“New Store”: any Store not previously in existence at alocation, provided that a relocation of any Store within the same building,strip mall or retail mall shall not be considered a New Store.Notwithstanding the foregoing provision, the definition of New Store shallat all times be consistent with the Company’s reporting of the opening ofnew Stores in all financial statements and reports that any member of theRestricted Group makes to, or files with, the SEC or provides to the holdersof any class of its debt securities or public equity securities.2. By deleting in their entireties the definitions of “Adjustment Date”, “COF Loan”, “COFRate” and “Pricing Grid”.3. By amending and restating the definition of “Applicable Margin” in its entirety asfollows:     “Applicable Margin”: at any time, in respect of Base RateLoans, two (2.0%) percent per annum and in respect of Eurodollar Loans,three and three-quarters (3.75%) percent per annum.4. By amending and restating the definition of Commitment Fee Rate in its entirety asfollows:     “Commitment Fee Rate”: one (1.0%) percent per annum.5. By amending the definition of “Consolidated EBITDA” by deleting the reference to “fiscalquarter” contained therein and by substituting therefor the phrase “fiscal period”.6. By inserting the following at the end of the definition of “Eurodollar Base Rate”:“Notwithstanding anything in this Agreement to the contrary, at no timeshall the Eurodollar Base Rate be less than two and one-quarter (2.25%)percent.”7. By amending and restating the definition of “New Store Commitment” in its entirety asfollows:     “New Store Commitment”: an enforceable obligation of the Company orany of its Subsidiaries to lease, acquire, develop or open a New Store.8. By amending and restating the definition of “Revolving Termination Date” in its entiretyas follows:     “Revolving Termination Date”: June 30, 2010.9. By amending and restating the last sentence in the definition of “Revolving Commitment”in its entirety as follows:     “The amount of the Total Revolving Commitments as of November 12, 2008 is$9,000,000.”
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10. By amending and restating the definition of “Store” in its entirety as follows:     “Store”: any store, kiosk, or other retail unit, includingwithout limitation, any New Store, which is owned or controlled directly orindirectly by the Company or any of its Subsidiaries.     B. Base Rate Loans. The Credit Agreement is amended by deleting the phrases “COFLoan” and “COF Loans” in each place where such phrases appear and by in each case substitutingtherefor the phrases “Base Rate Loan” and “Base Rate Loans”, respectively.     C. Base Rate. The Credit Agreement is amended by deleting the phrase “COF Rate” ineach place where such phrase appears and by substituting therefor the phase “Base Rate”.     D. Commitment Fees. Section 2.3(a) of the Credit Agreement is hereby amended andrestated in its entirety as follows:“(a) The Borrower agrees to pay to the Administrative Agent for the accountof each Lender in accordance with its Revolving Percentage, a commitment feefor the period from and including November 12, 2008 to the last day of theRevolving Commitment Period, computed at the Commitment Fee Rate on theamount of the Total Revolving Commitments in effect (regardless of usage) onthe due date of each such payment, payable monthly in advance on the firstBusiness Day of each calendar month, commencing on the first such date tooccur after the date hereof.”     E. Interest Rate on Base Rate Loans. Section 2.9(b) of the Credit Agreement is herebyamended and restated as follows:          “(b) Each Base Rate Loan shall bear interest at a rate per annum equalto the Base Rate plus the Applicable Margin.”     