Exhibit 10.1

 

Execution Version

AMENDMENT NUMBER TWO
TO CREDIT AGREEMENT

 

THIS AMENDMENT NUMBER TWO TO CREDIT AGREEMENT this “Amendment”), dated as of
September 30, 2019, is entered into by and among KAYNE SOLUTIONS FUND, L.P.
(“Kayne”), in its capacity as administrative agent and as collateral agent for
each Lender (in such capacities, together with its successors and assigns in
such capacities, “Agent”), BUDDY’S NEWCO, LLC, a Delaware limited liability
company (“Buddy’s Newco”), BUDDY’S FRANCHISING AND LICENSING LLC, a Florida
limited liability company (“Buddy’s FL”; together with Buddy’s Newco, each
individually and collectively, jointly and severally, “Borrower”), FRANCHISE
GROUP INTERMEDIATE B, LLC, a Delaware limited liability company (“Parent”), and
the lenders identified on the signature pages hereof (such lenders, and the
other lenders party to the below-defined Credit Agreement, together with their
respective successors and permitted assigns, each individually, a “Lender”, and
collectively, the “Lenders”), and in light of the following:

 

W I T N E S S E T H

WHEREAS, Parent, Borrower, Lenders, and Agent are parties to that certain Credit
Agreement, dated as of July 10, 2019 (as amended by that certain Amendment
Number One to Credit Agreement and Consent, dated as of August 23, 2019, and as
further amended, restated, supplemented, or otherwise modified from time to
time, the “Credit Agreement”);

 

WHEREAS, Borrower has requested that Agent and Required Lenders make certain
amendments to the Credit Agreement;

 

WHEREAS, upon the terms and conditions set forth herein, Agent and Required
Lenders are willing to make certain amendments to the Credit Agreement.

 

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:

 

1.                   Defined Terms. All initially capitalized terms used herein
(including the preamble and recitals hereof) without definition shall have the
meanings ascribed thereto in Section 1.01 of the Credit Agreement.

 

2.                   Amendments to Credit Agreement. Subject to the satisfaction
(or waiver in writing by Required Lenders) of the conditions precedent set forth
in Section 3 hereof, the Credit Agreement shall be amended as follows:

 

(a)                Section 1.01 of the Credit Agreement is hereby amended by
amending and restating the second to last paragraph in the definition of
“Consolidated EBITDA” as follows:

 

“Notwithstanding anything to the contrary, it is agreed, that for the purpose of
calculating the Leverage Ratio for any period that includes the fiscal quarters
ended on September 30, 2018, December 31, 2018, March 31, 2019, or June 30,
2019, Consolidated EBITDA shall be deemed to be $3,354,682, $4,797,683,
$6,802,859, or $4,288,531, respectively, in each case, as adjusted on a pro
forma basis. For the purposes of calculating Consolidated EBITDA for any period,
if at any time during such period (and after the Closing Date), Parent or any of
its Subsidiaries shall have consummated (a) an acquisition not in violation of
this Agreement (including the consummation of an acquisition by any direct or
indirect parent of Parent solely to the extent that the acquired assets are
contributed by such direct or indirect parent, directly or indirectly, to Parent
or any of its Subsidiaries) or (b) a material disposition permitted hereunder
(including the termination or discontinuance of activities constituting the
disposed of business) of business entities, properties, or assets, in each case,
constituting one or more divisions or lines of business of any business entity,
(i) Consolidated EBITDA for such period shall be calculated after giving pro
forma effect thereto as if any such acquisition or disposition occurred on the
first day of such period. For the avoidance of doubt, Consolidated EBITDA shall
not be calculated on a cash basis.”

 

 

3.                   Conditions Precedent to Amendment. The satisfaction (or
waiver in writing by Agent and Required Lenders) of each of the following shall
constitute conditions precedent to the effectiveness of the Amendment (such date
being the “Amendment Effective Date”):

 

(a)                Agent shall have received this Amendment, duly executed by
the parties hereto, and the same shall be in full force and effect.

 

(b)                After giving effect to this Amendment, with respect to Parent
and its Subsidiaries, the representations and warranties contained herein, in
the Credit Agreement, and in the other Loan Documents, in each case, shall be
true and correct in all material respects (except that such materiality
qualifier shall not be applicable to any representations and warranties that
already are qualified or modified as to “materiality” or “Material Adverse
Effect” in the text thereof, which representations and warranties are true and
correct in all respects subject to such qualification) on and as of the date
hereof, to the same extent as though made on and as of the date hereof, except
to the extent that such representations and warranties specifically relate to an
earlier date, in which case such representations and warranties shall have been
true and correct in all material respects (except that such materiality
qualifier shall not be applicable to any representations or warranties that
already are qualified or modified as to “materiality” or “Material Adverse
Effect” in the text thereof, which representations and warranties shall be true
and correct in all respects subject to such qualification) on and as of such
earlier date).

