EXECUTION COPY
RECAPITALIZATION AGREEMENT
THIS RECAPITALIZATION AGREEMENT dated as of April 24, 1998
(the "Agreement"), among ROMACORP, INC., a Delaware corporation
("Company"), NPC INTERNATIONAL, INC., a Kansas corporation
("NPC"), NPC RESTAURANT HOLDINGS, INC., a Delaware corporation
and wholly-owned subsidiary of NPC ("Holdings," and collectively
with NPC, "NPC Group"), and SENTINEL CAPITAL PARTNERS, L.P., a
Delaware limited partnership ("Investor").
W I T N E S S E T H:
WHEREAS, Holdings owns 100 shares ("Shares") of common
stock, par value $0.01 per share, of Company ("Company Common
Stock"), constituting all of the issued and outstanding shares of
capital stock of Company;
WHEREAS, Investor will contribute the Equity Purchase Price
(as defined below) to the Company in exchange for shares of the
Company Common Stock and such other securities of the Company
(collectively, the "Purchase Shares") as Investor shall request
pursuant to this Agreement (such purchase, the "Stock Purchase");
provided that the Investor shall hold 90% of the Company Common
Stock and Designated Preferred Stock, if any, outstanding after
the Recapitalization (without taking into account any potential
dilution pursuant to the pool of management options);
WHEREAS, Investor has proposed, and the Company and NPC
Group have agreed, that the Company arrange for the issuance by
the Company of high yield debt securities and/or preferred
securities pursuant to Rule 144A promulgated pursuant to the
Securities Act of 1933, in exchange for approximately $90 million
to $100 million (the "Rule 144A Offering");
WHEREAS, the parties hereto desire that, immediately after
the Stock Purchase and the Rule 144A Offering, the Company shall
redeem from Holdings, shares (the "Redemption Shares") of Company
Common Stock in exchange for the Redemption Price (such
redemption, the "Stock Redemption") and Holdings shall retain
shares of Company Common Stock and other securities such that
immediately after the Closing Holdings shall own 10% of the
Company Common Stock and Designated Preferred Stock, if any,
outstanding after the Recapitalization (without taking into
account any potential dilution pursuant to the pool of management
options);
WHEREAS, the Investor intends to cause the Company to enter
into a credit facility with a lender effective on the Closing
Date (the "Credit Transaction"), which agreement will be secured
by assets of the Company and the Company Affiliates;
WHEREAS, the Stock Purchase, the Rule 144A Offering, the
Stock Redemption and the Credit Transaction are referred to
herein as the "Recapitalization"; and
WHEREAS, it is intended that the Recapitalization be
recorded as a recapitalization for financial reporting purposes
but the transactions contemplated by this Agreement are not
contingent upon such financial reporting treatment.
NOW, THEREFORE, for good, valid and binding consideration,
the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound, hereby agree as
follows:
ARTICLE 1.
PURCHASE, SALE AND TERMS OF STOCK AND DEBT SECURITIES
1.1 Authorization. Immediately prior to the effectiveness
of the Closing, the Company shall have (i) authorized (x) the
filing of the Amended and Restated Certificate of Incorporation
of the Company, in a form reasonably acceptable to Holdings and
Investor (the "Amended Certificate"), and such Amended
Certificate shall be duly filed by the Company on or prior to the
Effective Date and shall be in full force and effect under the
laws of the State of Delaware as of the Effective Date, (y) the
adoption of Amended and Restated Bylaws of the Company, in a form
reasonably acceptable to Holdings and Investor (the "Amended
Bylaws"), and the Amended Bylaws shall be in full force and
effect under the laws of the State of Delaware as of the Closing,
(ii) the issuance and sale of the Purchase Shares to the
Investor, (iii) the issuance and sale of high yield debt or
preferred securities pursuant to the Rule 144A Offering, and
(iv) the redemption of the Redemption Shares from Holdings.
1.2 Sale of Company Common Stock. At 11:59 p.m. on the
Effective Date, subject to the terms and conditions of this
Agreement, the Company shall issue to Investor, and Investor
shall purchase, shares of Company Common Stock, or, upon the
request of Investor, a combination of Company Common Stock and
preferred stock of the Company having rights, preferences and
designations requested by Investor ("Designated Preferred
Stock"), for an aggregate purchase price of between $20,700,000
and $29,700,000, as determined by the Investor (such finally
determined price, the "Equity Purchase Price"); provided that
this Section 1.2, in conjunction with Section 1.3, shall result
in Investor owning 90% of the Company Common Stock and Designated
Preferred Stock, if any, outstanding immediately following the
Recapitalization; provided further that any transfer pursuant to
this Section 1.2 to the Investor of shares of Company Common
Stock or Designated Preferred Stock, shall be made with
certificates which shall be delivered on the Closing Date.
1.3 Stock Redemption. At the 11:59 p.m. on the Effective
Date, subject to the terms and conditions set forth in this
Agreement, Holdings agrees that it shall offer for redemption,
and the Company shall redeem from Holdings, the Redemption
Shares. The price (the "Unadjusted Redemption Price") which the
Company shall pay to Holdings for the Redemption Shares shall
equal $117,480,909 minus the sum of (x) the aggregate amount of
the Adjustment Liabilities and (y) the lesser of (i) 1/9 of the
Equity Purchase Price, and (ii) $3,750,000. In the event that
the Company issues to Investor shares of Designated Preferred
Stock pursuant to Section 1.2, a number of the shares of Company
Common Stock held by Holdings after taking effect of the
redemption described in Section 1.3 shall be converted or
exchanged for shares of Designated Preferred Stock so that
Holdings will have the same ratio of shares of Company Common
Stock to shares of Designated Preferred Stock as Investor has
immediately after any issuance pursuant to Section 1.2; provided
that this Section 1.3, in conjunction with Section 1.2, shall
result in Holdings owning 10% of the Company Common Stock and
Designated Preferred Stock, if any, outstanding immediately
following the Recapitalization; provided further that any
transfer pursuant to this Section 1.3 to the Company or Holdings
of shares of Company Common Stock or Designated Preferred Stock,
shall be made with certificates which shall be delivered on the
Closing Date.
1.4 Redemption Price Adjustment.
1.4.1 Adjustment Statement. As soon as reasonably
practicable, but not later than sixty (60) days after the Closing
Date, NPC Group shall deliver to Investor (i) the Closing Balance
Sheet and (ii) a statement prepared in accordance with Schedule
1.4.1 (the "Adjustment Statement"). Within thirty (30) days
after receipt of the Adjustment Statement, Investor shall inform
NPC Group in writing either (a) that the Adjustment Statement is
acceptable to Investor or (b) that Investor objects to the
Adjustment Statement, which objection, if any, shall set forth in
reasonable detail Investor's objections and the basis for those
objections (an "Objection Notice"). If Investor so objects, and
Investor and NPC Group do not resolve such objections on a
mutually agreeable basis within ten (10) business days after NPC
Group's receipt of the Objection Notice, the disagreement shall
be resolved within an additional period of ten (10) business days
by an independent, nationally recognized "big six" accounting
firm reasonably acceptable to Investor and Holdings (the
"Independent Firm"). If the Investor and Holdings cannot agree
on the Independent Firm, each of Investor and Holdings shall be
entitled to exclude one of the "big six" firms and the
Independent Firm shall be chosen randomly by counsel to Investor
and NPC Group from the remaining "big six" firms. The decision
of the Independent Firm shall be final and binding upon Investor
and NPC Group. Upon the agreement of Investor and NPC Group or
the decision of the Independent Firm, or if Investor fails to
deliver an Objection Notice to NPC Group within the first thirty
(30) day period provided above, the Adjustment Statement (as
adjusted, if applicable, by the agreement of Investor and NPC
Group or the decision of the Independent Firm) shall be deemed
final. Investor and NPC Group each shall bear the fees, costs
and expenses of its own accountants, shall share equally the
fees, costs and expenses of the Independent Firm and shall permit
each other and each other's accountants access to the books and
records reasonably necessary to prepare the Adjustment Statement.
1.4.2 Post-Closing Adjustment Procedure. Upon the
Adjustment Statement being deemed final in accordance with
Section 1.4.1, the Unadjusted Redemption Price shall be adjusted,
up or down, as applicable, in an amount equal to the Adjustment
Amount set forth on the Adjustment Statement (as so adjusted, the
"Adjusted Redemption Price"). To the extent that the Adjusted
Redemption Price exceeds the Unadjusted Redemption Price, the
Company shall pay to Holdings the difference between such
amounts, and to the extent that the Unadjusted Redemption Price
exceeds the Adjusted Redemption Price, Holdings shall pay to the
Company the difference between such amounts. Any payment required
under this Section 1.4.2 shall be made by wire transfer of
immediately available funds to the account specified by the party
entitled to payment within five (5) business days after the date
on which the Adjustment Statement is deemed final in accordance
with Section 1.4.1.
1.4.3 Payments Relating to Damaged Restaurant and
Certain Franchised Restaurants.
(a) If the Lease with respect to the New Restaurant
and the real estate upon which it sits shall have been
extended or redone on terms reasonably acceptable to
Investor, including an extension or extensions, or a new
term, which shall be at least 15 years in length (including
any renewals or extensions which are exercisable at the sole
option of the Company), upon the opening to the public for
business of the New Restaurant (the "Business Commencement
Date"), the Company shall pay to Holdings $1,000,000.
(b) As soon as practicable following the end of the 12
consecutive full Fiscal Periods of the Company commencing
three full Fiscal Periods following the Business
Commencement Date, the Company shall determine the EBITDA of
the New Restaurant during such twelve Fiscal Periods (the
"New Restaurant EBITDA"). If the New Restaurant EBITDA
exceeds $140,252, then the Company shall, within 45 days
after the end of the twelfth such Fiscal Period, pay to
Holdings an amount equal to the sum of (i) the product of
such excess multiplied by 7.13 (such product, the "Variable
Amount"), provided that the Variable Amount shall not exceed
$683,000, plus (ii) a cost of capital in the amount of 9
percent per annum of the Variable Amount, computed from the
Business Commencement Date to the date of payment of the
amounts due pursuant to this Section 1.4.3.
1.4.4 As soon as practicable, but not later than 30
days after the end of the twelfth full Fiscal Period referred to
in clause (b) of Section 1.4.3, the Company shall pay to Holdings
the product of (i) 7.13 multiplied by (ii) the Earnings Amount,
which product shall not exceed $3,336,091. The "Earnings Amount"
shall equal (A) the sum of (x) the aggregate EBITDA of the Owned
Restaurants during the first 12 consecutive full Fiscal Periods
after the Closing Date (the "Test Period"), plus (y) the
aggregate gross royalties earned by the Company with respect to
the Domestic Franchise Restaurants (net of reasonable reserves
for uncollectible franchise royalties relating to such Domestic
Franchise Restaurants) during the Test Period, plus (z) the
aggregate gross royalties earned by the Company with respect to
the Foreign Franchise Restaurants (net of reasonable reserves for
uncollectible franchise royalties relating to such Foreign
Franchise Restaurants) during the Test Period, minus (B)
$4,639,375. At or prior to the payment of amounts required to be
paid by this Section 1.4.4, the Company shall deliver to Holdings
a calculation of the Earnings Amount prepared in reasonably
sufficient detail to verify the accuracy of the Earnings Amount.
NPC Group and its agents and representatives, may at reasonable
times during normal business hours, and NPC Group's cost,
inspect, copy and audit the books and records of the Company
solely for the purpose of verifying the calculation of the
Earnings Amount (and subject to reasonable confidentiality
obligations), and the Company shall, and shall cause the Company
Affiliates and their respective agents and representatives to,
reasonably cooperate with any such inspection or audit.
1.4.5 Any amounts payable by the Company to
Holdings pursuant to Sections 1.4.3 and 1.4.4 shall be added to
the Adjusted Redemption Price to equal the "Redemption Price".
1.5 Purchase and Sale of Real Estate. Company and Investor
acknowledge that NPC Group has since December 21, 1997, acquired
the real estate described on Schedule 1.5, and following the date
hereof, may acquire certain other real estate (subject to Section
5.7.2(xi)), in each case which is intended to be used for the
benefit of Company. Accordingly, NPC Group shall transfer to
Company or its designees and Company or its designees shall
accept all such real estate and the buildings, fixtures and
equipment located thereon, no later than the time the store to be
located thereon is to be opened (but in no event later than nine
(9) months after the Closing), for consideration equal to the
difference of (i) the total cost thereof to NPC Group including
reasonable closing costs, broker fees and costs, appraisals,
environmental audits, recording and filing fees, reasonable
attorneys fees and all other reasonable costs, fees and expenses
incurred in connection with or as a result of the purchase of
such real estate and any construction of any related buildings,
fixtures and equipment minus (ii) $1,397,480. Investor shall
receive copies of any and all diligence materials, including, but
not limited to, copies of any and all appraisals and
environmental audits, at least thirty (30) days prior to the
expiration of any diligence period contingency or other
contingency period referenced in the purchase contracts for such
real estate.
1.6 Letter of Credit; Capitalization Proceeds. At Closing,
either (A) the Company shall put in place for a period of 2
years, a letter of credit which shall at any point in time be in
a face amount not less than 60% of the Company's maximum
obligations under Sections 1.4.3 and 1.4.4 (but ignoring Section
1.4.3(b)(ii)) for the benefit of Holdings to secure the Company's
obligations to Holdings under Sections 1.4.3 and 1.4.4, such
letter of credit to be held in escrow pursuant to an escrow
agreement reasonably acceptable to the Parties, provided that
such escrow agreement shall contain a dispute mechanism
consistent with Section 1.4.1 pursuant to which the arbitrator or
accounting firm who settles any dispute will have final authority
to direct the escrow agent to disbuse funds under the
aforementioned letter of credit, or (B) the sum of (a) the net
proceeds to the Company of the Rule 144A Offering, (b) 10/9 of
the Equity Purchase Price, (c) the net proceeds to the Company of
any sale leaseback transactions, (d) the net proceeds to the
Company of any other permanent (having at least a 2 year term)
financing other than the facility entered into pursuant to the
Credit Transaction, shall exceed the sum of (x) $117,480,000, and
(y) the fees and expenses payable by the Company at Closing
pursuant to Section 13.8, by at least $2,000,000.
1.7 Cancellation of Intercompany Payables. Immediately
prior to the Closing, all intercompany payables owed by Company
to NPC and its Affiliates shall be contributed to the capital of
the Company and become additional equity of the Company.
ARTICLE 2.
REPRESENTATIONS AND WARRANTIES OF NPC GROUP
As a material inducement to the Investor to purchase the
Purchase Shares and enter into and otherwise perform this
Agreement, NPC and Holdings jointly and severally make the
following representations and warranties to Investor:
2.1 Organization; Power and Authority. NPC is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Kansas. Holdings is a corporation
duly organized, validly existing and in good standing under the
laws of the State of Delaware. Each of NPC and Holdings has all
corporate power and authority needed to execute, deliver and
perform its obligations under this Agreement and the Related
Documents and to consummate the transactions contemplated hereby
to be consummated by it.
2.2 Authorization; Execution and Validity. The execution,
delivery and performance by each of NPC and Holdings of this
Agreement and the Related Documents and the consummation by each
of NPC and Holdings of the transactions contemplated hereby and
thereby to be consummated by it have been duly authorized by all
necessary corporate action. This Agreement and the Related
Documents (to which either NPC or Holdings is a party) have been
duly and validly executed and delivered by each of NPC and
Holdings (as the case may be), constitute valid and binding
obligations of each of NPC and Holdings (as the case may be) and
are enforceable against each of NPC and Holdings in accordance
with their terms, except to the extent that the enforcement
hereof may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter
in effect relating to creditors' rights generally, and
(ii) general principles of equity regardless of whether
enforceability is considered in a proceeding in equity or at law.
2.3 Title to Shares. Holdings owns of record and
beneficially good, valid and marketable title to the Shares, free
and clear of any and all Liens, which Shares constitute all of
the issued and outstanding capital stock of the Company. Upon
the delivery of and payment for the Redemption Shares at the
Closing as provided for pursuant to the terms of this Agreement,
the Company will acquire good, valid, and marketable title to
such Redemption Shares, free and clear of any Lien.
2.4 No Conflict; NPC Group Consents. The (i) execution,
delivery and performance by each of NPC and Holdings of this
Agreement and the Related Documents and (ii) execution, delivery,
and performance by each of NPC and Holdings of the agreements,
certificates, and instruments to be executed and delivered by
each of them pursuant hereto and thereto will not, (a) violate
any Law, (b) violate any Charter Document of either NPC or
Holdings, (c) violate any Order to which either NPC or Holdings
is a party or by which it is bound or to which the Redemption
Shares are subject, (d) require any Consent from any Governmental
Authority, except for (x) compliance with the HSR Act, (y)
obtaining consents and authorizations required by applicable
state and local liquor laws, and (z) actions required to be taken
by Investor or Company, (e) breach any material Contract to which
either NPC or Holdings is a party or by which it is bound or any
other Contract to which the Redemption Shares are subject, or (f)
result in the creation of any Lien on any of the Shares.
2.5 Litigation; Orders. There is no Action by any Person
by or before any Governmental Authority that is pending or, to
NPC Group's Knowledge, threatened by, against or affecting either
NPC or Holdings or any of its respective properties, assets,
operations or business which would, if adversely determined,
adversely affect either NPC's or Holdings's ability to consummate
the transactions contemplated by this Agreement, nor is either
NPC or Holdings subject to any Order which would have any such
effect.
