Exhibit 10.20
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THE EXISTENCE AND CONTENTS
OF THIS ASSET PURCHASE AND SALE AGREEMENT ARE
CONFIDENTIAL
AND ARE TO BE HELD AS SUCH BY THE PARTIES HERETO IN ACCORDANCE
WITH THE PROVISIONS HEREOF
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ASSET PURCHASE AND SALE AGREEMENT
September 10, 2002
Among
XXXXXXXXX RESTAURANTS, LTD.,
MNC RESTAURANT PROPERTIES, L.P.,
WELL SEASONED, INC., and METRO NATIONAL CORPORATION
and
LSRI HOLDINGS, INC.
TABLE OF CONTENTS
Page
TABLE OF CONTENTS........................................................... i
Recitals.................................................................... 1
Article 1 Sale and Purchase................................................. 2
Section 1.1 Sale and Purchase........................................ 2
Article 2 Consideration for Conveyance...................................... 2
Section 2.1 Purchase Price........................................... 2
Section 2.2 Liabilities Not Assumed by Purchaser..................... 3
Article 3 Surveys and Title Policies........................................ 3
Section 3.1 Survey................................................... 3
Section 3.2 Title Commitments and Title Review....................... 3
Section 3.3 Owner's Policies and Leasehold Policies of Title
Insurance............................................... 4
Article 4 Additional Items to be Furnished to Purchaser by Seller........... 5
Section 4.1 Required Information Materials........................... 5
Article 5 Inspection and Audit.............................................. 6
Section 5.1 Inspection and Audit..................................... 6
Section 5.2 Environmental Inspections................................ 7
Article 6 Loss, Damage or Destruction Prior to Closing; Condemnation........ 8
Section 6.1 Fire and Casualty........................................ 8
Section 6.2 Condemnation............................................. 8
Article 7 Representations, Warranties, and Covenants of the Parties;
Indemnification............................................................ 8
Section 7.1 Representations, Warranties, and Covenants............... 8
Section 7.2 Survival................................................. 16
Section 7.3 Purchaser Indemnity...................................... 16
Article 8 Closing........................................................... 17
Section 8.1 Closing Conditions....................................... 17
Section 8.2 Closing Date............................................. 19
Section 8.3 Closing Deliveries by Seller Group....................... 19
Section 8.4 Closing Deliveries by Purchaser.......................... 20
Section 8.5 Prorations............................................... 21
Section 8.6 Possession............................................... 22
Section 8.7 Other Costs and Expenses................................. 22
Article 9 Liability for Taxes............................................... 22
Section 9.1 Tax Obligations.......................................... 22
Section 9.2 Tax Refunds.............................................. 22
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Article 10 Commission....................................................... 22
Section 10.1 Seller Group Commission Indemnity........................ 22
Section 10.2 Purchaser Commission Indemnity........................... 23
Article 11 Remedies for Default or Termination.............................. 23
Section 11.1 Failure of Conditions.................................... 23
Section 11.2 Purchaser Default........................................ 24
Article 12 Miscellaneous.................................................... 24
Section 12.1 Notices.................................................. 24
Section 12.2 Next Business Day........................................ 25
Section 12.3 Survival................................................. 25
Section 12.4 Assignment............................................... 25
Section 12.5 Governing Law............................................ 25
Section 12.6 Modification............................................. 25
Section 12.7 Authorization............................................ 26
Section 12.8 Time Is of the Essence................................... 26
Section 12.9 Prevailing Party......................................... 26
Section 12.10 Further Assurance........................................ 26
Section 12.11 Headings................................................. 26
Section 12.12 Entire Agreement......................................... 26
Section 12.13 Multiple Counterparts.................................... 26
Section 12.14 No Third Party Beneficiaries............................. 26
Section 12.15 Joint and Several........................................ 26
Section 12.16 Confidentiality and Publicity............................ 27
Section 12.17 Commercially Reasonable Efforts to Consummate............ 27
Article 13 Simultaneous Closings............................................ 27
Section 13.1 Simultaneous Closing with Transactions in Stock Purchase
Agreement............................................... 27
Section 13.2 Purchaser Breach of Stock Purchase Agreement............. 27
Section 13.3 Seller Group Breach of Stock Purchase Agreement.......... 27
Annex 1 .................................................................... A-1
List of Exhibits
Exhibit "A-1" - Legal description of Fee Tracts
Exhibit "A-2" - List of Leases and legal description of
Leasehold Tracts
Exhibit "B" - Survey Requirements
Exhibit "C" - Certain Leases
Exhibit "D" - Exceptions to Section 7.1
Exhibit "E" - Environmental Reports
Exhibit "F" - Form of Lessor Estoppel
Exhibit "G" - Guaranties
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ASSET PURCHASE AND SALE AGREEMENT
THIS ASSET PURCHASE AND SALE AGREEMENT (this "Contract") is executed
effective as of the 10th day of September, 2002 (the "Effective Date"), by and
among Xxxxxxxxx Restaurants, Ltd. a Texas limited partnership ("Xxxxxxxxx"), MNC
Restaurant Properties, L.P., a Texas limited partnership ("MNC"), Well Seasoned,
Inc., a Delaware corporation ("WSI"), and Metro National Corporation, a Texas
corporation ("Metro National"), on the one hand, and LSRI Holdings, INC., a
Delaware corporation and/or its assigns ("Purchaser"), on the other hand.
Xxxxxxxxx, Metro National, and MNC are hereinafter sometimes collectively
referred to as "Sellers" and sometimes, individually, as a "Seller." Sellers and
WSI are sometimes collectively referred to as the "Seller Group." The members of
the Seller Group and Purchaser may sometimes hereinafter be referred to
singularly as a "Party" or collectively as the "Parties."
R E C I T A L S
WHEREAS, The members of the Seller Group and others have entered into that
certain Stock Purchase Agreement, dated of even date herewith (the "Stock
Purchase Agreement"), with Purchaser, covering the potential acquisition by
Purchaser of all of the issued and outstanding capital stock of WSI (the "Stock
Purchase Transaction");
WHEREAS, as a condition precedent to Purchaser's willingness to consummate
the Stock Purchase Transaction, Purchaser has required that Sellers convey to
Purchaser certain selected assets of Sellers, which selected assets consist of:
(i) fee simple title to all of those certain tracts or parcels of real property
described on Exhibit "A-1" attached hereto (the "Fee Tracts"), together with:
(a) any and all buildings, structures, and other improvements situated thereon
(collectively, the "Fee Improvements"); (b) any and all furniture, fixtures,
equipment, inventory, and other tangible and intangible personal property owned
by any of the Sellers and located on, or about, or used in connection with, such
Fee Tracts and Fee Improvements (hereinafter, the "Fee Personalty"); (c) any and
all of Sellers' interest in easements, tenements, hereditaments, reciprocal
access agreements, privileges, and appurtenances in any way belonging to such
Fee Tracts and Fee Improvements, (d) any and all land lying in the bed of any
highway, street, road, avenue, or access way, open or proposed, in front of,
abutting, adjacent to, contiguous to, or adjoining such Fee Tracts and/or Fee
Improvements, (e) any and all of Sellers' interest in strips, gores, and
rights-of-way, if any, in front of, abutting, adjacent, contiguous to, or
adjoining such Fee Tracts and/or Fee Improvements, and (f) all other rights and
appurtenances belonging or in any way pertaining thereto including, without
limitation, all water, wastewater, riparian rights, and other utility rights and
capacities (the matters referred to in clause (i) being collectively referred to
as the "Owned Real Property"); and (ii) the leasehold interest of "lessee" or
"tenant" in and to those certain leases described on Exhibit A-2 (the "Leases"),
which such respective Leases cover or pertain to those tracts or parcels of land
also described on Exhibit "A-2" (such tracts or parcels of land being referred
to as the "Leasehold Tracts"), together with: (a) all buildings, structures or
other improvements situated thereon that are owned by any of the Sellers (the
"Leasehold Improvements"); (b) furniture, fixtures, equipment, inventory, and
other tangible and intangible personal property owned by any of the Sellers and
located on, or about, or used in connection with, the Leasehold Tracts or the
Leases (collectively, the "Leasehold Personalty"); and (c) all other rights and
appurtenances belonging or in any way pertaining to the interest of "tenant" or
"lessee" under the Leases (the matters referred to in clause
(ii) being collectively referred to as the "Leasehold Real Property"); and (iii)
contracts or agreements such as maintenance, service, or utility contracts, to
the extent that Purchaser elects to take assignment thereof (provided, however,
that the foregoing shall not be interpreted to affect or limit Purchaser's
assumption [or deemed assumption] of contracts pursuant to the Stock Purchase
Agreement), warranties, guaranties, indemnities, and claims, development rights,
governmental approvals, licenses, permits, or similar documents, telephone
exchanges, plans, drawings, specifications, surveys, engineering reports,
environmental reports and audits, government or regulatory compliance reports,
such as, American with Disabilities Act compliance reports, equipment manuals,
and other technical manuals and descriptions, insurance contracts or policies,
to the extent that Purchaser elects to take assignment thereof, and other
property (real, personal, or mixed, tangible or intangible), owned or held by
Sellers and relating to or used in connection with the Owned Real Property and
the Leasehold Real Property, to the extent Purchaser elects to take assignment
thereof (collectively, all such matters described in this clause (iii) being
called the "Intangible Property"). The Fee Improvements and the Leasehold
Improvements are sometimes hereinafter referred to as the "Improvements." The
Fee Personalty and the Leasehold Personalty are sometimes collectively referred
to as the "Personalty." The items comprising the Owned Real Property, the
Leasehold Real Property, and the Intangible Property are sometimes collectively
referred to as the "Subject Properties";
WHEREAS, WSI operates, on portions of the Subject Properties and on the
properties covered by the Target Leases, restaurant operations (and related
operations) which are identified as Saltgrass Steak House Restaurants (which are
operated by FSI Restaurant Development Limited, a Texas limited partnership
("FSI")), and Xxxxx'x Seafood Restaurants (which are operated by WSI Fish
Limited, a Texas limited partnership);
WHEREAS, Purchaser desires to be able to assign various of its rights under
this Contract to various entities so that title to the Subject Properties and/or
title to the Target Leases can be acquired by discrete entities rather than
wholly by Purchaser;
WHEREAS, all initially capitalized, undefined terms used in this Contract
shall have the meanings ascribed to such terms in the Stock Purchase Agreement;
NOW THEREFORE, in consideration of the mutual covenants and undertakings
herein contained, and subject to the terms and conditions herein set forth, the
Parties agree as follows:
AGREEMENT
Article 1
Sale and Purchase
Section 1.1 Sale and Purchase. Subject to the terms and provisions hereof,
Sellers agree to sell, and Purchaser agrees to purchase, the Subject Properties.
Article 2
Consideration for Conveyance
Section 3.1 Purchase Price. The aggregate Purchase Price for the Stock and
the Subject Properties shall be as set forth in the Stock Purchase Agreement.
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Section 2.2 Liabilities Not Assumed by Purchaser. Sellers shall retain all
obligations and responsibilities for any claims, debts, defaults, duties, or
liabilities of the Sellers under any contracts or agreements (provided, however,
that the foregoing shall not be interpreted to affect or limit Purchaser's
assumption [or deemed assumption] of contracts pursuant to the Stock Purchase
Agreement) relating or appertaining, directly or indirectly to, the Subject
Properties, whether known or unknown, contingent or fixed, unless explicitly set
forth to the contrary in the Stock Purchase Agreement or in this Contract. Other
than as expressly set forth in the Stock Purchase Agreement or in this Contract,
Purchaser does not assume or agree to pay, perform, or discharge, and shall not
be responsible for, any liabilities or obligations (whether contractual or
otherwise) of any of the Sellers, whether accrued, absolute, contingent, or
otherwise, based on, arising out of, or in connection with the following:
(a) any indebtedness of the Sellers;
(b) any Taxes (as hereinafter defined);
(c) any claim, litigation, or proceeding threatened or pending or
initiated after the Closing Date, to the extent based on acts or omissions
occurring on or prior to the Closing Date; or
(d) any contracts, agreements and the like with any of the Sellers,
relating to any of the Subject Properties, other than the Assumed
Agreements, as more particularly addressed elsewhere in this Contract.
