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Exhibit 10.32    
  


 
 

FIRST AMENDMENT
  TO CREDIT AGREEMENT    
  


        THIS FIRST AMENDMENT TO CREDIT AGREEMENT (the "Amendment") is made and dated as of the 17th day of December, 2002 by and between DIEDRICH COFFEE, INC., a
Delaware corporation (the "Company"), and BANK OF THE WEST (the "Lender"). 


RECITALS  


        A.    Pursuant
to that certain Credit Agreement dated as of September 3, 2002 by and between the Company and the Lender (as amended, extended and replaced from time to
time, the "Credit Agreement," and with capitalized terms used herein and not otherwise defined used with the meanings given such terms in the Credit Agreement), the Lender agreed to extend credit to
the Company on the terms and subject to the conditions set forth therein. 


        B.    The
Company has requested the Lender to amend the Credit Agreement in certain respects and the Lender has agreed to do so on the terms and subject to the conditions set
forth herein. 


        NOW,
THEREFORE, in consideration of the above Recitals and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto hereby
agree as follows: 


AGREEMENT  


        1.    Applicable LIBOR Interest.    To reflect the agreement of the parties hereto to modify the applicable interest
rate with respect to Loans bearing interest based on the LIBOR Rate, Paragraph 7(a)(2) of the Credit Agreement is hereby amended to read in its entirety as follows: 



        "(2)    The
LIBOR Rate for the selected Interest Period plus: (i) at any time up to but not including February 1,
2003, two and one-half percent (2.50%) and (ii) at all times thereafter, three percent (3.00%)." 




        2.    Minimum EBITDA.    To reflect the agreement of the parties hereto to modify the minimum EBITDA financial
covenant, Paragraph 13(m) of the Credit Agreement is hereby amended in to read in its entirety as follows: 



        "13(m)    Minimum EBITDA.    Permit as of the end of any fiscal quarter, calculated for such fiscal quarter and the
immediately preceding three fiscal quarters, EBITDA of the Company and its Subsidiaries on a consolidated basis to be less than $3,500,000.00." 




        3.    Effective Date. This Amendment shall be effective as of the date first written above upon the date that the Administrative
Agent shall have received: 



        (a)  This
Amendment, duly executed by all parties signatory hereto; 


        (b)  Such
corporate resolutions, incumbency certificates and other authorizing documentation for the Company and the Guarantors as the Lender may request; and 


        (c)  An
amendment fee in an amount equal to $5,000.00. 




        4.    Reaffirmation of the Loan Documents.    The Company and each of the Guarantors, by executing this Amendment as
provided below, hereby affirms and agrees that: (a) the execution and delivery by it of and the performance of its obligations under this Amendment shall not in any way amend, impair,
invalidate or otherwise affect any of its obligations under the Loan Documents to which 


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it is party except to the extent expressly amended hereby, (b) the term "Obligations" as used in the Loan Documents include, without limitation, the Obligations of the Company under the Credit
Agreement as amended by this Amendment, and (c) except as expressly amended hereby, the Loan Documents remain in full force and effect as written. 


        5.    Representations and Warranties.    The Company and each of the Guarantors by executing this Amendment as
provided below, hereby represents and warrants to the Lenders that: 



        (a)  It
has the requisite power and authority and the legal right to execute, deliver and perform this Amendment and has taken all necessary corporate action to authorize the
execution, delivery and performance of this Amendment. 


        (b)  This
Amendment has been duly executed and delivered on its behalf and constitutes its legal, valid and binding obligation enforceable against it in accordance with its
terms. 


        (c)  There
does not exist a Event of Default or Potential Default. 


        (d)  None
of such Persons has any existing claims, counterclaims, defenses, personal or otherwise, or rights of setoff whatsoever with respect to any of the Loan Documents,
and the Loan Documents, as amended hereby, constitute valid, legal, binding and enforceable obligations of such Persons, as appropriate. 




        6.    No Other Amendment.    Except as expressly amended hereby, the Credit Agreement and other Loan Documents shall
remain in full force and effect as written. 


        7.    Counterparts.    This Amendment may be executed in any number of counterparts, each of which when so executed
shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement. 


        [Signatures
Page Following] 


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        IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the day and year first above written. 



	 	 	DIEDRICH COFFEE, INC.,

a Delaware corporation
	

 	
 	

By:	

/s/  MATTHEW C. MCGUINNESS      
 Name: Matthew C. McGuinness

Title: Executive Vice President and Chief Financial Officer
	

 	
 	

By:	

/s/  PAMELA J. BRITTON      
 Name: Pamela J. Britton

Title: Secretary
	

 	
 	

BANK OF THE WEST
	

 	
 	

By:	

 Bruce Young, Vice President





       





	ACKNOWLEDGED AND AGREED TO:	 
	

COFFEE PEOPLE WORLDWIDE, INC.,

a Delaware corporation	

 
	

By:	
 	

/s/  MATTHEW C. MCGUINNESS      
 Name: Matthew C. McGuinness

Title: Executive Vice President and Chief Financial Officer	

 
	

By:	
 	

/s/  PAMELA J. BRITTON      
 Name: Pamela J. Britton

Title: Secretary	

 




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	COFFEE PEOPLE, INC.,

an Oregon corporation	 
	

By:	
 	

/s/  MATTHEW C. MCGUINNESS      
 Name: Matthew C. McGuinness

Title: Executive Vice President and Chief Financial Officer	

 
	

By:	
 	

/s/  PAMELA J. BRITTON      
 Name: Pamela J. Britton

Title: Secretary	

 
	

GLORIA JEAN'S, INC.,

a Delaware corporation	

 
	

By:	
 	

/s/  MATTHEW C. MCGUINNESS      
 Name: Matthew C. McGuinness

Title: Executive Vice President and Chief Financial Officer	

 
	

By:	
 	

/s/  PAMELA J. BRITTON      
 Name: Pamela J. Britton

Title: Secretary	

 
	

EDGLO ENTERPRISES, INC.,

an Illinois corporation	

 
	

By:	
 	

/s/  MATTHEW C. MCGUINNESS      
 Name: Matthew C. McGuinness

Title: Executive Vice President and Chief Financial Officer	

 
	

By:	
 	

/s/  PAMELA J. BRITTON      
 Name: Pamela J. Britton

Title: Secretary	

 




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	GLORIA JEAN'S GOURMET COFFEES CORP.,

an Illinois corporation	 
	

By:	
 	

/s/  MATTHEW C. MCGUINNESS      
 Name: Matthew C. McGuinness

Title: Executive Vice President and Chief Financial Officer	

 
	

By:	
 	

/s/  PAMELA J. BRITTON      
 Name: Pamela J. Britton

Title: Secretary	

 
	

GLORIA JEAN'S GOURMET COFFEES FRANCHISING CORP.,

an Illinois corporation	

 
	

By:	
 	

/s/  MATTHEW C. MCGUINNESS      
 Name: Matthew C. McGuinness

Title: Executive Vice President and Chief Financial Officer	

 
	

By:	
 	

/s/  PAMELA J. BRITTON      
 Name: Pamela J. Britton

Title: Secretary	

 




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Exhibit 10.32


FIRST AMENDMENT TO CREDIT AGREEMENT