Exhibit 10.28
SIXTH AMENDMENT TO CREDIT AGREEMENT
     THIS SIXTH AMENDMENT TO CREDIT AGREEMENT (this “Amendment”), dated as of
November 12, 2008, is by and between ARABICA FUNDING, INC., a Delaware
corporation (the “Borrower”), the several banks and other financial institutions
or entities from time to time parties to this Agreement (the “Lenders”), and
BANK OF AMERICA, N.A., as successor-by-merger to Fleet National Bank, as
administrative agent (the “Administrative Agent”).
RECITALS
     A. The Borrower, the Lenders and the Administrative Agent are parties to
the Credit Agreement dated as of June 29, 2004 (as amended and in effect from
time to time, the “Credit Agreement”). Capitalized terms used herein without
definition have the meanings assigned to them in the Credit Agreement.
     B. The Borrower has requested certain amendments to the Credit Agreement
and the consent of the Lenders to the Borrower’s execution and delivery of an
amendment to the Master Lease. The Lenders signing below are willing to effect
such amendment and consent to such execution and delivery, on the terms and
conditions hereinafter set forth.
     NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
I. AMENDMENT TO CREDIT AGREEMENT AND CONSENT. Subject to the satisfaction of
each of the conditions set forth herein, the Credit Agreement is hereby amended
as follows:
     A. Definitions. Section 1.1 of the Credit Agreement is hereby amended as
follows:
1. By adding the following new definitions of “Base Rate”, “Base Rate Loan” and
“New Store”, each in proper alphabetical order:
     “Base Rate Loan”: any Loan bearing interest based upon the Base Rate.
     “Base Rate”: for any day, a fluctuating rate per annum equal to the higher
of (a) the Federal Funds Effective Rate plus 1/2 of 1% and (b) the rate of
interest in effect for such day as publicly announced from time to time by the
Reference Lender as its “prime rate”, provided that notwithstanding anything in
this Agreement to the contrary, at no time shall the Base Rate be less than four
(4.0%) percent. The “prime rate” is a rate set by the Reference Lender based
upon various factors including the Reference Lender’s costs and desired return,
general economic conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below such announced
rate. Any change in such rate announced by the Reference Lender shall take
effect at the opening of business on the day specified in the public
announcement of such change.

 

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     “New Store”: any Store not previously in existence at a location, provided
that a relocation of any Store within the same building, strip mall or retail
mall shall not be considered a New Store. Notwithstanding the foregoing
provision, the definition of New Store shall at all times be consistent with the
Company’s reporting of the opening of new Stores in all financial statements and
reports that any member of the Restricted Group makes to, or files with, the SEC
or provides to the holders of any class of its debt securities or public equity
securities.
2. By deleting in their entireties the definitions of “Adjustment Date”, “COF
Loan”, “COF Rate” and “Pricing Grid”.
3. By amending and restating the definition of “Applicable Margin” in its
entirety as follows:
     “Applicable Margin”: at any time, in respect of Base Rate Loans, two (2.0%)
percent per annum and in respect of Eurodollar Loans, three and three-quarters
(3.75%) percent per annum.
4. By amending and restating the definition of Commitment Fee Rate in its
entirety as follows:
     “Commitment Fee Rate”: one (1.0%) percent per annum.
5. By amending the definition of “Consolidated EBITDA” by deleting the reference
to “fiscal quarter” contained therein and by substituting therefor the phrase
“fiscal period”.
6. By inserting the following at the end of the definition of “Eurodollar Base
Rate”:
“Notwithstanding anything in this Agreement to the contrary, at no time shall
the Eurodollar Base Rate be less than two and one-quarter (2.25%) percent.”
7. By amending and restating the definition of “New Store Commitment” in its
entirety as follows:
     “New Store Commitment”: an enforceable obligation of the Company or any of
its Subsidiaries to lease, acquire, develop or open a New Store.
8. By amending and restating the definition of “Revolving Termination Date” in
its entirety as follows:
     “Revolving Termination Date”: June 30, 2010.
9. By amending and restating the last sentence in the definition of “Revolving
Commitment” in its entirety as follows:
     “The amount of the Total Revolving Commitments as of November 12, 2008 is
$9,000,000.”

