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EXHIBIT 1.1
KRISPY KREME DOUGHNUTS, INC.
3,000,000 Shares of Common Stock
Underwriting Agreement
, 2000
Deutsche Bank Securities Inc.
X.X. Xxxxxx Securities Inc.
Xxxx Xxxxxxxx Incorporated
BB&T Capital Markets/Xxxxx & Xxxxxxxxxxxx, Inc.
As Representatives of the several Underwriters
listed in Schedule I hereto
c/o Deutsche Bank Securities Inc.
Xxx Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Ladies and Gentlemen:
Krispy Kreme Doughnuts, Inc., a North Carolina corporation
("Holding"), proposes to issue and sell to the several Underwriters listed in
Schedule I hereto (the "Underwriters"), for whom you are acting as
representatives (the "Representatives"), an aggregate of 3,000,000 shares (the
"Underwritten Shares") of common stock, no par value, of Holding (the "Common
Stock"), and, for the sole purpose of covering over-allotments in connection
with the sale of the Underwritten Shares, up to an additional 450,000 shares
(the "Option Shares") of Common Stock. The Underwritten Shares and the Option
Shares are herein referred to as the "Shares."
Holding currently is a wholly owned subsidiary of Krispy Kreme
Doughnut Corporation, a North Carolina corporation (the "Company"). As soon as
possible following the execution of this Agreement by the parties hereto, (i)
KKDC Reorganization Corporation, a North Carolina corporation and a wholly owned
subsidiary of Holding ("Newco"), will be merged with and into the Company, with
the Company continuing as the surviving corporation (the "Merger") and (ii) each
outstanding share of common stock, par value $10.00 per share, of the Company,
other than shares held by Holding, will be converted into the right to receive
(A) 20.0 shares of Common Stock and (B) a cash payment of $15.00, payable on the
Closing Date (as defined herein) from the proceeds of the offering contemplated
hereby. Following consummation of the Merger, the Company will be a wholly owned
subsidiary of Holding. Holding, the Company and Newco are herein referred to
collectively as the "Krispy Kreme Entities."
The Common Stock, including the Shares, will have attached
thereto rights (the "Rights") to purchase one one-hundredth (1/100) of a share
of Series A Participating Cu-
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mulative Preferred Stock, $1.00 par value per share (the " Series A Preferred
Stock"). The Rights are to be issued pursuant to a Rights Agreement (the "Rights
Agreement") dated as of January 18, 2000 between Holding and Branch Banking and
Trust Company.
As part of the offering contemplated by this Agreement,
Deutsche Bank Xxxx Xxxxx LLC, an affiliate of Deutsche Bank Securities Inc. (the
"Designated Underwriter"), has agreed to reserve out of the Underwritten Shares
purchased by it under this Agreement, up to 450,000 shares for sale to officers,
directors, and employees of Krispy Kreme Entities and persons having business
relationships with and friends of the Krispy Kreme Entities (collectively, the
"Participants"), as set forth in the Prospectus (as defined herein) under the
heading "Underwriting" (the "Directed Share Program"). The Underwritten Shares
to be sold by the Designated Underwriter pursuant to the Directed Share Program
(the "Directed Shares") will be sold by the Designated Underwriter pursuant to
this Agreement at the public offering price.
Holding has prepared and filed with the Securities and
Exchange Commission (the "Commission") in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Securities Act"), a registration
statement, including a prospectus, relating to the Shares and the Rights. The
registration statement as amended at the time when it shall become effective,
including information (if any) deemed to be part of the registration statement
at the time of effectiveness pursuant to Rule 430A under the Securities Act, is
referred to in this Agreement as the "Registration Statement," and the
prospectus in the form first used to confirm sales of Shares is referred to in
this Agreement as the "Prospectus." Each preliminary prospectus contained in the
Registration Statement prior to the time it becomes effective is referred to in
this Agreement as a "Preliminary Prospectus." If Holding has filed an
abbreviated registration statement pursuant to Rule 462(b) under the Securities
Act (the "Rule 462 Registration Statement"), then any reference herein to the
term "Registration Statement" shall be deemed to include such Rule 462
Registration Statement.
1. Holding agrees to sell the Underwritten Shares to the
several Underwriters as hereinafter provided, and each Underwriter, upon the
basis of the representations and warranties herein contained, but subject to the
conditions hereinafter stated, agrees to purchase, severally and not jointly,
from Holding the respective number of Underwritten Shares set forth opposite
such Underwriter's name on Schedule I hereto at a purchase price per share of
$ (the "Purchase Price"). The public offering price of the Shares is
not in excess of the price recommended by X.X. Xxxxxx Securities Inc., acting as
a "qualified independent underwriter" within the meaning of Rule 2720 of the
Rules of Conduct of the National Association of Securities Dealers, Inc.
In addition, Holding agrees to issue and sell the Option
Shares to the several Underwriters as hereinafter provided, and the
Underwriters, on the basis of the representations and warranties herein
contained, but subject to the conditions hereinafter stated, shall have the
option to purchase, severally and not jointly, from Holding, for the sole
purpose of covering
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over-allotments (if any) in the sale of Underwritten Shares by the several
Underwriters, all or any portion of the Option Shares at the Purchase Price.
If any Option Shares are to be purchased, the number of Option
Shares to be purchased by each Underwriter shall be the number of Option Shares
which bears the same ratio to the aggregate number of Option Shares being
purchased as the number of Underwritten Shares set forth opposite the name of
such Underwriter in Schedule I hereto (or such number increased as set forth in
Section 9 hereof) bears to the aggregate number of Underwritten Shares being
purchased from Holding by the several Underwriters, subject, however, to such
adjustments to eliminate any fractional Shares as the Representatives in their
sole discretion shall make.
The Underwriters may exercise the option to purchase the
Option Shares at any time (but not more than once) on or before the thirtieth
day following the date of this Agreement, by written notice from the
Representatives to Holding. Such notice shall set forth the aggregate number of
Option Shares as to which the option is being exercised and the date and time
when the Option Shares are to be delivered and paid for, which may be the same
date and time as the Closing Date (as hereinafter defined) but shall not be
earlier than the Closing Date or later than the tenth full Business Day (as
hereinafter defined) after the date of such notice (unless such time and date
are postponed in accordance with the provisions of Section 9 hereof). Any such
notice shall be given at least two Business Days prior to the date and time of
delivery specified therein.
2. The Krispy Kreme Entities understand that the Underwriters
intend (i) to make a public offering of the Shares as soon after (A) the
Registration Statement has become effective (if it has not already become
effective) and (B) the parties hereto have executed and delivered this
Agreement, as in the judgment of the Representatives is advisable and (ii)
initially to offer the Shares upon the terms set forth in the Prospectus.
3. Payment for the Shares shall be made by wire transfer in
immediately available funds (X) to the account specified to the Representatives
by Holding in the case of the Underwritten Shares on , 2000, or at
such other time on the same or such other date, not later than the fifth
Business Day thereafter, as the Representatives and Holding may agree upon in
writing or (Y) to the account specified to the Representatives by Holding with
regard to payment to Holding with regard to the Option Shares on the date and
time specified by the Representatives in the written notice of the Underwriters'
election to purchase such Option Shares. The time and date of such payment for
the Underwritten Shares is referred to herein as the "Closing Date" and the time
and date for such payment for the Option Shares, if other than the Closing Date,
are herein referred to as the "Additional Closing Date." As used herein, the
term "Business Day" means any day other than a day on which banks are permitted
or required to be closed in New York City.
Payment for the Shares to be purchased on the Closing Date or
the Additional Closing Date, as the case may be, shall be made against delivery
to the Representatives for the
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respective accounts of the several Underwriters of the Shares to be purchased on
such date registered in such names and in such denominations as the
Representatives shall request in writing not later than two full Business Days
prior to the Closing Date or the Additional Closing Date, as the case may be,
with any transfer taxes payable in connection with the transfer to the
Underwriters of the Shares duly paid by Holding. The certificates for the Shares
will be made available for inspection and packaging by the Representatives at
the office of Deutsche Bank Securities Inc. set forth above not later than 1:00
P.M., New York City time, on the Business Day prior to the Closing Date or the
Additional Closing Date, as the case may be.