F. Debit Authorization. Section 2.12(c) of the Credit Agreement is hereby amended byinserting the following at the end thereof:“The Borrower hereby irrevocably authorizes the Administrative Agent todebit any of Borrower’s accounts held with the Reference Bank (any of theforegoing, a “Borrower Account”), or if the funds therein areinsufficient, to advance to a Borrower Account as a Revolving Loan that is aBase Rate Loan and simultaneously debit such Borrower Account, a sumsufficient to pay when due all scheduled payments of principal and allinterest accrued on the Obligations and to pay when due all costs, fees andexpenses at any time owed by the Borrower to the Administrative Agent, theLenders and/or the Issuing Lender.”     G. Monthly Compliance Certificates. Section 6.2(b) of the Credit Agreement is herebyamended and restated in its entirety as follows:          “(b) concurrently with the delivery of any financial statementspursuant to Section 6.1, (i) (A) a certificate of a Responsible Officerstating that, to the best of such Responsible Officer’s knowledge, each ofHoldings and eachof its Subsidiaries during such period has observed or performed all of itscovenants and other agreements, and satisfied every condition contained inthis
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Agreement and the other Transaction Documents to which it is a party tobe observed, performed or satisfied by it, and that such Responsible Officerhas obtained no knowledge of any “Default” or “Event of Default” (each asdefined in the Master Lease) except as specified in such certificate, and(B) a certificate of appropriate officer of the Borrower, such officer to bereasonably acceptable to the Administrative Agent, stating that to the bestof such officer’s knowledge, each of the Borrower and the Securities Pledgorduring such period has observed or performed all of its covenants and otheragreements, and satisfied every condition contained in this Agreement andthe other Transaction Documents to which it is a party to be observed,performed or satisfied by it, and that such officer has obtained noknowledge of any Default or Event of Default except as specified in suchcertificate, (ii) a Store by Store report substantially in the form ofExhibit 6.2(b), and (iii) in the case of quarterly, annual and monthlyfinancial statements, (x) a Compliance Certificate and (y) to the extent notpreviously disclosed to the Administrative Agent, a description of anychange in the jurisdiction of organization of any Loan Party and a list ofany Intellectual Property or other property as to which action is requiredunder Section 6.10 hereof, in each case acquired by any Loan Party since thedate of the most recent report delivered pursuant to this clause (y), and(z) the applicable compliance certificate required to be delivered under theMaster Lease;”     H. Financial Covenants. Section 7.1 of the Credit Agreement is hereby amended andrestated in its entirety as follows:     “7.1 Financial Condition Covenants; New Stores.     (a) Maximum Senior Leverage Ratio. Permit the ratio (the‘Consolidated Senior Leverage Ratio‘) of the Consolidated FundedIndebtedness of the Company and its Subsidiaries (excluding any AdditionalSubordinated Debt included therein) at September 30, 2008 and at the lastday of each fiscal month thereafter to the Consolidated EBITDA of theCompany for the twelve fiscal month period ending on such last day of thefiscal month to be greater than 1.00:1.00.     (b) Minimum Consolidated EBITDA. Permit the ConsolidatedEBITDA of the Company for the twelve fiscal month period ending on September30, 2008 and for the twelve fiscal month period ending on the last day ofeach fiscal month thereafter to be less than $9,000,000.     (c) Minimum Interest Coverage Ratio. Permit the ratio of (i)the Consolidated EBITDAR of the Company for any Reference Period ending onany Quarterly Date falling in any period referred to below to (ii) the sumof Consolidated Interest Expense plus Consolidated Rental Expense of theCompany and its Subsidiaries for such Reference Period to be less than theratio specified below for the period during which such date falls.
