Document:

a5817595ex10.htm

    Exhibit
10(b)

     

    THIRD AMENDMENT TO CREDIT
AGREEMENT

     

    THIS THIRD AMENDMENT TO CREDIT
AGREEMENT (the “Amendment”) is made effective
as of the 29th
day of October, 2008 by and among TASTY BAKING COMPANY, a
Pennsylvania corporation (“Company”), the direct and
indirect subsidiaries of the Company from time to time parties to the Credit
Agreement (as defined below) (the “Subsidiary Borrowers” and with
the Company, collectively, the “Borrowers”), each lender from
time to time party to the Credit Agreement (collectively, the “Lenders” and individually, a
“Lender”), and CITIZENS BANK OF PENNSYLVANIA, as
Administrative Agent, Collateral Agent, Swing Line Lender and L/C Issuer (the
“Agent”).

    

    BACKGROUND

     

    A.     Borrowers,
Lenders and Agent have previously entered into a certain Credit Agreement dated
September 6, 2007, amended by (i) that certain First Amendment to Credit
Agreement dated December 12, 2007 and (ii) that certain Second Amendment to
Credit Agreement dated July 16, 2008 (as amended and as may be further amended,
supplemented or restated from time to time, the “Credit Agreement”), pursuant
to which, inter
alia, Agent and
Lenders agreed to extend to Borrowers certain credit facilities subject to the
terms and conditions set forth therein.

     

    B.    Borrowers,
Lenders and Agent have agreed to amend the terms of the Credit Agreement in
accordance with the terms and conditions hereof.

     

    C.    Capitalized
terms used herein and not otherwise defined in this Amendment shall have the
meanings set forth therefor in the Credit Agreement.

     

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

     

    1.    Definitions.

     

    1.1    The
pricing grid contained within the definition of “Applicable Rate” set forth in
Section
1.01 of the Credit Agreement is hereby amended to read, in its entirety,
as follows:

     

    
      	
              Applicable
      Rate

            
	 
	
              Pricing

              Level

            	
              Operating

              Leverage
      Ratio

            	
              Unused

              Commitment
      Fee

            	
              LIBOR
      Rate +

              ___________

              L/C
      Fee

            	
              Daily
      LIBOR

              Rate
      +

            
	
              1

            	
              
                <1.0x

              

            	
              0.20%

            	
              1.25%

            	
              1.25%

            
	
              2

            	
              >1.0x <
      2.0x

            	
              0.25%

            	
              1.75%

            	
              1.75%

            
	
              3

            	
              >2.0x <
      3.0

            	
              0.30%

            	
              2.25%

            	
              2.25%

            
	
              4

            	
              >3.0x <
      4.0x

            	
              0.40%

            	
              2.75%

            	
              2.75%

            
	
              5

            	
              >4.0
      x

            	
              0.50%

            	
              3.25%

            	
              3.25%

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    1.2    The
definition of “Daily LIBOR
Loan” set forth in Section
1.01 of the Credit Agreement is hereby amended to read, in its entirety,
as follows:

     

    ““Daily LIBOR Loan”
means any Fixed Asset Loan, Swing Line Loan or Working Capital Revolver Loan
bearing interest based on the Daily LIBOR Rate plus the applicable basis points
specified in the calculation of the Applicable Rate for a Daily LIBOR
Loan.”

     

    1.3    The
following definitions are hereby added to Section
1.01 of the Credit Agreement in their proper alphabetical order and when
used in this Amendment, such terms shall have the following
meanings:

     

    ““Daily LIBOR Fixed Asset
Loan” means a Fixed Asset Loan that is a Daily LIBOR Loan.”

     

    ““Daily LIBOR Working Capital
Revolver Loan” means a Working Capital Revolver Loan that is a Daily
LIBOR Loan.”

     

    1.4    (a) The
definition of “Prime
Rate” set forth in Section
1.01 of the Credit Agreement is hereby deleted in its entirety and all
references to the defined term “Prime Rate” contained in the Credit
Agreement and Loan Documents are hereby deleted in their entirety and replaced
with the defined term “Daily
LIBOR Rate”; (b) the definition of “Prime Rate Fixed Asset Loan”
set forth in Section
1.01 of the Credit Agreement is hereby deleted in its entirety and all
references to the defined term “Prime Rate Fixed Asset Loan”
contained in the Credit Agreement and Loan Documents are hereby deleted in their
entirety and replaced with the defined term “Daily LIBOR Fixed Asset Loan”;
(c) the definition of “Prime
Rate Loan” set forth in Section
1.01 of the Credit Agreement is hereby deleted in its entirety and all
references to the defined term “Prime Rate Loan” contained in the
Credit Agreement and Loan Documents are hereby deleted in their entirety and
replaced with the defined term “Daily LIBOR Loan”; and (d) the
definition of “Prime Rate
Working Capital Revolver Loan” set forth in Section
1.01 of the Credit Agreement is hereby deleted in its entirety and all
references to the defined term “Prime Rate Working Capital Revolver
Loan” contained in the Credit Agreement and Loan Documents are hereby
deleted in their entirety and replaced with the defined term “Daily LIBOR Working Capital Revolver
Loan”.

     

    2.    Condition
of Fixed Asset Loan; Maximum Funding Cap.  Section
4.04(g) of the Credit Agreement is hereby amended and restated to read in
its entirety as follows:

     

    “(g)           Lenders
shall have no obligation to make any Fixed Asset Loan advances which would cause
the aggregate amount of all advances of Fixed Asset Loans, plus all advances
under the Job Bank Term Loan, plus all advances under the MELF Financing, plus
all advances under the PIDC Financing to exceed $44,000,000 in total, unless and
until Agent has received evidence reasonably satisfactory to Agent that fee
simple title to the Navy Yard Property has been conveyed to Landlord pursuant to
the terms of the PAID Agreement of Sale.”

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    2.1    Minimum
EBITDA.  Section
6.12(a) of the Credit Agreement is hereby amended and restated to read in
its entirety as follows:

     

    “(a)           Minimum
EBITDA.  Maintain on a consolidated basis EBITDA of at least
the amount indicated for each period specified below:

     

    
    

     

    
      	 	Period	 	Minimum
      Amount	 
	 	 	 	 	 
	 	 	 	 	 
	 	From the date hereof
      through the fiscal quarter ending on or about 09/30/08	 	$13,000,000	 
	 	 	 	 	 
	 	For the fiscal
      quarter ending on or about 12/31/08	 	$11,275,000	 
	 	 	 	 	 
	 	From the fiscal
      quarter ending on or about 3/31/09 through the fiscal quarter ending on or
      about 09/30/09	 	$15,000,000	 
	 	 	 	 	 
	 	From the fiscal
      quarter ending on or about 12/31/09 through the fiscal quarter ending on
      or about 09/30/10	 	$15,250,000	 
	 	 	 	 	 
	 	From the fiscal
      quarter ending on or about 12/31/10 through the fiscal quarter ending on
      or about 09/30/11	 	 $21,000,000	 
	 	 	 	 	 
	 	For the fiscal
      quarter ending on or about 12/31/11 and for all fiscal quarter
      thereafter	 	$25,000,000	 
	 	 	 	 	 
	 	 	 	 	 
	 	
              The
      amount will be calculated at the end of each fiscal quarter using the
      results of the twelve-month period then ended.”

            	 

    

     

    3.    Maximum
Operating Leverage Ratio.  Notwithstanding the effective date
of this Amendment, effective as of September 27, 2008, Section
6.12(c) of the Credit Agreement is hereby amended and restated to read in
its entirety as follows:

     

    “(c)           Maximum Operating Leverage
Ratio.  Maintain on a consolidated basis an Operating Leverage
Ratio not exceeding the ratios indicated for each period specified
below:

     

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    
    

     

    
      	 	Period	Maximum
      Ratio	 
	 	 	 	 
	 	From the date hereof
      through 12/29/07  	3.75 to
      1.0 	 
	 	 	 	 
	 	From 12/30/07 through
      6/28/08	4.25 to
      1.0 	 
	 	 	 	 
	 	From 6/29/08 through
      9/28/08	4.90 to
      1.0 	 
	 	 	 	 
	 	From 9/29/08 through
      12/27/08 	6.0 to
      1.0 	 
	 	 	 	 
	 	From 12/28/08 through
      12/26/09	6.0 to
      1.0 	 
	 	 	 	 
	 	From 12/27/09 through
      12/25/10	4.75 to
      1.0 	 
	 	 	 	 
	 	From 12/26/11 and
      thereafter	3.75 to
      1.0 	 
	 	 	 	 
	 	 	 	 
	 	
              This
      ratio will be calculated at the end of each fiscal quarter using the
      results of the twelve-month period then
    ended.” 

            	 

    

     

    4.    No Prime Rate Loans.  Notwithstanding
anything to the contrary set forth in the Loan Agreement, Borrowers shall not
request and Lenders shall have no obligation to make or continue any Prime Rate
Loans.

     

    5.    Amendment
Fee.  As consideration for Agent and Lenders to enter into this
Amendment, Borrowers shall pay to Agent, for the account of each Lender in
accordance with their respective Applicable Percentages of the Loans, an
amendment fee in an amount of $150,000 (the “Amendment Fee”).  The
Amendment Fee is due and payable in full upon execution of this
Amendment.  Borrowers agree that the Amendment Fee has been fully
earned by Agent and Lenders and is non-refundable.

     

    6.    Other
References.  All references in the Credit Agreement and all the
Loan Documents to the term “Loan Documents” shall mean the
Loan Documents as defined therein and this Amendment and any and all other
documents executed and delivered by Borrowers pursuant to and in connection
herewith.

     

    7.    Covenants
and Representations and Warranties.  Borrowers
hereby:

     

    7.1    ratify,
confirm and agree that the Credit Agreement, as amended by this Amendment, and
all other Loan Documents are valid, binding and in full force and effect as of
the date of this Amendment, and enforceable in accordance with their
terms.

     

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    7.2    agree that
they have no defense, set-off, counterclaim or challenge against the payment of
any sums owed or owing under the Loan Documents or the enforcement of any of the
terms of the Loan Documents.

     

    7.3    ratify,
confirm and continue all liens, security interests, pledges, rights and remedies
granted to Agent for the benefit of Lenders in the Loan Documents and agree that
such liens, security interests and pledges shall secure all of the Obligations
under the Loan Documents as amended by this Amendment.

     

    7.4    represent
and warrant that all representations and warranties in the Loan Documents are
true and complete as of the date of this Amendment.

     

    7.5    agree that
their failure to comply with or perform any of their covenants or agreements in
this Amendment will constitute a Default or an Event of Default under the Loan
Documents subject to applicable notice and cure periods set forth in Section
9.01 of the Credit Agreement.

     

    7.6    represent
and warrant that no condition or event exists after taking into account the
terms of this Amendment which would constitute a Default or an Event of
Default.

     

    7.7    represent
and warrant that the execution and delivery of this Amendment by Borrowers and
all documents and agreements to be executed and delivered pursuant to this
Amendment:

     

    (a)    have been
duly authorized by all requisite action of Borrowers;

     

    (b)    will not
conflict with or result in a breach of, or constitute a default (or with the
passage of time or the giving of notice or both, will constitute a default)
under, any of the terms, conditions, or provisions of any applicable statute,
law, rule, regulation or ordinance or any Borrower’s Articles of Incorporation
or By-Laws or any indenture, mortgage, loan or credit agreement or instrument to
which any Borrower is a party or by which it may be bound or affected, or any
judgment or order of any court or governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign; and

     

    (c)    will not
result in the creation or imposition of any lien, charge or encumbrance of any
nature whatsoever upon any of the property or assets of Borrowers under the
terms or provisions of any such agreement or instrument, except liens in favor
of Lenders.

