<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM 10-Q
(MARK
ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Transition period from to
COMMISSION FILE NUMBER 333-04261
AMERIKING, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE
(STATE OR OTHER JURISDICTION
OF INCORPORATION OR ORGANIZATION)
2215 ENTERPRISE DRIVE, SUITE 1502
WESTCHESTER, ILLINOIS
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
36-3970707
(I.R.S. EMPLOYER
IDENTIFICATION NO.)
60154
(ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE 708-947-2150
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
The number of shares outstanding of each of the registrant's classes of
common stock as of May 1, 1997 was 893,290 of common stock, $.01 par value per
Share (the "Common Stock").
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
PART I
Item 1. Financial Statements......................................... 5
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of
Operations................................................... 10
PART II
Item 6. Exhibits, and Reports on Form 8-K............................ 13
</TABLE>
2
<PAGE>
PART I
Certain statements in this Form 10-Q may constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Such forward-looking statements involve known and unknown risks,
uncertainties, and other factors which may cause the actual results,
performance, or achievements of AmeriKing, Inc. ("AmeriKing" or the "Company")
to be materially different from any future results, performance, or
achievements expressed or implied by such forward-looking statements. Such
factors include, among others, the following: general economic and business
conditions; competition; success of operating initiatives; development and
operating costs; advertising and promotional efforts; brand awareness; adverse
publicity; acceptance of new product offerings; availability, locations, and
terms of sites for store development; changes in business strategy or
development plans; quality of management; availability, terms, and deployment
of capital; business abilities and judgment of personnel; availability of
qualified personnel; food, labor, and employee benefit costs; changes in, or
the failure to comply with, governmental regulations; regional weather
conditions; construction schedules; and other factors referenced in this Form
10-Q.
RECENT DEVELOPMENTS
During the second quarter the Company executed purchase agreements pursuant
to which it may acquire up to 26 Burger King restaurants in the Fayetteville
and Raleigh Durham, North Carolina areas (the "North Carolina Acquisition")
from a franchisee for an aggregate purchase price of approximately $23.5
million. The Company anticipates that, concurrently with the North Carolina
Acquisition, the Company will amend its current Credit Agreement to increase
the credit available thereunder from $15 million to $50 million. The North
Carolina acquisition will be funded through the use of the available credit
under the Credit Agreement and the Company's cash on hand, and will be
accounted for using the purchase method of accounting. The North Carolina
Acquisition is conditioned on, among other things, both of the Company and the
Sellers' obtaining the consent of Burger King Corporation ("BKC") as well as
other standard closing conditions. It is anticipated that the key operating
personnel of the restaurants acquired in the North Carolina Acquisition will be
retained. Pursuant to the terms of BKC's standard franchise agreements,
acquisitions of Burger King restaurants, including those to be acquired in the
North Carolina Acquisition, are subject to BKC's consent and right of first
refusal.
3
<PAGE>
ITEM 1. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS OF AMERIKING, INC. AND
SUBSIDIARY
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Consolidated Balance Sheets as of March 31, 1997 and December 30, 1996.... 5
Consolidated Statements of Operations for the quarters ended March 31,
1997 and April 1, 1996................................................... 6
Consolidated Statements of Cash Flows for the quarters ended March 31,
1997 and April 1, 1996................................................... 8
Notes to Consolidated Financial Statements................................ 9
</TABLE>
4
<PAGE>
AMERIKING, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
MARCH 31, 1997 AND DECEMBER 30, 1996
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 30,
1997 1996
------------ ------------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents........................ $ 3,399,000 $ 5,259,000
Accounts receivable.............................. 660,000 828,000
Inventories...................................... 1,445,000 1,667,000
Prepaid expenses................................. 1,660,000 1,338,000
Current portion of deferred income taxes......... 438,000 438,000
------------ ------------
Total current assets........................... 7,602,000 9,530,000
PROPERTY AND EQUIPMENT (net of accumulated
depreciation)..................................... 37,439,000 36,765,000
GOODWILL (net of accumulated amortization)......... 93,608,000 94,324,000
DEFERRED INCOME TAXES.............................. 3,426,000 3,426,000
OTHER ASSETS:
Deferred financing costs (net of accumulated
amortization)................................... 6,410,000 6,577,000
Deferred organization costs (net of accumulated
amortization)................................... 156,000 170,000
Franchise agreements (net of accumulated
amortization)................................... 4,193,000 4,245,000
------------ ------------
Total other assets............................. 10,759,000 10,992,000
------------ ------------
TOTAL.............................................. $152,834,000 $155,037,000
============ ============
LIABILITIES, SENIOR PREFERRED STOCK
AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable and other accrued expenses...... $ 5,910,000 $ 10,333,000
Accrued payroll.................................. 3,939,000 3,571,000
Accrued sales tax payable........................ 959,000 1,021,000
Accrued interest payable......................... 3,641,000 911,000
Current portion of long-term debt................ 537,000 525,000
Current portion of capital leases................ 116,000 110,000
------------ ------------
Total current liabilities...................... 15,102,000 16,471,000
LONG-TERM DEBT--Less current portion............... 107,028,000 107,167,000
LONG-TERM DEBT--Related parties.................... 600,000 600,000
OTHER LONG-TERM LIABILITIES........................ 36,000 63,000
------------ ------------
Total liabilities.............................. 122,766,000 124,301,000
------------ ------------
SENIOR PREFERRED STOCK............................. 31,278,000 30,303,000
STOCKHOLDERS' EQUITY:
Preferred stock.................................. 75 75
Common stock..................................... 8,933 8,933
Additional paid-in capital....................... 6,272,992 7,277,992
Retained earnings (deficit)...................... (7,492,000) (6,854,000)
------------ ------------
Total stockholders' equity (deficit)........... (1,210,000) 433,000
------------ ------------
TOTAL.............................................. $152,834,000 $155,037,000
============ ============
</TABLE>
See notes to consolidated financial statements.
5
<PAGE>
AMERIKING, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE QUARTERS ENDED MARCH 31, 1997 AND APRIL 1, 1996
<TABLE>
<CAPTION>
QUARTER QUARTER
ENDED ENDED
MARCH 31 % OF APRIL 1 % OF
1997 SALES 1996 SALES
----------- ----- ----------- -----
<S> <C> <C> <C> <C>
SALES
Restaurant food sales............... $48,192,000 97.6% $42,251,000 98.0%
Non-food sales...................... 1,201,000 2.4 852,000 2.0
----------- ----- ----------- -----
Total sales....................... 49,393,000 100.0 43,103,000 100.0
RESTAURANT OPERATING EXPENSES:
Cost of food sales.................. 14,592,000 29.5 13,200,000 30.6
Cost of non-food sales.............. 1,139,000 2.3 833,000 1.9
Restaurant labor and related costs.. 12,943,000 26.2 11,059,000 25.7
Occupancy........................... 5,673,000 11.5 4,817,000 11.2
Depreciation and amortization of
goodwill and franchise agreements.. 1,992,000 4.0 1,669,000 3.9
Advertising......................... 2,576,000 5.2 2,094,000 4.9
Royalties........................... 1,689,000 3.4 1,479,000 3.4
Other operating expenses............ 4,487,000 9.1 3,711,000 8.6
----------- ----- ----------- -----
Total restaurant operating
expenses......................... 45,091,000 91.2 38,862,000 90.2
GENERAL AND ADMINISTRATIVE EXPENSES... 1,973,000 4.0 1,721,000 4.0
OTHER OPERATING EXPENSES:
Depreciation expense--office........ 133,000 0.3 93,000 0.2
Loss on disposal of fixed assets.... 23,000
Management and directors' fees...... 123,000 0.2 118,000 0.3
----------- ----- ----------- -----
Total other operating expenses.... 279,000 0.5 211,000 0.5
----------- ----- ----------- -----
OPERATING INCOME...................... 2,050,000 4.3 2,309,000 5.3
OTHER INCOME (EXPENSE):
Interest expense.................... (2,936,000) (5.9) (1,950,000) (4.5)
Interest expense--related party..... (9,000) (792,000) (1.9)
Amortization of deferred costs...... (152,000) (0.3) (224,000) (0.5)
Other income (expense)--net......... (16,000) (3,000)
----------- -----------
Total other expense............... (3,113,000) (6.2) (2,969,000) (6.9)
----------- ----- ----------- -----
LOSS BEFORE PROVISION FOR INCOME
TAXES................................ (1,063,000) (1.9) (660,000) (1.6)
INCOME TAXES BENEFIT.................. (425,000) (0.9) (271,000) (0.6)
----------- ----- ----------- -----
NET LOSS.............................. $ (638,000) (1.0)% $ (389,000) (1.0)
=========== ===== =========== =====
PREFERRED STOCK DIVIDENDS (cumulative,
undeclared).......................... 975,000
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING.......................... 893.29 863.29
NET LOSS PER COMMON SHARE............. $ (1.98) $ (0.58)
</TABLE>
See notes to consolidated financial statements.
6
<PAGE>
AMERIKING, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE QUARTER ENDED MARCH 31, 1997 AND THE FISCAL YEAR ENDED DECEMBER 30,
1996
<TABLE>
<CAPTION>
ADDITIONAL RETAINED
PREFERRED COMMON PAID-IN EARNINGS
STOCK STOCK CAPITAL (DEFICIT) TOTAL
--------- ------ ---------- ----------- -----------
<S> <C> <C> <C> <C> <C>
INITIAL ISSUANCE OF
STOCK.................. $56 $ 10 $5,699,934 $ 5,700,000
Issuance of preferred
stock................ 19 1,899,981 1,900,000
Net income............ $ 241,000 241,000
--- ------ ---------- ----------- -----------
BALANCE--December 31,
1994................... 75 10 7,599,915 241,000 7,841,000
Net income............ 902,000 902,000
--- ------ ---------- ----------- -----------
BALANCE--January 1,
1996................... 75 10 7,599,915 1,143,000 8,743,000
Dividends on senior
preferred stock...... (303,000) (303,000)
Amortization of senior
preferred stock
issuance costs....... (10,000) (10,000)
Recapitalization of
common stock......... 8,923 (8,923)
Net loss.............. (7,997,000) (7,997,000)
--- ------ ---------- ----------- -----------
BALANCE--December 30,
1996................... 75 8,933 7,277,992 (6,854,000) 433,000
Dividends on senior
preferred stock...... (975,000) (975,000)
Amortization of senior
preferred stock
issuance costs....... (30,000) (30,000)
Net loss.............. (638,000) (638,000)
--- ------ ---------- ----------- -----------
BALANCE--March 31,
1997................... $75 $8,933 $6,272,992 $(7,492,000) $(1,210,000)
=== ====== ========== =========== ===========
</TABLE>
See notes to consolidated financial statements.
7
<PAGE>
AMERIKING, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE QUARTERS ENDED MARCH 31, 1997 AND APRIL 1, 1996
<TABLE>
<CAPTION>
QUARTER QUARTER
ENDED ENDED
MARCH 31, APRIL 1,
1997 1996
----------- ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)................................... $ (638,000) $ (389,000)
Adjustments to reconcile net income (loss) to net
cash flowsfrom operating activities:
Depreciation and amortization..................... 2,277,000 1,986,000
Interest.......................................... 2,730,000
Loss on disposal of fixed assets.................. 23,000
Changes in:
Accounts receivable............................. 168,000 347,000
Inventories..................................... 222,000 (227,000)
Prepaid expenses................................ (322,000) (449,000)
Accounts payable and accrued expenses........... (4,117,000) 5,828,000
----------- ------------
Net cash flows from operating activities...... 343,000 7,096,000
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of restaurant franchise agreements,
equipment and goodwill........................... (39,205,000)
Proceeds from sale of property.................... 817,000
Cash paid for franchise agreements................ (41,000) (81,000)
Cash paid for property and equipment.............. (2,014,000) (1,372,000)
----------- ------------
Net cash flows from investing activities...... (2,055,000) (39,841,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt...................... 85,000,000
Proceeds from subordinated debt-related party..... 15,000,000
Cash paid for financing costs..................... (2,644,000)
Advances under line of credit..................... 5,000,000
Payments on line of credit........................ (1,000,000)
Payments on long-term debt........................ (127,000) (65,896,000)
Payments on capital leases........................ (21,000) (22,000)
----------- ------------
Net cash flows from financing activities...... (148,000) 35,438,000
----------- ------------
NET CHANGE IN CASH AND CASH EQUIVALENTS............. (1,860,000) 2,693,000
CASH AND CASH EQUIVALENTS--Beginning of period...... 5,259,000 1,887,000
----------- ------------
CASH AND CASH EQUIVALENTS--End of period............ $ 3,399,000 $ 4,580,000
=========== ============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for interest.......... $ 215,000 $ 1,583,000
=========== ============
Cash paid for income taxes........................ $ 91,000
===========
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND
FINANCING ACTIVITIES:
Senior preferred stock dividends (cumulative, non-
declared).......................................... $ 975,000
===========
</TABLE>
See notes to consolidated financial statements.
8
<PAGE>
AMERIKING, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE QUARTERS ENDED MARCH 31, 1997 AND APRIL 1, 1996
1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
In the opinion of the Company, the accompanying unaudited consolidated
financial statements contain all of the adjustments necessary (consisting of
normal and recurring accruals) to present fairly the Company's financial
position as of March 31, 1997, the results of operations and cash flows for the
quarters ended March 31, 1997 and April 1, 1997. These financial statements
should be read in conjunction with the Company's annual report on Form 10K for
the fiscal year ended December 30, 1996 filed on March 28, 1997.
The results of operations for the quarter ended March 31, 1997 and April 1,
1996 are not necessarily indicative of the results to be expected for the full
fiscal year.
Inventories--Inventories consist primarily of restaurant food and supplies
and are stated at the lower of cost or market. Cost is determined using the
first-in, first-out (FIFO) method.
Net Income (Loss) Per Common Share--Net income per share was computed by
deducting from the Company's net income dividends payable to the holders of
Class A1, Class A2 and Class B Preferred Stock (collectively, the "Preferred
Stock") and 13% Senior Exchangeable Preferred Stock due 2008, (the "Senior
Preferred Stock"), and amortization of the issuance costs on the Senior
Preferred Stock and using the weighted average number of common stock of the
Company (the "Common Stock"), and common stock equivalent shares outstanding on
a post-split basis.
9
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
OVERVIEW
The Company operates Burger King restaurants through its wholly owned
subsidiaries, each of which is a party to a BKC franchise agreement. BKC
franchise agreements require a one-time franchise fee (currently $40,000), a
monthly royalty fee of 3.5% of each restaurant's gross sales and a monthly
advertising contribution of 4.0% of gross sales. Most franchise agreements
provide for a term of 20 years, and, at the option of the franchise and BKC, a
renewal franchise agreement may be granted by BKC upon payment of the then
current franchise fee provided that the restaurant meets BKC's operating
standards applicable at that time and the franchisee is not in default under
the relevant franchise agreement. In addition, the Company has committed to
BKC that it will spend 1% of gross sales on local advertising to supplement
BKC's national advertising activities.
As the Company acquires additional Burger King restaurants, it capitalizes
the value of franchise agreements based on the number of years remaining on
the terms of the agreement and the franchise fee in effect at the time of
acquisition (currently, $40,000 over a 20 year term or $2,000 per year) and it
capitalizes excess cost over fair value of the other net assets acquired and
amortizes goodwill expense for financial statement purposes over a 35-year
period. The Company generally purchases assets and is able to deduct goodwill
amortization expense for tax purposes over a 15-year period.
Restaurant sales include restaurant food sales and non-food sales. Non-food
sales include convenience store sales at the Company's dual-use facilities (of
which the Company currently has five), as well as sales of promotional
products at the Company's restaurants. Historically, non-food sales have
contributed less than 3.0% to restaurant sales. Promotional products, which
account for the majority of non-food sales, are generally sold at or near the
Company's costs.
EBITDA represents operating income plus depreciation and amortization
(including losses on disposal of fixed assets and provisions for disposition
of restaurants and equipment) and management and director's fees. While EBITDA
should not be construed as a substitute for operating income or a better
indicator of liquidity than cash flow from operating activities, which are
determined in accordance with generally accepted accounting principles, EBITDA
is included to provide additional information with respect to the ability of
the Company to meet its future debt service, capital expenditure and working
capital requirements. In addition, management believes that certain investors
find EBITDA to be a useful tool for measuring the ability of the Company to
service its debt. EBITDA is not necessarily a measure of the Company's ability
to fund its cash needs. See the Consolidated Statements of Cash Flows of the
Company and the related notes to the Consolidated Financial Statements
included herein.
The Company includes in the comparable restaurant sales analysis discussed
below only those restaurants that have been in operation for a minimum of
thirteen months. For a restaurant not operating for the entire prior annual
period, the sales for the interim period in the prior year are compared to
that for the comparable interim period in the indicated year.
QUARTER ENDED MARCH 31, 1997 COMPARED TO QUARTER ENDED APRIL 1, 1996
Restaurant Sales. Total sales increased $6.3 million or 14.6% during the
first quarter 1997, to $49.4 million from $43.1 million in the first quarter
1996, due primarily to the inclusion of the 36 restaurants purchased in 1996.
In addition, the Company developed 8 restaurants in 1996 and 1 restaurant in
1997 and closed 1 restaurant in 1997. Newly acquired restaurants accounted for
$3.5 million of the total increase in restaurant sales, while new restaurant
development accounted for $1.8 million of the increase in sales. Sales at the
comparable restaurants owned by the Company at the end of the first quarter of
1997 increased $1.0 million or 2.3%. Menu prices remained stable during the
period.
10
<PAGE>
Restaurant Operating Expenses. Total restaurant operating expenses increased
$6.2 million, or 16.0% during the first quarter 1997, to $45.1 million from
$38.9 million in the first quarter 1996, due primarily to the inclusion of the
36 restaurants purchased in 1996. In addition, the company developed 8
restaurants in 1996 and 1 restaurant in 1997 and closed 1 restaurant in 1997.
As a percentage of sales, restaurant operating expenses increased 1.0% to
91.2% in fiscal 1997 from 90.2% in fiscal 1996.
Cost of sales increased $1.7 million during the first quarter 1997, and
decreased 0.7% as a percentage of sales to 31.8% in the first quarter 1997
from 32.5% in the first quarter 1996. The percentage increase in cost of sales
was due to a 0.4% increase in the cost of non-food sales offset by a 1.1%
decrease on the cost of food sales, primarily as a result of a lower level of
discounting.
Restaurant labor and related expenses increased $1.9 million during the
first quarter 1997, and increased 0.5% as a percentage of restaurant sales to
26.2% in the first quarter 1996 from 25.7% in the first quarter 1995. The
percentage increase in restaurant labor was due to an increase in the federal
minimum wage.
Depreciation and amortization increased $0.3 million during the first
quarter 1997, to $2.0 million in the first quarter 1997 from $1.7 million in
the first quarter 1996. As a percentage of sales, depreciation and
amortization expense increased 0.1% to 4.0% for the first quarter 1997 from
3.9% in the first quarter 1996. The increase was due primarily to the increase
in goodwill amortization resulting from the purchase method of accounting for
the newly acquired restaurants.
Occupancy and other expenses increased $2.3 million during the first quarter
1997, and increased 1.1% as a percentage of sales to 29.2% for the first
quarter 1997 from 28.1% in the first quarter 1995. Occupancy expense increased
$0.9 million, and increased 0.3% as a percentage of sales to 11.5% in the
first quarter 1997 from 11.2% in the first quarter 1996, Other operating
expenses increased $1.5 million during the first quarter 1997, and increased
0.8% as a percentage of sales to 17.7% in the first quarter 1997 from 16.9%
for the first quarter 1996. This increase is a partially a result of a 0.4%
increase in local advertising expense
EBITDA. Earnings before interest, taxes, depreciation, and amortization
increased $0.1 million or 3.2% to 4.3 million for the first quarter 1997 from
$4.2 million for the first quarter 1996. As a percentage of restaurant sales,
EBITDA decreased 1.0%, to 8.7% for the first quarter 1997 from 9.7% for the
first quarter 1996.
Operating Income. Operating income decreased $0.3 or 11.2% to $2.0 million
for the first quarter 1997 from $2.3 million for the first quarter 1996. As a
percentage of sales, operating income decreased 1.0%, to 4.3% in the first
quarter 1997 from 5.3% for the first quarter 1996.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary cash usages are to finance additional acquisitions,
make capital expenditures in connection with the development of new
restaurants, upgrade acquired and existing restaurants and to meet general
working capital needs. The Company has budgeted approximately $355,000 for the
development of each of its new restaurants. The Company anticipates it will
spend approximately an additional $3.0 to $5.0 million annually for other
capital expenditures. In addition, the Company has committed to BKC that it
will make capital expenditures at its AmeriKing Tennessee Corporation I
restaurants of approximately $1.5 million on or before September 7, 1997, of
which approximately two thirds had been made as of March 31, 1997. The Company
has further committed to BKC that for the foreseeable future (i) it will make
capital expenditures on its existing restaurants equal to 1% of its gross
sales and (ii) it will spend an amount equal to 1% of its gross sales on local
advertising. The Company has also committed to BKC that it will develop 17
restaurants in fiscal 1997. In the event the Company fails to develop at least
14 restaurants in fiscal 1997, the Company will pay BKC $150,000. In addition,
to the extent the Company develops 13 or fewer restaurants in fiscal 1997, the
Company will be obligated to pay BKC $75,000 for each restaurant less than 14
it fails to develop. The actual amount of the Company's cash requirements for
capital expenditures depends on, among other things, the number of new
restaurants opened or acquired by the Company and the costs associated with
such restaurants and the number of franchises subject to renewal and the costs
associated with bringing the related restaurants up to BKC's then current
design specifications in connection with these franchise renewals.
11
<PAGE>
The Company is structured as a holding company with no independent
operations, as the Company's operations are conducted exclusively through its
wholly owned subsidiaries. The Company's only significant assets are the
capital stock of its subsidiaries. As a holding company, the Company's cash
flow, its ability to meet its debt service requirements and its ability to pay
cash dividends on the Senior Preferred Stock are dependent upon the earnings
of its subsidiaries and their ability to declare dividends or make other
intercompany transfers to the Company. Under the terms of the indenture
pursuant to which the Senior Notes were offered (the "Indenture"), the
Company's subsidiaries may incur certain indebtedness pursuant to agreements
that may restrict the ability of such subsidiaries to make such dividends or
other intercompany transfers necessary to service the Company's obligations,
including its obligations under the Senior Notes, the Senior Preferred Stock
and any 13% Subordinated Exchange Debentures due 2008 (the "Exchange
Debentures") the Company may exchange pursuant to the Indenture. The Indenture
restricts, among other things, the Company's and its Restricted Subsidiaries'
(as defined in the Indenture) ability to pay dividends or make certain other
restricted payments, including the payment of cash dividends on or the
redemption of the Senior Preferred Stock, to incur additional indebtedness, to
encumber or sell assets, to enter into transactions with affiliates, to enter
into certain guarantees of indebtedness, to make restricted investments, to
merge or consolidate with any other entity and to transfer or lease all or
substantially all of their assets. In addition, (i) the Company's Amended and
Restated Credit Agreement (as defined) with the First National Bank of Boston
and other lenders thereto contains other and more restrictive covenants and
prohibits the Company's subsidiaries from declaring dividends or making other
intercompany transfers to the Company in certain circumstances and (ii)
agreements reached with BKC contain restrictions with respect to dividend
payments and intercompany loans.
The Company believes that the proceeds from its Offerings, together with its
increased availability under its anticipated credit of $50.0 million under
Credit Agreement, following its anticipated amendment in the second quarter
and the Company's cash on hand, will be sufficient to cover its working
capital, capital expenditures, planned development and debt service
requirements for fiscal 1997. The Company expects that additional financing
will be required in connection with any significant acquisitions in the
future.
12
<PAGE>
PART II
ITEM 1. LEGAL PROCEEDINGS
The Company is not a party to any pending legal proceedings, the resolutions
of which, the management of the Company believes, would have a material adverse
effect on the Company's results of operations or financial condition, nor to
any other pending legal proceedings other than ordinary, routine litigation
incidental to its business.
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
EXHIBITS
The following exhibits are filed as part of this report.
<TABLE>
<C> <S>
2.19 Asset Purchase Agreement dated March 7, 1997 among F&P Enterprises, Inc.,
the Shareholders of F&P Enterprises, Inc. and National Restaurant
Enterprises, Inc.
2.20 Amendment No. 1 to Asset Purchase Agreement dated April 8, 1997 among F&P
Enterprises, Inc., the Shareholders of F&P Enterprises, Inc. and National
Restaurant Enterprises, Inc.