2.6 Brokers. No Person (other than ▇▇▇▇▇▇▇▇ & Co. Inc.,
whose fee will be paid by NPC Group, except for the fee payable
in connection with the financing raised by the Company and
Investor in connection with the transactions contemplated by this
Agreement) is or will become entitled to receive any brokerage or
finder's fee, advisory fee or other similar payment for the
transactions contemplated by this Agreement by virtue of having
been engaged by or acted on behalf of either NPC, Holdings or the
Company.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES OF NPC GROUP AND COMPANY
As a material inducement to the Investor to purchase the
Purchase Shares and enter into and otherwise perform this
Agreement, NPC, Holdings and Company jointly and severally make
the following representations and warranties to Investor:
3.1 Organization; Power and Authority. Company is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and has full corporate
power and authority to conduct its business and own and operate
its properties as now conducted, owned, and operated. Company
has all corporate power needed to execute, deliver and perform
its obligations under this Agreement and to consummate the
transactions contemplated hereby to be consummated by it. On or
before the Effective Date, the Company will duly adopt and cause
to be filed and to become effective the Amended Certificate and
the Amended Bylaws each of which will be in effect and binding
upon the Company as of the date thereof. Schedule 3.1 indicates
all jurisdictions where the nature of the business or the nature
of the location of the assets of the Company or any Company
Affiliate requires it to be licensed or qualified as a foreign
corporation (except where the failure to be so licensed or
qualified would not have a Material Adverse Effect) and each of
the Company and each Company Affiliate is so licensed or
qualified and is in good standing in each jurisdiction set forth
on Schedule 3.1.
3.2 Authorization; Execution and Validity. The execution,
delivery and performance by Company of this Agreement and each of
the Related Documents to which it is a party and the consummation
by Company of the transactions contemplated hereby and thereby to
be consummated by it have been duly authorized by all necessary
corporate action. This Agreement and each of the Related
Documents to which it is a party have been duly and validly
executed and delivered by Company, constitute valid and binding
obligations of Company and are enforceable against Company in
accordance with their terms, except to the extent that the
enforcement hereof or thereof may be limited by (i) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now
or hereafter in effect relating to creditors' rights generally,
and (ii) general principles of equity regardless of whether
enforceability is considered in a proceeding in equity or at law.
3.3 Company Common Stock. The Company Common Stock has
been duly authorized and, when issued and delivered in accordance
with this Agreement, will be validly issued, fully paid, and
nonassessable, free and clear of any Liens other than Liens
created by the Investor or as otherwise contemplated by this
Agreement.
3.4 Capitalization. The authorized, issued and outstanding
capital stock or equity interests of the Company and each of the
Company Affiliates immediately prior to the consummation of the
Recapitalization is set forth on Schedule 3.4. All of the
outstanding shares of the Company Common Stock and shares of
capital stock of the Company Affiliates are validly issued,
fully-paid and non-assessable. There are no outstanding options,
warrants, rights, agreements, contracts, calls, demands of any
character, transfer restrictions (except restrictions imposed by
federal and state securities laws), Liens, rights of first offer,
rights of first refusal, preemptive or other preferential rights,
stock appreciation rights, phantom stock rights, profit
participation or similar rights, antidilution provisions or
commitments of any character relating to any issued or unissued
shares of capital stock or equity interests of the Company or any
Company Affiliate other than (i) pursuant to this Agreement or
the Related Documents or (ii) those that will be extinguished
prior to the Closing.
3.5 Private Sale; Voting Agreements. Subject to the
accuracy of the Investor's representations and warranties
contained herein, the offer, sale, and issuance of the Purchase
Shares do not require registration under the Securities Act or
any applicable state securities laws. There are no agreements or
understandings with any Person with respect to the voting or
transfer of shares of the capital stock of the Company, except as
contemplated by this Agreement.
3.6 Financial Statements.
3.6.1 Audited Financial Statements. Schedule 3.6.1
includes: (a) audited consolidated balance sheets of Company as
of March 24, 1996, March 23, 1997, and December 21, 1997, and the
related audited consolidated statements of income, retained
earnings, and cash flow for the two fiscal years ended March 24,
1996 and March 23, 1997 and the 39 weeks ended December 21, 1997,
together with the notes thereto and the report thereon of Ernst &
Young. The financial statements described in the previous
sentence, (i) are true, correct and complete in all material
respects, (ii) are consistent with the books and records of the
Company and the Company Affiliates, (iii) present fairly the
financial condition, results of operations and cash flows of the
Company and the Company Affiliates as of the dates and for the
periods indicated, in accordance with GAAP, (iv) will be
presented in accordance with GAAP (excluding normal year-end
adjustments in the case of the financial statements for the
period ended December 21, 1997) and (v) will reflect the
application of accounting principles consistent with prior
periods subject to (ii) above.
3.6.2 Closing Balance Sheet. The unaudited
consolidated balance sheet of Company as of the Effective Date
(the "Closing Balance Sheet") to be delivered to Investor
pursuant to Section 1.4 and the financial statements described in
Section 3.6.1, (i) will be true, correct and complete in all
material respects, (ii) will be prepared consistent with the
books and records of the Company and the Company Affiliates,
(iii) will present fairly the financial condition, results of
operations and cash flows of the Company and the Company
Affiliates as of the dates and for the periods indicated, in
accordance with GAAP, (iv) will be presented in accordance with
GAAP excluding footnotes and normal year-end adjustments, and
(v) will reflect the application of accounting principles
consistent with prior periods subject to (ii) above.
3.6.3 Liabilities. Company and the Company
Affiliates have no material liabilities, whether accrued,
absolute, contingent or otherwise, of a type required by GAAP to
be included as a liability on an audited balance sheet or
described in the notes thereto of Company, other than (i)
liabilities which are reflected or reserved against in Company's
most recent consolidated balance sheet included in Schedule
3.6.1, (ii) liabilities incurred since the date of the most
recent consolidated balance sheet included in Schedule 3.6.1 in
the ordinary course of business and (iii) liabilities set forth
on Schedule 3.6.3. Except as set forth on Schedule 3.6.3,
neither the Company nor any of the Company Affiliates has any
indebtedness for borrowed money as of the date hereof.
3.7 Absence of Certain Changes. Since December 21, 1997
until the Closing Date, and except as expressly set forth on
Schedule 3.7, there has been no event or occurrence that has had
or would have a Material Adverse Effect. Since December 21, 1997
until the Closing Date (except clauses (b) and (m) which shall
only run until the date hereof), and except as expressly set
forth on Schedule 3.7, there has been no (a) material amendment
or termination of, or failure to perform by the Company in any
material respect under, any Material Contract, Material Lease or
material Permit relating to Company or any Company Affiliate
other than in the ordinary course of business, (b) material
destruction, damage or other loss to any of Company's or any
Company Affiliate's assets that is not covered by insurance,
(c) sale, lease, license, assignment, or other disposition of any
of Company's or any Company Affiliate's assets (tangible or
intangible), other than assets sold, leased or otherwise disposed
of in the ordinary course of business, (d) material purchase or
lease of any assets of the Company or any Company Affiliate,
other than assets purchased or leased in the ordinary course of
business, (e) incurrence or guaranty by the Company or any
Company Affiliate of any Liabilities in excess of $50,000 in the
aggregate except for Liabilities incurred in the ordinary course
of business consistent with past practices, (f) cancellation,
waiver or release by the Company or any Company Affiliate of any
debt, claim, or right except in the ordinary course of business
consistent with past practices, (g) delay or postponement by the
Company or any Company Affiliate of the payment of the accounts
payable or other Liabilities outside the ordinary course of
business, (h) issuance of any capital stock or other equity
securities of the Company or any Company Affiliate or any
securities convertible, exchangeable, or exercisable into any
such capital stock or other equity securities, (i) declaration,
set aside, or payment by the Company or any Company Affiliate of
any dividend or distribution with respect to capital stock or
redemption, purchase or other acquisition by the Company or any
Company Affiliate of any capital stock, (j) occurrence of any of
the material assets of the Company or any Company Affiliate,
tangible or intangible, becoming subject to any Lien (other than
any Permitted Lien) which is not to be released at Closing,
(k) capital expenditure or commitment by the Company or any
Company Affiliate, or series thereof, involving more than
$100,000, individually or in the aggregate, made outside the
ordinary course of business, (l) direct or indirect (whether
through a foreign subsidiary or otherwise) commitment to invest
or investment by the Company or any Company Affiliate in, and
neither the Company nor any Company Affiliate owns, any tangible
property located in any jurisdiction other than a jurisdiction
within the United States of America, (m) write off by the Company
or any Company Affiliate as uncollectible of any accounts
receivable other than in the ordinary course of business and for
amounts not greater than $25,000 individually, or $100,000 in the
aggregate, (n) loans or advances by the Company or any Company
Affiliate to, guarantees for the benefit of, or any investments
in any Person, other than advances to employees in the ordinary
course of business that do not exceed $10,000 individually or
$25,000 in the aggregate and other than guarantees in the
ordinary course of business under NPC's existing loan and credit
agreements, (o) payment by the Company or any Company Affiliate
to, or execution by the Company or any Company Affiliate of, any
agreement, arrangement or transaction with, any Affiliate of the
Company (including its officers, directors, or employees), other
than payroll and other compensation payments made in the ordinary
course of business, (p) other than the potential accelerated
vesting of options to purchase stock of NPC held by employees of
the Company on or prior to the Closing, increase by the Company
or any Company Affiliate in the compensation of any officer or
employee or any other change in the employment terms of any
officer or employee, in either case outside the ordinary course
of business, (q) material change in any method of accounting or
accounting practice of the Company or any Company Affiliate other
than as required by GAAP or Law, (r) failure to maintain any
material assets (tangible or intangible) of the Company or any
Company Affiliate, (s) entry by the Company or any Company
Affiliate into any other material transaction other than in the
ordinary course of business, or (t) agreement or commitment to
take any action described in this Section 3.7.
3.8 No Conflict; Company Consents. Except as set forth on
Schedule 3.8, the execution, delivery and performance by Company
of this Agreement or the Related Documents will not (a) violate
any Law, (b) violate any Charter Document of Company, (c) violate
any material Order to which Company is a party or by which it is
bound, (d) require any Consent from any Governmental Authority,
except for (i) compliance with the HSR Act, (ii) obtaining
consents and authorizations required by applicable state and
local liquor laws, and (iii) actions required to be taken by
Investor; (e) breach any Material Contract, Material Lease or
material Permit relating to Company or any Company Affiliate, or
(f) result in the creation of any Lien on any of the Shares.
3.9 Permits; Compliance with Law. Each of the Company and
the Company Affiliates has all material Permits, franchises, and
other rights reasonably required of it to allow it to conduct its
business and is not in violation of any Order or of any Law.
Except as set forth on Schedule 3.9, the business of each of the
Company and the Company Affiliates has been conducted in
compliance with all applicable Laws, except where the failure to
so comply would not have a Material Adverse Effect.
3.10 Real Property.
3.10.1 Owned Real Property. Schedule 3.10.1 lists
the address and legal description of all of the real property
owned by Company and each Company Affiliate (the "Owned Real
Property"). Except as set forth in Schedule 3.10.1, Company and
each Company Affiliate has good, marketable and indefeasible fee
simple title to all of its Owned Real Property, free and clear of
all Liens (other than Permitted Liens). Schedule 3.10.1 also
lists all of the real property subject to Section 1.5 which has
been acquired to the date of this Agreement.
3.10.2 Leased Real Property.
(a) Attached as Schedule 3.10.2 is a list of all
leases and subleases as currently in effect (the "Leases") for
real property (the "Leased Real Property"; the "Owned Real
Property" and the "Leased Real Property" collectively, the "Real
Property") to which the Company or any Company Affiliate is a
party. Except as set forth on Schedule 3.10.2, the Company or its
applicable Company Affiliate has a good and valid leasehold
interest in and to all of the Leased Real Property, and the
leasehold interest in the Leased Real Property is not subject to
any Liens (other than Permitted Liens). Each Lease is in full
force and effect and is enforceable in all material respects in
accordance with its terms. Neither the Company nor any Company
Affiliate is in material default nor are there any conditions
which, with the giving of notice, the passage of time or both,
would become a material default by the Company or any Company
Affiliate under any Lease. NPC Group has previously delivered to
the Investor true and complete copies of all the Leases. Except
as described on Schedule 3.10.2, no Consent is required from the
landlord under any Lease as a result of the execution of this
Agreement or the consummation of the transactions contemplated
hereby.
(b) The Real Property constitutes all of the material
real property owned or leased in connection with the business of
the Company and the Company Affiliates. Except as set forth on
Schedule 3.10.2, other than the Company, the Company Affiliates
and lessors under the Leases (and any assignees of such lessors'
interests in the Leases), there are no parties in possession or
parties having any current or future right to occupy (other than
such rights held by future lessees of the Leased Real Property
which do not allow such lessees any right to occupy any such
Leased Real Property at least until the term of the applicable
Leases and any extension period thereof shall have expired) any
of the Real Property. The material Real Property is in a
condition and repair sufficient and appropriate for the conduct
of the business of the Company and the Company Affiliates. The
Real Property and all improvements located thereon conform in all
material respects to all building, zoning and other laws,
ordinances, rules and regulations which are applicable to the
Company or the Company Affiliates. There exists no material
violation of any covenant, condition, restriction, easement,
agreement or order affecting any portion of the Real Property.
All improvements located on the Real Property have access to a
public road from such Real Property. No such improvements
encroach on land not included in the Real Property. There is no
pending or, to NPC Group's Knowledge, threatened condemnation
proceeding affecting any portion of the Real Property. There are
no outstanding options or rights of first refusal with respect to
the purchase or use of any of the Owned Real Property, any
portion thereof or interest therein. Except as contemplated by
Section 1.5, and other than the leases of the Leased Real
Property, neither the Company nor any of the Company Affiliates
is obligated to purchase or lease any real property.
3.11 Personal Property.
3.11.1 Owned Personal Property. Company and the
Company Affiliates have and will have immediately prior to the
Closing, good and marketable title to, or a valid leasehold
interest in, all of the personal property used in the conduct of
Company's business (other than hardware, software, network
equipment, books and records, contract rights and certain other
assets relating primarily to NPC's business and the
administrative services provided by NPC Management, Inc. but used
by or for the benefit of Company), wherever located, free and
clear of all Liens, other than Permitted Liens. Such assets and
properties, taken as a whole, are free from any material defects,
have been maintained in accordance with normal industry practice,
are in an operating condition and repair (subject to normal wear
and tear) adequate and suitable for the purposes for which such
assets and properties are presently used.
3.11.2 Leased Personal Property. Schedule 3.11.2
lists personal property leased to Company and each Company
Affiliate (the "Leased Personal Property") pursuant to a Material
Lease. All such Material Leases of Leased Personal Property are
valid and binding and in full force and effect in all material
respects. Since December 21, 1997, there has been no material
breach of any such Material Lease by Company or any Company
Affiliate, or, to NPC Group's Knowledge, any other Person. The
Leased Personal Property, taken as a whole, is free from any
material defects, has been maintained in accordance with normal
industry practice and is in an operating condition and repair
(subject to normal wear and tear) adequate and suitable for the
purposes for which it is presently used.
3.12 Suppliers. Schedule 3.12 lists, as of December 31,
1997, each of the ten largest suppliers or third-party
contractors of the Company and the Company Affiliates based on
prior twelve month purchases from such suppliers or obligations
to such third-party contractors ("Material Suppliers"). Except
as listed on Schedule 3.12, (i) no single supplier or third-party
contractor is materially important to the business of the Company
or any Company Affiliates, (ii) no Material Supplier has canceled
or otherwise terminated, or, to NPC Group's knowledge, threatened
to cancel or otherwise terminate, its relationship with the
Company or any Company Affiliates or has during the last 12
months decreased materially, or to NPC Group's Knowledge
threatened to decrease or limit materially, its services,
supplies, or materials to the Company or any Company Affiliates,
and (iii) to the NPC Group's Knowledge, no supplier or third-
party contractor has taken any action that would have a material
adverse effect on the quality of the goods that it supplies to
the Company or any Company Affiliates. To NPC's Knowledge as of
the date hereof, the consummation of the Recapitalization will
not have a material adverse effect on the relationship of the
Company or any Company Affiliates with any such supplier or
third-party contractor.
3.13 Contracts.
(a) Set forth on Schedule 3.13(a) is a list of each
agreement to which the Company or any of the Company Affiliates
is a party or by which the Company or any of the Company
Affiliates is bound (a complete and correct copy or, if oral, a
description of each of which has been delivered to the Investor)
(the "Material Contracts"):
(i) for the lease of personal property from or to
third parties providing for annual lease payments to any single
lessor or from any single lessee in excess of $25,000;
(ii) for the purchase, distribution or sale of
supplies, products or other personal property or for the
furnishing or receipt of information or services, in each case
that is not terminable within one year and involves more than
$25,000;
(iii) relating to the acquisition by the Company or
any of the Company Affiliates of any entity or all or
substantially all of the assets of any Person;
(iv) under which it has created, incurred, assumed or
guaranteed (or may create, incur, assume or guarantee)
indebtedness or pursuant to which a Lien (other than a Permitted
Lien) is or may be imposed on any of its tangible or intangible
assets (other than any such agreement, arrangement or
understanding which is being terminated at or prior to Closing);
(v) for the license of Intellectual Property or the
payment of royalties (whether as licensee or licensor or payor or
payee) or any other agreement providing in whole or in part for
the use of, or limiting the use of, any Intellectual Property;
(vi) concerning confidentiality or secrecy other than
those agreements which would not prevent the disclosure of any
agreement or fact, in either case that is, required to be
disclosed by Regulation S-K promulgated by the SEC in connection
with the filing of a registration statement filed under the
Securities Act or a report filed under the Exchange Act.
(vii) purporting to limit the right of the Company
or any of the Company Affiliates to compete in any line of
business, with any Person or in any geographic area other than
franchise agreements and development agreements entered into by
the Company in the ordinary course of its business;
(viii) with any director, officer, employee, or
other Affiliate of the Company or any Company Affiliate
(including any involving employment or severance) or any of their
respective Affiliates;
(ix) relating to indemnification obligations in favor
of any Person;
(x) under which is created any restriction on the
ability of the Company or any of the Company Affiliates to (a)
pay dividends or make similar distributions, (b) make loans or
advances to any Person, or (c) sell, lease, or transfer any of
their respective properties or assets, except in each case for
Permitted Liens, or any instrument governing any outstanding debt
of the Company or pursuant to which the Company must maintain or
not violate any financial covenant (other than any such Lien
combining any such restrictions which are terminated on or prior
to Closing);
(xi) the consequences of a default or termination of
which would have a Material Adverse Effect not otherwise set
forth on Schedule 3.13(a), Schedule 3.10.1 or Schedule 3.10.2;
(xii) otherwise involving the receipt or
expenditure of more than $100,000 or not entered into in the
ordinary course of business;
(xiii) for the purchase or sale of real property,
any business or line of business or for any merger or
consolidation, other than the agreements contemplated by
Section 1.5;
(xiv) relating to joint ventures or partnerships;
or
(xv) otherwise material to the business of the Company
or any of the Company Affiliates taken as a whole.
