Exhibit 10.4


 


EXECUTION COPY


 


ADVISORY
AGREEMENT


 


This Advisory Agreement (this “Agreement”) is
made and entered into as of May     , 2006 (the “Effective
Date”), by and among NPC International, Inc., a Kansas corporation (“Company”),
NPC Acquisition Holdings, LLC, a Delaware limited liability company (“Parent”),
and Merrill Lynch Global Partners, Inc., a Delaware corporation (“MLGP”).


 


WHEREAS, pursuant to that certain Stock Purchase
Agreement, dated as of March 3, 2006 (the “Purchase Agreement”), by
and among Mr. O. Gene Bicknell, the Stockholders of the Company, Parent
and the Company, Parent will acquire all of the capital stock of the Company
(the “Acquisition”).


 


WHEREAS, the Company desires to retain MLGP with
respect to the services described herein.


 


NOW, THEREFORE, the parties agree as follows:


 


1.                                       Term. This
Agreement shall be in effect for a term commencing on the Effective Date and
ending on the fifteenth anniversary of the Effective Date (the “Term”),
and shall be automatically extended thereafter on a year to year basis unless
the Company or MLGP provides written notice of its desire to terminate this
Agreement to the other party 30 days prior to the expiration of the Term or any
extension thereof.


 


2.                                       Services. During the
Term, MLGP shall perform or cause to be performed by its Affiliates and
their respective officers, employees, representatives and third party service
providers, such services for the Company and/or its subsidiaries as mutually
agreed by MLGP and the Company’s board of directors, which may include,
without limitation, the following:


 


(a)                                  general
executive and management services;


 


(b)                                 identification,
support, negotiation and analysis of acquisitions and dispositions by Parent or
its subsidiaries;


 


(c)                                  support,
negotiation and analysis of financing alternatives, including, without
limitation, in connection with acquisitions, capital expenditures and
refinancing of existing indebtedness;


 


(d)                                 finance
functions, including assistance in the preparation of financial projections and
monitoring of compliance with financing agreements;


 


(e)                                  marketing
functions, including monitoring of marketing plans and strategies;


 


(f)                                    human resources
functions, including searching and hiring of executives and directors; and


 


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(g)                                 other services
for the Parent and its subsidiaries upon which the Company’s board of directors
and MLGP agree.


 


3.                                       Management
Fees; Expense Reimbursement.


 


(a)                                  During the Term
of this Agreement, MLGP or its designee(s) will be promptly (x) reimbursed for
the Covered Expenses (as defined below) of MLGP and its Affiliates (as defined
below), plus (y) paid fees (the “Management Fees”) equal to
$1,000,000 per fiscal year. The Management Fees will be payable by the Company
to MLGP or its designee(s) as follows:  (a) non-refundable
Management Fees for fiscal year 2006 (in the amount of $667,000) shall be paid
in advance on the Effective Date and (b) non-refundable Management Fees
for each fiscal year subsequent to fiscal 2006 (in the amount of $1,000,000)
shall be payable in advance on the first day of each fiscal year, beginning December 27,
2006. The Covered Expenses will be payable by the Company to MLGP or its
designee(s) on a quarterly basis in arrears commencing on the Effective Date,
upon presentation by MLGP of reasonably detailed invoices for such expenses. The
term “Covered Expenses” shall mean those out-of-pocket and third-party
fees and expenses:  (i) reasonably
incurred in connection with the services contemplated by this Agreement, (ii) relating
to the review, preparation, negotiation and execution of any amendments or
waivers (whether or not the same become effective) or the enforcement of any
rights by the MLGP Group (as defined below) under or in respect of this
Agreement, the Stock Purchase Agreement (or any other related or ancillary
agreements); (iii) relating to any proposed merger, sale or
recapitalization or debt or equity financing of Parent or the Company, and (iv) reasonably
incurred in connection with any transaction, claim or event which MLGP believes
affects Parent or the Company or the direct or indirect investment of MLGP and
its Affiliates in the Company and as to which MLGP or its Affiliates seek
advice of counsel (in each case, including without limitation, fees and
expenses of counsel, consultants and accountants). As used herein, the term “Affiliate”
shall mean, with respect to a specified person, another person that directly or
indirectly through one or more intermediaries, controls or is controlled by or
that is under common control with, the specified person; provided, however,
any reference to Affiliate, or Affiliates of MLGP shall not include Parent, the
Company, their subsidiaries or officers or directors.


