Contract
Exhibit
10.2
EXECUTION
COPY
AMENDMENT
NO. 7 TO SECOND LIEN CREDIT AGREEMENT dated as of October 30, 2006 (this
“Amendment
Agreement”)
among
KRISPY KREME DOUGHNUT CORPORATION, a North Carolina corporation (the
“Borrower”),
the
GUARANTORS (as defined in the Credit Agreement referred to below) signatory
hereto and the LENDERS (as defined in the Credit Agreement referred to below)
signatory hereto.
PRELIMINARY
STATEMENTS
WHEREAS,
the Borrower is party to a Second Lien Credit Agreement dated as of April 1,
2005 (as amended, amended and restated, supplemented or otherwise modified
through the date hereof, the “Credit
Agreement”)
among
the Borrower, the Parent Guarantor, the Subsidiary Guarantors, the Lenders,
and
Credit Suisse (formerly known as Credit Suisse First Boston), as Administrative
Agent, Paying Agent, Fronting Bank, and Collateral Agent.
WHEREAS,
the Borrower has requested that the Required Lenders agree to amend certain
provisions of the Credit Agreement, and the Required Lenders have agreed,
subject to the terms and conditions hereinafter set forth to such
amendment.
Accordingly,
in consideration of the premises and for other good and valuable consideration,
the sufficiency and receipt of all of which are hereby acknowledged, the parties
hereto hereby agree as follows:
SECTION 1.
Defined
Terms.
Capitalized terms used but not herein shall be used herein as defined in the
Credit Agreement.
SECTION 2.
Amendment.
As of
the Amendment Effective Date:
(a) Section
6.01(a) is amended by deleting the following language therein:
“(setting
forth in a footnote or in a financial schedule thereto consolidating balance
sheets and related statements of operations and cash flows for the
Parent
Guarantor, the Borrower, Freedom Rings, LLC, the other Consolidated Subsidiaries
that are Guarantors and the Consolidated Subsidiaries that are not Guarantors;
provided
that if
the separate listing of Freedom Rings, LLC is not acceptable to
PricewaterhouseCoopers LLP (or other independent public accountants of
recognized national standing of the Borrower), then Freedom Rings, LLC will
be
included with the other Consolidated Subsidiaries that are
Guarantors)”
(b) Sections
6.01(b)(ii) and (c)(ii) are hereby amended by deleting the following language
therein:
“(setting
forth in a footnote or in a financial schedule thereto consolidating balance
sheets and related statements of operations and cash flows in the same
presentation as for the information presented pursuant to Section
5.01(a))”
(c) The
table
in Section 7.09(a) of the Credit Agreement is amended to read as
follows:
2
|
Period
|
Ratio
|
|
|
Second,
Third and Fourth Fiscal Quarters of 2006 Fiscal Year
|
4.50
to 1.00
|
|
|
First
Fiscal Quarter of 2007 Fiscal Year
|
5.40
to 1.00
|
|
|
Second
Fiscal Quarter of 2007 Fiscal Year
|
5.00
to 1.00
|
|
|
Third
Fiscal Quarter of 2007 Fiscal Year
|
4.80
to 1.00
|
|
|
Fourth
Fiscal Quarter of 2007 Fiscal Year
|
4.70
to 1.00
|
|
|
First
Fiscal Quarter of 2008 Fiscal Year
|
4.40
to 1.00
|
|
|
Second
Fiscal Quarter of 2008 Fiscal Year
|
4.45
to 1.00
|
|
|
Third
Fiscal Quarter of 2008 Fiscal Year
|
4.35
to 1.00
|
|
|
Fourth
Fiscal Quarter of 2008 Fiscal Year
|
4.25
to 1.00
|
|
|
First
Fiscal Quarter of 2009 Fiscal Year and Thereafter
|
3.70
to 1.00
|
(d) The
table
in Section 7.09(b) of the Credit Agreement is amended to read as
follows:
3
|
Period
|
Ratio
|
|
|
Second
and Third Fiscal Quarters of 2006 Fiscal Year
|
3.15
to 1.00
|
|
|
Fourth
Fiscal Quarter of 2006 Fiscal Year
|
2.50
to 1.00
|
|
|
First
Fiscal Quarter of 2007 Fiscal Year
|
2.10
to 1.00
|
|
|
Second
Fiscal Quarter of 2007 Fiscal Year
|
2.05
to 1.00
|
|
|
Third
Fiscal Quarter of 2007 Fiscal Year
|
2.05
to 1.00
|
|
|
Fourth
Fiscal Quarter of 2007 Fiscal Year
|
2.05
to 1.00
|
|
|
First
Fiscal Quarter of 2008 Fiscal Year
|
2.20
to 1.00
|
|
|
Second
Fiscal Quarter of 2008 Fiscal Year
|
2.25
to 1.00
|
|
|
Third
Fiscal Quarter of 2008 Fiscal Year
|
2.30
to 1.00
|
|
|
Fourth
Fiscal Quarter of 2008 Fiscal Year
|
2.30
to 1.00
|
|
|
First
Fiscal Quarter of 2009 Fiscal Year and Thereafter
|
3.40
to 1.00
|
SECTION 3.
Representations
and Warranties.
The
Borrower hereby represents and warrants to the undersigned Lenders that (a)
the
representations and warranties of the Borrower and the Parent Guarantor set
forth in the Credit Agreement, and of each Obligor in each of the other Loan
Documents to which it is a party, is true and correct in all material respects
on and as of the date hereof (except to the extent that any such representation
or warranty expressly relates to an earlier date), with each reference therein
to the Credit Agreement being deemed for purposes hereof to be a reference
to
the Credit Agreement as modified hereby and (b) no Default has occurred and
is
continuing.
