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Technology Stocks : Amazon.com, Inc. (AMZN)

AMZN 233.22

+1.8%

Nov 28 9:30 AM EST

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To: Jan Crawley who wrote (3455)	4/26/1998 11:34:00 PM
From: Gary Korn	Read Replies (1) of 164684

Jan, The original $75MM note does in fact have a minimum cash balance provision. Perhaps the new obligation was obtained because of a threat that AMZN would be in default of this or other financial covenants: Article 7.14 of the $75MM note states: "7.14(a) Minimum Cash Balance. The Borrower shall maintain at all times a minimum balance of readily available unencumbered cash and Cash Equivalents on deposit or similar accounts at least equal to the Required Cash Balance." (The Required Cash Balance, a defined term, was left blank for reasons of confidentiality.) "7.14(b) EBITDA/Negative EBITDA Covenant. The Borrower's EBITDA, measured at the end of the first fiscal quarter of 1998 for the quarter then ended [THAT IS THIS TUESDAY's RESULTS], at the end of the second fiscal quarter of 1998 for the two consecutive fiscal quarters then ended, at the end of the third fiscal quarter of 1998 for the three consecutive fiscal quarters then ended, and at each quarter end thereafter for the three consecutive quarters then ended shall not be less than the amounts indicated below for the quarter end (and, if expressed as a deficit, the Borrower's EBIDTA loss shall not be greater than the amount indicated below for the relevant period: [the amount is left blank for reasons of confidentiality]. "7.14(c) Maximum Payable Days. as of the end of each fiscal quarter, the product of (i) the quotient of (A) the accounts payable (excluding accounts payable in respect of general administration and marketing to the extent not included in cost of goods sold as reported per GAAP) of the Borrower as of the end of such fiscal quarter divided by (B) the product of (I) the cost of goods sold as reported per GAAP by the Borrower for such fiscal quarter and to be disclosed in financials to be filed with the SEC times (II) 4 times (ii) 365, shall be equal to or less than 100." Gary Korn

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