REVOLVING CREDIT AGREEMENT

dated effective as of September 1, 2016, between

WEIS MARKETS, INC., DUTCH VALLEY FOOD COMPANY, LLC, WEIS TRANSPORTATION, LLC AND
WMK FINANCING, INC., 

as Co-Borrowers

AND

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Lender

 

 

--------------------------------------------------------------------------------

 

 

TABLE OF CONTENTS

﻿

 

Article 1 DEFINITIONS

1

1.1.Defined Terms

1

1.2.Calculations and Financial Data

12

Article 2 THE LOAN

13

2.1.The Loan and the Note

13

2.2.Borrowings

13

2.3.Interest

18

2.4.Repayments and Prepayments

18

2.5.Origination and Unused Fees

19

2.6.Additional Provisions Respecting Rates and Costs

20

2.7.Taxes

21

Article 3 CONDITIONS OF FUNDING

22

3.1.Conditions to Funding

22

3.2.Conditions to Each Loan

24

3.3.Methods of Satisfying Certain Conditions

24

Article 4 REPRESENTATIONS AND WARRANTIES

25

4.1.Representations of Borrowers

25

Article 5 FINANCIAL REPORTS AND INFORMATION

31

5.1.Financial Data

31

5.2.Ongoing Reporting Requirements

32

5.3.Disclosure

33

Article 6 FINANCIAL COVENANTS

34

6.1.Minimum EBITDA

34

Article 7 GENERAL AFFIRMATIVE COVENANTS

34

7.1.Existence

34

7.2.Legal Requirements; Maintenance of Properties

34

7.3.Payment of Taxes and Claims

35

7.4.Insurance

35

7.5.Inspection

35

7.6.Exchange of Note

35

7.7.Consistent Action

36

7.8.Use of Loan Proceeds

36

7.9.Subsidiaries to be Wholly-Owned

36

7.10.Maintenance of Certain Contracts and Other Rights

36

7.11.Conduct of Business

36

7.12.Further Assurances

36

Article 8 GENERAL NEGATIVE COVENANTS

37

8.1.Indebtedness

37

8.2.Liens

37

﻿

1

 

--------------------------------------------------------------------------------

 

﻿

 

8.3.Investments and Acquisitions

39

8.4.Transactions with Affiliates

40

8.5.Sales or Other Dispositions of Assets, Etc.

40

8.6.Management; Control

41

8.7.Compliance with Federal Reserve Regulations

41

8.8.Limitations on Restrictive Covenants

41

8.9.Environmental Matters

41

8.10.ERISA

42

8.11.Sale and Leaseback

43

8.12.Limitations on Changes in Lines of Business

43

Article 9 EVENTS OF DEFAULT

43

9.1.Events of Default

43

9.2.Acceleration; Remedies

45

Article 10 MISCELLANEOUS

46

10.1.Notices

46

10.2.Duration; Survival

47

10.3.No Implied Waiver

48

10.4.Entire Agreement and Amendments

48

10.5.Successors and Assigns

48

10.6.Descriptive Headings

49

10.7.Governing Law

49

10.8.Holidays

49

10.9.Counterparts

49

10.10.Maximum Lawful Interest Rate

49

10.11.Set-off

50

10.12.Severability

50

10.13.Non-Merger of Remedies

50

10.14.Payment and Reimbursement of Costs and Expenses; Indemnification

50

10.15.Reserved

52

10.16.Consent to Jurisdiction, Service and Venue; Waiver of Jury Trial

52

10.17.Foreign Assets Control Regulations, Etc

53

10.18.Terrorism Sanctions Regulations

55

10.19.Joint and Several Liability

55

﻿

﻿

 

-2-

 

--------------------------------------------------------------------------------

 

 

REVOLVING CREDIT AGREEMENT

REVOLVING CREDIT AGREEMENT dated effective as of September 1, 2016, among WEIS
MARKETS, INC., a Pennsylvania corporation, DUTCH VALLEY FOOD COMPANY, LLC, a
Pennsylvania limited liability company, WEIS TRANSPORTATION, LLC, a Pennsylvania
limited liability company and WMK FINANCING, INC., a Delaware corporation
(individually and collectively the "Borrowers" and each a "Borrower"), and WELLS
FARGO, NATIONAL ASSOCIATION (the "Lender").

Background of Agreement

The Borrowers are engaged in the business of operating retail grocery markets.

The Borrowers have requested, and the Lender is willing to provide, a revolving
credit facility (the "Line of Credit") in an aggregate principal amount not to
exceed One Hundred Million Dollars ($100,000,000.00), with an additional
discretionary availability of Fifty Million Dollars ($50,000,000.00), subject in
all events to the terms and conditions set forth below.

NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree
as follows:

Article 1
DEFINITIONS

1.1. Defined Terms.

Unless the context otherwise requires, as used in this Agreement, the following
terms shall have the meanings specified in this Section.  Further, unless the
context otherwise requires, references to the plural include the singular,
references to the singular include the plural, and all gender references are
interchangeable and deemed to refer to the appropriate gender.

Accordion Amount:  shall have the meaning specified in Section 2.2.2(a)(iv).

Accumulated Funding Deficiency:  any accumulated funding deficiency as defined
in Section 412(a) of the Code and Section 302(a) of ERISA and any successor
sections thereto.

Acquisition:  any transaction or series of transactions by means of which (a) a
Person (the "Acquiror") acquires any going business or all or substantially all
the assets of any other Person or division thereof whether through purchase of
assets or stock, merger or otherwise or (b) any Person becomes a Subsidiary of
the Acquiror.

Affiliate:  with reference to any Person, any director or officer of such
Person, any other entity of which such Person is a general partner, director,
officer or employee, and any other individual or entity directly or indirectly
controlling or controlled by or under direct or indirect common control with
such Person.  For purposes of this definition "control" (including, with
correlative meanings, the terms "controlled by" and "under common control
with"), as used with respect to any Person, shall mean the possession, direct or
indirect, of the power to direct or

1

 

--------------------------------------------------------------------------------

 

cause the direction of the management and policies of such Person, whether
through the ownership of voting securities or by contract or otherwise,
provided, however, that, in any event, any Person that owns directly or
indirectly capital securities having 20% or more of the ordinary voting power
for the election of the directors or other governing body of a corporation or
20% or more of the partnership or other ownership interests in any other Person
(other than as a limited partner of such Person) will be deemed to control such
corporation or other Person.

Agreement:  this Revolving Credit Agreement, as the same may be amended,
modified or supplemented from time to time.

Anti-Corruption Laws:  shall have the meaning specified in Section 10.17.

Anti-Money Laundering Laws:  shall have the meaning specified in Section 10.17.

Applicable Margin:  the meaning specified in Subsection 2.3.3.

Asbestos-Containing Material:  any material containing more than 1% asbestos by
weight.

Bank Tax:  any Tax based on or measured by net income, any franchise Tax and any
doing business Tax (including any gross receipts Tax in the nature of a doing
business Tax), or any tax measured by any similar standard, imposed upon the
Lender by any jurisdiction (or any political subdivision thereof) in which the
Lender is located and/or doing business.

Base Rate:  shall mean, for any day, the higher of (a) the rate of interest
publicly announced by the Lender from time to time at its principal office as
its prime commercial lending rate (which rate is not necessarily the lowest rate
charged by the Lender to its borrowers) or (b) the Federal Funds Rate, plus
one-half of one percent (0.50%).  Notwithstanding anything in this Agreement to
the contrary, if the Base Rate determined as provided above would be less than
zero percent (0.00%) then the Base Rate shall be deemed to be zero percent
(0.00%).

Blocked Person:  shall have the meaning specified in Section 10.17.

Borrowers and Borrower:  the respective meanings specified in the preamble to
this Agreement.

Business Day:  a day other than a Saturday, Sunday or day on which commercial
banks are required or permitted to close in Harrisburg, Pennsylvania.

CAA:  the Clean Air Act (42 U.S.C.A. §§ 7401 to 7642), as amended from time to
time, and all rules, regulations and guidance issued, promulgated or adopted in
connection therewith.

Capital Expenditures:  expenditures to acquire or construct fixed or capital
assets (within the meaning of GAAP), including, but not limited to, the
purchase, construction or rehabilitation of equipment or other physical assets
(including renewals, improvements, replacements and incurrence of Capital Lease
Obligations, but excluding Acquisitions).

-2-

 

--------------------------------------------------------------------------------

 

Capital Lease:  a lease with respect to which the lessee has recognized or is
required to recognize as a capital lease on the balance sheet of such lessee or
otherwise disclose in a note to such balance sheet in accordance with GAAP.

Capital Lease Obligation:  with respect to any Capital Lease, the amount of the
obligation of the lessee thereunder which would in accordance with GAAP appear
on a balance sheet of such lessee in respect of such Capital Lease or otherwise
be disclosed in a note to such balance sheet.

CERCLA:  the Comprehensive Environmental Response, Compensation, and Liability
Act of 1980 (42 U.S.C.A. §§ 9601 to 9675), as amended from time to time, and all
rules, regulations and guidance issued, promulgated or adopted in connection
therewith.

Change of Control:  the occurrence of any of the following events:

(a) any sale, lease, exchange or other transfer (collectively, a "Transfer") (in
one transaction or series of related transactions) of all or substantially of
the assets of the Borrowers and their Subsidiaries; or

(b) the Controlling Shareholders cease to have the power, directly or
indirectly, to vote or direct the voting of securities having more than 51% of
the ordinary voting power for the election of directors of the Borrowers or of
any direct or indirect holding company thereof.

CISADA:  shall mean the Comprehensive Iran Sanctions, Accountability and
Divestment Act.

Closing Date:  the date on which the initial Loans are advanced pursuant to the
terms of this Agreement.

COBRA:  the Consolidated Omnibus Budget Reconciliation Act of 1985 and any
amendments thereto.

Code:  the Internal Revenue Code of 1986, as amended, or its predecessor or
successor, as applicable, and any Treasury regulations, revenue rulings or
technical information releases issued thereunder.

Commitment:  the meaning specified in Subsection 2.2.2 below.

Consolidated:  with respect to any Person and any specified Subsidiaries, the
method of consolidation of financial statements of such Person and such
Subsidiaries and of particular items in such financial statements in accordance
with GAAP.

Controlled Entity:  shall mean (i) any of the Subsidiaries of the Borrowers and
any of their or the Borrowers' respective Controlled Affiliates and (ii) if any
of the Borrowers have a parent company, such parent company and its Controlled
Affiliates.  As used in this definition, "Control" means the possession,
directly or indirectly, of the power to direct or cause

-3-

 

--------------------------------------------------------------------------------

 

the direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.

Controlling Shareholders: Ellen W.P. Wasserman, EKTJ Management, Kathryn J. Zox,
Thomas H. Platz, James A. Platz, Patricia G. Ross Weis, Jonathan H. Weis,
Jennifer Weis and Colleen Ross Weis.  

CWA:  the Clean Water Act (33 U.S.C.A. § 1251 to 1387), as amended from time to
time, and all rules, regulations and guidance issued, promulgated or adopted in
connection therewith.

Default:  any condition or event which, with notice or passage of time or both,
would become an Event of Default.

Default Rate:  the meaning specified in Subsection 2.3.4.

EBITDA:  for any period, the Net Income of the Borrowers and their Subsidiaries,
on a Consolidated basis, plus (to the extent otherwise deducted therefrom)
Interest Expense, income tax expense, depreciation and amortization minus only
gains or losses from asset sales not in the ordinary course of business,
non-cash nonrecurring gain plus any non-cash non-recurring charges to the extent
included in determining Net Income. 

Eligible Institution:  any commercial bank, savings and loan or savings bank
organized under the laws of the United States or any state or political
subdivision thereof or under the laws of another country that is a member of the
Organization for Economic Cooperation and Development (OECD), or any affiliate
of the foregoing, in each case having combined capital and surplus in excess of
One Billion Dollars ($1,000,000,000).

Employee Pension Plan:  any Plan other than a Multiemployer Plan which (a) is
maintained by the Borrowers, any Subsidiary thereof or any ERISA Affiliate and
(b) is subject to Part 3 of Title I of ERISA.

Environmental Laws:  any national, state or local law, ordinance or regulation
(including, without limitation, CERCLA, RCRA, CWA, CAA, EPCRA and OSHA) enacted
in connection with or relating to the protection or regulation of the indoor or
outdoor environment or public or employee health and safety, including, without
limitation, those laws, statutes, and regulations regulating the presence,
Release, disposal, removal, production, storing, refining, handling,
transferring, processing, generating, or transporting of Hazardous Substances,
and all rules, regulations and guidance issued, promulgated or adopted in
connection with such statutes by any governmental authority and any orders,
decrees or judgments issued by any court of competent jurisdiction or
administrative body in connection with any of the foregoing.

EPCRA:  the Emergency Planning Community Right-to-Know Act of 1986 (42 U.S.C.A.
§§ 11001 to 11050) as amended from time to time, and all rules, regulations and
guidance issued, promulgated or adopted in connection therewith.

ERISA:  the Employee Retirement Income Security Act of 1974, as amended, and any
regulations issued thereunder by the Department of Labor or PBGC.

-4-

 

--------------------------------------------------------------------------------

 

ERISA Affiliate:  (a) any corporation included with the Borrowers or any
Subsidiary thereof in a controlled group of corporations within the meaning of
Section 414(b) of the Code, (b) or any trade or business (whether or not
incorporated) which is under common control with the Borrowers or
any  Subsidiary thereof within the meaning of Section 414(c) of the Code, and
(c) any member of an affiliated service group of which the Borrowers or any
Subsidiary thereof is a member within the meaning of Section 414(m) of the Code.

Event of Default:  the meaning specified in Section 9.1.

Federal Funds Rate:  for any day, a fluctuating interest rate per annum equal
for such day 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 Business Day as so published on the next
succeeding Business Day, and (b) if such rate is not so published for any day,
the Federal Funds Rate for such day shall be the average rate charged to the
Lender on such day on such transactions as determined by the Lender in a
commercially reasonable manner.

Fiscal Year:  Means the fiscal year of Borrowers and their Subsidiaries ending
on the last Saturday in the month of December of each year.

GAAP:  generally accepted accounting principles in the United States of America
as in effect from time to time consistently applied that are applicable to the
circumstances as of the date of determination, which, as applied to the
Borrowers shall be consistent with those applied in the preparation of the
financial statements referred to in Subsection 4.1.14.

Governmental Authority shall mean

(a) the government of

(i) the United States of America or any state or other political subdivision
thereof, or

(ii) any other jurisdiction in which the Borrowers conduct all or any part of
their business, or which assert jurisdiction over any properties of the
Borrowers, or

(b) any entity exercising executive, legislative, judicial, regulatory or
administrative functions of, or pertaining to, any such government.

Governmental Official:  (a) any governmental official or employee, (b) official
or employee of any government-owned or government-controlled entity or political
party, or (c) any employee or official or anyone else acting in an official
capacity for a Governmental Authority, a government-owned or
government-controlled entity or political party.

Guaranty:  as applied to any Person, any direct or indirect liability,
contingent or otherwise, of such Person with respect to any indebtedness, lease,
dividend or other obligation of another Person, including, but not limited to,
any such obligation directly or indirectly

-5-

 

--------------------------------------------------------------------------------

 

guaranteed, endorsed (otherwise than for collection or deposit in the ordinary
course of business) or discounted or sold with recourse by such Person, or in
respect of which such Person is otherwise directly or indirectly liable,
including, but not limited to, any such obligation in effect guaranteed by such
Person through any agreement (contingent or otherwise) to purchase, repurchase
or otherwise acquire such obligation or any security therefor, or to provide
funds for the payment or discharge of such obligation (whether in the form of
loans, advances, stock purchases, capital contributions or otherwise), or to
maintain the solvency or other financial condition of the obligor of such
obligation, or to make payment for any products, materials or supplies or for
any transportation or services regardless of the non-delivery or nonfurnishing
thereof, in any such case if the purpose or intent of such agreement is to
provide assurance that such obligation will be paid or discharged, or that any
agreements relating thereto will be complied with, or that the holders of such
obligation will be protected against loss in respect thereof.

Hazardous Substances:  any and all pollutants, contaminants, toxic or hazardous
wastes, toxic or hazardous substances, or any other substances that might pose a
hazard to health, safety or the environment, the investigation, removal or
remediation of which may be required or the generation, manufacture, refining,
production, processing, treatment, storage, handling, transportation, transfer,
use, disposal, Release, discharge, spillage, seepage, migration, or filtration
of which is or shall be regulated, restricted, prohibited or penalized by any
Environmental Law (including, without limitation, petroleum products, asbestos,
Asbestos-Containing Materials, urea formaldehyde foam insulation and
polychlorinated biphenyls and substances defined or regulated as Hazardous
Substances, Pollutants or Contaminants under any Environmental Law).

HIPAA:  the Health Insurance Portability and Accountability Act of 1996 and any
amendments thereto.

Indebtedness:  with respect to any Person (without duplication):

(a) all principal indebtedness of such Person for borrowed money and non-current
interest and fees relating thereto;

(b) all obligations of such Person for the deferred purchase price of property
or services (not payable and paid on ordinary trade terms);

(c) all obligations of such Person evidenced by notes, bonds, debentures or
other similar instruments;

(d) all indebtedness created or arising under any conditional sale or other
title retention agreement with respect to property acquired by such Person (even
though the rights and remedies of the seller or lender under such agreement in
the event of default are limited to repossession or sale of such property);

(e) all Capital Lease Obligations of such Person;

(f) all obligations, contingent or otherwise, of such Person under acceptance,
letter of credit or similar facilities;

-6-

 

--------------------------------------------------------------------------------

 

(g) all obligations of such Person to purchase, redeem, retire, defease or
otherwise acquire for value any capital stock of such Person or any warrants,
rights or options to acquire such capital stock, which obligations shall be
valued, in the case of redeemable preferred stock, at the greater of its
voluntary or involuntary liquidation preference plus accrued and unpaid
dividends and, in the case of other such obligations, at the amount that, in
light of all the facts and circumstances existing at the time of determination,
can reasonably be expected to become payable;

(h) a Guaranty of such Person;

(i) all Indebtedness referred to in clauses (a) through (h) above secured by (or
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on property (including, without
limitation, accounts and contract rights) owned by such Person, even though such
Person has not assumed or become liable for the payment of such Indebtedness;
and

(j) all payments required by such Person under non-compete agreements which are
recorded on the balance sheet of such Person as a liability in accordance with
GAAP.

Indemnitees:  the meaning specified in Section 10.14.

Interest Expense:  for any period, the amount of interest accrued on, or with
respect to, Indebtedness of the Borrowers and their Subsidiaries, on a
Consolidated basis, for such period, including, without limitation, imputed
interest on Capital Leases and imputed or accreted interest in respect of deep
discount or zero coupon obligations.

Investment:  as applied to any Person (the "Investor"), any direct or indirect
purchase or other acquisition by the Investor of stock or other securities of
any other Person (other than an Acquisition), or any direct or indirect loan,
advance, or capital contribution by the Investor to any other Person, including
all Indebtedness and accounts receivable from such other Person which are not
current assets or did not arise from sales to such other Person in the ordinary
course of business.  The "amount" of any Investment shall mean the sum of the
following (without duplication):  the amount of cash paid for or contributed to
such Investment; the fair market value of any equity or other assets
constituting consideration for or contributed to such Investment; and any
commitment to pay, contribute, incur, or become liable for any of the foregoing.

