ASSET PURCHASE AGREEMENT
BETWEEN
AMERICANA DINING CORP.,
AS SELLER
AND
NEW BRIGHTON VENTURES, INC.,
AS BUYER
DATED: March ___, 1996
TABLE OF CONTENTS
Exhibits:
Exhibit A: Sublease Agreement
Exhibit B: Sub-License Agreement
Exhibit C: Promissory Note
Exhibit D: Security Agreement
Exhibit E: Assignment of Contracts, Licenses, Permits, Agreements,
Warranties and Approvals
Exhibit F: Stock Pledge Agreement
Exhibit G: Limited Guaranty
Exhibit H: Opinion of Seller Counsel
Exhibit I: Lessor Consent and Certificate
Exhibit J: Opinion of Buyer's Counsel
Exhibit K: Interim Management Agreement
Schedules:
Schedule I: Assumed Contracts
Schedule II: List of Furniture, Fixtures and Equipment
Schedule III: Permitted Encumbrances
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (the "Agreement") is made and entered into as
of the ___ day of March, 1996, by and between:
(a) Americana Dining Corp., a Delaware corporation (the "Seller").
(b) New Brighton Ventures, Inc., a Minnesota corporation (the "Buyer").
RECITALS
WHEREAS, Seller presently operates a restaurant and on-sale beverage
business (collectively, the "Restaurant") located at 0000 Xxxxxx Xxxxx, Xxx
Xxxxxxxx, Xxxxxxxxx 00000 (the "Location").
WHEREAS, Seller owns furniture, fixtures, equipment and leasehold
improvements, goodwill and other general intangibles at the Location. Buyer
desires to purchase and have assigned and transferred to it such assets.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter contained, it is hereby agreed by and between the parties
as follows:
ARTICLE
CERTAIN DEFINITIONS
Section 1
Definitions
For purposes of this Agreement, the following terms shall have the meanings
set forth below: "Assumed Obligations" means:
All obligations accruing from and after the Date of Closing (as hereafter
defined) under the Sublease and under the other leases, contracts, purchase
agreements, permits, licenses and other obligations described on Schedule I
attached hereto and other similar or replacement agreements entered into by
Seller in the ordinary course of business of operating the Restaurant in
accordance with past practice between the date hereof and the Date of Closing,
including, without limitation, all base rent, common area charges, operating
expenses and other similar costs, expenses, obligations and liabilities accruing
under such agreements from and after the Date of Closing.
All Taxes (as defined below) incurred by or on behalf of Buyer from and after
the Date of Closing in connection with the operation of the Restaurant from and
after the Date of Closing.
The fees and expenses payable by Buyer under Section 14.8 below.
To the extent not included above, any and all debts, liabilities and obligations
which arise, result from, or relate in any way to the operation of the
Restaurant by Buyer following the Date of Closing, including all amounts due any
employees employed in connection with the operation of business conducted on the
Location from and after the Date of Closing, including, without limitation, all
salaries, wages and other amounts due such employees and all employee payroll
deductions such as FICA, state and federal withholding taxes, unemployment
compensation taxes, union or other required payments or deductions and all
vacation or sick leave benefits or pay (but only to the extent that such amounts
relate to services performed by such employees at the Location or such other
location as previously designated by Xx. Xxxxxxxxx from and after the Date of
Closing). "Main Lease" means the following: (a) Lease Agreement dated as of
October 17, 1990 between Xxxxxx X. Xxxxxxxx, Xxxxx X. Xxxxxxxx and Xxxxxx X.
Xxxxxxx, as Trustees of the Xxxxx Xxxxxxxx 1984 Family Trust, underIrrevocable
Trust Agreement dated June 20, 1984, as Lessor (the "Main Lessor") and Renard
Ventures, II, Ltd., as Tenant. (b) Amendment to Lease Agreement dated as of
January 7, 1991. (c) Amendment to Lease Agreement dated as of February 26, 1991.