4. The Krispy Kreme Entities, jointly and severally, represent
and warrant to each Underwriter that:
(a) no order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission, and each
Preliminary Prospectus filed as part of the Registration Statement as
originally filed or as part of any amendment thereto, or filed pursuant
to Rule 424 under the Securities Act, complied when so filed in all
material respects with the Securities Act, and did not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; provided that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in
conformity with information relating to any Underwriter furnished to
the Krispy Kreme Entities in writing by such Underwriter through the
Representatives expressly for use therein;
(b) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that
purpose has been instituted or, to the best knowledge of any Krispy
Kreme Entity, threatened by the Commission; and the Registration
Statement and Prospectus (as amended or supplemented if Holding shall
have furnished any amendments or supplements thereto) comply, or will
comply, as the case may be, in all material respects with the
Securities Act and do not and will not, as of the applicable effective
date as to the Registration Statement and any amendment thereto and as
of the date of the Prospectus and any amendment or supplement thereto,
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading, and the Prospectus, as amended or
supplemented, if applicable, at the Closing Date or Additional Closing
Date, as the case may be, will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading; except that the foregoing representations and
warranties shall not apply to statements or omissions in the
Registration Statement or the Prospectus made in reliance upon and in
conformity with information relating to any Underwriter furnished to
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the Krispy Kreme Entities in writing by such Underwriter through the
Representatives expressly for use therein;
(c) the financial statements, and the related notes thereto,
included in the Registration Statement and the Prospectus present
fairly, in the case of Holding, the financial position of Holding as of
the date indicated and, in the case of the Company and its consolidated
subsidiaries, the consolidated financial position of the Company and
its consolidated subsidiaries and, as of the dates indicated and the
results of their operations and changes in their consolidated cash
flows for the periods specified; said financial statements have been
prepared in conformity with generally accepted accounting principles
applied on a consistent basis; and the supporting schedules included in
the Registration Statement present fairly the information required to
be stated therein;
(d) since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has not
been any change in the capital stock or long-term debt of any of the
Krispy Kreme Entities or any of their subsidiaries (other than changes
in capital stock contemplated in the Prospectus as a result of the
Merger), or any material adverse change, or any development involving a
prospective material adverse change, in or affecting the general
affairs, business, prospects, management, financial position,
shareholders' equity or results of operations of the Krispy Kreme
Entities and their subsidiaries, taken as a whole (a "Material Adverse
Change"), otherwise than as set forth or contemplated in the
Prospectus; and except as set forth or contemplated in the Prospectus,
none of the Krispy Kreme Entities nor any of their subsidiaries has
entered into any transaction or agreement (whether or not in the
ordinary course of business) material to the Krispy Kreme Entities and
their subsidiaries, taken as a whole;
(e) each of the Krispy Kreme Entities has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation, with power and
authority (corporate and other) to own its properties and conduct its
business as described in the Prospectus, and has been duly qualified as
a foreign corporation for the transaction of business and is in good
standing under the laws of each other jurisdiction in which it owns or
leases properties, or conducts any business, so as to require such
qualification, other than where the failure to be so qualified or in
good standing would not have a material adverse effect on the general
affairs, business, prospects, management, financial position,
shareholders' equity or results of operations of the Krispy Kreme
Entities and their subsidiaries, taken as a whole (a "Material Adverse
Effect");
(f) each of the Company's subsidiaries which is not a Krispy
Kreme Entity has been duly incorporated or organized and is validly
existing as a corporation under the laws of its jurisdiction of
incorporation or organization, with power and authority (corporate and
other) to own its properties and conduct its business as described in
the
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Prospectus, and has been duly qualified as a foreign corporation for
the transaction of business and is in good standing under the laws of
each jurisdiction in which it owns or leases properties, or conducts
any business, so as to require such qualification, other than where the
failure to be so qualified or in good standing would not have a
Material Adverse Effect; and all the outstanding shares of capital
stock of each subsidiary of the Company (other than Holding) have been
duly authorized and validly issued, are fully-paid and non-assessable,
and (except, in the case of foreign subsidiaries, for directors'
qualifying shares and except as set forth in the Prospectus) are owned
by the Company, directly or indirectly, free and clear of all liens,
encumbrances, security interests and claims;
(g) this Agreement has been duly authorized, executed and
delivered by each of the Krispy Kreme Entities;
(h) the Company has an authorized capitalization as set forth
in the Prospectus, and all of the outstanding shares of capital stock
of the Company have been duly authorized and validly issued, are
fully-paid and non-assessable and are not subject to any pre-emptive or
similar rights; and, except as set forth in or contemplated by the
Prospectus, there are no outstanding rights (including, without
limitation, pre-emptive rights), warrants or options to acquire, or
instruments convertible into or exchangeable for, any shares of capital
stock or other equity interest in the Company or any of its
subsidiaries, or any contract, commitment, agreement, understanding or
arrangement of any kind relating to the issuance of any capital stock
of the Company or any such subsidiary, any such convertible or
exchangeable securities or any such rights, warrants or options;
(i) Holding has an authorized capitalization as set forth in
the Prospectus and such authorized capital stock conforms as to legal
matters to the description thereof in the Prospectus, and, upon
consummation of the Merger, all of the outstanding shares of capital
stock of Holding shall have been duly authorized and validly issued,
will be fully-paid and non-assessable and will not be subject to any
pre-emptive or similar rights; and, except as set forth in or expressly
contemplated by the Prospectus, there will be no outstanding rights
(including, without limitation, pre-emptive rights), warrants or
options to acquire, or instruments convertible into or exchangeable
for, any shares of capital stock or other equity interest in Holding or
any of its subsidiaries, or any contract, commitment, agreement,
understanding or arrangement of any kind relating to the issuance of
any capital stock of Holding or any such subsidiary, any such
convertible or exchangeable securities or any such rights, warrants or
options; and, upon consummation of the Merger, all the outstanding
shares of capital stock of the Company will be directly owned by
Holding, free and clear of all liens, encumbrances, security interests
and claims;
(j) the Shares have been duly authorized, and, when issued and
delivered to and paid for by the Underwriters in accordance with the
terms of this Agreement,
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will be duly issued and will be fully paid and non-assessable and will
conform to the description thereof in the Prospectus; and the issuance
of such Shares is not subject to any preemptive or similar rights;
(k) the Rights Agreement has been duly authorized, executed
and delivered by Holding; the Rights have been duly authorized by
Holding and, when issued upon issuance of the Shares, will be validly
issued, and Series A Preferred Stock has been duly authorized by
Holding and validly reserved for issuance upon the exercise of the
Rights and, when issued upon exercise in accordance with the terms of
the Rights Agreement, will be validly issued, fully paid and
non-assessable;
(l) none of the Krispy Kreme Entities nor any of their
subsidiaries is, or with the giving of notice or lapse of time or both
would be, in violation of or in default under its certificate or
articles of incorporation or by-laws or any indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument to which any
of the Krispy Kreme Entities or any of their subsidiaries is a party or
by which it or any of them or any of their respective properties is or
will be bound, except for violations and defaults which individually
and in the aggregate are not material to the Krispy Kreme Entities and
their subsidiaries, taken as a whole; the issue and sale of the Shares
to be sold by Holding hereunder and the performance by the Krispy Kreme
Entities of their obligations under this Agreement and the consummation
of the transactions contemplated herein will not conflict with or
result in a breach of any of the terms or provisions of, or constitute
a default under, any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument to which any of the Krispy Kreme
Entities or any of their subsidiaries is a party or by which any of the
Krispy Kreme Entities or any of their subsidiaries is bound or to which
any of the property or assets of any of the Krispy Kreme Entities or
any of their subsidiaries is subject, nor will any such action result
in any violation of the provisions of the certificate or articles of
incorporation or the by-laws of any of the Krispy Kreme Entities or any
applicable law or statute or any order, rule or regulation of any court
or governmental agency or body having jurisdiction over any of the
Krispy Kreme Entities, their subsidiaries or any of their respective
properties; and no consent, approval, authorization, order, license,
registration or qualification of or with any such court or governmental
agency or body is required for the issue and sale of the Shares to be
sold by Holding hereunder or the consummation by the Krispy Kreme
Entities of the transactions contemplated by this Agreement, except
such consents, approvals, authorizations, orders, licenses,
registrations or qualifications as have been obtained under the
Securities Act and as may be required under state securities or Blue
Sky Laws in connection with the purchase and distribution of the Shares
by the Underwriters;
(m) other than as set forth or contemplated in the Prospectus,
there are no legal or governmental investigations, actions, suits or
proceedings pending or, to the knowledge of the Krispy Kreme Entities,
threatened against or affecting any Krispy
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Kreme Entity, any of their subsidiaries or any of their respective
properties or to which any of the Krispy Kreme Entities or any of their
subsidiaries is a party or to which any property of any of the Krispy
Kreme Entities or any of their subsidiaries is, or may be the subject
