SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: May 29, 1997
NPC INTERNATIONAL, INC
(Exact name of registrant is specified in its charter)
Kansas
(State of incorporation)
0-13007 48-0817298
(Commission Identification No.) (IRS Employer
Identification No.)
720 West 20th Street, Pittsburg, Kansas 66762
(Address of principal executive office Zip Code)
Registrant's telephone number: (316/231-3390)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
Pursuant to an Asset Purchase Agreement, dated May 14, 1997, by and
among NPC International, Inc. and certain of its subsidiaries and
affiliates (collectively, the "Company") and Jamie B. Coulter and
certain of his affiliates (collectively, "Coulter"), on May 15,
1997 the Company completed the acquisition of certain of the Pizza
Hut restaurants announced April 23, 1997.
The consideration for the purchase of 74 of the units and the
operations of eight other units was $47 million. The Company will
manage 18 units in North Carolina under a management agreement and
will record the results of these unit's operations as if owned,
less a management fee to be paid to Coulter. Upon resolution of
certain contingencies, the Company anticipates paying additional
consideration of $10 million for these restaurants. The purchase
price was negotiated between the Company and Coulter, based
primarily on the Company's internal review of the value of cash
flow generated by operations of the restaurants and future
development opportunities perceived to be available to the Company.
The Company financed the acquisition of the units through it's
recently ammended and restated $200 million Revolving Credit
Facility, for which the agent bank is Texas Commerce Bank.
A press release of Registrant issued on May 15, 1997, announcing
the completion of the above described acquisition, is attached as
an exhibit to this report and incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a.) Financial statements of business acquired
Financial statements are not available at this time. However, in
accordance with Rule 3-05(b) the applicable statements are expected
to be filed prior to July 29, 1997.
(b.) Pro forma financial information
Pro forma financial information will be filed in conjunction with
the filing of the financial statements referred to in Item 7. (a)
above.
(c.) Exhibits
The exhibits set forth on the Index to Exhibits on page 4 are
incorporated herein by reference.
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.
NPC INTERNATIONAL, INC.
DATED:
Troy D. Cook
Vice President Finance
Chief Financial Officer
Principal Financial Officer
INDEX TO EXHIBITS
PAGE NO.
IN THIS
EXHIBIT DESCRIPTION FILING
2-A Asset Sale Agreement 5
99-A Press Release of Registrant dated May 15, 1997 28
EXHIBIT 2-A
ASSET PURCHASE AGREEMENT
By and Between
Jamie B. Coulter, et al., Sellers
and
NPC International, Inc., NPC Restaurants LP
and NPC Management, Inc., Buyer
Dated May 14, 1997
TABLE OF CONTENTS
Page
1. Transfer of Business 2
1.1 Conveyance 2
1.2 Excluded Assets and Equipment 2
1.3 Real Property 3
1.4 Licenses 3
1.5 Restaurant Inventories and Change Funds 4
1.6 Purchase Price and Other Payments 4
1.7 Non-Competition 5
1.8 Non-Assumption 5
1.9 Closing Documents 5
2. Representations and Warranties of Sellers 6
2.1 Title to Assets 6
2.2 Adequacy of Assets 6
2.3 Leases and Contracts 6
2.4 Power and Authority 6
2.5 Insurance 6
2.6 Taxes 6
2.7 Environmental Matters 6
2.8 Consent of Pizza Hut, Inc. 7
2.9 Financial Information of Sellers 7
2.10 No Material Changes 8
3. Warranties of Buyer 8
4. Pre-Closing Covenants 8
4.1 Operation Until Closing 8
4.2 Access to Restaurants 8
4.3 Obligations Under Franchise Agreements 8
5. Sellers' Employees 9
6. Hart-Scott-Rodino Act 9
7. Post-Closing Audit 9
8. Conditions to Closing 9
9. Closing Matters 11
9.1 Time of Closing 11
9.2 Post-Closing Adjustments 11
9.3 Post-Closing Indemnification 12
9.4 Additional Documents 12
9.5 Buyer Evaluation 12
9.6 Information Statement 12
9.7 Recording and Taxes 12
10. Miscellaneous 12
10.1 Notices 12
10.2 Brokerage and Finder's Fees 12
10.3 Termination of Agreement 13
10.4 Modification and Waiver 13
10.5 Assignment; Binding Effect 13
10.6 Severability 13
10.7 Entire Agreement 13
10.8 Confidential Information 13
10.9 Governing Law 14
10.10Bulk Sales Waiver 14
10.11Expenses 14
10.12Construction 14
10.13No Negotiations on Sale of Assets 14
10.14Time is of the Essence 14
11. Delaware Units; Deferred Closing 14
12. North Carolina Units; Deferred Closing 15
ASSET PURCHASE AGREEMENT
DATE: May 14, 1997
PARTIES: "Sellers" Jamie B. Coulter, et al. and
Certain operating entities owned by
Jamie B. Coulter
(As listed on Exhibit "A")
300 Crescent Court
Building 300, Suite 850
Dallas, Texas 75201
"Buyer" NPC International, Inc. ("NPC")
NPC Restaurants LP ("NPC LP")
NPC Management, Inc. ("NPCM")
720 West 20th Street
Pittsburg, Kansas 66762
"Owner" Jamie B. Coulter, d/b/a
Coulter Properties
300 Crescent Court
Dallas, Texas 75201
RECITALS: Sellers own or lease a variety of real and personal
property used in the operation of one hundred (100) Pizza Hut
restaurants (the "Restaurants"), as such Restaurants are
described on Schedule 1.1. Jamie B. Coulter ("JBC") is the owner
of all of the outstanding stock of Sellers. Coulter Properties,
a sole proprietorship ("Owner") owns and will at the time of
Closing own the real property and the improvements in which
thirty-six (36) of the Restaurants are located. Page Pizza
Company, Inc., a Seller hereunder, owns the real property and
improvements in which one Restaurant is located and operates the
Restaurant and will directly lease the premises to Buyer.