None of the foregoing representations and warranties shall
be deemed to have been breached by virtue of the entry of the
Company or the NPC Group into this Agreement or any of the
Related Documents or the consummation of the transactions
contemplated in this Agreement or any of the Related Documents.
(b) Except as set forth on Schedule 3.13(b), neither the
Company nor any Company Affiliate is in material default, nor, to
the NPC Group's Knowledge, is there any basis for any valid claim
of material default, and no event has occurred which, with notice
or lapse of time, would constitute a material default, under any
agreement, arrangement, or understanding required to be set forth
on Schedule 3.13(a) and, except as set forth on Schedule 3.13(b),
to the NPC Group's Knowledge, no other Person is in material
default under any such agreement. No defaults set forth on
Schedule 3.13(b), either individually or in the aggregate, would
have a Material Adverse Effect.
3.14 Litigation; Orders. Except as set forth on Schedule
3.14, there is no materially adverse Action that is pending or,
to NPC Group's Knowledge, threatened against or affecting (a)
Company, (b) any Company Affiliate, (c) any of the assets or
properties of the Company or any Company Affiliate, (d) any
officers or directors of Company or any Company Affiliate (which
Action arose out of or relates to such officers' or directors'
position with the Company or any Company Affiliate), or (e) any
of the Shares. Except as set forth on Schedule 3.14, Company and
the Company Affiliates are not subject to any materially adverse
Order. To the NPC Group's Knowledge, there is no basis for any
such Action or Order described in this Section 3.14.
3.15 Environmental Laws.
3.15.1 Compliance. None of the Real Property, the
Company or any Company Affiliate has failed to (a) comply with
any Environmental Law, (b) maintain in effect and comply with any
Permit required by any Environmental Law, or (c) comply with any
consent agreement or Order to which it is a party or by which it
is bound that relates to any Environmental Law. Schedule 3.15.1
sets forth all of the material Permits required for the conduct
of Company's business by any Environmental Law and consent
agreements and Orders to which Company and each Company Affiliate
is a party or by which Company and each Company Affiliate is
bound that relate to any Environmental Law. There is no pending
or, to NPC Group's Knowledge, threatened material Action against
NPC Group, Company or any Company Affiliate or the Owned Real
Property related to any Environmental Law. No underground
storage tanks or asbestos-containing material in any form or
condition are located on or under the Real Property. Neither
Company nor any Company Affiliate has treated, stored, disposed
of, arranged for or permitted the disposal of, transported,
handled, or released any substance, including without limitation
any hazardous substance, or owned or operated the Real Property
or any other property or facility (and no such property or
facility is contaminated by any such substance) in a manner that
has given or would give rise to liabilities, or any
investigative, corrective or remedial obligations, pursuant to
the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended ("CERCLA") or any other
Environmental Laws. NPC Group has provided to Investor copies of
all environmental, health and safety audits, assessments,
analyses, and reports, and any other documents materially bearing
on environmental liabilities or obligations of Company or the
Company Affiliates, which are in the possession of NPC Group.
3.15.2 Exclusivity. Except as set forth in this
Section 3.15, NPC Group and Company make no express or implied
representation or warranty in this Agreement concerning
environmental matters.
3.16 Intellectual Property.
3.16.1 Owned Intellectual Property. Schedule 3.16.1
sets forth a true and complete list of all patented, registered
or applied for Intellectual Property. Except as set forth on
Schedule 3.16.1, (a) Company or the applicable Company Affiliate
owns all right, title and interest in and to, or has a valid and
enforceable right to use, all Intellectual Property owned or used
by the Company or any Company Affiliates, and such Intellectual
Property is all of the Intellectual Property which is necessary
for the operation of the respective businesses of the Company and
the Company Affiliates as each is currently conducted,
(b) Company has an absolute right to use the Intellectual
Property owned or used by the Company or the Company Affiliates,
(c) to NPC Group's Knowledge, Company and the Company Affiliates
have not infringed or misappropriated any Intellectual Property
of any other Person and no infringement, or misappropriation will
occur as a result of the continued operation of the respective
businesses of the Company and the Company Affiliates as currently
conducted, (d) as of the date hereof no material Action is
pending or, to NPC Group's Knowledge, threatened asserting any
such infringement or misappropriation with respect to
Intellectual Property of any other Person by Company or any
Company Affiliate, (e) the Company and the Company Affiliates
have taken reasonable measures to maintain the confidentiality of
the processes and formulae, research and development results and
other know-how and trade secrets of the Company and the Company
Affiliates, the value to which to the Company and the Company
Affiliates is contingent upon maintenance of the confidentiality
thereof, (f) no claim by any Person contesting the validity,
enforceability, use or ownership of any of the Intellectual
Property owned or used by the Company or the Company Affiliates
has been made, is currently outstanding or to NPC Group's
Knowledge, is threatened, and, to NPC Group's Knowledge, there
are no grounds for the foregoing.
3.16.2 Licenses; Infringement. Other than over-the-
counter licenses with a value of less than $1,000, Schedule
3.16.2 sets forth a true and complete list of all licenses and
other agreements for Intellectual Property which are owned or
used by Company and the Company Affiliates, including, without
limitation, software licenses ("Material Licensed Intellectual
Property"). All such agreements and licenses are valid and in
full force and effect in all material respects and neither the
Company nor any of the Company Affiliates is in breach of any of
the terms of such licenses and agreements. There is no pending
or, to NPC Group's Knowledge, threatened Action against Company
or any Company Affiliate contesting its rights to or the validity
of any Material Licensed Intellectual Property and to NPC Group's
Knowledge no basis therefor exists.
3.17 Unions. Except as set forth on Schedule 3.17, since
December 21, 1997, no executive of the Company or any Company
Affiliate and no group of employees of the Company or any Company
Affiliate, has terminated, or to the NPC Group's Knowledge, plans
to terminate, employment with the Company or any Company
Affiliate. There are no collective bargaining or other labor
union agreements applicable to any Employees or by which the
Company or any Company Affiliate is bound. As of the date
hereof, no work stoppage, material grievance, material claim of
unfair labor practice, or dispute against Company or any Company
Affiliate has occurred within the past five (5) years, is pending
or, to NPC Group's Knowledge, threatened, and to NPC Group's
Knowledge there is no basis for any of the foregoing. To NPC
Group's Knowledge, there is no organizational activity being made
or threatened by or on behalf of any labor union with respect to
any employees of Company or any Company Affiliate. Set forth on
Schedule 3.17 is a list of (i) all agreements between the Company
or any of the Company Affiliates and any employee thereof, and
(ii) any bonus or special payment obligation of the Company or
any Company Affiliate payable in connection with the sale,
acquisition, or change of control of the Company or any Company
Affiliate. The executive employees of Company and the Company
Affiliates as of the date hereof are set forth on Schedule 3.17
and are deemed for purposes of this Agreement "Key Employees".
Schedule 3.17 sets forth the current rate of base compensation,
title, and years of service of each of the Key Employees.
3.18 Employee Benefits.
3.18.1 Employee Benefit Plans. Schedule 3.18.1
lists, as of the date hereof, each written pension, retirement,
profit-sharing, deferred compensation, bonus, incentive,
performance, stock option, stock appreciation, phantom stock,
stock purchase, restricted stock, medical, hospitalization,
vision, dental or other health, life, disability, severance,
termination or other employee benefit plan, program, arrangement,
agreement or policy (including each ERISA Plan) which currently
covers any Employee (each, an "Employee Benefit Plan"). Each
Employee Benefit Plan complies in all material respects, and has
been operated and administered in all material respects, in
accordance with all applicable requirements of all Laws,
including ERISA and the Code, and no "reportable event",
"prohibited transaction" (as such terms are defined in ERISA and
the Code, as applicable) or termination has occurred with respect
to any Employee Benefit Plan. Each Employee Benefit Plan
intended to qualify under Section 401(a) of the Code has received
a ruling or determination letter concluding that such Employee
Benefit Plan so qualifies, and to NPC Group's Knowledge, no event
has occurred, amendment been adopted or action been taken that
would cause such Employee Benefit Plan to lose its qualified
status. The Company, from and after the Closing Date, will have
no obligation or liability with respect to any Employee Benefit
Plan. No Employee Benefit Plan is a defined benefit plan subject
to Title IV of ERISA or Section 412 of the Code.
3.18.2 Records. Company has made available to
Investor copies of each Employee Benefit Plan and any amendments
thereto and any related trust agreement, funding agreement and
insurance contract relating thereto and, if applicable, the
summary plan description currently in effect for each Employee
Benefit Plan, and all material modifications thereto.
3.18.3 Actions. As of the date hereof, there are no
Actions pending (other than routine claims for benefits) or, to
NPC Group's Knowledge, threatened, with respect to any Employee
Benefit Plan.
3.18.4 Funding. All contributions required by
applicable Law or the Employee Benefit Plan to be made by Company
to an Employee Benefit Plan have been made within the time
prescribed by the applicable Law or Employee Benefit Plan.
3.18.5 Multiemployer Plans and Multiple Employer
Plans. Except as set forth in Schedule 3.18.5, (a) no Employee
Benefit Plan is a "multiple employer" plan within the meaning of
Section 4063 or 4064 of ERISA, (b) no Employee Benefit Plan is a
"multiemployer plan" within the meaning of Section 4001(a)(3) of
ERISA or other applicable employee benefit legislation, (c)
Company does not have either primary or secondary liability under
the provisions of Section 4204 of ERISA or any agreement entered
into in accordance with the provisions of that Section and (d)
Company has not (i) engaged in any transaction that could result
in the imposition of any material liability pursuant to Section
4069 or 4212 of ERISA or (ii) incurred any material liability
under or pursuant to Title I or IV of ERISA or the penalty or
excise tax provisions of the Code relating to employee benefit
plans, and no event or condition exists with respect to Company
that may result in the imposition of any material liability with
respect to Investor pursuant to Title I or IV of ERISA or the
penalty or excise tax provisions of the Code relating to Employee
Benefit Plans.
3.19 Tax Matters.
3.19.1 Taxes. All federal, state and local Tax
returns (including returns related to income tax withholding),
reports, declarations, information return or statement and forms,
including any schedule or attachment thereto ("Returns") relating
to Company or any combined, consolidated, affiliated or unitary
tax group of which Company is or has been a member (an
"Affiliated Group") that were required to be filed prior to the
date hereof have been accurately prepared in all material
respects and timely filed. Except for Taxes that are being
contested in good faith and by appropriate proceeding, the
following Taxes have been duly and timely paid: (a) all Taxes
shown to be due on the Returns; and (b) all deficiencies and
assessments for any material amount of Taxes that are or would
become payable by NPC Group or the Company or any Company
Affiliate or chargeable as a Lien upon any of Company's assets.
3.19.2 None of the NPC Group, the Company or any
Company Affiliate currently is the beneficiary of any extension
of time within which to file any Return. To the NPC Group's
Knowledge, no claim has been made by a Governmental Authority
within the last three years in a jurisdiction where NPC Group,
the Company or any Company Affiliate does not file Returns that
the company so not filing is or may be subject to taxation by
that jurisdiction. Schedule 3.19.2 lists all federal, state,
local, and foreign income Returns filed with respect to any of
the Company and any Company Affiliate for taxable periods ended
on or after December 31, 1994, indicates those Returns that have
been audited, and indicates those Returns that currently are the
subject of audit or any administrative or judicial proceeding.
The NPC Group has delivered to the Investor correct and complete
copies of the portion of all federal income Returns directly
relating to the Company or any Company Affiliate, and copies of
the portion of the examination reports, and statements of
deficiencies assessed against or agreed to by any of the Company
or any Company Affiliate since December 31, 1994, directly
relating to the Company or Company Affiliate. For any return
filed by or with respect to the Company or any Company Affiliate,
no statute of limitations for a taxable period ending on or
before December 31, 1994 remains open and there are no audits, or
administrative or judicial proceedings pending relating to such
period.
3.19.3 None of NPC Group, the Company or any Company
Affiliate has waived any statute of limitations in respect of
Taxes or agreed to any extension of time with respect to a Tax
assessment or deficiency.
3.19.4 None of the Company nor any Company Affiliate
has filed a consent under Code Section 341(f) concerning
collapsible corporations. None of the Company nor any Company
Affiliate has made any payments, is obligated to make any
payments, or is a party to any agreement that under certain
circumstances could obligate it to make any payments that will
not be deductible under Code Section 280G. Since June 8, 1993,
the Company has not been a member of an affiliated group filing a
consolidated federal income tax Return other than a group the
common parent of which is NPC and, since the later of the date
the Company was acquired by NPC or the date a Company Affiliate
was acquired by the Company, no Company Affiliate has not been a
member of an affiliated group filing a consolidated federal
income tax Return other than a group the common parent of which
is NPC. None of the Company nor any Company Affiliate has any
liability for Taxes of any other Person other than of the Company
and the Company Affiliates as a transferee or successor.
3.19.5 The unpaid Taxes of the Company and each
Company Affiliate (A) do not exceed the reserve for Tax liability
(rather than any reserve for deferred Taxes established to
reflect timing differences between book and Tax income) set forth
on the face of the December 21, 1997 balance sheet (rather than
in any notes thereto) and (B) do not exceed that reserve as
adjusted for the passage of time and the occurrence of events
through the Closing Date in accordance with the past custom and
practice of the Company and the Company Affiliates in filing
their Returns.
3.19.6 None of the Company nor any Company Affiliate
will be required to make an adjustment to taxable income under
Code Section 481 (or any similar provision of state, local, or
foreign law) for any period ending on or after the Closing Date
by reason of a voluntary change in accounting method initiated by
any or any similar provision of state, local, or foreign law) of
the Company or any similar provision of state, local, or foreign
law) or any Company Affiliate on or prior to the Closing Date and
neither the Internal Revenue Service nor any other governmental
authority has initiated or proposed any such change in accounting
method.
3.19.7 None of the Company nor any Company Affiliate
is a "controlled foreign corporation" within the meaning of Code
Section 957.
3.19.8 Except as set forth in Schedule 3.19.8, none
of the Company nor any Company Affiliate owns an interest in an
entity either treated as a partnership or whose separate
existence is ignored for federal income tax purposes.
3.20 Brokers. No person (other than ▇▇▇▇▇▇▇▇ & Co. Inc.,
whose fee payable in connection with the financing raised by the
Company and Investor in connection with the transactions
contemplated by this Agreement will be paid by Company) is or
will become entitled to receive any brokerage or finder's fee,
advisory fee or other similar payment from Company for the
transactions contemplated by this Agreement by virtue of having
been engaged by or acted on behalf of Company.
3.21 Powers of Attorney. There are no material outstanding
powers of attorney executed on behalf of the Company or any of
the Company Affiliates.
3.22 Guaranties. Except in connection with the collection
of bank deposits and instruments in the ordinary course of
business and guarantees that are to be released as of the Closing
Date, neither the Company nor any of the Company Affiliates is a
guarantor or is otherwise liable for any Liability (including
indebtedness for borrowed money) of any other Person.
3.23 Transactions With Affiliates. Other than the
Transitional Financial and Accounting Services Agreement, neither
the Company nor any Company Affiliate has entered into any
agreement, arrangement, or transaction with any of their
respective Affiliates other than the Company or Company
Affiliates within the past twelve months, and none of their
respective Affiliates owns any asset, property, or right,
tangible or intangible, that is used in the Company's business
that is not to be released or terminated as of the Closing Date.
3.24 Insurance. Set forth on Schedule 3.24 is a list and
summary description of all policies (including scope, duration
and amount of coverage) of fire, liability, product liability,
worker's compensation and other forms of insurance currently in
effect with respect to the Company, the Company Affiliates and
their business and assets. Neither the Company nor any of the
Company Affiliates is in default with respect to its material
obligations under any insurance policy maintained by it, and
neither the Company nor any of the Company Affiliates has been
denied insurance coverage. To the NPC Group's Knowledge, the
insurance coverage of the Company and the Company Affiliates
covers risks of such types and in such amounts as are customary
for corporations of similar size engaged in similar lines of
business. Except as set forth on Schedule 3.24, the Company and
the Company Affiliates do not have any self-insurance or co-
insurance programs.
3.25 Franchise Matters.
3.25.1 Offering Circular; Compliance with Franchise
Laws.
(a) The Company has previously delivered, or made
available, to the Investor true and correct copies of the
Uniform Franchise Offering Circular ("Circular") of the
Company or any Company Affiliates, listed on Schedule
3.25.1(a), in use in the offer and sale by the Company or
any Company Affiliates of franchise and area development
rights pursuant to the Franchise Agreements, which are
required to be delivered by the Company or any Company
Affiliates to prospective Franchisees in the United States
pursuant to the Rules and Regulations of the Federal Trade
Commission (the "Rules") or state law including, without
limitation, franchise investment laws, franchise
registration and disclosure laws, business opportunity laws,
and seller assisted marketing plan laws (the "Franchise
Laws"). The Circular complies in all material respects with
the requirements of the Rules and applicable Franchise Laws
and does not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the
statements made therein, in light of the circumstances in
which they were made, not misleading.
(b) The Company has previously made available to the
Investor true and correct copies of all 1997 renewal
applications containing the Circular, as set forth in
Schedule 3.25.1(b), required to be filed with the
appropriate state authorities in those states where (i) such
filings are required for the sale by the Company or any
Company Affiliates of franchises or franchise area
development rights or (ii) franchise area development rights
or franchise rights have been offered for sale by the
Company or any Company Affiliates prior to the date hereof.
