Document:

PLEDGE AGREEMENT

 

SECURITIES COLLATERAL PLEDGE AGREEMENT

 

SECURITIES COLLATERAL PLEDGE AGREEMENT dated as of August 30, 2002 (this "Agreement") by and between GREEN MOUNTAIN COFFEE ROASTERS, INC., a Vermont corporation having its chief executive offices at 33 Coffee Lane, Waterbury, Vermont 05676 (the "Pledgor"), and FLEET NATIONAL BANK, a national banking association organized under the laws of the United States of America with an address of Mail Stop NH DE 01102A, 1155 Elm Street, Manchester, New Hampshire 03101 (the "Agent"), acting in its capacity as agent for itself and the other banking institutions  (collectively, the "Lenders") that are or may become parties to a certain Credit Agreement dated as of the date hereof (the "Credit Agreement") among the Pledgor, Green Mountain Coffee Roaster Franchising Corporation, the Borrowers (as defined below), the Agent, and the Lenders.

WHEREAS, the Pledgor is the direct legal and beneficial owner of the issued and outstanding shares of capital stock of each of the entities listed on Schedule 2 (each, an "Issuer" and collectively, the "Issuers");

WHEREAS, the Pledgor has requested that the Lenders and the Agent enter into the Credit Agreement pursuant to which the Lenders will make Loans and extend other credit to the Borrowers on the terms and subject to the conditions set forth therein;

WHEREAS, the Lenders and the Agent are unwilling to enter into the Credit Agreement unless the Pledgor executes and delivers this Agreement and grant the pledges and security interests as herein provided, for the benefit of the Lenders and the Agent; and

WHEREAS, the Pledgor wishes to grant pledges and security interests in favor of the Agent, for the benefit of the Lenders and the Agent, as herein provided;

NOW, THEREFORE, in consideration of the premises contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

Article 1.  Definitions; Interpretation.

1.01  Defined Terms Generally.  Capitalized terms used without definition herein (including those terms used in the premises set forth above) or in any certificate, report or other document delivered pursuant hereto, but defined in the Credit Agreement, shall have the meanings ascribed to such terms in the Credit Agreement.  Except as otherwise defined herein or in the Credit Agreement, terms which are defined in the NH UCC (as defined below), shall have the meanings ascribed to such terms in the NH UCC; provided, however, that if a term is defined in Article 9 of the NH UCC differently than in another Article thereof, the term shall have the meaning set forth in Article 9.

1.02  Terms Defined in this Agreement.  For purposes of this Agreement, the following terms have the meanings set forth below:

"Additional Securities" shall have the meaning set forth in clause (b) of Article 2.

"Agent" shall have the meaning set forth in the Preamble.

"Agreement" shall have the meaning set forth in the Preamble.

"Borrowers" means, collectively, Green Mountain Coffee Roasters, Inc. and Green Mountain Coffee Roasters Franchising Corporation

"Cash Collateral" shall have the meaning set forth in Section 3.05(b)

"Cash Collateral Account" shall have the meaning set forth in Section 3.05(b).

"Credit Agreement" shall have the meaning set forth in the Preamble.

"Exchange Act" means the Securities Exchange Act of 1934, as amended.

 "Issuers" shall have the meaning set forth in the Preamble.

"Issuer" shall have the meaning set forth in the Preamble.

"Lenders" shall have the meaning set forth in the Preamble.

"NH UCC" means the Uniform Commercial Code in effect in the State of New Hampshire, provided, that if by reason of mandatory provisions of law, matters pertaining to the perfection or non-perfection of the security interest in any Securities Collateral, the effect of such perfection or non-perfection, or the availability of any remedy hereunder, is governed by the Uniform Commercial Code as in effect in a jurisdiction other than New Hampshire, "NH UCC" shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions of this Agreement relating to the matters so governed.

"Obligations" means the obligations of the Borrowers under the Credit Agreement.

"Pledged Securities" means the Scheduled Securities, any Additional Securities, and all other Investment Property at any time pledged or required to be pledged hereunder.

"Pledgor" shall have the meaning set forth in the Preamble.

"Scheduled Securities" shall have the meaning set forth in clause (a) of Article 2.

"SEC" means the United States Securities and Exchange Commission.

"Securities Act" means the Securities Act of 1933, as amended.

"Securities Collateral" shall have the meaning set forth in Article 2.

"Time Deposits" shall have the meaning set forth in Section 3.05(b).

"Uniform Commercial Code" means, in reference to any jurisdiction, the Uniform Commercial Code as adopted and in effect in such jurisdiction.

1.03  Matters of Interpretation and Construction.

(a)  The language of this Agreement, having been negotiated by the parties hereto, shall not be construed against any party hereto by reason of the extent to which such party or its counsel participated in the drafting hereof or by reason of the extent to which any such provision is inconsistent with any prior draft hereof.

(b)  Use of the singular shall be deemed to include the plural and use of the plural shall be deemed to include the singular.  Use of any gender shall be deemed to include all other genders.

(c)  A reference to any law, agreement or other document includes any amendment or modification to such law, agreement or document.

(d)  A reference to any Person includes its successors and permitted assigns.

(e)  Unless the context clearly requires otherwise, reference to a particular (i) "Article" or "Section" refers to the corresponding article or section of this Agreement and (ii) "subsection" refers to the corresponding subsection of the section of this Agreement in which such reference is made.

(f)  Unless the context clearly requires otherwise, use of the word "including" shall mean "including, without limitation"; use of the words "and" and "or" shall in each case mean "and/or."

Article 2.  Grant of Security.  As security for the prompt and unconditional payment and performance of the Obligations, and for the benefit of the Agent and the Lenders, the Pledgor hereby pledges, assigns and transfers to the Agent, and grants the Agent a security interest in, all of the Pledgor's right, title and interest in and to the following, whether now owned or hereafter acquired, and all proceeds thereof (collectively, the "Securities Collateral"):

(a)  the securities owned by the Pledgor on the date hereof as described in Schedule 2 hereto (the "Scheduled Securities"), the certificates representing the Scheduled Securities, and all distributions or other property (regardless of form) at any time received, receivable or otherwise distributed (whether by dividend or distribution, or upon the consolidation, merger, recapitalization, reclassification or liquidation of the issuer, or otherwise) in respect of or in exchange for any or all of the Scheduled Securities, and all other financial assets, investment property and monies owned by the Pledgor and relating thereto;

(b)  all additional securities of any Issuer of the Scheduled Securities from time to time acquired by the Pledgor in any manner ("Additional Securities"), the certificates representing such Additional Securities, and all distributions or other property (regardless of form) at any time received, receivable or otherwise distributed (whether by dividend or distribution, or upon the consolidation, merger, recapitalization, reclassification or liquidation of the issuer, or otherwise) in respect of or in exchange for any or all of the such Additional Securities, and all other financial assets, investment property and monies owned by the Pledgor and relating thereto; and

(c)  the Cash Collateral Account and all of the Cash Collateral.

Notwithstanding anything to the contrary stated herein, the term "Securities Collateral" shall not include income or proceeds received by the Pledgor to the extent that the Pledgor is expressly permitted to retain such income or proceeds under Article 4.

Article 3.   Delivery and Control; Financing Statements.

3.01  Certificated Securities.  With respect to Pledged Securities that are certificated securities, the Pledgor shall deliver to the Agent the original certificates representing same accompanied by duly executed instruments of transfer or assignment in blank, all in form and substance satisfactory to the Agent, to be held by the Agent as pledgee upon the terms and conditions set forth in this Agreement.

3.02  Uncertificated Securities.  With respect to Pledged Securities that are uncertificated securities, the Pledgor shall, pursuant to an agreement in form and substance satisfactory to the Agent, at the Agent's option either (i) cause the Issuer to agree to comply with instructions from the Agent as to such securities, without further consent of the Pledgor, or (ii) arrange for the Agent to become the registered holder (as pledgee) of such Uncertificated Securities.  The Agent agrees with the Pledgor that the Agent will not give any instructions of the nature contemplated by clause (i) above unless an Event of Default has occurred and is continuing, or if after giving effect to the investment represented by such Pledged Securities, an Event of Default would occur.

3.03  Additional Securities.  If the Pledgor shall acquire by purchase, stock dividend or otherwise any Additional Securities at any time or from time to time after the date hereof, the Pledgor will forthwith notify the Agent of such acquisition and shall immediately take such action with respect to such Additional Securities as is required under Section 3.01 or 3.02, as the case may be.  The Pledgor authorizes the Agent to attach as Schedule 2 hereto from time to time an updated list of the Pledged Securities (including the Issuers thereof) then pledged with the Agent hereunder.

3.04  Securities Collateral Held By Intermediaries.  If any Pledged Securities, whether certificated or uncertificated, or other Securities Collateral, now held or hereafter acquired by the Pledgor are held by the Pledgor or its nominee through a securities intermediary, the Pledgor shall promptly notify the Agent of such fact and, at the request and option of the Agent, (a) cause any certificates representing such Pledged Securities to be delivered to the Agent in accordance with Section 3.01, or (b) pursuant to an agreement in form and substance satisfactory to the Agent, either (i) cause such securities intermediary to agree to comply with entitlement orders or other instructions from the Agent to such securities intermediary as to such Pledged Securities or other Securities Collateral without further consent of the Pledgor or such nominee, or (ii) arrange for the Agent (as pledgee) to become the entitlement holder with respect to such Pledged Securities or other Securities Collateral, with the Pledgor being permitted, only with the consent of the Agent, to exercise rights to withdraw or otherwise deal with such Pledged Securities or other Securities Collateral.  The Agent agrees with the Pledgor that the Agent will not give any such entitlement orders, instructions or directions to any securities intermediary, and shall not withhold its consent to the exercise of any withdrawal or dealing rights by the Pledgor, unless an Event of Default has occurred and is continuing, or if after giving effect to the investment or exercise of withdrawal or dealing rights, an Event of Default would occur.

3.05  Dividends, Distributions, Etc.

(a)  Except to the limited extent provided in Article 4 hereof, all sums of money and property paid or distributed in respect of the Pledged Securities, whether as a dividend or upon a liquidation, dissolution, recapitalization or reclassification of the issuer, or otherwise, that are received by the Pledgor shall be paid over and delivered to the Agent and held or applied, as the case may be, as provided in subsection (b) below.  The Pledgor agrees to promptly endorse, assign and deliver such items to the Agent, accompanied by such instruments of transfer or assignment duly executed in blank as the Agent may from time to time request.