Certain of the Restaurant locations are leased by third parties
to certain Sellers, which leases Sellers will assign to Buyer.
Sellers are willing to sell, assign and transfer all of the
personal property, franchise rights and other assets used in
connection with the operation of the Restaurants, and Owner is
willing to lease the real property and improvements which are
owned by Owner to Buyer in accordance with the terms and
conditions of this Agreement. The respective rights and
ownership of Assets of each of Sellers are set out on Exhibit "B"
hereto.
AGREEMENT: In consideration of the mutual promises set forth in
this Agreement, Sellers and Buyer agree as follows:
1. Transfer of Business. Subject to the terms and conditions
of this Agreement, the following will take place:
1.1. Conveyance. The Sellers will convey to NPC, NPC LP or
NPCM, as Buyer may direct, all of Sellers' interest in the
following types of personal property (the "Assets") relating to
the Pizza Hut restaurant business being conducted at the
Restaurants:
(a) All furniture, fixtures, and equipment located in
the Restaurants or used in connection therewith, except as
provided in Section 1.2, below;
(b) Any third party prepaid lease and utility deposits
and all miscellaneous deposits relating to the Assumed Contracts
(as defined in Section 1.1(g) and set out on Schedule 1.1(b));
(c) All uniforms, menus, dishes, glassware, utensils,
and other smallwares used in the Restaurants;
(d) All useable inventories of food ingredients,
supplies, paper products, and other consumables used in the
Restaurants, as well as a change fund for each of the Restaurants
in an amount and in denominations adequate to do business at the
Restaurant as of the opening for business on the "Closing Date"
(as defined in Section 9.1, below);
(e) All alcoholic beverage and other licenses relating
to the Restaurants, to the extent those licenses are
transferable;
(f) The franchise rights and obligations contained in
certain Pizza Hut, Inc. Franchise Agreements as set out on
Schedule 1.1(f) (the "Franchise Agreements") covering the
Restaurants (copies of the Franchise Agreements have been
provided to Buyer); and
(g) Sellers' rights under any equipment leases or
service or other contracts or agreements specifically assumed by
Buyer ("Assumed Contracts"), as set out in Schedule 1.1(g),
consent to the assignment of which is to be obtained by Buyer at
no expense to Buyer.
1.2 Excluded Assets and Equipment. The Assets do not
include the equipment listed in Schedule 1.2, which is leased by
Sellers (the "Excluded Leased Equipment"), or existing leases
from Owner, as landlord, to Sellers, as tenant, for the
Restaurant premises. Subject to the Closing of the transactions
contemplated hereby, Buyer agrees to purchase Summit Leasing
Company LLC ("Summit") which owns the Assets as set out on
Schedule 1.2, for the purchase price of $521,000.00 on such other
terms and conditions as set out in the purchase agreement between
Buyer and the Summit owners. Sellers will use Sellers' best
efforts to cause the Summit owners to enter into such agreements
with Buyer.
1.3 Real Property.
(a) Owned Real Property. Sellers own various real
estate assets and are selling none of these assets in this
transaction. This includes, without limitation, two residential
real property interests in Frisco, Colorado owned by Pizza Hut by
Dillon Reservoir, Inc., residential property in Elko, Nevada
owned by Desert Pizza Huts, Inc. and restaurant real property and
improvements in Page, Arizona owned by Page Pizza Company, Inc.
Owner owns or leases certain of the parcels and leases the land
and improvements thereon to Sellers, all as listed in Schedule
1.3(a) (the "Owner Real Properties"), which Sellers and Owner
will terminate and on which Sellers will cause new lease
agreements to be entered into with Buyer ("Lease"). Each Lease,
which will include the Page, Arizona real estate and improvements
noted above, will have an initial term expiring on March 21,
2010, with three options to renew for successive five-year terms.
Rent, exclusive of any ground rents, for the initial term will be
an amount equal to six percent (6%) of unit net sales for the
calendar year ended December 31, 1996 for each Restaurant, plus
percentage rent equal to six percent (6%) of annual net sales per
calendar year less the amount paid as base rent, as set out on
Schedule 1.3. Each lease will provide that base rent for each of
the renewal terms will be one hundred five percent (105%) of base
rental paid during the preceding term plus applicable percentage
rent. The Lease will further require that Buyer pay all ad
valorem taxes, Arizona landlord tax, insurance premiums and
maintenance expenses on the Owner Real Properties.
(b) Leased Real Properties. Sellers lease from
unrelated third parties the parcels of real estate listed in
Schedule 1.3(b) (the "Leased Real Properties"). Sellers will use
best efforts to obtain prior to the Closing:
(i) from each landlord from whom consent to an
assignment to Buyer is required, a consent to that
assignment; and
(ii) from each landlord an estoppel certificate showing
substantially the information shown on Schedule
1.3(b)(ii).
None of the leases on the Leased Real Properties have
less than two (2) years remaining on the current Term of such
leases except unit no. 8352 located at 1305 S.E. Tacoma,
Portland, OR 97202, currently operated under a month-to-month
agreement. If any required consent to an assignment is not
obtained by the Closing Date, Sellers may, at their option,
either sublease the affected property to Buyer or assign the
lease without consent; in either event, Sellers will indemnify
Buyer (using a mutually agreeable form of indemnity) against
claims by the respective landlord arising out of the
sublease/assignment without consent.
1.4 Licenses. Buyer understands it needs various licenses
and permits (including alcoholic beverage licenses) as now held
by Seller and set out in Schedule 1.4 to conduct the business
following Closing, and that some or all of the licenses may be
nontransferable. Except as provided below, Sellers will remove
all nontransferable licenses from the Restaurants on the Closing
Date and promptly surrender such licenses to the appropriate
authority if such surrender is required for Buyer to obtain a
comparable license.
