FIRST AMENDMENT TO CREDIT AGREEMENT
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THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this "First Amendment") is
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entered into by and between PEET'S OPERATING COMPANY, INC. (formerly known as
Peet's Coffee and Tea, Inc.) ("Borrower"), PEET'S TRADEMARK COMPANY ("Trademark
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Co."), and PEET'S COFFEE & TEA, INC. (formerly known as Peet's Companies, Inc.)
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("Holdings"), each a Washington corporation (each a "Credit Party" and
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collectively, the "Credit Parties"), and GENERAL ELECTRIC CAPITAL CORPORATION, a
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New York corporation ("Lender"), as of January 19, 2001, with reference to the
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following facts:
RECITALS
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A. Pursuant to that certain Credit Agreement dated as of September 1,
2000, by and among Credit Parties and Lender (as the same may have been amended,
supplemented, or otherwise modified from time to time prior to the date of this
First Amendment, the "Credit Agreement"), Lender agreed to provide certain
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financial accommodations to or for the benefit of Borrower and the other Credit
Parties upon the terms and conditions contained therein. Unless otherwise
defined in this First Amendment, (i) capitalized terms or matters of
construction defined or established in Annex A to the Credit Agreement shall be
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applied as defined or established therein, and (ii) references to Sections,
Schedules, and Annexes shall refer, respectively, to Sections, Schedules, and
Annexes of the Credit Agreement.
B. Credit Parties have advised Lender that they propose to enter into
certain transactions described in a registration statement on Form S-1 (File No.
333-47976), filed with the Securities and Exchange Commission ("SEC") on or
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about October 13, 2000, and amended as of December 1, 2000, and further amended
as of December 22, 2000, and as of January 17, 2001 (collectively, the
"Registration Statement"), relating to the offer of Holdings to sell up to
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3,300,000 shares of its common Stock through a Public Offering described in the
Registration Statement (the "Offering"). Credit Parties have further advised
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Lender that the effective date of the Offering is anticipated to occur on or
about January 22, 2001.
C. Pursuant to the Credit Agreement, Credit Parties have agreed that they
shall not take certain actions described in the Registration Statement, and
certain related actions in connection with the Offering, without the prior
written consent of Lender. Credit Parties have requested the consent of Lender
to such actions, and Lender has agreed to such request on the terms and
conditions set forth in this First Amendment.
NOW, THEREFORE, in consideration of Credit Parties' performance of
their promises and obligations hereunder, the continued performance by Credit
Parties of their promises and obligations under the Credit Agreement and the
other Loan Documents, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, Credit Parties and Lender
hereby agree as follows:
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AGREEMENT
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1. Amendments Effective As of the Date Hereof. Effective as of the date
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hereof, the Credit Agreement is hereby amended as follows:
1.1 Clause (d) of Section 6.2 is hereby amended by deleting the
phrase "so long as no Default or Event of Default shall have occurred and be
continuing and there is no Revolving Loan balance, Borrower may make investments
up to $1,000,000 in the aggregate" and substituting the phrase "so long as no
Default or Event of Default shall have occurred and be continuing and so long as
proceeds of Revolving Loans are not applied, directly or indirectly, to the
purchase of such investments, Borrower may make investments up to $35,000,000 in
the aggregate" therefor.
1.2 Section 6.2 is hereby further amended by deleting the word "and"
immediately prior to clause (d) thereof, substituting a semicolon for the period
at the conclusion of clause (d) thereof, and adding the following new text after
clause (d), as so amended:
"and (e) except as otherwise provided in Section 1.3(b)(iii), capital
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contributions by Holdings to Borrower funded by proceeds of any Public
Offering or Private Placement of Stock of Holdings."
1.3 Section 6.20 is hereby amended by deleting the word "None" at the
commencement of such section and adding the following in place thereof:
"Except as otherwise expressly permitted under Section 6.2, none"
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2. Amendments Effective as of the Closing Date. Effective as of the
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Closing Date, the Credit Agreement is hereby further amended as follows:
2.1 Section 1.3(b)(iv) is hereby amended by deleting in its entirety
the final sentence thereof, and substituting the following therefor:
"Any prepayments required by Section 1.3(b)(ii) or 1.3(b)(iii)(B) shall be
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applied in accordance with Section 1.3(c)."
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2.2 Section 5.10 is hereby amended by deleting the phrase "90 days"
in the second sentence thereof and substituting the phrase "180 days" therefor.
2.3 Clause (b) of Section 6.5 is hereby amended by deleting the
phrase "other than the issuance of Stock of Borrower" and substituting the
phrase "other than the issuance of Stock of Holdings" therefor.
