Exhibit 10.1
 
Amended and Restated
Credit Agreement
 
This Amended and Restated Credit Agreement (this “Agreement”) is entered into as
of December 21, 2010, by and between Peet’s Coffee & Tea, Inc., a Washington
corporation (“Borrower”), and Wells Fargo Bank, National Association (“Bank”).

Recitals
 
Whereas, Borrower and Bank are party to that certain Credit Agreement, dated as
of November 26, 2008 (as amended, restated, modified and/or supplemented prior
to the date hereof, the “Existing Agreement”).
 
Whereas, Borrower has requested that Bank (i) amend and restate the Existing
Agreement and (ii) extend or continue credit to Borrower as described below, and
Bank has agreed to provide such credit to Borrower on the terms and conditions
contained herein.
 
Now, Therefore, for valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Bank and Borrower hereby agree as follows:

Article I
Credit Terms
 
Section 1.1.     Line of Credit.
 
(a)      Line of Credit.  Subject to the terms and conditions of this Agreement,
Bank hereby agrees to make advances to Borrower from time to time up to and
including December 1, 2013, not to exceed at any time the aggregate principal
amount of Fifty Million Dollars ($50,000,000) (the “Line of Credit”).  The
proceeds of the initial advance under the Line of Credit shall be used to
refinance all outstanding indebtedness owing under the Existing Agreement and
the proceeds of all other advances under the Line of Credit shall be used to
finance general corporate purposes, including Borrower’s repurchase of stock and
to fund working capital, capital expenditures and other needs.  Borrower’s
obligation to repay advances under the Line of Credit shall be evidenced by a
promissory note dated as of December 21, 2010 (the “Line of Credit Note”), all
terms of which are incorporated herein by this reference.
 
(b)      Borrowing and Repayment.  Borrower may from time to time during the
term of the Line of Credit borrow, partially or wholly repay its outstanding
borrowings, and reborrow, subject to all of the limitations, terms and
conditions contained herein or in the Line of Credit Note; provided however,
that the total outstanding borrowings under the Line of Credit shall not at any
time exceed the maximum principal amount available thereunder, as set forth
above.

 
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Section 1.2.      Interest/Fees.
 
(a)       Interest/Applicable Rate.  The outstanding principal balance of the
Line of Credit shall bear interest at the rate of interest set forth in the Line
of Credit Note.
 
As used in this Agreement, the following terms shall have the meaning set forth
below:
 
“Adjusted Annual Rental Expense” means, as of any date of determination, Annual
Rental Expense for the four fiscal quarter period ending on such date of
determination multiplied by six (6).
 
“Annual EBITDA” means, as of any date of determination, income before income
taxes of Borrower and Borrower’s consolidated subsidiaries on a consolidated
basis for the four fiscal quarter period ending on such date of determination,
plus (without duplication) interest expense (net of capitalized interest
expense) to the extent included in the determination of such income before
income taxes, plus (without duplication) depreciation expense to the extent
included in the determination of such income before income taxes, plus (without
duplication) amortization expense to the extent included in the determination of
such income before income taxes, plus (without duplication) non-cash stock
compensation expense to the extent included in the determination of such income
before income taxes.
 
“Annual Rental Expense” means, as of any date of determination, all rental
expense of Borrower and Borrower’s consolidated subsidiaries on a consolidated
basis incurred during the four fiscal quarter period ending on such date of
determination under any rental agreements or leases, other than obligations in
respect of any capitalized leases.
 
“Applicable Rate” means, from time to time, with respect to any advance under
the Line of Credit for which interest is determined based on Daily One-Month
LIBOR (as defined in the Line of Credit Note) or LIBOR (as defined in the Line
of Credit Note) for a fixed term, or with respect to the Unused Commitment Fees
payable pursuant to Section 1.2(c) hereof, as the case may be, the applicable
rate per annum set forth below (expressed in basis points) under the caption
“Daily One-Month LIBOR Spread” (which is the Applicable Rate applicable to
advances under the Line of Credit for which interest is determined based on
Daily One-Month LIBOR), “Fixed LIBOR Spread” (which is the Applicable Rate
applicable to advances under the Line of Credit for which interest is determined
based on LIBOR for a fixed term) or “Unused Commitment Fee Rate” (which is the
Applicable Rate applicable to the unused portion of the Line of Credit), as the
case may be, based upon, subject to Section 1.2(b), the Leverage Ratio as set
forth in the most recent Compliance Certificate received by Bank pursuant to
Section 4.3(c):

 
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Tier
Leverage
Ratio
 
Daily One-
Month
LIBOR
Spread
   
Fixed
LIBOR
Spread
   
Unused
Commitment
Fee Rate
 
1
Greater than 2.00 to 1.00
    150.00       150.00       25.00  
2
Less than or equal to
2.00 to 1.00
    100.00       100.00       12.50  

 
“Default” means any Event of Default or any event or condition that, with the
giving of notice, the passage of time, or both, would constitute an Event of
Default.
 
“GAAP” means generally accepted accounting principles in the United States,
consistently applied.
 
“Leverage Ratio” means, as of any date of determination, (A) the sum of Total
Funded Debt as of such date plus Adjusted Annual Rental Expense as of such date
divided by (B) the sum of Annual EBITDA as of such date plus Annual Rental
Expense as of such date.
 
“Material Adverse Effect” means any of the following:  (a) a material adverse
change in or a material adverse effect upon (in either case, irrespective of
whether occurring as a result of a specific event or circumstance or otherwise)
the business, condition (financial or otherwise), operations or properties of
Borrower and POCI taken as a whole; (b) a material impairment (irrespective of
whether occurring as a result of a specific event or circumstance or otherwise)
of the rights and remedies of Bank under the Loan Documents; or (c) a material
adverse effect (irrespective of whether occurring as a result of a specific
event or circumstance or otherwise) upon the legality, validity, binding effect
or enforceability against either Borrower or POCI of any Loan Document to which
it is a party.
 
“POCI” means Peet’s Operating Company, Inc.
 
