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EXHIBIT 10.11
COLLATERAL REPURCHASE AGREEMENT
THIS COLLATERAL REPURCHASE AGREEMENT (this "Agreement") is made as of
the 30th day of January , 1998, by and among X.X. XXXXXXX, XX., a resident of
Forsyth County, North Carolina and MACKK, L.L.C., an Alabama limited liability
company (collectively the "Borrower"), KRISPY KREME DOUGHNUT CORPORATION, a
North Carolina corporation (the "Company") and BRANCH BANKING AND TRUST COMPANY,
a national banking institution ("BB&T").
R E C I T A L :
A. BB&T has on this date extended credit to the Borrower in the
aggregate maximum principal sum of One Million Seven Hundred
Fifty Thousand and 00/100 Dollars ($1,750,000.00) consisting
of a term loan in the amount of One Million Five Hundred
Thousand and 00/100 Dollars ($1,500,000.00) (the "Term Loan")
and a line of credit in the maximum principal amount of Two
Hundred Fifty Thousand and no/100 Dollars ($250,000.00) (the
"Line of Credit") (the Term Loan and the Line of Credit are
herein together referred to as the "Indebtedness"), evidenced
by two Promissory Notes of even date herewith executed and
delivered by the Borrower to BB&T (the "Notes").
B. The Indebtedness is secured, in part, by a pledge by X.X.
XxXxxxx, Xx. ("Pledgor") of five thousand two hundred
twenty-six (5,226) shares of the common voting stock of the
Company owned by the Pledgor (the "Pledged Stock"), pursuant
to a Pledge Agreement of even date herewith executed by and
between Pledgor and BB&T (the "Pledge Agreement"; the Pledge
Agreement, and all other documents, instruments and agreements
executed to evidence, create or secure the Indebtedness are
herein called the "Loan Documents").
C. The Pledged Stock is subject to a Stock Purchase Agreement
dated July 1, 1984 executed by and among the Company and its
shareholders (as it may be amended) (the "Stock Purchase
Agreement"), which Stock Purchase Agreement has been consented
and agreed to by Pledgor.
D. In order to induce BB&T to make the loans giving rise to the
Indebtedness, the Company has agreed to purchase all or part
of the Pledged Stock in the event of a default under the Notes
or any of the Loan Documents in accordance with the terms of
this Agreement.
E. BB&T has required the execution and delivery of this Agreement
by the parties hereto as a condition to making the Loans
comprising the Indebtedness.
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NOW, THEREFORE, in consideration of the premises and for other valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. ELECTION BY BB&T TO CAUSE THE COMPANY TO PURCHASE THE PLEDGED STOCK.
Upon a default under the Notes or any of the Loan Documents (hereinafter
referred to as a "Default"), BB&T may give notice to the Company and the
Borrower, requiring the Company to purchase, and the Pledgor to sell, the
Pledged Stock in the following manner and upon the following terms. The notice
shall specify whether the purchase is to be made (a) from the Pledgor prior to
the commencement of proceedings by BB&T to exercise its rights and remedies as a
secured party against the Pledged Stock, or (b) at a private sale ("Private
Sale") conducted pursuant to the terms of the Pledge Agreement and applicable
law. For purposes of determining the time as of which such purchase price is to
be determined, the Pledgor and BB&T agree that such notice shall constitute
written notice of a proposed transfer, disposition or sale of its Pledged Stock
under paragraph 2(a) of the Stock Purchase Agreement. At the Closing (as defined
in paragraph 3 hereof), the Company shall pay to BB&T and not to the Borrower or
Pledgor, in United States dollars and in immediately available funds, a purchase
price determined in accordance with the Stock Purchase Agreement. If the
purchase price of the Pledged Stock is greater than the then outstanding
Indebtedness (including accrued but unpaid interest and all other sums owed by
Borrower to BB&T pursuant to the terms of the Notes and the Loan Documents),
then the Company shall be required to purchase hereunder only so much of the
Pledged Stock as is necessary to pay in full the Indebtedness. In consideration
of the purchase price received by BB&T, the Pledgor shall transfer title to the
