ELEVENTH AMENDMENT TO FLEET BANK - NH
COMMERCIAL LOAN AGREEMENT AND LOAN DOCUMENTS
THIS ELEVENTH AMENDMENT TO COMMERCIAL LOAN AGREEMENT AND LOAN DOCUMENTS
(the "Amendment") is made effective February 20, 1998, by and among FLEET BANK
- NH, a bank organized under the laws of the State of New Hampshire with an
address of Mail Stop XXXX X00X, 0000 Xxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxxxxx 00000
(the "Bank"), GREEN MOUNTAIN COFFEE ROASTERS, INC. (f/k/a Green Mountain Coffee,
Inc.), a Vermont corporation with a principal place of business at 00 Xxxxxx
Xxxx, Xxxxxxxxx, Xxxxxxx 00000 (the "Borrower"), and GREEN MOUNTAIN COFFEE
ROASTERS FRANCHISING CORPORATION, a Delaware corporation (the "Subsidiary").
W I T N E S S E T H:
WHEREAS, the Bank, the Borrower, and the Subsidiary are parties to a
certain Fleet Bank - NH Seventh Amendment and First Restatement of Commercial
Loan Agreement dated April 12, 1996, as amended by Eighth Amendment to Fleet
Bank - NH Commercial Loan Agreement and Loan Documents dated February 19, 1997,
Ninth Amendment to Fleet Bank - NH Commercial Loan Agreement and Loan Documents
dated June 9, 1997, and Tenth Amendment to Commercial Loan Agreement dated
January 15, 1998 (as amended to date, the "Loan Agreement") and certain Loan
Documents of various dates (as defined in the Loan Agreement and as amended
through the date hereof), including, but not limited to a certain Guaranty
Agreement dated October 22, 1992, as amended to date, of the Subsidiary (the
"Guaranty"), and certain Security Agreements of the Borrower dated April 12,
1996 and of the Subsidiary dated October 22, 1992, as amended to date
(collectively, the "Security Agreements");
WHEREAS, pursuant to the Loan Agreement, the Bank has extended to the
Borrower certain credit facilities including a revolving line of credit loan up
to the maximum principal amount of Six Million Dollars ($6,000,000.00) (the
"Revolving Line of Credit Loan"); and
WHEREAS, the Borrower has requested, and the Bank has agreed, to (a)
increase the maximum principal amount available under the Revolving Line of
Credit Loan from Six Million Dollars ($6,000,000.00) to Nine Million Dollars
($9,000,000.00), (b) modify the interest rate provisions applicable to the
Revolving Line of Credit Loan, (c) extend a new revolving line of credit/term
loan in the maximum principal amount of up to Four Million Five Hundred Thousand
Dollars ($4,500,000.00), and (d) make certain other modifications and amendments
to the terms and conditions affecting all of the credit facilities provided
under the Loan Agreement and the Loan Documents. All capitalized terms not
otherwise defined herein shall have the meanings ascribed to them in the Loan
Agreement and/or the Loan Documents, as the case may be.
NOW, THEREFORE, in consideration of the Bank increasing the Revolving Line
of Credit Loan as described above, extending the Revolving Line of Credit/Term
Loan, and amending the Loan Agreement in other respects as provided below, the
Bank, the Borrower, and the Subsidiary hereby agree to amend the Loan Agreement
and the Loan Documents as follows:
I. AMENDMENT OF LOAN AGREEMENT.
A. Increase of Revolving Line of Credit Loan and Establishing of Borrowing
Base. The provisions of Section I of the Loan Agreement and of Section I. A. of
Schedule A of the Loan Agreement shall be and hereby are deleted and in place of
Section I is inserted the following:
I. THE REVOLVING LINE OF CREDIT LOAN. The Bank agrees to extend to the
Borrower a Revolving Line of Credit Loan (the "Revolving Line of Credit
Loan") upon and subject to the terms and conditions set forth below and in
the Revolving Line of Credit Note evidencing such Loan, the other Loan
Documents, and elsewhere in this Agreement.
A. Special Terms and Definitions for Revolving Line of Credit Loan:
Revolving Line of Credit Loan Amount- $9,000,000.00. Applicable
Percentage for Acceptable Accounts - 80% Applicable Percentage for
Acceptable Inventory - 50%
"Acceptable Accounts" means the dollar value of those of the
Borrower's accounts and accounts receivable as the Bank determines in
a commercially reasonable manner to be acceptable to include for
purposes of calculating the Borrowing Base. Subject to the foregoing,
"Acceptable Accounts" shall not include any service charges or sales
or other taxes and shall be accounts of the Borrower: (i) which arise
in the ordinary course of Borrower's business from Borrower's
performance of services or sale of goods which have been performed or
sold; (ii) which are not older than the Acceptable Accounts Age; (iii)
which are not evidenced by a promissory note or other instrument; (iv)
which are payable in U.S. Dollars; (v) which are owed by any customer
whose principal place of business is within the United States or any
foreign account which is FCIA-insured or secured by an acceptable
letter of credit; (vi) which are owed by any corporation or other
entity other than one which is related to the Borrower, or is of
common ownership with the Borrower, or could be treated as a member of
the same controlled group of corporations of which the Borrower is a
member; (vii) which constitute valid, binding, and enforceable
obligations of account debtors which are not subject to any claim,
counterclaim, set off, credit, allowance, or chargeback; (viii) as to
which the Borrower has received no notice and has no knowledge as to
whether the account debtor (or any guarantor or endorser thereof) is
bankrupt or insolvent, or any other facts which make the collection of
the account doubtful; (ix) which are not owed by any person employed
by, or salesman of, the Borrower; (x) which do not arise out of the
sale by the Borrower of goods consigned or delivered to the Borrower
on "sell or return" terms (whether or not compliance has been made
with Section 2-326 of the UCC); and (xi) which do not arise out of any
sale made on a "xxxx and hold", dating, or delayed shipping basis.