“Total Funded Debt” means, as of any date of determination and with respect to
Borrower and Borrower’s consolidated subsidiaries on a consolidated basis, the
sum of (without duplication):  (a) the outstanding principal amount of all
obligations of such person or persons, whether current or long-term, for
borrowed money and all obligations of such person or persons evidenced by bonds,
debentures, notes, loan agreements or other similar instruments; plus (b) all
purchase money debt of such person or persons; plus (c) all direct obligations
of such person or persons arising under letters of credit (whether standby or
commercial), bankers’ acceptances, bank guaranties, surety bonds and similar
instruments; plus (d) all obligations of such person or persons in respect of
the deferred purchase price of property or services (other than trade accounts
payable in the ordinary course of business); plus (e) the capitalized amount of
any capital leases of such person or persons that would appear on such person or
persons balance sheet prepared as of such date in accordance with GAAP; plus
(f) the amount of all guarantees made by such person or persons with respect to
outstanding debt of the types specified in clauses (a) through (e) of this
definition of persons other than the person or persons for which Total Funded
Debt is being determined.

 
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(b)       Computation and Payment.  Interest shall be computed on the basis of a
360-day year, actual days elapsed.  Interest shall be payable at the times and
place set forth in each promissory note or other instrument or document required
hereby.  Any increase or decrease in any Applicable Rate resulting from a change
in the Leverage Ratio shall become effective as of the first day of the month
immediately following the month in which Borrower is required to deliver a
Compliance Certificate in accordance with Section 4.3(c) for a given period
(each such date, a “calculation date”); provided that the Applicable Rate in
effect from the date of this Agreement to the first day of the month immediately
following receipt by Bank of a timely delivered Compliance Certificate with
respect to the fiscal quarter ending December 31, 2010 shall be determined based
upon Tier 2 (as indicated in the definition of “Applicable Rate”); provided
further that, if any Compliance Certificate required to be delivered in
accordance with Section 4.3(c) for any given period is not delivered to Bank on
or before the related calculation date, then Tier 1 (as indicated in the
definition of “Applicable Rate”) shall apply, effective on the related
calculation date until two business days after such Compliance Certificate is
actually received by Bank.  Notwithstanding the foregoing and for the avoidance
of doubt, if for any period and for any reason, the actual Leverage Ratio is
higher than that reported in the Compliance Certificate, Borrower shall
immediately, without the requirement of notice or demand from any person, pay to
Bank an amount equal to the excess of:  (A) the amount of interest or fees that
would have accrued had the Applicable Rates for the relevant period been based
upon the actual Leverage Ratio for the prior period rather than the Leverage
Ratio reported in the Compliance Certificate delivered for such prior period;
over (B) the amount of interest or fees that was actually paid by Borrower based
upon the Leverage Ratio reported in the Compliance Certificate delivered for
such period.
 
(c)       Unused Commitment Fee.  Borrower shall pay to Bank unused commitment
fees (each, an “Unused Commitment Fee”) equal to the Applicable Rate multiplied
by the average daily unused amount of the Line of Credit (computed on the basis
of a 360-day year, actual days elapsed).  Unused Commitment Fees shall accrue at
all times prior to the maturity date of the Line of Credit, and shall be due and
payable monthly in arrears ten (10) days after last day of each month,
commencing with the first such date to occur after the date of this agreement,
and on the maturity date of the Line of Credit.  Unused Commitment Fees shall be
calculated monthly in arrears, and if there is any change in the Applicable Rate
during any month, the actual daily unused amount shall be computed and
multiplied by the Applicable Rate separately for each period during such month
that such Applicable Rate was in effect.
 
Section 1.3.     Collection of Payments.  Borrower authorizes Bank to collect
all principal, interest and fees due under each credit subject hereto by
charging POCI’s deposit account number 4950-014654 with Bank, or any other
deposit account maintained by Borrower or POCI with Bank, for the full amount
thereof.  Should there be insufficient funds in any such deposit account to pay
all such sums when due, the full amount of such deficiency shall be immediately
due and payable by Borrower.

 
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Section 1.4.     Guaranty.  The payment and performance of all indebtedness and
other obligations of Borrower to Bank shall be guaranteed by POCI in the
principal amount of Fifty Million Dollars ($50,000,000), as evidenced by and
subject to the terms of a guaranty in form and substance satisfactory to Bank.

Article II
Representations and Warranties
 
Borrower makes the following representations and warranties to Bank, which
representations and warranties shall survive the execution of this Agreement and
shall continue in full force and effect until the full and final payment, and
satisfaction and discharge, of all obligations of Borrower to Bank subject to
this Agreement.
 
Section 2.1.     Legal Status.  Borrower is a corporation, duly organized and
existing and in good standing under the laws of Washington, and POCI is a
corporation, duly organized and existing and in good standing under the laws of
Virginia.  Borrower and each of its subsidiaries is qualified or licensed to do
business (and is in good standing as a foreign corporation, if applicable) in
all jurisdictions in which the failure to so qualify or to be so licensed could
have a material adverse effect on Borrower or such subsidiary.
 
Section 2.2.   Authorization and Validity.  This Agreement and each promissory
note, contract, instrument and other document required hereby or at any time
hereafter delivered to Bank in connection herewith (collectively, the “Loan
Documents”) have been duly authorized, and upon their execution and delivery in
accordance with the provisions hereof will constitute legal, valid and binding
agreements and obligations of Borrower or the party which executes the same,
enforceable in accordance with their respective terms, subject to the effect of
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforceability of creditor’s rights generally and to general principles of
equity.
 
Section 2.3.     No Violation.  The execution, delivery and performance by
Borrower and POCI of each of the Loan Documents to which it is a party do not
violate any material provision of any law or regulation, or contravene any
provision of the Articles of Incorporation or By-Laws of Borrower or POCI, or
result in any breach of or default under any material contract, obligation,
indenture or other material instrument to which Borrower or POCI is a party or
by which Borrower or POCI may be bound.
 
Section 2.4.    Litigation.  There are no pending, or to the best of Borrower’s
knowledge threatened, actions, claims, investigations, suits or proceedings by
or before any governmental authority, arbitrator, court or administrative agency
which would reasonably be expected to have a material adverse effect on the
financial condition or operation of Borrower or POCI other than those disclosed
by Borrower to Bank in writing (including as disclosed pursuant to Borrower’s
Forms 8-K, 10-K and 10-Q filed with the United States Securities and Exchange
Commission) prior to the date hereof.

 
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Section 2.5.     Correctness of Financial Statement.  The consolidated annual
financial statement of Borrower dated January 3, 2010, and all interim financial
statements delivered to Bank since said date, true copies of which have been
delivered by Borrower to Bank prior to the date hereof, (a) are complete and
correct and present fairly the financial condition of Borrower and POCI, (b)
disclose all liabilities of Borrower and POCI that are required to be reflected
or reserved against under GAAP, whether liquidated or unliquidated, fixed or
contingent, and (c) have been prepared in accordance with GAAP.  Since the dates
of such financial statements there has been no material adverse change in the
financial condition of Borrower or POCI, nor has Borrower or POCI mortgaged,
pledged, granted a security interest in or otherwise encumbered any of its
assets or properties except for Permitted Liens or in favor of Bank or as
otherwise permitted by Bank in writing.
 