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10. By amending and restating the definition of “Store” in its entirety as
follows:
     “Store”: any store, kiosk, or other retail unit, including without
limitation, any New Store, which is owned or controlled directly or indirectly
by the Company or any of its Subsidiaries.
     B. Base Rate Loans. The Credit Agreement is amended by deleting the phrases
“COF Loan” and “COF Loans” in each place where such phrases appear and by in
each case substituting therefor the phrases “Base Rate Loan” and “Base Rate
Loans”, respectively.
     C. Base Rate. The Credit Agreement is amended by deleting the phrase “COF
Rate” in each place where such phrase appears and by substituting therefor the
phase “Base Rate”.
     D. Commitment Fees. Section 2.3(a) of the Credit Agreement is hereby
amended and restated in its entirety as follows:
“(a) The Borrower agrees to pay to the Administrative Agent for the account of
each Lender in accordance with its Revolving Percentage, a commitment fee for
the period from and including November 12, 2008 to the last day of the Revolving
Commitment Period, computed at the Commitment Fee Rate on the amount of the
Total Revolving Commitments in effect (regardless of usage) on the due date of
each such payment, payable monthly in advance on the first Business Day of each
calendar month, commencing on the first such date to occur after the date
hereof.”
     E. Interest Rate on Base Rate Loans. Section 2.9(b) of the Credit Agreement
is hereby amended and restated as follows:
          “(b) Each Base Rate Loan shall bear interest at a rate per annum equal
to the Base Rate plus the Applicable Margin.”
     F. Debit Authorization. Section 2.12(c) of the Credit Agreement is hereby
amended by inserting the following at the end thereof:
“The Borrower hereby irrevocably authorizes the Administrative Agent to debit
any of Borrower’s accounts held with the Reference Bank (any of the foregoing, a
“Borrower Account”), or if the funds therein are insufficient, to advance to a
Borrower Account as a Revolving Loan that is a Base Rate Loan and simultaneously
debit such Borrower Account, a sum sufficient to pay when due all scheduled
payments of principal and all interest accrued on the Obligations and to pay
when due all costs, fees and expenses at any time owed by the Borrower to the
Administrative Agent, the Lenders and/or the Issuing Lender.”
     G. Monthly Compliance Certificates. Section 6.2(b) of the Credit Agreement
is hereby amended and restated in its entirety as follows:
          “(b) concurrently with the delivery of any financial statements
pursuant to Section 6.1, (i) (A) a certificate of a Responsible Officer stating
that, to the best of such Responsible Officer’s knowledge, each of Holdings and
each of its Subsidiaries during such period has observed or performed all of its
covenants and other agreements, and satisfied every condition contained in this