Pledged Stock (or so much therefor as shall be purchased) to the Company or in
the event the sale is at a Private Sale, BB&T shall deliver to the Company the
certificates evidencing the Pledged Stock (or so much thereof as shall be
purchased) together with stock powers executed in blank by the Pledgor. In
either case, BB&T shall release its security interest in the Pledged Stock
purchased by the Company upon receipt of the purchase price. The Borrower and
the Company hereby acknowledge that the Pledged Stock is subject to the terms
and provisions of the Stock Purchase Agreement which provides, in part, an
option to purchase the Pledged Stock in favor of the Company and each of its
shareholders in the event Pledgor desires to transfer, sell or dispose of all or
any portion of the Pledged Stock. Accordingly, and given the difficulty of
obtaining a reasonable price for the Pledged Stock at a public sale or auction
and the difficulty of selling the Pledged Stock at a public sale or auction in
compliance with the Stock Purchase Agreement and applicable federal and state
securities laws, the Company, the Pledgor and the Borrower specifically agree
that a Private Sale at which the Company shall purchase any or all of the
Pledged Stock pursuant to the terms of this Agreement shall have been conducted
in a commercially reasonable manner, and, to the extent permitted by applicable
law, the Company, the Pledgor and the Borrower hereby waive any claim or defense
to any such sale arising under any applicable law, including, but not limited
to, under Section 9-504(3) of the Uniform Commercial Code as in effect in the
applicable jurisdiction.
2. OTHER PURCHASERS. In the event of a default under any of the Loan
Documents, BB&T agrees not to purchase all or any part of the Pledged Stock or
allow any other person (other than the Company) to do so, without the prior
written consent of the Company, unless the
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Company shall, within thirty (30) days after BB&T's request for performance
hereunder, fail, refuse or be unable to perform its obligations hereunder.
3. THE CLOSING. If purchase of the Pledged Stock is to be made from the
Pledgor, or the Borrower, as the case may be, the Closing shall take place at a
time and place selected by BB&T within fifteen (15) days after the date of
BB&T's notice to the Company and the Borrower requiring that the Company
purchase the Pledged Stock. If purchase of the Pledged Stock is to take place
pursuant to a Private Sale, Closing shall take place at a time and in the manner
as provided for by applicable law or in the Pledge Agreement, as the case may
be, or as may be provided for in any notice given by BB&T pursuant thereto for
the Private Sale provided, however, that the Closing and delivery of the Pledged
Stock purchased by the Company shall occur at the principal office of BB&T in
Winston-Salem, North Carolina, at no expense to BB&T.
4. SURPLUS. If all proceeds ever received by BB&T, either before or
after the Closing, from any sale or other disposition of any collateral, or part
therefor, for the Indebtedness, or the exercise of any other remedy pursuant to
the Notes or any of the Loan Documents, together with the aggregate purchase
price actually received by BB&T for the Pledged Stock to be purchased pursuant
to this Agreement, shall exceed the aggregate amount of the Indebtedness,
interest thereon, the costs and expenses incurred or other sums thereunder owed
by the Borrower to BB&T pursuant to any of the Notes or the Loan Documents, and
the costs and expenses incurred in the enforcement of the Borrower's obligations
under this Agreement, including reasonable attorneys' fees, the amount of such
excess shall be remitted to or for the account of the Borrower, subject however,
to the rights and claims of others having a prior interest in or a lien upon any
such proceeds.
5. ASSIGNMENT BY BORROWER. Borrower hereby assigns all of its right,
title and interest in and to this Agreement to BB&T as collateral security for
the Indebtedness and agrees to execute and deliver Uniform Commercial Code
Financing Statements with respect thereto as BB&T may request.