     

    8.    No
Novation or Waiver.  Nothing contained herein constitutes a
novation of the Credit Agreement or any of the documents collateral thereto and
shall not constitute a release, termination or waiver of any of the liens,
security interests, rights or remedies granted to Agent and Lenders in the
Credit Agreement or any of the other Loan Documents, which liens, security
interests, rights or remedies are hereby ratified, confirmed, extended and
continued as security for all obligations secured by the Credit
Agreement.  Nothing contained herein constitutes an agreement or
obligation by Agent or Lenders to grant any further amendments to the Credit
Agreement or any of the other Loan Documents.

     

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    9.     Inconsistencies.  To
the extent of any inconsistency between the terms and conditions of this
Amendment and the terms and conditions of the Credit Agreement or the other Loan
Documents, the terms and conditions of this Amendment shall
prevail.  All terms and conditions of the Credit Agreement and the
other Loan Documents not inconsistent herewith, shall remain in full force and
effect and are hereby ratified and confirmed by Borrowers.

     

    10.    Binding
Effect.  This Amendment shall be binding upon and inure to the
benefit of the parties hereto and their respective permitted successors and
assigns.

     

    11.    No Third
Party Beneficiaries.  The rights and benefits of this Amendment
and the Loan Documents shall not inure to the benefit of any third
party.

     

    12.    Headings.  The
headings of the Sections of this Amendment are inserted for convenience only and
shall not be deemed to constitute a part of this Amendment.

     

    13.    Severability.  The
provisions of this Amendment and all other Loan Documents are deemed to be
severable, and the invalidity or unenforceability of any provision shall not
affect or impair the remaining provisions which shall continue in full force and
effect.

     

    14.    Modifications.  No
modifications of this Amendment or any of the Loan Documents shall be binding or
enforceable unless done in accordance with Section
11.01 of the Credit Agreement.

     

    15.    Law
Governing.  This Amendment has been made, executed and
delivered in the Commonwealth of Pennsylvania and will be construed in
accordance with and governed by the laws of such Commonwealth, without regard to
any rules or principles regarding conflicts of law or any rule or canon of
construction which interprets agreements against the draftsman.

     

    16.    Waiver of
Right to Trial by Jury.  EACH PARTY HERETO HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO THIS AMENDMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY).  EACH PARTY HERETO (a) CERTIFIES THAT NO REPRESENTATIVE,
AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE
THE FOREGOING WAIVER AND (b) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES
HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.

     

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    17.    Counterparts;
Facsimile Signatures.  This Amendment may be executed in any
number of counterparts, each of which when so executed and delivered shall be
deemed to be an original without the production of any other
counterpart.  Any signature delivered via facsimile or other
electronic means shall be deemed an original signature hereto.

     

    [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

     

     

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    IN WITNESS WHEREOF, the
parties hereto have executed this Amendment as of the date first above
written.

     

     

    
    

     

    
      	 	BORROWERS: 
	 	 	 
	 	TASTY
      BAKING COMPANY 
	 	 	 
	 	By: 	/s/  Eugene
      P. Malinowski 
	 	Name: 	Eugene
      P. Malinowski 
	 	Title: 	Vice President &
      Corporate Treasurer 
	 	 	 
	 	 	 
	 	 	 
	 	TASTYKAKE INVESTMENT
      COMPANY 
	 	 	 
	 	By: 	/s/  Eugene
      P. Malinowski     
	 	Name: 	Eugene
      P. Malinowski  
	 	Title: 	Treasurer   
	 	 	 
	 	 	 
	 	 	 
	 	TBC FINANCIAL SERVICES,
      INC. 
	 	 	 
	 	By: 	/s/  Eugene
      P. Malinowski    
	 	Name: 	Eugene
      P. Malinowski  
	 	Title: 	Treasurer   
	 	 	 
	 	 	 
	 	 	 
	 	TASTY BAKING OXFORD,
      INC. 
	 	 	 
	 	By: 	/s/  Eugene
      P.
  Malinowski      
	 	Name: 	Eugene
      P. Malinowski   
	 	Title: 	Treasurer    
	 	 	 
	 	 	 
	 	 	 
	 	AGENT: 
	 	 
	 	
              CITIZENS BANK OF
      PENNSYLVANIA,
      as

              Administrative Agent,
      Collateral Agent and L/C Issuer 

            
	 	 	 
	 	By: 	/s/  W.
      Anthony Watson   
	 	Name: 	W.
      Anthony Watson   
	 	Title: 	Senior
      Vice
      President         

    

     

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

     

    
      	 	
              CITIZENS
      BANK OF PENNSYLVANIA, as Lender 

            
	 	 	 
	 	By: 	/s/  W.
      Anthony Watson    
	 	Name:  	W. Anthony
      Watson 
	 	Title:  	Senior
      Vice President 
	 	 	 
	 	 	 
	 	 	 
	 	BANK OF AMERICA,
      N.A., as Lender 
	 	 	 
	 	By:  	/s/  Robert
      Fratta 
	 	Name:   	Robert
      Fratta  
	 	Title:  	Vice
      President 
	 	 	 
	 	 	 
	 	 	 
	 	SOVEREIGN BANK, as
      Lender 
	 	 	 
	 	By: 	/s/  Dennis
      Wasilewski 
	 	Name:  	Dennis
      Wasilewski   
	 	Title:  	Senior
      Vice President  
	 	 	 
	 	 	 
	 	 	 
	 	
              MANUFACTURERS AND TRADERS TRUST
      COMPANY, as
      Lender 

            
	 	 	 
	 	By:  	/s/  David
      W. Mills 
	 	Name:   	David W.
      Mills 
	 	Title:    	Vice
      President 

    

     

     

     

    9a5817595ex10c.htm

    Exhibit
10(c)

     

    MACHINERY
AND EQUIPMENT LOAN FUND

    LOAN
AGREEMENT

    

     

    THIS LOAN
AGREEMENT, MADE this 9th day of September, 2008, effective as of September 9,
2008 (the "Effective Date"), BY AND BETWEEN TASTY BAKING COMPANY, a corporation
organized and existing under the laws of the Commonwealth of Pennsylvania and
having an address of 3413 Fox Street, Philadelphia, PA  19129 (the
"Borrower") and THE COMMONWEALTH OF PENNSYLVANIA, acting by and through the
DEPARTMENT OF COMMUNITY AND ECONOMIC DEVELOPMENT, having its principal place of
business at Commonwealth Keystone Building, 400 North Street, Fourth Floor,
Harrisburg, Pennsylvania  17120 (the "Department").

     

    NOW,
THEREFORE, the parties hereto, in consideration of the mutual promises herein
contained, and intending to be legally bound hereby, covenant and agree as
follows:

    

    ARTICLE
I

    DEFINITIONS AND
BACKGROUND

    

    Section
1.01.    When used herein the
following words and phrases shall have the following meanings:

    "Act"
means Chapter 29 of the Job Enhancement Act, Act of February 12, 2004, No. 12,
P.L. 99, codified at 12 P.S. § 2901 et seq.

    "Application"
means the application for the Loan submitted by the Borrower to the Department,
including all attachments and exhibits thereto.

    "CERCLA"
means The Comprehensive Environmental Response, Compensation and Liability Act
of 1980, as amended.

    "Collateral"
means that certain machinery and equipment the Borrower has purchased or intends
to purchase or has upgraded or intends to upgrade for use at the Premises as
more fully described at Exhibit “A”, which is incorporated herein by reference
and made a part hereof .

     

    
      
        
        

      

      
        
          Final
- Loan Agreement

          Page 1 of
40

        

        
          

        

      

      
        
        

      

    

     

    "Commitment"
means the Department's letter of August 21, 2007, setting forth its agreement to
make the Loan, and the conditions under which the Loan would be
made.

     

    "Control"
shall mean the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of a person, whether through
the ownership of voting securities, by contract or otherwise.

     

    "Cost" or
"Costs" means the costs of the purchase and installation of the
Collateral.

     

    "Due
Inquiry" shall mean that the Borrower, consistent with good commercial or
customary practice, has caused to be made by a responsible officer or agent of
the Borrower appropriate inquiry among those directors, officers, employees,
agents, accountants and attorneys for the Borrower who might reasonably be
expected to have knowledge of the particular matter and, when such matter
includes the condition of the Collateral, the Premises or other facility, has
further undertaken appropriate inquiries into the present and past ownership and
uses thereof.

     

    "Eligible
Activity" means manufacturing, industrial processes, mining, Production
Agriculture, information technology, biotechnology, services as a Medical
Facility or other industrial or technology sectors as defined by the
Department.

     

    "Environmental
Laws" shall mean The Comprehensive Environmental Response, Compensation and
Liability Act of 1980, the Superfund Amendments and Reauthorization Act of 1986,
The Resource Conservation and Recovery Act of 1976, as amended by the Hazardous
and Solid Waste Amendments of 1984, The Clean Water Act, The Toxic Substances
Control Act, The Clean Air Act, the Pennsylvania Hazardous Sites Cleanup Act,
the Pennsylvania Solid Waste Management Act, the Pennsylvania Storage Tank and
Spill Prevention Act, the Pennsylvania Worker and Community Right to Know Act,
the Pennsylvania Clean Streams Law, as amended, or any rule or regulation
promulgated pursuant to any of the foregoing statutes, or any other applicable
law, statute, rule, regulation or ordinance regulating the manufacture, use,
possession, discharge or disposal of substances injurious to the natural
environment or to human health, whether federal, state or local.

     

    "ERISA"
means the Employee Retirement Income Security Act of 1974, as
amended.

     

    "Event of
Default" means those occurrences listed in Section 7.01 herein.

     

    
      
        
        

      

      
        
          Final
- Loan Agreement

          Page 2 of
40

        

        
          

        

      

      
        
        

      

    

     

    "First
Lien" means the lien on the Collateral held by the First Lien Holder to secure
$46,000,000 of the aggregate maximum principal amount of $100,000,000, as set
forth in the Intercreditor Agreement.

     

    "First
Lien Holder" means Citizens Bank of Pennsylvania in its capacity as agent for
the Senior Lenders as defined in the Intercreditor Agreement and its successors
and/or assigns.

     

    "Hazardous
Materials", shall include, without limitation, asbestos (including, without
limitation, asbestos in friable form), polychlorinated biphenyls, petroleum
products, flammable or explosive materials, radioactive materials, hazardous
materials, hazardous waste, hazardous or toxic substances or related materials,
each as defined under or pursuant to any Environmental Law.

     

    "Indemnified
Party" means the Department and its employees and agents, including, without
limitation, any engineer or environmental consultant retained by the
Department.

     

    "Intercreditor
Agreement" means the Intercreditor and Collateral Sharing Agreement effective as
of the Effective Date by and among the Department, the First Lien Holder,
Philadelphia Industrial Development Corporation and the Borrower.