Accounts payable by Borrower to any account debtor shall be netted
against accounts due from such debtor for purposes of determining
Acceptable Accounts. Borrower must issue a separate invoice to the
account debtor with respect to an account for such account to be
included by as an Acceptable Account. The acceptance of or
characterization by the Bank of any account as an Acceptable Account
shall not be deemed a determination by the Bank as to its actual value
nor in any way obligate Bank to accept any account arising
subsequently from such debtor to be, or to continue to deem such
account to be, an Acceptable Account. All accounts of Borrower whether
Acceptable Accounts or not, shall constitute Collateral under the
Security Agreement.
"Acceptable Accounts Age" means with respect to any account receivable
sixty (60) days from due date of the invoice therefor.
"Acceptable Inventory" means the dollar value of Borrower's wholesale
and mail order coffee inventory, and Borrower's grinders, brewers,
flavoring, packaged foods, and accessories inventory, all as
determined at the lower of cost on a "first-in/first-out" basis or
fair market value, which inventory is owned and held by Borrower at
its places of business (including warehouses which are holding the
same subject to written confirmation of the Bank's security interests)
for sale in the ordinary course of Borrower's business as presently
conducted by it and which is subject to a valid and prior, fully
perfected security interest of Bank, free of all security interests or
liens of any other person. The following inventory will not, in any
event, be included for purposes of determining Acceptable Inventory:
(i) inventory which is obsolete, not in good condition, not of
merchantable quality or saleable in the ordinary course of business or
which is subject to defects which would affect its market value; (ii)
supplies and packaging materials and labels; (iii) inventory which
Bank determines in a commercially reasonable manner to be ineligible
because of age, type, category, or quantity; and (iv) inventory in the
possession of any person other than Borrower (or such warehouses as
noted above). The acceptance of or characterization by the Bank of
inventory as Acceptable Inventory shall not be deemed a determination
by the Bank as to its actual value nor in any way obligate Bank to
continue to deem such inventory to be Acceptable Inventory. All
inventory of Borrower whether Acceptable Inventory, or not, shall
constitute Collateral under the Security Agreement.
"Acceptable Accounts Amount" means the amount determined from time to
time equal to the product of the Acceptable Accounts multiplied by the
Applicable Percentage therefor.
"Acceptable Inventory Amount" means the amount determined from time to
time equal to (a) during the period of October through April, the
product of the Acceptable Inventory multiplied by the Applicable
Percentage; and (b) during the period of May through September, the
product of the Acceptable Inventory multiplied by the Applicable
Percentage plus the product of twenty percent (20%) multiplied by the
dollar value of Borrower's wholesale and mail order coffee inventory
which is included in Acceptable Inventory.
"Applicable Percentage" means with respect to each of Acceptable
Accounts and Acceptable Inventory, the applicable percentages set
forth above. The Borrower acknowledges and agrees that the Bank may,
at any time or times, lower the applicable percentage for Acceptable
Accounts or Acceptable Inventory for purposes of determining the
Borrowing Base to such percentage as the Bank may determine in a
commercially reasonable manner to be appropriate based upon any
material deterioration of the Borrower's condition, financial or
otherwise, and/or of the condition or quality of the Acceptable
Accounts or Acceptable Inventory.
"Borrowing Base" means the lesser of (1) Nine Million Dollars
($9,000,000.00), or (2) the amount determined from time to time equal
to the sum of (a) the Acceptable Accounts Amount and (b) Acceptable
Inventory Amount.
"Borrowing Base Certificate" means a certificate substantially in the
form attached hereto as Schedule A-1 pursuant to which the Borrower
shall calculate and report to the Bank the then current Borrowing Base
as of the first day of each Borrowing Base Reporting Period, and which
shall be accompanied by a reconciliation of accounts, accounts
receivable and inventory, and aging reports therefor, all in a form
reasonably acceptable to the Bank.
"Borrowing Base Reporting Period" means each of the thirteen (13)
twenty-eight (28) day periods which comprise a fiscal year of the
Borrower.
"Review Date" means March 31, 2001.
B. Maximum Available Amount of Revolving Line of Credit Loan. The
Borrower may borrow and reborrow from time to time under the Revolving
Line of Credit Loan a maximum principal amount equal to the then
current Borrowing Base. Borrower shall furnish the Bank on or before
the first day of each Borrowing Base Reporting Period with a Borrowing
Base Certificate. The Borrowing Base reported on each such Borrowing
Base Certificate shall remain in effect until the first day of the
next Borrowing Base Period.
C. Advances. The Revolving Line of Credit Loan shall be disbursed,
advanced, readvanced, and repaid as provided in the Note evidencing
the Revolving Line of Credit Loan and in the Agreement. Borrower may
request advances orally or in writing from time to time in accordance
with such procedures as the Bank may from time to time specify in an
amount such that the aggregate amounts of principal outstanding under
the Revolving Line of Credit Loan do not at any time exceed the
Borrowing Base. The Bank shall be under no obligation to make any
advance (automatic or otherwise) at any time or times during which an
Event of Default has occurred or is existing under the Agreement or
the Loan Documents, or if any condition exists which, if not cured,
would with the passage of time or the giving of notice, or both,
constitute such an Event of Default. At the time of each advance and
readvance under the Revolving Line of Credit Loan, Borrower shall
immediately become indebted to the Bank for the amount thereof. Each
such advance or readvance may be credited by the Bank to any deposit
account of Borrower with the Bank, be paid to Borrower, or applied to
any Obligation, as the Bank may in each instance elect. Borrower
authorizes the Bank to charge any account which Borrower maintains
with the Bank for any payments which Borrower may or must make, or
customarily makes, to the Bank from time to time. Bank agrees to first
charge that account of Borrower with Bank which is customarily charged
for such payments before charging any other account of the Borrower
with the Bank.