(b) All sums of cash or cash equivalents that are delivered to the Agent pursuant to this Section 3.05 shall be applied to pay the Obligations, or if the Obligations are not then due and payable, shall be deposited into an interest bearing account with the Agent (the "Cash Collateral Account") and held by the Agent as security for the payment and performance in full of the Obligations.  All other items of property delivered to the Agent pursuant to this Article 3 shall be held by the Agent as security for the payment and performance in full of the Obligations.  Some or all of the funds from time to time in the Cash Collateral Account may be invested in time deposits, including, without limitation, certificates of deposit issued by the Agent (such certificates of deposit or other time deposits being hereinafter referred to, collectively, as "Time Deposits"), that are satisfactory to the Agent after consultation with the Pledgor, provided that, in each such case, arrangements satisfactory to the Agent are made and are in place to perfect and to ensure the first priority status of the security interest of the Agent therein.  Interest earned on the Cash Collateral Account and on the Time Deposits, and the principal of the Time Deposits at maturity that is not invested in new Time Deposits, shall be deposited in the Cash Collateral Account.  The Cash Collateral Account, all sums from time to time standing to the credit of the Cash Collateral Account, all Time Deposits, all instruments or other writings evidencing Time Deposits, and all proceeds of any of the foregoing, are hereinafter referred to as the "Cash Collateral".

(c)  Except as otherwise expressly provided in Article 12, the Pledgor shall have no right to withdraw sums from the Cash Collateral Account, to receive any of the Cash Collateral or to require the Agent to part with possession of any instruments or other writings evidencing any Time Deposits.

3.06  Items Held in Trust.  All items required to be paid or delivered to the Agent under this Article 3 shall, until so paid or delivered to the Agent, be held in trust for the benefit of the Agent and the Lenders, as security for the payment and performance in full of the Obligations.

3.07  Authorization to File Financing Statements and Take Other Action.  The Pledgor hereby irrevocably authorizes the Agent at any time and from time to time to sign (if required) and file in any appropriate filing office, wherever located, any financing statement that (a) describes the Securities Collateral in a manner consistent with Article 2 hereof, and (b) contains any other information required by Part 5 of Article 9 of the Uniform Commercial Code of the applicable jurisdiction for the sufficiency or filing office acceptance of any financing statement, including whether the Pledgor is an organization, the type of organization and any organization identification number issued to the Pledgor.  The Pledgor also authorizes the Agent to file a copy of this Agreement in lieu of a financing statement, and to take any and all actions required by any earlier versions of the Uniform Commercial Code or by any other applicable law.  The Pledgor shall provide the Agent with any information the Agent shall reasonably request in connection with any of the foregoing.

Article 4.  Dividends; Voting.

4.01  So long as no Event of Default shall have occurred and be continuing (or would occur as a result of such payment), the Pledgor shall be entitled to receive all cash dividends and distributions paid in respect of the Pledged Securities without delivering such sums to the Agent or depositing such sums in the Cash Collateral Account, to vote and exercise any and all other voting and consensual rights with respect to the Pledged Securities and to give consents, waivers or ratifications in respect thereof, provided that no vote shall be cast or consent, waiver or ratification given or action taken which would violate or be inconsistent with any of the terms of this Agreement or the other Lender Agreements or which could reasonably be expected to adversely affect the interest of the Agent in the Securities Collateral.  The Agent shall execute and deliver to the Pledgor such proxies and other instruments as may be reasonably necessary to permit the Pledgor to exercise such rights.

4.02  Following the occurrence and during the continuance of an Event of Default, or if the payment proposed to made would result in an Event of Default, (i) the Pledgor's rights under Section 4.01 shall immediately cease, (ii) all cash dividends and other distributions in respect of the Pledged Securities shall be deposited to the Cash Collateral Account in accordance with the provisions of Article 3, and (iii) the Agent (as pledgee) shall have the right to vote, and to give consents, waivers and ratifications with respect to, the Pledged Securities upon notice to the Pledgor of the Agent's intent to exercise such right.  If the Agent elects not to exercise such rights, the Pledgor may continue to exercise such rights, provided that the Pledgor shall not take any vote or other action with respect to such Pledged Securities that could reasonably be expected to have an adverse effect on the interest of the Agent in the Securities Collateral, and if so directed by the Agent in writing, shall vote or take such other action as directed by the Agent.

Article 5.  Representations, Warranties and Covenants of Pledgor.  For so long as this Agreement shall remain in effect, the Pledgor represents, warrants and covenants to and with the Agent and the Lenders as follows:

5.01  The Pledgor has the requisite power, authority and legal right to execute, deliver and perform its obligations under this Agreement and to pledge and grant a security interest in all of the Securities Collateral.  The execution, delivery and performance of this Agreement, and the pledge of and granting of a security interest in the Securities Collateral hereunder, have been duly authorized by all necessary corporate or other action of the Pledgor and do not contravene (i) any law, rule or regulation, (ii) any provision of the Pledgor's charter documents or by-laws, (iii) any judgment, decree or order of any arbitrator, court or other adjudicatory or regulatory body or (iv) any agreement or instrument to which the Pledgor is a party or by which it or any of its property is bound or affected or constitute a default thereunder.

5.02  Except as set forth on Schedule 5.02, the Pledgor is the owner, legally, beneficially and of record, of all of the Scheduled Securities free of any Encumbrances, except for Encumbrances specifically permitted under the terms of the Credit Agreement.  All of the Scheduled Securities have been duly and validly issued, and are fully paid and nonassessable.

5.03  The Pledgor covenants that, with respect to any Additional Securities that it may pledge to the Agent in the future, at the time of such pledge, (a) the Pledgor will be the legal, beneficial and record owner of such Additional Securities free of any Encumbrances, except as set forth on Schedule 5.02 and for Encumbrances specifically permitted under the terms of the Credit Agreement, (b) the Pledgor will have the requisite legal right, power and authority to pledge same to the Agent hereunder and (c) all such Additional Securities shall be duly and validly issued, and will be fully paid and nonassessable.

5.04  Schedule 2 accurately sets forth as to each Issuer of Scheduled Securities (i) the total number of issued and outstanding securities of such Issuer and (ii) the total number of such securities that have been pledged hereunder.

5.05  Upon execution and delivery of the Lender Agreements by the parties thereto and the delivery by the Pledgor of the Scheduled Securities and related certificates to the Agent accompanied by instruments of transfer or assignment duly executed in blank in form and substance satisfactory to the Agent or, if a security interest in any of the Securities Collateral may not under applicable law be perfected by possession, then upon the filing of appropriate financing statements, the Agent will obtain a valid first lien on, and perfected security interest in, the Securities Collateral and the proceeds thereof, subject to no prior Encumbrance, except as set forth on Schedule 5.02.

5.06  The Pledgor will defend the security interest of the Agent in the Securities Collateral against the competing claims and demands of all other Persons, other than claims or demands related to Encumbrances specifically permitted under the terms of the Credit Agreement.

5.07  Except as may be permitted by the Credit Agreement, and as required by the Agreements set forth on Schedule 5.02, the Pledgor will not (a) sell or otherwise dispose of, grant any option with respect to, or mortgage, pledge (except pursuant to this Agreement) or otherwise encumber any of the Securities Collateral, any shares in the capital stock of any Issuer, or any membership or other ownership interest therein, or (b) consent to or approve the issuance of (i) any additional shares of any class of capital stock of any Issuer, or the issuance of any membership or other ownership interest in any Issuer; (ii) any securities convertible voluntarily by the holder thereof or automatically upon the occurrence or nonoccurrence of any event or condition into, or exchangeable for, any such shares or interests; or (iii) any warrants, options, rights, or other commitments entitling any person to purchase or otherwise acquire any such shares or interests.

5.08  The Pledgor, at its sole cost and expense, will execute and deliver all such instruments, and take all such other action as the Agent from time to time may reasonably request, in order to further effectuate the purposes of this Agreement and to carry out the terms hereof.

Article 6.  Remedies Upon Event of Default.

6.01  Remedies in General.  Subject to the Agreements set forth on Schedule 5.02, upon the occurrence and during the continuance of an Event of Default, the Agent shall be entitled to exercise all of its rights, powers and remedies (whether vested in it by this Agreement, the other Lender Agreements or by law) for the protection and enforcement of its rights in respect of the Securities Collateral, and the Agent shall be entitled, without limitation, to exercise the following rights and remedies (in addition to the rights and remedies of a secured party under the NH UCC), which rights and remedies the Pledgor hereby agrees are commercially reasonable:

(a)  to cause the Pledged Securities and any other securities constituting Securities Collateral to be transferred into its own name or the name(s) of its nominee(s) or successor(s) in interest on the books of the issuer of such Pledged Securities or other securities;

(b)  to collect, receive and hold as Cash Collateral for the Obligations (or apply the same to any Obligation) all dividends, distributions and other income on the Pledged Securities and the other Securities Collateral;

(c)  to vote all or any part of the Pledged Securities (whether or not transferred into the name of a Person other than the Pledgor pursuant to clause (a)) and give all consents, waivers and ratifications in respect of the Securities Collateral and otherwise act with respect thereto as though the Agent was the outright owner thereof;

(d)  to demand, sue for, collect or make any compromise or settlement the Agent deems suitable in respect of any Securities Collateral;

(e)  subject to applicable law, at any time or from time to time to sell, assign and deliver, or grant options to purchase, all or any part of the Securities Collateral, or any interest therein in accordance with the provisions of Section 6.02;

(f)  to set off against the Obligations any and all sums deposited with the Agent or held by it, including without limitation, any sums or financial assets standing to the credit of the Cash Collateral Account and any Time Deposits issued by the Agent.

The Agent may enforce its rights hereunder without any other notice and without compliance with any other condition precedent now or hereafter imposed by statute, rule of law or otherwise (all of which are hereby expressly waived by the Pledgor, to the fullest extent permitted by law).