     

    “Lease”
means that certain lease entered into between Borrower and L/S THREE CRESCENT
DRIVE, LP, dated June 15, 2007, for office space at temporary address of 3
Crescent Drive (pending final subdivision with the City of Philadelphia) at the
Philadelphia Navy Yard in the City of Philadelphia.

     

    "Loan"
means a loan in the maximum principal amount of Five Million Dollars
($5,000,000) to be used exclusively by the Borrower to defray a portion of the
Cost not to exceed 50%.

     

    "Loan
Documents" means this Loan Agreement, the Note, the Security Agreement,
Intercreditor Agreement, the opinions of counsel hereinafter referred to, and
all other agreements, instruments and documents to be delivered
hereunder.

     

    “Material
Adverse Effect” means (a) a material adverse change in, or a material adverse
effect upon, the operations, business, properties, liabilities (actual or
contingent), or condition (financial or otherwise) of Borrower taken as a whole,
(b) a material impairment of the ability of any Borrower to perform its
obligations under any Loan Document to which it is a party, or (c) a material
adverse effect upon the legality, validity, binding effect or enforceability
against any Borrower of any Loan Document to which it is a party or the rights
of the Department thereunder.

     

    
      
        
        

      

      
         Final
- Loan Agreement

          Page 3 of
40

        

        
          

        

      

      
        
        

      

    

     

    “Navy Yard
Project” means the Premises and the office facilities leased by Borrower under
the Lease and located at the temporary address of 3 Crescent Drive (pending
final subdivision with the City of Philadelphia) at the Philadelphia Navy Yard
in the City of Philadelphia.

     

    "Note"
means the $5,000,000 promissory note given by the Borrower to the Department,
effective as of the Effective Date.

     

    “Obligations”
means all advances to, and debts, liabilities, obligations, covenants and duties
of, the Borrower arising under any of the Loan Documents, the loan documents
executed in connection with any future or past loans or otherwise with respect
to any loan, whether direct or indirect (including those acquired by
assumption), absolute or contingent, due or to become due, now existing or
hereafter arising and including interest and fees that accrue after the
commencement by or against the Borrower of any proceeding under any Bankruptcy
Laws naming such Borrower as the debtor in such proceeding, regardless of
whether such interest and fees are allowed claims in such
proceeding.

     

    "Participation
Percentage" means fifty percent (50%).

     

    "Premises"
means a tract of land located at the temporary address of 4300 South 26th Street
(pending final subdivision with the City of Philadelphia) at the Philadelphia
Navy Yard in the City of Philadelphia, Philadelphia County, Pennsylvania as
described in more detail on Exhibit B.

     

    "Production
Agriculture" means the management and use of a normal agricultural operation for
the production of a farm commodity.

     

    "Project"
means the purchase and installation of new machinery and equipment or the
upgrade of existing machinery and equipment that is directly related to the
business process.

     

    "Security
Documents" means the Security Agreement and financing statements given by the
Borrower to the Department which constitutes not less than a shared first lien
upon the Collateral with the First Lien Holder, subject to the Intercreditor
Agreement.

     

    
      
        
        

      

      
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    “UCC”
means the Pennsylvania Uniform Commercial Code as codified at 13 Pa.C.S.A.§
9101, et seq.

     

    Section
1.02.    The Borrower has
purchased or intends to purchase or has upgraded or intends to upgrade certain
machinery and equipment for use at the Premises.  The Borrower has
filed with the Department the Application and accepted from the Department
the Commitment for the Loan, to be used exclusively to defray a portion of the
Cost.  The Department is willing to make the Loan upon the terms and
subject to the conditions hereinafter set forth.

    

    ARTICLE
II

    THE LOAN

    

    Section
2.01.      The
Loan.  Subject to the conditions set forth herein, the
Department agrees to make the Loan to the Borrower, and the Borrower agrees to
accept the Loan from the Department, for the purposes set forth in the
Application.

    

    ARTICLE
III

    THE NOTE AND SECURITY
DOCUMENTS

     

    

    Section
3.01.      The
Note.  The Loan shall be evidenced by the Note, which shall be
executed by the Borrower.

     

    Section
3.02.      The Security
Documents.  Payment of the Note and satisfaction of the
Obligations shall be secured by a perfected security interest in the Collateral
given by the Borrower to the Department under the Security
Documents.  The Security Documents shall be dated the date of the Note
and shall create a perfected first lien upon the Collateral shared only with the
First Lien subject to and as set forth in the Intercreditor Agreement and the
lien in favor of the Department as security for the $5,000,000 MELF loan
(#26-9-856), which closed on September 6, 2007.  At all times until
the Obligations have been paid in full, the Borrower agrees that whatever right,
title and interest which it and its successors and assigns may have in and to
the Collateral shall be, and the same are hereby expressly made subject and
subordinate to the lien of the Security Documents and any other judgment, lien
or encumbrance pursuant to the Note, the Security Documents or this Loan
Agreement.

    
      
        
        

      

      
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    ARTICLE
IV

    REPRESENTATIONS AND
WARRANTIES OF THE BORROWER

    

    The
Borrower makes the following representations and warranties to the Department,
which shall survive and continue until the Loan is paid in full and all of the
Borrower’s obligations hereunder have been satisfied:

     

    Section
4.01.    Organization.  The
Borrower is a corporation validly existing and in good standing under the laws
of the Commonwealth of Pennsylvania.

     

    Section
4.02.    Power and
Authority.  The Borrower has all necessary power and authority
to purchase, own, encumber, and sell its property and to carry on its business
as now being conducted, and to carry out the transactions contemplated by the
Loan
Documents.

     

    Section
4.03.    Loan Documents Consistent
with Law and Agreements.  The execution and delivery of this
Agreement and of each of the Loan Documents to be executed and delivered by the
Borrower, consummation of the transactions herein contemplated, and compliance
with the terms and provisions hereof and of the Loan Documents which Borrower
has executed and delivered or to which it is otherwise subject do not (i)
contravene any provision of law, statute, rule or regulation to which Borrower
is subject or any judgment, decree, franchise, order or permit applicable to
the  Borrower or (ii) conflict with, or result in, a breach of any of
the terms, conditions or provisions of the organizational documents of the
Borrower, or of any material agreement, indenture or other instrument to which
the Borrower is a party or by which it is bound or to which it or its property
is subject.

     

    Section
4.04.    Due
Authorization.  The execution, delivery and performance of this
Agreement, the performance of the transactions contemplated by the provisions
hereof, and the execution, issuance and delivery of each of the Loan Documents
to be executed and delivered by the Borrower hereunder have each been duly
authorized by all necessary action on the part of the Borrower.

     

    
      
        
        

      

      
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    Section
4.05.    Execution and
Delivery.  This Agreement and each of the Loan Documents being
executed and delivered by Borrower concurrently herewith have been duly and
validly executed and delivered by the Borrower and constitute valid and legally
binding obligations of the Borrower, enforceable in accordance with their
respective terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency or other substantially similar laws of general
application relating to or affecting the enforcement of creditors' rights or by
general principles of equity.

     

    Section
4.06.      Litigation.  There
is no material litigation or governmental proceeding pending or, to the
knowledge of the Borrower, threatened against the Borrower, which if
determined  adversely, could reasonably be expected to have a
Materially Adverse Effect, other than that which has been previously disclosed
to the Department in writing.  If such litigation or proceeding exists
or is threatened, it shall be set forth in Exhibit C attached hereto and made a
part hereof.

     

    Section
4.07.      Taxes.  The
Borrower has filed all required federal, state and local tax returns and has
paid all taxes shown on such returns as such taxes have become due unless the
obligation to file such return or pay such tax is the subject of a pending
administrative or judicial appeal or proceeding with respect to which the
Borrower has set aside adequate reserves in accordance with GAAP.

     

    Section
4.08.    No Default For Borrowed
Money.  No default with respect to any agreement pursuant to
which the Borrower has borrowed money or guaranteed the obligations of others
has occurred and is continuing as of the date hereof nor has any such event
occurred which with the passage of time and/or giving of notice would constitute
such a default.

     

    Section
4.09.    Financial Statements and
Financial Condition.  All financial statements of the Borrower
(including all related notes) and all supplementary financial information
delivered to the Department fairly present what they purport to present as of
the dates and for the respective fiscal periods presented, and were prepared in
accordance with generally accepted accounting principles consistently applied,
except as disclosed in such financial statements. The Borrower has no material
liabilities, direct or indirect, fixed or contingent, as of the date of such
financial statements which are not reflected therein.  There has been
no material adverse change in the financial condition of the Borrower from that
disclosed in the most recent annual financial statements delivered to the
Department prior to the initial approval of the Loan by the
Department.

     

    
      
        
        

      

      
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    Section
4.10.    Employee
Benefits.  Any employee pension benefit plans and employee welfare
benefit plans, collectively referred to as employee benefit plans, within the
meaning of ERISA maintained by the Borrower or any subsidiary of the Borrower
comply in all material respects with the reporting and disclosure and fiduciary
responsibility provisions of Title I of ERISA.

     

    Section
4.11.      Environmental
Violations.  Any transportation, storage, handling or usage of
Hazardous Materials by the Borrower, whether on the Premises or otherwise, has
been in compliance with all Environmental Laws.  Borrower further
represents and warrants that, to the best of its knowledge, no spill, release,
discharge, or disposal of Hazardous Materials has occurred on the Premises to
date, and that the soil and groundwater on the Premises are free of Hazardous
Materials except as disclosed by that certain Phase I Environmental Report
relating to the Premises conducted by Dewberry & Davis, LLC, dated January
2007.

     

    Section
4.12.    Bankruptcy,
etc.  The Borrower has not within seven (7) years prior to
the date hereof filed any voluntary petition for relief under the U.S.
Bankruptcy Code.

     

    Section
4.13.    Criminal
Convictions.  Neither the Borrower nor any owner, director,
officer or person employed or engaged by the Borrower in a senior management
capacity or as a manager or comptroller, has been convicted by any court of any
felony or any misdemeanor involving theft, dishonesty, deception, false
swearing, or the filing or submission of any false or misleading information to
any agency of government.

     

    Section
4.14.    No Consent
Required.  No consent or approval to the execution and
performance of this Agreement and the transactions contemplated hereby not
already obtained is required to be obtained by the Borrower from any
governmental body, authority, agency, court or other person or entity, public or
private, other than the Department.

     

    Section
4.15.    No Removal of
Jobs.  The establishment of the Project by the Borrower at the
Premises will not cause the removal of any business operation from one area of
Pennsylvania to another area of Pennsylvania.

     

    
      
        
        

      

      
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    Section
4.16.    Eligible Activity at the
Premises.  The Borrower engages in an Eligible Activity at the
Premises.

     

    
      
        
        

      

      
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    ARTICLE
V

    BORROWING PROCEDURES AND
AGREEMENTS

    

    Section
5.01.    Conditions Precedent to All
Advances.  The obligation of the Department to make the initial
advance of the proceeds of the Loan to the Borrower and to make each subsequent
advance thereof is subject to the satisfaction of the following conditions
precedent at the time of each such advance:

     

    (a)    The Borrower
has satisfied all conditions set forth in the Commitment, the closing
requirements transmitted by the Department’s counsel to the Borrower’s counsel
following issuance of the Commitment have been satisfied; if applicable, the
conditions regarding Property Coverage set forth in Section 6.11 of this
Agreement have been satisfied; the Loan Documents shall have been properly
executed and, where appropriate, delivered to the Department; and the Security
Documents and any other document requested to be filed or recorded by the
Department shall have been duly acknowledged and delivered for filing or
recording in the appropriate public office.