D. Interest Rate.
(i) Except as provided below, the principal balance outstanding from
time to time under the Revolving Line of Credit Loan, net of amounts
subject to a LIBOR based rate of interest as provided below, shall
bear interest at a variable annual rate equal to the BANK's Base Rate
plus the Applicable Base Rate Margin (as set forth below in Section I.
D (iii)) per annum. The "Base Rate" shall be the Base Rate of the BANK
as established and changed by the BANK from time to time whether or
not such rate shall be otherwise published or BORROWER receives notice
thereof. The BORROWER acknowledges that the Base Rate is used for
reference purposes only as an index and is not necessarily the lowest
interest rate charged by the BANK on commercial loans. Each time the
Base Rate changes the interest rate under the Revolving Line of Credit
Loan shall change contemporaneously with such change in the Base Rate.
Interest shall be calculated and charged daily on the basis of actual
days elapsed over a three hundred sixty (360) day banking year.
(ii) BORROWER may elect from time to time to have amounts outstanding
under the Revolving Line of Credit Loan bear interest for one or more
periods of thirty (30) days to up to three hundred sixty (360) days
each (each such period to be in increments of thirty (30) days) but in
no event beyond the next Review Date) at a rate (the "Revolving
LIBOR-based Rate") equal to the LIBOR rate (as hereinafter defined)
plus the Applicable LIBOR Margin (as set forth below in Section I. D
(iii)) per annum. BORROWER may only elect the Revolving LIBOR-based
Rate with respect to an outstanding principal amount under the
Revolving Line of Credit Loan of not less than Five Hundred Thousand
Dollars ($500,000.00). BORROWER shall notify BANK in writing at least
two (2) banking Days (as hereinafter defined) in advance of the date
upon which the BORROWER desires an election to the Revolving
LIBOR-based Rate to be effective. BORROWER's notice to BANK as
aforesaid shall specify the outstanding amount under the Revolving
Line of Credit Loan that BORROWER desires to bear interest at the
Revolving LIBOR-based Rate, the period selected (i.e., 30, 60, 90,
120, 150, 180, 210, 240, 270, 300, 330, or 360 days), and the date
such election is to be effective (which must be a Banking Day). Any
amounts outstanding under the Revolving Line of Credit Loan as to
which BORROWER has elected the Revolving LIBOR-based Rate shall
hereinafter be referred to as a "LIBOR Advance". All amounts
outstanding under the Revolving Line of Credit Loan which are not
subject to the Revolving LIBOR-based Rate shall bear interest at a
variable annual rate equal to the BANK's Base Rate plus Applicable
Base Rate Margin as provided above. The term "LIBOR rate" shall mean
the rate as determined by the BANK on the basis of the offered rates
for deposits in U.S. dollars for the period selected by the BORROWER
which appear on the Telerate page 3750 or Xxxxxx'x XXXX page as of
11:00 a.m. London time on the date that is two (2) Banking Days
preceding the effective date of BORROWER's election of the Revolving
LIBOR-based Rate in respect of a LIBOR Advance. If such rate does not
appear on the Telerate page 3750 or Xxxxxx'x XXXX page, the rate for
that date will be determined on the basis of the offered rates for
deposits in U.S. dollars which are offered by four major banks in the
London interbank market at approximately 11:00 a.m. London time on the
date that is two (2) Banking Days preceding the effective date of
BORROWER's election of the Revolving LIBOR-based Rate in respect of a
LIBOR Advance. The principal London office of each of the four major
banks in the London interbank market will be requested to provide a
quotation of its U.S. dollar deposit offered rate. If at least two
such quotations are provided, the rate for that date will be the
arithmetic mean of all such quotations. If fewer than two quotations
are provided as requested, the rate for that date will be determined
on the basis of the rates quoted for loans in U.S. dollars to leading
European banks for the period selected offered by major banks in New
York City at approximately 11:00 a.m., New York City time, on the date
that is two (2) Banking Days preceding the effective date of
BORROWER's election of the Revolving LIBOR-based Rate in respect of a
LIBOR Advance. In the event that the BANK is unable to obtain any such
quotation as provided above, it will be deemed that the LIBOR rate
cannot be determined and that the BORROWER's election for the
applicable LIBOR Advance shall be void. In the event that the Board of
Governors of the Federal Reserve System shall impose a Reserve
Percentage on the BANK with respect to LIBOR deposits of the BANK,
then for any period during which such Reserve Percentage shall apply,
the LIBOR rate shall be equal to the amount determined above divided
by an amount equal to one (1) minus the Reserve Percentage actually
maintained by the BANK. For purposes hereof, "Reserve Percentage"
means the rate (expressed as a decimal) at which the BANK is required
to maintain reserves under Regulation D of the Board of Governors of
the Federal Reserve System against Eurodollar liabilities outstanding.