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       Minimum InterestQuarterly Dates Coverage RatioJanuary 1, 2008 through June 30, 2008  1.38:1.00 July 1, 2008 through September 30, 2008  1.40:1.00 October 1, 2008 and thereafter  1.35:1.00      (d) Maximum Capital Expenditures.     (i) Make any Capital Expenditures, except to purchase andlease back assets of the Company and its Subsidiaries in connectionwith Loans hereunder (limited in purchase price to the amount ofsuch Revolving Loans) pursuant to the Lease/Purchase Documents.     (ii) Permit the Capital Expenditures made by the Company andits Subsidiaries in any fiscal year to exceed $10,000,000.     (e) Minimum Rental Payments. Permit the Lease/PurchaseDocuments not to provide at all times for rental and other payments from theCompany under the Lease/Purchase Documents in amounts sufficient to coverall of the Obligations and all of its operating and other expenses, in eachcase on or prior to the dates when such Obligations and expenses become dueand payable.     (f) New Store Commitments. Permit the Company to enter intoany New Store Commitment if at such time (A) the Coffeehouse Level EBITDAMargin for the Reference Period ended December 30, 2007 and each ReferencePeriod thereafter is less than 15% of Coffeehouse Level Sales for suchReference Period, or (B) the aggregate Available Revolving Commitments ofall Lenders are less than (1) the budgeted amount of Capital Expendituresfor outstanding New Store Commitments (including the New Store Commitment inquestion, and assuming that the budgeted amount of Capital Expenditures forany New Store Commitment for which a Capital Expenditure budget has not beendetermined is $300,000), less (2) the aggregate amount of CapitalExpenditures made toward New Store Commitments prior to the opening of eachsuch New Store.”     I. Foreign Intellectual Property. Section 7.3 of the Credit Agreement is herebyamended by inserting the following at the end thereof:“Without limitation of the foregoing, the Borrower covenants and agrees that it willnot enter into (and will not suffer or permit any of its Subsidiaries to enter into)any agreement or understanding (each, a ‘Restrictive Agreement‘) with anyPerson other than the Administrative Agent which could prohibit or restrict in anymanner the right of the Borrower or any such Subsidiary to grant to theAdministrative Agent any Lien on any of its Intellectual Property arising under lawsother than those of the United States, whether such Intellectual Property is nowowned or hereafter acquired. The Borrower represents and warrants that, at the dateof this Agreement, neither the Borrower nor any such Subsidiary is party to any suchRestrictive Agreement.”
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     J. Commitments. Schedule 1.1(A) of the Credit Agreement is amended andrestated in its entirety in the form attached hereto as Annex I.     K. Borrower Schedules. Each of Schedule 1.1B, 1.1C, 4.4, 4.9, 4.15, 4.17, 4.19(a),4.24, 4.25(a) and 4.25(d) to the Credit Agreement is amended and restated in its entirety in theform attached hereto as Annex II by updating each as of the date hereof     L. Amendment to Lease/Purchase Documents. The Lenders hereby agree to the form of theSeventh Amendment to Second Amended and Restated Lease and License Financing and Purchase OptionAgreement attached hereto as Exhibit A (the “Amendment to Lease/PurchaseDocuments”).     M. No Further Amendments. Except as specifically amended hereby, the text of theCredit Agreement and all other Loan Documents shall remain unchanged and in full force and effect.**II.****REFERENCES IN LOAN DOCUMENTS; CONFIRMATION OF SECURITY****.**All references to the “CreditAgreement” in all Loan Documents shall, from and after the date hereof, refer to the CreditAgreement, as amended by this Amendment, and all obligations of the Borrower under the LoanDocuments shall be secured by and be entitled to the benefits of the Security Documents. AllSecurity Documents heretofore executed by the Restricted Group shall remain in full force andeffect and, by the Borrower’s signature hereto, and Holdings’ and the Company’s and itsSubsidiaries’ signatures to such Amendment to Lease/Purchase Documents, such Security Documents arehereby ratified and affirmed.**III.****REPRESENTATIONS, WARRANTIES AND COVENANTS**. The Borrower hereby represents andwarrants to, and covenants and agrees with the Lenders that:     A. The execution and delivery of this Amendment has been duly authorized by all requisiteaction on the part of the Borrower and does not contravene, conflict with, or constitute a defaultunder, any provision of: (i) the Borrower’s articles of incorporation or bylaws, (ii) any law,judgment, decree or order applicable to the Borrower or to any other Loan Party, or (iii) anyprovision of any material agreement or instrument binding upon any Loan Party or upon any of therespective property of a Loan Party. The execution and delivery of this Amendment by the Borrowerdo not and will not cause any lien to arise under any provision of any material agreement orinstrument binding upon any Loan Party or upon any of the respective property of a Loan Party.     