2.21 Asset Purchase Agreement dated March 7, 1997 among North Foods, Inc., the
Shareholders of North Foods, Inc. and National Restaurant Enterprises,
Inc.
2.22 Amendment No. 1 to Asset Purchase Agreement dated April 8, 1997 among
North Foods, Inc., the Shareholders of North Foods, Inc. and National
Restaurant Enterprises, Inc.
11 Statement Re: Computation of Earnings Per Share
12 Statements Re: Computation of Ratios
27 Financial Data Schedule
</TABLE>
A list of exhibits included as part of this Form 10-Q or incorporated by
reference is set forth in the Index to Exhibits. Included in the Index to
Exhibits are the following exhibits which constitute management contracts or
compensatory plans or arrangements.
1. TJC Consulting Agreement
2. Jaro Employment Agreement
3. Osborn Employment Agreement
4. Hubert Employment Agreement
5. Aaseby Employment Agreement
6. Vasatka Employment Agreement
7. New Osborn Employment Agreement
REPORTS ON FORM 8-K
The Company did not file any reports on Form 8-K in the quarter ended May 31,
1997.
13
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE
REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF WESTCHESTER, STATE OF
ILLINOIS.
Ameriking, Inc.
- -------------------------------------
-------------------------------------
Date Lawrence E. Jaro
Managing Owner, Chairman and Chief
Executive Office
- -------------------------------------
-------------------------------------
Date Joel Aaseby
Chief Financial Officer and
Corporate Secretary (Principal
Financial and Accounting Officer)
14
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
------- ----------- ------------
<C> <S> <C>
1.1 FORM OF UNDERWRITING AGREEMENT FOR NOTES OFFERING... *
1.2 FORM OF UNDERWRITING AGREEMENT FOR UNITS OFFERING... *
2.1++ PURCHASE AND SALE AGREEMENT, DATED SEPTEMBER 1,
1994, BETWEEN BURGER KING CORPORATION ("BKC") AND
NATIONAL RESTAURANT ENTERPRISES, INC.
("ENTERPRISES") (Filed as exhibit 2.1 to AmeriKing's
Registration Statement (No. 333-04261) and
incorporated herein by reference)................... *
2.2++ PURCHASE AND SALE AGREEMENT, DATED SEPTEMBER 1,
1994, BETWEEN JARO ENTERPRISES, INC. AND AMERIKING,
INC. (FORMERLY KNOWN AS NRE HOLDINGS, INC.)
("AMERIKING") (Filed as exhibit 2.2 to AmeriKing's
Registration Statement (No. 333-04261) and
incorporated herein by reference)................... *
2.3++ PURCHASE AND SALE AGREEMENT, DATED SEPTEMBER 1,
1994, BETWEEN JARO RESTAURANTS, INC. AND AMERIKING
(Filed as exhibit 2.3 to AmeriKing's Registration
Statement (No. 333-04261) and incorporated herein by
reference).......................................... *
2.4++ PURCHASE AND SALE AGREEMENT, DATED SEPTEMBER 1,
1994, BETWEEN TABOR RESTAURANTS ASSOCIATES, INC. AND
AMERIKING (Filed as exhibit 2.4 to AmeriKing's
Registration Statement (No. 333-04261) and
incorporated herein by reference)................... *
2.5++ PURCHASE AND SALE AGREEMENT, DATED SEPTEMBER, 1,
1994, BETWEEN JB RESTAURANTS, INC. AND AMERIKING
(Filed as exhibit 2.5 to AmeriKing's Registration
Statement (No. 333-04261) and incorporated herein by
reference).......................................... *
2.6++ PURCHASE AND SALE AGREEMENT, DATED SEPTEMBER 1,
1994, BETWEEN CASTLEKING, INC. AND AMERIKING (Filed
as exhibit 2.6 to AmeriKing's Registration Statement
(No. 333-04261) and incorporated herein by
reference).......................................... *
2.7++ PURCHASE AND SALE AGREEMENT, DATED SEPTEMBER 1,
1994, BETWEEN OSBURGER, INC. AND AMERIKING (Filed as
exhibit 2.7 to AmeriKing's Registration Statement
(No. 333-04261) and incorporated herein by
reference).......................................... *
2.8++ PURCHASE AND SALE AGREEMENT, DATED SEPTEMBER 1,
1994, BETWEEN WHITE-OSBORN RESTAURANTS, INC. AND
AMERIKING (Filed as exhibit 2.8 to AmeriKing's
Registration Statement (No. 333-04261) and
incorporated herein by reference)................... *
2.9++ PURCHASE AND SALE AGREEMENT, DATED NOVEMBER 30,
1994, BY AND AMONG SHELDON T. FRIEDMAN, BNB LAND
VENTURE, INC. AND ENTERPRISES (Filed as exhibit 2.9
to AmeriKing's Registration Statement (No. 333-
04261) and incorporated herein by reference)........ *
2.10++ ASSET PURCHASE AGREEMENT, DATED JULY 5, 1995, BY AND
AMONG DMW, INC., DANIEL L. WHITE AND AMERIKING
COLORADO CORPORATION I (Filed as exhibit 2.10 to
AmeriKing's Registration Statement (No. 333-04261)
and incorporated herein by reference)............... *
2.11++ ASSET PURCHASE AGREEMENT, DATED JULY 5, 1995, BY AND
AMONG WSG, INC., DANIEL L. WHITE, SUSAN J. WAKEMAN,
GEORGE ALAIZ, JR. AND AMERIKING COLORADO CORPORATION
I (Filed as exhibit 2.11 to AmeriKing's Registration
Statement (No. 333-04261) and incorporated herein by
reference).......................................... *
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
------- ----------- ------------
<C> <S> <C>
2.12++ PURCHASE AGREEMENT, DATED NOVEMBER 21, 1995, BY AND
AMONG QSC, INC., THE SHAREHOLDERS OF QSC, INC. AND
AMERIKING TENNESSEE CORPORATION I (Filed as exhibit
2.12 to AmeriKing's Registration Statement (No.
333-04261) and incorporated herein by reference).... *
2.13++ PURCHASE AGREEMENT, DATED NOVEMBER 21, 1995, BY AND
AMONG RO-LANK, INC., THE SHAREHOLDERS OF RO-LANK,
INC. AND AMERIKING TENNESSEE CORPORATION I (Filed as
exhibit 2.13 to AmeriKing's Registration Statement
(No. 333-04261) and incorporated herein by
reference).......................................... *
2.14++ PURCHASE AND SALE AGREEMENT, DATED NOVEMBER 30,
1995, BY AND AMONG C&N DINING, INC. AND AFFILIATES
AND AMERIKING VIRGINIA CORPORATION I (Filed as
exhibit 2.14 to AmeriKing's Registration Statement
(No. 333-04261) and incorporated herein by
reference).......................................... *
2.15++ AMENDMENT NO. 1 TO PURCHASE AND SALE AGREEMENT,
DATED FEBRUARY 7, 1996, BY AND AMONG C&N DINING,
INC. AND AFFILIATES AND AMERIKING VIRGINIA
CORPORATION I (Filed as exhibit 2.15 to AmeriKing's
Registration Statement (No. 333-04261) and
incorporated herein by reference)................... *
2.16++ ASSET PURCHASE AGREEMENT, DATED FEBRUARY 7, 1996,
BETWEEN THIRTY-FORTY, INC. AND AMERIKING CINCINNATI
CORPORATION I (Filed as exhibit 2.16 to AmeriKing's
Registration Statement (No. 333-04261) and
incorporated herein by reference)................... *
2.17++ ASSET PURCHASE AGREEMENT, DATED FEBRUARY 7, 1996,
BETWEEN HOUSTON, INC. AND AMERIKING CINCINNATI
CORPORATION I (Filed as exhibit 2.17 to AmeriKing's
Registration Statement (No. 333-04261) and
incorporated herein by reference)................... *
2.18++ ASSET PURCHASE AGREEMENT, DATED FEBRUARY 7, 1996,
BETWEEN FIFTH & RACE, INC. AND AMERIKING CINCINNATI
CORPORATION I (Filed as exhibit 2.18 to AmeriKing's
Registration Statement (No. 333-04261) and
incorporated herein by reference)................... *
2.19 ASSET PURCHASE AGREEMENT dated March 7, 1997 among
F&P ENTERPRISES, INC., THE SHAREHOLDERS OF F&P
ENTERPRISES, INC. and NATIONAL RESTAURANT
ENTERPRISES, INC....................................
2.20 AMENDMENT NO. 1 TO THE ASSET PURCHASE AGREEMENT
dated April 8, 1997 among F&P ENTERPRISES, INC., THE
SHAREHOLDERS OF F&P ENTERPRISES, INC. and NATIONAL
RESTAURANT ENTERPRISES, INC.........................
2.21 ASSET PURCHASE AGREEMENT dated March 7, 1997 among
NORTH FOODS, INC., THE SHAREHOLDERS OF NORTH FOODS,
INC. and NATIONAL RESTAURANT ENTERPRISES, INC.......
2.22 AMENDMENT NO. 1 to the ASSET PURCHASE AGREEMENT
dated April 8, 1997 among NORTH FOODS, INC., THE
SHAREHOLDERS OF NORTH FOODS, INC. and NATIONAL
RESTAURANT ENTERPRISES, INC.........................
3.1 AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF
AMERIKING (Filed as exhibit 3.1 to AmeriKing's
Registration Statement (No. 333-04261) and
incorporated herein by reference)................... *
3.2 AMENDED AND RESTATED BYLAWS OF AMERIKING (Filed as
exhibit 3.2 to AmeriKing's Registration Statement
(No. 333-04261) and incorporated herein by
reference).......................................... *
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
------- ----------- ------------
<C> <S> <C>
4.1 STOCKHOLDERS AGREEMENT, DATED SEPTEMBER 1, 1994, BY
AND AMONG AMERIKING AND THE STOCKHOLDERS APPEARING
ON THE SIGNATURE PAGES THERETO (Filed as exhibit 4.1
to AmeriKing's Registration Statement (No.
333-04261) and incorporated herein by reference).... *
4.2 CONSENT AND AMENDMENT NO. 1 TO STOCKHOLDERS
AGREEMENT, DATED NOVEMBER 30, 1994, BY AND AMONG
AMERIKING AND THE STOCKHOLDERS APPEARING ON THE
SIGNATURE PAGES THERETO (Filed as exhibit 4.2 to
AmeriKing's Registration Statement (No. 333-04261)
and incorporated herein by reference)............... *
4.3 CONSENT AND AMENDMENT NO. 2 TO STOCKHOLDERS
AGREEMENT, DATED FEBRUARY 7, 1996, BY AND AMONG
AMERIKING AND THE STOCKHOLDERS APPEARING ON THE
SIGNATURE PAGES THERETO (Filed as exhibit 4.3 to
AmeriKing's Registration Statement (No. 333-04261)
and incorporated herein by reference)............... *
4.4 AMENDED AND RESTATED STOCKHOLDERS AGREEMENT BY AND
AMONG AMERIKING AND THE STOCKHOLDERS APPEARING ON
THE SIGNATURE PAGES THERETO (Filed as exhibit 4.4 to
AmeriKing's Form 10-K for the year ended December
30, 1996 and incorporated herein by reference)...... *
4.5 MANAGEMENT SUBSCRIPTION AGREEMENT, DATED SEPTEMBER
1, 1994, BY AND AMONG AMERIKING, TABOR RESTAURANT
ASSOCIATES, INC., JARO ENTERPRISES, INC., JARO
RESTAURANTS, INC., JB RESTAURANTS, INC., CASTLEKING,
INC., WHITE-OSBORN RESTAURANTS, INC., OSBURGER,
INC., LAWRENCE JARO, WILLIAM OSBORN, GARY HUBERT,
JOEL AASEBY, DONALD STAHURSKI AND SCOTT VASATKA
(Filed as exhibit 4.5 to AmeriKing's Registration
Statement (No. 333-04261) and incorporated herein by
reference).......................................... *
4.6 STOCK OPTION AGREEMENT, DATED SEPTEMBER 1, 1994,
BETWEEN AMERIKING AND SCOTT VASATKA (Filed as
exhibit 4.6 to AmeriKing's Registration Statement
(No. 333-04261) and incorporated herein by
reference).......................................... *
4.7 STOCK OPTION AGREEMENT, DATED SEPTEMBER 1, 1994,
BETWEEN AMERIKING AND DONALD STAHURSKI (Filed as
exhibit 4.7 to AmeriKing's Registration Statement
(No. 333-04261) and incorporated herein by
reference).......................................... *
4.8 WARRANT AGREEMENT, DATED SEPTEMBER 1, 1994, BETWEEN
AMERIKING AND THE FIRST NATIONAL BANK OF BOSTON
(Filed as exhibit 4.8 to AmeriKing's Registration
Statement (No. 333-04261) and incorporated herein by
reference).......................................... *
4.9 COMMON STOCK PURCHASE WARRANT, DATED SEPTEMBER 1,
1994, BETWEEN AMERIKING AND BANCBOSTON INVESTMENTS
INC. (Filed as exhibit 4.9 to AmeriKing's
Registration Statement (No. 333-04261) and
incorporated herein by reference)................... *
4.10 FIRST AMENDMENT TO COMMON STOCK PURCHASE WARRANT,
DATED NOVEMBER 30, 1994 (Filed as exhibit 4.10 to
AmeriKing's Registration Statement (No. 333-04261)
and incorporated herein by reference)............... *
4.11 SECOND AMENDMENT TO COMMON STOCK PURCHASE WARRANT,
DATED FEBRUARY 7, 1996 (Filed as exhibit 4.11 to
AmeriKing's Registration Statement (No. 333-04261)
and incorporated herein by reference)............... *
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
------- ----------- ------------
<C> <S> <C>
4.12 AMENDED AND RESTATED NOTE, DATED FEBRUARY 7, 1996,
FROM AMERIKING TO MCIT PLC IN THE AGGREGATE
PRINCIPAL AMOUNT OF $11,000,000 (Filed as exhibit
4.12 to AmeriKing's Registration Statement (No.
333-04261) and incorporated herein by reference).... *
4.13 AMENDED AND RESTATED DEFERRED LIMITED INTEREST
GUARANTY, DATED FEBRUARY 7, 1996, FROM ENTERPRISES
TO MCIT PLC (Filed as exhibit 4.13 to AmeriKing's
Registration Statement (No. 333-04261) and
incorporated herein by reference)................... *
4.14 AMENDED AND RESTATED NOTE, DATED FEBRUARY 7, 1996,
FROM AMERIKING TO JARO ENTERPRISES, INC. IN THE
AGGREGATE PRINCIPAL AMOUNT OF $1,224,000 (Filed as
exhibit 4.14 to AmeriKing's Registration Statement
(No. 333-04261) and incorporated herein by
reference).......................................... *
4.15 AMENDED AND RESTATED NOTE, DATED FEBRUARY 7, 1996,
FROM AMERIKING TO JARO RESTAURANTS, INC. IN THE
AGGREGATE PRINCIPAL AMOUNT OF $112,000 (Filed as
exhibit 4.15 to AmeriKing's Registration Statement
(No. 333-04261) and incorporated herein by
reference).......................................... *
4.16 AMENDED AND RESTATED NOTE, DATED FEBRUARY 7, 1996,
FROM AMERIKING TO JB RESTAURANTS, INC. IN THE
AGGREGATE PRINCIPAL AMOUNT OF $2,019,000 (Filed as
exhibit 4.16 to AmeriKing's Registration Statement
(No. 333-04261) and incorporated herein by
reference).......................................... *
4.17 AMENDED AND RESTATED NOTE, DATED FEBRUARY 7, 1996,
FROM AMERIKING TO CASTLEKING, INC. IN THE AGGREGATE
PRINCIPAL AMOUNT OF $385,769 (Filed as exhibit 4.17
to AmeriKing's Registration Statement (No.
333-04261) and incorporated herein by reference).... *
4.18 AMENDED AND RESTATED NOTE, DATED FEBRUARY 7, 1996,
FROM AMERIKING TO WHITE-OSBORN RESTAURANTS, INC. IN
THE AGGREGATE PRINCIPAL AMOUNT OF $659,231 (Filed as
exhibit 4.18 to AmeriKing's Registration Statement
(No. 333-04261) and incorporated herein by
reference).......................................... *
4.19 SECURITIES PURCHASE AGREEMENT, DATED NOVEMBER 30,
1994, BETWEEN AMERIKING AND BANCBOSTON INVESTMENTS,
INC. (Filed as exhibit 4.19 to AmeriKing's
Registration Statement (No. 333-04261) and
incorporated herein by reference)................... *
4.20 COMMON STOCK PURCHASE WARRANT, DATED NOVEMBER 30,
1994, BETWEEN AMERIKING AND BANCBOSTON INVESTMENTS,
INC. (Filed as exhibit 4.20 to AmeriKing's
Registration Statement (No. 333-04261) and
incorporated herein by reference)................... *
4.21 JUNIOR SUBORDINATED NOTE, DATED NOVEMBER 30, 1994,
FROM AMERIKING TO BANCBOSTON INVESTMENTS, INC. IN
THE AGGREGATE PRINCIPAL AMOUNT OF $600,000 (Filed as
exhibit 4.21 to AmeriKing's Registration Statement
(No. 333-04261) and incorporated herein by
reference).......................................... *
4.22 SECURED PROMISSORY NOTE, DATED NOVEMBER 21, 1995,
FROM AMERIKING TENNESSEE CORPORATION I TO BKC IN THE
AGGREGATE PRINCIPAL AMOUNT OF $6,920,700 (Filed as
exhibit 4.22 to AmeriKing's Registration Statement
(No. 333-04261) and incorporated herein by
reference).......................................... *
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
------- ----------- ------------
<C> <S> <C>
4.23 AMENDMENT TO SECURED PROMISSORY NOTE, DATED MAY 21,
1996, FROM AMERIKING TENNESSEE CORPORATION I TO BKC
IN THE AGGREGATE PRINCIPAL AMOUNT OF $6,093,067
(Filed as exhibit 4.23 to AmeriKing's Registration
Statement (No. 333-04261) and incorporated herein by
reference).......................................... *
4.24 GUARANTY, DATED NOVEMBER 21, 1995, FROM LAWRENCE
JARO AND WILLIAM OSBORN TO BKC (Filed as exhibit
4.24 to AmeriKing's Registration Statement (No. 333-
04261) and incorporated herein by reference)........ *
4.25 RATIFICATION OF GUARANTY, MAY 21, 1996, FROM
LAWRENCE JARO AND WILLIAM OSBORN TO BKC (Filed as
exhibit 4.25 to AmeriKing's Registration Statement
(No. 333-04261) and incorporated herein by
reference).......................................... *
4.26 PROMISSORY NOTE, DATED NOVEMBER 29, 1995, FROM
AMERIKING COLORADO CORPORATION I TO FRANCHISE
ACCEPTANCE CORPORATION LIMITED IN THE AGGREGATE
PRINCIPAL AMOUNT OF $1,865,000 (Filed as exhibit
4.26 to AmeriKing's Registration Statement (No. 333-
04261) and incorporated herein by reference)........ *
4.27 AMENDMENT TO PROMISSORY NOTE, DATED DECEMBER 14,
1995, FROM AMERIKING COLORADO CORPORATION I TO
FRANCHISE ACCEPTANCE CORPORATION LIMITED (Filed as
exhibit 4.27 to AmeriKing's Registration Statement
(No. 333-04261) and incorporated herein by
reference).......................................... *
4.28 COMMON STOCK PURCHASE WARRANT, DATED FEBRUARY 7,
1996, FROM AMERIKING TO PMI MEZZANINE FUND, L.P.
(Filed as exhibit 4.28 to AmeriKing's Registration
Statement (No. 333-04261) and incorporated herein by
reference).......................................... *
4.29 SENIOR SUBORDINATED NOTE, DATED FEBRUARY 7, 1996,
FROM ENTERPRISES TO PMI MEZZANINE FUND, L.P IN THE
AGGREGATE PRINCIPAL AMOUNT OF $15,000,000. (Filed as
exhibit 4.29 to AmeriKing's Registration Statement
(No. 333-04261) and incorporated herein by
reference).......................................... *
4.30 SUBORDINATED GUARANTY, DATED FEBRUARY 7, 1996, FROM
AMERIKING VIRGINIA CORPORATION I AND AMERIKING
CINCINNATI CORPORATION I TO PMI MEZZANINE FUND, L.P.
(Filed as exhibit 4.30 to AmeriKing's Registration
Statement (No. 333-04261) and incorporated herein by
reference).......................................... *
4.31 SECOND AMENDED AND RESTATED REVOLVING CREDIT NOTE,
DATED FEBRUARY 7, 1996, FROM ENTERPRISES TO THE
FIRST NATIONAL BANK OF BOSTON, THE OTHER LENDING
INSTITUTIONS LISTED ON SCHEDULE 1 THERETO, AND THE
FIRST NATIONAL BANK OF BOSTON, AS AGENT (Filed as
exhibit 4.31 to AmeriKing's Registration Statement
(No. 333-04261) and incorporated herein by
reference).......................................... *
4.32 SECOND AMENDED AND RESTATED TERM LOAN A NOTE, DATED
FEBRUARY 7, 1996, FROM ENTERPRISES TO THE FIRST
NATIONAL BANK OF BOSTON, THE OTHER LENDING
INSTITUTIONS LISTED ON SCHEDULE 1 THERETO, AND THE
FIRST NATIONAL BANK OF BOSTON, AS AGENT (Filed as
exhibit 4.32 to AmeriKing's Registration Statement
(No. 333-04261) and incorporated herein by
reference).......................................... *
4.33 SECOND AMENDED AND RESTATED TERM LOAN B NOTE, DATED
FEBRUARY 7, 1996, FROM ENTERPRISES TO THE FIRST
NATIONAL BANK OF BOSTON, THE OTHER LENDING
INSTITUTIONS LISTED ON SCHEDULE 1 THERETO, AND THE
FIRST NATIONAL BANK OF BOSTON, AS (Filed as exhibit
4.33 to AmeriKing's Registration Statement (No. 333-
04261) and incorporated herein by reference)........ *
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
------- ----------- ------------
<C> <S> <C>
4.34 LIMITED GUARANTY, DATED SEPTEMBER 1, 1994, FROM
AMERIKING TO THE FIRST NATIONAL BANK OF BOSTON, THE
OTHER LENDING INSTITUTIONS LISTED ON SCHEDULE 1
THERETO, AND THE FIRST NATIONAL BANK OF BOSTON, AS
AGENT (Filed as exhibit 4.34 to AmeriKing's
Registration Statement (No. 333-04261) and
incorporated herein by reference).................... *
4.35 GUARANTY, DATED FEBRUARY 7, 1996, FROM AMERIKING
VIRGINIA CORPORATION I AND AMERIKING CINCINNATI
CORPORATION I TO THE FIRST NATIONAL BANK OF BOSTON,
THE OTHER LENDING INSTITUTIONS LISTED ON SCHEDULE 1
THERETO, AND THE FIRST NATIONAL BANK OF BOSTON, AS
AGENT (Filed as exhibit 4.35 to AmeriKing's
Registration Statement (No. 333-04261) and
incorporated herein by reference).................... *
4.36 UNCONDITIONAL GUARANTY OF PAYMENT AND PERFORMANCE,
DATED FEBRUARY 7, 1996, FROM ENTERPRISES TO FFCA
ACQUISITION CORPORATION (Filed as exhibit 4.36 to
AmeriKing's Registration Statement (No. 333-04261)
and incorporated herein by reference)................ *
4.37 FORM OF AMENDMENT NO. 1 TO COMMON STOCK PURCHASE
WARRANT FROM AMERIKING TO PMI MEZZANINE FUND, L.P.... *
4.38 INDENTURE BETWEEN AMERIKING AND TRUSTEE WITH RESPECT
TO SENIOR NOTES (Filed as exhibit 4.38 to AmeriKing's
Registration Statement (No. 333-04261) and
incorporated herein by reference).................... *
4.39 FORM OF SENIOR NOTES (ATTACHED TO EXHIBIT 4.38)......
4.40 INDENTURE BETWEEN AMERIKING AND TRUSTEE WITH RESPECT
TO EXCHANGE DEBENTURES (Filed as exhibit 4.40 to
AmeriKing's Registration Statement (No. 333-04261)
and incorporated herein by reference)................ *
4.41 INTENTIONALLY OMITTED................................
4.42 FORM OF EXCHANGE DEBENTURES (ATTACHED TO EXHIBIT
4.40)................................................
