Exhibit 2
ASSET SALE AGREEMENT
By and Between
R&W Pizza Huts of North Carolina, Inc.,
Xxxxx X. Xxxxxx and Xxxxx X. Xxxxxxx, Sellers
with
R&W Pizza Huts of North Carolina Building Partners
and
NPC International, Inc., Buyer
Dated October 30, 1996
TABLE OF CONTENTS
Page
1. Transfer of Business.
1
1.1. Conveyance. 1
1.2 Excluded Equipment 2
1.3 Real Property 2
1.4 Licenses 3
1.5 Restaurant Inventories and Change Funds
3
1.6 Purchase Price and Other Payments
4
1.7 Antitrust Law Compliance 4
1.8 Closing Documents 4
1.9 Non-Assumption 5
1.10 Non-Competition 5
2. Representations and Warranties of Sellers
2.1 Title to Assets
5
2.2 Adequacy of Assets 5
2.3 Leases and Contracts
5
2.4 Corporate Power and Authority
2.5 Insurance 6
2.6 Taxes 6
2.7 Environmental Matters 6
2.8 Consent of Pizza Hut, Inc.
6
2.9 Financial Information of Sellers
7
2.10 No Material Changes 7
3. Warranties of Buyer 7
4. Pre-Closing Covenants 7
4.1 Operation Until Closing 7
4.2 Access to Restaurants
7
4.3 Obligations Under Franchise Agreement
8
5. Sellers' Employees 8
6. Conditions to Closing
8
7. Closing Matters 8
7.1 Time of Closing 8
7.2 Post-Closing Adjustments 9
7.3 Post-Closing Indemnification
9
7.4 Additional Documents 9
7.5 Buyer Evaluation 9
7.6 Information Statement 9
7.7 Recording and Taxes 9
7.8 Sellers Failure to Close 9
8. Miscellaneous 10
8.1 Notices 10
8.2 Brokerage and Finder's Fees
10
8.3 Termination of Agreement 10
8.4 Modification and Waiver 10
8.5 Assignment; Binding Effect
10
8.6 Severability 10
8.7 Entire Agreement 10
8.8 Confidential Information 11
8.9 Governing Law 11
8.10 Bulk Sales Waiver 11
8.11 Expenses 11
8.12 Construction 11
8.13 Break-Up Fee 11
8.14 Time is of the Essence 12
DATE: October 30, 1996
PARTIES: "Sellers" R&W Pizza Huts of North Carolina, Inc.
("R&W")
Xxxxx X. Xxxxxx, Stockholder
Xxxxx X. Xxxxxxx, Stockholder
P. O. Drawer 41007
0000 Xxxx Xxxxx Xxxx
Xxxxxxxxxxxx, Xxxxx Xxxxxxxx 00000
"Buyer" NPC International, Inc.
000 Xxxx 00xx Xxxxxx
Xxxxxxxxx, Xxxxxx 00000
"R&W
Partners" R&W Pizza Huts of North Carolina
Building Partnership, a North Carolina
general partnership
P. O. Drawer 41007
0000 Xxxx Xxxxx Xxxx
Xxxxxxxxxxxx, Xxxxx Xxxxxxxx 00000
RECITALS: Sellers lease certain real property and own or lease
certain personal property used in the operation and support of 31
Pizza Hut restaurants. Sellers are willing to sell the assets
and assign the leases and certain franchise agreements relating
to those restaurants to Buyer as provided in this Asset Sale
Agreement (this "Agreement"). Buyer has inspected each of the
operating restaurants, and desires to acquire them on the terms
and conditions set forth in this Agreement. R&W Partners, an
affiliate of Sellers, is willing to lease the restaurant real
estate to Buyer as provided herein.