which, if determined adversely to any of the Krispy Kreme Entities or
any of their subsidiaries, could individually or in the aggregate have,
or reasonably be expected to have, a Material Adverse Effect, and, to
the best knowledge of the Krispy Kreme Entities, no such proceedings
are threatened or contemplated by governmental authorities or
threatened by others; to the knowledge of the Krispy Kreme Entities,
there are no legal or governmental investigations, actions, suits or
proceedings pending against or affecting any Krispy Kreme franchisee
which, if determined adversely, could individually or in the aggregate
have, or reasonably be expected to have, a Material Adverse Effect; and
there are no statutes, regulations, contracts or other documents that
are required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement
that are not described or filed as required;
(n) the Krispy Kreme Entities and their subsidiaries have good
and marketable title in fee simple to all items of real property and
good and marketable title to all personal property owned by them, in
each case free and clear of all liens, encumbrances and defects except
such as are set forth or referred to in the Prospectus or such as do
not materially affect the value of such property and do not interfere
with the use made or proposed to be made of such property by the Krispy
Kreme Entities and their subsidiaries; and any real property and
buildings held under lease by the Krispy Kreme Entities and their
subsidiaries are held by them under valid, existing and enforceable
leases with such exceptions as are not material and do not interfere
with the use made or proposed to be made of such property and buildings
by the lessee;
(o) no relationship, direct or indirect, exists between or
among any of the Krispy Kreme Entities or any of their subsidiaries, on
the one hand, and their directors, officers, shareholders, customers or
suppliers, on the other hand, which is required to be described in the
Registration Statement or the Prospectus which is not described as
required;
(p) no person has the right to require any Krispy Kreme Entity
to register any securities for offering and sale under the Securities
Act by reason of the filing of the Registration Statement with the
Commission or the issue and sale of the Shares to be sold by Holding
hereunder;
(q) neither Holding nor the Company is and, after giving
effect to the offering and sale of the Shares, neither will be an
"investment company" or an entity "controlled" by an "investment
company", as such terms are defined in the Investment Company Act of
1940, as amended (the "Investment Company Act");
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(r) to the knowledge of the Krispy Kreme Entities,
PricewaterhouseCoopers LLP ("PricewaterhouseCoopers") who have
certified certain financial statements included in the Registration
Statement and the Prospectus are independent public accountants as
required by the Securities Act;
(s) the Krispy Kreme Entities and their subsidiaries have
filed all federal, state, local, foreign and franchise tax returns
which have been required to be filed and have paid all taxes shown
thereon and all assessments received by them or any of them to the
extent that such taxes have become due and are not being contested in
good faith which would have or could reasonably be expected to have a
Material Adverse Effect; and, except as disclosed in the Registration
Statement and the Prospectus, there is no tax deficiency which has been
or might reasonably be expected to be asserted or threatened against
any of the Krispy Kreme Entities or any of their subsidiaries which
would have or could reasonably be expected to have a Material Adverse
Effect;
(t) none of the Krispy Kreme Entities and no subsidiary
thereof has taken nor will it take, directly or indirectly, any action
designed to, or that might be reasonably expected to, cause or result
in stabilization or manipulation of the price of the Common Stock;
(u) each of the Krispy Kreme Entities and their subsidiaries
owns, possesses or has obtained all material licenses, permits,
certificates, consents, orders, approvals, franchises and other
authorizations from, and has made all declarations and filings with,
all federal, state, local and other governmental authorities (including
foreign regulatory agencies), all self-regulatory organizations and all
courts and other tribunals, domestic or foreign, necessary to own or
lease, as the case may be, and to operate its properties and to carry
on its business as conducted as of the date hereof, and none of the
Krispy Kreme Entities or any of their subsidiaries has, and, received
any actual notice of any proceeding relating to revocation or
modification of any such license, permit, certificate, consent, order,
approval, franchise or other authorization, except as set forth in the
Registration Statement and the Prospectus; and each Krispy Kreme Entity
and each of their subsidiaries is in compliance with all material laws
and regulations relating to the conduct of its business as conducted as
of the date hereof;
(v) the Krispy Kreme Entities and their subsidiaries are in
compliance in all material respects with the applicable requirements of
the Federal Trade Commission (the "FTC") rules governing franchising
and all applicable provisions of federal, state, local and other laws
or regulations governing the business of a franchisor;
(w) there are no existing or, to the best knowledge of the
Krispy Kreme Entities, threatened labor disputes with any employees of
any of the Krispy Kreme Entities or any of their subsidiaries which are
likely to have a Material Adverse Effect;
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(x) the Krispy Kreme Entities and their subsidiaries are (i)
in compliance with any and all applicable foreign, federal, state and
local laws and regulations relating to the protection of human health
and safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants ("Environmental Laws"), (ii) in receipt of
all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses
and (iii) in compliance with the terms and conditions of any such
permit, license or other approval, except where such noncompliance with
Environmental Laws, failure to receive required permits, licenses or
other approvals or failure to comply with the terms and conditions of
such permits, licenses or other approvals would not, singly or in the
aggregate, have a Material Adverse Effect;
(y) in the ordinary course of its business, the Company
conducts a periodic review of the effect of Environmental Laws on the
business, operations and properties of the Company and its
subsidiaries, in the course of which it identifies and evaluates
associated costs and liabilities (including, without limitation, any
capital or operating expenditures required for clean-up, closure of
properties or compliance with Environmental Laws or any permit, license
or other approval, any related constraints on operating activities and
any potential liabilities to third parties). On the basis of such
review, the Company has reasonably concluded that such associated costs
and liabilities would not, singly or in the aggregate, have a Material
Adverse Effect;
(z) each employee benefit plan, within the meaning of Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), that is maintained, administered or contributed to by the
Company or any of its affiliates for employees or former employees of
the Company and its affiliates has been maintained in compliance with
its terms and the requirements of any applicable statutes, orders,
rules and regulations, including but not limited to ERISA and the
Internal Revenue Code of 1986, as amended ("Code"). No prohibited
transaction, within the meaning of Section 406 of ERISA or Section 4975
of the Code, has occurred with respect to any such plan excluding
transactions effected pursuant to a statutory or administrative
exemption. For each such plan which is subject to the funding rules of
Section 412 of the Code or Section 302 of ERISA, no "accumulated
funding deficiency" as defined in Section 412 of the Code has been
incurred, whether or not waived, and the fair market value of the
assets of each such plan (excluding for these purposes accrued but
unpaid contributions) exceeds the present value of all benefits accrued
under such plan determined using reasonable actuarial assumptions;
(aa) except as set forth in the Prospectus, each Krispy Kreme
Entity and each of their subsidiaries owns, is licensed to use or
otherwise possesses adequate rights to use the patents, patent rights,
licenses, inventions, trademarks, service marks, trade names,
copyrights and know-how, including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems or
procedures
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(collectively, the "Intellectual Property"), necessary to carry on the
business conducted by it, except to the extent that the failure to own,
be licensed to use or otherwise possess adequate rights to use such
Intellectual Property would not have a Material Adverse Effect; except
as set forth in the Prospectus, no Krispy Kreme Entity nor any of its
subsidiaries has received any notice of infringement of or conflict
with (and no Krispy Kreme Entity has knowledge of any infringement of
or conflict with) asserted rights of others with respect to
Intellectual Property of the Krispy Kreme Entities and their
subsidiaries which could have a Material Adverse Effect; the
discoveries, inventions, products or processes of the Krispy Kreme
Entities and their subsidiaries referred to in the Registration
Statement and the Prospectus do not, to the best knowledge of the
Krispy Kreme Entities, infringe or conflict with any right or patent of
any third party, or any discovery, patent product or process which is
the subject of a patent application filed by any third party, known to
the Krispy Kreme Entities which could have a Material Adverse Effect;
(bb) the statistical and market-related data included in the
Registration Statement and the Prospectus are based on or derived from
sources which are believed by the Krispy Kreme Entities to be reliable;
(cc) the Krispy Kreme Entities and their subsidiaries carry,
or are covered by, insurance in such amounts and covering such risks as
is adequate for the conduct of their business and the value of their
properties and as is customary for companies engaged in similar
businesses in similar industries;
(dd) except for compensation to be received by the
Underwriters under this Agreement, none of the Krispy Kreme Entities
know of any outstanding claims for services, either in the nature of a
finder's fee or origination fee, with respect to any of the
transactions contemplated hereby;
(ee) as of the date of this Agreement, the Krispy Kreme
Entities have satisfied all conditions precedent to the Merger except
for the execution and delivery of this Agreement and, if it has not
already occurred, the effectiveness of the Registration Statement; and
(ff) (i) the Registration Statement, the Prospectus and any
Preliminary Prospectus comply, and any further amendments or
supplements thereto will comply, in all material respects, with any
applicable laws or regulations of foreign jurisdictions in which the
Prospectus or any preliminary prospectus, as amended or supplemented,
if applicable, are distributed in connection with the Directed Share
Program, and (ii) no authorization, approval, consent, license, order,
registration or qualification of or with any government, governmental
instrumentality or court, other than such as have been obtained, is
necessary under the securities law and regulations of foreign
jurisdictions in which the Directed Shares are offered outside the
United States.