Article 3
Surveys and Title Policies
Section 3.1 Survey. Sellers have heretofore delivered to Purchaser copies
of the most current surveys of the Fee Tracts, the Leasehold Tracts, and the
Target Lease Tracts which are in Sellers' possession. Additionally, Sellers, at
their sole expense, shall deliver to Purchaser within fifteen (15) days after
the Effective Date either an ALTA survey or a Category 1A, Condition II survey
(each hereinafter referred to singularly as a "Survey" and collectively as the
"Surveys") of each of the Fee Tracts, the Leasehold Tracts, and the Target Lease
Tracts satisfying the requirements set forth on Exhibit "B" attached hereto.
Section 3.2 Title Commitments and Title Review. Sellers and Purchaser
confirm and acknowledge that Sellers have heretofore delivered to Purchaser, at
Sellers' sole cost, with respect to each of the Fee Tracts, the Leasehold
Tracts, and the Target Lease Tracts: (i) a current commitment (each hereinafter
called a "Title Commitment" and collectively, the "Title Commitments") for the
issuance to Purchaser of: (a) an Owner's Policy of Title Insurance (with respect
to the Fee Tracts); and (b) a Tenant's Leasehold Policy of Title Insurance (with
respect to the Leasehold Tracts and the Target Lease Tracts) from Alamo Title
Company, 0000 Xxx Xxxxxx, Xxxxxxx, Xxxxx, 00000 Attn: W. Xxxx Xxxxxxxx (herein
called the "Title Company"), and (ii) legible copies of all documents
constituting exceptions as reflected in each Title Commitment (the "Exception
Documents"). With respect to each of the Fee Tracts, the Leasehold Tracts, and
the Target Lease Tracts, if any exceptions appear on any Title Commitment or in
any Exception Documents, other than the standard printed exceptions (which shall
be modified as provided in this Contract) which a lender would
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reasonably object to or if any encroachments, overlapping of improvements, or
other conditions are shown on any Survey which a lender would reasonably object
to, Purchaser shall, within fifteen (15) days after receipt of the last of the
Title Commitment, the Exception Documents, and the Survey as to the relevant
tract, notify Sellers in writing of such fact. Sellers agree to use their
reasonable efforts to cure all such objections (provided, however, except with
respect to (i) Monetary Liens, as to which Purchaser may subtract the amount of
the Monetary Liens from the Purchase Price if the same are not discharged (this
does not entitle Purchaser to discharge Monetary Liens encumbering the leasehold
interest of the lessor under the Leases or the Target Leases or the fee title
interest of lessor in and to the premises which are the subject of any such
lease) and (ii) exceptions created by Sellers from and after the Effective Date,
as to which Seller shall be obligated to cure, Sellers shall not be obligated to
institute litigation or to pay more than Two Thousand and No/100ths Dollars
($2,000.00) for each tract to cure such objections). Defects in title created by
Sellers from and after the Effective Date and Monetary Liens now or hereafter
encumbering any of the Subject Properties or Target Lease Properties (excluding
the fee title interest of the premises which are the subject of the Target
Leases and the Leases) shall be released or discharged at or prior to Closing
(or the Purchase Price reduced in the case of Monetary Liens). If Sellers are
unable or unwilling (after exercising their reasonable efforts to cure the same)
to cure such objections on or before fifteen (15) days after receipt of such
notice, Purchaser may, at any time on or before the Closing Date, (i) accept
such title as Sellers can deliver and, (a) in the case of Monetary Liens (other
than the "Omni Lien" or any Monetary Lien upon the fee title interest of the
premises which are the subject of the Target Leases or the Leases [provided,
however, the foregoing does not prohibit Purchaser from requesting
subordination, nondisturbance, and attornment agreements from the lessors under
any such leases or from the lenders holding any such Monetary Liens in the
estoppel certificates described in Section 7.1(ll)]) which shall constitute a
Permitted Encumbrance), subtract the amount of such Monetary Liens from the
Purchase Price, and (b) recover from Sellers any damages resulting from Sellers'
failure to cure any exceptions created from and after the Effective Date
(without regard to the cost), (ii) exercise any other remedy provided herein,
and/or, (iii) if such title objections (individually or in the aggregate)
constitute a Material Adverse Effect on the Business, terminate this Contract
(the provisions of this sentence are not intended to limit Purchaser's remedies
with respect to any breach by Sellers of any other provision of this
Contract[e.g. Section 7.1]). In the event of such termination, the Parties shall
have no further right or other obligation hereunder (other than with respect to
obligations hereunder that expressly survive the termination of this Contract)
and the Deposit shall be immediately returned to Purchaser. As to each
applicable Fee Tract, Leasehold Tract, or Target Lease Tract, those exceptions
or title deficiencies that appear on the Title Commitment for such tract and any
encroachments, overlapping of improvements, or other conditions that are shown
on the Survey for such tract and are accepted by Purchaser pursuant to the terms
of this Section 3.2 shall constitute the "Permitted Encumbrances"; provided,
however, the term "Permitted Encumbrances" shall not include any Liens or any
other title defects which Seller is obligated to cure under the terms of this
Contract or agrees in writing to cure on or before the Closing. Notwithstanding
the foregoing, in no event shall Sellers be obligated to provide a survey, title
commitment, or title policy in connection with any leasehold interest of any
Seller under the leases described on Exhibit "C."
Section 3.3 Owner's Policies and Leasehold Policies of Title Insurance. At
Closing, Sellers shall furnish to Purchaser, at Sellers' sole cost and expense,
an Owner's Policy of Title Insurance as to each Fee Tract (or, at Purchaser's
option, a single Owner's Policy of Title Insurance covering all Fee Tracts), and
a Tenant's Leasehold Policy of Title Insurance, as to each Leasehold Tract and
each Target Lease Tract (or, at Purchaser's option, a single Leasehold Policy of
Title
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Insurance covering all Leasehold Tracts and Target Lease Tracts), in amounts
agreed upon by Sellers and Purchaser prior to the Closing Date (each of the
Parties agrees to use its reasonable, good faith efforts to agree on such
amounts), on the standard form in use in the State of Texas (the "Title Policy"
or "Title Policies"), on the policy of Chicago Title Insurance Company or
another underwriter(s) reasonably acceptable to Purchaser, insuring good and
indefeasible title (or leasehold estate, as applicable) to each Fee Tract,
Leasehold Tract, and Target Lease Tract, subject only to the Permitted
Encumbrances, and provided further that: (a) the exception relating to taxes
shall be limited to the year of Closing and subsequent years (Purchaser being
liable for any subsequent reassessments for prior years due to changes in use or
ownership); (b) if elected by Purchaser, the survey exception shall be deleted,
at Purchaser's cost, except as to shortages in area; and (c) there shall be no
exception for the rights of "parties in possession."
Article 4
Additional Items to be Furnished to Purchaser by Seller
Section 4.1 Required Information Materials. Within five (5) days after the
Effective Date, Sellers shall deliver to Purchaser (to the extent not previously
delivered prior to the Effective Date), true, correct, and complete copies of
the following which are in possession or control of the Seller Group
(collectively referred to as the "Required Information Materials") (Sellers
believe that all of the Required Information Materials have been delivered to
Purchaser prior to the date hereof. If Purchaser discovers that all of the
Required Information Materials have not been so delivered and requests such
non-delivered item, Sellers shall deliver such item(s) to Purchaser with five
(5) days after such written request is given.). The following are the Required
Information Materials:
(a) All of the Leases, Target Leases, and all contracts, agreements,
and warranties affecting the ownership or operation of the Subject
Properties or the Target Lease Properties (other than agreements that will
be terminated at or prior to Closing for which Purchaser shall have no
liability);
(b) Accurate, complete, true, and correct schedules, statements, and
reports (herein "Operating Schedules") reflecting in detail reasonably
satisfactory to Purchaser, with respect to the Subject Properties and
Target Lease Properties for the year-to-date period of calendar year 2002,
and for the three (3) calendar years ending immediately preceding the date
of this Contract, reflecting all income and expenses received and incurred
during such periods with respect to the Subject Properties and the Target
Lease Properties;
(c) Complete, detailed lists of the Fee Personalty, the Leasehold
Personalty, and Target Lease Personalty;
(d) Copies of the certificates of occupancy, and any amendments
thereto, for the Fee Improvements, the Leasehold Improvements, and Target
Lease Improvements;
(e) Any and all site plans, surveys, appraisals, title policies, soil
studies, architectural drawings, shop drawings, plans and specifications,
log books, and maintenance records with respect to the Subject Properties
and/or Target Lease Properties in Sellers' possession;
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(f) All existing environmental reports, engineering reports,
structural reports, mechanical reports, air quality reports, asbestos
reports, audit reports, consulting reports, management reports, utility
studies or reports, and all other reports with respect to the Subject
Properties and/or Target Lease Properties in Sellers' possession;
(g) All permits, certificates, and licenses required or obtained by
Sellers for or in connection with the Subject Properties and/or Target
Lease Properties;
(h) Except to the extent reflected in the Title Commitments, any
agreement that restricts the right of any of any member of the Seller Group
to engage in any type of business; and
(i) Within five (5) Business Days after the written request from
Purchaser, such other and additional information that Purchaser may
reasonably request to receive or examine that pertains to the Subject
Properties and/or Target Lease Properties it being understood that
Purchaser need not make all such requests or inspections during the first
five (5) days after the Effective Date, but rather that Purchaser shall be
entitled to make such requests, and to conduct such inspections (including
the right to conduct one or more physical inventories), on an ongoing basis
throughout the period from the Effective Date through the Closing Date.
If this Contract is terminated, all of the foregoing materials described in this
Section 4.1 shall be returned to Sellers within fifteen (15) days following any
such termination.
Article 5
Inspection and Audit
Section 5.1 Inspection and Audit. The Seller Group agrees that prior to
Closing, Purchaser and its authorized agents or representatives, shall be
entitled to enter upon the Subject Properties and/or Target Lease Properties, at
all reasonable times, upon at least twenty-four (24) hours written notice and
during normal business hours, to make non-invasive inspections of the Subject
Properties and/or Target Lease Properties and to conduct non-invasive
investigations and non-invasive tests of the Subject Properties and/or Target
Lease Properties, so long as such activities do not unreasonably interfere with
the operation of the Subject Properties or Target Lease Properties. The Seller
Group agrees to make available to Purchaser and to its duly authorized agents or
representatives, all applicable books and records relating to the Subject
Properties and Target Lease Properties. Such books and records may be examined
at all reasonable times. Before any entry to conduct non-invasive inspections or
tests, Purchaser shall provide the Sellers with a certificate of insurance
naming Sellers as additional insureds, and with an insurer and insurance limits
and coverage reasonably satisfactory to Sellers. Sellers or Sellers' agent shall
have the right to accompany Purchaser during any activities performed by
Purchaser on the Subject Properties or Target Lease Properties. At Sellers'
request, Purchaser shall provide Sellers with a copy of the results of any tests
or inspections made by Purchaser, excluding only market and economic feasibility
studies; provided, however, Purchaser makes no representation or warranty
regarding the accuracy or completeness of any such tests or studies or of the
Sellers' rights to rely thereon. If any inspection or test performed by
Purchaser disturbs the Subject Properties or Target Lease Properties, Purchaser
will restore same to the same condition that existed before the inspection or
test.