Notwithstanding the foregoing, if as a result of any change in any
foreign or United States law or regulation (or change in the
interpretation thereof) it is determined by BANK that it is unlawful
to maintain a LIBOR Advance, or if any central bank or governmental
authority (foreign or domestic) shall assert that it is unlawful to
maintain a LIBOR Advance, then such LIBOR Advance shall terminate and
the BORROWER shall have no further right hereunder to elect the
Revolving LIBOR-based Rate. If for any reason a LIBOR Advance is
terminated or prepaid prior to the end of the applicable period for
which the Revolving Libor-based Rate is to be in effect, the BORROWER
shall, upon demand by BANK, pay to BANK any amounts required to
compensate BANK for any losses, costs, or expenses which it may
reasonably incur as a result of such termination or prepayment,
including, without limitation, any losses, costs, or expenses incurred
by reason of the liquidation or redeployment of deposits or other
funds acquired by the BANK to fund or maintain such LIBOR Advance. For
purposes hereof, a "Banking Day" means a day upon which BANKS are open
for business to the general public in Manchester, New Hampshire, and
upon which dealings are carried on and banks are open for business in
the London interbank market.
(iii) For purposes of this Section I. D., the terms "Applicable Base
Rate Margin" and "Applicable LIBOR Margin" shall mean the margins
determined by BANK on a quarterly basis as provided below. The margins
shall be determined by reference to the ratio of BORROWER's Funded
Debt to Cash Flow (each as described and defined in Schedule B
attached hereto) as reported on BORROWER's quarterly financial
covenant compliance certificate (as described on Schedule B attached
hereto) delivered to the BANK and as evidenced by BORROWER's Financial
Statements (as defined and described on Schedule B attached hereto)
delivered to the BANK. The Applicable Base Rate Margin and Applicable
LIBOR Margin for the Revolving Line of Credit Loan are as follows:
If ratio of Funded Debt Then the Applicable Then the Applicable
to Cash Flow is: Base Rate Margin is: LIBOR Margin is:
Greater or equal to 2.5:1 0% 2.50%
Greater or equal to 2.0:1
but less than 2.5:1 0% 2.25%
Greater or equal to 1.5:1
but less than 2.0:1 0% 2.0%
Greater or equal to 1.0:1
but less than 1.5:1 0% 1.75%
Less than 1.0:1 0% 1.50%
Within forty-five (45) days of the end of each of its fiscal quarters,
BORROWER shall (a) deliver to BANK its quarterly Financial Statements
(other than with respect to the fourth fiscal quarter for which
BORROWER shall deliver management prepared financial statements for
purposes hereof), (b) deliver to BANK the quarterly financial covenant
compliance certificate of BORROWER, and (c) certify to BANK the then
ratio of BORROWER's Funded Debt to Cash Flow and the BORROWER's
determination of the Applicable Base Rate Margin and Applicable LIBOR
Margin therefrom on such form as the BANK may from time to time
specify. BORROWER shall also provide to the BANK such other reasonable
information as BANK may request of BORROWER to verify its
determination of the Applicable Base Rate Margin and Applicable LIBOR
Margin. As of the tenth (10th) Banking Day after the BORROWER's
certification to the BANK of BORROWER's delivery of all of the
above-referenced items to the BANK, the BANK shall notify BORROWER of
its determination of the Applicable Base Rate Margin and Applicable
LIBOR Margin. The Applicable Base Rate Margin and Applicable LIBOR
Margin as so determined by the BANK shall be effective as to all
outstanding advances under the Revolving Line of Credit Loan as of the
tenth (10th) Banking Day after the date of the BORROWER's delivery to
the BANK of the above-referenced items through the next date upon
which the determination of a new Applicable Margin becomes effective
in accordance with the above provisions.
E. Review and Repayment. The Revolving Line of Credit Loan shall be
subject to review and, at the sole option and discretion of the Bank,
renewal on the first Review Date and, if renewed, thereafter on each
Review Date through which the Revolving Line of Credit Loan is
renewed. IF THE REVOLVING LINE OF CREDIT LOAN IS NOT RENEWED BY THE
BANK AS AFORESAID ON ANY REVIEW DATE, THE ENTIRE AMOUNT OF OUTSTANDING
PRINCIPAL, ACCRUED INTEREST AND OTHER CHARGES PAYABLE THEREUNDER SHALL
BE DUE AND PAYABLE BY BORROWER ON SUCH REVIEW DATE. BORROWER
ACKNOWLEDGES AND AGREES THAT THE BANK HAS NO OBLIGATION OR COMMITMENT
TO RENEW THE REVOLVING LINE OF CREDIT LOAN ON ANY REVIEW DATE.
NOTWITHSTANDING THE FOREGOING, OR ANY PROVISION OF THE REVOLVING LINE
OF CREDIT NOTE, ANY OF LOAN DOCUMENTS OR HEREIN TO THE CONTRARY, THE
REVOLVING LINE OF CREDIT LOAN SHALL BE A DEMAND OBLIGATION OF BORROWER
TO THE EXTENT THAT THE AMOUNT OUTSTANDING THEREUNDER AT ANY TIME
EXCEEDS THE MAXIMUM AVAILABLE AMOUNT UNDER SUCH REVOLVING LINE OF
CREDIT LOAN AS DETERMINED ABOVE, BUT ONLY TO THE EXTENT OF THE AMOUNT
OUTSTANDING IN EXCESS OF THE MAXIMUM AVAILABLE AMOUNT.
F. Purposes. Amounts advanced and readvanced to Borrower under the
Revolving Line of Credit Loan shall only be used for BORROWER's
ordinary working capital requirements.
The Borrower shall execute and deliver to Bank a replacement Revolving Line of
Credit Loan promissory note in form and substance satisfactory to the Bank to
reflect the increase of the maximum principal amount under the Revolving Line of
Credit Loan.
