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
Dated as of November __, 1996
RECAPITALIZATION AGREEMENT
RECAPITALIZATION AGREEMENT (this "Agreement") dated as of November __,
1996, by and among National Restaurant Enterprises, Inc. ("Enterprises"),
AmeriKing, Inc. (the "Company"), (i) each of MCIT PLC ("MCIT"), BancBoston
Investments, Inc. ("BBI"), PMI Mezzanine Fund, L.P. ("PMI"), Jordan/Zalaznick
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, Xxxx Rodzevick, Xxxxxxxx X. Xxxx ("Jaro"), Xxxxxxx X.
Xxxxxx ("Xxxxxx"), 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 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 Stockholders"). The Common Stockholders, Preferred
Stockholders, together with PMI, the Company and TJC Management Corporation
("TJC") are referred to herein as the "Parties".
R E C I T A L S
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") relating to the proposed public offerings of the Company's $100.0
million aggregate principal amount of ___% Senior Notes due 2006 (the "Senior
Notes") and $30.0 million aggregate principal amount of Units consisting of
Senior Preferred Stock and Common Stock (the "Units") (the "Offerings");
WHEREAS, the proposed recapitalization ("Recapitalization") includes
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) the 1,000-to-1
stock split (the "Stock Split") of all outstanding shares of Common Stock; (c)
the Offering; (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 June 30, 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 June 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") held by affiliates of Jaro and Xxxxxx as of June 30,
1996; (g) the repurchase of all of the warrants issued by the Company to PMI;
(h) the payment of $_____ to TJC in payment of accrued fees under the TJC
Consulting Agreement prior to November __, 1996; (i) the amendment of the
Stockholders Agreement; and (j) 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 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
Restated By-Laws substantially in the form of Exhibit A hereto.
"Amended and Restated Company Charter" means the Company's Amended and
Restated Certificate of Incorporation substantially in the form of Exhibit B
hereto.
"Amended and Restated Stockholders Agreement" means the Amended and
Restated Stockholders Agreement substantially in the form of Exhibit G hereto.
"AmeriKing Investors" means Xxxxxxxx Xxxx, Xxxxxxx Xxxxxx, Xxxx
Xxxxxx, Xxxx Xxxxxx, Xxxxx Xxxxxxx, Xxxxx Restaurants Associates, Inc., Jaro
Enterprises, Inc., Jaro
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Restaurants Associates, Inc., JB Restaurants, Inc., Osburger, Inc., Castleking,
Inc. and Xxxxx-Xxxxxx Restaurants, Inc.
"BKC" means the Burger King Corporation.
"Class A Common Stock" means the Company's Class A Common Stock, par
value $.01 per share.
"Class B Common Stock" means the Company's Class B Common Stock, par
value $.01 per share.
"Class C Common Stock" means the Company's Class C Common Stock, par
value $.01 per share.
"Class D Common Stock" means the Company's Class D Common Stock, par
value $.01 per share.
"Class A1 Preferred Stock" means the Company's Class A Preferred
Stock, par value $.01 per share.
"Class A2 Preferred Stock" means the Company's Class A2 Preferred
Stock, par value $.01 per share.
"Class B Preferred Stock" means the Company's Class B Preferred Stock,
par value $.01 per share.
"Closing" has the meaning specified in Section 4.1 of this Agreement.
"Closing Time" has the meaning specified in Section 4.1 of this
Agreement.
"Common Stock" means the Company's Common Stock, par value $.01 per
share.
"Company" shall have the meaning as set forth in the preamble to this
Agreement.
"Consulting Agreement" means the Management and Consulting Agreement
between the Company and TJC, dated as of September 1, 1994, as amended on
February 7, 1996.
"Directors Indemnification Agreements" means the Indemnification
Agreements substantially in the form of Exhibit C hereto.
"Enterprises" means National Restaurant Enterprises, Inc., a Delaware
corporation and a wholly-owned subsidiary of the Company.
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"Equity Securities" of the Company means the Class A1 Preferred Stock,
Class A2 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.
"Jordan Investors" means Jordan/Zalaznick Capital Company, Leucadia
Investors, Inc., TJC Management Corporation, 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
Section 8.2 of this Agreement.
"Liens" means any security interest, lien, charge, restriction,
encumbrance or other interest of another Person.
"Management Investors" means Xxxxxxx Xxxxxx, Xxxx Xxxxxx, Xxxx Xxxxxx,
Xxxxx Xxxxxxx, Xxxxxx Xxxxxxxxx, Osburger, Inc., Castleking, Inc. and
Xxxxx-Xxxxxx Restaurants, Inc.
"Management Investors' Representative" has the meaning specified in
Section 8.2 of this Agreement.
"Material Adverse Effect" means any circumstances or event that (i)
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.