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Purchaser and Xxxxxx'x each agrees not to disclose to any personnel of WSI on
the site of such inspections that same are being made on behalf of Purchaser or
Xxxxxx'x or of the existence of the Stock Purchase Agreement. Purchaser shall
indemnify and defend each of the Seller Group and hold each member of the Seller
Group harmless from and against all loss, liability, damage, injury, and claims
resulting from Purchaser's testing or inspection of the Subject Properties
and/or the Target Lease Properties; provided, however, this indemnity shall not
include, and shall specifically exclude, any loss, liability, damage, injury,
and claims arising out of or resulting from, in whole or in part, (a) any latent
defect in, on, or under the Subject Properties or the Target Lease Properties,
(b) the negligence, gross negligence, or willful misconduct of any member of the
Seller Group, or any agents, representatives, contractors, or employees of any
of such Persons, or (c) the discovery by Purchaser or its agents,
representatives, contractors, or employees of the presence of any substance or
substances in, on, or under the Subject Properties or Target Lease Properties,
which condition must be remediated and/or reported under applicable
Environmental Laws (as that term is hereinafter defined). This indemnity shall
survive the closing of this transaction (or if this transaction does not close,
the termination of this Contract) for a period of two (2) years commencing on
the Closing Date (as hereinafter defined), or if the transaction does not close,
the date this Contract is terminated. Upon the expiration of such two (2) year
period, this indemnity shall automatically terminate without the necessity of
any notice, and Purchaser shall be conclusively deemed released from any
liability or obligations under this indemnity.
Section 5.2 Environmental Inspections. The inspections under Section 5.1
may include a non-invasive Phase I environmental inspection of the properties,
but no Phase II environmental inspection or other invasive inspection or
sampling of soil or materials, including, without limitation, construction
materials, either as part of a Phase I or any other inspection, shall be
performed without the prior written consent of Sellers, which shall not be
unreasonably withheld or delayed (unless any applicable lease agreement with a
third party owner of the respective real property prohibits same and the
approval of same cannot be obtained from said third party owner), and, if
consented to by Sellers, the proposed scope of work and the party who will
perform the work shall also be subject to Sellers' reasonable review and
approval. At Sellers' request, Purchaser shall deliver to Sellers copies of any
Phase I or other environmental reports to which Sellers consent as provided
above, provided that any such reports shall be delivered without any
representation or warranty of Purchaser, and Sellers shall have no right to rely
on any such report without the prior written consent of the party preparing
same. If any inspections under Section 5.1 or under Section 5.2 results in
Purchaser discovering any environmental conditions that a lender would
reasonably object to, then Purchaser shall inform the Sellers of the same and
Sellers shall use their reasonable efforts to cure the same. If Sellers are
unable or unwilling (after exercising their reasonable efforts to cure the same)
to cure such objections on or before fifteen (15) days after receipt of such
notice, Purchaser may, at any time on or before the Closing Date, accept such
condition as Sellers can deliver, exercise any other remedy provided herein, or,
if such adverse condition(s), individually or in the aggregate, constitute(s) a
Material Adverse Effect on the Business, terminate this Contract (the provisions
of this sentence are not intended to limit Purchaser's remedies with respect to
any breach by Sellers of any other provision of this Contract[e.g. Section
7.1]). In the event of such termination, the Parties shall have no further right
or other obligation hereunder (other than with respect to obligations hereunder
that expressly survive the termination of this Contract) and the Deposit shall
be immediately returned to Purchaser.
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Article 6
Loss, Damage or Destruction Prior to Closing; Condemnation
Section 6.1 Fire and Casualty. If, prior to Closing, there occurs one or
more incidents of a fire or other casualty affecting the Subject Properties that
individually or in the aggregate result in a Material Adverse Effect on the
Business, then Purchaser may elect to terminate this Contract, in which event,
neither Purchaser nor any member of the Seller Group shall have any further
liabilities, obligations, or rights with regard to this Contract (except for
those liabilities, obligations, or rights which by their terms survive any
termination of this Contract). If Purchaser does not elect to terminate this
Contract (or if the damage or destruction caused by such casualty or casualties
does not individually or in the aggregate result in a Material Adverse Effect on
the Business), then in such event, this Contract shall remain in full force and
effect and Sellers shall pay or assign to Purchaser, at Closing, all insurance
proceeds payable for such damage or destruction, together with the amount of any
deductible required by Sellers' insurance policies, and the sale shall be closed
without Sellers' repair or restoration of such damage and without reduction in
Purchase Price.
Section 6.2 Condemnation. If, prior to Closing, there occurs with respect
to the Subject Properties or the Target Lease Properties any condemnation by a
Governmental Authority, or conveyance or sale in lieu of condemnation that
individually or in the aggregate result in a Material Adverse Effect on the
Business, then Purchaser may elect to terminate this Contract, in which event,
neither Purchaser nor the Seller Group shall have any further liabilities,
obligations, or rights with regard to this Contract (except for those agreements
which by their terms survive any termination of this Contract). If Purchaser
does not elect to terminate this Contract (or if the extent of the condemnation
or conveyance in lieu thereof does not individually or in the aggregate result
in a Material Adverse Effect on the Business ), then in such event, this
Contract shall remain in full force and effect and Sellers shall pay or assign
to Purchaser, at Closing, all condemnation proceeds or sales proceeds payable
for such condemnation or sale, and the sale shall be closed without Sellers'
repair or restoration of the remainder of the Subject Properties and Target
Lease Properties that are not so taken or sold and without reduction in Purchase
Price.
Article 7
Representations, Warranties, and Covenants of the Parties; Indemnification
Section 7.1 Representations, Warranties, and Covenants. Each of the
Sellers, jointly and severally, represents, warrants, and covenants (as
applicable) to Purchaser as of the date of this Contract and as of the Closing
Date that:
(a) During the period commencing on the Effective Date and continuing
up to the Closing Date (the "Contract Period"), Sellers will cause the
Subject Properties and Target Lease Properties to be maintained and
operated in the ordinary course of the Business and in accordance with all
Applicable Laws (except to the extent the failure to do so would not
constitute a Material Adverse Effect on the Business), and will keep the
Subject Properties and Target Lease Properties in good order and operating
condition (ordinary wear and tear excepted), causing all necessary repairs,
renewals, and replacements to be made promptly;
(b) During the Contract Period, Sellers will not, and will cause each
member of the Seller Group not to, enter into any lease, sublease, use, or
occupancy agreement affecting
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any portion of the Subject Properties or the Target Lease Properties. During the
Contract Period, Sellers shall fully and timely comply (and Sellers shall cause
any tenant to so comply)with all the obligations of "tenant" or "lessee" under
each of the Leases and Target Leases.
(c) To the best of Sellers' Knowledge, none of the Required
Information Materials contains any untrue statement of a fact or omits any
fact necessary to make the statements contained therein not materially
misleading. If any of Sellers discovers any material defect, error, or
omission in any Required Information Materials, such Party will promptly
give Purchaser notice thereof, with detailed information correcting such
defect, error, or omission.
(d) Sellers will not, and Sellers shall cause each member of the
Seller Group not to, sell, exchange, assign, transfer, convey, encumber, or
otherwise dispose of all or any part of the Subject Properties or Target
Lease Properties or any interest therein, or permit or negotiate for any of
the foregoing. However, notwithstanding the foregoing, Xxxxxxxxx shall be
permitted to sell and convey that certain approximately .72 tract of real
property located in Mesquite, Dallas County, Texas being shown on Exhibit
A-1 as saved and excepted from the Fee Tract commonly known as (and
referred to herein as) the "Saltgrass/Mesquite" tract (such
approximately .72 acre tract being referred to as the "Ahdam Tract")
pursuant to that certain Unimproved Property Contract, dated effective as
of February 27, 2002, between Xxxxxxxxx, as "Seller," and Adham-1, Inc., as
"Buyer" (the "Adham Contract"); provided that: (i) all "curb cuts"
(excepting one which is part of the Adham Tract) and access drives
providing ingress and egress to and from both the IH 000 xxxxxx xxxx and
Franklin Drive shall remain wholly on the Saltgrass/Mesquite Tract; (ii) to
the extent permitted by the Adham Contract, Xxxxxxxxx shall cause
restrictive covenants (whether in the deed conveying such property or
otherwise), in form and substance satisfactory to Purchaser, to be placed
of record restricting the Adham Tract so that it may not be used or
operated as a restaurant; (iii) following the conveyance of the Adham
Tract, the remaining portion of the "Saltgrass/Mesquite" tract shall have
the right to park on such Adham Tract, but the owner and/or lessee or other
occupant of the Adham Tract shall not have the right to park or otherwise
use (except for access) the remaining portion of the "Saltgrass/Mesquite"
tract and (iv) to the extent not required by the Adham Contract, neither
Xxxxxxxxx nor any of the other Sellers shall cause or permit any
restrictions, encumbrances, easements, obligations, or the like to be
placed upon the Saltgrass/Mesquite Tract in connection with the sale and
conveyance of the Adham Tract without the express prior written consent of
Purchaser (which may be withheld in Purchaser's good faith business
judgment). If the Adham Contract is terminated, and the Buyer under the
Adham Contract (and such Buyer's successors or assigns) has no further
rights in and to the Adham Contract, then Sellers agree to notify Purchaser
and allow Purchaser the right to purchase the Adham Tract under on the same
terms and conditions set forth in the Adham Contract.
(e) During the Contract Period, Sellers will not, and Sellers shall
cause each member of the Seller Group not to, without the prior written
consent of Purchaser, enter into any service, maintenance, management, or
other type of agreement with respect to any of the Subject Properties or
Target Lease Properties which is not terminable (without penalty or further
consideration) on or before the Closing Date (or if not terminable on or
before the
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Closing Date, which is entered into in the ordinary course of business and which
may be terminated on no more than one (1) month's prior written notice, without
penalty or consideration). During the Contract Period, Sellers will not, and
Sellers shall cause each member of the Seller Group not to, enter into any
brokerage commission agreement or leasing commission agreement with respect to
the Subject Properties or Target Lease Properties, or any portion thereof,
without the prior written consent of Purchaser.
(f) During the Contract Period, Sellers will cause the Subject
Properties and Target Lease Properties to be covered by one or more
policies of fire and extended coverage casualty insurance in an amount at
least equal to eighty percent (80%) of their replacement cost.
(g) To the best of Sellers' Knowledge, the Required Information
Materials, are and will be true, correct, accurate, and complete and will
not omit to state any fact or condition, the omission of which makes any of
such Required Information Materials misleading. All financial reports which
are included in such materials are and will be prepared in accordance with
generally accepted accounting principles, consistently applied.
(h) To the best of Sellers' Knowledge, the location, construction,
occupancy, operation, and use of the Subject Properties and Target Lease
Properties (including any Improvements, Target Lease Improvements,
Personalty, and Target Lease Personalty forming any part thereof) do not
violate any Applicable Laws (except to the extent the failure to follow
such Applicable Laws would not constitute a Material Adverse Effect on the
Business).
