FIFTH AMENDMENT TO CREDIT AGREEMENT
                       -----------------------------------

          THIS  FIFTH  AMENDMENT TO CREDIT AGREEMENT (this "Fifth Amendment") is
                                                            ---------------
entered  into  by  and  among  PEET'S OPERATING COMPANY, INC. (formerly known as
Peet's  Coffee and Tea, Inc.) ("Borrower"), PEET'S TRADEMARK COMPANY, and PEET'S
                                --------
COFFEE & TEA, INC. (formerly known as Peet's Companies, Inc.), each a Washington
corporation  (each a "Credit Party" and collectively, the "Credit Parties"), and
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GENERAL  ELECTRIC  CAPITAL CORPORATION, a Delaware corporation ("Lender"), as of
                                                                 ------
December  31,  2002,  with  reference  to  the  following  facts:

                                    RECITALS

     A.     Pursuant  to  that certain Credit Agreement dated as of September 1,
2000, as amended by that certain First Amendment to Credit Agreement dated as of
January  19, 2001, that certain Second Amendment to Credit Agreement dated as of
June  29,  2001,  that  certain  Third Amendment to Credit Agreement dated as of
March 1, 2002, and that certain Fourth Amendment to Credit Agreement dated as of
April  23,  2002,  each  by and among Credit Parties and Lender (as the same may
have been further amended, supplemented, or otherwise modified from time to time
prior  to  the  date  of  this  Fifth Amendment, the "Credit Agreement"), Lender
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agreed  to  provide  certain  financial  accommodations to or for the benefit of
Borrower  and  the  other Credit Parties upon the terms and conditions contained
therein. Unless otherwise defined in this Fifth Amendment, (i) capitalized terms
or  matters  of  construction  defined  or  established in Annex A to the Credit
Agreement  shall  be  applied  as  defined  or  established  therein,  and  (ii)
references  to  Sections,  Schedules,  and Annexes shall refer, respectively, to
Sections,  Schedules,  and  Annexes  of  the  Credit  Agreement.

     B.     Credit  Parties  have  requested certain modifications to the Credit
Agreement, and Lender has agreed to such request on the terms and conditions set
forth  in  this  Fifth  Amendment.

          NOW,  THEREFORE,  in  consideration  of Credit Parties' performance of
their  promises  and  obligations hereunder, the continued performance by Credit
Parties  of  their  promises  and obligations under the Credit Agreement and the
other Loan Documents, and for other good and valuable consideration, the receipt
and  sufficiency  of  which  are  hereby acknowledged, Credit Parties and Lender
hereby  agree  as  follows:

                                    AGREEMENT
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     1.     AMENDMENTs.  The  Credit  Agreement  is  hereby  amended as follows:
            ----------

1.1     Clause  (d)  of  Section  6.2  is  hereby  deleted  and the following is
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substituted  in  lieu  thereof:

(d)  so  long  as  no  Default  or  Event  of Default shall have occurred and be
continuing  and  so  long  as  proceeds  of the Revolving Loans are not applied,
directly  or  indirectly, to the purchase of such investments, Borrower may make
investments  up  to  $50,000,000 in the aggregate, subject to Control Letters in
favor  of  Lender or otherwise subject to a perfected security interest in favor
of  Lender,  in the following: (i) if the Revolving Loan balance does not exceed
$5,000,000,  investments  consistent  with  the  guidelines set forth on Exhibit
                                                                         -------
6.2(d);  and  (ii)  if  the  Revolving  Loan  balance  exceeds  $5,000,000,  (A)
    --
marketable direct obligations issued or unconditionally guaranteed by the United
    --
States  of  America or any agency thereof maturing within one year from the date
of acquisition thereof, (B) commercial paper maturing no more than one year from
the  date of creation thereof and currently having the highest rating obtainable
from  either  Standard & Poor's Rating Group or Moody's Investors Service, Inc.,
(C)  certificates  of  deposit  maturing  no more than one year from the date of
creation  thereof  issued by commercial banks incorporated under the laws of the
United  States  of  America, each having combined capital, surplus and undivided
profits  of  not  less than $300,000,000 and having a senior unsecured rating of
"A"  or better by a nationally recognized rating agency (an "A Rated Bank"), (D)
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time  deposits  maturing  no more than 30 days from the date of creation thereof
with  A  Rated  Banks, and (E) mutual funds that invest solely in one or more of
the  investments  described  in  clauses  (A)  through  (D)  above.