6.02  Sale of Securities Collateral.

(a)  In the event of any disposition of the Securities Collateral as provided in Section 6.01(e), the Agent shall give to the Pledgor at least ten (10) days' prior written notice of the time and place of any public sale of the Securities Collateral or of the time after which any private sale or any other intended disposition is intended to be made.  The Pledgor hereby acknowledges that ten (10) days' prior written notice of such sale or sales constitutes reasonable notice.  If any of the Securities Collateral is sold by the Agent upon credit or for future delivery, the Agent shall not be liable for the failure of the purchaser to pay for the same and in such event the Agent may resell such Securities Collateral.  At any public sale of Securities Collateral, unless prohibited by applicable law, the Agent or any holder of the Obligations may bid for and purchase all or any part of the Securities Collateral so sold free from any such right or equity of redemption; and if any part or all of the Securities Collateral is of a type customarily sold in a recognized market or is of the type which is the subject of widely-distributed standard price quotations, the Agent or any holder of the Obligations may buy at a private sale and may make payment therefor by any means including, without limitation, cancellation of indebtedness secured thereby and payment of any surplus to the Pledgor or such other party as may be required by applicable law.

(b)  The Pledgor recognizes that the Agent may be unable to effect a public sale of the Pledged Securities by reason of certain prohibitions contained in the Securities Act, federal banking laws or other applicable laws, regulations, or agreements to which such Pledged Securities may be subject and, therefore, may be compelled to resort to one or more private sales thereof to a restricted group of purchasers.  The Pledgor agrees that any such private sales, which may be at prices and other terms less favorable to the seller than if sold at public sales, shall be deemed to have been made in a "commercially reasonable" manner within the meaning of the NH UCC, provided that the notice specified in Section 6.02(a) shall have been given to the Pledgor.  The Agent shall be under no obligation to delay a sale of any of the Pledged Securities for the period of time necessary to permit the issuer of such Pledged Securities to register same for public sale under the Securities Act, or such other federal banking or applicable laws, even if the issuer agrees to do so.  Subject to the foregoing, the Agent agrees that any sale of the Securities Collateral shall be made in a commercially reasonable manner.

(c)  The Pledgor agrees to do or cause to be done all acts and things as may be reasonably necessary to cause the sale(s) of all or any portion of the Securities Collateral pursuant to this Article 6 to be valid and binding and to comply with any and all applicable laws, including, without limitation, the Securities Act, the Exchange Act, SEC and other regulations, orders, writs, injunctions or decrees of any and all courts, arbitrators or governmental agencies or similar regulatory bodies having jurisdiction over any such sale or sales, all at the Pledgor's sole cost and expense.  In furtherance and not in limitation of the foregoing, at the request of the Agent, the Pledgor shall use best efforts to cause any issuer of Securities Collateral contemplated to be sold:

(i)  to execute and deliver, and cause its directors and officers to execute and deliver, all instruments and documents, and to do or cause to be done all such other acts and things, as may be (in the opinion of legal counsel to the Agent) necessary or advisable to facilitate the registration of all or a portion of the Pledges Securities under the provisions of the Securities Act, and to cause the registration statement relating thereto to become and remain effective for a period of 9 months;

(ii)  to execute and deliver, and to cause its directors and officers to execute and deliver, all instruments and documents, and to do or cause to be done all other acts and things as may be necessary or advisable (in the opinion of legal counsel to the Agent) to cause such Pledged Securities to be exempt from the registration requirements of the Securities Act; and

(iii)  to comply with the provisions of the securities or "Blue Sky" laws of any jurisdiction which the Agent shall reasonably designate and, if required, to make available to its security holders, as soon as practicable, an earnings statement (which need not be audited) which will allow Persons to take advantage of the provisions of Section 11(a) of the Securities Act.

6.03  Appointment as Attorney-in-Fact.  The Pledgor hereby irrevocably appoints the Agent as the Pledgor's attorney-in-fact with full power of substitution, to take, following the occurrence and during the continuance  of an Event of Default, any and all of the actions specified in this Article 6 and elsewhere in this Agreement with full authority in the name of the Pledgor and at the Pledgor's sole cost and expense.  This power of attorney is coupled with an interest and shall be irrevocable for so long as this Agreement shall remain in effect.

6.04  Injunctive Relief.  The Pledgor acknowledges that a breach of any of the covenants contained in this Article 6 will cause irreparable injury to the Agent and the Lenders, and that the Agent and the Lenders have no adequate remedy at law in respect of such breach.  As a consequence, the Pledgor agrees that each and every covenant contained in this Article 6 shall be specifically enforceable against the Pledgor, and the Pledgor hereby (i) agrees not to assert in defense of any action for specific performance that the Agent has not suffered irreparable harm or that the Agent has an adequate remedy at law, and (ii) waives any defense based upon the grounds set forth in clause (i) of this Section 6.04.

Article 7.  Remedies Cumulative.  Each right, power and remedy of the Agent or any holder of the obligations provided for in this Agreement, the other Lender Agreements, or now or hereafter existing at law or in equity, or otherwise, shall be cumulative and concurrent and shall be in addition to every other such right, power or remedy.  The exercise or beginning of the exercise by the Agent or any holder of such obligations of one or more of such rights, powers or remedies shall not preclude the simultaneous or subsequent exercise by such Person of all such other rights, powers or remedies, and no failure or delay on the part of any such Person to exercise any such right, power or remedy shall operate as a waiver thereof.

Article 8.  Marshalling.  The Agent may exercise its rights with respect to the Securities Collateral without resorting or regard to other collateral or sources of reimbursement.  The Agent shall not be required to marshal any present or future collateral security for, or other assurances of payment of, the Obligations or the Obligations, or any of them, or to resort to such collateral security or other assurances of payment in any particular order.  To the extent that it may lawfully do so, the Pledgor hereby (a) agrees that it will not invoke any law relating to the marshaling of collateral that might cause delay in or impede the enforcement of the Agent's rights with respect to the Obligations, the Obligations or any of the Collateral and (b) irrevocably waives the benefits of all such laws.

Article 9.  Application of Moneys by the Agent.  All moneys collected upon any sale of the Securities Collateral hereunder, together with all other moneys received by the Agent hereunder, shall be applied as follows (i) first, to the payment of all reasonable costs and expenses incurred by the Agent in connection with such sale, the delivery of the Securities Collateral or the collection of any such moneys (including, without limitation, reasonable attorneys' fees and all other expenses reasonably incurred); (ii) second, to satisfy the Obligations in such manner as the Agent shall determine in its sole discretion consistent with the Credit Agreement; and (iii) third, to the extent of any surplus Proceeds, to the Pledgor or to such other Person(s) as may be legally entitled to same.

Article 10.  Pledgor's Obligations Absolute.  The obligations of the Pledgor under this Agreement shall be absolute and unconditional and shall remain in full force and effect without regard to, and shall not be released, suspended, discharged, terminated or otherwise affected by any circumstance or occurrence whatsoever, including, without limitation: (a) any renewal, extension, amendment or modification of or addition or supplement to or deletion from the Credit Agreement or other Lender Agreements, or any assignment or transfer of the Credit Agreement or other Lender Agreements; (b) any waiver, consent, extension, indulgence or other action or inaction under or in respect of the Credit Agreement or other Lender Agreements; (c) any furnishing of any additional collateral security to the Agent or its assignee or any acceptance thereof or any release of any collateral security by the Agent or its assignee; (d) any limitation on any party's liability or obligations under the Credit Agreement or other Lender Agreements, or any invalidity or unenforceablity, in whole or in part, of the same; or (e) any bankruptcy, insolvency, reorganization, composition, adjustment, dissolution, liquidation or other like proceeding relating to the Pledgor or any other Person, or any action taken with respect to this Agreement by any trustee or receiver or by any court, in any such proceeding; whether or not the Pledgor shall have notice or knowledge of any of the foregoing.  The Pledgor expressly consents to any and all of the foregoing and, to the maximum extent permitted by law, waives any rights or defenses relating to the enforcement of this Agreement that the Pledgor may have in connection therewith.  Except for notices specifically provided for herein or in the Credit Agreement, the Pledgor hereby expressly waives demand, notice, protest, notice of acceptance of this Agreement, notice of loans made, credit extended, collateral received or delivered or other action taken in reliance hereon and all other demands and notices of any description.

Article 11.  Exoneration of Agent.  Under no circumstances shall the Agent be deemed to assume any responsibility for or obligation or duty with respect to any part or all of the Securities Collateral of any nature or kind, or any matter or proceedings arising out of or relating thereto, other than (i) to exercise reasonable care in the physical custody of the Securities Collateral and (ii) during the existence of an Event of Default, to act in a commercially reasonable manner.  The Agent shall not be required to take any action of any kind to collect, preserve or protect its or the Pledgor's rights in the Securities Collateral or against any other Person.  The Agent's prior recourse to any part or all of the Securities Collateral shall not constitute a condition of any demand, suit or proceeding for payment or collection of the Obligations.

Article 12.  Termination. The obligations of the Pledgor hereunder shall terminate when the commitment of the Lenders to extend credit under the Credit Agreement shall have terminated and all of the Obligations have been indefeasibly paid in full in cash and discharged; provided, however, that:

(a)  if a claim is made upon the Agent or any of the Lenders at any time for repayment or recovery of any amounts or any property received by the Agent or such Lender from any source on account of any of the Obligations and the Agent or such Lender repays or returns any amounts or property so received (including interest thereon to the extent required to be paid by the Agent or such Lender) or

(b)  if the Agent or any of the Lenders becomes liable for any part of such claim by reason of (i) any judgment or order of any court or administrative authority having competent jurisdiction, or (ii) any settlement or compromise of any such claim,

then the Pledgor shall remain obligated under this Agreement with respect to the amounts so repaid or property so returned and the amounts for which the Agent or such Lender becomes liable (such amounts being deemed part of the Obligations), and the pledges and security interests granted herein shall apply with full force and effect to such Obligations, to the same extent as if such amounts or property had never been received by the Agent or such Lender, notwithstanding any termination hereof or the cancellation of any instrument or agreement evidencing any of the Obligations or Obligations.

Article 13.  Overdue Amounts.  Until paid, all amounts due and payable by the Pledgor hereunder shall constitute a Obligation and shall be secured by the Securities Collateral.  Such amounts shall bear interest at the rate per annum provided in the Credit Agreement to be paid on Prime Rate Loans during the existence of an Event of Default.