 


(b)                                 The payment of
all Management Fees payable hereunder shall be deferred (but such amounts will
nonetheless continue to be accrued, without interest) at any time that they are
not permitted to be paid by the Company in accordance with the terms of that
Credit Agreement, dated as of the Effective Date, among the Company, Parent,
the Other Guarantor Party, JPMorgan Chase Bank, N.A., Merrill Lynch, Pierce
Fenner & Smith Incorporated and other lenders thereunder (the “Credit
Agreement”) or that Indenture, dated as of the Effective Date, among the
Company, the Guarantors thereunder and Wells Fargo Bank, N.A.. (the “Indenture”),
and any payment of any such deferred fees shall thereafter be paid at the
earliest time (whether or not the Term has ended prior thereto) that payment
thereof becomes permitted to be paid in accordance with the terms of the Credit
Agreement and/or the Indenture.


 


4.                                       Transaction
Fees and Expenses. On the Effective Date, the Company shall pay to
MLGP, or to another person designated by MLGP, a fee in the amount of
$3,000,000 as consideration for services rendered by MLGP and its Affiliates’
to the Company and its Afilliates in connection with the structuring and
arrangement of the Acquisition and shall


 


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reimburse MLGP and its Affiliates for all
out-of-pocket and third-party fees and expenses (including without limitation,
fees and expenses of counsel, consultants and accountants) reasonably incurred
in connection with the review, preparation, negotiation and execution of the
Stock Purchase Agreement (or any other related or ancillary agreements) and the
financing of the transactions contemplated thereby.


 


5.                                       Personnel. MLGP will
provide and devote to the performance of this Agreement such partners,
employees and agents of MLGP and its Affiliates as MLGP shall deem appropriate
to the furnishing of the services mutually agreed upon by the Company and MLGP.
The fees and other compensation specified in this Agreement will be payable by
the Company regardless of the extent of services requested by the Company
pursuant to this Agreement, and regardless of whether or not the Company
requests MLGP to provide any such services.


 


6.                                       Liability. Neither MLGP
nor any of its Affiliates, nor any of their respective partners, members,
employees or agents (collectively, the “MLGP Group”) shall be liable at
any time to Parent, the Company, their subsidiaries or any of their Affiliates
for any loss, liability, damage or expense (including attorney’s fees and
expenses) (collectively a “Loss”) arising out of or in connection with
the performance of services contemplated by this Agreement, other than Losses
attributable to MLGP or its Affiliate’s gross negligence or willful misconduct.
MLGP makes no representations or warranties, express or implied, in respect of the
services provided by any member of the MLGP Group. In no event will any of the
parties hereto be liable to any other party hereto for (i) any indirect,
special, incidental or consequential damages, including lost profits or
savings, whether or not such damages are foreseeable, or (ii) in respect
of any liabilities relating to any third party claims (whether based in
contract, tort or otherwise), except as set forth in Section 7
below.


 


7.                                       Indemnity. Parent, the
Company and their subsidiaries shall (during and after the Term) defend,
indemnify and hold harmless each member of the MLGP Group from and against any
and all Losses arising from any claim by any person or entity with respect to,
or in any way related to, this Agreement (collectively, “Claims”) resulting
from any act or omission of any member of the MLGP Group in connection with
this Agreement, other than Losses attributable to MLGP or its Affiliate’s gross
negligence or willful misconduct. Parent and the Company shall (during and
after the Term) defend at their own cost and expense any and all suits or
actions (just or unjust) which may be brought against Parent, the Company,
their subsidiaries or any of their Affiliates, or any member of the MLGP Group
or in which any member of the MLGP Group may be impleaded with others upon
any Claims, or upon any matter, directly or indirectly related to or arising
out of this Agreement or the performance hereof by any member of the MLGP
Group.