Knowledge:  an individual will be deemed to have "Knowledge" of a particular
fact or other matter if such individual is actually aware of such fact or other
matter.  An entity will be deemed to have "Knowledge" of a particular fact or
other matter if any individual who is serving as a director, officer, partner,
executor, trustee, or key management-level employee of such entity (or in any
similar capacity) has, or at any time had, knowledge of such fact or other
matter.

Lender:  the meaning specified in the preamble to this Agreement.

-7-

 

--------------------------------------------------------------------------------

 

Lending Office:  means, with respect to the Lender, the lending office of the
Lender (or of an affiliate of the Lender) designated by the Lender from time to
time.

Letter of Credit Agreement:  means, with respect to each Letter of Credit to be
issued by the Lender, the letter of credit application and reimbursement
agreement which such Lender requires to be executed by a Borrower in connection
with the issuance of such Letter of Credit.

Letter of Credit Fee:  the meaning specified in Section 2.2.2(d)(iii).

Letter of Credit Liabilities:  means, at any time, the sum of (a) the aggregate
undrawn face amount of all outstanding Letters of Credit, plus (b) all
unreimbursed drawings under Letters of Credit.

Letters of Credit:  has the meaning specified in Section 2.2.2.

LIBOR Rate:  means the variable rate of interest per annum determined in a
commercially reasonable manner by Lender each day based on the rate for United
States dollar deposits for delivery of funds for one (1) month as reported on
Reuters Screen LIBOR page (or any successor page) at approximately 11:00 a.m.,
London time, or, for any day not a London Business Day, the immediately
preceding London Business Day (or if not so reported, then as determined in a
commercially reasonable manner by Lender from another recognized source or
interbank quotation).  Notwithstanding anything in this Agreement to the
contrary, if the LIBOR Rate determined as provided above would be less than zero
percent (0.00%), then the LIBOR Rate shall be deemed to be zero percent (0.00%).

Lien:  with respect to any Person, any mortgage, lien, pledge, adverse claim,
charge, security interest or other encumbrance in or on any property or asset of
such Person, or any interest or title of any vendor, lessor, lender or other
secured party to or of such Person under any conditional sale or other title
retention agreement or Capital Lease with respect to, any property or asset of
such Person.

Line of Credit:  the Line of Credit provided for in the preamble to this
Agreement.

Loan or Loans:  an advance or advances made to the Borrowers pursuant to the
terms of this Agreement.

Loan Documents:  this Agreement, the Note, and any and all agreements, documents
and instruments executed, delivered or filed pursuant to this Agreement, in each
case as amended, modified or supplemented from time to time pursuant to the
provisions hereof and thereof.

Loan Party:  collectively, the Borrowers, their Subsidiaries, and each other
party to any Loan Document as a Borrower, guarantor or grantor, from time to
time (other than the Lender), if any, together with their successors and
permitted assigns, if any.

-8-

 

--------------------------------------------------------------------------------

 

London Business Day:  means any day that is a day for trading by and between
banks in U.S. Dollar deposits in the London interbank market.

Material Adverse Effect:  any material adverse effect on:

(a) the business, financial condition, operations, properties or financial
prospects of the Borrowers and their Subsidiaries, taken as a whole,

(b) the ability of the Borrowers taken as a whole to perform their obligations
under the Loan Documents, or

(c) the binding nature, validity or enforceability of any of the Loan Documents
as an obligation of the Borrowers.

Maturity Date:  September 1, 2019, or such earlier date as the Commitment shall
terminate pursuant to the terms hereof.

Multiemployer Plan:  means a multiemployer pension plan as defined in
Section 3(37) of ERISA to which Borrowers, any Subsidiary thereof or any ERISA
Affiliate has any liability or is required to contribute.

Net Income:  means, with respect to the Borrowers and their Subsidiaries, on a
Consolidated basis, their net income after taxes determined in accordance with
GAAP.

Note:  the meaning specified in Section 2.1.

Obligations:  all payment and performance obligations of every kind, nature and
description of the Borrowers and each other Loan Party to the Lender under,
arising out of, or in connection with, this Agreement and the other Loan
Documents (including, in each case, any interest, fees, indemnities and other
charges that would accrue but for the filing of a bankruptcy action, whether or
not such claim is allowed in such bankruptcy action), whether such obligations
are direct or indirect, absolute or contingent, due or not due, contractual or
tortuous, liquidated or unliquidated, arising by operation of law or otherwise,
now existing or hereafter arising, including, without limitation (and without
duplication), the following:

(a) principal of, premium, if any, on and interest on the Loan and the Note; and

(b) any and all other fees, indemnities, costs, obligations and liabilities of
the Borrowers or any Subsidiary and each and every other Loan Party from time to
time owing to the Lender, any holder of the Note or other Indemnitee or any
successors, agents, nominees or assigns of the foregoing under or in respect of
this Agreement and each other Loan Document.

OFAC:  is defined in Section 10.17.

OFAC Listed Person:  shall have the meaning specified in Section 10.17.

-9-

 

--------------------------------------------------------------------------------

 

OFAC Sanctions Program:  shall mean any economic or trade sanction that OFAC is
responsible for administering and enforcing.  A list of OFAC Sanctions Programs
may be found at
http://www.treasury.gov/resource-center/sanctions/Programs/Pages/Programs.aspx.

Officer's Compliance Certificate:  a certificate in substantially the form of
Exhibit D attached hereto or in such other form as the Lender and the Borrowers
shall agree upon, signed by the chief financial officer or other authorized
officer of the Borrowers as to: (a) the truth of representations and warranties
of the Borrowers in the Loan Documents; (b) the absence of any Default or Event
of Default; (c) compliance with the financial covenants set forth herein
including the calculations relating thereto; and (d) such other information as
is required by this Agreement.

OSHA:  the Occupational Safety and Health Act (29 U.S.C.A. §§ 651-678), as
amended from time to time, and all rules, regulations and guidance issued,
promulgated or adopted in connection therewith.

PBGC:  Pension Benefit Guaranty Corporation, or any governmental agency or
instrumentality succeeding to the functions thereof.

Permitted Business:  Operation of retail grocery markets and related activities
and other lines of business reasonably related thereto and reasonable extensions
thereof.

Permitted Liens:  the meaning specified in Section 8.2.

Person:  a corporation, an association, a limited liability company, a
partnership, an organization, a business, an individual, a government or
political subdivision thereof, a governmental agency or other entity.

Plan:  an "Employee Pension Benefit Plan" (as defined in Section 3(2) of ERISA)
which is currently maintained, or to which contributions are currently being
made, by the Borrowers, any Subsidiary thereof, or any ERISA Affiliate of the
foregoing (or any predecessor thereof).

Projection:  the meaning specified in Section 3.1.5.

Quarterly Payment Date:  the last Business Day of each March, June, September
and December.

RCRA:  the Resource Conservation and Recovery Act of 1976 (42 U.S.C.A. §§ 6901
to 6991; a/k/a the Solid Waste Disposal Act), as amended, and all rules,
regulations and guidance issued, promulgated or adopted in connection therewith.

Regulatory Change:  with respect to the Lender, any change or implementation
after the Closing Date in United States federal, state or foreign laws or
regulations, including, without limitation, the issuance of any final
regulations or guidelines, or the adoption or making after such date of any
interpretations, directives or requests applying to a class of banks, including
the Lender, of or under any United States federal or state, or any foreign, laws
or regulations (having the force of law) or by any court or governmental or
monetary authority

-10-

 

--------------------------------------------------------------------------------

 

charged with the interpretation or administration thereof provided, however,
that any change in, or the implementation of, any Bank Tax shall not constitute
a Regulatory Change hereunder.

Reimbursement Obligations:  means all indebtedness, liabilities, and obligations
of Borrowers or any other Loan Party to reimburse the Lender in accordance with
Section 2.2.2 for any demand for payment or drawing under a Letter of Credit.

Release:  a release, spill, emission, leaking, pumping, emptying, escaping,
injection, deposit, disposal, discharge, dispersal, leaching or migration into
the indoor or outdoor environment or into or out of any property, including the
movement of Hazardous Substances through or in the air, soil, surface water,
groundwater or property.

Remedial Action:  actions necessary to comply with any Environmental Law with
respect to (a) clean up, removal, treatment or handling Hazardous Substances in
the indoor or outdoor environment; (b) prevention of Releases or threats of
Releases or minimization of further Releases of Hazardous Substances so they do
not migrate or endanger or threaten to endanger public or employee health or
safety or welfare or the indoor or outdoor environment; or (c) performance of
pre-remedial studies and investigations and post-remedial monitoring and care.

Reportable Event:  with respect to any Employee Pension Plan, an event described
in Section 4043(c) of ERISA.

SEC:  the United States Securities and Exchange Commission and any successor
governmental agency.

Solvent:  with respect to any Person as of the date of any determination, that
on such date (a) the fair value of the assets of such Person (both at fair
valuation and at present fair saleable value) is greater than the total
liabilities, including, without limitation, contingent liabilities, of such
Person, (b) the present fair saleable value of the assets of such Person is not
less than the amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured, (c) such Person is able
to realize upon its assets and pay its debts and other liabilities, contingent
obligations, and other commitments as they mature in the normal course of
business, (d) such Person does not intend to, and does not believe that it will,
incur debts or liabilities beyond such Person's ability to pay as such debts and
liabilities mature, and (e) such Person is not engaged in business or a
transaction, and is not about to engage in business or a transaction, for which
such Person's property would constitute unreasonably small capital after giving
due consideration to current and anticipated future capital requirements and
current and anticipated future business conduct and the prevailing practice in
the industry in which such Person is engaged.  In computing the amount of
contingent liabilities at any time, such liabilities shall be computed at the
amount which, in light of the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or
matured liability.

Subsidiary:  with respect to any Person, (a) any corporation of which more than
50% of the issued and outstanding capital stock having ordinary voting power to
elect a majority of the Board of Directors of such corporation (irrespective of
whether at the time capital stock of

-11-

 

--------------------------------------------------------------------------------

 

any other class or classes of such corporation shall or might have voting power
upon the occurrence of any contingency) is at the time directly or indirectly
owned or controlled by the Borrowers, by the Borrowers and one or more of its
other Subsidiaries or by one or more of the Borrowers' other Subsidiaries, (b)
any partnership, joint venture, limited liability company, or other association
of which more than 50% of the equity interests having the power to vote to
direct or control the management of such partnership, joint venture, limited
liability company, or other association is at the time owned or controlled by
the Borrowers, by the Borrowers and one or more of the other Subsidiaries or by
one or more of the Borrowers' other Subsidiaries or (c) any other Person that is
Consolidated with the Borrowers.

Tax:  any federal, state, local or foreign tax, assessment or other governmental
charge or levy (including any withholding tax) upon a Person or upon its assets,
revenues, income or profits.

United States Person:  the meaning specified in Subsection 2.7.1.

USA PATRIOT Act:  shall mean United States Public Law 107-56, Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, as amended from time to time,
and the rules and regulations promulgated thereunder from time to time in
effect.

U.S. Economic Sanctions:  shall have the meaning specified in Section 10.17.

U.S. Dollars and $:  lawful money of the United States of America.

Unused Fee Rate:  shall mean one eighth of one percent (0.125%).

Withdrawal Liability:  any withdrawal liability as defined in Section 4201 of
ERISA.

1.2. Calculations and Financial Data.

Except as otherwise provided in this Agreement, calculations under this
Agreement shall be subject to the following:

1.2.1. Calculations made pursuant to this Agreement and financial data delivered
hereunder and terms referred to herein shall be prepared and interpreted both as
to classification of items and as to amounts in accordance with GAAP.

1.2.2. It shall be assumed that any Indebtedness constituting a Guaranty will
require payments of principal in the amounts as called for in the underlying
obligation which is the subject of such Guaranty subject to any express
limitations set forth in such Guaranty (it being understood that neither the
Borrowers nor any Subsidiary may incur any Guaranties except as specifically
permitted under this Agreement).

1.2.3. If the Borrowers or any of their Subsidiaries make an Acquisition with
the consent of the Lender pursuant to Section 8.3 below, for purposes of the
calculations contemplated hereby, there shall be added to the net income, cash
flow and other financial data

-12-

 

--------------------------------------------------------------------------------

 

of the Borrowers and their Subsidiaries, on a Consolidated basis, for the fiscal
quarter in which such Acquisition occurs and for each of the preceding fiscal
quarters to which the relevant financial tests apply, the net income, cash flow
and other financial data of the acquired assets or entity for such period (with
such pro forma adjustments as the Lender shall approve, if any, such approval
not to be unreasonably withheld, conditioned or delayed).  If there occurs any
disposition of any assets or entity by the Borrowers or any Subsidiary, for
purposes of the calculations contemplated hereby, there shall be deducted from
net income, cash flow and other financial data of the Borrowers and their
Subsidiaries, on a Consolidated basis, for the fiscal quarter in which such
disposition occurs and the preceding fiscal quarters to which the relevant
financial tests apply, the net income, cash flow and other financial data of the
assets or entity so disposed of for such period (with such pro forma adjustments
as the Lender shall approve, if any, such approval not to be unreasonably
withheld, conditioned or delayed).

Article 2
THE LOAN

2.1. The Loan and the Note.

The Line of Credit shall be evidenced by the Promissory Note to be issued by the
Borrowers to the Lender in substantially the form attached hereto as Exhibit A
(as the same may be amended, modified or supplemented from time to time in
accordance with the terms hereof and together with each replacement thereof, a
"Note"), the principal and unpaid interest of which, and all unpaid fees and
other sums of any nature due under or in connection with which (to the extent
not due and payable before), shall be due and payable on the Maturity Date.

2.2. Borrowings.

2.2.1. General Conditions.  All advances requested by the Borrowers are subject
to and conditioned upon continuing compliance with all terms and conditions set
forth in this Agreement.

2.2.2. Line of Credit.

(a) (i)Commitment.  The Lender shall make advances to the Borrowers until the
Maturity Date in an aggregate principal amount not to exceed at any time
outstanding One Hundred Million Dollars ($100,000,000.00) (as the same may be
reduced or increased pursuant to the terms of this Agreement, the "Commitment");
provided however, that the aggregate amount of the Commitment available for
borrowing at any time shall not exceed the amount of the Commitment at that time
less the amount of any outstanding Loans under the Line of Credit and the Letter
of Credit Liabilities.  Within the foregoing limits, and subject to the terms
and conditions set forth in this Agreement until the Maturity Date, the
Borrowers may borrow under this Subsection 2.2.2, repay or prepay such advances,
and reborrow under this Subsection 2.2.2.  The Lender shall have no obligation
to advance any principal sums in excess of the amount of the Commitment set
forth above in this Section 2.2.2(a)(i) and any agreement between the parties to
permit advances of the Accordion Amount greater than the Commitment amount set
forth above in this Section 2.2.2(a)(i) must be evidenced by compliance with
Section 2.2.2(a)(iv) below.

-13-

 

--------------------------------------------------------------------------------

 

(ii) Termination of Commitment.  Unless terminated earlier pursuant to the terms
of this Agreement, the Commitment shall terminate on the Maturity Date.

(iii) Reduction of Commitment.

(A) Voluntary Reductions.  The Borrowers shall have the right at any time and
from time to time upon two (2) Business Days' (or such shorter period as is
acceptable to Lender) prior written notice to the Lender to permanently reduce
in amounts equal to Five Million Dollars ($5,000,000.00) or integral multiples
thereof in excess thereof, or terminate the Commitment, without penalty or
premium; provided, however, that no voluntary reduction to the Commitment may be
made or shall be effective during each period of time commencing on the date of
the Lender's grant of Borrowers' request for the increase of the Commitment
utilizing all or a portion of the Accordion Amount in accordance with Section
2.2.2(a)(iv) and ending at the close of the Borrowers' next fiscal quarter.    

(iv) Increase of Commitment.  At any time or times when no Event of Default
exists (and provided no Event of Default will occur if the request is given
effect), the Borrowers may request in writing that the Lender agree to increase
the Commitment by an amount not exceeding in the aggregate Fifty Million Dollars
($50,000,000.00) ("Accordion Amount"), thereby increasing the Commitment to a
total sum no greater than One Hundred Fifty Million Dollars
($150,000,000.00).  The Lender shall consider such request in its sole
discretion.  The Lender shall grant or decline such request within thirty (30)
days of its receipt of the request and shall confirm same in writing.  Requests
by the Borrowers for approval of advances under this Section 2.2.2(a)(iv) shall
seek an increased amount of no less than $5,000,000.00 per request (or, if less,
any remaining unfunded amount of the Accordion Amount or such lower amounts
agreed to by Lender), and shall not be made less than thirty (30) days prior to
the Maturity Date.  A request for an advance of all or a portion of the
Accordion Amount shall be made by a written notice substantially in the form of
Exhibit "B" annexed hereto and incorporated herein, which is delivered to the
Lender in accordance with Section 10.1 below, and shall be executed by the
Borrowers' Chief Financial Officer or other authorized signatory.  Any Loans
made by Lender pursuant to all or any portion of the Accordion Amount which has
been approved for advances by the Lender shall be on the same terms set forth in
this Agreement (including, for the avoidance of doubt, the Maturity Date and
pricing).

(b) Manner of Effecting a Borrowing.

(i) Borrowing Notice.  To effect a borrowing, the Borrowers shall give the
Lender written notice substantially in the form annexed to this Agreement as
Exhibit B or in such other form as the Lender and the Borrowers may agree upon,
specifying the amount and date of each intended borrowing, the manner in which
the same shall be disbursed, which notice shall be given no later than 11:00
a.m. (Harrisburg, Pennsylvania time) two (2) Business Days (or such shorter
period as is acceptable to Lender) prior to the date of such borrowing.  Each
such notice of borrowing shall contain a certification by the Borrowers that,
both before and after giving effect to the proposed borrowing, the Borrowers are
in compliance with the covenant set forth in Article 6 below and that no Event
of Default exists or would be created thereby.

-14-

 

--------------------------------------------------------------------------------

 

(ii) Cash Management.  The borrowing notice procedures set forth in Section
2.2.2(b)(i) above shall continue in effect for the making of Loans under the
then-existing Commitment until such time as the Borrowers and Lender have agreed
upon (in writing) and instituted the Lender's day-to-day cash management and
cash sweep services, whereupon advances of Loans and repayments of Loans under
the Line of Credit shall occur daily in accordance with the terms of such cash
management and cash sweep services.

(iii) Obligations Suspended During Default.  The Lender shall not be obligated
to comply with a borrowing notice or to advance any Loan if there shall then
exist an Event of Default.

(c) Letters of Credit.

(i) Commitment to Issue.  Borrowers may utilize the Commitment by requesting
that the Lender issue, and the Lender, subject to the terms and conditions of
this Agreement, shall issue, standby letters of credit for a Borrowers' account
(such letters of credit being hereinafter referred to as the "Letters of
Credit"; provided, however, (A) the aggregate amount of outstanding Letter of
Credit Liabilities shall not at any time exceed Thirty Million Dollars
($30,000,000.00) (such amount the "Letter of Credit Sublimit") and (B) the sum
of any amount of any outstanding Loans under the Line of Credit and outstanding
Letter of Credit Liabilities shall not at any time exceed the Commitment.  Upon
termination of the Commitment, any Letter of Credit then outstanding which has
been fully cash collateralized to the reasonable satisfaction of Lender shall no
longer be considered a "Letter of Credit" as defined in this Agreement but the
letter of credit fees payable hereunder shall continue to accrue to the Lender
with respect to such Letter of Credit until the expiry thereof.