Article 14.  Miscellaneous.

14.01  Successors and Assigns.  This Agreement be binding upon the Pledgor, the Agent and the Lenders and their respective successors and permitted assigns, and shall inure to the benefit of the Agent and the Lenders and their respective successors, transferees and assigns, as permitted by Section IX of the Credit Agreement.  The Pledgor may not assign any of its obligations hereunder.

14.02  Survival.  All representations, warranties, covenants and agreements contained in this Agreement shall survive the execution and delivery of the Lender Agreements and shall continue for so long as this Agreement shall remain in effect.

14.03  Severability.  If any provision of this Agreement shall be held invalid or unenforceable by any court of competent jurisdiction, that holding shall not invalidate or render unenforceable any other provision hereof.

14.04  Amendments; Waiver, Etc.  No provision of this Agreement, or any right of the Agent in respect of the Obligations, can be changed, waived, modified, discharged or terminated except by an instrument in writing signed by the Agent and the Pledgor expressly referring to the provision of this Agreement or the right to which such instrument relates; and no such waiver shall extend to, affect or impair any right with respect to any obligation which is not expressly dealt with therein.  No course of dealing or delay or omission on the part of the Agent or the Lenders or any of them in exercising any right shall operate as a waiver of such right or any other right, or otherwise be prejudicial thereto.  A waiver on any one occasion shall not be construed as a bar to or waiver of any right on any future occasion.

14.05  Execution and Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall constitute an original of this Agreement and all of which, when taken together, shall constitute one and the same Agreement, notwithstanding the fact that such counterparts have not been executed by all parties hereto.  The exchange of copies of this Agreement and of signature pages by facsimile transmission shall constitute effective execution and delivery as to the parties hereto and may be used in lieu of the original Agreement for all purposes.  Signatures of the parties transmitted by facsimile shall be deemed to be their original signatures for all purposes.

14.06   Captions.  Captions and headings in this Agreement are for convenience only and in no way define, limit or describe the scope or intent of the provisions hereof.

14.07  Notices.  All notices, certificates or other communications hereunder shall be in writing and shall be sufficiently given and shall be deemed given when given in the manner prescribed in the Credit Agreement and delivered to a party at its address for notice set forth in the Credit Agreement or to such other address as a party shall furnish by notice to the other parties.

14.08  Governing Law.  This Agreement and all rights and obligations hereunder, including matters of construction, validity and performance, shall be governed by, and construed in accordance with, the laws of State of New Hampshire (without regard to principles relating to choice and conflicts of laws).

14.09  CONSENT TO JURISDICTION.  THE PLEDGOR AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS AGREEMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW HAMPSHIRE LOCATED IN HILLSBOROUGH COUNTY, OR IN THE UNITED STATES DISTRICT COURT SITTING IN CONCORD, NEW HAMPSHIRE, OR ANY APPELLATE COURT TO WHICH APPEALS MAY BE TAKEN FROM ANY OF THE FOREGOING COURTS, AND CONSENTS TO THE NON-EXCLUSIVE JURISDICTION OF SUCH COURTS AND TO SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE PLEDGOR BY MAIL AT THE ADDRESS ABOVE.  THE PLEDGOR HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT.

14.10  WAIVER OF JURY TRIAL. EACH OF THE PLEDGOR, THE AGENT AND THE LENDERS HEREBY WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS.  EXCEPT AS PROHIBITED BY LAW, EACH OF THE PLEDGOR, THE AGENT AND THE LENDERS HEREBY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION REFERRED TO IN THE PRECEDING SENTENCE ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN ACTUAL DAMAGES.  THE PLEDGOR (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE AGENT OR THE LENDERS HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE AGENT OR THE LENDERS WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (B) ACKNOWLEDGES THAT EACH OF THE AGENT AND LENDERS HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BECAUSE OF, AMONG OTHER THINGS, THE PLEDGOR'S WAIVERS AND CERTIFICATIONS CONTAINED HEREIN.

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as a contract under seal by their duly authorized officers or representatives, all as of the date first above written.

	
PLEDGOR:

GREEN MOUNTAIN COFFEE ROASTERS, INC.

 By:__/s/ William G. Hogan____

Name: William G. Hogan

Title:  Vice President

Hereunto Duly Authorized

	
AGENT:

FLEET NATIONAL BANK

 

By:__/s/ Kenneth R. Sheldon___________

Name: Kenneth R. Sheldon

Title: Vice President

Hereunto Duly Authorized

SCHEDULE 2

 

	
Name/Address

of Issuer

	
Jurisdiction

of Incorporation
	
Class

of Securities
	
Total Number of Shares

Issued and Outstanding*
	
Total Number of Shares Pledged

	
Keurig, Incorporated
	
DE
	
Common Stock
	
3,142,557
	
1,642,727

	
Keurig, Incorporated
	
DE
	
Series A Convertible Preferred Stock
	
60,342
	
42,323

	
Keurig, Incorporated
	
DE
	
Series B Convertible Preferred Stock
	
525,792
	
115,546

	
Keurig, Incorporated
	
DE
	
Series C Convertible Preferred Stock
	
1,550,000
	
470,708

* True to the best of the Pledgor's knowledge as of February 4, 2002 and the Pledgor makes no representation or warranty that such information regarding the number of issued and outstanding shares of Keurig, Incorporated is true and correct.

SCHEDULE 5.2

1. Shareholders Rights Agreement dated April 4, 2002 by and among Keurig, Incorporated, MD Co., and Green Mountain Coffee Roasters, Inc. ("GMCR")

2. Voting Agreement, dated as of February 4, 2002 by and among Keurig, Incorporated, a Delaware corporation), the holders of Series B Convertible Redeemable Preferred Stock, $.01 par value of Keurig, Incorporated, and the holders of Series C Convertible Redeemable Preferred Stock, $.01 par value, of Keurig,MORTGAGE SECURITY AGREEMENT

Recording requested by

and when recorded mail to:

Thomas P. Manson, Esquire

Cook, Little, Rosenblatt, & Manson, p.l.l.c.

The Center of New Hampshire

650 Elm Street

Manchester, New Hampshire 03101

MORTGAGE, SECURITY AGREEMENT,

AND FIXTURE FILING

 

GREEN MOUNTAIN COFFEE ROASTERS, INC., a Vermont corporation having its chief executive offices at 33 Coffee Lane, Waterbury, Vermont 05676 ("Mortgagor"), for consideration paid, grants to FLEET NATIONAL BANK, a national banking association organized under the laws of the United States of America with an address of Mail Stop NH DE 01102A, 1155 Elm Street, Manchester, New Hampshire 03101 (together with its successors and assigns, the "Mortgagee"), acting as agent under the terms of that certain Credit Agreement dated as of even date herewith (as it may be amended from time to time, the "Credit Agreement") by and among the Mortgagor, Green Mountain Coffee Roaster Franchising Corporation (the ("Subsidiary"), the Mortgagee, and the banks that are parties thereto (the "Lenders"), to secure (i) the payment of a certain revolving line of credit loan of even date to Mortgagor and the Subsidiary, jointly and severally, from the Lenders in the principal amount of up to Twelve Million Five Hundred Thousand Dollars ($12,500,000.00) (the "Revolving Line of Credit Loan"), together with all accrued interest and other charges thereon; (ii) the payment of an Equipment Line of Credit Loan of even date to Mortgagor and the Subsidiary, jointly and severally, from the Lenders in the principal amount of up to Five Million Dollars ($5,000,000.00) (the "Equipment Line of Credit Loan"), together with all accrued interest and other charges thereon; (iii) the payment of a Term Loan of even date to Mortgagor and the Subsidiary, jointly and severally, from the Lenders in the principal amount of Fifteen Million Dollars ($15,000,000.00) (the "Term Loan"), together with all accrued interest and other charges thereon; (iv) the payment of a Swing Line Loan of even date to Mortgagor and the Subsidiary, jointly and severally, from Mortgagee in the principal amount of up to One Million Dollars ($1,000,000.00) (the "Swing Loan"), together with all accrued interest and other charges thereon (collectively, the Swing Loan, the Term Loan, the Equipment Line of Credit Loan and the Revolving Line of Credit Loan are sometimes hereinafter referred to as the "Loans" and the promissory notes evidencing each of the Loans being collectively referred to as the "Notes"); (v) the payment of all sums advanced in accordance herewith by Mortgagee in order to protect the security, priority and validity of this Mortgage, Security Agreement and Fixture Filing (the "Mortgage") (this Mortgage, the Credit Agreement, the Notes, and any other documents now or hereafter evidencing or securing the Notes, and any amendments, modifications, extensions, restatements or renewals of the foregoing are sometimes hereinafter collectively referred to as the "Loan Documents"); and (vi) the payment and performance of all of Mortgagee's payment and performance obligations under the Loan Documents, THE FOLLOWING DESCRIBED PROPERTY:

	The fixtures and other leasehold improvements (collectively, the "Improvements") as are located on certain real property located in Waterbury Vermont, as more particularly described on Schedule A attached hereto (the "Real Property"); and
	Mortgagor's rights, title and interest as lessee in, to and under a certain lease between Mortgagor and Pilgrim Partnership dated April 28, 1993, including any and all amendments, modifications, renewals, and extensions thereof, said notice of said lease having been recorded in the Waterbury, Vermont Land Records at Book __, Page ___ (collectively, the "Lease") and the leasehold estate created by such Lease (the "Leasehold Estate").

Collectively, the Improvements and the Leasehold Estate are hereinafter referred to as the "Premises".

