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RECAPITALIZATION AGREEMENT
among
AMERIKING, INC.
BANCBOSTON INVESTMENTS INC.
MCIT PLC
PMI MEZZANINE FUND, L.P.
and
THE OTHER STOCKHOLDERS NAMED ON THE SIGNATURE PAGES HERETO
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Dated as of November 26, 1996
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RECAPITALIZATION AGREEMENT
RECAPITALIZATION AGREEMENT (this "Agreement") dated as of November 26,
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1996, by and among National Restaurant Enterprises, Inc. ("Enterprises"),
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AmeriKing, Inc. (the "Company"), (i) each of MCIT PLC ("MCIT"), BancBoston
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Investments, Inc. ("BBI"), PMI Mezzanine Fund, L.P. ("PMI"), Jordan/Zalaznick
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Capital Company, Leucadia Investors, Inc., Xxxx X. Xxxxxx XX Revocable Trust,
Xxxxxx X. Xxxxx, Xxxx X. Xxxx Profit Sharing Plan, Xxxx X. Xxxx, Xxxxx X.
Xxxxxxxxx, Xxxxxxxx X. Xxxxxxx, Xxxx X. Xxxxxx, Xxxx X. Max, A. Xxxxxxx Xxxxxx,
Xx., Xxxxx X. Xxxxxx, Profit Sharing Plan and Trust, Xxxx Rodzevick, Profit
Sharing Plan and Trust, Xxxxxxxx X. Xxxx ("Jaro"), Xxxxxxx X. Xxxxxx ("Xxxxxx"),
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Xxxx X. Xxxxxx, Xxxx X. Xxxxxx, Xxxxx X. Xxxxxxx, Xxxxxx Xxxxxxxxx, Xxxxx
Restaurant Associates, Inc., Jaro Enterprises, Inc., Jaro Restaurant Associates,
Inc., JB Restaurants, Inc., Osburger, Inc., Xxxxx-Xxxxxx Restaurants, Inc.,
Castleking, Inc., Xxxxxx Xxxxxxx, Xxxxxx Xxxx and JII Partners (collectively,
other than PMI, referred to herein as the "Common Stockholders") and (ii) each
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of MCIT, BBI, Leucadia Investors, Inc., Xxxx X. Xxxxxx XX Revocable Trust, Xxxxx
X. Xxxxxxxxx, Xxxxxxxx X. Xxxxxxx, Xxxx X. Xxxxxx, Xxxx X. Max, Xxxxx Restaurant
Associates, Inc., Jaro Enterprises, Inc., Jaro Restaurant Associates, Inc., JB
Restaurants, Inc., Osburger, Inc., Xxxxx-Xxxxxx Restaurants, Inc. and
Castleking, Inc. (collectively referred to herein as the "Preferred
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Stockholders"). The Common Stockholders, Preferred Stockholders, together with
PMI, the Company and TJC Management Corporation ("TJC") are referred to herein
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as the "Parties".
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R E C I T A L S
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WHEREAS, the Parties desire to recapitalize the Company, and in
connection therewith, the Company has filed a Registration Statement on Form S-1
(File No. 333-04261) (as amended or supplemented, the "Registration Statement")
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relating to the proposed public offerings (the "Offerings") of $100.0 million
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aggregate principal amount of Senior Notes due 2006 (the "Senior Notes") and
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$30.0 million aggregate principal amount of Units (the "Units") consisting of
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Senior Exchangeable Preferred Stock due 2008 ("Senior Preferred Stock") and
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Common Stock $.01 par value of the Company;
WHEREAS, the proposed recapitalization ("Recapitalization") includes
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the following primary components: (a) (i) the reclassification of all of the
issued and outstanding shares of (x) Class A Common Stock, Class C Common Stock
and Class D Common Stock into an equal number of shares of Common Stock and (y)
Class B Common Stock into an equal number of shares of Non-Voting Common Stock
and (ii) the retirement of each of the Class A Common Stock, Class B Common
Stock, Class C Common Stock and Class D Common Stock as classes of capital stock
of the Company (collectively, the "Reclassification"); (b) following the
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Reclassification the 863.281-for-1 stock split (the "Stock Split") of all
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outstanding shares of Common Stock; (c) the Offerings; (d) the prepayment in
full of the
Company's $15.0 million aggregate principal amount of 12.5% Senior Subordinated
Notes due 2005 (the "Senior Subordinated Notes") held by PMI as of September 30,
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1996, plus prepayment premiums and accrued interest thereon; (e) the prepayment
in full of the Company's $11.0 million aggregate principal amount of 12.75%
Subordinated Notes due 2005 (the "Subordinated Notes) held by MCIT as of
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September 30, 1996; (f) the prepayment in full of the Company's $4.4 million
aggregate principal amount of 12.75% Seller Notes due 2005 (the "Seller Notes")
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held by affiliates of Jaro and Xxxxxx as of June 30, 1996; (g) the repayment of
Borrowings under the Credit Agreement in the aggregate amount of $86.6 million
and the termination of Term Loan A and Term Loan B pursuant to the terms of the
Credit Agreement; (h) the cancellation of all of the warrants to purchase Class
C Common Stock of the Company issued by the Company to PMI; (i) the amendment of
the Stockholders Agreement; (j) the amendment of the Management Subscription
Agreement; (k) the amendment of the Option Agreements; and (l) all other related
transactions, agreements and instruments contemplated by this Agreement and/or
described, and based upon the assumptions described, in the Registration
Statement.
WHEREAS, the Company is required to notify BKC and obtain its consent
prior to amending any of the Company's corporate governance documents, including
without limitation, those instruments specified in Section 5.3 of this
Agreement;
WHEREAS, pursuant to the rules and regulations of the Securities and
Exchange Commission, the Company is required to file the Amended and Restated
Company Charter prior to the effective date of the Registration Statement; and
WHEREAS, in order to implement the
Recapitalization, the Parties hereto agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms
shall have the meanings specified below:
"Amended and Restated Company By-Laws" means the Company's Amended and
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Restated By-Laws substantially in the form of Exhibit A hereto.