4.43 PROMISSORY NOTE, DATED JULY 18, 1996, FROM AMERIKING
TENNESSEE CORPORATION I TO FRANCHISE ACCEPTANCE
CORPORATION LIMITED IN THE AGGREGATE PRINCIPAL AMOUNT
OF $6,100,000 (Filed as exhibit 4.43 to AmeriKing's
Registration Statement (No. 333-04261) and
incorporated herein by reference).................... *
4.44 CERTIFICATE OF DESIGNATION RELATING TO THE SENIOR
PREFERRED STOCK (Filed as exhibit 4.44 to AmeriKing's
Registration Statement (No. 333-04261) and
incorporated herein by reference).................... *
4.45 PROMISSORY NOTE, DATED JULY 18, 1996, FROM AMERIKING
TENNESSEE CORPORATION I TO FRANCHISE ACCEPTANCE
CORPORATION LIMITED IN THE AGGREGATE PRINCIPAL AMOUNT
OF $900,000 (Filed as exhibit 4.45 to AmeriKing's
Registration Statement (No. 333-04261) and
incorporated herein by reference).................... *
4.46 AMENDMENT NO. 1 TO STOCK OPTION AGREEMENT BY AND
AMONG AMERIKING, SCOTT VASATKA AND DONALD STAHURSKI
(Filed as exhibit 4.46 to AmeriKing's Form 10-K for
the year ended December 30, 1996 and incorporated
herein by reference)................................. *
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
------- ----------- ------------
<C> <S> <C>
4.47 AMENDMENT NO. 1 TO MANAGEMENT SUBSCRIPTION AGREEMENT
(Filed as exhibit 4.47 to AmeriKing's Form 10-K for
the year ended December 30, 1996 and incorporated
herein by reference)................................ *
9.1 JARO PROXY AGREEMENT, DATED SEPTEMBER 1, 1994, BY
AND AMONG LAWRENCE JARO, TABOR RESTAURANT
ASSOCIATES, INC., JARO ENTERPRISES, INC., JARO
RESTAURANTS, INC. AND JB RESTAURANTS, INC. (Filed as
exhibit 9.1 to AmeriKing's Registration Statement
(No. 333-04261) and incorporated herein by
reference).......................................... *
9.2 OSBORN PROXY AGREEMENT, DATED SEPTEMBER 1, 1994, BY
AND AMONG WILLIAM OSBORN, CASTLEKING, INC.,
OSBURGER, INC. AND WHITE-OSBORN, INC. (Filed as
exhibit 9.2 to AmeriKing's Registration Statement
(No. 333-04261) and incorporated herein by
reference).......................................... *
10.1 SECOND AMENDED AND RESTATED REVOLVING CREDIT AND
TERM LOAN AGREEMENT, DATED FEBRUARY 7, 1996, BY AND
AMONG AMERIKING, ENTERPRISES, THE FIRST NATIONAL
BANK OF BOSTON, THE OTHER LENDING INSTITUTIONS
LISTED ON SCHEDULE 1 THERETO, AND THE FIRST NATIONAL
BANK OF BOSTON, AS AGENT (Filed as exhibit 10.1 to
AmeriKing's Registration Statement (No. 333-04261)
and incorporated herein by reference)............... *
10.2 SECURITY AGREEMENT, DATED SEPTEMBER 1, 1994, BY AND
AMONG ENTERPRISES AND THE FIRST NATIONAL BANK OF
BOSTON, THE OTHER LENDING INSTITUTIONS LISTED ON
SCHEDULE 1 THERETO, AND THE FIRST NATIONAL BANK OF
BOSTON, AS AGENT (Filed as exhibit 10.2 to
AmeriKing's Registration Statement (No. 333-04261)
and incorporated herein by reference)............... *
10.3 AMENDMENT TO SECURITY AGREEMENT, DATED FEBRUARY 7,
1996, BY AND AMONG ENTERPRISES AND THE FIRST
NATIONAL BANK OF BOSTON, THE OTHER LENDING
INSTITUTIONS LISTED ON SCHEDULE 1 THERETO, AND THE
FIRST NATIONAL BANK OF BOSTON, AS AGENT (Filed as
exhibit 10.3 to AmeriKing's Registration Statement
(No. 333-04261) and incorporated herein by
reference).......................................... *
10.4 STOCK PLEDGE AGREEMENT, DATED SEPTEMBER 1, 1994, BY
AND AMONG AMERIKING AND THE FIRST NATIONAL BANK OF
BOSTON, THE OTHER LENDING INSTITUTIONS LISTED ON
SCHEDULE 1 THERETO, AND THE FIRST NATIONAL BANK OF
BOSTON, AS AGENT (Filed as exhibit 10.4 to
AmeriKing's Registration Statement (No. 333-04261)
and incorporated herein by reference)............... *
10.5 AMENDMENT TO STOCK PLEDGE AGREEMENT, DATED FEBRUARY
7, 1996, BY AND AMONG AMERIKING AND THE FIRST
NATIONAL BANK OF BOSTON, THE OTHER LENDING
INSTITUTIONS LISTED ON SCHEDULE 1 THERETO, AND THE
FIRST NATIONAL BANK OF BOSTON, AS AGENT (Filed as
exhibit 10.5 to AmeriKing's Registration Statement
(No. 333-04261) and incorporated herein by
reference).......................................... *
10.6 SECURITY AGREEMENT, DATED FEBRUARY 7, 1996, BY AND
AMONG AMERIKING VIRGINIA CORPORATION I, AMERIKING
CINCINNATI CORPORATION I AND THE FIRST NATIONAL BANK
OF BOSTON (Filed as exhibit 10.6 to AmeriKing's
Registration Statement (No. 333-04261) and
incorporated herein by reference)................... *
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
------- ----------- ------------
<C> <S> <C>
10.7 STOCK PLEDGE AGREEMENT, DATED FEBRUARY 7, 1996, BY
AND AMONG ENTERPRISES, AMERIKING VIRGINIA
CORPORATION I, AMERIKING CINCINNATI CORPORATION I
AND THE FIRST NATIONAL BANK OF BOSTON (Filed as
exhibit 10.7 to AmeriKing's Registration Statement
(No. 333-04261) and incorporated herein by
reference).......................................... *
10.8 AMENDED AND RESTATED PURCHASE AGREEMENT, DATED
FEBRUARY 7, 1996, BETWEEN AMERIKING AND MCIT PLC
(Filed as exhibit 10.8 to AmeriKing's Registration
Statement (No. 333-04261) and incorporated herein by
reference).......................................... *
10.9 PLEDGE AGREEMENT, DATED SEPTEMBER 1, 1994, BETWEEN
AMERIKING AND MCIT PLC (Filed as exhibit 10.9 to
AmeriKing's Registration Statement (No. 333-04261)
and incorporated herein by reference)............... *
10.10 SUBORDINATION AGREEMENT, DATED SEPTEMBER 1, 1994, BY
AND AMONG BKC, MCIT PLC AND AMERIKING (Filed as
exhibit 10.10 to AmeriKing's Registration Statement
(No. 333-04261) and incorporated herein by
reference).......................................... *
10.11 AMENDMENT AND CONSENT NO. 1 TO SECURITIES PURCHASE
AGREEMENT, DATED FEBRUARY 7, 1996, BETWEEN AMERIKING
AND BANCBOSTON INVESTMENTS, INC. (Filed as exhibit
10.11 to AmeriKing's Registration Statement (No.
333-04261) and incorporated herein by reference).... *
10.12 INTERCREDITOR AGREEMENT, DATED FEBRUARY 7, 1996, BY
AND AMONG BKC, AMERIKING VIRGINIA CORPORATION I,
AMERIKING CINCINNATI CORPORATION I, LAWRENCE JARO,
WILLIAM OSBORN, GARY HUBERT, ENTERPRISES, AMERIKING
AND THE FIRST NATIONAL BANK OF BOSTON (Filed as
exhibit 10.12 to AmeriKing's Registration Statement
(No. 333-04261) and incorporated herein by
reference).......................................... *
10.13 STOCK PLEDGE AGREEMENT, DATED NOVEMBER 21, 1995,
BETWEEN ENTERPRISES AND BKC (Filed as exhibit 10.13
to AmeriKing's Registration Statement (No. 333-
04261) and incorporated herein by reference)........ *
10.14 RATIFICATION OF STOCK PLEDGE AGREEMENT, DATED MAY
21, 1996, BETWEEN ENTERPRISES AND BKC (Filed as
exhibit 10.14 to AmeriKing's Registration Statement
(No. 333-04261) and incorporated herein by
reference).......................................... *
10.15 STOCK PLEDGE AGREEMENT, DATED NOVEMBER 21, 1995,
BETWEEN ENTERPRISES AND THE FIRST NATIONAL BANK OF
BOSTON, THE OTHER LENDING INSTITUTIONS LISTED ON
SCHEDULE 1 THERETO, AND THE FIRST NATIONAL BANK OF
BOSTON, AS AGENT (Filed as exhibit 10.15 to
AmeriKing's Registration Statement (No. 333-04261)
and incorporated herein by reference)............... *
10.16 NOTE PURCHASE AGREEMENT, DATED FEBRUARY 7, 1996, BY
AND AMONG AMERIKING, ENTERPRISES AND PMI MEZZANINE
FUND, L.P. (Filed as exhibit 10.16 to AmeriKing's
Registration Statement (No. 333-04261) and
incorporated herein by reference)................... *
10.17 FORM OF AMENDMENT NO. 1 TO NOTE PURCHASE AGREEMENT,
BY AND AMONG AMERIKING, ENTERPRISES AND PMI
MEZZANINE FUND, L.P................................. *
10.18 SUBORDINATION AGREEMENT, DATED FEBRUARY 7, 1996, BY
AND AMONG AMERIKING, ENTERPRISES, AMERIKING VIRGINIA
CORPORATION I, AMERIKING CINCINNATI CORPORATION I,
AMERIKING TENNESSEE CORPORATION I, AMERIKING
COLORADO CORPORATION I, LAWRENCE JARO, WILLIAM
OSBORN, GARY HUBERT AND BKC (Filed as exhibit 10.18
to AmeriKing's Registration Statement (No. 333-
04261) and incorporated herein by reference)........ *
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
------- ----------- ------------
<C> <S> <C>
10.19 SALE-LEASEBACK AGREEMENT, DATED FEBRUARY 7, 1996, BY
AND AMONG AMERIKING VIRGINIA CORPORATION I, AMERIKING
TENNESSEE CORPORATION I AND FFCA ACQUISITION
CORPORATION (Filed as exhibit 10.19 to AmeriKing's
Registration Statement (No. 333-04261) and
incorporated herein by reference).................... *
10.20 LEASE, DATED FEBRUARY 7, 1996, BY AND AMONG AMERIKING
VIRGINIA CORPORATION I, AMERIKING TENNESSEE
CORPORATION I AND FFCA ACQUISITION CORPORATION (Filed
as exhibit 10.20 to AmeriKing's Registration
Statement (No. 333-04261) and incorporated herein by
reference)........................................... *
10.21 FORM OF FRANCHISE AGREEMENT BETWEEN BKC AND
FRANCHISEE (Filed as exhibit 10.21 to AmeriKing's
Registration Statement (No. 333-04261) and
incorporated herein by reference).................... *
10.22 SCHEDULE OF AMERIKING FRANCHISE AGREEMENTS (Filed as
exhibit 10.22 to AmeriKing's Registration Statement
(No. 333-04261) and incorporated herein by
reference)........................................... *
10.23 FORM OF LEASE AGREEMENT BETWEEN BKC AND LESSEE (Filed
as exhibit 10.23 to AmeriKing's Registration
Statement (No. 333-04261) and incorporated herein by
reference)........................................... *
10.24 SCHEDULE OF AMERIKING LEASE AGREEMENTS (Filed as
exhibit 10.24 to AmeriKing's Registration Statement
(No. 333-04261) and incorporated herein by
reference)........................................... *
10.25 FORM OF GUARANTEE, INDEMNIFICATION AND ACKNOWLEDGMENT
OF BKC FRANCHISE AGREEMENT (Filed as exhibit 10.25 to
AmeriKing's Registration Statement (No. 333-04261)
and incorporated herein by reference)................ *
10.26 FORM OF GUARANTEE, INDEMNIFICATION AND ACKNOWLEDGMENT
OF BKC LEASE AGREEMENT (Filed as exhibit 10.26 to
AmeriKing's Registration Statement (No. 333-04261)
and incorporated herein by reference)................ *
10.27 CAPITAL EXPENDITURE AGREEMENT, DATED SEPTEMBER 1,
1994, BY AND AMONG AMERIKING, ENTERPRISES AND BKC
(Filed as exhibit 10.27 to AmeriKing's Registration
Statement (No. 333-04261) and incorporated herein by
reference)........................................... *
10.28 CAPITAL EXPENDITURE AGREEMENT, DATED NOVEMBER 21,
1995, BY AND AMONG ENTERPRISES, AMERIKING TENNESSEE
CORPORATION I AND BKC (Filed as exhibit 10.28 to
AmeriKing's Registration Statement (No. 333-04261)
and incorporated herein by reference)................ *
10.29 LETTER AGREEMENT, DATED FEBRUARY 7, 1996, BETWEEN
ENTERPRISES AND BKC (Filed as exhibit 10.29 to
AmeriKing's Registration Statement (No. 333-04261)
and incorporated herein by reference)................ *
10.30 NAPARLO DEVELOPMENT AGREEMENT, DATED FEBRUARY 7,
1996, BETWEEN AMERIKING VIRGINIA CORPORATION I AND
JOSEPH J. NAPARLO (Filed as exhibit 10.30 to
AmeriKing's Registration Statement (No. 333-04261)
and incorporated herein by reference)................ *
10.31 MANAGEMENT CONSULTING AGREEMENT, DATED SEPTEMBER 1,
1994, BY AND AMONG TJC MANAGEMENT CORPORATION,
AMERIKING AND ENTERPRISES (Filed as exhibit 10.31 to
AmeriKing's Registration Statement (No. 333-04261)
and incorporated herein by reference)................ *
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
------- ----------- ------------
<C> <S> <C>
10.32 INTENTIONALLY OMITTED............................... *
10.33 INTERCOMPANY MANAGEMENT CONSULTING AGREEMENT, DATED
SEPTEMBER 1, 1994 BETWEEN ENTERPRISES AND AMERIKING
(Filed as exhibit 10.33 to AmeriKing's Registration
Statement (No. 333-04261) and incorporated herein by
reference).......................................... *
10.34 AMENDED AND RESTATED TAX SHARING AGREEMENT, DATED
FEBRUARY 7, 1996, BETWEEN ENTERPRISES AND AMERIKING
(Filed as exhibit 10.34 to AmeriKing's Registration
Statement (No. 333-04261) and incorporated herein by
reference).......................................... *
10.35 EMPLOYMENT AND NON-INTERFERENCE AGREEMENT, DATED
SEPTEMBER 1, 1994, BETWEEN LAWRENCE JARO AND
ENTERPRISES (Filed as exhibit 10.35 to AmeriKing's
Registration Statement (No. 333-04261) and
incorporated herein by reference)................... *
10.36 EMPLOYMENT AND NON-INTERFERENCE AGREEMENT, DATED
SEPTEMBER 1, 1994, BETWEEN WILLIAM OSBORN AND
ENTERPRISES (Filed as exhibit 10.36 to AmeriKing's
Registration Statement (No. 333-04261) and
incorporated herein by reference.................... *
10.37 EMPLOYMENT AND NON-INTERFERENCE AGREEMENT, DATED
SEPTEMBER 1, 1994, BETWEEN GARY HUBERT AND
ENTERPRISES (Filed as exhibit 10.37 to AmeriKing's
Registration Statement (No. 333-04261) and
incorporated herein by reference)................... *
10.38 EMPLOYMENT AND NON-INTERFERENCE AGREEMENT, DATED
SEPTEMBER 1, 1994, BETWEEN JOEL AASEBY AND
ENTERPRISES (Filed as exhibit 10.38 to AmeriKing's
Registration Statement (No. 333-04261) and
incorporated herein by reference)................... *
10.39 EMPLOYMENT AND NON-INTERFERENCE AGREEMENT, DATED
SEPTEMBER 1, 1994, BETWEEN SCOTT VASATKA AND
ENTERPRISES (Filed as exhibit 10.39 to AmeriKing's
Registration Statement (No. 333-04261) and
incorporated herein by reference)................... *
10.40 INTENTIONALLY OMITTED...............................
10.41 FORM OF INDEMNIFICATION AGREEMENT BY AND AMONG
AMERIKING AND EACH OF THE SIGNATORIES TO THIS
REGISTRATION STATEMENT (Filed as exhibit 10.41 to
AmeriKing's Registration Statement (No. 333-04261)
and incorporated herein by reference)............... *
10.42 INTENTIONALLY OMITTED...............................
10.43 INTENTIONALLY OMITTED...............................
10.44 LEASE AGREEMENT FOR WESTCHESTER, ILLINOIS
HEADQUARTERS (Filed as exhibit 10.44 to AmeriKing's
Registration Statement (No. 333-04261) and
incorporated herein by reference)................... *
10.45 LOAN AND SECURITY AGREEMENT, DATED NOVEMBER 29,
1995, BETWEEN AMERIKING COLORADO CORPORATION I AND
FRANCHISE ACCEPTANCE CORPORATION LIMITED (Filed as
exhibit 10.45 to AmeriKing's Registration Statement
(No. 333-04261) and incorporated herein by
reference).......................................... *
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
------- ----------- ------------
<C> <S> <C>
10.46 LOAN AND SECURITY AGREEMENT, DATED JULY 21, 1996,
BETWEEN AMERIKING TENNESSEE CORPORATION I AND
FRANCHISE ACCEPTANCE CORPORATION LIMITED (Filed as
exhibit 10.46 to AmeriKing's Registration Statement
(No. 333-04261) and incorporated herein by
reference).......................................... *
10.47 FORM OF INTERCREDITOR AGREEMENT BY AND AMONG BKC,
AMERIKING, AND THE TRUSTEE AS REPRESENTATIVE OF THE
HOLDERS OF SENIOR NOTES UNDER THE INDENTURE
(ATTACHED TO EXHIBIT 4.38).......................... *
10.48 RESTATED EMPLOYMENT AND NON-INTERFERENCE AGREEMENT
BETWEEN WILLIAM OSBORN AND ENTERPRISES (Filed as
exhibit 10.48 to AmeriKing's Form 10-K for the year
ended December 30, 1996 and incorporated herein by
reference).......................................... *
10.49 RECAPITALIZATION AGREEMENT AMONG AMERIKING AND THE
STOCKHOLDERS APPEARING ON THE SIGNATURE PAGES
THERETO (Filed as exhibit 10.49 to AmeriKing's Form
10-K for the year ended December 30, 1996 and
incorporated herein by reference.................... *
10.50 MEMORANDUM OF UNDERSTANDING BETWEEN BKC AND THE
COMPANY (Filed as exhibit 10.50 to AmeriKing's
Registration Statement (No. 333-04261) and
incorporated herein by reference)................... *
10.51 AMENDMENT TO SECOND AMENDED AND RESTATED REVOLVING
CREDIT AND LOAN AGREEMENT, DATED MAY 14, 1996, BY
AND AMONG AMERIKING, ENTERPRISES, THE FIRST NATIONAL
BANK OF BOSTON, THE OTHER LENDING INSTITUTIONS
LISTED ON SCHEDULE I THERETO AND THE FIRST NATIONAL
BANK OF BOSTON, AS AGENT (Filed as exhibit 10.51 to
AmeriKing's Form 10-K for the year ended December
30, 1996 and incorporated herein by reference)...... *
10.52 ASSIGNMENT AND ACCEPTANCE DATED MAY 14, 1996, BY AND
AMONG AMERIKING, ENTERPRISES, THE FIRST NATIONAL
BANK OF BOSTON AND THE OTHER LENDING INSTITUTIONS,
LISTED THERETO AND THE FIRST NATIONAL BANK OF
BOSTON, AS AGENT (Filed as exhibit 10.52 to
AmeriKing's Form 10-K for the year ended December
30, 1996 and incorporated herein by reference)...... *
10.53 FORM OF OPERATING AGREEMENT BY AND AMONG BKC,
AMERIKING ENTERPRISES, AMERIKING COLORADO
CORPORATION I, AMERIKING ILLINOIS CORPORATION I,
AMERIKING TENNESSEE CORPORATION I, AMERIKING
VIRGINIA CORPORATION I AND AMERIKING CINCINNATI
CORPORATION I (Filed as exhibit 10.53 to AmeriKing's
Form 10-K for the year ended December 30, 1996 and
incorporated herein by reference)................... *
11++++ STATEMENT RE: COMPUTATION OF EARNINGS PER SHARE.....
12++++ STATEMENTS RE: COMPUTATION OF RATIOS................
21 SUBSIDIARIES OF AMERIKING (Filed as exhibit 10.21 to
AmeriKing's Registration Statement (No. 333-04261)
and incorporated herein by reference)............... *
23.1 CONSENT OF MAYER, BROWN & PLATT (Filed as exhibit
23.1 to AmeriKing's Registration Statement (No. 333-
04261) and incorporated herein by reference)........ *
23.2 CONSENT OF DELOITTE & TOUCHE (Filed as exhibit 23.2
to AmeriKing's Registration Statement (No. 333-
04261) and incorporated herein by reference)........ *
24 POWER OF ATTORNEY...................................
25 T-1 FOR EXCHANGE DEBENTURE INDENTURE................ *
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
------- ----------- ------------
<C> <S> <C>
26 T-1 FOR SENIOR NOTE INDENTURE......................... *
27++++ FINANCIAL DATA SCHEDULE...............................
</TABLE>
- --------
*Previously filed.
++The schedules and exhibits to these agreements have not been filed
pursuant to Item 601(b)(2) of Regulation S-K. Such schedules and exhibits
will be filed supplementally upon the request of the Securities and
Exchange Commission.
++++Superseding exhibit.
<PAGE>
ASSET PURCHASE AGREEMENT
among
F & P ENTERPRISES, INC., THE SHAREHOLDERS OF F & P ENTERPRISES, INC.
and
AMERIKING CAROLINA CORPORATION I
<PAGE>
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement") is made and entered into
this 7th day of March, 1997, among F & P ENTERPRISES, INC., a North Carolina
corporation ("Seller"); THOMAS FICKLING and WILLIAM PRENTICE (collectively
referred to as the "Shareholders"), and AMERIKING CAROLINA CORPORATION I, a
Delaware corporation ("Purchaser").
R E C I T A L S:
WHEREAS, Seller operates nineteen (19) Burger King(R) restaurants (the
"Business") whose locations are listed in Exhibit 1 attached hereto and
incorporated by reference herein (hereinafter, referred to as the
"Restaurants");
WHEREAS, the Shareholders own of record and beneficially all of the
outstanding shares of the capital stock of Seller, and are the directors of
Seller;
WHEREAS, Seller desires to sell, assign, transfer and deliver to Purchaser,
and Purchaser desires to purchase from Seller, certain of the assets of Seller
as described in Article I hereof on the terms and subject to the conditions
hereinafter contained;
WHEREAS, Purchaser and the Shareholders desire to enter into certain
agreements between them on the terms and subject to the conditions hereinafter
contained;
WHEREAS, Simultaneously with the Closing hereof, Purchaser shall purchase
certain assets of North Foods, Inc., a North Carolina corporation, pursuant to
an Asset Purchase Agreement (the "North Foods Asset Purchase Agreement), and
Castle Properties, L.L.C., a Delaware limited liability company, shall purchase
real estate and improvements for seventeen (17) Burger King(R) restaurants and
the improvements only on two (2) other Burger King(R) restaurants (the
"Properties") pursuant to a Real Estate Purchase Agreement (the "T & B Purchase
Agreement") with T & B Leasing, a North Carolina general partnership ("T & B"),
and a Real Estate Purchase Agreement (the "W & W Purchase Agreement") with W & W
Investments Limited Partnership, a Delaware limited partnership ("W & W");
WHEREAS, Seller occupies certain other real property (the "Leasehold
Properties") pursuant to certain Lease Agreements (the "Real Property Leases")
which Seller proposes to assign to Purchaser; and
WHEREAS, Purchaser proposes to assume the Real Property Leases.