Except as set forth on Schedule 3.25.1(b), each current
renewal application has been declared effective in all
jurisdictions where the Company or any Company Affiliates
are required to file such applications, and there are no
stop orders or other proceedings in effect or threatened,
which would prohibit or impede the ability of the Company or
any Company Affiliates to sell franchise area development
rights or franchises in such jurisdictions.
(c) The Company and the Company Affiliates have sold
or solicited the sale of franchises and franchise area
development rights only in compliance with all applicable
laws governing such activity, except where the failure to
comply would not have a Material Adverse Effect. Except as
set forth on Schedule 3.25.1(c), there are no Actions
pending or threatened which allege failure to comply by the
Company or any Company Affiliates with the Rules or the
Franchise Laws.
3.25.2 Franchise Agreements. The Company has made
available to the Investor all Franchise Agreements now in effect,
and neither the Company nor any Company Affiliate is in violation
in any material respect of any Franchise Agreement to which it is
a party or by which it is bound.
3.25.3 Compliance with Franchise Agreements. Except
as set forth on Schedule 3.25.3, to NPC Group's Knowledge, no
Franchisee is in material violation of any term of any Franchise
Agreement between the Franchisee and the Company or any Company
Affiliate and no notice of default or termination has been
delivered to any Franchisee pursuant to the terms of any
Franchise Agreement.
3.25.4 Compliance with Certain Laws. The Company
and the Company Affiliates are in compliance with and have
complied at all times with all applicable laws regulating the
relationship of the Company and the Company Affiliates with the
Franchisees, except where such non-compliance would not have a
Material Adverse Effect.
3.26 Other Laws. To the NPC Group's Knowledge, neither the
Company nor any Company Affiliate has failed to (a) comply in all
material respects with any Other Law or (b) maintain in effect
and comply in all material respects with any Permit required by
any Other Law.
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES OF INVESTOR
As a material inducement to NPC Group to offer for
redemption the Redemption Shares and to enter into and otherwise
perform this Agreement, Investor makes the following
representations and warranties to NPC Group:
4.1 Organization; Power and Authority. Investor is a
limited partnership duly organized, validly existing and in good
standing under the laws of Delaware. Investor has all power
needed to execute, deliver and perform its obligations under this
Agreement and to consummate the transactions contemplated hereby
to be consummated by it.
4.2 Authorization; Execution and Validity. The execution,
delivery and performance by Investor of this Agreement and the
consummation by Investor of the transactions contemplated hereby
to be consummated by it have been duly authorized by all
necessary action. This Agreement has been duly and validly
executed and delivered by Investor, constitutes a valid and
binding obligation of Investor and is enforceable against
Investor in accordance with its terms, except to the extent that
the enforcement hereof may be limited by (i) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now
or hereafter in effect relating to creditors' rights generally,
and (ii) general principles of equity regardless of whether
enforceability is considered in a proceeding in equity or at law.
4.3 No Conflict; Investor Consents. The execution,
delivery and performance by Investor of this Agreement will not
(a) violate any Law, (b) violate any Charter Document of
Investor, (c) violate any Order to which Investor is a party or
by which it is bound, (d) require any Consent from any
Governmental Authority except (i) to comply with the HSR
Act,(ii) to obtain consents and authorizations required by
applicable state and local liquor laws, and (iii) for actions
required to be taken by NPC Group or Company, or (e) breach any
material Contract to which Investor is a party or by which it is
bound.
4.4 Litigation; Orders. There is no materially adverse
Action that is pending or, to the knowledge of Investor,
threatened by, against or affecting Investor or any of its
properties, assets, operations or business which would, if
adversely determined, have a material adverse effect on
Investor's ability to consummate the transactions contemplated by
this Agreement, nor is Investor subject to any materially adverse
Order which would have any such effect.
4.5 Brokers. No Person is or will become entitled to
receive any brokerage or finder's fee, advisory fee or other
similar payment for the transactions contemplated by this
Agreement by virtue of having been engaged by or acted on behalf
of Investor.
4.6 Investment Matters.
(a) Investment Intent. Investor is an "accredited
investor" as defined in Rule 501 under the Securities Act and is
purchasing the Purchase Shares for its own account for investment
and not with a present view to, or for sale in connection with,
any distribution thereof in violation of the Securities Act.
(b) Acquisition for Investment and Rule 144. Investor
understands that the Purchase Shares will not be registered under
the Securities Act by reason of a specific exemption from the
registration provision of the Securities Act which depends upon,
among other things, the bona fide nature of Investor's investment
intent as expressed herein. Investor acknowledges that the
Purchase Shares must be held indefinitely unless they are
subsequently registered under the Securities Act or an exemption
from such registration is available. Investor has been advised
or is aware of the provisions of Rule 144 promulgated under the
Securities Act which permit limited resale of shares purchased in
a private placement subject to the satisfaction of certain
conditions.
(c) Legal Investment. The purchase of the Purchase Shares
by Investor is legally permitted by all applicable Law and all
Consents of or designations, declarations or filings in
connection with the valid execution and delivery of this
Agreement by Investor or the purchase of the Purchase Shares by
Investor have been obtained, or will be obtained prior to the
Closing Date.
ARTICLE 5.
COVENANTS OF NPC GROUP AND THE COMPANY
5.1 Cooperation by NPC Group and the Company. From the
date hereof through the Closing Date, NPC Group and the Company
shall use all commercially reasonable efforts to take, or cause
to be taken, all actions and to do, or cause to be done, all
things necessary or advisable to consummate the transactions
contemplated by this Agreement and to cooperate with Investor in
connection with the foregoing, including using commercially
reasonable efforts to obtain all of the Consents and to satisfy
the conditions precedent to the obligations of any party hereto.
However, neither NPC Group nor the Company shall have any
obligation to make, or cause to be made, any payment to obtain
any Consent.
5.2 Further Assurances. Subject to the other terms and
conditions of this Agreement, at any time and from time to time,
whether before or after the Closing, NPC Group and the Company
shall execute and deliver all instruments and documents and take
all other action that Investor may reasonably request to
consummate or to evidence the consummation of the transactions
contemplated by this Agreement. NPC Group shall cause the
Company's financial statements for the fiscal year ended March
29, 1998 to be audited and shall deliver such audited financial
statements to Investor no later than May 15, 1998.
5.3 Governmental Matters.
5.3.1 HSR Act Compliance. Within five (5) business
days after the date hereof, NPC Group shall file any notification
required to be filed under the HSR Act to consummate the
transactions contemplated hereby, and shall request early
termination of the waiting period thereunder. NPC Group and the
Company shall use all commercially reasonable efforts to comply
as promptly as practicable with any request made pursuant to the
HSR Act for additional information. NPC Group and the Company
shall cooperate with Investor in such compliance to the extent
commercially reasonable.
5.3.2 Other Governmental Approvals. NPC Group and the
Company shall comply with any other Laws which are applicable to
any of the transactions contemplated hereby and pursuant to which
government notification or approval of such transaction is
necessary. NPC Group and the Company shall cooperate with
Investor in any manner reasonably requested by Investor in
providing any information about NPC Group which is required for
this purpose and in promptly filing, separately or jointly with
Investor, any applications for such government notification or
approval.
5.4 Supplements to Schedules. If, to NPC Group's
Knowledge, any event occurs or condition changes that causes any
of its representations or warranties in this Agreement to be
inaccurate or any of its covenants in this Agreement to be
breached, NPC Group shall notify Investor thereof in writing.
NPC Group may supplement the Schedules to account for any such
event or change subject to the consent of the Investor (which
consent shall be at the sole discretion of the Investor). If NPC
Group gives written notice to Investor of any proposed supplement
to the Schedules and Investor fails to deliver a written
objection to such proposed supplement within ten (10) days of NPC
Group's notice, Investor shall be deemed to have consented to
such proposed supplement.
5.5 Cooperation in Rule 144A Offering. The NPC Group and
the Company agree to use all commercially reasonable effects to
assist the Investor in the consummation of the Rule 144A
Offering. Without limiting the foregoing, NPC shall cause its
Chief Financial Officer to cooperate reasonably with Company and
Investor to accomplish the foregoing. Such assistance and
cooperation shall include assisting in the preparation of the
Rule 144A offering memorandum and attending "road show" meetings
prior to the Closing.
5.6 Pre-Closing Access to Information. From the date
hereof through the Closing Date, NPC Group and the Company shall
afford to Investor, its accountants and its counsel access, in a
reasonable manner, upon reasonable notice and at reasonable
times, to ▇▇▇▇▇▇ ▇. Page, and all of the Key Employees (after
prior notice to and consent (which consent shall not be
unreasonably withheld) by the NPC Group), properties, books and
records of the Company and shall furnish the Investor and its
representatives with such financial and operating data and other
information concerning the business and properties of the Company
and the Company Affiliates as the Investor may from time to time
reasonably request (excluding information that is subject to
attorney-client privilege, confidentiality agreements or the
disclosure of which would violate Law). Investor shall direct
all requests for information to:
▇▇▇▇▇▇▇▇ & Co. Inc.
The Equitable Center
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
5.7 Conduct of Business.
5.7.1 Ordinary Course. From the date hereof through
the Closing Date, Company shall, and NPC Group shall use
commercially reasonable efforts to, cause the Company and the
Company Affiliates to: (a) preserve substantially the Company's
and the Company Affiliates' relationships with suppliers,
customers and Employees; (b) maintain substantially the same
amounts and kinds of existing insurance coverage; (c) perform the
Company's and the Company Affiliates' obligations under the
Material Contracts and material Permits in all material respects;
(d) comply with all applicable Laws in all material respects; and
(e) carry on the Company's and the Company Affiliates' business
in the ordinary course and consistent with past practice.
5.7.2 Prohibited Actions. Unless otherwise expressly
required or expressly permitted by this Agreement, Company shall
not, and NPC Group shall use reasonable efforts to cause the
Company or any of the Company Affiliates not to, without the
prior written consent of Investor:
(i) incur or guaranty any debt in excess of
$50,000 in the aggregate, except in the ordinary course of
business consistent with past practices and except for the
incurrence of intercompany debt;
(ii) sell, license, lease, assign or
otherwise transfer, or permit the creation of any Lien
(other than a Permitted Lien) on, any asset (whether
tangible or intangible) of the Company or any Company
Affiliate, except for any assets sold, licensed, leased,
assigned or transferred, or any franchise agreement or
franchise development agreement entered into, in the
ordinary course of business consistent with past practices;
(iii) enter into any material Contract,
Material Lease or other material transaction outside the
ordinary course of business consistent with past practices;
(iv) amend or terminate any Material
Contract, Material Lease or material Permit outside the
ordinary course of business consistent with past practices;
(v) except for customary merit, cost-of-living
and promotional increases to Employees in the
ordinary course of business consistent with past practices,
increase the rate of compensation for any Management
Employee;
(vi) waive any right, forgive any debt or
release any claim, except in the ordinary course of business
consistent with past practices;
(vii) other than pursuant to the terms hereof,
issue any capital stock or other equity securities or any
securities convertible, exchangeable, or exercisable into
any capital stock or other equity securities;
(viii) other than pursuant to the terms hereof,
declare, set aside, or pay any dividend or distribution with
respect to its capital stock or redeem, purchase, or
otherwise acquire any of its capital stock;
(ix) fail to protect its interest in or to,
or fail to maintain any Intellectual Property, or other
intangible asset;
(x) make capital expenditures or
commitments, or series thereof involving more than an
aggregate of $100,000 outside the ordinary course of
business consistent with past practices;
(xi) purchase or lease any real estate
(Investor's consent will not be unreasonably withheld so
long as any such purchase or lease of real estate is
consistent with past practices);
(xii) make any change in any method of
accounting or accounting practice, either for Tax or
financial accounting purposes except as required by GAAP or
Law; or
(xiii) agree or commit (in writing or
otherwise) to take any of the actions described in
Sections 5.7.2(i) through 5.7.2(xii).
5.7.3 Investor's Consent. If Company gives written
notice to Investor that Company proposes to take any action for
which Investor's consent is required under Section 5.7.2 and if
Investor has not delivered to Company a written objection to such
proposed action within ten (10) days of Company's notice,
Investor shall be deemed to have consented to such proposed
action.
5.8 Transfer of Stock. From the date hereof through the
Closing Date, the Company shall not, and the NPC Group shall not
permit the Company or any Company Affiliate to, record or
acknowledge any sale, transfer, assignment, pledge or other
disposition of (whether with or without consideration and whether
voluntarily or involuntarily or by operation of Law) any interest
in any capital stock of the Company or any Company Affiliate.
5.9 Non-Solicitation. Except as set forth in Schedule 5.9,
in consideration of the transactions contemplated hereby and the
payment of the Redemption Price, during the period beginning on
the date of this Agreement and ending on the second anniversary
of the Closing Date (the "Non-Solicitation Period"), neither the
NPC Group nor any Affiliate of the NPC Group will directly
contact, approach or solicit for the purpose of offering
employment to or hiring (whether as an employee, consultant,
agent, independent contractor or otherwise) or, directly or
indirectly, actually hire any officer or employee at, or above,
the area general manager level or its equivalent, of the Company
and the Company Affiliates (which shall include the Key
Employees), or induce or attempt to induce any customer or other
business relation of the Company into any business relationship
which could reasonably be expected to materially harm the
Investor or the Company. If the final judgment of a court of
competent jurisdiction declares that any term or provision of
this Section 5.9 is invalid or unenforceable, the parties agree
that the court making the determination of invalidity or unen-
forceability will have the power to reduce the scope or duration
of the term or provision, to delete specific words or phrases, or
to replace any invalid or unenforceable term or provision with a
term or provision that is valid and enforceable and that comes
closest to expressing the intention of the invalid or
unenforceable term or provision, and this Agreement will be
enforceable as so modified after the expiration of the time
within which the judgment may be appealed.
5.10 Real Estate. NPC Group shall use commercially
reasonable efforts to assist Investor in obtaining the following
prior to Closing:
(i) Title insurance from a title insurance
company selected by the Investor (the "Title Company")
insuring at standard rates the Company's or the applicable
Company Affiliate's marketable title in and to the Owned
Real Property in fee simple, the Company's leasehold estate
in any Leased Real Property believed by Investor to be
financeable (a "Financeable Leasehold") and, if required, a
mortgage lien on the Owned Real Property and each
Financeable Leasehold free and clear of all Liens (other
than Permitted Liens), defects, claims, leases, rights of
possession or other encumbrances (other than the matters
disclosed in Schedule 3.10.1 and Schedule 3.10.2), including
such endorsements and affirmative coverages as Investor
shall reasonably require including without limitation non-
imputation endorsements. NPC Group shall provide all such
standard form affidavits as the Title Company reasonably
shall require in order to afford such coverages.
(ii) A survey of each Owned Real Property and
each Leased Real Property to which the Company or any
Company Affiliate holds a Financeable Leasehold conforming
to the Minimum Standard Detail Requirements jointly
established and approved in 1992 by ALTA and ACM certified
to the Company and the Title Company.
(iii) (A) An estoppel certificate from each
landlord under a Lease, (B) a consent to the transactions
contemplated by this Agreement from each landlord under a
Lease described in Schedule 3.10.2 if and to the extent
required by the Lease, and (C) a nondisturbance agreement,
in each case in form and substance reasonably satisfactory
to the Investor, from each mortgagee of any Leased Real
Property.
5.11 Re-building or Replacement of Damaged Restaurant. NPC
and the Company shall exercise commercially reasonable efforts to
ensure that the Coral Gables ▇▇▇▇ ▇▇▇▇'▇ restaurant (Unit
Number 3013), located at ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, which was damaged by fire (the "Damaged Restaurant") is
either re-built or replaced on its current site, as required
under the terms of the Lease for the Damaged Restaurant (such re-
built or replaced ▇▇▇▇ ▇▇▇▇'▇ restaurant, the "New Restaurant")
and, if re-built from the remains of the Damaged Restaurant, to
at least the condition of the Damaged Restaurant immediately
prior to the fire which occurred on February 24, 1998, and, if
completely reconstructed, to at least the standards maintained in
the typical brand new ▇▇▇▇ ▇▇▇▇'▇ restaurant, and on a basis
consistent with the insurance claim made by the Company with
respect to the damage incurred by the Damaged Restaurant in
connection with such fire. NPC Group and the Company shall
exercise commercially reasonable efforts to ensure that the Lease
for the New Restaurant is extended or a new Lease is entered into
on terms reasonably acceptable to Investor.
5.12 Exclusivity. Until this Agreement is terminated by its
terms, NPC Group will not (and will not cause or permit any
Affiliate, director, officer, trustee, employee, or agent of it
or the Company or any Company Affiliate to), directly or
indirectly,
(i) solicit, initiate or encourage the
submission of any proposal or offer from any Person
(including any of them) relating to any (A) liquidation,
dissolution or recapitalization of, (B) merger or
consolidation with or into, (C) acquisition or purchase of
any material asset (or any material portion of the assets)
of, or any equity interest in, or (D) similar transaction or
business combination involving the Company or any Company
Affiliate or any assets of the Company or any Company
Affiliate (other than dispositions of obsolete or worn-out
assets which are disposed of in the ordinary course of
business and dispositions of assets which are replaced with
assets of equal or greater value and utility) and ("Sale
Transaction"), or
(ii) participate in any discussions or
negotiations regarding, furnish any information (other than
information which is traditionally provided in the ordinary
course of the Company's or any Company Affiliate's business
to third parties where NPC Group has no reason to believe
that such information may be used to evaluate a possible
Sale Transaction) with respect to, assist or participate in,
or facilitate in any other manner any effort or attempt by
any other Person to do or seek a Sale Transaction;
Until this Agreement is terminated by its terms, NPC Group and
the Company will notify the Investor if any Person makes any
proposal or offer with respect to any of the foregoing and will
provide the Investor with reasonable detail regarding such offer.
5.13 Confidentiality. From the date hereof NPC Group (and
NPC Group will cause its Affiliates to comply with this Section
5.13 as well) shall treat and hold as confidential, shall not
disclose, and shall refrain from using, any Confidential
Information except as expressly permitted under this Agreement
(other than disclosures of Confidential Information which is not
Intellectual Property and which NPC Group reasonably determines
is necessary or advisable to disclose to satisfy its disclosure
obligations under applicable securities laws). In the event that
NPC Group is requested or required (by oral question or request
for information or documents in any legal proceeding,
interrogatory, subpoena, civil investigative demand, or similar
process) to disclose any Confidential Information, NPC Group will
notify Investor promptly of the request or requirement so that
Investor may seek an appropriate protective order or waive
compliance with the provisions of this Section 5.13. If, in the
absence of a protective order or the receipt of a waiver
hereunder, NPC Group, on the advice of counsel, is compelled to
disclose any Confidential Information to any tribunal or else
stand liable for contempt, NPC Group may disclose the
Confidential Information to the tribunal; provided, that NPC
Group shall use its best efforts to obtain, at the reasonable
request of Investor, an order or other assurance that
confidential treatment will be accorded to such portion of the
Confidential Information required to be disclosed as Investor
shall designate.
5.14 Termination of Agreements. At the request of Investor,
NPC Group shall, and NPC Group will cause its Affiliates to, use
reasonable efforts to take such actions that would cause the
first, second and fifth agreements listed under clause (viii) of
Schedule 3.13 to have no further force and effect after the
Effective Date, including, if reasonable, the termination of such
agreements.
ARTICLE 6.
COVENANTS OF INVESTOR
6.1 Cooperation by Investor. From the date hereof through
the Closing Date, Investor shall use commercially reasonable
efforts to take, or cause to be taken, all actions and to do, or
cause to be done, all things necessary or advisable to consummate
the transactions contemplated by this Agreement and to cooperate
with NPC Group and Company in connection with the foregoing,
including using commercially reasonable efforts to obtain all of
the Consents and the Releases and to satisfy the conditions
precedent to the obligations of any party hereto.
6.2 Pre-Closing Access to Information. Investor shall
comply with the limitations on the disclosure and use of
information set forth in the Confidentiality Agreement with
respect to the information that NPC Group and Company provide to
Investor in and pursuant to this Agreement. Investor shall not
contact any Employee or conduct any soil, groundwater or other
environmental sampling in connection with the transactions
contemplated hereby without the prior consent of NPC.
6.3 Further Assurances. Subject to the other terms and
conditions of this Agreement, at any time and from time to time,
whether before or after the Closing, Investor shall execute and
deliver all instruments and documents and take all other action
that NPC Group may request, to the extent commercially
reasonable, to consummate or to evidence the consummation of the
transactions contemplated by this Agreement.
6.4 Governmental Matters.
6.4.1 HSR Act Compliance. Within five (5) business
days after the date hereof, Investor shall file any notification
required to be filed under the HSR Act to consummate the
transactions contemplated hereby, and shall request early
termination of the waiting period thereunder. Investor shall use
all commercially reasonable efforts to comply as promptly as
practicable with any request made pursuant to the HSR Act for
additional information. Investor shall cooperate with NPC Group
in such compliance to the extent commercially reasonable, and
shall pay the statutory filing fees required by law in connection
with the filings required under the HSR Act.
6.4.2 Other Governmental Approvals. Investor shall
comply with any other Laws which are applicable to any of the
transactions contemplated hereby and pursuant to which government
notification or approval of such transaction is necessary.
Investor shall cooperate with NPC Group in any manner requested
by NPC Group that is commercially reasonable in providing any
information about Investor which is required for this purpose and
in promptly filing, separately or jointly with NPC Group, any
applications for such government notification or approval.
Investor shall use all commercially reasonable efforts to resolve
such objections, if any, as may be asserted by any Governmental
Authority with respect to the transactions contemplated hereby.
6.5 Notice of Breach. If at any time on or before the
Closing Date, Investor obtains any knowledge (whether through
investigation or otherwise) of any fact, condition or event
constituting a breach of any representation or warranty of NPC
Group and/or Company set forth herein or any document referred to
herein, then Investor shall immediately upon obtaining such
knowledge inform NPC Group thereof and of such breach; provided
that any such knowledge shall not affect the Investor's remedies
or NPC Group's indemnification obligations hereunder or
otherwise, except as expressly provided in Section 11.4.4.
6.6 The Rule 144A Offering. Investor shall use its best
efforts to cause the successful consummation of the Rule 144A
Offering. Investor shall indemnify and hold (i) NPC Group
Indemnitees, (ii) NPC's Chief Financial Officer, and (iii)
Company, the Company Affiliates and their respective employees,
officers, directors and agents harmless from and against any and
all Damages arising out of their participation in or cooperation
with the Rule 144A Offering (including those activities
contemplated by Section 5.5); provided, however, that Investor
shall not be required to provide indemnification for any action
or omission that constitutes gross negligence or willful
misconduct. The provisions of Section 11.3 shall apply to any
such indemnification. Investor shall not alter or amend any of
its or the Company's Charter Documents in any respect that would
adversely affect the rights of NPC's Chief Financial Officer or
any NPC Group Indemnitee to be indemnified and held harmless by
Investor. Investor shall also provide contribution, based upon
relative fault and relative benefit, to the Persons entitled to
be indemnified pursuant to the second sentence of this
Section 6.6, for such Damages if such indemnification is not
enforceable. Investor shall cause to be procured at Investor's
cost, as soon as practicable following the date of this
Agreement, and shall cause to be maintained at Investor's cost
(provided that such costs shall be paid or reimbursed by the
Company on the Closing Date), directors' and officers' liability
insurance covering NPC's Chief Financial Officer, only if and to
the extent the Investor procures such insurance for any officer
of Investor.
6.7 Non-Solicitation. Except as approved by NPC Group and
except for ▇▇▇▇ Salts, in consideration of the transactions
contemplated hereby and the offer of redemption of the Redemption
Shares, during the Non-Solicitation Period, neither Investor nor
any Affiliate of Investor (which shall include the Company after
the Closing) will directly contact, approach or solicit for the
purpose of offering employment to or hiring (whether as an
employee, consultant, agent, independent contractor or otherwise)
or, directly or indirectly, actually hire any officer or employee
at, or above, the area general manager level or its equivalent,
of NPC Group and its Affiliates (other than of the Company and
Company Affiliates). If the final judgment of a court of
competent jurisdiction declares that any term or provision of
this Section 6.7 is invalid or unenforceable, the parties agree
that the court making the determination of invalidity or
unenforceability will have the power to reduce the scope or
duration of the term or provision, to delete specific words or
phrases, or to replace any invalid or unenforceable term or
provision with a term or provision that is valid and enforceable
and that comes closest to expressing the intention of the invalid
or unenforceable term or provision, and this Agreement will be
enforceable as so modified after the expiration of the time
within with the judgment may be appealed.
ARTICLE 7.
MUTUAL COVENANTS
7.1 Tax Matters. The following provisions shall govern the
allocation of responsibility as between Investor and NPC Group
for certain tax matters following the Effective Date:
7.1.1 Returns for Periods Through the Effective Date.
NPC Group will include the income of the Company and each Company
Affiliate (including any deferred income triggered into income by
Treas. Reg. Section 1.1502-13 and Treas. Reg. Section 1.1502-14
and any excess loss accounts taken into income under Treas. Reg.
Section 1.1502-19) on the NPC Group consolidated federal income
Returns (and, if applicable, any consolidated, combined or
unitary state or local income Returns) for all periods concluding
on or prior to the Effective Date and pay any Taxes attributable
to such income. All such Returns shall be prepared in keeping
with the Company's past custom and practice, or the past custom
and practice of the Company Affiliate, as the case may be. The
Company and each Company Affiliate will furnish Tax information
to NPC Group for inclusion in such returns for the period which
includes the Effective Date in accordance with the Company's past
custom and practice unless a contrary treatment is required by
Law. The income of the Company and the Company Affiliates will
be apportioned to the period up to the Effective Date and the
period beginning on and after the Effective Date by closing the
books of the Company and each Company Affiliate as of 12:01 a.m.
on the Effective Date.
7.1.2 Tax Periods Ending on or Before the Effective
Date. Except as provided in Section 7.1.1 above, NPC Group shall
prepare or cause to be prepared and file or cause to be filed all
Returns for the Company or any Company Affiliate for all periods
ending on or prior to the Effective Date which are filed on or
after the Closing Date. Company or such Company Affiliate shall
appoint ▇▇▇▇ ▇. Salts as an officer for the sole purpose of
executing and filing any such Return.
7.1.3 Tax Periods Ending After the Effective Date.
The Company shall prepare or cause to be prepared and file or
cause to be filed any Returns of the Company or any Company
Affiliate for Tax periods which end after the Effective Date.
7.1.4 Cooperation on Tax Matters.
(i) Investor, the Company and each Company
Affiliate and NPC Group shall cooperate fully, as and to the
extent reasonably requested by the other party, in
connection with the filing of Returns pursuant to this
Section 7.1.4 and any audit, litigation or other proceeding
with respect to Taxes. Such cooperation shall include the
retention and (upon the other party's request) the provision
of records and information which are reasonably relevant to
any such audit, litigation or other proceeding and making
employees available on a mutually convenient basis to
provide additional information and explanation of any
material provided hereunder. The Company and each Company
Affiliate and NPC Group agree (A) to retain all books and
records with respect to Tax matters pertinent to the Company
and each Company Affiliate relating to any taxable period
beginning before the Effective Date until the expiration of
the statute of limitations (and, to the extent notified by
Investor or NPC Group, any extensions thereof) of the
respective taxable periods, and to abide by all record
retention agreements entered into with any taxing authority,
and (B) to give the other party reasonable written notice
prior to transferring, destroying or discarding any such
books and records and, if the other party so requests, the
Company and each Company Affiliate or NPC Group, as the case
may be, shall allow the other party to take possession of
such books and records.
(ii) Investor and NPC Group further agree,
upon request, to use their best efforts to obtain any
certificate or other document from any governmental
authority or any other Person as may be necessary to
mitigate, reduce or eliminate any Tax that could be imposed
(including, but not limited to, with respect to the
transactions contemplated hereby).
7.1.5 Tax Sharing Agreements. All tax sharing
agreements or similar agreements with respect to or involving the
Company or any Company Affiliate shall be terminated as of the
Effective Date and, after the Effective Date, the Company and
each Company Affiliate shall not be bound thereby or have any
liability thereunder.
7.1.6 NPC Group Liability and Indemnity. NPC Group
shall be responsible for all Federal, state, and local income
Taxes of the Company and any Company Affiliate attributable to
any taxable period for which NPC Group is responsible to file the
Returns pursuant to Sections 7.1.1 and 7.1.2 hereof beginning
prior to the Effective Date and ending on or prior to the
Effective Date. With respect to any period ending after the
Effective Date for which the Company is obligated to file
pursuant to Section 7.1.3 hereof, NPC Group shall be responsible
for all state and local income Taxes of the Company and any
Company Affiliate attributable to the operations for the period
ending on or prior to the Effective Date (the "Pre-Sale period")
to the extent that such Taxes in the aggregate exceed the reserve
for Tax Liability (rather than any reserve for deferred Taxes
established to reflect timing difference between book and Tax
income). The portion attributable to the Pre-Sale Period shall
be determined based upon an interim closing of the books as of
the beginning of the Effective Date. NPC Group shall indemnify
Company and each Company Affiliate for any and all income Taxes
for which NPC Group is responsible pursuant to this Section
7.1.6, as well as any liability for fees, costs and expenses
(including reasonable attorneys' fees) arising out of or incident
to any proceeding before any taxing authority or any judicial
authority with respect to an amount indemnified pursuant to this
sentence. NPC Group shall pay to the applicable governmental
agency (on behalf of the Company or Company Affiliate), the
Company or Company Affiliates, as the case may be, any amount
owed by NPC Group under this Section 7.1.6 no later than the due
date of the applicable Tax Return (or if paid to the Company or
Company Affiliate, no later than fifteen days prior to such due
date), or, if later, within fifteen days of receipt of notice of
liability from the Company.
7.1.7 Company Liability and Indemnity. The Company
shall indemnify the NPC Group and each member of the Company
consolidated group against and hold them harmless from any
liability resulting from any Taxes of the Company or any of its
Affiliates with respect to any taxable period beginning after the
Effective Date and any liability for fees, costs and expenses
(including reasonable attorneys' fees) arising out of or incident
to any proceeding before any taxing authority or any judicial
authority with respect to an amount indemnified pursuant to this
sentence.
7.1.8 Carryback of Net Operating Losses. If Company,
or a Company Affiliate, incurs a net operating loss in a taxable
period beginning on or after the Effective Date that may be
carried back to a consolidated Federal income tax Return of the
NPC Group or its consolidated group, the Company or Company
Affiliate shall make an election pursuant to section 172(b)(3) of
the Code (or comparable state or local law) to relinquish the
entire carryback period with respect to any such net operating
loss.
7.1.9 Carryback of Tax Attributes Which Must be
Carried Back. If Company, or a Company Affiliate, incurs a net
capital loss, business credit or other Tax attribute in a taxable
period beginning after the Effective Date that must be carried
back to an NPC Group consolidated, combined or unitary Return,
Company may file a refund claim or application for adjustment
only after receiving the written consent of the NPC Group which
may be unreasonably withheld. In the event the NPC Group
receives a refund (or credit against Taxes) attributable to such
claim or application, the NPC Group shall promptly pay the
Company the amount of such refund or credit (including any
interest payable thereon by the governmental authority or
interest which would have been received from the governmental
authority if the Tax had not been credited).
7.1.10 Survival. Notwithstanding anything in this
Agreement to the contrary, the warranties and covenants of the
Parties under this Section 7.1 relating to Income Taxes shall
survive until the expiration of all applicable statutes of
limitation provided that the statute of limitations with respect
to the Company or Company Affiliates shall not be extended
without NPC's prior consent (which shall not be unreasonably
withheld).
7.2 Books and Records.
7.2.1 Access. For a period of three (3) years after
the Closing, NPC Group and the Company shall each provide the
other with commercially reasonable access during normal business
hours to its books and records relating to the business of
Company (other than books and records protected by the attorney-
client privilege, confidentiality agreements or the disclosure of
which would violate law) to the extent that they relate to the
condition or operation of the business of Company prior to the
Closing and are requested by a Party to prepare its Returns, to
respond to Third Party Claims or for any other legitimate purpose
specified in writing. NPC Group and Investor shall each have the
right, at its own expense, to make copies of any such books and
records.
7.2.2 Destruction. None of NPC Group, Company or
Investor shall dispose of or destroy any material books and
records relating to the business of Company to the extent that
they relate to the condition or operation of the business of
Company prior to the Closing without NPC Group first offering to
turn over possession thereof to Investor, or Investor first
offering to turn over possession thereof to NPC Group, by written
notice at least thirty (30) days prior to the proposed date of
disposition or destruction.
7.2.3 Confidentiality. Each of NPC Group, Company and
Investor may take such action which it deems to be commercially
reasonable to separate or redact information unrelated to the
business of Company from documents and other materials requested
and made available pursuant to this Section 7.2.3 and may
condition the other Party's access to documents and other
materials that it deems confidential upon the execution and
delivery of an agreement by the other Party not to disclose or
misuse such information.
7.2.4 Assistance. Each of NPC Group, Company and
Investor shall, upon receipt of a commercially reasonable request
in writing and at the requesting Party's expense, make personnel
reasonably available to assist in locating and obtaining any
books and records relating to the business of Company to the
extent that they relate to the condition or operation of the
business of Company prior to the Closing and make personnel
reasonably available whose assistance, participation or testimony
is reasonably required in anticipation of, preparation for or the
prosecution or defense of any Third Party Claim in which the
Party of whom the request is made does not have any adverse
interest.
7.3 Certain Consents. Prior to the Closing, each of NPC
Group, Company and Investor will use all commercially reasonable
efforts and take such reasonable actions and cooperate with each
other as may be necessary to obtain all Consents necessary to
effect the transactions contemplated hereby; provided, however,
that no Party shall be required to pay or commit to pay any
amount to (or incur any obligation in favor of) any person from
whom any such Consent may be required (other than customary
transfer fees and governmental filing fees which shall be paid by
Investor).
7.4 Releases. Prior to the Closing, each of NPC Group,
Company and Investor will use commercially reasonable efforts and
take such commercially reasonable actions and cooperate with the
others as may be necessary to obtain all Releases required to be
obtained pursuant to this Agreement.
ARTICLE 8.
CONDITIONS PRECEDENT TO CLOSING
8.1 Conditions Precedent to Investor's Obligations. The
obligation of Investor to consummate the transactions
contemplated by this Agreement shall be subject to the
satisfaction of the following conditions, any of which may be
waived in writing by Investor.
8.1.1 Accuracy of Representations and Warranties. The
representations and warranties of NPC, Holdings and Company set
forth in this Agreement that are qualified by materiality shall
be true and correct, and those not so qualified shall be true and
correct in all material respects, as of the date hereof and as of
the time of the Closing as though made as of such time, except
that to the extent such representations expressly relate to an
earlier date (in which case such representations and warranties
qualified as to materiality shall be true and correct, and those
not so qualified shall be true and correct in all material
respects, on and as of such earlier date).
8.1.2 Performance of Covenants. NPC Group and Company
shall have performed and complied in all material respects with
all covenants and agreements required by this Agreement to be
performed by NPC Group and Company prior to or at the Closing.
8.1.3 Deliveries. NPC Group shall have delivered to
Investor the documents required by Section 9.2 and Company shall
have delivered to Investor the documents required by Section 9.3.
8.1.4 Compliance with HSR Act. All applicable waiting
periods under the HSR Act shall have expired or been terminated.
8.1.5 Consents and Authorizations. All applicable
Consents, Permits and Orders required to consummate the
transactions contemplated hereby shall have been obtained.
8.1.6 Financing. Investor shall have successfully
consummated the Rule 144A Offering and obtained all other
financing for the transaction contemplated by this Agreement
(which shall not include the equity purchase by Investor
described in Section 1.2).
8.1.7 Releases. Company and Company Affiliates shall
be released, effective as of the Closing Date, from any and all
guarantees it has made or provided in connection with the
indebtedness of NPC or its Affiliates other than Company and
Company Affiliates.
8.1.8 No Action. No written notice shall have been
received by any Party that any Action is pending or overtly
threatened before any Governmental Authority to restrain,
prohibit, or collect damages as a result of or otherwise
challenge this Agreement or any Related Document or any
transaction contemplated hereby or thereby.
8.1.9 Articles of Incorporation. The Company's
Certificate of Incorporation shall have been amended and restated
to be in the form of the Amended Certificate. The Amended
Certificate shall have been filed with the Secretary of State of
Delaware, shall be in full force and effect under the laws of the
State of Delaware as of the Closing, and no further amendments or
modifications shall have been made to the Company's Certificate
of Incorporation.
8.1.10 Bylaws. The Company's Bylaws shall have been
amended and restated in the form of the Amended Bylaws. The
Company's Bylaws shall be in full force and effect as of the
Closing as so amended and restated and shall not have been
further amended or modified.
8.1.11 Termination of Existing Options, Warrants and
Other Rights. Any option, warrant, or other right to purchase
the capital stock of the Company or any Company Affiliates
pursuant to any employee or director compensation plan or
otherwise shall have been exercised, canceled, redeemed, or
otherwise terminated on or prior to the Closing Date.
8.2 Conditions Precedent to NPC Group's and Company's
Obligations. The obligation of NPC Group and Company to
consummate the transactions contemplated by this Agreement shall
be subject to the satisfaction of the following conditions, any
of which may be waived in writing by NPC Group.
8.2.1 Accuracy of Representations and Warranties. The
representations and warranties of Investor set forth in this
Agreement that are qualified by materiality shall be true and
correct, and those not so qualified shall be true and correct in
all material respects, as of the date hereof and as of the time
of the Closing as though made as of such time, except that to the
extent such representations expressly relate to an earlier date
(in which case such representations and warranties qualified as
to materiality shall be true and correct, and those not so
qualified shall be true and correct in all material respects, on
and as of such earlier date).
8.2.2 Performance of Covenants. Investor shall have
performed and complied in all material respects with all
covenants and agreements required by this Agreement to be
performed by Investor prior to or at the Closing.
8.2.3 Deliveries. Investor shall have delivered to
NPC Group the payments and documents required by Section 9.4.
8.2.4 Compliance with HSR Act. All applicable waiting
periods under the HSR Act shall have expired or been terminated.
8.2.5 Releases from Obligations. NPC Group and the
Other Affiliates shall be released, effective as of the Closing
Date, from any and all further obligation or liability with
respect to the obligations listed on Schedule 8.2.5 (the
"Releases").
8.2.6 Consents and Authorizations. All applicable
Consents, Permits and Orders required to consummate the
transactions contemplated hereby shall have been obtained or
applied for.
8.2.7 No Action. No written notice shall have been
received by any Party that any Action is pending or overtly
threatened before any Governmental Authority to restrain,
prohibit, or collect damages as a result of or otherwise
challenge this Agreement or any Related Document or any
transaction contemplated hereby or thereby.
8.2.8 Solvency Opinion. NPC Group shall have received
a Solvency Opinion addressed to the Board of Directors of NPC
(among others) which shall be substantially similar to any
Solvency Opinion delivered to any banks or other lenders party to
the Credit Transaction and which provides assurance or
conclusions, from which a reasonable person could obtain
assurance that the Recapitalization does not result in a
violation of either the Delaware fraudulent conveyance statutes
or Section 548 of the U.S. Bankruptcy Code.
ARTICLE 9.
CLOSING
9.1 Time and Place. On the terms and subject to the
conditions of this Agreement, the Closing shall take place at the
offices of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, located at Citicorp Center, ▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ at 10:00 a.m. local
time on the first Monday (the "Closing Date") which is at least
three (3) Business Days after all of the conditions precedent set
forth in Article 8 have been satisfied or waived by the
appropriate Party (or, with respect to conditions to be satisfied
on the Closing Date, the appropriate Party has given reasonable
assurances to the other Parties that such conditions will be
satisfied or waived on the designated date) or at such other time
and place as the Parties shall agree upon in writing. The
Closing shall be effective as of 11:59 p.m. on the Sunday (the
"Effective Date") immediately preceding the Closing Date.
9.2 Deliveries by NPC Group. At the Closing, NPC Group
shall deliver to Investor the following:
(a) A certificate or certificates representing the
Redemption Shares, registered in the name of Holdings, duly
endorsed by Holdings for transfer or accompanied by an
assignment or assignments of the Shares duly executed by
Holdings, free and clear of all Liens;
(b) Copies of the recorded Charter Documents of NPC,
recently certified by the Secretary of State of the State of
Kansas and a Certificate of Good Standing of NPC dated
within ten (10) business days of the Closing Date issued by
the Secretary of State of the State of Kansas;
(c) A certificate of the Secretary or Assistant
Secretary of NPC dated the Closing Date certifying (i)
copies of NPC's Charter Documents, (ii) resolutions adopted
by NPC's board of directors authorizing the transactions
contemplated by this Agreement, and (iii) the incumbency and
signatures of NPC's officers, all in form and substance
reasonably satisfactory to Investor;
(d) Copies of the recorded Charter Documents of
Holdings, recently certified by the Secretary of State of
the State of Delaware and a Certificate of Good Standing of
Holdings dated within ten (10) business days of the Closing
Date issued by the Secretary of State of the State of
Delaware;
(e) A certificate of the Secretary or Assistant
Secretary of Holdings dated the Closing Date certifying (i)
copies of Holdings's Charter Documents, (ii) resolutions
adopted by Holdings's board of directors authorizing the
transactions contemplated by this Agreement, and (iii) the
incumbency and signatures of Holdings's officers, all in
form and substance reasonably satisfactory to Investor;
(f) A certificate of an executive officer of NPC
Group dated the Closing Date certifying to the fulfillment
of the conditions specified in Section 8.1.1 and
Section 8.1.2;
(g) A written opinion addressed to Investor from
counsel for NPC Group and Company in form and substance
reasonably acceptable to Investor;
(h) A Registration Rights Agreement in substantially
the form annexed hereto as Exhibit A, executed by NPC Group;
(i) A Stockholders' Agreement in substantially the
form annexed hereto as Exhibit B, executed by NPC Group;
(j) A Transitional Financial and Accounting Services
Agreement in substantially the form annexed hereto as
Exhibit C, executed by NPC Management, Inc.; and
(k) Such other documents, instruments and
certificates as Investor may reasonably request for the
transactions contemplated by this Agreement.
9.3 Deliveries by Company. At the Closing, Company shall
deliver to Investor the following:
(a) a certificate or certificates representing the
Purchase Shares, registered in the name of Investor.
(b) Copies of the recorded Charter Documents of
Company, recently certified by the Secretary of State of the
State of Delaware and a Certificate of Good Standing of
Company dated within ten (10) business days of the Closing
Date issued by the Secretary of State of the State of
Delaware;
(c) A certificate of the Secretary or Assistant
Secretary of Company dated the Closing Date certifying (i)
Company's Charter Documents and good standing, (ii) the
adoption of resolutions by Company's board of directors
authorizing the transactions contemplated by this Agreement,
and (iii) the incumbency and signatures of Company's
officers, all in form and substance reasonably satisfactory
to Investor;
(d) A certificate of an executive officer of Company
dated the Closing Date certifying to the fulfillment of the
conditions specified in Section 8.1.1 and Section 8.1.2;
(e) A Registration Rights Agreement in substantially
the form annexed hereto as Exhibit A, executed by the
Company;
(f) A Stockholders' Agreement in substantially the
form annexed hereto as Exhibit B, executed by the Company;
and
(g) An Employment Agreement between Company and
▇▇▇▇▇▇ ▇. Page as Chief Executive Officer of Company, in a
form reasonably acceptable to Company and Investor.
9.4 Deliveries by Investor. At the Closing, Investor shall
deliver to NPC Group the following:
(a) The Equity Purchase Price, in the manner
required by Section 1.2;
(b) Copies of the recorded partnership certificate
of Investor, recently certified by the Secretary of State of
the State of Delaware and a Certificate of Good Standing of
Investor dated within ten (10) business days of the Closing
Date issued by the Secretary of State of Delaware;
(c) A certificate of the general partner of Investor
and dated the Closing Date certifying to the fulfillment of
the conditions specified in 8.2.1 and Section 8.2.2;
(d) A written opinion addressed to NPC Group from
counsel for Investor, substantially in form and substance
reasonably acceptable to NPC Group;
(e) A Registration Rights Agreement in substantially
the form annexed hereto as Exhibit A, executed by Investor;
(f) A Stockholders' Agreement in substantially the
form annexed hereto as Exhibit B, executed by Investor; and
(g) Such other documents, instruments and
certificates as NPC Group may reasonably request for the
transactions contemplated by this Agreement.
ARTICLE 10.
TERMINATION PRIOR TO CLOSING DATE
10.1 Termination. This Agreement may be terminated prior to
the Closing Date only as follows:
(a) By the mutual written consent of NPC Group,
Company and Investor;
(b) By Investor immediately upon written notice to
NPC Group, or by NPC Group immediately upon written notice
to Investor, if an Order is issued forbidding or enjoining
the consummation of the transaction contemplated hereby
which has become final and non-appealable; or
(c) (i) By Investor upon written notice to NPC Group
if any of the conditions in Section 8.1 have not been
satisfied as of Termination Date or if satisfaction of such
a condition is or becomes impossible (other than through the
failure of Investor to comply with its obligations under
this Agreement) and Investor has not waived such condition
on or before Termination Date; or (ii) by NPC Group upon
written notice to Investor, if any of the conditions in
Section 8.2 have not been satisfied as of Termination Date
or if satisfaction of such a condition is or becomes
impossible (other than through the failure of NPC Group or
Company to comply with their respective obligations under
this Agreement) and NPC Group has not waived such condition
on or before Termination Date.
10.2 Effect of Termination. If this Agreement terminates
pursuant to Section 10.1, none of NPC Group, Company or Investor
shall have any liability or obligation to any of the other
parties hereunder, other than the confidentiality obligations set
forth in the Confidentiality Agreement, and no party shall be
liable for Consequential Damages. However, such termination
shall not relieve any party of liability for any breach of this
Agreement other than Consequential Damages.
ARTICLE 11.
INDEMNIFICATION AND PROCEDURES
11.1 Indemnification by NPC Group. Subject to the other
provisions of this Article 11, from and after the Closing Date,
NPC Group shall indemnify and hold Investor, its Affiliates, the
Company, and the Company Affiliates and their respective
employees, officers, directors and agents (the "Investor
Indemnitees") harmless from and against any and all Damages
suffered by any Investor Indemnitee arising out of:
(a) the breach of any representation or warranty
made by NPC Group or the Company in this Agreement or in any
certificate required to be executed and delivered by NPC
Group or the Company at the Closing pursuant to this
Agreement;
(b) the failure of NPC Group to perform any covenant
or obligation of NPC Group contained in (x) this Agreement
or (y) any other agreement required to be executed and
delivered by NPC Group at the Closing pursuant to this
Agreement; and
(c) any matters disclosed on Schedule 3.14
(Litigation) and any other matters which would be required
to be disclosed on such Schedule 3.14 if the representations
and warranties contained in Section 3.14 were made as of the
Closing Date (which Damages shall not include any
deductibles required to be paid with respect to insurance
for the foregoing described matters).
Provided that all claims for indemnification under Article 7
relating to Income Taxes will not be subject to this Article 11
but, rather, will be governed exclusively by Section 7.1.
11.2 Indemnification by Investor. Subject to the other
provisions of this Article 11, from and after the Closing Date,
Investor shall indemnify and hold NPC Group, its Affiliates and
their respective employees, officers, directors and agents (the
"NPC Group Indemnitees") harmless from and against any Damages
suffered by any NPC Group Indemnitee arising out of:
(a) the breach of any representation or warranty
made by Investor in this Agreement or in any certificate
required to be executed and delivered by Investor at the
Closing pursuant to this Agreement; and
(b) the failure of Investor to perform any covenant
or obligation by Investor contained in this Agreement or any
other agreement required to be executed and delivered by
Investor at the Closing pursuant to this Agreement.
11.3 Notice and Resolution of Claims.
11.3.1 Notice. Each person entitled to
indemnification pursuant to Section 11.1 or Section 11.2 (an
"Indemnitee") shall promptly give written notice to the party
liable for indemnification (the "Indemnifying Party") after
obtaining knowledge of any claim that it may have pursuant to
this Article 11; provided that the failure to provide reasonably
prompt notice shall not extinguish the rights of a Party entitled
to indemnification hereunder except to the extent that such
failure materially prejudices the dollar amount of any such claim
for indemnification or the ability to defend such claim. Such
notice shall set forth in reasonable detail the claim and the
basis for indemnification.
11.3.2 Right to Assume Defense. (a) Except as set
forth in 11.3.2(b) below, if any claim for indemnity pursuant to
this Article 11 shall arise from a claim or Action involving a
third party (a "Third Party Claim"), the Indemnitee shall permit
the Indemnifying Party to assume its defense. If the
Indemnifying Party assumes the defense of such Third Party Claim,
it shall take all steps necessary to investigate, defend or
settle such Action and shall, subject to Section 11.4, hold the
Indemnitee harmless from and against any and all Damages caused
by or arising out of any settlement approved by the Indemnifying
Party or any judgment in connection with such Third Party Claim.
Without the written consent of the Indemnitee, the Indemnifying
Party shall not consent to entry of any judgment or enter into
any settlement that does not include an unconditional and
complete release of the Indemnitee by the claimant or plaintiff
making the Third Party Claim. The Indemnitee may participate in
such defense or settlement through its own counsel, but at its
own expense.
(b) Notwithstanding anything in this Agreement to
the contrary, the Indemnifying Party will not be entitled to
assume control of such defense if the Indemnitee reasonably
concludes that, in light of any actual or potential conflict of
interest, it would be inappropriate for legal counsel selected by
the Indemnifying Party to represent the Indemnitee, but the
Indemnifying Party shall have the right to participate in such
defense or settlement through its own counsel, at its own
expense.
11.3.3 Failure to Assume Defense. Failure by the
Indemnifying Party to notify the Indemnitee of its election to
assume the defense of any Third Party Claim within thirty (30)
days after its receipt of notice thereof pursuant to Section
11.3.1 shall be deemed a waiver by the Indemnifying Party of its
right to assume the defense of such Third Party Claim. In such
event, the Indemnitee may defend against such Third Party Claim
in any manner it deems appropriate. The Indemnitee may settle
such Third Party Claim or consent to the entry of any judgment
with respect thereto, provided that it acts in good faith and in
a commercially reasonable manner.
11.4 Limits on Indemnification.
11.4.1 Basket. NPC Group shall be liable, in the
aggregate, to the Investor Indemnitees for all Damages that are
indemnifiable pursuant to Section 11.1(a) only to the extent and
in an amount that the aggregate amount of the Damages to all
Investor Indemnitees exceeds two percent (2%) of the sum of (x)
the Redemption Price and (y) the lesser of (i) 1/9 of the Equity
Purchase Price, and (ii) $3,750,000 (the "Basket"); provided that
amounts recovered by any Investor Indemnitee as described in
clauses 11.4.6(b)(i) and 11.4.6(b)(ii) shall not count against
the Basket; provided, further, that this Section 11.4.1 shall not
apply to any willful or fraudulent breach of any representation,
warranty or other provision of this Agreement or to any breach of
an Excluded Representation or any matter described in
Section 11.1(c).
11.4.2 Limit of Liability. The total aggregate
liability of NPC Group for any claims for Damages arising under
Section 11.1(a) of this Agreement shall not, in the aggregate,
exceed ten percent (10%) of the sum of (x) the Redemption Price
and (y) the lesser of (i) 1/9 of the Equity Purchase Price, and
(ii) $3,750,000 (the "Cap"); provided that amounts recovered by
any Investor Indemnitee as described in clauses 11.4.6(b)(i) and
11.4.6(b)(ii) shall not count against the Cap; provided, further,
that this Section 11.4.2 shall not apply to any willful or
fraudulent breach of any representation, warranty or other
provision of this Agreement, or to any breach of an Excluded
Representation or any matter described in Section 11.1(c).
11.4.3 Survival. Neither NPC Group nor Investor
shall have any obligation to indemnify any Indemnitee pursuant to
Sections 11.1(a) or 11.2(a) for the breach of any representation
or warranty unless such Indemnitee has in good faith commenced an
action or suit for such breach prior to the earlier of June 30,
1999 or the date of receipt of the audited financial statements
of Company for the fiscal year ending March 28, 1999, in the case
of all representations and warranties except the Excluded
Representations, in respect of which such action or suit must be
commenced (a) within the sixth anniversary of the Closing Date in
the case of the representations and warranties set forth in
Section 3.19, and (b) at any time with respect to the
representations and warranties set forth in Section 2.3.
11.4.4 Actual Knowledge. Neither Investor, on the
one hand, nor NPC Group and the Company on the other hand shall
have any liability hereunder for Damages arising from or relating
to a breach or inaccuracy of any representation or warranty set
forth in this Agreement if the other Party had knowledge on or
before the time of Closing of the fact, condition or event
constituting such breach or inaccuracy; provided that the
Investor shall only be deemed to have had knowledge of facts,
conditions or events if such facts, conditions or events are
specifically and expressly disclosed in the private offering
memorandum prepared pursuant to the Rule 144A Offering. Investor
agrees that for purposes of determining materiality in connection
with the determination of required disclosures in the private
offering memorandum referred to above, Investor shall not take
into account receipt of indemnification from NPC Group.
11.4.5 Prohibited Claims. Notwithstanding any
provision to the contrary contained herein, other than as
expressly set forth in Section 6.6 hereof, each of the NPC Group
Indemnitees hereby agrees that it will not make any claim for
indemnification or contribution against the Company pursuant to
this Agreement, and it will cause its Affiliates, officers and
employees not to make any claim for indemnification or
contribution against the Company pursuant to this Agreement, by
reason of the fact that such NPC Group Indemnitee was a
stockholder, director, officer, employee (other than employees
who are employed by the Company after the Closing), or agent of
the Company with respect to or in connection with (a) any action,
suit, proceeding, complaint, claim, or demand brought by the
Company, the Investor, or the Investor Indemnitees against such
NPC Group Indemnitee (whether such action, suit, proceeding,
complaint, claim, or demand is pursuant to this Agreement,
applicable law, or otherwise) or (b) any action, suit,
proceeding, complaint, claim or demand arising out of or in
connection with the redemption of the Redemption Shares, the
Recapitalization or the other transactions contemplated by this
Agreement.
11.4.6 Consequential Damages; Mitigation. Neither
NPC Group nor Investor shall have any obligation to indemnify any
NPC Group Indemnitee or Investor Indemnitee for (a) any
Consequential Damages, or (b) any other Damages (i) that are
recovered by the Indemnitee from any third party (including
insurers), or (ii) to the extent (and as of and not until the
time) such Damages are offset by actual tax savings realized on
account of such Damages by the Indemnitee or any of its
Affiliates.
11.4.7 Exclusive Remedy. Except as provided in
Section 7.1 with respect to Income Taxes, this Article 11 sets
forth the exclusive remedy for monetary damages owing from NPC
Group to the Investor Indemnitees and from Investor to NPC Group
Indemnitees that arise from the matters described in Sections
11.1 and 11.2, except to the extent limited by applicable
securities laws, which, if applied, shall be subject to the
Basket and the Cap to the extent permitted by law. Each of the
Parties hereby waives any claim or cause of action for monetary
damages that it might assert against the other, with respect to
the matters described in Sections 11.1 and 11.2, whether under
common law or under any Environmental Law or trade regulation or
other Law.
11.5 Determination of Loss and Amount. The determination of
whether any Damages have occurred, or the amount of any such
Damages (including, without limitation, for purposes of Section
11.4), the representations, warranties, covenants and agreements
of the Parties (other than the Excluded Representations and the
representations and warranties set forth in Section 3.6.1,
Section 3.6.2 and the first sentence of Section 3.7) set forth in
this Agreement and the Schedules and Exhibits attached hereto or
in any writing delivered by any Party to another Party in
connection with this Agreement, will be made without regard to
any materiality qualifications set forth therein.
11.6 Payment. Upon final determination by NPC Group and
Investor or by a court of competent jurisdiction that an
Indemnitee is entitled to indemnification under this Article 11,
the Indemnifying Party shall promptly pay or reimburse, as
appropriate, the Indemnitee for any Damages for which it is
entitled to be indemnified hereunder. Neither NPC Group nor
Investor shall permit any exercise of any right of set-off
against the other party until such final determination is made.
11.7 Other Indemnitees. Investor shall cause the Investor
Indemnitees, and NPC Group shall cause NPC Group Indemnitees, to
comply with the provisions and to abide by the limitations set
forth in this Article 11.
ARTICLE 12.
EMPLOYEE MATTERS
12.1 Employees. Schedule 12.1 lists certain employees of
Company who are engaged in management (the "Management
Employees") as of the date indicated thereon (which date is not
more than thirty (30) days prior to the date hereof), including
each such person's name and current position or job
classification. Company has provided Investor with a separate,
confidential list of wage or salary and bonus information for
each Management Employee. On and after the Closing, (a) except
as provided in Section 12.2 below, NPC Group shall have no
further obligation to provide benefits, or make its benefit plans
available, to the Management Employees or other employees of
Company, other than the right of certain Management Employees to
exercise stock options of NPC after the Closing; and (b) Company
shall assume, and hold NPC Group harmless from, all obligations
and liabilities to the Company's employees and their dependents
under COBRA or similar Laws with respect to occurrences after the
Closing Date.
12.2 Welfare Benefits. (a) NPC Group shall be responsible
for providing Company employees and former Company and Company
Affiliate employees and their respective beneficiaries and depen-
dents with welfare benefits, including without limitation life
insurance, accidental death and dismemberment insurance, business
travel accident insurance, hospital, medical, major medical,
dental, vision, short-term and long-term disability benefits
(such benefits, collectively, "Welfare Benefits"), for claims
incurred before the Closing Date. The Company shall be solely
responsible for providing Company employees that remain employees
of the Company or the Company Affiliates after the Closing Date
and their respective beneficiaries and dependents with the
Welfare Benefits that are provided under plans to be established
by the Company for claims incurred after the Closing Date.
Without limiting the generality of the foregoing, NPC Group shall
be solely responsible for providing Company and Company Affiliate
employees, former Company or Company Affiliate employees and
their respective current and former dependents and beneficiaries
with all required continuation coverage under Section 601 et seq.
of ERISA and Section 4980B of the Code for Qualifying Events (as
defined in Section 603 of ERISA and the regulations pertaining
thereto) occurring on or prior to the Closing Date. For purposes
of this Section 12.2, a claim for a medical, dental or other
similar benefit shall be considered to be incurred when the ser-
vices that are the subject of the claim are performed; a claim
for life insurance or other death-related benefits shall be
considered to be incurred when the death of the covered indi-
vidual occurs; and a claim for disability benefits or other
income-replacement benefits shall be considered incurred as and
when such benefits are payable.
ARTICLE 13.
MISCELLANEOUS
13.1 Non-Compete Covenant.
(a) Non-Competition with Business of the Company.
Effective upon the Closing, for a period of three (3) years after
the date hereof (the "Non-Competition Period"), NPC shall not,
directly or indirectly, own, operate, lease, manage, control,
engage in, invest in, permit its name to be used by, act as
consultant or advisor to, render services for (alone or in
association with any person, firm, corporate or other business
organization) or otherwise assist in any manner any person or
entity (other than Company and the Company Affiliates) that is in
the casual dining rib restaurant business anywhere in the world
("Covered Activities"). Nothing herein shall prohibit NPC from
being a passive owner of not more than five percent (5%) of the
outstanding stock of any class of securities of a publicly traded
corporation engaged in Covered Activities, so long as NPC does
not actively participate in the management of such corporation.
(b) Acknowledgment. NPC acknowledges and agrees
that (i) the covenants set forth in this Agreement are reasonable
in scope, duration, geographic area and in all other respects,
(ii) the Investor would not have entered into this Agreement but
for the covenants of NPC contained in this Section 13.1, and
(iii) the covenants contained in this Section 13.1 have been made
in order to induce the Investor to enter into this Agreement.
(c) Severability. If a court shall hold that the
duration, scope, or area restrictions stated in this Section 13.1
are unreasonable under circumstances then existing, the parties
agree that the maximum duration, scope, or area reasonable under
such circumstances shall be substituted for the stated duration,
scope or area. If any provision of this Section 13.1 shall be
determined by any court of competent jurisdiction to be invalid,
illegal or unenforceable in whole or in part, and such
determination shall become final, and such determination shall
not be curable by the application of the previous sentence, such
provision shall be deemed to be severed or limited, but only to
the extent required to render the remaining provisions of this
Section 13.1 enforceable. This Section 13.1, as thus amended,
shall be enforced to give effect to the intention of the parties
insofar as that is possible.
(d) Remedies. NPC and the Investor acknowledge and
agree that money damages would not adequately compensate the
Investor if NPC were to breach any of its covenants contained in
this Section 13.1 and that the Investor would have no adequate
remedy at law. Accordingly, NPC agrees that in the event of any
such breach, the Investor shall be entitled, in addition to any
other rights and remedies existing in its favor, to enforce its
rights under this Section 13.1, not only by an action or actions
for damages, but also by an action or actions for specific
performance, injunction and/or other equitable relief in order to
enforce or prevent any violations of the provisions of this
Section 13.1 (including the extension of the Non-Competition
Period by a period equal to (i) the length of the violation of
any of the provisions of this Section 13.1 plus (ii) the length
of any court proceedings necessary to stop such violation). In
the event of a breach or violation of any of the provisions of
this Section 13.1, the Non-Competition Period (but not NPC's
obligations hereunder) shall be tolled during the continuance of
any actual breach or violation.
13.2 Severability. If any provision of this Agreement as
applied to any party or to any circumstance shall be held
invalid, illegal or unenforceable by any court of competent
jurisdiction, (i) the validity, legality and enforceability of
the remaining provisions of this Agreement will remain in full
force and effect and (ii) the application of such provision to
any other party or to any other circumstance shall not be
affected or impaired thereby.
13.3 Successors and Assigns. The terms and conditions of
this Agreement shall inure to the benefit of and be binding upon
the successors and permitted assigns of the parties hereto;
provided, however, that neither this Agreement nor any of the
rights or obligations hereunder may be assigned by any party
without the prior written consent of the other parties hereto,
except that Investor shall have the right to assign all or a
portion of its rights hereunder to one or more Persons without
the consent of the other parties hereto, which assignment shall
not result in a release of any of Investor's obligations or
liabilities under this Agreement provided that Investor and each
such Person execute and deliver to the other parties an
assignment and assumption agreement, in a form reasonably
acceptable to NPC. In connection with the arrangement and
consummation of the financing contemplated by this Agreement, the
NPC Group and the Company hereby consent to Investor's
assignment, effective immediately after the Closing, to
Investor's financing sources thereunder its rights pursuant to
and any claims under this Agreement.
13.4 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall for all purposes be deemed
to be an original and all of which, when taken together, shall
constitute one and the same agreement.
13.5 Headings. The table of contents, captions and headings
used in this Agreement are inserted for convenience only and
shall not be deemed to constitute part of this Agreement or to
affect the construction or interpretation hereof.
13.6 Waiver. Any of the terms or conditions of this
Agreement may be waived in writing at any time by the party which
is entitled to the benefits thereof. No waiver of any of the
provisions of this Agreement shall be deemed or shall constitute
a waiver of such provision at any time in the future or a wavier
of any other provision hereof. The rights and remedies of the
parties are cumulative and not alternative. Neither the failure
nor any delay by any party in exercising any right, power or
privilege under this Agreement or the documents referred to in
this Agreement will operate as a waiver of such right, power or
privilege, and no single or partial exercise of any such right,
power or privilege will preclude any other or further exercise of
such right, power or privilege or the exercise of any other
right, power or privilege.
13.7 No Third-Party Beneficiaries. Nothing in this
Agreement, express or implied, shall create or confer upon any
person (including but not limited to any Employees), other than
the parties hereto or their respective successors and permitted
assigns, any legal or equitable rights, remedies, obligations,
liabilities or claims under or with respect to this Agreement,
except as expressly provided herein. The Investor Indemnitees
and NPC Group Indemnitees are intended third-party beneficiaries
of the applicable indemnification and contribution provisions
herein.
13.8 Expenses.
13.8.1 Except as otherwise expressly provided
herein, NPC Group shall pay all costs and expenses incurred by it
or on its behalf in connection with this Agreement and the
transactions contemplated hereby, including fees and expenses of
its own agents, representatives, financial consultants,
accountants and legal counsel.
13.8.2 Except as otherwise expressly provided
herein, at the Closing, the Company shall pay all costs and
expenses incurred by the Investor or on the Investor's behalf in
connection with this Agreement and the transactions contemplated
hereby, including fees and expenses of the Investor's agents,
representatives, financial consultants, accountants and legal
counsel, and fees and expenses incurred in connection with the
acquisition of title insurance, surveys and the certificates,
consents and nondisturbance agreements set forth in Section 5.10
and any environmental audits or investigations undertaken by the
Investor in connection with the Real Property; provided that the
costs, fees and expenses paid by the Company pursuant to this
Section 13.8.2 shall not be included in the Closing Balance Sheet
or the Adjustment Statement.
13.8.3 Company shall pay at the Closing the audit
fees associated with the audited historical financial statements
of Company. If the transaction contemplated by this Agreement is
not consummated, then NPC Group shall pay that portion of the
audit fees, relating to the preparation of the audited financial
statements of the Company prepared pursuant to Section 3.6.1 and
Section 5.2, which would otherwise be attributable to the normal
recurring audit of NPC Group, and Investor shall pay the
remaining part of the audit fee; provided, however, that if NPC
Group disposes of all or substantially all of the assets or stock
of Company, whether through sale or merger, within one year of
the date of this Agreement, the purchaser of Company shall
reimburse Investor for that portion of the audit fees paid by
Investor.
13.9 Notices. Unless otherwise provided herein, any notice,
request, waiver, instruction, consent or other document or
communication required or permitted to be given pursuant to this
Agreement shall be in writing and shall be deemed to have been
duly given and received (a) when delivered by hand (with written
confirmation of receipt), (b) when received by the addressee, if
sent by a nationally-recognized overnight delivery service or
(c) when received by the addressee, if mailed by registered or
certified mail, postage prepaid, return receipt requested, as
follows:
If to NPC Group or Company:
NPC International, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Romacorp, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. Page
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇, Mag & Fizzell, P.C.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Investor:
Sentinel Capital Partners, L.P.
▇▇▇ ▇▇▇▇▇ ▇▇▇., ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
Citicorp Center
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or at such other address or facsimile number for such party as
shall be specified in writing by that party.
13.10 Governing Law. This Agreement shall be
construed in accordance with and governed by the Laws of the
State of Delaware applicable to agreements made and to be
performed wholly within such jurisdiction, without regard to
conflicts of law principles.
13.11 Interpretation.
13.11.1 Unless specifically stated otherwise,
references to Articles, Sections, Exhibits and Schedules refer to
Articles, Sections, Exhibits and Schedules in this Agreement.
References to "includes" and "including" mean "includes without
limitation" and "including without limitation."
13.11.2 Each party hereto is a sophisticated legal
entity that was advised by experienced counsel and, to the extent
it deemed necessary, other advisors in connection with this
Agreement. Accordingly, each party hereby acknowledges that no
party has relied or will rely, in respect of this Agreement, the
transactions contemplated hereby, upon any document, projections,
financial data or other written or oral information previously
furnished to or discovered by it or its representatives, other
than that information set forth in this Agreement, the Exhibits
and Schedules hereto, the documents and instruments required by
this Agreement to be delivered at the Closing.
13.11.3 Any item disclosed in one Section or Schedule
shall be deemed to be disclosed in any other Section or Schedule
where such disclosure is relevant, even if there is no express
cross-reference, provided that the relevance of the disclosure is
reasonably apparent. Disclosure of items that may or may not be
required to be disclosed by this Agreement does not mean that
such items are material or create a standard of materiality and
shall not be deemed an admission that any such disclosed matter
is or may give rise to a breach of any Contract or violation of
any Law.
13.11.4 No provision of this Agreement shall be
interpreted in favor of, or against, any of the parties hereto by
reason of the extent to which any such party or its counsel
participated in the drafting thereof or by reason of the extent
to which any such provision is inconsistent with any prior draft
hereof or thereof.
13.12 Public Announcements. NPC Group and Investor
shall agree on the terms of any press releases or other public
announcements and certain other communications related to this
Agreement and shall consult with each other before issuing any
press releases or other public announcements related to this
Agreement; provided, however, that any Party may make a public
disclosure if in the opinion of such Party's counsel it is
required by Law, legal process or the rules of the Nasdaq
National Market System to make such disclosure. The Parties
agree, to the extent practicable, to consult with each other
regarding any such public announcement in advance thereof. In
addition, the Parties agree to consult with, and provide
commercially reasonable cooperation to, each other with respect
to the form and content of any communication to employees,
customers, suppliers and others having dealings with NPC Group,
Company and Other Affiliates concerning this Agreement and the
transactions contemplated thereby through the Closing Date.
13.13 Specific Performance. The Company and NPC Group
acknowledge that money damages would not be a sufficient remedy
for any breach by the Company or NPC Group of this Agreement and
agrees that the Investor shall be entitled to specific
performance and injunctive relief as remedies for any such
breach.
13.14 Entire Agreement. This Agreement, together with
the Schedules and Exhibits hereto and the Confidentiality
Agreement, constitutes the sole understanding of the parties
hereto with respect to the matters contemplated hereby and
thereby and supersedes and renders null and void all prior
agreements and understandings, written and oral, between or among
the parties hereto with respect to the subject matter hereof and
thereof. No party hereto shall be liable or bound to any other
party in any manner by any promises, conditions, representations,
warranties, covenants, agreements and understandings, except as
specifically set forth herein or therein.
13.15 Amendment. No amendment, modification or
alteration of the terms or provisions of this Agreement,
including any Schedules and Exhibits, shall be binding unless the
same shall be in writing and duly executed by the Party against
whom such amendment, modification or alteration is sought to be
enforced.
ARTICLE 14.
DEFINITIONS
14.1 Definitions. For purposes of this Agreement, the terms
set forth below shall have the following meanings:
14.1.1 "Accrued Expenses" means unpaid accrued
expenses, other than the closure reserve and health and worker's
compensation reserves, and intercompany receivables and payables
to and from NPC Group and Company.
14.1.2 "Action" means any action, suit, arbitration,
inquiry, proceeding or investigation by or before any
Governmental Authority or arbitrator.
14.1.3 "Adjusted Redemption Price" shall have the
meaning set forth in Section 1.4.2.
14.1.4 "Adjustment Liabilities" means (i) all
indebtedness for borrowed money, including bank lines of credit
and the current portion of long term debt of the Company
immediately prior to the Closing, and (ii) capital lease
financing (as defined by GAAP) and other long term debt of the
Company immediately prior to the Closing.
14.1.5 "Adjustment Statement" shall have the meaning
set forth in Section 1.4.1.
14.1.6 "Affiliate" means, with respect to any
Person, any other Person controlling, controlled by, or under
common control with such Person. For purposes of this Agreement,
the term "control" (including, with correlative meanings, the
terms "controlled by" and "under common control with" as used
with respect to any Person) means the possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of such Person whether through ownership
of voting securities, by contract or otherwise.
14.1.7 "Affiliated Group" shall have the meaning set
forth in Section 3.19.1.
14.1.8 "Agreement" means this Agreement, together
with the Schedules and Exhibits hereto.