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"Amended and Restated Company Charter" means the Company's Amended and
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Restated Certificate of Incorporation substantially in the form of Exhibit B
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hereto.
"Amended and Restated Stockholders Agreement" means the Amended and
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Restated Stockholders Agreement substantially in the form of Exhibit C hereto.
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"Amendment No. 1 to Option Agreement" means Amendment No. 1 to each of
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the Option Agreements substantially in the form of Exhibit D hereto..
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"Amendment No. 1 to Management Subscription Agreement" means Amendment
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No. 1 to the Management Subscription Agreement dated the date hereof
substantially in the form of Exhibit E hereto.
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"BKC" means the Burger King Corporation.
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"Certificate of Designation" means the Certificate of Designation
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authorizing the Senior Preferred Stock.
"Class A Common Stock" means the Company's Class A Common Stock, par
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value $.01 per share.
"Class B Common Stock" means the Company's Class B Common Stock, par
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value $.01 per share.
"Class C Common Stock" means the Company's Class C Common Stock, par
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value $.01 per share.
"Class D Common Stock" means the Company's Class D Common Stock, par
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value $.01 per share.
"Class A//1// Preferred Stock" means the Company's Class A//1//
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Preferred Stock, par value $.01 per share.
"Class A\\2\\ Preferred Stock" means the Company's Class A\\2\\
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Preferred Stock, par value $.01 per share.
"Class B Preferred Stock" means the Company's Class B Preferred Stock,
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par value $.01 per share.
"Closing" has the meaning specified in Section 4.1 of this Agreement.
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"Closing Time" has the meaning specified in Section 4.1 of this
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Agreement.
"Common Stock" means the Company's Common Stock, par value $.01 per
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share, after giving effect to the Recapitalization.
"Common Stockholders" has the meaning specified in the preamble to
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this Agreement.
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"Company" has the meaning as specified in the preamble to this
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Agreement.
"Consulting Agreement" means the Management and Consulting Agreement
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between the Company and TJC, dated as of September 1, 1994, as amended from time
to time.
"Credit Agreement" means the Second Amended and Restated Credit
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Agreement, dated February 7, 1996, by and among Enterprises, the Company, The
First National Bank of Boston and the other lenders thereto and the First
National Bank of Boston, as agent.
"Directors Indemnification Agreements" means the Indemnification
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Agreements substantially in the form of Exhibit F hereto.
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"Enterprises" has the meaning specified in the preamble of this
Agreement.
"Equity Securities" of the Company means the Class A\\1\\ Preferred
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Stock, Class A\\2\\ Preferred Stock, Class B Preferred Stock, Class A Common
Stock, Class B Common Stock, Class C Common Stock and Class D Common Stock.
"Jaro" has the meaning specified in the preamble.
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"Jordan Investors" means Jordan/Zalaznick Capital Company, Leucadia
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Investors, Inc., TJC, Xxxx X. Xxxxxx XX Revocable Trust, Xxxxx X. Xxxxxxxxx,
Xxxxxx X. Xxxxx, Xxxxxxxx X. Xxxxxxx, Xxxx X. Xxxxxx, Xxxx X. Max, Xxxx X. Xxxx
Profit Sharing Plan, Xxxx X. Xxxx, A. Xxxxxxx Xxxxxx, Xx., Xxxxx X. Xxxxxx, Xx.
Profit Sharing Plan and Trust, Xxxx Rodzevick Profit Sharing Plan and Trust,
Xxxxxx Xxxxxxx, Xxxxxx Xxxx and JII Partners.
"Jordan Investors' Representative" has the meaning specified in
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Section 8.2 of this Agreement.
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"Liens" means any security interest, lien, charge, restriction,
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encumbrance or other interest of another Person.
"Management Investors" means Xxxxxx, Xxxx X. Xxxxxx, Xxxx X. Xxxxxx,
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Xxxxx X. Xxxxxxx, Xxxxxx Xxxxxxxxx, Osburger, Inc., Castleking, Inc. and Xxxxx-
Xxxxxx Restaurants, Inc.
"Management Investors' Representative" has the meaning specified in
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Section 8.2 of this Agreement.
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"Management Subscription Agreement" means the Management Subscription
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Agreement, dated September 1, 1994, by and among the Company and the
stockholders listed on the signature page thereto.
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"Material Adverse Effect" means any circumstances or event that (i)
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has, or may be reasonably expected to have, any materially adverse effect upon
the validity or enforceability of this Agreement or any of the other
Recapitalization Documents or (ii) is, or may be reasonably expected to be,
materially adverse to the business or operations of the Company and its
subsidiaries, taken as a whole.
"MCIT" has the meaning specified in the preamble to this Agreement.
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"Non-Voting Common Stock" means the Company's non-voting common stock,
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par value $.01 per share after giving effect to the Recapitalization.
"Offerings" shall mean the concurrent public offerings of Senior Notes
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and Units pursuant to the Registration Statement.
"Option Agreements" mean the Stock Option Agreements, dated September
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1, 1994, between the Company and each of Xxxxx Xxxxxxx and Xxxxxx Xxxxxxxxx.
"Xxxxxx" has the meaning specified in the preamble to this Agreement.
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"Parties" has the meaning specified in the preamble to this Agreement.
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"Person" means any individual, corporation, partnership, joint
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venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof or any other entity.
"PMI" has the meaning specified in the preamble to this Agreement.
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"Preferred Stock" means the Company's Class A\\1\\ Preferred Stock,
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Class A\\2\\ Preferred Stock, Class B Preferred Stock and Senior Preferred
Stock.