NOW THEREFORE, in consideration of the Recitals that shall be deemed to be
a substantive part of this Agreement and the mutual covenants, promises,
agreements, representations and warranties contained in this Agreement, the
parties hereto do hereby covenant, promise, agree, represent and warrant as
follows:
ARTICLE I -- PURCHASE AND SALE OF ASSETS
1.1 Purchase and Sale. On the terms and subject to the conditions set
forth in this Agreement, at the Closing on the Closing Date (as such terms are
defined in Section 2.1 hereof), Seller shall sell, convey assign, transfer and
deliver to Purchaser and Purchaser shall purchase from Seller all of the right,
title and interest of Seller in and to the following assets of Seller (all of
which assets of Seller are hereinafter collectively referred to as the
"Assets"):
1
<PAGE>
1.1.1 All of Seller's equipment, furniture, materials and supplies
including, but not limited to, all of the equipment, furniture, materials and
supplies described in Exhibit 1.1.1 attached hereto and incorporated by
reference herein (the "Equipment").
1.1.2 All of Seller's fixed assets, including, but not limited to,
all of the fixed assets described in Exhibit 1.1.2 attached hereto and
incorporated by reference herein (the "Fixed Assets").
1.1.3 All of Seller's saleable, usable and merchantable Inventory (as
hereinafter defined) located at the Restaurants.
1.1.4 All of Seller's rights under the Seller's Burger King Franchise
Agreements between Seller and Burger King Corporation, copies of which are
attached hereto as Exhibit 1.1.4 and incorporated by reference herein
("Franchise Agreements").
1.1.5 All of Seller's leasehold and tenant improvements (excluding
fixtures that have become part of the real property to which they are attached).
1.1.6 All of Seller's customer lists and customer sales files
("Customer Lists" ).
1.1.7 All of Seller's leasehold interest in the Real Property Leases.
At the Closing, Seller shall assign to Purchaser all of Seller's leasehold
interest in the Real Property Leases, parking and other access agreements
relating to the Premises. Prior to the Closing, Seller shall deliver to
Purchaser (i) Lease Assignment and Assumption Agreements (the "Lease
Assignments") and (ii) Consents to Assignment, Estoppel, and Release, in the
form of Exhibit 1.1.7 (a) and Exhibit 1.1.7 (b) attached hereto and incorporated
by reference herein.
1.1.8 All of Seller's goodwill and original copies of all of Seller's
employment and personnel records, books and records relating or pertaining to
Seller's Business, including all sales records and similar data (hereinafter
collectively referred to as the "Records"); Seller shall deliver to Purchaser
copies of the Records upon the written request of Purchaser. Seller reserves
the right to inspect such records at such reasonable times and places after
Closing for any legitimate business purpose including tax audits.
1.2 Store Bank. Upon the Closing, Seller shall leave cash (the "Store
Bank") in the amount of not less than $1,000 at each Restaurant. Purchaser
agrees to purchase the Store Banks at the Restaurants from Seller and agrees to
pay for the Store Banks in addition to the Purchase Price at Closing.
1.3 Inventory. Within 24 hours prior to the date of the Closing, an
inventory shall be taken by Seller (with the participation of Purchaser) of all
merchantable food, paper, new uniforms and current promotional items (the
"Inventory") located at the Restaurants. Purchaser agrees to purchase the
Inventory from Seller, and Seller agrees to sell the Inventory to Purchaser, at
Seller's actual Inventory purchase price. On the Closing Date, Purchaser agrees
to pay Seller the sum of $6,000 per Restaurant, separately and not as part of
the Purchase Price, as partial payment for the Inventory. Following the taking
of the Inventory as discussed above, Seller and Purchaser agree to make
adjustments to the Inventory purchase price for the difference between the
amount paid on the Closing Date and Seller's actual Inventory purchase price. In
the event the Inventory purchase price is less than $6,000 per Restaurant,
Seller shall within fifteen (15) days of the Closing Date, reimburse Purchaser
for any overage in payment. In the event the Inventory purchase price is in
excess of $6,000 per Restaurant, Purchaser agrees to make payment to Seller
within fifteen (15) days of the Closing Date of any additional monies which may
be due for the purchase of the Inventory.
1.4 Purchase Price for Assets; Allocations. The purchase price for the
Assets shall be Fourteen Million Seven Hundred Fifty Eight Thousand One Hundred
Fifty Eight and no/100 Dollars ($14,758,158.00)
2
<PAGE>
adjusted pursuant to Section 1.7, plus (i) the aggregate dollar amount in the
Store Banks on the Closing Date; and (ii) $6,000 per restaurant for the
estimated value of the Inventory at the Closing Date (the foregoing calculation
is referred to as the "Purchase Price"). The parties agree that the Purchase
Price for the Assets shall be allocated among the Assets in the manner set forth
on Exhibit 1.4, which shall be mutually agreed to by Seller and Purchaser prior
to the Closing Date. The total purchase price shall be paid in cash at Closing.
1.5 Noncompetition Agreement. At the Closing, Purchaser, the Shareholders
and Seller shall enter into Noncompetition Agreements in the form attached
hereto as Exhibit 1.5 (hereinafter referred to as the "Noncompetition
Agreements") pursuant to which Seller and the Shareholders shall agree not to
compete with the business of Purchaser as provided therein.
1.6 Liabilities of Seller. Except as set forth in this Section 1.6,
Seller shall be and remain solely liable and responsible for all debts,
obligations, duties, and liabilities of Seller and its business. Purchaser does
not and shall not assume, agree to pay or pay any debts, obligations, duties or
liabilities of any nature of Seller or its business, including, but not limited
to, any debts, obligations, duties or liabilities relating to Seller's employees
or employee benefit plans, regardless of whether any such debt, obligation,
duties or liability arises under any contract, agreement, practice, arrangement,
statute, law, ordinance, rule, regulation or otherwise, and nothing in this
Agreement or otherwise is intended or shall be construed to the contrary. The
parties further covenant, promise and agree that Purchaser is not and shall not
be obligated or required to employ any of Seller's employees. Notwithstanding
the foregoing, Purchaser agrees to assume from and after the Closing Date all of
the rights and obligations of Seller attributable to the period from and after
the Closing Date under the Franchise Agreements, the Real Property Leases and
the contracts listed on the attached Exhibit 1.6 (collectively, the "Assumed
Contracts"). This provision shall specifically survive the Closing of this
transaction.
1.7 Prorations. All customary prorations with respect to obligations
under the Assumed Contracts, utility and fuel charges, personal property taxes
and other proratable charges related to the operation of the Restaurants shall
be adjusted between the parties as of 12:01 a.m. on the Closing Date. Payment of
the amount due by reason of the foregoing prorations shall be made at the
Closing or as soon thereafter as reasonably practicable. All real estate taxes
which are due and payable during the tax year in which the Closing occurs shall,
when received, be prorated as of the Closing Date. All rentals, including
minimum and percentage rentals, and other monetary obligations under the Real
Property Leases shall be adjusted for the month in which the Closing occurs.
1.8 Exclusion of Assets. Those assets of Seller and/or the Shareholders
as set forth in full in Exhibit 1.8 attached hereto and incorporated herein (the
"Excluded Assets") are not being purchased by Purchaser.
ARTICLE II -- CLOSING AND TERMINATION
2.1 Time, Date and Place. The closing of the purchase and sale of the
Assets and the other transactions contemplated by this Agreement (referred to
throughout this Agreement as the "Closing") shall take place upon the later to
occur of: (i) May 23, 1997 or (ii) ten (10) days following the satisfaction,
fulfillment or waiver, as the case may be, of all the conditions precedent, set
forth in Section VII hereof, at the offices of Poyner & Spruill, L.L.P., Suite
4000, 100 North Tryon Street, Charlotte, North Carolina, or such other place
that Purchaser shall determine. The time, place and date of the Closing are
referred to throughout this Agreement as the "Closing Date."
3
<PAGE>
2.2 Termination.
2.2.1 If the Closing contemplated hereunder has not occurred on or
before June 30, 1997, either Purchaser or Seller may terminate this Agreement
upon written notice to the other party.
2.2.2 If any of the representations, warranties or covenants of
Seller or the Shareholders are found to be untrue or breached in any material
respect, at or prior to Closing, and Seller or the Shareholders shall not have
cured such breach within thirty (30) days after Purchaser shall have given
written notice to Seller of the existence of such breach, Purchaser may
terminate this Agreement upon written notice to Seller.
2.2.3 If any of the representations, warranties or covenants of
Purchaser are found to be untrue or breached in any material respect, at or
prior to Closing, and Purchaser shall not have cured such breach within 30 days
after Seller shall have given written notice to Purchaser of the existence of
such breach, Seller may terminate this Agreement upon written notice to
Purchaser.
2.2.4 This Agreement may be terminated by the written agreement of
Purchaser and Seller. This Agreement may be terminated by Purchaser in its sole
discretion if any of the contingencies set forth in Section 7.2 is not met to
Purchaser's satisfaction.
2.2.5 This Agreement may be terminated by Purchaser if the Exhibits
hereto are not furnished in accordance with Section 5.1.13 hereof, or are found,
in Purchaser's sole discretion, to be unacceptable within five (5) business days
following receipt by Purchaser thereof and of the letter required by Section
5.1.13.
2.3 Effect of Termination. In the event of the termination and
abandonment of this Agreement pursuant to Section 2.2, this Agreement shall be
of no further force and effect, and, except as specifically provided herein,
with no liabilities or obligations to any party under this Agreement; provided,
however, that the parties shall not be released from any liabilities, claims or
actions regarding the falsity in any material respect of a representation or
warranty set forth in Article III or Article IV or a failure to perform or
comply with any material obligation under this Agreement.
2.4 Expenses.
2.4.1 Except as set forth below, each party shall pay the fees and
expenses of its own legal counsel and, except as provided above, the cost of
obtaining or preparing each document to be delivered by such party at Closing.
2.4.2 Upon termination of this Agreement pursuant to Sections 2.2.2
or 2.2.5 or the second sentence of Section 2.2.4, or if the transactions set
forth herein do not close because of the exercise by a third party of any
contractual right to acquire the Restaurants, the Seller and the Shareholders
shall reimburse the Purchaser for its reasonable out-of-pocket fees, costs and
expenses (including, but not limited to, fees and expenses associated with
Purchaser's filing under the HSR Act, as hereinafter defined) of the Purchaser
incurred in attempting to consummate the transactions contemplated herein;
provided, however, that the aggregate of all such fees, costs and expenses (the
"Expenses") shall not exceed $290,000, in the aggregate with the Expenses
incurred under the North Foods Asset Purchase Agreement. In addition, if the
Closing occurs, then Seller shall pay to Purchaser at the Closing the sum of
$211,924.00. The provisions of this paragraph 2.4 shall survive the termination
of this Agreement for any reason.
4
<PAGE>
ARTICLE III -- REPRESENTATIONS AND WARRANTIES
OF SELLER AND SHAREHOLDERS
Seller and the Shareholders, jointly and severally, represent and warrant
to Purchaser as of the date hereof and as of the Closing on the Closing Date
each of the following:
3.1 Ownership of Seller's Stock. The Shareholders are the sole and
exclusive record and beneficial owners of all of the outstanding shares of the
capital stock of Seller. The Shareholders have duly approved Seller's sale,
assignment, transfer and delivery of the Assets to Purchaser in accordance with
the terms of this Agreement, the consummation of all the transactions
contemplated hereby and Seller entering into the Noncompetition Agreement.
3.2 Due Organization; Name and Address; Good Standing, Authority of
Seller. Seller is a corporation duly organized, validly existing and in good
standing under the laws of the State of North Carolina. The only name and
business address of Seller which has been used by Seller at any time within the
past three years ending at the date of this Agreement is F & P Enterprises,
Inc., 3932 Breezewood Avenue, Fayetteville, North Carolina. Seller has full
right, power and authority to own, lease and operate its properties and assets,
and to carry on its Business. Seller is duly licensed, qualified and authorized
to do business in each jurisdiction in which the properties and assets owned by
it or the nature of the business conducted by it make such licensing,
qualification and authorization legally necessary. Except as disclosed on
Exhibit 3.2, Seller is not in breach or violation of, and the execution,
delivery and performance of this Agreement will not result in a breach or
violation of, any of the provisions of Seller's articles of incorporation, as
amended to the date of this Agreement (the "Articles") or by-laws, as amended to
the date of this Agreement (the "By-Laws"), or, to the best of Seller's
knowledge, any agreement to which it is a party.
3.3 Authorization and Validity of Agreements. Seller and the Shareholders
have the legal capacity, right, power, and authority to enter into this
Agreement and the Noncompetition Agreement. Seller has the full right, power and
authority to execute, acknowledge and deliver this Agreement and to perform the
transactions contemplated by this Agreement. The execution, acknowledgment and
delivery of this Agreement by Seller and the Shareholders and the performance by
Seller and the Shareholders of the transactions contemplated hereby have been
duly and validly authorized by all necessary corporate and shareholder action.
This Agreement has been duly executed, acknowledged and delivered by Seller and
the Shareholders and is the legal, valid and binding obligation of Seller and
the Shareholders enforceable against Seller and the Shareholders, respectively,
in accordance with its terms, except in each case as such enforceability may be
limited by general principles of equity, bankruptcy, insolvency, moratorium and
similar laws relating to creditors rights generally. The Noncompetition
Agreement, when executed, acknowledged and delivered by Seller and the
Shareholders, will be the legal, valid and binding obligation of Seller and the
Shareholders, respectively, enforceable against Seller and against the
Shareholders, respectively, in accordance with its terms, except in each case as
such enforceability may be limited by general principles of equity, bankruptcy,
insolvency, moratorium and similar laws relating to creditors rights generally.
3.4 Agreement Not in Conflict with Other Instruments; Required Approvals
Obtained. Except as disclosed on Exhibit 3.4, the execution, acknowledgment,
delivery, and performance of this Agreement and the Noncompetition Agreement by
the parties thereto, and the consummation of the transactions contemplated by
this Agreement and the Noncompetition Agreement will not (a) materially violate
or require any consent, approval, or filing under, (i) any common law, law,
statute, ordinance, rule or regulation (collectively referred to throughout this
Agreement as "Laws") of any federal, state or local government (collectively
referred to throughout this Agreement as "Governments") or any agency, bureau,
commission, instrumentality or judicial body of any Governments (collectively
referred to throughout this Agreement as "Governmental Agencies") except that
which may be required by the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended
5
<PAGE>
(the "HSR Act"), or (ii) any judgment, injunction, order, writ or decree of any
court, arbitrator, Government or Governmental Agency by which Seller or any of
the Assets is bound; (b) conflict with, require any consent, approval, or filing
under, result in the breach or termination of any provision of, constitute a
default under, or result in the creation of any claim, security interest, lien,
charge, or encumbrance upon any of the Assets pursuant to (i) Seller's Articles
or By-Laws, (ii) any indenture, mortgage, deed of trust, license, permit,
approval, consent, franchise, lease, contract, or other instrument, document or
agreement to which Seller is a party or by which Seller, or any of the Assets is
bound, or (iii) any judgment, injunction, order, writ or decree of any court,
arbitrator, Government or Governmental Agency by which Seller or any of the
Assets is bound. All permits, licenses and authorizations of any Government or
Governmental Agency required to be obtained by Seller prior to the Closing shall
have been obtained and shall be in full force and effect as of the Closing Date.
3.5 Conduct of Business in Compliance with Regulatory and Contractual
Requirements. Seller has conducted and is conducting its business in material
compliance with all applicable Laws of all Governments and Governmental
Agencies.
3.6 Legal Proceedings. There is no action, suit, proceeding, claim or
arbitration, or to the best of Seller's and the Shareholders' knowledge any
investigation by any person or entity, including, but not limited to, any
Government or Governmental Agency, (i) pending, to which Seller or the
Shareholders are a party, or threatened against or relating to Seller, Seller's
business or the Assets, or (ii) challenging Seller's or the Shareholders' right
to execute, acknowledge, deliver, perform under or consummate the transactions
contemplated by this Agreement and, as respects Seller and the Shareholders, the
Noncompetition Agreement, or (iii) asserting any right with respect to any of
the Assets, and, in each such case, there is no basis for any such action, suit,
proceeding, claim, arbitration or investigation.
3.7 Financial Information. Attached hereto as Exhibit 3.7 are copies of
the unaudited Balance Sheets of Seller as of October 31, 1994, 1995, 1996, and
as of December 31, 1996, and the Operating Statements of Seller for each of the
three fiscal years and the two month period, respectively, then ended, which are
being provided by Seller and the Shareholders to Purchaser (the "Financial
Statements"). The Financial Statements are in accordance with the books and
records of Seller, are true and correct and accurately present Seller's
financial position in all material respects as of the dates set forth therein
and the results of Seller's operations for the periods then ended; all such
Financial Statements are in conformity with the accounting principles
historically utilized by Seller and applied on a consistent basis during each
period and on a basis consistent with that of prior periods. Until the Closing
Date, Seller shall deliver to Purchaser month end balance sheets and income
statements within twenty (20) days of the end of each month.
3.8 Tax Matters. All tax returns of Seller as filed by Seller with the
Internal Revenue Service (the "IRS") and all information reported on the returns
are true, accurate, and complete in all material respects. Seller is not a party
to any pending, and is not aware of any threatened action, suit, proceeding, or
assessment against it for the collection of taxes by any Government or
Governmental Agency. Seller has duly and timely filed with all appropriate
Governments and Governmental Agencies, all tax returns, information returns, and
reports required to be filed by Seller. Seller has paid in full all taxes,
interest, penalties, assessments and deficiencies owed by Seller to all taxing
authorities, except for such amounts not yet due and payable. All taxes and
other assessments and levies which Seller is required by applicable Law to
withhold or to collect have been duly withheld and collected and have been paid
over to the proper Governments and Governmental Agencies or are properly held by
Seller for such payment. All claims by the IRS or any state taxing authorities
for taxes due and payable by Seller have been paid by Seller. Seller is not a
party to any pending , and is not aware of any threatened action, suit,
proceeding, or assessment against it for the collection of taxes by any
Government or Governmental Agency.
6
<PAGE>
3.9 Franchise Agreements. The Franchise Agreements are full, complete,
true and correct Franchise Agreements between Seller and Burger King
Corporation, which are, and shall continue to be until the Closing on the
Closing date, in full force and effect.
3.10 Title to Assets; Equipment and Fixed Assets. Seller has sole and
exclusive, good and marketable title to all of the Assets and the same shall be
free and clear of any and all pledges, claims, threats, liens, restrictions,
agreements, leases, security interests, charges and encumbrances at the time of
Closing. All of the Equipment and Fixed Assets are in good, working and
operating condition and repair, reasonable wear and tear excepted and free from
any material defects.
3.11 Records. The Records that have been delivered by Seller to Purchaser
or that shall be delivered by Seller to Purchaser are true, complete and correct
in all material respects.
3.12 Employment Matters.
3.12.1 None of Seller's employees are covered by a collective
bargaining agreement or are represented by a labor organization, and no petition
for representation concerning any of Seller's employees has been filed with the
National Labor Relations Board; Seller is not aware of any union organizational
activity and has no reason to believe that any such activity is being
contemplated. Seller has not engaged in any unfair labor practice.
3.12.2 Except as set forth on Exhibit 3.12.2, Seller is not in
violation of applicable equal employment opportunity wage and hour requirement
or any other Laws of any Government or Governmental Agency relating to
employment; there are no active, pending, or, threatened administrative or
judicial proceedings under any Laws of any Government or Governmental Agency;
there are no claims, charges, and employment related suits which have occurred
within the last three years or are presently pending or, to the best of Seller's
and Shareholders' knowledge, threatened under any employment related Laws of any
Government or Governmental Agency; and Seller is not subject to any judgments,
decrees, conciliation agreements and settlement agreements concerning employment
related matters.
3.12.3 Seller has not entered into any employment agreements with any
of its employees, and all employees may be terminated at will; there is no
contractual obligation or special termination or severance arrangement in
respect of any of Seller's employees; and there is no provision of any agreement
or arrangement with any of Seller's employees, or any other legal or contractual
requirement, which would obligate Seller to require Purchaser of the Assets to
employ any of Seller's employees.
3.12.4 Seller has paid, in accordance with its normal payroll
practices and all applicable Laws, all wages, bonuses, commissions and other
benefits and sums due (and all required taxes, insurance, social security and
withholding thereon), as they have accrued, except for such items, and accrued
vacation, accrued sick leave, accrued benefits and accrued payments (and pro
rata accruals for a portion of a year), accruing during the pay period
immediately preceding the Closing.
3.12.5 Purchaser is under no obligation or duty, whether under any
contract, agreement, understanding or arrangement or under any applicable Law of
any Government or Governmental Agency to assume or be responsible for any
obligation, duty or liability, now existing or hereafter arising, relating to or
in connection with Seller's employees or any compensation, benefits or benefit
plans in respect of Seller's employees, or otherwise arising out of or in
connection with the transactions contemplated by this Agreement, and Seller has
made no commitment and is under no obligation to cause Purchaser of the Assets
to assume or to be responsible for any such obligation, duty or liability.
7
<PAGE>
3.13 Absence of Certain Changes or Events. Since December 31, 1996,
Seller has not engaged in or experienced any of the following:
3.13.1 Sold, assigned, transferred, leased, disposed of, or agreed to
sell, assign, transfer, lease, or dispose of, any of the Assets, except
Inventory sold and Equipment replaced in the ordinary course of Seller's
business, as such business has been operated historically.
3.13.2 Except as disclosed on Exhibit 3.13.2, made any capital
expenditure in excess of Five Thousand Dollars ($5,000) per Restaurant or
entered into any contract, agreement, arrangement, understanding or commitment
therefor, or acquired or leased any assets or property of any third person or
party other than in the ordinary course of Seller's business, as such business
has been operated historically.
3.13.3 Suffered any material adverse change in Seller's operations,
earnings, assets, liabilities, or business (financial or otherwise).
3.13.4 Except as set forth in Exhibit 3.13.4, failed to pay any
indebtedness or other obligation, including any taxes and other charges, when
due.
3.14 Adverse Conditions. Except as set forth in Exhibit 3.14, attached
hereto and incorporated by reference herein, there are no past, present or
future conditions, facts or circumstances which have materially affected or
which might materially affect adversely the business of Seller or prevent
Purchaser from carrying on Seller's business, excluding general economic,
financial and market conditions that are known to the public.
3.15 Leases. Attached hereto as Exhibit 3.15 and incorporated by
reference herein is a list of the following, which is accurate and complete as
of the date hereof: all leases, contracts, licenses, agreements or other
commitments of Seller as obligor involving a liability, obligation, contingent
liability or contingent obligation in excess of $1,000 per Restaurant.
3.16 Bonus, Pension or Other Plans, etc. Except as set forth on Exhibit
3.16, Seller is not a party to, does not maintain or make any contribution to,
and Seller has not incurred any liability or expense with respect to any
employment agreement, current or future pension, retirement, deferred
compensation, bonus, profit-sharing, insurance or similar plan, agreement,
arrangements or formal or informal understandings for the benefit of employees,
in each case whether or not legally binding. In no event shall Purchaser be
liable for any of the above, including those items disclosed on Exhibit 3.16.
3.17 Full Disclosure. This Agreement (including the Exhibits hereto) does
not contain any untrue statement of a material fact or omit to state any
material fact necessary to make the statements contained herein not misleading.
There is no fact known to Seller or to the Shareholders that is not disclosed in
this Agreement that materially adversely affects the accuracy of the
representations and warranties contained in this Agreement or Seller's financial
condition, operations, business, earnings, assets, or liabilities.
3.18 No Brokerage. Other than the obligations owed to Cypress Consulting
Group, Inc., which Seller agrees to pay, neither Seller nor the Shareholders
have incurred any obligation or liability, contingent or otherwise, for
brokerage fees, finder's fees, agent's commissions, or the like in connection
with this Agreement or the transactions contemplated hereby.
3.19 Seller's Franchise Agreements. Seller is not in breach of or default
under any provision of the Franchise Agreements, and no condition exists which,
with passage of time or the giving of notice or both, will result in a material
breach or default by Seller of any provision of any of the Franchise Agreements.
8
<PAGE>
3.20 Creditors; Bulk Sale Laws. Seller has fully paid, or will fully pay
at Closing, all amounts due to its secured creditors holding any security
interest in any of the Assets and all amounts due to its unsecured creditors to
whom more than $20,000 is owed, and furnish proof to Purchaser of the payment of
same and the release of all such security interests. To further ensure that
Seller's creditors are fully paid, Seller agrees that the sum of $85,000 will be
escrowed with Poyner & Spruill, L.L.P., counsel for Seller, for a period of 120
days following Closing, to be distributed by Poyner & Spruill, L.L.P. for the
payment of such of Seller's creditors as Seller or, in the absence of objection
by Seller, Purchaser may direct, with the balance of such amount that has not
been directed to be paid to the creditors of Seller to be delivered to Seller at
the end of such 120 day period. Purchaser hereby waives compliance by Seller
with the provisions of any so-called "bulk transfer laws" of any jurisdiction in
connection with the sale of the Assets to Purchaser. Seller agrees to indemnify
and hold Purchaser harmless from all loss, cost, damage or expense by reason of
any failure of Seller to pay any of its creditors in accordance with this
Section 3.20 and such "bulk transfer laws."
