Sample Business Contracts

Collateral Repurchase Agreement - Krispy Kreme Doughnut Corp., Mackk LLC, and Branch Banking and Trust

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         THIS COLLATERAL REPURCHASE AGREEMENT (the "Agreement") is made and
entered into this 30th day of January, 1998 by and among KRISPY KREME DOUGHNUT
CORPORATION, a North Carolina corporation, with its principal office and place
of business at 370 Knollwood Street, Suite 500, Winston-Salem, North Carolina,
27103 ("Krispy Kreme"), MACKK, L.L.C., an Alabama limited liability company (the
"Borrower") and BRANCH BANKING AND TRUST (the "Bank").

                                R E C I T A L S :

               1. The Borrower has requested a loan from the Bank to finance the
         purchase of certain land, buildings, equipment, signage, furniture and
         fixtures from Krispy Kreme.

               2. The Bank has agreed to lend to Borrower One Million Five
         Hundred Thousand and 00/100 Dollars ($1,500,000.00) in the form of an
         Acquisition and Term Loan and up to Two Hundred Fifty Thousand and
         00/100 Dollars ($250,000.00) in the form of a Line of Credit secured in
         part by a security interest in the Equipment (as defined below) (the
         "Bank Loans") as evidenced by the Notes (as defined below); and

               3. Therefore, the parties desire to enter into this Agreement.

         NOW THEREFORE, in consideration of the mutual promises and covenants
herein contained, and in further consideration of one Dollar ($1.00) and other
valuable consideration paid by each party hereto to each other party, the
receipt and adequacy of which is acknowledged by each party hereto, the parties
hereto do agree as follows:

               1. Copies of the Notes are attached hereto as EXHIBIT A and
         incorporated herein by reference (the "Notes")

               2. Bank shall provide Krispy Kreme with a copy of any notice to
         Borrower declaring a default under either of the Notes and demanding
         payment in full and a copy of any notice to Borrower after which Bank
         will exercise its remedies under either of the Notes. Such copies shall
         be sent to Krispy Kreme within three (3) business days of the sending
         of the same to Borrower.

               3. In the event of a default under either of the Notes, as long
         as Bank has fully complied with the terms of this Agreement, Bank shall
         have the right, but not the obligation, to demand by notice to Krispy
         Kreme (the "Notification") that Krispy Kreme repurchase the Equipment
         at a price equal to the lesser of (i) Three Hundred Twenty Five
         Thousand and no/100 Dollars ($325,000.00) or (ii) the unpaid balance of
         the applicable portion of the Bank Loans as of the date of the
         Notification (the "Unpaid Balance").

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         Such lesser amount is sometimes herein referred to as the "Purchase
         Price". The parties acknowledge that the Bank Loans are for Borrower's
         entire project for the acquisition of three (3) Krispy Kreme Doughnut
         Shops and includes, but is not limited to, the purchase of the
         Equipment. Consequently, the unpaid balance of the Bank Loans will be
         multiplied by a fraction, the numerator of which is $325,000.00 and the
         denominator of which is the amount of the Bank Loans ($1,750,000.00),
         to determine the "Unpaid Balance" as such term is used in this
         Agreement. For example, if the outstanding balance of the Bank Loans is
         $1,635,000.00 at the time of the Notification, then the Unpaid Balance,
         for purposes of this Agreement, shall be equal to $303,642.71. The
         parties agree that the calculations set forth in this Paragraph 3 are
         done for the sole reason of determining Krispy Kreme's financial
         obligations to the Bank with respect to the matters set forth herein.

               4. The parties acknowledge and agree that any default by Borrower
         under either of the Notes or any other documents related to the Bank
         Loans, whether or not waived by the Bank, shall, at the option of
         Krispy Kreme, constitute a default under the Associate's License
         Agreement and under any and all other agreements between Borrower and
         Krispy Kreme.

               5. The liability of Krispy Kreme hereunder shall be subject to,
         and conditioned upon, full and complete compliance by Bank with the

                     (a) Bank shall obtain and perfect a first priority security
               interest in the Equipment (the "Security Interest") and shall
               continuously maintain such perfected Security Interest from the
               moment Borrower acquires any interest in the Equipment. All
               filings and indicia of such Security Interest shall state that
               they are subject to the terms of this Agreement.

                     (b) [This Section intentionally left blank.]

                     (c) [This Section intentionally left blank.]

                     (d) Any transfer of the Security Interest or any interest
               therein to any other party shall provide that it is subject to
               the terms of this Agreement and the transferee thereof shall
               enter into an agreement with Krispy Kreme agreeing to abide by
               the terms hereof.

                     (e) Bank shall not release the Security Interest in the
               Equipment nor shall Bank take any action, or fail to take any
               action, which action or failure to act will compromise or
               diminish the Security Interest in any way. Provided, however,
               Bank may release the Security Interest in portions of the
               Equipment if Bank, at Bank's election, either (i) fully releases
               Krispy Kreme from liability under this Agreement or (ii)
               determines that Borrower reasonably desires to replace the
               Equipment with new or different equipment (the "New Equipment")
               of value and function comparable to that in which the Security
               Interest is to be released and ensures that

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                  the New Equipment is obtained by Borrower prior to such
                  release and that the Security Interest applies to such New
                  Equipment as a first priority Security Interest. Upon such
                  replacement, the New Equipment shall be deemed to be
                  "Equipment" under this Agreement. Bank shall provide notice to
                  Krispy Kreme of any such release and shall provide Krispy
                  Kreme with a list of the New Equipment and evidence that the
                  Security Interest applies thereto.