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5. Each of the Krispy Kreme Entities, jointly and severally,
covenants and agrees with each of the several Underwriters as follows:
(a) if the Registration Statement has not already become
effective, to use its best efforts to cause the Registration Statement
to become effective at the earliest possible time and, if required, to
file the final Prospectus with the Commission within the time periods
specified by Rule 424(b) and Rule 430A under the Securities Act and to
file promptly all reports and any definitive proxy or information
statements required to be filed by the Company with the Commission
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Exchange Act") subsequent to
the date of the Prospectus and for so long as the delivery of a
prospectus is required in connection with the offering or sale of the
Shares; and to furnish copies of the Prospectus to the Underwriters in
New York City prior to 10:00 a.m., New York City time, on the Business
Day next succeeding the date of this Agreement in such quantities as
the Representatives may reasonably request;
(b) to deliver, at the expense of the Krispy Kreme Entities,
to the Representatives six signed copies of the Registration Statement
(as originally filed) and each amendment thereto, in each case
including exhibits, and to each other Underwriter a conformed copy of
the Registration Statement (as originally filed) and each amendment
thereto, in each case without exhibits and, during the period mentioned
in paragraph (e) below, to each of the Underwriters as many copies of
the Prospectus (including all amendments and supplements thereto) as
the Representatives may reasonably request;
(c) before filing any amendment or supplement to the
Registration Statement or the Prospectus, whether before or after the
time the Registration Statement becomes effective, to furnish to the
Representatives a copy of the proposed amendment or supplement for
review and not to file any such proposed amendment or supplement to
which the Representatives reasonably object;
(d) to advise the Representatives promptly, and to confirm
such advice in writing (i) when the Registration Statement has become
effective, (ii) when any amendment to the Registration Statement has
been filed or becomes effective, (iii) when any supplement to the
Prospectus or any amended Prospectus has been filed and to furnish the
Representatives with copies thereof, (iv) of any request by the
Commission for any amendment to the Registration Statement or any
amendment or supplement to the Prospectus or for any additional
information, (v) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of any
order preventing or suspending the use of any preliminary prospectus or
the Prospectus or the initiation or threatening of any proceeding for
that purpose, (vi) of the occurrence of any event, within the period
referenced in paragraph (e) below, as a result of which the Prospectus
as then amended or supplemented would in-
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clude an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances when the Prospectus is delivered to a
purchaser, not misleading, and (vii) of the receipt by any Krispy Kreme
Entity of any notification with respect to any suspension of the
qualification of the Shares for offer and sale in any jurisdiction or
the initiation or threatening of any proceeding for such purpose; and
to use its best efforts to prevent the issuance of any such stop order,
or of any order preventing or suspending the use of any preliminary
prospectus or the Prospectus, or of any order suspending any such
qualification of the Shares, or notification of any such order thereof
and, if issued, to obtain as soon as possible the withdrawal thereof;
(e) if, during such period of time after the first date of the
public offering of the Shares as in the opinion of counsel for the
Underwriters a prospectus relating to the Shares is required by law to
be delivered in connection with sales by the Underwriters or any
dealer, any event shall occur as a result of which it is necessary to
amend or supplement the Prospectus in order to make the statements
therein, in light of the circumstances when the Prospectus is delivered
to a purchaser, not misleading, or if it is necessary to amend or
supplement the Prospectus to comply with law, forthwith to prepare and
furnish, at the expense of the Krispy Kreme Entities, to the
Underwriters and to the dealers (whose names and addresses the
Representatives will furnish to the Krispy Kreme Entities) to which
Shares may have been sold by the Representatives on behalf of the
Underwriters and to any other dealers upon request, such amendments or
supplements to the Prospectus as may be necessary so that the
statements in the Prospectus as so amended or supplemented will not, in
the light of the circumstances when the Prospectus is delivered to a
purchaser, be misleading or so that the Prospectus will comply with
law;
(f) to endeavor to qualify the Shares for offer and sale under
the securities or Blue Sky laws of such jurisdictions as the
Representatives shall reasonably request and to continue such
qualification in effect so long as reasonably required for distribution
of the Shares; provided that no Krispy Kreme Entity shall be required
to file a general consent to service of process in any jurisdiction;
(g) to make generally available to its security holders and to
the Representatives as soon as practicable a consolidated earnings
statement covering a period of at least twelve months beginning with
the first fiscal quarter of Holding occurring after the effective date
of the Registration Statement, which shall satisfy the provisions of
Section 11(a) of the Securities Act and Rule 158 of the Commission
promulgated thereunder;
(h) for a period of three years from the Closing Date, to
furnish to the Representatives copies of all reports or other
communications (financial or other) furnished to holders of the Shares,
and copies of any reports and financial statements furnished to or
filed with the Commission or any national securities exchange;
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(i) for a period of 180 days after the date of the initial
public offering of the Shares not to (i) offer, pledge, announce the
intention to sell, sell, contract to sell, sell any option or contract
to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase or otherwise transfer or dispose of,
directly or indirectly, any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock or
(ii) enter into any swap or other agreement that transfers, in whole or
in part, any of the economic consequences of ownership of the Common
Stock, whether any such transaction described in clause (i) or (ii)
above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise without the prior written consent of
Deutsche Bank Securities Inc., other than the Shares to be sold by
Holding hereunder, shares issued in connection with the Merger and any
options granted or shares of Common Stock issued upon the exercise of
options granted under any stock option plan existing as of the date of
this Agreement;
(j) to use the net proceeds received by Holding from the sale
of the Shares by Holding pursuant to this Agreement in the manner
specified in the Prospectus under caption "Use of Proceeds";
(k) to file with the Commission such reports as may be
required by Rule 463 under the Securities Act;
(l) to use its best efforts to list for quotation the Shares
on the National Market System of The Nasdaq Stock Market, Inc. (the
"NNM"); and
(m) whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or
cause to be paid all costs and expenses incident to the performance of
its obligations hereunder, including without limiting the generality of
the foregoing, all costs and expenses (i) incident to the preparation,
reregistration, transfer, execution and delivery of the Shares, (ii)
incident to the preparation, printing and filing under the Securities
Act of the Registration Statement, the Prospectus and any preliminary
prospectus (including in each case all exhibits, amendments and
supplements thereto), (iii) incurred in connection with the
registration or qualification of the Shares under the laws of such
jurisdictions as the Representatives may designate (including
reasonable fees of counsel for the Underwriters and its disbursements),
(iv) in connection with the listing of the Shares on the NNM, (v)
related to the filing with, and clearance of the offering by, the
National Association of Securities Dealers, Inc. (including the fees
and expenses of X.X. Xxxxxx Securities Inc. acting as "qualified
independent underwriter" within the meaning of the aforementioned Rule
2720 of the Conduct Rules), (vi) in connection with the printing
(including word processing and duplication costs) and delivery of this
Agreement, the Preliminary and Supplemental Blue Sky Memoranda and the
furnishing to the Underwriters and dealers of copies of the
Registration Statement and the Prospectus, including mailing and
shipping, as herein provided, (vii) any expenses incurred by the
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Krispy Kreme Entities in connection with a "road show" presentation to
potential investors, (viii) the cost of preparing stock certificates
and (ix) the cost and charges of any transfer agent and any registrar;
(n) in connection with the Directed Share Program, the Krispy
Kreme Entities will ensure that the Directed Shares will be restricted
to the extent required by the National Association of Securities
Dealers, Inc. (the "NASD") or the NASD rules from sale, transfer,
assignment, pledge or hypothecation for a period of three months
following the date of the effectiveness of the Registration Statement.
The Designated Underwriter will notify Holding as to which Participants
will need to be so restricted. Holding will direct the transfer agent
to place stop transfer restrictions upon such securities for such
period of time; and
(o) the Krispy Kreme Entities will pay all fees and
disbursements of counsel incurred by the Underwriters in connection
with the Directed Shares Program and stamp duties, similar taxes or
duties or other taxes, if any, incurred by the Underwriters in
connection with the Directed Share Program.
Furthermore, the Krispy Kreme Entities covenant with the
Underwriters that they will comply with all applicable securities and other
applicable laws, rules and regulations in each foreign jurisdiction in which the
Directed Shares are offered in connection with the Directed Share Program.