Section 2.6.     Income Tax Returns.  Borrower has no knowledge of any pending
assessments or adjustments of its income tax payable with respect to any year.
 
Section 2.7.     No Subordination.  There is no agreement, indenture, contract
or instrument to which Borrower is a party or by which Borrower may be bound
that requires the subordination in right of payment of any of Borrower’s
obligations subject to this Agreement to any other obligation of Borrower.
 
Section 2.8.     Permits, Franchises.  Each of Borrower and POCI possesses, and
Borrower will and will cause POCI  to hereafter possess, all permits, consents,
approvals, franchises and licenses required and rights to all trademarks, trade
names, patents, and fictitious names, if any, necessary to enable it to conduct
the business in which it is now engaged in compliance with applicable law,
except to the extent the failure to so possess would not reasonably be expected
to have a material adverse effect on Borrower or any of its subsidiaries.
 
Section 2.9.     Erisa.  Borrower and its subsidiaries each (i) is in compliance
in all material respects with all applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended or recodified from time to
time (“ERISA”); (ii) has not violated any provision of any defined employee
pension benefit plan (as defined in ERISA) maintained or contributed to by it
(each, a “Plan”); (iii) has had no Reportable Event as defined in ERISA occur
and be continuing with respect to any Plan initiated by it; (iv) has met its
minimum funding requirements under ERISA with respect to each Plan; and (v)
represent and warrant that each Plan will be able to fulfill its benefit
obligations as they come due in accordance with the applicable Plan documents
and under GAAP.
 
Section 2.10.   Other Obligations.  No Default exists or would result from the
incurring of any of the obligations of Borrower subject hereto.  As of the date
of this Agreement, none of Borrower, POCI or any consolidated subsidiary of
Borrower or POCI is in default under or with respect to any obligation for
borrowed money, any purchase money obligation or any other material lease,
commitment, contract, instrument or obligation in any respect that, individually
or together with all such defaults, could reasonably be expected to have a
Material Adverse Effect, or that would, if such default had occurred after the
date of this Agreement, create an Event of Default under Section 6.1(d) hereof.

 
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Section 2.11.   Environmental Matters.  Except as disclosed by Borrower to Bank
in writing prior to the date hereof, Borrower and its subsidiaries each are in
compliance in all material respects with all applicable federal or state
environmental, hazardous waste, health and safety statutes, and any rules or
regulations adopted pursuant thereto, which govern or affect any of Borrower’s
operations and/or properties, including without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, the Superfund
Amendments and Reauthorization Act of 1986, the Federal Resource Conservation
and Recovery Act of 1976, and the Federal Toxic Substances Control Act, as any
of the same may be amended, modified or supplemented from time to time.  None of
the operations of Borrower or any of its subsidiaries is the subject of any
federal or state investigation evaluating whether any remedial action involving
a material expenditure is needed to respond to a release of any toxic or
hazardous waste or substance into the environment.  Neither Borrower nor any
subsidiary has any material contingent liability in connection with any release
of any toxic or hazardous waste or substance into the environment.

Article III
Conditions
 
Section 3.1.    Conditions of Initial Extension of Credit.  The obligation of
Bank to extend the initial credit extension contemplated by this Agreement is
subject to the fulfillment to Bank’s satisfaction of all of the following
conditions:
 
(a)      Approval of Bank Counsel.  All legal matters incidental to the
extension of credit by Bank shall be satisfactory to Bank’s counsel.
 
(b)       Documentation.  Bank shall have received, in form and substance
satisfactory to Bank, each of the following, duly executed:

  (i)
This Agreement.

  (ii)
The Line of Credit Note.

  (iii)
Certificate of Incumbency.

  (iv)
Corporate Resolution: Borrowing.

  (v)
Corporate Resolution: Continuing Guaranty.

  (vi)
Corporate Account Holder Resolution.

  (vii)
Disbursement Order.

  (viii)
Automatic Transfer Authorization.

  (ix)
Amended and Restated Continuing Guaranty.

  (x)
Such other documents as Bank may require under any other Section of this
Agreement.

 
(c)       Financial Condition.  There shall have been no material adverse
change, as determined by Bank, in the financial condition or business of
Borrower and its consolidated subsidiaries, taken as a whole.
 
(d)      Insurance.  Borrower shall have delivered to Bank evidence of insurance
coverage on all Borrower’s and POCI’S property, in form, substance, amounts,
covering risks and issued by companies satisfactory to Bank, and where required
by Bank, with loss payable endorsements in favor of Bank.

 
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Section 3.2.     Conditions of Each Extension of Credit.  The obligation of Bank
to make each extension of credit requested by Borrower hereunder shall be
subject to the fulfillment to Bank’s satisfaction of each of the following
conditions:
 
(a)       Compliance.  The representations and warranties contained herein and
in each of the other Loan Documents shall be true in all material respects on
and as of the date of the signing of this Agreement and on the date of each
extension of credit by Bank pursuant hereto, with the same effect as though such
representations and warranties had been made on and as of each such date, and on
each such date, no Default or Event of Default shall have occurred and be
continuing or shall exist.
 
(b)       Documentation.  Bank shall have received all additional documents
which may be required in connection with such extension of credit.

Article IV
Affirmative Covenants
 
Borrower covenants that so long as Bank remains committed to extend credit to
Borrower pursuant hereto, or any liabilities (whether direct or contingent,
liquidated or unliquidated, but excluding inchoate indemnification obligations)
of Borrower to Bank under any of the Loan Documents remain outstanding, and
until payment in full of all obligations of Borrower subject hereto, Borrower
shall, unless Bank otherwise consents in writing:
 
Section 4.1.      Punctual Payments.  Punctually pay all principal, interest,
fees or other liabilities due under any of the Loan Documents at the times and
place and in the manner specified therein.
 
Section 4.2.     Accounting Records.  Maintain, and cause POCI to maintain,
adequate books and records in accordance with GAAP, and permit any
representative of Bank, at any reasonable time and upon reasonable advance
notice, to inspect, audit and examine such books and records, to make copies of
the same, and to inspect the properties of Borrower and POCI.
 
