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Amended And Restated Purchase Agreement

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Sectors: Retail
Governing Law: New York, View New York State Laws
Effective Date: September 01, 1994
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EXECUTION]


AMENDED AND RESTATED
PURCHASE AGREEMENT,


dated as of September 1, 1994
and modified as of November 30, 1994
and October 13, 1995
and amended and restated as of February 7, 1996,


between


NRE HOLDINGS, INC.


and


MCIT PLC


for


$11,000,000 Principal Amount of
12.75% Subordinated Notes due August 31, 2005


and


3,000 Class A-1 Preferred Shares,


500 Class B Preferred Shares


and


285.31 Class A Common Shares.


TABLE OF CONTENTS


PAGE


ARTICLE I


DEFINITIONS


1.1. Defined Terms.............................................. 5 1.2. Use of Defined Terms....................................... 30 1.3. Cross-References........................................... 30 1.4. Accounting and Financial Determinations.................... 30


ARTICLE II


THE SUBJECT SECURITIES, ETC.


2.1. The Note................................................... 31 2.2. Preferred and Common Shares................................ 31 2.3. Issue Price................................................ 31


ARTICLE III


CONDITIONS TO RESTATEMENT EFFECTIVE DATE


3.1. Certificate of Incorporation............................... 32 3.2. Resolutions, etc........................................... 32 3.3. Stockholders Agreement..................................... 33 3.4. Mezzanine Pledge Agreement................................. 33 3.5. FNBB Intercreditor Letter.................................. 33 3.6. Deferred Limited Interest Guaranty......................... 33 3.7. Seller and BBI Junior Notes................................ 33 3.8. Certain Affiliate Agreements............................... 34 3.9. Completion, etc., of 1995/1996
Acquisitions........................................... 35 3.10. Effectiveness, etc. of Senior Credit
Agreement.............................................. 35 3.11. Effectiveness of PMI Agreement............................. 36 3.12. Effectiveness of FFCA Arrangements......................... 37 3.13. Performance; No Default.................................... 37 3.14. Absence of Litigation, etc................................. 38 3.15. Certificate as to Compliance............................... 38 3.16. Certificate as to Solvency, etc............................ 38 3.17. Preemption Letter.......................................... 38 3.18. Opinion of Counsel......................................... 38 3.19. Legal Expenses............................................. 39 3.20. Satisfactory Legal Form.................................... 39


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TABLE OF CONTENTS
(CONTINUED)
PAGE


ARTICLE IV


PAYMENTS, REGISTRATION, ETC.


4.1. Place of Payment........................................... 39 4.2. Home Office Payment........................................ 39 4.3. Optional Payments.......................................... 40 4.4. Allocation................................................. 40 4.5. Mandatory Redemption of Notes.............................. 41 4.6. Registration, Transfer, etc................................ 41 4.7. Transfer and Exchange...................................... 41 4.8. Replacement................................................ 42 4.9. Taxes...................................................... 42


ARTICLE V


WARRANTIES, ETC.


5.2. Due Authorization.......................................... 45 5.3. Validity, etc.............................................. 45 5.4. Financial Information...................................... 45 5.5. Absence of Material Adverse Change......................... 46 5.6. Continuing Indebtedness.................................... 46 5.7. Litigation, etc............................................ 46 5.8. Capitalization............................................. 47 5.9. Regulation G............................................... 48 5.10. Government Regulation...................................... 48 5.11. Patents, Trademarks, etc................................... 49 5.12. Environmental Matters...................................... 49 5.13. Title to and Condition of Properties....................... 50 5.14. Offering of Subject Securities............................. 50 5.15. Special Purpose Holding Company............................ 51 5.16. Subsidiaries............................................... 51 5.17. Accuracy of Information.................................... 51


ARTICLE VI


COVENANTS


6.1. Certain Affirmative Covenants.............................. 52 6.1.1. Financial Information, etc................................. 52 6.1.2. Notice of Default, Litigation, etc......................... 54 6.1.3. Perform Senior Credit Agreement............................ 55 6.1.4. Conforming Changes......................................... 56


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TABLE OF CONTENTS
(CONTINUED)
PAGE


