SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report: (Date of earliest event reported): December 5, 1995
TPI Enterprises, Inc.
(Exact name of registrant as specified in its charter)
New Jersey 0-7961 22-1899681
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
3950 RCA Boulevard
Suite 5001
Palm Beach Gardens, Florida 33401
(Address of principal executive offices) (Zip Code)
(407) 691-8800
(Registrant's telephone number, including area code)
Item 5. Other Events.
The registrant entered into a letter of intent (the "Letter of
Intent") dated December 5, 1995 with Shoney's, Inc. regarding the proposed
acquisition by a newly formed subsidiary of Shoney's, Inc. of substantially all
of the assets of the registrant. The Letter of Intent replaces the letter of
intent dated September 3, 1995, as amended on October 30, 1995, by and between
Shoney's, Inc. and the registrant, which expired on November 30, 1995 in
accordance with its terms. The Letter of Intent is attached hereto as Exhibit
10.1 and incorporated by reference herein.
Item 7. Financial Statements and Exhibits.
(C) Exhibits
Exhibit No.
10.1 Letter of Intent dated December 5, 1995 by and between Shoney's, Inc.
and the Special Committee of the Board of Directors of TPI
Enterprises, Inc.
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 hereunto duly authorized.
TPI ENTERPRISES, INC.
By: /s/ Frederick W. Burford
--------------------------
Frederick W. Burford
Executive Vice President and
Chief Financial Officer
Date: December 7, 1995
EXHIBIT INDEX
Exhibit Sequential
No. Description Page No.
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10.1 Letter of Intent dated December 5, 1995 by and
between Shoney's, Inc. and the Special
Committee of the Board of Directors of TPI
Enterprises, Inc.
Exhibit 10.1
Shoney's Inc.
1727 Elm Hill Pike
Nashville, TN 37210
December 5, 1995
The Special Committee of the Board
of Directors of TPI Enterprises, Inc.
3950 RCA Boulevard, Suite 5001
Palm Beach Gardens, Florida 33410
Attention: Mr. Edwin B. Spievack
Dear Ed:
This Letter of Intent will serve to set forth our mutual understandings
with respect to the proposed acquisition (the "Acquisition") of all of the
issued and outstanding shares of capital stock of TPI Restaurants, Inc., a
Tennessee corporation ("TPIR"), TPI Entertainment Corp., a Tennessee corporation
("TPIE"), and TPI Insurance Corp., a Hawaii corporation ("TPII"), which we
understand to be substantially all of the assets of TPI Enterprises, Inc., a New
Jersey corporation ("TPI"), by a newly formed subsidiary ("Newco") of Shoney's,
Inc. ("Shoney's").
Our intention to consummate the Acquisition is subject to the following
terms and conditions:
1. Structure. The Acquisition will be structured as a tax-free
reorganization under Section 368(a)(1)(C) of the Internal Revenue Code of 1986,
as amended, in which Newco will acquire all of the issued and outstanding shares
of capital stock of TPIR, TPIE, and TPII from TPI in exchange for an aggregate
of 6,456,223 shares (the "Exchange Shares") of Shoney's $1.00 par value common
stock ("Shoney's Common Stock"). TPI hereby confirms that the affirmative vote
of a majority of the outstanding shares of common stock, $.01 par value per
share ("TPI Common Stock"), of TPI will be necessary to approve the Acquisition
and that no holder of TPI Common Stock may exercise dissenters' rights with
respect to the Acquisition. Shoney's hereby confirms that the affirmative vote
of a majority of the outstanding shares of the Shoney's Common Stock will be
necessary to approve the Acquisition if the Exchange Shares are equal to or in
excess of 20% of the number of shares of Shoney's Common Stock outstanding prior
to the Acquisition. Shoney's further confirms that no holder of Shoney's Common
Stock may exercise dissenters' rights with respect to the Acquisition.