 

(c)                No event has occurred and is continuing or would result from
the consummation of the transactions contemplated herein that would constitute a
Default or Event of Default.

 

(d)                Borrower shall pay concurrently with the closing of the
transactions evidenced by this Amendment, all fees, costs, expenses and taxes
then payable pursuant to the Credit Agreement and Section 4 of this Amendment.

 

4.                   Payment of Costs and Fees. Borrower shall pay to Agent and
each Lender all expenses required to be paid pursuant to Section 10.02 of the
Credit Agreement (including, without limitation, the reasonable fees and
expenses of any attorneys retained by Agent or any Lender) in connection with
the preparation, negotiation, execution and delivery of this Amendment and any
documents and instruments relating hereto.

 

5.                   [Reserved].

 

6.                   [Reserved].

 

7.                   [Reserved].

 

8.                   APPLICABLE LAW; CONSENT TO JURISDICTION; WAIVER OF JURY
TRIAL PROVISIONS. THIS AMENDMENT SHALL BE SUBJECT TO THE PROVISIONS REGARDING
APPLICABLE LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL SET FORTH IN
SECTIONS 10.14, 10.15 AND 10.16 OF THE CREDIT AGREEMENT, AND SUCH PROVISIONS ARE
INCORPORATED HEREIN BY THIS REFERENCE, MUTATIS MUTANDIS.

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9.                   Amendments. This Amendment cannot be altered, amended,
changed or modified in any respect except in accordance with Section 10.05 of
the Credit Agreement.

 

10.               Counterpart Execution. This Amendment may be executed in any
number of counterparts and by different parties on separate counterparts, each
of which, when executed and delivered, shall be deemed to be an original, and
all of which, when taken together, shall constitute but one and the same
Amendment. Delivery of an executed counterpart of this Amendment by
telefacsimile or other electronic method of transmission shall be equally as
effective as delivery of an original executed counterpart of this Amendment. Any
party delivering an executed counterpart of this Amendment by telefacsimile or
other electronic method of transmission also shall deliver an original executed
counterpart of this Amendment, but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Amendment.

 

11.               Effect on Loan Documents.

 

(a)                The Credit Agreement, as amended hereby, and each of the
other Loan Documents shall be and remain in full force and effect in accordance
with their respective terms and hereby are ratified and confirmed in all
respects. The execution, delivery, and performance of this Amendment shall not
operate, except as expressly set forth herein, as a modification or waiver of
any right, power, or remedy of Agent or any Lender under the Credit Agreement or
any other Loan Document. Except for the amendments to the Credit Agreement
expressly set forth herein, the Credit Agreement and the other Loan Documents
shall remain unchanged and in full force and effect. The waivers, consents and
modifications set forth herein, if any, are limited to the specifics hereof
(including facts or occurrences on which the same are based), shall not apply
with respect to any facts or occurrences other than those on which the same are
based, shall neither excuse any future non-compliance with the Loan Documents
nor operate as a waiver of any Default or Event of Default, shall not operate as
a consent to any further waiver, consent or amendment or other matter under the
Loan Documents, and shall not be construed as an indication that any future
waiver or amendment of covenants or any other provision of the Credit Agreement
will be agreed to, it being understood that the granting or denying of any
waiver or amendment which may hereafter be requested by Borrower remains in the
sole and absolute discretion of Agent and Lenders. To the extent that any terms
or provisions of this Amendment conflict with those of the Credit Agreement or
the other Loan Documents, the terms and provisions of this Amendment shall
control.

 

(b)                Upon and after the effectiveness of this Amendment, each
reference in the Credit Agreement to “this Agreement”, “hereunder”, “herein”,
“hereof” or words of like import referring to the Credit Agreement, and each
reference in the other Loan Documents to “the Credit Agreement”, “thereunder”,
“therein”, “thereof” or words of like import referring to the Credit Agreement,
shall mean and be a reference to the Credit Agreement as modified and amended
hereby.

 

(c)                To the extent that any of the terms and conditions in any of
the Loan Documents shall contradict or be in conflict with any of the terms or
conditions of the Credit Agreement, after giving effect to this Amendment, such
terms and conditions are hereby deemed modified or amended accordingly to
reflect the terms and conditions of the Credit Agreement as modified or amended
hereby.

 

(d)                This Amendment is a Loan Document.