Section 4.3.      Financial Statements; Reports.  Provide to Bank all of the
following, in form and detail satisfactory to Bank:
 
(a)       not later than 90 days after and as of the end of each fiscal year,
consolidated financial statements of Borrower, audited and accompanied by a
report and opinion of Deloitte & Touche LLP or another independent certified
public accountant reasonably acceptable to Bank, which financial statements are
to include balance sheet, income statement, statement of cash flow and all
supporting schedules and footnotes;
 
(b)       not later than 45 days after and as of the end of each fiscal quarter
(other than the last fiscal quarter of any fiscal year), consolidated financial
statements of Borrower, which financial statements are to include balance sheet,
income statement and statement of cash flow;

 
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(c)       contemporaneously with the delivery of any annual and quarterly
financial statements of Borrower required hereby, a certificate (each, a
“Compliance Certificate”) of the chief financial officer of Borrower that said
financial statements fairly present the consolidated financial position and
results of operations of Borrower as of and for the periods presented, subject
in the case of quarterly financial statements, to normal year-end adjustments
and the absence of footnotes, and that to the best knowledge of such officer,
there exists no Default or Event of Default, and including covenant calculation
information on a schedule in the form attached as Exhibit A hereto;
 
(d)       promptly, or if applicable, within the time frame required for
delivery of items required above that may be included therein, copies of all
proxy statements, financial statements, reports, and notices sent or made
available generally by Borrower to its security holders or to any holders of its
debt and all registration statements, regular, periodic and special reports
filed with the Securities and Exchange Commission or any governmental authority
that may be substituted therefor, or with any national securities exchange;
provided that any such proxy statements, financial statements (including any
financial statements deliverable pursuant to Sections 4.3(a) and (b) hereof),
reports and notices shall be deemed to have been provided to Bank to the extent
publicly available on the website of the United States Securities and Exchange
Commission; and
 
(e)       from time to time such other information as Bank may reasonably
request.
 
Section 4.4.     Compliance.  Preserve and maintain and cause POCI to preserve
and maintain, all licenses, permits, governmental approvals, rights, privileges
and franchises necessary for the conduct of its business (other than such
approvals, rights, privileges and/or franchises, the failure to preserve or
maintain would not reasonably be expected to result in a material adverse effect
on Borrower or any of its subsidiaries); and comply with the provisions of all
documents pursuant to which it is organized and/or which govern its continued
existence and with the requirements of all laws, rules, regulations and orders
of any governmental authority applicable to it and/or its business, except where
non-compliance would not reasonably be expected to result in a material adverse
effect on Borrower or any of its subsidiaries.
 
Section 4.5.     Insurance.  Maintain and keep in force, and cause POCI to
maintain and keep in force, for each business in which it is engaged, insurance
of the types and in amounts customarily carried in similar lines of business,
including but not limited to fire, extended coverage, public liability, flood,
property damage and workers’ compensation, with all such insurance carried with
companies and in amounts reasonably satisfactory to Bank, and deliver to Bank
from time to time at Bank’s request schedules setting forth all insurance then
in effect.
 
Section 4.6.     Facilities.  Keep all properties useful or necessary to
Borrower’s and POCI ‘s businesses in good repair and condition, subject to
normal wear and tear, and from time to time make necessary repairs, renewals and
replacements thereto, except where the failure to do so would not reasonably be
expected to have a material adverse effect on Borrower or any of its
subsidiaries.
 
 
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Section 4.7.    Taxes and Other Liabilities.  Pay and discharge when due
(subject to applicable grace periods) any and all indebtedness, obligations,
assessments and taxes, both real or personal, including without limitation
federal and state income taxes and state and local property taxes and
assessments applicable to Borrower and its subsidiaries, except (a) such as
Borrower may in good faith contest or as to which a bona fide dispute may arise,
and (b) for which Borrower has set aside adequate reserves in accordance with
GAAP.
 
Section 4.8.     Litigation.  Promptly give notice in writing to Bank of any
litigation pending or threatened against Borrower or POCI involving any claims
in excess of $1,000,000.
 
Section 4.9.     Financial Condition.  Maintain Borrower’s financial condition
as follows on a consolidated basis using GAAP consistently applied (except to
the extent modified by the definitions herein):
 
(a)         Leverage Ratio not greater than 2.50 to 1.0 at each fiscal quarter
end.
 
(b)         Net income after tax provision not less than $1.00 on a quarterly
basis, determined as of each fiscal quarter end.
 
Section 4.10.  Notice to Bank.  Promptly (but in no event more than five (5)
days after the occurrence of each such event or matter) give written notice to
Bank in reasonable detail of:  (a) the occurrence of any Default or Event of
Default; (b) any change in the name or the organizational structure of Borrower
or POCI; (c) the occurrence and nature of any Reportable Event or Prohibited
Transaction, each as defined in ERISA, or any funding deficiency with respect to
any Plan; or (d) any termination or cancellation of any insurance policy which
Borrower or POCI is required to maintain, or any uninsured or partially
uninsured loss through liability or property damage, or through fire, theft or
any other cause affecting Borrower’s or POCI’s property.

Article V
Negative Covenants
 
Borrower further covenants that so long as Bank remains committed to extend
credit to Borrower pursuant hereto, or any liabilities (whether direct or
contingent, liquidated or unliquidated, but excluding inchoate indemnification
obligations) of Borrower to Bank under any of the Loan Documents remain
outstanding, and until payment in full of all obligations of Borrower subject
hereto, Borrower will not without Bank’s prior written consent:
 
Section 5.1.     Use of Funds.  Use or permit the use of any of the proceeds of
any credit extended hereunder except for the purposes stated in Article I
hereof.
 
Section 5.2.     Other Indebtedness.  Create, incur, assume or permit to exist
or permit POCI to create, incur, assume or permit, any indebtedness or
liabilities resulting from borrowings, loans or advances, whether secured or
unsecured, matured or unmatured, liquidated or unliquidated, joint or several,
except (a) liabilities to Bank, (b) any other liabilities of Borrower and POCI
existing as of, and disclosed to Bank prior to, the date hereof, (c) new
purchase money debt, (d) operating leases that are not categorized, or would not
be categorized, as capital leases under GAAP as in effect on the date of this
Agreement, and (e) other unsecured indebtedness of Borrower not existing on the
date hereof, provided that the aggregate principal amount of all such
indebtedness does not exceed $500,000.