               6. Upon election by Bank to require repurchase of the Equipment
         by Krispy Kreme hereunder, Bank shall assign and transfer the Security
         Interest together with an interest in the Notes equal to the Purchase
         Price to Krispy Kreme or such entity as Krispy Kreme may designate in
         writing, and shall authorize foreclosure by Krispy Kreme or such entity
         of the Security Interest in the Equipment. Borrower shall transfer all
         of its right, title and interest in the Equipment to Krispy Kreme at
         the same time. The Security Interest is agreed by the parties to also
         secure all of Borrower's obligations under this Agreement and Borrower
         hereby grants to Bank and to Krispy Kreme a security interest (which is
         agreed to be a part of the Security Interest) in the Equipment to
         secure Borrower's obligations under this Agreement. In no event shall
         the Security Interest be permitted to merge with ownership of the

               7. Except as permitted under subparagraph 5(e) hereof, Borrower
         shall not sell or transfer, and Bank shall not consent to the sale or
         transfer, whether by gift or with or without consideration, of all or
         any part of the Equipment. Bank shall not sell or transfer the
         Equipment or any portion thereof through exercise of its rights under
         the Bank Loan and any documents executed in connection therewith, or
         otherwise, without first giving Krispy Kreme the option to purchase the
         Equipment in an amount equal to the Purchase Price. Bank shall provide
         notice to Krispy Kreme of its proposed transfer and thirty (30) days in
         which to exercise its right to purchase said Equipment. At the time
         Krispy Kreme purchases the Equipment, Bank shall also transfer the
         Security Interest as provided under Paragraph 6 above. In no event
         shall the Security Interest be permitted to merge with ownership of the

               8. As used herein, the term Equipment shall mean all furniture,
         fixtures, equipment, doughnut making equipment and signage purchased by
         Borrower and reasonably necessary for the operation of the Krispy Kreme
         Doughnut Shops located at 1354 Government Street or 3950-A Airport
         Boulevard or 3951 Government Boulevard, Mobile, Alabama, and as to
         which the Security Interest is effective. Krispy Kreme must approve the
         purchase of each item of Equipment.

               9. Borrower consents and agrees to the terms of this Agreement
         and agrees to transfer the Equipment to Krispy Kreme immediately and at
         the same time as Krispy Kreme makes a payment of the Purchase Price to
         Bank or at the time Krispy Kreme elects to purchase the Equipment under
         Paragraph 7 hereof or as otherwise provided herein. Any such transfer
         shall be free and clear of all liens, claims or interests other than
         the Security Interest. In no event shall the Security Interest be
         permitted to merge with ownership of the Equipment.

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               10. A partial list of the Equipment is attached as EXHIBIT B
         hereto and incorporated herein by reference. The parties agree to amend
         such list as each item of Equipment is purchased, upon the completion
         of the purchase of the Equipment, and again upon the purchase of any
         New Equipment. No New Equipment shall be considered a part of the
         Equipment until added to this EXHIBIT B.

               11. All notices required or desired to be sent hereunder shall be
         sent by certified mail, return receipt requested, postage prepaid, or
         by a recognized overnight courier such as Airborne Express, FedEx, etc.
         and shall be effective on receipt. Any party may change the address for
         notices to it by notice sent in accordance herewith. Notices shall be
         sent the parties hereto at their respective addresses set forth below
         (or as such address may be changed as permitted herein):

                     IF TO KRISPY KREME:    Krispy Kreme Doughnut Corporation
                           By Mail:         P.O. Box 83
                                            Winston-Salem, NC 27102-0083
                                            Attention: Stephen A. Johnson
                           By Overnight:    370 Knollwood Street
                                            Suite 500
                                            Winston-Salem, NC 27103
                                            Attention: Stephen A. Johnson

                     IF TO BORROWER:        MACKK, L.L.C.
                                            709 Chippenham Court
                                            Winston-Salem, NC 27104

                     IF TO BANK:            BB&T
                                            110 S. Stratford Road
                                            Winston-Salem, NC 27104
                                            Attention: Steve Bullard

               12. No failure of Bank to provide Krispy Kreme with a copy of any
         notice sent to Borrower shall relieve Krispy Kreme of its liability

               13. This Agreement shall be binding upon, and inure to the
         benefit of, the parties hereto and to the successors and assigns of
         Bank and Krispy Kreme. Borrower shall not have any right to assign this
         Agreement or any interest herein without the prior written consent of
         Bank and Krispy Kreme. Bank and Krispy Kreme shall each provide the
         other with a copy of any assignment of this Agreement. Any such
         assignment by Bank may be whole or partial, shall only be to a holder
         of an interest in the Notes, and shall contain an agreement by the
         assignee to abide by the terms hereof. No assignment hereof by Krispy
         Kreme shall relieve it of its obligations hereunder without Bank's
         consent to such release.

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         IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective the day and year first above written.

                                       KRISPY KREME DOUGHNUT CORPORATION

                                       BY: /s/ Randy S. Casstevens
                                           RANDY S. CASSTEVENS, VICE PRESIDENT


                                       MACKK, L.L.C.

                                       BY: /s/ J.A. McAleer
                                           J.A. MCALEER, JR., MANAGER


                                       BRANCH BANKING AND TRUST

                                       BY: /s/ Steven G. Bullard
                                       PRINTED NAME: Steven G. Bullard
                                       PRINTED TITLE: Vice President