AGREEMENT: In consideration of the mutual promises set forth in
this Agreement, Sellers, Buyer and R&W Partners (as its interest
appears) agree as follows:
1. Transfer of Business. Subject to the terms and
conditions of this Agreement, the following will take place:
1.1. Conveyance. The Sellers will each convey to Buyer
all of the respective interest of each in the following types of
personal property (the "Assets") relating to the Pizza Hut
restaurant business being conducted at the restaurants listed on
Schedule 1.1 (the "Restaurants"):
(a) All furniture, fixtures, and equipment
located in the Restaurants or used in connection therewith,
except as provided in Section 1.2, below;
(b) Any third party prepaid rents, all utility
deposits and all miscellaneous deposits relating to the Assumed
Contracts (as defined in Section 1.1(g) herein);
(c) All uniforms, menus, dishes, glassware,
utensils, and other smallwares used in the Restaurants;
(d) All useable inventories of food ingredients,
supplies, paper products, and other consumables used in the
Restaurants, as well as a change fund for each of the Restaurants
in an amount and in denominations adequate to do business at the
Restaurant on the "Closing Date" (as defined in Section 7.1,
below);
(e) All liquor and other licenses relating to the
Restaurants, to the extent those licenses are transferable;
(f) The franchise rights and obligations
contained in that certain 1990 Pizza Hut, Inc. Franchise
Agreement, dated February 27, 1990, attached as Exhibit "A" (the
"Franchise Agreement") covering the Restaurants. A copy of the
Franchise Agreement has been previously provided to Buyer; and
(g) To the extent such rights are transferable,
Sellers' rights under any service or other contracts or
agreements specifically assumed by Buyer ("Assumed Contracts") as
set out in Schedule 1.1(g).
1.2 Excluded Equipment. The Assets do not include the
equipment listed in Schedule 1.2, which is leased by Sellers (the
"Leased Equipment"). To the extent the leases are assignable,
Sellers will assign to Buyer, and Buyer will assume, certain of
the leases (the "Assumed Leases") on the Leased Equipment, as set
out on Schedule 1.2.
1.3 Real Property.
(a) Owned Real Properties. Sellers own no real
property associated with the business of R&W. R&W Partners owns
21 parcels and leases one parcel of real estate on which R&W has
constructed certain improvements as listed in Schedule 1.3(a)
(the "R&W Partners Real Properties"), which R&W Partners will
lease or assign, as appropriate, to Buyer. Each lease will have
a 10-year term with three options to renew for successive five-
year terms, a right of first refusal to Buyer to acquire the
premises and an option to purchase as set forth in the lease.
Base rent, inclusive of any ground rents, for the term will equal
6% of "gross sales" (as defined in the Franchise Agreements) for
the last twelve (12) full calendar months preceding the Closing
Date ("Base Rent"). Annual rent shall be the greater of Base Rent
or six percent (6%) of Gross Sales for each succeeding calendar
year. Not later than sixty (60) days following the end of each
calendar year Buyer will pay any additional rentals due under
each lease.
(b) Leased Real Properties. Sellers lease from
unrelated third parties (not including R&W and R&W Partners) nine
parcels of real estate with improvements as listed and described
in Schedule 1.3(b) (the "Third Party Leased Real Properties").
Sellers will use reasonable, good-faith efforts to obtain:
(i) from each landlord from whom consent to
an assignment to Buyer is required, a consent to that assignment;
and
(ii) from each landlord an estoppel
certificate showing substantially the information shown on
Schedule 1.3(b).
Buyers shall pay no part of any consideration paid to obtain
either a consent or estoppel certificate. If any required
consent to an assignment cannot be obtained, Sellers may, at
their option, either sublease the affected property to Buyer or
assign the lease without consent; in either event, Sellers will
indemnify Buyer (using a mutually-agreeable form of indemnity)
against claims by the respective landlord arising out of the
sublease/assignment without consent.
1.4 Licenses. Buyer understands it needs various
licenses and permits (including alcoholic beverage licenses) as
set out in Schedule 1.4 to conduct the business following
Closing, and that some or all of the licenses may be
nontransferable. Except as provided below, Sellers will remove
all nontransferable licenses from the Restaurants on the Closing
Date.