2. Acquisition Agreement. The transaction will be effected pursuant to a
definitive purchase agreement (the "Acquisition Agreement") among Shoney's,
Newco, and TPI. The Acquisition Agreement will contain representations,
warranties, covenants, and other terms and conditions customarily contained in
such acquisitions. In addition, the Acquisition Agreement will provide for: (i)
mutually agreeable disposition of outstanding TPI employee stock options
(including provision for any such options that are exercised prior to the
Closing) and warrants and the assumption of TPI's convertible debentures
(including the elimination of restrictions upon TPI's ability to make
distributions to its shareholders), each in accordance with the provisions of
the governing instruments; (ii) assignment of TPI's real property and equipment
leases and their assumption by one of TPIR, TPIE or TPII; (iii) allocation of
certain net operating loss carryforwards ("NOLs") of TPI and TPIR such that, to
the extent required, such NOLs may be utilized to offset TPI's gains realized
due to the contemplated settlement of certain litigation and the remainder may
be utilized by TPIR (or Newco, as successor to the tax characteristics of TPIE)
following the Acquisition; and (iv) mutually agreeable allocation of the cash of
TPI and its subsidiaries (including the litigation settlement proceeds referred
to in (iii)) such that an aggregate of $10 million shall be applied to TPIR bank
debt and/or to transaction and other expenses of TPI (with such transaction and
other expenses not to exceed $6.1 million in the aggregate) and $7.5 million of
such litigation proceeds may be distributed to TPI shareholders.
3. Target Date for Definitive Agreement. TPI and Shoney's hereby agree
to work in good faith to execute a definitive Acquisition Agreement on or before
January 15, 1996, or such other date as shall be mutually agreed in writing by
TPI and Shoney's (the "Definitive Agreement Date"). If a definitive Acquisition
Agreement has not been executed on or before that date, this Letter of Intent
may be terminated by written notice from either party to the other.
4. Closing. The closing of the Acquisition (the "Closing") shall take
place on or before April 30, 1996 (the "Closing Date").
5. Conditions to Closing. Completion of the Acquisition shall be subject
to certain conditions, which shall include, without limitation, the completion
or satisfaction of the following:
(a) Due Diligence by Shoney's. Shoney's shall have completed to its
satisfaction its due diligence review of TPI's assets and each of TPI's
subsidiaries being acquired, and their respective businesses, assets, and
liabilities, and TPI shall have furnished to Shoney's and its representatives
such information as may reasonably be required for such purpose, including,
without limitation, financial statements, accounting books and records,
information with respect to litigation and loss contingencies, employee matters,
environmental matters, tax and ERISA matters, vendors and customer information,
legal and regulatory compliance, licenses, insurance, contracts, and other
matters.
(b) Due Diligence by TPI. TPI shall have completed to its
satisfaction its due diligence review of Shoney's and each of Shoney's
subsidiaries, and their respective businesses, assets, and liabilities, and
Shoney's shall have furnished to TPI and its representatives such information as
TPI may reasonably require for such purpose, including, without limitation,
financial statements, accounting books and records, information with respect to
litigation and loss contingencies, employee matters,
environmental matters, tax and ERISA matters, vendors and customer information,
legal and regulatory compliance, licenses, insurance, contracts, and other
matters.
(c) Documentation. The negotiation, execution, and delivery of a
definitive Acquisition Agreement setting forth the terms and conditions of the
proposed Acquisition and containing customary provisions, representations,
warranties, and covenants; and the receipt by the parties of such ancillary
documents, including opinions of counsel, as shall be reasonably acceptable to
the parties and their respective counsel.
(d) Approvals. The Acquisition shall have been approved by the
Shoney's Board of Directors and by Shoney's lenders (including those providing
the proposed financing for the Acquisition). In addition, the proposed
Acquisition shall have been approved by TPI's Board of Directors and all other
necessary corporate action of TPI, including the approval of its shareholders.
(e) Fairness. Each of Shoney's and TPI shall have received an
opinion from their respective financial advisors satisfactory to their
respective boards of directors that the Acquisition Consideration is fair to
their respective shareholders from a financial point of view.
6. Maintenance of Business. 6.1 TPI hereby represents and warrants that
since September 4, 1995, TPI and TPI's subsidiaries have complied with all of
the terms and provisions of Section 6.1 of that certain Letter of Intent dated
September 3, 1995 between TPI and Shoney's with respect to a proposed merger of
TPI with a subsidiary of Shoney's (the "Prior Letter of Intent"), as if the
Prior Letter of Intent had remained in full force and effect. Until the
Definitive Agreement Date, TPI and TPI's subsidiaries shall, except with the
written consent of Shoney's, (a) continue to operate their respective businesses
in the customary and ordinary manner, (b) use their reasonable efforts to
preserve their business operations intact, to keep available the services of
their present personnel, and to preserve the goodwill and relationships of their
suppliers, customers, and others having business relations with TPI or TPI's
subsidiaries, as applicable, (c) notify Shoney's in writing of any event
involving TPI or a subsidiary thereof which has had or may be reasonably
expected to have a material adverse effect on the business or financial
condition of TPI or any of TPI's subsidiaries, (d) not sell, encumber, or
otherwise dispose of any of their assets except in the ordinary course of their
respective businesses, (e) not enter into any employment agreements with any
person or amend the terms of any existing employment agreement, (f) not merge,
restructure, or reorganize either TPI nor any of its subsidiaries in any manner
that shall have the effect of changing any aspect of, or ownership rights in,
the TPI Common Stock, including, without limitation, creating appraisal rights
or diluting TPI shareholders' interest, or (g) not issue any additional shares
of capital stock of any designation or class (except pursuant to the exercise or
conversion of
options, rights and/or warrants existing on the date hereof or pursuant to the
terms of 401(k) or Section 423 stock purchase plans of TPI and its subsidiaries
existing on the date hereof).