"Preferred Stockholders" has the meaning specified in the preamble to
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this Agreement.
"Pricing Committee" means the Pricing Committee of the Company's Board
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of Directors, established in connection with the Offerings, and composed of
Messrs. Xxxxxx and Jaro.
"Recapitalization" has the meaning specified in the recitals to this
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Agreement.
"Recapitalization Documents" means this Agreement (including all
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Schedules and Exhibits hereto) and each of the agreements, instruments, consents
and documents referred to in Sections 5.2 through 5.13, the Registration
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Statement, and the Underwriting Agreements.
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"Reclassification" has the meaning set forth in recitals to this
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Agreement.
"Registration Statement" has the meaning set forth in the recitals to
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this Agreement.
"Seller Notes" has the meaning specified in the recitals to this
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Agreement.
"Senior Notes" has the meaning specified in the recitals to this
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Agreement.
"Senior Subordinated Notes" has the meaning specified in the recitals
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to this Agreement.
"Stock Split" has the meaning specified in the recitals to this
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Agreement.
"Stockholder Chart" means the stockholder chart described in Section
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2.3 and set forth as Exhibit G hereto.
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"Stockholders" means the Common Stockholders, PMI and the Preferred
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Stockholders.
"Stockholders Agreement" means the Stockholders Agreement, dated as of
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September 1, 1994, as amended by Consent and Amendment No. 1 to the Stockholders
Agreement, dated as of November 30, 1994, as further amended by Waiver and
Amendment No. 2 to the Stockholders Agreement, dated as of February 7, 1996, and
as further amended and restated by the Amended and Restated Stockholders
Agreement.
"Subordinated Notes" has the meaning specified in the recitals to
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this Agreement.
"Termination Date" means January 31, 1997.
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"TJC" has the meaning specified in the preamble to this Agreement.
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"Underwriting Agreements" means the Underwriting Agreements, to be
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entered into by the Company and the Underwriters in connection with the
Offerings.
"Underwriters" means Xxxxxxxxx, Lufkin & Xxxxxxxx Securities
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Corporation and Xxxxxxxx & Company Inc., as representatives, on behalf of
themselves and the other underwriters named in the Underwriting Agreements.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to each of the other Parties to
this Agreement, as of the Closing Time, as follows:
Section 2.1. Due Authorization. The Company is a duly organized,
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validly existing corporation under the laws of the State of Delaware. Each of
this Agreement and the other Recapitalization Documents have been duly
authorized, executed and delivered by the Company and each of this Agreement and
such other Recapitalization Documents is a legal, valid and binding obligation
of the Company enforceable against the Company in accordance with its terms,
except as enforcement thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other similar laws affecting the
enforceability of creditors' rights generally and by general principles of
equity (whether arising under a proceeding at law or in equity). The Amended
and Restated Company Charter has been duly filed with the Secretary of State of
the State of Delaware.
Section 2.2. Authority; No Conflicts. The Company has the corporate
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power and authority and the legal right to make, deliver and perform, and has
taken all necessary corporate action to authorize the transactions contemplated
by this Agreement and the other Recapitalization Documents, and to conduct its
business as described in the Registration Statement. Neither the execution and
delivery of this Agreement or the other Recapitalization Documents nor the
consummation of any of the transactions contemplated herein or therein nor
compliance with the terms and provisions hereof or thereof (a) violates or will
violate any law or regulation or any order or decree of any court or government
instrumentality applicable to the Company or any of its subsidiaries or
properties, except such violations as would not, in the aggregate, have a
Material Adverse Effect, or (b) conflicts with or would result in the breach of,
or constitutes a default under, any contract, lease, indenture, loan agreement,
mortgage, deed of trust or other agreement or instrument to which the Company or
any of its subsidiaries, is a party or by which any of them or any of their
respective assets may be bound, except such conflicts, breaches or defaults as
have been waived or consents therefor have been obtained or such conflicts,
breaches or defaults as would not, in the aggregate, have a Material Adverse
Effect. Except as contemplated herein, no consent, approval, authorization or
order is presently required in connection with the execution and delivery of
this Agreement or the Recapitalization Documents by the Company or the
consummation of the transactions contemplated hereby or thereby that has not
been obtained, except for such consents, approvals, authorizations or orders as
would not, in the aggregate, have a Material Adverse Effect.
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Section 2.3. Capital Stock.
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(a) At the Closing Time, the Company's authorized capital stock shall
consist of 4,000,000 shares of Common Stock, 300,000 shares of Non-Voting Common
Stock and 2,607,000 shares of Preferred Stock, including 7,500 shares of
existing Preferred Stock, and 2,500,000 shares of Senior Preferred Stock and
100,000 shares of undesignated Preferred Stock. At the Closing Time but prior
to the consummation of the Offerings, the Company shall have 893,290 shares of
Common Stock outstanding and 1,207,500 shares of Preferred Stock outstanding.
(b) Set forth on the Stockholder Chart is a true, complete and
correct chart showing, among other things, the record ownership of the Company's
Equity Securities prior to the Recapitalization.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE OTHER PARTIES
Each of the Parties to this Agreement (other than the Company and
Enterprises) represents and warrants, severally as to themselves and not
jointly, to each of the other Parties to this Agreement, as of the Closing Time,
as follows:
Section 3.1. Due Authorization. Each of this Agreement and the other
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Recapitalization Documents to which such Party is a party have been duly
authorized, executed and delivered by such Party, as required, and each of this
Agreement and such other Recapitalization Documents is a legal, valid and
binding obligation of such Party, enforceable against such Party, in accordance
with its terms, except as enforcement thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium and other similar laws
affecting the enforceability of creditors' rights generally and by general
principles of equity (whether arising under a proceeding at law or in equity).