If Buyer requests the temporary use of any of the
nontransferable licenses until Buyer obtains its own licenses,
Seller will allow that use, but only if each of the following
conditions is (in Sellers' opinion) satisfied:
(a) Buyer demonstrates to Sellers' continuing
satisfaction that Buyer is diligently and in good faith trying to
obtain the appropriate licenses for each Restaurant;
(b) The use of Sellers' licenses by Buyer on an
interim basis is legally permissible and poses no unreasonable
liability or risk to Sellers that Sellers (in their sole
discretion) consider unacceptable; and
(c) Buyer agrees in writing, in form acceptable
to Sellers;
(i) to indemnify Sellers against all claims,
losses, liability (including fines), expenses (including
reasonable attorneys' fees), or damages that Sellers suffer as a
result of Buyer's use of the licenses;
(ii) in exchange for Sellers' management
services in connection with Buyer's use of Sellers' licenses to
pay a fee of $10.00 per license per month beginning 90 days after
the Closing Date, and continuing for each month or portion of a
month that Buyer uses any of Sellers' licenses; and
(iii) to reimburse Sellers promptly for
any out-of-pocket expenses incurred in connection with this
Section.
1.5 Restaurant Inventories and Change Funds. On the
night prior to the Closing Date, Sellers' and Buyer's
representatives will take an inventory of the usable food
ingredients in each Restaurant, and count each Restaurant's
change fund. Buyer will reimburse Sellers for Sellers' actual
costs of the inventories and change funds, net of any offsets, as
provided in Section 7.2.
1.6 Purchase Price and Other Payments. As
consideration for this Agreement, Buyer will pay Sellers the
following amounts at the times noted:
(a) For the sale and transfer of the operations
of the Restaurants (the "Business") and for the Assets (except
that portion of the Assets for which Buyer must separately
reimburse Sellers, as contemplated in Section 1.6(b)) and Sellers
other agreements herein, Buyer will pay Sellers the sum of
$27,500,000.00 (the "Purchase Price") at Closing, the allocation
of which shall be as agreed by the parties and set out on
Schedule 1.6(b). Each party will include such allocation on a
timely filing of Internal Revenue Form 8594. The Purchase Price
includes an amount to compensate Sellers for relinquishing their
existing franchise and leasehold rights, but does not include any
ongoing fees or obligations under the Franchise Agreements; and
(b) Reimbursement for inventory and change funds,
for third party rents and prepaid expenses under the Assumed
Contracts, and for any other items payment for which is required
by Sections 1.5 or 7, at the times called for by Section 7.2.
1.7 Antitrust Law Compliance. Sellers and Buyer
shall prepare and file with the United States Department of
Justice (the "Department") and the Federal Trade Commission (the
"FTC") the notification and report form with respect to the
transactions contemplated by this Agreement as required pursuant
to the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended (the "HSR Act"). Sellers and Buyer shall each cooperate
with the other in preparation of such filings and shall promptly
comply with any reasonable request by the Department or the FTC
for supplemental information and shall use their best efforts to
obtain early termination of the waiting period under the HSR Act.
1.8 Closing Documents. At the Closing of the sale,
Sellers and Buyer will exchange the following fully-executed
documents:
(a) Assignment(s) of the Franchise
Agreements with consent of Pizza Hut, Inc.
attached thereto;
(b) Assignments of leases for each of the
Third Party Leased Real Properties, in the
form of Exhibit "B", accompanied by any
required consents and estoppel certificates
(or indemnities) as contemplated by Section
1.3(b);
(c) a Xxxx of Sale for the Assets, in the
form attached as Exhibit "C";
(d) Assignments of all Assumed Leases and
Assumed Contracts;
(e) leases for each of the R&W Partners Real
Properties, in the form of Exhibit "D";
(f) the Non-Competition Agreement, executed
by Seller in favor of Purchaser, in the form
of Exhibit "E" attached hereto ("Non-
Competition Agreement"); and
(g) a Tax Clearance Certificate from the
North Carolina Department of Revenue stating
that all franchise and income tax returns
due, and taxes shown due thereon, have been
paid and that there are no outstanding final
assessments on, R&W; and
(h) any other documents reasonably requested
by any party.