6. CONTINUING OBLIGATIONS. The obligations of the Company under this
Agreement shall be continuing, and the Company agrees that its obligations
hereunder shall not be modified, diminished, extinguished or released by reason
that the whole or any part of any security or collateral for the Indebtedness
(other than the Pledged Stock) now or hereafter held may be exchanged,
compromised, impaired, released, or surrendered from time to time, that the time
or place of payment of any Indebtedness or of any security therefor may be
exchanged or extended, in whole or in part, to a time certain or otherwise, and
may be renewed or accelerated, in whole or in part, that the Borrower may be
granted indulgences generally, that any of the provisions of any note or other
instrument evidencing any debt of the Borrower or any security therefor,
including, without limitation, the Notes and the Loan Documents, may be modified
or waived, or that any party liable for the payment thereof (including but not
limited to any guarantor, surety or endorser) may be granted indulgences or
released, all of which are hereby expressly consented to by the Company,
provided, however, that neither the original principal amount of the Notes nor
the interest rate thereunder may be increased except in accordance with the
terms of the Notes, nor may additional amounts be advanced or readvanced under
the Notes except as provided in the Line of
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Credit Note, nor shall the Pledge Agreement be amended, compromised or released,
nor shall the Pledged Stock be compromised or released as collateral for the
Indebtedness. Neither the death, disability, bankruptcy, or insolvency of any
one or more of the Borrower or any guarantor, surety or endorser shall affect
the continuing obligation of the Company. No claim need be asserted against the
personal representative, guardian, custodian, trustee, debtor in bankruptcy, or
receiver of any deceased, incompetent, bankrupt or insolvent borrower,
guarantor, surety or endorser. Any deposit balance to the credit of the Borrower
or any other party liable for the payment of the Indebtedness or liable upon any
security therefor may be released, in whole or in part, at, before and/or after
the stated, extended or accelerated maturity of any Indebtedness. All of the
foregoing may be done without notice to or further assent by the Company, which
shall remain bound hereon notwithstanding any such exchange, compromise,
surrender, extension, renewal, acceleration, modification, indulgence or
release. The Company expressly waives notice of acceptance of this Agreement and
of all extensions of credit to the Borrower, presentment and demand for payment
of the Indebtedness, protest and any notice of dishonor or of default to the
Company or to any other party with respect to any of the Indebtedness or with
respect to any security or collateral therefor and all other notices to which
the Company might otherwise be entitled. The obligations of the Company under
this Agreement shall be direct and immediate and not conditional or contingent
upon either the pursuit of any remedies against the Borrower or any other person
or foreclosure of any security interest or liens available to BB&T, its
successors, endorsees or assigns, other than pursuant to the Pledge Agreement
and this Agreement enabling the Company to purchase the Pledged Stock as
required hereunder, the Company hereby waiving any rights to require that any
action be brought against the Borrower or any other person or to require that
resort be had to any security or to any balance of any deposit account or credit
on the books of BB&T in favor of the Borrower or any other person, and the
Company hereby waiving any rights of the Company pursuant to North Carolina
General Statutes Section 26-7 or any similar or subsequent law. If the
Indebtedness is partially paid through the election of BB&T, its successors,
endorsees or assigns, to pursue any of the remedies mentioned herein, in the
Notes, or in the Loan Documents or if such Indebtedness is otherwise partially
paid, the Company shall nevertheless remain fully liable and obligated under and
pursuant to the terms of this Agreement. The Borrower and BB&T agree to provide
the Company with copies of all Loan Documents and modifications thereof.
7. NO CREDIT; WAIVER OF DEFENSES. The Company shall not be entitled to
provide for the payment of the purchase price either for the Pledged Stock (or
any part thereof) by the issuance of credit or credits to or for the account of
the Borrower, the Pledgor or either of them. Nor shall any portion of any
purchase price for the Pledged Stock be subject to offset, reduction or
diminution by reason of any disputed or undisputed claim, suit or demand which
the Company may have against the Borrower, the Pledgor or either of them, or by
reason of any disputed or undisputed unpaid accounts or liabilities of or
amounts otherwise owed by the Borrower, the Pledgor or either of them to the
Company. Nothing herein shall prohibit the Company from purchasing the Pledged
Stock over and above the amounts necessary to satisfy the Borrower's obligations
to BB&T and applying the proceeds thereof to any obligation of the Borrower to
the Company.