"Non-Voting Common Stock" means the Company's non-voting common stock,
par value $.01 per share.
"Offerings" shall mean the concurrent public offering of Senior Notes
in the aggregate principal amount of $100 million and $30 million of Units each
consisting of ___ shares of Preferred Stock and ___ shares of Common Stock,
pursuant to the Registration Statement.
"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.
"Person" means any individual, corporation, partnership, joint
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.
"Pricing Committee" means the Pricing Committee of the Company's Board
of Directors, established in connection with the Offering, and composed of
Messrs. Xxxxxx and Jaro.
"Recapitalization" has the meaning specified in the recitals to this
Agreement.
"Recapitalization Documents" means this Agreement (including all
Schedules and Exhibits hereto) and each of the agreements, instruments,
consents and documents referred to in Sections 5.2 through 5.10, the
Registration Statement, and the Underwriting Agreements.
"Reclassification" has the meaning set forth in recitals to this
Agreement.
"Registration Statement" has the meaning set forth in the recitals to
this Agreement.
"Seller Notes" has the meaning specified in the recitals to this
Agreement.
"Senior Subordinated Notes" has the meaning specified in the recitals
to this Agreement.
"Stock Split" has the meaning specified in the recitals to this
Agreement.
"Stockholder Chart" means the stockholder chart described in Section
2.3 and set forth as Exhibit F hereto.
"Stockholders" has the meaning specified in the preamble to this
Agreement.
"Stockholders Agreement" means the Stockholders Agreement, dated as of
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 this
Agreement.
"Termination Date" means December 31, 1996.
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"TJC" has the meaning specified in the preamble to this Agreement.
"Underwriting Agreements" means the Underwriting Agreements, [Custody
Agreement,] Power of Attorney and related documentation relating to the
Offering.
"Underwriters" means Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities
Corporation and Xxxxxxxx & Company Inc., as managing underwriters, on behalf of
themselves and the other underwriters, under the Underwriting Agreements.
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,
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
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,
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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.
Section 2.3. Capital Stock.
(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 100,000 shares of Preferred Stock. At the Closing Time, the
Company shall have 1,030,660 shares of Common Stock outstanding and 37,500
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) represent and warrant, 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
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
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
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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 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
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
herein, the transactions contemplated by this Agreement, other than those
contemplated by Sections 5.3(a), 5.3(c), 5.4, 5.8, 5.10 and 5.11 which will be
deemed 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
Offering (the "Closing Time") at the offices of Xxxxx, Xxxxx & Xxxxx, New York,
New York, 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
otherwise under this Agreement.
ARTICLE V
THE RECAPITALIZATION
Section 5.1. General. Each of the Parties (in whatever capacity,
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
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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.
Section 5.2. Preferred Stock. Upon the Closing, the Company shall pay
from the net proceeds of the Offering dividends accruing after the date of
issuance through the Closing Date.
Section 5.3. Amended Charter Documents.
(a) Prior to the effective date of the Registration Statement, the
Amended and Restated Company Charter 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 effective date of the Registration Statement, BKC
will consent to the adoption by the Company of those documents referred to in
Sections 5.3(a) and 5.3(b) of this Agreement.
Section 5.4. Reclassification and Stock Split.
(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 which 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) Effective upon the filing of the Amended and Restated Company
Charter, the Stock Split shall be consummated and each holder of shares of
capital stock of the Company
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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.
(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 5.5. Subordinated Note Repurchase.
(a) At the Closing, the Company will use a portion of the net proceeds
from the Offering 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 Offering 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 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 Offering 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 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 5.6. Repurchase of Warrants. Upon the Closing, the Company
will repurchase all of the warrants issued to PMI pursuant to the certificate
of Common Stock Purchase Warrants, dated February 7, 1996, issued by the
Company, as amended by enter
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into Amendment No. 1 in substantially the form of Exhibit H hereto in
accordance with the terms of Section 18 thereof.
Section 5.7. Xxxxxx Employment Agreement. At or prior to the Closing,
Xx. Xxxxxx will enter into a new Employment and Non-Interference Agreement in
substantially the form of Exhibit I hereto.
Section 5.8. Directors Indemnification Agreements. At the Closing, the
Company will enter into the Directors Indemnification Agreements with each of
the signatories to the Registration Statement.
Section 5.9. 1996 Annual Meeting of Stockholders. The Parties hereby
agree to execute and deliver stockholder consents, substantially in the form of
Exhibit K hereto, with regard to (a) the Amended and Restated Company 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 5.10. Amended and Restated Stockholders Agreement. At the
Closing, the Company and the Stockholders will execute, deliver and consummate
the Amended and Restated Stockholders Agreement.
