owned or hereafter acquired, pursuant to the terms of the Security Documents to which the Borrowers are a party.

 

 

 

8.            REPRESENTATIONS AND WARRANTIES.

 

Each of the Borrowers represents and warrants to the Lenders and the Administrative Agent as follows:

 

8.1.   Corporate Authority .

 

8.1.1.   Incorporation; Organization; Good Standing .  Each of the Borrowers and their Subsidiaries (a) is a corporation (or similar business entity) duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation or formation, (b) has all requisite corporate (or the equivalent company) power to own its property and conduct its business as now conducted and as presently contemplated, and (c) is in good standing as a foreign corporation (or similar business entity) and is duly authorized to do business in each jurisdiction where such qualification is necessary except where a failure to be so qualified would not have a Material Adverse Effect.

 

8.1.2.   Authorization .  The execution, delivery and performance of this Credit Agreement and the other Loan Documents to which any Borrower or any of its Subsidiaries is or is to become a party and the transactions contemplated hereby and thereby (a) are within the corporate (or the equivalent company) authority of such Person, (b) have been duly authorized by all necessary corporate (or the equivalent company) proceedings, (c) do not and will not conflict with or result in any breach or contravention of any provision of law, statute, rule or regulation to which any Borrower or any of its Subsidiaries is subject or any judgment, order, writ, injunction, license or permit applicable to the Borrowers or any of their Subsidiaries and (d) do not conflict with any provision of the Governing Documents of, or any agreement or other instrument binding upon, any Borrower or any of its Subsidiaries.

 

8.1.3.   Enforceability .  The execution and delivery of this Credit Agreement and the other Loan Documents to which any Borrower or any of its Subsidiaries is or is to become a party will result in valid and legally binding obligations of such Person enforceable against it in accordance with the respective terms and provisions hereof and thereof, except as enforceability is limited by bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting generally the enforcement of creditors’ rights and except to the extent that availability of the remedy of specific performance or injunctive relief is subject to the discretion of the court before which any proceeding therefor may be brought.

 

8.2.   Governmental Approvals .  The execution, delivery and performance by the Borrowers and any of their Subsidiaries of this Credit Agreement and the other Loan Documents to which any Borrower or any of its Subsidiaries is or is to become a party and the transactions contemplated hereby and thereby do not require the approval or consent of, or filing with, any governmental agency or authority other than those already obtained.

 

8.3.   Title to Properties; Leases .  Except as indicated on Schedule 8.3 hereto, the Borrowers and their Subsidiaries own (or with respect to property leased under a Capitalized Lease, have a leasehold interest in) all of the assets reflected in the consolidated balance sheet of Holdings and its Subsidiaries as at the Balance Sheet Date or acquired since that date (except property and assets sold or otherwise disposed of in the ordinary course of business since that date), subject to no Liens or other rights of others, except Permitted Liens.

 

 

 

 

8.4.   Financial Statements and Projections .

 

8.4.1.   Fiscal Year .  Holdings and each of its Subsidiaries has a fiscal year which is the twelve months ending on October 31 of each calendar year.

 

8.4.2.   Financial Statements .  There has been furnished to each of the Lenders a consolidated balance sheet of Holdings and its Subsidiaries as at the Balance Sheet Date, and a consolidated statement of income of Holdings and its Subsidiaries for the fiscal year then ended, certified by Wolf & Company, P.C.  Such balance sheet and statement of income have been prepared in accordance with GAAP and fairly present in all material respects the financial condition of Holdings and its Subsidiaries as at the close of business on the date thereof and the results of operations for the fiscal year then ended.  There are no contingent liabilities of Holdings or any of its Subsidiaries as of such date involving material amounts which are required by GAAP to be disclosed, any of which were not disclosed in such balance sheet and the notes related thereto.

 

8.4.3.   Projections .  The projections of the annual operating budgets of Holdings and its Subsidiaries on a consolidated basis, balance sheets and cash flow statements for the 2010 to 2013 fiscal years, copies of which have been delivered to each Lender prior to the date hereof are based upon reasonable estimates and assumptions, have been prepared on the basis of the assumptions stated therein and reflect the reasonable estimates of the Borrowers and their Subsidiaries of the results of operations and other information projected therein.  To the knowledge of the Borrowers as of the Effective Date no facts exist that (individually or in the aggregate) would result in any material adverse change in any of such projections.  It is understood that nothing contained in this section shall constitute a representation or warranty that such future financial performance or results of operations will be achieved.