1.9 Non-Assumption. Buyer is assuming only
liabilities that relate to operation of the Restaurants on and
after the Closing Date. Except as specifically contemplated by
this Agreement, Buyer is not assuming any liabilities or
obligations that arise from operation of the Restaurants before
the Closing Date. Sellers will timely perform all obligations
relating to the Restaurants that arise out of operations of the
Restaurants before the Closing Date.
1.10 Non-Competition. Sellers agree to enter into the
Non-Competition Agreement in the form of Exhibit "E" attached
hereto.
2. Representations and Warranties of Sellers. As of the
date of this Agreement and as of the Closing, Sellers, jointly
and severally, represent and warrant as follows:
2.1 Title to Assets. The Seller has good and
marketable title to all of the Assets, free and clear of any
liens and encumbrances, except for liens for current taxes not
yet due and payable. This warranty does not constitute a
warranty by Sellers of the title of Sellers' lessors of any
leased real property.
2.2 Adequacy of Assets. The Assets and the leased
equipment constitute all of the items of personal property
currently in use and necessary to operate the Restaurants as
PIZZA HUTr restaurants. This warranty does not constitute a
warranty of the condition of the Assets, which are sold "AS IS",
but which are in good working condition.
2.3 Leases and Contracts. Each of the leases for the
Third Party Leased Real Properties, the R&W Partners Real
Properties, and each of the Assumed Leases and Assumed Contracts
are in full force and effect, and no Seller has been given notice
of default under any of them. The applicable Seller has the
right to assign each of the leases for the Third Party Leased
Real Properties, the Assumed Leases and the Assumed Contracts to
Buyer, providing Buyer with the right to occupy the premises, to
use the leased equipment and receive performance on the same
terms and conditions as Sellers, all subject to required
consents. This warranty does not constitute a warranty as to the
adequacy of any lessor's title to any of these items.
2.4 Corporate Power and Authority. R&W Pizza Huts of
North Carolina, Inc. is a corporation duly organized and in good
standing under the laws of North Carolina and has full corporate
power and authority to enter into and perform this Agreement.
2.5 Insurance. Sellers carry adequate insurance (both
in form and amount) with respect to their properties, assets, and
business. That insurance is in effect and will be kept in effect
through the Closing.
2.6 Taxes. Sellers have filed all requisite federal,
state, and local tax returns and paid all taxes required thereby,
to the extent they have become due and payable, other than those
presently payable without penalty or interest, and except any
that are being contested in good faith by appropriate
proceedings, for which Sellers will indemnify Buyer.
2.7 Environmental Matters. To the best of Sellers'
knowledge:
(a) The Restaurants contain no asbestos in
friable form;
(b) No underground petroleum or chemical storage
tanks or underground storage facilities are located under or
adjacent to the Restaurants;
(c) No contaminant, industrial waste, pollutant1,
toxic or hazardous waste, or any similar substance of any kind or
character has been stored, processed, or disposed of in or around
the Restaurants by Sellers in conducting their business, or
discharged at any time by Sellers directly or indirectly into the
environment in violation of any law or governmental regulation
applicable to Sellers, or into any sanitary sewer connection or
treatment system except in conformity with requirements of all
applicable laws, regulations, and valid permits as the result of
any activities of the Sellers, nor has any such act or occurrence
taken place under the ownership of a prior owner which has not
been cured.