6.1.5. Additional AmeriKing Guarantors............................ 56 6.1.6. Performance of Purchase Documents.......................... 57 6.2. Certain Negative Covenants................................. 57 6.2.1. Business Activities........................................ 57 6.2.2. Indebtedness............................................... 57 6.2.3. Liens...................................................... 59 6.2.4. Minimum EBITDA............................................. 60 6.2.5. Restricted Payments, etc................................... 61 6.2.6. Investments................................................ 63 6.2.7. Consolidation, Merger, etc................................. 63 6.2.8. Modification of Senior Credit Agreement
...................................................... 63 6.2.9. Modification of PMI Agreement.............................. 64 6.2.10. Modification of Seller Notes, etc.......................... 64 6.2.11. Modification of Other NRE Instruments...................... 64 6.2.12. Modification of Certificates of
Incorporation.......................................... 65 6.2.13. Negative Pledges........................................... 65 6.2.14. Upstream Limitations....................................... 65 6.2.15. Transactions with Affiliates............................... 66 6.2.16. Inconsistent Agreements.................................... 66


ARTICLE VII


EVENTS OF DEFAULT


7.1. Events of Default.......................................... 67 7.1.1. Non-Payment of Obligations................................. 67 7.1.2. Default on Other Indebtedness.............................. 67 7.1.3. Bankruptcy, Insolvency, etc................................ 67 7.1.4. Breach of Warranty......................................... 68 7.1.5. Non-Performance of Certain Undertakings
...................................................... 68 7.1.6. Non-Performance of Other Undertakings...................... 68 7.1.7. Judgments.................................................. 68 7.1.8. Ownership of NRE........................................... 69 7.1.9. Leases and BKC Franchises.................................. 69 7.1.10. Unrestricted Subsidiary Revenue............................ 69 7.2. Action if Bankruptcy....................................... 69 7.3. Action if Other Event of Default........................... 69


ARTICLE VIII


SUBORDINATION


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TABLE OF CONTENTS
(CONTINUED)
PAGE


8.1. Acceleration, Dissolution, etc............................. 70 8.2. Turnover................................................... 71 8.3. Unconditional Obligation, etc.............................. 71 8.4. Waivers, etc............................................... 72 8.5. Amendment of Subordination Provisions...................... 72 8.6. Notice to the Noteholders.................................. 73 8.7. Proving, etc. Claims....................................... 73 8.8. Reliance on Judicial Order or
Certificate of Liquidating Agent....................... 73 8.9. Amendment of Subordination Provisions...................... 73


ARTICLE IX


MISCELLANEOUS


9.1. Waivers, Amendments, etc................................... 74 9.2. Notices.................................................... 74 9.3. Costs and Expenses......................................... 75 9.4. Indemnification............................................ 75 9.5. Survival................................................... 76 9.6. Severability............................................... 76 9.7. Headings................................................... 76 9.8. Counterparts............................................... 76 9.9. Governing Law; Entire Agreement............................ 77 9.10. Jurisdiction............................................... 77 9.11. Successors and Assigns..................................... 77 9.12. Waiver of Jury Trial....................................... 77


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SCHEDULE AND EXHIBITS:


SCHEDULE I - Disclosure Schedule


EXHIBIT A - Note EXHIBIT B-1 - Certificate as to Company Certificate of Incorporation EXHIBIT B-2 - Certificates as to NRE Certificate of Incorporation EXHIBIT C - Certificate as to Authorizing Resolutions, etc. EXHIBIT D - Certificate as to Stockholders Agreement EXHIBIT E - Mezzanine Pledge Agreement EXHIBIT F - Affirmation of FNBB Intercreditor Letter EXHIBIT G - Deferred Limited Interest Guaranty EXHIBIT H - Certificate as to Seller Notes and BBI Junior Notes EXHIBIT I - Certificate as to Certain Affiliate Agreements EXHIBIT J - Certificate as to 1995/1996 Acquisitions EXHIBIT K - Certificate as to Senior Credit Agreement EXHIBIT L - Certificate as to PMI Agreement EXHIBIT M - Certificate as to FFCA Arrangements EXHIBIT N - Certificate as to Compliance EXHIBIT O - Certificate as to Solvency EXHIBIT P - Preemption Letter EXHIBIT Q - Opinion of Counsel to the Company


