EXHIBIT 10.2
EXECUTION COPY
AMENDMENT NO. 1 TO
2001 WARRANT,
AMENDMENT NO. 4 TO
CONTINGENT CONVERTIBLE NOTE
PURCHASE AGREEMENT
AND
CANCELLATION OF
NOTE PURCHASE
WARRANT
THIS AMENDMENT NO. 1 TO 2001
WARRANT, AMENDMENT NO. 4 TO CONTINGENT CONVERTIBLE NOTE PURCHASE
AGREEMENT AND CANCELLATION OF NOTE PURCHASE WARRANT (this “
Amendment ”) is entered into as of August 26,
2008, by and among Diedrich Coffee, Inc., a Delaware corporation
(the “ Company ”), and Sequoia Enterprises,
L.P., a California limited partnership (“ Sequoia
”), with reference to the following facts:
WHEREAS, on May 8, 2001, the
Company issued to Sequoia a warrant (the “ 2001
Warrant ”) to purchase 250,000 shares of common stock,
par value $0.01 per share, of the Company (“ Common
Stock ”);
WHEREAS, the Company and Sequoia are
parties to that certain Contingent Convertible Note Purchase
Agreement, dated as of May 10, 2004, as amended (the “
Note Purchase Agreement ”), pursuant to which certain
promissory notes in favor of Sequoia are outstanding (the “
Notes ”) and pursuant to which the Company issued to
Sequoia a warrant to purchase 4,219 shares of Common Stock (the
“ Note Purchase Warrant ”);
WHEREAS, concurrently herewith, the
Company and Sequoia are entering into a new Loan Agreement (the
“ Loan Agreement ”), and in connection therewith
the Company is issuing to Sequoia a warrant to purchase 1,667,000
shares of Common Stock (the “ 2008 Warrant
”);
WHEREAS, in connection with the Loan
Agreement and the 2008 Warrant, the Company and Sequoia have agreed
to (i) amend the exercise price of the 2001 Warrant,
(ii) extend the maturity date of the Note Purchase Agreement
and Notes and amend the timing for payment of principal,
(iii) remove the conversion feature of the Notes and provide
that no further warrants will be issued under the Note Purchase
Agreement and (iv) cancel the outstanding Note Purchase
Warrant, in each case as further described herein.
NOW, THEREFORE, in consideration of
the foregoing and the respective covenants and agreements set forth
herein, the parties hereto, intending to be legally bound, hereby
agree as follows:
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1.
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Amendment of
Exercise Price of 2001 Warrant . The definition of “Warrant Price”
set forth in Section 1.11 of the 2001 Warrant is hereby
amended and restated in its entirety as follows:
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“1.11 “Warrant
Price” means $2.00 per share of Warrant Stock, which takes
into account all adjustments pursuant to Section 4
hereof and Section 1.7 of the Registration Rights Agreement
due to any applicable event that occurred prior to August 26,
2008, but as may be adjusted pursuant to Section 4
hereof and/or Section 1.7 of the Registration Rights Agreement
due to any applicable event occurring after such
date.”
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2.
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Extension of
Maturity Date; Timing of Payment of Principal
.
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(a) The definition of “Change
of Control” set forth in Section 1.1 of the Note
Purchase Agreement is hereby amended and restated in its entirety
as follows:
““ Change of
Control ” shall mean (a) a transaction (or series of
transactions) in which a Third Party (other than Heeschen or any
entity controlled by Heeschen) becomes the Beneficial Owner,
directly or indirectly, of equity representing 25% or more of the
voting equity of the Company; (b) a merger, consolidation or
other business combination transaction (or series of transactions)
involving the Company, the result of which is that a Third Party
who, immediately prior to such transaction or transactions is not
the Beneficial Owner, directly or indirectly, of more than 25% of
the voting equity of the Company, becomes the Beneficial Owner,
directly or indirectly, of more than 25% of the voting equity of
the Company or the successor entity in such transaction or
transactions; or (c) a sale of all or substan