14.1.9 "Amended Bylaws" shall have the meaning set
forth in Section 1.1.
14.1.10 "Amended Certificate" shall have the meaning
set forth in Section 1.1.
14.1.11 "Basket" shall have the meaning set forth in
Section 11.4.1.
14.1.12 "Business Commencement Date" shall have the
meaning set forth in Section 1.4.3.
14.1.13 "Cap" shall have the meaning set forth in
Section 11.4.2.
14.1.14 "Cash" means cash, cash equivalents and
credit card receipts.
14.1.15 "Charter Documents" means (a) in the case of
any corporation, its articles or certificate of incorporation and
its by-laws, (b) in the case of any partnership, its partnership
agreement and partnership certificate, if any, and (c) in the
case of any other Person, its organic and governing documents, as
each has been amended or supplemented from time to time.
14.1.16 "Checks in Excess of Cash Balances" means
checks that have been issued for more than the book balance in
the account on which it was drawn. All cash accounts of Company
shall be combined for purposes of this definition.
14.1.17 "Circular" shall have the meaning set forth
in Section 3.25.1.
14.1.18 "Closing" means the consummation of the
transactions contemplated hereby.
14.1.19 "Closing Balance Sheet" shall have the
meaning set forth in Section 3.6.2.
14.1.20 "Closing Date" shall have the meaning set
forth in Section 9.1
14.1.21 "Code" means the Internal Revenue Code of
1986, as amended from time to time.
14.1.22 "Company" shall have the meaning set forth in
the first paragraph of this Agreement.
14.1.23 "Company Affiliates" means any corporation,
partnership, association or other business entity of which (i) if
a corporation, a majority of the total voting power of shares of
stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or
trustees thereof is at the time owned or controlled, directly or
indirectly, by the Company or (ii) if a partnership, association
or other business entity, a majority of the partnership or other
similar ownership interests thereof is at the time owned or
controlled, directly or indirectly, by the Company. For purposes
hereof, the Company shall be deemed to have a majority ownership
interest in a partnership, association or other business entity
if the Company, directly or indirectly, is allocated a majority
of partnership, association, or other business entity gains or
losses, or is or controls the managing director or general
partner (or Person having like authority) of such partnership,
association or other business entity.
14.1.24 "Company Common Stock" shall have the meaning
set forth in the preamble hereto.
14.1.25 "Confidential Information" means any
proprietary or confidential information which relates solely or
primarily to the business of the Company or the Company
Affiliates.
14.1.26 "Confidentiality Agreement" means the
confidentiality agreement, dated December 11, 1997, between
Investor and NPC Group.
14.1.27 "Consent" means a consent, approval,
authorization, waiver or notification from any Person, including
any Governmental Authority or third party.
14.1.28 "Consequential Damages" means (a) Damages
arising out of any interruption of business, loss of profits,
loss of use of facilities, claims of customers, loss of goodwill
or (b) any indirect, incidental or special Damages, but expressly
excluding, without limitation, any direct Damages.
14.1.29 "Contracts" means all contracts, agreements,
instruments, leases, licenses, commitments and arrangements,
except Permits.
14.1.30 "Covered Activities" shall have the meaning
set forth in Section 13.1.
14.1.31 "Damaged Restaurant" shall have the meaning
set forth in Section 5.11.
14.1.32 "Damages" means all losses, claims, damages,
costs, fines, penalties, obligations, payments and liabilities
(including those arising out of any Action), together with all
reasonable costs and expenses (including reasonable outside
attorneys' fees and reasonable out-of-pocket expenses) incurred
in connection with any of the foregoing.
14.1.33 "Designated Preferred Stock" shall have the
meaning set forth in Section 1.2.
14.1.34 "Dollars" or "$" means lawful currency of the
United States.
14.1.35 "Domestic Franchise Restaurants" means the
franchised ▇▇▇▇ ▇▇▇▇ restaurants located at ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇-▇,
Space #125, Laredo, Texas, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇, ▇▇▇▇ Porsche
Way, Ontario, California, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇, and
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇.
14.1.36 "Earnings Amount" shall have the meaning set
forth in Section 1.4.4.
14.1.37 "EBITDA" means earnings before interest
expenses, income taxes, depreciation and amortization at the
restaurant level, not including field and general and
administrative expenses, determined consistent with prior
practices and consistent with the calculation method contained in
the by-store EBITDA presentation provided to Investor by
▇▇▇▇▇▇▇▇ & Co. Inc.) and will not be impacted by any real estate
financing transactions that are inconsistent with past practice
(including sales leaseback transactions).
14.1.38 "Effective Date" shall have the meaning set
forth in Section 9.1.
14.1.39 "Employee" means each employee of Company.
14.1.40 "Employee Benefit Plan" shall have the
meaning set forth in Section 3.18.1.
14.1.41 "Environment" means soil, land surface or
subsurface strata, surface waters (including navigable waters,
ocean waters, streams, ponds, drainage basins, and wetlands),
groundwaters, drinking water supply, stream sediments, ambient
air (including indoor air), plant and animal life, and any other
environmental medium or natural resource.
14.1.42 "Environmental Laws" means all Laws, all
similar provisions having the force or effect of law, all
judicial and administrative orders and determinations, all
contractual obligations and all common law concerning work place
health and safety, public health and safety, or pollution or
protection of the environment, including without limitation all
those relating to the presence, use, production, generation,
handling, transportation, treatment, storage, disposal,
distribution, labeling, testing, processing, discharge, release,
threatened release, control, or cleanup of any hazardous
materials, substances or wastes, chemical substances or mixtures,
pesticides, pollutants, contaminants, toxic chemicals, petroleum
products or byproducts, asbestos, polychlorinated biphenyls,
noise or radiation, as such of the foregoing are enacted or in
effect, prior to, on, or after the Closing Date.
14.1.43 "Equity Purchase Price" shall have the
meaning set forth in Section 1.2.
14.1.44 "ERISA" means the Employee Retirement Income
Security Act of 1974, as amended.
14.1.45 "Exchange Act" means the Securities Exchange
Act of 1934, as amended.
14.1.46 "Excluded Representations" means the
representations and warranties set forth in Section 2.3,
Section 3.19 (with respect to Income Taxes only), the third
sentence of Section 2.1, the first sentence of Section 2.2, the
second sentence of Section 3.1, and the first sentence of
Section 3.2.
14.1.47 "Financeable Leasehold" shall have the
meaning set forth in Section 5.10.
14.1.48 "Fiscal Period" means one of 12 periods which
together constitute the Company's 52 week fiscal year.
14.1.49 "Foreign Franchise Restaurants" means the
franchised ▇▇▇▇ ▇▇▇▇ restaurants located at (a) Panin Bank
Centre, Ground Floor, Jalan Jend, Sudirman, Kavling ▇▇. ▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, (▇) ▇▇▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇/▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, (▇) Dong Hyun ▇/▇ ▇▇, ▇▇▇-▇▇, ▇▇▇▇ ▇▇-
▇▇▇▇, ▇▇▇▇▇▇▇-▇▇, ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, (▇) ▇▇▇ ▇▇ Bldg B-1,
1451-34 Secho Dong, Secho - ku, Seoul, South Korea, and (e) ▇▇▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇▇-▇▇▇▇, ▇▇▇▇▇-▇▇, ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇.
14.1.50 "Franchise Agreements" means the written
agreements with Roma Franchise Corporation (directly or by
assignment from the Company) pursuant to which Franchisees have
the right to develop and operate ▇▇▇▇ ▇▇▇▇'▇ restaurants.
14.1.51 "Franchise Laws" shall have the meaning set
forth in
Section 3.25.1.
14.1.52 "Franchisees" means the Persons who are
parties to the Franchise Agreements, other than Roma Franchise
Corporation.
14.1.53 "GAAP" means U.S. generally accepted
accounting principles at the time in effect.
14.1.54 "Governmental Authority" means any federal,
state or local government, any of its subdivisions, agencies,
authorities, commissions, boards or bureaus, any federal, state
or local court or tribunal and any arbitrator.
14.1.55 "Guarantee" means any guarantee, any
indemnification obligation and any other contingent obligation to
purchase, to provide funds for payment or to supply funds to
invest in any Person or otherwise to assure a creditor against
loss.
14.1.56 "HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇
Antitrust Improvements Act of 1976, as amended, and the
regulations promulgated thereunder.
14.1.57 "Income Tax" means any federal, state or
local income, alternative minimum, franchise or other similar
Tax, duty, governmental charge or assessment imposed by or on
behalf of any Governmental Authority that is based on or measured
by income (including, interest and penalties on any of the
foregoing).
14.1.58 "Indemnifying Party" shall have the meaning
set forth in Section 11.3.1.
14.1.59 "Indemnitee" shall have the meaning set forth
in Section 11.3.1.
14.1.60 "Independent Firm" shall have the meaning set
forth in Section 1.4.1.
14.1.61 "Intellectual Property" means all patents,
patent applications and patent disclosures; all inventions
(whether or not patentable and whether or not reduced to
practice); all trademarks, service marks, trade dress, trade
names and corporate names and all the goodwill associated
therewith; all mask works; all registered and unregistered
statutory and common law copyrights; all registrations,
applications and renewals for any of the foregoing; and all trade
secrets, confidential information, ideas, formulae, compositions,
recipes, standards for raw materials, packaging, labeling, know-
how, manufacturing and production processes and techniques,
quality control standards, processes and technical descriptions
for the transformation of raw materials into finished products,
research information, drawings, specifications, designs, plans,
improvements, proposals, technical and computer data,
documentation and software, financial business and marketing
plans, customer and supplier lists and related information,
marketing materials and all other proprietary rights.
14.1.62 "Inventory" means all inventory and raw
materials used by Company.
14.1.63 "Investor" shall have the meaning set forth
in the first paragraph of this Agreement.
14.1.64 "Investor Indemnitees" shall have the meaning
set forth in Section 11.1.
14.1.65 "Key Employees" shall have the meaning set
forth in Section 3.17.
14.1.66 "Law" means any federal, state, local or
other statute, rule, regulation or ordinance.
14.1.67 "Lease" shall have the meaning set forth in
Section 3.10.2.
14.1.68 "Leased Personal Property" shall have the
meaning set forth in Section 3.11.2.
14.1.69 "Leased Real Property" shall have the meaning
set forth in Section 3.10.2.
14.1.70 "Liabilities" shall mean all liabilities and
obligations of any kind, nature or description, whether known or
unknown, accrued or unaccrued, liquidated or unliquidated, direct
or indirect, due or to become due, actual or contingent.
14.1.71 "Lien" means any lien, mortgage, deed of
trust, security interest, charge, pledge, retention of title
agreement, easement, encroachment, condition, reservation,
covenant or other encumbrance affecting title.
14.1.72 "Management Employee" has the meaning set
forth in Section 12.1.
14.1.73 "Material Adverse Effect" means a material
adverse effect on (a) the business, financial condition or
results of operations of Company and the Company Affiliates,
taken as a whole, or (b) the ability of NPC Group to consummate
the transactions contemplated by this Agreement.
14.1.74 "Material Contracts" shall have the meaning
set forth in Section 3.13(a).
14.1.75 "Material Lease" means a Lease or a Personal
Property Lease involving a term of more than one (1) year or
rental obligations exceeding $25,000 per annum.
14.1.76 "Material Suppliers" shall have the meaning
set forth in Section 3.12.
14.1.77 "Net Accounts Receivable" means all accounts
receivable, trade receivables, notes receivables and other
receivables, which in any case are payable as a result of goods
sold or services provided, or billed for, by Company, net of
allowance for doubtful accounts.
14.1.78 "New Restaurant" shall have the meaning set
forth in Section 5.11.
14.1.79 "Non-Competition Period" shall have the
meaning set forth in Section 13.1.
14.1.80 "NPC" shall have the meaning set forth in the
first paragraph of this Agreement.
14.1.81 "NPC Group" shall have the meaning set forth
in the first paragraph of this Agreement.
14.1.82 "NPC Group Indemnitees" shall have the
meaning set forth in Section 11.2.
14.1.83 "NPC Group's Knowledge" means the actual
knowledge as of the date of this Agreement of O. ▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇
Salts.
14.1.84 "Objection Notice" shall have the meaning set
forth in Section 1.4.1.
14.1.85 "Order" means any order, judgment,
injunction, decree, determination or award of any Governmental
Authority.
14.1.86 "Other Affiliates" means Affiliates of
Company other than NPC Group.
14.1.87 "Other Law" means any Law applicable to
Company other than an Environmental Law or a law relating to (a)
Taxes or (b) ERISA.
14.1.88 "Owned Real Property" shall have the meaning
set forth in Section 3.10.1.
14.1.89 "Owned Restaurants" means the ▇▇▇▇ ▇▇▇▇
restaurants (A) owned or leased, and (B) operated, by the Company
or the Company Affiliates located at (a) ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, (b) ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, (c) ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇, (d) ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, (e)
▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, (f) ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, (g) ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, (h) ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, (i) ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ (j) ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, and (k) ▇▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇,
▇▇▇▇▇▇▇.
14.1.90 "Party" means each of NPC Group, Company and
Investor and "Parties" means NPC Group, Company and Investor
collectively.
14.1.91 "Permit" means any permit, license,
franchise, certificate (including a certificate of occupancy)
registration, authorization or approval issued by a Governmental
Authority.
14.1.92 "Permitted Liens" means (a) Liens for Taxes
that are not yet due and payable or that are being contested in
good faith by appropriate proceedings and as to which adequate
reserves have been established in accordance with GAAP,
consistently applied, (b) workers', repairmens' and similar Liens
imposed by Law that have been incurred in the ordinary course of
business, (c) Liens that do not, individually or in the
aggregate, materially impair the occupancy, value or continued
use of the property (as currently used) to which they relate,
(d) the rights of others to customer deposits, and (e) Liens
incurred in the ordinary course of business after the date
hereof.
14.1.93 "Person" means any natural person,
corporation, partnership, limited liability company, trust,
unincorporated organization or other entity.
14.1.94 Personal Property Leases" means any lease or
sublease of personal property.
14.1.95 "Prepaid Expenses" means all prepaid expenses
of Company other than net pre-opening costs.
14.1.96 "Purchase Shares" shall have the meaning set
forth in the preamble to this Agreement.
14.1.97 "Real Property" shall have the meaning set
forth in Section 3.10.2.
14.1.98 "Recapitalization" shall have the meaning set
forth in the preamble to this Agreement.
14.1.99 "Redemption Price" shall have the meaning set
forth in Section 1.4.5.
14.1.100 "Redemption Shares" shall have the meaning
set forth in the preamble to this Agreement.
14.1.101 "Related Documents" means the Registration
Rights Agreement, the Stockholder's Agreement, and the
Transitional Financial and Accounting Services Agreement, in
substantially the forms annexed hereto as Exhibits A, B, and C,
respectively.
14.1.102 "Releases" shall have the meaning set forth
in Section 8.2.5.
14.1.103 "Returns" shall have the meaning set forth in
Section 3.19.1.
14.1.104 "Rule 144A Offering" shall have the meaning
set forth in the preamble to this Agreement.
14.1.105 "Rules" shall have the meaning set forth in
Section 3.25.1.
14.1.106 "Securities Act" means the Securities Act of
1933, as amended.
14.1.107 "Shares" shall have the meaning set forth in
the preamble to this Agreement.
14.1.108 "Stock Purchase" shall have the meaning set
forth in the preamble to this Agreement.
14.1.109 "Stock Redemption" shall have the meaning set
forth in the preamble to this Agreement.
14.1.110 "Tax" or "Taxes" means all income, profits,
franchise, gross receipts, capital, sales, use, withholding,
value added, ad valorem, transfer, employment, social security,
disability, occupation, property, severance, production, excise
and other taxes, duties and similar governmental charges and
assessments imposed by or on behalf of any Governmental Authority
(including interest and penalties thereon).
14.1.111 "Tax Laws" means the Code and all other Laws
relating to Taxes.
14.1.112 "Termination Date" means sixty (60) days
after the date hereof; provided that if Investor is using
commercially reasonable efforts to consummate the Rule 144A
Offering, then the "Termination Date" shall be ninety (90) days
after the date hereof; provided, further, that if on or before
the ninetieth (90th) day after the date hereof a written offering
memorandum, circular or other document has been prepared which is
intended to be used for purposes of meeting the disclosure
requirements of applicable securities law in connection with the
Rule 144A offering, and such memorandum, circular or other
document has been delivered to prospective investors in
connection with such Rule 144A Offering, then the "Termination
Date" shall be August 31, 1998.
14.1.113 "Third Party Claim" shall have the meaning
set forth in Section 11.3.2.
14.1.114 "Trade Accounts Payable" means any payable
for goods or services rendered by a third party vendor or
supplier in the ordinary course of business.
14.1.115 "Unadjusted Redemption Price" shall have the
meaning set forth in Section 1.3.
14.1.116 "Working Capital" means (i) the sum of Cash,
Accounts Receivable, Inventory, and Prepaid Expenses, minus (ii)
the sum of Trade Accounts Payable, Checks in Excess of Cash
Balances, and Accrued Expenses, excluding the closure reserve,
and health and worker's compensation reserves, intercompany
receivables and payables to and from NPC Group and Company and
Company Affiliates and net pre-opening costs; provided that the
calculation of Working Capital shall not take into account any
payments or obligations of Company related to its obligation to
purchase the real estate and related buildings, equipment and
fixtures pursuant to Section 1.5.
IN WITNESS WHEREOF, the Parties have caused this Agreement
to be executed as of the date first written above.
ROMACORP, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇
Name: ▇▇▇▇ ▇▇▇▇
Title: Vice-President
NPC INTERNATIONAL, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇
Name: ▇▇▇▇ ▇▇▇▇
Title: Vice-President
NPC RESTAURANT HOLDINGS, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇
Name: ▇▇▇▇ ▇▇▇▇
Title: Vice-President
SENTINEL CAPITAL PARTNERS, L.P.
By Sentinel Partners, L.P.
Its: General Partner
By: Sentinel Partners, Inc.
Its: General Partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: President