(i) To the best of Sellers' Knowledge, except as detailed in the Stock
Purchase Agreement, none of the Subject Properties or Target Lease
Properties and none of the Seller Group is currently subject to any
existing, pending, or threatened investigation or inquiry by any
Governmental Authority or to any remedial obligations under any Applicable
Laws; and no member of the Seller Group has any Knowledge or any reason to
believe that Purchaser will be required to obtain any permits, licenses, or
similar authorizations of a type different from the existing permits,
licenses, or similar authorizations in order to construct, occupy,
renovate, operate, or use any portion of the Subject Properties or Target
Lease Properties by reason of any Applicable Laws.
(j) Sellers have no information or Knowledge of any change
contemplated in any of the Applicable Laws or of any judicial or
administrative action, any action by adjacent landowners, or any fact or
condition relating to the Subject Properties or Target Lease Properties
which would reasonably be expected to materially and adversely affect,
prevent, or limit the use of the Subject Properties or Target Lease
Properties for the uses to which they are currently being put.
(k) To the best of Sellers' Knowledge, the Improvements, Target Lease
Improvements, Personalty, and Target Lease Personalty are in good condition
and repair (ordinary wear and tear excepted), free of any patent or latent
structural, roof, foundation, or engineering defects.
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(l) Each of (i) the Leases and Target Leases; and (ii) every other
contract, agreement, and the like relating to or pertaining to any of the
Subject Properties or Target Lease Properties is valid and subsisting and
is in full force and effect in accordance with its terms, except as may be
limited by bankruptcy, insolvency, reorganization, fraudulent conveyance or
other similar laws affecting the enforcement of creditors' rights generally
and general equitable principles; to the best of Sellers' Knowledge, as to
each Lease and also as to each such other contract or agreement, no party
thereunder is in default under any of the terms of same, nor are there in
existence any facts or circumstances which, with the passage of time or the
giving of notice or both would constitute a default thereunder.
(m) Except with respect to the Omni Lien, which lien covers and
encumbers only the following properties or tracts: (i) the leasehold estate
in and to the Target Lease Tract commonly known as "Salt V"; (ii)
equipment, fixtures and the like situated on (x) Tracts "B" and "C" of
Saltgrass, a Subdivision in Xxxxxx County, Texas according the Map or Plat
thereof Film Code Ref. No. 349067 of the Map Records of Xxxxxx County,
Texas, and (y) the Target Lease Tract commonly known as "Salt I," the
Subject Properties are owned or leased solely by the Sellers, and the
Target Lease Properties are leased solely by FSI, and each of the Subject
Properties and the Target Lease Properties are free and clear of all Liens
(except permitted Liens, statutory landlord liens, and contractual liens
granted under the Target Leases or the Leases), and no work has been
performed or is in progress by or on behalf of any member of the Seller
Group, FSI, or any other Person and no materials have been furnished to any
of the Subject Properties, the Target Lease Properties, or any portion
thereof, the payment of which is past due. Neither the Subject Properties,
nor Target Lease Properties or any portion thereof or interest therein,
have been mortgaged, assigned, pledged as security, encumbered, or
hypothecated in any form or fashion.
(n) No brokerage or leasing commissions or other compensation is due
or payable or shall hereafter become due or payable with respect to or on
account of any of the Leases or Target Leases or any extension or renewal
thereof. Sellers will pay, at their sole cost, all such brokerage, leasing
commissions, and other compensation and, at the Closing, will deliver to
Purchaser releases from the brokers involved.
(o) Except as set forth in the Environmental Reports, to the best of
Sellers' Knowledge, none of the Subject Properties or Target Lease
Properties have been contaminated by, or are or have been used for the
disposal of any Hazardous Materials, other than de minimis quantities of
cleaning solvents and other similar items customarily used in the operation
of a restaurant business, in such amounts and concentrations that do not
violate Applicable Laws.
(p) Except as set forth in the Environmental Reports, to the best of
Sellers' Knowledge, none of the Subject Properties or Target Lease
Properties contain or are or have been used for the storage of any
Hazardous Materials, other than de minimis quantities of cleaning solvents
and other similar items customarily used in the operation of a restaurant
business, in such amounts and concentrations that do not violate Applicable
Laws.
(q) Except as set forth in the Environmental Reports, to the best of
Sellers' Knowledge, none of the Subject Properties or Target Lease
Properties contain any
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aboveground or underground storage tanks, or any other environmental conditions
that a prudent and cautious owner or purchaser would remove or remediate.
(r) Except as set forth on Exhibit "D," none of the Sellers and, to
the Knowledge of Sellers, neither WSI nor any of the Subsidiaries, has
received any communication or notice from a Governmental Authority that
alleges that any of such parties are not in compliance with any
Environmental Law; none of the Sellers, and, to the Knowledge of the
Sellers, neither WSI nor any of the Subsidiaries, has received any
communication or notice from a Governmental Authority that alleges or that
states that any property which any of such parties owns or upon which WSI
or any Subsidiaries operates the Business (including, without limitation,
the Subject Properties and the Target Lease Properties, and being
collectively referred to as the "Property") or property which WSI or any of
such parties owned or upon which the any of such parties formerly operated
the Business ("Former Property"), are not in compliance with any
Environmental Law;
(s) Except as set forth on Exhibit "D," none of the Sellers, and to
the Knowledge of the Sellers, neither WSI nor any of the Subsidiaries has
received any communication or notice from a Governmental Authority that
alleges that any of the Property or Former Property has been impacted by a
Release or threatened Release of Hazardous Materials;
(t) To the best of Sellers' Knowledge, WSI and its Subsidiaries hold,
and are in compliance with, all Permits, if any, required under
Environmental Laws to conduct the Business, all such Permits are in full
force and effect, and WSI and its Subsidiaries are in compliance with all
Environmental Laws;
(u) Except as set forth on Exhibit "D" or as set forth in the
Environmental Reports, the Acquisition will not impact the validity of
environmental Permits and no approvals or authorizations of any
Governmental Authority will be required to permit the Business to continue
under the environmental Permits after consummation of the Acquisition.
(v) Except as set forth on Exhibit "D," in connection with the conduct
of the Business, none of the Sellers, WSI, or any of the Subsidiaries has
entered into, is subject to, or has agreed to any court or administrative
decree or order and is not subject to any Judgment or order relating to
compliance with any Environmental Law or to investigation or cleanup of a
Release or threatened Release of Hazardous Materials,
(w) Except as set forth on Exhibit "D" or as set forth in the
Environmental Reports, other than de minimis quantities of cleaning
solvents and other similar items customarily used in the operation of a
restaurant business, in such amounts and concentrations that do not violate
Applicable Laws, WSI and its Subsidiaries have not, and to the best of
Sellers' Knowledge, no third party has, generated, treated, stored,
released or disposed of, or otherwise placed, deposited in or located on
the Property or the Former Property, any Hazardous Materials except in
compliance with all Environmental Laws and in a manner that would not
create liability under Environmental Laws (including but not limited to
CERCLA), and no Hazardous Materials have been generated, treated, stored,
released or disposed of, or otherwise placed, deposited in or located on
the Property or the Former
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Property except in compliance with all Environmental Laws, nor, to the
Knowledge of the Sellers, has any activity been undertaken on the Property
or the Former Property that would cause
(i) the Property or the Former Property to become a treatment,
storage or disposal facility under the RCRA or any similar
state law or local ordinance,
(ii) a Release or threatened Release of Hazardous Materials on,
to, about or from the Property or the Former Property, or
(iii) the discharge of Hazardous Materials, pollutants or
effluent from the Property or Former Property, the dredging
or filling of any waters or the discharge into the air of
any emissions, for which the Corporation does not have all
required permits under the federal Clean Water Act, 33
X.X.X.xx. 1251 et seq., or the federal Clean Air Act, 42
U.S.C.ss.7401 et seq., or any similar state law or local
ordinance,
(x) Except as set forth on Exhibit "D" or as set forth in the
Environmental Reports, there are no substances or conditions in or on the
Property or Former Property that would support a claim or cause of action
under Environmental Laws (including but not limited to RCRA, CERCLA and
analogous state laws), other than de minimis quantities of cleaning
solvents and other similar items customarily used in the operation of a
restaurant business, in such amounts and concentrations that do not violate
Applicable Laws.
(y) Sellers have not been identified as a potentially responsible
party in connection with any National Priority List or Superfund Site or in
connection with a similarly designated state site and, to the Knowledge of
Sellers, neither WSI nor any of its Subsidiaries has been identified as a
potentially responsible party in connection with any National Priority List
or Superfund Site or in connection with a similarly designated state site.
(z) There is no pending or, to the best of Sellers' Knowledge,
threatened litigation (including, without limitation, any condemnation or
notice of condemnation) affecting or related to the Subject Properties or
Target Lease Properties, except as disclosed in a Schedule to the Stock
Purchase Agreement.
(aa) MNC is a limited partnership duly organized and validly existing
under the laws of the State of Texas and has all requisite partnership
power and authority to own, lease, and operate its properties and to carry
on its business as now being conducted. MNC has full partnership power and
authority to execute, deliver, and perform this Contract and each of the
other agreements necessary to affect the transaction contemplated by this
Contract, and the execution, delivery, and performance of this Contract and
each of such other agreements have been duly authorized by MNC. The
signing, delivery, and performance of this Contract and each of such other
agreements by MNC are not prohibited or limited by, and will not result in
the breach of or a default under, any provision of the partnership
documents of MNC or of any agreement or instrument binding on MNC, or of
any applicable order, writ,
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injunction, or decree of any court or Governmental Authority. This Contract
and each of such other agreements have been or will be duly executed and
delivered by MNC and constitute or shall constitute the legal, valid, and
binding obligations of MNC, enforceable in accordance with their respective
terms except as may be limited by bankruptcy, insolvency, reorganization,
fraudulent conveyance or other similar laws affecting the enforcement of
creditors' rights generally and general equitable principles.
(bb) This Contract has been executed by each Person that has an
ownership interest in the Subject Properties or Target Lease Properties
and, other than consents by the landlords or lessors under the Leases or to
the assignment thereof to Purchaser, there is no requirement that any
person or entity that has not signed this Contract grant any consent or
take any other action in order to enable Sellers to convey the Subject
Properties as contemplated by this Contract (provided, however, this does
not address consents that may be required under liquor licenses). Each of
Sellers agrees to exercise commercially reasonable efforts to procure all
required consents from the landlords or lessors under the Leases with
respect to the assignment thereof to Purchaser. The Subject Properties
together with the assets and properties owned and/or leased by WSI and its
Subsidiaries constitute all assets owned and/or leased by the Seller Group
(or Affiliates thereof) in the operation of the Business. The transfer and
conveyance of the Subject Properties and the Stock result in the transfer
and conveyance of all assets owned and/or leased by the Seller Group (or by
any Affiliate) that are used in connection with the Business and such
assets constitute all assets owned by the Seller Group which is necessary
or useful to conduct the Business in the manner conducted as of the
Effective Date and the Closing Date.
(cc) To the Knowledge of Sellers, there are no oral agreements
affecting any of the Subject Properties or Target Lease Properties, and if
any such oral agreement does in fact exist, or is deemed to exist, it is
terminable, without consideration or penalty, upon no more than thirty (30)
days' notice.
(dd) Other than the Adham Contract, there are no agreements with any
other Person relating to the sale or other conveyance of the Subject
Properties or otherwise relating to the transfer of the Target Lease
Properties other than this Contract and the Stock Purchase Agreement.
(ee) As to each of the Fee Tracts, except for (i) agreements between
or among one or more of the Sellers and/or their Affiliates that will be
terminated at or prior to Closing or (ii) agreements scheduled on schedules
to the Stock Purchase Agreement that will be terminated at or prior to
Closing or which are terminable upon one (1) month's written notice with no
penalty or additional consideration, there is no written lease, sublease,
use, management, service, maintenance, occupancy, or other type of
agreement affecting any portion of such tracts, except as set forth on
Exhibit "D," and there are no parties in possession of or claiming any
right to possess any portion of any of the Fee Tracts (whether as tenants,
lessees, pursuant to easements, or otherwise) other than the members of the
Seller Group (or their Affiliates).