6.2 Shoney's hereby represents and warrants that since September 4,
1995, Shoney's and Shoney's subsidiaries have complied with all of the terms and
provisions of Section 6.2 of the Prior Letter of Intent as if the Prior Letter
of Intent had remained in full force and effect. Until the Definitive Agreement
Date, Shoney's and Shoney's subsidiaries shall, except with the written consent
of TPI, (a) continue to operate their respective businesses in the customary and
ordinary manner (which includes, without limitation, all publicly announced
plans to divest certain businesses), (b) notify TPI in writing of any event
involving Shoney's or a subsidiary thereof which has had or may be reasonably
expected to have a material adverse effect on the business or financial
condition of Shoney's or any of Shoney's subsidiaries, or (c) not merge,
restructure, or reorganize either Shoney's nor any of its subsidiaries in any
manner that shall have the effect of diluting the value of Shoney's
Common Stock.
7. Exclusivity. Until the Definitive Agreement Date (or such earlier
date on which Shoney's ends its active efforts to consummate the proposed
Acquisition), neither TPI nor any of its officers, directors, or affiliates
shall initiate negotiations nor negotiate directly or indirectly with any other
party in respect of any business combination involving TPI or a subsidiary
thereof or the sale of any of the assets of TPI or a subsidiary thereof or the
sale of a controlling interest in TPI or a subsidiary thereof. Shoney's
acknowledges that TPI directors may have a competing fiduciary obligation to the
shareholders of TPI under certain circumstances, and nothing in this Letter of
Intent is intended to conflict with the exercise of that fiduciary duty.
8. Confidentiality. Each of TPI and Shoney's hereby reaffirms the terms
and provisions of the confidentiality letters each dated July 26, 1995 with
respect to the exchange of confidential information between the parties.
9. Conduct to Consummate. It is the intention of the parties that
following execution and delivery of this Letter of Intent, the parties will use
all reasonable efforts to satisfy the conditions set forth in Paragraph 5 hereof
which are within their respective control and cooperate in the negotiation and
preparation of the Acquisition Agreement and other necessary documentation.
Each party shall bear its own expenses with no liability for such expenses to
the other party, whether or not the Acquisition Agreement is executed.
10. Public Announcements. It is the intention of the parties to use
reasonable efforts to reach agreement on the wording of any news releases or
other public announcements by Shoney's or TPI, or any of their respective
affiliates, pertaining to this Letter of Intent, the proposed Acquisition, or
the negotiations concerning the proposed Acquisition. In the absence of
circumstances requiring otherwise, any such releases or public announcements
shall be submitted to the other party for its comment prior to issuance.
11. Binding and Nonbinding Nature of this Letter. It is understood that
this Letter of Intent merely constitutes a statement of the mutual intentions of
the parties with respect to the proposed Acquisition, does not contain all
matters upon which agreement must be reached in order for the proposed
Acquisition to be consummated and, except as respects Paragraphs 6, 7, 8, 9, and
10 above, creates no binding rights in favor of either party. A binding
commitment with respect to the proposed Acquisition will result only after
execution and delivery of definitive Acquisition Agreement, subject to the terms
and conditions contained therein.
If the foregoing is acceptable to you, please so indicate by signing a
copy of this Letter of Intent and returning it to the undersigned. This Letter
of Intent will be void unless it is fully executed and returned to Shoney's by
5:00 P.M. (Central Standard Time) on December 6, 1995.
Very truly yours,
SHONEY'S, INC.
By: /s/ W. Craig Barber
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W. Craig Barber
Senior Executive Vice President and
Chief Financial Officer
ACCEPTED AND AGREED TO:
THE SPECIAL COMMITTEE OF THE
BOARD OF DIRECTORS OF
TPI ENTERPRISES, INC.
By: /s/ Edwin B. Spievack
-----------------------------
Edwin B. Spievack, a member
of the Special Committee
Date: December 5, 1995