     

    (b)    The Borrower
shall submit to the Department a bringdown of the UCC searches showing that no
new liens have been filed against the Collateral prior to the initial
disbursement only.

     

    (c)    Each and all
of the representations and warranties of the Borrower set forth in Articles IV
hereof, and in any of the other Loan Documents, shall be true and correct in all
respects, as though separately and independently made on and as of the date of
each such advance.

     

    (d)    There shall
be no event of default under any of the Loan Documents or any event which, with
the passage of time or the giving of notice, or both, could constitute an event
of default under any of the Loan Documents.

     

    (e)    There shall
have been no material adverse change in the financial condition of the Borrower
from that disclosed in financial statements heretofore delivered to and approved
by the Department.

     

    
      
        
        

      

      
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    (f)    In the event
there is any material change in the Project, Department may refuse to make
further advances under this Agreement until the matter is resolved to the
Department's reasonable satisfaction, whether or not the Department has declared
an Event of Default hereunder or such revocation, rescission, suspension, or
material adverse effect would comprise an Event of Default
hereunder.

     

    The
Borrower agrees that by making a request for an advance hereunder, the Borrower
shall be deemed to be reconfirming to the Department that all representations
and warranties of the Borrower set forth in this Agreement and all related
instruments, agreements and documents remain true and correct as of the date of
each request.

     

    Section
5.02.    Deadline for Requesting
Disbursements.  Unless otherwise agreed to by the Department,
the Borrower shall comply with the conditions stated in Section 5.01, and submit
a request or requests to the Department for disbursement of one hundred percent
(100%) of the Loan by the end of the twenty-fourth full calendar month following
the Effective Date. If the Borrower fails to comply with this deadline the
Commitment shall be automatically terminated and no further disbursements will
be permitted.

    

    ARTICLE
VI

    BORROWER'S
COVENANTS

    

    Until the
Loan has been entirely repaid and all of Borrower's obligations to the
Department in connection therewith and herewith have been satisfied, the
Borrower hereby covenants that:

     

    Section
6.01.    Use of
Proceeds.  The Borrower shall use the proceeds of the Loan
solely for the purpose of defraying a portion of the Cost.

     

    Section
6.02.    Preservation of
Existence.  The Borrower will (a) maintain and preserve its
existence as a corporation and the right to carry on its Eligible Activity at
the Premises, and (b) take all reasonable action to maintain all necessary
licenses, franchises, permits and other documents necessary or appropriate in
connection therewith and all necessary renewals and extensions thereof, provided
that failure to do so could not reasonably be expected to have a Material
Adverse Effect.

     

    Section
6.03.    Debt Secured by
Collateral.  Without the prior written consent of the
Department, the Borrower shall not take any action to cause or permit any lien
or encumbrance to be placed against the Collateral or any interest therein,
except such liens and encumbrances which replace or refinance the First Lien or
except such liens and encumbrances as may be expressly permitted by the Security
Documents or the Intercreditor Agreement.

     

    
      
        
        

      

      
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    Section
6.04.    Nondiscrimination/Sexual
Harassment.  The Borrower and its subsidiaries will not
discriminate against or intimidate any employee or any applicant for employment
because of gender, race, creed, or color, in any manner, including but not
limited to the following activities:  employment; upgrading, demotion
or transfer; recruitment or recruitment advertising; layoff or termination;
rates of pay or other forms of compensation; and selection for training,
including apprenticeship.  The Borrower hereby accepts and agrees to
be bound by the nondiscrimination/sexual harassment provisions set forth in
Exhibit "E" hereto, and will cause comparable nondiscrimination/sexual
harassment provisions to be inserted into all Project contracts.

     

    Section
6.05.    Filing and Other
Costs.  The Department may require the Borrower to pay the costs of
filing or recording and any other reasonable costs that the Department may incur
in connection with closing and administration of the Loan.

     

    Section
6.06.    Inspection.  Subject
to Borrower’s rights under the Lease, the Borrower shall provide proper
facilities at reasonable times during normal business hours for inspection of
the Project before and after completion thereof by the Department and the
Department's authorized representatives (including, without limitation, any
engineer or environmental consultant retained by the Department), and afford
full and free access to the Project and Premises to such persons as may from
time to time be designated by the Department.

     

    Section
6.07.    Operations and Number of
Jobs.  The Borrower will retain at the Navy Yard Project no
less than 455 jobs and a total of 494 jobs in Pennsylvania within three years
from the Effective Date.

     

    (a)    A breach by
the Borrower of this Section 6.07 shall be an Event of Default under this Loan
Agreement.  The remedies of the Department for an Event of Default
arising solely from a breach by the Borrower of this Section 6.07 are governed
by Section 7.03 of this Loan Agreement.

     

    
      
        
        

      

      
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    (b)    The
Department Policy For Failure to Meet Job Projections (the "Department Policy")
is incorporated herein by reference and is attached hereto as Exhibit D and the
Department may, in compliance with the Department Policy and such other
regulations and statements of policy, if any, as are then in effect, raise the
rate of interest on the Loan as permitted under the Note.

     

    (c)    The Borrower
shall be required to meet job projections within the three (3) year period
referred to above and shall not be penalized if there is a reduction in the
number of jobs once the projections have been achieved even if such reduction
occurs within the three (3) year period.

     

    Section
6.08.    Certificate re
Jobs.  The Borrower will annually provide the Department with a
certificate executed by an authorized officer setting forth the number of
employees, and their respective job classifications (skilled, semi-skilled and
unskilled), employed by the Borrower or any subsidiary during the previous year
at the Premises, together with such other related information as the Department
may reasonably request.

     

    Section
6.09.    Employee Benefit
Plans.  To the extent that the Borrower maintains any employee
benefit plans subject to the requirements of ERISA, the Borrower and its
subsidiaries shall:  (1) fund all of its employee pension benefit
plans, to the extent required, in accordance with the minimum funding standards
of Section 302 of ERISA and Section 412 of the Internal Revenue Code of 1986
(the "Code"), except where the failure to do so would not have a material
adverse effect on the continuing operations of the Borrower; (2) make all
payments of contributions to all employee benefit plans within the time periods
established in ERISA and the Code, except where the failure to do so would not
have a material adverse effect on the continuing operations of the Borrower; (3)
furnish the Department, upon its request, with copies of all reports or other
statements filed with the United States Department of Labor, the Internal
Revenue
Service or the Pension Benefit Guaranty Corporation, or any other agencies,
whether federal, state, or local, with respect to all employee benefit plans;
(4) advise the Department within thirty days of the occurrence of any
"reportable event" or "prohibited transaction," within the respective meanings
of these terms in ERISA and the Code, with respect to any employee benefit plan
to which the Borrower contributes, potentially having a material adverse effect
on the continuing operations of the Borrower; (5) promptly advise the Department
of any audit or investigation of any employee benefit plans by the Internal
Revenue Service or Department of Labor or any other governmental agency or any
threatened or proposed action by any such agency affecting the status of, and
deductibility of contributions to, any employee benefit plans, potentially
having in any such case a material adverse effect on the continuing operations
of the Borrower.

     

    
      
        
        

      

      
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    Section
6.10.    Environmental
Compliance.  The Borrower shall comply with all Environmental
Laws.

     

    Section
6.11.    Insurance.  Upon
installation of the Collateral at the Premises, the Borrower shall provide the
Department with evidence that the Borrower and/or the owner of the Premises has
the Property Coverage set forth in Section 3 (a) (i) of the Security
Agreement.  Upon commencement of operations at the Premises, the
Borrower shall provide the Department with evidence that the Borrower has
obtained the Property Coverage set forth in Section 3 (a) (i) of the Security
Agreement . The Borrower shall annually submit to the Department evidence of its
compliance with the Department's insurance requirements set forth in the
Security Agreement.

     

    Section
6.12.    Compliance with Agreements
and Laws; Payment of Obligations.  The Borrower will act in
accordance with all applicable agreements, laws, rules, regulations, orders,
judgments, injunctions, decrees, resolutions, permits, franchises,
determinations or awards of any administrative or governmental authority or
administrative or governmental organization, non-compliance with which could
have a Material Adverse Effect. The Borrower will pay and discharge all bills,
claims and charges relating to the Project or the Premises, including without
limitation claims for taxes and claims of laborers, mechanics and materialmen
(collectively, "Project Claims"), prior to the time the holder of any Project
Claim lawfully may cause any judgment or writ of execution to be filed or lodged
against the Premises as a result of such Project Claim except in such instances
in which such Project Claim is being contested in good faith by appropriate
proceedings diligently conducted.

     

    Section
6.13.    Financial
Statements.  During the term of the Loan, the Borrower will
provide the Department with:

     

    
      
        
        

      

      
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    (a)    financial
statements for the Borrower within one hundred twenty (120) days after the close
of each fiscal year including balance sheets, statements of income and
reconciliations of equity, in accordance with generally accepted accounting
principles, reviewed by an independent certified public accountant satisfactory
to the Department, provided that if the Borrower is a corporation subject to the
reporting requirements of the Exchange Act, the relevant entity's obligation
under this paragraph shall be satisfied by delivery to the Department of the
financial statements required to be filed by the Borrower under the Exchange Act
in its annual reports;

     

    (b)    with
reasonable promptness, such other information respecting the business,
operations and condition (financial or otherwise) of the Borrower as the
Department may from time to time reasonably request, including information
relating to the Project; and

     

    (c)    with
reasonable promptness, after it becomes known to the Borrower, reasonably
complete information on material adverse developments which may reasonably be
expected to threaten the completion or continued operation of the
Project.

     

    The
Department will not disclose any confidential information submitted to it by the
Borrower pursuant to this Section 6.13 to any third party, except as may be
required by applicable law or court order, or to fulfill the requirements of the
Act.

     

    Section
6.14.    Compliance
Certificates.  If the Department shall so request, the Borrower
will provide the Department with annual Compliance Certificates, executed (in
the case of entities other than natural persons) by officers authorized to
execute and deliver the same, within 120 days of each fiscal year's end reciting
compliance with representations, warranties and covenants.

     

    Section
6.15.    Accuracy of Information
Supplied.  The Borrower will ensure that all information
prepared by the Borrower and supplied to the Department or any third party under
the provisions of this Agreement for the purpose of any report or certificate to
be furnished to the Department in connection with this Agreement or any of the
Loan Documents will at the time it is supplied be true and accurate in all
material respects, except that (i) financial statements and other statements
expressly effective as of a particular date prior to the date when furnished are
required only to be true and accurate or (in the case of financial statements)
fairly to present what they purport to present, in either case as of the
effective date thereof, and (ii) to the extent any such information is based
upon or constitutes a forecast, projection or other data which by its nature is
uncertain, the Borrower is committed only to act in good faith and utilize due
and careful consideration and the best information then known to it in preparing
such information.  With respect to all information prepared by third
parties and supplied by the Borrower to the Department and/or any third party
under the provisions hereof for the purpose of any report or certificate to be
furnished to the Department in connection with this Agreement or any of the Loan
Documents, the Borrower shall deliver a written notice to the Department as soon
as possible if it believes that such information is not complete and accurate in
all material respects, which written notice shall include the basis for such
belief.