1.2     Section  6.19(b)(ii) is hereby deleted in its entirety and the following
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is  substituted  therefor:

(ii)     From  and  after the Term Loan B Repayment Date, Borrower may engage in
transactions  and enter into agreements with respect to the opening of up to ten
(10)  new retail locations during any Fiscal Year; provided, that Credit Parties
shall  not  make  any  Capital  Expenditures  in connection with such new retail
locations  exceeding,  $800,000,  individually, or $5,000,000, in the aggregate,
during  any  such  Fiscal  Year.

1.3     The definition of "Change of Control" in Annex A to the Credit Agreement
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is  hereby  amended  by  deleting the reference to "25%" set forth in clause (a)
thereof  and  substituting  "40%"  in  lieu  thereof.

1.4     Annex  C  to  the  Credit  Agreement  is  hereby amended by deleting the
        --------
following  from clause (d) thereof: "The Concentration Blocked Account Agreement
shall  further  provide  that from and after the Closing Date, the Concentration
Account Bank shall immediately forward all amounts received in the Concentration
Account  to  the  Collection Account through daily sweeps from the Concentration
Account  into  the  Collection  Account"; and substituting the following in lieu
thereof:

"The Concentration Blocked Account Agreement shall further provide that from and
after the Closing Date, the Concentration Account Bank shall, from the after the
date  that  Lender  has  delivered  a  notice,  in  its sole discretion, to such
Concentration  Account  Bank,  the  Concentration Account Bank shall immediately
forward  all  amounts  received  in  the Concentration Account to the Collection
Account  through daily sweeps from the Concentration Account into the Collection
Account."

1.5     Annex  G is hereby amended by deleting paragraph (a) in its entirety and
        --------
substituting  the  following  in  lieu  thereof:

     (a)  Maximum  Capital  Expenditures.  Credit Parties shall not make Capital
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Expenditures  on a consolidated basis (i) during the period from August 1, 2000,
through  December 31, 2000, in excess of $3,000,000, (ii) during the period from
January  1,  2001, through December 31, 2001, in excess of $6,500,000 (excluding
$2.84 million applied in satisfaction of Borrower's obligations under the Heller
Loan  Documents),  or (iii) during any Fiscal Year of Borrower commencing during
or  after  January  2002,  in  excess  of  $12,000,000.

1.6     A new Exhibit 6.2(d) is hereby added to the Credit Agreement is attached
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hereto  as  Exhibit  A.
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1.7     An updated version of Disclosure Schedule (3.19) to the Credit Agreement
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is  attached  hereto  as  Exhibit  B.
                          ----------

     2.     EFFECTIVENESS.  This  Fifth  Amendment  shall  be  effective  as  of
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October  31,  2002, upon Lender's receipt of an original of this Fifth Amendment
duly  executed  by  the  Credit  Parties  and  Lender.

     3.     REPRESENTATIONS AND WARRANTIES.  Each Credit Party hereby represents
            ------------------------------
and  warrants  that  (a)  as  of  the  date  of  this Fifth Amendment, it has no
Commercial Tort Claims, (b) at all times from the Closing Date through and until
the  date  of  this  Fifth  Amendment  WBG  has  remained  inactive  and (c) the
representations  and  warranties contained in the Credit Agreement were true and
correct  in  all  material  respects  when made and, after giving effect to this
Fifth  Amendment,  shall  remain true and correct in all material respects as of
the  date  hereof  and  thereof,  except  to  the  extent  that  a  particular
representation  or  warranty  by  its terms expressly applies only to an earlier
date,  or is the subject of an updated disclosure schedule attached hereto.  The
Credit  Agreement  and the other Loan Documents, as modified and amended by this
Fifth  Amendment, constitute legal, valid and binding obligations of each Credit
Party  that  is  a  party  thereto,  enforceable  against  such  Credit Party in
accordance  with  their  respective  terms.

     4.     RATIFICATION.  Except  as  specifically  modified  by  this  Fifth
            ------------
Amendment,  the  parties  acknowledge  that  the  Credit  Agreement shall remain
binding  upon  Credit  Parties  and  Lender  and  all  provisions  of the Credit
Agreement shall remain in full force and effect. Credit Parties expressly ratify
and affirm their respective obligations to Lender under the Credit Agreement and
the  other  Loan  Documents.