Section 3.2. Authority; No Conflicts. Such Party has the power and
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authority and the legal right to make, deliver and perform, and has taken all
necessary corporate action to authorize the transactions contemplated by, this
Agreement and the other Recapitalization Documents to which such Party is a
party. Neither the execution and delivery of this Agreement or such
Recapitalization Documents nor the consummation of any of the transactions
contemplated herein or therein nor compliance with the terms and provisions
hereof or thereof (a) violates or will violate any law or regulation or any
order or decree of any court or government instrumentality applicable to such
Party, except such violations as would not, in the aggregate, have a Material
Adverse Effect, or (b) conflicts with or would result in the breach of, or
constitutes a default under, any contract, lease, indenture, loan agreement,
mortgage, deed of trust or other agreement or instrument to which such Party is
a
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party or by which they or any of their respective assets may be bound, except
such conflicts, breaches or defaults as have been waived or consents therefor
have been obtained or such conflicts, breaches or defaults as would not, in the
aggregate, have a Material Adverse Effect. No consent, approval, authorization
or order of any governmental authority is presently required in connection with
the execution and delivery of this Agreement or the Recapitalization Documents
by such Party or the consummation of the transactions contemplated hereby or
thereby that has not been obtained.
Section 3.3. Capital Stock. Such Party, if a Stockholder, is the
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record and beneficial owner of the Company's Equity Securities ascribed to such
Party in the Stockholder Chart and beneficially owns such Equity Securities free
and clear of any Liens, other than such as may be created under the Stockholders
Agreement.
ARTICLE IV
THE CLOSING
Section 4.1. Closing. Upon satisfaction of the conditions set forth
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herein, the transactions contemplated by this Agreement, other than those
contemplated by Sections 5.2, 5.3, 5.4(a), 5.10 and 5.12 which will be deemed
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consummated at the times set forth therein, shall be consummated at the closing
(the "Closing") thereof, which shall occur on the closing date of the Offerings
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(the "Closing Time") at the offices of Xxxxx, Xxxxx & Xxxxx, New York, New York,
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or at such other place as shall be agreed upon by the Stockholders and the
Company. All of the transactions contemplated by this Agreement shall be deemed
to have been consummated simultaneously and none of such transactions shall be
deemed consummated unless all of such transactions are consummated.
Notwithstanding the foregoing, if the Closing does not occur by the Termination
Date, none of the Parties hereto shall have any obligations under Article V or
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otherwise under this Agreement or any Exhibits attached hereto.
ARTICLE V
THE RECAPITALIZATION
Section 5.1. General. Each of the Parties (in whatever capacity,
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including as stockholders of the Company) will take all actions, including
executing and delivering all of the Recapitalization Documents to which it is a
party, necessary or reasonably requested by the Company, to authorize, adopt,
approve, implement, consummate and close the Recapitalization Documents and the
Recapitalization generally, provided that, with regard to Parties that are
directors of the Company, the foregoing will be subject to their fiduciary
duties as directors.
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Section 5.2. Amended Charter Documents.
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(a) Prior to the effective date of the Registration Statement, the
Amended and Restated Company Charter that provides for, among other things, the
authorization of 92,500 shares of undesignated Preferred Stock will be duly
approved and adopted as the Charter of the Company and filed by the Company with
the Secretary of State of the State of Delaware.
In the event the Closing does not occur by the Termination Date, then
the Stockholders hereby consent, and the Company hereby agrees, without any
further action by the Stockholders, to promptly effect an amendment to the
Amended and Restated Company Charter so that it is identical to the Company's
certificate of incorporation in effect as of the date hereof.
(b) At or prior to the Closing, the Amended and Restated Company By-
Laws will be duly approved and adopted as the By-Laws of the Company.
(c) Prior to the Closing Time, the Certificate of Designation will be
filed by the Company with the Secretary of State of the State of Delaware.
(d) Prior to the effective date of the Registration Statement, BKC
will consent to the adoption by the Company of those documents referred to in
Sections 5.2(a), 5.2(b) and 5.2(c) of this Agreement.
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Section 5.3. Reclassification and Stock Split.
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(a) Effective simultaneously upon the filing of the Amended and
Restated Company Charter, the Reclassification shall be effected and (i) each
share of Class A Common Stock, Class C Common Stock and Class D Common Stock
currently issued and outstanding shall be converted into a like number of shares
of Common Stock and (ii) each share of Class B Common Stock currently issued and
outstanding shall be converted into a like number of shares of Non-Voting Common
Stock. Upon written notice, holders of the Class A Common Stock, Class C Common
Stock or Class D Common Stock shall deliver their stock certificates to the
Company for cancellation and such certificates that are not so delivered will
thereafter represent the right to receive a new certificate or certificates
representing an equivalent number of shares of Common Stock or Non-Voting Common
Stock, as the case may be, subject to the effect of the Stock Split.
(b) the Stock Split shall be consummated and each holder of shares of
capital stock of the Company shall be entitled to receive a new certificate or
certificates representing the appropriate number of shares of Common Stock or
Non-Voting Common Stock, as the case may be.
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(c) As a result of the Reclassification and the Stock Split, if any
fractional interest in a share of Common Stock or Non-Voting Common Stock, as
the case may be, would be deliverable, the Company, in lieu of delivering the
fractional share, shall pay an amount to the holder thereof equal to the fair
market value of such fractional interest as determined by the Board of
Directors.
Section 5.4. Issuance of Securities.
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(a) At or prior to the effective date, the Stockholders, will have
consented to the Offerings and to the execution and delivery of the Underwriting
Agreements by the Company to the Underwriters.
(b) At the Closing the Company and the Underwriters will consummate
the Offerings pursuant to the terms of the Underwriting Agreements and the
Company will issue the Senior Notes, the Units, the Senior Preferred Stock and
the Common Stock.
