EXHIBIT 10.1
AMENDMENT NO. 2
TO
MANAGEMENT AGREEMENT
This Amendment No. 2, dated as of August 31, 2001 (this "Amendment"),
amends the Management Agreement, dated as of May 31, 2000, as amended by
Amendment No. 1 to Management Agreement, dated as of December 22, 2000 (as so
amended, the "Existing Agreement"), by and among Xxx. Xxxxxx' Original
Cookies, Inc. ("Xxx. Xxxxxx"), a Delaware corporation, TCBY Holding Company,
Inc., a Delaware corporation ("Holding"), and TCBY Systems, LLC, a Delaware
limited liability company ("Systems" and, together with Holding, "TCBY").
Capitalized terms used herein not otherwise defined herein shall have the
meanings ascribed thereto in the Existing Agreement.
R E C I T A L S
WHEREAS, the Parties desire to amend certain terms of the Existing
Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereby agree as
follows:
1. Amendment.
1.1 Section 1.18 of the Existing Agreement is amended by adding
the following sentence at the end thereof:
"In no case shall Reimbursable Expenses be treated as Management Fees."
1.2 Section 1.19 of the Existing Agreement is amended in its
entirety by replacing the existing text with the following:
"1.19 "Senior Debt" means the indebtedness and other obligations
outstanding under the Amended and Restated Credit Agreement, dated as
of the date of Amendment No. 2 to this Agreement, among Systems, as
borrower, Xxxxx Fargo Bank, National Association, as agent and
lender, other lenders and certain other parties in any fiscal
quarter."
1.3 Section 1.21 of the Existing Agreement is amended in its
entirety by replacing the existing text with the following:
"1.21 "Senior Loan Documents" means the Amended and Restated Credit
Agreement under which the Senior Debt is outstanding, together with
the Restated Loan Documents (as defined therein), in each case, as
such documents may from time to time be amended in accordance with
the terms thereof."
1.4 The following new Sections 1.26, 1.27, 1.28 and 1.29 are
inserted after Sections 1.25 of the Existing Agreement:
"1.26 "Acceleration Event" has the meaning set forth in the Amended and
Restated Subordination Agreement, dated as of August 31, 2001, by and
among Xxx. Xxxxxx, Systems, Holding, TCBY Enterprises, Inc. and Xxxxx
Fargo Bank, National Association.
1.27 "Modified Calendar Quarter" has the meaning set forth in the Senior
Loan Documents.
1.28 "Modified Ratio Test" means Section 9.02(c) of the Amended and
Restated Credit Agreement under which the Senior Debt is outstanding.
1.29 "Reimbursable Expenses" means any and all out-of-pocket costs or
expenses for which direct payment by TCBY or reimbursement by TCBY to
Xxx. Xxxxxx is required by this Agreement."
1.5 The Annual Plan currently in effect for the 2001 fiscal year
under the Existing Agreement is hereby amended in part by
reducing the Management Fee of $12.7 million for such fiscal
year to $12.4 million.
1.6 Section 2.5.2 of the Existing Agreement is hereby amended
and restated as follows:
"2.5.2 Product Manufacturing Cost Savings. Commencing with the Modified
Calendar Quarter beginning on June 3, 2001, if in any Modified
Calendar Quarter Americana's cost of manufacturing product (exclusive
of raw material costs) is less than $1.64 per gallon, then the
savings will be allocated as follows: (i) the first $0.11 per gallon
of such difference shall be entirely for Systems' benefit; (ii) the
next $0.11 per gallon of such difference shall be entirely for Xxx.
Xxxxxx' benefit; and (iii) any further difference shall be divided
and shared equally between Systems and Xxx. Xxxxxx. Amortization,
depreciation, property taxes, etc. shall also be considered in the
analysis."
1.7 Section 5.3 of the Agreement is amended by adding the
following at the end of such section:
"5.3.1 Retention of Fees. Notwithstanding the foregoing, for each Modified
Calendar Quarter of TCBY beginning with the Modified Calendar Quarter
ending September 29, 2001, TCBY will retain a portion of the
Management Fees through ratably reducing the semi-monthly payment of
Management Fees payable pursuant to Section 5.4 by an amount
sufficient to ensure that the aggregate amount of such fees so
retained (the "Retained Fees") and the Deferred Fees (as defined
below) at the end of such fiscal quarter equals the following:
3rd Modified Calendar Quarter 2001 $500,000
4th Modified Calendar Quarter 2001 $1,000,000
Each 1st Modified Calendar Quarter $500,000 plus the "Deferred Amount"
thereafter
Each 2nd Modified Calendar Quarter $1,000,000 plus the "Deferred Amount"
thereafter
Each 3rd Modified Calendar Quarter $1,500,000 plus the "Deferred Amount"
thereafter
Each 4th Modified Calendar Modified $2,000,000 plus the "Deferred Amount"
Calendar Quarter thereafter
Notwithstanding the foregoing, in the first Modified Calendar Quarter
for each Modified Calendar Year beginning in 2002, the Retained Fees
will not be paid through semi-monthly payment reductions but instead
be paid in a lump sum on the date on which the relevant compliance
certificate is delivered.