     5.     MISCELLANEOUS  .
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5.1     Entire  Agreement;  Amendment.  This  Fifth Amendment, together with the
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Credit  Agreement  and the other Loan Documents, is the entire agreement between
the  parties  hereto  with  respect  to  the  subject matter hereof.  This Fifth
Amendment  supersedes  all prior and contemporaneous oral and written agreements
and  discussions  with  respect  to  the  subject  matter hereof or thereof.  No
amendment,  modification,  or  waiver  of  any  of  the provisions of this Fifth
Amendment  shall be valid or enforceable unless set forth in a writing signed by
Credit  Parties  and  Lender.

5.2     Recitals.  The  recitals  set  forth  at  the  beginning  of  this Fifth
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Amendment  are true and correct, and such recitals are incorporated into and are
a  part  of  this  Fifth  Amendment.

5.3     Headings.  Section headings used herein are for convenience of reference
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only,  are  not  part  of  this  Fifth  Amendment,  and are not to be taken into
consideration  in  interpreting  this  Fifth  Amendment.

5.4     Counterparts.  This  Fifth  Amendment  may  be  executed  in  identical
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counterpart  copies,  each of which shall be an original, but all of which shall
constitute one and the same agreement.  Delivery of an executed counterpart of a
signature  page  to  this  Fifth  Amendment  by  facsimile transmission shall be
effective  as  delivery  of  a  manually  executed  counterpart  of  this  Fifth
Amendment.  Any  party  delivering  this Fifth Amendment by facsimile shall send
the  original manually executed counterpart of this Fifth Amendment to the other
party  promptly  after  such  facsimile  transmission.

5.5     GOVERNING LAW.  THIS FIFTH AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED
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AND  ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA APPLICABLE
TO  CONTRACTS MADE AND PERFORMED IN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES
THEREOF  REGARDING  CONFLICT  OF  LAWS.

5.6     No  Waiver.  Except  as  specifically set forth in this Fifth Amendment,
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the  execution, delivery and effectiveness of this Fifth Amendment shall not (a)
limit,  impair,  constitute  a waiver of or otherwise affect any right, power or
remedy  by  Lender  under  the  Credit Agreement or any other Loan Document, (b)
constitute  a  waiver of any provision in the Credit Agreement or any other Loan
Document,  or  (c)  alter,  modify, amend or in any way affect any of the terms,
conditions,  obligations,  covenants  or  agreements  contained  in  the  Credit
Agreement  or any other Loan Document, all of which are ratified and affirmed in
all  respects  and  shall  continue  in  full  force  and  effect.

5.7     Conflict  of  Terms.  In  the  event  of  any  inconsistency between the
        -------------------
provisions  of  this  Fifth Amendment and any provision of the Credit Agreement,
the  terms  and  provisions  of  this  Fifth Amendment shall govern and control.

[Remainder  of  Page  Intentionally  Left  Blank]

<PAGE>



     IN  WITNESS WHEREOF, this Fifth Amendment to Credit Agreement has been duly
executed  as  of  the  date  first  written  above.

                              "CREDIT  PARTIES"

                              PEET'S  COFFEE  &  TEA,  INC.

                              By:     /s/  Mark  N.  Rudolph
                              Name:     Mark  N.  Rudolph
                              Title:     CFO

                              PEET'S  OPERATING  COMPANY,  INC.

                              By:     /s/  Mark  N.  Rudolph
                              Name:     Mark  N.  Rudolph
                              Title:     CFO

                              PEET'S  TRADEMARK  COMPANY

                              By:     /s/  Mark  N.  Rudolph
                              Name:     Mark  N.  Rudolph
                              Title:     CFO

                              "LENDER"

                              GENERAL  ELECTRIC  CAPITAL
                              CORPORATION

                              By:     /s/  Todd  Gronski
                              Name:     Todd  Gronski
                              Duly  Authorized  Signatory

<PAGE>


                                    Exhibit A
                                    ---------

                     EXHIBIT 6.2(D) TO THE CREDIT AGREEMENT

                            Peet's Coffee & Tea, Inc.
                              Investment Guidelines

I.     STATEMENT  OF  PURPOSE
The  purpose  of  this  policy is to institute proper guidelines for the ongoing
management  of  the  Company's  short-term  investments.

II.     INVESTMENT  OBJECTIVES
The  assets  represent  the  liquid and working funds for the present and future
operations  of  the  Company.  These  assets are to be invested in a manner that
preserves capital, provides liquidity, maintains appropriate diversification and
generates returns relative to these guidelines and prevailing market conditions.