     

    
      
        
        

      

      
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    Section
6.16.    Notice of
Defaults.  The Borrower will give prompt notice to the
Department of the occurrence of any Event of Default under the Loan Documents
either on its part, or on the part of the Borrower of which the Borrower becomes
aware.

     

    Section
6.17.    Further
Assurances.  The Borrower will make, execute or endorse, and
acknowledge and deliver or file, all such vouchers, invoices, notices and
certifications and additional agreements, undertakings, conveyances, transfers,
assignments, financing statements, continuation statements or further
assurances, and take any and all such other actions, as the Department may
reasonably deem necessary or advisable from time to time in connection with the
Loan or the Loan Documents to assure or confirm to the Department and perfect
all or any part of the security for the Loan and any other obligations of the
Borrower.

     

    Section
6.18.    Indemnification.  The
Borrower hereby indemnifies and holds harmless the Indemnified Party from and
against any and all claims, damages, losses, liabilities, costs or expenses
(including all reasonable fees or expenses resulting from the settlement of any
claims or liabilities and reasonable attorneys' fees) (collectively,
"Indemnified Claims") whatsoever which the Indemnified Party may incur (or which
may be claimed against the Indemnified Party by any person or entity whatsoever)
by reason of or in connection with (a) the issuance of the Loan, (b) any breach
by the Borrower of any representation, warranty, covenant, term or condition in,
or the occurrence of any default under, this Agreement or the Loan Documents,
and (c) involvement of the Indemnified Party in any legal suit, investigation,
proceeding, inquiry or action as a consequence, direct or indirect, of the
Department's issuance of the Loan, the Department's or the Borrower's entering
into this Agreement or any of the Loan Documents or any other event or
transaction contemplated by any of the foregoing; provided, however, that (i)
the Indemnified Party shall within sixty (60) days of becoming aware of (A) its
actual or potential liability for any Indemnified Claim or (B) the formal
assertion against it in writing of any Indemnified Claim, have notified the
Borrower in writing of such Indemnified Claim and tendered to the Borrower the
defense of such claim; (ii) that no Indemnified Claim shall be paid or
compromised without the consent of the Borrower, which shall not unreasonably be
withheld, by a notice in writing to the Indemnified Party, to the payment or
compromise of such Indemnified Claim within 10 calendar days after the
Indemnified Party has given to the Borrower notice of the proposed payment or
compromise thereof, and (iii) the Borrower shall not be required to indemnify an
Indemnified Party hereunder for any claims, damages, losses, liabilities, costs
or expenses to the extent, but only to the extent, caused by the negligence or
willful misconduct of such Indemnified Party.

     

    
      
        
        

      

      
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    Except as
set forth in subclause (iii) of the immediately preceding paragraph, the
liability under this Section 6.18 shall in no way be limited or impaired by (i)
any extension of time for performance required by any of the Loan Documents,
(ii) any sale, assignment or foreclosure of the Note or any sale or transfer of
all or part of the Collateral or the Premises, (iii) the discharge of the Note,
(iv) any exculpatory provisions in any of the Loan Documents limiting the
Department's recourse to any other security, (v) the accuracy or inaccuracy of
the representations and warranties made by the Borrower; (vi) the release of the
Borrower or any other person from performance or observance of any of the
agreements, covenants, terms or conditions contained in any of the Loan
Documents by operation of law, the Department's voluntary act (other than the
execution and delivery by the Department of an instrument of release expressly
and specifically referring to Borrower's indemnification obligations), or
otherwise, (vii) the release or substitution in whole or in part of any security
for the Note; or (viii) the Department's failure to file any mortgage or
UCC financing statements (or the Department's improper filing of any
thereof) or to otherwise perfect, protect, secure or insure any mortgage,
security interest or lien given as security for the Note; and, in any such case,
whether with or without notice to the Borrower and with or without
consideration.

     

    
      
        
        

      

      
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    The
indemnity provisions contained in this Section 6.18 hereof shall survive any
judicial foreclosure, foreclosure by power of sale, deed in lieu of foreclosure,
transfer of the property by the Borrower or the Department, and payment of the
Loan in full, provided, however, that such indemnity provisions shall at no time
accrue to, or be construed to benefit, any other third-party entity (other than
an Indemnified Party or a successor in interest or assign of the Department) no
matter how such other third-party entity obtains title or any interest in the
Project or Premises.

     

    The
liability covered by the indemnity provision shall include, but not be limited
to, losses sustained by an Indemnified Party for (i) amounts owing under the
Loan and the Loan Documents, (ii) amounts arising out of personal injury or
death claims, (iii) amounts charged to an Indemnified Party for any
environmental or Hazardous Materials clean up costs and expenses, liens, or
other such charges or impositions, (iv) payment for fees, court costs,
environmental tests and design studies, and (v) any other amounts reasonably
expended by an Indemnified Party.

     

    Section
6.19.    Payment.  The
Borrower will make all payments required to be made by it to the Department, at
such address as the Department may specify from time to time.

     

    Section
6.20.    Negative
Covenants.

     

    (a)    Without the
prior written consent of the Department, the Borrower shall not permit, allow or
suffer to exist, any lien or encumbrance to be placed against the Collateral or
any interest therein or enter into any agreement requiring, contemplating or
providing for placement of any such lien or encumbrance, except (i) liens and
encumbrances expressly provided for in the Application and the Intercreditor
Agreement  and (ii) that the terms of this Section 6.19(a) shall not
be deemed to prohibit execution of any note or credit instrument not providing
for any specific lien against the Collateral but permitting confession of
judgment against the Borrower subsequent to an event of default thereunder so
long as judgment is not confessed thereunder.

     

    (b)    The Borrower
will not change its name without notice to the Department.

     

    (c)    Without the
prior written consent of the Department, the Borrower shall not merge or
consolidate with any other corporation or other entity or dispose of all or any
substantial portion of its assets, except in the ordinary course of business,
unless the Borrower
or the surviving corporation, as the case may be, shall have a tangible net
worth (after giving effect to such merger, consolidation or sale of assets) not
less than that shown in the most recent audited financial statements for the
Borrower, as the case may be, delivered to the Department, and, if a corporation
different from the Borrower, shall have expressly assumed the obligations of the
Borrower hereunder.  Notwithstanding the foregoing, Borrower may merge
with a subsidiary without the prior written consent of the Department provided
that (i) the Borrower shall survive and (ii) no Event of Default exists or would
result from the merger.

     

    
      
        
        

      

      
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    (d)    Without prior
written notice to the Department, the Borrower shall not take any corporate
action to permit or facilitate any change in control from that set forth in the
Application.

    

    ARTICLE
VII

    EVENTS OF
DEFAULT

    

    Section
7.01.    Events of
Default.  The following shall each constitute an Event of
Default hereunder:

     

    (a)    Payment
Default.  The Borrower shall fail to pay when due any amount
payable under any of the Loan Documents and such failure shall continue for a
period of thirty (30) days;

     

    (b)    False
Representation.  Any representation, warranty or statement made
by the Borrower herein or in the Application or in any of the Loan Documents or
in any certificate or financial or other statement furnished pursuant to the
provisions of any of the Loan Documents or the Application (except for any
representation, warranty or statement expressly made effective as of a date
prior to the date when made or furnished), shall have been false or misleading
in any material respect when made or deemed made;

     

    (c)    Borrower
Insolvency.  The Borrower shall (i) become insolvent, (ii)
admit its inability to pay its debts as they come due, (iii) make an assignment
to the benefit of its creditors, (iv) be adjudicated bankrupt or insolvent, (v)
voluntarily initiate proceedings under any bankruptcy or reorganization law
either now or hereafter in effect, (vi) become the subject of any involuntary
proceedings under any bankruptcy or reorganization law either now or hereafter
in effect that shall not have been discharged within ninety (90) days of the
initiation thereof, or (vii) seek to take advantage of any moratorium law either
now or hereafter in effect;

     

    
      
        
        

      

      
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    (d)    Receiver
Appointed.  A receiver, liquidator or trustee shall be
appointed for the Borrower and shall not have been discharged within ninety (90)
days;

     

    (e)    Covenant
Default.  The Borrower shall fail to observe or perform any of
the terms, covenants, promises and agreements on the Borrower’s part to be
observed and performed under this Agreement or under the Note, Security
Agreement or any of the other Loan Documents and such failure continues for
thirty (30) days after written notice;

     

    (f)    Default Under Other
Financing.  A default in the due and punctual payment of
principal or interest or the due and punctual observance or performance of any
covenants or agreements on any loan or debt instrument;

     

    (g)    Collateral
Default.  The Collateral is (i) sold, leased, liened or
encumbered without the prior written consent of the Department, which consent
shall not be unreasonably withheld, except those liens or encumbrances permitted
under the Intercreditor Agreement; (ii) the Collateral is seized or levied upon
under any legal or governmental process against the Debtor or against the
Collateral; (iii) the Collateral is lost, stolen, or moved from the Premises
without the consent of the Department, provided that Borrower may dispose of any
obsolete or worn-out Collateral, whether now owned or hereinafter acquired in
the ordinary course of business; (iv) the Collateral is substantially damaged or
destroyed, and such damage is not covered by insurance; or

     

    (h)    Change in the
Project. The Borrower makes substantial changes to or does not complete
the Project as described in the Application, and such changes have a Material
Adverse Effect.  Notwithstanding the foregoing, if such change affects
the eligibility of the Borrower under the Act or the guidelines promulgated by
the Department, even if it is not deemed to have a Material Adverse Effect, the
change in Project shall be an Event of Default.

     

    
      
        
        

      

      
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    Section
7.02.    Remedies Upon an Event of
Default.  Immediately and without further notice to the
Borrower, upon the occurrence of an Event of Default, other than an Event of
Default, arising solely from a breach by the Borrower of Section 6.07
"Operations and Number of Jobs" pertaining to job creation or retention, the
Department, or any subsequent holder of the Note, may, subject to the
Intercreditor Agreement, exercise any one or more of the following
remedies:

     

    (a)    cease making
any further disbursements of advances hereunder;

     

    (b)    declare the
Note and interest accrued thereon and all liabilities of the Borrower thereunder
to be immediately due and payable, and the same shall thereupon become and be
due and payable;

     

    (c)    raise the
rate of interest on the Loan as provided in the Note;

     

    (d)    bring an
action against the Borrower under the Note; or

     

    (e)    exercise any
other remedy available to it under any of the Loan Documents or applicable law,
including the Pennsylvania Uniform Commercial Code.

     

    Except as
expressly required by the particular Loan Document pursuant to which such
remedies are exercised or by applicable law, the Department may exercise any of
the foregoing remedies without presentment, demand, protest or notice of any
kind to any person (including, without limitation, the Borrower), all of which
are hereby expressly and knowingly waived.

     

    Subject
solely to the limitation that the Department is limited to one recovery for the
aggregate amounts due and owing under the Loan Documents, the Department's
remedies under the Loan Documents are cumulative and concurrent and may, in the
Department's sole discretion, be exercised, deferred, compromised, settled or
discontinued without affecting any other remedy available to the Department
under any of the Loan Documents or under applicable law.