SECTION 4.
Conditions
to Effectiveness.
The
amendments set forth in Section 2 hereof shall become effective when, and only
when, and as of the date (the “Amendment
Effective Date”)
on
which:
(a)
the
Administrative Agent shall have received counterparts of this Amendment
Agreement executed by the Borrower, each of the Guarantors (other than Freedom
Rings, LLC) and the Required Lenders;
4
(b)
all
the conditions to the effectiveness of the Amendment No. 7 to the First Lien
Credit Agreement of even date herewith, substantially in the form heretofore
delivered to the Lenders, shall have occurred other than the effectiveness
of
this Amendment Agreement; and
(c) the
Administrative Agent shall have received payment of all accrued fees and
expenses of the Administrative Agent (including the reasonable and accrued
fees
of counsel to the Administrative Agent invoiced on or prior to the date
hereof).
SECTION 5.
Reference
to and Effect on the Financing Documents.
(a)
On
and
after the Amendment Effective Date, each reference in the Credit Agreement
to
“this Agreement”, “hereunder”, “hereof” or words of like import referring to the
Credit Agreement, and each reference in the other Loan Documents to “the Credit
Agreement”, “thereunder”, “thereof”, or words of like import referring to the
Credit Agreement shall mean and be a reference to the Credit Agreement as
modified hereby.
(b) The
Credit
Agreement and each of the other Loan Documents, as specifically modified by
this
Amendment Agreement, are and shall continue to be in full force and effect
and
are hereby in all respects ratified and confirmed.
(c) The
execution, delivery and effectiveness of this Amendment Agreement shall not,
except as expressly provided herein, operate as a waiver of any right, power
or
remedy of the Credit Agreement or the other Loan Documents, nor constitute
a
waiver of any provision of the Credit Agreement or the other Loan
Documents.
SECTION
6.
Fees.
The
Borrower shall pay to the Administrative Agent for the account of each Lender
that executes and delivers to the Administrative Agent a counterpart of this
Amendment Agreement on or before 12:00 noon (New York time) on October 30,
2006
an amendment fee equal to 0.125% of the Commitment of such Lender, such fee
to
be payable (i) in the case of Lenders that execute and deliver this Amendment
Agreement on or before the Amendment Effective Date, on the Amendment Effective
Date and (ii) in the case of all other Lenders entitled to receive such fee,
not
later than October 30, 2006.
SECTION 7.
Affirmation
of Guarantors.
Each
Guarantor signatory hereto hereby consents to the amendments to the Credit
Agreement effected hereby, and hereby confirms and agrees that, notwithstanding
the effectiveness of the amendments set forth in Section 2 hereof (and
notwithstanding the failure of Freedom Rings, LLC to be a party hereto), the
obligations of such Guarantor contained in Article III of the Credit
Agreement or in any other Loan Documents to which it is a party are, and shall
remain, in full force and effect and are hereby ratified and confirmed in all
respects, except that, on and after the effectiveness of such amendments, each
reference in Article III of the Credit Agreement and in each of the other
Loan Documents to “the Credit Agreement”, “thereunder”, “thereof” or words of
like import shall mean and be a reference to the Credit Agreement as modified
by
this Amendment Agreement.
SECTION 8.
GOVERNING
LAW.
THIS
AMENDMENT AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK.
SECTION 9.
Execution
in Counterparts.
This
Amendment Agreement may be executed by one or more of the parties to this
Amendment Agreement on any number of separate counterparts, and
5
all
of
said counterparts taken together shall be deemed to constitute one and the
same
instrument. Delivery of an executed counterpart of a signature page to this
Amendment Agreement by telecopier shall be effective as delivery of a manually
executed counterpart of this Amendment Agreement.
IN
WITNESS
WHEREOF, the parties hereto have caused this Amendment Agreement to be duly
executed and delivered by their respective proper and duly authorized officers
as of the day and year first above written.
KRISPY
KREME DOUGHNUT CORPORATION
By:
/s/
Xxxxxxx X. Xxxxxx
Name:
Xxxxxxx X. Xxxxxx
Title:
CFO
GUARANTORS:
KRISPY
KREME DOUGHNUTS, INC.
KRISPY
KREME DISTRIBUTING COMPANY,
INCORPORATED
INCORPORATED
KRISPY
KREME CANADA, INC.
HD
CAPITAL
CORPORATION
HDN
DEVELOPMENT CORPORATION
KRISPY
KREME BRAND FUND CORPORATION
KK
CANADA
HOLDINGS, INC.
NORTHEAST
DOUGHNUTS, LLC
KRISPY
KREME MANAGEMENT I, LLC
KRISPY
KREME MANAGEMENT II, LLC
KRISPY
KREME MANAGEMENT III, LLC
GOLDEN
GATE DOUGHNUTS, LLC
|
By:
|
KRISPY
KREME DOUGHNUT CORPORATION, an
authorized Member |
PANHANDLE
DOUGHNUTS, LLC
|
By:
|
KRISPY
KREME DOUGHNUT CORPORATION, an
authorized Member |
NORTH
TEXAS DOUGHNUTS, L.P.
|
By:
|
KRISPY
KREME DOUGHNUT CORPORATION, its
General Partner |
By:
/s/
Xxxxxxx X. Xxxxxx
Name:
Xxxxxxx X. Xxxxxx
Title:
Authorized Officer
LENDER
Consent
of
Required Lenders Received