III.     RESPONSIBILITIES
A.     It  is  the responsibility of the Investment Committee/Board of Directors
                                         ---------------------------------------
of  the  Company  to  adopt  the  Investment  Policy.
B.     It  is the responsibility of the President or the Chief Financial Officer
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to  implement  the  Investment  Policy of the Company including the direction of
purchases  and  sales  of  securities.
C.     The approval of either the President or the Chief Financial Officer shall
                                  ----------------------------------------
be  required  to transfer Company funds to Company banks or investment accounts.
All  other  transfers  will  require  the approval of both the President and the
Chief  Financial  Officer.
D.     The  President  and  Chief Financial Officer may employ the services of a
            ---------------------------------------
Registered  Investment  Advisor  to  direct  a  portion or all of the investment
activities  of  the  Company  consistent  with  the  guidelines set forth in the
Investment  Policy.
E.     The Chief Financial Officer will monitor ongoing investment activities to
           -----------------------
insure  that  proper  liquidity  is  being  maintained  and  that the investment
strategy  is  consistent  with  Company  objectives.
F.     The  Chief  Financial  Officer  will  report  to  the  Board of Directors
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quarterly  concerning the investment performance during the most recent quarter.
G.     The  assigned  Investment  Manager will communicate with the President or
Chief  Financial Officer before investing the portfolio within the guidelines of
this  Corporate  Investment  Policy.

<PAGE>

Investment  Guidelines

A.     Appropriate  Investments  and  Concentration  Limits

                                  MAXIMUM      MAXIMUM  %        SINGLE  ISSUER
TYPE                            MATURITY     OF  PORTFOLIO     %  OF  PORTFOLIO
----                            --------     -------------     ----------------
U.S.  Treasury  Securities          5 year          100%                   N/A

U.S.  Federal  Agency  Securities   3 year           75%                   N/A

U.S.  Government  only  Money  Market
Funds                                  N/A           25%                  100%

Guaranteed  Student  Loan  Obligations,
Fully  Collateralized  to  Principal  and
Interest                           1  year           35%                   10%

B.     Maturity  Limits  and  Benchmarks
The  Chief  Financial  Officer  will  establish,  from time to time, the maximum
allowable  maturity  and  the  average  maturity  of the portfolio.  The initial
                                                                     -----------
maximum  allowable  maturity for any investment is five (5) years.  The weighted
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average  maturity  of  the  portfolio  should  not  exceed two (2) year, or such
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shorter  period,  as  determined by the Chief Financial Officer based on current
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business  environment  and  expected  future  cash  flows.
 ---------------------------------------------------------

Appropriate benchmarks will be established for the respective portfolio classes.
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C.     Credit  Quality
In  all  categories  described above, the emphasis will be on securities of high
credit  quality.
All  short-term  investments  (or  applicable underlying collateral) shall bear,
from  at  least  two of the following securities, a rating of at least: A-1 from
Standard  &  Poor's,  P-1  from  Moody's,  and/or  F-1  from  Fitch.
Long-term  investments shall bear from at least two of the following services, a
rating  of  at  least:  A from Standard & Poor's, A2 from Moody's, and/or A from
Fitch.
Municipal  Obligations  -  Investments  shall  bear  from  at  least  one of the
following  services  a rating of: short term SP-1/MIG1, A-1/VMIG1, A-1/P-1, long
term  AA/AA2  or  better,  Money  Market  Mutual  funds  -  AAA

D.     Marketability
Investments  should  be  of sufficient size (minimum $1 million block preferred)
and  be  held in issues that are traded actively to facilitate transactions at a
minimum  cost  and  accurate  market  valuation.

E.     Classification  of  Portfolio
Investments  will  generally  be made with the intention of holding to maturity/
keeping  them  available for sale.  Investments may be sold prior to maturity in
the  event of unanticipated cash needs, deterioration of the financial situation
of  the  issuer, or for other general portfolio considerations (i.e. decision to
shorten  or  lengthen  average  portfolio  maturity,  etc.)


V.  COMMUNICATION
The Fund Managers will contact the CFO immediately upon the occurrence of any of
the  following:
1.     Any  significant adverse unfavorable event or shifts in the market place.
2.     An  issuer  is  placed  on negative credit watch whereby any action taken
would  result  in  the  investment's  credit  rating  being  below  the  minimum
acceptable  credit  rating  stated  in  this  policy.
3.     A  decline in the issuer's credit rating below the minimum credit quality
standards  stated  in  this  Investment  policy.


<PAGE>


                                    Exhibit B
                                    ---------

               DISCLOSURE SCHEDULE (3.19) TO THE CREDIT AGREEMENT