Document:

SECURITY AGREEMENT FRANCHISING CORP

SECURITY AGREEMENT

SECURITY AGREEMENT (this "Agreement") made this 30th day of August, 2002, by and between GREEN MOUNTAIN COFFEE ROASTERS FRANCHISING CORPORATION., a Vermont corporation having its chief executive offices at 33 Coffee Lane, Waterbury, Vermont 05676 (the "Debtor"), in favor of 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 "Secured Party"), 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 Debtor, Green Mountain Coffee Roasters, Inc., the Secured Party and the banks that are parties thereto (the "Lenders").

WHEREAS, the Debtor has requested that the Lenders enter into the Credit Agreement with the Debtor, and to extend credit to the Debtor on the terms and subject to the conditions set forth therein;

WHEREAS, it is a condition precedent to the Lenders' agreement to enter into the Credit Agreement and extend credit to the Debtor thereunder that the Debtor execute and deliver this Agreement and grant the security interest herein provided;

NOW, THEREFORE, in order to induce the Lenders to enter into the Credit Agreement and extend credit to the Debtor thereunder, and in consideration thereof, 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.

1.01 Generally.  All capitalized terms used without definition herein 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, terms defined in the NH UCC (as defined below) and used herein 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:

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

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

"Blue Sky Laws" shall have the meaning set forth in Section 9.02(c).

"Change" shall have the meaning set forth in Section 8.02.

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

"Copyright Office" shall have the meaning set forth in Article 6.

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

"Indemnified Party" shall have the meaning set forth in Article 12.

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

"NH UCC" means the Uniform Commercial Code in effect in the State of New Hampshire, as it may be amended from time to time, provided, that if by reason of mandatory provisions of law, perfection, or the effect of perfection or nonperfection, of the Security Interest in any Collateral 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" means the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection or effect of perfection or non-perfection or availability of such remedy, as the case may be.

"Perfection Certificate" means the certificate, substantially in the form attached hereto as Exhibit A, signed by an authorized officer of the Debtor and delivered to the Secured Party.

"Perfection Documents" shall have the meaning set forth in Section 3.01.

"Secured Party" shall have the meaning set forth in the Preamble.

"Securities Act" shall have the meaning set forth in Section 9.02(c).

"Security Interest" means the security interest and liens granted pursuant to Article 2 hereof as well as all other security interests created or assigned as additional security for the Obligations pursuant to this Agreement.

"Uniform Commercial Code" means, in reference to any jurisdiction, the Uniform Commercial Code as adopted and in effect in such jurisdiction, as it may be amended from time to time.

1.03Terms Defined in NH UCC.  For purposes of this Agreement, the terms for which definitions are supplied by the NH UCC include, without limitation, those set forth below.  Term and section references contained herein are provided for convenience only, and the omission of any term from following list is not intended to mean that the applicable NH UCC definition does not apply to such omitted term.

	
"Accession"
	
Section9-102(a)(1)

	
"Account"
	
Section9-102(a)(2)

	
"Account Debtor"
	
Section9-102(a)(3)

	
"Certificated Security"
	
Section8-102(a)(4)

	
"Confirmer"
	
Section5-102(a)(4)

	
"Chattel Paper"
	
Section9-102(a)(11)

	
"Commercial Tort Claim"
	
Section9-102(a)(13)

	
"Commodity Intermediary
	
Section9-102(a)(17)

	
"Deposit Account"
	
Section9-102(a)(29)

	
"Document"
	
Section9-102(a)(30)

	
"Electronic Chattel Paper"
	
Section9-102(a)(31)

	
"Entitlement Holder"
	
Section8-102(a)(7)

	
"Entitlement Order"
	
Section8-102(a)(8)

	
"Equipment"
	
Section9-102(a)(33)

	
"Filing Office"
	
Section9-102(a)(37)

	
"Financial Asset"
	
Section8-102(a)(9)

	
"Financing Statement"
	
Section9-102(a)(39)

	
"Fixture Filing"
	
Section9-102(a)(40)

	
"General Intangible"
	
Section9-102(a)(42)

	
"Goods"
	
Section9-102(a)(44)

	
"Instrument(s)"
	
Section9-102(a)(47)

	
"Inventory"
	
Section9-102(a)(48)

	
"Investment Property"
	
Section9-102(a)(49)

	
"Issuer"
	
Section8-201

	
"Letter-of-Credit Right"
	
Section9-102(a)(51)

	
"Payment Intangible"
	
Section9-102(a)(61)

	
"Proceeds"
	
Section9-102(a)(64)

	
"Securities Intermediary"
	
Section8-102(a)(14)

	
"Security"
	
Section8-102(a)(15)

	
"Supporting Obligation"
	
Section9-102(a)(77)

	
"Tangible Chattel Paper"
	
Section9-102(a)(78)

	
"Uncertificated Security"
	
Section8-102(a)(18)

1.04  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 "Article" or "Section" refers to the corresponding article or section of this Agreement.

(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 Interest.  The Debtor hereby grants to the Secured Party for the benefit of the Secured Party and the Lenders, to secure the full, punctual and unconditional payment and performance of the Obligations, a security interest in all of the Debtor's right, title and interest in and to the following properties, assets and rights of the Debtor, wherever located, whether now owned or hereafter acquired or arising, and all Proceeds and products thereof (all of the same being hereinafter called the "Collateral"):

all personal and fixture property of every kind and nature including without limitation all Goods (including Inventory, Equipment and any Accessions thereto), Instruments (including promissory notes), Documents, Accounts, Chattel Paper (whether Tangible Chattel Paper or Electronic Chattel Paper), Deposit Accounts (other than payroll accounts), Letter-of-Credit Rights (whether or not the letter of credit is evidenced by a writing), Commercial Tort Claims, Securities and all other Investment Property, Supporting Obligations, any other  contract rights or rights to the payment of money, all sums payable under any policy of insurance (including without limitation, any return for premiums), tort claims, and all General Intangibles (including all Payment Intangibles).

The Secured Party acknowledges that the attachment of its security interest in any Commercial Tort Claim is subject to the Debtor's compliance with Section 8.22(g).  The Debtor agrees that the security interest herein granted has attached and shall continue until (i) the Obligations have been paid, performed and undefeasibly discharged in full and (ii) the Lenders are no longer committed to extend any credit to the Debtor under the Credit Agreement or any other Loan Document.  The security interest is granted as security only and shall not subject the Secured Party or the Lenders to, transfer to the Secured Party or the Lenders, or in any way affect or modify, any obligation or liability of the Debtor with respect to any of the Collateral or any transaction in connection therewith.  Except during the existence of an Event of Default, the Debtor shall retain the right to vote any of the Investment Property constituting Collateral in a manner not inconsistent with the terms of this Agreement and the Credit Agreement.

Article 3.  Delivery and Filing of Financing Statements.

3.01Delivery of Perfection Documents.  Upon the execution of this Agreement, and from time to time thereafter, the Debtor shall deliver to the Secured Party such Financing Statements, documentation, notices, and assignments, including assignments under the Assignment of Claims Act of 1940, as amended (collectively, the "Perfection Documents"), as may be deemed necessary by the Secured Party to perfect the Security Interest in all Collateral.

3.02 Authorization to File Financing Statements and Take Other Action.  The Debtor hereby irrevocably authorizes the Secured Party 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 Collateral (i) as all assets of the Borrower or words of similar effect, regardless of whether any particular assets comprised in the Collateral falls within the scope of Article 9 of the Uniform Commercial Code of such jurisdiction, or (ii) as being of any equal or lesser scope or with greater detail 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 (i) whether the Debtor is an organization, the type of organization and any organization identification number issued to the Debtor and, (ii) in the case of a Financing Statement filed as a Fixture Filing, a sufficient description of real property to which the Collateral relates.  The Debtor also authorizes the Secured Party 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 Debtor shall provide the Secured Party with any information the Secured Party shall reasonably request in connection with any of the foregoing.

Article 4.  Securities Pledge Agreement.  Concurrently herewith the Debtor is executing and delivering to the Secured Party, for the benefit of the Secured Party and the Lenders, a Securities Collateral Pledge Agreement pursuant to which the Debtor is pledging to the Secured Party, among other things, Securities representing 100% of the Debtor's ownership interest in Keurig, Incorporated.  Such pledges shall be governed by the terms of the Securities Collateral Pledge Agreement and not by the terms of this Agreement.

Article 5.  Patent and Trademark Security Agreement.  Concurrently herewith the Debtor is executing and delivering to the Secured Party, for the benefit of the Secured Party and the Lenders, a Patent and Trademark Security Agreement pursuant to which the Debtor is granting to the Secured Party a security interest in certain Collateral consisting of patents, patent rights, trademarks, service marks, and trademark and service mark rights, together with the goodwill appurtenant thereto.  The provisions of the Patent and Trademark Security Agreement are supplemental to the provisions of this Agreement, and nothing contained in the Patent and Trademark Security Agreement shall derogate from any of the rights or remedies of the Secured Party hereunder; nor shall anything contained in the Patent and Trademark Security Agreement be deemed to prevent or extend the time of attachment or perfection of any Security Interest in such Collateral created hereby.

Article 6.  Copyright Memorandum.  Concurrently herewith the Debtor is, in addition, executing and delivering to the Secured Party, for the benefit of the Secured Party and the Lenders, and for recording in the United States Copyright Office (the "Copyright Office"), a Memorandum of Grant of Security Interests in Copyrights.  The Debtor represents and warrants to the Secured Party and the Lenders that such Memorandum identifies all now existing material copyrights and other rights in and to all material copyrightable works of the Debtor, identified, where applicable, by title, author and/or Copyright Office registration number and date.  The Debtor represents and warrants to the Secured Party and the Lenders that it has registered all material copyrights with the Copyright Office, as identified in such Memorandum.  The Debtor covenants, promptly following the acquisition thereof, to provide to the Secured Party like identifications of all material copyrights and other rights in and to all material copyrightable works hereafter acquired by the Debtor and to execute and deliver to the Secured Party a supplemental Memorandum of Grant of Security Interest in Copyrights modified to reflect such subsequent acquisitions.

Article 7.  Representations and Warranties.  The Debtor hereby represents and warrants to the Secured Party and the Lenders as follows, each such representation and warranty to continue in full force so long as this Agreement remains in effect:

7.01Accuracy of Perfection Certificate.  The Debtor has delivered a Perfection Certificate to the Secured Party on the date hereof, which is hereby incorporated by reference as if fully set forth herein.  All of the information set forth in such Perfection Certificate is true and correct in all material respects. The Debtor has not failed to disclose in the Perfection Certificate any information necessary for the information contained in the Perfection Certificate not to be misleading.

7.02Ownership of Collateral; Absence of Liens and Restrictions.  The Debtor is, and in the case of property acquired after the date hereof, will be, the sole legal and equitable owner of the Collateral purported to be owned by it, holding good and marketable title to the same free and clear of all Encumbrances except for the Security Interest and Encumbrances specifically permitted under the terms of the Credit Agreement, and has good right and legal authority to pledge, sell, assign, deliver, and create the Security Interest in such Collateral in the manner herein contemplated.  The Collateral is genuine and is what it is purported to be.  The Collateral is not subject to any restriction that would prohibit or restrict the assignment, delivery or creation of the Security Interests.

7.03First Priority Security Interest.  This Agreement creates a valid and continuing lien on and security interest in the Collateral.  Upon the filing of a Financing Statement in the appropriate Filing Office for the location of the Debtor listed in the Debtor's Perfection Certificate, the Security Interest will be perfected (except to the extent a security interest may not be perfected by filing under the Uniform Commercial Code), prior to all other Encumbrances, and will be enforceable as such against creditors of the Debtor, any owner of the real property where any of the Collateral is located, any purchaser of such real property and any present or future creditor obtaining a lien on such real property.

7.04No Conflicts.  Neither the Debtor nor any of its predecessors has performed any act or is bound by any agreement which might prevent the Secured Party from enforcing the Security Interest or any of the terms of this Agreement, or which would limit the Secured Party in any such enforcement.  Except as specifically disclosed in the Perfection Certificate, no Financing Statement or other document evidencing a lien that names the Debtor as debtor is on file in any jurisdiction and the Debtor has not signed any document or agreement authorizing the filing of any such Financing Statement or document.

7.05Accounts.  Each Account constituting Collateral (i) is and will be a true and correct statement of the actual Indebtedness incurred by each Account Debtor with respect thereto, (ii) arises and will arise out of or in connection with the sale or lease of Goods or for the rendering of services by the Debtor to each Account Debtor, and (iii) is and shall be a valid, legal and binding obligation of the party purported to be obligated thereon, enforceable in accordance with its terms and free of material setoffs, defenses or counterclaims.

7.06Inventory.  All Inventory constituting Collateral at any time are and will be genuine and salable in the ordinary course of the Debtor's business.  None of the Inventory has been or will be produced in violation of the Fair Labor Standards Act of 1938, as amended, or any other law.

7.07Notes and Other Instruments.  Pursuant to the terms of this Agreement, the Debtor has endorsed, assigned and delivered to the Secured Party all promissory notes and other Instruments pledged hereunder.  Regardless of the form of such endorsement, the Debtor hereby waives presentment, demand, notice of dishonor, protest, notice of protest and all other notices with respect thereto.

7.08 No Authorization.  No authorization, approval or other action by, and no notice to or filing with, any domestic or foreign governmental authority or regulatory body or consent of any other Person is required for (i) the grant of the Security Interest, (ii) the execution, delivery or performance of this Agreement by the Debtor or (iii) the perfection of the Security Interest or the exercise by the Secured Party of its rights and remedies hereunder, other than (a) the filing of Financing Statements under the Uniform Commercial Code, (b) the filing of appropriate documents in the United States Patent and Trademark Office, (c) the filing of appropriate documents in the U.S. Copyright Office and (d) such other filings as have already been made.

7.09Validity of Collateral.  The Debtor has no knowledge of any fact that would impair the validity or make uncollectible any material amount of the Collateral that is Accounts, Chattel Paper, Payment Intangibles, General Intangibles, contract rights, Documents or Instruments, and to the best of the Debtor's knowledge, each obligor liable on such Collateral has and will have the capacity to contract.