 
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Section 5.3.     Merger, Consolidation, Transfer of Assets.  Merge into or
consolidate or permit POCI to merge or consolidate with any other entity; make
any substantial change in the nature of Borrower’s or POCI’s business as
conducted as of the date hereof; acquire all or substantially all of the assets
of any other entity or permit POCI to do the same; or sell, lease, transfer or
otherwise dispose of all or a substantial or material portion of Borrower’s
assets except in the ordinary course of its business or permit POCI to do the
same in respect of its assets; provided, however, that Borrower and/or POCI
shall be permitted to engage in any non-hostile mergers or acquisitions so long
as (a) Borrower or POCI, as the case may be, remains the surviving entity in the
event of any merger, (b) no Default or Event of Default exists at the time of
such transaction or would result from the consummation of any such transaction,
immediately after giving effect thereto, on a pro-forma basis, and (c) any such
merger or acquisition involves a line of business substantially the same as, or
related to, that which is presently engaged in by Borrower and POCI.
 
Section 5.4.     Guaranties.  Guarantee or become liable in any way as surety,
endorser (other than as endorser of negotiable instruments for deposit or
collection in the ordinary course of business), accommodation endorser or
otherwise for, nor pledge or hypothecate any assets as security for, any
liabilities or obligations of any person or entity (other than Borrower or
POCI), except any of the foregoing in favor of Bank, or allow POCI to do any of
the foregoing, except that Borrower and POCI may guarantee or become liable for
indebtedness otherwise permitted under Section 5.2 and Borrower and POCI may
incur Permitted Liens (as defined below).
 
Section 5.5.     Loans, Advances, Investments.  Make any loans or advances to or
investments (collectively, “investments”) in any person or entity, or allow POCI
to do any of the foregoing, except (a) any of the foregoing existing as of, and
disclosed to Bank prior to, the date hereof, (b) investments acquired as a
result of an acquisition or merger permitted by Section 5.3, (c) investments in
cash, cash equivalents, and investments approved by Borrower’s board of
directors or otherwise pursuant to an investment policy approved by Borrower’s
board of directors, (d) guaranties and other contingent obligations permitted by
Section 5.4, (e) investments by Borrower in POCI, (f) investments consisting of
extensions of credit to Borrower’s or any subsidiary’s customers that arise in
the ordinary course of Borrower’s or such subsidiary’s business and are in the
nature of accounts receivables, prepaid royalties or notes receivables arising
from the sale or lease of goods, provision of services or licensing activities
of Borrower, (g) investments, not to exceed $100,000 in the aggregate
outstanding at any time, received in satisfaction or partial satisfaction of
obligations owed by financially troubled obligors and investments acquired in
connection with or as a result of a bankruptcy, workout, reorganization or
recapitalization of an obligor or customer, (h) investments consisting of
commodity forward purchase contracts, (i) investments consisting of loans and
advances to employees in an aggregate amount not to exceed $250,000 at any one
time outstanding, (j) investments constituting accounts receivables, trade debt
or deposits made in the ordinary course of business, and (k) joint ventures,
provided (a) no Default or Event of Default exists at the time of such
transaction or would result from the consummation of any such transaction,
immediately after giving effect thereto, on a pro-forma basis, and (b) any such
joint venture involves a line of business substantially the same as, or related
to, that which is presently engaged in by Borrower and POCI.

 
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Section 5.6.     Pledge of Assets.  Mortgage, pledge, grant or permit to exist a
security interest in, or lien upon (collectively, “liens”), all or any portion
of Borrower’s assets now owned or hereafter acquired, or permit POCI to do the
same in respect of its assets, except the following liens (collectively,
“Permitted Liens”): (a) liens in favor of Bank, (b) liens existing as of, and
disclosed to Bank in writing prior to, the date hereof, (c) liens to the extent
they secure purchase money debt permitted under Section 5.2 hereof provided that
such liens do not extend beyond the assets (including accessions, additions,
parts, replacements, fixtures, improvements and attachments thereto, and the
proceeds thereof) subject to such purchase money financing, (d) liens to the
extent they secure Borrower’s obligations to a lessor of property leased to
Borrower and permitted under Section 5.2(d) hereof provided that such liens do
not extend beyond the assets (including accessions, additions, parts,
replacements, fixtures, improvements and attachments thereto, and the proceeds
thereof) subject to such permitted lease, (e) liens for taxes, fees, assessments
or other government charges or levies, either not delinquent or being contested
in good faith pursuant to appropriate proceedings and for which Borrower
maintains adequate reserves on its books in accordance with GAAP, (f) liens
incurred in the extension, renewal or refinancing of the indebtedness secured by
Liens described in (b) through (d), but any extension, renewal or replacement
Lien must be limited to the property encumbered by the existing Lien and the
terms relating to principal amount, amortization, maturity, collateral (if any)
and subordination (if any), and other material terms taken as a whole, of any
such refinancing, refunding, renewing or extending indebtedness, and of any
agreement entered into and of any instrument issued in connection therewith, are
no less favorable in any material respect to Borrower than the terms of any
agreement or instrument governing the indebtedness being refinanced, refunded,
renewed or extended and the interest rate applicable to any such refinancing,
refunding, renewing or extending indebtedness does not exceed the then
applicable market interest rate; (g) leases, subleases, licenses or sublicenses
of property granted in the ordinary course of business and not substantial in
amount; (h) liens in favor of other financial institutions arising in connection
with Borrower’s deposit or securities accounts held at such institutions; (i)
liens to secure payment of workers’ compensation, employment insurance, old-age
pensions, social security and other like obligations incurred in the ordinary
course of business (other than Liens imposed by ERISA); (j) liens on property
of, or on shares of stock or Indebtedness of, any corporation existing at the
time such corporation becomes, or becomes a part of, any subsidiary; provided
that such liens do not extend to or cover any property or assets of Borrower or
any subsidiary other than the property or assets acquired and the proceeds and
products thereof and were not incurred in anticipation of such person becoming a
subsidiary; (k) liens arising by operation of law and in the ordinary course of
Borrower’s and its subsidiaries’ business of landlords and carriers,
warehousemen, mechanics, suppliers, sellers, material men or repairmen, or other
similar liens; (l) easements, rights-of-way, municipal and zoning and building
ordinances and similar charges, encumbrances, title defects or other
irregularities, governmental restrictions on the use of property or conduct of
business, and liens in favor of governmental authorities and public utilities,
that do not materially interfere with the ordinary course of business of
Borrower and its subsidiaries; (m) liens arising from the rendering of an
interim or final judgment or order against Borrower or any subsidiary that does
not give rise to an Event of Default; and (n) liens arising in the ordinary
course of Borrower’s and/or its subsidiaries’ business in favor of customs and
revenue authorities arising as a matter of law to secure payment of customs
duties in connection with the importation of goods.

 
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Article VI
Events of Default
 
Section 6.1.     The occurrence of any of the following shall constitute an
“Event of Default” under this Agreement:
 
(a)     Borrower shall fail to pay when due any principal, interest, fees or
other amounts payable under any of the Loan Documents and such failure, in the
case of interest, fees or other amounts continues for five (5) business days.
 
(b)     Any financial statement or certificate furnished to Bank in connection
with, or any representation or warranty made by Borrower or any other party
under this Agreement or any other Loan Document shall prove to be incorrect,
false or misleading in any material respect when furnished or made.
 
(c)     Any default in the performance of or compliance with any obligation,
agreement or other provision contained herein or in any other Loan Document
(other than those referred to in subsections (a) and (b) above), and with
respect to any such default which by its nature can be cured, such default shall
continue for a period of thirty (30) days.
 
(d)     Borrower or POCI:  (i) fails to make any payment when due (whether by
scheduled maturity, required prepayment, acceleration, demand, or otherwise) in
respect of any debt having an aggregate principal amount (including undrawn
committed or available amounts and including amounts owing to all creditors
under any combined or syndicated credit arrangement) of more than $500,000; or
(ii) fails to observe or perform any other agreement or condition relating to
any such other debt or contained in any document evidencing, securing or
relating to any of the foregoing, or any other default or event occurs, the
effect of which default or other event is to cause, or to permit the holder or
holders of such debt (or a trustee or agent on behalf of such holder or holders)
to cause, with the giving of notice if required, such debt to be demanded or to
become due or to be repurchased, prepaid, defeased or redeemed (automatically or
otherwise), or an offer to repurchase, prepay, defease or redeem such Debt to be
made, prior to its stated maturity.
 
(e)     There is entered against Borrower or POCI:  (i) one or more final
judgments or orders for the payment of money in an aggregate amount exceeding
$10,000,000 (to the extent not covered by independent third-party insurance as
to which the insurer does not dispute coverage); or (ii) any one or more
non-monetary final judgments that have, or could reasonably be expected to have,
individually or in the aggregate, a material adverse effect on Borrower or POCI,
as applicable, and, in either case:  (A) enforcement proceedings are commenced
by any creditor upon such judgment or order; or (B) there is a period of thirty
consecutive days during which a stay of enforcement of such judgment, by reason
of a pending appeal or otherwise, is not in effect.

 
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(f)     Borrower or POCI shall become insolvent, or shall suffer or consent to
or apply for the appointment of a receiver, trustee, custodian or liquidator of
itself or any of its property, or shall generally fail to pay its debts as they
become due, or shall make a general assignment for the benefit of creditors;
Borrower or POCI shall file a voluntary petition in bankruptcy, or seeking
reorganization, in order to effect a plan or other arrangement with creditors or
any other relief under the Bankruptcy Reform Act, Title 11 of the United States
Code, as amended or recodified from time to time (“Bankruptcy Code”), or under
any state or federal law granting relief to debtors, whether now or hereafter in
effect; or any involuntary petition or proceeding pursuant to the Bankruptcy
Code or any other applicable state or federal law relating to bankruptcy,
reorganization or other relief for debtors is filed or commenced against
Borrower or POCI, or Borrower or POCI shall file an answer admitting the
jurisdiction of the court and the material allegations of any involuntary
petition; or Borrower or POCI shall be adjudicated a bankrupt, or an order for
relief shall be entered against Borrower or POCI by any court of competent
jurisdiction under the Bankruptcy Code or any other applicable state or federal
law relating to bankruptcy, reorganization or other relief for debtors.
 
(g)     There shall exist or occur any event or condition that has a Material
Adverse Effect.
 
(h)     The dissolution or liquidation of Borrower or POCI (other than the
dissolution or liquidation of POCI into Borrower); or Borrower or POCI, or any
of its directors or stockholders, shall take action seeking to effect the
dissolution or liquidation of Borrower or POCI (other than the dissolution or
liquidation of POCI into Borrower).
 
Section 6.2.     Remedies.  Upon the occurrence of any Event of
Default:  (a) all indebtedness of Borrower under each of the Loan Documents, any
term thereof to the contrary notwithstanding, shall at Bank’s option and without
notice become immediately due and payable without presentment, demand, protest
or notice of dishonor, all of which are hereby expressly waived by Borrower;
(b) the obligation, if any, of Bank to extend any further credit under any of
the Loan Documents shall immediately cease and terminate; and (c) Bank shall
have all rights, powers and remedies available under each of the Loan Documents,
or accorded by law, including without limitation the right to resort to any or
all security for any credit subject hereto and to exercise any or all of the
rights of a beneficiary or secured party pursuant to applicable law.  All
rights, powers and remedies of Bank may be exercised at any time by Bank and
from time to time after the occurrence of an Event of Default, are cumulative
and not exclusive, and shall be in addition to any other rights, powers or
remedies provided by law or equity.

Article VII
Miscellaneous
 
Section 7.1.     No Waiver.  No delay, failure or discontinuance of Bank in
exercising any right, power or remedy under any of the Loan Documents shall
affect or operate as a waiver of such right, power or remedy; nor shall any
single or partial exercise of any such right, power or remedy preclude, waive or
otherwise affect any other or further exercise thereof or the exercise of any
other right, power or remedy.  Any waiver, permit, consent or approval of any
kind by Bank of any breach of or default under any of the Loan Documents must be
in writing and shall be effective only to the extent set forth in such writing.

 
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Section 7.2.     Notices.  All notices, requests and demands which any party is
required or may desire to give to any other party under any provision of this
Agreement must be in writing delivered to each party at the following address:

Borrower:
Peet’s Coffee & Tea, Inc.

1400 Park Avenue
Emeryville, CA 94608-3520

Bank:
Wells Fargo Bank, National Association

East Bay RCBO
One Kaiser Plaza, Suite #850
Oakland, CA 94612
 
or to such other address as any party may designate by written notice to all
other parties.  Each such notice, request and demand shall be deemed given or
made as follows:  (a) if sent by hand delivery, upon delivery; (b) if sent by
mail, upon the earlier of the date of receipt or three (3) days after deposit in
the U.S. mail, first class and postage prepaid; and (c) if sent by telecopy,
upon receipt.
 