If Buyer requests the temporary use of any of the
nontransferable licenses until Buyer obtains its own licenses,
Sellers will allow that use, but only if each of the following
conditions is (in Sellers' opinion) satisfied:
(a) Buyer demonstrates to Sellers' continuing
satisfaction that Buyer is diligently and in good faith trying to
obtain the appropriate licenses for each Restaurant;
(b) The use of Sellers' licenses by Buyer on an
interim basis is legally permissible and poses no unreasonable
liability or risk to Sellers that each of Sellers (in its sole
discretion) considers unacceptable; and
(c) Buyer agrees in writing, in form acceptable to
Sellers;
(i) to indemnify Sellers against all claims,
losses, liability (including fines), expenses (including
reasonable attorneys' fees), or damages that Sellers suffers as a
result of Buyer's use of the licenses;
(ii) to pay a fee of $10.00 per license per month
(in consideration for Sellers' management services in connection
with Buyer's use of Sellers' licenses), beginning 90 days after
the Closing Date, and continuing for each month or portion of a
month that Buyer uses any of Sellers' licenses; and
(iii) to reimburse Sellers promptly for any
out-of-pocket expenses incurred in connection with this Section.
1.5 Restaurant Inventories and Change Funds. On the night
prior to the Closing Date, Sellers' and Buyer's representatives
will take an inventory of the usable food ingredients in each
Restaurant, and count each Restaurant's change fund. Buyer will
reimburse Sellers for the lesser of actual cost or market value
of the inventories and for the change funds, net of any offsets,
as provided in Section 9.2.
1.6 Purchase Price and Other Payments. As consideration
for this Agreement, Buyer will pay Sellers the following amounts
at the times noted:
(a) For the sale and transfer of the operations of
the Restaurants (the "Business"), the assignment of the
Restaurant Leases and for the Assets (except that portion of the
Assets for which Buyer must separately reimburse Sellers, as
contemplated in Section 1.6(b)) and Sellers' other agreements
herein, Buyer will pay Sellers the sum of $56,479,000.00 (the
"Purchase Price"), the allocation of which shall be as agreed by
the parties. Payment will be in cash at Closing. The Purchase
Price includes an amount to compensate Sellers for relinquishing
their existing franchise and leasehold rights, but does not
include any ongoing fees or obligations under the Franchise
Agreements; and
(b) Reimbursement for inventory and change funds, for
third party lease payments and prepaid expenses under the Assumed
Contracts, and for any other items payment for which is required
by Sections 1.5 or 9, at the times called for by Section 9.2.
1.7 Non-Competition. Sellers agree to enter into the Non-
Competition Agreement in the form of Exhibit "E" attached hereto.
1.8 Non-Assumption. At the Closing, Buyer shall assume the
liabilities of Sellers that relate to the operation of the
Restaurants from and after the Closing Date (the "Assumed
Liabilities"); provided, however Buyers shall not be obligated to
assume and perform the obligations arising under the "Excluded
Liabilities" after the expiration of the 90-day period following
the applicable Closing Date. As used herein, the "Excluded
Liabilities" shall mean any equipment leases or contracts which
cannot be terminated within 90 days from the date of the
applicable Closing Date and which Buyer identified in writing to
Sellers within 60 days after the applicable Closing Date,
provided, however, that any liability that is disclosed in
Schedule 1.1(g) shall be assumed. Except as specifically
contemplated by this Agreement, Buyers are not assuming any
liabilities or obligations that arise from the operation of the
Restaurants before the Closing Date, and Sellers agree to timely
perform all obligations relating to the Restaurants that arise
out of operations of the Restaurants for the period prior to the
Closing Date.
1.9 Closing Documents. At the Closing of the sale, Sellers
and Buyer will exchange the following fully-executed documents:
(a) Assignment of the Franchise Agreements
with consent of Pizza Hut, Inc. attached thereto;
(b) Leases for each of the Owner Real
Properties, in the form of Exhibit "C";
(c) A Bill of Sale for the Assets, in the form
attached as Exhibit "D";
(d) Assignments of all Assumed Contracts;
(e) a Non-Competition Agreement, executed by
JBC in favor of Buyer, in the form of Exhibit "E"
attached hereto ("Non-Competition Agreement");
(f) Assignment and Assumption Agreement for
the Restaurant Leases, in the form of Exhibit "F",
accompanied by any required consents and estoppel
certificates (or indemnities) as contemplated by
Section 1.3(b);
(g) evidence of corporate good standing and
corporate authority as required by Buyer;
(h) the Franchise Agreement
assigned to NPCM and to which is attached evidence
of the consent of Pizza Hut, Inc. to the
transactions which are the subject of this
Agreement; and
(i) any other documents reasonably requested by any
party.
2. Representations and Warranties of Sellers. As of the date
of this Agreement and as of the Closing:
2.1 Title to Assets. The Sellers have good and marketable
title to all of the Assets being transferred to Buyer, free and
clear of any liens and encumbrances, except for liens for current
taxes not yet due and payable.
2.2 Adequacy of Assets. The Assets, the Summit Assets and
the leased equipment constitute all of the items of personal
property currently in use and reasonably necessary to operate the
Restaurants as PIZZA HUTr restaurants. This warranty does not
constitute a warranty of the condition of the Assets, which are
sold "AS IS", but which are in working order; provided, however,
that all Restaurants shall remain open for business and be in
such condition that Buyer, other than by Buyer's own action or
inaction, is not prevented, by governmental authority or
otherwise, from operating each as a Pizza Hut as operated on the
date hereof. Ovens in each unit will have been calibrated to the
new standard set by Pizza Hut, Inc. for production of the
Lightning Bolt product.
2.3 Leases and Contracts. Each of the leases for the Owner
Real Properties, the Restaurant Leases and each of the Assumed
Contracts is in full force and effect, and Sellers have not been
given notice of default under any of them. Each respective Seller
has the right to assign each of the Restaurant Leases and the
Assumed Contracts to Buyer, providing Buyer with the right to use
the Restaurant and the leased equipment and receive performance
on the same terms and conditions as Sellers, all subject to
required consents which Seller shall obtain at no cost to Buyer.
