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1 2 3 4 5 6 7 8 9 In re 10 TC GLOBAL, INC., 11 Debtor.

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HONORABLE KAREN A. OVERSTREET HEARING DATE: FRIDAY, NOVEMBER 2, 2012 HEARING TIME: 9:30 A.M. LOCATION: SEATTLE, COURTROOM 8106 RESPONSE DATE: AT TIME OF HEARING

UNITED STATES BANKRUPTCY COURT WESTERN DISTRICT OF WASHINGTON

No. 12-20253 MOTION FOR ORDER AUTHORIZING DEBTOR TO ENTER INTO PREMIUM FINANCING AGREEMENT

TC Global, Inc. ("Debtor") dba Tully’s Coffee, debtor-in-possession herein, moves the Court for an order approving the insurance premium finance agreement described herein. This Motion is based on the records and files herein, and the accompanying Declaration of Cathy Campbell ("Campbell Decl.") in support of the Motion. The Debtor commenced this Chapter 11 case on October 10, 2012. The Debtor is operating its business and managing its affairs as a debtor-in-possession. A detailed discussion of the Debtor’s business operations and the events leading to this Chapter 11 are set forth in the Declaration of Scott Pearson in support of First Day Motions, Docket No. 8. On March 27, 2012, the Debtor secured insurance premium financing from Premium Assignment Corporation ("PAC"), in the ordinary course of business, for certain insurance policies that were due for renewal at the time ("Prepetition Agreement"). The Prepetition Agreement is MOTION FOR ORDER AUTHORIZING DEBTOR TO ENTER INTO PREMIUM FINANCING AGREEMENT – Page 1
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attached as Exhibit A to the Campbell Decl. Under the Prepetition Agreement, PAC financed a premium in the amount of $121,077.60 to be paid over nine monthly installments of $13,578.95, with the last payment on December 27, 2012. The Debtor now requires additional financing to renew insurance policies including, but not limited to, property, equipment, inventory, workers compensation, automobile, and umbrella coverage. The Debtor has negotiated with PAC the terms of additional premium financing ("New Financing") for $96,381.75. Details of the New Financing are attached as Exhibit B to the Campbell Decl. By virtue of the New Financing, the Debtor will become obligated to pay to PAC the total sum of $97,172.80 in eight monthly installments of $12,146.60 each, with the first payment due October 27, 2012, or within a reasonable grace period thereafter. As a condition of providing additional financing, PAC has required that the Prepetition Agreement and the New Financing be combined and treated as one loan, described on Exhibit C to the Campbell Decl. ("Proposed Agreement"). Under the Proposed Agreement, the Debtor will make monthly payments of $25,725.55 in October, November, and December, 2012, and then reduced monthly payments of $12,146.60, January through May, 2013. PAC further requires that the Debtor grant PAC a first priority lien on and security interest in unearned premiums as described in the Proposed Agreement, which will be deemed senior to a lien of any DIP Lender in this case and senior to any claims under 11 U.S.C. §§ 503, 506(b) or 507(b). In the event that the Debtor is in default of its obligations under the Proposed Agreement, PAC requires authority to cancel the insurance policies and collect unearned premiums without further hearing or order by this Court. The Debtor believes that the terms of the Proposed Agreement are commercially fair and reasonable given the circumstances, and that continued insurance coverage is essential to continue MOTION FOR ORDER AUTHORIZING DEBTOR TO ENTER INTO PREMIUM FINANCING AGREEMENT – Page 2
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5000 Two Union Square 601 Union Street Seattle, Washington 98101-2373 Telephone (206) 292-2110 Facsimile (206) 292-2104

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business operations. For the reasons set forth above, the Debtor respectfully requests the entry of an Order authorizing the Debtor to enter into the Proposed Agreement with PAC and the Debtor and PAC be authorized and directed to take all actions necessary or appropriate to affect and perform under the Proposed Agreement. DATED this 19th day of October, 2012. BUSH STROUT & KORNFELD LLP

By /s/ Arthur A. Shwab Christine M. Tobin-Presser, WSBA #27628 Arthur A. Shwab, WSBA #44250 Attorneys for TC Global, Inc.