(d) Assignment of Lease, Acceptance or Assignment and Consent to Assignment
between Renard Ventures, II, Ltd. and Champps Entertainment, Inc. (e) Amendment
No. 3 to Lease Agreement executed as of February 12, 1992 by the Sub-Lessor and
the Main Lessor. "Sublease" means the Sublease Agreement to be executed between
Buyer and Seller as of the Date of Closing in substantially the form of Exhibit
A attached hereto. "Taxes" means all federal, state, local, foreign, and other
taxes, including, without limitation, income taxes, estimated taxes, alternative
minimum taxes, excise taxes, sales taxes, use taxes, value-added taxes, gross
receipts taxes, franchise taxes, capital stock taxes, employment and
payroll-related taxes, withholding taxes, stamps taxes, transfer taxes and
windfall profit taxes, whether or not measured in whole or in part by net
income,and all deficiencies, or other additions, including interest, fines and
penalties
ARTICLE
SALE AND PURCHASE OF ASSETS
Section 2
Property to be Sold
Seller, in consideration of the covenants and agreements of Buyer hereinafter
set forth, does hereby agree to sell, transfer, assign and convey unto Buyer,
its successors and assigns, the business and goodwill of the Restaurant and the
tangible operating assets located at the Location and used in the operation of
the Restaurant (collectively, the "Assets") (exclusive, however, of the assets
described in Section 2.3 below), including, but not limited to the following:
The furniture fixtures and equipment described on Schedule II attached hereto
and all furniture, fixtures, equipment, furnishings, maintenance equipment and
leasehold improvements, all trade fixtures, furnishings, machinery and
equipment, cooking utensils, glassware, dishes, silverware, and supplies and
other personal property located on or about the Location or used by Seller in
the operation of the Restaurant at the Location.
Customer lists, vendor lists, operating paper goods and business forms, rights
to telephone numbers and directory listings and goodwill associated with the
Restaurant.
The Seller's interest, if any, in the service and maintenance contracts, real
estate and equipment leases, permits and licenses and other contracts, permits
and licenses pertaining to the operation of the Restaurant at the Location and
described on Schedule I hereto.
Section 2
"AS-IS" PURCHASE
IT IS EXPRESSLY UNDERSTOOD AND AGREED THAT BUYER HAS FULLY EXAMINED THE ASSETS
AND HAS RELIED ON ITS OWN DISCRETION AND JUDGMENT WITH REGARD TO THE
TRANSACTIONS CONTEMPLATED HEREUNDER. EXCEPT AS EXPRESSLY PROVIDED HEREIN, THE
ASSETS HAVE BEEN SOLD ON AN "AS IS" AND "WHERE IS" BASIS, WITH NO
REPRESENTATIONS OR WARRANTIES OF SELLER OF ANY KIND, TYPE OR NATURE, INCLUDING,
WITHOUT LIMITATION, ANY REPRESENTATION OR WARRANTY REGARDING THE VALUE, PAST,
PRESENT OR FUTURE INCOME, COMPLIANCE WITH SPECIFICATIONS, SIZE, LOCATION, AGE,
USE, MERCHANTABILITY, DESIGN, QUALITY, DESCRIPTION, DURABILITY, OPERATION OR
CONDITIONS OF THE ASSETS, WHETHER VISIBLE OR NOT.
Section 2
Excluded Assets
Buyer and Seller expressly understand and agree that Seller has not agreed to
sell, assign, transfer or convey (a) Seller's corporate minute book, stock
books,accounts receivable and other rights to payment, bonds and savings
certificates and bank accounts, (b) all trade names, trademarks, service marks,
symbols, logos, copyrights and other proprietary materials or trade rights used
by Seller in the operation of the Restaurant and all registrations, applications
and licenses for any of the foregoing, it being understood that Buyer and Seller
will, on the Date of Closing, enter into a Sub-License Agreement in
substantially the form attached hereto as Exhibit B (the "Sub-License
Agreement") whereby Buyer will obtain certain rights to use the foregoing in the
operation of the Restaurant under the terms and conditions set forth in the
Sub-License Agreement, and (c) all cash and cash equivalents except as otherwise
provided in Article IV hereof.
