EXHIBIT 10.8.1
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OFFER TO PURCHASE
Austins Steaks & Saloon, Inc., as Buyer, hereby offers to purchase assets
from Steer Enterprises, Inc./MIHART, Inc., as Seller, identified herein.
SECTION ONE
SUBJECT MATTER
Subject to the terms and conditions of this offer, Buyer agrees to
purchase:
(a) All of the furniture, fixtures, equipment and leasehold
interests of Seller of every kind and description, real, personal, mixed,
tangible, and intangible (Assets), wherever situated (except for the Bum
Steer outdoor signs). Without limiting the foregoing, the Assets are as
listed on the attached Exhibit "A," which is incorporated herein. Prior to
closing, Buyer shall have the option to conduct a due diligence inspection of
the Assets. This offer is contingent on such due diligent inspection
confirming the Assets are in Buyer's possession and further that such Assets
are in good operating condition and repairs.
By accepting this Offer, Seller represents and warrants the book value of
Seller's furniture, fixtures and equipment has not materially changed from
February 22, 1998 until the date this Offer is signed by Seller. This Offer
is contingent upon Seller's representations herein being true and accurate.
(b) It is further expressly agreed that Buyer shall assume the
following liabilities and obligations of Seller only and NO OTHERS:
Xxxxx - $174,881.67 (approximately)
Mid City Bank - $102,971.65 (approximately)
(c) Seller acknowledges that the computer system and
point-of-sale equipment used by Seller is not year 2000 compatible. Seller
agrees to pay for the cost of upgrading said computer system and
point-of-sale equipment to make it year 2000 compatible prior to closing
date. If the upgrade is not completed prior to the closing, Seller agrees to
deposit in escrow such funds as are acceptable to Buyer as Seller's assurance
such upgrade will be timely completed. Such escrow funds will be released at
such time as the upgrade is complete. Should Seller fail to complete the
upgrade within 30 days following closing, Buyer shall be entitled to demand
from escrow the funds deposited by Seller and apply such funds to the upgrade.
SECTION TWO
CONSIDERATION
The consideration to be paid by Buyer to Seller for the assets, and
rights to be purchased by Buyer shall be:
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(A) 225,000 shares of stock of Buyer delivered to Seller on the
closing date subject to the conditions described section two(c) below:
(B) An additional 75,000 shares of stock of Buyer to be
delivered to Seller within 30 days following the one year anniversary of the
closing of the sale and purchase contemplated by this Agreement, contingent
upon the following:
(i) That the Buyer's net sales for the steak house
to be operated by Seller at 00000 Xxxxx Xxxxxx, Xxxxx, Xxxxxxxx, for
the period commencing on the closing date and ending on the one year
anniversary of said closing, shall be an average of $28,500 per week
for each week Buyer's store was in operation during such period;
(ii) If Buyer's net sales do not meet the minimum
stated in section two(b)(i), Seller shall not be entitled to any
additional shares of stock or other compensation as consideration in
this Agreement;
(iii) For purposes of this Agreement, "net sales"
shall be defined as all food and beverage (beer, liquor, and wine)
sales less discounts and promotions.
(c) Seller shall hold all shares of stock subject to the
following conditions:
(i) Seller shall not transfer, sell, assign, or
otherwise dispose of said stock for a period of one year from the
date the shares of stock are issued to Seller. The holding period
for the 225,000 shares of stock to be issued at closing shall end on
the one year anniversary of the closing; the holding period for the
additional 75,000 shares of stock, if acquired by Seller under the
terms of this Agreement, shall be on the one year anniversary
following the date said shares are issued to Seller.
(ii) Following the one year holding period for the
225,000 shares of stock, Seller may transfer, sell, assign, or
otherwise dispose of said stock as follows.
(A) Seller shall be permitted to transfer,
sell, assign, or otherwise dispose of more than 11,250
shares of stock each calendar month;
(B) Buyer shall have a right of first
refusal to purchase any shares of stock to be
transferred, sold, assigned or otherwise disposed of by
Seller, upon the same terms and conditions as offered
by a bona fide offeror for said shares of stock.
(iii) Following the one year holding period for the
75,000 shares of stock (if acquired by Seller under the terms of this
Agreement), Seller may transfer, sell, assign, or otherwise dispose
of said stock as follows:
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(A) Seller shall be permitted to transfer,
sell, assign, or otherwise dispose of not more than
3,750 shares of stock each calendar month;
(B) Buyer shall have a right of first
refusal to purchase any shares of stock to be
transferred, sold, assigned or otherwise disposed of by
Seller, upon the same terms and conditions as offered by
a bona fide offeror for said shares of stock.