(d) With respect to the Restaurants, Sellers have
not at any time been the subject of any governmental
investigation or proceeding pertaining to the use, storage,
processing, transportation, or disposition of toxic or hazardous
waste or any other subject or material that has been determined
to be hazardous to human health under applicable law or
government regulation, nor have they been the subject of any
governmental investigation or proceeding pertaining to violation
of any waste water or sewage disposal statutes or regulations
applicable to the business and operation of the Sellers.
2.8 Consent of Pizza Hut, Inc. Sellers will use best
efforts to obtain for delivery at Closing the consent of Pizza
Hut, Inc. to the transfer of the Franchise Agreements to Buyer.
2.9 Financial Information of Sellers. Sellers have
delivered to Buyer, before Buyer's execution of this Agreement,
certain financial information relating to the Restaurants,
including copies of Sellers' income and profit and loss
statements ("Financial Information") and certain other
information, which Sellers represent and warrant to fairly
present Sellers' financial condition and results of operations
for the periods presented in accordance with generally accepted
accounting principles. Sellers acknowledge that Buyer's decision
to close the transactions which are the subject of this Agreement
and to purchase the Assets and Business for the consideration set
forth in this Agreement was made principally based on inspection
of such information and Buyer's reliance on the accuracy thereof.
2.10 No Material Changes. Since December 27, 1995
there has not been any material adverse change in the Assets,
financial condition, operations, business environment contracts
and leases to be assumed by Buyer, income or Business of R&W or
event which would make the financial information described in
Section 4.1 misleading. Without limiting the generality of the
foregoing, since December 27, 1995, the Sellers have not engaged
in any practice, taken any material action, or entered into any
material transaction outside the ordinary course of business,
there has been no damage, destruction, or loss to the Business or
Assets of R&W materially and adversely affecting the Business or
the prospects of R&W nor has R&W received any notice or become
aware of any employee or labor dispute or any governmental notice
or citation which in any event may have a material adverse effect
on the financial condition or results of operations of R&W.
3. Warranties of Buyer. Buyer warrants to Sellers that,
as of the date of this Agreement and as of Closing, Buyer is duly
organized and in good standing under the laws of the State of
Kansas and has full power and authority to enter into and perform
this Agreement.
4. Pre-Closing Covenants. Sellers covenant as follows:
4.1 Operation Until Closing. Sellers have operated,
and through the Closing Date Sellers will operate, the
Restaurants in the ordinary course of business. Sellers have
maintained, and will maintain, all of the Assets in substantially
the same condition (ordinary wear and tear excepted) as on
December 27, 1995. The damage or destruction of any Restaurant
before Closing will not affect Buyer's or Sellers' obligation to
close; at Buyer's option, Sellers shall proceed to repair the
damage or credit to Buyer at Closing an amount equal to the sum
of the reasonable cost (as agreed by Buyer and Sellers) of
repairing or restoring the damaged or destroyed Restaurant to
substantially the same condition as immediately before the damage
or destruction.
4.2 Access to Restaurants. Buyer may inspect each
Restaurant (under the conditions set forth below) to assess the
condition of the Business and the Assets. As to each inspection,
Buyer must schedule the inspection with Sellers, Buyer must be
accompanied by a representative of Sellers, and Buyer must
conduct the inspection in a manner that minimizes disruption to
any Restaurant's operations. The buildings, premises, Assets and
leasehold rights to be transferred are conveyed "AS IS", in their
current condition, except as otherwise agreed herein.
4.3 Obligations Under Franchise Agreement. Sellers
are now current in payment and performance, and at Closing will
be current in payment and performance, under all other franchise
agreements it has with Pizza Hut, Inc., and on all indebtedness
to and accounts with Pizza Hut, Inc., PepsiCo Food Service and
all local Pizza Hut advertising cooperatives. Buyer is not in
material default under any Franchise Agreement, nor do there
exist conditions that, with the giving of notice, the passage of
time, or both, will ripen into defaults.
5. Sellers' Employees. Sellers will terminate the
employment of its employees at the close of business on the day
prior to the Closing Date. The terminated employees may become
employees of Buyer on the Closing Date (the "Hired Employees").
