EXECUTION
COPY
SECOND AMENDMENT, dated as of November 29, 2000 (this "Amendment") to LOAN
AND SECURITY AGREEMENT dated as of November 21, 1997 (as amended through the
date hereof, the "Loan Agreement") between COFFEE HOLDING CO. INC. ("Borrower")
and ▇▇▇▇▇ FARGO BUSINESS CREDIT, INC., as assignee of Banc of America Commercial
Finance Corporation, f/k/a NationsCredit Commercial Corporation ("Lender").
Terms which are capitalized in this Amendment and not otherwise defined shall
have the meanings described to such terms in the Loan Agreement.
WHEREAS, the Borrower has requested the Lender to consider (i) extending
the maturity of the credit facility established pursuant to the Loan Agreement,
(ii) extending an additional Equipment Advance to the Borrower and (iii)
modifying certain of the terms and provisions contained in the Loan Agreement,
and the Lender is willing to agree to the foregoing, subject to the terms and
conditions set forth herein;
NOW THEREFORE, in consideration of the premises and mutual agreements
herein contained, the parties hereto agree as follows:
Section One. Amendments to the Loan Agreement. Effective as of the date
hereof, upon the satisfaction of the conditions precedent contained in Section
Three hereof, the Loan Agreement is hereby amended as follows:
(a) Preamble. The name and address of the Lender set forth in the Preamble
shall be amended to read entirely as follows:
"▇▇▇▇▇ FARGO BUSINESS CREDIT, INC., as assignee of Banc of America
Commercial Finance Corporation, f/k/a NationsCredit Commercial
Corporation (the "Lender"), with a business address at ▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇"
(b) Section 1.1(a). Revolving Loans and Credit Accomodations. A new clause
(iii) is added to the definition of Availability in Section 1.1(a) to read as
follows, and clauses (iii), (iv) and (v) of Section 1.1(a) are renumbered (iv),
(v), (vi), respectively:
"plus
(iii) an amount equal to the lesser of $250,000 and the aggregate
balance of funds in the Cash Collateral Account maintained by the
Borrower with ▇▇▇▇▇ Fargo Bank as set forth in Section 14 of
Schedule A."
(c) Section 1.1(b). Term Loan. The following sentences are added to the
end of Section 1.1(b):
"On the effective date of the Second Amendment to this Agreement,
dated as of November 29, 2000, (x) the Borrower warrants and
represents that the unpaid principal balance of the Term Loan equals
$192,000 and (y) the Lender shall make an additional Equipment
Advance to Borrower in the amount of $408,000. The term "Term Loan"
shall include the making of such additional Equipment Advance."
(d) Article 3. Security Interest. A new Section 3.2 shall be added to the
Loan Agreement to read in its entirety as follows:
"3.2 Until all Obligations have been paid in full and the Lender's
obligation to make Loans and to provide Credit Accommodations under
the Loan Agreement have terminated, Borrower shall maintain a Cash
Collateral Account with ▇▇▇▇▇ Fargo Bank, the minimum balance of
which shall at no time be less than the amount set forth in Section
14(a) of Schedule A. Such account shall earn interest at the annual
rate set forth in Section 14(c) of Schedule A."
(e) Section 5.3. Title to Collateral; Permitted Liens. Section 5.3 is
amended by adding the following sentence to the end thereof:
"The Borrower will not enter into any arrangement, directly or
indirectly, with any other Person whereby the Borrower shall sell or
transfer any real or personal property, whether now owned or
hereafter acquired, and then or thereafter rent or lease as lessee
such property or any part thereof or any other property which the
Borrower intends to use for substantially the same purpose or
purposes as the property being sold or transferred."
(f) Section 5.13. Financial and Collateral Reports. Section 5.13 is
amended by adding the following paragraph (h) thereto:
"(h) Personal Financial Statements. No later than April 30 of each
year, the personal financial statement, as of December 31 of the
preceding year, of each of ▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇, each of
which personal financial statements shall be (i) prepared based on
reasonable accounting standards consistently applied, (ii) signed by
▇▇▇▇▇▇ ▇▇▇▇▇▇ or ▇▇▇▇▇ ▇▇▇▇▇▇, as applicable, and (iii) reflect all
assets and liabilities in reasonable detail, and the net worth, of
such applicable person."
(g) Section 5.18. Negative Covenants. Section 5.18 is amended by deleting
clause (vi) thereof in its entirety and by substituting the following in lieu
thereof:
"(vi) incur, create, assume or permit to exist any indebtedness or
liability on account of deposits or advances or any indebtedness for
borrowed money or letters of credit issued on the Borrower's behalf
or any other indebtedness or liability evidenced by notes, bonds,
debentures or similar obligations, except (a) indebtedness arising
hereunder; (b) indebtedness of the Borrower in existence on the date
hereof and listed on Schedule 5.18 (vi); and (c) indebtedness
secured by Permitted Liens."