Section 5.5. Repayment of Credit Agreement Borrowings.
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(a) At the Closing, the Company will use a portion of the net
proceeds from the Offerings to repay the entire outstanding aggregate principal
amount of the Term Loan A facility, Term Loan B facility and Revolving Credit
facility (each as defined in the Credit Agreement) plus accrued interest and any
other amounts owed thereon through the Closing Date. At the Closing, the
lenders under the Credit Agreement, will deliver to the Company the notes
evidencing the principal amount of the Term Loan A facility and the Term Loan B
facility held by such lenders to be repaid together with written instructions to
complete the repayment.
Section 5.6. Subordinated Note Repurchase.
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(a) At the Closing, the Company will use a portion of the net
proceeds from the Offerings to repurchase at a minimum of 105% of the principal
amount the entire outstanding aggregate principal amount of the Senior
Subordinated Notes plus the applicable prepayment premium and will pay accrued
interest thereon through the Closing Time. Upon repurchase by the Company, such
notes shall cease to accrue interest and the Company's obligations thereunder
shall be cancelled. At the Closing, the holders of the Senior Subordinated
Notes will deliver to the Company the note(s) evidencing the principal amount of
Senior Subordinated Notes held by such holder to be repurchased, together with
written instructions to complete such repurchase.
(b) At the Closing, the Company will use a portion of the net
proceeds from the Offerings to repurchase at 100% of the principal amount the
entire outstanding aggregate principal amount of the Subordinated Notes and will
pay accrued interest thereon through the Closing Time. Upon repurchase by the
Company, such notes shall cease to accrue interest
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and the Company's obligations thereunder shall be cancelled. At the Closing,
the holders of the Subordinated Notes will deliver to the Company the note(s)
evidencing the principal amount of Subordinated Notes held by such holder to be
repurchased, together with written instructions to complete such repurchase.
(c) At the Closing, the Company will use a portion of the net
proceeds from the Offerings to repurchase at 100% of the principal amount the
entire outstanding aggregate principal amount of the Seller Notes from the
holders thereof and will pay accrued interest thereon through the Closing Time.
Upon repurchase by the Company, such notes shall cease to accrue interest and
the Company's obligations thereunder shall be cancelled. At the Closing, the
holders of the Seller Notes will deliver to the Company the notes evidencing the
principal amount of Seller Notes held by such holder to be repurchased, together
with written instructions to complete such repurchase.
Section 5.7. Repurchase of Warrants. At the Closing, the Company
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will repurchase all of the warrants issued to PMI pursuant to Section 18 of the
Common Stock Purchase Warrants, dated February 7, 1996, issued by the Company,
pursuant to a repurchase agreement substantially in the form of Exhibit H.
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Section 5.8. Xxxxxx Employment Agreement. At or prior to the
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Closing, Xx. Xxxxxx will enter into a new Employment and Non-Interference
Agreement in substantially the form of Exhibit I hereto.
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Section 5.9. Directors Indemnification Agreements. At the Closing,
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the Company will enter into the Directors Indemnification Agreements with each
of the signatories to the Registration Statement in substantially the form of
Exhibit F hereto.
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Section 5.10. 1996 Annual Meeting of Stockholders. The Parties
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hereby agree to execute and deliver stockholder consents, substantially in the
form of Exhibit J hereto, with regard to (a) the Amended and Restated Company
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Charter, (b) the Amended and Restated Company By-Laws, (c) the Reclassification,
(d) the Stock Split, (e) the Recapitalization Agreement and Recapitalization
Documents, (f) the election of directors of the Company as reasonably requested
by the Company, (g) the ratification of the appointment of accountants and (h)
such other matters as the Pricing Committee shall determine to submit for
stockholder approval. The Parties hereto hereby agree and acknowledge that such
stockholder consents shall serve as and constitute the Company's 1996 Annual
Meeting of Stockholders.
Section 5.11. Amended and Restated Stockholders Agreement. At the
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Closing, the Company and the Stockholders will execute, deliver and consummate
the Amended and Restated Stockholders Agreement.
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Section 5.12. Amendment to Management Subscription Agreement.
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Effective upon the filing of the Amended and Restated Company Charter, the
Company, Jaro and affiliates of Jaro and the Management Investors Subscription
will execute, deliver and consummate Amendment No. 1 to the Management
Agreement.
Section 5.13. Amendment to Option Agreements. Effective upon the
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filing of the Amended and Restated Company Charter, the Company, Enterprises,
Xxxxx X. Xxxxxxx and Xxxxxx Xxxxxxxxx will execute, deliver and consummate the
Amendment No. 1 to the Option Agreements.
ARTICLE VI
CONDITIONS OF THE PARTIES'
(OTHER THAN THE COMPANY AND ENTERPRISES) OBLIGATIONS
Section 6.1. Conditions of the Stockholders' Obligations. The
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obligation of each of the Parties (other than the Company and Enterprises) on
the Closing Time to consummate the transactions contemplated by Article V of
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this Agreement will be subject to the prior or concurrent satisfaction on the
Closing Time of the following conditions:
(a) Representations and Warranties; Agreements; No Default. The
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representations and warranties of the Company set forth in this Agreement
will be true in all material respects at and as if repeated on and as of
the Closing Time after giving effect to the transactions contemplated
hereby; and the Company will have executed, delivered and consummated all
Recapitalization Documents on its part to be performed pursuant to this
Agreement on or prior to the Closing Time.
(b) Certificate as to Representations, Etc. The Parties (other than
--------------------------------------
the Company and Enterprises) will each have received an Officers'
Certificate signed by the Chief Executive Officer and the Chief Financial
Officer of the Company, addressed to the Parties (other than the Company
and Enterprises) and dated as of the date of the Closing, certifying the
accuracy of the statements set forth in clause (a) above.