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3. Lender's Receipt of Certain Documents. In connection with this First
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Amendment, Lender hereby acknowledges receipt of the following:
3.1 The documents described on Schedule A to this First Amendment
(the "Offering Related Documents"), which Holdings and Borrower represent and
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warrant to be true and correct copies of the documents (a) filed with the SEC as
exhibits to the Registration Statement and (b) approved by the boards of
directors or holders of Stock of Holdings or Borrower, as applicable, with the
intent of adopting or otherwise giving effect to such documents on or about the
effective date of the Offering; provided, that to the extent that Lender has not
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received, on or before the date of this First Amendment, true and correct copies
of the final and fully executed Registration Statement, the Offering Related
Documents, or any further amendments to the Registration Statement, Credit
Parties shall promptly deliver the same to Lender;
3.2 UCC financing statements or amendments in form and substance
satisfactory to Lender, duly executed on behalf of Borrower and Holdings,
bearing information regarding the name changes of Borrower and Holdings
sufficient to ensure that no financing or continuation statement filed under the
Code in connection with the Loan Documents is seriously misleading within the
meaning of Section 9402(7) of the Code; and
3.3 A Control Letter in favor of Lender or other documents
establishing a perfected security interest in favor of Lender, in form and
substance satisfactory to Lender, duly executed on behalf of Borrower, with
respect to the investments contemplated by Section 6.2(d), as such section is to
be amended by this First Amendment
4. Lender's Consent to Certain Transactions. Subject to the terms and
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conditions of this First Amendment, and notwithstanding any other provision of
the Loan Documents to the contrary, Lender hereby consents to (a) the issuance
and transfers of Stock of Holdings, and the payment of related underwriting and
marketing fees and expenses, to be effected pursuant to the terms of the
Offering (the "Offering Stock Transfers"), and (b) Credit Parties' filing,
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execution, and delivery, as the case may be, of the Registration Statement and
each of the Offering Related Documents. Lender and Credit Parties acknowledge
that the Offering constitutes a Public Offering for all purposes under the
Credit Agreement.
5. Credit Parties' Receipt of Proceeds. Immediately upon any Credit
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Party's receipt of any initial proceeds of the Offering, and on any Business Day
thereafter on which any Credit Party has received further proceeds of the
Offering, Credit Parties shall report to Lender in writing as to the receipt and
proposed disposition of such proceeds.
6. Application of Certain Proceeds. Credit Parties and Lender shall
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apply all proceeds of the Offering, net of underwriting discounts and
commissions and other reasonable costs paid to non-Affiliates in connection
therewith, as set forth in the Credit Agreement, including, without limitation,
Sections 1.3(b)(iii)(A) and 1.3(b)(iv) thereof. To the extent
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proceeds of the Offering are not applied to the Loans, Borrower may expend such
proceeds pursuant to and subject to the limitations set forth in the Credit
Agreement. Credit Parties and Lender hereby confirm that in connection with
Borrower's prepayment of Term Loan B and the Revolving Loan from proceeds of the
Offering, LIBOR breakage costs and related charges will be assessed against the
Loan Account pursuant to the Credit Agreement in an aggregate amount not to
exceed $1,500.
7. Term Loan B Note. Within five Business Days of the date on which the
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outstanding principal amount of Term Loan B and all accrued and unpaid interest
thereunder shall have been paid in full, Lender shall deliver to Borrower the
original executed Term Loan B Note, stamped "Cancelled."
8. Ownership of Stock of Holdings. Within thirty days of the date on
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which any Credit Party receives any initial proceeds of the Offering, and on the
first Business Day of each Fiscal Quarter thereafter, Credit Parties shall
deliver to Lender an addendum to Disclosure Schedule (3.8) setting forth updated
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information concerning the Stock of Holdings held at such time by the Persons
constituting, as of the date of the Offering Stock Transfers or such later date
as is reflected in such addendum, each of the directors, executive officers and
5% shareholders of Holdings, as each such term is used in the description of
"Principal and Selling Shareholders" set forth in the Registration Statement.
9. Effectiveness. This First Amendment shall become effective upon
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receipt by Lender of an original of this First Amendment that bears the
signatures of Credit Parties and Lender.