     

    Section
7.03.    Remedies for Event of
Default Arising From Failure to Create or Retain Jobs.  Upon
the occurrence of an Event of Default arising solely from a breach by the
Borrower of Section 6.07 "Number of Jobs" of this Agreement, the Department may,
in compliance with such regulations and statements of policy, if any, as are
then in effect, raise the rate of interest on the Loan as permitted under the
Note.

    

    
      
        
        

      

      
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    ARTICLE
VIII

    MISCELLANEOUS

    

    Section
8.01.    Obligations
Unconditional.  The obligations to the Department under this
Agreement and each of the Loan Documents shall be absolute and unconditional
without defense or set-off by reason of any default by the contractors under the
contracts relating to the Project or by the Department under this Agreement, any
of the Loan Documents, or under any other agreement between the Borrower and the
Department, or for any other reason, including without limitation failure to
complete the Project, any acts or circumstances that may constitute failure of
consideration, destruction of or damage to the Project, commercial frustration
of purpose, or failure of the Department to perform and observe any agreement,
whether express or implied, or any duty, liability or obligation arising out of
or connected with this Agreement, it being the intention of the parties that the
payments required under each of the Loan Documents will be paid in full when due
without any delay or diminution whatsoever.  Payments and additional
sums required to be paid to the Department under any of the Loan Documents shall
be received by the Department as net sums and the Borrower agrees to pay or
cause to be paid all charges against or which might diminish such net
sums.  The provisions of this Section shall not impair the ability of
the Borrower or any other persons to bring an independent action against the
Department with respect to any cause of action such person may have against the
Department.

     

    Section
8.02.    Provisions
Complementary.  The provisions of this Agreement shall be in
addition to those of any other Loan Document.  All of such provisions
shall be construed as complementary to each other.  Nothing contained
herein shall prevent the Department from enforcing any and all of such
provisions in accordance with their respective terms.

     

    Section
8.03.    Rights and
Remedies.  The terms of all Loan Documents shall be liberally
construed in favor of the Department to effectuate the purposes
hereof.  No delay or failure on the part of the Department in
exercising any right, power or privilege under any of the Loan Documents shall
affect such right, power or privilege; nor shall any single or partial exercise
thereof or any abandonment, waiver, or discontinuance of steps to enforce such a
right, power or privilege preclude any other or further exercise thereof, or the
exercise of any other right, power or privilege.  The rights and
remedies of the Department under any of the Loan Documents are cumulative and
concurrent and not exclusive of any rights or remedies which the Department
might otherwise have.  The Department shall have the right at all
times to enforce the provisions of each of the Loan Documents and all related
documentation in strict accordance with the terms hereof and thereof,
notwithstanding any conduct or custom on the part of the Department in
refraining from so doing at any time or times.  The failure of the
Department at any time or times to enforce the Department's rights under such
provisions, strictly in accordance with the same, shall not be construed as
having created a custom in any way or manner contrary to specific provisions of
such Loan Documents or any such documentation, or as having in any way or manner
modified or waived the same.

     

    
      
        
        

      

      
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    Section
8.04.    Writing
Required.  Any permit, consent or approval of any kind or
character on the part of the Department under any of the Loan Documents, and any
waiver of any provision or condition thereof, must be in writing and executed by
the Department and shall be effective only to the extent specifically set forth
in such writing.

     

    Section
8.05.    Duration of
Covenants.  All covenants and agreements of the Borrower or any
of the Guarantors in any of the Loan Documents, or otherwise made in writing in
connection herewith, shall survive and continue until the Loan is entirely paid
and all of the obligations of the Borrower hereunder have been entirely
satisfied, unless a longer term is expressly provided for, in which event such
longer term shall apply.

     

    Section
8.06.    Pennsylvania Law to
Govern.  Each of the Loan Documents shall be deemed to be
contracts made under the laws of the Commonwealth of Pennsylvania and, for all
purposes, shall be construed in accordance with the laws of such Commonwealth,
including its statutes of limitations, but without regard to its rules regarding
conflict of laws.

     

    Section
8.07.    Counterparts.  Each
of the Loan Documents may be executed in as many counterparts as may be deemed
necessary and convenient and each of which, when so executed, shall be deemed an
original, but all such counterparts shall constitute but one and the same
instrument.  All signatures need not appear on the same copy of any
Loan Document.

     

    Section
8.08.    Department Project
Inspections Solely for the Department's Benefit.  It is
understood and agreed that, subject to Borrower’s rights under the Lease, the
Department, its agents, servants, invitees and employees, may inspect the plans
and specifications for the Project and enter the Premises and conduct such
tests, surveys, examinations and inspections at reasonable times during normal
business hours.  The Borrower hereby acknowledges and agrees (i) that
such project inspections are solely for the protection and benefit of the
Department, and (ii) that the Department, its agents, servants, invitees and
employees carry no responsibility whatsoever for the Project, its quality or the
compliance or lack of compliance with the plans and specifications.

     

    
      
        
        

      

      
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    Section
8.09.    Setoff.  The
Borrower agrees that the Commonwealth of Pennsylvania may set off the amount of
any state tax liability or other debt of the Borrower or its subsidiaries that
is owed to the Commonwealth and not being contested on appeal
against any payments due the Borrower under this or any other contract with the
Commonwealth.

     

    Section
8.10.    Contractor
Responsibility.  Included in and made a part of this Agreement
is Exhibit "F", a clause pertaining to Contractor Responsibility.

     

    Section
8.11.    Contractor
Integrity.  The Borrower represents, warrants and covenants
that it currently has no interest and shall not acquire any interest, direct or
indirect, which would conflict in any manner or degree with the performance of
its obligations hereunderas set forth in Exhibit "G", attached hereto and made a
part hereof..

     

    Section
8.12.    Americans with Disabilities
Act.  Included in and made a part of this Agreement is Exhibit
"H", a clause pertaining to compliance with the Americans with Disabilities
Act.

     

    Section
8.13.    Successors and
Assigns.  This Agreement and each of the Loan Documents shall
inure to the benefit of, and shall be binding upon, the respective successors
and assigns of the Department and the Borrower.  Although the
Department has no present intention to convey, pledge or otherwise assign its
rights under the Loan Documents, it may nevertheless do so in whole or in part
without notice to any person (including, without limitation, the
Borrower).  The Borrower has no right to assign any of its rights or
obligations hereunder or under any of the Loan Documents without the prior
written consent of the Department, and any such assignment without the prior
written consent of the Department shall be void. The Borrower and the Department
intend that no person except Borrower shall have any claim or interest under
this Agreement or right of action hereunder.

     

    
      
        
        

      

      
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    Section
8.14.    Notices.  Notices
required hereunder, or any correspondence concerning this Agreement shall be
directed to the following addresses and shall be deemed properly given (a) if
delivered by hand, (b) if sent by certified mail, return receipt requested,
postage prepaid, or by recognized overnight courier service (including, without
limitation, Federal Express or United Parcel Service overnight service), charges
prepaid; or (c) if sent by facsimile, with a copy sent by first class U.S. Mail,
postage prepaid.

     

    To the
Department:

     

    Department
of Community and Economic Development

    Commonwealth
Keystone Building

    400 North
Street, Fourth Floor

    Harrisburg,
PA  17120

    FAX:  (717)
772-2890

    Attention:  Machinery
and Equipment Loan Fund

    

    

    
      
        
        

      

      
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    To
Borrower:

    Tasty
Baking Company

    3413 Fox
Street

    Philadelphia,
PA  19129

    Attention:
President and CEO

     

    
With a
copy to:

    Linda Ann
Galante, Esquire

    Stradley
Ronon Stevens & Young, LLP

    2600 One
Commerce Square

    Philadelphia,
PA 19103-7098

    

    Notices
and communications hereunder shall be deemed sufficiently given when dispatched
pursuant to the foregoing provisions.  Notices and communications
delivered by hand shall be effective upon receipt; notices and communications
sent by fax, with a copy by first class U.S. Mail, shall be effective upon
dispatch provided they are dispatched between 9:00 a.m. and 5:00 p.m. on a
business day; notices and communications sent by recognized overnight courier
service shall be effective on the business day following dispatch; and notices
sent by certified mail shall be effective on the third business day following
dispatch.  The parties hereto may, by a notice given hereunder,
designate any further or different addresses to which any subsequent notice or
communication hereunder shall be sent.

     

    Section
8.15.    Severability.  If
any provision hereof or of the Loan Documents is found by a court of competent
jurisdiction to be prohibited or unenforceable in any jurisdiction, it shall be
ineffective as to such jurisdiction only to the extent of such prohibition or
unenforceability, and such prohibition or unenforceability shall not invalidate
the balance of such provision as to such jurisdiction to the extent it is not
prohibited or unenforceable, nor invalidate such provision in any other
jurisdiction, nor invalidate the other provisions of the Loan Documents, all of
which shall be liberally construed in favor of the Department in order to effect
the provisions of this Agreement.  Notwithstanding anything to the
contrary herein contained, the total liability of the Borrower for payment of
interest pursuant hereto shall not exceed the maximum amount, if any, of such
interest permitted by applicable law to be contracted for, charged or received,
and if any payments by the Borrower to the Department include interest in excess
of such a maximum amount, the Department shall apply such excess to the
reduction of the unpaid principal amount due pursuant hereto, or if none is due,
such excess shall be refunded to the Borrower or the Borrower, as appropriate;
provided that, to the extent permitted by applicable law, in the event the
interest is not collected, is applied to principal or is refunded pursuant to
this sentence and interest thereafter payable pursuant hereto shall be less than
such maximum amount, then such interest thereafter so payable shall be increased
up to such maximum amount to the extent necessary to recover the amount of
interest, if any, theretofore uncollected, applied to principal or refunded
pursuant to this sentence.  Any such application or refund shall not
cure or waive any Event of Default.  In determining whether or not any
interest payable under the Loan Documents exceeds the highest rate permitted by
law, any nonprincipal payment (except payments specifically stated to be
"interest") shall be deemed, to the extent permitted by applicable law, to be an
expense, fee, premium or penalty rather than interest.

     

    
      
        
        

      

      
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    Section
8.16.    Consent to
Jurisdiction.  The Borrower hereby irrevocably (a) agrees that
any suit, action or other legal proceeding arising out of or relating to this
Agreement or the Loan Documents may be brought in any federal or state court
located in the county wherein the Project is located and consents to the
jurisdiction of such court in any such suit, action or proceeding, and (b)
waives any objection it may have to the laying of venue of any such suit, action
or proceeding in any such court and any claim that any such suit, action or
proceeding has been brought in an inconvenient forum.  The Borrower
hereby irrevocably consents to the service of any and all process in any such
suit, action or proceeding by mailing of copies of such process to the Borrower
at its address provided under or pursuant to Section 8.14.  The
Borrower agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law.  All mailings under this section
shall be by certified or registered mail, return receipt
requested.  Nothing in this section shall affect the right of the
Department to serve legal process in any other manner permitted by law or affect
the right of the Department to bring any suit, action or proceeding against the
Borrower or its property in the courts of any other jurisdiction.