ARTICLE VI
CONDITIONS OF THE PARTIES'
(OTHER THAN THE COMPANY AND ENTERPRISES) OBLIGATIONS
Section 6.1. Conditions of the Stockholders' Obligations. The
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
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 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.
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(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. Subject
to the proviso at the end of Section 4.1, (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.
(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
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agreements on their part to be performed pursuant to this Agreement on
or prior to the Closing Time.
(b) Recapitalization and Recapitalization Documents. Subject
to the proviso at the end of Section 4.1, (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 Offering and the Amended and Restated Bank Credit
Agreement 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(c) of this
Agreement.
(c) Consummation of the Company's Public Offerings. The
Offerings shall have been consummated substantially in accordance with
the terms set forth in the Registration Statement filed on November 8,
1996.
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 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 arising from the issuance and sale of the
Units in the Offerings and (iii) agrees not to exercise any "demand
registration right" it may have prior to the consummation of the Offerings and
for the period of time covered by the lock-up agreement and 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 appoint A. Xxxxxxx
Xxxxxx, Xx., or his designee, to serve as their 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.
-13-
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 appoint Xxxxxxxx
Xxxx, or his designee, to serve as their 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
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.
-14-
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 a majority of the Parties, provided that (a) any adjustments to the
Recapitalization Documents and the Recapitalization generally resulting from
the determination of the price at which the Senior Notes or Units will be sold
to the public 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 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.
-15-
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:
-16-
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:
-17-
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
-18-
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
-19-
XXXX XXXXXXXX PROFIT SHARING PLAN
AND TRUST
By:
------------------------------------
Name: Xxxx Xxxxxxxx
Title: Trustee
---------------------------------------
Xxxxxx Xxxxxxx
---------------------------------------
Xxxxxx Xxxx
JII PARTNERS
By:
------------------------------------
Name:
Title:
-20-
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
-21-
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
-22-
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:
-23-
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
-24-
-----------------------------------
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
-25-
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
-26-
EXHIBIT A
AMENDED AND RESTATED COMPANY BY-LAWS
EXHIBIT B
AMENDED AND RESTATED COMPANY CHARTER
EXHIBIT C
INDEMNIFICATION AGREEMENT
EXHIBIT D
STOCKHOLDER CHART
EXHIBIT E
AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
EXHIBIT F
AMENDMENT NO. 1 TO PMI NOTE PURCHASE AGREEMENT
EXHIBIT G
XXXXXX EMPLOYMENT AND NON-DISCLOSURE AGREEMENT
EXHIBIT H
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............................. 6
Section 2.2. Authority; No Conflicts....................... 6
Section 2.3. Capital Stock................................. 7
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE OTHER PARTIES
Section 3.1. Due Authorization............................. 7
Section 3.2. Authority; No Conflicts....................... 7
Section 3.3. Capital Stock................................. 8
ARTICLE IV
THE CLOSING
Section 4.1. Closing....................................... 8
ARTICLE V
THE RECAPITALIZATION
Section 5.1. General....................................... 9
Section 5.2. Preferred Stock............................... 9
Section 5.3. Amended Charter Documents..................... 9
Section 5.4. Reclassification and Stock Split.............. 9
Section 5.5. Subordinated Note Repurchase.................. 10
Section 5.6. Repurchase of Warrants........................ 11
Section 5.7. Employment Agreements......................... 11
Section 5.8. Directors Indemnification Agreements.......... 11
Section 5.9. 1996 Annual Meeting of Stockholders........... 11
Section 5.10. Amended and Restated Stockholders Agreement... 11
-i-
ARTICLE VI
CONDITIONS OF THE PARTIES'
(OTHER THAN THE COMPANY AND ENTERPRISES) OBLIGATIONS
Section 6.1. Conditions of the Stockholders' Obligations... 12
ARTICLE VII
CONDITIONS OF THE COMPANY'S OBLIGATIONS
Section 7.1. Conditions of the Company's Obligations....... 13
ARTICLE VIII
MISCELLANEOUS
Section 8.1. Waiver of First Refusal, Anti-Dilution Rights
and Registration Rights..................... 13
Section 8.2. Power of Attorney............................. 14
Section 8.3. Notices....................................... 15
Section 8.4. Consent to Amendments and Waivers............. 15
Section 8.5. Governing Law................................. 15
Section 8.6. Successors and Assigns........................ 15
Section 8.7. Survival...................................... 15
-ii-
EXHIBITS
A Amended and Restated Company By-Laws
B Amended and Restated Company Charter
C Indemnification Agreement
D Stockholder Chart
E Amended and Restated Stockholders Agreement
F Amendment No. 1 to PMI Note Purchase Agreement
G Xxxxxx Employment and Non-Disclosure Agreement
H Stockholder Written Consent in Lieu of 1996 Annual Meeting