(ii) Letter of Credit Request Procedure.  Except for Letters of Credit issued on
the Closing Date, Borrowers shall give Lender not less than three (3) Business
Days' (or such shorter period as is acceptable to Lender) prior notice
(effective upon receipt) specifying the date of each Letter of Credit and the
nature of the transactions to be supported thereby.  Each Letter of Credit shall
have a term which does not exceed one (1) year and an expiration date that does
not extend beyond a date which is thirty (30) days prior to the Maturity Date,
shall be payable in U.S. Dollars, must support a transaction entered into in the
ordinary course of business of Borrowers, must be reasonably satisfactory in
form and substance to Lender, and shall be issued pursuant to such documentation
as Lender may reasonably require, including, without limitation, the Lender's
standard form Letter of Credit Agreement executed by an authorized signer of the
Borrowers for the account of which the Letter of Credit is to be issued;
provided, that, in the event of any conflict between the terms of such Letter of
Credit Agreement and the other Loan Documents, the terms of the other Loan
Documents shall control.

(iii) Letter of Credit Fees.  Borrowers will pay to the Lender a fee (the
"Letter of Credit Fee"), such fee (A) to be paid in arrears on the first
Quarterly Payment Date occurring after the date of the issuance of the first
Letter of Credit and on each Quarterly Payment Date thereafter until the date of
expiration or termination of all Letters of Credit and (B) to be calculated by
reference to the product of the actual daily undrawn face amount of all issued
Letters of Credit multiplied by a rate per annum equal to one-half of one
percent (0.50%) on the basis of a year of 360 days and the actual number of days
elapsed

-15-

 

--------------------------------------------------------------------------------

 

(including the first day but excluding the last day).  The Borrowers will pay to
the Lender all customary issuance and other fees for issuing and processing
Letters of Credit and for amendments to and processing of the Letters of Credit.

(iv) Reimbursements.  The Borrowers shall be irrevocably and unconditionally
obligated to immediately reimburse the Lender for any amounts paid by the Lender
upon any demand for payment or drawing under any Letter of Credit, without
presentment, demand, protest or other formalities of any kind.  All payments on
the Reimbursement Obligations shall be made to Lender not later than 2:00 p.m.
on the first Business Day after the date of the corresponding payment under the
Letter of Credit by the Lender; provided, that Lender has provided notice to the
Borrowers prior to 11:00 a.m. on the first Business Day prior to such day that
such payment is due.  In the event such notice is received after 11:00 a.m. on a
Business Day, such payment shall be due not later than 1:00 p.m. on the second
succeeding Business Day.  Subject to the other terms and conditions of this
Agreement, such reimbursement may be made by Borrowers requesting a Loan under
the Line of Credit in accordance with Section 2.2.2(b) hereof, the proceeds of
which shall be credited against Borrowers' Reimbursement Obligations.

(v) Reimbursement Obligations Absolute.  The Reimbursement Obligations of
Borrowers under this Agreement shall be absolute, unconditional and irrevocable,
and shall be performed strictly in accordance with the terms of the Loan
Documents under all circumstances whatsoever and Borrowers hereby waive any
defense to the payment of the Reimbursement Obligations based on any
circumstance whatsoever, including, without limitation, in either case, the
following circumstances:  (A) any lack of validity or enforceability of any
Letter of Credit or any other Loan Document; (B) the existence of any claim,
set-off, counterclaim, defense or other rights which any Loan Party or any other
Person may have at any time against any beneficiary of any Letter of Credit, the
Lender, or any other Person, whether in connection with any Loan Document or any
unrelated transaction; (C) any statement, draft or other documentation presented
under any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement herein being untrue or inaccurate
in any respect whatsoever; (D) payment by the Lender under any Letter of Credit
against presentation of a draft or other document that does not comply with the
terms of such Letter of Credit; or (E) any other circumstance whatsoever,
whether or not similar to any of the foregoing.  Notwithstanding any prepayment
by Borrowers to Lender of all amounts due on account of Loans under the Line of
Credit, or the expiration or termination of the availability of Loans under the
Line of Credit, or the occurrence of the Maturity Date or a Default,  so long as
any Letter of Credit, or any extension, amendment or renewal thereof, is
outstanding, available and unexpired, whether or not draws have been made
thereunder, it shall be deemed that sums are due and owing to Lender pursuant to
this Agreement on account of the Reimbursement Obligations and Borrowers shall
remain bound by all covenants, conditions, restrictions, and obligations set
forth in this Agreement and the Loan Documents until such time as all amounts
due hereunder have been repaid to Lender in full (other than contingent
indemnification obligations) and no Letter of Credit is outstanding or in
effect.

(vi) Assumption of Risk by Borrowers.  As between the Borrowers and the Lender,
the Borrowers assume all risks of the acts and omissions of, or misuse of any of
the Letters of Credit by, the respective beneficiaries of such Letters of
Credit.  In

-16-

 

--------------------------------------------------------------------------------

 

furtherance and not in limitation of the foregoing, subject to the provisions of
the applications for the issuance of Letters of Credit, the Lender shall not be
responsible for:

(A) the form, validity, sufficiency, accuracy, genuineness or legal effect of
any document submitted by any Person in connection with the application for and
issuance of and presentation of drafts with respect to any of the Letters of
Credit, even if it should prove to be in any or all respects, invalid,
insufficient, inaccurate, fraudulent or forged;

(B) the validity or sufficiency of any instrument transferring or assigning, or
purporting to transfer or assign, any Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may provide to be
invalid or ineffective for any reason;

(C) the failure of the beneficiary of any Letter of Credit to comply duly with
conditions required in order to draw upon such Letter of Credit;

(D) errors, omissions, interruptions or delays in transmission or delivery of
any messages, by mail, cable, telegraph, telex or otherwise, whether or not they
be in cipher;

(E) errors in interpretation of technical terms;

(F) any loss or delay in the transmission or otherwise of any document required
in order to make a drawing under any Letter of Credit or of the proceeds
thereof;

(G) the misapplication by the beneficiary of any Letter of Credit of the
proceeds of any drawing under such Letter of Credit; or

(H) any consequences arising from causes beyond the control of the Lender,
including, without limitation, any act of any Governmental Authority.

None of the foregoing shall affect, impair, or prevent the investing of any of
the Lender's rights or powers under this Section 2.2.2(c).  The Borrowers shall
have a claim against the Lender and the Lender shall be liable to Borrowers, to
the extent of any direct (but not indirect, consequential or punitive) damages
suffered by the Borrowers which the Borrowers prove in a final nonappealable
judgment were caused by (A) the Lender's willful misconduct or gross negligence
in determining whether documents presented under any Letter of Credit complied
with the terms thereof or (B) the Lender's willful failure to pay under any
Letter of Credit after presentation to it of documentation strictly complying
with the terms and conditions of such Letter of Credit.  The Lender may accept
documents that reasonably appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary.

﻿

﻿

-17-

 

--------------------------------------------------------------------------------

 

2.3. Interest.

2.3.1. Interest Rate.  The Loans shall bear interest on the outstanding
principal amount thereof from the date when made until paid at the LIBOR Rate
plus the Applicable Margin.  In the event that Section 2.6.1 below shall become
applicable, the Loans shall bear interest at the Base Rate, plus the Applicable
Margin.  The variable rate of interest applicable to the Loans is subject to
daily change.

2.3.2. Calculation and Payment of Interest.  Interest shall be payable monthly
in arrears on the first day of each month.  In addition to the foregoing,
interest shall be due and payable upon repayment or prepayment of all or any
portion of a Loan.  Interest shall be computed on the basis of a 360 day year
and actual days elapsed.

2.3.3. Applicable Margin.  The term "Applicable Margin", when used herein with
respect to the rate of interest to be charged on the Line of Credit, shall mean,
at any time, sixty-five hundredths of one percent (0.65%).

2.3.4. Default Rate.  Anything in this Agreement to the contrary
notwithstanding, during the existence of any Event of Default hereunder, at the
election of the Lender, the Loans shall bear interest at a rate equal to the sum
of two percent (2%) per annum plus the rate of interest otherwise prevailing
pursuant to Section 2.3.1 above (the "Default Rate").

2.4. Repayments and Prepayments.

2.4.1. Scheduled Payments

Line of Credit.  Until such time as the Promissory Note becomes due and payable,
the Borrowers shall make payments of interest only on the then outstanding
principal amount of the Line of Credit, payable in arrears as set forth in
Section 2.3.2.

2.4.2. Payments of Loan on Maturity Date.  Notwithstanding anything else
provided herein, all outstanding amounts of principal on the Line of Credit,
together with all unpaid interest and fees related thereto and all other amounts
payable under the Loan Documents, if not due and payable or paid before, shall
be due and payable on the Maturity Date.

2.4.3. Voluntary Prepayments of Loan.  Except as specifically set forth in this
Agreement, the Borrowers shall be permitted to prepay the Line of Credit at any
time without penalty or premium.

2.4.4. Prepayments of Loan In Connection With Commitment Reductions.  The amount
of the outstanding and unpaid advances of principal under the Line of Credit may
not, at any time, exceed the amount of the Commitment.  Therefore, upon the
effective date of each reduction in the Commitment (whether voluntary of
otherwise), the Borrowers shall pay to the Lender a sum equal to the amount of
the principal advances under the Line of Credit to the extent, if any, that the
aggregate principal amount under the Line of Credit then outstanding exceeds the
amount of the Commitment as so reduced, together with all interest accrued, on
the principal sum prepaid.

-18-

 

--------------------------------------------------------------------------------

 

2.4.5. Mandatory Prepayment of Loan.

Loans under the Line of Credit.  If at any time the outstanding principal
balance under the Line of Credit exceeds the Commitment, Borrowers shall
immediately prepay and reduce, without need of demand, from time to time, the
outstanding principal balance by the amount of such excess.

2.4.6. Application of Prepayments and Repayments.  Unless otherwise provided in
this Agreement, repayments and prepayments shall be applied first to costs,
indemnities and fees (to the extent then payable) then to principal applied
first to any Base Rate Loans then outstanding, then to outstanding LIBOR Rate
Loans, and finally to provide cash collateral for Letters of Credit.  All
mandatory prepayments under Section 2.4.5 shall be applied first to outstanding
Loans under the Line of Credit (with a corresponding reduction in the
Commitment) in the same order as the previous sentence.

2.4.7. Payments to Lender.

(a) All payments on account of principal and interest on the Loans, the Unused
Fees, and all other amounts otherwise payable by the Borrowers to the Lender
under this Agreement, shall be made to the Lender in U.S.  Dollars which are
immediately available by 3:00 p.m. (Harrisburg, Pennsylvania time), on the due
date for such payment, at the Lender's principal office in Harrisburg,
Pennsylvania specifying amount and date of payment, re: Borrowers (and if by
wire transfer, in accordance with the instructions on the signature page to this
Agreement executed by the Lender), or to such other accounts or Persons or at
such other place as the Lender may direct in writing.  The Borrowers hereby
authorize the Lender to (i) apply to the aforesaid payments, up to the amount of
such payments, any portion of the balance of any account maintained by the
Borrowers for the purpose of facilitating said payments, and/or (ii) cause the
aforesaid payments to be made, if not paid by the Borrowers when due, by drawing
under the loan facilities provided under this Agreement if available;
notwithstanding the foregoing, any amounts not paid when due shall bear interest
at the Default Rate, subject to the following sentence.  The failure by the
Borrowers to make a payment by 3:00 p.m. shall not constitute an Event of
Default if such payment is made on the due date; however, any payment made after
such time on such due date shall be deemed made on the next Business Day for the
purpose of interest and reimbursement calculations.

(b) Borrowers authorize Lender to collect all principal, interest and fees due
under the Line of Credit by charging Borrowers' deposit account number x3529
with Lender, or any other deposit account maintained by Borrowers with Lender,
for the full amount thereof.  Should there be insufficient funds in any such
deposit account to pay all such sums when due, the full amount of such
deficiency shall be immediately due and payable by the Borrowers.

2.5. Origination and Unused Fees.

2.5.1. Unused Fee.  The Borrowers shall pay to the Lender quarterly in arrears
on each Quarterly Payment Date and at any time there shall be a reduction in the
amount of the Commitment and on the Maturity Date, a non-refundable unused fee
(the "Unused Fee")

-19-

 

--------------------------------------------------------------------------------

 

(calculated on the basis of a 365 day year and the actual days elapsed) equal to
the product of the Unused Fee Rate times the average daily unborrowed portion of
the amount of the Commitment during the period ended on such Quarterly Payment
Date or such Commitment reduction date or Maturity Date, as the case may be.

2.6. Additional Provisions Respecting Rates and Costs.

2.6.1. Mandatory Suspension of LIBOR Rate.  The Lender's obligations to make or
continue Loans at the LIBOR Rate shall be suspended, and all the Lender's
outstanding Loans shall be converted into Loans at the Base Rate, if:

(a) on or prior to the determination of the LIBOR Rate, the Lender determines
that for any reason appropriate information is not available to it for purposes
of determining the LIBOR Rate;

(b) the Lender determines that the LIBOR Rate as determined by the Lender would
not accurately reflect the cost to the Lender of making or continuing Loans at
the LIBOR Rate;

(c) at any time, the Lender determines that any Regulatory Change makes it
unlawful or impracticable for Lender to make or continue the LIBOR Rate, or to
comply with its obligations hereunder in respect thereof; or

(d) the Lender determines that, by reason of any Regulatory Change, the Lender
is restricted, directly or indirectly, in the amount that it may hold of (i) a
category of liabilities that includes deposits by reference to which, or on the
basis of which, the interest rate is the LIBOR Rate or (ii) the category of
assets that includes Loans at the LIBOR Rate.

2.6.2. Regulatory Changes; Increased Costs.  If in the opinion of the Lender (a)
any Regulatory Change shall directly or indirectly (i) reduce the amount of any
sum received or receivable by the Lender on any Loan, (ii) impose a cost on the
Lender or any Affiliate of the Lender that is attributable to the making or
maintaining of, or the Lender's commitment to make, any Loan, (iii) require the
Lender or any Affiliate of the Lender to make any payment on, or calculated by
reference to, the gross amount of any amount received by the Lender under any
Loan Document or (iv) reduce, or have the effect of reducing, the rate of return
on any capital of the Lender or any Affiliate of the Lender that the Lender or
such Affiliate is required to maintain on account of any Loan or the Lender's
commitment to make any Loan and (b) such reduction, increased cost or payment
shall not be fully compensated for by an adjustment in the applicable rates of
interest payable under the Loan Documents, then, upon written request of the
Lender, the Borrowers shall pay to the Lender such additional amounts as the
Lender determines will, together with any adjustment in the applicable rates of
interest payable hereunder, fully compensate it for such reduction, increased
cost or payment.  Such additional amounts shall be payable, in the case of those
applicable to prior periods, within thirty (30) days after request by the Lender
for such payment and, in the case of those applicable to future periods, on the
date specified in such request.  The Lender will promptly notify the Borrowers
of any determination made by it referred to above, but the failure to give such
notice shall not affect the Lender's right to such compensation; provided,
 however, that the Borrowers shall not be required to pay such

-20-

 

--------------------------------------------------------------------------------

 

additional amounts for any period ending prior to the date that is ninety (90)
days prior to the giving of such notice.

2.6.3. Capital Requirements.  If, in the determination of the Lender, the Lender
or any Affiliate of the Lender is required, as a result of a Regulatory Change,
to maintain capital on account of any Loan or the Lender's commitment to make
any Loan, then, upon request by the Lender, the Borrowers shall from time to
time thereafter pay to the Lender such additional amounts as the Lender
determines will fully compensate for any reduction in the rate of return on the
capital that the Lender or such Affiliate is so required to maintain on account
of such Loan or commitment suffered as a result of such capital
requirement.  Such additional amounts shall be payable, in the case of those
applicable to prior periods, within thirty (30) days after request by the Lender
for such payment and, in the case of those relating to future periods, on the
dates specified in such request; provided, however, that the Borrowers shall not
be required to pay such additional amounts for any period ending prior to the
date that is ninety (90) days prior to the giving of such notice.

2.6.4. Determinations.  In making the determinations contemplated by this
Section 2.6, the Lender may make such estimates, assumptions, allocations and
the like that the Lender reasonably and in good faith determines to be
appropriate, and the Lender's selection thereof in accordance with this
Section 2.6, and the determinations made by the Lender on the basis thereof,
shall be final, binding and conclusive upon the Borrowers, absent manifest
error.  The Lender shall furnish to the Borrowers, at the time of any request
for compensation under Subsections 2.6.2 or 2.6.3, a certificate outlining in
reasonable detail the computation of any amounts claimed by it under said
Subsection 2.6.2 or 2.6.3 and the assumptions underlying such computations,
which shall include a statement of an officer of such Lender certifying that
such request for compensation is being made pursuant to a policy adopted by such
Lender to seek such compensation generally from customers similar to the
Borrowers and having similar provisions in agreements with the Lender.

2.6.5. Change of Lending Office.  If an event occurs with respect to a Lending
Office of the Lender that makes operable the provisions of Subsection 2.6.1 or
requires a payment under Subsection 2.6.2 or 2.6.3, the Lender shall use
reasonable efforts to designate another Lending Office, the designation of which
will reduce the amount the Borrowers are so obligated to pay, eliminate such
operability or reduce the amount the Lender is so entitled to claim, provided,
 however, that such designation would not, in the sole and absolute discretion
of the Lender, be materially disadvantageous to the Lender in any manner or
contrary to the Lender's policies.  Except as set forth in this
Subsection 2.6.5, the Lender may designate any lending office as its Lending
Office.

2.7. Taxes.

2.7.1. Taxes Payable by the Borrowers.  If any Tax is required to be withheld or
deducted from, or is otherwise payable by the Borrowers in connection with, any
payment due hereunder to the Lender that is not a "United States Person" (as
such term is defined in Section 7701(a)(30) of the Code) the Borrowers (i)
shall, if required, withhold or deduct the amount of such Tax from such payment
and, in any case, pay such Tax to the appropriate taxing authority in accordance
with applicable law and (ii) except in the case of any Bank Tax, shall pay

-21-

 

--------------------------------------------------------------------------------

 

to the Lender such additional amounts as may be necessary so that the net amount
received by the Lender with respect to such payment, after withholding or
deducting all Taxes (other than Bank Taxes) required to be withheld or deducted,
is equal to the full amount payable hereunder.  If any Tax is withheld or
deducted from, or is otherwise payable by the Borrowers in connection with, any
payment due to the Lender hereunder, the Borrowers shall furnish to the Lender
the original or a certified copy of a receipt for such Tax from the applicable
taxing authority within 30 days after the date of such payment (or, if such
receipt shall not have been made available by such taxing authority within such
time, the Borrowers shall use reasonable efforts to promptly obtain and furnish
such receipt).  If the Borrowers fail to pay any Taxes, other than Bank Taxes,
when due to the appropriate taxing authority or fail to remit to the Lender the
required receipts, the Borrowers shall indemnify the Lender for any such Taxes,
interest, penalties or additions to such Tax that may become payable by the
Lender as a result of any such failure.

2.7.2. Reimbursement of Taxes Payable by the Lender.  The Borrowers shall,
promptly upon request by the Lender for the payment thereof, pay to the Lender
an amount equal to (a) all Taxes (other than Bank Taxes and without duplication
of amounts paid pursuant to the preceding Subsection 2.7.1) payable by the
Lender with respect to any payment due to the Lender hereunder and (b) all Taxes
(other than Bank Taxes) payable by the Lender as a result of payments made by
the Borrowers (whether made to a taxing authority or to the Lender pursuant to
Subsection 2.7.1 or this Subsection 2.7.2).  The Lender shall only require
payment under this Subsection 2.7.2 if such request for payment is made pursuant
to a policy adopted by the Lender to seek such payments generally from customers
similar to the Borrowers and having similar provisions in agreements with the
Lender.