The Mortgagor also grants a security interest in the following (collectively, the "Personal Property"):

(1)  All fixtures, machinery and all other tangible personal property owned by Mortgagor intended for use with respect to the Premises, whether now or hereafter owned by the Mortgagor and now affixed or to be affixed, or now or hereafter located upon the Premises, including all appurtenant easements.  The foregoing shall include, without limitation, all machinery, plant, plumbing, heating, lighting, refrigerating, ventilating and air conditioning apparatus and equipment, elevators and elevator machinery, boilers, tanks, motors, sprinkler and fire extinguishing systems, alarm systems, screens, awnings, screen doors, storm and other detachable windows and doors, perennial flowers, signage, and other equipment, machinery, furniture and furnishings, fixtures, and articles of personal property now and hereafter owned by the Mortgagor and now and hereafter affixed to, placed upon or used in connection with the operation of the Premises, and all other purposes whether or not included in the foregoing enumeration, together with cash proceeds and non-cash proceeds of all of the foregoing, all of which are covered by this Mortgage, whether or not such property is subject to prior conditional sales agreements, chattel mortgages or other liens, excepting inventory and personal property to be consumed or sold in the normal course of business of the Mortgagor.  If the lien hereof on any fixtures or personal property is subject to a conditional sales agreement or chattel mortgage or security agreement covering such property, then upon an Event of  Default under the Credit Agreement  all the rights, title and interest of the Mortgagor in and to any and all deposits made thereon or therefor are hereby assigned to the Mortgagee, together with the benefit of any payments now or hereafter made thereon.  There are also transferred, set over and assigned to the Mortgagee, its successors and assigns, all conditional sales agreements, leases and use agreements of machinery, equipment and other personal property of the Mortgagor in the categories hereinabove set forth and now and hereafter affixed to, placed upon or used in connection with the operation of the Premises under which the Mortgagor is the owner, lessee, or licensee of, and the Mortgagor agrees to execute and deliver to the Mortgagee specific separate assignments thereof to the Mortgagee of such leases and agreements when requested by the Mortgagee; and nothing herein shall obligate the Mortgagee to perform any obligations of the Mortgagor under such leases or agreements, unless it so chooses, which obligations the Mortgagor hereby covenants and agrees to well and punctually perform;

(2)  All of the Mortgagor's right, title and interest in and to any governmental approvals, licenses, franchises, permits, grants, etc. with respect to the Premises, including, but not limited to, all approvals, licenses, and permits for the use and occupancy of the Premises;

(3)  All goods, documents, instruments, general intangibles, chattel paper, accounts and contract rights (each as defined in the Uniform Commercial Code), deposits, and customer deposits related to the Premises;

(4)  All eminent domain awards made and insurance proceeds paid with respect to the Premises;

(5)  All trade names associated with the use or occupancy of the Premises;

(6)  All books and records relating to Mortgagor's operation of the Premises;

(7)  All contracts, agreements, warranties, including rights to return of deposits, prepaid premiums or other payments, relating to the construction, use or occupancy of the Premises;

(8)  Any and all additions, accessions, substitutions or replacements to or for any of the foregoing;

(9)  Any and all products and proceeds of any or all of the foregoing, including, without limitation, cash and cash equivalents, tax refunds and the proceeds, including interest, of insurance policies providing coverage against the loss or destruction of or damage to any of such collateral; and

(10)  All of the Mortgagor's after-acquired property of the kinds and types described in the foregoing paragraphs.

(collectively, the Premises and the Personal Property are hereinafter sometimes referred to as the "Mortgaged Property"). 

As further security for payment of the indebtedness and performance of the obligations, covenants and agreements secured hereby, the Mortgagor hereby transfers, sets over and assigns to the Mortgagee:

(a)  Any and all tenants, hereditaments, easements, rights of way, licenses, permits, approvals, profits, privileges and other appurtenances belonging, relating or pertaining to the Mortgaged Property;

(b)  All rents, security deposits, issues and profits, revenues, royalties, bonuses, rights and benefits under any and all leases or tenancies now existing or hereafter created with respect to the Mortgaged Property or any part thereof, with the right to receive and apply the same to the indebtedness secured hereby, and the Mortgagee may demand, sue for and recover such payments, but shall not be required to do so; provided, however, that so long as an Event of Default has not occurred under the Credit Agreement, , the right to receive and retain such rents, issues and profits is reserved to the Mortgagor.  To carry out the foregoing, the Mortgagor agrees (1) to execute and deliver to the Mortgagee such conditional assignments of leases and rents applicable to the Mortgaged Property as the Mortgagee may from time to time request, while this Mortgage and the debt secured hereby are outstanding, and further (2) not to cancel, accept a surrender of, reduce the rentals under, anticipate any rentals under, or modify any such leases or tenancies, or consent to an assignment or subletting thereof, in whole or in part, without the Mortgagee's written consent, which consent shall not be unreasonably withheld.  Nothing herein shall obligate the Mortgagee to perform the duties of the Mortgagor as landlord or lessor under any such leases or tenancies, which duties the Mortgagor hereby covenants and agrees to well and punctually perform; and

(c)  All judgments, awards of damages, insurance proceeds, and settlements hereafter made as a result or in lieu of any taking of the Mortgaged Property or any interest therein or part thereof under the power of eminent domain or for any damage or casualty (whether caused by such taking or otherwise) to the Mortgaged Property or any part thereof, including any award for change of grade of streets.  The Mortgagee may apply all such sums or any part thereof so received on the indebtedness secured hereby in such manner as it elects, or, at its option, the entire amount or any part thereof so received may be released.  The Mortgagor hereby irrevocably authorizes and appoints the Mortgagee its attorney-in-fact to collect and receive any such judgments, awards, proceeds, and settlements from the authorities or entities making the same, to appear in any proceeding therefor, to give receipts and acquittances therefor, and to apply the same to payment on account of the debt secured hereby, whether then matured or not.  The Mortgagor will execute and deliver to the Mortgagee on demand such assignments and other instruments as the Mortgagee may require for said purposes and will reimburse the Mortgagee for its costs and expenses (including reasonable counsel fees) in the collection of such judgments and settlements.

If the Mortgagor, its successors or assigns, pays to the Mortgagee, or its successors or assigns, all amounts due under the Loan Documents and, complies with and performs fully and satisfactorily all terms and obligations as set forth in the Notes and the Loan Documents, then the Mortgage shall be discharged.  Otherwise it shall remain in full force and effect.

 

1.  Representations, Warranties and Covenants of the Mortgagor.  In addition to the MORTGAGE COVENANTS, the Mortgagor further represents, warrants, covenants and agrees with the Mortgagee, its successors and assigns, as follows:

(a)  Power and Authority.  The Mortgagor is a corporation with all power, authority, and legal right to execute and deliver the Mortgage and to consummate the transactions contemplated herein; and, the execution and delivery of the Mortgage and the consummation of the transactions contemplated herein will not conflict with or result in a breach of the terms of any agreement or law or order of any court or governmental body;

(b)  Title.  The Mortgagor, for itself and its successors and assigns, does hereby covenant, grant and agree to and with the Mortgagee and its successors and assigns, that until the delivery hereof it is the lawful owner of the Mortgaged Property seized and possessed thereof in its own right, has full power and lawful authority to grant and convey the same in manner aforesaid, that the Mortgaged Property is free and clear from any encumbrance whatsoever excepting only those encumbrances described on Schedule B attached hereto, that it and its successors shall warrant and defend the same to the Mortgagee and its successors and assigns against the lawful claims and demands of any person or persons whatsoever, and that it will not hereafter cause or permit any lien to arise against the Mortgaged Property which is superior to the lien or security interest granted herein, except as provided in the Credit Agreement;

(c)  Payment and Performance.  To pay the Notes hereby secured and interest thereon as the same shall become due and payable, and also any other indebtedness that may accrue to the Mortgagee under the terms of this Mortgage, and to perform all other agreements set forth herein and in the Loan Documents;

(d)  Insurance.  That the Mortgagor will keep the Mortgaged Property insured against loss by fire and such other hazards, casualties and contingencies, and in manner, form, and with such companies as may be required by the Mortgagee.  In no event shall the amount of coverage be less than one hundred percent (100%) of the insurable value thereof based on replacement cost, and in default thereof the Mortgagee shall have (in addition to other rights set forth herein) the right to obtain such insurance at the cost of the Mortgagor, such cost to be secured hereby.  Such policy shall be endorsed with the standard Vermont mortgagee clause with loss payable to the Mortgagee, as its interest may appear, and an original certificate of insurance and/or copy of such policy shall be deposited with the Mortgagee and the Mortgagor shall deliver to the Mortgagee a certificate or copy of a new policy as replacement for any expiring policy at least fifteen (15) days before the date of such expiration; and that all such policies shall provide for not less than thirty (30) days written notice of cancellation from the insurer to theAdditionally, the Mortgagor shall maintain or cause to be maintained public liability insurance on the Premises in an amount acceptable to the Mortgagee (but in no event less than $5,000,000).   If the Premises are located in an area which has been identified by the Secretary of Housing and Urban Development as a flood hazard area, it will keep the Premises insured against loss by flood for the term of the Notes, in an amount at least equal to the outstanding principal balance of the Notes or the maximum limit of coverage available for the Premises under the National Flood Insurance Act of 1968, whichever is less;

(e)  Taxes and Assessments.  That the Mortgagor will pay, before the same become delinquent or any penalty attached thereto for nonpayment, all taxes, assessments and charges of every nature that may now or hereafter be levied or assessed, upon the Premises or any part thereof, or upon the rents, issues, income or profits thereof, whether any or all of said taxes, assessments or charges be levied directly or indirectly, and will pay, before the same become delinquent or any penalty attached thereto for the nonpayment, all taxes which by reason of nonpayment create a lien prior to the lien of the Mortgage; and will thereupon submit to the Mortgagee such evidence of the due and punctual payment of such taxes, etc. as the Mortgagee may require;

(f)  Maintenance of the Premises.  That the Personal Property is in good working order and condition, and the Premises are free from structural defects.  The Mortgagor will keep the Mortgaged Property protected in good order, repair and condition (reasonable wear and tear and casualty insured against excepted) at all times, promptly replacing any part thereof which may become lost, destroyed or unsuitable for use; and will not commit or suffer any strip or waste of the Mortgaged Property, or any violation of any law, regulation, ordinance or contract affecting the Mortgaged Property, and will not commit or suffer any demolition, removal or material alteration of the Mortgaged Property without the written consent of the Mortgagee.  The Mortgagor shall maintain and preserve the parking areas, passageways and drives, now or hereafter existing on the Premises, and, without prior written consent of the Mortgagee, no building or other structure other than those currently in existence on the Premises shall be erected thereon and no additions to existing buildings shall be erected, in either case for a cost exceeding $100,000.00,  without the prior written consent of the Mortgagee;