 

8.5.   No Material Adverse Changes, etc .  Since the Balance Sheet Date there has been no event or occurrence which has had or could reasonably be expected to have a Material Adverse Effect.  Since the Balance Sheet Date, no Borrower has made any Restricted Payment except for Restricted Payments which would be permitted by the terms of this Credit Agreement.

 

8.6.   Franchises, Patents, Copyrights, etc .  The Borrowers and each of their Subsidiaries possesses all franchises, patents, copyrights, trademarks, trade names, licenses and permits, and rights in respect of the foregoing, necessary for the conduct of its business substantially as now conducted without known conflict with any rights of others.

 

8.7.   Litigation .  Except as set forth in Schedule 8 . 7 hereto, there are no actions, suits, proceedings or investigations of any kind pending or, to the knowledge of Borrowers, threatened against any Borrower or any of its Subsidiaries before any Governmental Authority, that, (a) if adversely determined, might, either in any case or in the aggregate,  (i) have a Material Adverse Effect or (ii) materially impair the right of the Borrowers and their Subsidiaries, considered as a whole, to carry on business substantially as now conducted by them, or result in any substantial liability not adequately covered by insurance, or for which adequate reserves are not maintained on the consolidated balance sheet of Holdings and its Subsidiaries, or (b) which question the validity of this Credit Agreement or any of the other Loan Documents, or any action taken or to be taken pursuant hereto or thereto.

 

 

 

8.8.   No Materially Adverse Contracts, etc .  No Borrower nor any of their Subsidiaries is subject to any Governing Document or other legal restriction, or any judgment, decree, order, law, statute, rule or regulation that has or is reasonably expected in the future to have a Material Adverse Effect.  No Borrower nor any of their Subsidiaries is a party to any contract or agreement that has had or could reasonably be expected to have any Material Adverse Effect.

 

8.9.   Compliance with Other Instruments, Laws, etc .  None of the Borrowers nor any of their Subsidiaries is in violation of any provision of its Governing Documents, or any agreement or instrument to which it may be subject or by which it or any of its properties may be bound or any decree, order, judgment, statute, license, rule or regulation, in any of the foregoing cases in a manner that could result in the imposition of substantial penalties or have a Material Adverse Effect.

 

8.10.   Tax Status .  The Borrowers and their Subsidiaries (a) have made or filed all federal, state and foreign income and all other tax returns, reports and declarations required by any jurisdiction to which any of them is subject, (b) have paid all taxes and other governmental assessments and charges shown or determined to be due on such returns, reports and declarations, except those being contested in good faith and by appropriate proceedings and (c) have set aside on their books provisions reasonably adequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply.  There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the Borrowers do not know of any basis for any such claim.

 

8.11.   No Event of Default .  No Default or Event of Default has occurred and is continuing.

 

8.12.   Holding Company and Investment Company Acts .  No Borrower nor any of their Subsidiaries is a “ holding company ”, or a “ subsidiary company ” of a “ holding company ”, or an “ affiliate ” of a “ holding company ”, as such terms are defined in the Public Utility Holding Company Act of 1935; nor is it an “ investment company ”, or an “ affiliated company ” or a “ principal underwriter ” of an “ investment company ”, as such terms are defined in the Investment Company Act of 1940.

 

8.13.   Absence of Financing Statements, etc .  Except with respect to Permitted Liens, there is no financing statement, security agreement, chattel mortgage, real estate mortgage or other document filed or recorded with any filing records, registry or other public office, that purports to cover, affect or give notice of any present or possible future Lien on any assets or property of the Borrowers or any of their Subsidiaries or any rights relating thereto.

 

8.14.   Perfection of Security Interest .  All filings, assignments, pledges and deposits of documents or instruments have been made and all other actions have been taken that are necessary, under applicable law, to establish and perfect the Administrative Agent’s security interest in the Collateral.  The Collateral and the Administrative Agent’s rights with respect to the Collateral are not subject to any setoff, claims, withholdings or other defenses.  The Borrowers are the owners of the Collateral free from any Lien, except for Permitted Liens.