 

(e)                Unless the context of this Amendment clearly requires
otherwise, references to the plural include the singular, references to the
singular include the plural, the terms “includes” and “including” are not
limiting, and the term “or” has, except where otherwise indicated, the inclusive
meaning represented by the phrase “and/or”. The words “hereof,” “herein,”
“hereby,” “hereunder,” and similar terms in this Amendment refer to this
Amendment as a whole and not to any particular provision of this Amendment.
Section, subsection, clause, schedule, and exhibit references herein are to this
Amendment unless otherwise specified. Any reference in this Amendment to any
agreement, instrument, or document shall include all alterations, amendments,
changes, extensions, modifications, renewals, replacements, substitutions,
joinders, and supplements, thereto and thereof, as applicable (subject to any
restrictions on such alterations, amendments, changes, extensions,
modifications, renewals, replacements, substitutions, joinders, and supplements
set forth herein). The words “asset” and “property” shall be construed to have
the same meaning and effect and to refer to any and all tangible and intangible
assets and properties. The words “asset” and “property” shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties. Any reference herein or in any other Loan
Document to the satisfaction, repayment, or payment in full of the Obligations
or Guaranteed Obligations shall mean (a) the payment or repayment in full in
immediately available funds of (i) the principal amount of, and interest accrued
and unpaid with respect to, all outstanding Loans, together with the payment of
the Applicable Prepayment Premium, (ii) all costs, expenses, or indemnities
payable pursuant to Section 10.02 or 10.03 of the Credit Agreement that have
accrued and are unpaid regardless of whether demand has been made therefor, and
(iii) all fees or charges that have accrued hereunder or under any other Loan
Document and are unpaid, (b) the receipt by Collateral Agent of cash collateral
in order to secure any other contingent Obligations for which a claim or demand
for payment has been made on or prior to such time or in respect of matters or
circumstances known to an Agent or a Lender at such time that are reasonably
expected to result in any loss, cost, damage, or expense (including attorneys’
fees and legal expenses), such cash collateral to be in such amount as Agents
reasonably determine is appropriate to secure such contingent Obligations,
(c) the payment or repayment in full in immediately available funds of all other
outstanding Obligations, and (d) the termination of all of the Commitments of
Lenders. Notwithstanding anything in the Agreement to the contrary, (y) the
Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests,
rules, guidelines, or directives thereunder or issued in connection therewith
and (z) all requests, rules, guidelines, or directives concerning capital
adequacy promulgated by the Bank for International Settlements, the Basel
Committee on Banking Supervision (or any successor or similar authority), or the
United States or foreign regulatory authorities shall, in each case, be deemed
to be enacted, adopted, issued, phased in, or effective after the date of this
Agreement regardless of the date enacted, adopted, issued, phased in, or
effective. Any reference herein to the Obligations shall (i) mean “Obligations”
as defined in the Credit Agreement (including any expenses, fees or interest
that accrue after the commencement of an Insolvency Proceeding, regardless of
whether allowed or allowable in whole or in part as a claim in any such
Insolvency Proceeding) and (ii) include all or any portion thereof and any
extensions, modifications, renewals, or alterations thereof, both prior and
subsequent to any Insolvency Proceeding.

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12.               Entire Agreement. This Amendment, and the terms and provisions
hereof, the Credit Agreement and the other Loan Documents constitute the entire
understanding and agreement between the parties hereto with respect to the
subject matter hereof and supersede any and all prior or contemporaneous
amendments or understandings with respect to the subject matter hereof, whether
express or implied, oral or written.

 

13.               Integration. This Amendment, together with the other Loan
Documents, incorporates all negotiations of the parties hereto with respect to
the subject matter hereof and is the final expression and agreement of the
parties hereto with respect to the subject matter hereof.

 

14.               Reaffirmation of Obligations. Each Loan Party hereby (a)
acknowledges and reaffirms its obligations owing to Agent and each Lender under
each Loan Document to which it is a party (including, in respect of Parent, its
Guaranty of the Obligations), and (b) agrees that each of the Loan Documents to
which it is a party is and shall remain in full force and effect. Each Loan
Party hereby (i) further ratifies and reaffirms the validity and enforceability
of all of the Liens and security interests heretofore granted, pursuant to and
in connection with the Security Agreement or any other Loan Document to Agent,
on behalf and for the benefit of each Lender, as collateral security for the
obligations under the Loan Documents in accordance with their respective terms,
and (ii) acknowledges that all of such Liens and security interests, and all
Collateral heretofore pledged as security for such obligations, continue to be
and remain collateral for such obligations from and after the date hereof
(including, without limitation, from after giving effect to this Amendment).

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15.               Severability. In case any provision in this Amendment shall be
invalid, illegal or unenforceable, such provision shall be severable from the
remainder of this Amendment and the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.

 

[Signature pages follow]

 

 

 

 

 

 

 

 

 

 

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IN WITNESS WHEREOF, the parties have entered into this Amendment as of the date
first above written.

 

 

  FRANCHISE GROUP INTERMEDIATE B, LLC,   as Parent                 By: /s/
Michael S. Piper   Name: Michael S. Piper   Title: Chief Financial Officer      
        BUDDY’S NEWCO, LLC,   as a Borrower               By: /s/ Michael
Bennett   Name: Michael Bennett   Title: Chief Executive Officer              
BUDDY’S FRANCHISING AND LICENSING LLC,   as a Borrower               By: /s/
Michael Bennett   Name: Michael Bennett   Title: Chief Executive Officer

 

 

[Signature Page to Amendment Number Two]

 

 

  KAYNE SOLUTIONS FUND, L.P.,   as Agent           By: Kayne Solutions Fund GP,
LLC,    its general partner               By: /s/ Jon Levinson     Name: Jon
Levinson     Title: Managing Partner                     KAYNE SOLUTIONS FUND,
L.P.,   as a Lender         By: Kayne Solutions Fund GP, LLC,    its general
partner               By: /s/ Jon Levinson     Name: Jon Levinson    
Title: Managing Partner                     KAYNE MULTIPLE STRATEGY FUND, L.P.,
  as a Lender         By: Kayne Anderson Capital Advisors, L.P.,    its general
partner               By: /s/ Jenna Young     Name: Jenna Young    
Title: Authorized Signatory

 

 

[Signature Page to Amendment Number Two]

 

 

 SAN BERNARDINO COUNTY EMPLOYEES’ RETIREMENT ASSOCIATION, as a New Lender   
 By: Kayne Anderson Capital Advisors, L.P., its investment manager     By:/s/
Paul Blank   Name: Paul Blank   Title: Chief Operating Officer

 

By:/s/ Michael O’Neil   Name: Michael O’Neil   Title: Chief Compliance Officer

 

 

 

 

 

[Signature Page to Amendment Number Two]

 

  Guggenheim MM CLO 2018-1, LTD.,   as a Lender   By: Guggenheim Partners
Investment Management, LLC as Collateral Manager         By: /s/ Kevin M.
Robinson   Name: Kevin M. Robinson   Title: Attorney-in-Fact              
Guggenheim Private Debt Fund NOTE ISSUER 2.0, LLC,   as a Lender   By:
Guggenheim Partners Investment Management, LLC as Manager               By: /s/
Kevin M. Robinson   Name: Kevin M. Robinson   Title: Attorney-in-Fact          
          Hobson Capital, LLC,   as a Lender   By: Guggenheim Partners
Investment Management, LLC as Collateral Manager               By: /s/ Kevin M.
Robinson   Name: Kevin M. Robinson   Title: Attorney-in-Fact

 

 

[Signature Page to Amendment Number Two]

 

  KIM Global KPI Guggenheim Professional Private Trust,   as a Lender   By:
Guggenheim Partners Investment Management, LLC as Advisor               By: /s/
Kevin M. Robinson   Name: Kevin M. Robinson   Title: Attorney-in-Fact          
    KIM Global KPS Guggenheim Professional Private Trust,   as a Lender   By:
Guggenheim Partners Investment Management, LLC as Advisor               By: /s/
Kevin M. Robinson   Name: Kevin M. Robinson   Title: Attorney-in-Fact          
    Sunwise CLO LLC,   as a Lender   By: Guggenheim Partners Investment
Management, LLC as Collateral Manager               By: /s/ Kevin M. Robinson  
Name: Kevin M. Robinson   Title: Attorney-in-Fact

 

[Signature Page to Amendment Number Two]

 

  Guggenheim Credit Income Fund, as a Lender   By: Guggenheim Partners
Investment Management, LLC as Advisor               By: /s/ Kevin M. Robinson  
  Name: Kevin M. Robinson     Title: Attorney-in-Fact               Guggenheim
Private Debt Fund 2.0-I, LLC, as a Lender   By: Guggenheim Partners Investment
Management, LLC as Manager               By: /s/ Kevin M. Robinson     Name:
Kevin M. Robinson     Title: Attorney-in-Fact               Guggenheim Private
Debt Fund 2.0, LLC, as a Lender   By: Guggenheim Partners Investment Management,
LLC as Manager               By: /s/ Kevin M. Robinson     Name: Kevin M.
Robinson     Title: Attorney-in-Fact

 

 

[Signature Page to Amendment Number Two]