(g)  Tax Escrow.  After the occurrence of an Event of Default, the Mortgagor shall, upon request therefor by the Mortgagee, which request may be withdrawn and remade from time to time at the discretion of the Mortgagee, pay to the Mortgagee on a monthly basis as hereafter set forth a sum equal to the municipal and other governmental real estate taxes, personal property taxes, other assessments next due on the Mortgaged Property and all premiums next due for fire and other casualty insurance required of the Mortgagor hereunder, less all sums already paid therefor, divided by the number of months to lapse not less than one (1) month prior to the date when said taxes and assessments will become delinquent and when such premiums will become due.  Such sums as estimated by the Mortgagee shall be paid with monthly payments of interest due pursuant to the terms of the Notes and such sums shall be held by the Mortgagee to pay said taxes, assessments and premiums before the same become delinquent.  The Mortgagor agrees that should there be insufficient funds so deposited with the Mortgagee for said taxes, assessments and premiums when due, it will upon demand by the Mortgagee promptly pay to the Mortgagee amounts necessary to make such payments in full; any surplus funds may be applied toward the payment of the indebtedness secured by the Mortgage or credited toward future such taxes, assessments and premiums.  If the Mortgagee shall have commenced foreclosure proceedings, the Mortgagee may apply such funds toward the payment of the Mortgage indebtedness without causing thereby a waiver of any rights, statutory or otherwise, and specifically such application shall not constitute a waiver of the right of foreclosure hereunder.  The Mortgagor hereby assigns to the Mortgagee all the foregoing sums so held hereunder for such purposes;

(h)  Books and Records; Financial Statements.  That the Mortgagor shall maintain full and correct books and records showing in detail the earnings and expenses of the Mortgaged Property and will permit the Mortgagee and its representatives to examine said books and records and all supporting vouchers and data any time from time to time upon request by the Mortgagee.

(i)  Other Proceedings.  That if any action or proceeding be commenced, excepting an action to foreclose the Mortgage or to collect the debt hereby secured, to which action or proceeding the Mortgagee is made a party by reason of the execution of the Mortgage or the Notes, or in which it becomes necessary to defend or uphold the lien of the Mortgage, all reasonable sums paid by the Mortgagee for the expense of any litigation to prosecute or defend the rights and lien created hereby, including attorneys' fees, shall be paid by the Mortgagor, together with interest thereon from date of payment at the highest rate specified in the Notes, and any such sum, and the interest thereon, shall be immediately due and payable and be secured hereby, having the benefit of the lien hereby created, as a part thereof and of its priority.  The Mortgagee shall give the Mortgagor prompt notice of the initiation of any such action or proceeding;

(j)  Consent to Release, Etc.  Without affecting the liability of the Mortgagor or any other person (except any person expressly released in writing) for payment of any indebtedness secured hereby or for performance of any obligation contained herein or in the Loan Documents, and without affecting the rights of the Mortgagee with respect to any security not expressly released in writing, the Mortgagee may at any time and from time to time, either before or after the maturity of the Notes and without notice or consent:

(i)  Release any person liable for payment of all or any part of the indebtedness evidenced by the Notes or for performance of any obligation contained in the Loan Documents;

(ii)  Make any agreement extending the time or otherwise altering the terms of payment of all or any part of the Notes indebtedness, or modifying or waiving any obligation in the Loan Documents, or subordinating, modifying or otherwise dealing with the lien or charge hereof;

(iii)  Exercise or refrain from exercising or waive any right the Mortgagee may have hereunder, in the Loan Documents, or by law;

(iv)  Accept additional security of any kind; or

(v)  Release or otherwise deal with any property, real or personal, securing the indebtedness, including all or any part of the Premises;

(k)  Leases.  The Mortgagee must examine and approve (which approval will not be unreasonably withheld) in writing prior to execution, delivery and commencement thereof, all leases, tenancies and occupancies of the Premises entered into by the Mortgagor; and the Mortgagor at its cost and expense, upon request of the Mortgagee, shall cause any parties in possession of the Premises under any such leases, tenancies and occupancies, not so approved, to vacate the Premises immediately; and the Mortgagor acknowledges that the Mortgagee may from time to time at its option enter upon the Premises and take any other action in court or otherwise to cause such parties to vacate the Premises; the costs and expenses of the Mortgagee in so doing shall be paid by the Mortgagor to the Mortgagee on demand thereof and shall be part of the indebtedness secured by the Mortgage as costs and expenses incurred to preserve and protect the security; such rights of the Mortgagee shall be in addition to all its other rights as the Mortgagee, including the right of foreclosure, for breach by the Mortgagor in the requirements of this paragraph;

(l)  Due on Sale.  This Mortgage is not assignable or assumable and if all or any part of the Mortgaged Property is sold or conveyed or if there are transfers of any interests in the Mortgagor, then the Mortgagee may, at its option, require immediate payment in full of all sums secured by this Mortgage;

(m)  Liens.  The Mortgagor shall not hereafter, without the prior written consent of the Mortgagee, grant any other mortgage, lien or security interest in the Mortgaged Property;

(n)  Underground Tanks.  The Mortgagor will comply with the laws of the State of Vermont relating to the inspection and replacement of underground fuel storage tanks located on the Premises;

(o)  Flood Hazard; Hazardous Waste.  The Mortgagor represents and warrants that the Premises are not located in an "area of Special Flood Hazard", as that term is defined in the National Flood Insurance Act of 1968 (as amended and supplemented by the Flood Disaster Protection Act of 1973), and that the Premises do not contain any oil, hazardous wastes, hazardous substances, hazardous materials, toxic substances or toxic pollutants (collectively, "Hazardous Materials"), as those terms are used in the Resource Conservation and Recovery Act, the Comprehensive Environmental Response, Compensation and Liability Act, the Hazardous Materials Transportation Act and the Toxic Substances Control Act, the Clean Air Act, the Clean Water Act, or any similar state or local law, or in any regulations promulgated pursuant thereto, or in any other applicable law (collectively, "Hazardous Waste Laws").  The Mortgagor further represents and warrants that no asbestos is present in or has been used in the construction of the Premises.  The Mortgagor covenants to strictly comply with the requirements of all Hazardous Waste Laws and to promptly notify the Mortgagee of the presence in or on the Premises of any materials, the use, storage, transportation or disposal of which is regulated by the Hazardous Waste Laws (and immediately to notify Mortgagee if at any time there is a discharge, deposit, injection, dumping, spilling, leaking, incineration or placing of any Hazardous Materials into or on the Premises or if, at any time, the use, generation, storage, treatment, disposal, or transportation of any Hazardous Materials in, on, to, or from the Premises is in violation of any law.)  The Mortgagor hereby covenants to protect, indemnify, and hold the Mortgagee harmless from and against all, loss, cost, damage and liability, including attorneys' fees and costs of litigation, suffered or incurred by the Mortgagee on account of the presence of any Hazardous Materials in, on, or under the Premises, including, without limitation, any such loss, cost, damage or liability arising from a violation of any Hazardous Waste Laws.  The Mortgagor covenants not to permit any tenants or other occupants of the Premises to use any portion or all of the Premises for the use, generation, treatment, storage, disposal, or transportation of Hazardous Materials, except with the prior written consent of the Mortgagor and in compliance with all applicable laws and regulations.  Mortgagee, at its election and in its sole discretion and without notice, may (but shall not be obligated to) cure any failure on the part of Mortgagor or any occupant of the Premises so as to comply with the foregoing and any all applicable laws in furtherance thereof, including, without limitation (i) arrange for the clean up or containment of Hazardous Materials found in, on, or near the Premises and pay for such clean up and containment costs and costs associated therewith; (ii) pay on behalf of Mortgagor or any occupant of the Premises, any fines or penalties imposed on Mortgagor or any occupant by any federal, state, or local governmental agency or authority in connection with such Hazardous Materials; and (iii) make any other payment or perform any other act which may prevent a release of Hazardous Materials, facilitate the clean up thereof, and/or prevent a lien from attaching to the Premises.  Any partial exercise by Mortgagee of the remedies hereinabove set forth or any partial undertaking on the part of Mortgagee to cure Mortgagor's failure or any failure by an occupant of the Premises to comply with all applicable laws, shall not obligate Mortgagee to complete the actions taken or require Mortgagee to expend further sums to cure Mortgagor's or any such occupants' non-compliance; neither shall the exercise of any remedy operate to place upon the Mortgagee any responsibility for the operation, control, care, management or repair of the Premises, or make the Mortgagee the "operator" or "generator" of the Premises within the meaning of Hazardous Waste Laws.  The Mortgagee, by making any such payment or incurring any such costs, shall be subrogated to any rights of the Mortgagor or any occupant on the Premises to seek reimbursement from any third parties, including without limitation, the predecessor in interest to the Mortgagor's title or a predecessor to the occupant's use of the Premises who may be a "responsible party" under the Hazardous Waste Laws, in connection with the presence of such materials in, on or near the Premises.  Mortgagee, in the reasonable exercise of its discretion and with reasonable notice under the circumstances, may, at any time, without regard to whether Mortgagor is in default, cause one or more environmental assessments of the Premises to be undertaken.  Environmental assessments may include a detailed visual inspection of the Premises, including, without limitation, all storage areas, storage tanks, drains, drywells, and leaching areas, as well as the taking of soil samples, surface water samples, and ground water samples, and such other investigation or analysis as is necessary or appropriate for a complete assessment of the compliance of the Premises and the use and operation thereof with all Hazardous Waste Laws;

(p)  Future Advances.  Future advances from the Mortgagee shall be secured by this Mortgage as evidenced by the Notes secured hereby;