 

 

 

8.15.   Certain Transactions .  Except as set forth on Schedule 8.15 attached hereto, none of the officers, directors, or employees of any Borrower or any of its Subsidiaries or any of the Bakers or any entity which is an Affiliate of any of the Bakers is presently a party to any transaction with any Borrower or any of its Subsidiaries (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Borrowers, any corporation, limited liability company, partnership, trust or other entity in which any officer, member, manager, director, or any such employee has a substantial interest or is an officer, member, manager, director, trustee or partner.

 

8.16.   Employee Benefit Plans .

 

8.16.1.   In General .  Each Employee Benefit Plan and each Guaranteed Pension Plan has been maintained and operated in compliance in all material respects with the provisions of ERISA and, to the extent applicable, the Code, including but not limited to the provisions thereunder respecting prohibited transactions and the bonding of fiduciaries and other persons handling plan funds as required by §412 of ERISA. The Borrowers have heretofore delivered to the Administrative Agent the most recently completed annual report, Form 5500, with all required attachments, and actuarial statement required to be submitted under §103(d) of ERISA, with respect to each Guaranteed Pension Plan.

 

8.16.2.   Terminability of Welfare Plans .  No Employee Benefit Plan, which is an employee welfare benefit plan within the meaning of §3(1) or §3(2)(B) of ERISA, provides benefit coverage subsequent to termination of employment, except as required by Title I, Part 6 of ERISA or the applicable state insurance laws. The Borrowers may terminate each such Plan at any time (or at any time subsequent to the expiration of any applicable bargaining agreement) in the discretion of the Borrowers without liability to any Person other than for claims arising prior to termination.

 

8.16.3.   Guaranteed Pension Plans .  Each contribution required to be made to a Guaranteed Pension Plan, whether required to be made to avoid the incurrence of an accumulated funding deficiency, the notice or lien provisions of §302(f) of ERISA, or otherwise, has been timely made.  No waiver of an accumulated funding deficiency or extension of amortization periods has been received with respect to any Guaranteed Pension Plan, and no Borrower nor any ERISA Affiliate is obligated to or has posted security in connection with an amendment to a Guaranteed Pension Plan pursuant to §307 of ERISA or §401(a)(29) of the Code.  No liability to the PBGC (other than required insurance premiums, all of which have been paid) has been incurred by the Borrowers or any ERISA Affiliate with respect to any Guaranteed Pension Plan and there has not been any ERISA Reportable Event (other than an ERISA Reportable Event as to which the requirement of 30 days notice has been waived), or any other event or condition which presents a material risk of termination of any Guaranteed Pension Plan by the PBGC. Based on the latest valuation of each Guaranteed Pension Plan (which in each case occurred within twelve months of the date of this representation), and on the actuarial methods and assumptions employed for that valuation, the aggregate benefit liabilities of all such Guaranteed Pension Plans within the meaning of §4001 of ERISA did not exceed the aggregate value of the assets of all such Guaranteed Pension Plans, disregarding for this purpose the benefit liabilities and assets of any Guaranteed Pension Plan with assets in excess of benefit liabilities.

 

 

 

8.16.4.   Multiemployer Plans .  No Borrower nor any ERISA Affiliate has incurred any material liability (including secondary liability) to any Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan under §4201 of ERISA or as a result of a sale of assets described in §4204 of ERISA.  No Borrower nor any ERISA Affiliate has been notified that any Multiemployer Plan is in reorganization or insolvent under and within the meaning of §4241 or §4245 of ERISA or is at risk of entering reorganization or becoming insolvent, or that any Multiemployer Plan intends to terminate or has been terminated under §4041A of ERISA.

 

8.17.   Use of Proceeds .

 

8.17.1.   General .  The proceeds of the Revolving Credit Loans shall be used solely (a) to finance Capital Expenditures, (b) to finance Permitted Acquisitions and (c) for working capital and general corporate purposes.  The proceeds of the Term Loan shall be used solely to refinance Holdings and Crystal Rock LLC’s outstanding Indebtedness owing under the Original Credit Agreement.  For the avoidance of doubt, no proceeds of the Revolving Credit Loans or the Term Loan shall be used (x) to finance the purchase, redemption, defeasance, retirement or other acquisition of any shares of any class of Capital Stock of Holdings or (y) to make payments on any Subordinated Debt.  The Borrowers will obtain Letters of Credit solely for general corporate purposes.