This warranty does not constitute a warranty as to the adequacy
of any unrelated third party lessor's title to any of these
items.
2.4 Power and Authority. Seller corporations are duly
incorporated and in good standing in the respective states of
incorporation and have full corporate power and authority to
enter into and perform this Agreement.
2.5 Insurance. Sellers carry reasonable and customary
insurance (both in form and amount) with respect to its
properties, assets, and business. That insurance is in effect
and will be kept in effect through the Closing.
2.6 Taxes. Sellers have filed all requisite federal,
state, and local tax returns and paid all taxes required thereby,
to the extent due and payable, other than those presently payable
without penalty or interest, and except any that are being
contested in good faith by appropriate proceedings, for which
Sellers will indemnify Buyer.
2.7 Environmental Matters. To the best of Sellers'
knowledge:
(a) The Restaurants contain no asbestos in friable
form;
(b) No underground petroleum or chemical storage tanks
or underground storage facilities are located under or adjacent
to the Restaurants;
(c) No contaminant, industrial waste, pollutant1,
toxic or hazardous waste, or any similar substance of any kind or
character has been stored, processed, or disposed of in or around
the Restaurants by Sellers in conducting their business, or
discharged at any time by Sellers directly or indirectly into the
environment in violation of any law or governmental regulation
applicable to Sellers, or into any sanitary sewer connection or
treatment system except in conformity with requirements of all
applicable laws, regulations, and valid permits as the result of
any activities of the Sellers, nor has any such act or occurrence
taken place under the ownership of a prior owner that has not
been cured.
(d) With respect to the Restaurants, Sellers have not
at any time been the subject of any governmental investigation or
proceeding pertaining to the use, storage, processing,
transportation, or disposition of toxic or hazardous waste or any
other subject or material that has been determined to be
hazardous to human health under applicable law or government
regulation, nor has it been the subject of any governmental
investigation or proceeding pertaining to violation of any waste
water or sewage disposal statutes or regulations applicable to
the business and operation of the Sellers.
2.8 Consent of Pizza Hut, Inc. Sellers will obtain for
delivery at Closing the consent of Pizza Hut, Inc. to the
transfer of the Franchise Agreements to Buyer. The Franchise
Agreements contain no unsatisfied development commitments.
2.9 Financial Information of Sellers. Sellers have
delivered to Buyer, before Buyer's execution of this Agreement,
certain financial information relating to the Restaurants,
including audited financial statements for the year ended
December 26, 1995, unaudited internal income statements for the
year ended December 31, 1996 and unaudited internal income
statements for the sixteen (16) weeks ended April 22, 1997, of
Sellers all as to The Coulter Enterprises Pizza Huts on a
combined and individual Restaurant basis ("Financial
Information") and certain other information, presented in
accordance with a federal income tax reporting basis,
consistently applied. Sellers acknowledges that Buyer's decision
to close the transactions which are the subject of this Agreement
and to purchase the Assets and Business for the consideration set
forth in this Agreement was made principally based on inspection
of such information and Buyer's reliance on the accuracy thereof.
2.10 No Material Changes. Since April 22, 1997, there has
not been any material adverse change in the Assets, financial
condition, operations, contracts and leases to be assumed by
Buyer, income or Business of Sellers or event which would make
the Financial Information misleading. Without limiting the
generality of the foregoing, since April 22, 1997, the Sellers
have not engaged in any practice, taken any material action, or
entered into any material transaction outside the ordinary course
of business, there has been no damage, destruction, or loss to
the Business or Assets of Sellers materially and adversely
affecting the Business or the prospects of Sellers nor have
Sellers received any notice or become aware of any proposed or
actual governmental action or claim or any employee or labor
dispute which in any event may have a material adverse effect on
the financial condition or results of operations of the Business
of any Restaurant or of Sellers.
3. Warranties of Buyer. Each Buyer warrants to Sellers that,
as of the date of this Agreement and as of Closing, Buyer is duly
organized and in good standing under the laws of the State of its
organization, is qualified to do business as a foreign
corporation in each state where required to be so qualified to
conduct its business, and has full power and authority to enter
into and perform this Agreement.
4. Pre-Closing Covenants. Sellers covenants as follows:
4.1 Operation Until Closing. Until the Closing (or earlier
termination), Sellers shall operate the Restaurants only in the
ordinary course and shall not (i) make any changes in the
ownership structure which could impact the transactions
contemplated (unless approved by NPC, which approval will not be
unreasonably withheld), (ii) increase compensation payable to its
employees or bonuses under established plans, (iii) incur any
obligations for or acquire by purchase, lease or otherwise any
material amount of capital expenditures or assets, (iv) incur any
other material corporate obligations, expenses or liabilities
except in the usual and ordinary course of business, (v)
mortgage, pledge or subject to lien any of its assets, or (vi)
sell or otherwise dispose of assets or cancel any debts or claims
except in the ordinary course of business.
4.2 Access to Restaurants. Buyer may inspect each
Restaurant (under the conditions set forth below) to assess the
condition of each and of the Business and the Assets. As to each
inspection, Buyer must schedule the inspection with Sellers,
Buyer must be accompanied by a representative of Sellers, and
Buyer must conduct the inspection in a manner that minimizes
disruption to any Restaurant's operations. Buyer shall have
completed such inspections by May 9, 1997, following which Buyer,
in Buyer's reasonable business judgment, may terminate this
Agreement, without further liability to Sellers, by the close of
business within five (5) days prior to the scheduled Closing.
4.3 Obligations Under Franchise Agreements. Sellers are
now current in payment and performance, and at Closing will be
current in payment and performance, under the Franchise
Agreements and on all indebtedness to and accounts with Pizza
Hut, Inc. and related entities, including PepsiCo Food Service
and any Pizza Hut advertising cooperative, and no conditions
shall exist which with the giving of notice or the passage of
time, or both, could ripen into a default of any such obligation.