6. The several obligations of the Underwriters hereunder to
purchase the Shares on the Closing Date or the Additional Closing Date, as the
case may be, are subject to the performance by the Krispy Kreme Entities of
their obligations hereunder and to the following additional conditions:
(a) the Registration Statement shall have become effective (or
if a post-effective amendment is required to be filed under the
Securities Act, such post-effective amendment shall have become
effective) not later than 5:00 P.M., New York City time, on the date
hereof; and no stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment shall be in
effect, and no proceedings for such purpose shall be pending before or
threatened by the Commission; the Prospectus shall have been filed with
the Commission pursuant to Rule 424(b) within the applicable time
period prescribed for such filing by the rules and regulations under
the Securities Act and in accordance with Section 5(a) hereof; and all
requests for additional information shall have been complied with to
the satisfaction of the Representatives;
(b) the respective representations and warranties of the
Krispy Kreme Entities contained herein are true and correct on and as
of the Closing Date or the Additional Closing Date, as the case may be,
as if made on and as of the Closing Date or the Additional Closing
Date, as the case may be, and each of the Krispy Kreme Enti-
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ties shall have complied with all agreements and all conditions on its
part to be performed or satisfied hereunder at or prior to the Closing
Date or the Additional Closing Date, as the case may be;
(c) since the respective dates as of which information is
given in the Prospectus there shall not have been any change in the
capital stock or long-term debt of any of the Krispy Kreme Entities or
any of their subsidiaries (other than changes in capital stock
contemplated in the Prospectus as a result of the Merger), or any
Material Adverse Change, or any development involving a prospective
Material Adverse Change, otherwise than as set forth or contemplated in
the Prospectus, the effect of which in the judgment of the
Representatives makes it impracticable or inadvisable to proceed with
the public offering or the delivery of the Shares on the Closing Date
or the Additional Closing Date, as the case may be, on the terms and in
the manner contemplated in the Prospectus; and none of the Krispy Kreme
Entities nor any of their subsidiaries shall have sustained since the
date of the latest audited financial statements of the Company and its
consolidated subsidiaries included in the Prospectus any material loss
or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus;
(d) the Representatives shall have received on and as of the
Closing Date or the Additional Closing Date, as the case may be, a
certificate of an executive officer of Holding and the Company, with
specific knowledge about the Krispy Kreme Entities' financial matters,
satisfactory to the Representatives to the effect set forth in
subsections (a) through (c) (with respect to the respective
representations, warranties, agreements and conditions of the Krispy
Kreme Entities) of this Section and to the further effect that there
has not occurred any Material Adverse Change, or any development
involving a prospective Material Adverse Change;
(e) Xxxxxxxxxx Xxxxxxxx LLP, counsel for the Company, shall
have furnished to the Representatives their written opinion, dated the
Closing Date or the Additional Closing Date, as the case may be, in
form and substance reasonably satisfactory to the Representatives, to
the effect that:
(i) Holding has been duly incorporated and is validly
existing as a corporation in good standing under the laws of
its jurisdiction of incorporation, with power and authority
(corporate and other) to own its properties and conduct its
business as described in the Prospectus;
(ii) Holding has been duly qualified as a foreign
corporation for the transaction of business and is in good
standing under the laws of each other jurisdiction in which it
owns or leases properties, or conducts any business, so as
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to require such qualification, other than where the failure to
be so qualified or in good standing would not have a Material
Adverse Effect;
(iii) each of Holding's subsidiaries has been duly
incorporated or organized and is validly existing as a
corporation under the laws of its jurisdiction of
incorporation or organization with power and authority
(corporate and other) to own its properties and conduct its
business as described in the Prospectus and has been duly
qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties, or
conducts any business, so as to require such qualification,
other than where the failure to be so qualified and in good
standing would not have a Material Adverse Effect; and all of
the outstanding shares of capital stock of each subsidiary
have been duly and validly authorized and issued, are fully
paid and non-assessable, and (except, in the case of foreign
subsidiaries, for directors' qualifying shares and except as
otherwise set forth in the Prospectus) are owned directly or
indirectly by Holding, free and clear of all liens,
encumbrances, equities or claims;
(iv) other than as set forth or contemplated in the
Prospectus, there are no legal or governmental investigations,
actions, suits or proceedings pending or, to the best of such
counsel's knowledge, threatened against or affecting Holding
or any of its subsidiaries or any of their respective
properties or to which Holding or any of its subsidiaries is
or may be a party or to which any property of Holding or its
subsidiaries is or may be the subject which, if determined
adversely to Holding or any of its subsidiaries, would
individually or in the aggregate have, or reasonably be
expected to have, a Material Adverse Effect; to the best of
such counsel's knowledge, no such proceedings are threatened
or contemplated by governmental authorities or threatened by
others; and such counsel does not know of any statutes,
regulations, contracts or other documents that are required to
be described in the Registration Statement or the Prospectus
or to be filed as exhibits to the Registration Statement that
are not described or filed as required;
(v) this Agreement has been duly authorized, executed
and delivered by each of the Krispy Kreme Entities;
(vi) the authorized capital stock of Holding conforms
as to legal matters to the description thereof contained in
the Prospectus;
(vii) the shares of capital stock of Holding
outstanding prior to the issuance of the Shares to be sold by
Holding hereunder have been duly authorized and are validly
issued, fully paid and non-assessable;
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(viii) the Shares to be issued and sold by Holding
hereunder have been duly authorized, and when delivered to and
paid for by the Underwriters in accordance with the terms of
this Agreement, will be validly issued, fully paid and
non-assessable and the issuance of such Shares is not subject
to any preemptive or similar rights;
(ix) the statements in the Prospectus under "Shares
Eligible For Future Sale" and "Description of Capital Stock",
and in the Registration Statement in Items 14 and 15, insofar
as such statements constitute a summary of the terms of the
Common Stock, legal matters, documents or proceedings referred
to therein, fairly present in all material respects the
information called for with respect to such terms, legal
matters, documents or proceedings;
(x) such counsel is of the opinion that the
Registration Statement and the Prospectus and any amendments
and supplements thereto (other than the financial statements
and related schedules therein, as to which such counsel need
express no opinion) comply as to form in all material respects
with the requirements of the Securities Act and believes that
(other than the financial statements and related schedules
therein and the statistical or other industry data therein, as
to which such counsel need express no belief) the Registration
Statement and the prospectus included therein at the time the
Registration Statement became effective did not contain any
untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to
make the statements therein not misleading, and that the
Prospectus, as amended or supplemented, if applicable, does
not contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading;
(xi) the Registration Statement has been declared
effective under the Securities Act and, to such counsel's
knowledge, no stop order proceedings with respect thereto are
pending before or threatened by the Commission under the
Securities Act;
(xii) all holders of securities of Holding or, prior
to consummation of the Merger, the Company having rights to
the registration of shares of Common Stock, or other
securities, because of the filing of the Registration
Statement have waived such rights or such rights have expired
by reason of lapse of time following notification of the
intent to file the Registration Statement;
(xiii) neither Holding nor any of its subsidiaries
is, or with the giving of notice or lapse of time or both
would be, in violation of or in default under its certificate
or articles of incorporation or by-laws or any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument known to
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such counsel to which Holding or any of its subsidiaries is a
party or by which it or any of them or any of their respective
properties is bound, except for violations and defaults which
would not, individually and in the aggregate, have a Material
Adverse Effect; the issue and sale of the Shares being
delivered on the Closing Date or the Additional Closing Date,
as the case may be, to be sold by Holding hereunder and the
performance by Holding of its obligations under this Agreement
and the consummation of the transactions contemplated herein
will not conflict with or result in a breach of any of the
terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel to which Holding
or any of its subsidiaries is a party or by which Holding or
any of its subsidiaries is bound or to which any of the
property or assets of Holding or any of its subsidiaries is
subject, nor will any such action result in any violation of
the provisions of the articles of incorporation or the by-laws
of Holding or any applicable law or statute or any order, rule
or regulation of any court or governmental agency or body
having jurisdiction over Holding, its subsidiaries or any of
their respective properties;
(xiv) no consent, approval, authorization, order,
license, registration or qualification of or with any court or
governmental agency or body is required for the issuance by
Holding of the Shares to be sold by it hereunder or the
consummation by the Krispy Kreme Entities of the other
transactions contemplated by this Agreement, except such
consents, approvals, authorizations, orders, licenses,
registrations or qualifications as have been obtained under
the Securities Act and as may be required under state
securities or Blue Sky laws in connection with the purchase
and distribution of the Shares by the Underwriters;
(xv) Holding is not and, after giving effect to the
offering and sale of the Shares, will not be an "investment
company" or entity "controlled" by an "investment company", as
such terms are defined in the Investment Company Act;
(xvi) the Rights Agreement has been duly authorized,
executed and delivered by Holding; the Rights have been duly
authorized by Holding and, when issued upon issuance of the
Shares, will be validly issued, and the Series A Preferred
Stock has been duly authorized by Holding and validly reserved
for issuance upon the exercise of the Rights and, when issued
upon such exercise in accordance with the terms of the Rights
Agreement, will be validly issued, fully paid and
non-assessable; and
(xvii) the Merger has become effective under North
Carolina law in accordance with the Agreement and Plan of
Merger dated December 2, 1999 by and between the Company,
Holding and Newco; the Company is the sur-
20
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viving corporation of the Merger and has the status, rights
and liabilities of a surviving corporation set forth in North
Carolina law; the Merger was duly authorized by all necessary
corporate and shareholder action on the part of each
constituent corporation and complies with all applicable
provisions of North Carolina law; in the Merger, the Company
became a wholly owned subsidiary of Holding.