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Agreement and the other Transaction Documents to which it is a party to be
observed, performed or satisfied by it, and that such Responsible Officer has
obtained no knowledge of any “Default” or “Event of Default” (each as defined in
the Master Lease) except as specified in such certificate, and (B) a certificate
of appropriate officer of the Borrower, such officer to be reasonably acceptable
to the Administrative Agent, stating that to the best of such officer’s
knowledge, each of the Borrower and the Securities Pledgor during such period
has observed or performed all of its covenants and other agreements, and
satisfied every condition contained in this Agreement and the other Transaction
Documents to which it is a party to be observed, performed or satisfied by it,
and that such officer has obtained no knowledge of any Default or Event of
Default except as specified in such certificate, (ii) a Store by Store report
substantially in the form of Exhibit 6.2(b), and (iii) in the case of quarterly,
annual and monthly financial statements, (x) a Compliance Certificate and (y) to
the extent not previously disclosed to the Administrative Agent, a description
of any change in the jurisdiction of organization of any Loan Party and a list
of any Intellectual Property or other property as to which action is required
under Section 6.10 hereof, in each case acquired by any Loan Party since the
date of the most recent report delivered pursuant to this clause (y), and
(z) the applicable compliance certificate required to be delivered under the
Master Lease;”
     H. Financial Covenants. Section 7.1 of the Credit Agreement is hereby
amended and restated in its entirety as follows:
     “7.1 Financial Condition Covenants; New Stores.
     (a) Maximum Senior Leverage Ratio. Permit the ratio (the ‘Consolidated
Senior Leverage Ratio‘) of the Consolidated Funded Indebtedness of the Company
and its Subsidiaries (excluding any Additional Subordinated Debt included
therein) at September 30, 2008 and at the last day of each fiscal month
thereafter to the Consolidated EBITDA of the Company for the twelve fiscal month
period ending on such last day of the fiscal month to be greater than 1.00:1.00.
     (b) Minimum Consolidated EBITDA. Permit the Consolidated EBITDA of the
Company for the twelve fiscal month period ending on September 30, 2008 and for
the twelve fiscal month period ending on the last day of each fiscal month
thereafter to be less than $9,000,000.
     (c) Minimum Interest Coverage Ratio. Permit the ratio of (i) the
Consolidated EBITDAR of the Company for any Reference Period ending on any
Quarterly Date falling in any period referred to below to (ii) the sum of
Consolidated Interest Expense plus Consolidated Rental Expense of the Company
and its Subsidiaries for such Reference Period to be less than the ratio
specified below for the period during which such date falls.

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              Minimum Interest Quarterly Dates   Coverage Ratio
January 1, 2008 through June 30, 2008
    1.38:1.00  
July 1, 2008 through September 30, 2008
    1.40:1.00  
October 1, 2008 and thereafter
    1.35:1.00  

     (d) Maximum Capital Expenditures.
     (i) Make any Capital Expenditures, except to purchase and lease back assets
of the Company and its Subsidiaries in connection with Loans hereunder (limited
in purchase price to the amount of such Revolving Loans) pursuant to the
Lease/Purchase Documents.
     (ii) Permit the Capital Expenditures made by the Company and its
Subsidiaries in any fiscal year to exceed $10,000,000.
     (e) Minimum Rental Payments. Permit the Lease/Purchase Documents not to
provide at all times for rental and other payments from the Company under the
Lease/Purchase Documents in amounts sufficient to cover all of the Obligations
and all of its operating and other expenses, in each case on or prior to the
dates when such Obligations and expenses become due and payable.
     (f) New Store Commitments. Permit the Company to enter into any New Store
Commitment if at such time (A) the Coffeehouse Level EBITDA Margin for the
Reference Period ended December 30, 2007 and each Reference Period thereafter is
less than 15% of Coffeehouse Level Sales for such Reference Period, or (B) the
aggregate Available Revolving Commitments of all Lenders are less than (1) the
budgeted amount of Capital Expenditures for outstanding New Store Commitments
(including the New Store Commitment in question, and assuming that the budgeted
amount of Capital Expenditures for any New Store Commitment for which a Capital
Expenditure budget has not been determined is $300,000), less (2) the aggregate
amount of Capital Expenditures made toward New Store Commitments prior to the
opening of each such New Store.”
     I. Foreign Intellectual Property. Section 7.3 of the Credit Agreement is
hereby amended by inserting the following at the end thereof:
“Without limitation of the foregoing, the Borrower covenants and agrees that it
will not enter into (and will not suffer or permit any of its Subsidiaries to
enter into) any agreement or understanding (each, a ‘Restrictive Agreement‘)
with any Person other than the Administrative Agent which could prohibit or
restrict in any manner the right of the Borrower or any such Subsidiary to grant
to the Administrative Agent any Lien on any of its Intellectual Property arising
under laws other than those of the United States, whether such Intellectual
Property is now owned or hereafter acquired. The Borrower represents and
warrants that, at the date of this Agreement, neither the Borrower nor any such
Subsidiary is party to any such Restrictive Agreement.”