3.21 Notice of Violations. Seller has received no notice of and, to the
best of Seller's knowledge, there is no violation or alleged violation of any
legal requirement affecting the Restaurants, including, without limitation, any
violation or alleged violation of any local, state or federal environmental,
zoning, handicap or fire law, ordinance, code, regulation, rule or order, and
specifically including, without limitation, variances or special permits
affecting the Restaurants. Seller has performed all conditions to any permits or
other governmental approvals or licenses with respect to the Restaurants,
including, without limitation, the payment of all development impact or other
fees and developer exactions.
3.22 Condition of Restaurants. The Restaurants comply, in all material
respects, with the current Burger King Corporation Repairs and Maintenance
Standards (the "Standards"). In the event Burger King Corporation requires any
modification to the Restaurants as a result of the failure of the Restaurants to
meet the Standards, Seller shall, at its sole cost and expense, effect such
repairs to bring all Restaurants into compliance with the Standards; provided,
however, that Seller shall not be required to make any improvements to the
Restaurants to comply with the Burger King Corporation's Project Jennifer
standards or other merely cosmetic changes not related to the operation,
functionality or safety of the Restaurants.
ARTICLE IV -- REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller and the Shareholders,
jointly and severally, as of the date hereof and as of the Closing on the
Closing Date each of the following:
4.1 Due Organization; Good Standing; Power. Purchaser is a corporation
duly incorporated, validly existing, and in good standing under the laws of the
State of Delaware. Purchaser has full right, power and authority to enter into
this Agreement and the Noncompetition Agreement and to perform its obligations
hereunder and thereunder. Purchaser is not in breach or violation of, and the
execution, delivery and performance of this Agreement will not result in a
breach or violation of, any of the provisions of Seller's certificate of
incorporation (the "Certificate") or By-laws.
4.2 Authorization and Validity of Documents. The execution, delivery and
performance by Purchaser of this Agreement and the Noncompetition Agreement and
the transactions contemplated hereby and thereby, have been duly and validly
authorized by Purchaser. This Agreement has been duly executed, acknowledged and
delivered by Purchaser and is a legal, valid and binding obligation of
Purchaser, and the Noncompetition Agreement, when executed and delivered, will
be legal, valid and binding obligation of Purchaser, each enforceable against
Purchaser in accordance with its terms except as such enforceability may be
limited by general principles of equity, bankruptcy, insolvency, moratorium and
similar laws relating to creditors' rights generally.
9
<PAGE>
4.3 No Brokerage. Purchaser has not incurred any obligation or liability,
contingent or otherwise, for brokerage fees, finder's fees, agent's commissions,
or the like in connection with this Agreement or the transactions contemplated
hereby.
4.4 Obligations Assumed. Purchaser covenants that Purchaser will pay all
obligations assumed by it under this Agreement.
ARTICLE V -- COVENANTS
5.1 Seller's and Shareholders' Covenants. Seller and the Shareholders,
jointly and severally, covenant, promise and agree that from the date hereof and
until the Closing, the Shareholders shall, and the Shareholders shall cause
Seller to, perform and comply with each of the following:
5.1.1 Continue to operate the Business of Seller diligently, and not
take any action, omit to take any action, or engage in any transaction other
than acts or transactions in the ordinary course of business, as such Business
has been operated historically.
5.1.2 Preserve the Business of Seller and preserve the relationship of
Seller with suppliers, customers, Burger King Corporation and others as such
relationships have been preserved historically.
5.1.3 Maintain and continue normal and usual maintenance and repair
of the Equipment, the Fixed Assets, and all other assets being sold and
transferred to Purchaser herein.
5.1.4 Cooperate with Purchaser to achieve an orderly transition of
the Business of Seller to Purchaser and an orderly transfer of the Assets to
Purchaser.
5.1.5 Pay or provide for payment of all sales, use, personal
property, social security, withholding, payroll, unemployment compensation,
income and other taxes, assessments, fees and public charges due and payable by
Seller in respect of its Business and the Assets through the Closing Date and
any portion thereof applicable to any period prior to the Closing Date.
5.1.6 Pay all wages, bonuses, commissions and other employment
benefits and sums (and all required taxes, insurance and withholding thereon),
including all accrued vacation, accrued sick leave, accrued benefits and accrued
payments (and pro rata accruals for a portion of a year) due to Seller's
employees through the Closing Date.
5.1.7 Maintain in effect all insurance policies and other employee
benefits covering any employee claims that may be incurred through the Closing
Date.
5.1.8 Fully perform and comply with all covenants, promises and
agreements hereunder which are required to be performed or complied with by
Seller and the Shareholders prior to or at the Closing, and exert their best
efforts to completely satisfy and fulfill all conditions precedent to Seller's
and the Shareholders' obligations to close hereunder at the Closing on the
Closing Date.
5.1.9 Exert their best efforts to prevent the occurrence of any event
which could result in any of Seller's or the Shareholders' representations and
warranties contained in this Agreement not being true and correct at or as of
the time immediately after the occurrence of such event, and Seller and the
Shareholders shall promptly notify Purchaser of the occurrence of any event or
the discovery of any fact which would cause any of their covenants, promises and
agreements to be breached or violated or any of their representations and
warranties
10
<PAGE>
to become not true and correct or which could interfere with or prevent the
consummation of the transactions contemplated hereby.
5.1.10 Provide Purchaser and its representatives, subject to the
restrictions contained in Section 7.2.8, with access during normal business
hours to all of Seller's properties, assets and Records, provide Purchaser and
its representatives with such financial and operating data and other information
with respect to Seller's Business, Assets and properties as Purchaser shall from
time to time reasonably request, and permit Purchaser and its representatives,
at Purchaser's sole expense, to consult with Seller's representatives, officers,
employees and accountants up to the time of Closing and for 120 days thereafter.
5.1.11 Take no action which is or would cause a material violation of
any Laws of any Governments or Governmental Agencies.
5.1.12 Take, or cause to be taken, all reasonable actions necessary
to permit Purchaser to furnish all information required under the HSR Act and
will promptly cooperate with and furnish information to Purchaser in connection
with any such requirements imposed upon Purchaser or its parent in connection
with the transaction as set forth herein. The parties acknowledge and agree that
the filing fees for any filings required under the HSR Act shall be paid by
Purchaser.
5.1.13 Deliver to Purchaser within fourteen (14) business days of the
date of execution of this Agreement all exhibits to be furnished by Purchaser,
together with a letter certifying that all such exhibits have been furnished and
that the information contained therein is true and complete in all material
respects.
ARTICLE VI -- OPINIONS OF COUNSEL
6.1 Opinion of Seller's and Shareholders' Counsel. At the Closing, Seller
and the Shareholders shall deliver to Purchaser the opinion of their counsel,
dated as of the Closing Date, in substantially the form attached hereto as
Exhibit 6.1.
6.2 Opinion of Purchaser's Counsel. At the Closing, Purchaser shall
deliver to Seller and to the Shareholders the opinion of its counsel, dated as
of the Closing Date, in substantially the form attached hereto as Exhibit 6.2.
ARTICLE VII -- CONDITIONS
7.1 Seller's Conditions to Close. Seller's obligation to close the
transactions contemplated hereby at the Closing shall be subject to the complete
satisfaction and fulfillment of all of the following conditions precedent, any
or all of which may be waived in whole or in part by Seller (but no such waiver
of any such condition precedent shall be or constitute a waiver of any covenant,
promise, agreement, representation or warranty made by Purchaser in this
Agreement):
7.1.1 All representations and warranties made by Purchaser in this
Agreement shall be complete and accurate at and as of the Closing on the Closing
Date. Seller shall have been furnished with a certificate, signed by Purchaser
and dated the Closing Date, to the foregoing effect.
7.1.2 All covenants, promises and agreements made by Purchaser in
this Agreement and all other actions required to be performed or complied with
by Purchaser under this Agreement prior to or at the Closing shall have been
fully performed or complied with by Purchaser. Seller shall have been furnished
with a certificate, signed by Purchaser and dated the Closing Date, to the
foregoing effect.
11
<PAGE>
7.1.3 Purchaser shall deliver to Seller by wire transfer or bank
check the amount of cash set forth in Section 1.4 of this Agreement.
7.1.4 The Board of Directors of Seller shall have approved this
Agreement and the transactions contemplated herein within seven (7) days of the
date of this Agreement. If no written notice of disapproval is provided to
Purchaser prior to the expiration of such seven (7) day period, the transaction
will be deemed to be approved and this condition will be deemed to be satisfied.
7.1.5 Seller shall have received an opinion of counsel for Purchaser
as of the Closing Date, as required by Section 6.2.
7.1.6 Purchaser shall not have received, prior to Closing, any
notification under the HSR Act that seeks to prohibit Purchaser and Seller from
consummating the transaction set forth in this Agreement.
7.1.7 Seller shall have received consent from the landlord for each
Leasehold Property location to the assignment of each Real Property Lease to
Purchaser.
7.2 Purchaser's Conditions to Close. Purchaser's obligation to close the
transactions contemplated hereby at the Closing shall be subject to the complete
satisfaction and fulfillment of all of the following conditions precedent, any
or all of which may be waived in whole or in part by Purchaser (but no such
waiver of any such condition precedent shall be or constitute a waiver of any
covenant, promise, agreement, representation or warranty made by Seller and the
Shareholders in this Agreement):
7.2.1 All representations and warranties made by Seller and the
Shareholders in this Agreement shall be complete and accurate at and as of the
Closing on the Closing Date. Purchaser shall have been furnished with a
certificate, signed by the Shareholders and Seller and dated the Closing Date,
to the foregoing effect.
7.2.2 All covenants, promises and agreements made by Seller and the
Shareholders in this Agreement and all other actions required to be performed or
complied with by Seller and the Shareholders under this Agreement prior to or at
the Closing shall have been fully performed or complied with by Seller and the
Shareholders. Purchaser shall have been furnished with a certificate, signed by
the Shareholders and Seller and dated the Closing Date, to the foregoing effect.
7.2.3 Seller shall have obtained, and delivered to Purchaser, copies
of all consents, approvals or other authorizations which Seller is required to
obtain from, and any filing which Seller is required to make with, any
governmental authority or agency or any other person including, but not limited
to, consents required from Burger King Corporation (the "Burger King Consents")
in connection with the execution, delivery and consummation of this Agreement
and the other documents associated herewith and the consummation of the
transactions contemplated hereby or thereby (collectively, the "Required
Consents"), in form and substance reasonably satisfactory to Purchaser.
7.2.4 Purchaser shall have received all things required to be
delivered or furnished to Purchaser by Seller and the Shareholders hereunder
prior to or at the Closing.
7.2.5 All necessary permits, licenses and approvals (including the
Burger King Consents) required to be obtained by Purchaser shall have been
obtained and paid for by Purchaser or Purchaser shall have exercised all
reasonable efforts to obtain same.
12
<PAGE>
7.2.6 There shall not have occurred any material adverse change in
the business of Seller or in the Assets.
7.2.7 Purchaser shall have received an opinion of counsel for Seller
and the Shareholders, as of the Closing Date, as required by Section 6.1 hereof.
7.2.8 Purchaser and its representatives shall have completed, to their
complete satisfaction, an investigation and examination of all aspects of the
Restaurants and the Assets, including the Financial Statements. No employee or
representative of Purchaser will perform on-site due diligence of the
Restaurants without Seller's prior approval, at which time such employee or
representative will be accompanied by Seller or its designee. Purchaser shall
have completed its review of the Restaurants to confirm the Equipment in the
Restaurants is in proper working order and that the Restaurants conform in all
material respects to Burger King(R) Standards (exclusive of any Project Jennifer
upgrades or other merely cosmetic changes not related to the operation,
functionality or safety of the Restaurants) (the "Walk-Thru") that apply to the
Restaurants on or before forty-five (45) days following the execution of this
Agreement. Purchaser shall itemize any deficiencies noted in the Walk-Thru and
provide such list to Seller prior to the Closing Date.
7.2.9 Seller shall have delivered to Purchaser the following
documents:
7.2.9.1 the Lease Assignments of its Real Property Leases, each
Assumed Contract, and the Consents to Assignment, Estoppel, and Releases;
7.2.9.2 any required easement assignments;
7.2.9.3 to the extent available, a fully executed original
counterpart of each Real Property Lease in Seller's possession;
7.2.9.4 certificates dated no earlier than thirty (30) days
prior to the Closing Date, from the Secretary of State for the State of North
Carolina as to the good standing of Seller; and
7.2.9.5 all other documents, instruments and agreements required
to be delivered by Seller to Purchaser pursuant to this Agreement.
7.2.10 Between the date of this Agreement and the Closing Date,
Seller shall conduct the operation of its Restaurants in the ordinary and usual
course of business, consistent with past practices and will use its best efforts
to preserve intact the present business organization with respect to its
Restaurants, to keep available the services of its officers and employees and to
maintain satisfactory relationships with landlords, franchisors, dealers,
licensors, licensees, suppliers, contractors, distributors, customers and others
having business relations with it and its Restaurants and will maintain its
Restaurants, real property, and Assets in a condition conducive to the operation
of the business currently carried on therein.
7.2.11 Seller shall have provided to Purchaser copies of all
operating permits and licenses (collectively, the "Approvals") which are in
Seller's possession.
7.2.12 Seller shall have provided to Purchaser copies of all
documents with respect to any actions, suit or proceeding which has been brought
by or on behalf of Seller with respect to the Assets or the Business.
13
<PAGE>
7.2.13 Seller shall execute, acknowledge and deliver to Purchaser a
Bill of Sale and Assignment in the form attached hereto as Exhibit 7.2.13 and
incorporated herein by reference pursuant to which Seller shall sell, assign,
and transfer to Purchaser the Assets.
7.2.14 Seller shall execute, acknowledge and deliver to Purchaser a
Warranty Assignment in the form attached hereto as Exhibit 7.2.14 and
incorporated herein by reference pursuant to which Seller shall sell, assign and
transfer to Purchaser the Franchise Agreements.
7.2.15 The Shareholders, Seller and Purchaser shall execute,
acknowledge and deliver the Noncompetition Agreement attached hereto as Exhibit
1.5.
7.2.16 Seller shall have previously delivered to Purchaser the Real
Property Leases and the Purchaser shall have fifteen (15) days from the date of
this Agreement to review such Real Property Leases to ensure that it is
satisfactory to the Purchaser, in its sole discretion.
7.2.17 Within forty-five (45) days of the execution of this Agreement,
Purchaser's auditor shall have (i) reviewed the financial and accounting system
of Seller; (ii) reviewed and confirmed the Financial Statements and results set
forth in the Financial Statements; and (iii) found no material objection to the
financial and accounting system of Seller, or Seller and Purchaser shall have
resolved any objection raised by the auditor and presented to Seller by
Purchaser.
7.2.18 The Boards of Directors of National Restaurant Enterprises,
Inc. d/b/a AmeriKing, Inc. and Purchaser shall have approved this Agreement and
the transactions contemplated herein within thirty (30) days of the date of this
Agreement.
7.2.19 Purchaser shall have concurrently consummated the transactions
set forth in the North Foods Asset Purchase Agreement, and Castle Properties,
L.L.C. shall have concurrently consummated the T & B Purchase Agreement and the
W & W Purchase Agreement.
7.3 Contemporaneous Transfer. All transfers, assignments, conveyances, and
transactions under this Agreement shall be effected contemporaneously for
present value between and among Seller, the Shareholders and Purchaser.
ARTICLE VIII -- INDEMNIFICATION
8.1 Indemnification By Seller And Shareholders. Seller and the
Shareholders, jointly and severally, shall defend, indemnify and hold harmless
Purchaser, its officers, directors, stockholders, agents, servants and employees
and their respective heirs, personal and legal representatives, guardians,
successors and assigns, from and against any and all claims, threats,
liabilities, taxes, interest, fines, penalties, suits, actions, proceedings,
demands, damages, losses, costs and expenses (including reasonable attorneys'
and experts' fees and court costs) of every kind and nature arising out of,
resulting from, or in connection with the following:
8.1.1 Any material misrepresentation or breach by Seller or the
Shareholders of any representation or warranty contained in this Agreement.
8.1.2 Any material nonperformance, failure to comply or breach by
Seller or the Shareholders of any covenant, promise or agreement of Seller or
the Shareholders contained in this Agreement.
8.1.3 Any debts, obligations, duties and liabilities of Seller and
the Shareholders (except those assumed by Purchaser).
14
<PAGE>
8.1.4 The past or future failure of Seller to comply with any
applicable Environmental Laws (as hereinafter defined) or the presence of
Hazardous Materials (as hereinafter defined) in the soil or ground water on the
former or present properties of Seller at the time of Closing.
For purposes of this Section 8.1, the following terms shall have the
meaning set forth below:
(i) "Environmental Law" shall mean any and all laws, statutes,
ordinances, rules, regulations, judgments, orders, decrees, permits,
concessions, grants, agreements, licenses, or other governmental restrictions or
requirements regulating Hazardous Materials or relating to health, safety, the
environment or the release of Hazardous Materials into the environment, now or
hereafter in effect.
(ii) "Hazardous Materials" shall mean any chemical, substance,
material, object, condition, waste or combination thereof which is or may be
hazardous to human health or safety due to its radioactivity, ignitability,
corrosivity, reactivity, explosiveness, toxicity, carcinogenicity,
infectiousness or other harmful or potentially harmful properties or effects,
including, without limitation, all of those chemicals, substances, materials,
objects, conditions, wastes or combinations thereof which are now or become
listed, defined or regulated in any manner by any Environmental Law.
8.2 Indemnification by Purchaser. Purchaser shall defend, indemnify and
hold harmless Seller, the Shareholders and their respective heirs, personal and
legal representatives, guardians, successors and assigns, from and against any
and all claims, threats, liabilities, taxes, interest, fines, penalties, suits,
actions, proceedings, demands, damages, losses, costs and expenses (including
reasonable attorneys' and experts' fees and court costs) of every kind and
nature arising out of, resulting from, or in connection with the following:
8.2.1 Any material misrepresentation, omission or breach by Purchaser
of any representation or warranty contained in this Agreement.
8.2.2 Any material nonperformance, failure to comply or breach by
Purchaser of any covenant, promise or agreement of Purchaser contained in this
Agreement.
8.3 Defense of Claims. In the event of any claim, threat, liability, tax,
interest, fine, penalty, suit, action, proceeding, demand, damage, loss, cost or
expense with respect to which indemnity is or may be sought hereunder (an
"Indemnity Claim"), the indemnified party shall promptly notify the indemnifying
party in writing of such Indemnity Claim, specifying in reasonable detail the
Indemnity Claim and the circumstances under which it arose. The indemnifying
party may elect to assume the defense of such Indemnity Claim, at its own
expense, by written notice to the indemnified party given within ten (10) days
after the indemnifying party receives written notice of the Indemnity Claim, and
the indemnifying party shall promptly engage counsel reasonably acceptable to
the indemnified party to direct and conduct such defense; provided, however,
that the indemnified party shall have the right to engage its own counsel, at
its own expense, to participate in such defense. In the event the indemnifying
party does not so elect to assume the defense of such Indemnity Claim in the
manner specified above, or if, in the reasonable opinion of counsel to the
indemnified party, there are defenses available to the indemnified party which
are different from or additional to those available to the indemnifying party or
which give rise to a material conflict between the defense of the indemnified
party and of the indemnifying party, then upon notice to the indemnifying party,
the indemnified party may elect to engage separate counsel to conduct its
defense, at the expense of the indemnifying party.
In the event the indemnifying party assumes the defense of any Indemnity
Claim, it may at any time notify the indemnified party of its intention to
settle, compromise or satisfy such Indemnity Claim and may make such settlement,
compromise or satisfaction (at its own expense) unless within twenty (20) days
after the giving of such written notice the indemnified party shall give written
notice to the indemnifying party of its intention to
15
<PAGE>
assume the defense of the Indemnity Claim, in which event the indemnifying party
shall be relieved of its duty hereunder to indemnify the indemnified party.
Unless the indemnified party shall have given the notice referred to in the
preceding sentence, (i) the indemnified party shall not consent to or make any
settlement, compromise or satisfaction with respect to the Indemnity Claim
without the prior written consent of the indemnifying party, which consent shall
not be unreasonably withheld, and (ii) any settlement, compromise or
satisfaction made by the indemnifying party with respect to such Indemnity Claim
shall be deemed to have been consented to by and shall be binding upon the
indemnified party.
8.4 Arbitration. Any dispute arising out of or relating to this Agreement
which occurs after the date of Closing, which has not been resolved by non-
binding means within thirty (30) days, shall be finally settled by arbitration
conducted in accordance with the American Arbitration Association Commercial
Arbitration Rules by a sole arbitrator selected by the parties. In the event the
parties cannot agree upon an arbitrator, each party shall select an arbitrator
and the two arbitrators so selected shall select the arbitrator to hear the
dispute. The place for arbitration shall be Chicago, Illinois.
ARTICLE IX -- MISCELLANEOUS
9.1 Survival of Representations, Warranties and Agreements. All of the
representations, warranties, covenants, promises and agreements of the parties
contained in this Agreement (or in any document delivered or to be delivered
pursuant to this Agreement or at or in connection with the Closing) shall
survive the execution, acknowledgment and delivery of this Agreement and the
consummation of the transactions contemplated hereby for a period of five (5)
years from the date of Closing.
9.2 Post-Closing Obligation. Within fifteen (15) days following the
Closing Date, Seller shall pay all wages, bonuses, commissions and other
benefits and sums (and all required taxes, insurance, social security and
withholding thereon), including all accrued vacation, accrued sick leave,
accrued benefits and accrued payments (and pro rata accruals for a portion of a
year) due to Seller's employees for all periods prior to and through the Closing
Date.
9.3 Notices. All notices, requests, demands, consents, and other
communications which are required or may be given under this Agreement
(collectively, the "Notices") shall be in writing and shall be given either (a)
by personal delivery with a receipted copy of such delivery, (b) by certified or
registered United States mail, return receipt requested, postage prepaid, or (c)
by facsimile transmission with an original mailed by first class mail, postage
prepaid, to the following addresses:
(i) If to Seller, to:
Thomas Fickling
F & P Enterprises, Inc.
3932 Breezewood Avenue
Fayetteville, North Carolina 28303
Facsimile No.: (910) 486-0863
with a copy to:
Mark B. Edwards, Esq.
Poyner & Spruill, L.L.P.
100 North Tryon Street, Suite 4000
Charlotte, North Carolina 28202
Facsimile No.: (704) 342-5264
16
<PAGE>
(ii) If to the Shareholders, to:
Thomas Fickling
William Prentice
F & P Enterprises, Inc.
3932 Breezewood Avenue
Fayetteville, North Carolina 28303
Facsimile No.: (910) 486-0863
with a copy to:
Mark B. Edwards, Esq.
Poyner & Spruill, L.L.P.
100 North Tryon Street, Suite 4000
Charlotte, North Carolina 28202
Facsimile No.: (704) 342-5264
(iii) If to Purchaser, to:
Lawrence E. Jaro, Chief Executive Officer
AmeriKing Carolina Corporation I
2215 Enterprise Drive
Westchester, Illinois 60154
Facsimile No.: (708) 947-2160
with copies to:
A. Richard Caputo
The Jordan Company
9 West 57th Street, Suite 4000
New York, New York 10019
Facsimile No.: (212) 755-5263
and
Ernest J. Panasci, Esq.
Slivka Robinson Waters & O'Dorisio, P.C.
1099 18th Street
Suite 2600
Denver, Colorado 80202
Facsimile No.: (303) 297-2750
or to such other address of which written notice in accordance with this Section
9.2 shall have been provided to the other parties. Notices may only be given in
the manner hereinabove described in this Section 9.2 and shall be deemed
received three (3) days after given in such manner; provided however, that any
notice sent by facsimile shall be deemed to have been given as of the date of
the transmission.
9.4 Entire Agreement. This Agreement (including the Exhibits hereto which
constitute a part hereof) constitutes the full, entire and integrated agreement
between the parties hereto with respect to the subject matter
17
<PAGE>
hereof, and supersedes all prior negotiations, correspondence, understandings
and agreements among the parties hereto respecting the subject matter hereof.
9.5 Assignability. This Agreement shall not be assignable by any party
hereto without the prior written consent of the other parties hereto; provided,
however, that Purchaser may assign this Agreement to another subsidiary of
AmeriKing Corporation.