 

8.17.2.   Regulations U and X .  No portion of any Loan is to be used, and no portion of any Letter of Credit is to be obtained, for the purpose of purchasing or carrying any “ margin security ” or “ margin stock ” as such terms are used in Regulations U and X of the Board of Governors of the Federal Reserve System, 12 C.F.R. Parts 221 and 224.

 

8.17.3.   Ineligible Securities .  No portion of the proceeds of any Loan is to be used, and no portion of any Letter of Credit is to be obtained, for the purpose of knowingly purchasing, or providing credit support for the purchase of, during the underwriting or placement period or within thirty (30) days thereafter, any Ineligible Securities underwritten or privately placed by a Financial Affiliate.

 

8.18.   Environmental Compliance .  The Borrowers have determined that:

 

(a)   no Borrower, nor any of their Subsidiaries nor any of their operations on the Real Estate is in violation, or, to the knowledge of Borrowers, alleged violation, of any judgment, decree, order, law, license, rule or regulation pertaining to environmental matters, including without limitation, those arising under the Resource Conservation and Recovery Act (“ RCRA ”), the Comprehensive Environmental Response, Compensation and Liability Act of 1980 as amended (“ CERCLA ”), the Superfund Amendments and Reauthorization Act of 1986 (“ SARA ”), the Federal Clean Water Act, the Federal Clean Air Act, the Toxic Substances Control Act, or any state, local or foreign law, statute, regulation, ordinance, order or decree relating to health, safety or the environment (hereinafter “ Environmental Laws ”), which violation could reasonably be expected to have a material adverse effect on the environment or a Material Adverse Effect;

 

 

(b)   no Borrower nor any of their Subsidiaries has received notice from any third party including, without limitation, any Governmental Authority, (i) that any one of them has been identified by the United States Environmental Protection Agency (“ EPA ”) as a potentially responsible party under CERCLA with respect to a site listed on the National Priorities List, 40 C.F.R. Part 300 Appendix B; (ii) that any hazardous waste, as defined by 42 U.S.C. §6903(5), any hazardous substances as defined by 42 U.S.C. §9601(14), any pollutant or contaminant as defined by 42 U.S.C. §9601(33) and any toxic substances, oil or hazardous materials or other chemicals or substances regulated by any Environmental Laws (“ Hazardous Substances ”) which any one of them has generated, transported or disposed of has been found at any site at which a Governmental Authority has conducted or has ordered that any Borrower or any of its Subsidiaries conduct a remedial investigation, removal or other response action pursuant to any Environmental Law; or (iii) that it is or shall be a named party to any claim, action, cause of action, complaint, or legal or administrative proceeding (in each case, contingent or otherwise) arising out of any third party’s incurrence of costs, expenses, losses or damages of any kind whatsoever in connection with the release of Hazardous Substances;

 

(c)   except as set forth on Schedule 8 . 18 attached hereto: (i) no portion of the Real Estate has been used by Borrowers for the handling, processing, storage or disposal of Hazardous Substances except in accordance with applicable Environmental Laws; and no underground tank or other underground storage receptacle for Hazardous Substances is located on any portion of the Real Estate; (ii) in the course of any activities conducted by the Borrowers or their Subsidiaries, no Hazardous Substances have been generated or are being used on the Real Estate except in accordance with applicable Environmental Laws; (iii) while the Borrowers have been leasing the Real Estate there have been no releases (i.e. any releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, disposing or dumping) or threatened releases of Hazardous Substances on, upon, into or from the Real Estate of any Borrower or its Subsidiaries in violation of applicable Environmental Law, which releases could reasonably be expected to have a material adverse effect on the value of any of the Real Estate or adjacent properties or the environment; (iv) to the Borrowers’ knowledge, there have been no releases in violation of applicable Environmental Law on, upon, from or into any real property in the vicinity of any of the Real Estate which, through soil or groundwater contamination, may have come to be located on, and which could reasonably be expected to have a material adverse effect on the value of, the Real Estate; and (v) in addition, any Hazardous Substances that have been generated on any of the Real Estate while the Borrowers have been leasing the Real Estate have been transported offsite only by carriers having an identification number issued by the EPA (or the equivalent thereof in any foreign jurisdiction), treated or disposed of only by treatment or disposal facilities maintaining valid permits as required under applicable Environmental Laws, which transporters and facilities have been and are, to the best of the Borrowers’ knowledge, operating in compliance with such permits and applicable Environmental Laws; and

 

(d)   no Borrower, nor any of their Subsidiaries nor any of the Real Estate is subject to any applicable Environmental Law requiring the performance of Hazardous Substances site assessments, or the removal or remediation of Hazardous Substances, or the giving of notice to any Governmental Authority or the recording or delivery to other Persons of an environmental disclosure document or statement by virtue of the transactions set forth herein and contemplated hereby, or as a condition to the recording of any mortgage or to the effectiveness of any other transactions contemplated hereby.