(ff) As to the Leasehold Tracts and Target Lease Tracts, except for
(i) agreements between or among one or more of the Sellers and/or their
Affiliates that will be terminated
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at or prior to Closing or (ii) agreements scheduled on schedules to the
Stock Purchase Agreement that will be terminated at or prior to Closing or
which are terminable upon one (1) month's written notice with no penalty or
additional consideration, there is no written lease, sublease, use,
management, service, maintenance, occupancy, or other type of agreement
affecting any portion of such tracts, except for the Leases and Target
Leases and also except as set forth on Exhibit "D," and there are no
parties in possession of or claiming any right to possess any portion of
any of the Leasehold Tracts or Target Lease Tracts (whether as tenants,
lessees, pursuant to easements or otherwise) other than the Seller Group
(or their Affiliates).
(gg) As to each Leasehold Tract and Target Lease Tract, the Lease or
Target Lease applicable to such tract represents the entire agreement and
understanding between the Seller Group (or Affiliate) entity that is the
"tenant" or "lessee" thereunder, and the applicable lessor or landlord
thereunder, and there has been no cancellation, modification, assignment,
renewal, extension, or amendment to any such Lease or Target Lease, except
as set forth on Exhibit "A-2" and Exhibit "G" to this Contract and Schedule
3.7 to the Stock Purchase Agreement.
(hh) No member of the Seller Group is a foreign person as that term is
defined in Section 1445 and 7701 of the Code, and regulations promulgated
hereunder.
(ii) To the best of Sellers' Knowledge, the Subject Properties and
Target Lease Properties are not subject to assessment or collection of
additional Taxes for prior years based upon a change in land usage or
ownership. Specifically, no part of the Subject Properties or Target Lease
Properties has been assessed for Taxes during the preceding five years
using appraisal procedures established for either (a) land designated for
"agricultural use" value within the meaning of TEX. CONST. art. VIII,ss.
1-d, and TEX. TAX XXXXxx.xx. 23.51-23.56; (b) land designated for "timber
use" value within the meaning of TEX. CONST. art. VIII,ss.1-d, and TEX. TAX
CODE XXX.ss.ss.23.71-23.79; (c) land designated for "recreational, park and
scenic" value within the meaning of TEX. TAX CODE XXX.xx.xx. 23.81-23.86;
or (d) land designated as "open-space land" within the meaning oF Tex.
Const. art. VIII,ss. 1-d, to value the property, or any part thereof. If
any Taxes have been assessed based on either (a), (b), (c) or (d) herein,
as provided in this section, Sellers shall pay any and all subsequent
assessments therefore.
(jj) If any of the Subject Properties or Target Lease Properties is
subject to any reciprocal easement agreements, agreement of covenants,
conditions, and restrictions, or similar documents with adjacent
landowners, Sellers shall use their reasonable efforts to obtain at least
ten (10) Business Days (and not more than fifteen [15] days) before the
Closing an estoppel certificate from each owner of the adjacent property
subject to such documents which estoppel certificate shall state, among
other things, that there are no defaults by any party thereunder or claims
against any party thereunder arising out of such documents and shall
otherwise be in form and substance acceptable to Purchaser.
(kk) If requested by Purchaser, Xxxxxxxxx agrees, prior to Closing,
pursuant to such instruments of assignment and the like, in form and
substance reasonably satisfactory to Purchaser, to transfer, assign and
convey all of the Leasehold Real Property to FSI, so that
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the Leasehold Real Property becomes part of the Target Leases.
Additionally, Xxxxxxxxx shall have the right prior to Closing, pursuant to
such instruments of assignment and the like, in form and substance
satisfactory to Purchaser, to transfer, assign and convey all of the
Leasehold Real Property to FSI, so that the Leasehold Real Property becomes
part of the Target Leases.
(ll) Sellers shall request estoppel certificates from all landlords or
lessors under all of the Leases and Target Leases in the form materially
similar to the form attached hereto as Exhibit "F" (with such non-material
modifications as Purchaser in its good-faith business judgment
shall suggest to clarify ambiguities and errors in the Leases and/or Target
Leases delivered to Purchaser by Sellers) and exercise their reasonable
efforts to obtain the same at least two (2) Business Days (and not more
than thirty [30] days) before the Closing. If Sellers do not obtain an
estoppel from a particular landlord or lessor that satisfies the provisions
of the immediately preceding sentence, then Sellers shall execute an
estoppel certificate in the form prepared by Purchaser (with no
representation, affirmation or warranty to be different from those set
forth in Exhibit "F" attached hereto except as contemplated by the
first sentence of this subparagraph (ll)) and deliver the same to Purchaser
(provided, however, if Sellers or their Affiliates are listed as
addressees of the estoppel prepared by Purchaser, Sellers and their
Affiliates shall not be listed on the estoppel signed by Sellers and
Sellers further agree (and waive and release any claims to the contrary)
that Sellers shall have no right of contribution or other claim against
Purchaser or any of its existing (as of the Effective Date) Affiliates or
Affiliates of Purchaser after the Closing Date (e.g. WSI will be considered
an Affiliate of Purchaser after the Closing Date if the Closing occurs).
Any Losses sustained by Purchaser as a result of any breach of the estoppel
shall be Losses covered by the final sentence of Section 9.6(b) of the
Stock Purchase Agreement.
Section 7.2 Survival. The representations, warranties, and covenants
contained in Section 7.1 shall be deemed repeated at Closing and shall survive
the Closing Date and the consummation of the transactions contemplated hereby
for the later of (as applicable): (i) without a time limit relating to breaches
of representations, warranties, and covenants relating to fraud, Hazardous
Materials, and Environmental Laws; and (ii) a period of two (2) years after the
Closing Date with regard to all other representations and warranties, and
covenants other than those referred to in clause (i) of this Section 7.2
(regardless of any investigation made by the parties hereto); and (ii) the final
resolution of claims or demands pending as of the relevant dates described in
clause (ii) of this Section 7.2. The obligation of Purchaser to close this
transaction is expressly conditioned upon said representations, warranties, and
covenants being true and correct in all material respects on the Closing Date
(unless the failure of the same to be true and correct on such date does not
individually or in the aggregate constitute a Material Adverse Effect on the
Business). The waiver of any condition based on the accuracy of any
representation or warranty, or on the performance of or compliance with any
covenant or obligation, will not affect the right to indemnification, payment of
Losses, or other remedy based on such representations, warranties, covenants,
and obligations.
Section 7.3 Purchaser Indemnity. Purchaser shall indemnify, defend and hold
harmless the Sellers from (i) any and all claims, losses, liabilities, amounts
and damages incurred by Metro National as a result of Metro National being
called on to perform pursuant to any of the guaranties set forth on Exhibit "G"
and (ii) any obligation or liability under any Assumed Agreements (e.g., the
Leases) which accrues, which is to be performed, or which comes due after the
Closing Date.
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Article 8
Closing
Section 8.1 Closing Conditions.
(a) The obligations of Purchaser to consummate the transactions
contemplated herein are subject, at the option of Purchaser, to satisfaction of
the following conditions:
(i) All conditions precedent to Purchaser's and/or Xxxxxx'x
obligations to consummate the transactions set forth in the Stock Purchase
Agreement shall have been satisfied.
(ii) The members of the Seller Group shall have performed each
covenant to have been performed by each of such Parties hereunder (or the
performance of same has been waived by Purchaser), including, without
limitations, any and all required Closing deliveries as more particularly
set forth below.
(iii) The representations and warranties of the Sellers shall be true
and correct in all material respects as of the Effective Date and as of the
Closing Date unless the failure of the same to be true and correct does not
individually or in the aggregate constitute a Material Adverse Effect on
the Business (other than any representation or warranty that expressly
relates to a specific date, which representation and warranty shall be
correct in all material respects on the date so specified and other than
any representation or warranty which is qualified by materiality shall,
with regard to the portion so qualified, be true and correct in all
respects).
(iv) There shall be no material and adverse change in the matters
reflected in the Title Commitments which has not been cured as set forth in
Section 3.2.
(v) There shall be no material and adverse change in the matters
reflected in the Surveys which has not been cured as set forth in Section
3.2.
(vi) All municipal and utility services shall be available to the
Subject Properties and Target Lease Properties in such amounts as are
sufficient for the conduct of business at the applicable Subject Property
as historically conducted thereon.
(vii) Nothing shall have occurred or be threatened with respect to the
Subject Properties or Target Lease Properties which constitutes a Material
Adverse Effect on the Business.
(viii) There shall be no litigation pending or threatened affecting
the Subject Properties or Target Lease Properties which would have a
Material Adverse Effect on the Business other than as set forth in the
Stock Purchase Agreement or in an exhibit or schedule attached thereto.
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(ix) On the Closing Date, no member of the Seller Group shall have
filed a petition under any section of the United States Bankruptcy Code, as
amended, or under any similar law or statute of the United States or any
State thereof, nor shall any member of the Seller Group have been adjudged
bankrupt or insolvent, nor shall any rearrangement of its debts have been
requested by any member of the Seller Group; no member of the Seller Group
shall be insolvent and no receiver or trustee shall have been appointed for
any such member of the Seller Group, or for any of the Subject Properties.
(x) Purchaser shall have received a payoff letter or similar letter
from the holder of the Omni Lien, in form and substance acceptable to
Purchaser, at least ten (10) Business Days (and not more than fifteen [15]
Business Days) before Closing detailing the amounts outstanding under the
note(s) secured by the Omni Lien.
(xi) If consent by the landlord is required under the Leases or Target
Leases, the landlords or lessors under each of the Leases and Target Leases
shall have executed written consents, in form and substance acceptable to
Purchaser, with respect to the assignment of the Leases (and possible
assignment of the Target Leases)to Purchaser.
If any one of the above conditions is not satisfied, Purchaser, at its sole
option may (i) waive such condition in writing and proceed to Closing; (ii)
extend the Closing Date for a period of time not to exceed thirty (30) days to
allow any of the Seller Group an opportunity to satisfy any such unsatisfied
condition or conditions (provided, that after the expiration of such period of
time, if such condition or conditions remain unsatisfied, Purchaser shall have
all of its other remedies available to it elsewhere in this Contract); or (iii)
terminate this Contract and the Stock Purchase Agreement by written notice
thereof to the Seller Group, in which latter event (i.e., clause (iii)), the
Parties shall have no further rights or obligations under this Contract or the
Stock Purchase Agreement (other than the obligations that expressly survive
termination or expiration of this Contract or the Stock Purchase Agreement).
(b) The obligations of the Seller Group to consummate the transactions
contemplated herein are subject, at the option of the Seller Group, to
satisfaction of the following conditions:
(i) All conditions precedent to the Seller Group's obligations to
consummate the transactions set forth in the Stock Purchase Agreement
shall have been satisfied.
(ii) The Purchaser shall have performed each covenant to have
been performed by Purchaser hereunder within the time specified,
including, without limitations, any and all required Closing
deliveries as more particularly set forth below.
(iii) The representations and warranties of the Purchaser shall
be true and correct on the Closing Date.