5. Sellers' Employees. Sellers will terminate the employment
of its employees at the close of business on the day prior to the
Closing Date except for Kenneth Syvarth, Donald Stack and Fran
Vavala. The terminated employees may at Buyer's option become
employees of Buyer on the Closing Date (the "Hired Employees").
Sellers will not extend any offer of employment to any Hired
Employee for a period of six (6) months from Closing without
Buyer's prior written consent, but may rehire any terminated
employee not hired by Buyer. All claims of the employees arising
out of their employment with Sellers before the Closing Date will
be the sole liability of Sellers, and Sellers will indemnify
Buyer from all claims related to such employment. Sellers will
directly pay all terminated employees, including the Hired
Employees, for earned and unused vacation in accordance with
Sellers' normal policies or as required by law.
6. Hart-Scott-Rodino Act. Buyer and Sellers shall, in
cooperation with each other, file (or cause to be filed) with
each of the Department of Justice ("DOJ") and the Federal Trade
Commission ("FTC") any reports or notifications that may be
required to be filed by them under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976 (the "HSR Act") in connection
with the transactions contemplated by this Agreement. Buyer and
Sellers shall promptly comply with all requests for further
documents and information made by the DOJ or the FTC, shall use
their best efforts to obtain early termination of all waiting
periods under the HSR Act, and shall furnish to the others all
such information in its possession as may be necessary for the
completion of the reports or notifications to be filed by the
others. All fees due to the FTC or the DOJ under the HSR Act in
connection with the filing of any of those reports or
notifications shall be borne by Sellers.
7. Post-Closing Audit. Sellers will produce consolidated
audited financial statements for Seller entities operating the
Restaurants for the year ended December 31, 1996 before the
Closing, if available, or, if not, reasonably in advance of the
date required for Buyer's filing of a report on Form 8-K under
the Securities Exchange Act of 1934, as amended. The Sellers
represent and warrant that these December 31, 1996 financial
statements will fairly present Sellers' financial condition and
results of operations for the period presented in accordance with
generally accepted accounting principles. The audit fees
associated with preparation of these audited financial statements
will be borne by Sellers.
8. Conditions to Closing.
(a) The obligations of Sellers, on the one hand, and Buyer,
on the other hand, to consummate the transactions contemplated by
this Agreement are subject to the fulfillment, at or prior to the
Closing, of each of the following conditions:
(i) there shall not be in effect any preliminary or
permanent injunction or other order issued by any
Federal or state court of competent jurisdiction in the
United States or by any United States Federal or state
governmental or regulatory body nor any statute, rule,
regulation or executive order promulgated or enacted by
any United States Federal or state governmental
authority which restrains, enjoins or otherwise
prohibits the consummation of the transactions
contemplated by this Agreement or any other agreement
or document contemplated hereby;
(ii) any filings required to be made under the HSR Act
shall have been made, and all applicable waiting
periods thereunder with respect to the transactions
contemplated by this Agreement shall have expired or
been terminated; and
(iii) the required consent of Pizza Hut, Inc. to the
transfers shall have been received.
(b) Each Seller's obligation to consummate the transactions
contemplated by this Agreement are subject to the fulfillment, at
or prior to the Closing, of each of the following conditions (any
of which may be waived in writing by such Seller):
(i) each of the representations of each Buyer under
this Agreement and each of the other agreements and
documents contemplated hereby shall be true and correct
in all material respects at and as of the time of the
Closing with the same effect as though such
representations had been made again at and as of that
time, except to the extent that any such
representations expressly relate to an earlier date in
which case any such representations shall be true and
correct in all material respects at and as of such
earlier date;
(ii) each Buyer shall have performed and complied with
each obligation, covenant and condition required by
this Agreement and the other documents contemplated
hereby to be performed or complied with by it prior to
or at the Closing, with such exceptions as could be
reasonably be expected to result in a material adverse
effect on the ability of Buyers to perform their
obligations under this Agreement or any other agreement
or document contemplated hereby.
(c) Each Buyer's obligation to consummate the transactions
contemplated by this Agreement are subject to the fulfillment, at
or prior to the Closing, of each of the following conditions (any
of which may be waived in writing by such Buyer):
(i) each of the representations of each Seller under
this Agreement and each of the other agreements and
documents contemplated hereby shall be true and correct
in all material respects at and as of the time of the
Closing with the same effect as though such
representations had been made again at and as of that
time, except to the extent that any such
representations expressly relate to an earlier date in
which case any such representations shall be true and
correct in all material respects at and as of such
earlier date;
(ii) each Seller shall have performed and complied with
each obligation, covenant and condition required by
this Agreement and the other documents contemplated
hereby to be performed or complied with by it prior to
or at the Closing, with such exceptions as could not
reasonably be expected to result in a material adverse
effect on the ability of the Sellers to perform their
obligations under this Agreement or any other agreement
or document contemplated hereby;
(iii) Buyer will have received a copy of a
resolution of each of Seller's Board of Directors
approving the sale of the Assets certified by an
authorized officer of the applicable Seller;
(iv) Buyer shall have obtained financing for the
acquisition of the Restaurants on terms acceptable to
Buyer;
(v) Buyer shall have completed the inspection of the
Assets and facilities of the Restaurants; and
(vi) the transactions contemplated hereby shall have
been approved by the Board of Directors of NPC, NPCM
and the General Partner of NPC LP no later than April
30, 1997.
9. Closing Matters.
9.1 Time of Closing. Unless otherwise agreed the
consummation of the transactions contemplated by this Agreement
will occur at the "Closing", which will be held at the offices of
Sellers, at 10:00 a.m. (local time) as soon as possible after May
13, 1997, but no later than May 29, 1997 unless (1) consent of
Pizza Hut, Inc. or required waivers pursuant to the HSR Act have
not been received, in which case the Closing will occur within
five (5) days after receipt of such consent and waivers, or (2)
extended by mutual agreement of the parties (the date the Closing
actually occurs is referred to in this Agreement as the "Closing
Date"). At the close of business on the day prior to the Closing
Date, Sellers' representatives, accompanied by Buyer's
representatives, will take inventory, utilizing an Inventory Form
in the form of Exhibit "G" of the food ingredients, supplies,
paper products, and other consumables in each Restaurant.