(q)  Compliance with Laws, Etc.  The Premises and the Mortgagor's use and occupancy thereof comply in all material respects with all applicable zoning, building, environmental, and other laws, ordinances, and regulations.  The Mortgagor has no knowledge of any claim of any violation of any such legal requirements.  The Mortgagor will comply, and will cause any tenant or person occupying the Premises to comply, with all applicable laws, regulations, covenants, rules, ordinances, statutes, codes, permits, orders and decrees applicable to the Mortgagor, the Mortgaged Property, or the use, occupancy or condition of the Premises.  The Mortgagor, if an entity other than a natural person, will, so long as the indebtedness secured hereby remaining outstanding, do all things necessary to preserve and keep in full force and effect its existence, franchises, rights and privileges as such an entity under the laws of the state of its incorporation or creation including, without limitation, the payment of all fees and other charges required in connection therewith.  The Mortgagor shall have the right to contest by appropriate legal proceedings, but without cost or expense to the Mortgagee, the validity of any laws, ordinances, orders, rules, regulations and assessments affecting the Mortgagor or the Mortgaged Property if compliance therewith may legally be held in abeyance without the sufferance of any charge, lien or liability against the Mortgaged Property, and the Mortgagor may postpone compliance therewith until the final determination of any such proceedings, provided they shall be prosecuted with due diligence and dispatch, and if any lien or charge is incurred, the Mortgagor may, nevertheless, make the contest and delay compliance, provided the Mortgagee is furnished with security, reasonably satisfactory to it, against any loss or injury by reason of such non-compliance or delay; 

(r)  Mechanics Liens, Etc.  The Mortgagor will pay, as the same shall become due, all lawful and uncontested claims and demands of mechanics, materialmen, laborers and others which, if unpaid, might result in, or permit the creation of, a lien on the Mortgaged Property or on the revenues, rents, issues, income and profits arising therefrom.  The Mortgagor will not create or permit to be created and will promptly discharge any mortgage, lien, or charge on the Mortgaged Property or on the interest of the Mortgagor or the Mortgagee therein, and the Mortgagor will do or cause to be done everything necessary so that the lien hereof shall be fully preserved, at the cost of the Mortgagor, without expense to the Mortgagee; and

(s)  Performance of Obligations under the Lease.  The Mortgagor shall keep, perform, and otherwise comply with each and every covenant, restriction, agreement, and provision in the Lease required to be kept, performed, or complied with by the Mortgagor.  The Mortgagor shall notify the Mortgagee immediately of any defaults under the Lease (whether by the lessor or the Mortgagor) and shall not take any action to modify, amend, or terminate the Lease without the Mortgagee's express written consent.  

2.  Payments by the Mortgagee.  If the Mortgagor shall neglect or refuse to keep in good repair the Property, to replace the same as herein agreed, to maintain and pay the premiums for insurance which may be required under Paragraph 1(d) or to pay and discharge all taxes, assessments, charges and liens of every nature and to whomever assessed, as provided for in Paragraphs 1(e) and 1(r), the Mortgagee may, at its election, cause such repairs or replacements to be made, obtain such insurance or pay said taxes, assessments, charges and liens, and any amounts paid as a result thereof, together with interest thereon at the highest rate of interest specified in the Notes secured hereby from the date of payment, shall be immediately due and payable by the Mortgagor to the Mortgagee, and until paid shall be added and become part of the principal debt secured hereby, and the same may be collected as a part of said principal debt in any suit herein or upon the Notes; or the Mortgagee, by the payment of any tax, assessment or charge, may, if it sees fit if allowed by law, be thereby subrogated to the rights of the state, county, village and all political or governmental subdivisions.  No such advances shall be deemed to relieve the Mortgagor of any default hereunder or impair any right or remedy consequent thereon, and the exercise of the rights to make advances granted in this paragraph shall be optional with the Mortgagee and not obligatory, and the Mortgagee shall not in any case be liable to the Mortgagor for a failure to exercise any such right.  The Mortgagee shall have no responsibility with respect to the legality, validity and priority of any such claim, lien, encumbrance, tax, assessment and premium, and of the amount necessary to be paid in satisfaction thereof.

3.  Events of Default.  

(a)  An Event of Default under  the Credit Agreement shall be deemed an "Event of Default" hereunder; and

(; or

(b)   Any uninsured loss, theft, damage, or destruction of any substantial portion of any of the Mortgaged Property shall be deemed an "Event of Default" hereunder.

Upon the occurrence of any Event of Default,  the Mortgagee, or its successors or assigns, may forthwith exercise all of the rights and remedies provided in this Section, in Sections 4, 5, and 6 hereinbelow, in the Credit Agreement and in any of the other Loan Documents, or which may be available to the Mortgagee by law.  Notwithstanding any other provisions set forth herein and without limitation thereof, this Mortgage is upon the STATUTORY CONDITIONS, for any breach of which Mortgagee shall have the STATUTORY POWER OF SALE.

4.  Possession by Mortgagee.

(a)  If the Mortgagee shall take possession of the Mortgaged Property as permitted hereby, then in addition to, and not in limitation of, the Mortgagee's other legal remedies, the Mortgagee may:

   (i)  hold, manage, operate, and lease the Mortgaged Property to the Mortgagor or to any other entity on such terms and for such period(s) of time as the Mortgagee may deem proper, and the provisions of any lease made by the Mortgagee pursuant hereto shall be valid and binding upon the Mortgagor notwithstanding the fact that the Mortgagee's right of possession may terminate or this Mortgage may be satisfied of record prior to the expiration of the term of such lease;

  (ii)  make such alterations, additions, improvements, renovations, repairs, and replacements to the Mortgaged Property, and remodel such improvements, as the Mortgagee may deem necessary or appropriate for the continuance of the Mortgagor's business or preservation of the value of the Mortgaged Property; and ;

  (iii)  collect the rents, issues, and profits arising from the Mortgaged Property, past due and thereafter becoming due, and apply the same to the payment of all charges and commissions incidental to the collection of rents, the management of the Mortgaged Property, and thereafter to the obligations and all sums or charges required to be paid by the Mortgagor hereunder; and

   (iv)  take any other action the Mortgagee deems necessary or appropriate in its sole discretion to preserve, protect, or improve the Mortgaged Property;

(b)  All monies advanced by the Mortgagee for the above purposes and not repaid out of the rents collected shall immediately and without demand be repaid by the Mortgagor to the Mortgagee, together with interest thereon at the highest rate provided in the Notes, and shall be added to the principal indebtedness secured hereby; 

(c)  The taking of possession and the collection of rents by the Mortgagee as described above shall not be construed to be an affirmation of any lease of the Mortgaged Property or any part thereof, and the Mortgagee, or any purchaser at any foreclosure sale, may terminate any such lease at any time, whether or not such taking of possession and collection of rents has occurred; and

(d)  Mortgagor hereby indemnifies and holds Mortgagee harmless from and against any liability or damage which Mortgagee may incur with respect to the taking possession of the Mortgaged Property and in the exercise and performance, and good faith, of its rights and duties otherwise set forth in this Section. 

5.  Foreclosure of Premises Pursuant to Statutory Power of_Sale.

(a)  Upon an Event of Default, the Mortgagee or its legal representatives or assigns may foreclose this mortgage and exercise such other rights as it may have, including, but not limited to, the POWER OF SALE under 12 V.S.A. Sections 4531 a et seq., without first commencing a foreclosure action or obtaining a foreclosure decree, and may give such notices and to do all other actions, including the giving of a foreclosure deed upon completion of the foreclosure sale, as permitted or required by 12 V.S.A. Section 4531 a-4553 to foreclose a mortgage without judicial action.

(b)  If the provisions of the Uniform Commercial Code apply to any property or security given to secure the indebtedness secured hereby which is sold with or as a part of the Premises, or any part thereof, at one or more foreclosure sales, any notice required under such provisions shall be deemed commercially reasonable and fully satisfied by the notice provided to be given hereby in execution of the POWER OF SALE; and 

(c)  The Mortgagee may resort to any remedies and the security given by the Loan Documents in whole or in part, and in such portions and in such order as may seem best to the Mortgagee in its sole discretion, and the Mortgagor waives all rights to a marshaling of its assets.

 

6.  UCC Sale of Personal Property.  The Mortgage is intended to be and is a security agreement and financing statement with respect to the Personal Property pursuant to, and in accordance with, the terms of the Uniform Commercial Code as adopted by the State of Vermont ("UCC").  Upon an Event of Default, the Mortgagee may, at its discretion, require the Mortgagor to assemble the Personal Property and make it available to the Mortgagee at a place reasonably convenient to both parties to be designated by the Mortgagee.  The Mortgagee shall give the Mortgagor notice, by registered mail, postage prepaid, of the time and place of any public sale of any of the Personal Property or of the time any private sale or other intended disposition thereof is to be made by sending notice to the Mortgagor at least ten (10) days before the time of the sale or other disposition, which provisions for notice the Mortgagor and the Mortgagee agree are reasonable; provided, however, that nothing herein shall preclude the Mortgagee from proceeding as to both the Personal Property and the Premises, in accordance with the Mortgagee's rights and remedies in respect of the Premises.  The Mortgagee shall have all of the remedies of a secured party under the Uniform Commercial Code as now in effect in the State of Vermont, and such further remedies as may from time to time hereafter be provided in Vermont for a secured party.  The Mortgagor agrees that all rights of the Mortgagee as to the Personal Property and the Premises may be exercised together or separately and further agrees that in exercising its power of sale as to the Personal Property and the Premises, the Mortgagee may sell the Personal Property or any part thereof, either separately from or together with the sale of the Premises or any part thereof, all as the Mortgagee may in its discretion elect.  Mortgagor warrants, for UCC purposes, that its principal place of business is in Waterbury, Vermont and that Mortgagor has no other place of business in Vermont.

7.  Joint and Several Liability.  If the Mortgagor be more than one party, such parties shall be jointly and severally liable under any and all obligations, covenants and agreements of the Mortgagor contained herein or in any of the other Loan Documents, and any reference herein to "Mortgagor" shall mean and refer to such parties individually and collectively.

8.  General Provisions.  The Mortgagor and the Mortgagee further agree that:

(a)  Homestead.  There is no homestead interest in the Premises.

(b) Waivers.

(i)  Except as otherwise specifically provided in this Mortgage, the Notes and the other Loan Documents, the Mortgagor waives demand, notice of any action taken in reliance on this Mortgage, and all other demands and notices of any description;

(ii)  No delay or omission on the part of the Mortgagee in exercising any right or remedy hereunder shall operate as a waiver of such right or remedy or of any other right or remedy under this Mortgage.  A waiver on any one occasion shall not be construed as a bar to or waiver of any such right and/or remedy on any future occasion.  No single or partial exercise of any power hereunder shall preclude other or future exercise thereof or the exercise of any other right; and

(iii)  That receipt and disposition of rents, income of the Mortgaged Property, insurance proceeds, eminent domain awards, or any other sums under the provisions of the Loan Documents by the Mortgagee shall not be a waiver or release of any rights of the Mortgagee, including but not limited to, the right of foreclosure or acceleration of the Notes, whether such receipt or disposition shall be before or after exercise of any such rights.