9.6 Binding Effect; Benefit. This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective heirs, personal and
legal representatives, guardians, successors and permitted assigns. Nothing in
this Agreement, express or implied, is intended to confer upon any other person
any rights, remedies, obligations, or liabilities.
9.7 Severability. Any provision of this Agreement which is held by a court
of competent jurisdiction to be prohibited or unenforceable only shall be
ineffective only to the extent of such prohibition or unenforceability, without
invalidating or rendering unenforceable the remaining provisions of this
Agreement.
9.8 Amendment; Waiver. No provision of this Agreement may be amended,
waived or otherwise modified without the prior written consent of all of the
parties hereto. No action taken pursuant to this Agreement, including any
investigation by or on behalf of any party shall be deemed to constitute a
waiver by the party taking such action of compliance with any representation,
warranty, covenant or agreement herein contained. The waiver by any party hereto
of a breach of any provision or condition contained in this Agreement shall not
operate or be construed as a waiver of any subsequent breach or of any other
conditions hereof.
9.9 Section Headings. The section and other headings contained in this
Agreement are for reference purposes only and shall not affect the meaning or
interpretation of this Agreement.
9.10 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be one and the same instrument.
9.11 Applicable Law; Jurisdiction and Venue; Service of Process. This
Agreement shall be governed by, construed, interpreted and enforced in
accordance with the laws of the State of North Carolina.
9.12 Remedies. The parties hereto acknowledge that in the event of a
breach of this Agreement by Seller, any claim for monetary damages hereunder may
not constitute an adequate remedy, and that it may therefore be necessary for
the protection of the Purchaser to carry out the terms of this Agreement to
apply for the specific performance of the provisions hereof. It is accordingly
hereby agreed by Seller that no objection to the form of the action or the
relief prayed for in any proceeding for specific performance of this Agreement
shall be raised by Seller, the Shareholders or any of their affiliates, in order
that such relief may be expeditiously obtained by Purchaser.
9.13 Further Assurances. Seller and the Shareholders jointly and severally
agree to execute, acknowledge and deliver, after the date hereof, without
additional consideration, such further assurances, instruments and documents,
and to take such further actions, as Purchaser may reasonably request in order
to fulfill the intent of this Agreement and the transactions contemplated
hereby.
9.14 Use of Genders. Whenever used in this Agreement, the singular shall
include the plural and vice versa, and the use of any gender shall include all
genders and the neuter.
18
<PAGE>
9.15 Risk of Loss. All risk of loss of damage to or destruction of the
Assets, in whole or in part, shall be and remain with Seller until the Closing
and all of the transactions contemplated hereby shall have been consummated.
9.16 Negotiations with Other Persons. Until the earlier of the Closing or
the termination of this Agreement as provided herein, neither Seller nor the
Shareholders shall initiate, encourage the initiation by others, or participate
in any discussion or negotiations with any other person or entity relating to
the sale of any or all of the Assets, the business of Seller or any securities
of Seller. From the date of this Agreement and until after the Closing and the
consummation of the transactions contemplated by this Agreement, the
Shareholders shall not offer for sale, sell or otherwise transfer (with or
without consideration) any securities of Seller owned of record or beneficially
by him.
9.17 Expenses of Transactions. All sales, transfer and use taxes incurred
in connection with the sale, assignment, transfer and delivery of the Assets
shall be paid by Seller. All Burger King franchise transfer fees and taxes shall
be paid fifty percent (50%) by Purchaser and fifty percent (50%) by Seller.
19
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement, with the intention of making it a valid and binding instrument, on
the date first above written.
Seller:
ATTEST: F & P ENTERPRISES, INC.
/s/ William Prentice By: /s/ W. Thomas Fickling
- ----------------------------- --------------------------------------
W. Thomas Fickling, President
------------------
WITNESS: Shareholders:
/s/ Thomas T. Fickling /s/ Thomas Fickling
- ----------------------------- ------------------------------------------
Thomas Fickling
/s/ William Prentice
------------------------------------------
William Prentice
Purchaser:
ATTEST: AMERIKING CAROLINA CORPORATION I
/s/ Joel Aaseby By: /s/ Lawrence E. Jaro
- ----------------------------- --------------------------------------
Joel Aaseby, Secretary Lawrence E. Jaro, Chief Executive Officer
20
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT LIST
<C> <S>
1 Restaurant Locations
1.1.1 Equipment, Materials, Furniture and Supplies
1.1.2 Fixed Assets
1.1.4 Franchise Agreements
1.1.7 (a) Form of Lease Assignment and Assumption Agreement
(b) Form of Consent to Assignment, Estoppel, and Release
1.4 Allocation of Purchase Price
1.5 Form of Noncompetition Agreement
1.6 List of Other Assumed Contracts
1.8 Excluded Assets
3.2 Breaches or Violations of Agreements, Articles or Bylaws
3.4 Disclosure of Exceptions regarding Authority
3.7 Financial Statements
Unaudited Balance Sheets as of October 31, 1994
Unaudited Balance Sheets as of October 31, 1995
Unaudited Balance Sheets as of October 31, 1996
Unaudited Balance Sheets as of December 31, 1996
Operating Statements for November 1, 1993 through October 31, 1994
Operating Statements for November 1, 1994 through October 31,1995
Operating Statements for November 1, 1995 through October 31,1996
Interim Statements for November 1, 1996 through December 31, 1996
3.12.2 Employment Issues
3.13.2 Capital Expenditures
3.13.4 Payment of Indebtedness and Taxes
3.14 Adverse Conditions
3.15 List of Leases, Contracts, Licenses, Agreements and other Commitments
involving liabilities of more than $1000
3.16 Bonuses and Pension Plans
6.1 Opinion of Seller's and Shareholders' Counsel
6.2 Opinion of Purchaser's Counsel
7.2.13 Bill of Sale and Assignment
7.2.14 Warranty Assignment
</TABLE>
21
<PAGE>
AMENDMENT NO. 1
TO
ASSET PURCHASE AGREEMENT
THIS AMENDMENT NO. 1 TO ASSET PURCHASE AGREEMENT (this "Amendment") is made
and entered into this 8th day of April, 1997, among F & P ENTERPRISES, INC., a
North Carolina corporation ("Seller"); THOMAS FICKLING and WILLIAM PRENTICE
(collectively referred to as the "Shareholders"), AMERIKING CAROLINA CORPORATION
I, a Delaware corporation ("Purchaser"), and NATIONAL RESTAURANT ENTERPRISES,
INC. d/b/a AMERIKING CORPORATION, a Delaware corporation ("NRE").
R E C I T A L S:
WHEREAS, Seller, the Shareholders and Purchaser entered into an Asset
Purchase Agreement, dated March 7, 1997 (the "Agreement"); and
WHEREAS, the parties hereto desire to amend the Agreement to further
clarify the parties' intentions.
NOW THEREFORE, in consideration of the Recitals, which shall be deemed to
be a substantive part of this Amendment, and the mutual covenants, promises,
agreements, representations and warranties contained in this Amendment, the
parties hereto do hereby covenant, promise, agree, represent and warrant as
follows:
1. Definitions of Terms. Capitalized terms used without definition herein
shall have the meanings assigned to them in the Agreement.
2. Purchase Price Amended. The parties hereto agree that the Purchase
Price is hereby amended to be Fifteen Million Eight Hundred Sixty Three Thousand
One Hundred Ninety Eight and no/100 Dollars ($15,863,198.00).
3. Inventory. The definition of the term "Inventory" in Section 1.3
of the Agreement is hereby amended to include all merchantable food, saleable
merchandise, paper, new uniforms and current promotional items located in or
stored at the convenience stores contiguous to Burger King Store Numbers 7627,
8884 and 9821.
4. Assignment. Purchaser hereby assigns the Agreement, as amended by this
Amendment, and all rights and obligations thereunder, to NRE, and each and every
reference to Purchaser (other than in this Section 4) in the Agreement, as
amended by this Amendment, shall be deemed to refer to NRE. NRE hereby accepts
such assignment.
5. Scope. To the extent not amended or modified herein, the Agreement
shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Amendment, with the intention of making it a valid and binding instrument, on
the date first above written.
Seller:
F & P ENTERPRISES, INC.
By:/s/ W. Thomas Fickling
-----------------------------------
W. Thomas Fickling ,President
-------------------------
Shareholders:
/s/ Thomas Fickling
-----------------------------------
Thomas Fickling
/s/ William Prentice
-----------------------------------
William Prentice
AMERIKING CAROLINA CORPORATION I
<PAGE>
By: /s/ Lawrence E. Jaro
-----------------------------------------
Lawrence E. Jaro, Chief Executive Officer
NATIONAL RESTAURANT ENTERPRISES, INC.
d/b/a AMERIKING CORPORATION
By: /s/ Lawrence E. Jaro
-----------------------------------------
Lawrence E. Jaro, Chief Executive Officer
2
<PAGE>
ASSET PURCHASE AGREEMENT
among
NORTH FOODS, INC., THE SHAREHOLDERS OF NORTH FOODS, INC.
and
AMERIKING CAROLINA CORPORATION I
<PAGE>
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement") is made and entered
into this 7th day of March, 1997, among F & P ENTERPRISES, INC., a North
Carolina corporation ("Seller"); THOMAS FICKLING and WILLIAM PRENTICE
(collectively referred to as the "Shareholders"), and AMERIKING CAROLINA
CORPORATION I, a Delaware corporation ("Purchaser").
R E C I T A L S:
WHEREAS, Seller operates nineteen (19) Burger King(R) restaurants (the
"Business") whose locations are listed in Exhibit 1 attached hereto and
incorporated by reference herein (hereinafter, referred to as the
"Restaurants");
WHEREAS, the Shareholders own of record and beneficially all of the
outstanding shares of the capital stock of Seller, and are the directors of
Seller;
WHEREAS, Seller desires to sell, assign, transfer and deliver to
Purchaser, and Purchaser desires to purchase from Seller, certain of the assets
of Seller as described in Article I hereof on the terms and subject to the
conditions hereinafter contained;
WHEREAS, Purchaser and the Shareholders desire to enter into certain
agreements between them on the terms and subject to the conditions hereinafter
contained;
WHEREAS, Simultaneously with the Closing hereof, Purchaser shall
purchase certain assets of North Foods, Inc., a North Carolina corporation,
pursuant to an Asset Purchase Agreement (the "North Foods Asset Purchase
Agreement), and Castle Properties, L.L.C., a Delaware limited liability company,
shall purchase real estate and improvements for seventeen (17) Burger King(R)
restaurants and the improvements only on two (2) other Burger King(R)
restaurants (the "Properties") pursuant to a Real Estate Purchase Agreement (the
"T & B Purchase Agreement") with T & B Leasing, a North Carolina general
partnership ("T & B"), and a Real Estate Purchase Agreement (the "W & W Purchase
Agreement") with W & W Investments Limited Partnership, a Delaware limited
partnership ("W & W");
WHEREAS, Seller occupies certain other real property (the "Leasehold
Properties") pursuant to certain Lease Agreements (the "Real Property Leases")
which Seller proposes to assign to Purchaser; and
WHEREAS, Purchaser proposes to assume the Real Property Leases.
NOW THEREFORE, in consideration of the Recitals that shall be deemed
to be a substantive part of this Agreement and the mutual covenants, promises,
agreements, representations and warranties contained in this Agreement, the
parties hereto do hereby covenant, promise, agree, represent and warrant as
follows:
ARTICLE I -- PURCHASE AND SALE OF ASSETS
1.1 Purchase and Sale. On the terms and subject to the conditions
set forth in this Agreement, at the Closing on the Closing Date (as such terms
are defined in Section 2.1 hereof), Seller shall sell, convey assign, transfer
and deliver to Purchaser and Purchaser shall purchase from Seller all of the
right, title and interest of Seller in and to the following assets of Seller
(all of which assets of Seller are hereinafter collectively referred to as the
"Assets"):
1
<PAGE>
1.1.1 All of Seller's equipment, furniture, materials and supplies,
including, but not limited to, all of the equipment, furniture, materials and
supplies described in Exhibit 1.1.1 attached hereto and incorporated by
reference herein (the "Equipment").
1.1.2 All of Seller's fixed assets, including, but not limited to,
all of the fixed assets described in Exhibit 1.1.2 attached hereto and
incorporated by reference herein (the "Fixed Assets").
1.1.3 All of Seller's saleable, usable and merchantable Inventory
(as hereinafter defined) located at the Restaurants.
1.1.4 All of Seller's rights under the Seller's Burger King
Franchise Agreements between Seller and Burger King Corporation, copies of which
are attached hereto as Exhibit 1.1.4 and incorporated by reference herein
("Franchise Agreements").
1.1.5 All of Seller's leasehold and tenant improvements (excluding
fixtures that have become part of the real property to which they are attached).
1.1.6 All of Seller's customer lists and customer sales files
("Customer Lists").
1.1.7 All of Seller's leasehold interest in the Real Property
Leases. At the Closing, Seller shall assign to Purchaser all of Seller's
leasehold interest in the Real Property Leases, parking and other access
agreements relating to the Premises. Prior to the Closing, Seller shall deliver
to Purchaser (i) Lease Assignment and Assumption Agreements (the "Lease
Assignments") and (ii) Consents to Assignment, Estoppel, and Release, in the
form of Exhibit 1.1.7 (a) and Exhibit 1.1.7 (b) attached hereto and incorporated
by reference herein.
1.1.8 All of Seller's goodwill and original copies of all of
Seller's employment and personnel records, books and records relating or
pertaining to Seller's Business, including all sales records and similar data
(hereinafter collectively referred to as the "Records"); Seller shall deliver to
Purchaser copies of the Records upon the written request of Purchaser. Seller
reserves the right to inspect such records at such reasonable times and places
after Closing for any legitimate business purpose including tax audits.
1.2 Store Bank. Upon the Closing, Seller shall leave cash (the "Store
Bank") in the amount of not less than $1,000 at each Restaurant. Purchaser
agrees to purchase the Store Banks at the Restaurants from Seller and agrees to
pay for the Store Banks in addition to the Purchase Price at Closing.
1.3 Inventory. Within 24 hours prior to the date of the Closing, an
inventory shall be taken by Seller (with the participation of Purchaser) of all
merchantable food, paper, new uniforms and current promotional items (the
"Inventory") located at the Restaurants. Purchaser agrees to purchase the
Inventory from Seller, and Seller agrees to sell the Inventory to Purchaser, at
Seller's actual Inventory purchase price. On the Closing Date, Purchaser agrees
to pay Seller the sum of $6,000 per Restaurant, separately and not as part of
the Purchase Price, as partial payment for the Inventory. Following the taking
of the Inventory as discussed above, Seller and Purchaser agree to make
adjustments to the Inventory purchase price for the difference between the
amount paid on the Closing Date and Seller's actual Inventory purchase price.
In the event the Inventory purchase price is less than $6,000 per Restaurant,
Seller shall within fifteen (15) days of the Closing Date, reimburse Purchaser
for any overage in payment. In the event the Inventory purchase price is in
excess of $6,000 per Restaurant, Purchaser agrees to make payment to Seller
within fifteen (15) days of the Closing Date of any additional monies which may
be due for the purchase of the Inventory.
2
<PAGE>
1.4 Purchase Price for Assets; Allocations. The purchase price for the
Assets shall be Fourteen Million Seven Hundred Fifty Eight Thousand One Hundred
Fifty Eight and no/100 Dollars ($14,758,158.00) adjusted pursuant to Section
1.7, plus (i) the aggregate dollar amount in the Store Banks on the Closing
Date; and (ii) $6,000 per restaurant for the estimated value of the Inventory at
the Closing Date (the foregoing calculation is referred to as the "Purchase
Price"). The parties agree that the Purchase Price for the Assets shall be
allocated among the Assets in the manner set forth on Exhibit 1.4, which shall
be mutually agreed to by Seller and Purchaser prior to the Closing Date. The
total purchase price shall be paid in cash at Closing.
1.5 Noncompetition Agreement. At the Closing, Purchaser, the Shareholders
and Seller shall enter into Noncompetition Agreements in the form attached
hereto as Exhibit 1.5 (hereinafter referred to as the "Noncompetition
Agreements") pursuant to which Seller and the Shareholders shall agree not to
compete with the business of Purchaser as provided therein.
1.6 Liabilities of Seller. Except as set forth in this Section 1.6,
Seller shall be and remain solely liable and responsible for all debts,
obligations, duties, and liabilities of Seller and its business. Purchaser does
not and shall not assume, agree to pay or pay any debts, obligations, duties or
liabilities of any nature of Seller or its business, including, but not limited
to, any debts, obligations, duties or liabilities relating to Seller's employees
or employee benefit plans, regardless of whether any such debt, obligation,
duties or liability arises under any contract, agreement, practice, arrangement,
statute, law, ordinance, rule, regulation or otherwise, and nothing in this
Agreement or otherwise is intended or shall be construed to the contrary. The
parties further covenant, promise and agree that Purchaser is not and shall not
be obligated or required to employ any of Seller's employees. Notwithstanding
the foregoing, Purchaser agrees to assume from and after the Closing Date all of
the rights and obligations of Seller attributable to the period from and after
the Closing Date under the Franchise Agreements, the Real Property Leases and
the contracts listed on the attached Exhibit 1.6 (collectively, the "Assumed
Contracts"). This provision shall specifically survive the Closing of this
transaction.
1.7 Prorations. All customary prorations with respect to obligations
under the Assumed Contracts, utility and fuel charges, personal property taxes
and other proratable charges related to the operation of the Restaurants shall
be adjusted between the parties as of 12:01 a.m. on the Closing Date. Payment of
the amount due by reason of the foregoing prorations shall be made at the
Closing or as soon thereafter as reasonably practicable. All real estate taxes
which are due and payable during the tax year in which the Closing occurs shall,
when received, be prorated as of the Closing Date. All rentals, including
minimum and percentage rentals, and other monetary obligations under the Real
Property Leases shall be adjusted for the month in which the Closing occurs.
1.8 Exclusion of Assets. Those assets of Seller and/or the
Shareholders as set forth in full in Exhibit 1.8 attached hereto and
incorporated herein (the "Excluded Assets") are not being purchased by
Purchaser.
ARTICLE II -- CLOSING AND TERMINATION
2.1 Time, Date and Place. The closing of the purchase and sale of the
Assets and the other transactions contemplated by this Agreement (referred to
throughout this Agreement as the "Closing") shall take place upon the later to
occur of: (i) May 23, 1997 or (ii) ten (10) days following the satisfaction,
fulfillment or waiver, as the case may be, of all the conditions precedent, set
forth in Section VII hereof, at the offices of Poyner & Spruill, L.L.P., Suite
4000, 100 North Tryon Street, Charlotte, North Carolina, or such other place
that Purchaser shall determine. The time, place and date of the Closing are
referred to throughout this Agreement as the "Closing Date."
3
<PAGE>
2.2 Termination.
-----------
2.2.1 If the Closing contemplated hereunder has not occurred on or
before June 30, 1997, either Purchaser or Seller may terminate this Agreement
upon written notice to the other party.
2.2.2 If any of the representations, warranties or covenants of
Seller or the Shareholders are found to be untrue or breached in any material
respect, at or prior to Closing, and Seller or the Shareholders shall not have
cured such breach within thirty (30) days after Purchaser shall have given
written notice to Seller of the existence of such breach, Purchaser may
terminate this Agreement upon written notice to Seller.
2.2.3 If any of the representations, warranties or covenants of
Purchaser are found to be untrue or breached in any material respect, at or
prior to Closing, and Purchaser shall not have cured such breach within 30 days
after Seller shall have given written notice to Purchaser of the existence of
such breach, Seller may terminate this Agreement upon written notice to
Purchaser.
2.2.4 This Agreement may be terminated by the written agreement of
Purchaser and Seller. This Agreement may be terminated by Purchaser in its sole
discretion if any of the contingencies set forth in Section 7.2 is not met to
Purchaser's satisfaction.
2.2.5 This Agreement may be terminated by Purchaser if the Exhibits
hereto are not furnished in accordance with Section 5.1.13 hereof, or are found,
in Purchaser's sole discretion, to be unacceptable within five (5) business days
following receipt by Purchaser thereof and of the letter required by Section
5.1.13.
2.3 Effect of Termination. In the event of the termination and
abandonment of this Agreement pursuant to Section 2.2, this Agreement shall be
of no further force and effect, and, except as specifically provided herein,
with no liabilities or obligations to any party under this Agreement; provided,
however, that the parties shall not be released from any liabilities, claims or
actions regarding the falsity in any material respect of a representation or
warranty set forth in Article III or Article IV or a failure to perform or
comply with any material obligation under this Agreement.
2.4 Expenses.
--------
2.4.1 Except as set forth below, each party shall pay the fees and
expenses of its own legal counsel and, except as provided above, the cost of
obtaining or preparing each document to be delivered by such party at Closing.
2.4.2 Upon termination of this Agreement pursuant to Sections 2.2.2
or 2.2.5 or the second sentence of Section 2.2.4, or if the transactions set
forth herein do not close because of the exercise by a third party of any
contractual right to acquire the Restaurants, the Seller and the Shareholders
shall reimburse the Purchaser for its reasonable out-of-pocket fees, costs and
expenses (including, but not limited to, fees and expenses associated with
Purchaser's filing under the HSR Act, as hereinafter defined) of the Purchaser
incurred in attempting to consummate the transactions contemplated herein;
provided, however, that the aggregate of all such fees, costs and expenses (the
"Expenses") shall not exceed $290,000, in the aggregate with the Expenses
incurred under the North Foods Asset Purchase Agreement. In addition, if the
Closing occurs, then Seller shall pay to Purchaser at the Closing the sum of
$211,924.00. The provisions of this paragraph 2.4 shall survive the termination
of this Agreement for any reason.
4
<PAGE>
ARTICLE III -- REPRESENTATIONS AND WARRANTIES
OF SELLER AND SHAREHOLDERS
Seller and the Shareholders, jointly and severally, represent and warrant
to Purchaser as of the date hereof and as of the Closing on the Closing Date
each of the following:
3.1 Ownership of Seller's Stock. The Shareholders are the sole and
exclusive record and beneficial owners of all of the outstanding shares of the
capital stock of Seller. The Shareholders have duly approved Seller's sale,
assignment, transfer and delivery of the Assets to Purchaser in accordance with
the terms of this Agreement, the consummation of all the transactions
contemplated hereby and Seller entering into the Noncompetition Agreement.
3.2 Due Organization; Name and Address; Good Standing, Authority of
Seller. Seller is a corporation duly organized, validly existing and in good
standing under the laws of the State of North Carolina. The only name and
business address of Seller which has been used by Seller at any time within the
past three years ending at the date of this Agreement is F & P Enterprises,
Inc., 3932 Breezewood Avenue, Fayetteville, North Carolina. Seller has full
right, power and authority to own, lease and operate its properties and assets,
and to carry on its Business. Seller is duly licensed, qualified and authorized
to do business in each jurisdiction in which the properties and assets owned by
it or the nature of the business conducted by it make such licensing,
qualification and authorization legally necessary. Except as disclosed on
Exhibit 3.2, Seller is not in breach or violation of, and the execution,
delivery and performance of this Agreement will not result in a breach or
violation of, any of the provisions of Seller's articles of incorporation, as
amended to the date of this Agreement (the "Articles") or by-laws, as amended to
the date of this Agreement (the "By-Laws"), or, to the best of Seller's
knowledge, any agreement to which it is a party.
3.3 Authorization and Validity of Agreements. Seller and the
Shareholders have the legal capacity, right, power, and authority to enter into
this Agreement and the Noncompetition Agreement. Seller has the full right,
power and authority to execute, acknowledge and deliver this Agreement and to
perform the transactions contemplated by this Agreement. The execution,
acknowledgment and delivery of this Agreement by Seller and the Shareholders and
the performance by Seller and the Shareholders of the transactions contemplated
hereby have been duly and validly authorized by all necessary corporate and
shareholder action. This Agreement has been duly executed, acknowledged and
delivered by Seller and the Shareholders and is the legal, valid and binding
obligation of Seller and the Shareholders enforceable against Seller and the
Shareholders, respectively, in accordance with its terms, except in each case as
such enforceability may be limited by general principles of equity, bankruptcy,
insolvency, moratorium and similar laws relating to creditors rights generally.
The Noncompetition Agreement, when executed, acknowledged and delivered by
Seller and the Shareholders, will be the legal, valid and binding obligation of
Seller and the Shareholders, respectively, enforceable against Seller and
against the Shareholders, respectively, in accordance with its terms, except in
each case as such enforceability may be limited by general principles of equity,
bankruptcy, insolvency, moratorium and similar laws relating to creditors rights
generally.