Transfer of title to the Assets will take place as of 12:01 a.m.
on the Closing Date on receipt by Sellers of the Purchase Price.
Sellers will cooperate with Buyer to see that the transfer of
the Assets proceeds smoothly.
9.2 Post-Closing Adjustments. From time to time after the
Closing Date, Buyer or Sellers may prepare and submit to the
other party one or more post-closing statements concerning
obligations paid by either the Buyer or Sellers that are properly
the cost of the other party or relate to the other party's period
of ownership, offsetting any amounts owed by the other party.
The net amount owed will be paid within 30 days after receipt of
the post-closing statement. Any amount not paid within 30 days
after receipt of a post-closing statement will bear interest at
the rate of 18% per annum, or the maximum legal rate. Without
limiting the generality of this provision, the following is a
list of some of the types of items that may be reimbursed through
use of post-closing statements: sales and transfer taxes, amounts
paid (including rents, percentage rents, real estate taxes and
personal property taxes paid to third parties) under Restaurant
Leases (including pro rata obligations of any Seller to third
party lessors), Assumed Contracts, utilities, inventories and
change funds. In addition, Sellers shall be entitled to
reimbursement for post-closing costs which were incurred by
Sellers at the request of Buyer, including salary and related
costs of any of Seller's employees who perform consulting or
other services related to the Restaurants after Closing.
9.3 Post-Closing Indemnification. Buyer will indemnify
Sellers, their affiliates, employees and agents, against any
loss, cost, damage, or other expense (including attorneys' fees)
that arises from operation of the Restaurants or related
properties on and after the Closing Date. Sellers will indemnify
Buyer, its affiliates, subsidiaries, employees, officers,
directors, and agents against any claim, liability or obligation,
whether known or unknown, fixed or contingent, and any related
loss, cost, damage, or other expense (including attorneys' fees)
arising from operation of the Restaurants or related properties
before the Closing Date.
9.4 Additional Documents. Following the Closing, each of
the parties covenants to provide such additional documents or
instruments as the other party may reasonably request for the
purpose of carrying out this Agreement. Sellers will use best
efforts to have affiliates and present employees of Sellers
cooperate after the Closing in furnishing information, evidence,
testimony, and other assistance concerning matters that occurred
prior to the Closing.
9.5 Buyer Evaluation. Buyer acknowledges that except as
set forth in the Financial Statements, Sellers (and its agents
and employees) have made no statements or warranties to Buyer as
an inducement for Buyer's decision to purchase, except as
contained in this Agreement, and Buyer's decision to purchase was
made independently by Buyer with the aid of professional
counselors, including legal, accounting, and financial advisors.
9.6 Information Statement. Buyer will cooperate with
Sellers in the timely filing of any information statement
required by regulations issued pursuant to Section 1060(b) of the
Internal Revenue Code of 1986, as amended.
9.7 Recording and Taxes. Promptly after Closing but no
later than the due date, Sellers will pay all sales or transfer
taxes and fees, if any, arising out of the sale of the Assets.
Such payments will be shared equally by Buyer and Sellers and
adjusted or provided in Section 9.2 above. At Buyer's
discretion, Buyer may record any assignments and subleases at
Buyer's expense.
10. Miscellaneous.
10.1 Notices. Notices may be given to each party at the
respective addresses set forth on the first page of this
Agreement.
10.2 Brokerage and Finder's Fees. Each party will indemnify
the other against any claims through such party for any
brokerage, finder's or similar fee in connection with the
transfers contemplated by this Agreement.
10.3 Termination of Agreement. This Agreement will
terminate and be of no further force and effect if the Closing
has not been consummated by the close of business on May 29, 1997
if not extended by Buyer as provided herein.
10.4 Modification and Waiver. No modification or waiver of
any of the provisions of this Agreement, and no consent by any of
the parties to any departure from the provisions of this
Agreement by the other party, will be effective unless the
modification or waiver is in writing and signed by the party or
parties to be bound. Each modification or waiver will be
effective only for the period, on the conditions, and for the
specific instances and purposes specified in writing. No notice
to or demand on any of the parties in any case will entitle it,
them, or any of them to any other or further notice or demand in
similar or other circumstances.
10.5 Assignment; Binding Effect. This Agreement extends to,
inures to the benefit of, and is binding upon, the parties and
all of their respective successors and permitted assigns. This
Agreement is not, however, assignable or transferable, in whole
or in part, by any of the parties except upon the express prior
written consent of the other party, and nothing contained in this
Agreement is intended to confer upon any person, other than the
parties and their respective heirs, successors, and permitted
assigns, any rights, remedies, or obligations under, or by reason
of, this Agreement. Any request by Buyer for Sellers' consent to
the assignment of this Agreement will be subject to the
conditions on assignment contained in the Franchise Agreements.
10.6 Severability. If any provision or provisions of this
Agreement or of any of the documents or instruments delivered
pursuant hereto, or any portion of any provision hereof or
thereof, is invalid or unenforceable pursuant to a final
determination of any court of competent jurisdiction or a result
of future legislative action, that determination or action will
be construed (whenever possible) so as not to affect the validity
or enforceability hereof or thereof and will not affect the
validity or affect any other portion hereof or thereof.
10.7 Entire Agreement. This Agreement (including Exhibits
"A" through "G" and the Schedules, which are incorporated into
this Agreement by reference) contains the entire understanding of
the parties with respect to the transactions contemplated by this
Agreement and may be amended, modified, supplemented, or altered
only by a writing duly executed by all of the parties. Any prior
agreements or understandings relating to the same subject matter,
whether oral or written, are entirely superseded by this
Agreement.