(h) Section 5.18. Negative Covenants. Section 5.18 is amended by deleting
clause (i) thereof in its entirety and by substituting the following in lieu
thereof:
"(i) merge or consolidate with another Person, acquire any interest
in any Person or from any new Subsidiary, engage in any line of
business materially different from that presently engaged in by the
Borrower, or purchase, lease or otherwise acquire assets not related
to its business"
(i) Article 5. Representations, Warranties and Covenants. Article 5
amended by adding a new Section 5.20 thereto, captured "Additional Negative
Covenants, as follows:
"5.20 Negative Covenants. Borrower will not, without Lender's prior
written consent, (i) engage in any line of business materially
different from that presently engaged in by the Borrower and will
not purchase, lease or otherwise acquire assets not related to its
business; (ii) adopt any material change in accounting principles
other than as required by GAAP, and will not adopt, permit or
consent to any change in its fiscal year; (iii) adopt, create,
assume or become a party to any defined benefit pension plan, unless
previously disclosed in writing to the Lender; (iv) amend its
certificate of incorporation, articles of incorporation or bylaws;
(v) pay excessive or unreasonable salaries, bonuses, commissions,
consultant fees or other
compensation; (vi) issue or sell any stock of the Borrower so as to
change the percentage of voting and non-voting stock owned by each
of the Borrower's shareholders on November 29, 2000 and the Borrower
will not permit or suffer to occur the sale, transfer, assignment,
pledge or other disposition of any or all of the issued and
outstanding shares of stock of the Borrower.
(j) Section 7.1. Maturity Date. 7.1 is amended by deleting the first
sentence thereof in its entirety, and by substituting the following in lieu
thereof:
"7.1 Maturity Date. Lender's obligation to make Loans and to provide
Credit Accommodations under this Agreement shall initially continue
in effect until the Initial Maturity Date set forth in Section 7 (a)
of Schedule A (the "Initial Term"); provided that such date shall
automatically be extended (the Initial Maturity Date, as it may be
so extended, being referred to as the "Maturity Date") for
successive additional terms of two years each (each a "Renewal
Term") unless one party gives written notice to the other, not less
than sixty (60) days prior to the Maturity Date, that such party
elects not to extend the Maturity Date."
(k) Schedule A of the Loan Agreement shall be amended and restated in its
entirety to read as set forth in Schedule A attached hereto.
(l) Schedule B of the Loan Agreement shall be amended to add the following
defined term:
"Preferred Products Account" means an Account, the Account Debtor in
respect of which is Supervalue.
Section Two. Representations and Warranties. To induce the Lender to enter
into this Amendment, the Borrower warrants and represents to the Lender as
follows:
(a) All of the representations and warranties contained in the Loan
Agreement and each other Loan Document to which the Borrower is a party continue
to be true and correct in all material respects as of the date hereof, as if
repeated as of the date hereof, except for such representations and warranties
which, by their terms, are only made as of a previous date;
(b) The execution, delivery and performance of this Amendment by the
Borrower is within its corporate powers, has been duly authorized by all
necessary corporate action, and the Borrower has received all necessary consents
and approvals (if any shall be required) for the execution and delivery of this
Amendment;
(c) Upon its execution, this Amendment shall constitute the legal, valid
and binding obligation of the Borrower, enforceable against the Borrower in
accordance with its terms, except as such enforceability may be limited by (i)
bankruptcy, insolvency or similar laws affecting creditors' rights generally and
(ii) general principles of equity;
(d) The Borrower is not in default under any indenture, mortgage, deed of
trust, or other material agreement or material instrument to which it is a party
or by which it may be bound. Neither the execution and delivery of this
Amendment, nor the consummation of the transactions herein contemplated, nor
compliance with the provisions hereof will (i) violate any law or regulation
applicable to it, (ii) cause a violation by the Borrower, of any order or decree
of any court or government instrumentality applicable to it, (iii) conflict
with, or result in the breach of, or constitute a default under, any indenture,
mortgage, deed of trust, or other material agreement or material instrument to
which the Borrower is a party or by which it may be bound, (iv) result in the
creation or imposition of any lien, charge, or encumbrance upon any of the
property of the Borrower, except in favor of the Lender, to secure the
Obligations, or (v) violate any provision of the Certificate of Incorporation,
By-Laws or any capital stock provisions of the Borrower;
(e) No Event of Default has occurred and is continuing; and
(f) Since the date of the Lender's receipt of the financial statements of
the Borrower for the eleven month period ended on September 30, 2000, no change
or event has occurred which has had or is reasonably likely to have a material
adverse effect on the Borrower's business, operations, condition (financial or
otherwise) or prospects (a "Material Adverse Effect").
Section Three. Conditions Precedent. This Amendment shall become effective
upon the date that the last of the following events shall have occurred:
(a) the Lender shall have received this Amendment, duly executed by the
Borrower.
(b) No Default shall have occurred and be continuing which constitutes an
Event of Default or would constitute an Event of Default upon the giving of
notice or lapse of time or both, and no event or development which has had or is
reasonably likely to have a Material Adverse Effect shall have occurred, in each
case since the date of delivery to the Lender of the Borrower's most recent
financial statement.
(c) the Lender shall have received (i) an officer's certificate, executed
by the chief financial officer or chief executive officer of the Borrower,
confirming the truth and accuracy of the representations and warranties
contained in Section Two hereof and contained in Section Three (b) hereof, and
(ii) a secretary's certificate, executed by the corporate secretary of the
Borrower, in form reasonably satisfactory to the Lender.
(d) the Lender shall have received a letter agreement from each of ▇▇▇▇▇
▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇, duly executed by each of them, each in the form of
Exhibit A of this Agreement.
(e) the Lender shall have received a promissory note, duly executed by the
Borrower, in the form of Exhibit B to this Agreement.
(f) the Lender shall have received and reviewed to its satisfaction the
results of a tax, lien and judgment search report, as of a recent date,
conducted against the Borrower and its properties.
(g) the Lender shall have received (i) financing statements on form UCC-1,
to be filed against the Borrower, as debtor, suitable for recordation in all
appropriate jurisdictions and (ii) financing statements on form UCC-3, to
reflect the assignment to the Lender by Banc of America Commercial Finance
Corporation of its security interests in the assets and properties of the
Borrower, suitable for recordation in all appropriate jurisdictions.
(h) the Lender shall have received an amendment, duly executed by ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, to the Subordination Agreement dated as of August 31, 1999 executed by
him in favor of Banc of America Commercial Financial Corporation, such amendment
to be in the form of Exhibit C to this Agreement.
(i) the Lender shall have received a Certificate of Property Insurance
evidencing the effectiveness of casualty insurance on the Borrower's assets and
properties, together with a loss payable endorsement form naming the Lender as
loss payee with respect thereto.
Section Four. General Provisions.
(a) Except as herein expressly amended, the Loan Agreement and all other
agreements, documents, instruments and certificates executed in connection
therewith, are ratified and confirmed in all respects and shall remain in full
force and effect in accordance with their respective terms.
(b) All references to "the Loan Agreement" in the Loan Agreement shall
mean the Loan Agreement as amended as of the effective date hereof, and as
amended hereby and as hereafter amended, supplemented and modified from time to
time. All references to "the Mortgage" in the Patent, Trademark and License
Mortgage made as of November 21, 1997 by Coffee Holding Co., Inc. in favor of
Nationscredit Commercial Corporation shall be deemed to be references to ▇▇▇▇▇
Fargo Business Credit, Inc., as assignee of Banc of America Commercial Finance
Corporation, f/k/a Nationscredit Commercial Corporation.
(c) This Amendment shall be governed by and construed in accordance with
the internal laws of the State of New York, without regard to the conflicts of
law principles thereof.
(d) The Borrower agrees to use its reasonable best efforts to obtain from
(i) each warehouseman, bailee or other Person that has possession or control
from time to time of any
Inventory or Equipment of the Borrower a written acknowledgement by such Person
in substantially the form of Exhibit D to this Amendment, and (ii) T & O
Management Corp. a landlord's waiver in substantially the form of Exhibit E to
this Amendment.
(e) Upon the effective date of this Amendment, that certain notification
letter dated September 20, 2000, as amended by letter dated as of November 17,
2000, from the Borrower to the Lender, pursuant to which the Borrower notified
the Lender of its intention to terminate the Loan Agreement effective December
15, 2000, is hereby deemed rescinded by the Borrower and is null and void and of
no force or effect.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized and delivered at
New York, New York as of the date first above written.
COFFEE HOLDING CO. INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: President/CEO
▇▇▇▇▇ FARGO BUSINESS CREDIT, INC., as
assignee of Banc of America Commercial
Finance Corporation, f/k/a NationsCredit
Commercial Corporation
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: V.P. Div. Mgr.
Exhibit A
Form of Amendment of Guaranty
▇▇▇▇▇ FARGO BUSINESS CREDIT, INC.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
As of November 29, 2000
▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Gentlemen:
Reference is made to the Individual Guaranty dated as of November 21, 1997
(the "Guaranty") executed by each of you in favor of NationsCredit Commercial
Corporation, now known as Banc of America Commercial Finance Corporation ("Banc
of America") with respect to the obligations owing to Banc of America by Coffee
Holding Co., Inc., a New York corporation (the "Borrower") pursuant to the Loan
and Security Agreement dated as of November 21, 1997 (as amended, the "Loan
Agreement") between Banc of America and the Borrower.
As you may know, pursuant to an Asset Sale Agreement dated as of September
5, 2000 between Banc of America and ▇▇▇▇▇ Fargo Business Credit, Inc. ("▇▇▇▇▇
Fargo"), Banc of America assigned to ▇▇▇▇▇ Fargo, among other things, all of the
right, title and interest of Banc of America in and to the Loan Agreement and
all agreements, documents and instruments executed or delivered in connection
therewith, including without limitation the Guaranty.
The purpose of this letter is to obtain your written acknowledgment of the
foregoing, and your agreement that for all purposes, on and after September 5,
2000, ▇▇▇▇▇ Fargo shall be deemed to be and is the "Lender" referred to in the
Guaranty, as if the Guaranty had originally been executed by each of you in
favor of ▇▇▇▇▇ Fargo. In addition, the Guaranty is hereby amended to provide
that the maximum liability of each of you thereunder shall be and is hereby
increased to the sum of $500,000 (exclusive of interest, costs and expenses of
collection). Accordingly, the third paragraph contained on the first page of the
Guaranty is hereby deleted in its entirety, and the following is substituted in
lieu thereof:
"NOTWITHSTANDING ANYTHING IN THIS GUARANTY TO THE CONTRARY, THE
LIABILITY OF EACH GUARANTOR HEREUNDER SHALL NOT EXCEED $500,000 IN THE
AGGREGATE WITH RESPECT TO EACH SUCH GUARANTOR, PLUS COSTS AND EXPENSES OF
COLLECTION AND PROSECUTION OF ACTIONS AGAINST EACH GUARANTOR AND PLUS
INTEREST AS PROVIDED FOR IN THIS GUARANTY."
If the foregoing is acceptable to you and is in accordance with your
understanding, kindly sign in the space below to so indicate. Your signature
shall also constitute your acknowledgement and agreement that the Guaranty
continues to be in full force and effect, and is enforceable by ▇▇▇▇▇ Fargo
against each of you in accordance with its terms. This letter agreement shall be
governed by and construed in accordance with the internal laws of the State of
New York. Except to the extent set forth herein, no other change in any of the
terms or provisions of the Guaranty is intended or implied.
Very truly yours,
▇▇▇▇▇ FARGO BUSINESS CREDIT, INC.,
as assignee of Banc of America
Commercial Finance Corporation, f/k/a
NationsCredit Commercial Corporation
By: __________________________________
Name:
Title:
Read and Agreed to:
_____________________
▇▇▇▇▇▇ ▇▇▇▇▇▇,
individually
_____________________
▇▇▇▇▇ ▇▇▇▇▇▇,
individually
Exhibit B
Form of Promissory Note evidencing Term Loan
TERM NOTE
As of November 29, 2000
$600,000.00
FOR VALUE RECEIVED, the undersigned, COFFEE HOLDING CO., INC., a New York
corporation (the "Borrower") promises to pay to the order of ▇▇▇▇▇ FARGO
BUSINESS CREDIT, INC. (the "Lender"), at its office located at ▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, in lawful money of the United States of
America and in immediately available funds, the principal amount of SIX HUNDRED
THOUSAND DOLLARS, ($600,000.00) in sixty (60) equal and consecutive monthly
installments of $10,000 each, payable on the first day of each month, commencing
January 1, 2001, provided, however, that the entire unpaid balance of this Term
Note shall be due and payable in full on the Maturity Date, as defined in the
Loan Agreement, as hereinafter defined.
The Borrower further agrees to pay interest at said office, in like money, on
the unpaid principal amount owing hereunder from time to time from the date
hereof on the dates and at the rate specified in paragraph 3 (b) of Schedule A
to the Loan and Security Agreement dated as of November 21, 1997 (as amended
from time to time, the "Loan Agreement") between the Borrower and the Lender, as
assignee of Banc of America Commercial Finance Corporation, f/k/a NationsCredit
Commercial Corporation. All capitalized terms used herein shall have the
meanings ascribed to them in the Loan Agreement, unless otherwise defined
herein.
If any payment on this Term Note becomes due and payable on a day other than a
Business Day, the maturity thereof shall be extended to the next succeeding
Business Day, and with respect to payments of principal, interest thereon shall
be payable at the then applicable rate during such extension.
This Term Note evidences the Term Loan made under the Loan Agreement by the
Lender to the Borrower and is subject to, and entitled to, all provisions and
benefits thereof and is subject to optional and mandatory prepayment, in whole
or in part, as provided therein. The Borrower acknowledges that (i) a portion of
the proceeds of such Term Loan has been disbursed to the Borrower prior to the
date hereof, (ii) $408,000 of the proceeds of such Term Loan is being disbursed
to the Borrower concurrently with its execution of this Term Note, and (iii)
this Term Note evidences the consolidation of the unpaid principal balance of
prior Equipment Advances made to the Borrower and a new Equipment Advance being
made to the Borrower concurrently with its execution of this Term Note. Upon the
occurrence of any Event of Default specified in the Loan Agreement or upon
termination of the Loan Agreement, all amounts then remaining unpaid on this
Term Note may become, or be declared to be, immediately due and payable as
provided in the Loan Agreement.
COFFEE HOLDING CO., INC.
By: __________________________________
Name:
Title:
Exhibit C
Form of Amendment to Subordination Agreement
▇▇▇▇▇ FARGO BUSINESS CREDIT, INC.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
As of November 29, 2000
▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear ▇▇. ▇▇▇▇▇▇:
Reference is made to the Subordination Agreement dated as of August 31,
1999 (the "Subordination Agreement") executed by you in favor of NationsCredit
Commercial Corporation, now known as Banc of America Commercial Finance
Corporation ("Banc of America") with respect to the subordination of all
indebtedness, liabilities and obligations owing to you by Coffee Holding Co.,
Inc., a New York corporation (the "Borrower") to the prior payment and
satisfaction in full of all indebtedness, liabilities and obligations owing by
the Borrower to Banc of America, including those arising under the Loan and
Security Agreement dated as of November 21, 1997 (as amended, the "Loan
Agreement") between Banc of America and the Borrower.
As you may know, pursuant to an Asset Sale Agreement dated as of September
5, 2000 between Banc of America and ▇▇▇▇▇ Fargo Business Credit, Inc. ("▇▇▇▇▇
Fargo"), Banc of America assigned to ▇▇▇▇▇ Fargo, among other things, all of the
right, title and interest of Banc of America in and to the Loan Agreement and
all agreements, documents and instruments executed or delivered in connection
herewith, including without limitation the Subordination Agreement.
The purpose of this letter is to obtain your written acknowledgment of the
foregoing, and your agreement that for all purposes, on and after September 5,
2000, ▇▇▇▇▇ Fargo shall be deemed to be and is the "Lender" referred to in the
Subordination Agreement, as if the Subordination Agreement had originally been
executed by you in favor of ▇▇▇▇▇ Fargo.
If the foregoing is acceptable to you and is in accordance with your
understanding, kindly sign in the space below to so indicate. Your signature
shall also constitute your acknowledgement and agreement that the Subordination
Agreement continues to be in full force and effect, and is exercisable by ▇▇▇▇▇
Fargo against you in accordance with its terms. The Borrower has signed below to
confirm its acknowledgment of and agreement with the foregoing. This letter
agreement shall be governed by and construed in accordance with the internal
laws of the State of New York. Except to the extent set forth herein, no other
change in any of the terms or provisions of the Subordination Agreement is
intended or implied.
Very truly yours,
▇▇▇▇▇ FARGO BUSINESS CREDIT, INC.,
as assignee of Banc of America
Commercial Finance Corporation, f/k/a
NationsCredit Commercial Corporation
By: __________________________________
Name:
Title:
Read and Agreed to:
_____________________
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
individually
Confirmed:
Coffee Holding Co., Inc.
By:________________________
Name:
Title:
Exhibit D
Form of Acknowledgment from lessor, warehouseman, or bailee
▇▇▇▇▇ FARGO BUSINESS CREDIT, INC.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
[Name of Warehouse man
on bailee]
Address
[ Date ]
Gentlemen:
Please be advised that all of the right, title and interest of
NationsCredit Commercial Corporation, now known as Banc of America Commercial
Finance Corporation ("NationsCredit") under the Loan and Security Agreement
dated as of November 21, 1997 between NationsCredit and Coffee Holding Co., Inc.
(the "Client") was assigned as of September 5, 2000 to ▇▇▇▇▇ Fargo Business
Credit, Inc. ("▇▇▇▇▇ Fargo").
Kindly sign below to indicate your acknowledgment of the foregoing, and to
confirm your agreement that the agreement between you and NationsCredit dated
__________, with respect to certain of the Client's merchandise, inventory and
goods which may be held by you from time to time shall continue in full force
and effect in favor of ▇▇▇▇▇ Fargo, as assignee of NationsCredit, as if ▇▇▇▇▇
Fargo was an original party thereto. The Client has signed below to confirm its
agreement with the foregoing.
Very truly yours,
▇▇▇▇▇ FARGO BUSINESS CREDIT, INC.
By: __________________________________
Name:
Title:
Read and Agreed to:
[Name of warehouseman or bailee]
By:____________________________
Name:
Title:
Confirmed:
Coffee Holding Co., Inc.
By:____________________________
Name:
Title:
Exhibit E
Form of Landlord Waiver
THIS LANDLORD WAIVER AGREEMENT AND CONSENT (this "Agreement") is made and
delivered as of this day of _____, 200___, by T&O MANAGEMENT CORP. (the
"Landlord"), to and for the benefit of ▇▇▇▇▇ FARGO BUSINESS CREDIT, INC., a
Minnesota corporation, with an office at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇ (the "Lender").
RECITALS
WHEREAS, Coffee Holding Co., Inc. a New York corporation, is a tenant
under that certain [Lease Agreement] dated _____________, by and between the
Lessee and the Landlord (the "Lease") pertaining to certain space located at
4425 a ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "Leased Premises");
WHEREAS, the Lessee is a party to and a borrower under that certain Loan
and Security Agreement dated as of November 21, 1999 (as hereafter amended,
modified, supplemented or restated from time to time, the "Loan Agreement")
between the Lessee and the Lender;
WHEREAS, the Lender will make certain loans and advances (collectively,
the "Loans") to the Lessee pursuant to the terms of the Loan Agreement, which
Loans will be secured, in part, by all merchandise, inventory and goods of the
Lessee, including, without limitation, all inventory of the Lessee now or
hereafter located on the Leased Premises (the "Inventory") and all machinery,
equipment, fittings and furniture now or hereafter located on the Leased
Premises (the "Equipment"); and
WHEREAS, the Lender has requested that the Landlord execute this Agreement
as a condition precedent to the extension of certain Loans to the Lessee under
the Loan Agreement.
NOW, THEREFORE, for and in consideration of the premises and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Landlord hereby represents and warrants to and covenants and
agrees with the Lender as follows:
1. The Landlord hereby waives and releases unto the Lender and its
successors and assigns: (i) any contractual landlord's lien and any other
landlord's lien which the Landlord may be entitled to assert or enforce, whether
at law or in equity, against the Inventory or Equipment, (ii) any and all rights
granted by or under any present or future laws to levy or distrain for rent (or
any other charges which may be due to the Landlord) against the Inventory or
Equipment and (iii) any and all other claims, liens and demands of every kind
which the Landlord has or may hereafter have against the Inventory or Equipment.
The Landlord acknowledges that the Inventory and Equipment are and will remain
personal property and not fixtures even though they may be affixed to or placed
on the Leased Premises.
2. The Landlord certifies that: (i) the Lease is in full force and effect
and has not been amended, modified, or supplemented, (ii) there is no defense,
offset, claim or counterclaim
by or in favor of the Landlord against the Lessee under the Lease or against the
obligations of the Landlord under the Lease, and (iii) no notice of default has
been given under or in connection with the Lease which has not been cured, and
the Landlord has no knowledge of any occurrence of any other default by the
Lessee under or in connection with the Lease.
3. The Landlord agrees that the Lender has the right to remove the
Inventory and Equipment from the Leased Premises at any time prior to the
occurrence of a default under the Lease and, after the occurrence of such
default, during the Standstill Period (as hereinafter defined). The Landlord
further agrees that, during the foregoing periods, the Landlord will not: (i)
remove any of the Inventory or Equipment from the Leased Premises or (ii) hinder
the Lender's actions in removing the Inventory or Equipment from the Leased
Premises or the Lender's actions in otherwise enforcing its security interest in
the Inventory and Equipment. The Landlord acknowledges that the Lender shall
have no obligation to remove the Inventory or Equipment from the Leased
Premises.
4. The Landlord acknowledges and agrees that the Lessee's granting of a
security interest to the Lender in the Inventory and Equipment shall not
constitute a default under the Lease and the Landlord hereby expressly consents
to the granting of such security interest.
5. The Landlord shall send to the Lender a copy of any notice of default
under the Lease sent by the Landlord to the Lessee. In addition, the Landlord
shall send to the Lender a copy of any notice received by the Landlord of a
breach or default under the Lease.
6. Notwithstanding anything to the contrary contained in this Agreement or
the Lease, in the event of a default by the Lessee under the Lease, the Landlord
shall forbear from exercising any of its remedies against the Lessee provided in
favor of Landlord under the Lease or at law or in equity until the date which is
90 days after the date the Landlord delivers written notice of such default to
the Lender (such 90 day period being referred to herein as the "Standstill
Period"). The Lender shall have the right, but not the obligation, during the
Standstill Period, to cure such default and the Landlord shall accept any such
cure by the Lender. If, during the Standstill Period, the Lender or the Lessee
cures the default, then the Landlord shall rescind the notice of default. The
Landlord shall not, after the expiration of the Standstill Period, terminate the
Lease or exercise any other remedies available to it thereunder or at law or in
equity, so long as: (i) the Lender complies with all provisions of the Lease
requiring the payment or expenditure of money by the Lessee and (ii) the Lender
cures the default to the reasonable satisfaction of Landlord prior to the
expiration of the Standstill Period.
7. The Landlord hereby agrees to give the Lender at least ten (10) days
written notice prior to the effectiveness of any termination, cancellation or
surrender of the Lease by the Lessee.
8. The terms and provisions of this Agreement shall inure to the benefit
of and be binding upon the successors and assigns of the Landlord and the
Lender. Specifically, the Landlord acknowledges and agrees that, in connection
with any refinancing of the Loans (including, without limitation, any increase
in the aggregate principal amount of indebtedness incurred in respect thereof),
the Lender may assign this Agreement to the lender extending such
financing (which lender may include the Lender) (the "New Lender"), in which
event this Agreement shall, without further action by any party, be enforceable
by the New Lender. Notwithstanding that the provisions of this paragraph are
intended to be self-executing, the Landlord agrees, upon request by the New
Lender, to execute and deliver a written acknowledgment confirming the
provisions of this paragraph in form satisfactory to the New Lender.
9. All notices to the Lender under this Agreement shall be in writing and
sent to the Lender at its address set forth above by certified mail, postage
prepaid, return receipt requested or by overnight delivery service.
10. The provisions of this Agreement shall continue in full force and
effect until the Landlord shall have received the Lender's written certification
that the Loans have been paid in full.
11. The interpretation, validity and enforcement of this Agreement shall
be governed by and construed in accordance with the laws of the State of New
York, without giving effect to the conflicts of the laws principles thereof.
12. The Landlord agrees to execute, acknowledge and deliver such further
instruments as the Lender may reasonably request to allow for the proper
recording of this Agreement (including, without limitation, a revised agreement
in form and substance sufficient for recording) or to otherwise accomplish the
purposes of this Agreement.
IN WITNESS WHEREOF, the undersigned Landlord has executed this Agreement
as of the day and year first set forth above.
T&O MANAGEMENT CORP.
By: __________________________________
Name:
Title:
ACCEPTED:
▇▇▇▇▇ FARGO BUSINESS CREDIT, INC.
By:____________________________
Name:
Title:
Schedule A
Description of Certain Terms
This Schedule is an integral part of the Loan and Security Agreement dated
as of November 21, 1997 (as amended through the date hereof, the "Agreement"),
between COFFEE HOLDING CO., INC (the "Borrower") and ▇▇▇▇▇ FARGO BUSINESS
CREDIT, INC. (as assignee of Banc of America Commercial Finance Corporation,
f/k/a NationsCredit Commercial Corporation) (in such capacity, the "Lender").
1. Loan Limits for Revolving Loans:
(a) Maximum Facility Amount: $5,000,000
(b) Advance Rates:
(i) Accounts 85%; provided, that if the
Advance Rate: Dilution Percentage exceeds 4%,
such advance rate will be
reduced by the number of full
or partial percentage points of
such excess
(ii) Inventory
Advance
Rate(s):
(A) Finished 60%
goods:
(B) Raw materials: 60%
(C) Work in
process: Not Applicable
(iii) Cash Collateral $250,000, provided that (x) a
sum not less than such amount
is maintained at all times by
the Borrower in a Cash
Collateral Account at ▇▇▇▇▇
Fargo Bank and (y) the Lender
at all times has a first
priority lien against such Cash
Collateral Account
(c) Accounts Sublimit Not Applicable
A-1
(d) Inventory Sublimit(s):
(i) Overall sublimit on $1,000,000 or, if less, the
advances against aggregate advances against
Eligible Inventory Accounts at any time of
determination
(ii) Sublimit on advances Not Applicable
against finished goods
(iii) Sublimit on advances Not Applicable
against raw materials
(e) Credit Accommodation Limit: $500,000
(f) Permanent Reserve Amount: Not Applicable
(g) Overadvance Amount: Not Applicable
2. Loan Limits for Term Loan:
(a) Principal Amount:
(i) Equipment Advance: The lesser of $600,000 and 85%
of the appraised auction sale
value of Borrower's Eligible
Equipment
(ii) Real Property Advance: Not Available
A-2
(b) Repayment Schedule:
(i) Equipment Advance: The Equipment Advance shall be
repaid based on an amortization
schedule consisting of 60
months, in equal consecutive
monthly installments of $10,000
each, payable on the first day
of each calendar month
commencing January 1, 2001,
with the entire unpaid balance
due and payable on the Maturity
Date
(ii) Real Property Advance: Not Applicable
3. Interest Rates:
(a) Revolving Loans: 0.50% per annum in excess of
the Prime Rate
(b) Term Loan: 0.75% per annum in excess of
the Prime Rate
4. Minimum Loan Amount: $2,750,000
5. Maximum Days: the lesser of
(a) Maximum days after original
due date for Eligible
Accounts: 60 days
(b) Maximum days after original
invoice date for Eligible
Accounts: 90 days
6. Fees:
(a) Closing Fee: Not Applicable
(b) Facility Fee:
(i) Initial Term: $27,000
(ii) Renewal Term(s) $27,000
A-3
(c) Service Fee: Not Applicable
(d) Unused Line Fee: Not Applicable
(e) Minimum Borrowing Fee:
(i) Applicable Period: Each Year
(ii) Date payable: Each anniversary of the date of
the Agreement
(f) Success Fee: Not Applicable
(g) Warrants: Not Applicable
(h) Early Termination 2% of the Maximum Facility
Amount if terminated during the
first year of the Renewal Term,
1% of the Maximum Facility
Amount if terminated thereafter
and prior to the Maturity Date;
provided that the Early
Termination Fee will be waived
by Lender if Borrower transfers
the Loans and all of its other
Obligations hereunder to
another division of ▇▇▇▇▇ Fargo
Bank
(i) Fees for letters of credit 1 % per annum of the face
and other Credit amount of each open Credit
Accommodations (or guaranties Accommodation, plus all costs
thereof by Lender): and fees charged by the issuer
(j) Field Exam Fee: $750 per day per person plus
all out-of-pocket expenses,
provided that if no Default has
occurred during any consecutive
365 day period commencing on
November 20, 2000, then the
maximum amount of the field
exam fees for which the
Borrower shall be obligated to
pay the Lender during such
period shall not exceed
$13,500.
7. Maturity Date:
(a) Initial Maturity Date: November 20, 2002
A-4
8. Financial Covenants:
(a) Capital Expenditure
Limitation: Not Applicable
(b) Minimum Net Worth
Requirement: Not Applicable
(c) Minimum Tangible Net Worth Not Applicable
(d) Minimum Working Capital: Not Applicable
(e) Maximum Cumulative Net Loss: Not Applicable
(f) Minimum Cumulative for the fiscal quarter ending
Net Income: January 31,2001
Not less than $1.00
for the two fiscal quarters
ending April 30, 2001
Not less than $ 261,000
for the three fiscal quarters
ending July 31, 2001
Not less than $ 312,000
for the four fiscal quarters
ending October 31, 2001
Not less than $ 511,000
for the fiscal quarter ending
January 31, 2002, for the two
fiscal quarters ending April
30, 2002, for the three fiscal
quarters ending July 31, 2002,
and for the four fiscal
quarters ending October 31,
2002, the Borrower shall be
required to maintain a minimum
cumulative net income in an
amount mutually agreed upon
with the Lender, but in no
event less than 67% of the
cumulative net income projected
by the Borrower for each such
period, as reflected in its
forecasted income statement for
the fiscal year ending October
31, 2002
(g) Maximum Leverage Ratio: Not Applicable
(i) Limitation on
Equipment Leases: Not Applicable
A-5
(h) Limitation on Purchase Money
Security Interests: Not Applicable
(i) Additional Financial
Covenants: Not Applicable
9. Borrower Information:
(a) Prior Name of Borrower: None
(b) Prior Trade Names of Borrower None
(c) Existing Trade Names of
Borrower: None
(d) Inventory Locations: Continental Terminals, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
(e) Other Locations: ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇ ▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(f) Litigation: None
(g) Ownership of Borrower ▇▇▇▇▇▇ ▇▇▇▇▇▇ - 32.5%
▇▇▇▇▇ ▇▇▇▇▇▇ - 32.5%
Mr. and ▇▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ -
15.0%
Other - 20.0%
(h) Subsidiaries (and ownership
thereof): None
A-6
(i) Facsimile Numbers:
Borrower: ▇▇▇-▇▇▇-▇▇▇▇
Lender: ▇▇▇-▇▇▇-▇▇▇▇
10. Description of Real Property None
11. Lender's Bank: ▇▇▇▇▇ Fargo Bank
12. Other Covenants: None
13. Exceptions to Negative Covenants: None
14. Cash Collateral:
(a) Minimum Amount $250,000
(b) Duration: Until all Loans are repaid in
full and all of the Lender's
commitments under the Agreement
are terminated.
(c) Interest Paid: 0.50% per annum below the Prime
Rate
15. Guaranties:
(a) Guarantors: ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
(b) Amount: Each in the amount of $500,000
A-7
IN WITNESS WHEREOF, Borrower and Lender have signed this Schedule A as of
the date set forth in the letter agreement to which this Schedule is attached.
Borrower: Lender:
COFFEE HOLDING CO., INC. ▇▇▇▇▇ FARGO BUSINESS CREDIT, INC., (as
assignee of Banc of America Commercial
Finance Corporation, f/k/a NationsCredit
Commercial Corporation)
By: ___________________________ By:____________________________________
Name: Name:
Title: Title:
A-8