All claims of the employees arising out of their employment with
Sellers before the Closing Date will be the sole liability of
Sellers, and Sellers will indemnify Buyer from all claims of that
nature. Sellers will directly pay all terminated employees,
including any of the Hired Employees, for earned and unused
vacation, in accordance with Sellers' normal policies.
6. Conditions to Closing.
(a) Sellers' obligations under this Agreement are
conditioned upon the following: (i) Sellers' receipt of the
Purchase Price and any other amounts then due under this
Agreement and (ii) Sellers' receipt of a certified copy of an
action of Buyer's Board of Directors approving the purchase of
the Business and Assets under this Agreement.
(b) Buyer's obligations under this Agreement are
conditioned upon the receipt of a certificate of the officers of
Sellers certifying the truth of each of Sellers' warranties and
upon Buyer's receipt of a certified copy of resolutions of the
Shareholders and the Board of Directors of Seller R&W approving
the sale of the Business and Assets.
(c) All parties' obligations under this Agreement
are conditioned on the execution and delivery of all documents
required by this Agreement and on expiration or earlier
termination of the waiting period (including any extensions)
under the HSR Act.
7. Closing Matters.
7.1 Time of Closing. Unless otherwise agreed, the
consummation of the transactions contemplated by this Agreement
will occur at the "Closing", which will be held at the offices of
Sellers, at 10:00 a.m. (local time) as soon as possible after
October 15, 1996, but no later than November 15, 1996 unless
extended at Buyer's sole option (the date the Closing actually
occurs is referred to in this Agreement as the "Closing Date").
At the close of business on the day prior to the Closing Date,
Sellers' representatives, accompanied by Buyer's representatives,
will take inventory, utilizing an Inventory Form in the form of
Exhibit "F" of the food ingredients, supplies, paper products,
and other consumables in each Restaurant. Transfer of title to
the Assets will take place as of 11:59 p.m. on the day prior to
the Closing Date. Sellers will cooperate with Buyer to see that
the transfer of the Assets and the transfer of utility services
effective as of the Closing Date, proceeds smoothly.
7.2 Post-Closing Adjustments. From time to time after
the Closing Date, Buyer or Sellers may prepare and submit to the
other party one or more post-closing statements concerning
obligations that become due under this Agreement that were not
paid at Closing, offsetting any amounts owed by the other party.
The net amount owed will be paid within 10 days after receipt of
the post-closing statement. Any amount not paid within 10 days
after receipt of a post-closing statement will bear interest at
the rate of 18% per annum, or the maximum legal rate. Without
limiting the generality of this provision, the following is a
list of some of the types of items that may be reimbursed through
use of post-closing statements: rent or other amounts due under
Third Party Leased Real Properties; Assumed Leases or Assumed
Contracts, utilities; inventories and change funds; and real or
personal property taxes due under third party leases.
7.3 Post-Closing Indemnification. Buyer will
indemnify Sellers, their affiliates, subsidiaries, employees,
officers, directors, and agents against any loss, cost, damage,
or other expense (including attorneys' fees) that arises from
operation of the Restaurants or related properties after Closing.
Sellers (jointly and severally) will indemnify Buyer, its
affiliates, subsidiaries, employees, officers, directors, and
agents against any loss, cost, damage, or other expense
(including attorneys' fees) that arises from operation of the
Restaurants or related properties on or before the Closing.
7.4 Additional Documents. Following the Closing, each
of the parties covenants to provide such additional documents or
instruments as the other party may reasonably request for the
purpose of carrying out this Agreement. Sellers will use their
best efforts to have the present officers, directors, and
employees of R&W cooperate after the Closing in furnishing
information, evidence, testimony, and other assistance concerning
matters that occurred prior to the Closing.