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     J. Commitments. Schedule 1.1(A) of the Credit Agreement is amended and
restated in its entirety in the form attached hereto as Annex I.
     K. Borrower Schedules. Each of Schedule 1.1B, 1.1C, 4.4, 4.9, 4.15, 4.17,
4.19(a), 4.24, 4.25(a) and 4.25(d) to the Credit Agreement is amended and
restated in its entirety in the form attached hereto as Annex II by updating
each as of the date hereof
     L. Amendment to Lease/Purchase Documents. The Lenders hereby agree to the
form of the Seventh Amendment to Second Amended and Restated Lease and License
Financing and Purchase Option Agreement attached hereto as Exhibit A (the
“Amendment to Lease/Purchase Documents”).
     M. No Further Amendments. Except as specifically amended hereby, the text
of the Credit Agreement and all other Loan Documents shall remain unchanged and
in full force and effect.
II. REFERENCES IN LOAN DOCUMENTS; CONFIRMATION OF SECURITY. All references to
the “Credit Agreement” in all Loan Documents shall, from and after the date
hereof, refer to the Credit Agreement, as amended by this Amendment, and all
obligations of the Borrower under the Loan Documents shall be secured by and be
entitled to the benefits of the Security Documents. All Security Documents
heretofore executed by the Restricted Group shall remain in full force and
effect and, by the Borrower’s signature hereto, and Holdings’ and the Company’s
and its Subsidiaries’ signatures to such Amendment to Lease/Purchase Documents,
such Security Documents are hereby ratified and affirmed.
III. REPRESENTATIONS, WARRANTIES AND COVENANTS. The Borrower hereby represents
and warrants to, and covenants and agrees with the Lenders that:
     A. The execution and delivery of this Amendment has been duly authorized by
all requisite action on the part of the Borrower and does not contravene,
conflict with, or constitute a default under, any provision of: (i) the
Borrower’s articles of incorporation or bylaws, (ii) any law, judgment, decree
or order applicable to the Borrower or to any other Loan Party, or (iii) any
provision of any material agreement or instrument binding upon any Loan Party or
upon any of the respective property of a Loan Party. The execution and delivery
of this Amendment by the Borrower do not and will not cause any lien to arise
under any provision of any material agreement or instrument binding upon any
Loan Party or upon any of the respective property of a Loan Party.
     B. The representations and warranties of the Borrower contained in the
Credit Agreement and the other Loan Documents are true and correct in all
material respects on and as of the date of this Amendment as though made at and
as of such date, except to the extent (a) such representations and warranties
expressly relate to an earlier date (and the representations and warranties set
forth in Section 4.1 and Section 4.18 (relating solely to the Confidential
Offering Memorandum) of the Credit Agreement and Section 19(a) and Section 19(q)
(relating solely to the Confidential Offering Memorandum) of the Master Lease
shall be construed to relate only to the date of the Credit Agreement and the
Master Lease, respectively, and to the Closing Date), in which case each such
representation and warranty shall be true and correct in all material respects
as of such earlier date and (b) of inaccuracies resulting from transactions