(c) Recapitalization and Recapitalization Documents. (a) Each of
-----------------------------------------------
the other Parties to the Recapitalization Documents will have executed,
delivered and consummated the Recapitalization Documents to which they are
parties, (b) the Offerings will close concurrently with the Closing
hereunder and (c) the Recapitalization will have been consummated.
-13-
(d) Closing Papers. The Parties will have received copies of the
--------------
following:
(i) copies of the resolutions adopted by the Board of Directors
and stockholders of the Company authorizing the execution, delivery
and performance of this Agreement and each of the Recapitalization
Documents and the other transactions contemplated hereby;
(ii) copies of each of the Recapitalization Documents; and
(iii) an incumbency certificate in respect of officers of the
Company executing the Recapitalization Documents, a standard good
standing certificate from the Secretary of the State of Delaware in
respect of the Company, and such other customary and standard
documents reasonably requested by any of the Parties.
ARTICLE VII
CONDITIONS OF THE COMPANY'S OBLIGATIONS
Section 7.1. Conditions of the Company's Obligations. The obligation of
---------------------------------------
the Company on the Closing Time to consummate the transactions contemplated by
this Agreement will be subject to the prior or concurrent satisfaction on the
Closing Time of the following conditions:
(a) Representations and Warranties; Agreements. The representations
------------------------------------------
and warranties of the other Parties set forth in this Agreement shall be
true in all material respects at and as if repeated on and as of the
Closing Time after giving effect to the transactions contemplated hereby
and the other Parties will have performed all agreements on their part to
be performed pursuant to this Agreement on or prior to the Closing Time.
(b) Recapitalization and Recapitalization Documents. (a) Each of
-----------------------------------------------
the other Parties to the Recapitalization Documents will have executed,
delivered and consummated the Recapitalization Documents to which they are
parties, (b) the Offerings will be consummated, (c) the Recapitalization
will have been consummated and (d) BKC shall have delivered a written
consent to the Company with respect to the matters set forth in Section
5.2(d) of this Agreement.
(c) Consummation of the Offerings. The Offerings shall have been
-----------------------------
consummated substantially in accordance with the terms set forth in the
Registration Statement.
-14-
ARTICLE VIII
MISCELLANEOUS
Section 8.1. Waiver of First Refusal, Anti-Dilution Rights and
-------------------------------------------------
Registration Rights. Each of the Parties (i) waives any right of first refusal
-------------------
it may have from the issuance and sale of the Units, Senior Preferred Stock or
Common Stock in the Offerings, including, but not limited to, any prior notice
or response periods any Party may be entitled to, (ii) waives any right it may
have to anti-dilution adjustment of its Equity Securities (including any
warrants or options to purchase any Equity Securities) arising from the issuance
and sale of the Units, Senior Preferred Stock or Common Stock in the Offerings;
provided that such waiver shall not apply to any adjustments required as a
result of the Stock Split and (iii) waives any "piggyback registration rights"
it may have and related notice requirements as a result of the Offerings.
Section 8.2. Power of Attorney.
-----------------
(a) Each of the Jordan Investors hereby appoints A. Xxxxxxx Xxxxxx,
Xx., or his designee, to serve as his agent and attorney-in-fact (the "Jordan
------
Investors' Representative"), with full power and authority (including power of
-------------------------
substitution), in the name of and for an on behalf of each of the Jordan
Investors, or in its own name as the Jordan Investors' Representative, to take
all actions required or permitted under this Agreement and in connection with
the transactions contemplated hereby (including, without limitation, the
execution and delivery of each of the Recapitalization Documents and to effect
all of the transactions set forth in Article V hereof). The authority conferred
hereby shall be an agency coupled with an interest, and all authority conferred
hereby is irrevocable and not subject to termination by any of the Jordan
Investors, or by operation of law, whether by the death or incapacity of any of
the Jordan Investors, or the occurrence of any other event. Any notice given to
the Jordan Investors' Representative shall constitute effective notice to each
of the Jordan Investors, and any other party to this Agreement or any other
Person may rely on any notice, consent, election or other communication received
from the Jordan Investors' Representative as if such notice, consent, election
or other communication had been received from each of the Jordan Investors.
(b) Each of the Management Investors hereby appoints Xxxxxxxx Xxxx,
or his designee, to serve as his agent and attorney-in-fact (the "Management
----------
Investors' Representative"), with full power and authority (including power of
-------------------------
substitution), in the name of and for an on behalf of each of the Management
Investors, or in its own name as the Management Investors' Representative, to
take all actions required or permitted under this Agreement and in connection
with the transactions contemplated hereby (including, without limitation, the
execution and delivery of each of the Recapitalization Documents and to effect
all of the transactions set forth in Article V hereof). The authority conferred
hereby shall be an agency coupled with an interest, and all authority conferred
hereby is irrevocable and not subject to termination by any of the Management
Investors, or by operation of law, whether by the death or incapacity of any of
the Management Investors, or the occurrence of any
-15-
other event. Any notice given to the Management Investors' Representative shall
constitute effective notice to each of the Management Investors, and any other
party to this Agreement or any other Person may rely on any notice, consent,
election or other communication received from the Management Investors'
Representative as if such notice, consent, election or other communication had
been received from each of the Management Investors.
(c) The Jordan Investors' Representative and the Management
Investors' Representative shall have no duties or responsibilities except those
expressly set forth herein. The Jordan Investors' Representative and the
Management Investors' Representative shall be held harmless by the Jordan
Investors and the Management Investors, as the case may be, from any liability,
loss, claim, demand or expense (including attorney's fees and expenses) arising
out of or in connection with the performance of their obligations in accordance
with this Agreement, except for any of the foregoing arising out of the gross
negligence or willful misconduct of the Jordan Investors' Representative and the
Management Investors' Representative, as the case may be. The foregoing
provision shall survive the resignation or substitution of the Jordan Investors'
Representative or the Management Investors' Representative, as the case may be,
or the termination of this Agreement.
