Sample Business Contracts


Commitment Letter - U.S. Bank of Idaho and Coldwater Creek Inc.


                               [Letterhead]


December 18, 1996


Mr. Don Robson
Vice President & Chief Financial Officer
Coldwater Creek Inc.
One Coldwater Creek Drive
Sandpoint, Idaho 83864

Dear Don:

I'm pleased to be able to inform you of U.S. Bank of Idaho's commitment to 
increase and modify the two revolving credit facilities, and to add a 
separate Letter of Credit facility, for your good company.

As we had discussed the increased facilities will consist of the following 
two components:

Line #1:    Amount:        $17,500,000 (a $9,000,000 increase over the 
                           existing line)

            Type:          Short-Term Revolving Line of Credit

            Interest Rate: 30, 60 or 90 day LIBOR + 1.75%, or U.S. Bank's 
                           Prime Rate minus 0.05%

            Fee:           0.125% non-usage, payable quarterly

            Maturity:      June 30th, 1998

            Collateral:    Unsecured; however, Coldwater Creek pledges not to 
                           encumber Accounts Receivable and Inventory

Line #2:    Amount:        $17,500,000 (a $6,000,000 increase over the 
                           existing line)

            Type:          Longer Term Revolving Line of Credit

            Interest Rate: 30, 60 or 90 day LIBOR + 1.85%, or U.S. Bank's 
                           Prime Rate

            Fee:           0.125% non-usage, payable quarterly

            Maturity:      June 30th, 2000

            Collateral:    Secured by a First Deed of Trust on Coldwater 
                           Creek's headquarters complex and liens on 
                           substantially all other fixed assets including 
                           leaseholds at any other business locations 
                           operated by the company plus fixed assets 
                           contained therein. Collateral is being held as an 
                           abundance of caution, given the multi-year term of 
                           the commitment, and no appraisals are required.

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In addition to the increased facilities described above, U.S. Bank will 
provide a separate unsecured line of credit exclusively for the purpose of 
issuing either Standby or Commercial Letters of Credit with an aggregate face 
value of no more than $1,000,000. Letters of Credit under this facility can 
be issued up through June 30, 1998 for expiration by no later than June 30, 
1999.

The Loan Agreement between the bank and the borrower will include the 
following financial covenants:

-   The ratio of Total Liabilities to Tangible Net Worth is not to exceed 
    1.50 : 1 at the fiscal year ending March 3, 1997 and 1.20 : 1 at the 
    fiscal year ending March 2, 1998 and at each fiscal year-end thereafter. 
    During each fiscal year, for measurement as of the end of the first, 
    second and third fiscal quarter, the ratio of Total Liabilities to 
    Tangible Net Worth is not to exceed 1.50 : 1.

-   The Tangible Net Worth is to be at least $18,000,000 at the fiscal year 
    ending March 3, 1997 and $30,000,000 at the fiscal year ending March 2, 
    1998 and at each fiscal year-end thereafter.

-   The Debt Service Coverage Ratio (Net Income + Depreciation / Debt Service 
    Requirement) is to be no less than 1.25 : 1 as of each fiscal year end. 
    For purposes of this covenant, Debt Service Requirement will be assumed 
    to be $3,500,000 which equates approximately to the annual principal 
    reduction requirement to fully amortize a $17,500,000 term loan over five 
    years.

For purposes of covenant measurements, we will treat Prepaid Expenses and 
Deferred Catalog Costs as tangible assets.

In addition to the financial covenants, it will be a condition of the 
unsecured Short Term Revolving Line of Credit that any borrowings thereunder 
be fully repaid and that the line remains "at rest" for a minimum of thirty 
consecutive days during a twelve month period starting as of the date of 
closing of the documents finalizing this commitment. This condition is not 
applicable to the secured Longer Term Revolving Line of Credit.

The above-described terms and conditions will be included in a new Loan 
Agreement substantially comparable to the agreement that currently exists 
between us. The only other notable difference will be a requirement for 
quarterly Compliance Certificates whereby the Company certifies that it is in 
compliance - or if applicable, out of compliance - with the covenants 
contained in the agreement.

Don, as you and I discussed briefly yesterday, we'll do our best to complete 
the documentation of these new credit facilities as quickly as possible to 
fit within the timetable for your potential IPO processes. As in the past we 
should be able to prepare all documents internally, without using outside 
counsel, thereby limiting your out-of-pocket documentation expenses to only 
the title insurance necessary to support the amended deed of trust and any 
filing fees that may be payable. Please understand that such insurance 
premiums and fees, if any, are for the account of Coldwater Creek.

I trust that this increase and modification of U.S. Bank's financing 
commitment to Coldwater Creek will meet with your and the Board's approval. 
Unless I hear otherwise, we will proceed immediately with the preparation of 
the operative documents that will reflect

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this commitment. Obviously, if you or anyone has questions or concerns along 
the way please don't hesitate to call.

Please know that all of us at U.S. Bank who have been involved in the growth 
of our relationship appreciate the opportunity to be Coldwater Creek's bank. 
We look forward to continuing to serve all of your commercial banking needs 
as the company continues to grow and transform itself, potentially, into a 
public corporation.

In closing, please accept my Very Best Wishes to you and your associates and 
family for a wonderful Holiday Season!

Sincerely,


/s/  Anthony W. Olbrich

Anthony W. Olbrich
Senior Vice President & Mgr.
Corporate Banking
Ph. 208-383-7606


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