B. New Revolving Line of Credit/Term Loan. The Loan Agreement shall be and
hereby is amended by inserting the following new Section I-A:
I-A. REVOLVING LINE OF CREDIT/TERM LOAN. The Bank agrees to extend to
the Borrower a Revolving Line of Credit/Term Loan (the "Revolving Line
of Credit/Term Loan"), upon and subject to the terms and conditions
set forth below and in the Revolving Line of Credit/Term Note
evidencing such Loan, the other Loan Documents, and elsewhere in this
Agreement.
A. Maximum Available Amount. The maximum amount available to the
BORROWER under the Revolving Line of Credit/Term Loan shall be up
to Four Million Five Hundred Thousand Dollars ($4,500,000.00).
B. Advances. The Revolving Line of Credit/Term Loan shall be
disbursed, advanced, readvanced, and repaid as provided in the
Revolving Line of Credit/Term Note and this Agreement. The
initial advance under the Revolving Line of Credit/Term Loan
shall be made to pay in full all principal outstanding under the
existing Equipment Line of Credit Loan and New Term Loan and,
after such repayment, no further advances shall be made under the
Equipment Line of Credit or the New Term Loan. After the initial
advance as aforesaid, through and until September 30, 1999 (the
"Conversion Date"), BORROWER may request advances and readvances
orally or in writing from time to time in accordance with such
procedures as BANK may reasonably impose. Each such advance and
readvance shall be in the minimum amount of Two Hundred Thousand
Dollars ($200,000.00), provided that the aggregate amounts of all
advances outstanding under the Revolving Line of Credit/Term Loan
shall not at any time exceed the maximum available amount under
Paragraph A of this Section I-A above. Each request for an
advance hereunder shall be accompanied by a written statement of
the BORROWER as to the capital expenditure to be made with such
advance, which statement describes in detail the capital assets
to be acquired and certifies that such expenditure is consistent
with the capital expenditure budget previously delivered by
BORROWER to BANK for the fiscal year in which such request is
being made. Notwithstanding any other provision hereof, no
advances or readvances shall be made by BANK to BORROWER at any
time an Event of Default (as hereinafter defined) exists under
this Agreement or the Loan Documents, or any condition exists
which, if not cured, would with the passage of time or the giving
of notice, or both, constitute such an Event of Default. At the
time of each advance and readvance under the Revolving Line of
Credit/Term Loan the BORROWER shall immediately become indebted
to the BANK for the amount thereof.
C. Repayment of Principal. On the Conversion Date, the then
outstanding principal balance of the Revolving Line of
Credit/Term Loan shall be converted to a term loan; provided,
however, that the aggregate principal amount of such term loan
shall not exceed the maximum available amount under Paragraph A
of this Section I-A above. Commencing October 31, 1999, and
continuing on the last day of each month thereafter through and
including February 28, 2003, BORROWER shall make equal monthly
payments of principal each in the amount of Seventy-five Thousand
Dollars ($75,000.00), together with monthly payments of accrued
and unpaid interest at the rate set forth herein below. BORROWER
shall pay all remaining outstanding principal and accrued and
unpaid interest under such term loan in full on or before March
31, 2003 (the "Maturity Date"). BORROWER shall have the right to
prepay the Revolving Line of Credit/Term Loan at any time without
payment of any premium or penalty, other than the reimbursement
obligation of BORROWER with respect to any prepayment of
principal which is subject to a LIBOR based rate of interest.
D. Interest. The Revolving Line of Credit/Term Loan shall bear
interest in accordance with the following provisions:
(i) Except as provided below, the principal balance outstanding
from time to time under the Revolving Line of Credit/Term Loan,
net of amounts subject to a LIBOR based rate of interest as
provided below, shall bear interest at a variable annual rate
equal to the BANK's Base Rate plus the Applicable Base Rate
Margin (as set forth below in Section I-A. D (iii)) per annum.
Each time the Base Rate changes the interest rate under the
Revolving Line of Credit/Term Loan shall change contemporaneously
with such change in the Base Rate. Interest shall be calculated
and charged daily on the basis of actual days elapsed over a
three hundred sixty (360) day banking year.
(ii) BORROWER may elect from time to time to have amounts
outstanding under the Revolving Line of Credit/Term Loan bear
interest for one or more periods of thirty (30) days to up to
three hundred sixty (360) days each (each such period to be in
increments of thirty (30) days but in no event beyond the
Maturity Date) at a rate equal to the LIBOR rate as defined and
determined under Section I. D. (ii) above plus the Applicable
LIBOR Margin (as set forth below in Section I-A. D (iii)) per
annum. Outstanding principal under the Revolving Line of
Credit/Term Loan which is not subject to a current election to
bear interest at the LIBOR-based rate shall bear interest at the
Base Rate plus the Applicable Base Rate Margin per annum.
BORROWER shall make elections to have principal outstanding under
the Revolving Line of Credit/Term Loan subject to the LIBOR-based
rate in accordance with the procedures set forth above for the
Revolving Line of Credit Loan in Section I. D. (ii) and, except
as otherwise specifically set forth in this section, the terms
and conditions of Section I. D. (ii) shall apply to all such
elections, and outstanding principal under the Revolving Line of
Credit/Term Loan which is subject to such an election shall
constitute a LIBOR Advance for purposes of Section I. D. (ii)
above.