18
If any one of the above conditions is not satisfied, the Seller Group, at
its sole option may (i) waive such condition in writing and proceed to Closing;
(ii) extend the Closing Date for a period of time not to exceed thirty (30) days
to allow Purchaser an opportunity to satisfy any such unsatisfied condition or
conditions (provided, that after the expiration of such period of time, if such
condition or conditions remain unsatisfied, the Seller Group shall have all of
its other remedies available to it elsewhere in this Contract); or (iii)
terminate this Contract and the Stock Purchase Agreement by written notice
thereof to Purchaser, which latter event, the Parties shall have no further
right or obligation under this Contract or the Stock Purchase Agreement (other
than the obligations that survive termination or expiration of this Contract or
the Stock Purchase Agreement).
(c) Neither Purchaser nor any of the Seller Group may rely on the
failure of any condition set forth in this Contract to be satisfied if such
failure was caused by such Party's failure to act in good faith or to use
its commercially reasonable efforts to cause the Closing to occur as
required under Section 12.17 of this Contract.
Section 8.2 Closing Date. The Closing hereunder shall take place at the
place and at the time set forth in the Stock Purchase Agreement (the actual date
on which the Closing occurs or being called both herein and in the Stock
Purchase Agreement, the "Closing Date").
Section 8.3 Closing Deliveries by Seller Group. At the Closing, each member
the Seller Group, as applicable, shall deliver or cause to be delivered to
Purchaser, at the sole cost and expense of the Seller Group, each of the
following items:
(a) Special warranty deeds, in form and substance reasonably
acceptable to Purchaser, each duly executed and acknowledged by the
applicable of Sellers, and in form for recording, conveying good,
indefeasible fee simple title in the Owned Real Property to Purchaser,
subject only to the Permitted Encumbrances as to each such tract;
(b) Bills of Sale, in form and substance reasonably acceptable to
Purchaser, each duly executed and acknowledged by the applicable Seller,
conveying to Purchaser good and marketable title to the Personalty;
(c) Assignments, in form and substance reasonably acceptable to
Purchaser, each duly executed and acknowledged by the applicable Sellers,
assigning to Purchaser the Leases (and, if requested by Purchaser, similar
instruments with respect to the Target Lease Properties), all items of the
Leased Real Property, all Environmental Claims, and all items of the
Intangible Property owned by any of the Sellers (to the extent Purchaser
elects to take an assignment thereof), it being expressly agreed that
Purchaser shall have no obligation to assume any contracts or to otherwise
assume or take any of the Subject Properties subject to any debts, claims,
or liabilities other than as expressly set forth in the Stock Purchase
Agreement and as set forth in the Leases (provided, however, that the
foregoing shall not be interpreted to affect or limit Purchaser's
assumption [or deemed assumption] of contracts pursuant to the Stock
Purchase Agreement);
(d) Certifications, in a form to be provided or approved by Purchaser,
signed by Sellers under penalties of perjury, containing the following: (i)
each Seller's U.S. Taxpayer
19
Identification Number; (ii) the business address of each Seller; and (iii)
a statement that such Seller is not a foreign Person within the meaning of
sections 1445 and 7701 of the Code;
(e) If such consent is required under the applicable Leases, consents
from all of the landlords or lessors, in a form reasonably satisfactory to
Purchaser, to the assignment of the Leases (and, if requested by Purchaser,
similar instruments with respect to the Target Leases) to Purchaser;
(f) To the extent not transferred pursuant to the Stock Purchase
Agreement, Texas Department of Public Safety Motor Vehicle title transfer,
certificates, and documents necessary to transfer title to any motor
vehicles constituting part of the Subject Properties or Target Lease
Properties;
(g) The Title Policies in the form specified in this Contract;
(h) Evidence that all financing statements, liens, and security
interests reflected on the Title Commitment, as updated, have been paid and
released or that the funds received by Sellers at Closing will be
immediately used to pay same and obtain such releases;
(i) Such evidence or documents as may be reasonably required by
Purchaser or the Title Company conveying the Subject Properties or Target
Lease Properties and evidencing the status and capacity of Sellers and the
authority of the Person or Persons who are executing the various documents
on behalf of Sellers in connection with the transactions contemplated by
this Contract and such other matters as are reasonably necessary to the
proper consummation of this Contract;
(j) To the extent in Sellers' possession or control, all keys to all
locks on the Subject Properties and Target Lease Properties (and an
accounting for keys in possession of others); all books, records, plans,
reports, studies, manuals, menus, recipes, and other writings (whether in
paper or electronic format or otherwise recorded) pertaining to the Subject
Properties and Target Lease Properties; and
(k) All permits, certificates, and licenses (to the extent that the
same are not required to be surrendered) issued by Governmental Authorities
with respect to the Subject Properties and/or Target Lease Properties.
Section 8.4 Closing Deliveries by Purchaser. At the Closing, Purchaser
shall deliver to Sellers the following items:
(a) The Purchase Price in accordance with the terms of the Stock
Purchase Agreement; and
(b) Such evidence or documents as may reasonably be required by
Sellers, Sellers, their respective counsel, or the Title Company evidencing
the status and capacity of Purchaser, the authority of the Person or
Persons who are executing the various documents on behalf of Purchaser in
connection with the transactions contemplated by this Contract and such
other matters as are reasonably necessary to the proper consummation of
this Contract.
20
Section 8.5 Prorations. At Closing, the following items shall be adjusted
or prorated between the Sellers and Purchaser:
(a) Ad valorem taxes, both real and personal, for the Subject
Properties (whether the Owned Real Property, the Leasehold Real Property,
the Intangible Property, or otherwise) for the current calendar year shall
be prorated to the Closing Date, and the Sellers shall pay to Purchaser in
cash at Closing, the Sellers' pro rata portion of such taxes (no prorations
being made under this Section 8.5(a) for the Target Lease Properties). The
Sellers' pro rata portion of such taxes shall be based upon taxes actually
assessed for the current calendar year. If, for any reason, ad valorem
taxes for the current calendar year have not been assessed on the Subject
Properties, such proration shall be estimated based upon ad valorem taxes
for the immediately preceding calendar year to the extent that the actual
taxes and assessments for the current year differ from the amount of
proration at Closing, the Parties shall make, within thirty (30) days after
issuance of the then current year's tax bills, all necessary adjustments by
appropriate payments between themselves following Closing.
(b) All ordinary, recurring operating income and expenses for, or
pertaining to the Owned Real Property such as public utility charges,
maintenance, service, and any other charges payable under any assumable
contracts assumed by Purchaser shall be prorated (based on number of days
each Party used or occupied the space or the service in question) at the
Closing effective as of the Closing Date; provided, further, rents and
other charges under any leases of space and similar agreements pertaining
to the Owned Real Property shall also be prorated between the Sellers and
Purchaser and Purchaser shall be entitled to a credit for any prepaid rent,
if any, under the leases of space or similar agreements applicable to the
Owned Real Property or the Leased Properties. All such leases of space and
similar agreements applicable to the Owned Real Property shall be
terminated by the Sellers and the applicable tenant or other party thereto,
and Purchaser shall have no liability for any security deposit, prepaid
rent, or other amounts thereunder.
(c) Regarding the Leasehold Real Property is assigned to Purchaser
under this Contract, all items of base rent, percentage rent, and other
charges paid or payable under the Leases shall be prorated at the Closing
effective as of the Closing Date. The Sellers shall be entitled to a credit
for any prepaid rent under such applicable Leases and any security deposits
paid by the Sellers under such applicable Leases (it being agreed, however,
that in such event, Purchaser shall be entitled to [or shall have the
benefit of] any such prepaid rent and/or such security deposit under the
applicable Leases). The Purchaser shall be entitled to a similar credit
from the Sellers for any percentage rent it may pay for any of the Leases
in the amount of the portion of such percentage rent that is attributable
to gross sales (or other applicable measure, depending upon the Lease in
question) generated on or prior to the Closing Date. Within thirty (30)
days after any such Percentage Rent is actually paid, Purchaser shall
notify Seller in writing of Seller's proportionate part of the Percentage
Rent and due from Seller. Seller shall pay such amount within five (5)
Business Days in immediately available funds wired to Purchaser's account.
(d) If any adjustments pursuant to this Section 8.5 are, within ninety
(90) days subsequent to Closing, found to be erroneous, then either Party
hereto who is entitled to
21
additional monies shall invoice the other Party for such additional amounts
as may be owing, and such amount shall be paid within ten (10) days from
receipt of the invoice.
Section 8.6 Possession. Possession of the Subject Properties and Target
Lease Properties shall be delivered to Purchaser by Sellers effective as of the
Closing Date free and clear of the rights of all parties in possession, rights,
costs, expenses, or claims other than the Permitted Encumbrances.
Section 8.7 Other Costs and Expenses. Sellers shall continue to have
liability for all costs and expenses of the Subject Properties and Target Lease
Properties to the extent that such costs and expenses arose, accrued, or pertain
to periods on or prior to the Closing Date, regardless of when the obligation to
pay any such costs and expenses matures, is asserted or otherwise becomes known.
Likewise, Purchaser shall have liability for all costs and expenses of the
Subject Properties and Target Lease Properties to the extent that such costs and
expenses arose, accrued, or pertain to periods on and after the Closing Date,
regardless of when the obligation to pay such costs and expenses matures, is
asserted or otherwise becomes known.
Article 9
Liability for Taxes
Section 9.1 Tax Obligations. To the extent the Seller Group has not
previously paid same, the Sellers shall be liable for, and shall jointly and
severally indemnify, defend, and hold Purchaser and its Affiliates harmless
from, (i) all Taxes that are imposed on or incurred by any member of the Seller
Group other than to the extent permitted by the Stock Purchase Agreement as to
WSI, (ii) all transfer, sales, use, gross receipts, value added, excise or
similar Taxes imposed on or relating to the sale or transfer of the Subject
Properties or Target Lease Properties, (iii) all Taxes that are imposed on or
incurred with respect to the Subject Properties for any taxable period ending on
or before the Closing Date, (iv) a portion, determined in accordance with
Section 8.5 above, of any Taxes that are imposed on or incurred with respect to
the Subject Properties or Target Lease Properties for any taxable period
beginning prior to and ending after the Closing Date ("Straddle Period") which
is allocable to the period ending on or before the Closing Date, (v) any Taxes
payable as a result of a breach by any of the Sellers of any of the
representations or warranties set forth herein, and (vi) any attorneys' fees or
other costs incurred by Purchaser or its Affiliates in connection with any
payment from the Seller Group under this Section 9.1. Purchaser shall be liable
for, and shall indemnify, defend, and hold the Sellers harmless from, all Taxes
that are imposed on or incurred with respect to the Subject Properties and/or
Target Lease Properties that accrue after the Closing Date and for which the
Sellers are not liable under the preceding sentence.
Section 9.2 Tax Refunds. If Sellers, on the one hand, or Purchaser, on the
other hand, receives a refund of any Taxes for which the other is liable, then
the Party receiving such refund shall, within thirty (30) days after its
receipt, remit it to the other Party.
Article 10
Commission
Section 10.1 Seller Group Commission Indemnity. Each of the Sellers
represents and warrants that none of the Sellers Group has entered into
(directly or indirectly) any agreement with any Person that would obligate
Xxxxxx'x or Purchaser to pay any commission, brokerage or finder's
22
fee in connection with the transactions contemplated by this Contract or the
Stock Purchase Agreement.
Section 10.2 Purchaser Commission Indemnity. Purchaser represents and
warrants that Purchaser has not entered into (directly or indirectly) any
agreement with any Person that would obligate the Stockholders or WSI to pay any
commission, brokerage or finder's fee in connection with the transactions
contemplated by this Contract or the Stock Purchase Agreement.
Article 11
Remedies for Default or Termination
Section 11.1 Failure of Conditions.