     

    Section
8.17.    Defined
Terms.  In  each of the Loan Documents, unless
otherwise indicated, (i) defined terms may be used in the singular or the plural
and the use of any gender includes all genders, (ii) the words, "hereof",
"herein", "hereto", "hereby" and "hereunder" refer to the particular Loan
Document in which they occur in such document's entirety, (iii) the term, the
"Loan Documents", and the words, "thereof", "therein", "thereto", "thereby" and
"thereunder" refer to all the Loan Documents, taken together as a whole, (iv)
all references to particular Articles, Sections or Paragraphs are references to
the particular Article, Section or Paragraph of the particular Loan Document in
which such references occur, and (v) the Borrower shall be referred to as
Contractor in the Exhibits hereto.

     

    
      
        
        

      

      
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    Section
8.18.    Incorporation by
Reference.  All exhibits to this Agreement and the terms of all
Loan Documents shall be incorporated herein by reference as though expressly set
forth herein. The Borrower agrees to be bound as the "Contractor" under the
provisions of the exhibits to this Agreement.

     

    Section
8.19.    Descriptive
Headings.  Descriptive headings of the several Articles and
Sections of each of the Loan Documents are intended for convenience only and
shall not control or affect the meaning or construction of any of the provisions
hereof.

     

    Section
8.20.    Further
Assurances.  The Borrower from time to time, shall execute such
further instruments as the Department may reasonably request to further confirm
and assure the interests and rights created or intended to be created in favor
of the Department hereunder or under the Loan Documents.

     

    Section
8.21.    Complete
Agreement.  The Loan Documents constitute the entire agreement
between the Department and the Borrower with respect to the Project and the
Loan.  The Loan Documents supersede and replace all prior agreements
related to the subject matter thereof including, without limitation, the
Commitment, except to the extent such prior agreements are expressly
incorporated by reference or otherwise referred to.  This Agreement
may be modified or amended only by a written instrument duly executed by the
Department and the Borrower.  Each of the remaining Loan Documents may
be modified only by a written instrument duly executed by the Department and the
remaining parties to the particular Loan Document.

    

    

    [Signatures
on Following Page.]

     

    
      
        
        

      

      
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    WITNESS
WHEREOF, the parties hereto have duly executed this Agreement as of the day and
year first above written.

     

     

    
      
        	 	
                COMMONWEALTH
      OF PENNSYLVANIA,
acting by and through the DEPARTMENT OF
COMMUNITY
      AND ECONOMIC 
DEVELOPMENT

              	 
	 	 	 
	
                 

              	
              	 
	 	
                Deputy
      Secretary

              	 
	 	 	 
	 	 	 
	 	 	 
	ATTEST: 	
                TASTY
      BAKING COMPANY

              	 
	 	 	 
	 	 	 
	 	
                By:

              	 	 
	 	
                Charles
      P. Pizzi, President & CEO

              	 

      

    

    
 

    
      
        
        

      

      
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    EXHIBIT "A"

     

    COLLATERAL

     

     

    All
“Equipment” as such term is defined in the UCC, now owned or hereinafter
acquired by the Borrower located at the Premises, including all of Borrower’s
machinery and equipment, including processing equipment, conveyors, machine
tools, data processing and computer equipment, including embedded software and
peripheral equipment and all engineering, processing, and manufacturing
equipment, office machinery, furniture, materials handling equipment, tools,
attachments, accessories, automotive equipment, trailers, trucks, forklifts,
molds, dies, stamps, motor vehicles, rolling stock and other equipment of every
kind and nature, all fixtures as such term is defined in the UCC, together with
all additions and accessions thereto, replacements therefore, all substitutes
for any of the foregoing, fuel therefore and all manuals, drawings,
instructions, warranties and rights with respect thereto and all products and
proceeds thereof and condemnation awards and insurance proceeds with respect
thereto.

     

    
      
        
        

      

      
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    EXHIBIT
"B"

     

    The
Premises

     

    ALL
that certain lot, piece or parcel of land, now or formerly of Liberty
Property Trust, situated in Philadelphia, Pennsylvania known as the Tasty Baking
Property - Phase I as shown as Lease parcel 3B on a plan titled Lease Exhibit A,
prepared by Pennoni Associates Inc., dated May 8, 2007, and being more
particularly described, by PENNONI ASSOCIATES INC., as follows, to
wit:

     

    BEGINNING
at a point at the northwesterly corner of Lease Parcel 33, said point being
distant the following nine (9) courses and distances from the northeasterly
corner of Parcel 3, now or formerly of Liberty Property Trust, to wit: North 76°
37' 07" West, 199.40'
to a point, thence continuing; South 50° 08' 54" West, 851.14' to a point,
thence continuing; North 75° 57' 30" West, 72.56' to a point, thence continuing;
South 32° 49' 05" East, 329.48'
to a point, thence continuing; North 57° 10' 55" East, 10.00' to a point, thence
continuing; South 32° 49' 05"East, 129.39' to a point, thence continuing; South
01 ° 56' 00" East, 122.66' to a point, thence continuing; South 10° 26' 00"
East, 240.69' to a point, thence continuing; South 12° 14' 00" West, 79.33' to
the point of beginning, thence by a new line for Lease Parcel 3B the following
six (6) courses and distances, as follows, to wit:

     

    
    

     

    
      	
              1)

            	
              North
      70° 44' 07" East, 560.36' to a point, thence;

            
	 	 
	
              2)

            	
              North
      73° 38' 25" East, 11.37' to a point in the bed of an existing cartway,
      thence by the bed of said existing cartway the following three (3) courses
      and distances;

            
	 	 
	
              3)

            	
              southeasterly
      569.53 along the arc of a curve to the left having a radius 1,567.66'
      (chord being South 20° 44'47" East, 566.41') to a point of reverse curve,
      thence continuing;

            
	 	 
	
              4)

            	
              southeasterly
      247.47 along the arc of a curve to the right having a radius 625.00'
      (chord being South 19° 48'39" East, 245.86') to a point of tangency,
      thence continuing;

            
	 	 
	
              5)

            	
              South
      08° 28'03" East, 435.80' to a point, said point being a
      new common corner with Parcel 2, thence by a new common line with
      Parcel 2;

            
	 	 
	
              6)

            	
              South
      80° 52' 06" West, 1,160.33' to a point, said point being a common corner
      with Parcel 2 and lands now or formerly of Pier Hays Terminal,
      thence by the common line with said lands now or formerly of Pier Hays
      Terminal and lands now or formerly of Consolidated Rail Corporation, in
      part;

            
	 	 
	
              7)

            	
              North
      12° 14' 00" East, 1,215.71' to the point and place of beginning.
      Containing 23.9142 acres of land, more or
less.

            

    

     

     

    
      
        
        

      

      
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    EXHIBIT
“C”

    

    LITIGATION

    

    1.  In
November 1998, nine (9) independent route sales distributors (collectively,
“Plaintiffs”), on behalf of all present and former route sales distributors,
commenced suit against Tasty Baking Company (“TBC”) seeking recovery from TBC of
amounts (i) which the sales distributors paid in the past to the Internal
Revenue Service on account of employment taxes, and (ii) collected by TBC since
January 1, 1998, as an administrative fee from all unincorporated sales
distributors.  TBC removed the action to the United States District Court
for the Eastern District of Pennsylvania and was successful in having the action
dismissed with prejudice as to all federal causes of action on March 29,
1999.

     

    Subsequently,
Plaintiffs commenced a new suit in Common Pleas Court for Philadelphia County,
Pennsylvania, asserting state law claims seeking damages for (1) the alleged
erroneous treatment of the sales distributors as independent contractors by TBC
such that the sales distributors were required to pay self-employment, social
security and federal unemployment taxes which they allege should have been paid
by TBC, and (2) for alleged breach of contract relating to the collection of an
administrative fee from all unincorporated sales distributors.  The Court
dismissed with prejudice Plaintiffs’ first claim in March 2000.  As to the
second claim, in January 2002, the Court certified a class of approximately 200
sales distributors, consisting of unincorporated sales distributors who, since
February 7, 1998, have paid or continue to pay the administrative fee to
TBC.  On July 30, 2006, the court granted TBC’s motion for summary judgment
on the second claim. 

     

    On August
29, 2006, the Plaintiffs appealed the decisions on each of the claims to the
Pennsylvania Superior Court.  On November 19, 2007, the Superior Court
affirmed the lower court’s decision in TBC’s favor.  Since no further
appeal was filed, TBC believes this matter is fully resolved.

     

    2.  In February of 2006, the
U.S. Department of Labor (“DOL”) notified the Borrower that it was commencing an
investigation of the sale in December, 2005 by the Tasty Baking Company Pension
Plan (the “Plan”) to the Borrower of the Hunting Park Avenue bakery property
owned by the Plan since 1960.  In essence, the investigation related
to whether the Borrower adhered to the conditions of a prohibited transaction
exemption issued to the Borrower in 1984 by the DOL which permitted the Plan to
lease the bakery property to the Borrower and which gave the Borrower the right
to purchase the property from the Plan provided it paid the greater of the fair
market value or the value in use of the property.  In accordance with
an appraisal of the property by Binswanger as of November 30, 2005, the Borrower
paid the Plan the greater of the fair market value or the value in use of the
property.  On September 25, 2007, the DOL informed the Borrower that
the DOL’s limited review had concluded and that no further action by the DOL was
contemplated.

    
 

    
      
        
        

      

      
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    EXHIBIT
“D"

    

    CRITERIA FOR FAILURE TO MEET
JOB PROJECTIONS

    

    

    
      
         

        
          	Criteria for Penalty
      Waiver: 

        

         

      

      The
following four criteria will be evaluated to determine if a valid explanation
exists for failing to meet employment projections. If the Department determines
that a company has provided adequate justification that one of the factors below
led to its failure to meet projections, no penalty will be imposed. The criteria
are: (1) Natural Disaster, (2)
Industry Trend, (3) Labor Force and (4) Loss of Major
Supplier.

    

     

    
      	Detailed Explanation
      of Above Criteria 

    

     

    If a
company fails to meet its projections because of any of the following four
reasons, no penalty will be levied:

     

    (1) Natural
Disaster. A
company will not be held responsible for failing to attain employment
projections if a natural disaster such as a fire, flood, hurricanes or tornado
strikes the business.

     

    (2) Industry
Trend. If a
company can demonstrate to the satisfaction of the Department that the industry
in which the company does a majority of its business suffered a sales or revenue
decline of at least 10%, the company will not be held responsible for failing to
attain employment projections. The following points will be
considered:

     

    (i) Burden
of proof resides with the company. The company must provide documentation from
industry sources or other verifiable documentation to prove the overall industry
sales or revenue decline. Statistical comparisons must be for a period of no
less than one year and must be from within the project term.

     

    (ii) The
company must also provide a narrative explaining the business in which it
operates, and how the industry downturn impacted its business
operations.

     

    (iii) If
the company does business in more than one industry, the company must provide
evidence that it’s overall business was dramatically impacted by the failure of
its business within the declining industry.

     

    (3) Labor
Force If a
company can demonstrate to the satisfaction of the department that there was a
lack of an available labor pool, the company will not be held responsible for
failure to attain employment projections.  This demonstration must
take the following into consideration:

     

    (i) The
unemployment rate of the county in which the project is located does not in
itself signify the absence of available labor, particularly for low
skilled jobs; however, if the company requires skilled workers, or those with
scarce skills, this factor could constitute sufficient
demonstration.

     

    (ii) A
company will not be deemed to have experienced lack of an available labor pool
if the wages offered by the company are below average. In this instance, the
burden of proof shall be on the company to demonstrate that it pays employees
the average wage based on the industry-wide average for a particular region.
Staff research utilizing average wage data supplied by the Department of Labor
and Industry will be used to determine the validity of this
explanation.

     

    (4) Loss of a
Major Supplier If the failure of a
company to attain employment projections is the result of a loss of a major
supplier, the company will not be held responsible for failing to attain
employment projections.

     

    (i) Burden
of proof resides with the company. The company must provide financial/accounting
proof that the supplier accounted for at least 25% of its business.

     

    (ii) The
company must also provide a narrative outlining its dependence on this supplier,
and any attempts that were made to secure a new supplier.

    
       

      
      

       

      
        	90%
  Guideline:

      

       

    

    If a
company fails to retain the full job requirement, but achieves at least 90% of
the job retention requirement, the Department will take into consideration other
criteria including the quality of the jobs retained, the economic condition of
the area, the strategic importance of the industry to the Commonwealth and other
pertinent criteria, as determined by the Department.

    

    
      
        
        

      

      
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    EXHIBIT
“E”

    

    NONDISCRIMINATION
CLAUSE

    

    During the
term of this contract, the Contractor agree as follows:

    

    l.           The
Contractor shall not discriminate against any employe, applicant for employment,
independent contractor or any other person because of race, color, religious
creed, ancestry, national origin, age or sex.  The Contractor shall
take affirmative action to insure that applicants are employed, and that
employes or agents are treated during employment, without regard to their race,
color, religious creed, ancestry, national origin, age or sex.  Such
affirmative action shall include, but is not limited to:  employment,
upgrading, demotion or transfer, recruitment or recruitment advertising; layoff
or termination; rates of pay or other forms of compensation; and selection for
training.  The Contractor shall post in conspicuous places, available
to employes, agents, applicants for employment and other persons, a notice to be
provided by the contracting agency setting forth the provisions of this
nondiscrimination clause.

    

    2.           The
Contractor shall in advertisements or requests for employment placed by it or on
its behalf, state that all qualified applicants will receive consideration for
employment without regard to race, color, religious creed, ancestry, national
origin, age, or sex.

    

    3.           The
Contractor shall send each labor union or workers' representative with which
they have a collective bargaining agreement or other contract or understanding,
a notice advising said labor union or workers' representative of their
commitment to this nondiscrimination clause.  Similar notice shall be
sent to every other source of recruitment regularly utilized by the
Contractor.

    

    4.           It
shall be no defense to a finding of noncompliance with this nondiscrimination
clause that the Contractor had delegated some of its employment practices to any
union, training program or other source of recruitment which prevents it from
meeting its obligations.  However, if the evidence indicates that the
Contractor was not on notice of the third-party discrimination or made a good
faith effort to correct it, such factor shall be considered in mitigation in
determining appropriate sanctions.

    

    5.           Where
the practices of a union or of any training program or other source of
recruitment will result in the exclusion of minority group persons, so that the
Contractor will be unable to meet its obligations under this nondiscrimination
clause, the Contractor shall then employ and fill vacancies through other
nondiscriminatory employment procedures.

    

    6.           The
Contractor shall comply with all state and federal laws prohibiting
discrimination in hiring or employment opportunities.  In the event of
the Contractor's noncompliance with the nondiscrimination clause of this
contract or with any such laws, this contract may be terminated or suspended, in
whole or in part, and the Contractor may be declared temporarily ineligible for
further Commonwealth contracts, and other sanctions may be imposed and remedies
invoked.

    

    7.           The
Contractor shall furnish all necessary employment documents and records to, and
permit access to its books, records and accounts by, the contracting agency and
the Office of Administration, Bureau of Affirmative Action, for purposes of
investigation to ascertain compliance with the provisions of this
clause.  If the Contractor does not possess documents or records
reflecting the necessary information requested, it shall furnish such
information on reporting forms supplied by the contracting agency or the Bureau
of Affirmative Action.

    

    8.           The
Contractor shall actively recruit minority subcontractors or subcontractors with
substantial minority representation among its employes.

    

    9.           The
Contractor shall include the provisions of this nondiscrimination clause in
every subcontract, so that such provisions will be binding upon each
subcontractor.

    

    
      
        
        

      

      
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    10.           The
Contractor obligations under this clause are limited to the Contractor's
facilities within Pennsylvania or, where the contract is for purchase of goods
manufactured outside of Pennsylvania, the facilities at which such goods are
actually produced.

     

    
 

    
      
        
        

      

      
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    EXHIBIT "F"

     

    CONTRACTOR
RESPONSIBILITY PROVISIONS

    

    

    1.           The
Contractor certifies that it is not currently under suspension or debarment by
the Commonwealth, any other state, or the federal government, and if the
Contractor cannot so certify, then it agrees to submit along with the
bid/proposal a written explanation of why such certification cannot be
made.

    

    2.           If
the Contractor enters into any subcontracts or employs under this contract any
subcontractors/individuals who are currently suspended or debarred by the
Commonwealth or the federal government or who become suspended or debarred by
the Commonwealth or federal government during the term of this contract or any
extensions or renewals thereof, the Commonwealth shall have the right to require
the Contractor to terminate such subcontracts or employment.

    

    3.           The
Contractor agrees to reimburse the Commonwealth for the reasonable costs of
investigation incurred by the Office of Inspector General for investigations of
the Contractor's
compliance with terms of this or any other agreement between the Contractor and
the Commonwealth which result in the suspension or debarment of the
Contractor.  Such costs shall include, but not be limited to, salaries
of investigators, including overtime; travel and lodging expenses; and expert
witness and documentary fees.  The Contractor shall not be responsible
for investigative costs for investigations which do not result in the
Contractor's
suspension or debarment.

    

    4.           The
Contractor may obtain the current list of suspended and debarred contractors by
contacting the:

     

    
      	 	
              Department
      of General Services

              Office
      of Chief Counsel

              603
      North Office Building

              Harrisburg,
      PA 17125

              Telephone
      No. (717) 783-6472

              Fax
      No. (717) 787-9138

            

    

     

    

    

    

    

    
      
        
        

      

      
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    EXHIBIT
"G"

    

    CONTRACTOR INTEGRITY
PROVISIONS

    

    1.           Definitions.

    

    a.           Confidential
information means information that is not public knowledge, or available
to the public on request, disclosure of which would give an unfair, unethical,
or illegal advantage to another desiring to contract with the
Commonwealth.

    

    b.           Consent means written
permission signed by a duly authorized officer or employee of the Commonwealth,
provided that where the material facts have been disclosed, in writing, by
prequalification, bid, proposal, or contractual terms, the Commonwealth shall be
deemed to have consented by virtue of execution of this Agreement.

    

    c.           Commonwealth means
the Commonwealth of Pennsylvania Acting by and Through its Department of
Community and Economic Development and any agencies and instrumentalities of the
Commonwealth of Pennsylvania for which the Department of Community and Economic
Development provides staff services (including without limitation the
Pennsylvania Industrial Development Authority, Pennsylvania Economic Development
Financing Authority, Pennsylvania Energy Development Authority, and Pennsylvania
Minority Business Development Authority).

    

    d.           Contractor means the
individual or entity that has entered into an agreement with the Commonwealth,
assumed the obligations of another to repay moneys to the Commonwealth, or is
the intended beneficiary of, and has knowingly received benefits under, an
agreement between the Commonwealth and a financial intermediary or educational
institution, including directors, officers, partners, managers, key employees,
and owners of more than a 5% interest.

    

    e.           Financial Interest
means:

     

    
      
        (1)    ownership of more than a 5%
interest in any business; or

      

(2)           holding
a position as an officer, director, trustee, partner, employee, or the like, or
holding any position of management.

    

    f.           Gratuity means any
payment of more than nominal monetary value in the form of cash, travel,
entertainment, gifts, meals, lodging, loans, subscriptions, advances, deposits
of money, services, employment, or contracts of any kind.

    

    2.           The
Contractor shall take no action in violation of state or federal laws,
regulations, or other requirements that govern contracting with the
Commonwealth.

    

    3.           The
Contractor shall not, in connection with this or any other agreement with the
Commonwealth, directly or indirectly offer, confer, or agree to confer any
pecuniary benefit on anyone as consideration for the decision, opinion,
recommendation, vote, other exercise of discretion, or violation of a known
legal duty by any officer or employee of the Commonwealth.

    

    4.           The
Contractor shall not, in connection with this or any other agreement with the
Commonwealth, directly or indirectly offer, give, or agree or promise to give to
anyone any gratuity for the benefit of or at the direction or request of any
officer or employee of the Commonwealth.

    

    5.           Except
with the consent of the Commonwealth, the Contractor shall not have a financial
interest in any other contractor, subcontractor, or supplier providing services,
labor, or material on this project.

    

    6.           The
Contractor, upon being informed that any violation of these provisions has
occurred or may occur, shall immediately notify the Commonwealth in
writing.

    

    
      
        
        

      

      
        Final - Loan
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    7.           The
Contractor, by execution of this Agreement and by the submission of any bills or
invoices for payment pursuant thereto, certifies and represents that he has not
violated any of these provisions.

    

    8.           The
Contractor, upon the inquiry or request of the Inspector General of the
Commonwealth or any of that official's agents or representatives, shall provide,
or if appropriate, make promptly available for inspection or copying, any
information of any type or form relevant to the Contractor's
compliance with this Agreement (including without limitation these provisions
relating to Contractor integrity).  Such information shall be retained
by the Contractor for a period of three years beyond the termination of the
contract unless provided by law.

    

    9.           For
violation of any of the above provisions, the Commonwealth may declare an event
of default hereunder, subject to applicable notice and cure provisions, and
debar and suspend the Contractor from doing business with the Commonwealth,
including without limitation participation in its financial assistance
programs.  These rights and remedies are cumulative, and the use or
nonuse of any one shall not preclude the use of all or any
other.  These rights and remedies are in addition to those the
Commonwealth may have under law, statute, regulation, or otherwise.

    

    

    
      
        
        

      

      
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    EXHIBIT
"H"

    

    AMERICANS WITH DISABILITIES
ACT PROVISIONS

    

    During the
term of this contract, the Contractor agrees as follows:

    

    1.           Pursuant
to federal regulations promulgated under the authority of The Americans With
Disabilities Act, 28 C.F.R. §
35.101 et seq., the Contractor understands and agrees that no individual
with a disability shall, on the basis of the disability, be excluded from
participation in this contract or from activities provided for under this
contract.  As a condition of accepting and executing this contract,
the Contractor agrees to comply with the "General Prohibitions Against
Discrimination," 28 C.F.R. §
35.130, and all other regulations promulgated under Title II of The
Americans With Disabilities Act which are applicable to the benefits, services,
programs, and activities provided by the Commonwealth of Pennsylvania through
contracts with outside contractors.

    

    2.           The
Contractor shall be responsible for and agrees to indemnify and hold harmless
the Commonwealth of Pennsylvania from all losses, damages, expenses, claims,
demands, suits, and actions brought by any party against the Commonwealth of
Pennsylvania as a result of the Contractor's failure to comply with the
provisions of paragraph 1 above.

    

    3.           "Contractor"
means the individual or entity that has entered into this Agreement with the
Commonwealth.

    

    

     

     

     

     

     

     

    Final
- Loan Agreement 

      Page 40 of
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