10.8 Confidential Information. This Agreement, the terms of
the transactions contemplated by this Agreement, and any other
information heretofore or hereafter disclosed or obtained in
connection with this Agreement concerning the business,
operations, affairs, or financial condition of any party hereto
(collectively, the "confidential information"), will be kept
confidential, except as otherwise required by law or legal
process and except to the extent (i) the confidential information
is or has been disclosed to any lender, to Pizza Hut, Inc., or to
the respective attorneys, accountants, and financial advisors of
any party hereto, (ii) the confidential information is or
hereafter becomes lawfully obtainable from other sources, (iii)
this duty of confidentiality is waived in writing by the party to
whom the confidential information relates, or (iv) the parties
otherwise agree. These obligations of confidentiality will
permanently survive termination or abandonment of this Agreement.
10.9 Governing Law. This Agreement, and all instruments
delivered in connection with this Agreement, unless otherwise
expressly provided in those other instruments, shall in all
respects be construed in accordance with and governed by the
substantive laws of the State of Kansas without regard to
principles of conflicts of laws.
10.10 Bulk Sales Waiver. Sellers and Buyer each waive
compliance by the other with any bulk sales or similar laws that
may be applicable to the transactions contemplated by this
Agreement.
10.11 Expenses. Except as otherwise expressly provided in
this Agreement, each of the parties will bear its own expenses
incident to this Agreement and the transactions contemplated by
this Agreement, including without limitation all fees and
disbursements of counsel and accountants retained by the party,
whether or not the transactions contemplated by this Agreement
are consummated.
10.12 Construction. The captions of the various articles
and sections of this Agreement have been inserted for the purpose
of convenience of reference only. The captions are not a part of
this Agreement and will not be deemed in any manner to modify,
explain, enlarge, or restrict any of the provisions of this
Agreement.
The word "include", in all its tenses and variations, is
always used in a non-exclusive sense, as if followed by the
phrase "without limitation".
The auxiliary verb "will" is mandatory. The auxiliary verb
"may" is permissive (and, by extension, is prohibitive when used
negatively, as a denial of permission).
10.13 No Negotiations on Sale of Assets. Until the Closing
(or earlier termination), neither the Sellers, or any individual
Seller, nor Jamie B. Coulter shall directly or indirectly
institute, continue or entertain negotiations with respect to the
sale of all or a portion of the Assets or Business.
10.14 Time is of the Essence. Time is of the essence in
the performance of this Agreement.
11. Delaware Units: Deferred Closing. Notwithstanding any other
provision in this Agreement, the parties hereby agree with
respect to the eight (8) Restaurants located in the State of
Delaware (the "Delaware Restaurants"), as set out on Exhibit "H"
hereto, Sellers will hold the portion of the Purchase Price
allocable thereto in "escrow," although deposited with other
funds of Sellers, until the earlier of (i) 90 days from the
Closing or (ii) the effective date Sellers' licenses to serve
beer in the Delaware Restaurants ("Licenses") have been
transferred, with the approval of the Delaware Alcoholic Beverage
Control Commission ("DABCC"), to Buyer. The parties agree to
enter into a Management Agreement, substantially in the form
attached hereto as Exhibit "I", pursuant to the terms of which
Buyer shall be entitled to enter upon the Premises and manage the
Business of the Delaware Restaurants during the term thereof.
Buyer agrees that all net operating profit from operation under
the Management Agreement shall be held by Buyer in "escrow",
although commingled with other funds of Buyer, until such time as
the Licenses have been transferred to Buyer. On the completion
of such transfer in accordance with the requirements of the
DABCC, but no longer than 90 days from the date of Closing, the
following shall occur:
(a) That portion of the Purchase Price allocable to
the Delaware Restaurants
shall be fully and unconditionally released to Sellers;
(b) Sellers will execute and deliver, as appropriate,
Leases on the Owned Real
Property on which certain of the Delaware Restaurants are located
and consents assignments and estoppel certificates, as
appropriate, on the Leased Real Properties on which the remaining
Delaware Restaurants are located;
(c) All operating profit, if any, generated by Buyer
under the Management
Agreement and held in escrow by Buyer shall be released
unconditionally to Buyer; and
(d) The Management Agreement shall terminate.
By the terms hereof, the Sellers shall be deemed to have provided
their consent to the initiation of the License transfer process
with the DABCC and to the transfer of the Licenses; provided,
however, that Buyer is hereby authorized only to provide
documentation as required by the DABCC with the understanding
that no such transfer shall be accomplished prior to the Closing.
12. North Carolina Units; Deferred Closing. The parties have
been advised that various North Carolina Departments of Health
will be unable to inspect Sellers' Restaurants located in the
State of North Carolina ("North Carolina Restaurants") and,
accordingly, will not issue permits necessary for Buyer to
continue the operation of those restaurants as Pizza Hut
restaurants prior to the Closing. Further, the parties have been
advised that the Departments of Health may impose certain
conditions on the issuance of new licenses to Buyer, which
conditions may require the making of repairs and improvements to
the premises in which the North Carolina Restaurants are located.
As an additional condition to Closing, the parties shall
enter into a Management Agreement substantially in the form
attached hereto as Exhibit "J", at the Closing, pursuant to which
Buyer shall operate the North Carolina Restaurants on the terms
and conditions set out therein.
The parties hereby agree that notwithstanding any other provision
in this Agreement, the closing of the transaction with respect to
the purchase by Buyer of the North Carolina Restaurants, and
payment by Buyer of $10,000,000.00 of the Purchase Price
allocable to such purchase (the "North Carolina Purchase Price"),
will be subject to the satisfaction of the following terms and
conditions:
(a) Receipt of Health Department inspection reports
and agreement by the parties as to the satisfaction of conditions
and payment of any costs required for the issuance of new health
licenses to the Buyer;
(b) On completion of the inspections of the North
Carolina Restaurants by the Departments of Health, and the
determination by the parties of the costs of any repairs and
improvements or other conditions required as a result of such
inspections, the parties shall have thirty (30) days thereafter,
to agree to the conditions and the payment of any costs of
repairs and improvement;
(c) If the parties are unable to agree within the
thirty (30)
day period as to payment of such costs and the satisfaction of
conditions imposed, and neither party elects to pay such costs
and satisfy such conditions, the North Carolina Restaurants will
not be sold to Buyer, in which case Buyer, in its capacity as
Manager under the Management Agreement, shall return to Sellers
the cash flow generated by the North Carolina Restaurants less
$50,000.00 as a management fee to Buyer for Buyer's services
under the Management Agreement, and the Management Agreement
shall terminate.