B. The representations and warranties of the Borrower contained in the Credit Agreement andthe other Loan Documents are true and correct in all material respects on and as of the date ofthis Amendment as though made at and as of such date, except to the extent (a) such representationsand warranties expressly relate to an earlier date (and the representations and warranties setforth in Section 4.1 and Section 4.18 (relating solely to the Confidential Offering Memorandum) ofthe Credit Agreement and Section 19(a) and Section 19(q) (relating solely to the ConfidentialOffering Memorandum) of the Master Lease shall be construed to relate only to the date of theCredit Agreement and the Master Lease, respectively, and to theClosing Date), in which case each such representation and warranty shall be true and correct in allmaterial respects as of such earlier date and (b) of inaccuracies resulting from transactions
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expressly permitted under the Loan Documents. No Default or Event of Default has occurred and iscontinuing under the Credit Agreement or any other Loan Document.     C. Attached hereto as Exhibit A is a true, correct and complete copy of the Amendmentto Lease/Purchase Documents.     D. No member of the Restricted Group is required to obtain any consent, approval orauthorization from, or to file any declaration or statement with, any governmental instrumentalityor other agency or any other person or entity in connection with or as a condition to theexecution, delivery or performance of this Amendment.     E. This Amendment constitutes the legal, valid and binding obligation of the Borrower,enforceable against it in accordance with its terms, subject to bankruptcy, insolvency,reorganization, moratorium and similar laws affecting the rights and remedies of creditorsgenerally or the application of principles of equity, whether in any action at law or proceeding inequity, and subject to the availability of the remedy of specific performance or of any otherequitable remedy or relief to enforce any right thereunder.     F. $3,000,000 in Total Revolving Extensions of Credit are outstanding as of September 12,2008.     G. By the Borrower’s signature hereto, and Holdings’, the Company’s and its Subsidiaries’signatures to the Amendment to Lease/Purchase Documents, each such party hereby acknowledges andconfirms that (i) it does not have any grounds, and hereby agrees not to challenge (or to allege orto pursue any matter, cause or claim arising under or with respect to), in any case based upon actsor omissions of the Administrative Agent or the Lenders, the effectiveness, genuineness, validity,collectibility or enforceability of the Credit Agreement or any of the other Loan Documents, theLease/Purchase Documents, the Obligations, the Grantor Obligations (as defined in the BorrowerSecurity Agreement and the Company Guarantee and Security Agreement, respectively), the Lienssecuring the Obligations and Grantor Obligations, or any of the terms or conditions of any LoanDocument or any Lease/Purchase Document, and (ii) it does not possess (and hereby forever waives,remises, releases, discharges and holds harmless each Lender, the Administrative Agent, and theirrespective affiliates, stockholders, directors, officers, employees, attorneys, agents andrepresentatives and each of their respective heirs, executors, administrators, successors andassigns (collectively, the “Indemnified Parties”) from and against, and agrees not toallege or pursue) any action, cause of action, suit, debt, claim, counterclaim, cross-claim,demand, defense, offset, opposition, demand and other right of action whatsoever, whether in law,equity or otherwise (which it, all those claiming by, through or under it, or its successors orassigns, have or may have) against the Indemnified Parties, or any of them, by reason of, anymatter, cause or thing whatsoever, with respect to events or omissions occurring or arising on orprior to the date hereof and relating to the Credit Agreement, any of the other Loan Documents orany of the other Lease/Purchase Documents (including, without limitation, with respect to thepayment, performance, validity or enforceability of the Obligations, the Grantor Obligations, theLiens securing the Obligations and Grantor Obligations, or any or all of the terms or conditions ofany Loan Document or anyLease/Purchase Document) or any transaction relating thereto.