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PURCHASE AGREEMENT


THIS AMENDED AND RESTATED PURCHASE AGREEMENT, dated as of September 1, 1994 and modified as of November 30, 1994 and October 13, 1995 and amended and restated as of February 7, 1996, between NRE HOLDINGS, INC., a Delaware corporation (the "Company"), and MCIT PLC, a public company incorporated in England (the "Purchaser"),


W I T N E S S E T H:


WHEREAS, the Company and the Purchaser entered into a purchase agreement, dated as of September 1, 1994 ("this Agreement as Originally in Effect"), pursuant to which on September 1, 1994 (the "Original Closing Date") the Purchaser purchased from the Company:


(a) a 12.75% subordinated note due August 31, 2004 in
the original principal amount of $11,000,000 (the "Original
Note");


(b) certificates representing 3,000 Class A-1 Preferred
Shares (the "Class A-1 Preferred Certificate") and 500 Class B
Preferred Shares (the "Class B Preferred Certificate"); and


(c) a certificate representing 285.31 Class C Common Shares
(the "Original Common Certificate"), which then represented


(i) 28.531% of the aggregate number of Common
Shares then issued and outstanding, and


(ii) 27.367% of the aggregate number of Common
Shares then either issued and outstanding or reserved for
issuance upon the exercise of the FNBB Warrant and
Management Options; and


WHEREAS, on the Original Closing Date, the Company's wholly-owned subsidiary, National Restaurant Enterprises, Inc., a Delaware corporation ("NRE"), acquired


(a) from Burger King Corporation, a Florida corporation
("BKC"), the assets and businesses of 68 BKC franchised restaurants
(the "Chicago Restaurants") located in the Chicago metropolitan area
of Illinois and Indiana; and


(b) from Lawrence Jaro ("Jaro") and the other Jaro
Investors, the assets and businesses of 11 BKC franchised


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restaurants located in Colorado and Texas (the "Jaro
Restaurants"); and


(c) from William Osborn ("Osborn") and the other Osborn
Investors, the assets and businesses of three BKC franchised
restaurants located in Colorado (the "Osborn Restaurants"); and


WHEREAS, the Company and the Purchaser entered into a modification letter, dated as of November 30, 1994 ("Modification No. 1"), modifying this Agreement as Originally in Effect, and, in connection therewith on November 30, 1994 (the "Modification No. 1 Effective Date"), NRE acquired the assets and businesses of 39 BKC franchised restaurants in Chicago, Illinois from BNB Land Venture, Inc., an Illinois corporation ("BNB") wholly-owned by Sheldon Friedman (the "BNB Restaurants"); and


WHEREAS, NRE obtained financing to acquire the Chicago Restaurants, the Jaro Restaurants, the Osborn Restaurants and the BNB Restaurants in part from the proceeds of borrowings under a revolving credit and term loan agreement, dated as of the Original Closing Date and amended and restated as of the Modification No. 1 Effective Date (the "Existing Senior Credit Agreement"), among the Company, NRE and The First National Bank of Boston ("FNBB"), as lender (together with the other institutional lenders parties thereto) and as agent for the lenders, pursuant to which NRE is permitted to obtain extensions of credit in an aggregate principal amount not to exceed $74,500,000; and


WHEREAS, in connection with obtaining financing under the Existing Senior Credit Agreement,


(a) the Company issued to FNBB, a warrant dated the Original
Closing Date (the "FNBB Warrant"), to purchase 31.2801 Class B Common
Shares; and


(b) the Company entered into a securities purchase
agreement, dated as of the Modification No. 1 Effective Date (the
"BBI Existing Agreement"), Affiliate BancBoston Investments Inc., a
Massachusetts corporation and an Affiliate of FNBB ("BBI"), pursuant
to which the Company then issued to BBI


(i) junior subordinated notes due August 31, 2005
(the "BBI Existing Junior Note") in the aggregate original
principal amount of $600,000; and


(ii) a warrant (the "BBI Warrant") to purchase
81.0799 Class B Common Shares which had the effect of
diluting the Purchaser's Original Common Certificate from
27.367% to 25.392% on a fully diluted basis; and