(iii) For purposes this Section I-A. D., the terms "Applicable
Base Rate Margin" and "Applicable LIBOR Margin" shall mean the
margins determined by BANK on a quarterly basis as provided
below. The margins shall be determined by reference to the ratio
of BORROWER's Funded Debt to Cash Flow (each as described and
defined in Schedule B attached hereto) as reported on BORROWER's
quarterly financial covenant compliance certificate (as described
on Schedule B attached hereto) delivered to the BANK and as
evidenced by BORROWER's Financial Statements (as defined and
described on Schedule B attached hereto) delivered to the BANK.
The Applicable Base Rate Margin and Applicable LIBOR Margin for
the Revolving Line of Credit/Term Loan are as follows:
If ratio of Funded Debt Then the Applicable Then the Applicable
to Cash Flow is: Base Rate Margin is: LIBOR Margin is:
Greater or equal to 2.5:1 0% 2.75%
Greater or equal to 2.0:1
but less than 2.5:1 0% 2.50%
Greater or equal to 1.5:1
but less than 2.0:1 0% 2.25%
Greater or equal to 1.0:1
but less than 1.5:1 0% 2.0 %
Less than 1.0:1 0% 1.75%
Within forty-five (45) days of the end of each of its fiscal
quarters, BORROWER shall (a) deliver to BANK its quarterly
Financial Statements (other than with respect to the fourth
fiscal quarter for which BORROWER shall deliver management
prepared financial statements for purposes hereof), (b) deliver
to BANK the quarterly financial covenant compliance certificate
of BORROWER, and (c) certify to BANK the then ratio of BORROWER's
Funded Debt to Cash Flow and the BORROWER's determination of the
Applicable Base Rate Margin and Applicable LIBOR Margin therefrom
on such form as the BANK may from time to time specify. BORROWER
shall also provide to the BANK such other reasonable information
as BANK may request of BORROWER to verify its determination of
the Applicable Base Rate Margin and Applicable LIBOR Margin. As
of the tenth (10th) Banking Day after the BORROWER's
certification to the BANK of BORROWER's delivery of all of the
above-referenced items to the BANK, the BANK shall notify
BORROWER of its determination of the Applicable Base Rate Margin
and Applicable LIBOR Margin. The Applicable Base Rate Margin and
Applicable LIBOR Margin as so determined by the BANK shall be
effective as to all outstanding advances under the Revolving Line
of Credit/Term Loan as of the tenth (10th) Banking Day after the
date of the BORROWER's delivery to the BANK of the
above-referenced items through the next date upon which the
determination of a new Applicable Margin becomes effective in
accordance with the above provisions.
E. Purposes. Amounts advanced to BORROWER under the Revolving Line of
Credit/Term Loan shall be used solely for financing BORROWER's capital
expenditures made in the ordinary course of business and which expenditures are
consistent with the capital expenditure budget previously delivered by BORROWER
to BANK for the fiscal year in which the advance is to be made.
C. Amendment of Fees. Section I of Schedule B of the Loan Agreement shall
be and hereby is replaced with the following:
Annual Revolving Line of Credit Facility Fee: $4,000.00 per
annum, payable in quarterly installments of $1,000.00 on January
1st, April 1, July 1st, and October 1st.
Unused Revolving Line of Credit/Term Loan Commitment Fee: 0.125%
per annum of daily average of unadvanced amounts under Revolving
Line of Credit/Term Loan (based upon full availability of
$4,500,000.00), determined and payable quarterly in arrears.
Cash Management Fees: BANK's standard monthly fees as the same
may be adjusted from time to time for target balance management
and additional fees to be determined upon basis of scope of
monthly services (e.g. lockboxes, zero balance account, etc.).
D. Amendment of Financial Covenants. Effective as of the end of the Borrower's
second fiscal quarter of its 1998 fiscal year with respect to the Financial
Covenants set forth in paragraphs A., C., D., E. and F., and as of the end of
the Borrower's third fiscal quarter of its 1998 fiscal year with respect to the
Financial Covenants set forth in paragraphs B, the Financial Covenants of the
Borrower set forth in Section IV of Schedule B of the Loan Agreement shall be
and hereby are replaced with the following: "IV. Description of Additional
Financial and other Covenants:
A. BORROWER and the Subsidiary on a consolidated basis shall have a ratio
of Funded Debt (as hereinafter defined) to Cash Flow (as hereinafter
defined) as of the end of each fiscal quarter which does not exceed 3.0:1.
"Funded Debt" means all indebtedness of the BORROWER and the Subsidiary
other than ordinary trade accounts payable and accrued liabilities, all as
determined at the end of each fiscal quarter from BORROWER's and the
Subsidiary' financial statements delivered to the BANK in accordance with
the covenants of the BORROWER herein above (the "Financial Statements").
"Cash Flow" means the BORROWER's and Subsidiary's earnings for the relevant
period, before reduction for interest, depreciation, and amortization
expense, and after reduction or increase for non-cash items, all as
determined in accordance with generally accepted accounting principles from
the Financial Statements. The relevant periods for purposes of the
determination of Cash Flow as of the end of each of BORROWER's fiscal
quarters shall be the prior four (4) fiscal quarters (including the quarter
then ending).
B. The BORROWER and the Subsidiary on a consolidated basis shall have a
minimum "Debt Service Coverage" (as hereinafter defined) of 2.4:1 as at the
end of each fiscal quarter. For purposes hereof, "Debt Service Coverage"
shall mean the ratio of Cash Flow for the relevant period to the aggregate
amount of interest and current maturities on Funded Debt payable by
BORROWER and the Subsidiary for such period, all as determined in
accordance with generally accepted accounting principles from the Financial
Statements. The relevant periods for purposes of the determination of Debt
Service Coverage as of the end of each of BORROWER's fiscal quarters shall
be the prior four (4) fiscal quarters (including the quarter then ending).
C. BORROWER and the Subsidiary on a consolidated basis shall have a ratio
of Adjusted Total Liabilities (as hereinafter defined) to Tangible Net
Worth (as hereinafter defined) of not greater than 1.75:1 as of end of each
fiscal quarter. "Adjusted Total Liabilities" means the total liabilities of
BORROWER and the Subsidiary, less Excess Cash (as hereinafter defined), all
as determined in accordance with generally accepted accounting principles
from the Financial Statements. "Excess Cash" means the sum of BORROWER's
and the Subsidiary's cash balances in investment and depository accounts
which exceeds Four Hundred Thousand Dollars ($400,000.00). "Tangible Net
Worth" means total shareholders' equity, plus Permitted Subordinated Debt
(as hereinafter defined), plus deferred tax liabilities, and less
intangible assets (unamortized product development costs, goodwill, and
unamortized debt issuance costs), all as determined from the Financial
Statements. Deferred tax assets are considered tangible assets for purposes
of this calculation. "Permitted Subordinated Debt" means indebtedness of
the BORROWER and the Subsidiary that is subordinated in writing to the BANK
on terms of subordination acceptable to the BANK, all as determined from
the Financial Statements.
D. BORROWER and the Subsidiary shall have on a consolidated basis Net
Profits (as hereinafter defined) (i) of at least Seven Hundred Fifty
Thousand Dollars ($750,000.00) as of the end of their 1998 fiscal year for
the relevant period then ending; and (ii) of at least One Million Dollars
($1,000,000.00) as of the end of each fiscal quarter beginning with the
first quarter of their 1999 fiscal year for the relevant period then
ending. "Net Profits" means net profits as determined in accordance with
generally accepted accounting principles from the Financial Statements. The
relevant period for purposes of the determination of Net Profits shall be
the prior four (4) fiscal quarters (including the quarter then ending).
E. BORROWER shall not make expenditures for capital assets or capital
improvements (as determined in accordance with generally accepted
accounting principles) in any fiscal year in excess of the sum of Five
Million Dollars ($5,000,000.00) plus the amount of cash received in such
fiscal year by BORROWER from the sale of capital assets.
F. BORROWER shall report and certify to BANK its compliance with the
financial covenants hereinabove within forty-five (45) days after each
fiscal quarter end on such form or forms as may from time to time be
specified by the BANK."
E. Commitment Fee. For and in consideration of the Bank entering into this
Amendment, the Borrower shall pay the Bank a commitment fee in the amount of
$15,000.00 on the date of execution hereof.
II. AMENDMENT OF SECURITY AGREEMENTS. The Revolving Line of Credit Loan, as
increased hereby, and the Revolving Line of Credit/Term Loan shall each be
secured in accordance with the terms, conditions, and priorities under the Loan
Agreement and Loan Documents for the Revolving Line of Credit Loan prior to
increase hereunder. The Security Agreements of each of the Borrower and the
Subsidiary included among the Loan Documents shall be and hereby are amended by
including each of the Revolving Line of Credit Loan, as increased hereby, and
the Revolving Line of Credit/Term Loan as Secured Obligations under each of the
Security Agreements secured by the security interests in the Collateral granted
to the Bank by the Borrower and the Subsidiary thereunder.
III. AMENDMENT OF SUBSIDIARY'S GUARANTY AGREEMENT. The Guaranty shall be
and hereby is amended such that each of the Revolving Line of Credit Loan, as
increased hereby, and the Revolving Line of Credit/Term Loan shall be included
as a Guaranteed Obligations thereunder.
IV. REPRESENTATIONS AND WARRANTIES. Except as set forth in Schedule I
hereto, and except to the extent affected by the amendments hereunder or by
previous amendments, or otherwise consented to or acknowledged by the Bank in
writing, each of the Borrower and the Subsidiary, jointly and severally,
confirm, reassert, and restate all of the representations and warranties under
the Loan Agreement and the Loan Documents as of the date hereof.
V. AFFIRMATIVE COVENANTS. Except as set forth in Schedule II hereto and
except to the extent affected by the amendments hereunder or by previous
amendments, or otherwise consented to or acknowledged by the Bank in writing,
each of the Borrower and the Subsidiary, jointly and severally, hereby confirm,
reassert, and restate their respective affirmative covenants as set forth in the
Loan Agreement and Loan Documents as of the date hereof.
VI. AFFIRMATION OF NEGATIVE COVENANTS. Except as set forth on Schedule III
hereto and except to the extent affected by the amendments hereunder or by
previous amendments, or otherwise consented to or acknowledged by the Bank in
writing, each of the Borrower and the Subsidiary, jointly and severally, hereby
confirm, reassert, and restate their respective negative covenants as set forth
in the Loan Agreement and the Loan Documents as of the date hereof.
VII. FURTHER REPRESENTATION AND WARRANTY. Each of the Borrower and the
Subsidiary represent and warrant to the Bank that no consent, authorization or
approval is required of any third party, including, but not limited to, the
Vermont Economic Development Authority and the United States Small Business
Administration, for any of the Borrower or the Subsidiary to enter into this
Agreement and to consummate the transactions contemplated hereunder.
VIII. NO FURTHER EFFECT. Except as specifically amended hereby, the terms
and conditions of the Loan Agreement and the Loan Documents as set forth therein
and as amended through the date hereof shall remain in full force and effect.
IN WITNESS WHEREOF, the Bank, the Borrower and the Subsidiary have executed
this agreement effective as of the date and year first above written.