Article 3
CONDITIONS OF FUNDING

3.1. Conditions to Funding.

The Lender's obligation to make the initial Loans hereunder is subject to the
fulfillment of each of the following conditions, in each case to the reasonable
satisfaction of the Lender:

3.1.1. Secretary's Certificate.  Each of the Borrowers shall have delivered, or
caused to be delivered, a certificate of the Secretary or an Assistant Secretary
of such Borrower and substantially in the form of Exhibit C, with specimen
signatures of the authorized signatories to the Loan Documents, and to which
shall be attached copies of the following, as applicable: articles, bylaws,
resolutions, shareholder agreements, subscription agreements and other
organizational documents referred to in such certificate;

3.1.2. Organizational Documents.  Each of the Borrowers shall have delivered, or
caused to be delivered, copies (which may be attached to the applicable
aforesaid Secretary's certificate) of the certificate of incorporation or other
formation document, as applicable, of such Borrower, in each case certified, as
of a recent date, by the Secretary of State or other appropriate official of the
jurisdiction of formation of such Borrower and a copy of such Borrowers' bylaws,
operating agreement, or other organizational document, as applicable;

-22-

 

--------------------------------------------------------------------------------

 

3.1.3. Good Standing Certificate.  Each of the Borrowers shall have delivered,
or caused to be delivered, a good standing or subsistence certificate issued as
of a recent date (a) for such Borrower issued by the Secretary of State or other
appropriate official of the jurisdiction of formation of such Borrower and (b)
by the Secretary of State or other appropriate official of each jurisdiction
where such Borrower is required to qualify to do business other than
jurisdictions where failure to be so qualified would not reasonable be expected
to cause a Material Adverse Effect and, if any such certificate is dated more
than thirty (30) days prior to the Closing Date, evidence updating the
information in such certificate;

3.1.4. The Note.  The Borrowers shall have delivered a duly executed Note
payable to the Lender reflecting the aggregate principal amount of the Loans;

3.1.5. Projection.  The Borrowers shall provide to the Lender a projection (the
"Projection") covering the three (3) year period commencing on the Closing Date,
containing an income statement, cash flow and balance sheet of the Borrowers on
a Consolidated basis and otherwise in form reasonably satisfactory to the
Lender.  Such Projection shall fairly present the Borrowers' reasonable
assessment at the time when made or delivered; of the financial prospects of the
Borrowers for the periods covered.  The Borrowers represent and warrant that, to
the Knowledge of the Borrowers, the assumptions used in such Projection are
reasonable at the time when made or delivered.  It is acknowledged and agreed by
Lender that to the extent included in any of the foregoing, projections,
budgets, forward looking statements or estimates as to future events are
inherently uncertain and are not to be viewed as facts and that actual results
during the period or periods covered by the Projection may differ from projected
results;

3.1.6. Lien Searches, Etc.  The Lender shall have received:

certified copies of Requests for Information or Copies (Form UCC-11) or other
lien search reasonably acceptable to the Lender listing the financing statements
if any which name the Borrowers (under their respective present names and any
previous names) as debtor and which are filed in their respective jurisdictions
of formation, together with copies of such financing statements;

3.1.7. Officer's Compliance Certificate.  The Borrowers shall have delivered an
Officer's Compliance Certificate dated as of the Closing Date which certificate
shall specify, among other things, the financial covenant set forth in Section
6.1 after giving effect to the Loans to be made on the Closing Date in the form
attached hereto as Exhibit D;

3.1.8. Insurance.  The Borrowers shall have delivered a schedule of insurance
coverage and such insurance certificates and endorsements as (and if) required
by Section 7.4 of this Agreement;

3.1.9. Consents and Approvals.  All corporate, shareholder, governmental,
judicial and third party consents and approvals necessary in connection with
this Agreement and the other Loan Documents and the related transactions shall
have been obtained and become final orders, as applicable, and shall remain in
full force and effect;

3.1.10. Fees and Expenses.  The Borrowers shall have paid the fees, if
applicable, required to be paid to the Lender on or prior to the Closing Date;

-23-

 

--------------------------------------------------------------------------------

 

3.1.11. Absence of Material Change and Litigation.  There shall be no Material
Adverse Effect of the Borrowers or their Subsidiaries since July 28,
2016.  There shall be no material actions, suits, protests, reconsideration or
proceedings pending, or to the knowledge of the Borrowers, threatened, against
or affecting the Borrowers or any of their Subsidiaries before any court or
before any governmental or administrative body or agency;

3.1.12. Absence of Default; Truth of Representations.  The Borrowers shall have
delivered a certificate of a duly authorized officer confirming that each of the
conditions set forth in clause (a) and clause (c) of Section 3.2.1 below shall
have been satisfied; and

3.1.13. Termination of Existing Credit Facility.  Borrowers shall have delivered
to Lender written confirmation satisfactory to Lender that the availability of
loans and additional letters of credit under the Borrowers' existing credit
facility with BB&T Bank have been terminated, but for the honoring of any draws
that may be made on existing letters of credit.

3.1.14. Additional Information.  The Lender shall have received such additional
information and material as the Lender may reasonably request, including such
additional agreements or certifications executed by the Borrowers or any other
Loan Party as the Lender may reasonably request.

3.2. Conditions to Each Loan.

3.2.1. Conditions.  The obligation of the Lender to make any Loan, including the
initial Loans on the Closing Date, is subject to fulfillment of each of the
following conditions, in each case, unless otherwise specified, to the
satisfaction of the Lender:

(a) Absence of Default.  There shall not, either prior to or after giving effect
to each such Loan, exist an Event of Default or a Default that has occurred and
is continuing;

(b) Borrowing Notice.  The Lender shall have received a borrowing notice if and
as required by Section 2.2.2(b) above; and

(c) Truth of Representations.  The representations and warranties of the
Borrowers and each other Loan Party made in this Agreement and each other Loan
Document shall be true and correct in all material respects as of the date each
such Loan is made (both immediately prior to and after giving effect to said
Loan) as if made on and as of such date, except to the extent that changes in
the facts and conditions on which such representations and warranties are based
do not result from an act or omission that constitutes a breach of any covenant
set forth in this Agreement or in any other Loan Document and have been
disclosed to the Lender in writing (and the Lender shall not have objected
thereto).

3.3. Methods of Satisfying Certain Conditions.

The request for, and acceptance of, any Loan by the Borrowers shall be deemed to
be a representation and warranty by the Borrowers that the conditions specified
in paragraphs (a) and (c) of the preceding Subsection 3.2.1 have been satisfied.

-24-

 

--------------------------------------------------------------------------------

 

Article 4
REPRESENTATIONS AND WARRANTIES

4.1. Representations of Borrowers.

In order to induce the Lender to enter into this Agreement and to make the Loan
contemplated hereunder, the Borrowers hereby make the following representations
and warranties, which representations and warranties shall survive the execution
and delivery of this Agreement, the Note and the other Loan Documents and shall
not be affected or waived by any inspection or examination made by or on behalf
of the Lender:

4.1.1. Organization; Qualification.

(a) Each Borrower is a duly organized corporation or limited liability company,
validly existing and in good standing under the laws of its state of
formation.  Each Borrower has the power and authority and all material
governmental authorizations needed to own its property and assets and to
transact the business in which it is engaged or presently proposes to
engage.  Each Borrower is qualified to do business in each state or jurisdiction
where the failure to so qualify would reasonably be expected to have a Material
Adverse Effect.

(b) Schedule 4.1.1(b) attached hereto correctly sets forth, as of the Closing
Date, the correct legal name of each Borrower and:  (i) its state of formation
and (ii) each state in which it is qualified to do business.

(c) Schedule 4.1.1(c) attached hereto correctly sets forth as of the Closing
Date, the correct legal name of each Subsidiary of the Borrowers and:  (i) its
state of formation and (ii) each state in which it is qualified to do business.

4.1.2. Ownership.  Weis Markets, Inc., a Borrower, is a publicly held
corporation with common stock shares traded on the New York Stock Exchange under
the symbol "WMK".  The ownership of such Borrower's issued and outstanding
common stock is accurately reflected in its filings with the SEC.  Dutch Valley
Food Company, LLC, Weis Transportation, LLC and WMK Financing, Inc. are
wholly-owned subsidiaries of Weis Markets, Inc.

4.1.3. Power and Authority.  The Borrowers have the power to execute, deliver
and carry out the terms and provisions of each of the Loan Documents to which
each is a party, and Borrowers have taken all necessary action (including,
without limitation, obtaining any consent of stockholders, partners or members
required by law or by their respective organizational documents) to authorize
the execution, delivery and performance of the Loan Documents to which each
Borrower is a party.  This Agreement constitutes, and each of the other Loan
Documents when delivered hereunder by the Borrowers and/or other Loan Parties,
as applicable, will constitute, the authorized, valid and legally binding
obligations of such Persons, enforceable against each of said Persons in
accordance with their respective terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity.

-25-

 

--------------------------------------------------------------------------------

 

4.1.4. No Violation of Agreements.  The Borrowers are not in default under the
provisions of any agreement, indenture, franchise, license, permit, mortgage or
deed of trust to which any of them is a party, which default would reasonably be
expected to result in a Material Adverse Effect.  The execution and delivery of
the Loan Documents, the consummation of the transactions contemplated by the
Loan Documents and compliance with the terms and provisions of the Loan
Documents, will not (a) violate in any material respect any provision of law or
any injunction or any applicable regulation, order, writ, judgment or decree of
any court or governmental department, commission, board, bureau, agency or
instrumentality applicable to the Borrowers, or (b) conflict with or be
inconsistent with, or result in any material breach of, any of the terms,
covenants, conditions or provisions of, or constitute a default under, or result
in the creation or imposition of (or the obligation to impose) any Lien upon any
of the property or assets of the Borrowers, pursuant to the terms of any
agreement, indenture, franchise, license, permit, mortgage or deed of trust to
which any Borrower is a party or by which any Borrower may be bound, or to which
any Borrower may be subject, or (c) violate any of the provisions of the
articles of incorporation, bylaws or other organizational document of any
Borrower.

4.1.5. Consents.

No consent, approval or authorization of Borrowers, or recording, filing,
registration, notice or other similar action with or to Borrowers, is required
in order to insure the legality, validity, binding effect or enforceability of
any of the Loan Documents except as may be required by the SEC and those which
if not obtained or made would not reasonably be expected to have a Material
Adverse Effect.

4.1.6. Litigation.  There are no actions, suits, protests, reconsideration or
proceedings pending, or to the knowledge of the Borrowers, threatened, against
or affecting any Borrower before any court or before any governmental or
administrative body or agency, wherein unfavorable decisions, rulings or
findings individually or in the aggregate would reasonably be expected to have a
Material Adverse Effect.

4.1.7. No Burdensome Agreements; Material Agreements.

(a) The Borrowers are not a party to or subject to any agreement or instrument
or subject to any corporate or other restrictions which, assuming compliance by
such Persons with the terms of such agreements or instruments, would reasonably
be expected to have a Material Adverse Effect.  The Borrowers are not party to
any agreement prohibited by Section 8.8 below (dealing with limitations on
restrictive covenants).

(b) All contracts, instruments and other agreements with third parties,
(including, without limitation, all agreements with suppliers and customers)
that are necessary for the Borrowers to operate their business in the manner
reflected in the Projections delivered pursuant to Section 3.1.5 above are in
full force and effect.  The Borrowers are in material compliance with each of
the agreements referred to above.

4.1.8. Condition of Property.  All of the material property, equipment and
assets of the Borrowers necessary for the conduct of their business are in good
repair, working order and condition, ordinary wear and tear and casualty and
condemnation excepted.

-26-

 

--------------------------------------------------------------------------------

 

4.1.9. Title to Properties; Liens.  Except for Permitted Liens, the Borrowers
have good and marketable title to their respective properties and assets
necessary for the conduct of their business, including the properties and assets
reflected in the most recently delivered financial statements or reports (except
properties and assets disposed of since the date thereof in the ordinary course
of business or subject to casualty or condemnation), free and clear of any
Liens.

4.1.10. Names.  The Borrowers do not operate or do business, or, within the past
five years, have not operated or done business (whether by reason of a merger
with another entity or otherwise), under a fictitious, trade or assumed name or
has had a corporate or partnership name other than the names specified in
Schedule 4.1.10.

4.1.11. Business.  The Borrowers are engaged in the Permitted Business and no
other business.

4.1.12. Compliance with Law.  The Borrowers and to the knowledge of the
Borrowers all officers, directors and other agents acting on behalf of Borrowers
are in material compliance with all applicable law.

4.1.13. Absence of Default.  There exists no Event of Default.

4.1.14. Financial Statements; Projections; Material Adverse Change.

All financial reports and statements delivered pursuant to this Agreement and
all calculations for financial covenant compliance and other calculations,
projections (including those required by Section 3.1.5 above), etc. performed by
Borrowers hereunder shall have been prepared in accordance with GAAP applied on
a consistent basis throughout the period specified and present fairly in all
material respects the financial position of the subject Persons, subject to
normal year-end adjustments and absence of foot-note disclosures for interim
reporting.  The Borrowers have on the date hereof no material non-ordinary
course of business contingent liabilities, material liabilities for taxes (other
than those not yet due and payable or permitted pursuant to Section 4.1.15),
unusual forward or long-term commitments or material unrealized or anticipated
losses from any unfavorable commitments, except as referred to or reflected or
provided for in said balance sheets (including the footnotes thereof) as at said
dates.  Since the date of such financial reports and statements, no event or
condition has occurred which would reasonably be expected to result in a
Material Adverse Effect.  In any certificates delivered to the Lender after the
date of this Agreement which certify the truth and accuracy of the
representations, or at any time that these representations shall be deemed
restated, this representation shall be deemed to apply to financial reports and
statements which the Borrowers have most recently delivered to the Lender
pursuant to this Agreement.  It is acknowledged and agreed by Lender that to the
extent included in any of the foregoing, projections, budgets, forward looking
statements or estimates as to future events are inherently uncertain and are not
to be viewed as facts and that actual results during the period or periods
covered by the foregoing may differ from projected results.

4.1.15. Taxes.  The Borrowers have filed all United States Federal income tax
returns and all other material Tax returns which are required to be filed by it
and has paid all

-27-

 

--------------------------------------------------------------------------------

 

material Taxes due as set forth on such returns or pursuant to any assessment
received by the Borrowers or any of their Affiliates and relating to the
Borrowers, except such Taxes, if any, as are being contested in good faith by
appropriate proceedings, if any, and as to which adequate reserves have been
provided.  The charges, accruals and reserves on the books of the Borrowers in
respect of Taxes and other governmental charges are, in the opinion of the
Borrowers, adequate.  There is currently in effect no tax sharing, tax
allocation or similar agreement to which the Borrowers are a party.  The
respective Federal Tax Identification Numbers of the Borrowers are:

Weis Markets, Inc.:24-0755415;

Dutch Valley Food Company, LLC:23-1658330;

Weis Transportation, LLC:23-3099174; and

WMK Financing, Inc.:51-0407294.

4.1.16. Indebtedness.  Schedule 4.1.16 correctly describes as of the Closing
Date all Indebtedness of the Borrowers outstanding or for which Borrowers or any
Subsidiary have commitments, specifying which such Indebtedness is being repaid
concurrent with the closing and which shall remain outstanding after the
closing.  The Borrowers are not in default beyond any applicable grace period
with respect to any Indebtedness or any instrument or agreement relating to such
Indebtedness.

4.1.17. Federal Reserve Regulations.  No Indebtedness that is required to be, or
will be, reduced or retired from the proceeds of the Loans was incurred for the
purpose of purchasing or carrying any "margin stock" within the meaning of
Regulation U of the Board of Governors of the Federal Reserve System (12 C.F.R.
221, as amended), and no proceeds of the Loans will be used to purchase or
acquire any such margin stock.

4.1.18. Investment Company Act.  None of the Borrowers are an "investment
company," or a company "controlled" by an "investment company," within the
meaning of the Investment Company Act of 1940, as amended.

4.1.19. Public Utility Holding Company Act.  None of the Borrowers are a
"holding company," or a "subsidiary company" of a "holding company," or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company," as such terms are defined in the Public Utility Holding Company Act of
1935, as amended.

4.1.20. Compliance with ERISA.

(a) The Borrowers do not maintain or contribute to any Plan except as disclosed
in Schedule 4.1.20 attached hereto.

(b) Except as set forth on Schedule 4.1.20 hereto, each Plan which the Borrowers
or any ERISA Affiliate of any such Person sponsors and which is intended to be
qualified within the meaning of Section 401(a) of the Code is, as most recently
amended, the subject of a favorable determination by the Internal Revenue
Service with respect to its

-28-

 

--------------------------------------------------------------------------------

 

qualification under Section 401(a) of the Code or an application for such
determination within the applicable remedial amendment period has been
filed.  Upon request, the Borrowers will furnish the Lender with a copy of the
most recent actuarial report for each Employee Pension Plan, and each such
report is accurate in all material respects.

(c) Except as set forth on Schedule 4.1.20 attached hereto, the Borrowers and
each ERISA Affiliate of the foregoing have operated each Plan in all material
respects in compliance with the requirements of the Code and ERISA and the terms
of each such Plan.

(d) Except as specifically disclosed in Schedule 4.1.20:  (1) no transaction has
occurred with respect to any Plan in connection with which the Borrowers could
be subject to either a material civil penalty assessed pursuant to
Section 502(i) of ERISA or a material tax penalty imposed pursuant to
Section 4975 of the Code, (2) there is no Accumulated Funding Deficiency with
respect to any Employee Pension Plan, whether or not waived, or an unfulfilled
obligation to contribute to any Multiemployer Plan, (3) no Employee Pension Plan
has been terminated under conditions which resulted or could result in any
material liability to the PBGC, (4) no material liability to the PBGC has been
or is expected to be incurred by the Borrowers or any ERISA Affiliate of the
foregoing with respect to any Plan except for required premium payments to the
PBGC, (5) there has been (a) since January 1, 2009 no Reportable Event with
respect to any Employee Pension Plan (except to the extent that the PBGC has
waived such reporting requirement with respect to any such event), and (b) no
event or condition which presents a material risk of termination of any Employee
Pension Plan by the PBGC, in either case involving conditions which could result
in any liability to the PBGC, (6) neither the Borrowers nor any ERISA Affiliate
of the foregoing has incurred or anticipates incurring Withdrawal Liability with
respect to any Multiemployer Plan, (7) no Multiemployer Plan is in
reorganization to the knowledge of Borrowers or any ERISA Affiliate, (8) the
Borrowers and each ERISA Affiliate of the foregoing has complied in all material
respects with the continuation coverage requirements applicable to group health
plans as set forth in requirements of COBRA and with the requirements applicable
to group health plans as set forth in requirements of HIPAA, and (9) there is no
unfunded benefit liability as defined in Section 4001(a)(18) of ERISA in respect
of any Employee Pension Plan.

(e) No liability (whether or not such liability is being litigated) has been
asserted against the Borrowers or any ERISA Affiliate of the foregoing in
connection with any Employee Pension Plan or any Multiemployer Plan by the PBGC
other than for required premium payments to the PBGC, by a trustee appointed
pursuant to Section 4042(b) or (c) of ERISA, or by a sponsor or an agent of a
sponsor of a Multiemployer Plan (other than for required nondelinquent
contributions to such Multiemployer Plan), and no Lien has been attached and no
Person has threatened to attach a Lien on any of the Borrowers' or any ERISA
Affiliate's property as a result of failure to comply with ERISA or as a result
of the termination of any Employee Pension Plan.