 


8.                                       Notices. All notices
hereunder shall be in writing and shall be delivered personally or mailed,
postage prepaid, addressed to the parties as follows:


 


To
Company:


 


NPC
International, Inc.

14400 College Blvd.

Suite 201,




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Lexexa, KS 
66215

Attention:  Troy Cook


 


To Parent:


 


NPC Acquisition Holdings, LLC

c/o Merrill Lynch Global Partners, Inc.

4 World Financial Center

New York, New York  10080

Attention: Robert F. End


 


To
MLGP:


 


Merrill Lynch Global Partners, Inc.

4 World Financial Center

New York, New York  10080

Attention:  Robert F. End


 


9.                                       Successors. This
Agreement and all the obligations and benefits hereunder shall inure to the
successors and assigns of the parties.


 


10.                                 Assignment. No party may assign
any obligations hereunder to any other party without the prior written consent
of each of the other parties (which consent shall not be unreasonably
withheld); provided that MLGP may, without consent of Parent or the Company,
assign its rights and obligations under this Agreement to any of its Affiliates.
The assignor shall remain liable for the performance of any assignee.


 


11.                                 Counterparts. This
Agreement may be executed and delivered by each party hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an
original and all of which taken together shall constitute but one and the same
agreement.


 


12.                                 Entire
Agreement; Modification; Governing Law. The terms and conditions
hereof constitute the entire agreement between the parties hereto with respect
to the subject matter of this Agreement and supersede all previous agreements,
communications, either oral or written, representations or warranties of any
kind whatsoever, in each case with respect to the subject matter hereof, except
as expressly set forth herein. No modifications of this Agreement nor waiver of
the terms or conditions thereof shall be binding upon any party unless approved
in writing by an authorized representative of such party. This agreement shall
be governed by and construed in accordance with the laws of the State of New
York.


 


13.                                 Obligations of
Successors. In the event of a merger, consolidation or
liquidation of Parent or the Company, Parent or the Company shall, as the case may be,
as a condition to the consummation thereof, first make arrangements so that any
successor to such entity will assume the obligations of such entity under this
Agreement and be responsible in full for such obligations on the same basis as
if it had been an original signatory hereto (and such successor entity shall
execute and deliver a counterpart to this Agreement to MLGP agreeing to be
bound to the terms hereof).


 


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14.                                 Joint and
Several Liability. Each obligation described herein of Parent or the
Company, as the case may be, shall be a joint and several obligation of
Parent and its subsidiaries and the Company and its subsidiaries, as the case may be.
If requested by MLGP, Parent or the Company, as the case may be, shall
cause any of their respective subsidiaries to sign a counterpart signature
page to this Agreement to evidence such joint and several liability.


 


15.                                 Termination. The Term
shall terminate (i) at such time as no Affiliate of MLGP any longer
directly or indirectly owns any equity interests in the Company and (ii) at
the option of the Company, upon the initial public offering of the capital
stock of Parent, the Company or any direct or indirect parent of the Company. If
the Company opts to terminate this Agreement pursuant to clause (ii) of
the preceding sentence, the Company will pay MLGP the reasonably agreed-upon
net present value of the Management Fees that would otherwise be payable to
MLGP over the remainder of the Term.


 


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IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.


 


 


	
   

  	
  NPC INTERNATIONAL, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James K. Schwartz

  
	
   

  	
   

  	
  Name:

  	
  James K. Schwartz

  
	
   

  	
   

  	
  Title:

  	
  President and CEO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  NPC ACQUISITION HOLDINGS, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert F. End

  
	
   

  	
   

  	
  Name:

  	
  Robert F. End

  
	
   

  	
   

  	
  Title:

  	
  Chairman

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MERRILL LYNCH GLOBAL
  PARTNERS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert F. End

  
	
   

  	
   

  	
  Name:

  	
  Robert F. End

  
	
   

  	
   

  	
  Title: