NINTH AMENDMENT TO FLEET BANK - NH
COMMERCIAL LOAN AGREEMENT AND LOAN DOCUMENTS
THIS NINTH AMENDMENT TO COMMERCIAL LOAN AGREEMENT AND LOAN DOCUMENTS (the
"Amendment") is made effective June ___, 1997, 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
(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 Five Million Dollars ($5,000,000.00) (the
"Revolving Line of Credit Loan"); and
WHEREAS, the Borrower has requested, and the Bank has agreed, to increase
the maximum principal amount available under the Revolving Line of Credit Loan
from Five Million Dollars ($5,000,000.00) to Six Million Dollars
($6,000,000.00), and, in connection therewith, to make certain 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 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 and Elimination of Borrowing Base.
The maximum principal amount available to the Borrower under the Revolving Line
of Credit Loan as set forth in Section I. A. of the Loan Agreement shall be and
hereby is increased from Five Million Dollars ($5,000,000.00) to Six Million
Dollars ($6,000,000.00), subject to the terms and conditions of the Loan
Agreement and Revolving Line of Credit Loan promissory note. The provisions
limiting availability under the Revolving Line of Credit Loan under clause (2)
of Section I. A. of the Loan Agreement shall be and hereby are deleted. 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. Change of Interest Rate Provisions. Section I. D. of the Loan Agreement
shall be and hereby is amended by deleting the same and inserting in place
thereof the following new Section I. D.:
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 hereinafter defined) 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 hereinafter defined) 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 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 hereof, 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 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 1.8:1 0.25% 2.75%
Greater or equal to 1.5:1
but less than 1.8:1 0% 2.50%
Greater or equal to 1.25:1
but less than 1.5:1 0% 2.25%
Greater or equal to 1.0:1
but less than 1.25:1 0% 2.00%
Less than 1.0:1 0% 1.80%
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."
C. Amendment of Fees. The Annual Revolving Line of Credit Facility Fee set
forth in 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: $3,500.00 per annum,
payable in quarterly installments of $875.00 on January 1st, April 1,
July 1st, and October 1st."
D. Amendment of Financial Covenants. 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 2.0:1. "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 Senior Debt (as hereinafter defined) to Tangible
Capital Base (as hereinafter defined) of not greater than 1.4:1 as of
end of each fiscal quarter. "Adjusted Senior Debt" means Senior Debt
(as hereinafter defined) less Excess Cash (as hereinafter defined),
all as determined as of the end of the fiscal quarter from the
Financial Statements. "Senior Debt" means all indebtedness with the
exception of indebtedness of the BORROWER or the Subsidiary that is
subordinated to the BANK on terms of subordination acceptable to the
BANK ("Permitted Subordinated Debt"), all as determined from the
Financial Statements. "Excess Cash" means the sum of BORROWER's and
the Subsidiary's cash balances in investment and depository accounts
which exceed Four Hundred Thousand Dollars ($400,000.00). "Tangible
Capital Base" means total shareholders' equity, plus Permitted
Subordinated Debt, 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.
D. BORROWER and the Subsidiary shall have on a consolidated basis Net
Profits (as hereinafter defined) as of the end of each fiscal quarter
for the relevant period of at least One Millions Dollars
($1,000,000.00). "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 as of the end of each fiscal quarter
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 principals) in its 1997 fiscal year in excess of Five
Million Seven Hundred Thousand Dollars ($5,700,000.00) and in any
fiscal year thereafter in excess of Five Million Dollars
($5,000,000.00).
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
$2,000.00 on the date of execution hereof.
II. AMENDMENT OF SECURITY AGREEMENTS. The Revolving Line of Credit
Loan, as increased hereby, is and shall 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 the Revolving Line of Credit Loan, as increased
hereby, 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 the Revolving Line of Credit Loan, as
increased hereby 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 firs above written.
FLEET BANK-NH
/s/ Xxxxxxxxx Xxxxxxxxxx By: /s/ Xxxxx X. Xxxxxxxxx
------------------------ ------------------------------
Witness Xxxxx X. Xxxxxxxxx,
Vice President
GREEN MOUNTAIN COFFEE ROASTERS, INC.
/s/ Xxxxxxxx X. Xxxxxxx By: /s/ Xxxxxx X. Xxxxx
------------------------ -----------------------------
Witness Xxxxxx X. Xxxxx,
Chief Financial Officer
GREEN MOUNTAIN COFFEE ROASTERS
FRANCHISING CORPORATION
/s/ Xxxxxxxx X. Xxxxxxx By: /s/ Xxxxxx X. Xxxxx
----------------------- ---------------------------------
Xxxxxx X. Xxxxx,
Chief Financial Officer
STATE OF New Hampshire
--------------
COUNTY OF Hillsborough
--------------
On this, the 16 day of June, 1997, 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 9th day of June, 1997, 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 9th day of June, 1997, 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
NINTH AMENDMENT TO FLEET BANK - NH
COMMERCIAL LOAN AGREEMENT AND LOAN DOCUMENTS
Schedule I
None
NINTH AMENDMENT TO FLEET BANK - NH
COMMERCIAL LOAN AGREEMENT AND LOAN DOCUMENTS
Schedule II
None
NINTH AMENDMENT TO FLEET BANK - NH
COMMERCIAL LOAN AGREEMENT AND LOAN DOCUMENTS
Schedule III
None