In rendering such opinions, such counsel may rely (A) as to
matters involving the application of laws other than the laws of the
United States and the States of New York and North Carolina, to the
extent such counsel deems proper and to the extent specified in such
opinion, if at all, upon an opinion or opinions (in form and substance
reasonably satisfactory to Underwriters' counsel) of other counsel
reasonably acceptable to Underwriters' counsel, familiar with the
applicable laws; (B) as to matters of fact, to the extent such counsel
deems proper, on certificates of responsible officers of Holding and
the Company and certificates or other written statements of officials
of jurisdictions having custody of documents respecting the corporate
existence or good standing of Holding, the Company and their
subsidiaries. The opinion of such counsel for the Krispy Kreme Entities
shall state that the opinion of any such other counsel upon which they
relied is in form satisfactory to such counsel and, in such counsel's
opinion, the Underwriters and they are justified in relying thereon.
With respect to the matters to be covered in subparagraph (x) above
counsel may state their opinion and belief is based upon their
participation in the preparation of the Registration Statement and the
Prospectus and any amendment or supplement thereto and review and
discussion of the contents thereof but is without independent check or
verification except as specified.
The opinion of Xxxxxxxxxx Xxxxxxxx LLP described above shall
be rendered to the Underwriters at the request of Krispy Kreme Entities
and shall so state therein;
(f) Xxxxxxxxxx Xxxxxxxx LLP, counsel for the Company, shall
have furnished to the Representatives their additional written opinion,
dated the Closing Date, in form and substance reasonably satisfactory
to the Representatives, relating to the exemption from registration
under the Securities Act of the issuance of the shares of Common Stock
pursuant to the Merger;
(g) Xxxxxxx Xxxxxxx, Senior Counsel to the Company, shall have
furnished to the representatives his written opinion, dated the Closing
Date or the Additional Closing Date, as the case may be, in form and
substance reasonably satisfactory to the representatives, to the effect
that:
(i) such counsel is of the opinion that the
Registration Statement and the Prospectus and any amendments
and supplements thereto (other than the financial statements
and related schedules therein, as to which such counsel need
express no opinion) comply as to form in all material respects
with the
21
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requirements of the Securities Act and believes that (other
than the financial statements and related schedules therein
and the statistical or other industry data therein, as to
which such counsel need express no belief) the Registration
Statement and the prospectus included therein at the time the
Registration Statement became effective did not contain any
untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to
make the statements therein not misleading, and that the
Prospectus, as amended or supplemented, if applicable, does
not contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading;
(ii) each of Holding and its subsidiaries owns,
possesses or has obtained all licenses, permits, certificates,
consents, orders, approvals and other authorizations from, and
has made all declarations and filings with, all federal,
state, local and other governmental authorities (including
foreign regulatory agencies), all self-regulatory
organizations and all courts and other tribunals, domestic or
foreign, necessary to own or lease, as the case may be, and to
operate its properties and to carry on its business as
conducted as of the date hereof, and, to such counsel's
knowledge, neither Holding nor any such subsidiary has
received any actual notice of any proceeding relating to
revocation or modification of any such license, permit,
certificate, consent, order, approval or other authorization,
except as described in the Registration Statement and the
Prospectus; and each of Holding and its subsidiaries is in
compliance with all laws and regulations relating to the
conduct of its business as conducted as of the date of the
Prospectus, except where any such failure to comply would not,
individually or in the aggregate, have a Material Adverse
Effect;
(iii) Holding and its subsidiaries have good and
marketable title in fee simple to all real property and good
and marketable title to all personal property owned by them,
in each case free and clear of all liens, encumbrances and
defects except such as are set forth or referred to in the
Prospectus or such as do not materially affect the value of
such property and do not interfere with the use made and
proposed to be made of such property by Holding and its
subsidiaries; and any real property and buildings held under
lease by Holding and its subsidiaries are held by them under
valid, existing and enforceable leases with such exceptions as
are not material and do not interfere with the use made or
proposed to be made of such property and buildings by Holding
or its subsidiaries;
(iv) to the knowledge of such counsel, each of
Holding and its subsidiaries is in compliance with all
Environmental Laws, except, in each case, where noncompliance,
individually or in the aggregate, would not have a Mate-
22
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rial Adverse Effect; there are no legal or governmental
proceedings pending or, threatened against or affecting
Holding or any of its subsidiaries under any Environmental Law
which, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect; and
(v) except as set forth in the Prospectus, Holding
and each of its subsidiaries owns, is licensed to use or
otherwise possesses adequate rights to use the Intellectual
Property reasonably necessary to carry on the business
conducted by it, except to the extent that the failure to own,
be licensed to use or otherwise possess adequate rights to use
such Intellectual Property would not have a Material Adverse
Effect; except as set forth in the Prospectus, none of Holding
or any subsidiary has received any notice of infringement of
or conflict with, and to the best of the such counsel's
knowledge, there is no infringement of or conflict with,
asserted rights of others with respect to the Intellectual
Property, the discoveries, inventions, products or processes
of Holding and its subsidiaries referred to in the
Registration Statement and the Prospectus do not, to the best
of such counsel's knowledge, infringe or conflict with any
right or patent of any third party, or any discovery, patent
product or process which is the subject of a patent
application filed by any third party.
In rendering such opinions, such counsel may rely (A) as to
matters involving the application of laws other than the laws of the
United States and the States of New York and North Carolina, to the
extent such counsel deems proper and to the extent specified in such
opinion, if at all, upon an opinion or opinions (in form and substance
reasonably satisfactory to Underwriters' counsel) of other counsel
reasonably acceptable to Underwriters' counsel, familiar with the
applicable laws; (B) as to matters of fact, to the extent such counsel
deems proper, on certificates of responsible officers of Holding and
the Company and certificates or other written statements of officials
of jurisdictions having custody of documents respecting the corporate
existence or good standing of Holding, the Company and their
subsidiaries. The opinion of such counsel for the Krispy Kreme Entities
shall state that the opinion of any such other counsel upon which they
relied is in form satisfactory to such counsel and, in such counsel's
opinion, the Underwriters and they are justified in relying thereon.
With respect to the matters to be covered in subparagraph (i) above
counsel may state their opinion and belief is based upon their
participation in the preparation of the Registration Statement and the
Prospectus and any amendment or supplement thereto and review and
discussion of the contents thereof but is without independent check or
verification except as specified.
The opinion of Xxxxxxx Xxxxxxx described above shall be
rendered to the Underwriters at the request of Krispy Kreme Entities
and shall so state therein;
(h) Xxxxx Xxxxxxx Xxxxxxx & Xxxxx, special franchise counsel
for the Krispy Kreme Entities, shall have furnished to the
Representatives their written opinion, dated the Closing
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Date or the Additional Closing Date, as the case may be, in form and
substance satisfactory to the Representatives, to the effect that:
(i) Each of the franchise agreements entered into by
Holding or its subsidiaries relating to its conveyance of
franchise rights have been duly authorized, executed and
delivered by Holding and its subsidiaries;
(ii) the Company's uniform franchise offering
circulars, dated , , inclusive of attached
exhibits ("UFOCS"), contained information in compliance, as of
the effective date of the respective UFOCS, with the
disclosure provisions of the FTC franchise and business
opportunity laws and regulations ("FTC Rules") and the
franchise disclosure laws of those states with which the
Company has filed such UFOCS and complied as to form with the
FTC Rules and such state franchise disclosure laws;
(iii) Holding and its subsidiaries hold, and are
operating in compliance in all material respects with, all
franchises, licenses, permits, certificates, consents, orders,
approvals and other authorizations from, and has made all
declarations and filings with, all franchise, federal, state,
local and other governmental authorities and all
self-regulatory organizations required for the conduct of its
business and all such franchises, licenses, permits,
certificates, consents, orders, approvals and other
authorizations are valid and in full force and effect;
(iv) the descriptions of federal and state franchise
regulations set forth in the Prospectus under the captions
"Risk Factors - We need to successfully maintain our status as
a franchisor and may be harmed by actions taken by our
franchisees that are outside of our control" and "Business
Government regulations" fairly and accurately describe the
status of the material governmental franchise regulations
pertaining to franchising activities of Holding and its
subsidiaries;
(v) the description of the franchising agreements of
Holding and its subsidiaries set forth in the Prospectus under
the caption "Business - Store ownership" fairly and accurately
describes the material terms of such franchise agreements; and
(vi) no Krispy Kreme Entity has received any notice
of violation of any FTC Rule or any state franchise
registration or franchise disclosure law.