SECTION THREE
CONTINGENCIES AND CONDITIONS
1. This offer is subject to the following contingencies:
(a) This offer is specifically conditioned on and expressly
subject to the final approval of this sale prior to closing by the Board of
Directors of Buyer;
(b) The consummation of this offer does not violate any
agreement or restriction to which Seller is subject;
(c) All food and beverage inventories (consumables) should be
removed from the building upon closing;
(d) All furniture, fixtures, and equipment being sold is in
good operating condition and repair, subject only to normal wear and tear;
(e) Seller shall take all steps necessary and obtain all
authorizations necessary to consummate this transaction;
(f) Seller, as of the closing, shall have good and marketable
title to all the properties, assets, and rights to be delivered by Seller to
Buyer free of all liens, charges and encumbrances other than noted in section
one(b);
(g) Seller has not employed any broker or agent with respect
to the sale and purchase contemplated in this offer, nor taken any other
action nor will Seller take any such action that would cause Buyer to become
liable for the payment of any finder's fee, broker's fee, or commission;
(h) This offer is contingent upon legal and accounting due
diligence by Buyer and Buyer's attorneys and accountants;
(i) Seller shall lease to Buyer the property located at 00000
Xxxxx Xxxxxx, Xxxxx, XX 00000 for five years at $6,800.00 per month, triple
net, with three-five year renewal options. The monthly rental for each
renewal option will increase by 7.5 percent. If Buyer assigns
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said lease to a related entity, Buyer shall guarantee payments under said
lease agreement. Simultaneously with executing this offer to purchase, Seller
shall deliver to Buyer all written leases entered into by Seller for the
property at 00000 Xxxxx Xxxxxx, Xxxxx, XX 00000 and any personal property
leases for any personal property subject to this offer to purchase. The
parties will execute a written lease agreement on or before the closing date;
(j) All costs associated with removal of Bum Steer signs from
the premises shall be paid by Seller. All such signs shall be removed within
15 days following the closing date.
2. The following special conditions shall apply to this offer:
(a) Buyer has the right, with the Seller's approval, to
assign the lease under this offer to a corporation or other entity now
existing to be formed by Buyer.
(b) At the closing, or as soon as practicable after it,
Seller will deliver to Buyer all books, papers, and records relating to the
assets, and rights being purchased under this offer.
(c) All employees of the Seller will be given first
consideration for employment with Buyer.
(d) Seller agrees not to operate a steak house in Omaha,
Nebraska, without Buyer's written consent, for a period of five years from
the closing date. Buyer agrees not to operate a steak house in Lincoln,
Nebraska, without Seller's written consent, for a period of five years,
provided, such agreement shall not exclude Buyer from operating steak house
at 0000 Xxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx. The parties agree the above
covenants by each party are a material part of this Agreement.
(e) In the event Buyer shall receive a bona fide offer to
purchase either of Buyer's steak houses located at 0000 Xxxxxxxxxx Xxxx,
Xxxxxxxxxx, Arizona, or 0000 Xxxxxxxxx Xxxx, Xxxxx Xx, Xxx Xxxxxx, Seller
shall have a right of first refusal to purchase said steak house upon the
same terms and conditions as offered by such bona fide offeror. Buyer shall
provide written notice, by certified mail, to Seller of the receipt of a bona
fide offer and, thereafter, Seller shall have fifteen days in which to elect
to purchase said steak house on the same terms and conditions as the bona
fide offer. Such election shall be made in writing and delivered to Buyer by
certified mail.
(f) In the event Seller shall receive a bona fide offer to
purchase Seller's steak house located at 6440 "O" Street, Lincoln, Nebraska,
Buyer shall have a right of first refusal to purchase said steak house upon
the same terms and conditions as offered by such a bona fide offeror. Seller
shall provide written notice by certified mail to Buyer of the receipt of a
bona fide offer and, thereafter, Buyer shall have fifteen days in which to
elect to purchase on the same terms and conditions as the bona fide offer.
Such election shall be made in writing and delivered to Seller by certified
mail.
(g) Upon the prior approval of the shareholders of Buyer, a
representative
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designated by Seller will be elect to the Board of Directors of Buyer.
(h) The parties agree no public announcement of this sale and
purchase will be made by either party, or such parties' representatives,
without first giving the other party at least 48 hours prior notice. Formal
public announcement to be made on or before May 15, 1998.
(i) Buyer acknowledges that Buyer is not aware of any current
intent of Xxx Xxxxxx and Xxxx Xxxx-Xxxxx to leave their employment with Buyer
during the next two-year period.
SECTION FOUR
CLOSING
The date and time of closing shall be mutually agreed on by Seller and
Buyer; provided, however, said closing date to be not earlier than June 1,
1998 and not later than June 15, 1998. In the event of the inability of the
parties to agree on the closing date, Seller or Buyer shall have the right to
fix the closing date on 30 days' written notice to the other, the first such
notice received being binding.
SECTION FIVE
MISCELLANEOUS
1. Time is of the essence.
2. This offer shall be governed by and construed under the laws of
the State of Nebraska.
3. Seller and Buyer acknowledge Seller has prior to the Closing date
of this Agreement sold gift certificates to customers and members of the
general public, and Seller has received the consideration paid for said gift
certificates. Buyer agrees to accept and honor the gift certificates issued
by Seller, provided, Seller agrees to reimburse Buyer for such gift
certificates. On a monthly basis, Buyer will notify Seller of the number and
dollar amount of all gift certificates issued prior to the closing date and
honored by Buyer for the preceeding month. Seller agrees to reimburse buyer
for said gift certificates within thirty days of receipt of the notice
required hereto.
Dated: 5-14-98 Austins Steaks & Saloon, Inc., Buyer
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By: /s/ illegible
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Dated: 5-15-98 Steer Enterprises, Inc./MIHART, Inc., Seller
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By: /s/ illegible
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