7.5 Buyer Evaluation. Buyer acknowledges that except
as set forth in Section 2.9, Sellers (and their agents and
employees) have made no statements or warranties to Buyer as an
inducement for Buyer's decision to purchase, except as contained
in this Agreement, and Buyer's decision to purchase was made
independently by Buyer with the aid of professional counselors,
including legal, accounting, and financial advisors.
7.6 Information Statement. Buyer will cooperate with
Sellers in the timely filing of any information statement
required by regulations issued pursuant to Section 1060(b) of the
Internal Revenue Code of 1986, as amended.
7.7 Recording and Taxes. Promptly after Closing,
Sellers will pay all sale or transfer taxes and fees, if any,
arising out of the sale of the Assets. At Buyer's discretion,
Buyer may record any assignments and subleases.
7.8 Sellers Failure to Close. Should Sellers fail or
refuse to close or delay the Closing for any reason other than
good cause beyond the reasonable control of Seller, the Purchase
Price shall be reduced by $15,000.00, representing the net daily
cash flow of the Restaurants, for each day after November 15,
1996, unless extended as provided in Section 7.1.
8. Miscellaneous.
8.1 Notices. Notices may be given to each party at
the respective addresses set forth on the first page of this
Agreement.
8.2 Brokerage and Finder's Fees. Neither Buyer, nor
any stockholder, director, officer, partner, or employee of Buyer
has incurred or will incur on behalf of Buyer, any brokerage,
finder's or similar fee in connection with the transfers
contemplated by this Agreement.
8.3 Termination of Agreement. This Agreement will
terminate and be of no further force and effect if the Closing
has not been consummated by the close of business on November 15,
1996 if not extended by Buyer as provided herein ("Termination
Date").
8.4 Modification and Waiver. No modification or
waiver of any of the provisions of this Agreement, and no consent
by any of the parties to any departure from the provisions of
this Agreement by the other party, will be effective unless the
modification or waiver is in writing and signed by the party or
parties to be bound. Each modification or waiver will be
effective only for the period, on the conditions, and for the
specific instances and purposes specified in the writing. No
notice to or demand on any of the parties in any case will
entitle it, them, or any of them to any other or further notice
or demand in similar or other circumstances.
8.5 Assignment; Binding Effect. This Agreement
extends to, inures to the benefit of, and is binding upon, the
parties and all of their respective successors and permitted
assigns. This Agreement is not, however, assignable or
transferable, in whole or in part, by any of the parties except
upon the express prior written consent of all of the other
parties, and nothing contained in this Agreement is intended to
confer upon any person, other than the parties and their
respective heirs, successors, and permitted assigns, any rights,
remedies, or obligations under, or by reason of, this Agreement.
Any request by Buyer for Sellers' consent to the assignment of
this Agreement will be subject to the conditions on assignment
contained in the Franchise Agreement.
8.6 Severability. If any provision or provisions of
this Agreement or of any of the documents or instruments
delivered pursuant hereto, or any portion of any provision hereof
or thereof, is invalid or unenforceable pursuant to a final
determination of any court of competent jurisdiction or a result
of future legislative action, that determination or action will
be construed (whenever possible) so as not to affect the validity
or enforceability hereof or thereof and will no affect the
validity or affect any other portion hereof or thereof.
8.7 Entire Agreement. This Agreement (including
Exhibits "A" through "F" and the Schedules, which are
incorporated into this Agreement by reference) contains the
entire understanding of the parties with respect to the
transactions contemplated by this Agreement and may be amended,
modified, supplemented, or altered only by a writing duly
executed by all of the parties. Any prior agreements or
understandings relating to the same subject matter, whether oral
or written, are entirely superseded by this Agreement.