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expressly permitted under the Loan Documents. No Default or Event of Default has
occurred and is continuing under the Credit Agreement or any other Loan
Document.
     C. Attached hereto as Exhibit A is a true, correct and complete copy of the
Amendment to Lease/Purchase Documents.
     D. No member of the Restricted Group is required to obtain any consent,
approval or authorization from, or to file any declaration or statement with,
any governmental instrumentality or other agency or any other person or entity
in connection with or as a condition to the execution, delivery or performance
of this Amendment.
     E. This Amendment constitutes the legal, valid and binding obligation of
the Borrower, enforceable against it in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, moratorium and similar laws affecting
the rights and remedies of creditors generally or the application of principles
of equity, whether in any action at law or proceeding in equity, and subject to
the availability of the remedy of specific performance or of any other equitable
remedy or relief to enforce any right thereunder.
     F. $3,000,000 in Total Revolving Extensions of Credit are outstanding as of
September 12, 2008.
     G. By the Borrower’s signature hereto, and Holdings’, the Company’s and its
Subsidiaries’ signatures to the Amendment to Lease/Purchase Documents, each such
party hereby acknowledges and confirms that (i) it does not have any grounds,
and hereby agrees not to challenge (or to allege or to pursue any matter, cause
or claim arising under or with respect to), in any case based upon acts or
omissions of the Administrative Agent or the Lenders, the effectiveness,
genuineness, validity, collectibility or enforceability of the Credit Agreement
or any of the other Loan Documents, the Lease/Purchase Documents, the
Obligations, the Grantor Obligations (as defined in the Borrower Security
Agreement and the Company Guarantee and Security Agreement, respectively), the
Liens securing the Obligations and Grantor Obligations, or any of the terms or
conditions of any Loan Document or any Lease/Purchase Document, and (ii) it does
not possess (and hereby forever waives, remises, releases, discharges and holds
harmless each Lender, the Administrative Agent, and their respective affiliates,
stockholders, directors, officers, employees, attorneys, agents and
representatives and each of their respective heirs, executors, administrators,
successors and assigns (collectively, the “Indemnified Parties”) from and
against, and agrees not to allege or pursue) any action, cause of action, suit,
debt, claim, counterclaim, cross-claim, demand, defense, offset, opposition,
demand and other right of action whatsoever, whether in law, equity or otherwise
(which it, all those claiming by, through or under it, or its successors or
assigns, have or may have) against the Indemnified Parties, or any of them, by
reason of, any matter, cause or thing whatsoever, with respect to events or
omissions occurring or arising on or prior to the date hereof and relating to
the Credit Agreement, any of the other Loan Documents or any of the other
Lease/Purchase Documents (including, without limitation, with respect to the
payment, performance, validity or enforceability of the Obligations, the Grantor
Obligations, the Liens securing the Obligations and Grantor Obligations, or any
or all of the terms or conditions of any Loan Document or any Lease/Purchase
Document) or any transaction relating thereto.

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     H. Attached hereto as Annex III is a true and correct list of all deposit
accounts, securities accounts, commodities accounts and similar accounts
maintained by the Borrower and each other Loan Party as of the date hereof. On
or before January 15, 2009, the Borrower will obtain and maintain, or cause to
be obtained and maintained, control agreements in form and substance
satisfactory to the Administrative Agent with respect to each such account set
forth on Annex III and shall take, or cause to be taken, any other actions
deemed necessary by the Administrative Agent to obtain and maintain “control” of
each such account (as such term is defined in Section 9-104 of the Uniform
Commercial Code in the applicable jurisdiction), and the Borrower shall
thereafter in connection with the opening of any new deposit, securities,
commodities or similar account, deliver or cause to be delivered a control
agreement in form and substance satisfactory to the Administrative Agent
simultaneously with the opening of such new account; provided that so long as no
Default or Event of Default shall have occurred and be continuing, the Borrower
and the other Loan Parties shall be permitted to maintain those accounts
expressly designated on Annex III hereto not subject to the Administrative
Agent’s control (the “Unrestricted Accounts”) if (i) the total amount of funds
on deposit in all Unrestricted Accounts does not exceed $200,000 in the
aggregate at any given time and (ii) such Unrestricted Accounts are used solely
for petty cash purposes. Failure to comply with this Section III.H. shall
constitute an Event of Default under the Credit Agreement.
     I. On or before January 31, 2009, the Borrower will use its reasonable
efforts to obtain and maintain, or cause to be obtained and maintained, landlord
waivers, warehouseman’s waivers or other similar agreements, each in form and
substance reasonably satisfactory to the Administrative Agent, with respect to
those locations which are requested by the Administrative Agent in its sole
discretion and are listed on Schedule 2.6 of the Perfection Certificate of the
Company delivered in connection herewith and designated thereon as “food” or
“green coffee storage” sites. Failure to comply with this Section III.I. shall,
if unremedied for a period of 30 days after notice to the Borrower from the
Administrative Agent, constitute an Event of Default under the Credit Agreement.
     J. As of the date hereof, at least fifty (50%) percent of the Company’s
total number of Stores located in the United States utilize a Lender for their
primary cash management functions and the Borrower will cause at least such
percentage to be maintained at all times hereafter. In the event that Wachovia
Corporation and/or its Affiliates with commercial banking operations
(collectively, “Wachovia”) are merged with any Lender by March 31, 2009, then at
all times thereafter, the Borrower will cause at least seventy (70%) percent of
the Company’s total number of Stores located in the United States to utilize a
Lender for their primary cash management functions (inclusive of Wachovia). On
or before March 31, 2009 and at all times thereafter, the Borrower shall cause
all of the Borrower’s, the Company’s and its Subsidiaries’ operating accounts to
be maintained with a Lender. Failure to comply with this Section III.J. shall
constitute an Event of Default under the Credit Agreement.
IV. CONDITIONS.
     A. This Amendment shall become effective on the first date on which the
Borrower shall have executed and delivered to the Administrative Agent (or shall
have caused to be executed and delivered to the Administrative Agent by the
appropriate persons) the following:
1. This Amendment;