Section 8.3. Notices. Subject to Section 8.2 hereof, all notices and
-------
other communications pertaining to this Agreement shall be in writing and shall
be delivered in person with receipt acknowledged, or telecopied and confirmed
immediately in writing by a copy mailed by registered or certified mail, return
receipt requested, postage prepaid, addressed as hereafter set forth, or mailed
by registered or certified mail, return receipt requested, postage prepaid, to
the address set forth under the respective party's name on the signature pages
to this Agreement, or to such other person or address as shall be furnished to
the other party in compliance with this Section.
Section 8.4. Consent to Amendments and Waivers. The provisions of this
---------------------------------
Agreement may be amended only if the Company has obtained the written consent of
the holders of a majority of the Equity Securities (as if each share was
accorded one vote), provided that (a) any adjustments to the Recapitalization
Documents and the Recapitalization generally resulting from the determination of
the interest rate of the Senior Notes or Senior Preferred Stock or the number of
shares of Units, Senior Preferred Stock or Common Stock to be issued in the
Offerings will not be considered amendments, and (b) waivers, supplements and
modifications with regard to the representations and warranties in this
Agreement will not be considered amendments.
Section 8.5. Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the internal laws of the State of New York.
Section 8.6. Successors and Assigns. Whenever in this Agreement any of
----------------------
the parties hereto is referred to, such reference shall be deemed to include the
successors and assigns of such party; and all covenants and agreements of the
Company contained herein shall bind its successors and assigns. The Company may
not assign or transfer any of its rights or
-16-
obligations hereunder (by operation of law or otherwise) without the prior
written consent of each of the Parties.
Section 8.7. Survival. All representations, warranties, covenants and
--------
agreements herein will survive the Closing.
-17-
IN WITNESS WHEREOF, the Parties hereto as Common Stockholders have duly
executed this Agreement as of the date first above written.
AMERIKING, INC.
By:
------------------------------------------
Name:
Title:
Address:
NATIONAL RESTAURANT
ENTERPRISES, INC.
By:
------------------------------------------
Name:
Title:
Address:
MCIT PLC
By:
------------------------------------------
Name:
Title:
Address:
BANCBOSTON INVESTMENTS INC.
By:
------------------------------------------
Name:
Title:
Address:
-18-
PMI MEZZANINE FUND, L.P.,
a Delaware limited partnership
PACIFIC MEZZANINE INVESTORS, L.L.C.
a Delaware limited liability company,
its General Partner
By:
------------------------------------------
Name:
Title:
Address:
JORDAN INVESTORS:
JORDAN/ZALAZNICK CAPITAL COMPANY
By:
------------------------------------------
Name:
Title:
LEUCADIA INVESTORS, INC.
By:
------------------------------------------
Name:
Title:
-19-
XXXX X. XXXXXX, XX REVOCABLE TRUST
----------------------------------------------
Name: Xxxx X. Xxxxxx, XX
Title: Trustee
----------------------------------------------
Xxxxx X. Xxxxxxxxx
----------------------------------------------
Xxxxxxxx X. Xxxxxxx
----------------------------------------------
Xxxx X. Xxxxxx
----------------------------------------------
Xxxx X. Max
-20-
XXXX X. XXXX PROFIT SHARING PLAN
By:
---------------------------------------------
Name: Xxxx X. Xxxx
Title: Trustee
----------------------------------------------
Xxxx X. Xxxx
----------------------------------------------
A. Xxxxxxx Xxxxxx, Xx.
Address: 0 Xxxx 00xx Xxxxxx, Xxxxx 0000,
Xxx Xxxx, Xxx Xxxx 00000
XXXXX X. XXXXXX, XX. PROFIT SHARING
PLAN AND TRUST
By:
---------------------------------------------
Name: Xxxxx X. Xxxxxx, Xx.
Title: Trustee
-21-
XXXX XXXXXXXX PROFIT SHARING PLAN
AND TRUST
By:
----------------------------------------------
Name: Xxxx Xxxxxxxx
Title: Trustee
----------------------------------------------
Xxxxxx Xxxxxxx
----------------------------------------------
Xxxxxx Xxxx
JII PARTNERS
By:
----------------------------------------------
Name:
Title:
-22-
MANAGEMENT STOCKHOLDERS:
-----------------------------------------------
Xxxxxxxx Xxxx
Address: c/o AmeriKing, Inc., 0000 Xxxxxxxxxx
Xxxxx, Xxxxx 0000, Xxxxxxxxxxx, Xxxxxxxx 00000
----------------------------------------------
Xxxxxxx Xxxxxx
----------------------------------------------
Xxxx Xxxxxx
----------------------------------------------
Xxxx Xxxxxx
----------------------------------------------
Xxxxx Xxxxxxx
----------------------------------------------
Xxxxxx Xxxxxxxxx
-23-
JARO INVESTORS:
XXXXX RESTAURANTS ASSOCIATES, INC.
By:
----------------------------------------------
Name: Xxxxxxxx Xxxx
Title: President
JARO ENTERPRISES, INC.
By:
----------------------------------------------
Name: Xxxxxxxx Xxxx
Title: President
JARO RESTAURANTS ASSOCIATES, INC.
By:
----------------------------------------------
Name: Xxxxxxxx Xxxx
Title: President
JB RESTAURANTS, INC.
By:
----------------------------------------------
Name: Xxxxxxxx Xxxx
Title: President
-24-
XXXXXX INVESTORS:
OSBURGER, INC.
By:
----------------------------------------------
Name: Xxxxxxx Xxxxxx
Title: President
CASTLEKING, INC.