(f) Except as disclosed on Schedule 4.1.20 hereto, the Borrowers and each ERISA
Affiliate has not terminated any Plan in the last ten years in a manner which
could result in liability to the PBGC with respect to any benefit
liability.  All assets under each such

-29-

 

--------------------------------------------------------------------------------

 

terminated Plan have been distributed in accordance with ERISA, and all
liabilities with respect to participants and beneficiaries under any such
terminated Plan have been satisfied.

4.1.21. Disclosure.  Neither this Agreement nor any other Loan Document contains
any untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements contained in this Agreement and in
such other Loan Documents not materially misleading in light of the
circumstances under which such statements were made.

4.1.22. Environmental Compliance.  The Borrowers represent that:

(a) None of the current or former real property owned and/or occupied by the
Borrowers have (i) ever been used by previous owners and/or operators, or (ii)
ever been used by the Borrowers except in the normal course of the Permitted
Business activities of the Borrowers and in full compliance with all
Environmental Laws, to treat, produce, store, handle, transfer, process,
transport or dispose of any Hazardous Substances;

(b) There is no condition which exists on the current or former real property
owned and/or occupied by the Borrowers which requires Remedial Action and there
is not, nor has there ever been, a Release or threat of Release of any Hazardous
Substance;

(c) The Borrowers have not been notified of, or have Knowledge of any
notification having been sent, filed or received with regard to, a Release on,
into, about or beneath any current or former real property owned and/or occupied
by the Borrowers or for which the Borrowers may be held liable with respect to
any other property;

(d) The Borrowers have not received nor has any reasonable basis to expect to
receive a summons, citation, notice of violation, administrative order,
directive, letter or other written communication, written or oral, from any
judicial or administrative body or governmental or quasi-governmental authority
concerning any intentional or unintentional action or omission related to the
presence, generation, storage, transportation, handling, transfer, disposal or
treatment of Hazardous Substances in violation of any Environmental Law or
related to any Release or threat of Release of Hazardous Substances;

(e) There are no "friable" (as that term is defined in regulations under the
Federal Clean Air Act) asbestos or Asbestos-Containing Materials which have not
been removed, repaired, encapsulated and/or maintained in accordance with
accepted guidelines promulgated by the United States Environmental Protection
Agency (and any other governmental authorities having jurisdiction) existing in
any real property owned and/or occupied by the Borrowers and the Borrowers have
complied with all applicable OSHA requirements relating to asbestos;

(f) The Permitted Business activities of the Borrowers do not and never have
involved the use, handling, clean up or removal of Asbestos-Containing
Materials; and

(g) No equipment containing polychlorinated biphenyls, including electrical
transformers, are located on any real property owned and/or occupied by the
Borrowers

-30-

 

--------------------------------------------------------------------------------

 

in levels which exceed those permitted by any and all governmental authorities
with jurisdiction over such premises and which are not properly labeled in
accordance with requisite standards.

4.1.23. Labor Matters.  There are no existing, or, to the best of Borrowers'
knowledge, threatened or contemplated, strikes, slowdowns, picketing or work
stoppages by any employees against the Borrowers, any lockouts by the Borrowers
of any of their employees or any labor trouble or other occurrence, event or
condition of a similar character which, individually or in the aggregate, would
reasonably be expected to have a Material Adverse Effect.

4.1.24. Solvency.  As of and from and after the date of this Agreement and after
giving effect to the consummation of the transactions contemplated hereby, the
Loan Parties on a Consolidated basis are Solvent.

4.1.25. Intellectual Property Matters.  Borrowers and each Subsidiary owns or
possesses rights to use all franchises, licenses, copyrights, copyright
applications, patents, patent rights or licenses, patent applications,
trademarks, trademark rights, trade names, trade name rights, and all other
intellectual property in each case material to its business.  No event has to
the knowledge of the Borrowers occurred which permits, or after notice or lapse
of time or both would permit, the revocation or termination of any such rights,
and no Borrower nor any Subsidiary thereof is to the knowledge of the Borrowers
liable to any Person for infringement under Applicable Law with respect to any
such rights as a result of its business operations, except where such
revocation, termination or infringement would not reasonably be expected to have
a Material Adverse Effect.

Article 5
FINANCIAL REPORTS AND INFORMATION

The Borrowers shall comply with the following covenants so long as any Loan or
any other amounts due under the Loan Documents remain unpaid (other than
contingent indemnification obligations) or the Lender has a commitment to lend
hereunder:

5.1. Financial Data.

5.1.1. Financial Information.  The Borrowers and each Subsidiary of the
Borrowers will keep their books of account and financial statements in
accordance with GAAP subject to normal year-end adjustments and absence of
foot-note disclosures for interim reporting, reported on the basis of the
Borrowers' Fiscal Year.  The Borrowers and each of their Subsidiaries will keep
at all times books of record and account in which full, true and correct entries
will be made in all material respects of all dealings or transactions in
relation to their business and affairs.

5.1.2. Certain Certificates to be Delivered.  As soon as practicable after the
close of each fiscal quarter and each Fiscal Year of the Borrowers, and in any
event no later than the date on which reports are required to be delivered for
each such quarter or year, as provided in Subsection 5.1.4 below, the Borrowers
shall deliver to Lender an Officer's Compliance Certificate with respect to the
Fiscal Year or quarter covered by the companion report, and specifying the
financial computations evidencing the determinations set forth therein.

-31-

 

--------------------------------------------------------------------------------

 

5.1.3. Annual Budget.  As soon as available and in any event not later than
thirty (30) days after the beginning of each Fiscal Year of the Borrowers, the
Borrowers shall deliver to the Lender a Consolidated budget for such Fiscal
Year.

5.1.4. SEC Filings and Other Disclosure.  Promptly upon their becoming available
to any Borrower, but no later than the time periods set forth below in this
section, the Borrowers shall deliver to the Lender a copy of all reports, SEC
filings, including but not limited to Forms 10-K, 10-Q and 8-K, proxy
statements, financial statements and other information distributed by the
Borrowers to its stockholders, bondholders or the financial community generally.
 Delivery of such reports and information to the Lender shall be subject to the
following respective delivery deadlines:

﻿

 

Report

Time Period for Delivery to Lender

SEC 10-K

120 days after Fiscal Year end

SEC 10-Q

60 days after fiscal quarter end

SEC 8-K

10 days after public availability

All other reports required by section 5.1.4

60 days after public availability

﻿

In lieu of furnishing Lender with copies of the SEC 10-K and SEC 10-Q reports
referred to in this Section 5.1.4, the Borrowers may make available such reports
to Lender by posting such reports on the Borrowers' website or on the SEC's
EDGAR website.

﻿

5.2. Ongoing Reporting Requirements.

The Borrowers shall, in addition to other reporting requirements set forth
herein, deliver to the Lender the following information:

5.2.1. ERISA Information.

Upon request of the Lender, (i) a copy of each annual report filed with respect
to each Plan of the Borrowers or any Subsidiary with the Internal Revenue
Service, Secretary of Labor or the PBGC, (ii) a copy of all material non-routine
correspondence with the PBGC, Secretary of Labor or any representative of the
Internal Revenue Service with respect to any Plan, and (iii) actuarial reports
any such Person receives with respect to any Employee Pension Plan;

As soon as possible (and in any event within 5 days) after any officer of the
Borrowers or any Subsidiary thereof obtains knowledge that the Borrowers, any
Subsidiary thereof or any ERISA Affiliate has incurred or anticipates incurring
Withdrawal Liability, or that any material excise taxes have been assessed
against the Borrowers, a Subsidiary thereof or ERISA Affiliate in respect of any
Plan, or that any Multiemployer Plan is in reorganization or that any Reportable
Event has occurred with respect to any Employee Pension Plan except to the
extent that the PBGC has waived such reporting requirement with respect to such
event or that PBGC has instituted or will institute proceedings under Title IV
of ERISA to terminate any Employee Pension Plan or to appoint a trustee to
administer any Employee Pension Plan, a statement setting forth the details
respecting such situation;

-32-

 

--------------------------------------------------------------------------------

 

Within the time required for notice to the PBGC under Section 303(k)(4)(A) of
ERISA, a notice concerning any lien arising under Section 303(k) of ERISA in
favor of any Plan;

5.2.2. Notice of Defaults, Material Adverse Change, Etc.  Promptly, upon
knowledge thereof, notice of (i) any Default or Event of Default or (ii) any
event or condition which is reasonably likely to result in a Material Adverse
Effect or (iii) any changes in facts or circumstances which make the
representations and warranties set forth in this Agreement false or misleading
in any material respect;

5.2.3. Certain Environmental Matters.  Promptly upon receipt thereof, any
non-routine notice from the United States Environmental Protection Agency or any
other federal or state agency or authority with jurisdiction over environmental
matters and promptly after receiving the same, any environmental investigations,
studies, audits, tests, reviews or other analyses in relation to any site or
facility now or previously owned, operated or leased by any Loan Party.  The
Borrowers will give notice of the assertion of any environmental claim by any
Person against, or with respect to the activities of, the Borrowers or any of
their Subsidiaries and notice of any alleged violation which is asserted by a
Person that is not an agency or instrumentality of any state or federal
government of or non-compliance with any Environmental Laws or any permits,
licenses or authorizations or which involves or which may reasonably be expected
to involve a Release or threat of Release of Hazardous Substances or Remedial
Action, other than any environmental claim or alleged violation which is
asserted by a Person that is not an agency or instrumentality of any state or
federal government and which, if adversely determined, would not reasonably be
expected to have a Material Adverse Effect;

5.2.4. Litigation.  Promptly upon Borrowers' knowledge thereof, notice of all
legal or arbitral proceedings, and of all proceedings by or before any
governmental or regulatory authority or agency, and any material development in
respect of such legal or other proceedings affecting the Borrowers or any of
their Subsidiaries, except proceedings which, if adversely determined, would not
reasonably be expected to have a Material Adverse Effect;

5.2.5. Miscellaneous.  With reasonable promptness, such other information
respecting the business, operations and financial condition of the Borrowers or
any Subsidiary thereof as the Lender may from time to time reasonably request.

5.3. Disclosure.

The Lender is hereby authorized to show or deliver a copy of any financial
report or statement or any other information relating to the business,
operations or financial condition of the Borrowers or any Loan Party which may
be furnished to the Lender or come to its attention pursuant to this Agreement
to any regulatory body or agency having jurisdiction over the Lender, to the
Lender's counsel, advisers and auditors, and to any Person which shall, or has
expressed an interest to, succeed to all or any part of the Lender's interest in
the Note, and/or this Agreement.  Effective during the existence of an Event of
Default, the Lender and its counsel, advisors and auditors are hereby further
authorized to show or deliver a copy of such information to other Persons in
connection with protecting, preserving, exercising or enforcing any rights of
the Lender in, under or related to the Loan Documents.  Except as set forth
above in this

-33-

 

--------------------------------------------------------------------------------

 

Section 5.3 above, the Lender hereby covenants and agrees to use commercially
reasonable efforts to (a) maintain the confidentiality of all information of a
non-public nature submitted to it by the Borrowers and other Loan Parties
pursuant to the terms of this Agreement and the other Loan Documents, and (b)
ensure that its counsel, advisors, auditors, prospective assignees and
participants, and other persons referred to in this Section 5.3 maintain the
confidentiality of such information in similar fashion.

Article 6
FINANCIAL COVENANTS

The Borrowers shall comply with the following covenant so long as any Loan or
any other amounts due under the Loan Documents remain unpaid (other than
contingent indemnification obligations) or the Lender has a commitment to lend
hereunder:

6.1. Minimum EBITDA.

The Borrowers, on a Consolidated basis, shall maintain, at all times, minimum
EBITDA of not less than Seventy-Five Million Dollars ($75,000,000.00).  This
covenant shall be tested on the last day of each fiscal quarter of the Borrowers
on a trailing twelve (12) month basis based upon the reports required by Section
5.1.4 above.

Article 7
GENERAL AFFIRMATIVE COVENANTS

The Borrowers and their Subsidiaries shall comply with each of the following
covenants so long as any Loan or any other amounts due under the Loan Documents
remain unpaid (other than contingent indemnification obligations) or the Lenders
have a commitment to lend hereunder.

7.1. Existence.

Each of the Borrowers will at all times preserve and keep in full force and
effect its corporate existence and its good standing in all states in which it
is formed or required to qualify to do business where failure to be so qualified
would reasonably be expected to result in a Material Adverse Effect.  Except for
mergers and dispositions expressly permitted by this Agreement, each Subsidiary
of the Borrowers will at all times preserve and keep in full force and effect
its corporate or limited liability company existence and its good standing in
the state of its formation and its good standing in each other state where the
failure of qualify and remain qualified would reasonably be expected to have a
Material Adverse Effect.

7.2. Legal Requirements; Maintenance of Properties.

The Borrowers and each of their Subsidiaries shall materially comply with all
laws, ordinances or governmental rules and regulations to which it is subject,
including but not limited to ERISA and Environmental Laws, and obtain or
maintain all franchises, copyrights, trademarks, patents or other governmental
authorizations or approvals or intellectual property rights necessary for the
ownership of its properties and the conduct of its businesses except where
failure to do so would not reasonably be expected to have a Material Adverse
Effect.  The Borrowers and their Subsidiaries will each maintain its properties
in good repair, working order and condition (ordinary wear and tear and casualty
and condemnation events excluded) and

-34-

 

--------------------------------------------------------------------------------

 

make or cause to be made in the Borrowers' reasonable business judgment all
appropriate and proper repairs, renewals, replacements, additions and
improvements thereto.

7.3. Payment of Taxes and Claims.

The Borrowers and their Subsidiaries will pay all material taxes, assessments
and other governmental charges imposed upon them or any of their properties or
assets or in respect of any of their franchises, business, income or profits
before any penalty or interest accrues thereon, and all material claims
(including, without limitation, claims for labor, services, materials and
supplies) for sums which have become due and payable and which by law have or
might become a Lien upon any of their properties or assets except where such
taxes, assessments or governmental charges are being contested in good faith by
appropriate proceedings and adequate reserves have been set aside.  The
Borrowers shall not change their Fiscal Year without prior written notice to the
Lender.

7.4. Insurance.

7.4.1. Type of Insurance.  The Borrowers and each of their Subsidiaries will
maintain or cause to be maintained with financially sound and reputable
insurers, insurance (including, without limitation, business interruption,
product and other liability, casualty, workers' compensation and umbrella
insurance) with respect to the properties and business of the Borrowers or such
Subsidiary, as the case may be, against loss or damage of the kinds customarily
insured against by entities of established reputation engaged in the same or
similar businesses and similarly situated, of such types and in such amounts as
are customarily carried under similar circumstances by other such Persons and
otherwise as is prudent for Persons engaged in conducting the business conducted
by the Borrowers or such Subsidiary.

7.4.2. Evidence of Insurance.  Copies of insurance policies or the related
certificates shall be delivered to the Lender upon the Lender's request.

7.5. Inspection.

Upon reasonable notice if no Event of Default or Default shall exist and be
continuing, or at any time with or without notice after the occurrence and
during the continuation of an Event of Default or Default, the Borrowers and
each Subsidiary of the Borrowers will allow representatives of the Lender to
visit it at any reasonable time during normal business hours and inspect any of
the properties of the Borrowers or such Subsidiary, as the case may be, to
examine the books of account and other records and files of such Person, to make
copies thereof and to discuss the affairs, business, finances and accounts of
such Person with its personnel and accountants.

7.6. Exchange of Note.

Upon receipt of a written notice of loss, theft, destruction or mutilation of
the Note (and, if requested by the Borrowers, of a letter of indemnity from the
Lender or its successors or assigns) and upon surrender for cancellation such
Note if mutilated (in which event no indemnity shall be requested), the
Borrowers shall execute and deliver a new Note of like tenor in lieu of such
lost, stolen, destroyed or mutilated Note.

﻿

7.7. Consistent Action.

-35-

 

--------------------------------------------------------------------------------

 

The Borrowers and each Subsidiary of the Borrowers shall exercise any and all
voting or similar rights which it holds in any Person in a manner consistent
with adherence to the provisions of this Agreement and the other Loan Documents.

7.8. Use of Loan Proceeds.

Proceeds of the Loans shall be used by the Borrowers only for the following
purposes:  to finance working capital, Acquisitions permitted hereunder and
general corporate purposes.

7.9. Subsidiaries to be Wholly-Owned.

The Borrowers and their Subsidiaries will take such action from time to time as
shall be necessary to ensure that each of the Borrowers' Subsidiaries is,
directly or indirectly, a wholly-owned Subsidiary of the Borrowers.  Without
limiting the generality of the foregoing, neither of the Borrowers nor any of
their Subsidiaries shall sell, transfer or otherwise dispose of any shares of
stock of any Subsidiary owned by it, nor permit any such Subsidiary to issue any
shares of stock of any class whatsoever to any Person (other than to the
Borrowers or another Subsidiary of the Borrowers) if any of the foregoing
actions would result in there being Subsidiaries of the Borrowers that are not
wholly owned by the Borrowers. Dutch Valley Food Company, LLC, Weis
Transportation, LLC and WMK Financing, Inc. are each a wholly-owned Subsidiary
of Weis Markets, Inc.

7.10. Maintenance of Certain Contracts and Other Rights.

The Borrowers and each Subsidiary thereof shall maintain, preserve, protect and,
when necessary, renew all service marks, copyrights, trademarks, trade names and
other rights held by any of them and all agreements to which any of them are
parties including, without limitation, agreements with suppliers and with
customers, which are necessary to conduct the Permitted Businesses except where
the failure to do so would not reasonably be expected to result in a Material
Adverse Effect.

7.11. Conduct of Business.

The Borrowers and each of their Subsidiaries shall continue to operate, without
interruption within their control, the Permitted Business.  They shall conduct
no business other than the Permitted Business.

7.12. Further Assurances.

Either prior to or after a Default or an Event of Default, upon the reasonable
request of the Lender, the Borrowers and each Subsidiary of the Borrowers will
duly execute and deliver or cause to be duly executed and delivered, to the
Lender such further instruments and do or cause to be done such further acts as
may be necessary or proper in the reasonable opinion of the Lender to carry out
more effectively the provisions and purposes of this Agreement and the other
Loan Documents.

7.13Bank Accounts.

During such time as the Loan shall remain unpaid (other than contingent
indemnification obligations) and/or any Obligations of the Borrowers under this
Agreement, whether of payment or performance, shall remain unfulfilled (other
than contingent indemnification obligations),

-36-

 

--------------------------------------------------------------------------------

 

Borrowers shall maintain their primary deposit accounts, cash management
accounts and treasury services with the Lender.

Article 8
GENERAL NEGATIVE COVENANTS

The Borrowers and each of their Subsidiaries shall comply with the following
covenants so long as any Loan or any other amounts due under the Loan Documents
remain unpaid (other than contingent indemnification obligations) or the Lenders
have a commitment to lend hereunder.