In the event the parties are able to reach agreement with respect
to payment of the costs of repairs and improvements described
above and the satisfaction of conditions imposed or either party
elects, at its sole option, to pay such costs and satisfy such
conditions, the transaction shall close within five (5) days of
such agreement at which time Buyer shall pay Sellers the North
Carolina Purchase Price plus an additional $50,000 in
consideration to Sellers for the deferral of the closing and the
Management Agreement shall terminate.
Should, for any reason, the Management Agreement be extended
beyond the thirty (30) day term, and Buyer not acquire the North
Carolina Restaurants, Buyer shall receive an additional daily
management fee of $1,500.00 per day for so long as the Management
Agreement continues. Should Buyer acquire the North Carolina
Restaurants, on whatever terms, Buyer shall pay Sellers an
additional $1,500.00 per day for each day beyond the thirty (30)
day term Buyer manages under the Management Agreement. Such
amounts shall be paid, as appropriate, on termination of the
Management Agreement.
IN WITNESS WHEREOF, the parties have hereunto set their
hands and seals on the date and year first above written.
BUYER: NPC INTERNATIONAL, INC., a Kansas
corporation
By:___________________________________
Name:________________________________
Title:_________________________________
NPC RESTAURANTS LP, a Delaware
limited partnership
By: NPC INTERNATIONAL, INC., its
General Partner
By:___________________________________
Name:________________________________
Title:_________________________________
NPC MANAGEMENT, INC.,
a Delaware corporation
By:___________________________________
Name:________________________________
Title:_________________________________
SELLERS:
By:___________________________________
Name:_Jamie B. Coulter ____________
Title:___President_____________________
All entities set forth on Exhibit"A"_____
JBC:
__________________________________________
Jamie B. Coulter
OWNER:JAMIE B. COULTER d/b/a
COULTER PROPERTIES
_______________________________________
Jamie B. Coulter
INDEX TO EXHIBITS AND SCHEDULES
EXHIBITS
Exhibit "A" List of Sellers
Exhibit "B" Ownership of Assets and Franchise Rights
Exhibit "C" Form of Lease
Exhibit "D" Form of Bill of Sale
Exhibit "E" Form of Non-Competition Agreement
Exhibit "F" Form of Assignment and Assumption Agreement
for Real Property Leases
Exhibit "G" Inventory and Change Fund Forms
Exhibit "H" List of Delaware Restaruants
Exhibit "I" Management Agreement - Delaware
Exhibit "J" Management Agreement - North Carolina
SCHEDULES
Schedule 1.1 List of Restaurants
Schedule 1.1(b) Third Party Prepaids and Deposits
Schedule 1.1(f) Franchise Agreements
Schedule 1.1(g) Assumed Contracts
Schedule 1.2 Excluded Leased Equipment
Schedule 1.3(a) Owner Real Properties
Schedule 1.3(b) Leased Real Properties
Schedule 1.3(b)(ii) Form of Estoppel Certificate
Schedule 1.4 List of Licenses and Permits
EXHIBIT 99-A
Contact: Troy D. Cook
Vice President Finance and
Chief Financial Officer
(316) 231-3390
FOR IMMEDIATE RELEASE
NPC INTERNATIONAL, INC. ANNOUNCES PARTIAL CLOSING
OF COULTER PIZZA HUT ACQUISITION
Pittsburg, Kansas (May 15, 1997) - NPC International, Inc.
(NASDAQ:NPCI) today announced that it had completed the
acquisition of 74 units and the operations of 8 others from Jamie
B. Coulter for $47 million. The Company will also manage 18
units in North Carolina for a period of up to 30 days pending the
satisfaction of certain contingencies. Upon resolution of these
contingencies, to the Company's satisfaction, the Company expects
to acquire these units for $10 million. The 82 locations
acquired are in following states: Texas (3), Tennessee (9),
Illinois (10), Colorado (7), Nevada (5), Utah (5), Arizona (1),
Oregon (25), and Washington (4). The acquisition was funded
through the Company's recently increased $200 million Revolving
Credit Facility.
NPC International, Inc. is the world's largest Pizza Hut
franchisee and now operates 626 Pizza Hut restaurants and
delivery kitchens in twenty-one states. Through Romacorp, Inc. a
wholly-owned subsidiary, NPC also operates and franchises 183
Tony Roma's restaurants, the casual theme restaurant Famous For
Ribs.
For more information contact Troy D. Cook, Vice President
Finance and Chief Financial Officer, NPC International, Inc., 720
West 20th Street, Pittsburg, Kansas 66762. Telephone number:
(316) 231-3390.
**********************************
97-09
_______________________________
1 The term "pollutant" means any substance subject to control
under the Federal Water Pollution Act, 33 U.S.C. 1251, et seq.,
or the Clean Air Act, 42 U.S.C. 7401, et seq., or regulations
promulgated thereunder. The term "toxic or hazardous waste"
means any chemical, substance, or material that is classified by
the Environmental Protection Agency as a hazardous substance
under the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, 42 U.S.C. 9601, et seq., or regulations
promulgated thereunder, or under the Resource Conservation and
Recovery Act of 1976, 42 U.S.C. 6901, et seq., or regulations
promulgated thereunder, or which is a petroleum product, or which
is classified by any applicable state or local regulation or
statute as a hazardous waste.