3.4 Agreement Not in Conflict with Other Instruments; Required Approvals
Obtained. Except as disclosed on Exhibit 3.4, the execution, acknowledgment,
delivery, and performance of this Agreement and the Noncompetition Agreement by
the parties thereto, and the consummation of the transactions contemplated by
this Agreement and the Noncompetition Agreement will not (a) materially violate
or require any consent, approval, or filing under, (i) any common law, law,
statute, ordinance, rule or regulation (collectively referred to throughout this
Agreement as "Laws") of any federal, state or local government
5
<PAGE>
(collectively referred to throughout this Agreement as "Governments") or any
agency, bureau, commission, instrumentality or judicial body of any Governments
(collectively referred to throughout this Agreement as "Governmental Agencies")
except that which may be required by the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), or (ii) any judgment,
injunction, order, writ or decree of any court, arbitrator, Government or
Governmental Agency by which Seller or any of the Assets is bound; (b) conflict
with, require any consent, approval, or filing under, result in the breach or
termination of any provision of, constitute a default under, or result in the
creation of any claim, security interest, lien, charge, or encumbrance upon any
of the Assets pursuant to (i) Seller's Articles or By-Laws, (ii) any indenture,
mortgage, deed of trust, license, permit, approval, consent, franchise, lease,
contract, or other instrument, document or agreement to which Seller is a party
or by which Seller, or any of the Assets is bound, or (iii) any judgment,
injunction, order, writ or decree of any court, arbitrator, Government or
Governmental Agency by which Seller or any of the Assets is bound. All permits,
licenses and authorizations of any Government or Governmental Agency required to
be obtained by Seller prior to the Closing shall have been obtained and shall be
in full force and effect as of the Closing Date.
3.5 Conduct of Business in Compliance with Regulatory and Contractual
Requirements. Seller has conducted and is conducting its business in material
compliance with all applicable Laws of all Governments and Governmental
Agencies.
3.6 Legal Proceedings. There is no action, suit, proceeding, claim or
arbitration, or to the best of Seller's and the Shareholders' knowledge any
investigation by any person or entity, including, but not limited to, any
Government or Governmental Agency, (i) pending, to which Seller or the
Shareholders are a party, or threatened against or relating to Seller, Seller's
business or the Assets, or (ii) challenging Seller's or the Shareholders' right
to execute, acknowledge, deliver, perform under or consummate the transactions
contemplated by this Agreement and, as respects Seller and the Shareholders, the
Noncompetition Agreement, or (iii) asserting any right with respect to any of
the Assets, and, in each such case, there is no basis for any such action, suit,
proceeding, claim, arbitration or investigation.
3.7 Financial Information. Attached hereto as Exhibit 3.7 are copies of
the unaudited Balance Sheets of Seller as of October 31, 1994, 1995, 1996, and
as of December 31, 1996, and the Operating Statements of Seller for each of the
three fiscal years and the two month period, respectively, then ended, which are
being provided by Seller and the Shareholders to Purchaser (the "Financial
Statements"). The Financial Statements are in accordance with the books and
records of Seller, are true and correct and accurately present Seller's
financial position in all material respects as of the dates set forth therein
and the results of Seller's operations for the periods then ended; all such
Financial Statements are in conformity with the accounting principles
historically utilized by Seller and applied on a consistent basis during each
period and on a basis consistent with that of prior periods. Until the Closing
Date, Seller shall deliver to Purchaser month end balance sheets and income
statements within twenty (20) days of the end of each month.
3.8 Tax Matters. All tax returns of Seller as filed by Seller with the
Internal Revenue Service (the "IRS") and all information reported on the returns
are true, accurate, and complete in all material respects. Seller is not a
party to any pending, and is not aware of any threatened action, suit,
proceeding, or assessment against it for the collection of taxes by any
Government or Governmental Agency. Seller has duly and timely filed with all
appropriate Governments and Governmental Agencies, all tax returns, information
returns, and reports required to be filed by Seller. Seller has paid in full
all taxes, interest, penalties, assessments and deficiencies owed by Seller to
all taxing authorities, except for such amounts not yet due and payable. All
taxes and other assessments and levies which Seller is required by applicable
Law to withhold or to collect have been duly withheld and collected and have
been paid over to the proper Governments and Governmental Agencies or are
properly held by Seller for such payment. All claims by
6
<PAGE>
the IRS or any state taxing authorities for taxes due and payable by Seller have
been paid by Seller. Seller is not a party to any pending , and is not aware of
any threatened action, suit, proceeding, or assessment against it for the
collection of taxes by any Government or Governmental Agency.
3.9 Franchise Agreements. The Franchise Agreements are full, complete,
true and correct Franchise Agreements between Seller and Burger King
Corporation, which are, and shall continue to be until the Closing on the
Closing date, in full force and effect.
3.10 Title to Assets; Equipment and Fixed Assets. Seller has sole and
exclusive, good and marketable title to all of the Assets and the same shall be
free and clear of any and all pledges, claims, threats, liens, restrictions,
agreements, leases, security interests, charges and encumbrances at the time of
Closing. All of the Equipment and Fixed Assets are in good, working and
operating condition and repair, reasonable wear and tear excepted and free from
any material defects.
3.11 Records. The Records that have been delivered by Seller to Purchaser
or that shall be delivered by Seller to Purchaser are true, complete and correct
in all material respects.
3.12 Employment Matters.
------------------
3.12.1 None of Seller's employees are covered by a collective
bargaining agreement or are represented by a labor organization, and no petition
for representation concerning any of Seller's employees has been filed with the
National Labor Relations Board; Seller is not aware of any union organizational
activity and has no reason to believe that any such activity is being
contemplated. Seller has not engaged in any unfair labor practice.
3.12.2 Except as set forth on Exhibit 3.12.2, Seller is not in
violation of applicable equal employment opportunity wage and hour requirement
or any other Laws of any Government or Governmental Agency relating to
employment; there are no active, pending, or, threatened administrative or
judicial proceedings under any Laws of any Government or Governmental Agency;
there are no claims, charges, and employment related suits which have occurred
within the last three years or are presently pending or, to the best of Seller's
and Shareholders' knowledge, threatened under any employment related Laws of any
Government or Governmental Agency; and Seller is not subject to any judgments,
decrees, conciliation agreements and settlement agreements concerning employment
related matters.
3.12.3 Seller has not entered into any employment agreements with
any of its employees, and all employees may be terminated at will; there is no
contractual obligation or special termination or severance arrangement in
respect of any of Seller's employees; and there is no provision of any agreement
or arrangement with any of Seller's employees, or any other legal or contractual
requirement, which would obligate Seller to require Purchaser of the Assets to
employ any of Seller's employees.
3.12.4 Seller has paid, in accordance with its normal payroll
practices and all applicable Laws, all wages, bonuses, commissions and other
benefits and sums due (and all required taxes, insurance, social security and
withholding thereon), as they have accrued, except for such items, and accrued
vacation, accrued sick leave, accrued benefits and accrued payments (and pro
rata accruals for a portion of a year), accruing during the pay period
immediately preceding the Closing.
3.12.5 Purchaser is under no obligation or duty, whether under any
contract, agreement, understanding or arrangement or under any applicable Law of
any Government or Governmental Agency to assume or be responsible for any
obligation, duty or liability, now existing or hereafter arising, relating
7
<PAGE>
to or in connection with Seller's employees or any compensation, benefits or
benefit plans in respect of Seller's employees, or otherwise arising out of or
in connection with the transactions contemplated by this Agreement, and Seller
has made no commitment and is under no obligation to cause Purchaser of the
Assets to assume or to be responsible for any such obligation, duty or
liability.
3.13 Absence of Certain Changes or Events. Since December 31, 1996,
Seller has not engaged in or experienced any of the following:
3.13.1 Sold, assigned, transferred, leased, disposed of, or agreed
to sell, assign, transfer, lease, or dispose of, any of the Assets, except
Inventory sold and Equipment replaced in the ordinary course of Seller's
business, as such business has been operated historically.
3.13.2 Except as disclosed on Exhibit 3.13.2, made any capital
expenditure in excess of Five Thousand Dollars ($5,000) per Restaurant or
entered into any contract, agreement, arrangement, understanding or commitment
therefor, or acquired or leased any assets or property of any third person or
party other than in the ordinary course of Seller's business, as such business
has been operated historically.
3.13.3 Suffered any material adverse change in Seller's
operations, earnings, assets, liabilities, or business (financial or otherwise).
3.13.4 Except as set forth in Exhibit 3.13.4, failed to pay any
indebtedness or other obligation, including any taxes and other charges, when
due.
3.14 Adverse Conditions. Except as set forth in Exhibit 3.14, attached
hereto and incorporated by reference herein, there are no past, present or
future conditions, facts or circumstances which have materially affected or
which might materially affect adversely the business of Seller or prevent
Purchaser from carrying on Seller's business, excluding general economic,
financial and market conditions that are known to the public.
3.15 Leases. Attached hereto as Exhibit 3.15 and incorporated by
reference herein is a list of the following, which is accurate and complete as
of the date hereof: all leases, contracts, licenses, agreements or other
commitments of Seller as obligor involving a liability, obligation, contingent
liability or contingent obligation in excess of $1,000 per Restaurant.
3.16 Bonus, Pension or Other Plans, etc. Except as set forth on Exhibit
3.16, Seller is not a party to, does not maintain or make any contribution to,
and Seller has not incurred any liability or expense with respect to any
employment agreement, current or future pension, retirement, deferred
compensation, bonus, profit-sharing, insurance or similar plan, agreement,
arrangements or formal or informal understandings for the benefit of employees,
in each case whether or not legally binding. In no event shall Purchaser be
liable for any of the above, including those items disclosed on Exhibit 3.16.
3.17 Full Disclosure. This Agreement (including the Exhibits hereto)
does not contain any untrue statement of a material fact or omit to state any
material fact necessary to make the statements contained herein not misleading.
There is no fact known to Seller or to the Shareholders that is not disclosed in
this Agreement that materially adversely affects the accuracy of the
representations and warranties contained in this Agreement or Seller's financial
condition, operations, business, earnings, assets, or liabilities.
3.18 No Brokerage. Other than the obligations owed to Cypress Consulting
Group, Inc., which Seller agrees to pay, neither Seller nor the Shareholders
have incurred any obligation or liability, contingent
8
<PAGE>
or otherwise, for brokerage fees, finder's fees, agent's commissions, or the
like in connection with this Agreement or the transactions contemplated hereby.
3.19 Seller's Franchise Agreements. Seller is not in breach of or
default under any provision of the Franchise Agreements, and no condition exists
which, with passage of time or the giving of notice or both, will result in a
material breach or default by Seller of any provision of any of the Franchise
Agreements.
3.20 Creditors; Bulk Sale Laws. Seller has fully paid, or will fully
pay at Closing, all amounts due to its secured creditors holding any security
interest in any of the Assets and all amounts due to its unsecured creditors to
whom more than $20,000 is owed, and furnish proof to Purchaser of the payment of
same and the release of all such security interests. To further ensure that
Seller's creditors are fully paid, Seller agrees that the sum of $85,000 will be
escrowed with Poyner & Spruill, L.L.P., counsel for Seller, for a period of 120
days following Closing, to be distributed by Poyner & Spruill, L.L.P. for the
payment of such of Seller's creditors as Seller or, in the absence of objection
by Seller, Purchaser may direct, with the balance of such amount that has not
been directed to be paid to the creditors of Seller to be delivered to Seller at
the end of such 120 day period. Purchaser hereby waives compliance by Seller
with the provisions of any so-called "bulk transfer laws" of any jurisdiction in
connection with the sale of the Assets to Purchaser. Seller agrees to indemnify
and hold Purchaser harmless from all loss, cost, damage or expense by reason of
any failure of Seller to pay any of its creditors in accordance with this
Section 3.20 and such "bulk transfer laws."
3.21 Notice of Violations. Seller has received no notice of and, to the
best of Seller's knowledge, there is no violation or alleged violation of any
legal requirement affecting the Restaurants, including, without limitation, any
violation or alleged violation of any local, state or federal environmental,
zoning, handicap or fire law, ordinance, code, regulation, rule or order, and
specifically including, without limitation, variances or special permits
affecting the Restaurants. Seller has performed all conditions to any permits or
other governmental approvals or licenses with respect to the Restaurants,
including, without limitation, the payment of all development impact or other
fees and developer exactions.
3.22 Condition of Restaurants. The Restaurants comply, in all material
respects, with the current Burger King Corporation Repairs and Maintenance
Standards (the "Standards"). In the event Burger King Corporation requires any
modification to the Restaurants as a result of the failure of the Restaurants to
meet the Standards, Seller shall, at its sole cost and expense, effect such
repairs to bring all Restaurants into compliance with the Standards; provided,
however, that Seller shall not be required to make any improvements to the
Restaurants to comply with the Burger King Corporation's Project Jennifer
standards or other merely cosmetic changes not related to the operation,
functionality or safety of the Restaurants.
ARTICLE IV -- REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller and the Shareholders, jointly
and severally, as of the date hereof and as of the Closing on the Closing Date
each of the following:
4.1 Due Organization; Good Standing; Power. Purchaser is a corporation
duly incorporated, validly existing, and in good standing under the laws of the
State of Delaware. Purchaser has full right, power and authority to enter into
this Agreement and the Noncompetition Agreement and to perform its obligations
hereunder and thereunder. Purchaser is not in breach or violation of, and the
execution, delivery and performance of this Agreement will not result in a
breach or violation of, any of the provisions of Seller's certificate of
incorporation (the "Certificate") or By-laws.
9
<PAGE>
4.2 Authorization and Validity of Documents. The execution, delivery and
performance by Purchaser of this Agreement and the Noncompetition Agreement and
the transactions contemplated hereby and thereby, have been duly and validly
authorized by Purchaser. This Agreement has been duly executed, acknowledged and
delivered by Purchaser and is a legal, valid and binding obligation of
Purchaser, and the Noncompetition Agreement, when executed and delivered, will
be legal, valid and binding obligation of Purchaser, each enforceable against
Purchaser in accordance with its terms except as such enforceability may be
limited by general principles of equity, bankruptcy, insolvency, moratorium and
similar laws relating to creditors' rights generally.
4.3 No Brokerage. Purchaser has not incurred any obligation or
liability, contingent or otherwise, for brokerage fees, finder's fees, agent's
commissions, or the like in connection with this Agreement or the transactions
contemplated hereby.
4.4 Obligations Assumed. Purchaser covenants that Purchaser will pay all
obligations assumed by it under this Agreement.
ARTICLE V -- COVENANTS
5.1 Seller's and Shareholders' Covenants. Seller and the Shareholders,
jointly and severally, covenant, promise and agree that from the date hereof and
until the Closing, the Shareholders shall, and the Shareholders shall cause
Seller to, perform and comply with each of the following:
5.1.1 Continue to operate the Business of Seller diligently, and
not take any action, omit to take any action, or engage in any transaction other
than acts or transactions in the ordinary course of business, as such Business
has been operated historically.
5.1.2 Preserve the Business of Seller and preserve the relationship
of Seller with suppliers, customers, Burger King Corporation and others as such
relationships have been preserved historically.
5.1.3 Maintain and continue normal and usual maintenance and repair
of the Equipment, the Fixed Assets, and all other assets being sold and
transferred to Purchaser herein.
5.1.4 Cooperate with Purchaser to achieve an orderly transition of
the Business of Seller to Purchaser and an orderly transfer of the Assets to
Purchaser.
5.1.5 Pay or provide for payment of all sales, use, personal
property, social security, withholding, payroll, unemployment compensation,
income and other taxes, assessments, fees and public charges due and payable by
Seller in respect of its Business and the Assets through the Closing Date and
any portion thereof applicable to any period prior to the Closing Date.
5.1.6 Pay all wages, bonuses, commissions and other employment
benefits and sums (and all required taxes, insurance and withholding thereon),
including all accrued vacation, accrued sick leave, accrued benefits and accrued
payments (and pro rata accruals for a portion of a year) due to Seller's
employees through the Closing Date.
5.1.7 Maintain in effect all insurance policies and other employee
benefits covering any employee claims that may be incurred through the Closing
Date.
10
<PAGE>
5.1.8 Fully perform and comply with all covenants, promises and
agreements hereunder which are required to be performed or complied with by
Seller and the Shareholders prior to or at the Closing, and exert their best
efforts to completely satisfy and fulfill all conditions precedent to Seller's
and the Shareholders' obligations to close hereunder at the Closing on the
Closing Date.
5.1.9 Exert their best efforts to prevent the occurrence of any
event which could result in any of Seller's or the Shareholders' representations
and warranties contained in this Agreement not being true and correct at or as
of the time immediately after the occurrence of such event, and Seller and the
Shareholders shall promptly notify Purchaser of the occurrence of any event or
the discovery of any fact which would cause any of their covenants, promises and
agreements to be breached or violated or any of their representations and
warranties to become not true and correct or which could interfere with or
prevent the consummation of the transactions contemplated hereby.
5.1.10 Provide Purchaser and its representatives, subject to the
restrictions contained in Section 7.2.8, with access during normal business
hours to all of Seller's properties, assets and Records, provide Purchaser and
its representatives with such financial and operating data and other information
with respect to Seller's Business, Assets and properties as Purchaser shall from
time to time reasonably request, and permit Purchaser and its representatives,
at Purchaser's sole expense, to consult with Seller's representatives, officers,
employees and accountants up to the time of Closing and for 120 days thereafter.
5.1.11 Take no action which is or would cause a material violation
of any Laws of any Governments or Governmental Agencies.
5.1.12 Take, or cause to be taken, all reasonable actions necessary
to permit Purchaser to furnish all information required under the HSR Act and
will promptly cooperate with and furnish information to Purchaser in connection
with any such requirements imposed upon Purchaser or its parent in connection
with the transaction as set forth herein. The parties acknowledge and agree that
the filing fees for any filings required under the HSR Act shall be paid by
Purchaser.
5.1.13 Deliver to Purchaser within fourteen (14) business days of
the date of execution of this Agreement all exhibits to be furnished by
Purchaser, together with a letter certifying that all such exhibits have been
furnished and that the information contained therein is true and complete in all
material respects.
ARTICLE VI -- OPINIONS OF COUNSEL
6.1 Opinion of Seller's and Shareholders' Counsel. At the Closing,
Seller and the Shareholders shall deliver to Purchaser the opinion of their
counsel, dated as of the Closing Date, in substantially the form attached hereto
as Exhibit 6.1.
6.2 Opinion of Purchaser's Counsel. At the Closing, Purchaser shall
deliver to Seller and to the Shareholders the opinion of its counsel, dated as
of the Closing Date, in substantially the form attached hereto as Exhibit 6.2.
ARTICLE VII -- CONDITIONS
7.1 Seller's Conditions to Close. Seller's obligation to close the
transactions contemplated hereby at the Closing shall be subject to the complete
satisfaction and fulfillment of all of the following conditions precedent, any
or all of which may be waived in whole or in part by Seller (but no such waiver
11
<PAGE>
of any such condition precedent shall be or constitute a waiver of any covenant,
promise, agreement, representation or warranty made by Purchaser in this
Agreement):
7.1.1 All representations and warranties made by Purchaser in this
Agreement shall be complete and accurate at and as of the Closing on the Closing
Date. Seller shall have been furnished with a certificate, signed by Purchaser
and dated the Closing Date, to the foregoing effect.
7.1.2 All covenants, promises and agreements made by Purchaser in
this Agreement and all other actions required to be performed or complied with
by Purchaser under this Agreement prior to or at the Closing shall have been
fully performed or complied with by Purchaser. Seller shall have been furnished
with a certificate, signed by Purchaser and dated the Closing Date, to the
foregoing effect.
7.1.3 Purchaser shall deliver to Seller by wire transfer or bank
check the amount of cash set forth in Section 1.4 of this Agreement.
7.1.4 The Board of Directors of Seller shall have approved this
Agreement and the transactions contemplated herein within seven (7) days of the
date of this Agreement. If no written notice of disapproval is provided to
Purchaser prior to the expiration of such seven (7) day period, the transaction
will be deemed to be approved and this condition will be deemed to be satisfied.
7.1.5 Seller shall have received an opinion of counsel for
Purchaser as of the Closing Date, as required by Section 6.2.
7.1.6 Purchaser shall not have received, prior to Closing, any
notification under the HSR Act that seeks to prohibit Purchaser and Seller from
consummating the transaction set forth in this Agreement.
7.1.7 Seller shall have received consent from the landlord for each
Leasehold Property location to the assignment of each Real Property Lease to
Purchaser.
7.2 Purchaser's Conditions to Close. Purchaser's obligation to close the
transactions contemplated hereby at the Closing shall be subject to the complete
satisfaction and fulfillment of all of the following conditions precedent, any
or all of which may be waived in whole or in part by Purchaser (but no such
waiver of any such condition precedent shall be or constitute a waiver of any
covenant, promise, agreement, representation or warranty made by Seller and the
Shareholders in this Agreement):
7.2.1 All representations and warranties made by Seller and the
Shareholders in this Agreement shall be complete and accurate at and as of the
Closing on the Closing Date. Purchaser shall have been furnished with a
certificate, signed by the Shareholders and Seller and dated the Closing Date,
to the foregoing effect.
7.2.2 All covenants, promises and agreements made by Seller and the
Shareholders in this Agreement and all other actions required to be performed or
complied with by Seller and the Shareholders under this Agreement prior to or at
the Closing shall have been fully performed or complied with by Seller and the
Shareholders. Purchaser shall have been furnished with a certificate, signed by
the Shareholders and Seller and dated the Closing Date, to the foregoing effect.
7.2.3 Seller shall have obtained, and delivered to Purchaser,
copies of all consents, approvals or other authorizations which Seller is
required to obtain from, and any filing which Seller is
12
<PAGE>
required to make with, any governmental authority or agency or any other person
including, but not limited to, consents required from Burger King Corporation
(the "Burger King Consents") in connection with the execution, delivery and
consummation of this Agreement and the other documents associated herewith and
the consummation of the transactions contemplated hereby or thereby
(collectively, the "Required Consents"), in form and substance reasonably
satisfactory to Purchaser.
7.2.4 Purchaser shall have received all things required to be delivered
or furnished to Purchaser by Seller and the Shareholders hereunder prior to or
at the Closing.
7.2.5 All necessary permits, licenses and approvals (including the
Burger King Consents) required to be obtained by Purchaser shall have been
obtained and paid for by Purchaser or Purchaser shall have exercised all
reasonable efforts to obtain same.
7.2.6 There shall not have occurred any material adverse change in the
business of Seller or in the Assets.
7.2.7 Purchaser shall have received an opinion of counsel for Seller and
the Shareholders, as of the Closing Date, as required by Section 6.1 hereof.
7.2.8 Purchaser and its representatives shall have completed, to their
complete satisfaction, an investigation and examination of all aspects of the
Restaurants and the Assets, including the Financial Statements. No employee or
representative of Purchaser will perform on-site due diligence of the
Restaurants without Seller's prior approval, at which time such employee or
representative will be accompanied by Seller or its designee. Purchaser shall
have completed its review of the Restaurants to confirm the Equipment in the
Restaurants is in proper working order and that the Restaurants conform in all
material respects to Burger King(R) Standards (exclusive of any Project Jennifer
upgrades or other merely cosmetic changes not related to the operation,
functionality or safety of the Restaurants) (the "Walk-Thru") that apply to the
Restaurants on or before forty-five (45) days following the execution of this
Agreement. Purchaser shall itemize any deficiencies noted in the Walk-Thru and
provide such list to Seller prior to the Closing Date.
7.2.9 Seller shall have delivered to Purchaser the following documents:
7.2.9.1 the Lease Assignments of its Real Property Leases, each
Assumed Contract, and the Consents to Assignment, Estoppel, and Releases;
7.2.9.2 any required easement assignments;
7.2.9.3 to the extent available, a fully executed original
counterpart of each Real Property Lease in Seller's possession;
7.2.9.4 certificates dated no earlier than thirty (30) days prior
to the Closing Date, from the Secretary of State for the State of North Carolina
as to the good standing of Seller; and
7.2.9.5 all other documents, instruments and agreements required
to be delivered by Seller to Purchaser pursuant to this Agreement.
7.2.10 Between the date of this Agreement and the Closing Date, Seller
shall conduct the operation of its Restaurants in the ordinary and usual course
of business, consistent with past practices and
13
<PAGE>
will use its best efforts to preserve intact the present business organization
with respect to its Restaurants, to keep available the services of its officers
and employees and to maintain satisfactory relationships with landlords,
franchisors, dealers, licensors, licensees, suppliers, contractors,
distributors, customers and others having business relations with it and its
Restaurants and will maintain its Restaurants, real property, and Assets in a
condition conducive to the operation of the business currently carried on
therein.