8.1. Indebtedness.

8.1.1. Limitations on Indebtedness.  Neither the Borrowers nor any Subsidiary
will create, incur, assume, guarantee, permit to exist or otherwise become or
remain directly or indirectly liable with respect to any Indebtedness except as
follows:

(a) obligations under the Line of Credit (which may result in an increase of the
Commitment, as provided in Section 2.2.2(a)(iv));

(b) Indebtedness of a Subsidiary of the Borrowers owing to the Borrowers or to
another Subsidiary of the Borrowers or Indebtedness of any Borrower to another
Borrower or to one or more Subsidiaries of the Borrowers;

(c) Indebtedness with respect to bonds or security deposits provided to
utilities with respect to utilities services provided to Borrowers and their
Subsidiaries in the ordinary course of business;

(d) Indebtedness incurred as a result of endorsements for collections or
deposits in the ordinary course of business;

(e) Indebtedness in connection with the financing of insurance premiums in the
ordinary course of business;

(f) Indebtedness for bank overdrafts or returned items incurred in the ordinary
course of business;

(g) Indebtedness set forth on Schedule 4.1.16; and

(h) other Indebtedness of the Borrowers and their Subsidiaries in an aggregate
principal amount not to exceed $40,000,000 of Indebtedness at any time
outstanding.

8.1.2. No Default.  No Indebtedness may be incurred by the Borrowers or any
Subsidiary thereof unless immediately before and after giving effect to the
incurrence of such Indebtedness, no Event of Default shall have occurred and be
continuing.

8.2. Liens.

-37-

 

--------------------------------------------------------------------------------

 

8.2.1. Limitation on Liens.  Neither the Borrowers nor any Subsidiary of the
Borrowers will directly or indirectly, create, incur, assume or permit to exist
any Lien on or with respect to any property or asset (including, without
limitation, any document or instrument in respect of goods or accounts
receivable) of the Borrowers or any such Subsidiary, except the following (the
"Permitted Liens"):

(a) Liens for taxes, assessments or other governmental charges not yet due or
remain payable without penalty or which are being contested in good faith and by
appropriate proceedings if adequate reserves with respect thereto are maintained
on the books of the Borrowers or such Subsidiary, as the case may be, in
accordance with GAAP;

(b) statutory Liens of landlords and Liens of carriers, warehousemen, mechanics
and materialmen incurred in the ordinary course of business for sums not yet due
or the payment of which is not at the time required which are being contested in
good faith and by appropriate proceedings if adequate reserves with respect
thereto are maintained on the books of the Borrowers or such Subsidiary, as the
case may be, in accordance with GAAP;

(c) Liens (other than any Lien imposed by ERISA) incurred or deposits made in
the ordinary course of business in connection with workers' compensation,
unemployment insurance and other types of social security, or to secure the
performance of statutory obligations and other similar obligations (exclusive of
obligations for the payment of borrowed money) for which adequate reserves are
maintained on the books of the relevant entity;

(d) Liens arising out of judgments or awards with respect to which Borrowers
shall be prosecuting an appeal in good faith and in respect of which a stay of
execution shall have been issued and adequate reserves established;

(e) Licenses, sublicenses, leases or subleases granted to others, easements,
rights-of-way, restrictions and other similar charges or encumbrances on real
property, in each case incidental to, and not interfering with, the ordinary
conduct of the business of the Borrowers or any Subsidiary thereof and in each
case not securing Indebtedness;

(f) Liens in favor of collecting banks arising by operation of law under Section
4-210 of the UCC or, with respect to collecting banks located in the State of
New York, under Section 4-208 of the UCC; 

(g) Liens in favor of customs and revenue authorities arising as a matter of law
which secure payment of customs duties in connection with the importation of
goods in the ordinary course of business;

(h) Liens on property acquired in an Acquisition permitted by Section 8.3(c) so
long as such Lien only attaches to such property (and any replacements of such
Liens applicable solely to such property), provided, that such Lien shall not
have been incurred in contemplation of such Acquisition and such Lien secures
Indebtedness permitted under clause (h) of subsection 8.1.1;

(i) Liens arising by operation of law or contract on insurance policies and
proceeds thereof to secure premiums payable thereunder;

-38-

 

--------------------------------------------------------------------------------

 

(j) Liens incurred by any Loan Party or its  Subsidiaries consisting of good
faith deposits required in connection with any Investment permitted under
Section 8.3, prepayments and security deposits in connection with leases,
subleases, licenses, sublicenses, use and occupancy agreements, utility services
and similar transactions entered into by the applicable Loan Party or Subsidiary
of a Loan Party in the ordinary course of business and not required as a result
of any breach of any agreement or default in payment of any obligation;

(k) Liens on property, and only such property, which is the subject of an
unconsummated asset purchase agreement in connection with an asset disposition
permitted hereunder, which Liens arise solely under Article 2 of the UCC and
secure the obligation of a Loan Party or any  Subsidiary of a Loan Party under
such agreement;

(l) Liens securing Indebtedness (not in default) described in clause (g) of
Subsection 8.1.1, but only to the extent such Indebtedness is either purchase
money indebtedness, operating lease  or Capital Lease obligations, provided,
however, that such Liens shall encumber only the property acquired with the
proceeds of such Indebtedness or subject to any such operating lease or Capital
Leases; and

(m) other Liens not otherwise permitted by clauses (a) through (l) above
securing Indebtedness permitted pursuant to Section 8.1.1 above and in an amount
not to exceed $1,000,000 in the aggregate at any time outstanding.

8.2.2. Limitation on Negative Pledge.  The Borrowers shall not permit or suffer
to exist any negative pledge covenant or agreement similar to that contained in
Section 8.2.1 of this Agreement, restricting the rights of the Borrowers for the
benefit of any Person other than the Lender.

8.3. Investments and Acquisitions.

Absent the prior written consent of the Lender (such consent not to be
unreasonably withheld, conditioned or delayed), neither the Borrowers nor any
Subsidiary of the Borrowers shall directly or indirectly, make or permit to
exist or enter into any agreement or make any Investment or make any
Acquisition, except:

(a) Investments existing as of the Closing Date;

(b) the Borrowers or any such Subsidiary may purchase marketable securities,
marketable debt instruments, and marketable mutual funds, financial assets and
investment property, which in each case are traded in public exchanges or
markets and for which there are quoted prices;

(c) Acquisitions, provided,  however, that no single Acquisition shall require
payment by the Borrowers and/or any of their Subsidiaries (in the aggregate) of
total consideration (including debt assumption) in excess of Thirty-Five Million
Dollars ($35,000,000.00) nor shall all Acquisitions by the Borrowers and any of
their Subsidiaries (occurring after the Closing Date and in the aggregate)
require payment of total consideration (including debt assumption) in excess of
Seventy Million Dollars ($70,000,000.00); 

(d) Investments by any Loan Party in any other Loan Party;

-39-

 

--------------------------------------------------------------------------------

 

(e) Investments received as the non-cash portion of consideration received in
connection with transactions permitted pursuant to Section 8.3(c);  

(f) Investments acquired in connection with the settlement of delinquent
accounts in the ordinary course of business or in connection with the bankruptcy
or reorganization of suppliers or customers;

(g) Investments consisting of notes receivables of, or prepaid royalties and
other credit extensions, to customers and suppliers who are not Affiliates, in
the ordinary course of business;

(h) (i) bank deposits and Investments in securities accounts in the ordinary
course of business, (ii) accounts receivables owing if created or acquired in
the ordinary course of business and payable or dischargeable in accordance with
customary terms, (iii) endorsement of negotiable instruments held for collection
in the ordinary course of business, and (iv) lease, utility, pledges and other
similar deposits in the ordinary course of business;

(i) Capital Expenditures;

(j) loans or advances to employees, directors and officers in the ordinary
course of business; and

(k) other Investments not to exceed $1,000,000 in the aggregate at any time
outstanding.

8.4. Transactions with Affiliates.

Neither the Borrowers nor any Subsidiary thereof, on the one hand, will,
directly or indirectly, engage in any transaction with any Affiliate of the
Borrowers or of any Subsidiary, (but exclusive of the Borrowers or any
Subsidiary, itself), on the other hand, on terms that are less favorable to the
Borrowers or such Subsidiary, as the case may be, than those which might be
obtained at the time from Persons which are not affiliated other than:

(a) any issuances of awards or grants of equity securities, stock options, and
stock ownership plans, or loans or advances to employees, officers or directors
relating to the purchase of shares of stock of the Loan Parties pursuant to
employee stock purchase plans or agreements; and

(b) loans or advances to employees of Loan Parties for travel, entertainment and
relocation expenses and other ordinary business purposes in the ordinary course
of business.

8.5. Sales or Other Dispositions of Assets, Etc.

Neither the Borrowers nor any Subsidiary of the Borrowers will, absent the
Lender's prior written consent (such consent not to be unreasonably withheld,
conditioned or delayed), directly or indirectly:  (a) consolidate with or merge
into any other Person other than another Loan Party; (b) sell, lease, abandon or
otherwise transfer or dispose of any substantial

-40-

 

--------------------------------------------------------------------------------

 

amount of its assets or property, or sell, lease, abandon or otherwise transfer
or dispose of any of its assets or property of any nature except in each case in
the ordinary course of its business or to another Loan Party; or (c) enter into
any agreement to do any transaction prohibited by the terms of this Section 8.5,
in each case other than:

(i) transfers of property subject to casualty or condemnation proceeding
(including in lieu thereof);

(ii) the abandonment of intellectual property rights which, in the reasonable
good faith determination of the Borrowers, are no longer used or useful to the
business of any Loan Party and its Subsidiaries; and

(iii) issuances and sales of stock by the Loan Parties and their Subsidiaries to
the extent not prohibited hereunder.

8.6. Management; Control.

Neither the Borrowers nor any Subsidiary of the Borrowers shall (a) enter into
any management agreement with any Person that gives such Person the right to
manage any business owned by the Borrowers or such Subsidiary, (b) directly or
indirectly pay or accrue to an entity any sum or property for fees for
management or similar services rendered in connection with the operation of a
business, or (c) undergo a Change in Control.

8.7. Compliance with Federal Reserve Regulations.

Neither the Borrowers nor any Subsidiary of the Borrowers will directly or
indirectly, take or permit to be taken any action which would result in the
Loans or the carrying out of any of the other transactions contemplated by this
Agreement, being violative of Regulation U (12 C.F.R. 221, as amended) or of
Regulation T (12 C.F.R. 220, as amended) or of Regulation X (12 C.F.R. 224, as
amended) or any other regulation of the Board of Governors of the Federal
Reserve System.

8.8. Limitations on Restrictive Covenants.

Neither the Borrowers nor any Subsidiary of the Borrowers will enter into any
agreements which provide for, or otherwise place any restriction, directly or
indirectly, on (a) the right or ability of the Borrowers or any such Subsidiary
to create or suffer to exist any Liens (other than Permitted Liens) or (b) the
right or ability of any such Subsidiary to pay dividends or make other payments
to the Borrowers or other Subsidiaries of the Borrowers.

8.9. Environmental Matters.

Neither the Borrowers nor any Subsidiary of the Borrowers shall (a) use or
permit any Person to use any of the real property owned or occupied by the
Borrowers or any such Subsidiary for the purposes of treating, producing,
handling, transferring, processing, transporting, disposing, storing or
otherwise causing or threatening a Release of Hazardous Substances, in violation
of any Environmental Laws, (b) cause or knowingly permit to exist as the result
of an intentional or unintentional action or omission on the part of the
Borrowers or

-41-

 

--------------------------------------------------------------------------------

 

any such Subsidiary or any other Person who occupies any real property owned or
occupied by the Borrowers or any such Subsidiary, a Release from, about, under
or on any real property owned or occupied by Borrowers or such Subsidiary of any
Hazardous Substance except in the normal course of the Permitted Business
activities of the Borrowers or applicable Subsidiary and in full compliance with
all Environmental Law, or (c) cause, contribute to or become potentially liable
for a Release or threat of a Release of Hazardous Substances at any site or
property listed or proposed for listing on the National Priorities List under
CERCLA, or the Comprehensive Environmental Response, Compensation and Liability
Information System List or on any similar state or foreign list of sites
targeted for or requiring investigation or Remedial Action.

8.10. ERISA.

Each of the Borrowers and the Subsidiaries thereof will not, and will not permit
any of its ERISA Affiliates or any employees of Borrowers, the Subsidiaries
thereof or any ERISA Affiliate who are fiduciaries with respect to an employee
benefit plan as defined in Section 3(3) of ERISA to, take any of the following
actions or permit any of the following events to occur if such action or event
could cause the Borrowers, any Subsidiary thereof or any ERISA Affiliates of any
of the foregoing to be liable for any material tax, penalty, or other liability:

(a) engage in any transaction in connection with which the Borrowers, any
Subsidiary thereof or any ERISA Affiliate could be subject to either a civil
penalty assessed pursuant to Section 502(i) of ERISA or a tax imposed by
Section 4975 of the Code;

(b) terminate any Employee Pension Plan in a manner, or take any other action or
fail to take any action, which could result in any liability of Borrowers or any
ERISA Affiliate to the PBGC other than required nondelinquent premium payments;

(c) fail to make full payment when due of all amounts which, under the
provisions of any Plan, the Borrowers, any Subsidiary thereof or any ERISA
Affiliate is required to pay as contributions thereto, or permit to exist any
Accumulated Funding Deficiency, whether or not waived, with respect to any
Employee Pension Plan;

(d) fail to comply with the requirements of COBRA or HIPAA;

(e) withdraw from any Multiemployer Plan, if such withdrawal would result in the
imposition of a material Withdrawal Liability; or

(f) fail to comply with the reporting and disclosure requirements of ERISA if
such failure could result in the assessment of a material civil penalty by the
Secretary of Labor under §502(c) of ERISA; or

(g) fail to operate each Plan in all material respects in compliance with the
requirements of the Code and ERISA and the terms of each Plan if such failure
could result in disqualification of such Plan or in payment of a material
monetary sanction to the Internal Revenue Service under its Closing Agreement
Program.

As used in this Section, "material" shall mean an amount in excess of
$2,000,000.

-42-

 

--------------------------------------------------------------------------------

 

8.11. Sale and Leaseback.

The Borrowers shall not, absent the Lender's prior written consent (such consent
not to be unreasonably withheld, conditioned or delayed), sell, transfer, or
otherwise dispose of, any real or personal property to any Person and thereafter
directly or indirectly lease back such property (each a "Sale-Leaseback"), other
than Sale-Leasebacks in an amount not to exceed $30,000,000 in the aggregate at
any time outstanding.

8.12. Limitations on Changes in Lines of Business.

Neither the Borrowers nor any Subsidiary shall engage in any business other than
a Permitted Business.

Article 9
EVENTS OF DEFAULT

9.1. Events of Default.

"Event of Default" wherever used herein means any one of the following events
(whatever the reason for such Event of Default, whether it shall be voluntary or
involuntary and whether it shall be by action or inaction, by operation of law,
pursuant to a court order or any rule or regulation of any administrative or
governmental instrumentality otherwise):

9.1.1. Failure to Pay Principal.  If the Borrowers shall fail to make any
payment of the principal of any Loan on the date when the same shall become due
and payable, whether at stated maturity or at a date fixed for any installment
or prepayment thereof or otherwise; or

9.1.2. Failure to Pay Interest, Fees and Other Amounts.  If the Borrowers shall
fail to make any payment of interest on any Loan or Unused Fees or any other
amounts owing hereunder (other than principal of the Loans) on the dates when
such interest, Unused Fees or other amounts shall become due and payable and
such failure shall continue for three (3) days after the date when such amount
was due and payable; or

9.1.3. Cross-Default.

(a) If the Borrowers or any Subsidiary thereof shall default (as payor or
guarantor or other surety) in the payment of any principal of or premium or
interest on or any other amount due in respect of any Indebtedness (other than
the obligations under the Loan Documents), including, without limitation, any
direct or contingent reimbursement obligations arising on account of the
issuance of a letter of credit, and the underlying obligation with respect to
which a default has occurred aggregates Ten Million-Dollars ($10,000,000.00) or
more or could result in a required payment of Ten Million Dollars
($10,000,000.00) or more and such default, event or condition shall continue for
more than the period of grace, if any, specified in the relevant agreement or
instrument and shall not have been waived pursuant thereto or which are being
contested in good faith by appropriate proceedings; or if any event shall occur
or condition shall exist which would permit, or shall have caused, the
acceleration of the payment, time for payment or maturity of any of the
foregoing obligations, and such default, event or condition shall continue for
more than the period of grace, if any, specified in the relevant

-43-

 

--------------------------------------------------------------------------------

 

agreement or instrument and shall not have been waived pursuant thereto or which
are being contested in good faith by appropriate proceedings; or

(b) If the Borrowers or any Subsidiary of the Borrowers shall default in a
payment or performance of any obligation (except obligations which are covered
in Subsections 9.1.1, 9.1.2 or clause (a) of this Subsection 9.1.3) under any
contract or agreement, whether now or hereafter incurred, which default (singly,
or together with any other such defaults in a 12 month period) could result in a
required payment of Ten Million Dollars ($10,000,000.00) or more, and such
default (or defaults) shall continue for more than the period of grace, if any,
specified in the contract or agreement, and such default shall not have been
waived pursuant to the terms thereof or which are being contested in good faith
by appropriate proceedings; or

9.1.4. Representations and Warranties Untrue.  If any representation or warranty
made by the Borrowers or any other Loan Party in this Agreement or in any other
Loan Document shall be false or misleading in any material respect when made or
deemed made; or

9.1.5. Covenant Defaults.

(a) If there shall occur a default in the due performance or observance of any
term, covenant or agreement to be performed or observed pursuant to any of
Subsection 5.2.2 or 5.2.3, Article 6, Section 7.1, 7.3, 7.4, 7.8 or Article 8;
or if there shall occur a default in the due performance or observance of any
term, covenant or agreement to be performed or observed pursuant to any of
Section 5.1, Section 5.2, Section 7.5, or 7.10 which shall continue unremedied
for a period of fifteen (15) days; or

(b) If there shall occur any default in the due performance or observance of any
term, covenant or agreement to be performed or observed pursuant to the
provisions of this Agreement other than as provided in Subsections 9.1.1, 9.1.2
or 9.1.5(a) and, if capable of being remedied, such default shall continue
unremedied for a period of thirty (30) days; or

9.1.6. Invalidity or Noncompliance With Loan Documents.  If any of the Loan
Parties shall fail to perform any of its obligations under any of the Loan
Documents (other than as set forth in Section 9.1.5 above) (after taking into
account any applicable cure period set forth in such agreements), or if the
validity of this Agreement or any of the other Loan Documents shall have been
challenged or disaffirmed by or on behalf of any of the Loan Parties or if any
of the Loan Documents shall cease to be in full force and effect (other than
pursuant to its terms); or

9.1.7. Judgment.  One or more judgments for the payment of money in excess of
Ten Million Dollars ($10,000,000.00) in the aggregate shall be rendered against
the Borrowers, any Subsidiary or any combination thereof (to the extent not paid
or covered by a reputable and solvent independent third-party insurance company
which has not disputed coverage) and the same shall remain unbonded,
unsatisfied, unvacated, undischarged or unpaid for a period of sixty (60)
consecutive days during which execution shall not be effectively stayed, or any
action shall be legally taken by a judgment creditor to attach or levy upon any
assets of the Borrowers or any Subsidiary to enforce any such judgment and such
action shall not be stayed; or

-44-

 

--------------------------------------------------------------------------------

 