Article 8.  Covenants.  The Debtor hereby covenants with the Secured Party and the Lenders that, so long as this Agreement remains in effect:

8.01 Perfection Certificate.  The Debtor will supplement the Perfection Certificate promptly upon learning of (i) the inaccuracy of any of the information provided therein or (ii) the existence of any information that is necessary for the information contained therein not to be misleading or incomplete.

8.02Changes Relating to Debtor.  The Debtor will not change its name, identity or organizational structure, nature or jurisdiction of organization, or chief executive office, or place where its business records and records relating to the Collateral are kept, or move any tangible Collateral (other than Investment Property and Inventory which has been sold in the ordinary course of business) to a location other than those set forth in the Perfection Certificate, or merge into or consolidate with any other Person, without the prior written consent of the Secured Party and the Lenders.  With respect to any such proposed event, the Debtor shall provide the Secured Party and the Lenders at least 30 days' prior written notice thereof and the Debtor shall deliver to the Secured Party and the Lenders such new Financing Statements or other documentation as may be necessary or required by the Secured Party and the Lenders to ensure the continued perfection and priority of the Security Interest.  In connection with the movement of any Collateral to a new location, a Landlord Waiver with respect to such new location shall be delivered to the Secured Party, at the Secured Party's request, concurrently with the occupancy thereof.  The Debtor hereby grants to the Secured Party, for a term commencing on the date hereof and continuing so long as any of the Obligations remain outstanding, at a rental of $1.00 for such entire term, the receipt and sufficiency of which are hereby acknowledged, the right upon and after an Event of Default to the use of all premises or places of business which the Debtor now or hereafter may have and where any Collateral may be located for the purpose of exercising its rights against the Collateral, except, in the case of leased premises, to the extent such a grant is prohibited by the terms of the applicable lease.  With respect to any such leased premises, the Debtor hereby agrees that the Secured Party shall not owe to the Debtor any rent attributable to the Secured Party's use of such leased premises while exercising its right under this Agreement.  Promptly after the consummation of any of the foregoing changes or any merger or consolidation (each, a "Change"), the Debtor shall deliver to the Secured Party copies of its amended organizational documents, if any, certified by the Secretary of State (or equivalent) of its state of organization evidencing the Change.

8.03Protection and Defense of Security Interest; Sales and Encumbrances.  The Debtor shall take all steps that are necessary and prudent to protect the Security Interest in the Collateral, and shall defend the Security Interest of the Secured Party in the Collateral against the competing claims and demands of all other Persons.  The Debtor will not sell, grant, lease, assign or transfer any interest in, or permit to exist any lien, security interest or other Encumbrance on, any of the Collateral, except the Security Interest and as specifically permitted by the Credit Agreement.

8.04Fixture Conflicts; Required Waivers.  The Debtor intends, to the extent not inconsistent with applicable law, that the Collateral shall remain personal property of the Debtor and shall not be deemed to be a fixture irrespective of the manner of its attachment to any real estate.  The Debtor will deliver to the Secured Party such disclaimers, waivers, or other documents as the Secured Party reasonably may request to confirm the foregoing, executed by each Person having an interest in such real estate.

8.05 Books and Records; Notice of Security Interest.  The Debtor shall keep complete and accurate books and records (in form and substance satisfactory to the Secured Party) relating to the Collateral at its chief executive office as listed on the Perfection Certificate, and will not remove the same from such location without the prior written consent of the Secured Party in accordance with Section 8.02.  Upon the request of the Secured Party, the Debtor shall stamp or otherwise mark such books and records in such manner as the Secured Party may reasonably request in order to reflect the Security Interest including, without limitation notation of the Security Interest on any certificates of title or other evidence of ownership outstanding with respect to the Collateral and the posting of notices thereof upon the Collateral or in and about designated areas where the Collateral may be used, stored or kept, from time to time.  The Debtor will allow the Secured Party or its designees access at any reasonable time and from time to time during the Debtor's regular business hours upon reasonable notice (and at all times during the existence of an Event of Default) to examine, to inspect and make extracts from or copies of the Debtor's books and records, inspect the Collateral and, during the existence of an Event of Default, arrange for verification of Accounts constituting Collateral directly with any Account Debtors or by other methods or for other purposes as the Secured Party may require.

8.06Collection and Delivery of Proceeds.  The Debtor will diligently collect all of its Accounts constituting Collateral until the Secured Party exercises its right to collect the Accounts pursuant to this Agreement during the existence of an Event of Default.  During the existence of an Event of Default, all Proceeds of Accounts, Inventory and other Collateral received by the Debtor, regardless of the form of the Collateral or the manner of receipt, shall be held in trust for the Secured Party and the Lenders, and the Debtor shall deliver said Proceeds daily to the Secured Party, without commingling, in the identical form received (properly endorsed or assigned where required to enable the Secured Party to collect same), for application to the Obligations.  If any Accounts are at any time evidenced by Tangible Chattel Paper, promissory notes, trade acceptances or other Instruments, the Debtor will promptly deliver the same to the Secured Party, accompanied by such instruments of transfer or assignment duly executed in blank as the Secured Party may from time to time specify and, regardless of the form of such instrument, the Debtor hereby waives presentment, demand, notice of dishonor, protest, notice of protest and all other notices with respect thereto.

8.07Lockboxes.  Upon request of the Secured Party during the existence of an Event of Default, the Debtor will (i) enter into a lockbox arrangement satisfactory to the Secured Party with one or more financial institutions (which may include the Lenders) deemed acceptable by the Secured Party for the collection of Proceeds and direct all of its Account Debtors to make all payments on Accounts to the lockboxes established thereunder, and/or (ii) maintain all its Deposit Accounts (other than payroll) with the Secured Party or at another financial institution which has agreed to accept drafts drawn on it by the Secured Party under a written depository transfer agreement or other arrangement with the Secured Party and to block such Deposit Accounts and waive such institution's own rights as against such Deposit Accounts, and deposit all Proceeds of Collateral (including the Proceeds received in such lockboxes) into such Deposit Accounts.  The Debtor shall pay all fees, costs and expenses associated with the establishment and maintenance of such lockboxes and Deposit Accounts.

8.08Notification of Account Debtors.  The Debtor shall at the request of the Secured Party, and at its option the Secured Party may itself during the existence of an Event of Default, notify Account Debtors of the Security Interest in any Account and that payment thereof is to be made directly to the Secured Party for application to the Obligations.

8.09Information re Inventory.  Whenever reasonably requested by the Secured Party, the Debtor shall prepare a physical listing of all Inventory, shall furnish to the Secured Party a report (certified by an authorized officer of the Debtor to be true, correct and complete) of such physical listing, such report to be in such form and with such specificity as may be requested by the Secured Party, and shall take all further steps requested by the Secured Party to perfect the Security Interest in the Inventory.

8.10Insurance.  The Debtor will maintain insurance on the Collateral as required by the Credit Agreement or other Loan Documents.

8.11Maintenance and Use; Payment of Taxes.  The Debtor will maintain, preserve, protect and keep the Collateral in good condition and repair (ordinary wear and tear excepted) and prevent any waste or unusual or unreasonable depreciation thereof; will not use the same in violation of law or any policy of insurance thereon, and will pay promptly when due all taxes and assessments on such Collateral or on its use or operation, except as otherwise permitted by the Credit Agreement.

8.12General Intangibles.  The Debtor will apply for, and diligently pursue applications for, registration of its ownership of the General Intangibles constituting Collateral for which registration is appropriate, and will use such other measures as are appropriate to preserve its rights in its other General Intangibles constituting Collateral.  The Debtor will, at the request of the Secured Party, retain off-site current copies of all materials created by or furnished to the Debtor on which is recorded then-current information about any computer programs or data bases that the Debtor has developed or otherwise has the right to use from time to time.  Such materials shall include, without limitation, magnetic or other computer media on which object, source or other code is recorded and documentation of those computer programs or data bases, in the nature of listing printouts, narrative descriptions, flow diagrams and similar items.  The Debtor will, at the request of the Secured Party, deliver a set of such copies to the Secured Party for safekeeping and retention or transfer in the event of foreclosure.

8.13Investment Property.  If the Debtor shall at any time hold or acquire any Certificated Securities, the Debtor shall forthwith endorse, assign and deliver the same to the Secured Party, accompanied by such instruments of transfer or assignment duly executed in blank as the Secured Party may from time to time specify.  If any Securities now held or hereafter acquired by the Debtor are Uncertificated Securities and are issued to the Debtor or its nominee directly by the Issuer thereof, the Debtor shall promptly notify the Secured Party thereof and, at the Secured Party's request and option, pursuant to an agreement in form and substance satisfactory to the Secured Party, either (i) cause the Issuer to agree to comply with instructions from the Secured Party as to such Securities, without further consent of the Debtor or such nominee, or (ii) arrange for the Secured Party to become the registered owner of the Securities.  If the Debtor, as registered holder of Investment Property, receives (i) any dividend or other distribution in cash or other property in connection with the liquidation or dissolution of the Issuer of such Investment Property, or in connection with the redemption or payment of such Investment Property, or (ii) any stock certificate, option or right, or other distribution, whether as an addition to, in substitution of, or in exchange for, such Investment Property, or otherwise, the Debtor agrees to accept the same in trust for the Secured Party and the Lenders and to forthwith endorse, assign and deliver the same to the Secured Party, accompanied by such instruments of transfer or assignment duly executed in blank as the Secured Party may from time to time specify, to be held by the Secured Party as Collateral.  If any Securities, whether Certificated Securities or Uncertificated Securities, or other Investment Property now held or hereafter acquired by the Debtor are held by the Debtor or its nominee through a Securities Intermediary or Commodity Intermediary, the Debtor shall promptly notify the Secured Party thereof and, at the Secured Party's request and option, pursuant to an agreement in form and substance satisfactory to the Secured Party, either (i) cause such Securities Intermediary or  Commodity Intermediary, as the case may be, to agree to comply with Entitlement Orders or other instructions from the Secured Party to such Securities Intermediary as to such Securities or other Investment Property or, as the case may be, to apply any value distributed on account of any commodity contract as directed by the Secured Party to such Commodity Intermediary, in each case without further consent of the Debtor or such nominee, or (ii) in the case of Financial Assets or other Investment Property held through a Securities Intermediary, arrange for the Secured Party to become the Entitlement Holder with respect to such Investment Property, with the Debtor being permitted, only with the consent of the Secured Party, to exercise rights to withdraw or otherwise deal with such Investment Property.

8.14 Deposit Accounts.  The Debtor shall take all actions necessary or requested by the Secured Party to maintain, preserve or protect the rights and interest of the Secured Party with respect to all cash deposits of the Debtor (other than payroll accounts) and all other Proceeds of Collateral.  The Debtor shall not open or maintain any Deposit Account or other bank account (other than payroll accounts) unless the Debtor shall either (a) cause the depositary bank to agree to comply at any time with instructions from the Secured Party to such depositary bank directing the disposition of funds from time to time credited to such Deposit Account or other bank account, without further consent of the Debtor, or (b) arrange for the Secured Party to become the customer of the depositary bank with respect to the Depositary Account or other bank account, with the Debtor being permitted, only with the consent of the Secured Party, to exercise rights to withdraw funds from such Deposit Account or other bank account.  The provisions of this section shall not apply to (i) any Deposit Account for which the Debtor, the depositary bank and the Secured Party have specifically negotiated and entered into a cash collateral agreement, (ii) Deposit Accounts for which the Secured Party or any of the Lenders is the depositary bank or (iii)  payroll accounts.

8.15Letters of Credit Rights.  For each letter of credit at any time issued to the Debtor as beneficiary thereunder, the Debtor shall notify the Secured Party thereof and, at the option and request of the Secured Party, the Debtor shall deliver the original letter of credit and any ancillary documents to the Secured Party and shall, pursuant to an agreement in form and substance satisfactory to the Secured Party, either (i) arrange for the issuer and any Confirmer of such letter of credit to consent to an assignment to the Secured Party of the proceeds of any drawing under the letter of credit or (ii) arrange for the Secured Party to become the transferee beneficiary of the letter of credit, with the Secured Party agreeing, in each case, that the proceeds of any drawing under the letter of credit are to be paid to the Secured Party to be held by the Secured Party as Collateral.

8.16 Electronic Chattel Paper and Transferable Records.  If the Debtor at any time holds or acquires an interest in any Electronic Chattel Paper or any "transferable record," as that term is defined in Section 201 of the federal Electronic Signatures in Global and National Commerce Act, or in Section 16 of the Uniform Electronic Transactions Act as in effect in any jurisdiction applicable to the Debtor, the Debtor shall promptly notify the Secured Party thereof and, at the request of the Secured Party, shall take such action as the Secured Party may reasonably request to vest in the Secured Party control under Section 9-105 of the Uniform Commercial Code of such Electronic Chattel Paper or control under Section 201 of the federal Electronic Signatures in Global and National Commerce Act or, as the case may be, Section 16 of the Uniform Electronic Transactions Act, of such transferable record.

8.17Bailments, Etc.  If any Collateral is at any time in the possession or control of any warehouseman, bailee or any of the Debtor's agents, the Debtor shall promptly notify the Secured Party thereof and, upon request of the Secured Party, (i) notify such warehouseman, bailee or agent of the Security Interest and instruct such warehouseman, bailee or agent to hold all such Collateral for the Secured Party 's account subject to the Secured Party 's instructions, (ii) obtain from such warehouseman, bailee or agent a written acknowledgment that such Person holds possession of the Collateral for the Secured Party's benefit and shall act upon the Secured Party's instructions with respect to such Collateral without the further consent of the Debtor, (iii) deliver any negotiable warehouse receipt, bill of lading or other document of title issued with regard to the Collateral to the Secured Party appropriately endorsed to the Secured Party's order, and/or (iv) arrange for the issuance in the name of the Secured Party, in form reasonably satisfactory to the Secured Party, any nonnegotiable document of title covering such Collateral.  Until the occurrence of an Event of Default, Debtor shall be entitled to issue instructions to each such warehouseman, bailee, an agent regarding the Collateral.

8.18Assignment of Claims Act.  If at any time any Accounts of the Debtor arise from contracts with the United States of America or any department, agency or instrumentality thereof, the Debtor will promptly notify the Secured Party thereof and shall execute all assignments and take all steps reasonably requested by the Secured Party in order that all monies due and to become due thereunder will be assigned and paid to the Secured Party and notice thereof given to the federal authorities under the Assignment of Claims Act of 1940.

8.19Tangible Chattel Paper, Notes and Other Instruments.  If at any time any amount payable under or in connection with any of the Collateral is evidenced by any Tangible Chattel Paper, promissory note, trade acceptances or other Instrument, the Debtor shall promptly deliver the same to the Secured Party, accompanied by such instruments of transfer or assignment duly executed in blank as the Secured Party may from time to time reasonably request.  Regardless of the form of such instrument, the Debtor hereby waives presentment, demand, notice of dishonor, protest, notice of protest and all other notices with respect thereto.

8.20Assembly of Collateral.  Following the occurrence and during the continuance of an Event of Default, the Debtor will, upon demand, assemble the Collateral and make it available to the Secured Party at a place and time designated by the Secured Party that is reasonably convenient to both parties.

8.21Further Assurances.  Upon the reasonable request of the Secured Party, and at the sole expense of the Debtor, the Debtor will promptly execute and deliver such further instruments and documents and take such further actions as the Secured Party may deem desirable to obtain the full benefits of this Agreement and of the rights and powers herein granted, including, without limitation, filing of any Financing Statement, or notice under the Uniform Commercial Code or other applicable law, execution of assignments or mortgages of General Intangibles, delivery of appropriate stock or bond powers, and transfer of Collateral (other than Inventory, Accounts, General Intangibles and Equipment) to the Secured Party's possession.  The Debtor shall also take all actions requested by the Secured Party in order to insure the continued perfection and priority of the Security Interest in any of the Collateral and the preservation of the rights of the Secured Party therein.

8.22Notices and Reports Pertaining to Collateral.  In addition to any other notice or reporting requirement imposed on the Debtor under this Agreement, the Debtor will, with respect to the Collateral:

(a)promptly furnish to the Secured Party, from time to time upon request, reports in form and detail reasonably satisfactory to the Secured Party;

(b)promptly notify the Secured Party of any Encumbrance (except Encumbrances specifically permitted under the Credit Agreement) asserted against the Collateral, including any attachment, levy, execution or other legal process levied against any of the Collateral, and of any information received by the Debtor relating to the Collateral, including the Accounts, the Account Debtors, or other Persons obligated in connection therewith, that may in any way materially adversely affect the value of the Collateral or the rights and remedies of the Secured Party with respect thereto, and reimburse the Secured Party and the Lenders for any expenses they may incur in satisfying any of the foregoing;

(c)promptly notify the Secured Party when it obtains knowledge of actual or imminent bankruptcy or other insolvency proceeding of any material Account Debtor or Issuer of Investment Property;

(d)promptly deliver to the Secured Party, as the Secured Party may from time to time request, originals of all schedules, lists, invoices, delivery receipts, customers' purchase orders, documents of the shipping instructions, bills of lading and any other evidence of shipping arrangements, receipts, writings and other items relating to the Collateral;

(e)promptly notify the Secured Party of any material return or adjustment, rejection, repossession, or loss or damage of or to merchandise represented by Accounts or constituting Inventory and of any material credit, adjustment or dispute arising in connection with the goods or services represented by Accounts or constituting Inventory;

(f) promptly after the application by the Debtor for registration of any General Intangibles, as contemplated in Section 8.12, notify the Secured Party thereof;

(g)promptly upon acquiring any Commercial Tort Claim, notify the Secured Party in a writing signed by the Debtor, of the details thereof and grant to the Secured Party, for the benefit of the Secured Party and the Lenders, in such writing a security interest therein and in all the Proceeds thereof, such writing to be in form and substance satisfactory to the Secured Party; and

(h)promptly notify the Secured Party in the event of a material loss or damage to the Collateral, if such loss or damage is not covered by insurance, of any reclamation or repossession of or any action by a creditor to reclaim or repossess any material asset(s) of the Debtor, of any material adverse change in the Collateral; and of any other occurrence that may materially adversely affect the Security Interest of the Secured Party in the Collateral.

 

Article 9.  Rights and Remedies of the Secured Party.

9.01Rights and Remedies Generally.  Following the occurrence and during the continuance of an Event of Default, in addition to the rights and remedies of a secured party under the NH UCC and the Uniform Commercial Code in effect in any other jurisdiction in which enforcement of the rights of the Secured Party is sought, the Secured Party may take any or all of the following actions:

(a)The Secured Party may, at its option, without notice or demand, cause all of the Obligations to become immediately due and payable and take immediate possession of the Collateral, and for that purpose the Secured Party may, so far as the Debtor can give authority therefor, enter upon any premises on which any of the Collateral is situated and remove the same therefrom or remain on such premises and in possession of such Collateral for purposes of conducting a sale or enforcing the rights of the Secured Party.

(b)The Secured Party may collect and receive all income and Proceeds in respect of any Collateral and exercise all rights of the Debtor with respect thereto, including without limitation the right to exercise all voting and corporate rights at any meeting of the shareholders of the Issuer of any Investment Property and to exercise any and all rights of conversion, exchange, subscription or any other rights, privileges or options pertaining to any Investment Property as if the Secured Party was the absolute owner thereof, including the right to exchange, at its discretion, any and all of any Investment Property upon the merger, consolidation, reorganization, recapitalization or other readjustment of the Issuer thereof, all without liability except to account for property actually received (but the Secured Party shall have no duty to exercise any of the aforesaid rights, privileges or options and shall not be responsible for any failure to do so or delay in so doing).

(c)The Secured Party may sell, lease or otherwise dispose of any Collateral at a public or private sale, with or without having such Collateral at the place of sale, and upon such terms and in such manner as the Secured Party may determine, and the Secured Party may purchase any Collateral at any such sale.  The Debtor agrees that upon any such sale the Collateral sold shall be held by the purchaser free from all claims or rights of every kind and nature, including any equity of redemption or similar rights, and all such equity of redemption and similar rights are hereby expressly waived and released by the Debtor. In the event any consent, approval or authorization of any governmental agency is necessary to effectuate any such sale, the Debtor agrees to execute all applications or other instruments as may be required.

(d)With respect to any Collateral consisting of Accounts, the Secured Party may  (i) demand, collect, and receive any amounts relating thereto, as the Secured Party may determine; (ii) commence and prosecute any actions in any court for the purposes of collecting any such Accounts and enforcing any other rights in respect thereof, (iii) defend, settle or compromise any action brought and, in connection therewith, give such discharges or releases as the Secured Party may deem appropriate; (iv) receive, open and dispose of mail addressed to any of the Debtor and endorse checks, notes, drafts, acceptances, money orders, bills of lading, warehouse receipts or other instruments or documents evidencing payment, shipment or storage of the goods giving rise to such Accounts or securing or relating to such Accounts, on behalf of and in the name of any of the Debtor; and (v) sell, assign, transfer, make any agreement in respect of, or otherwise deal with or exercise rights in respect of, any such Accounts or the goods or services which have given rise thereto, as fully and completely as though the Secured Party were the absolute owner thereof for all purposes.

(e)With respect to any Collateral consisting of Equipment or Inventory, the Secured Party may (i) make, adjust and settle claims under any insurance policy related thereto and place and pay for appropriate insurance thereon; (ii) discharge taxes and other Encumbrances at any time levied or placed thereon; (iii) make repairs or provide maintenance with respect thereto; and (iv) pay any necessary filing fees and any taxes arising as a consequence of any such filing.  The Secured Party shall have no obligation to make any such expenditures nor shall the making thereof relieve any Debtor of its obligation to make such expenditures.

(f)With respect to any Collateral consisting of Investment Property, the Secured Party may (i) transfer such Collateral at any time to itself, or to its nominee, and receive the income thereon and hold the same as Collateral hereunder or apply it to the Obligations; and (ii) demand, sue for, collect or make any compromise or settlement it deems desirable.

(g)The Secured Party may perform any covenant or agreement of any of the Debtor contained herein that the Debtor has failed to perform and in so doing the Secured Party may expend such sums as it may reasonably deem advisable in the performance thereof, including, without limitation, the payment of any taxes or insurance premiums, payment to obtain a release of an Encumbrance or potential Encumbrance, expenditures made in defending against any adverse claim and all other expenditures which the Secured Party may make for the protection of any Collateral or which it may be compelled to make by operation of law.  All such sums and amounts so expended shall be repaid by the Debtor upon demand, shall constitute additional Obligations and shall bear interest from the date said amounts are expended at the rate per annum provided in the Credit Agreement to be paid on Prime Rate Loans after the occurrence of an Event of Default.  No such performance of any covenant or agreement by the Secured Party on behalf of any Debtor, and no such advance or expenditure therefor, shall relieve the Debtor of any Event of Default.

(h)The Secured Party may retain and apply the Proceeds of any disposition of Collateral, first, to its reasonable expenses of retaking, holding, protecting and maintaining, and preparing for disposition and disposing of, the Collateral, including attorneys' fees and other legal expenses incurred by it in connection therewith; and second, to the payment of the Obligations in such order of priority as the Lenders shall determine.  Any surplus remaining after such application shall be paid to the Debtor or to whomever may be legally entitled thereto, provided that in no event shall the Debtor be credited with any part of the Proceeds of the disposition of the Collateral until such Proceeds shall have been received in cash by the Lenders.  The Debtor shall remain liable for any deficiency.

9.02Disposition of Collateral.

(a)Prior to any disposition of Collateral pursuant to this Agreement, the Secured Party may, at its option, cause any of the Collateral to be repaired or reconditioned in such manner and to such extent as to make it saleable.  Unless such Collateral threatens to decline rapidly in value or is of the type customarily sold on a recognized market, the Secured Party shall send to the Debtor prior written notice (which, if given within ten (10) days of any sale, shall be deemed to be reasonable) of the time and place of any public sale of such Collateral or of the time after which any private sale or other disposition thereof is to be made.

(b)The Debtor hereby grants to the Secured Party a license or other right to use, without charge, the Debtor's labels, patents, copyrights, rights of use of any name, trade secrets, trade names, trademarks and advertising matter, or any property of a similar nature, relating to the Collateral, in completing production of, advertising for sale and selling any Collateral; and the Debtor's rights under all licenses and all franchise agreements shall inure to the Secured Party 's benefit.

(c) The Debtor recognizes (i) that the Secured Party may be unable to effect a public sale of all or a part of the Investment Property by reason of certain prohibitions contained in the Securities Act of 1933 (as amended from time to time, the "Securities Act") or the Securities laws of various states (the "Blue Sky Laws"), but may be compelled to resort to one or more private sales to a restricted group of purchasers who will be obliged to agree, among other things, to acquire the Investment Property for their own account, for investment and not with a view to the distribution or resale thereof, (ii) that private sales so made may be at prices and upon other terms less favorable to the seller than if the Investment Property were sold at public sales, (iii) that neither the Secured Party nor the Lenders has any obligation to delay sale of any of the Investment Property for the period of time necessary to permit the Investment Property to be registered for public sale under the Securities Act or the Blue Sky Laws, and (iv) that private sales made under the foregoing circumstances shall be deemed to have been made in a commercially reasonable manner.

9.03Appointment as Attorney-in-Fact.  The Debtor hereby appoints the Secured Party and the Secured Party 's designees or agents as attorney-in-fact of the Debtor, irrevocably and with power of substitution, with full authority in the name of the Debtor, for sole use and benefit of the Lenders, but at the Debtor's expense, so long as an Event of Default is continuing, to take any and all of the actions specified above in this section and elsewhere in this Agreement. This power of attorney is coupled with an interest and shall be irrevocable for so long as any of the Obligations remain outstanding.

9.04Duties re Collateral.  Except as otherwise provided herein, and as may be mandated by applicable law despite an agreement by the Debtor and the Secured Party to the contrary, the Secured Party shall have no duty as to the collection or protection of any Collateral nor as to the preservation of any rights pertaining thereto, beyond the safe custody of any Collateral in its possession.

9.05Destruction of Documents and Records.  The Debtor authorizes the Secured Party and the Lenders to destroy all invoices, delivery receipts, reports and other types of documents and records delivered to the Secured Party and/or the Lenders in connection with the transactions contemplated herein at any time subsequent to 12 months following such delivery.

Article 10.  Set-Off.  Any deposits or other sums at any time credited by or due from any of the Lenders or any entity under the control of Fleet Financial Group, Inc. to any of the Debtor may, without demand or notice (any such demand or notice being expressly waived hereby) and to the fullest extent permitted by law and without regard to any source of payment whatsoever, following the occurrence and during the continuance of an Event of Default, be applied to or set off against Obligations on which the Debtor is primarily liable and may at or after the maturity thereof be applied to or set off against Obligations on which the Debtor is secondarily liable, and advice thereof shall thereafter be given to the Debtor 's chief financial officer.

Article 11.  Waivers.  To the extent permitted by applicable law, the Debtor waives (i) presentment, demand, notice, protest, notice of acceptance of this Agreement, notice of any loans made, credit or other extensions granted, Collateral received or delivered and any other action taken in reliance hereon and all other demands and notices of any description, except for such demands and notices as are expressly required to be provided to the Debtor under this Agreement or any other document evidencing the Obligations and (ii) to the full extent permitted by law, the benefit of all appraisement, valuation, stay, extension and redemption laws now or hereafter in force and all rights of marshaling in the event of any sale or disposition of any of the Collateral.  To the extent that it lawfully may do so, the Debtor hereby agrees that it will not invoke any law relating to the marshaling of collateral which might cause delay in or impede the enforcement of the rights of the Secured Party or the Lenders under this Agreement or under any other instrument evidencing any of the Obligations or under which any of the Obligations is outstanding or by which any of the Obligations is secured or guaranteed, and to the extent that it lawfully may do so the Debtor hereby irrevocably waives the benefits of all such laws.  With respect to both the Obligations and any Collateral, the Debtor assents to any extension or postponement of the time of payment or any other forgiveness or indulgence, to any substitution, exchange or release of Collateral, to the addition or release of any party or Person primarily or secondarily liable, to the acceptance of partial payment thereon and the settlement, compromise or adjustment of any thereof, all in such manner and at such time or times as the Secured Party may deem advisable.  The Secured Party may exercise its rights with respect to the Collateral without resorting, or regard, to other collateral or sources of reimbursement for Obligations.  The Secured Party and the Lenders shall not be deemed to have waived any of their rights with respect to the Obligations or the Collateral unless such waiver is in writing and signed by the Secured Party and the Lenders.  No delay or omission on the part of the Secured Party or the Lenders in exercising any right and no course of dealing shall operate as a waiver of such right or any other right.  A waiver on any one occasion shall not bar or waive the exercise of any right on any future occasion.  All rights and remedies of the Secured Party and the Lenders with the respect to the Obligations or the Collateral, whether evidenced hereby or by any other instrument or papers, are cumulative and not exclusive of any remedies provided by law or any other agreement, and may be exercised separately or concurrently.

Article 12.  Indemnification and Expenses.  The Debtor agrees to indemnify and hold the Secured Party and the Lenders, and their respective officers, directors, trustees, agents, servants and employees (each, an "Indemnified Party") harmless from and against any taxes, liabilities, claims and damages, including reasonable attorneys' fees and disbursements, and other expenses incurred or arising by reason of the taking or the failure to take action by the Indemnified Party under this Agreement and in respect of any transactions effected in connection with this Agreement, except those arising from the gross negligence or willful misconduct of the Indemnified Party.  The Debtor promises to reimburse the Secured Party and the Lenders on demand for all reasonable out-of-pocket fees and disbursements (including all reasonable attorneys' fees and collateral evaluation costs) incurred or expended in protecting, preserving or enforcing the rights of the Secured Party and the Lenders under or in respect of the Obligations or any of the Collateral.  The amount of all such costs and expenses shall, until paid, bear interest at the rate applicable to Prime Rate Loans and shall be an Obligation secured by the Collateral.

Article 13.  Notices.  All notices, approvals, requests, demands and other communications hereunder expressly required by this Agreement to be in writing, to any party hereto shall be deemed to have been given when delivered to the Person(s) and in the manner provided in Section 9.1 of the Credit Agreement.  Any notice, unless otherwise specified, may be given orally or in writing.

Article 14.  Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of the Debtor and its respective successors and assigns, and shall be binding upon and inure to the benefit of and be enforceable by the Secured Party and its successors and assigns permitted under the Credit Agreement, whether or not an express assignment of rights hereunder is made; provided that the Debtor may not assign or transfer its rights or obligations hereunder.  Without limiting the generality of the foregoing sentence, the Lenders may, in the manner and to the extent set forth in the Credit Agreement, assign or otherwise transfer any agreement or any Note held by it evidencing, securing or otherwise executed in connection with the Obligations, or sell participations in any interest therein, to any other Person, and such other Person shall thereupon become vested, to the extent set forth in the agreement evidencing such assignment, transfer or participation, with all the rights in respect thereof granted to the Lenders under the terms of the Loan Documents.

Article 15.  Governing Law.  This agreement shall be governed by the laws of the State of New Hampshire without regard to its principles relating to choice and conflicts of law.

Article 16.  CONSENT TO JURISDICTION.  DEBTOR HEREBY CONSENTS TO THE JURISDICTION OF ANY OF THE COURTS OF THE STATE OF NEW HAMPSHIRE LOCATED IN HILLSBOROUGH COUNTY AND OF THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE SITTING IN CONCORD, NEW HAMPSHIRE IN CONNECTION WITH ANY ACTION TO ENFORCE THE RIGHTS OF THE SECURED PARTY UNDER THIS AGREEMENT.  THE DEBTOR IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE EXERCISE OF JURISDICTION BY SAID COURTS IN CONNECTION WITH ANY SUCH ACTION AND AGREES NOT TO ASSERT IN ANY SUCH ACTION THAT SUCH ACTION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

Article 17.  WAIVER OF JURY TRIAL.  EACH OF THE DEBTOR, THE SECURED PARTY 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 DEBTOR, THE SECURED PARTY 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 DEBTOR (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE SECURED PARTY OR THE LENDERS HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE SECURED PARTY OR THE LENDERS WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (B) ACKNOWLEDGES THAT EACH OF THE LENDERS HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BECAUSE OF, AMONG OTHER THINGS, THE DEBTOR'S WAIVERS AND CERTIFICATIONS CONTAINED HEREIN.

Article 18.  Continuing Obligations.  The Debtor acknowledges that the Secured Party and the Lenders, in determining to enter into the Credit Agreement, have relied upon the fact that the Security Interest granted herein constitutes the continuing and irrevocable agreement of the Debtor, and the Debtor agrees that its obligations hereunder may not be revoked in whole or in part.  The obligations of the Debtor 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 Secured Party or the Lenders at any time for repayment or recovery of any amounts or any property received by the Secured Party or the Lenders from any source on account of any of the Obligations and the Secured Party or the Lenders repay or return any amounts or property so received (including interest thereon to the extent required to be paid by the Secured Party or the Lenders) or

(b)  if the Secured Party or the Lenders become 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 Debtor shall remain obligated under this Agreement with respect to the amounts so repaid or property so returned and the amounts for which the Secured Party or the Lenders become liable (such amounts being deemed part of the Obligations), and the Security Interest granted herein shall apply with full force and effect with to such Obligations, to the same extent as if such amounts or property had never been received by the Secured Party or the Lenders, notwithstanding any termination hereof or the cancellation of any instrument or agreement evidencing any such Obligations.

Article 19.  General.

19.01Amendment, Etc.  This Agreement may not be amended, modified or supplemented except by a writing signed by the parties hereto. 

19.02Multiple Counterparts.  This Agreement and any amendment hereof may be executed in several counterparts by each party on a separate counterpart, each of which when so executed and delivered shall be an original, but all of which together shall constitute one and the same instrument.

19.03Captions and Headings.  Captions and section headings are for convenience of reference only and in no way define, limit or describe the scope or intent of the provisions hereof.

19.04Joint Possession.  In the event that any Collateral or any deposit or other sum due from or credited by the Lenders is held or stands in the name of any of the Debtor and another or others jointly, the Lenders may deal with the same for all purposes as if it belonged to or stood in the name of the Debtor alone.

19.05 Survival.  All representations, warranties, covenants and agreements contained in this Agreement, including without limitation the agreement of the Debtor to indemnify the Secured Party and the Lenders set forth in Article 12, shall survive the execution and delivery of the Loan Documents.

19.06Severability.  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.

IN WITNESS WHEREOF, the Debtor has caused this Agreement to be duly executed as an instrument under seal as of the date first written above.

 

	
DEBTOR:

GREEN MOUNTAIN COFFEE ROASTERS FRANCHISING CORPORATION

 By:_/s/ William G. Hogan________

Name:  William G. Hogan

Title: Vice President - Finance

Hereunto Duly Authorized

	 

 

Accepted in Manchester, New Hampshire as of 

the date and year first above written.

	
SECURED PARTY:

FLEET NATIONAL BANK

 By:_/s/ Kenneth R. Sheldon___

Name:  Kenneth R. Sheldon

Title:  Vice President

Hereunto Duly Authorized

 

 
Exhibit A

PERFECTION CERTIFICATE

to

SECURITY AGREEMENT

dated August __,  2002

of Green Mountain Coffee Roasters Franchising Corporation

The undersigned, the Vice President, Chief Financial Officer and Treasurer of GREEN MOUNTAIN COFFEE ROASTER FRANCHISING CORPORATION, a Delaware corporation (the "Debtor"), hereby certifies to FLEET NATIONAL BANK (the "Secured Party"), acting as agent under the terms of that certain Credit Agreement dated as of August __, 2002 (as it may be amended from time to time, the "Credit Agreement") by and among the Debtor, the Secured Party and the banks that are parties thereto (the "Lenders"), with reference to a certain Security Agreement dated August __, 2002 by and between the Debtor and the Secured Party (terms defined in such Security Agreement shall have the same meanings herein as specified therein), as follows:

Section 1.  Names.

(a)The exact corporate name of the Debtor as it appears on its organizational documents and its taxpayer identification number are as follows:

Name: 

Tax Identification No.: 

(b)The following is a list of all other names (including trade names or similar appellations) used by the Debtor, or any other business or organization to which the Debtor became the successor by merger, consolidation, acquisition, change in form, nature or jurisdiction of organization or otherwise, now or at any previous time:  

 

(c) The following is the type of organization of the Debtor:  

 

(d) The following is the jurisdiction of the Debtor's organization:  

 

(e) The following is the Debtor's state issued organizational number (state "None" if the state does not issue such a number):  

Section 2.  Locations.

(a)The chief executive office of the Debtor is located at the following address:

	
Mailing Address
	
County
	
State
	
Zip Code

	 	 	 	 

 
(b) The following is a list of all other locations in the United States of America in which the Debtor maintains any books or records relating to any of the Collateral consisting of Accounts, Chattel Paper, General Intangibles or mobile goods:

Currently:  

	
Street Address
	
County
	
State
	
Zip Code

	 	 	 	 

 

 
Within the last four months, if different:

	
Street Address
	
County
	
State
	
Zip Code

	 	 	 	 

 

(c) The following are all the other places of business of the Debtor in the United States of America:

Currently:  

	
Street Address
	
County
	
State
	
Zip Code

	 	 	 	 

 
Within the last four months, if different: 

	
Street Address
	
County
	
State
	
Zip Code

	 	 	 	 

 

 
(d) The following are all the other locations in the United States of America where any of the Collateral (other than Investment Property and any Deposit Accounts) is located:

Currently:  

	
Street Address
	
County
	
State
	
Zip Code

	 	 	 	 

 
Within the last four months, if different: 

	
Street Address
	
County
	
State
	
Zip Code

	 	 	 	 

 
(e) The following are the names and addresses of all persons or entities other than the Debtor, such as lessees, consignees, warehousemen or purchasers of chattel paper, that have possession or are intended to have possession of any of the Collateral consisting of chattel paper, Inventory or Equipment:

Currently: 

	
Street Address
	
County
	
State
	
Zip Code

	 	 	 	 

 
Within the last four months, if different: 

	
Street Address
	
County
	
State
	
Zip Code

	 	 	 	 

 

Section 3.  Fixtures.  Set forth below is the information required by UCC Section9-502(b) of each state in which any of the Collateral consisting of fixtures are or are to be located and the name and address of each real estate recording office where a mortgage on the real estate on which such fixtures are or are to be located would be recorded:

Property Description:

Recording Information:

 

Section 4.  Other UCC Filings.  Financing statements in favor of secured parties other than the Lenders have been filed in the Uniform Commercial Code filing offices in the jurisdictions and real estate recording offices identified below:  None.

	
Filing No.

	
Date
	
Filing Office
	
Secured Party
	
Collateral

	
99-117463
	
11/8/99
	
Vermont SOS
	
BC Capital
	
Copiers

	
99-107462
	
3/22/99
	
Vermont SOS
	
Compaq Capital Corporation
	
Computer

	
98-102770
	
11/17/98
	
Vermont SOS
	
Compaq Capital Corporation
	
Computer

	
99-106777
	
3/3/99
	
Vermont SOS
	
Compaq Capital Corporation 
	
Computer

	
93-35560
	
10/7/93
	
Vermont SOS
	
Central Vermont Economics Development Corporation
	
Machinery & Equipment

 

Section 5.  Securities.  All Securities and other Investment Property owned by the Debtor are identified below:

	
Issuer
	
Securities Owned
	
Record Owner
	
Location

	 	 	 	 
	 	 	 	 

 
IN WITNESS WHEREOF, I have hereunto signed this Perfection Certificate on August ___, 2002.

                                                                               
GREEN MOUNTAIN COFFEE ROASTERS FRANCHISING

                                                                               
CORPORATION

	

By:                              

Name: William G. Hogan

Title: Vice President - FinanceSECURITY AGREEMENT - intellectual property

SECURITY AGREEMENT

(INTELLECTUAL PROPERTY)

 

THIS SECURITY AGREEMENT (the "Agreement"), is made as of this 30th day of August, 2002, by and between GREEN MOUNTAIN COFFEE ROASTERS, INC., a Vermont corporation having its chief executive offices at 33 Coffee Lane, Waterbury, Vermont 05676 (hereinafter, together with any successors to and assigns of any or all of its present or future interests in the Intellectual Property Collateral, as hereinafter defined, other than the Lender, as hereinafter defined, referred to jointly, severally, individually, and collectively as the "Debtor"), 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 (together with its successors and assigns, the "Secured Party"), 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 Debtor, Green Mountain Coffee Roaster Franchising Corporation, the Secured Party and the banks that are parties thereto (the "Lenders") (the "Secured Party").

 

WHEREAS, the Debtor has requested that the Lenders enter into the Credit Agreement with the Debtor, and to extend credit to the Debtor on the terms and subject to the conditions set forth therein; and

WHEREAS, it is a condition precedent to the Lenders' agreement to enter into the Credit Agreement and extend credit to the Debtor thereunder that the Debtor execute and deliver this Agreement and grant the security interest herein provided.  Certain terms are used in this Agreement as specifically defined herein. These definitions are set forth or referred to in Section 9 hereof.  Any and all terms not described herein shall have the meaning ascribed to them in the Credit Agreement.

NOW, THEREFORE, in order to induce the Lenders to enter into the Credit Agreement and extend credit to the Debtor thereunder, and in consideration thereof, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1.Granting Clause; Intellectual Property Collateral; Assignments.

1.1Granting Clause.  For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Debtor hereby sells, assigns and transfers unto the Secured Party, and hereby grants to the Secured Party, a first security interest in the Intellectual Property Collateral, to secure the Secured Obligations and Debtor's obligations under the Credit Agreement and the Security Agreement both between the Debtor and the Secured Party pursuant to which the Secured Obligations are incurred.

1.2Intellectual Property Collateral.  As used herein, the term "Intellectual Property Collateral" shall mean all now owned or hereafter acquired or arising:

(a) (i) patents and patent applications, including, without limitation, those listed on Schedule 1.2(a) hereto and the inventions and improvements described and claimed therein, and patentable inventions, (ii) the reissues, divisions, continuations, continuations-in-part, renewals and extensions of any of the foregoing, (iii) all income, royalties, damages or payments now or hereafter due and/or payable under any of the foregoing or with respect to any of the foregoing, including without limitation, damages or payments for past or future infringements of any of the foregoing, (iv) the right to sue for past, present and future infringements of any of the foregoing, and (v) all rights corresponding to any of the foregoing throughout the world (collectively, the "Patents");

(b) (i) trademarks, service marks, trademark registrations, service mark registrations, trade names, collective marks and certification marks, and trademark and servicemark applications, and trade dress, including logos and/or designs, in connection with any of the foregoing including, without limitation, those listed on Schedule 1.2(b) hereto, (ii) all renewals of any of the foregoing, (iii) all income, royalties, damages and payments now or hereafter due and/or payable under any of the foregoing or with respect to any of the foregoing, including without limitation, damages or payments for past or future infringements of any of the foregoing, (iv) the right to sue for past, present and future infringements of any of the foregoing, (v) all rights corresponding to any of the foregoing throughout the world, and (vi) the goodwill of the Debtor's business connected with and symbolized by any of the foregoing (collectively, the "Marks");

(c) (i) trade secrets, including, without limitation, patentable inventions, any and all product formulae, manufacturing techniques, product specifications, financial information, customer lists, computer data and programs, and marketing and business plans, (ii) all income, royalties, damages and payments now or hereafter due and/or payable under any of the foregoing or with respect to any of the foregoing, including without limitation, damages or payments for past or future infringements of any of the foregoing, (iii) the right to sue for past, present and future infringements of any of the foregoing, and (iv) all rights corresponding to any of the foregoing throughout the world (collectively, the "Trade Secrets").

(d) (i) copyrights, copyright registrations, and copyright applications, including, without limitation, those listed on Schedule 1.2(d) hereto and copyrights for computer programs and all tangible property embodying the copyrights, (ii) the reissues, renewals and extensions of any of the foregoing, (iii) all income, royalties, damages and payments now or hereafter due and/or payable under any of the foregoing or with respect to any of the foregoing, including without limitation, damages or payments for past or future infringements of any of the foregoing, (iv) the right to sue for past, present and future infringements of any of the foregoing, and (v) all rights corresponding to any of the foregoing throughout the world (collectively, the "Copyrights");

(e) licenses and license agreements, whether as a licenser or licensee, with any other Person, including, without limitation, the licenses of the Debtor listed on Schedule 1.2(e) hereto, relating to the use of any Patents, Marks, Trade Secrets or Copyrights, and all rights of each Debtor under any of the foregoing, including the right to (i) prepare for sale, (ii) sell, and (iii) advertise for sale, all inventory now or hereafter owned by each Debtor and now or hereafter covered by such license (collectively, the "Licenses");

together with all proceeds (cash and non-cash) and products of the foregoing.

1.3Assignments.  In order to duly perfect the Secured Party's interests in the Intellectual Property Collateral and/or to notify interested third parties of the Secured Party's interests therein, each Debtor shall contemporaneously herewith duly execute and deliver to the Secured Party, and the Secured Party may file, with the U.S. Patent and Trademark Office (the "PTO") or the U.S. Copyright Office (the "Copyright Office"), as appropriate, and any appropriate state and local filing offices, a written assignment (in each case, an "Assignment") of Patents, Marks or Copyrights owned by such Debtor, each to be in substantially the form of Exhibits A, B and C, respectively, hereto.  At such time or times as any Debtor shall acquire or obtain any new Intellectual Property Collateral or rights thereto, each Debtor shall promptly notify the Secured Party by delivering to the Secured Party an amendment to the appropriate Schedule and to the appropriate exhibit hereto, and shall promptly duly execute and deliver to the Secured Party, and the Secured Party may file or record, if necessary, an appropriate Assignment with the appropriate filing or recording office, provided, however, Debtor shall not be required to assign any application for an intent-to-use a trademark or service mark.

2.General Provisions.

Each Debtor hereby represents and warrants to and covenants with the Secured Party as follows:

2.1Title to Security; First Lien.

(a) The Intellectual Property Collateral listed on the Schedules (and any amendments thereto) hereto constitute all material property rights of the Debtor described in Sections 1.2(a) through (d) hereof to which the Debtor has any right, title or interest or which are used in connection with the Debtor's business and all of such Intellectual Property Collateral is, to the best of Debtor's knowledge, valid and subsisting, unrevoked and uncancelled and none of the foregoing has been adjudged unenforceable, in whole or in part and, all of the Intellectual Property collateral is enforceable in accordance with its terms.  The Debtor is to the best of its knowledge the owner or is licensed to use or practice under all trademarks, service marks, patents, trade secrets and copyrights used in its business.

(b)To the best of Debtor's knowledge, the Debtor is the true and lawful sole and exclusive owner of the Intellectual Property Collateral, including any Intellectual Property Collateral acquired or arising after the date hereof, and the Intellectual Property Collateral is subject to no Lien, including covenants by the Debtor not to sue third Persons, other than Permitted Encumbrances and the provisions of Section 7 hereof and, except for the foregoing, no financing statement, security agreement, assignment, license, covenant not to sue, shop rights or other Lien instrument covering all or any part of the Intellectual Property Collateral is on file in any public office; and the Debtor will not execute or authorize to be filed in any public office any of the foregoing except in favor of the Secured Party or with respect to a Permitted Encumbrance.

(c) Upon (i) the giving of value to the Debtor by the Secured Party, (ii) the delivery to the Secured Party of any Intellectual Property Collateral consisting of Instruments or other collateral possession of which is required for perfection, (iii) the filing of financing statements on form UCC-1 (or other comparable form) in the appropriate filing offices, and (iv) upon the filing of any Assignments in the appropriate filing offices, the Secured Party will obtain a valid, enforceable first priority perfected Lien and security interest in the Intellectual Property Collateral except to the extent of any Liens permitted hereby.

2.2 New Intellectual Property Collateral.  Any Intellectual Property Collateral acquired or developed by any of the Debtor's officers, directors, stockholders or employees in the course of the Debtor's business shall be owned of record by the Debtor and shall be automatically subject to Section 1 hereof.

2.3 Chief Executive Office; Intellectual Property Collateral Locations.  The Debtor's chief executive office and the office where the Debtor keeps its books and records relating to the Intellectual Property Collateral, is located at the locations set forth on the Disclosure Schedule.  The Debtor will not move its chief executive office unless (i) it shall have given to the Secured Party not less than thirty (30) days' prior written notice of its intention so to do, clearly describing such new location and providing such other information in connection therewith as the Secured Party may reasonably request and (ii) with respect to such new location, it shall have taken all action satisfactory to the Secured Party to maintain the security interest of the Secured Party in the Intellectual Property Collateral to be granted hereby at all times fully perfected and in full force and effect. The originals of all documents evidencing the Intellectual Property Collateral and the only original records of the Debtor relating thereto are and will continue to be kept at such locations and/or at the offices of the Debtor's attorneys, Merritt & Merritt, 30 Main Street, Suite 330, Burlington, VT 05401.

2.4 General Duties of the Debtor.  The Debtor shall (i) prosecute diligently any patent, trademark, service mark or copyright application material to its business pending as of the date hereof or thereafter until the Secured Obligations shall have been paid in full, (ii) make application at the federal level on unpatented but patentable inventions and on trademarks, service marks and copyrights, as Debtor in its reasonable discretion deems appropriate, (iii) preserve and maintain all rights in the Patents, Marks, Trade Secrets, Copyrights and Licenses, and (iv) fulfill its obligations under any and all Licenses, except with the prior written consent of the Secured Party.  Any expenses incurred in connection with the foregoing shall be borne by the Debtor, including, without limitation, any and all maintenance fees.  Except in its commercial reasonable judgment, the Debtor shall not discontinue the payment any maintenance fees without the prior written consent of the Secured Party.

2.5 Filings and Consents.  Debtor shall deliver to the Secured Party in form and substance satisfactory to the Secured Party:

(i) evidence that appropriate filings have been made to perfect the interests granted by the Debtor to the Secured Party hereby, including without limitation, filings with the PTO and the Copyright Office and financing statements on Form UCC-1 in the appropriate jurisdictions; and

(ii) evidence that all necessary consents, waivers and agreements have been obtained from any other party to the Licenses to the granting of the Lien in favor of the Secured Party in such Licenses.

2.6 Recording and Filing.  At all times, and at its sole cost and expense, the Debtor shall cause appropriate assignments, confirmatory assignments and financing and continuation statements to be recorded and filed and to be kept recorded and filed in such manner and in such places, shall pay all such recording, filing or other taxes, fees and other charges, and shall comply with all such statutes and regulations, as may be required by law in order to establish, preserve, perfect and protect the first Lien (subject to the Permitted Encumbrances, if any) of the Secured Party in the Intellectual Property Collateral (including, without limitation, any interests acquired after the execution hereof) and the rights of the Secured Party thereunder. The Secured Party may record or file as such a financing statement or statements, a carbon, photographic or other reproduction of this Agreement.

2.7 Restrictions on Future Agreements.  Each Debtor agrees that until the Secured Obligations shall have been paid in full, the Debtor will not, without the Secured Party's prior written consent, sell, assign, pledge, encumber or otherwise transfer to any Person other than the Secured Party, any of the Debtor's rights in its present or future Patents, Marks, Trade Secrets, Copyrights or Licenses, or enter into any other agreement, including, without limitation, a license agreement, which is inconsistent with the Debtor's obligations under this Agreement, except (i) licenses by Debtor in the ordinary course of business , (ii) so-called end-user, non-exclusive licenses granted to the Debtor's customers in the ordinary course of its business, and (iii) Liens in favor of the Secured Party pursuant hereto or in respect of the Permitted Encumbrances or other Liens permitted hereby. Each Debtor further agrees that it will not take any action, or permit any action to be taken by any affiliate of the Debtor or any other Person subject to the Debtor's control, including, without limitation, licensees, or fail to take any action, which would affect the validity or enforcement of the rights transferred to the Secured Party under this Agreement.

2.8 Infringements.  To the best of Debtor's knowledge, none of the Intellectual Property Collateral infringes the superior rights of any Person and, except as set forth on the Disclosure Schedule, there is no pending or threatened claim, action, suit or proceeding against the Debtor with respect to any alleged infringement by the Debtor's business or operations of any trademark, service mark, patent, trade secret or copyright.  Each Debtor agrees, promptly upon learning thereof, to notify the Secured Party in writing of the name and address of, and to furnish such pertinent information that may be available with respect to, any Person who may be infringing or otherwise violating any of the Debtor's rights in and to any Intellectual Property Collateral in a manner which is materially adverse to the Debtor, or with respect to any Person claiming that the Debtor's use or practice of any Intellectual Property Collateral violates any property right of that Person.  Each Debtor further agrees, unless otherwise directed by the Secured Party, diligently to prosecute and/or enjoin permanently any Person infringing any such rights in a manner which is or may become materially adverse to the Debtor.  Each Debtor further agrees that it will not settle or compromise any dispute, claim, suit or legal proceeding with regard to the same without the prior written consent of the Secured Party.

2.9 Amendments. Etc.  The Debtor shall not and shall not permit any documents, instruments, chattel paper, guarantees and contracts constituting or evidencing any Intellectual Property Collateral hereunder to be amended, modified or changed in any way without the prior written consent of the Secured Party.

2.10 Direction to Third Parties; Etc.  Upon the occurrence of an Event of Default, the Debtor agrees (i) to cause payments, if any, on account of the Licenses to be made directly to a cash collateral account established by the Secured Party and (ii) that the Secured Party may, at its option, directly notify the obligors with respect to any Licenses to make any payments with respect thereto as provided in the preceding clause.  Without notice to or assent by the Debtor, the Secured Party may apply any or all amounts therein, or thereafter deposited in, any cash collateral account in the manner provided in Section 8.7 hereof.  The costs and expenses (including attorneys' fees) of collection, whether incurred by the Debtor or the Secured Party, shall be borne by the Debtor.

2.11 Collection.  Debtor shall endeavor to cause to be collected from the obligor under any License, as and when due (including, without limitation, amounts which are delinquent, such amounts to be collected in accordance with generally accepted lawful collection procedures) amounts, if any, owing under or on account of such License, and apply forthwith upon receipt thereof all such amounts as are so collected to the outstanding balance under such License, except that, prior to the occurrence of an Event of Default, the Debtor may allow in the ordinary course of business adjustments to amounts, if any, owing under its Licenses or an extension or renewal of the time or times of payment, or settlement for less than the total unpaid balance, which the Debtor deems appropriate in accordance with sound business judgment. The costs and expenses (including, without limitation, attorneys' fees) of collection, whether incurred by the Debtor or the Secured Party, shall be borne by the Debtor.

2.12 Payments.  Debtor shall pay or cause to be paid promptly when due all taxes and other governmental levies, to whomever and whenever laid or assessed, whether on this Agreement, or on or in respect of any of the Intellectual Property Collateral, which if unpaid might by law become a Lien upon any of the foregoing; provided, however, that, except to the extent otherwise provided in any other Loan Document, any such tax, levy or claim need not be paid if the validity or amount thereof shall currently be contested in good faith by appropriate proceedings and if the Debtor shall have set aside on its books appropriate reserves with respect thereto; and provided, further, that the Debtor will pay all such taxes, levies or other governmental charges forthwith upon the commencement of proceedings to foreclose any Lien which may have attached as security therefor.

2.13 Employees. Agents. Etc. Debtor has entered and will enter into written agreements with each of its present and future employees, agents and consultants which will enable it to comply with the covenants herein contained.

2.14 Further Assurances.  Upon the Secured Party's request from time to time, the Debtor will make, execute, endorse, acknowledge, file and/or deliver, and file and record in the proper filing and recording places, if applicable, all such instruments, including without limitation transfer endorsements, powers of attorney, certificates, reports and other assurances, and take all such action as the Secured Party or counsel for the Secured Party may reasonably deem necessary or advisable to carry out the intent and purposes of this Agreement, or for assuring and confirming to the Secured Party the Intellectual Property Collateral and the priority of the Secured Party's Lien therein provided for hereunder.

3. Special Provisions Concerning Marks and Licenses.

3.1 Maintenance of Records.  Debtor will keep and maintain or cause to be kept or maintained at its own cost and expense satisfactory and complete records of its Marks and Licenses, including, but not limited to, the originals of all documentation with respect thereto, and each Debtor will make the same available to the Secured Party for inspection, at the Debtor 's own cost and expense, at any and all reasonable times upon reasonable prior notice.  Each Debtor shall, at its own cost and expense, deliver all tangible evidence of its Marks and Licenses (including, without limitation, all Certificates of Registration relating to Marks and all Licenses) and such books and records relating thereto (including, in the case of Marks, file histories with regard to the prosecution and registration of such Marks, to the extent within the possession or control of the Debtor) to the Secured Party or to its representatives (copies of which evidence and books and records may be retained by the Debtor) at any time upon its demand.  If the Secured Party so directs, each Debtor shall legend, in form and manner reasonably satisfactory to the Secured Party, the Licenses, as well as books, records and documents of the Debtor evidencing or pertaining to the Licenses with an appropriate reference to the fact that the Licenses have been assigned to the Secured Party and that the Secured Party has a security interest therein. In furtherance of the foregoing, the Debtor hereby grants to the Secured Party or the Secured Party's designee the right to visit upon reasonable prior notice during normal business hours any or all of the Debtor's places of business which manufacture, sell, inspect or store goods sold or services rendered (or which have done so during the prior six month period) under any Mark, and to inspect the services and goods and control records relating thereto.  Secured Party shall conduct such inspections in a manner that is not unreasonably disruptive to Debtor's business and operations, and will obey any safety or work rules of Debtor while on its premises.

3.2 Standards of Quality.  Each Debtor has, and will continue to use for the duration of this Agreement, consistent standards of quality in its manufacture of goods sold under the Marks.  The Debtor has heretofore controlled, and will hereafter continue to control, the nature and quality of the goods and services in respect of which any Mark is used by any Person.

3.3 Preservation of Marks.  Each Debtor has used and agrees to use, and to cause licensees to use, proper statutory notice in connection with the use of the Marks.  Except as the same may be discontinued in the ordinary course of business, each Debtor further agrees to use its Marks in interstate commerce during the time in which this Agreement is in effect sufficiently to preserve such Marks as trademarks or service marks registered under the laws of the United States.

3.4 Maintenance of Applications and Registrations.  Each Debtor shall, at its own expense, diligently process all documents required by the Trademark Act of 1946, 15 U.S.C. Sections 1051 et seq., as amended, to maintain its trademark and service mark registrations which are material to its business and its pending applications with respect thereto, including, but not limited to, statements and affidavits of use and applications for renewals of registration, and shall pay all fees and disbursements in connection therewith, and shall not abandon any pending application or existing registration which is material to its business prior to the exhaustion of all administrative and judicial remedies, without the prior written consent of the Secured Party.  Each Debtor agrees to notify the Secured Party six (6) months prior to the dates on which any affidavits of use or applications for renewal of registration are due that the affidavit or application is being processed.

4. Special Provisions Concerning Patents.

4.1 Maintenance of Applications and Patents.  Each Debtor shall not abandon any right to file a patent application nor shall the Debtor abandon any pending patent application, Patent, or any right with respect to the foregoing which in each case is material to its business, prior to exhaustion of all administrative and judicial remedies, without the prior written consent of the Secured Party.  At its own expense, each Debtor shall make timely payment of all post-issuance fees required to maintain in force rights under each Patent.

4.2 Scope of Patents.  Each patent owned or licensed by each Debtor is broad enough in scope to preclude substantial competition with the product or good covered thereby.

4.3 Prior Art.  Each Debtor has notified the Secured Party in writing of all prior art (including public uses and sales) of which it is aware.

5. Special Provisions Concerning Trade Secrets.

5.1 Maintenance.  Each Trade Secret of the Debtor which is legally protectable as a trade secret has been preserved as "secret" and suitable security precautions have been taken with respect to each such Trade Secret, including confidentiality and noncompetition agreements with its employees, agents, officers and directors.  Upon request, each Debtor shall give the Secured Party copies of any such agreements.

 

6. Special Provisions Concerning Copyrights.

6.1 Maintenance of Applications and Copyrights.  Debtor shall not abandon any right to file a copyright application nor shall Debtor abandon any pending copyright application, Copyright, or any right with respect to the foregoing, prior to exhaustion of all administrative and judicial remedies, without the prior written consent of the Secured Party.

7.Grant-Back License.

7.1 License.  Unless and until there shall exist an Event of Default and the Secured Party has given notice to the Debtor of the Secured Party's intention to exercise its rights under this Agreement, the Secured Party hereby grants to the Debtor, without representation or warranty by the Secured Party, the exclusive, nontransferable (except by sublicense in the ordinary course of Debtor's business) right and license (i) to use the Marks on and in connection with goods and services sold by the Debtor, or its franchises, for the Debtor's own benefit and account and for none other, (ii) under the Patents, to make, have made for it, use and sell the inventions disclosed and claimed in the Patents for the Debtor's own benefit and account and for none other, (iii) to collect any and all royalties under any sublicenses granted by the Debtor, (iv) to prosecute any and all applications and maintain any and all registrations for such Marks and Patents, (v) to preserve and protect the Patents and Marks against infringement by third parties in the Debtor's reasonable commercial judgment, and (vi) to settle all disputes with third parties with respect to use or non-use of the Patents and Marks.  The Debtor agrees not to sell or assign its interest in, or grant any sublicense (except in the ordinary course of business) under the license granted to the Debtor in this Section, without the prior written consent of the Secured Party.

7.2 Royalties.  Each Debtor hereby agrees that the use by the Secured Party of any and all Intellectual Property Collateral shall, subject to applicable law and to any then existing Licenses granted by the Debtor of any such Patent, Mark, Trade Secret or Copyright, be without any liability for royalties or other related charges from the Secured Party to Debtor.

8.Rights and Remedies of Secured Party.

8.1 Rights Exercisable Regardless of Event of Default.  Whether or not an Event of Default exists, the Secured Party shall have the following rights:

(a) The Secured Party is hereby specifically authorized to make, at the Secured Party's sole option, any or all payments required to be made either hereunder or otherwise in respect of the Intellectual Property Collateral by Debtor, unless Debtor has intentionally abandoned such Intellectual Property Collateral in its reasonable commercial judgment in the ordinary course of business.  Such payments may include, but are not limited to, payments for maintenance fees, taxes, and other governmental levies, and insurance premiums.  The Secured Party shall have the right, but not the duty, to perform any obligations of the Debtor relating to the Intellectual Property Collateral, without waiving any other rights or releasing Debtor from any obligation hereunder.

(b) The Secured Party shall have the right, but not the duty, to intervene or otherwise participate in any legal or equitable proceeding which, in the Secured Party's sole judgment, affects the Intellectual Property Collateral or any of the rights created or secured by this Agreement, provided that the Debtor has the right to settle or compromise any suit, claim or action without the consent of Secured Party if, in the reasonable commercial judgment of Debtor, such settlement or compromise is in the best interest of Debtor.

Such rights may be exercised by the Secured Party at any time, but only after notice to the Debtor, and only to the extent permitted by law and necessary to protect the Secured Party's rights hereunder and in the Intellectual Property Collateral.

8.2 Power of Attorney.  After an Event of Default, in order to permit the Secured Party to operate each Debtor's business without interruption and to use the Marks and associated goodwill in conjunction therewith and other Intellectual Property Collateral, and otherwise to effectuate the intent of the parties hereto, each Debtor hereby appoints the Secured Party the true and lawful attorney-in-fact for the Debtor with full power of substitution, in its name or in the name of the Debtor or otherwise, for the sole benefit of the Secured Party but at the sole expense of the Debtor, without notice to or demand upon the Debtor, at any time whether or not an Event of Default has occurred, (i) to notify any party, and to demand, collect, receive payment of, receipt for, settle, compromise or adjust and give discharges and releases with respect to, any Intellectual Property Collateral; (ii) to commence and prosecute any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect any monies due to the Debtor and to enforce any rights pursuant to any Intellectual Property Collateral or any other rights in respect thereof including suits for infringement; (iii) to defend any suit, action, or proceeding brought against the Debtor in respect of any Intellectual Property Collateral; (iv) to settle, compromise or adjust any suit, action or proceeding described in clauses (ii) or (iii) above and, in connection therewith, to give such discharges, terminations or releases as the Secured Party may deem appropriate; (v) to endorse the name of the Debtor on checks, notes, drafts, acceptances, money orders, or other instruments or documents constituting payments on account of any Intellectual Property Collateral; (vi) to sign and file or record the foregoing described Assignments or any financing or other statement in order to perfect or protect the Secured Party's security interest in the Intellectual Property Collateral; (vii) to prosecute any applications, renewals and other matters in connection with any of the Intellectual Property Collateral and to sign the name of the Debtor on any and all agreements, documents, statements, certificates or other writings necessary or advisable to effect such purposes; (viii) generally to sell, assign, transfer, pledge, make any agreement in respect of or otherwise deal with any Intellectual Property Collateral, including any new Intellectual Property Collateral, as fully and completely as though the Secured Party were the absolute owner thereof for all purposes.  The powers vested in the Secured Party are, and shall be deemed to be, coupled with an interest and irrevocable.  The powers conferred on the Secured Party by this Agreement are solely to protect the Secured Party's interest and shall not impose upon the Secured Party any duty to exercise any such power, and if the Secured Party shall exercise any such power, the Secured Party shall be accountable only for amounts that the Secured Party actually receives as a result thereof and shall not be responsible to the Debtor except for willful misconduct.

8.3 Effect of Exercise of Rights.  Any sums paid, and any costs or expenses, including reasonable attorneys' fees, incurred by the Secured Party, pursuant to the Secured Party's exercise of rights specified or referred to herein, shall: (a) as between the parties hereto and their successors-in-interest, be deemed valid, so that in no event shall the necessity or validity of any such payments, costs or expenses be disputed; and (b) with respect to such sums, costs and expenses, be, until paid, part of the Secured Debt and, until paid, shall accrue interest at the Default Rate.

8.4 Remedies.  Upon the occurrence of any Event of Default, the Secured Party may at any time thereafter, at its option and, upon seven (7) days written notice, exercise any or all of the following rights and remedies:

(a) terminate the license granted to the Debtor pursuant to Section 7 hereof;

(b)collect, receive, appropriate and realize upon the Intellectual Property Collateral or any part thereof;

(c) exercise any or all of the rights and remedies granted to it under this Agreement or any other Loan Document and take such other actions or proceedings as the Secured Party deems necessary or advisable to collect or enforce or to protect its interest in the Secured Debt or the Intellectual Property Collateral;

(d) enter, with or without process of law and without breach of the peace, any premises where the Intellectual Property Collateral or the books and records of the Debtor related thereto are or may be located, and without charge or liability to the Secured Party therefor seize and remove any tangible personal property evidencing the Intellectual Property Collateral (and copies of said Debtor's books and records in any way relating to the Intellectual Property Collateral) from said premises and/or remain upon said premises and use the same (together with said books and records) for the purpose of collecting, preparing for sale and disposing of the Intellectual Property Collateral;

(e) exercise any one or more of the rights and remedies accruing to the Secured Party under any applicable law, or as provided herein or in the Loan Documents.  The Debtor recognizes that in the event it fails to perform, observe or discharge any of its obligations or liabilities under this Agreement, no remedy at law will provide adequate relief to the Secured Party, and the Debtor agrees that the Secured Party shall be entitled to temporary and permanent injunctive relief in any such case without the necessity of proving actual damages; and

(f) exercise any and all of the rights and remedies of a secured party under the Uniform Commercial Code or comparable statute in the applicable jurisdiction, including, without limitation, the right to exercise all of the following rights and remedies:

(i) declare the entire right, title and interest of the Debtor in and to each of the Marks, together with all trademark rights and rights of protection to the same, vested, in which event such rights, title and interest shall immediately vest, in the Secured Party;

(ii) declare the entire right, title and interest of the Debtor in and to each of the Patents and Copyrights vested, in which event such right, title and interest shall immediately vest in the Secured Party;

(iii) to take and practice or use all or any portion of the Intellectual Property Collateral;

(iv) to sell, license, or otherwise dispose of any or all of the Intellectual Property Collateral, including the goodwill of the Debtor's business symbolized by the Marks and the right to carry on the business and use the assets of the Debtor in connection with which the Marks have been used;

(v) to apply the proceeds of the Intellectual Property Collateral towards (but not necessarily in complete satisfaction of) the Secured Obligations; and/or

(vi)to direct the Debtor to refrain from practicing or using the Intellectual Property Collateral in any manner whatsoever, directly or indirectly, and, if requested by the Secured Party, change the Debtor's corporate name to eliminate therefrom any use of any Mark, as applicable, and execute such other and further documents that the Secured Party may request to further confirm this and to transfer ownership of the Intellectual Property Collateral and any associated goodwill to the Secured Party.

Any sale or other disposition of the Intellectual Property Collateral may be at public or private sale upon such terms and in such manner as the Secured Party deems advisable, having due regard to compliance with any statute or regulation which might affect, limit, or apply to the Secured Party's disposition of the Intellectual Property Collateral.  Unless otherwise permitted by law (in which event the Secured Party shall provide the Debtor with such notice as may be practicable under the circumstances), the Secured Party shall give the Debtor at least the greater of the minimum notice required by law or seven (7) days prior written notice of the date, time, and place of any proposed public sale of, and of the date after which any private sale or other disposition, of the Intellectual Property Collateral, or any portion thereof, is to be made.

Such options may be exercised individually, sequentially or in concert, all such remedies being cumulative, the exercise of one not being deemed a waiver of any other or a cure of any Event of Default. An Event of Default shall not be deemed to be in existence or to be continuing for any purpose of this Agreement if the Secured Party pursuant to this Agreement shall have waived such event in writing or stated in writing that the same has been cured to its reasonable satisfaction, but no such waiver shall extend to or affect any subsequent Event of Default or impair any rights of the Secured Party upon the occurrence thereof.

8.5Waivers and Enforcement of Rights.  The failure of the Secured Party to exercise any right or remedy or option provided for herein or otherwise shall not be deemed to be a waiver of any of the covenants or obligations secured by this Agreement or otherwise.  No sale of all or any of the Intellectual Property Collateral, no forbearance on the part of the Secured Party, no release or partial release of any of the Intellectual Property Collateral, and no extension; whether oral or in writing, of the time for the payment of the whole or any part of the Secured Debt or any other indulgence given by the Secured Party to the Debtor or any other Person, shall operate to release or in any manner affect the Lien of the Agreement or the original liability of the Debtor.  A waiver by the Secured Party on any one occasion shall not be construed as a bar to or waiver of any right or remedy on any future occasion.  No waiver or consent shall be binding upon the Secured Party unless it is in writing and signed by the Secured Party.  Debtor waives any requirement of diligence or promptness on the Secured Party's part in the enforcement of its rights under the provisions of this Agreement or any Loan Document.  To the fullest extent the Debtor may do so, the Debtor agrees that it will not at any time insist upon, plead, claim or take the benefit or advantage of any law now or hereafter in force providing for any appraisement, valuation, stay, extension or redemption, and the Debtor, to the extent permitted by law, hereby waives and releases all rights of redemption, valuation, appraisement, stay of execution, notice of election to mature or declare due the whole of the Secured Obligations and marshalling in the event of foreclosure of the Liens hereby created.  The Secured Party shall not be required to marshal the Intellectual Property Collateral, or any other Security in any particular order.  The Debtor hereby covenants and agrees that it will not enforce or otherwise exercise any rights of reimbursement, subrogation, contribution or other similar rights against any co-obligor or any other Person obligated on or with respect to any Secured Obligations or granting any Security prior to the payment in full of the Secured Obligations.  If any law referred to in this Section and now in force, of which the Debtor or its representatives, successors and assigns or other Person may take advantage despite this Section, shall hereafter be repealed or cease to be in force, such law shall not thereafter be deemed to preclude the application of this Section.  To the extent permitted by law and except as otherwise provided in this Agreement and the other Loan Documents, the Debtor expressly waives and relinquishes any and all rights and remedies which it may have or be able to assert by reason of the laws of the State of New Hampshire pertaining to the rights and remedies of sureties. With respect to any or all of the Secured Obligations and Intellectual Property Collateral, the Debtor assents to any extension or postponement of the time of payment or any other indulgence, to any substitution, exchange or release the Intellectual Property Collateral, to the addition or release of any Person primarily or secondarily liable, to the acceptance of partial payments thereon and the settlement, compromising or adjusting thereof, all at such time or times as the Secured Party may deem advisable, and the Debtor agrees that the Secured Party may so act without regard to any requests or demands by the Debtor and without thereby incurring any liability to the Debtor or releasing the Debtor hereunder.

8.6 Duty to Intellectual Property Collateral.  Anything herein contained to the contrary notwithstanding, neither the Secured Party nor any nominee or assignee shall have any obligation or liability by reason of or arising out of this Agreement to make any inquiry as to the nature or sufficiency of, to present or file any claim with respect to, or to take any action to collect or enforce the payment of, any amounts to which it may be entitled at any time or times by virtue of this Agreement.  The Secured Party makes no representations or warranties with respect to the Intellectual Property Collateral or any part thereof, and shall not be chargeable with any obligations or liabilities of the Debtor or any other Person with respect thereto.

8.7 Application of Proceeds.  The proceeds of all collections and any other moneys (including any cash contained in the Intellectual Property Collateral), the application of which is not otherwise herein or in any other Loan Document provided for, shall be applied as follows:

First, to the payment of the costs and expenses of collection, sale or other disposition of the Intellectual Property Collateral, including the reasonable compensation of the Secured Party and its counsel, and all other charges against the Intellectual Property Collateral;

Second, any surplus then remaining to the payment of the Secured Obligations secured by such Intellectual Property Collateral in such order and manner as the Secured Party in its sole discretion may determine; and

Third, any surplus then remaining shall be paid to the Debtor, subject, however, to the rights of the holders of any then existing Lien or as otherwise required by law.

9. Definitions.

9.1 Unless otherwise defined herein, terms used herein shall have the meanings set forth in the Security Agreement or in the Credit Agreement. For purposes of this Agreement, the following terms defined elsewhere in this Agreement and as set forth below shall have the respective meanings therein and herein defined:

Term Definition

"Agreement"Preamble

"Assignment"Section 1.3

"Copyright Office"Section 1.3

"Copyrights"Section 1.2 (d)

"Debtor"Preamable

"Intellectual Property Collateral"Section 1.2

"Licenses"Section 1.2 (e)

"Loan Document"Section 10.10

"Marks"Section 1.2 (b)

"Patents"Section 1.2 (a)

"PTO"Section 1.3

"Secured Party"Preamble

"Security Agreement"Preamble

"Trade Secrets"Section 1.2 (c)

9.2 "Secured Obligations" as used herein shall mean the Obligations of the Borrowers under the Credit Agreement.

10. General.

10.1 Fees and Expenses.  Any and all fees, costs and expenses, of whatever kind or nature, including the reasonable attorney's fees and legal expenses incurred by the Secured Party in connection with the preparation of this Agreement and all other documents relating hereto and the consummation of the transactions contemplated hereby, the filing or recording of any documents (including all taxes in connection therewith) in public offices, the payment or discharge of any taxes, counsel fees, maintenance fees, encumbrances or otherwise protecting, maintaining or preserving the Intellectual Property Collateral, or in defending or prosecuting any actions or proceedings arising out of or related to the foregoing, shall be borne and paid by the Debtor on demand by the Secured Party.

10.2 Defeasance.  When all Secured Obligations have been indefeasibly paid and performed in full and no further obligation on the part of the Secured Party or the Debtor shall exist, this Agreement shall cease and terminate, and, at the Debtor's written request, accompanied by such certificates, opinions and proof as the Secured Party shall reasonably deem necessary, the Intellectual Property Collateral furnished hereunder shall revert to the Debtor and the estate, rights, title, and interest of the Secured Party therein shall cease, and thereupon on the Debtor's written request and at its cost and expense, the Secured Party shall execute proper instruments, acknowledging satisfaction of and discharging this Agreement, and shall redeliver to the Debtor the Intellectual Property Collateral furnished hereunder then in its possession; subject, however, to the terms and provisions contained in Section 10.3 hereof.

10.3 Survival.  All covenants, agreements, representations and warranties made herein or in any other Loan Document and in certificates delivered pursuant hereto or thereto shall be deemed to have been material and relied upon by the Secured Party, notwithstanding any investigation made by the Secured Party or on the Secured Party's behalf, and shall survive the execution and delivery to the Secured Party hereof and thereof.  Each such covenant, agreement, representation and warranty is hereby confirmed by the Debtor to be true and correct in all respects with the same force and effect on and as of the date of delivery of any Intellectual Property Collateral to the Secured Party as though made as of the date of such delivery.

10.4 Amendments.  This Agreement may not be waived, changed or discharged orally, but only by an agreement in writing and signed by the Secured Party, and any oral waiver, change or discharge of any provision of this Agreement shall be without authority and of no force and effect.

10.5 Successors and Assigns.  The covenants, representations, warranties and agreements herein set forth shall be binding upon the Debtor, its successors and assigns and shall inure to the benefit of the Secured Party, its successors and assigns. Any purchaser, assignee or transferee of any of the Secured Obligations and the Secured Party's security interest hereunder shall forthwith become vested with and entitled to exercise all the powers and rights given by this Agreement and the other Loan Documents to the Secured Party, as if said purchaser, assignee, transferee or pledges were originally named herein.

10.6 Entire Agreement: Separability; Governing Law.  This Agreement, any Schedules or Exhibits hereto and any riders or other attachments, and the other Loan Documents constitute the entire agreement between the parties with respect to the subject matter hereof. If at any time one or more provisions of this Agreement or any Loan Document, any amendment or supplement thereto or any related writing is or becomes invalid, illegal or unenforceable in whole or in part in any jurisdiction, the validity, legality and enforceability of such provision in any other jurisdiction or of the remaining provisions shall not in any way be affected or impaired thereby. This Agreement shall be governed by the laws of the State of New Hampshire without regard to its conflict of laws provisions.

10.7 Counterparts.  This Agreement may be executed in as many counterparts as may be deemed necessary and convenient, and by the different parties hereto on separate counterparts, each of which when so executed shall be deemed an original, but all such counterparts shall constitute one and the same instrument.

10.8 Singular or Plural; Joint or Several.  The term "Debtor," together with any pronoun referring thereto, shall include the singular, plural, masculine, feminine and neuter, as the context may require; and if more than one Person constitutes the Debtor, the obligations of such Persons shall be joint and several.

10.9 Headings.  The headings to Sections appearing in this Agreement and in any Loan Document have been inserted for the purpose of convenience and ready reference.  They do not purport to, and shall not be deemed to, define, limit or extend the scope or intent of the Sections to which they appertain.

10.10 Loan Document.  This Agreement shall constitute a "Loan Document" as defined in the Credit Agreement. The terms and provisions of this Agreement are intended to supplement the terms and provisions of the security portions of the Security Agreement and are not intended to limit the force or effect of such provisions.

 

 

IN WITNESS WHEREOF, this instrument has been executed under seal as of the day and year first above written.

                                                           
DEBTOR

                                                           
GREEN MOUNTAIN COFFEE ROASTERS, INC.

_/s/ H. Kenneth Merritt, Jr.________ By:_/s/ William G. Hogan_________________

Witness                                               
William G. Hogan, for, on behalf of, and as Duly Authorized Officer or Agent

                                                           
of the above-named corporation

 

 

STATE OF NEW HAMPSHIRE

COUNTY OF HILLSBOROUGH

The foregoing instrument was acknowledged before me this _30th__ day of August, 2002, by William G. Hogan, for, on behalf of, and as Duly Authorized Officer or Agent of, GREEN MOUNTAIN COFFEE ROASTERS on behalf of each of the corporation.

 

_____/s/ Thomas P. Manson

Justice of the Peace/Notary Public

My Commission Expires:__9/28/2004_

 

SCHEDULES AND EXHIBITS

SCHEDULES:    1.2(a)

1.2(b)

1.2(d)

1.2(e)

EXHIBITS:ACollateral Assignment of Patents

BCollateral Assignment of Marks

CCollateral Assignment of Copyrights

SCHEDULE 1.2(a)

to

Security Agreement (Intellectual Property)

dated as of August ___, 2002

made by 

GREEN MOUNTAIN COFFEE ROASTERS, INC.

in favor of Fleet National Bank, as agent

Patents

                       
Application or                
Filing                
Issue or            
Expiration

Title                
Patent No.                     
Date                 
Filing Date         Date                        
Country

NONE

 

SCHEDULE 1.2(b)

to

Security Agreement (Intellectual Property)

dated as of August ____, 2002

made by 

GREEN MOUNTAIN COFFEE ROASTERS, INC., 

in favor of Fleet National Bank, as agent

Marks

 

	
Mark
	
Class
	
Number
	
Registered
	
Reg. No.
	
Country

	
 
	
	
	
	
 
	

	
APPROPRIATE ROAST
	
30
	
75/329504
	
Registered 07/06/99
	
Reg. No. 2,258,573.
	
US

	
AUTUMN HARVEST BLEND
	
30
	
75/375008
	
Registered 10/20/98
	
Reg. No. 2,198,448 10/20/08
	
US

	
BLACK PARROT
	
30
	
78/132854
	
ITU application filed 06/03/02
	
	
US

	
CAFE VERMONT
	
30
	
75/072,793
	
Registered 09/16/97
	
Reg. No. 2,096,771.
	
US

	
FRESH FROM THE ROASTER
	
16
	
75/440653
	
Registered 04/20/99
	
Reg. No. 2,240,634.
	
US

	
GREEN MOUNTAIN COFFEE
	
30
	
74/036,069
	
Registered 1/15/91.
	
Reg. No.1,631,794
	
US

	
GREEN MOUNTAIN COFFEE
	
30
	
15,617-006
	
Registered August 20, 2001 
	
Serial No. 874,412. Reg. No. 544898
	
Canada

	
GREEN MOUNTAIN COFFEE
	
30
	
822.718.758
	
Trademark Application filed 10/19/00.
	
	
Brazil

	
GREEN MOUNTAIN 
	
30
	
1026727
	
Trademark Application filed 06/20/01
	
	
South Korea

	
GREEN MOUNTAIN COFFEE ROASTERS
	
30
	
74/036,064
	
Registered 3/26/91
	
Reg. No. 1,639,220
	
US

	
GREEN MOUNTAIN COFFEE ROASTERS
	
30
	
74/466,677
	
Registered 10/04/94
	
Reg. No. 1,856,892
	
US

	
GREEN MOUNTAIN COFFEE ROASTERS
	
30
	
1625748
	
	
Office application filed 04/25/00.  Registered as of filing date.
	
EU

	
GREEN MOUNTAIN COFFEE ROASTERS
	
30
	
15,617-007
	
Registered August 20, 2001
	
Serial No. 874,413. Reg. No. 549,966
	
Canada

	
GREEN MOUNTAIN COFFEE ROASTERS
	
30
	
2164066
	
Registered 04/15/98.
	
	
United Kingdom

	
GREEN MOUNTAIN COFFEE ROASTERS
	
30
	
	
Application filed 01/14/02
	
	
South Korea

	
GREEN MOUNTAIN COFFEE ROASTERS
	
30
	
	
Application filed 11/29/01
	
	
Taiwan

	
GREEN MOUNTAIN COFFEE ROASTERS
	
42
	
74/035,961
	
Registered 3/5/91
	
Reg.No. 1,637,212
	
US

	
GREEN MOUNTAIN COFFEE ROASTERS
	
42
	
74/449,959 
	
Registered 10/4/94
	
Reg. No. 1,857,085
	
US

	
GREEN MOUNTAIN COFFEE ROASTERS and Design
	
30
	
822.731.959
	
Trademark Application filed 10/20/00.
	
	
Brazil

	
GREEN MOUNTAIN FILTERS
	
16
	
74/080,885
	
Registered 6/4/91.
	
Reg. No. 1,646,839
	
US

	
ITS A JUNGLE OUT THERE... LET=S KEEP IT THAT WAY
	
30
	
75/388843
	
Registered 08/07/01
	
Serial No. 2,476,059.
	
US

	
LA ESPERANZA
	
30
	
78/050379
	
Registered 11/27/01
	
Reg. No. 2,512,879.
	
US

	
LAKE & LODGE
	
30
	
78/050377
	
Registered 11/27/01
	
Reg. No. 2,512,878.
	
US

	
MOCHA ALMOND CHILLER
	
30
	
75/270,419
	
Registered 03/17/98. 
	
Reg. No. 2,144,686
	
US

	
MONTE VERDE
	
30
	
78/037686
	
Registered 01/01/02
	
Reg. No. 2,525,258
	
US

	
MONTE VERDE
	
30 and 32
	
75/749086
	
ITU Application filed 07/12/99
	
	
US

	
NANTUCKET BLEND
	
30
	
74/366,955
	
Registered 11/23/93
	
RegNo. 1,806, 305
	
US

	
ORGANIC BLACK PARROT BLEND
	
30
	
78/136200
	
ITU application filed 06/17/02 
	
	
US

	
PARTNERFARM
	
35
	
78/126496
	
ITU application filed 05/06/02
	
	
US

	
QUICK-CUP
	
30
	
78/147056
	
ITU application filed 07/24/02
	
	
US

	
RAINFOREST NUT
	
30
	
74/083,991
	
Registered 7/16/96 ('2(f))
	
RegNo. 1,986,423
	
US

	
STEWARDSHIP
	
30
	
74/349698
	
Registered 1/11/94
	
Reg. No. 1,816,056
	
US

	
STEWARDSHIP
	
42
	
74/507,592
	
Registered 09/12/95
	
Reg. No. 1,918,520
	
US

	
TAPESTRY BLEND DARK
	
30
	
75/289,237
	
Registered 5/5/98
	
Reg. No. 2,154,988
	
US

	
THE TASTE OF A BETTER WORLD
	
30
	
78/101631
	
ITU Application filed 01/09/02. 
	
	
US

	
VERMONT COUNTRY BLEND
	
30
	
74/668,531
	
Registered 11/12/96
	
Reg. No. 2,014,946
	
US

	
YOU=RE FOLLOWING THE LEADER
	
30
	
75/270418
	
Registered 05/04/99.
	
Reg. No. 2,243,407
	
US

 

 

SCHEDULE 1.2(d)

to

Security Agreement (Intellectual Property)

dated as of August __, 2002

made by 

GREEN MOUNTAIN COFFEE ROASTERS, INC., 

in favor of Fleet National Bank, as agent

Copyrights

 

                            
Registration or                       
Registration or

Title                     
Application No.                    
Application Date                                       
Author

NONE

 

 

SCHEDULE 1.2(e)

to

Security Agreement (Intellectual Property)

dated as of August ____, 2002

made by 

GREEN MOUNTAIN COFFEE ROASTERS, INC.,

in favor of FLEET NATIONAL BANK, as agent

Licenses

 

Licensor                        
Licensee            
Date                           
Subject Matter

Keurig, Incorporated     Debtor                
June 2000                
Patents, trademarks and

                                                               
As amended              
trade  secrets related to               manufacturing and sale of K-  Cups 
       

PeopleSoft                    
Debtor                
January 1997            
Computer Software

 

EXHIBIT A

COLLATERAL ASSIGNMENT OF PATENTS

FOR GOOD AND VALUABLE CONSIDERATION, receipt and sufficiency of which are hereby acknowledged, GREEN MOUNTAIN COFFEE ROASTERS, INC., a Vermont corporation, having its principal offices at 33 Coffee Lane, Waterbury, Vermont 05676 (the "Assignor") hereby assigns and grants to Fleet National Bank, with a place of business at 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, for itself as Lender and as Agent for the Lenders identified from time to time under a certain Credit Agreement dated August ___, 2002, to which the Assignor is a party and borrower thereunder (the "Assignee"), a security interest in and to all of the rights, title and interest of the Assignor in and to the (i) patents and patent applications as set forth on Schedule A hereto, and the inventions and improvements described and claimed therein, and patentable inventions, (ii) the reissues, divisions, continuations, continuations-in-part, renewals and extensions of any of the foregoing, (iii) all income, royalties, damages or payments now or hereafter due and/or payable under any of the foregoing or with respect to any of the foregoing, including without limitation, damages or payments for past or future infringements of any of the foregoing, (iv) the right to sue for past, present and future infringements of any of the foregoing and (v) all rights corresponding to any of the foregoing throughout the world (collectively, the "Patents").

Until and unless there shall exist an Event of Default under the Security Agreement (as defined below) and the Assignee has given notice to the Assignor of the Assignee's intention to exercise its rights under the Security Agreement, the Assignee hereby grants to the Assignor, without representation or warranty by the Assignee, the exclusive, nontransferable (except by sublicense in the ordinary course of Assignor's business) right and license (i) under the Patents to make, have made for it, use and sell the inventions disclosed and claimed in the Patents for the Assignor's own benefit and account and for none other and (ii) to collect any and all royalties under any sublicenses granted by the Assignor.

This Collateral Assignment is made pursuant to, and to further secure the satisfactory performance of all of the Secured Obligations as such term is defined in, that certain Security Agreement (Intellectual Property) dated as of August ____, 2002 by and between the Assignor, its affiliates and the Assignee, as the same may from time to time be amended and in effect (the "Security Agreement").

 

IN WITNESS WHEREOF, the Assignor has executed this instrument under seal as of

August ____, 2002.

 

ASSIGNOR

                                                           
GREEN MOUNTAIN COFFEE ROASTERS, INC.

_____________________________By:______________________________

Witness                                                
William G. Hogan, for, on behalf of,

                                                            
and as Duly Authorized Officer or Agent of the above-named corporation

 

STATE OF NEW HAMPSHIRE

COUNTY OF HILLSBOROUGH

The foregoing instrument was acknowledged before me this _____ day of August, 2002, by William G. Hogan, for, on behalf of, and as Duly Authorized Officer or Agent of __________________________, a ____________ corporation, on behalf of said corporation.

 

____________________________________

Justice of the Peace/Notary Public

My Commission Expires:___________

 

EXHIBIT B

COLLATERAL ASSIGNMENT OF MARKS

FOR GOOD AND VALUABLE CONSIDERATION, receipt and sufficiency of which are hereby acknowledged, GREEN MOUNTAIN COFFEE ROASTERS, INC., a Vermont corporation, having its principal offices at 33 Coffee Lane, Waterbury, Vermont 05676 (the "Assignor") hereby assigns and grants to Fleet National Bank, with a place of business at 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, for itself as Lender and as Agent for the Lenders identified from time to time under a certain Credit Agreement dated August ___, 2002, to which the Assignor is a party and borrower thereunder (the "Assignee"), a security interest in and to all of the rights, title and interest of the Assignor in and to the (i) trademarks, service marks, trademark registrations, service mark registrations, trade names, collective marks and certification marks and trademark and service mark applications, and trade dress, including logos and/or designs, in connection with any of the foregoing as set forth on Schedule A hereto, (ii) all renewals of any of the foregoing, (iii) all income, royalties, damages and payments now or hereafter due and/or payable under any of the foregoing or with respect to any of the foregoing, including without limitation, damages or payments for past or future infringements of any of the foregoing, (iv) the right to sue for past, present and future infringements of any of the foregoing, (v) all rights corresponding to any of the foregoing throughout the world, and (vi) the goodwill of the Assignor's business connected with and symbolized by any of the foregoing (collectively, the "Marks").

Until and unless there shall exist an Event of Default under the Security Agreement (as defined below) and the Assignee has given notice to the Assignor of the Assignee's intention to exercise its rights under the Security Agreement, the Assignee hereby grants to the Assignor, without representation or warranty by the Assignor, the exclusive, nontransferable (except by sublicense in the ordinary course of Assignor's business) right and license (i) to use the Marks on and in connection with goods and services sold by the Assignor, for the Assignor's own benefit and account and for none other and (ii) to collect any and all royalties under any sublicenses granted by the Assignor.

This Collateral Assignment is made pursuant to, and to further secure the satisfactory performance of all of the Secured Obligations as such term is defined in, that certain Security Agreement (Intellectual Property) dated as of August _____, 2002 by and between the Assignor, its affiliates, and the Assignee, as the same may from time to time be amended and in effect (the "Security Agreement").

 

IN WITNESS WHEREOF, the Assignor has executed this instrument under seal as of

_____________ ____, 2002.

 

 

                                                               
ASSIGNOR

                                                               
GREEN MOUNTAIN COFFEE ROASTERS, INC.

_____________________________      By:______________________________

Witness                                                    
William G. Hogan, for, on behalf of, and as

                                                                 
Duly Authorized Officer or Agent of the above-named corporations

 

STATE OF NEW HAMPSHIRE

COUNTY OF HILLSBOROUGH

The foregoing instrument was acknowledged before me this _____ day of __________, 2002, by William G. Hogan, for, on behalf of, and as Duly Authorized Officer or Agent of __________________________, a ____________ corporation, on behalf of each of said corporation.

 

____________________________________

Justice of the Peace/Notary Public

My Commission Expires:___________

 

EXHIBIT C

COLLATERAL ASSIGNMENT OF COPYRIGHTS

FOR GOOD AND VALUABLE CONSIDERATION, receipt and sufficiency of which are hereby acknowledged, GREEN MOUNTAIN COFFEE ROASTERS, INC., a Vermont corporation, having its principal offices at 33 Coffee Lane, Waterbury, Vermont 05676 (the "Assignor") hereby assigns and grants to Fleet National Bank, with a place of business at 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, for itself as Lender and as Agent for the Lenders identified from time to time under a certain Credit Agreement dated August ___, 2002, to which the Assignor is a party and borrower thereunder (the "Assignee"), a security interest in and to all of the rights, title and interest of the Assignor in and to the (i) copyrights, copyright registrations, and copyright applications, including, without limitation, those listed on Schedule A hereto and copyrights or computer programs and all tangible property embodying the copyrights, (ii) the reissues, renewals and extensions of any of the foregoing, (iii) all income, royalties, damages and payments now or hereafter due and/or payable under any of the foregoing or with respect to any of the foregoing, including without limitation, damages or payments for past or future infringements of any of the foregoing, (iv) the right to sue for past, present and future infringements of any of the foregoing, and (v) all rights corresponding to any of the foregoing throughout the world (collectively, the "Copyrights").

This Collateral Assignment is made pursuant to, and to further secure the satisfactory performance of all of the Secured Obligations as such term is defined in, that certain Security Agreement (Intellectual Property) dated as of August ____, 2002 by and between the Assignor, its affiliates, and the Assignee, as the same may from time to time be amended and in effect.

IN WITNESS WHEREOF, the Assignor has executed this instrument under seal as of 

August _____, 2002.

 

                                                                           
ASSIGNOR

                                                                           
GREEN MOUNTAIN COFFEE ROASTERS, INC.

_____________________________                
By:______________________________

Witness                                                                
William G. Hogan, for, on behalf of, and as 

                                                                             
Duly Authorized Officer or Agent of the

                                                                             
above-named corporation

 

STATE OF NEW HAMPSHIRE

COUNTY OF HILLSBOROUGH

The foregoing instrument was acknowledged before me this _____ day of _________, 2002, by William G. Hogan, for, on behalf of, and as Duly Authorized Officer or Agent of __________________________, a ____________ corporation, on behalf of said corporation.

 

____________________________________

Justice of the Peace/Notary Public

My Commission Expires:___________

 

 

 

<ClosingDate>

 

 

COMMISSIONER OF PATENTS

AND TRADEMARKS

WASHINGTON, DC 20231

Attention: Assignment Branch

Re:______________________

Ladies and Gentlemen:

Enclosed for recording is a Collateral Assignment of [Patents][Marks] dated August ______, 2002 granted by Green Mountain Coffee Roasters, Inc., in favor of Fleet National Bank, together with a completed form PTO-1594. Please record the enclosed instrument against all of the [patents and patent applications] [trademarks/service marks and applications therefor] listed in Schedule A thereto.

If the enclosed papers are determined to be incomplete in any respect, the Mail Room and/or the Assignment Branch is respectfully requested to contact the undersigned collect at the telephone number below.

A check in the amount of $_________________ payable to the Commissioner of Patents and Trademarks is enclosed with this letter to cover the recording fee.

Please indicate your receipt and acceptance of the enclosures by date-stamping the enclosed copy of this letter and returning it to me in the self-addressed, stamped envelope provided.

Respectfully submitted,

 

____________________________________

Thomas P. Manson, Esquire

Cook, Little, Rosenblatt & Manson, PLLC

350 Elm Street

Manchester, New Hampshire 03101

Tel.  (603) 621-7104

<Closing Date>

 

 

COPYRIGHT OFFICE

LIBRARY OF CONGRESS

WASHINGTON, DC 20559

Re:  Fleet Bank - NH

Ladies and Gentlemen:

Enclosed for recording is a Collateral Assignment of Copyrights dated

August ____, 2002 granted by Green Mountain Coffee Roasters, Inc., in favor of Fleet National Bank.  Please record the enclosed instrument against all of the copyrights/mask works and applications therefor listed in Schedule A thereto.

If the enclosed papers are determined to be incomplete in any respect, please contact the undersigned collect at the telephone number below.

A check in the amount of $_____________ payable to the Register of Copyrights is enclosed with this letter to cover the recording fee.

Please indicate your receipt and acceptance of the enclosures by date-stamping the enclosed copy of this letter and returning it to me in the self-addressed, stamped envelope provided.

Respectfully submitted,

 

_________________________________

Thomas P. Manson, Esquire

Cook, Little, Rosenblatt & Manson, PLLC

350 Elm Street

Manchester, New Hampshire 03101

Tel.  (603) 621-7104

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