For purposes of the foregoing, the "Deferred Amount" at any time is
the aggregate amount of Deferred Fees after giving effect to the
compliance calculations with respect to the Modified Ratio Test for
the immediately preceding Modified Calendar Year and the repayment of
any Deferred Fees then permitted or, if less, the aggregate amount of
Deferred Fees after giving pro forma effect to such compliance
calculations for the immediately preceding Modified Calendar Quarter
and the repayment of any Deferred Fees then permitted.
5.3.2 Effect of TCBY Compliance. If TCBY is in compliance with the Modified
Ratio Test as to a given Modified Calendar Quarter and there shall
have been no Acceleration Event then the Retained Fees as to such
Modified Calendar Quarter will be paid to Xxx. Xxxxxx promptly
following the delivery of the related compliance certificate. Once
any Retained Fees are paid to Xxx. Xxxxxx in compliance with the
foregoing provisions, such fees will not be subject to any reversion
to TCBY.
5.3.3 Effect of TCBY Non-Compliance. If TCBY is not in compliance with the
Modified Ratio Test with respect to any Modified Calendar Quarter,
then such amount of the Retained Fees needed to ensure compliance
(or, if the amount of Retained Fees is less than the amount necessary
to ensure compliance, then the entire Retained Fees) will be deferred
until such time as they can be paid in compliance with the Modified
Ratio Test and there has been no Acceleration Event (such deferred
fees, "Deferred Fees").
5.3.4 Repayment of Deferred Fees.
5.3.4.1 If TCBY is in compliance with the Modified Ratio Test with
respect to any Modified Calendar Quarter at the end of which
there were unpaid Deferred Fees and there shall have been no
Acceleration Event, the Retained Fee as to such Modified
Calendar Quarter and the then permitted amount of the then
Deferred Fees shall be paid promptly to Xxx. Xxxxxx. The
permitted amount of Deferred Fees that may then be paid will
be established by determining the maximum amount of Deferred
Fees that can be paid consistent with the Modified Ratio
Test with respect to such Modified Calendar Quarter after
giving pro forma effect to such payment for purposes of the
relevant calculation.
5.3.4.2 Any Deferred Fees will accrue interest, compounding on the
last day of each Modified Calendar Quarter of TCBY, at the
highest non-default rate from time to in effect on any
borrowings under the Senior Debt. Interest on any given
Deferred Fees will accrue over the period beginning on the
last day of the Modified Calendar Quarter to which such
Deferred Fees relate and ending on the date on which such
Deferred Fees are actually paid, with the oldest Deferred
Fees being deemed to be repaid first. Any remaining Deferred
Fees, and all accrued interest as to all Deferred Fees, will
be paid on the maturity date of the Subordinated Debt (as
defined in the Senior Loan Documents) or, if earlier, the
first date as of which all borrowings under the Senior Debt
have been repaid and the revolving commitment thereunder
terminated and all of the Subordinated Debt have been paid
(the date as so determined, the "Final Payment Date").
5.3.4.3 Once any Deferred Fees are paid to Xxx. Xxxxxx in compliance
with the foregoing provisions, such fees will not be subject
to any reversion to TCBY.
5.3.5 Xxx. Xxxxxx' Special Fee. In consideration for Xxx. Xxxxxx entering
in to this Amendment, Xxx. Xxxxxx will be entitled to receive a
special management fee (the "Special Fee") as to any Modified
Calendar Quarter of TCBY for which the Modified Ratio Test is met,
including after giving pro forma effect to the repayment in full of
any then Deferred Fees. The amount of the Special Fee for any such
fiscal quarter shall be 15% of the amount by which the numerator of
such Modified Ratio Test for such Modified Calendar Quarter could
have been reduced while maintaining compliance with the Modified
Ratio Test for such Modified Calendar Quarter, including after giving
pro forma effect to the repayment in full of any then Deferred Fees.
Any Special Fees that may be paid will for purposes of the Modified
Ratio Test be deemed to reduce the numerator of such Modified Test
for the Modified Calendar Quarter in which the payment is actually
made. Special Fees shall accrue without interest and will be payable
on and only on the Final Payment Date."
2. Miscellaneous.
2.1 This Amendment shall be binding upon and shall inure to the
benefit of the parties hereto and their respective
successors and assigns.
2.2 In case any provision in or obligation hereunder shall be
invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or
obligation in any other jurisdiction, shall not in any way
be affected or impaired thereby.
2.3 Section headings herein are included herein for convenience
of reference only and shall not constitute a part hereof for
any other purpose or be given any substantive effect.
2.4 THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
2.5 This Amendment may be executed in any number of
counterparts, each of which when so executed and delivered
shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
XXX. XXXXXX' ORIGINAL COOKIES, INC.
By:/s/ XXXXXXX XXXX
--------------------------------
Name: Xxxxxxx Xxxx
Title: Senior Vice President
TCBY HOLDING COMPANY, INC.
By: /s/ XXXXXXX XXXX
--------------------------------
Name: Xxxxxxx Xxxx
Title: Senior Vice President
TCBY SYSTEMS, LLC
By: /s/ XXXXXXX XXXX
--------------------------------
Name: Xxxxxxx Xxxx
Title: Senior Vice President