7.2.11 Seller shall have provided to Purchaser copies of all
operating permits and licenses (collectively, the "Approvals") which are in
Seller's possession.
7.2.12 Seller shall have provided to Purchaser copies of all
documents with respect to any actions, suit or proceeding which has been brought
by or on behalf of Seller with respect to the Assets or the Business.
7.2.13 Seller shall execute, acknowledge and deliver to Purchaser
a Bill of Sale and Assignment in the form attached hereto as Exhibit 7.2.13 and
incorporated herein by reference pursuant to which Seller shall sell, assign,
and transfer to Purchaser the Assets.
7.2.14 Seller shall execute, acknowledge and deliver to Purchaser
a Warranty Assignment in the form attached hereto as Exhibit 7.2.14 and
incorporated herein by reference pursuant to which Seller shall sell, assign and
transfer to Purchaser the Franchise Agreements.
7.2.15 The Shareholders, Seller and Purchaser shall execute,
acknowledge and deliver the Noncompetition Agreement attached hereto as Exhibit
1.5.
7.2.16 Seller shall have previously delivered to Purchaser the
Real Property Leases and the Purchaser shall have fifteen (15) days from the
date of this Agreement to review such Real Property Leases to ensure that it is
satisfactory to the Purchaser, in its sole discretion.
7.2.17 Within forty-five (45) days of the execution of this
Agreement, Purchaser's auditor shall have (i) reviewed the financial and
accounting system of Seller; (ii) reviewed and confirmed the Financial
Statements and results set forth in the Financial Statements; and (iii) found no
material objection to the financial and accounting system of Seller, or Seller
and Purchaser shall have resolved any objection raised by the auditor and
presented to Seller by Purchaser.
7.2.18 The Boards of Directors of National Restaurant
Enterprises, Inc. d/b/a AmeriKing, Inc. and Purchaser shall have approved this
Agreement and the transactions contemplated herein within thirty (30) days of
the date of this Agreement.
7.2.19 Purchaser shall have concurrently consummated the
transactions set forth in the F & P Asset Purchase Agreement, and Castle
Properties, L.L.C. shall have concurrently consummated the T & B Purchase
Agreement and the W & W Purchase Agreement.
7.3 Contemporaneous Transfer. All transfers, assignments, conveyances,
and transactions under this Agreement shall be effected contemporaneously for
present value between and among Seller, the Shareholders and Purchaser.
14
<PAGE>
ARTICLE VIII -- INDEMNIFICATION
8.1 Indemnification By Seller And Shareholders. Seller and the
Shareholders, jointly and severally, shall defend, indemnify and hold harmless
Purchaser, its officers, directors, stockholders, agents, servants and employees
and their respective heirs, personal and legal representatives, guardians,
successors and assigns, from and against any and all claims, threats,
liabilities, taxes, interest, fines, penalties, suits, actions, proceedings,
demands, damages, losses, costs and expenses (including reasonable attorneys'
and experts' fees and court costs) of every kind and nature arising out of,
resulting from, or in connection with the following:
8.1.1 Any material misrepresentation or breach by Seller or the
Shareholders of any representation or warranty contained in this Agreement.
8.1.2 Any material nonperformance, failure to comply or breach by
Seller or the Shareholders of any covenant, promise or agreement of Seller or
the Shareholders contained in this Agreement.
8.1.3 Any debts, obligations, duties and liabilities of Seller and
the Shareholders (except those assumed by Purchaser).
8.1.4 The past or future failure of Seller to comply with any
applicable Environmental Laws (as hereinafter defined) or the presence of
Hazardous Materials (as hereinafter defined) in the soil or ground water on the
former or present properties of Seller at the time of Closing.
For purposes of this Section 8.1, the following terms shall have the
meaning set forth below:
(i) "Environmental Law" shall mean any and all laws, statutes,
ordinances, rules, regulations, judgments, orders, decrees, permits,
concessions, grants, agreements, licenses, or other governmental restrictions or
requirements regulating Hazardous Materials or relating to health, safety, the
environment or the release of Hazardous Materials into the environment, now or
hereafter in effect.
(ii) "Hazardous Materials" shall mean any chemical, substance,
material, object, condition, waste or combination thereof which is or may be
hazardous to human health or safety due to its radioactivity, ignitability,
corrosivity, reactivity, explosiveness, toxicity, carcinogenicity,
infectiousness or other harmful or potentially harmful properties or effects,
including, without limitation, all of those chemicals, substances, materials,
objects, conditions, wastes or combinations thereof which are now or become
listed, defined or regulated in any manner by any Environmental Law.
8.2 Indemnification by Purchaser. Purchaser shall defend, indemnify and
hold harmless Seller, the Shareholders and their respective heirs, personal and
legal representatives, guardians, successors and assigns, from and against any
and all claims, threats, liabilities, taxes, interest, fines, penalties, suits,
actions, proceedings, demands, damages, losses, costs and expenses (including
reasonable attorneys' and experts' fees and court costs) of every kind and
nature arising out of, resulting from, or in connection with the following:
8.2.1 Any material misrepresentation, omission or breach by Purchaser
of any representation or warranty contained in this Agreement.
8.2.2 Any material nonperformance, failure to comply or breach by
Purchaser of any covenant, promise or agreement of Purchaser contained in this
Agreement.
15
<PAGE>
8.3 Defense of Claims. In the event of any claim, threat, liability, tax,
interest, fine, penalty, suit, action, proceeding, demand, damage, loss, cost or
expense with respect to which indemnity is or may be sought hereunder (an
"Indemnity Claim"), the indemnified party shall promptly notify the indemnifying
party in writing of such Indemnity Claim, specifying in reasonable detail the
Indemnity Claim and the circumstances under which it arose. The indemnifying
party may elect to assume the defense of such Indemnity Claim, at its own
expense, by written notice to the indemnified party given within ten (10) days
after the indemnifying party receives written notice of the Indemnity Claim, and
the indemnifying party shall promptly engage counsel reasonably acceptable to
the indemnified party to direct and conduct such defense; provided, however,
that the indemnified party shall have the right to engage its own counsel, at
its own expense, to participate in such defense. In the event the indemnifying
party does not so elect to assume the defense of such Indemnity Claim in the
manner specified above, or if, in the reasonable opinion of counsel to the
indemnified party, there are defenses available to the indemnified party which
are different from or additional to those available to the indemnifying party or
which give rise to a material conflict between the defense of the indemnified
party and of the indemnifying party, then upon notice to the indemnifying party,
the indemnified party may elect to engage separate counsel to conduct its
defense, at the expense of the indemnifying party.
In the event the indemnifying party assumes the defense of any Indemnity
Claim, it may at any time notify the indemnified party of its intention to
settle, compromise or satisfy such Indemnity Claim and may make such settlement,
compromise or satisfaction (at its own expense) unless within twenty (20) days
after the giving of such written notice the indemnified party shall give written
notice to the indemnifying party of its intention to assume the defense of the
Indemnity Claim, in which event the indemnifying party shall be relieved of its
duty hereunder to indemnify the indemnified party. Unless the indemnified party
shall have given the notice referred to in the preceding sentence, (i) the
indemnified party shall not consent to or make any settlement, compromise or
satisfaction with respect to the Indemnity Claim without the prior written
consent of the indemnifying party, which consent shall not be unreasonably
withheld, and (ii) any settlement, compromise or satisfaction made by the
indemnifying party with respect to such Indemnity Claim shall be deemed to have
been consented to by and shall be binding upon the indemnified party.
8.4 Arbitration. Any dispute arising out of or relating to this Agreement
which occurs after the date of Closing, which has not been resolved by non-
binding means within thirty (30) days, shall be finally settled by arbitration
conducted in accordance with the American Arbitration Association Commercial
Arbitration Rules by a sole arbitrator selected by the parties. In the event
the parties cannot agree upon an arbitrator, each party shall select an
arbitrator and the two arbitrators so selected shall select the arbitrator to
hear the dispute. The place for arbitration shall be Chicago, Illinois.
ARTICLE IX -- MISCELLANEOUS
9.1 Survival of Representations, Warranties and Agreements. All of the
representations, warranties, covenants, promises and agreements of the parties
contained in this Agreement (or in any document delivered or to be delivered
pursuant to this Agreement or at or in connection with the Closing) shall
survive the execution, acknowledgment and delivery of this Agreement and the
consummation of the transactions contemplated hereby for a period of five (5)
years from the date of Closing.
9.2 Post-Closing Obligation. Within fifteen (15) days following the
Closing Date, Seller shall pay all wages, bonuses, commissions and other
benefits and sums (and all required taxes, insurance, social security and
withholding thereon), including all accrued vacation, accrued sick leave,
accrued benefits and accrued payments (and pro rata accruals for a portion of a
year) due to Seller's employees for all periods prior to and through the Closing
Date.
16
<PAGE>
9.3 Notices. All notices, requests, demands, consents, and other
communications which are required or may be given under this Agreement
(collectively, the "Notices") shall be in writing and shall be given either (a)
by personal delivery with a receipted copy of such delivery, (b) by certified or
registered United States mail, return receipt requested, postage prepaid, or (c)
by facsimile transmission with an original mailed by first class mail, postage
prepaid, to the following addresses:
(i) If to Seller, to:
Thomas Fickling
North Foods, Inc.
3932 Breezewood Avenue
Fayetteville, North Carolina 28303
Facsimile No.: (910) 486-0863
with a copy to:
Mark B. Edwards, Esq.
Poyner & Spruill, L.L.P.
100 North Tryon Street, Suite 4000
Charlotte, North Carolina 28202
Facsimile No.: (704) 342-5264
(ii) If to the Shareholders, to:
Thomas Fickling
William Prentice
North Foods, Inc.
3932 Breezewood Avenue
Fayetteville, North Carolina 28303
Facsimile No.: (910) 486-0863
with a copy to:
Mark B. Edwards, Esq.
Poyner & Spruill, L.L.P.
100 North Tryon Street, Suite 4000
Charlotte, North Carolina 28202
Facsimile No.: (704) 342-5264
(iii) If to Purchaser, to:
Lawrence E. Jaro, Chief Executive Officer
AmeriKing Carolina Corporation I
2215 Enterprise Drive
Westchester, Illinois 60154
Facsimile No.: (708) 947-2160
17
<PAGE>
with copies to:
A. Richard Caputo
The Jordan Company
9 West 57th Street, Suite 4000
New York, New York 10019
Facsimile No.: (212) 755-5263
and
Ernest J. Panasci, Esq.
Slivka Robinson Waters & O'Dorisio, P.C.
1099 18th Street
Suite 2600
Denver, Colorado 80202
Facsimile No.: (303) 297-2750
or to such other address of which written notice in accordance with this Section
9.2 shall have been provided to the other parties. Notices may only be given in
the manner hereinabove described in this Section 9.2 and shall be deemed
received three (3) days after given in such manner; provided however, that any
notice sent by facsimile shall be deemed to have been given as of the date of
the transmission.
9.4 Entire Agreement. This Agreement (including the Exhibits hereto which
constitute a part hereof) constitutes the full, entire and integrated agreement
between the parties hereto with respect to the subject matter hereof, and
supersedes all prior negotiations, correspondence, understandings and agreements
among the parties hereto respecting the subject matter hereof.
9.5 Assignability. This Agreement shall not be assignable by any party
hereto without the prior written consent of the other parties hereto; provided,
however, that Purchaser may assign this Agreement to another subsidiary of
AmeriKing Corporation.
9.6 Binding Effect; Benefit. This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective heirs, personal and
legal representatives, guardians, successors and permitted assigns. Nothing in
this Agreement, express or implied, is intended to confer upon any other person
any rights, remedies, obligations, or liabilities.
9.7 Severability. Any provision of this Agreement which is held by a
court of competent jurisdiction to be prohibited or unenforceable only shall be
ineffective only to the extent of such prohibition or unenforceability, without
invalidating or rendering unenforceable the remaining provisions of this
Agreement.
9.8 Amendment; Waiver. No provision of this Agreement may be amended,
waived or otherwise modified without the prior written consent of all of the
parties hereto. No action taken pursuant to this Agreement, including any
investigation by or on behalf of any party shall be deemed to constitute a
waiver by the party taking such action of compliance with any representation,
warranty, covenant or agreement herein contained. The waiver by any party
hereto of a breach of any provision or condition contained in this Agreement
shall not operate or be construed as a waiver of any subsequent breach or of any
other conditions hereof.
18
<PAGE>
9.9 Section Headings. The section and other headings contained in this
Agreement are for reference purposes only and shall not affect the meaning or
interpretation of this Agreement.
9.10 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be one and the same instrument.
9.11 Applicable Law; Jurisdiction and Venue; Service of Process. This
Agreement shall be governed by, construed, interpreted and enforced in
accordance with the laws of the State of North Carolina.
9.12 Remedies. The parties hereto acknowledge that in the event of a
breach of this Agreement by Seller, any claim for monetary damages hereunder may
not constitute an adequate remedy, and that it may therefore be necessary for
the protection of the Purchaser to carry out the terms of this Agreement to
apply for the specific performance of the provisions hereof. It is accordingly
hereby agreed by Seller that no objection to the form of the action or the
relief prayed for in any proceeding for specific performance of this Agreement
shall be raised by Seller, the Shareholders or any of their affiliates, in order
that such relief may be expeditiously obtained by Purchaser.
9.13 Further Assurances. Seller and the Shareholders jointly and severally
agree to execute, acknowledge and deliver, after the date hereof, without
additional consideration, such further assurances, instruments and documents,
and to take such further actions, as Purchaser may reasonably request in order
to fulfill the intent of this Agreement and the transactions contemplated
hereby.
9.14 Use of Genders. Whenever used in this Agreement, the singular shall
include the plural and vice versa, and the use of any gender shall include all
genders and the neuter.
9.15 Risk of Loss. All risk of loss of damage to or destruction of the
Assets, in whole or in part, shall be and remain with Seller until the Closing
and all of the transactions contemplated hereby shall have been consummated.
9.16 Negotiations with Other Persons. Until the earlier of the Closing or
the termination of this Agreement as provided herein, neither Seller nor the
Shareholders shall initiate, encourage the initiation by others, or participate
in any discussion or negotiations with any other person or entity relating to
the sale of any or all of the Assets, the business of Seller or any securities
of Seller. From the date of this Agreement and until after the Closing and the
consummation of the transactions contemplated by this Agreement, the
Shareholders shall not offer for sale, sell or otherwise transfer (with or
without consideration) any securities of Seller owned of record or beneficially
by him.
9.17 Expenses of Transactions. All sales, transfer and use taxes incurred
in connection with the sale, assignment, transfer and delivery of the Assets
shall be paid by Seller. All Burger King franchise transfer fees and taxes
shall be paid fifty percent (50%) by Purchaser and fifty percent (50%) by
Seller.
19
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement, with the intention of making it a valid and binding instrument, on
the date first above written.
Seller:
ATTEST: NORTH FOODS, INC.
/s/ William Prentice By: /s/ W. Thomas Fickling
- ----------------------------- --------------------------------
W. Thomas Fickling, President
------------------
WITNESS: Shareholders:
/s/ Thomas T. Fickling /s/ Thomas Fickling
- ------------------------------ ------------------------------------
Thomas Fickling
/s/ William Prentice
------------------------------------
William Prentice
Purchaser:
ATTEST: AMERIKING CAROLINA
CORPORATION I
/s/ Joel Aaseby By: /s/ Lawrence E. Jaro
- ------------------------------- ---------------------------------
Joel Aaseby, Secretary Lawrence E. Jaro, Chief Executive
Officer
20
<PAGE>
EXHIBIT LIST
1 Restaurant Locations
1.1.1 Equipment, Materials, Furniture and Supplies
1.1.2 Fixed Assets
1.1.4 Franchise Agreements
1.1.7 (a) Form of Lease Assignment and Assumption Agreement
(b) Form of Consent to Assignment, Estoppel, and Release
1.4 Allocation of Purchase Price
1.5 Form of Noncompetition Agreement
1.6 List of Other Assumed Contracts
1.8 Excluded Assets
3.2 Breaches or Violations of Agreements, Articles or Bylaws
3.4 Disclosure of Exceptions regarding Authority
3.7 Financial Statements
Unaudited Balance Sheets as of October 31, 1994
Unaudited Balance Sheets as of October 31, 1995
Unaudited Balance Sheets as of October 31, 1996
Unaudited Balance Sheets as of December 31, 1996
Operating Statements for November 1, 1993 through October 31, 1994
Operating Statements for November 1, 1994 through October 31, 1995
Operating Statements for November 1, 1995 through October 31, 1996
Interim Statements for November 1, 1996 through December 31, 1996
3.12.2 Employment Issues
3.13.2 Capital Expenditures
3.13.4 Payment of Indebtedness and Taxes
3.14 Adverse Conditions
3.15 List of Leases, Contracts, Licenses, Agreements and other Commitments
involving liabilities of more than $1000
3.16 Bonuses and Pension Plans
6.1 Opinion of Seller's and Shareholders' Counsel
6.2 Opinion of Purchaser's Counsel
7.2.13 Bill of Sale and Assignment
7.2.14 Warranty Assignment
21
<PAGE>
AMENDMENT NO. 1
TO
ASSET PURCHASE AGREEMENT
THIS AMENDMENT NO. 1 TO ASSET PURCHASE AGREEMENT (this "Amendment") is
made and entered into this 8th day of April, 1997, among NORTH FOODS, INC., a
North Carolina corporation ("Seller"); THOMAS FICKLING and WILLIAM PRENTICE
(collectively referred to as the "Signatories"), THOMAS TROY FICKLING
("Additional Party"), AMERIKING CAROLINA CORPORATION I, a Delaware corporation
("Purchaser"), and NATIONAL RESTAURANT ENTERPRISES, INC. d/b/a AMERIKING
CORPORATION, a Delaware corporation ("NRE").
R E C I T A L S:
WHEREAS, Seller, the Signatories and Purchaser entered into an Asset
Purchase Agreement, dated March 7, 1997 (the "Agreement");
WHEREAS, the Agreement erroneously provided that the Signatories owned
of record and beneficially all of the outstanding shares of the capital stock of
Seller;
WHEREAS, Additional Party is also a shareholder of Seller and desires
to become a party to the Agreement, on the same terms as the Signatories, and
Seller, the Signatories and Purchaser desire Additional Party to become a party
to the Agreement on such terms; and
WHEREAS, the parties hereto desire to made certain amendments to add
Additional Party as a party to the Agreement and to further clarify the parties'
intentions.
NOW THEREFORE, in consideration of the Recitals, which shall be deemed
to be a substantive part of this Amendment, and the mutual covenants, promises,
agreements, representations and warranties contained in this Amendment, the
parties hereto do hereby covenant, promise, agree, represent and warrant as
follows:
1. Definitions of Terms. Capitalized terms used without definition
herein shall have the meanings assigned to them in the Agreement.
2. Joinder. Additional Party hereby agrees to be bound by the terms
of the Agreement, including the mutual covenants, promises, agreements,
representations and warranties thereof, to the same extent as if Additional
Party had been an original party to such Agreement and defined to individually
be a "Shareholder" and as if Additional Party and the Signatories were
collectively defined to be the "Shareholders." Seller, Purchaser and the
Signatories hereby agree to the joinder of Additional Party as a party to the
Agreement as if Additional Party had originally been one of the Shareholders
thereunder.
3. Purchase Price Amended. The parties hereto agree that the
Purchase Price is hereby amended to be Eight Million Fifty Three Thousand Eight
Hundred Forty Six and no/100 Dollars ($8,053,846.00).
4. Inventory. The definition of the term "Inventory" in Section 1.3
of the Agreement is hereby amended to include all merchantable food, saleable
merchandise, paper, new uniforms and current promotional items located in or
stored at the convenience stores contiguous to Burger King Store Numbers 9053
and 7626.
5. Assignment. Purchaser hereby assigns the Agreement, as amended by
this Amendment, and all rights and obligations thereunder, to NRE, and each and
every reference to Purchaser (other than in this Section 5) in the Agreement, as
amended by this Amendment, shall be deemed to refer to NRE. NRE hereby accepts
such assignment.
6. Scope. To the extent not amended or modified herein, the
Agreement shall remain in full force and effect.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Amendment, with the intention of making it a valid and binding instrument, on
the date first above written.
Seller:
NORTH FOODS, INC.
By: /s/ W. Thomas Fickling
---------------------------------------
W. Thomas Fickling , President
----------------------------
Signatories:
/s/ Thomas Fickling
---------------------------------------
Thomas Fickling
/s/ William Prentice
---------------------------------------
William Prentice
Additional Party:
/s/ Thomas Troy Fickling
---------------------------------------
Thomas Troy Fickling
Purchaser:
AMERIKING CAROLINA CORPORATION I
By: /s/ Lawrence E. Jaro
-------------------------------------
Lawrence E. Jaro, Chief Executive
Officer
NATIONAL RESTAURANT ENTERPRISES, INC.
d/b/a AMERIKING CORPORATION
By: /s/ Lawrence E. Jaro
-------------------------------------
Lawrence E. Jaro, Chief Executive
Officer
2
<PAGE>
<TABLE>
<CAPTION>
AmeriKing, Inc.
Calculation of Earnings per Common Share
(Dollars in thousands, except per share amounts)
Quarter Ended Quarter Ended
March 31, 1997 April 1, 1996
<S> <C> <C>
Net loss $ (638) $ (389)
Earnings available to stockholders
Dividends
Preferred Stock (113) (113)
Senior Preferred Stock (985)
Amortization of issuance costs (30)
-------
Earnings available to common stockholders (1,766) (502)
Weighted average number of shares outstanding 893.29 863.29
Fully diluted weighted average number of shares
outstanding 999.99 969.99
Net income per common share (weighted average) $ (1.98) $ (0.58)
Net income per common share (fully diluted) $ (1.77) $ (0.52)
Total Shares
------------
Weighted average number of common shares:
Original shares 863.29 863.29
Common stock units 30.00 30.00
------- -------
Total 893.29 893.29
Fully diluted weighted average number of common
shares:
Original shares 969.99 969.99
Common stock units 30.00 30.00
------- -------
Total 999.99 999.99
</TABLE>
<PAGE>
AmeriKing, Inc.
Calculation of Ratio of Earnings to Fixed Charges
(Dollars in thousands)
<TABLE>
<CAPTION>
Quarter Ended Quarter Ended
March 31, 1997 April 1, 1996
W/O PIK With PIK W/O PIK With PIK
Dividends Dividends Dividends Dividends
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
EARNINGS
Loss before provision for income taxes $(1,063) $(1,063) $ (660) $ (660)
Interest expense 2,945 2,945 2,742 2,742
Amortization of deferred financing costs 137 137 209 209
Portion of rents representative of interest 1,244 1,244 1,073 1,073
Preferred stock PIK dividends 113 113
Total Earnings $ 3,263 $ 3,376 $3,364 $3,477
FIXED CHARGES
Interest expense 2,945 2,945 2,742 2,742
Amortization of deferred financing costs 137 137 209 209
Portion of rents representative of interest 1,244 1,244 1,073 1,073
Preferred stock PIK dividends 113 113
Total Fixed Charges $ 4,326 $ 4,439 $4,024 $4,137
RATIO OF EARNINGS TO FIXED CHARGES 0.75x 0.76x 0.84x 0.84x
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the fiscal
1996 Consolidated Fiancial Statements of Ameriking, Inc. and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-29-1997
<PERIOD-END> MAR-31-1997
<CASH> 3,399
<SECURITIES> 0
<RECEIVABLES> 660
<ALLOWANCES> 0
<INVENTORY> 1,445
<CURRENT-ASSETS> 7,602
<PP&E> 47,043
<DEPRECIATION> 9,604
<TOTAL-ASSETS> 152,834
<CURRENT-LIABILITIES> 15,102
<BONDS> 107,664
31,278
0
<COMMON> 9
<OTHER-SE> (1,219)
<TOTAL-LIABILITY-AND-EQUITY> 152,834
<SALES> 49,393
<TOTAL-REVENUES> 49,393
<CGS> 15,731
<TOTAL-COSTS> 45,091
<OTHER-EXPENSES> 2,397
<LOSS-PROVISION> 23
<INTEREST-EXPENSE> 2,945
<INCOME-PRETAX> (1,063)
<INCOME-TAX> (425)
<INCOME-CONTINUING> (638)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (638)
<EPS-PRIMARY> (1.98)
<EPS-DILUTED> (1.77)
</TABLE>