(a) If this Contract is terminated by Purchaser pursuant to Section
8.1(a) of this Contract, then the Deposit shall be immediately returned to
Xxxxxx'x in accordance with Section 1.3 and Section 8.2(a) of the Stock
Purchase Agreement. If this Contract is terminated by the Seller Group
pursuant to Section 8.1(b) of this Contract, then the members of the Seller
Group, in accordance with Section 8.2(b) of the Stock Purchase Agreement,
as their sole exclusive remedy shall receive one-half (1/2) the Deposit as
liquidated damages (the other one-half (1/2) of the Deposit to be
immediately refunded to Purchaser); it being acknowledged and agreed by the
Parties that one-half (1/2) of the Deposit is a reasonable forecast of just
compensation for the harm that could be caused by Purchaser's failure to
satisfy the conditions set forth in Section 8.1(b) of this Contract, that
the harm that could be caused to the Seller Group by such default is one
that is difficult or impossible to accurately ascertain or predict, and
that the payment of such amount upon Purchaser's default shall constitute
full satisfaction and accord of Purchaser's obligations under this
Contract. The members of the Seller Group hereby waive and release any
claim for specific performance and all claims or remedies other than the
right to receive one-half (1/2) of the Deposit in accordance with the terms
of this Section 11.1. It further is expressly agreed, however, that
one-half (1/2) of the Deposit shall be the sole funds against which the
Seller Group shall have recourse as a result of failure of the transactions
contemplated by this Contract to close as a result of a default by
Purchaser (whether under this Contract or -- under the Stock Purchase
Agreement as well). In other words, the Seller Group shall not be entitled
to any additional amounts or deposits as a result of a breach by Purchaser
whether under this Contract or under the Stock Purchase Agreement;
provided, however, this sentence is not intended to relieve Purchaser from
any obligations that survive the expiration or termination of this Contract
(e.g. Section 5.1);
(b) Breach by Seller Group. In the event of a material breach by any
member of the Seller Group of any of their respective representations,
warranties, covenants, or obligations, then in addition to any remedies to
which Purchaser may be entitled at law or in equity, (i) the Deposit shall
be immediately returned to Purchaser by the Seller Group and (ii) Purchaser
shall also be entitled to enforce specific performance hereunder or to xxx
the Sellers for damages.
(c) Without limiting the foregoing provisions of this Section 11.1, if
the transactions contemplated by this Contract are not consummated and
closed for any reason
23
other than pursuant to the circumstances set forth in Section 11.2, below,
then the Deposit shall be immediately returned to Purchaser by the Seller
Group.
Section 11.2 Purchaser Default. If all conditions of this Contract are
satisfied and if all covenants and agreements to be performed prior to Closing
are fully performed, and if performance of this Contract is tendered by the
Seller Group, and the sale is not consummated through default on the part of
Purchaser on the Closing Date, then, the members of the Seller Group, as their
sole exclusive remedy shall receive one-half (1/2) the Deposit as liquidated
damages (the other one-half (1/2) of the Deposit to be immediately refunded to
Purchaser); it being acknowledged and agreed by the Parties that one-half (1/2)
of the Deposit is a reasonable forecast of just compensation for the harm that
could be caused by Purchaser's default, that the harm that could be caused to
the Seller Group by such default is one that is difficult or impossible to
accurately ascertain or predict, and that the payment of such amount upon
Purchaser's default shall constitute full satisfaction and accord of Purchaser's
obligations under this Contract. The members of the Seller Group hereby waive
and release any claim for specific performance and all claims or remedies other
than the right to receive one-half (1/2) of the Deposit in accordance with the
terms of this Section 11.2. It further is expressly agreed, however, that
one-half (1/2) of the Deposit shall be the sole funds against which the Seller
Group shall have recourse as a result of failure of the transactions
contemplated by this Contract to close as a result of a default by Purchaser
(whether under this Contract or under the Stock Purchase Agreement as well). In
other words, the Seller Group shall not be entitled to any additional amounts or
deposits as a result of a breach by Purchaser whether under this Contract or
under the Stock Purchase Agreement; provided, however, this sentence is not
intended to relieve Purchaser from any obligations that survive the expiration
or termination of this Contract (e.g. Section 5.1).
Article 12
Miscellaneous
Section 12.1 Notices. All notices, demands, or other communications of any
type (herein collectively referred to as "Notices") given by the Seller Group to
Purchaser or by Purchaser to the Seller Group, whether required by this Contract
or in any way related to the transaction contracted for herein, shall be void
and of no effect unless given in accordance with the provisions of this Section
12.1. All notices shall be in writing and delivered to the Person to whom the
notice is directed, either in Person, by courier, by telecopy or by United
States Mail, as a registered or certified item, return receipt requested.
Notices delivered by mail in the manner provided above shall be effective on the
second (2nd) day after they are deposited in a post office or other depository
under the care or custody of the United States Postal Service, enclosed in a
wrapper with proper postage affixed, and addressed as hereinafter provided.
Notice given in any other manner will be effective upon actual receipt by the
Party to whom such notice is addressed. The respective addresses for notice for
each Party shall be those set forth in the Stock Purchase Agreement.
24
In addition, a copy (which shall not constitute notice) of all notices to
Purchaser shall be sent to:
Xxxxxx X. XxXxxxxxx
Xxxxxx and Xxxxx, LLP
0000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Telecopier No. (000) 000-0000
In addition, a copy (which shall not constitute notice) of all notices to any
member of the Seller Group shall be sent to:
Xxxx X. Xxxxxx
Xxxxxxx & Xxxxx, LLP
000 Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Telecopier No. (000) 000-0000
Any Party hereto may change the address for notice specified above by
giving the other Parties ten (10) days advance written notice of such change of
address.
Section 12.2 Next Business Day. If any date on which an action is to be
taken or an event is to be performed falls on a day other than a Business Day
then the date for the taking of such action or performing of such event shall be
continued until the first ensuing Business Day.
Section 12.3 Survival. Any representation, warranty, covenant, or agreement
herein of any Party to this Contract, whether to be performed before or after
the time of Closing (e.g., the indemnification obligations of the Parties),
shall not be deemed to be merged into or waived by the instruments of Closing,
but shall expressly survive Closing and shall be binding upon the Party
obligated thereby to the extent provided elsewhere herein.
Section 12.4 Assignment. This Contract may be assigned in whole or in part,
and in multiple assignments, by Purchaser to any Person that is an Affiliate of
Purchaser, and shall be binding upon and inure to the benefit of the Parties
hereto, their heirs, executors, administrators, and assigns. In such event,
Purchaser shall (within two (2) Business Days after such assignment) notify
Sellers in writing of the effective date of such assignment, the identity of the
assignee and the address of such assignee for purposes of notice.
Section 12.5 Governing Law. This Contract shall be construed and
interpreted in accordance with the internal, local laws of the State of Texas
(excluding any conflicts of law provisions that would render the law of another
jurisdiction applicable) and the obligations of the Parties hereto are and shall
be performable in Xxxxxx County, Texas. Where required for proper
interpretation, words in the singular shall include the plural; the masculine
gender shall include the neuter and the feminine, and vice versa. The terms
"heirs, executors, administrators, and assigns" shall include "successors, legal
representatives, and assigns."
Section 12.6 Modification. This Contract may not be modified or amended,
except by an agreement in writing signed by all Parties thereto. The Parties may
waive any of the conditions
25
contained herein or any of the obligations of the other Parties hereunder, but
any such waiver shall be effective only if in writing and signed by the Party
waiving such conditions or obligations.
Section 12.7 Authorization. Each Person executing this Contract warrants
and represents that it is fully authorized to do so.
Section 12.8 Time Is of the Essence. Time is of the essence with respect to
performance under this Contract.
Section 12.9 Prevailing Party. If it becomes necessary for any of the
Parties hereto to file a suit to enforce this Contract or any provisions
contained herein, then the prevailing Party in such action shall be entitled to
recover from the non-prevailing Party, in addition to all other remedies or
damages, reasonable attorneys' fees incurred in such suit.
Section 12.10 Further Assurance. Each Party agrees that it will without
further consideration execute and deliver such other documents and taken such
other action, whether prior or subsequent to Closing, as may be reasonably
requested by the other Parties to consummate more effectively the purposes or
subject matter of this Contract. Without limiting the generality of the
foregoing, Purchaser shall, as requested by any Seller, execute acknowledgments
of receipt in form and substance reasonably accepted to Purchaser with respect
to any materials delivered by Sellers to Purchaser with respect to the Subject
Properties. The provisions of this Section 12.10 shall survive Closing.
Section 12.11 Headings. The descriptive headings of the several articles,
sections, and paragraphs contained in this Contract are inserted for convenience
only and shall not control or affect the meaning or construction of any of the
provisions hereof.
Section 12.12 Entire Agreement. This Contract, including the Exhibits
hereto and the Stock Purchase Agreement constitute the entire agreement among
the Parties pertaining to the subject matter hereof and supersedes all prior and
contemporaneous agreements and understandings of the Parties in connection
therewith, including, without limitation, that certain Letter, dated July 24,
2002, between the Seller Group, on the one hand, and Xxxxxx'x Restaurants, Inc.,
on the other, as the same may have been amended. No representation, warranty,
covenant, agreement, or condition not expressed in this Contract shall be
binding upon the Parties hereto or shall affect or be effective to interpret,
change, or restrict the provisions of this Contract.
Section 12.13 Multiple Counterparts. This Contract may be executed by the
Parties in counterparts, all of which will, when taken together, constitute, an
original executed instrument.
Section 12.14 No Third Party Beneficiaries. Any agreement to pay any amount
and any assumption of liability contained in this Contract, express or implied,
is and shall be only for the benefit of the undersigned Parties and their
respective successors and assigns, and such agreements and assumption shall not
inure to the benefit of the obligees of any indebtedness of any other Party
whomsoever, it being the intention of the undersigned that no Person shall be or
be deemed to be a third-party beneficiary of this Contract.
Section 12.15 Joint and Several. It is expressly understood in this
Contract that, notwithstanding anything in this Contract to the contrary, any
representation, warranty, covenant, or
26
obligation of "Seller" or "Sellers" shall be and constitute the joint and
several obligation of each of the Sellers, and each of the Sellers shall be
jointly and severally liable for each and every representation, warranty,
covenant, or obligation of any of the Sellers of whatever nature, under the
terms of this Contract.
Section 12.16 Confidentiality and Publicity. The provisions of Section 6.3
of the Stock Purchase Agreement (entitled "Confidentiality"), and the provisions
of Section 6.7 of the Stock Purchase Agreement (entitled "Publicity") are
incorporated herein by reference and shall be applicable to this Contract.
Section 12.17 Commercially Reasonable Efforts to Consummate. Subject to the
terms and conditions of this Contract, each Party shall use its commercially
reasonable efforts to cause the Closing to occur, including defending against
any Proceedings, judicial or administrative, challenging this Contract or the
consummation of the transactions contemplated hereby, and seeking to have any
preliminary injunction, temporary restraining order, stay or other legal
restraint or prohibition entered or imposed by any court or other Governmental
Authority that is not yet final and nonappealable vacated or reversed. Without
limiting the foregoing, each Party shall use its commercially reasonable efforts
(subject to the provision in the immediately preceding sentence) to cause the
Closing to occur within thirty (30) days after execution of this Contract.
Article 13
Simultaneous Closings
Section 13.1 Simultaneous Closing with Transactions in Stock Purchase
Agreement. Notwithstanding anything contained in this Contract to the contrary,
the Closing of this Contract is expressly conditioned upon the simultaneous
consummation of the transactions set forth in the Stock Purchase Agreement.