 

 

 

8.19.   Subsidiaries, etc .  Crystal Rock LLC and Crystal Rock Holdings are the only Subsidiaries of Holdings and neither Crystal Rock LLC nor Crystal Rock Holdings has any Subsidiaries.  Except as set forth on Schedule 8 . 19 hereto, no Borrower nor any Subsidiary of any Borrower is engaged in any joint venture or partnership with any other Person.  The jurisdiction of incorporation/formation and principal place of business of each Subsidiary of the Borrowers is listed on Schedule 8 . 19 hereto.

 

8.20.   Bank Accounts .   Schedule 8 . 20 sets forth the account numbers and location of all bank accounts of the Borrowers and their Subsidiaries.

 

8.21.   Disclosure .  Neither this Credit Agreement nor any of the other Loan Documents contains any untrue statement of a material fact or omits to state a material fact (known to the Borrowers or any of their Subsidiaries in the case of any document or information not furnished by them or any of their Subsidiaries) necessary in order to make the statements herein or therein not misleading in light of the circumstances under which they were made.  There is no fact known to the Borrowers or any of their Subsidiaries that has not been disclosed in writing to Administrative Agent which has had or could reasonably be expected to have a Material Adverse Effect, or which could reasonably be expected to have in the future a Material Adverse Effect, exclusive of effects resulting from changes in general economic conditions, legal standards or regulatory conditions.

 

8.22.   Foreign Assets Control Regulations, Etc .  None of the requesting or borrowing of the Loans, the requesting or issuance, extension or renewal of any Letters of Credit or the use of the proceeds of any thereof will violate the Trading With the Enemy Act (50 U.S.C. § 1 et seq., as amended) (the “ Trading With the Enemy Act ”) or any of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) (the “ Foreign Assets Control Regulations ”) or any enabling legislation or executive order relating thereto (which for the avoidance of doubt shall include, but shall not be limited to (a) Executive Order 13224 of September 21, 2001 Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)) (the “ Executive Order ”) and (b) the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Public Law 107-56)).  Furthermore, no Borrower nor any of their Subsidiaries or other Affiliates (a) is or will become a “blocked person” as described in the Executive Order, the Trading With the Enemy Act or the Foreign Assets Control Regulations or (b) engages or will engage in any dealings or transactions, or be otherwise associated, with any such “blocked person”.

 

8.23.   Employment Contracts .  No Borrower nor any of their Subsidiaries is a party to any employment agreement or other compensation agreement with any member of Senior Management other than the Senior Management Employment Agreements.

 

9.            AFFIRMATIVE COVENANTS.

 

Each of the Borrowers covenants and agrees that, so long as any Loan, Unpaid Reimbursement Obligation, Letter of Credit or Note is outstanding or any Lender has any obligation to make any Loans or the Administrative Agent has any obligation to issue, extend or renew any Letters of Credit:

 

 

 

SCHEDULE 1

Name and Address of Lender	Revolving Credit Loan Commitment Amount	Term Loan Commitment Amount	Commitment Percentage (for Revolving Credit Loans and Term Loan)
Bank of America, N.A. 777 Main Street Hartford, CT 06115	$5,000,000.00	$15,500,000.00	100.00%

5.

Credit Agreement:

The Amended and Restated Credit Agreement dated as of April 5, 2010 among the Borrowers, the Lenders parties thereto and Bank of America, N.A., as Administrative Agent for itself and the other Lenders, which amends and restates that certain Credit Agreement dated as of April 5, 2005, as amended, among Holdings and Crystal Rock LLC, the Lenders parties thereto and Bank of America, N.A., as Administrative Agent for itself and the other Lenders.

Facility Assigned	Aggregate Amount of Commitment/Loans for all Lenders	Amount of Commitment/Loans Assigned	Percentage Assigned of Commitment/Loans
Revolving Credit Loan	$	$	%
Term Loan
[Reimbursement Obligation]	$	$	%