8. NOTIFICATION OF STOCK PURCHASE AGREEMENT. Nothing herein shall
prevent or restrict the Company and the Pledgor from amending or terminating
(and the Company and Pledgor
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shall have the right to amend and/or terminate the Stock Purchase Agreement) the
Stock Purchase Agreement provided that, in the event of the termination or
modification of the Stock Purchase Agreement, the Company and the Pledgor shall
remain obligated to comply with paragraph 1 above as if the Stock Purchase
Agreement remained in force (unmodified) as it is as of the date hereof.
9. CHOICE OF LAW. The parties hereby acknowledge and agree that this
Agreement shall be governed by and construed in accordance with the laws of the
State of North Carolina.
10. MODIFICATION OF COLLATERAL REPURCHASE AGREEMENT. This Agreement may
not be changed, amended or modified orally or by implication but only by a
written instrument signed by each of the parties hereto, and no obligation of
the Company or the Borrower or the Pledgor shall be released, waived or modified
by BB&T or any officer or agent of BB&T except by a writing signed by a duly
authorized officer of BB&T and bearing the seal of BB&T. This Agreement shall be
irrevocable by the Company, the Borrower and the Pledgor until the Indebtedness
has been completely repaid and all other obligations and undertakings of the
Borrower under, or by reason of, or pursuant to the Notes or any of the Loan
Documents have been completely performed and satisfied.
11. NOTICES. Any and all notices or demands permitted or required to
be made under this Agreement shall be in writing, signed by the party giving
such notice or demand, and shall be delivered personally or by a nationally
recognized courier service or sent by registered or certified United States
mail, postage prepaid, to the other party(ies) at the address(es) set forth
below, or at such other address as may have been designated in writing. The
effective date of such notice or demand shall be date of personal service or the
date on which the notice or demand is deposited in the mails.
The address of the Borrower is: X.X. XxXxxxx, Xx.
000 Xxxxxxxxxx Xxxxx
Xxxxxxx-Xxxxx, XX 00000
MACKK, L.L.C.
000 Xxxxxxxxxx Xxxxx
Xxxxxxx-Xxxxx, XX 00000
The address of the Company is: Krispy Kreme Doughnut Corporation
000 Xxxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx-Xxxxx, Xxxxx Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx
The address of BB&T is: Branch Bank and Trust Company
Xxxx Xxxxxx Xxx 00000
Xxxxxxx-Xxxxx, Xxxxx Xxxxxxxx 00000
Attn: Xxxxx Xxxxxxx
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12. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but taken together shall
constitute but one Agreement.
13. BENEFIT. This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective legal representatives,
heirs, successors and assigns.
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IN WITNESS WHEREOF, the parties have hereunto set their hands and seals
or have otherwise caused this Agreement to be due executed as of the day and
year first above written.
/s/ X.X. XxXxxxx, Xx. (SEAL)
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X.X. XXXXXXX, XX.
MACKK, L.L.C.
[CORPORATE SEAL] BY: /s/ X.X. XxXxxxx, Xx.
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X.X. XXXXXXX, XX., MANAGER
ATTEST:
_____________________________________
_________ SECRETARY
KRISPY KREME DOUGHNUT CORPORATION
BY: /s/ Xxxxx X. Xxxxxxxxxx
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[CORPORATE SEAL] XXXXX X. XXXXXXXXXX, VICE PRESIDENT
ATTEST:
Xxxxxxx X. Xxxxxxx
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XXXXXXX X. XXXXXXX, ASSISTANT SECRETARY
BRANCH BANKING AND TRUST COMPANY
BY: /s/ Xxxxxx X. Xxxxxxx
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PRINTED NAME: Xxxxxx X. Xxxxxxx
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PRINTED TITLE: Vice President
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