The opinion of Xxxxx Xxxxxxx Xxxxxxx & Xxxxx described above
shall be rendered to the Underwriters at the request of the Krispy
Kreme Entities and shall so state therein;
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(i) on the effective date of the Registration Statement and
the effective date of the most recently filed post-effective amendment
to the Registration Statement and also on the Closing Date or
Additional Closing Date, as the case may be, PricewaterhouseCoopers
shall have furnished to you letters, dated the respective dates of
delivery thereof, in form and substance satisfactory to you, containing
statements and information of the type customarily included in
accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in the
Registration Statement and the Prospectus;
(j) the Representatives shall have received on and as of the
Closing Date or Additional Closing Date, as the case may be, an opinion
of Xxxxxx Xxxxxx & Xxxxxxx, counsel to the Underwriters, with respect
to the due authorization and valid issuance of the Shares, the
Registration Statement, the Prospectus and other related matters as the
Representatives may reasonably request, and such counsel shall have
received such papers and information as they may reasonably request to
enable them to pass upon such matters;
(k) the Shares to be delivered on the Closing Date or
Additional Closing Date, as the case may be, shall have been approved
for listing on the NNM, subject to official notice of issuance;
(l) the Merger has become effective under North Carolina law
in accordance with the Agreement and Plan of Merger dated December 2,
1999 by and between the Company, Holding and Newco; the Company is the
surviving corporation of the merger of Newco with and into the Company
and has the status, rights and liabilities of the surviving corporation
as set forth in the applicable provisions of North Carolina law; the
Merger was duly authorized by all necessary corporate and shareholder
action on the part of each constituent corporation and complies with
all applicable provisions of North Carolina law;
(m) on or prior to the Closing Date or Additional Closing
Date, as the case may be, the Krispy Kreme Entities shall have
furnished to the Representatives such further certificates and
documents as the Representatives shall reasonably request; and
(n) the lock-up agreements of Holding's officers, directors
and shareholders, in the form delivered to the Company, shall be in
full force and effect on the Closing Date or Additional Closing Date,
as the case may be.
7. (a) Holding agrees:
(1) to indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of the
Securities Act, against any losses, claims, damages or liabilities to
which such Underwriter or any such controlling person may become
subject under the Securities Act or otherwise, insofar as
25
-25-
such losses, claims, damages or liabilities (or actions or proceedings
in respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of any material fact contained in
the Registration Statement, any Preliminary Prospectus, the Prospectus
or any amendment or supplement thereto, (ii) the omission or alleged
omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, or (iii)
any alleged act or failure to act by any Underwriter in connection
with, or relating in any manner to, the Shares or the offering
contemplated hereby, and which is included as part of or referred to in
any loss, claim, damage, liability or action arising out of or based
upon matters covered by clause (i) or (ii) above (provided that Holding
shall not be liable under this clause (iii) to the extent that it is
determined in a final judgment by a court of competent jurisdiction
that such loss, claim, damage, liability or action resulted directly
from any such acts or failures to act undertaken or omitted to be taken
by such Underwriter through its gross negligence or willful
misconduct); provided, however, that Holding will not be liable in any
such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue
statement, or omission or alleged omission made in the Registration
Statement, any Preliminary Prospectus, the Prospectus, or such
amendment or supplement, in reliance upon and in conformity with
written information furnished to Holding by or through the
Representatives specifically for use in the preparation thereof.
Holding also agrees to indemnify and hold harmless X.X. Xxxxxx
Securities Inc. ("X.X. Xxxxxx") and each person, if any, who controls
X.X. Xxxxxx within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages and liabilities incurred as a result of X.X.
Xxxxxx'x participation as a "qualified independent underwriter" within
the meaning of the Conduct Rules of the NASD in connection with the
offering of the Shares.
(2) to reimburse each Underwriter and each such controlling
person upon demand for any legal or other out-of-pocket expenses
reasonably incurred by such Underwriter or such controlling person in
connection with investigating or defending any such loss, claim, damage
or liability, action or proceeding or in responding to a subpoena or
governmental inquiry related to the offering of the Shares, whether or
not such Underwriter or controlling person is a party to any action or
proceeding. In the event that it is finally judicially determined that
the Underwriters were not entitled to receive payments for legal and
other expenses pursuant to this subparagraph, the Underwriters will
promptly return all sums that had been advanced pursuant hereto.
(b) Each Underwriter severally and not jointly will indemnify
and hold harmless Holding, each of its directors, each of its officers who have
signed the Registration Statement and each person, if any, who controls Holding
within the meaning of the Securities Act, against any losses, claims, damages or
liabilities to which Holding or any such director, officer or controlling person
may become subject under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions or proceedings in respect
thereof)
26
-26-
arise out of or are based upon (i) any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement, any
Preliminary Prospectus, the Prospectus or any amendment or supplement thereto,
or (ii) the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances under which they were made; and
will reimburse upon demand any legal or other expenses reasonably incurred by
Holding or any such director, officer or controlling person in connection with
investigating or defending any such loss, claim, damage, liability, action or
proceeding; provided, however, that each Underwriter will be liable in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission has been made in the
Registration Statement, any Preliminary Prospectus, the Prospectus or such
amendment or supplement, in reliance upon and in conformity with written
information furnished to Holding by or through the Representatives specifically
for use in the preparation thereof. This indemnity agreement will be in addition
to any liability which such Underwriter may otherwise have.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to this Section 8, such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing. No
indemnification provided for in Section 7(a) or (b) shall be available to any
party who shall fail to give notice as provided in this Section 7(c) if the
party to whom notice was not given was unaware of the proceeding to which such
notice would have related and was materially prejudiced by the failure to give
such notice, but the failure to give such notice shall not relieve the
indemnifying party or parties from any liability which it or they may have to
the indemnified party for contribution or otherwise than on account of the
provisions of Section 7(a) or (b). In case any such proceeding shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party and shall pay as incurred the
fees and disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own counsel
at its own expense. Notwithstanding the foregoing, the indemnifying party shall
pay as incurred (or within 30 days of presentation) the fees and expenses of the
counsel retained by the indemnified party in the event (i) the indemnifying
party and the indemnified party shall have mutually agreed to the retention of
such counsel, (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified party
and representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them or (iii) the
indemnifying party shall have failed to assume the defense and employ counsel
acceptable to the indemnified party within a reasonable period of time after
notice of commencement of the action. It is understood that the indemnifying
party shall not, in connection with any proceeding or related proceedings in the
same jurisdiction, be liable for the reasonable fees and expenses of more than
one separate firm for all such indemnified parties. Such firm shall be
27
-27-
designated in writing by you in the case of parties indemnified pursuant to
Section 7(a) and by Holding in the case of parties indemnified pursuant to
Section 7(b). The indemnifying party shall not be liable for any settlement of
any proceeding effected without its written consent but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment. In addition, the
indemnifying party will not, without the prior written consent of the
indemnified party, settle or compromise or consent to the entry of any judgment
in any pending or threatened claim, action or proceeding of which
indemnification may be sought hereunder (whether or not any indemnified party is
an actual or potential party to such claim, action or proceeding) unless such
settlement, compromise or consent includes an unconditional release of each
indemnified party from all liability arising out of such claim, action or
proceeding. Notwithstanding anything contained herein to the contrary, if
indemnity may be sought pursuant to Section 7(a) hereof in respect of such
action or proceeding, then in addition to such separate firm for the indemnified
parties, the indemnifying party shall be liable for the reasonable fees and
expenses of not more than one separate firm (in addition to any local counsel)
for X.X. Xxxxxx in its capacity as a "qualified independent underwriter" and all
persons, if any, who control X.X. Xxxxxx within the meaning of either Section 15
of the Act or Section 20 of the Exchange Act.
(d) Holding and each subsidiary of Holding, whether direct or
indirect, jointly and severally, agree to indemnify and hold harmless the
Designated Underwriter and its affiliates and each person, if any, who controls
the Designated Underwriter or its affiliates within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act, from and
against any and all losses, claims, damages and liabilities (including, without
limitation, any legal or other expenses reasonably incurred in connection with
defending or investigating any such action or claim) (i) caused by any untrue
statement or alleged untrue statement of a material fact contained in any
material prepared by or with the consent of Holding for distribution to
Participants in connection with the Directed Share Program, or caused by any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading; (ii)
caused by the failure of any Participant to pay for and accept delivery of
Directed Shares that the Participant has agreed to purchase; or (iii) related
to, arising out of, or in connection with the Directed Share Program other than
losses, claims, damages or liabilities (or expenses relating thereto) that are
finally judicially determined to have resulted from the bad faith or gross
negligence of the Designated Underwriter.