Section 7.3.     Costs, Expenses and Attorneys’ Fees.  Borrower shall pay to
Bank immediately upon demand the full amount of all payments, advances, charges,
costs and expenses, including reasonable attorneys’ fees (to include outside
counsel fees but not including any allocated costs of Bank’s in-house counsel),
expended or incurred by Bank in connection with (a) the negotiation and
preparation of this Agreement and the other Loan Documents, Bank’s continued
administration hereof and thereof, and the preparation of any amendments and
waivers hereto and thereto, (b) the enforcement of Bank’s rights and/or the
collection of any amounts which become due to Bank under any of the Loan
Documents, and (c) the prosecution or defense of any action in any way related
to any of the Loan Documents, including without limitation, any action for
declaratory relief, whether incurred at the trial or appellate level, in an
arbitration proceeding or otherwise, and including any of the foregoing incurred
in connection with any bankruptcy proceeding (including without limitation, any
adversary proceeding, contested matter or motion brought by Bank or any other
person) relating to Borrower or any other person or entity.
 
Section 7.4.     Successors, Assignment.  This Agreement shall be binding upon
and inure to the benefit of the heirs, executors, administrators, legal
representatives, successors and assigns of the parties; provided however, that
Borrower may not assign or transfer its interests or rights hereunder without
Bank’s prior written consent.  Bank reserves the right to sell, assign,
transfer, negotiate or grant participations in all or any part of, or any
interest in, Bank’s rights and benefits under each of the Loan Documents.  In
connection therewith, Bank may disclose all documents and information which Bank
now has or may hereafter acquire relating to any credit subject hereto, Borrower
or its business, any guarantor hereunder or the business of such guarantor.

 
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Section 7.5.    Entire Agreement; Amendment.  This Agreement and the other Loan
Documents constitute the entire agreement between Borrower and Bank with respect
to each credit subject hereto and supersede all prior negotiations,
communications, discussions and correspondence concerning the subject matter
hereof.  This Agreement may be amended or modified only in writing signed by
each party hereto.
 
Section 7.6.     No Third Party Beneficiaries.  This Agreement is made and
entered into for the sole protection and benefit of the parties hereto and their
respective permitted successors and assigns, and no other person or entity shall
be a third party beneficiary of, or have any direct or indirect cause of action
or claim in connection with, this Agreement or any other of the Loan Documents
to which it is not a party.
 
Section 7.7.     Time.  Time is of the essence of each and every provision of
this Agreement and each other of the Loan Documents.
 
Section 7.8.    Severability of Provisions.  If any provision of this Agreement
shall be prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or any remaining provisions of this
Agreement.
 
Section 7.9.    Counterparts.  This Agreement may be executed in any number of
counterparts, each of which when executed and delivered shall be deemed to be an
original, and all of which when taken together shall constitute one and the same
Agreement.
 
Section 7.10.   Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of California.
 
Section 7.11.   Arbitration.
 
(a)     Arbitration.  The parties hereto agree, upon demand by any party, to
submit to binding arbitration all claims, disputes and controversies between or
among them (and their respective employees, officers, directors, attorneys, and
other agents), whether in tort, contract or otherwise in any way arising out of
or relating to (i) any credit subject hereto, or any of the Loan Documents, and
their negotiation, execution, collateralization, administration, repayment,
modification, extension, substitution, formation, inducement, enforcement,
default or termination; or (ii) requests for additional credit.
 
(b)     Governing Rules.  Any arbitration proceeding will (i) proceed in a
location in California selected by the American Arbitration Association (“AAA”);
(ii) be governed by the Federal Arbitration Act (Title 9 of the United States
Code), notwithstanding any conflicting choice of law provision in any of the
documents between the parties; and (iii) be conducted by the AAA, or such other
administrator as the parties shall mutually agree upon, in accordance with the
AAA’s commercial dispute resolution procedures, unless the claim or counterclaim
is at least $1,000,000 exclusive of claimed interest, arbitration fees and costs
in which case the arbitration shall be conducted in accordance with the AAA’s
optional procedures for large, complex commercial disputes (the commercial
dispute resolution procedures or the optional procedures for large, complex
commercial disputes to be referred to herein, as applicable, as the
“Rules”).  If there is any inconsistency between the terms hereof and the Rules,
the terms and procedures set forth herein shall control.  Any party who fails or
refuses to submit to arbitration following a demand by any other party shall
bear all costs and expenses incurred by such other party in compelling
arbitration of any dispute.  Nothing contained herein shall be deemed to be a
waiver by any party that is a bank of the protections afforded to it under 12
U.S.C. §91 or any similar applicable state law.

 
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(c)     No Waiver of Provisional Remedies, Self-Help and Foreclosure.  The
arbitration requirement does not limit the right of any party to (i) foreclose
against real or personal property collateral; (ii) exercise self-help remedies
relating to collateral or proceeds of collateral such as setoff or repossession;
or (iii) obtain provisional or ancillary remedies such as replevin, injunctive
relief, attachment or the appointment of a receiver, before during or after the
pendency of any arbitration proceeding.  This exclusion does not constitute a
waiver of the right or obligation of any party to submit any dispute to
arbitration or reference hereunder, including those arising from the exercise of
the actions detailed in sections (i), (ii) and (iii) of this paragraph.
 
(d)     Arbitrator Qualifications and Powers.  Any arbitration proceeding in
which the amount in controversy is $5,000,000 or less will be decided by a
single arbitrator selected according to the Rules, and who shall not render an
award of greater than $5,000,000.  Any dispute in which the amount in
controversy exceeds $5,000,000 shall be decided by majority vote of a panel of
three arbitrators; provided however, that all three arbitrators must actively
participate in all hearings and deliberations.  The arbitrator will be a neutral
attorney licensed in the State of California or a neutral retired judge of the
state or federal judiciary of California, in either case with a minimum of ten
years experience in the substantive law applicable to the subject matter of the
dispute to be arbitrated.  The arbitrator will determine whether or not an issue
is arbitratable and will give effect to the statutes of limitation in
determining any claim.  In any arbitration proceeding the arbitrator will decide
(by documents only or with a hearing at the arbitrator’s discretion) any
pre-hearing motions which are similar to motions to dismiss for failure to state
a claim or motions for summary adjudication.  The arbitrator shall resolve all
disputes in accordance with the substantive law of California and may grant any
remedy or relief that a court of such state could order or grant within the
scope hereof and such ancillary relief as is necessary to make effective any
award.  The arbitrator shall also have the power to award recovery of all costs
and fees, to impose sanctions and to take such other action as the arbitrator
deems necessary to the same extent a judge could pursuant to the Federal Rules
of Civil Procedure, the California Rules of Civil Procedure or other applicable
law.  Judgment upon the award rendered by the arbitrator may be entered in any
court having jurisdiction.  The institution and maintenance of an action for
judicial relief or pursuit of a provisional or ancillary remedy shall not
constitute a waiver of the right of any party, including the plaintiff, to
submit the controversy or claim to arbitration if any other party contests such
action for judicial relief.
 