FLEET BANK-NH
/s/ Xxxxxxxxx Xxxxxxxxxx /s/ Xxxxx X. Xxxxxxxxx
------------------------ By: ---------------------------------------
Witness Xxxxx X. Xxxxxxxxx, Vice President
GREEN MOUNTAIN COFFEE ROASTERS, INC.
/s/ Xxxxx Xxxxxxx /s/ Xxxxxx X. Xxxxx
------------------------ By: ----------------------------------------
Witness Xxxxxx X. Xxxxx, Chief Financial Officer
GREEN MOUNTAIN COFFEE ROASTERS
FRANCHISING CORPORATION
/s/ Xxxxx Xxxxxxx /s/ Xxxxxx X. Xxxxx
------------------------ By: ----------------------------------------
Witness Xxxxxx X. Xxxxx, Chief Financial Officer
XXXXX XX Xxx Xxxxxxxxx
XXXXXX XX Xxxxxxxxxxxx
Xx this, the 20th day of February, 1998, before me, the undersigned officer,
personally appeared Xxxxx X. Xxxxxxxxx, who acknowledged himself to be a Vice
President of Fleet Bank - NH, a bank and that he, as such Vice President, being
authorized so to do, executed the foregoing instrument for the purposes therein
contained on behalf of said bank.
Before me,
/s/ Xxxxxxxxx X. Xxxxxxxxxx
------------------------------------
Justice of the Peace
STATE OF Vermont
COUNTY OF Washington
On this, the 20th day of February, 1998, before me, the undersigned officer,
personally appeared Xxxxxx X. Xxxxx, who acknowledged himself to be the Chief
Financial Officer of Green Mountain Coffee Roasters, Inc., a corporation and
that he, as such officer, being authorized so to do, executed the foregoing
instrument for the purposes therein contained on behalf of said corporation.
Before me,
/s/ Xxxxx Xxxxxxx
----------------------------------
Notary Public
STATE OF Vermont
COUNTY OF Washington
On this, the 20th day of February, 1998, before me, the undersigned officer,
personally appeared Xxxxxx X. Xxxxx, who acknowledged himself to be the Chief
Financial Officer of Green Mountain Coffee Roasters Franchising Corporation, a
corporation and that he, as such officer, being authorized so to do, executed
the foregoing instrument for the purposes therein contained on behalf of said
corporation.
Before me,
/s/ Xxxxx Xxxxxxx
----------------------------------
Notary Public
ELEVENTH AMENDMENT TO FLEET BANK - NH
COMMERCIAL LOAN AGREEMENT AND LOAN DOCUMENTS
Schedule I
None
ELEVENTH AMENDMENT TO FLEET BANK - NH
COMMERCIAL LOAN AGREEMENT AND LOAN DOCUMENTS
Schedule II
None
ELEVENTH AMENDMENT TO FLEET BANK - NH
COMMERCIAL LOAN AGREEMENT AND LOAN DOCUMENTS
Schedule III
None
SCHEDULE X-0
XXXXX XXXX - XX
BORROWING BASE CERTIFICATE
Borrower: Green Mountain Coffee Roasters, Inc.
The undersigned hereby certifies to Fleet Bank - NH (the "Bank), pursuant
to Section I of the Seventh Amendment and First Restatement of Commercial Loan
Agreement dated April 12, 1996, as amended by Eighth Amendment to Commercial
Loan Agreement and Loan Documents dated February 19, 1997, by Ninth Amendment to
Commercial Loan Agreement and Loan Documents dated June 9, 1997, by Tenth
Amendment to Commercial Loan Agreement dated January 15, 1998, and by Eleventh
Amendment to Commercial Loan Agreement and Loan Documents dated February 20,
1998 (the "Agreement"), as follows:
Calculation of Borrowing Base:
Accounts Receivable:
1. Total Accounts Receivable
as of __________ , 199__,
as per attached Aging Report
("Certified Accounts") $_______
2. Disqualified Accounts:
Accounts over 60 days
from invoice due date $_______
Intercompany accounts $_______
Other non-qualifying accounts $_______
Total Disqualified Accounts $_______ $_______
3. Item 1 minus item 2 ("Acceptable Accounts") $______
4. Advance Rate on Acceptable Accounts per Agreement 80%
5. Item 3 times item 4 $_______
6. Total Acceptable Inventory as of
________, 199__, as per attached Inventory Statement $_______
7. Advance Rate on Acceptable Inventory
during October through April and 50%
during May through September 50% + 20% of coffee
8. Lesser of Item 6 times Item 7 $________
9. Borrowing Base under Revolving
Line of Credit (Lesser of Item 5
plus Item 8, or $9,000,000) $________
Based upon the foregoing calculation made as of the close of business on the
date indicated below, the undersigned hereby requests that the Bank make
advances under the Revolving Line of Credit Loan to Borrower in accordance with
the provisions of Loan Agreement and the Loan Documents, which advances, when
added to the outstanding principal amount of all other advances under the
Revolving Line of Credit Loan does not and shall not exceed the Borrowing Base.
Except as set forth in the accompanying letter, the undersigned hereby reasserts
and restates all representations and warranties set forth in the Agreement as of
the date hereof and certifies that no Event of Default under the Agreement, or
any event which with the passage of time or the giving of notice, or both, would
constitute an Event of Default, has occurred and is continuing. Each capitalized
term used, but not defined herein, shall have the respective meaning set forth
in the Agreement.
WITNESS the execution hereof on the 20th day of February, 1998.
BORROWER:
GREEN MOUNTAIN COFFEE ROASTERS, INC.
By:
--------------------------------
Xxxxxx X. Xxxxx,
Chief Financial Officer