(c)  Binding Agreement.  This Mortgage shall inure to the benefit of and shall be binding upon the parties hereto and their respective heirs, legal representatives, successors, and permitted assigns; provided, however, that any assumption of any obligations of Mortgagor hereunder shall not constitute a release of the party whose obligation is being assumed without the Mortgagee's prior written consent.

(d)  Amendment.  This Mortgage shall not be changed in any respect except by written instrument signed by the parties hereto.

(e)  Governing Law.  This Mortgage and all rights and obligations hereunder, including matters of construction, validity, and performance, shall be governed by the laws of the State of Vermont.

(f)  Severability.  If any term, condition, or provision of this Mortgage or the application, thereof to any person or circumstance shall, to any extent, be held invalid or unenforceable according to law, then the remaining terms,  conditions, and provisions of this Mortgage, or the application of any such invalid or unenforceable term, condition or provision to persons or circumstances other than those to which it is held invalid or unenforceable, shall not be affected thereby, and each term, condition, and provision of this Mortgage shall be valid and enforced to the fullest extent permitted by law.

(g)  Headings.  The descriptive headings of the sections of this Mortgage have been inserted for convenience and reference only and shall not control or affect the meaning or construction of any of the contents hereof.

(h)  Estoppel Certificate.  The Mortgagor, within five (5) days after being given notice as provided below, will furnish to the Mortgagee a written statement duly acknowledged by the Mortgagor or its representative certifying the principal amount then outstanding on the Notes and certifying that no offsets or defenses exist against the Mortgage indebtedness.

(i)  Notices.  All notices, requests, demands and other communications provided for hereunder shall be in writing (including telegraphic communication) and shall be either mailed by certified mail, return receipt requested, or delivered by overnight courier service, to the applicable party at the addresses first set forth above, or, as to each party, at such other address as shall be designated by such parties in a written notice to the other party complying as to delivery with the terms of this Section.  All such notices, requests, demands and other communication shall be effective on the date of first attempted delivery.

(j)  Gender and Number.  All words denoting gender or number shall be construed to include any other gender or number as the context and facts require.

(k)  Conflict with other Loan Documents.  In the event of any conflict between the terms, covenants, conditions and restrictions contained in the Loan Documents, the term, covenant and condition or restriction which grants the greater benefit upon the Mortgagee shall control.  The determination as to which term, covenant, condition or restriction is the more beneficial shall be made by the Mortgagee in its sole discretion.

(l)  Waiver of Right of Exemption.  The Mortgagor, for the consideration aforesaid, hereby waives all rights of exemption in the Mortgaged Property as the same are now or here after provided by virtue of the Bankruptcy provisions of the United States Code, including, without limitation, 11 U.S.C. 522.

(m)  Rights Cumulative.  All rights and remedies set forth herein and in the Loan Documents shall be cumulative and concurrent, and may be pursued, singly, successively, or together, at the Mortgagee's sole discretion, and may be exercised as often as occasion therefor shall occur; Mortgagor expressly waives the application of any doctrine of marshaling of assets.

IN WITNESS WHEREOF, the Mortgagor and the Mortgagee have caused this Mortgage to be executed as of the 30th day of August, 2002.

 

MORTGAGOR:

                                                   
GREEN MOUNTAIN COFFEE ROASTERS,INC.

  /s/ H. Kenneth Merritt, Jr.            
By:  /s/ William G. Hogan                          

Witness                                        
William G. Hogan, Vice President

 

MORTGAGEE:

                                                   
FLEET NATIONAL BANK

   /s/ Tomas P. Manson                                  By:              
/s/ Kenneth R. Sheldon                       

Witness                                        
Kenneth R. Sheldon, Vice President

 

STATE OF NEW HAMPSHIRE

COUNTY OF HILLSBOROUGH, SS.

On this the 30th  day of August, 2002, before me, the undersigned notary personally appeared William G. Hogan, who acknowledged himself to be a Vice President of Green Mountain Coffee Roasters, Inc., a corporation, and that he, as such authorized officer, being authorized so to do, executed the foregoing instrument for the purposes therein contained, by signing the name of the corporation by himself as such authorized officer.

 

  /s/ Thomas P. Manson                                              

Notary Public

 

STATE OF NEW HAMPSHIRE

COUNTY OF HILLSBOROUGH, SS.

On this the 30th  day of August, 2002, before me, the undersigned notary personally appeared Kenneth R. Sheldon, who acknowledged himself to be a Vice President of Fleet National Bank, a bank, and that he, as such authorized officer, being authorized so to do, executed the foregoing instrument for the purposes therein contained, by signing the name of the corporation by himself as such authorized officer.

   /s/ Thomas P. Manson                                             

Notary Public

 

 

CONSENT OF LESSOR

The undersigned, Pilgrim Partnership, L.L.C.  ("Lessor"), lessor under the Lease, hereby acknowledges receipt of a copy of this Mortgage, Security Agreement and Fixture Filing and agrees that the Mortgagee is entitled to receive all notices required or permitted to be given to the lessee under the terms of the Lease.  Lessor agrees that in the event the Mortgagee either accepts a deed (or assignment) in lieu of foreclosure from the Mortgagor or forecloses the lien of this mortgage, then the Lease shall remain in full force and effect pursuant to its terms provided that either the Mortgagee or such other party as may acquire title to the Mortgaged Property ("New Lessee") pays and performs all of the covenants and agreements contained in the Lease required to be paid or performed by the lessee thereunder.  Upon any event of default by the Mortgagor under the Lease, the Lessor covenants and agrees that the Lessor shall take no action to effect a termination of the Lease by reason of any such default without first giving to the Mortgagee reasonable time within which either (i) to obtain possession of the Mortgaged Property (including possession by a receiver) and cure such default in the case of a default which is susceptible of being cured when the Mortgagee has obtained possession, or (ii) to institute foreclosure proceedings and complete such foreclosure, or otherwise acquire the Mortgagor's interest under the Lease with diligence and continuity, in the case of a default which is not so susceptible of being cured by the Mortgagee and any such default shall be deemed to have been waived by the Lessor upon the completion of such foreclosure or acquisition of the Lessee's interest.  The agreements set forth herein are intended to and shall survive the giving of a deed in lieu of foreclosure and/or any foreclosure proceeding and shall be binding upon and inure to the benefit of Lessor and the Mortgagee and their respective successors and assigns.

 

	
WITNESS:

 

________________________________
	
PILGRIM PARTNERSHIP, LLC. 

 

By:_________________________________

Member, Duly Authorized

 

	
 

 

 

________________________________
	
FLEET NATIONAL BANK

 

By:_________________________________

Signature and Title,

      Duly Authorized

 

 

STATE OF VERMONT

COUNTY OF WASHINGTON

On this __ day of August, 2002, before me, the undersigned officer, personally appeared _______________, who acknowledges him/herself to be a Member of Pilgrim Partnership, L.L.C> a Vermont limited liability company (the "Company'), and that s/he, as such Memberr, being authorized so to do, executed the foregoing instrument for the purposes therein contained, by signing the name of the Company p by him/herself as such Member.

IN WITNESS WHEREOF, I hereunto set my hand and official seal.

 

 

___________________________________

Justice of the Peace, Notary Public

 

STATE OF NEW HAMPSHIRE

COUNTY OF HILLSBOROUGH

On this __ day of August, 2002, before me, the undersigned officer, personally appeared _______________, who acknowledges him/herself to be the _____________of Fleet National Bank, a bank incorporated under the laws of the State of New Hampshire, and that s/he, as such _______________, being authorized so to do, executed the foregoing instrument for the purposes therein contained, by signing the name of the Bank by him/herself as _________________________.

IN WITNESS WHEREOF, I hereunto set my hand and official seal.

 

 

___________________________________

Justice of the Peace, Notary Public

 

 

 

 

SCHEDULE A

DESCRIPTION OF PREMISES

A parcel of land with appurtenances thereto and improvements thereon, being all and the same land and premises conveyed to Pilgrim Partnership by warranty deed of John S. Reynolds dated November 13, 1986 and recorded in Book 103 Page 432 of the Waterbury Land Records, and more particularly described therein as follows:

"Beginning at an iron rod in the most westerly corner of land conveyed to John S. Reynolds and Richard G. Hutchins, d/b/a Environmental Industrial Associates by warranty deed of Environmental Industrial Corporation dated December 30, 1977 and recorded in Volume 82 at Page 256 of the Waterbury Land Records; thence S 21 degrees 48' E 403 feet +/- to an iron rod; thence N 68 degrees 12' E 73.8 feet to a point; thence N 21 degrees 48' W 5.0 feet to a point; thence N 68 degrees 12' E 70.0 feet to a point; thence S 21 degrees 48' E 5.0 feet to a point; thence N 68 degrees 12' E 54.32 feet to a spike in concrete; thence N 68 degrees 12' E 35.18 feet to an iron rod; thence S 21 degrees 48' E 72.28 feet to an iron rod in a 137.10 foot radius curve to the left; thence northwesterly 80.13 feet along said curve to an iron rod at its point of tangency; thence N 27 degrees 57' W 327.67 feet to the point of curvature of a 64.56 foot radius curve to the right; thence northeasterly 108.43 feet along said curve to an iron rod at its point of tangency; thence S 68 degrees 17' W 25.80 feet to an iron rod; thence S 68 degrees 17' W 70.2 feet to an iron pipe; thence S 68 degrees 17' W 50.04 feet to an iron rod; thence S 68 degrees 17' W 131 feet +/- to the iron rod marking the place of beginning, containing 2.1 acres."

Said land and premises are shown as the parcel of land designated as Lot 1 on a map plan entitled "Environmental Industrial Associates, Waterbury, Vt." Prepared by Glenn R. Towne, Registered Land Surveyor, dated April, 1982, revised on November 3, 1986, and filed in Map Book 3 at Page 27 of the Waterbury Land Records.

 

 

 

SCHEDULE B

DESCRIPTION OF ENCUMBRANCES

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