(e) To the extent the indemnification provided for in this
Section 7 is unavailable to or insufficient to hold harmless an indemnified
party under Section 7(a) or (b) above in respect of any losses, claims, damages
or liabilities (or actions or proceedings in respect thereof) referred to
therein, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) in such proportion as
is appropriate to reflect the relative benefits received by Holding on the one
hand and the Underwriters on the
28
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other from the offering of the Shares. If, however, the allocation provided by
the immediately preceding sentence is not permitted by applicable law then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of Holding on the one hand and the
Underwriters on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by Holding on the one hand and
the Underwriters on the other shall be deemed to be in the same proportion as
the total net proceeds from the offering (before deducting expenses) received by
Holding bear to the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by Holding on the one hand or the Underwriters on the other and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
Holding and the Underwriters agree that it would not be just
and equitable if contributions pursuant to this Section 7(e) were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to above in this Section 7(e). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions or proceedings in respect thereof)
referred to above in this Section 7(e) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (e), (i) no Underwriter shall be required to
contribute any amount in excess of the underwriting discounts and commissions
applicable to the Shares purchased by such Underwriter and (ii) no person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this Section 7(e)
to contribute are several in proportion to their respective underwriting
obligations and not joint.
(f) In any proceeding relating to the Registration Statement,
any Preliminary Prospectus, the Prospectus or any supplement or amendment
thereto, each party against whom contribution may be sought under this Section 7
hereby consents to the jurisdiction of any court having jurisdiction over any
other contributing party, agrees that process issuing from such court may be
served upon him or it by any other contributing party and consents to the
service of such process and agrees that any other contributing party may join
him or it as an additional defendant in any such proceeding in which such other
contributing party is a party.
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-29-
(g) Any losses, claims, damages, liabilities or expenses for
which an indemnified party is entitled to indemnification or contribution under
this Section 7 shall be paid by the indemnifying party to the indemnified party
as such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 7 and the
representations and warranties of Holding set forth in this Agreement shall
remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any Underwriter or any person controlling
any Underwriter, Holding, its directors or officers or any persons controlling
the Company, (ii) acceptance of any Shares and payment therefor hereunder, and
(iii) any termination of this Agreement. A successor to any Underwriter, or to
Holding, its directors or officers, or any person controlling Holding, shall be
entitled to the benefits of the indemnity, contribution and reimbursement
agreements contained in this Section 7.
8. Notwithstanding anything herein contained, this Agreement
(or the obligations of the several Underwriters with respect to the Option
Shares) may be terminated in the absolute discretion of the Representatives, by
notice given to Holding, if after the execution and delivery of this Agreement
and prior to the Closing Date (or, in the case of the Option Shares, prior to
the Additional Closing Date) (i) trading generally shall have been suspended or
materially limited on or by, as the case may be, any of the New York Stock
Exchange or the American Stock Exchange, the National Association of Securities
Dealers, Inc., the Chicago Board Options Exchange, the Chicago Mercantile
Exchange or the Chicago Board of Trade, (ii) trading of any securities of or
guaranteed by Holding shall have been suspended on any exchange or in any
over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or New York
State authorities, or (iv) there shall have occurred any outbreak or escalation
of hostilities or any change in financial markets or any calamity or crisis
that, in the judgment of the Representatives, is material and adverse and which,
in the judgment of the Representatives, makes it impracticable to market the
Shares being delivered at the Closing Date or the Additional Closing Date, as
the case may be, on the terms and in the manner contemplated in the Prospectus.
9. This Agreement shall become effective upon the later of (x)
execution and delivery hereof by the parties hereto and (y) release of
notification of the effectiveness of the Registration Statement (or, if
applicable, any post-effective amendment) by the Commission.
If on the Closing Date or the Additional Closing Date, as the
case may be, any one or more of the Underwriters shall fail or refuse to
purchase Shares which it or they have agreed to purchase hereunder on such date,
and the aggregate number of Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase is not more than one-tenth
of the aggregate number of Shares to be purchased on such date, the other
Underwriters shall be obligated severally in the proportions that the number of
Shares set forth opposite their respective names in Schedule I bears to the
aggregate number of Underwritten
30
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Shares set forth opposite the names of all such non-defaulting Underwriters, or
in such other proportions as the Representatives may specify, to purchase the
Shares which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase on such date; provided that in no event shall the number of
Shares that any Underwriter has agreed to purchase pursuant to Section 1 be
increased pursuant to this Section 9 by an amount in excess of one-ninth of such
number of Shares without the written consent of such Underwriter. If on the
Closing Date or the Additional Closing Date, as the case may be, any Underwriter
or Underwriters shall fail or refuse to purchase Shares which it or they have
agreed to purchase hereunder on such date, and the aggregate number of Shares
with respect to which such default occurs is more than one-tenth of the
aggregate number of Shares to be purchased on such date, and arrangements
satisfactory to the Representatives and Holding for the purchase of such Shares
are not made within 36 hours after such default, this Agreement (or the
obligations of the several Underwriters to purchase the Option Shares, as the
case may be) shall terminate without liability on the part of any non-defaulting
Underwriter or Holding. In any such case either you or Holding shall have the
right to postpone the Closing Date (or, in the case of the Option Shares, the
Additional Closing Date), but in no event for longer than seven days, in order
that the required changes, if any, in the Registration Statement and in the
Prospectus or in any other documents or arrangements may be effected. Any action
taken under this paragraph shall not relieve any defaulting Underwriter from
liability in respect of any default of such Underwriter under this Agreement.
10. If this Agreement shall be terminated by the Underwriters,
or any of them, because of any failure or refusal on the part of the Krispy
Kreme Entities to comply with the terms or to fulfill any of the conditions of
this Agreement, or if for any reason Holding shall be unable to perform its
obligations under this Agreement or any condition of the Underwriters'
obligations cannot be fulfilled, Holding agrees to reimburse the Underwriters or
such Underwriters as have so terminated this Agreement with respect to
themselves, severally, for all out-of-pocket expenses (including the reasonable
fees and expenses of their counsel) reasonably incurred by the Underwriters in
connection with this Agreement or the offering contemplated hereunder.
11. This Agreement shall inure to the benefit of and be
binding upon the Krispy Kreme Entities and the Underwriters, including the
Designated Underwriter and the "qualified independent underwriter", each
affiliate of any Underwriter which assists such Underwriter in the distribution
of the Shares, any controlling persons referred to herein and their respective
successors and assigns. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any other person, firm or corporation any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision herein contained. No purchaser of Shares from any Underwriter
shall be deemed to be a successor by reason merely of such purchase.
12. Any action by the Underwriters hereunder may be taken by
the Representatives jointly or by Deutsche Bank Securities Inc. alone on behalf
of the Underwriters,
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and any such action taken by the Representatives jointly or by Deutsche Bank
Securities Inc. alone shall be binding upon the Underwriters. All notices and
other communications hereunder shall be in writing and shall be deemed to have
been duly given if mailed or transmitted by any standard form of
telecommunication. Notices to the Underwriters shall be given to the
Representatives, c/o X.X. Xxxxxx Securities Inc., 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000 (telefax: (000) 000-0000); Attention: Syndicate Department. Notices
to any Krispy Kreme Entity shall be given to it at 000 Xxxxxxxxx Xxxxxx,
Xxxxxxx-Xxxxx, XX 00000 (telefax: (000) 000-0000); Attention: President - Krispy
Kreme Doughnuts, Inc.
13. This Agreement may be signed in counterparts, each of
which shall be an original and all of which together shall constitute one and
the same instrument.
14. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE
CONFLICTS OF LAWS PROVISIONS THEREOF.
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If the foregoing is in accordance with your understanding,
please sign and return four counterparts hereof.
Very truly yours,
KRISPY KREME DOUGHNUTS, INC.
By:
------------------------------------
Name:
Title:
KRISPY KREME DOUGHNUT CORPORATION
By:
------------------------------------
Name:
Title:
KKDC REORGANIZATION CORPORATION
By:
------------------------------------
Name:
Title:
33
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Accepted the date first written above:
DEUTSCHE BANK SECURITIES INC.
X.X. XXXXXX SECURITIES INC.
XXXX XXXXXXXX INCORPORATED
BB&T CAPITAL MARKETS/XXXXX & XXXXXXXXXXXX, INC.
Acting severally on behalf of
themselves and the several
Underwriters listed in
Schedule I hereto.
By: DEUTSCHE BANK SECURITIES INC.
By:
------------------------------------
Name:
Title:
34
SCHEDULE I
Number of
Underwritten Shares
Underwriter To Be Purchased
----------- -------------------
Deutsche Bank Securities Inc...............................
X.X. Xxxxxx Securities Inc.................................
Xxxx Xxxxxxxx Incorporated.................................
BB&T Capital Markets/Xxxxx & Xxxxxxxxxxxx, Inc.............
---------
Total 3,000,000
=========