Section 2
Assets to be Transferred Free and Clear
The Assets to be transferred by Seller to Buyer shall be transferred free and
clear of all liabilities, obligations, security interests, and encumbrances,
except for the security interests and encumbrances of Seller ("Permitted
Encumbrances") set forth on Schedule III attached hereto.
Section 2
Assumption of Liabilities
Buyer, in consideration of the covenants and agreements of Seller hereinafterset
forth, does hereby agree to assume and perform the Assumed Obligations.
ARTICLE
PURCHASE PRICE
Section 3
Purchase Price and Payment
Buyer, in consideration of the covenants and agreements of Seller, hereby agrees
to pay to Seller as and for the purchase price for the Assets (exclusive of the
price of inventory and cash-on-hand as provided in Article IV hereof) the sum of
ONE MILLION THREE HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS ($1,350,000) (the
"Purchase Price"): (a) The sum of $70,000 shall be due and payable in cash or
certified funds on the Date of Closing. (b) The balance of the Purchase Price
(to wit: $1,280,000) shall be payable in the form of a promissory note (the
"Note") to be executed and delivered as of the Date of Closing in substantially
the form of Exhibit C attached hereto. Payment and performance of Note shall be
secured by the following documents to be executed as of the Date of Closing:
@Style #7@ (i) Security Agreement (the "Security Agreement") to be executed by
the Buyer in substantially the form of Exhibit D attached hereto. @Style #7@
(ii) Assignment of Contracts, Licenses, Permits, Agreements, Warranties and
Approvals (the "Assignment of Contracts") to be executed by the Buyer in the
form of Exhibit E attached hereto. (iii) Stock Pledge Agreement (the "Stock
Pledge Agreement") to be executed by Xxxxxx X. Xxxxxxxxx, and other stockholders
of Buyer in the form of Exhibit F attached hereto. @Style #7@ (iv) Limited
Guaranty (the "Limited Guaranty") be executed by Xxxxxx X. Xxxxxxxxx in the form
of Exhibit G attached hereto.
Section 3
Allocation of Purchase Price
Buyer and Seller shall attempt in good faith to reach an agreement on or before
the Date of Closing with regard to the allocation of the Purchase Price between
the Assets to be acquired hereunder. The Purchase Price shall be allocated among
the Assets in accordance with the agreement of the parties. Seller and Buyer
shall prepare their federal, state, local and foreign tax returns in a manner
which is consistent with allocation to be prepared in accordance with this
Agreement, and, to the extent applicable, shall comply with, andfurnish
information required by, Section 1060 of the Tax Code of 1986 and the treasury
regulations thereunder.
ARTICLE
INVENTORY AND CASH-ON-HAND
Buyer shall purchase on the Date of Closing, and Seller shall sell, all of
Seller's inventory of non-obsolete food, miscellaneous saleable products and
beverages (the "Inventory") located within the Location based on an inventory
taken the night prior to the Date of Closing by representatives of Buyer and
Seller. Such inventory of assets and supplies shall be in writing and shall
describe the quantity of each item constituting a part of the Inventory. The
Inventory shall be valued at the Seller's invoice prices, except that unusable
or obsolete supply shall be written to zero value. The price of the Inventory,
as determined in accordance with this Article IV, shall be accepted by the
parties on the Date of Closing and shall be paid by Buyer, in cash, within
fifteen (15) days from the Date of Closing. In addition to the foregoing, the
Buyer shall tender cash to Seller on the Date of Closing in an amount equal to
the Restaurant's cash-on-hand (consisting of so-called "change funds" at the
Location) and such cash-on-hand shall be transferred to Buyer as of the Date of
Closing.
ARTICLE
PRORATION
The following items relating to the Assets will be prorated between Buyer and
Seller as of the Closing Date:
Pre-paid lease and service contracts and other items assumed by Buyer (except
that there shall be no proration of prepaid fees under any management contract).
Water and other utility charges, assignable deposits, rent and all other common
area maintenance charges due under the Main Lease.