By:
----------------------------------------------
Name: Xxxxxxx Xxxxxx
Title: President
XXXXX-XXXXXX RESTAURANTS, INC.
By:
----------------------------------------------
Name: Xxxxxxx Xxxxxx
Title: President
----------------------------------------------
Xxxxxx X. Xxxxx
TJC MANAGEMENT CORPORATION
By:
----------------------------------------------
Name:
Title:
-25-
IN WITNESS WHEREOF, the Parties hereto as Preferred Stockholders have duly
executed this Agreement as of the date first written above.
MCIT PLC
By:
----------------------------------------------
Name:
Title:
Address:
BANCBOSTON INVESTMENTS INC.
By:
----------------------------------------------
Name:
Title:
Address:
LEUCADIA INVESTORS, INC.
By:
----------------------------------------------
Name:
Title:
XXXX X. XXXXXX, XX REVOCABLE TRUST
----------------------------------------------
Name: Xxxx X. Xxxxxx, XX
Title: Trustee
----------------------------------------------
Xxxxx X. Xxxxxxxxx
-26-
----------------------------------------------
Xxxxxxxx X. Xxxxxxx
----------------------------------------------
Xxxx X. Xxxxxx
----------------------------------------------
Xxxx X. Xxx
XXXX INVESTORS:
XXXXX RESTAURANTS ASSOCIATES, INC.
By:
----------------------------------------------
Name: Xxxxxxxx Xxxx
Title: President
JARO ENTERPRISES, INC.
By:
----------------------------------------------
Name: Xxxxxxxx Xxxx
Title: President
JARO RESTAURANTS ASSOCIATES, INC.
By:
----------------------------------------------
Name: Xxxxxxxx Xxxx
Title: President
-27-
JB RESTAURANTS, INC.
By:
----------------------------------------------
Name: Xxxxxxxx Xxxx
Title: President
XXXXXX INVESTORS:
OSBURGER, INC.
By:
----------------------------------------------
Name: Xxxxxxx Xxxxxx
Title: President
CASTLEKING, INC.
By:
----------------------------------------------
Name: Xxxxxxx Xxxxxx
Title: President
XXXXX-XXXXXX RESTAURANTS, INC.
By:
----------------------------------------------
Name: Xxxxxxx Xxxxxx
Title: President
-28-
EXHIBIT A
AMENDED AND RESTATED COMPANY BY-LAWS
EXHIBIT B
AMENDED AND RESTATED COMPANY CHARTER
EXHIBIT C
AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
EXHIBIT D
AMENDMENT NO. 1 TO OPTION AGREEMENT
EXHIBIT E
AMENDMENT NO. 1 TO MANAGEMENT SUBSCRIPTION AGREEMENT
EXHIBIT F
INDEMNIFICATION AGREEMENT
EXHIBIT G
STOCKHOLDER CHART
EXHIBIT H
PMI WARRANT REPURCHASE AGREEMENT
TO COME
EXHIBIT I
RESTATED XXXXXX EMPLOYMENT AND NON-DISCLOSURE AGREEMENT
EXHIBIT J
STOCKHOLDER WRITTEN CONSENT IN LIEU OF 1996 ANNUAL MEETING
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 2.1. Due Authorization............................................ 7
Section 2.2. Authority; No Conflicts...................................... 7
Section 2.3. Capital Stock................................................ 8
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE OTHER PARTIES
Section 3.1. Due Authorization............................................ 8
Section 3.2. Authority; No Conflicts...................................... 8
Section 3.3. Capital Stock................................................ 9
ARTICLE IV
THE CLOSING
Section 4.1. Closing...................................................... 9
ARTICLE V
THE RECAPITALIZATION
Section 5.1. General...................................................... 9
Section 5.2. Amended Charter Documents.................................... 10
Section 5.3. Reclassification and Stock Split............................. 10
Section 5.4. Issuance of Securities....................................... 11
Section 5.5. Repayment of Credit Agreement Borrowings..................... 11
Section 5.6. Subordinated Note Repurchase................................. 11
Section 5.7. Repurchase of Warrants....................................... 12
Section 5.8. Xxxxxx Employment Agreement.................................. 12
Section 5.9. Directors Indemnification Agreements......................... 12
Section 5.10. 1996 Annual Meeting of Stockholders......................... 12
i
Page
Section 5.11. Amended and Restated Stockholders Agreement................. 12
Section 5.12. Amendment to Management Subscription Agreement.............. 13
Section 5.13. Amendment to Option Agreements.............................. 13
ARTICLE VI
CONDITIONS OF THE PARTIES'
(OTHER THAN THE COMPANY AND ENTERPRISES) OBLIGATIONS
Section 6.1. Conditions of the Stockholders' Obligations.................. 13
ARTICLE VII
CONDITIONS OF THE COMPANY'S OBLIGATIONS
Section 7.1. Conditions of the Company's Obligations...................... 14
ARTICLE VIII
MISCELLANEOUS
Section 8.1. Waiver of First Refusal, Anti-Dilution Rights
and Registration Rights.................................... 15
Section 8.2. Power of Attorney............................................ 15
Section 8.3. Notices...................................................... 16
Section 8.4. Consent to Amendments and Waivers............................ 16
Section 8.5. Governing Law................................................ 16
Section 8.6. Successors and Assigns....................................... 16
Section 8.7. Survival..................................................... 17
ii
EXHIBITS
A Amended and Restated Company By-Laws
B Amended and Restated Company Charter
C Amended and Restated Stockholders Agreement
D Amendment No. 1 to Option Agreement
E Amendment No. 1 to Management Subscription Agreement
F Indemnification Agreement
G Stockholder Chart
H PMI Warrant Repurchase Agreement
I Restated Xxxxxx Employment and Non-Disclosure Agreement
J Stockholder Written Consent in Lieu of 1996 Annual Meeting