9.1.8. Insolvency, Bankruptcy, Etc.  If the Borrowers or any Subsidiary of the
Borrowers shall suspend or discontinue its business; if the Borrowers or any
Subsidiary of the Borrowers shall make an assignment for the benefit of
creditors or a composition with creditors, shall generally not be paying its
debts as they mature, shall admit its inability to pay its debts as they mature,
shall file a petition in bankruptcy, shall become insolvent (howsoever such
insolvency may be evidenced), shall be adjudicated insolvent or bankrupt, shall
petition or apply to any tribunal for the appointment of any receiver,
custodian, liquidator or trustee of or for it or any substantial part of its
property or assets, shall commence any proceeding relating to it under any
bankruptcy, reorganization, arrangement, readjustment of debt, receivership,
dissolution or liquidation law or statute of any jurisdiction, whether now or
hereafter in effect; or if there shall be commenced against the Borrowers, or
any Subsidiary of the Borrowers, any such proceeding and the same shall not be
dismissed within sixty (60) days or an order, judgment or decree approving the
petition in any such proceeding shall be entered against the Borrowers or any
Subsidiary of the Borrowers; or if the Borrowers or any Subsidiary of the
Borrowers shall by any act or failure to act indicate its consent to, approval
of or acquiescence in, any such proceeding or any appointment of any receiver,
custodian, liquidator or trustee of or for it or for any substantial part of its
property or assets, or shall suffer the appointment of any receiver, liquidator
or trustee, or shall take any corporate action for the purpose of effecting any
of the foregoing; or if any court of competent jurisdiction shall assume
jurisdiction with respect to any such proceeding and the same shall not be
dismissed within sixty (60) days or if a receiver or a trustee or other officer
or representative of a court or of creditors, or if any court, governmental
office or agency, shall, under color of legal authority, take and hold
possession of any substantial part of the property or assets of the Borrowers or
any Subsidiary of the Borrowers and shall not have relinquished possession
within sixty (60) days, or if the Borrowers or any Subsidiary of the Borrowers
shall have concealed, removed, or permitted to be concealed or removed, any part
of its property, with intent to hinder, delay or defraud its creditors, or any
of them, or shall have made or suffered a transfer of any of its property which
may be fraudulent under any bankruptcy, fraudulent conveyance or similar law, or
if the Borrowers or any Subsidiary of the Borrowers shall have made any transfer
of its property to or for the benefit of a creditor which constitutes a
preferential transfer under any bankruptcy or similar law, or if the Borrowers
or any Subsidiary of the Borrowers shall have suffered or permitted, while
insolvent, any creditor to obtain a Lien upon any of its property through legal
proceedings or distraint; or

9.1.9. Change of Control.  If there shall occur a Change of Control.

9.2. Acceleration; Remedies.

9.2.1. General Remedies.  Upon the occurrence of any event described in
Subsection 9.1.8 (Insolvency, Bankruptcy, Etc.), the entire unpaid principal
balance of the Note, and interest accrued and premium, if any, thereon, and any
unpaid accrued Unused Fees and all other amounts payable hereunder and under the
other Loan Documents, shall be immediately due and payable by the Borrowers and
the Commitment shall terminate.  Such principal and interest, premium and fees
shall thereupon become and be immediately due and payable without presentation,
demand, protest, notice of protest or other notice of dishonor of any kind, all
of which are hereby expressly waived by the Borrowers.  Upon the occurrence of
any other Event of Default, or at any time thereafter, if any Event of Default
shall then be continuing, the Lender may, by written notice to the Borrowers,
declare the entire unpaid principal balance of the Note,

-45-

 

--------------------------------------------------------------------------------

 

and interest accrued and premium, if any, thereon and any unpaid accrued Unused
Fees and all other amounts payable hereunder and under the other Loan Documents,
to be immediately due and payable by the Borrowers and/or may terminate the
Commitment.  Such principal and interest, premium, fees and other amounts shall
thereupon become and be immediately due and payable, without presentation,
demand, protest, notice of protest or other notice of dishonor or other notice
of any kind, all of which are hereby expressly waived by the Borrowers.  In the
event of any such acceleration, the Lender (acting directly or through the
appointment of one or more trustees or agents of Lender's choosing) may proceed
to protect and enforce its rights under the Loan Documents in any manner or
order it deems expedient without regard to any equitable principles of
marshalling or otherwise.

9.2.2. Equitable Remedies.  It is agreed that, in addition to all other rights
hereunder or under law, the Lender shall have the right to institute proceedings
in equity for the specific performance of any covenant or agreement made in any
of the Loan Documents or for an injunction against the violation of any of the
terms of any of the Loan Documents or in aid of the exercise of any power
granted in any of the Loan Documents or by law or otherwise.

9.2.3. Remedies Cumulative.  All rights and remedies given by this Agreement,
the Note and the other Loan Documents are cumulative and not exclusive of any of
such rights or remedies or of any other rights or remedies available to the
Lender, and no course of dealing between the Borrowers and/or any Subsidiary
thereof, on the one hand, and the Lender, on the other hand, or any delay or
omission in exercising any right or remedy shall operate as a waiver of any
right or remedy, and every right and remedy may be exercised from time to time
and as often as shall be deemed appropriate by the Lender.

Article 10
MISCELLANEOUS

10.1. Notices.

(a) All notices, requests and demands to or upon the respective parties hereto
shall be deemed to have been given or made (i) two days after deposited in the
United States mail, postage prepaid, (ii) on the next Business Day after it is
sent by courier system providing for receipt of delivery, (iii) when sent, if
sent by telecopy before 4:00 p.m.  on a Business Day (or the next Business Day
if sent after 4:00 p.m. or on a day other than a Business Day), with
confirmation of completed transmission, or (iv) via electronic communication in
accordance with Subsection 10.1(b) below, addressed as follows or to such other
address as may be hereafter designated in writing by the respective parties
hereto:

The Borrowers:

Weis Markets, Inc.

Dutch Valley Food Company, LLC

West Transportation, LLC

WMK Financing, Inc.

1000 South Second Street

P.O. Box 471

Sunbury, PA 17801-0471

Fax: 570.286.18089

-46-

 

--------------------------------------------------------------------------------

 

Email: sfrost@weismarkets.com

Attention: Scott F. Frost, Senior Vice President, Chief Financial Officer and
Treasurer

﻿

with a copy to:

Pepper Hamilton LLP

Hercules Plaza, Suite 5100

1313 Market Street

P.O. Box 1709

Wilmington, DE  19899-1709

Fax - 302.421.8390

Email - eckmanr@pepperlaw.com

Attention: Richard P. Eckman, Esquire

﻿

Lender:

Wells Fargo Bank, N.A.

214 Senate Avenue

Camp Hill, PA  17011

Fax: 717.730.3396

Email: brad.a.hilbish@wellsfargo.com

Attention: Brad Hilbish, Vice President

﻿

with a copy to:

Barley Snyder LLP

50 North Fifth Street, 2nd Fl.

P.O. Box 942

Reading, PA 19603

Fax: (610) 376-5243

Email: tdietrich@barley.com

Attention: Timothy G. Dietrich, Esquire

﻿

(b) Electronic Communications.  The Lender or the Borrowers may, in their
discretion, agree to accept notices and other communications to it hereunder by
electronic communications (including e-mail and internet or intranet websites)
pursuant to procedures approved by it, provided that approval of such procedures
may be limited to particular notices or communications.  Unless the Lender
otherwise prescribes, (i) notices and other communications sent to an e-mail
address shall be deemed received upon the sender's receipt of an acknowledgment
from the intended recipient (such as by the "return receipt requested" function,
as available, return e-mail or other written acknowledgment), provided that if
such notice or other communication is not sent during the normal business hours
of the recipient, such notice or communication shall be deemed to have been sent
at the opening of business on the next Business Day for the recipient, and (ii)
notices or communications posted to an Internet or intranet website including,
without limitation, the SEC's EDGAR website (when notice by website posting is
permitted by Section 5.1.4 above), shall be deemed received upon the deemed
receipt by the intended recipient at its e-mail address as described in the
foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.

10.2. Duration; Survival.

-47-

 

--------------------------------------------------------------------------------

 

All representations and warranties of the Borrowers and other Loan Parties
contained in the Loan Documents shall survive the making of the Loans and shall
not be waived by the execution and delivery of this Agreement, any investigation
by the Lender, the making of the Loans, or payment in full of the Loans.

10.3. No Implied Waiver.

No failure or delay on the part of the Lender in exercising any right, power or
privilege under any or all of the Loan Documents and no course of dealing
between the Borrowers and/or and the Lender shall operate as a waiver of any
such right, power or privilege; nor shall any single or partial exercise of any
right, power or privilege under the Loan Documents preclude any other or further
exercise of any such right, power or privilege or the exercise of any other
right, power or privilege.  The rights and remedies expressly provided in the
Loan Documents are cumulative and not exclusive of any rights or remedies which
Lender would otherwise have.  No notice to or demand on the Borrowers or any
other Loan Party in any case shall entitle the Borrowers or any other Loan Party
to any other or further notice or demand in similar or other circumstances or
shall constitute a waiver of the right of the Lender to take any other or
further action in any circumstances without notice or demand.

10.4. Entire Agreement and Amendments.

10.4.1. Entire Agreement.  This Agreement and the other Loan Documents represent
the entire agreement between the parties to this Agreement with respect to the
Commitment, the Loans and the transactions contemplated under the Loan Documents
and, except as expressly provided in the Loan Documents, shall not be affected
by reference to any other documents.

10.4.2. Amendments; Waivers.  Any term, covenant, agreement or condition of any
Loan Document to which the Lender is a party may be amended, and any right under
the Loan Documents may be waived, if, but only if, such amendment or waiver is
in writing and is signed by the Lender and the Borrowers.

10.5. Successors and Assigns.

10.5.1. Assignments by the Borrower.  Without the prior written consent of the
Lender, the Borrowers may not assign any of their rights or delegate any of
their duties or obligations under this Agreement or the other Loan Documents.

10.5.2. Participation.  The Lender may sell participations to one or more
Eligible Institutions of all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion of its
Commitment) and if no Event of Default exists, with the consent of the Borrowers
(such consent not to be unreasonably withheld or delayed); provided,  however,
that (i) the Lender's obligations under this Agreement shall remain unchanged,
(ii) the Lender shall remain solely responsible to the other parties to this
Agreement for the performance of such obligations, (iii) all amounts payable by
the Borrowers under this Agreement shall be determined as if the Lender had not
sold such participation and no participant shall be entitled to receive any
greater amount pursuant to this Agreement than the Lender would have been
entitled to receive in respect of the amount of the participation transferred by
the Lender to such

-48-

 

--------------------------------------------------------------------------------

 

participant had no such transfer occurred, (iv) each such participation shall be
of a constant, and not a varying, percentage of all the Lender's interests,
rights and obligations under this Agreement, (v) such participant shall agree to
be bound by the provisions of this Agreement and the other Loan Documents, and
(vi) the Borrowers shall continue to deal solely and directly with the Lender in
connection with the Lender's rights and obligations under this Agreement, and
the Lender shall retain the sole right and responsibility vis-a-vis the
Borrowers to enforce the obligations of the Borrowers relating to the Loans
including, without limitation, the right to approve any amendment, modification
or waiver of any provision of this Agreement.

10.6. Descriptive Headings.

The descriptive headings of the several sections of this Agreement are inserted
for convenience only and shall not affect the meaning or construction of any of
the provisions of this Agreement.

﻿

10.7. Governing Law.

This Agreement and the rights and obligations of the parties under this
Agreement and under the Loan Documents shall be construed in accordance with and
shall be governed by the laws of the Commonwealth of Pennsylvania.

10.8. Holidays.

Except as otherwise provided herein, whenever any payment to be made under the
Loan Documents shall become due and payable on a day which is not a Business
Day, such payment may be made on the next succeeding Business Day and such
extension of time shall in such case be included in computing interest on such
payment.

10.9. Counterparts.

The Loan Documents and any notice or communication under the Loan Documents may
be executed in one or more counterparts, each of which shall constitute an
original, but all of which together shall constitute one and the same
instrument.  Delivery via electronic communications pursuant to Section 10.1(b)
above of a photocopy, telecopy portable document format (PDF) electronic data
version of an executed counterpart of a signature page to any Loan Document
shall be effective as delivery of a manually executed counterpart of such Loan
Document.

10.10. Maximum Lawful Interest Rate.

Notwithstanding any provision contained in this Agreement or the Note, the total
liability of the Borrowers for payment of interest pursuant to this Agreement
and the Note shall not exceed the maximum amount of such interest permitted by
law to be charged, collected, or received from the Borrowers, and if any
payments by the Borrowers include interest in excess of such a maximum amount,
each Lender shall apply such excess to the reduction of the unpaid

-49-

 

--------------------------------------------------------------------------------

 

principal amount due pursuant to this Agreement and the Note, or if none is due,
such excess shall be refunded to the Borrowers.

10.11. Set-off.    

The Borrowers and each Subsidiary thereof hereby pledge and give to the Lender a
lien and security interest for the amount of the Obligations owing to the Lender
under the Loan Documents upon and in the balance of any account maintained by
the Borrowers or any such Subsidiary with the Lender or any other liability of
the Lender to such Subsidiary or the Borrowers.  Upon the occurrence of and
throughout the period in which there is continuing an Event of Default, in such
Lender's sole option, at any time and from time to time, the Borrowers and each
Subsidiary thereof hereby authorizes the Lender to apply any such deposit
balances now or hereafter in the possession of the Lender and/or a credit in the
amount of any such other liability to the payment of the Obligations owing to
the Lender under the Loan Documents.  The provisions of this Section 10.11 shall
not be deemed or construed to limit rights of set-off or liens or similar rights
which the Lender may otherwise have by reason of applicable law or otherwise.

﻿

10.12. Severability.

Every provision of this Agreement and each of the other Loan Documents is
intended to be severable, and if any term or provision of this Agreement or any
of the other Loan Documents shall be invalid, illegal or unenforceable for any
reason, the validity, legality and enforceability of the remaining provisions
shall not be affected or impaired thereby, and any invalidity, illegality or
unenforceability in any jurisdiction shall not affect the validity, legality or
enforceability of any such term or provision in any other jurisdiction.

10.13. Non-Merger of Remedies.

It is the intention of the parties hereto that the covenants and obligations of
the Borrowers and their Subsidiaries and the rights and remedies of the Lender
hereunder and under the other Loan Documents shall not merge with or be
extinguished by the entry of judgment hereunder or thereunder, and such
covenants, obligations, rights and remedies shall survive any entry of judgment
until payment in full of the Loans (other than contingent indemnification
obligations).  All Obligations under the Loan Documents shall continue to apply
with respect to and during the collection of amounts due under the Loan
Documents or the proof and allowability of any claim arising under this
Agreement or any other Loan Document, whether in bankruptcy or receivership
proceedings or otherwise, and in any workout, restructuring or in connection
with the protection, preservation, exercise or enforcement of any of the terms
of this Agreement or of any rights under this Agreement or under any other Loan
Document or in connection with any foreclosure, collection or bankruptcy
proceedings.  Without limiting the generality of the foregoing, post-judgment
interest rate shall be the interest rate provided herein.

10.14. Payment and Reimbursement of Costs and Expenses; Indemnification.

Whether or not any fundings are made under this Agreement, the Borrowers shall
unconditionally upon demand, pay or reimburse the Lender for, and indemnify and
save the

-50-

 

--------------------------------------------------------------------------------

 

Lender and its Affiliates, officers, directors, employees, agents, attorneys,
shareholders and consultants (collectively, "Indemnitees") harmless against, any
and all liabilities, losses, costs, expenses, claims and/or charges (including,
without limitation, reasonable and documented, out of pocket fees and
disbursements of legal counsel, accountants, investigators and other experts)
imposed on, incurred by or asserted against such Indemnitees and arising out of,
relating to or connected with:  (a) the negotiation, preparation, execution and
delivery of the Loan Documents and any waiver, amendment or consent under or
with respect to any of the Loan Documents whether or not executed, (b)
consulting with respect to any matter in any way arising out of, related to, or
connected with, the Loan Documents, including (i) the protection, preservation,
exercise or enforcement of any of the rights of the Lender in, under or related
to the Loan Documents or (ii) the performance of any of the obligations of the
Lender under or related to the Loan Documents, (c) protecting, preserving,
exercising or enforcing any of the rights of the Lender in, under or related to
the Loan Documents, (d) all transfer, documentary, stamp and similar taxes, and
all recording and filing fees and taxes payable in connection with, arising out
of, or in any way related to, the execution, delivery and performance of the
Loan Documents or the making of the Loans; and (e) commissions or claims by or
on behalf of brokers, finders or agents not retained by the Lender provided,
however, with respect to liabilities, losses, costs, expenses, claims and/or
charges referred to in clauses (a) through (d) above to the extent that they are
imposed on, incurred by or asserted against the Lender, the indemnification of
such Lender pursuant to this Section 10.14 shall be limited to amounts that
accrue after the occurrence of an Event of Default and provided, further, that,
unless an Event of Default shall have occurred and be continuing, the Borrowers
shall not be responsible for any costs or expenses (including legal fees) in
connection with the assignment or participation of any interests by the Lender
hereunder.

Without limiting the generality of the foregoing, the Borrowers hereby indemnify
and agree to defend and hold harmless each Indemnitee from and against any and
all claims, actions, causes of action, liabilities, penalties, fines, damages,
judgments, losses, suits, expenses, legal or administrative proceedings,
interest, reasonable and documented out of pocket costs and expenses (including
court costs and attorneys', consultants' and experts' fees) arising out of or in
any way relating to:  (i) the use, handling, management, production, treatment,
processing, storage, transfer, transportation, disposal, Release or threat of
Release of any Hazardous Substance by or on behalf of, Borrowers or any
Subsidiary thereof; (ii) the presence of Hazardous Substances on, about, beneath
or arising from any premises owned or occupied by the Borrowers or any
Subsidiary thereof (herein collectively, the "Premises"); (iii) the failure of
Borrowers or any of their Subsidiaries or Affiliates or any occupant of any
Premises to comply with the Environmental Laws; (iv) Borrowers' breach of any of
the representations, warranties and covenants contained herein or in any Loan
Documents; (v) Regulatory Actions (as hereinafter defined) and Third Party
Claims (as hereinafter defined); or (vi) the imposition or recording of a Lien
against any property of Borrowers, their Affiliates and Subsidiaries in
connection with any Release at, on or from any Premises or any activities
undertaken on or occurring at such property, or arising from such property or
pursuant to any Environmental Law.  Borrowers' indemnity and defense obligations
under this section shall include, without limitation and whether foreseeable or
unforeseeable, any and all costs related to any Remedial Action.  "Regulatory
Action" means any notice of violation, citation, complaint, request for
information, order, directive, compliance schedule, notice of claim, consent
decree, action, litigation or proceeding brought or instituted by any
governmental authority under or in connection with any

-51-

 

--------------------------------------------------------------------------------

 

Environmental Law involving the Borrowers any Subsidiary of the Borrowers, or
any occupant of any of the Premises or involving any of the Premises or any
activities undertaken on or occurring at any Premises.  "Third Party Claims"
means claims by a party (other than a party to this Agreement and other than
Regulatory Actions) based on negligence, trespass, strict liability, nuisance,
toxic tort or detriment to human health or welfare due to Hazardous Substances
on, about, beneath or arising from any premises of Borrowers, their Affiliates
or Subsidiaries or in any way related to any alleged violation of any
Environmental Laws or any activities undertaken on or occurring at any premises
of Borrowers, their Affiliates or Subsidiaries.

The indemnities contained herein shall survive repayment of the Loans and
satisfaction, release, and discharge of the Loan Documents, whether through full
payment of the Loans, foreclosure, deed in lieu of foreclosure or otherwise.