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WHEREAS, the Company and the Purchaser entered into a modification letter, dated as of October 13, 1995 ("Modification No. 2"), modifying this Agreement as Previously in Effect, and, in connection therewith, the Company issued to MCIT Existing Pool Limited (the "Existing Pool Nominee"), as nominee for the Purchaser,


(a) a 12.75% promissory note, dated April 30, 1995 and due
August 31, 2004 (the "Existing Note"), in the principal amount of
$11,000,000 in substitution for (but not in payment of) the Original
Note;


(b) a certificate representing 285.31 Class A Common Shares
(the "Existing Common Certificate") in exchange for the Original
Common Certificate; and


WHEREAS, during 1995, NRE acquired


(a) through AmeriKing Colorado, the assets and
businesses of the four Colorado Restaurants;


(b) through AmeriKing Tennessee, the assets and
businesses of the 11 Tennessee Restaurants; and


WHEREAS, contemporaneously with the occurrence of the Restatement Effective Date, NRE will acquire


(a) through AmeriKing Virginia, the assets and
businesses of the 24 Virginia Restaurants; and


(b) through AmeriKing Cincinnati, the assets and
businesses of the 12 Cincinnati Restaurants; and


WHEREAS, contemporaneously with the occurrence of the Restatement Effective Date, AmeriKing Tennessee and AmeriKing Virginia are entering into with FFCA Acquisition Corporation, a Delaware corporation ("FFCA"), a sale-leaseback arrangement (the "FFCA Sale/Leaseback"), with respect to the premises of one of the Tennessee Restaurants and certain of the Virginia Restaurants pursuant to which FFCA will purchase such premises for an aggregate purchase price not to exceed $16,200,000 and then enter into 20 year leases with each of AmeriKing Tennessee and AmeriKing Virginia with respect to the Tennessee Restaurants and Virginia Restaurants, respectively; and


WHEREAS, contemporaneously with the occurrence of the Restatement Effective Date, the Company and NRE are entering into an amendment and restatement of the Existing Senior Credit Agreement pursuant to which the maximum aggregate principal amount of Indebtedness permitted to be incurred and at any time


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outstanding thereunder will be increased from $74,500,000 to $100,000,000; and


WHEREAS, in connection with the effectiveness of the amendment and restatement of the Existing Senior Credit Agreement (and as a condition thereto), the Company is entering into an amendment and restatement of the Existing BBI Agreement with BBCI pursuant to which BBCI will accept, in substitution for (and not in payment of) the Existing BBCI Note, a promissory note due August 31, 2006; and


WHEREAS, contemporaneously with the occurrence of the Restatement Effective Date, the Company and the Company are entering into a note purchase agreement with PMI Mezzanine Fund, L.P., a Delaware limited partnership ("PMI"), pursuant to which PMI will purchase


(a) from NRE, a 12.5% senior subordinated note due
January 31, 2005 in the original principal amount of
$15,000,000; and


(b) from the Company, a detachable warrant to purchase 59.14
Class C Common Shares which will have the effect of diluting the
Purchaser's Existing Common Shares from 25.392% to 23.868% on a fully
diluted basis; and


WHEREAS, to facilitate all of the foregoing contemporaneous acquisition, sale/leaseback and financing transactions, the Company and the Purchaser desire to amend and restate this Agreement as Previously in Effect, and, in connection with such amendment and restatement, the Company has requested that


(a) the Purchaser accept in substitution for (but not in
payment of) the Existing Note, a new 12.75% promissory note, dated
October 31, 1995, in the principal amount of $11,000,000 to be
payable in the entirety in a single payment, without scheduled
prepayments, on August 31, 2005;


(b) the Purchaser permit the incurrence by NRE and its
Subsidiaries of the increased principal amounts of Indebtedness to be
incurred pursuant to the FFCA Guaranty, the Senior Credit Agreement
and the PMI Notes; and


(c) consent to an amendment to the Company's certificate of
incorporation which will increase the authorized number of Common
Shares from 3,300 to 5,500 for purposes of the PMI Warrant;


NOW, THEREFORE, the parties hereto hereby agree that, on the date (the "Restatement Effective Date") when all of the conditions of Article III are satisfied in full, this Agreement as Previously


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in Effect and all Schedules and Exhibits thereto hereby are, concurrently with (and subject to) the satisfaction of all such conditions, amended and restated in their entireties in the form of this Agreement and all Schedules and Exhibits hereto.