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2. The Amendment to Lease/Purchase Documents between the Borrower and the
Company;
3. Completed Perfection Certificates for the Borrower and each other Loan Party,
each in form and substance satisfactory to the Administrative Agent;
4. Trademark Security Agreements and any other intellectual property security
agreements deemed necessary by the Administrative Agent with respect to the
Borrower’s and the Company’s domestic intellectual property not already subject
to such an agreement; such documents to be in form and substance satisfactory to
the Administrative Agent and to be suitable for filing with the United States
Patent and Trademark or Copyright Office, as applicable;
5. Payment in immediately available funds of all fees agreed to be paid by the
Borrower in connection with this Amendment, including without limitation, a
fully-earned and non-refundable amendment fee in the amount of Fifty Thousand
Dollars ($50,000.00), which amendment fee shall be payable to the Administrative
Agent for pro rata distribution to the Lenders; and
6. Such other supporting documents and certificates as the Administrative Agent
or its counsel may reasonably request.
     B. All legal matters incident to the transactions contemplated hereby shall
be satisfactory to counsel for the Administrative Agent.
V. MISCELLANEOUS.
     A. As provided in the Credit Agreement, the Borrower agrees to reimburse
the Administrative Agent upon demand for all reasonable fees and disbursements
of counsel incurred in connection with the preparation of this Amendment.
     B. This Amendment shall be governed by and construed in accordance with the
laws of the State of New York.
     C. This Amendment may be executed by the parties hereto in several
counterparts hereof and by the different parties hereto on separate counterparts
hereof, all of which counterparts shall together constitute one and the same
agreement. Delivery of an executed signature page of this Amendment by facsimile
transmission shall be effective as an in-hand delivery of an original executed
counterpart hereof.
[The next pages are the signature pages.]

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     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as a sealed instrument by their duly authorized representatives,
all as of the day and year first above written.

            ARABICA FUNDING, INC.
      By:           Name:           Title:        

[Signatures continue on next page]
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            BANK OF AMERICA, N.A., successor-by-merger to
Fleet National Bank, as Administrative Agent
      By:           Name:           Title:        

[Signatures continue on next page]
Signature Page to Sixth Amendment to Credit Agreement

 

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            BANK OF AMERICA, N.A., successor-by-merger to
Fleet National Bank, as a Lender
      By:           Name:           Title:        

[Signatures continue on next page]
Signature Page to Sixth Amendment to Credit Agreement

 

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            WELLS FARGO BANK, N.A.
      By:           Name:           Title: