[LOGO] Bank of America Amendments to Documents
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AMENDMENT NO. 4 TO BUSINESS LOAN
AGREEMENT
This Amendment No. 4 (the "Amendment") dated as of October 10, 1997,
is between Bank of America NT & SA (the "Bank") and Coffee People, Inc. (the
"Borrower").
RECITALS
A. The Bank and the Borrower entered into a certain Business Loan
Agreement dated as of September 4, 1996, as previously amended (the
"Agreement").
B. The Bank and the Borrower desire to further amend the Agreement.
AGREEMENT
1. DEFINITIONS. Capitalized terms used but not defined in this
Amendment shall have the meaning given to them in the Agreement.
2. AMENDMENTS. The Agreement is hereby amended as follows:
2.1 A new Subparagraph 8.2(d) is hereby added to the Agreement
to read in its entirety as follows:
8.2(d) A detailed individual store earnings report within 45
days after the end of each fiscal quarter.
2.2 In Paragraph 8.3 of the Agreement the ratio ".75:1.0" is
substituted for the ratio "1.25:1.0".
2.3 Paragraph 8.3A of the Agreement is amended in its entirety
as follows:
8.3A TOTAL LIABILITIES TO TANGIBLE NET WORTH. To maintain
for each quarterly accounting period, a ratio of total
liabilities to tangible net worth not exceeding the
levels indicated for each period specified below:
Period Ratio
------ -----
For September 30, 1997 4.5:1.0
From December 31, 1997
through March 31, 1998 4.0:1.0
Period Ratio
------ -----
From June 30, 1998
through September 30, 1998 3.0:1.0
From December 31, 1998
through September 30, 1999 2.5:1.0
From December 31, 1999
and thereafter 2.0:1.0
"Total liabilities" means the sum of current liabilities plus long term
liabilities.
"Tangible net worth" means the gross book value of the Borrower's assets
(excluding goodwill, patents, trademarks, trade names, organization expense,
treasury stock, unamortized debt discount and expense, deferred research and
development costs, deferred marketing expenses, and other like intangibles) less
total liabilities, including but not limited to accrued and deferred income
taxes, and any reserves against assets.
2.4 Paragraph 8.4 of the Agreement is amended in its entirety
as follows:
8.4 CASH FLOW RATIO. To maintain for each quarterly
accounting period, a cash flow ratio of at least 2.0:1.0.
"Cash flow ratio" means the ratio of cash flow to
the current portion of long term debt.
"Cash flow" is defined as net income, excluding all
extraordinary charges and/or recoveries associated with
the closure of seven retail stores announced with the
Borrower's June 30, 1997 financial statement, plus
depreciation and amortization, less non-financed capital
expenditures, plus the cash and cash equivalents balance
as of the last day of the most recent quarterly
accounting period.
This ratio will be calculated at the end of each fiscal
quarter, using the result of that quarter and each of the
three immediately preceding quarters. The current portion
of long term debt will be measured as of the last day of
the most recent quarterly accounting period.
2.5 A new Paragraph 8.7A is hereby added to the Agreement to
read in its entirety as follows:
8.7A CHANGE IN OWNERSHIP. Not to cause, permit or
suffer any change, direct or indirect, in the
Borrower's capital ownership that would allow an
outside entity or current minority owner to obtain
a controlling interest in the Borrower.
2.6 A new Paragraph 8.7B is hereby added to the Agreement to
read in its entirety as follows:
8.7B CHANGE IN MANAGEMENT. Not to cause, permit, or
suffer any material changes in the Borrower's
Board of Directors or senior management without
the Bank's prior written consent.
3. EFFECT OF AMENDMENT. Except as provided in this Amendment, all of
the terms and conditions of the Agreement shall remain in full force and effect.
This Amendment is executed as of the date stated at the beginning of this
Amendment.
Bank of America NT & SA Coffee People, Inc.
X /s/ Xxxxxx Xxxxxxx X /s/ Xxxxxxx X. Xxxx
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By: Xxxxxx Xxxxxxx By: Xxxxxxx X. Xxxx
Title: Vice President Title: Chief Financial Officer