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     H. Attached hereto as Annex III is a true and correct list of all deposit accounts,securities accounts, commodities accounts and similar accounts maintained by the Borrower and eachother Loan Party as of the date hereof. On or before January 15, 2009, the Borrower will obtainand maintain, or cause to be obtained and maintained, control agreements in form and substancesatisfactory to the Administrative Agent with respect to each such account set forth on AnnexIII and shall take, or cause to be taken, any other actions deemed necessary by theAdministrative Agent to obtain and maintain “control” of each such account (as such term is definedin Section 9-104 of the Uniform Commercial Code in the applicable jurisdiction), and the Borrowershall thereafter in connection with the opening of any new deposit, securities, commodities orsimilar account, deliver or cause to be delivered a control agreement in form and substancesatisfactory to the Administrative Agent simultaneously with the opening of such new account;providedthat so long as no Default or Event of Default shall have occurred and becontinuing, the Borrower and the other Loan Parties shall be permitted to maintain those accountsexpressly designated on Annex III hereto not subject to the Administrative Agent’s control(the “Unrestricted Accounts”) if (i) the total amount of funds on deposit in allUnrestricted Accounts does not exceed $200,000 in the aggregate at any given time and (ii) suchUnrestricted Accounts are used solely for petty cash purposes. Failure to comply with this SectionIII.H. shall constitute an Event of Default under the Credit Agreement.     I. On or before January 31, 2009, the Borrower will use its reasonable efforts to obtain andmaintain, or cause to be obtained and maintained, landlord waivers, warehouseman’s waivers or othersimilar agreements, each in form and substance reasonably satisfactory to the Administrative Agent,with respect to those locations which are requested by the Administrative Agent in its solediscretion and are listed on Schedule 2.6 of the Perfection Certificate of the Company delivered inconnection herewith and designated thereon as “food” or “green coffee storage” sites. Failure tocomply with this Section III.I. shall, if unremedied for a period of 30 days after notice to theBorrower from the Administrative Agent, constitute an Event of Default under the Credit Agreement.     J. As of the date hereof, at least fifty (50%) percent of the Company’s total number of Storeslocated in the United States utilize a Lender for their primary cash management functions and theBorrower will cause at least such percentage to be maintained at all times hereafter. In the eventthat Wachovia Corporation and/or its Affiliates with commercial banking operations (collectively,“Wachovia”) are merged with any Lender by March 31, 2009, then at all times thereafter, theBorrower will cause at least seventy (70%) percent of the Company’s total number of Stores locatedin the United States to utilize a Lender for their primary cash management functions (inclusive ofWachovia). On or before March 31, 2009 and at all times thereafter, the Borrower shall cause allof the Borrower’s, the Company’s and its Subsidiaries’ operating accounts to be maintained with aLender. Failure to comply with this Section III.J. shall constitute an Event of Default under theCredit Agreement.**IV.****CONDITIONS****.**     A. This Amendment shall become effective on the first date on which the Borrower shall haveexecuted and delivered to the Administrative Agent (or shall have caused to be executed anddelivered to the Administrative Agent by the appropriate persons) the following:1. This Amendment;
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2. The Amendment to Lease/Purchase Documents between the Borrower and the Company;3. Completed Perfection Certificates for the Borrower and each other Loan Party,each in form and substance satisfactory to the Administrative Agent;4. Trademark Security Agreements and any other intellectual property securityagreements deemed necessary by the Administrative Agent with respect to theBorrower’s and the Company’s domestic intellectual property not already subject tosuch an agreement; such documents to be in form and substance satisfactory to theAdministrative Agent and to be suitable for filing with the United States Patent andTrademark or Copyright Office, as applicable;5. Payment in immediately available funds of all fees agreed to be paid by theBorrower in connection with this Amendment, including without limitation, afully-earned and non-refundable amendment fee in the amount of Fifty ThousandDollars ($50,000.00), which amendment fee shall be payable to the AdministrativeAgent for pro rata distribution to the Lenders; and6. Such other supporting documents and certificates as the Administrative Agent orits counsel may reasonably request.     B. All legal matters incident to the transactions contemplated hereby shall be satisfactory tocounsel for the Administrative Agent.**V.****MISCELLANEOUS****.**     A. As provided in the Credit Agreement, the Borrower agrees to reimburse the AdministrativeAgent upon demand for all reasonable fees and disbursements of counsel incurred in connection withthe preparation of this Amendment.     B. This Amendment shall be governed by and construed in accordance with the laws of the Stateof New York.     C. This Amendment may be executed by the parties hereto in several counterparts hereof and bythe different parties hereto on separate counterparts hereof, all of which counterparts shalltogether constitute one and the same agreement. Delivery of an executed signature page of thisAmendment by facsimile transmission shall be effective as an in-hand delivery of an originalexecuted counterpart hereof.*[The next pages are the signature pages.]*
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     **IN WITNESS WHEREOF,**the parties hereto have caused this Amendment to be duly executed as asealed instrument by their duly authorized representatives, all as of the day and year first abovewritten.      **ARABICA FUNDING, INC.**