Prepaid liquor and food license fees and other fees and other charges for
licenses and permits assigned by Seller to Buyer (but only to the extent that
such licenses and permits are assignable by Seller to Buyer under applicable
law).
Vacation pay and employee wages.
All other items customarily prorated and adjusted in connection with the sale of
property of the type contemplated by this Agreement. All prorations required
under this Article V shall be allocated so that items relating to time periods
prior to the Closing Date will be allocated to Seller and items relating to
timeperiods beginning on or after the Closing Date will be allocated to Buyer
(but only to the extent that such assets are part of the Assets acquired by
Buyer hereunder and such liabilities are part of the Assumed Obligations assumed
by Buyer). Seller shall provide Buyer with its written estimate of the amount
payable by Buyer or Seller, as the case may be, under this Article V within ten
(10) days of the Date of Closing. Buyer and Seller shall negotiate in good faith
to resolve any disagreements concerning the adjustments contemplated under this
Article V prior to the Date of Closing. In the event that the parties are unable
to resolve any such disagreement within fifteen (15) days following delivery to
Buyer of Seller's estimate, then, in such event, the parties shall submit the
dispute to a mutually accepted independent accountant (the "Reviewing
Accountant") to resolve such disagreement. Any determination by the Reviewing
Accountant shall be completed by no later than ninety (90) days following the
submission of the matter and shall be final, binding and conclusive with respect
to the matters in dispute, absent fraud or manifest error. The fees of the
Reviewing Accountant shall be proportioned equally between Buyer and Seller. The
net amount of the prorations required hereunder shall be settled and paid in
cash on or before the later of (a) June 1, 1996or (b) if prior to June 1, 1996
these matters are submitted to the Reviewing Accountant, within five days
following receipt of the report of the Reviewing Accountant. If any terms
prorated as of the Date of Closing are based on estimates (including, without
limitation, percentage rents and common area charges under the Main Lease) such
proration shall be adjusted at such time as the final adjustments of such
payments are made and any amounts due Seller or Buyer, as the case may be, on
account thereof shall be paid in cash within ten (10) days following such
adjustment.
ARTICLE
CLOSING
Section 6
Date of Closing
The date of closing ("Date of Closing" or "Closing Date") shall occur at 9:00
a.m. on April 1, 1996. The closing shall take place at the offices of Xxxxxx and
Xxxxxx, 0000 XXX Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx, or at such other place as the
parties may agree. Buyer shall assume possession of the Restaurant and Assets at
the Location as of midnight on March 31, 1996.
Section 6
Deliveries of Seller
At the closing, Seller shall deliver the following documents to Buyer:
Such bills of sale, assumptions of obligations, assignments and other
instruments of transfer, in form and substance reasonably satisfactory to Buyer,
as shall be sufficient to transfer to Buyer all of Seller's right, title and
interest in and to the Assets and all Assumed Obligations.
Certified resolutions of Seller's Board of Directors to evidence Seller's
authority to execute, deliver and perform this Agreement and the documents
required to consummate the transactions contemplated by this Agreement.
An opinion of counsel for Seller in substantially the form attached hereto as
Exhibit H.
An executed Sublease, together with an executed consent and estoppel certificate
from the Main Lessor in substantially the form of Exhibit I attached hereto.
An executed Sub-License, substantially in the form of Exhibit B, together with
the consent thereto of Champps Entertainment, Inc. in form and substance
reasonably acceptable to Buyer. The instruments of transfer to be delivered
under this Section 6.2 shall (i) be in the form and will contain the warranties,
covenants and other provisions which are usual and customary for transferring
the type of property involved under the laws of thejurisdiction applicable to
such transfer (provided, however, that such warranties and covenants shall not
expand or be otherwise inconsistent with any of the representations, covenants
or warranties of this Agreement), (ii) be in form and substance reasonably
satisfactory to Buyer and its counsel, and (iii) effectively vest in Buyer good
and marketable title to all the Assets free and clear of all liens, restrictions
and encumbrances other than the Permitted Encumbrances.