Section 13.2 Purchaser Breach of Stock Purchase Agreement. If Purchaser
breaches any of its representations, warranties, or covenants under the Stock
Purchase Agreement, then Purchaser also will be in breach of this Contract, and
the Seller Group will be entitled to exercise the rights and remedies available
to such Parties pursuant to Section 11.2 hereof.
Section 13.3 Seller Group Breach of Stock Purchase Agreement. If any member
of the Seller Group breaches any of the representations, warranties, or
covenants under the Stock Purchase Agreement, then the Seller Group also will be
in breach of this Contract, and Purchaser will be entitled to exercise the
rights and remedies available to Purchaser pursuant to Section 11.1 hereof.
{Rest of page intentionally left blank - signature page follows.}
27
EXECUTED on this the ______ day of September, 2002 by Purchaser.
LSRI HOLDINGS, INC.,
a Delaware corporation
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
EXECUTED on this the ______ day of September, 2002 by Sellers.
XXXXXXXXX RESTAURANTS, LTD.,
a Texas limited partnership
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
MNC RESTAURANT PROPERTIES, L.P.,
a Texas limited partnership
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
28
WELL SEASONED, INC.,
a Delaware corporation
By:
-------------------------------------------
Name:
-----------------------------------------
Title:
----------------------------------------
METRO NATIONAL CORPORATION,
a Texas corporation
By:
-------------------------------------------
Name:
-----------------------------------------
Title:
----------------------------------------
29
ANNEX 1
Definitions
Capitalized terms used in this Contract shall have the meanings given to
them in this Annex 1 unless defined elsewhere in this Contract or in the Stock
Purchase Agreement.
"Acquisition" shall be as defined in the Stock Purchase Agreement.
"Affiliate" shall be as defined in the Stock Purchase Agreement.
"Applicable Law" shall be as defined in the Stock Purchase Agreement.
"Assumed Agreements" shall mean those contracts, agreements, and the like
which have been expressly assumed by Purchaser at Closing under this Contract
(e.g., the Leases).
"Business Day" shall be as defined in the Stock Purchase Agreement.
"Business" shall be as defined in the Stock Purchase Agreement.
"CERCLA" shall be as defined in the Stock Purchase Agreement.
"Closing Date" shall be as defined in Section 8.2.
"Code" shall be as defined in the Stock Purchase Agreement.
"Contract" shall be as defined in the first paragraph of this Contract.
"Deposit" shall be as defined in the Stock Purchase Agreement.
"Effective Date" shall be as defined in first paragraph of this Contract.
"Environmental Claims" any and all claims, causes of action, demands and
suits of whatever kind or character, whether fixed or contingent, known or
unknown, matured or unmatured, whether at law or in equity, whether under
contract, tort, strict liability, statute, or otherwise, that Sellers may have
against any party if they arise out of, pertain to, or are related to any
violation of or any obligation or liability under any Environmental Law or to
the presence, Release, or threatened Release of any Hazardous Material;
provided, however, "Environmental Claims" shall not include any rights of
Sellers to seek contribution or indemnity from any Person (other than Purchaser
or its Affiliates) arising out of any claims, causes of actions, demands, or
suits of whatever kind or character brought against any of Sellers (or its
Affiliates) by any such third Person, which claims, causes of action, demands,
or suits brought by such third Person arise out of, pertain to, or are related
to any environmental condition of the Property or the Former Property.
"Environmental Laws" shall mean all federal, state or local laws, codes,
rules, ordinances, regulations, administrative rulings and decisions,
directives, Judgments, other court decisions, orders, decrees, documents, and
guidance relating to health, safety or the environment, including without
limitation, CERCLA, the Hazardous Material Transportation Act (49 U.S.C. 1801 et
seq.),
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the Resource Conservation and Recovery Act (42 U.S.C. 6901 et seq.), the Clean
Air Act (42 U.S.C. 7401 et seq.), the Clean Water Act (33 U.S.C. 1251 et seq.),
the Toxic Substances Control Act, as amended (15 U.S.C. 2601 et seq.), the
National Environmental Policy Act (42 U.S.C. 4321 et seq.), the Oil Pollution
Act (33 U.S.C. 2701 et seq.), and the Occupational Safety and Health Act (29
U.S.C. 651 et seq.), as these laws have been amended or supplemented, prior to
or as of the Effective Date, and any analogous state or local statutes, rules or
ordinances and the regulations promulgated pursuant thereto.
"Environmental Reports" shall mean those reports listed on Exhibit "E" to
this Contract.
"Exception Documents" shall be as defined in Section 3.2.
"Fee Improvements" shall be as defined in the Recitals.
"Fee Personalty" shall be as defined in the Recitals.
"Fee Tracts" shall be as defined in the Recitals.
"FSI" shall be as defined in the Recitals.
"Governmental Authority" shall be as defined in the Stock Purchase
Agreement.
"Hazardous Material" shall mean any substance that poses a threat to, or is
regulated to protect, human health, safety, public welfare, or the environment,
including without limitation: (a) any "hazardous substance," "pollutant" or
"contaminant," and any "petroleum" or "natural gas liquids" as those terms are
defined or used under Section 101 of CERCLA, (b) "solid waste" as defined by the
Federal Solid Waste Disposal Act (42 U.S.C. ss.6901, et seq.), which is also
known as RCRA, (c) any other substances regulateD to protect, or because of
their effect or potential effect on, public health or the environment,
including, without limitation, PCBs, lead paint, asbestos, urea formaldehyde,
bioaerosols, radioactive materials, putrescible and infectious materials, (d)
any substance whose presence on any portion of the Subject Properties causes or
threatens to cause a nuisance upon any portion of the Subject Properties or to
adjacent properties, (e) any substance whose presence on adjacent properties
could constitute a trespass, (f) asbestos or a material containing asbestos, (g)
any material that contains lead or lead based paint, (h) any radioactive
materials, (i) any infectious materials, (j) toxic microorganisms, including
mold, mildew or fungi, (k) oil, other petroleum products, and their respective
by-products, or (l) any substance the presence or release of which requires
reporting, investigation or remediation under any Environmental Laws.
"Improvements" shall be as defined in the Recitals.
"Intangible Property" shall be as defined in the Recitals.
"Judgment" shall be as defined in the Stock Purchase Agreement.
"Xxxxxxxxx" shall be as defined in the first paragraph to this Contract.
"Knowledge" shall be as defined in the Stock Purchase Agreement.
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"Leasehold Improvements" shall be as defined in the Recitals.
"Leasehold Personalty" shall be as defined in the Recitals.
"Leasehold Real Property" shall be as defined in the Recitals.
"Leasehold Tracts" shall be as defined in the Recitals.
"Leases" shall be as defined in the Recitals.
"Material Adverse Effect" shall be as defined in the Stock Purchase
Agreement.
"Metro National" shall be as defined in the first paragraph to this
Contract.
"MNC" shall be as defined in the first paragraph to this Contract.
"Monetary Liens" means mortgages, liens, and security interests.
"Notices" shall be as defined in Section 12.1.
"Omni Lien" shall mean the lien of Omnibank, N.A. as evidenced by that
certain Leasehold Deed of Trust, Security Agreement and Financing Statement,
dated as of April 13, 1995, recorded under Clerk's File No. R353231 of the
Official Public Records of Real Property of Xxxxxx County, Texas (the
indebtedness secured by same having an outstanding balance of approximately
$600,000.00 as of the Effective Date).
"Operating Schedules" shall be as defined in Section 4.1(b).
"Owned Real Property" shall be as defined in the Recitals.
"Party" or "Parties" shall be as defined in the first paragraph of this
Contract.
"Permitted Encumbrances" shall be as defined in Section 3.2.
"Person" shall be as defined in the Stock Purchase Agreement.
"Personalty" shall be as defined in the Recitals.
"Purchaser" shall be as defined in first paragraph of this Contract.
"RCRA" shall mean the Resource Conservation and Recovery Act of 1976 (42
U.S.C.ss.6901, et seq.)
"Release" means any depositing, spilling, leaking, pumping, pouring,
remitting, emptying, discharging, injecting, escaping, leaching, dumping,
migration, or disposing.
"Required Information Materials" shall be as defined in Section 4.1.
"Seller Group" shall be as defined in the first paragraph is this Contract.
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"Seller" or "Sellers" shall be as defined in the first paragraph of this
Contract.
"Stock Purchase Agreement" shall be as defined in the Recitals.
"Stock Purchase Transaction" shall be as defined in the Recitals.
"Straddle Period" shall be as defined in Section 9.1.
"Subject Properties" shall be as defined in the Recitals.
"Subsidiaries" shall be as defined in the Stock Purchase Agreement.
"Survey(s)" shall be as defined in Section 3.1.
"Target Appurtenances" means all rights and appurtenances belonging or in
any way pertaining to the interest of "tenant" or "lessee" under the Target
Leases.
"Target Lease Improvements" means all buildings, structures, or other
improvements situated on the Target Lease Tracts.
"Target Lease Personalty" means all furniture, fixtures, equipment,
inventory, and other tangible and intangible personal property located on or
about, or used in connection with, the Target Lease Tracts or the Target Leases.
"Target Lease Properties" means the Target Leases, the Target Lease
Improvements, the Target Lease Personalty, and the Target Lease Appurtenances.
"Target Lease Tracts" means those tracts or parcels of land covered or
encumbered by the Target Leases.
"Target Leases" shall be as defined in the Stock Purchase Agreement.
"Taxes" shall be as defined in the Stock Purchase Agreement.
"Termination Notice" shall be as defined in the Stock Purchase Agreement.
"Title Company" shall be as defined in Section 3.2.
"Title Commitment" shall be as defined in Section 3.2.
"Title Policy" shall be as defined in Section 3.3.
"WSI" shall be as defined in the first paragraph of this Contract.
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LIST OF EXHIBITS
Exhibit "A-1" - Legal description of Fee Tracts
Exhibit "A-2" - List of Leases and legal description of Leasehold
Tracts
Exhibit "B" - Survey Requirements
Exhibit "C" - Certain Leases
Exhibit "D" - Exceptions to Section 7.1
Exhibit "E" - Environmental Reports
Exhibit "F" - Form of Lessor Estoppel
Exhibit "G" Guaranties
EXHIBIT "A-1"
EXHIBIT "A-2"
EXHIBIT "B"
Survey Requirements
Each Survey shall be made by an engineer or a surveyor acceptable to
Purchaser and the Title Company, prepared in accordance with the current edition
of the Manual of Practice of Land Surveying in Texas adopted by the Texas
Surveyors Association and sufficient to enable the Title Company to endorse the
standard printed survey exception in each of the Title Policies (hereinafter
defined) to read "shortages in area." Sellers hereby acknowledge that
International Land Services, Inc. is acceptable as the engineer/surveyor who
will be preparing the surveys required hereunder. Without limiting the
foregoing, each Survey shall show the following with respect to each tract
covered thereby: adjacent roads; building lines; a metes and bounds description
showing the beginning point, its distance and bearing from a readily
ascertainable point (such as a street intersection), and the course, bearing,
and measured distances of all boundary lines; monuments or stakes found and set;
any building setback lines; location and dimensions of all buildings; physical
evidence of any building, fence, or hedge near any property line; physical
evidence and location of each actual public and private easement and utility
line and/or poles, and of each pipeline, manhole, and drain outlet; any
encroachment or overlapping of improvements; and the location and recording
references of all easements or other locatable encumbrances or restrictions
affecting the relevant tract which are established by any recorded instrument.
If any easements are not susceptible of location, the Survey shall so indicate.
Each Such Survey shall be dated, shall contain a certificate in a form
satisfactory to Purchaser and the Title Company, and shall be signed and sealed
by the aforesaid surveyor or engineer.