10. Representations and Warranties. Borrower hereby represents and
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warrants that the representations and warranties contained in the Credit
Agreement were true and correct in all material respects when made and, after
giving effect to this First Amendment, the Registration Statement, the Offering
Stock Transfers, the Offering Related Documents, and the other matters
contemplated under this First Amendment, shall remain true and correct in all
material respects as of the date hereof, except to the extent that a particular
representation or warranty by its terms expressly applies only to an earlier
date. The Credit Agreement, as modified and amended by this First Amendment, and
the other Loan Documents constitute legal, valid and binding obligations of
Borrower, enforceable against Borrower in accordance with their respective
terms.
11. Ratification. Except as specifically modified by this First Amendment,
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the parties acknowledge that the Credit Agreement shall remain binding upon
Credit Parties and Lender and all provisions of the Credit Agreement shall
remain in full force and effect. Credit Parties expressly ratify and affirm
their respective obligations to Lender under the Credit Agreement and the other
Loan Documents.
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12. Miscellaneous.
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12.1 Entire Agreement; Amendment. This First Amendment, together
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with the Credit Agreement and the other Loan Documents, is the entire agreement
between the parties hereto with respect to the subject matter hereof. This
First Amendment supersedes all prior and contemporaneous oral and written
agreements and discussions with respect to the subject matter hereof or thereof.
No amendment, modification, or waiver of any of the provisions of this First
Amendment shall be valid or enforceable unless set forth in a writing signed by
Credit Parties and Lender.
12.2 Recitals. The recitals set forth at the beginning of this First
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Amendment are true and correct, and such recitals are incorporated into and are
a part of this First Amendment.
12.3 Headings. Section headings used herein are for convenience of
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reference only, are not part of this First Amendment, and are not to be taken
into consideration in interpreting this First Amendment.
12.4 Counterparts. This First Amendment may be executed in identical
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counterpart copies, each of which shall be an original, but all of which shall
constitute one and the same agreement. Delivery of an executed counterpart of a
signature page to this First Amendment by facsimile transmission shall be
effective as delivery of a manually executed counterpart of this First
Amendment. Any party delivering this First Amendment by facsimile shall send
the original manually executed counterpart of this First Amendment to the other
party promptly after such facsimile transmission.
12.5 GOVERNING LAW. THIS FIRST AMENDMENT SHALL BE GOVERNED BY, AND
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CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA
APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE, WITHOUT REGARD TO THE
PRINCIPLES THEREOF REGARDING CONFLICT OF LAWS.
12.6 No Waiver. Except as specifically set forth in this First
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Amendment, the execution, delivery and effectiveness of this First Amendment
shall not (a) limit, impair, constitute a waiver of or otherwise affect any
right, power or remedy by Lender under the Credit Agreement or any other Loan
Document, (b) constitute a waiver of any provision in the Credit Agreement or
any other Loan Document, or (c) alter, modify, amend or in any way affect any of
the terms, conditions, obligations, covenants or agreements contained in the
Credit Agreement or any other Loan Document, all of which are ratified and
affirmed in all respects and shall continue in full force and effect.
12.7 Conflict of Terms. In the event of any inconsistency between
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the provisions of this First Amendment and any provision of the Credit
Agreement, the terms and provisions of this First Amendment shall govern and
control.
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IN WITNESS WHEREOF, this First Amendment has been duly executed as of
the date first written above.
"Credit Parties"
PEET'S COFFEE & TEA, INC.
By: /s/ Xxxx X. Xxxxxxx
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Xx. Xxxx X. Xxxxxxx
Chief Financial Officer
PEET'S OPERATING COMPANY, INC.
By: /s/ Xxxx X. Xxxxxxx
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Xx. Xxxx X. Xxxxxxx
Chief Financial Officer
PEET'S TRADEMARK COMPANY
By: /s/ Xxxx X. Xxxxxxx
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Xx. Xxxx X. Xxxxxxx
Chief Financial Officer
"Lender"
GENERAL ELECTRIC CAPITAL
CORPORATION
By: /s/ Xxxx X. Xxxxxxx
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Name Xxxx X. Xxxxxxx
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Duly Authorized Signatory
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Schedule A to First Amendment
Offering Related Documents
Form of Amended and Restated Articles of Incorporation of Holdings
Form of Articles of Amendment of Holdings (effecting a two-for-one stock split)
Form of Amended and Restated Bylaws of Holdings
Form of Underwriting Agreement among Holdings, XX Xxxxxxxxx+Co, and Pacific
Growth Equities, Inc.
2000 Equity Incentive Plan and form of Stock Option Agreement
2000 Non-Employee Director Plan and form of Stock Option Agreement
2000 Employee Stock Purchase Plan and form of Offering
Articles of Amendment of Holdings dated October 31, 2000