The foregoing amounts are in addition to any other amounts which may be due and
payable to the Lender under this Agreement.  A certification by the Lender
hereunder of the amount of liabilities, losses, costs, expenses, claims and/or
charges shall be conclusive, absent manifest error.  Notwithstanding the
foregoing, the Borrowers shall not be required to indemnify any Indemnitee with
respect to a claim or liability that arises as the result of the gross
negligence or willful misconduct of such Indemnitee.

10.15. Reserved.

10.16. Consent to Jurisdiction, Service and Venue; Waiver of Jury Trial.

(a) With respect to any matters which may be heard before a court of competent
jurisdiction under paragraph (c) of the preceding Section 10.15), the Borrowers
and their Subsidiaries hereby consent to the jurisdiction and venue of the
courts of the Commonwealth of Pennsylvania or of any federal court located in
such state, waive personal service of any and all process upon it and consents
that all such service of process be made by certified or registered mail
directed to the Borrowers or such Subsidiaries at the address provided for in
Section 10.1 and service so made shall be deemed to be completed upon actual
receipt.  The Borrowers and their Subsidiaries hereby waive the right to contest
the jurisdiction and venue of the courts located in the Commonwealth of
Pennsylvania on the ground of inconvenience or otherwise and, further, waive any
right to bring any action or proceeding against the Lender in any court outside
the Commonwealth of Pennsylvania.  The provisions of this Section 10.16 shall
not limit or otherwise affect the right of the Lender to institute and conduct
an action in any other appropriate manner, jurisdiction or court.

(b) NEITHER THE LENDER NOR ANY SUBSIDIARY OF THE BORROWERS NOR THE BORROWERS NOR
ANY OTHER PERSON LIABLE FOR THE INDEBTEDNESS TO THE LENDER REFERRED TO IN THE
LOAN DOCUMENTS, NOR ANY ASSIGNEE, SUCCESSOR, HEIR OR PERSONAL REPRESENTATIVE OF
THE FOREGOING SHALL SEEK A JURY TRIAL IN ANY PROCEEDING BASED UPON OR ARISING
OUT OF THIS AGREEMENT, OR ANY OTHER LOAN DOCUMENT OR ANY GUARANTY RELATING TO
SUCH INDEBTEDNESS OR THE RELATIONSHIP BETWEEN OR AMONG SUCH PERSONS OR ANY OF
THEM.  NEITHER THE LENDER NOR ANY SUBSIDIARY OF THE BORROWERS NOR THE BORROWERS
NOR ANY

-52-

 

--------------------------------------------------------------------------------

 

OTHER PERSON WILL SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN
WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED.

(c) EXCEPT AS PROHIBITED BY LAW, EACH PARTY TO THIS AGREEMENT WAIVES ANY RIGHTS
IT MAY HAVE TO CLAIM OR RECOVER IN ANY ARBITRATION OR OTHER LITIGATION, ANY
SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN,
OR IN ADDITION TO, ACTUAL DAMAGES.  EACH PARTY TO THIS AGREEMENT (i) CERTIFIES
THAT NEITHER THE LENDER NOR ANY REPRESENTATIVE OR ATTORNEY OF THE LENDER HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE LENDER WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (ii) ACKNOWLEDGES THAT IT
HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND EACH OTHER LOAN DOCUMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 10.16.  THE PROVISIONS OF THIS SECTION 10.16 HAVE BEEN FULLY DISCLOSED
TO THE PARTIES AND THE PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS.  NO PARTY
HAS IN ANY WAY AGREED WITH OR REPRESENTED TO ANY OTHER PARTY THAT THE PROVISIONS
OF THIS SECTION 10.16 WILL NOT BE FULLY ENFORCED IN ALL INSTANCES.

10.17. Foreign Assets Control Regulations, Etc.

(a) Neither the Borrowers nor any Controlled Entity is (i) a Person whose name
appears on the list of Specially Designated Nationals and Blocked Persons
published by the Office of Foreign Assets Control, United States Department of
the Treasury ("OFAC") (an "OFAC Listed Person"), (ii) an agent, department, or
instrumentality of, or is otherwise beneficially owned by, controlled by or
acting on behalf of, directly or indirectly, (x) any OFAC Listed Person or (y)
any Person, entity, organization, foreign country or regime that is subject to
any OFAC Sanctions Program, or (iii) otherwise blocked, subject to sanctions
under or engaged in any activity in violation of other United States economic
sanctions, including but not limited to, the Trading with the Enemy Act, the
International Emergency Economic Powers Act, the Comprehensive Iran Sanctions,
Accountability and Divestment Act ("CISADA") or any similar law or regulation
with respect to Iran or any other country, the Sudan Accountability and
Divestment Act, any OFAC Sanctions Program, or any economic sanctions
regulations administered and enforced by the United States or any enabling
legislation or executive order relating to any of the foregoing (collectively,
"U.S. Economic Sanctions") (each OFAC Listed Person and each other Person,
entity, organization and government of a country described in clause (i), clause
(ii) or clause (iii), a "Blocked Person").  Neither the Borrowers nor any
Controlled Entity has been notified that its name appears or may in the future
appear on a state list of Persons that engage in investment or other commercial
activities in Iran or any other country that is subject to U.S.  Economic
Sanctions.

(b) No part of the proceeds from the sale of the Note hereunder constitutes or
will constitute funds obtained on behalf of any Blocked Person or will otherwise
be used by the Borrowers or any Controlled Entity directly or indirectly (i) in
connection with any investment in, or any transactions or dealings with, any
Blocked Person, or (ii) otherwise in violation of U.S.  Economic Sanctions.

-53-

 

--------------------------------------------------------------------------------

 

(c) Neither the Borrowers nor any Controlled Entity (i) has been found in
violation of, charged with, or convicted of, money laundering, drug trafficking,
terrorist-related activities or other money laundering predicate crimes under
the Currency and Foreign Transactions Reporting Act of 1970 (otherwise known as
the Bank Secrecy Act), the USA PATRIOT Act or any other United States law or
regulation governing such activities (collectively, "Anti-Money Laundering
Laws") or any U.S. Economic Sanctions violations, (ii) to the Borrowers' actual
knowledge after making due inquiry, is under investigation by any Governmental
Authority for possible violation of Anti-Money Laundering Laws or any U.S.
Economic Sanctions violations, (iii) has been assessed civil penalties under any
Anti-Money Laundering Laws or any U.S.  Economic Sanctions, or (iv) has had any
of its funds seized or forfeited in an action under any Anti-Money Laundering
Laws.  The Borrowers and their Subsidiaries have established procedures and
controls which they reasonably believe are adequate (and otherwise comply with
applicable law) to ensure that the Borrowers and each Controlled Entity is and
will continue to be in compliance with all applicable current and future
Anti-Money Laundering Laws and U.S.  Economic Sanctions.

(d) (1) Neither the Borrowers nor any Controlled Entity (i) has been charged
with, or convicted of bribery or any other anti-corruption related activity
under any applicable law or regulation in the U.S. including but not limited to,
the U.S. Foreign Corrupt Practices Act (collectively, "Anti-Corruption Laws"),
(ii) to the Borrowers' Knowledge after making due inquiry, is under
investigation by any U.S.  or non-U.S.  Governmental Authority for possible
violation of Anti-Corruption Laws, or (iii) has been assessed civil or criminal
penalties under any Anti-Corruption Laws.

(2) To the Borrowers' actual Knowledge after making due inquiry, neither the
Borrower, nor any Controlled Entity has, within the last five years, directly or
indirectly offered, promised, given, paid or authorized the offer, promise,
giving or payment of anything of value to a Governmental Official or a
commercial counterparty for the purposes of: (i) influencing any act, decision
or failure to act by such Governmental Official in his or her official capacity
or such commercial counterparty, (ii) inducing a Governmental Official to do or
omit to do any act in violation of the Governmental Official's lawful duty, or
(iii) inducing a Governmental Official or a commercial counterparty to use his
or her influence with a government or instrumentality to affect any act or
decision of such government or entity; in each case in order to obtain, retain
or direct business or to otherwise secure an improper advantage in violation of
any applicable law or regulation or which would cause any holder of the Note to
be in violation of any law or regulation applicable to such holder; and

(3) No part of the proceeds from the sale of the Note hereunder will be used,
directly or indirectly, for any improper payments, including bribes, to any
Governmental Official or commercial counterparty in order to obtain, retain or
direct business or obtain any improper advantage.  The Borrowers and their
Subsidiaries have established procedures and controls which each reasonably
believes are adequate (and otherwise comply with applicable law) to ensure that
the Borrowers and each Controlled Entity is and will continue to be in
compliance with all applicable current and future Anti-Corruption Laws.

10.18. Terrorism Sanctions Regulations.

The Borrowers will not and will not permit any Controlled Entity (a) to become
(including by virtue of being owned or controlled by

-54-

 

--------------------------------------------------------------------------------

 

a Blocked Person), own or control a Blocked Person or any Person that is the
target of sanctions imposed by the United Nations or by the European Union, or
(b) directly or indirectly to have any investment in or engage in any dealing or
transaction (including, without limitation, any investment, dealing or
transaction involving the proceeds of the Notes) with any Person if such
investment, dealing or transaction (i) would cause any purchaser or holder to be
in violation of any law or regulation applicable to such holder, or (ii) is
prohibited by or subject to sanctions under any U.S. Economic Sanctions, or (c)
to engage, nor shall any Affiliate of either engage, in any activity that could
subject such Person or any purchaser or holder to sanctions under CISADA or any
similar law or regulation with respect to Iran or any other country that is
subject to U.S. Economic Sanctions.

10.19. Joint and Several Liability.

(a) Each Borrower has determined and represents to Lender that it has a
legitimate business purpose for obtaining the Line of Credit and it is in its
best interests to induce Lender to extend credit pursuant to this
Agreement.  Each Borrower acknowledges and represents that its business is
related to the business of every other Borrower hereunder, and all commitments,
advances and other credit extensions under this Agreement will individually and
collectively benefit each Borrower hereunder.

(b) Each Borrower has determined and represents to Lender that it is, and after
giving effect to the transactions contemplated by this Agreement will be,
Solvent, after giving effect to any available rights of contribution or
subrogation.

(c) Each Borrower agrees that it is jointly and severally and unconditionally
liable to Lender for, and will pay to Lender when due, the full amount of all
existing and future Indebtedness arising in connection with the Line of Credit
extended under this Agreement, and all modifications, extensions and renewals
thereto, including without limitation all principal and interest, and all fees,
costs and expenses chargeable to each Borrower individually or collectively in
connection with the Line of Credit.  These Obligations shall be in addition to
any other Obligations of any Borrower under any other agreement with Lender
entered into before or after the date of this Agreement, unless such other
agreement is expressly modified or revoked in writing, and this Agreement shall
not affect or invalidate the terms of any such other agreement, unless otherwise
expressly provided herein.

(d) The liability of a Borrower for Indebtedness hereunder shall be reinstated
and revived and the rights of Lender shall continue if and to the extent that
for any reason any amount at any time paid on account of any facility under this
Agreement by any Borrower or any other person or entity is rescinded or must
otherwise be restored by Lender, whether as a result of any proceedings in
bankruptcy or reorganization or otherwise, all as though such amount had not
been paid.

(e) Each Borrower authorizes Lender, without notice to or demand on such
Borrower, and without affecting such Borrowers' liability for Indebtedness
incurred under the Line of Credit extended under this Agreement, from time to
time to: (i) alter, compromise, extend, accelerate or otherwise change the time
for payment of, or otherwise change the terms of, the indebtedness of any other
Borrower to Lender on account of any such facilities; (ii) take and

-55-

 

--------------------------------------------------------------------------------

 

hold security from any other Borrower for the payment of Indebtedness incurred
under the Line of Credit extended under this Agreement, and exchange, enforce,
waive, subordinate or release any such security; (iii) apply such security and
direct the order or manner of sale thereof, including without limitation, a
non-judicial sale permitted by the terms of the controlling security agreement,
mortgage, or deed of trust, as Lender in its discretion may determine; (iv)
release or substitute any one or more of the endorsers or any guarantors of any
facility hereunder, or any other party obligated thereon; and (v) apply payments
received by Lender from any other Borrower to indebtedness of such other
Borrower to Lender other than to the Line of Credit extended under this
Agreement.

(f) Each Borrower represents and warrants to Lender that it has established
adequate means of obtaining from every other Borrower on a continuing basis
financial and other information relating to the financial condition of every
other Borrower, and each Borrower agrees to keep adequately informed by such
means of any facts, events or circumstances which might in any way affect its
risks hereunder.  Each Borrower further agrees that Lender shall have no
obligation to disclose to it any information or material about any other
Borrower which is obtained by Lender in any manner.

(g) Each Borrower waives any right to require Lender to: (i) proceed against any
other Borrower or any other person; (ii) proceed against or exhaust any security
held from any other Borrower or any other person; (iii) pursue any other remedy
in Lender's power; (iv) apply payments received by Lender from any other
Borrower to the Line of Credit extended under this Agreement; (v) make any
presentments or demands for performance, or give any notices of nonperformance,
protests, notices of protest or notices of any kind, including without
limitation, any notice of nonperformance, protest, notice of protest, notice of
dishonor, notice of intention to accelerate or notice of acceleration; or (vi)
set off against the indebtedness the fair value of any real or personal property
given as collateral for the indebtedness (whether such right of setoff arises
under statute or otherwise).  In addition to the foregoing, each Borrower
specifically waives any statutory right it might have to require Lender to
proceed against other Borrowers or any collateral (if any) that secures the
indebtedness.

(h) Each Borrower waives to the extent permitted by applicable law any defense
to its liability for repaying the Line of Credit extended under this Agreement
based upon or arising by reason of: (i) any disability or other defense of any
other Borrower or any other person; (ii) the cessation or limitation from any
cause whatsoever, other than payment in full, of the liability of any other
Borrower for the facility extended under this Agreement; (iii) any lack of
authority of any officer, director, partner, agent or other person acting or
purporting to act on behalf of any other Borrower or any defect in the formation
of any other Borrower; (iv) the application by any other Borrower of the
proceeds of the Line of Credit extended under this Agreement for purposes other
than the purposes intended or understood by Lender or each other Borrower; (v)
any act or omission by Lender which directly or indirectly results in or aids
the discharge of any other Borrower by operation of law or otherwise, or which
in any way impairs or suspends any rights or remedies of Lender against any
other Borrower; (vi) any impairment of the value of any interest in any security
(if any) for the Line of Credit extended under this Agreement, including without
limitation, the failure to obtain or maintain perfection or recordation of any
interest in any such security, the release of any such security without
substitution, and/or the failure to preserve the value of, or to comply with
applicable law in

-56-

 

--------------------------------------------------------------------------------

 

disposing of, any such security; or (vii) any modification of the Indebtedness
of any other Borrower for the Line of Credit extended under this Agreement,
including without limitation the renewal, extension, acceleration or other
change in time for payment of, or other change in the terms of, the indebtedness
of any Borrower for the Line of Credit extended under this Agreement, including
increase or decrease of the rate of interest thereon.

(i) Until the Line of Credit extended under this Agreement and all Indebtedness
arising under or in connection with this Agreement shall have been paid in full
(other than contingent indemnification obligations), no Borrower shall have any
right of subrogation.  Each Borrower waives all rights and defenses it may have
arising out of (i) any election of remedies by Lender, even though that election
of remedies, such as a non-judicial foreclosure with respect to any security for
the Line of Credit extended under this Agreement, destroys its rights of
subrogation or its rights to proceed against any other Borrower for
reimbursement, or (ii) any loss of rights it may suffer by reason of any rights,
powers or remedies of any other Borrower in connection with any anti-deficiency
laws or any other laws limiting, qualifying or discharging any Borrowers'
indebtedness for the Line of Credit extended under this Agreement, whether by
operation of law, or otherwise, including any rights Borrower may have to claim
a fair market credit with respect to a deficiency or have a fair market value
hearing to determine the size of a deficiency following any foreclosure sale or
other disposition of any real property security for any portion of the
Indebtedness, and each Borrower waives any right such Borrower may have under
any "one-action" rule.  Each Borrower further waives the benefit of any
homestead, exemption or other similar laws.

(j) Until all Indebtedness of each Borrower to Lender arising under or in
connection with this Agreement shall have been paid in full (other than
contingent indemnification obligations), each Borrower waives any right to
enforce any remedy which Lender now has or may hereafter have against any other
Borrower or any other person, and waives any benefit of, or any right to
participate in, any security now or hereafter held by Lender (if any).  To the
fullest extent permitted by applicable law, each Borrower waives all rights of a
surety and the benefits of any applicable suretyship law, statute or regulation,
and without limiting any of the waivers set forth herein, each Borrower further
waives any other fact or event that, in the absence of this provision, would or
might constitute or afford a legal or equitable discharge or release of or
defense to such Borrower.

(k) Notwithstanding any other provisions set forth herein, each Borrower agrees
that whenever an Officer's Compliance Certificate is required or permitted to be
submitted to the Lender under the terms of this Agreement, such Officer's
Compliance Certificate may be prepared, executed and submitted to the Lender by
the chief financial officer or other authorized officer of Weis Markets, Inc. on
behalf of (and to be binding upon) each and all of the Borrowers and the Lender
agrees to accept as properly executed the submission of a Certificate executed
solely by such officer on behalf of all of the Borrowers.

﻿

[THREE SIGNATURE PAGES FOLLOW]

-57-

 

--------------------------------------------------------------------------------

 

[PAGE 58 INTENTIONALLY BLANK]

-58-

 

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the undersigned have caused this Revolving Credit Agreement
to be duly executed by their respective, duly authorized officers as of the date
first above written.

﻿

BORROWER:

﻿

WEIS MARKETS, INC.

﻿

﻿

By: _________________________

Name:Scott F. Frost

Title: Senior Vice President, Chief Financial Officer and Treasurer

﻿

﻿

﻿

BORROWER:

﻿

DUTCH VALLEY FOOD COMPANY, LLC

﻿

﻿

By: __________________________

Name:Scott F. Frost

Title: Senior Vice President, Chief Financial Officer and Treasurer

﻿

﻿

﻿

BORROWER:

﻿

WEIS TRANSPORTATION, LLC

﻿

﻿

By: ____________________________

Name:Scott F. Frost

Title: Senior Vice President, Chief Financial Officer and Treasurer

﻿

﻿

﻿

[Borrower signature page one of two to Revolving Credit Agreement between Weis
Markets, Inc., Dutch Valley Food Company, LLC, Weis Transportation, LLC and WMK
Financing, Inc. and Wells Fargo Bank, National Association dated effective
September 1, 2016.]

-59-

 

--------------------------------------------------------------------------------

 

BORROWER:

﻿

WMK FINANCING, INC.

﻿

﻿

By: __________________________

Name:Lisa M. Oakes

Title: President, Treasurer and Secretary

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

[Borrower signature page two of two to Revolving Credit Agreement between Weis
Markets, Inc., Dutch Valley Food Company, LLC, Weis Transportation, LLC and WMK
Financing, Inc. and Wells Fargo Bank, National Association dated effective
September 1, 2016.]

-60-

 

--------------------------------------------------------------------------------

 

﻿

LENDER:

﻿

WELLS FARGO BANK,

NATIONAL ASSOCIATION

﻿

﻿

By: __________________________

Name:Brad Hilbish

Title:Vice President

﻿

﻿

[Lender signature page one of one to Revolving Credit Agreement between Weis
Markets, Inc., Dutch Valley Food Company, LLC, Weis Transportation, LLC and WMK
Financing, Inc. and Wells Fargo Bank, National Association dated effective
September 1, 2016.]

-61-

 

--------------------------------------------------------------------------------