8.8 Confidential Information. This Agreement, the
terms of the transactions contemplated by this Agreement, and
any other information heretofore or hereafter disclosed or
obtained in connection with this Agreement concerning the
business, operations, affairs, or financial condition of any
party hereto (collectively, the "confidential information"), will
be kept confidential, except as otherwise required by law or
legal process and except to the extent (i) the confidential
information is or has been disclosed to any lender, to Pizza Hut,
Inc., or to the respective attorneys, accountants, and financial
advisors of any party hereto, (ii) the confidential information
is or hereafter becomes lawfully obtainable from other sources,
(iii) this duty of confidentiality is waived in writing by the
party to whom the confidential information relates, or (iv) the
parties otherwise agree. These obligations of confidentiality
will permanently survive termination or abandonment of this
Agreement.
8.9 Governing Law. This Agreement, and all
instruments delivered in connection with this Agreement, unless
otherwise expressly provided in those other instruments, shall in
all respects be construed in accordance with and governed by the
substantive laws of the State of North Carolina without regard to
principles of conflicts of laws.
8.10 Bulk Sales Waiver. Sellers and Buyer each waive
compliance by the other with any bulk sales or similar laws that
may be applicable to the transactions contemplated by this
Agreement.
8.11 Expenses. Unless otherwise expressly provided in
this Agreement, each of the parties will bear its own expenses
incident to this Agreement and the transactions contemplated by
this Agreement, including without limitation all fees and
disbursements of counsel and accountants retained by the party,
whether or not the transactions contemplated by this Agreement
are consummated.
8.12 Construction. The captions of the various
articles and sections of this Agreement have been inserted for
the purpose of convenience of reference only. The captions are
not a part of this Agreement and will not be deemed in any manner
to modify, explain, enlarge, or restrict any of the provisions of
this Agreement.
The word "include", in all its tenses and variations,
is always used in a non-exclusive sense, as if followed by the
phrase "without limitation".
The auxiliary verb "will" is mandatory. The auxiliary
verb "may" is permissive (and, by extension, is prohibitive when
used negatively, as a denial of permission).
8.13 Break-Up Fee. If, for cause other than the failure
of Pizza Hut, Inc. to consent to the transfer of the Franchise
Agreements to Buyer, within six (6) months after the date of the
Termination Date either Sellers or R&W signs a letter of intent
or other agreement relating to the acquisition of R&W or all or
substantially all of its assets, or business, by a single
purchaser, whether directly or indirectly, through purchase,
merger, consolidation, or otherwise (other than sales of
inventory or immaterial portions of R&W's assets in the ordinary
course) and such transaction is ultimately consummated, then,
immediately upon the closing of such transaction, the Sellers
will pay, or cause R&W to pay, to the Buyer the sum of
$2,700,000. This fee will serve as the exclusive remedy to the
Buyer under Agreement in the event of a breach by the Sellers.
8.14 Time is of the Essence. Time is of the essence in
the performance of this Agreement.
IN WITNESS WHEREOF, the parties have hereunto set their
hands and seals on the date and year first above written.
SELLERS: R&W PIZZA HUTS OF NORTH CAROLINA, INC.
By:
Name:
Title:
XXXXX X. XXXXXX
XXXXX X. XXXXXXX
BUYER: NPC INTERNATIONAL, INC., a Kansas
corporation
By:
Name:
Title:
R&W PARTNERS: R& W PIZZA HUTS OF NORTH CAROLINA
BUILDING PARTNERS, a North Carolina
General
Partnership (only as its interests may
appear)
By:
Name:
Title:
_______________________________
1The term "pollutant" means any substance subject to control
under the Federal Water Pollution Act, 33 U.S.C. 1251, et seq.,
or the Clean Air Act, 42 U.S.C. 7401, et seq., or regulations
promulgated thereunder. The term "toxic or hazardous waste"
means any chemical, substance, or material that is classified by
the Environmental Protection Agency as a hazardous substance
under the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, 42 U.S.C. 9601, et seq., or regulations
promulgated thereunder, or under the Resource Conservation and
Recovery Act of 1976, 42 U.S.C. 6901, et seq., or regulations
promulgated thereunder, or which is a petroleum product, or which
is classified by any applicable state or local regulation or
statute as a hazardous waste.