(e)     Discovery.  In any arbitration proceeding, discovery will be permitted
in accordance with the Rules.  All discovery shall be expressly limited to
matters directly relevant to the dispute being arbitrated and must be completed
no later than 20 days before the hearing date.  Any requests for an extension of
the discovery periods, or any discovery disputes, will be subject to final
determination by the arbitrator upon a showing that the request for discovery is
essential for the party’s presentation and that no alternative means for
obtaining information is available.

 
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(f)     Class Proceedings and Consolidations.  No party hereto shall be entitled
to join or consolidate disputes by or against others in any arbitration, except
parties who have executed any Loan Document, or to include in any arbitration
any dispute as a representative or member of a class, or to act in any
arbitration in the interest of the general public or in a private attorney
general capacity.
 
(g)     Payment Of Arbitration Costs And Fees.  The arbitrator shall award all
costs and expenses of the arbitration proceeding.
 
(h)     [Reserved].
 
(i)     Miscellaneous.  To the maximum extent practicable, the AAA, the
arbitrators and the parties shall take all action required to conclude any
arbitration proceeding within 180 days of the filing of the dispute with the
AAA.  No arbitrator or other party to an arbitration proceeding may disclose the
existence, content or results thereof, except for disclosures of information by
a party required in the ordinary course of its business or by applicable law or
regulation.  If more than one agreement for arbitration by or between the
parties potentially applies to a dispute, the arbitration provision most
directly related to the Loan Documents or the subject matter of the dispute
shall control.  This arbitration provision shall survive termination, amendment
or expiration of any of the Loan Documents or any relationship between the
parties.
 
(j)     Small Claims Court.  Notwithstanding anything herein to the contrary,
each party retains the right to pursue in Small Claims Court any dispute within
that court’s jurisdiction.  Further, this arbitration provision shall apply only
to disputes in which either party seeks to recover an amount of money (excluding
attorneys’ fees and costs) that exceeds the jurisdictional limit of the Small
Claims Court.
 
Section 7.12.     No Novation.  This Agreement amends and restates the Existing
Agreement in its entirety, effective as of the date hereof, and is not intended
to constitute a novation of the obligations thereunder.
 
Section 7.13.     Accounting Changes.  Borrower and Bank acknowledge and agree
that, notwithstanding any change in GAAP after the date of this Agreement
relating to lease accounting, for purposes of the financial ratios, financial
covenants and other requirements set forth in this Agreement and the other Loan
Documents (including, without limitation, for purposes of Sections 1.2, 4.9 and
5.2 hereof), such financial ratios, financial covenants and other requirements
shall be computed in accordance with GAAP as in effect prior to such change.

 
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Section 7.14.     Release of Liens.  Bank hereby terminates and releases all
liens granted by Borrower and its subsidiaries in favor of Bank pursuant to the
Existing Agreement (and any related security or pledge agreement) and agrees, at
the sole expense of Borrower, to deliver such documents as Borrower shall
reasonably request to evidence such release and termination.
 
[Signatures on following page]

 
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In Witness Whereof, the parties hereto have caused this Agreement to be executed
as of the day and year first written above.

   
Wells Fargo Bank,
Peet’s Coffee & Tea, Inc.
 
National Association
       
By:
   
By:
   
Thomas P. Cawley
   
Todd G. Tajiri
 
Chief Financial Officer,
   
Vice President
 
Vice President, Secretary
     

Amended and Restated Credit Agreement

 
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Exhibit A

To:
Wells Fargo Bank, National Association

One Kaiser Plaza, Suite 850
Oakland, CA  94612
Attn:  Todd Tajiri

Re: 
Peet’s Coffee & Tea, Inc.

(“Borrower”)

The undersigned is the Chief Financial Officer of Borrower.  In said capacity,
the undersigned hereby certifies to Wells Fargo Bank, National Association
(“Bank”) that (a) the financial statement of Borrower dated as of
________________, ______, heretofore or concurrently herewith delivered by
Borrower to Bank, and all schedules and footnotes thereto, fairly present the
financial condition and results of operations as of and for the period set forth
therein, and (b) as of the date hereof, there exists no default or defined Event
of Default under the Amended and Restated Credit Agreement, dated as of
December 21, 2010, by and between the Borrower and Bank, as amended, modified
and/or supplemented prior to the date hereof.

Dated:  _______________, ______

 
By:
       
Title:
 

 
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Schedule I
To Compliance Certificate for
Peet’s Coffee & Tea, Inc.

Financial Statement Date: _____________

I.   Section 4.9(a) Leverage Ratio
                         
A.
Total Funded Debt
           
1.
the outstanding principal amount of all obligations for borrowed money and all
obligations evidenced by bonds, debentures, notes, loan agreements or other
similar instruments
   
—
     
2.
all purchase money debt
   
—
     
3.
all direct obligations arising under letters of credit, bankers’ acceptances,
bank guaranties, surety bonds and similar instruments
   
—
     
4.
all obligations in respect of the deferred purchase price of property or
services
   
—
     
5.
the capitalized amount of any capital leases
   
—
     
6.
the amount of all guarantees
   
—
     
7.
Sum of Lines A.1. through A.6
   
—
                   
B.
Adjusted Annual Rental Expense
           
1.
Annual Rental Expense
   
—
     
2.
Multiplied by six (6)
   
—
                   
C.
Annual EBITDA
           
1.
income before tax
   
—
     
2.
interest expense (net of capitalized interest expense)
   
—
     
3.
depreciation expense
           
4.
amortization expense
           
5.
non-cash stock compensation expense
           
6.
Sum of Lines C.1. plus C.2. plus C.3. plus C.4. plus C.5.
   
—
                   
D.
Annual Rental Expense
   
—
                       
Actual Leverage Ratio (A.7. + B.2.)/(C.5. + D)        
   
—
       
Required Maximum        
   
2.50
x 
     
Borrower is in Compliance Y/N        
                       
II.   Section 4.9(b) Net Income After Tax Provision
                         
A.
Net income after tax provision for current quarter
   
—
                       
Required Minimum        
 
$ 
1.00
       
Borrower is in Compliance Y/N        
   
 
 

 
 
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