MOTION FOR ORDER AUTHORIZING DEBTOR TO ENTER INTO PREMIUM FINANCING AGREEMENT – Page 3
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5000 Two Union Square 601 Union Street Seattle, Washington 98101-2373 Telephone (206) 292-2110 Facsimile (206) 292-2104

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1 2 3 4 5 6 7 8 9 In re 10 TC GLOBAL, INC., 11 Debtor. 12 13 14 15 16 17 18 19 20 21 22 23

HONORABLE KAREN A. OVERSTREET

UNITED STATES BANKRUPTCY COURT WESTERN DISTRICT OF WASHINGTON

No. 12-20253 [PROPOSED] ORDER AUTHORIZING DEBTOR TO ENTER INTO PREMIUM FINANCING AGREEMENT

THIS MATTER came before the Court upon the Motion for Order Authorizing Debtor to Enter into Premium Financing Agreement (“Motion”) filed by TC Global, Inc. (“Debtor”) dba Tully’s Coffee, debtor-in-possession herein. The Court has reviewed the files and records herein and finds that cause exists for the requested relief. Now, therefore, it is hereby ORDERED that: 1. 2. The Motion is granted; The Debtor is hereby authorized to enter into the premium finance arrangement

described in the Motion and the Declaration of Cathy Campbell, and exhibits thereto, in support of the Motion ("Agreement"); 3. The Debtor is further authorized to execute and deliver such documents and

amendments that the Debtor and lender, Premium Assignment Corporation or its successor or assigns [PROPOSED] ORDER AUTHORIZING DEBTOR TO ENTER INTO PREMIUM FINANCING AGREEMENT – Page 1
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("PAC") may deem reasonably necessary to carry out the Agreement and to perform and make monthly payments as prescribed therein; 4. The Debtor is authorized to grant PAC a first priority lien on and security interest in

unearned premiums as described in the Agreement, which are deemed senior to a lien of any DIP Lender in this case and senior to any claims under 11 U.S.C. §§ 503, 506(b) or 507(b); 5. In the event PAC fails to receive any payment due under the Agreement within 15 days

of the due date, the automatic stay under 11 U.S.C. § 362 shall thereupon be terminated with respect to PAC without further motion, hearing, or order by the Court, and PAC will be permitted to exercise its rights and remedies under the Agreement, including without limitation the rights to: (a) cancel the financed insurance policy(ies), and (b) collect and apply unearned premiums payable under the financed policy(ies) to the balance owed; 6. If the collection and application of unearned premiums is insufficient to pay the

balance owed, PAC may, within 21 days after the collection and application of such unearned premiums, file a proof of claim for the unsatisfied amount of any indebtedness under the Agreement notwithstanding the passage of any bar date for the filing of proofs of claim; 7. PAC's rights under the Agreement are fully preserved and protected and shall remain

unimpaired by this Bankruptcy proceeding, and shall remain in full force and effect, notwithstanding the subsequent conversion of this proceeding to one under Chapter 7 or any other provision of the Bankruptcy Code; // // // // [PROPOSED] ORDER AUTHORIZING DEBTOR TO ENTER INTO PREMIUM FINANCING AGREEMENT – Page 2
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8.

In order to enable the Debtor to have immediate insurance coverage, the ten day stay of

this order pursuant to Bankruptcy Rule 6004(h) shall not apply, and the relief herein granted is effective immediately upon entry. / / /End of Order/ / / Presented by:

5 BUSH STROUT & KORNFELD LLP 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 [PROPOSED] ORDER AUTHORIZING DEBTOR TO ENTER INTO PREMIUM FINANCING AGREEMENT – Page 3
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By /s/ Arthur A. Shwab Christine M. Tobin-Presser, WSBA #27628 Arthur A. Shwab, WSBA #44250 Attorneys for TC Global, Inc.

B USH S TROUT & K ORNFELD
LAW OFFICES

LLP

5000 Two Union Square 601 Union Street Seattle, Washington 98101-2373 Telephone (206) 292-2110 Facsimile (206) 292-2104

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