ARTICLE I


DEFINITIONS


SECTION 1.1. Defined Terms. The following terms (whether or not underscored) when used in this Agreement, including its preamble and recitals, shall, except where the context otherwise requires, have the following meanings (such meanings to be equally applicable to the singular and plural forms thereof):


"Acquisition" means any of the Chicago Acquisition, the Jaro Acquisition, the Osborn Acquisition, the BNB Acquisition, the Colorado Acquisition, the Tennessee Acquisition, the Cincinnati Acquisition or the Virginia Acquisition.


"Acquisition Agreement" means any of the BKC Acquisition Agreement, the Jaro Acquisition Agreement, the Osborn Acquisition Agreement, the BNB Acquisition Agreement, the Colorado Acquisition Agreement, the Tennessee Stock Purchase Agreement, the Cincinnati Acquisition Agreement or the Virginia Acquisition Agreement.


"Affiliate" of any Person means any other Person which, directly or indirectly, controls or is controlled by or under common control with such Person (excluding any trustee under, or any committee with responsibility for administering, any Plan). For the purposes of this definition, "control" (including the correlative terms "controlling", "controlled by" and "under common control with"), relative to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of Voting Stock, by agreement or otherwise; provided, however, that


(a) beneficial ownership of 10% or more of the Voting
Stock of a Person shall be deemed to be control; and


(b) any of the foregoing to the contrary notwithstanding,
the term "Affiliate," relative to the Company and Subsidiaries, shall
not include the Purchaser, the Existing Pool Nominee or any other
Noteholder, or PMI.


"this Agreement" means, on any date, this Amended and Restated Purchase Agreement as in effect on the Restatement Effective Date and as thereafter from time to time amended,


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supplemented or otherwise modified in accordance with the terms hereof and in effect on such date.


"this Agreement as Originally in Effect" is defined in the first recital.


"this Agreement as Previously in Effect" means, relative to any date prior to the Restatement Effective Date, this Agreement as Originally in Effect and as thereafter from time to time on or prior to such date, amended, supplemented or otherwise modified and then in effect.


"AmeriKing Cincinnati" means AmeriKing Cincinnati Corporation I, a Delaware corporation and a direct, wholly-owned Subsidiary of NRE.


"AmeriKing Colorado" means AmeriKing Colorado Corporation I, a Delaware corporation and a direct, wholly-owned Subsidiary of NRE.


"AmeriKing Guarantors" means


(a) AmeriKing Cincinnati and AmeriKing Virginia; and


(b) each such other Restricted Subsidiary as shall after the
Restatement Effective Date become a party to the Deferred Limited
Interest Guaranty from time to time in accordance with Section 6.1.5.


"AmeriKing Tennessee" means AmeriKing Tennessee Corporation I, a Delaware corporation and a direct, wholly-owned Subsidiary of NRE.


"AmeriKing Virginia" means AmeriKing Virginia Corporation I, a Delaware corporation and a direct, wholly-owned Subsidiary of NRE.


"Approval" means, relative to any Obligor, each approval, consent, filing or registration by or with any Federal, state or other regulatory authority necessary to authorize or permit the execution, delivery or performance of


(a) this Agreement, the Notes, the Deferred Limited Interest
Guaranty, the Mezzanine Pledge Agreement, any other Purchase Document
or the Stockholders Agreement or for the validity or enforceability
hereof or thereof;


(b) any Acquisition Agreement;


(c) the Senior Credit Agreement or any other Senior
Loan Document executed and delivered by the Company, NRE or


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any Subsidiary pursuant thereto or for the validity or
enforceability thereof;


(d) the PMI Purchase Agreement or any other PMI Document
executed and delivered by the Company, NRE or any Subsidiary pursuant
thereto or for the validity or enforceability thereof; and


(e) the FFCA Sale/Leaseback Agreement, the FFCA Leases or
any other FFCA Document executed and delivered by the Company, NRE or
any Subsidiary pursuant thereto or for the validity or e
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