Section 6
Deliveries of Buyer
At the closing, the Buyer (or Xx. Xxxxxxxxx, as appropriate) shall deliver to
Seller the following:
The Note, Security Agreement, Assignment of Contracts (together with one or more
completed UCC-1 financing statements suitable for filing with the Minnesota
Secretary of State and such local filing offices as Seller may determine).
The Sublease.
The Limited Guaranty and Stock Pledge Agreement (together with original
certificates representing all issued and outstanding capital stock of Buyer with
stock powers executed in blank). Certified resolutions of Buyer's Board of
Directors and sole shareholder to evidence Buyer's authority to execute,delivery
and perform this Agreement, the Note, Security Agreement and Assignment of
Contracts and the other documents required to consummate the transactions
contemplated by this Agreement. An opinion of counsel for Buyer in substantially
the form of Exhibit J attached hereto. Insurance certificate showing that Buyer
has in effect insurance in compliance with the Note and Security Agreement and
naming the Seller as loss payee on casualty policies and as an additional
insured party on liability policies. Such other documents, certificates and
instruments as may be reasonably requested by Seller in connection with the
transactions contemplated hereby.
Section 6
Collection of Accounts Receivable
From and after the Date of Closing, Buyer shall use reasonable commercial
efforts in accordance with usual and customary business procedures to collect
for the account of Seller the balance due under all credit card sales and other
accounts receivable generated by Seller in connection with the operation of the
Restaurant prior to the Date of Closing; provided, however, that Buyer shall not
be obligated to Seller in any way for the collection of the accountsreceivables
other than for the actual accounting to Seller of the money actually received
for the account of Seller subsequent to the Closing Date and for a period of
sixty (60) days thereafter. All amounts collected by the Buyer for the account
of Seller under this Section 6.4 shall be immediately remitted to Seller. It is
understood and agreed that Buyer shall not be required to institute litigation
or other collection actions with respect to any of Seller's account debtors.
ARTICLE
CONDUCT OF BUSINESS
Section 7
Conduct of Business up to Closing Date
During the period between the date hereof and the Closing Date, Seller agrees
that it will continue to operate the Restaurant diligently and only in the
ordinary course of business. Seller will not take any action which will cause
any material change in the operations of the Restaurant or in the properties
utilized in its operations, other than changes in the ordinary course of
business. Seller agrees to:
Use its best efforts to preserve intact for Buyer the Restaurant's business and
employees and the favor of the customers, suppliers and others having relations
with the Restaurant in connection with the operation thereof. Refrain from
making any sale or disposition of any asset or property to be acquired by the
Buyer hereunder other than in the ordinary course of business, from purchasing
any capital asset relating to the Restaurant costing more than $25,000 and from
mortgaging, pledging, subjecting to a lien or otherwise encumbering any of the
properties or assets to be acquired by Buyer hereunder. Refrain from making any
change in the compensation payable or to become payable to any of the employees
of the Restaurant. Promptly notify Buyer of any breach or default by Seller
under the terms of this Agreement.
Section 7
Authorization from Others
Prior to the Closing Date, Seller will use its best efforts, but without cost to
Seller, to obtain, the consent of the Lessor to the Sublease contemplated under
sub-paragraph (d) of Section 6.2 above and all other authorizations, consents
and permits of others required to permit the consummation by Seller of the
transactions contemplated by this Agreement.
Section 7
Consummation of Agreement
Seller shall use its best efforts, but without cost to Seller, to perform and
fulfill all conditions and obligations on its part to be performedand fulfilled
under this Agreement, to the end that the transactions contemplated by this
Agreement shall be fully carried out.
Section 7
Non-Competition
Seller agrees that, so long as the Sub-License remains in effect in accordance
with its terms, Seller will not, without the express written consent of Buyer,
within seven (7) miles from the Location, directly or indirectly, engage or
participate in the ownership, operation, licensing, franchising (whether as
owner, part-owner, shareholder, partner or otherwise) of restaurants that Buyer
is able to show are substantially similar in trade dress and concept to "Champps
Americana" restaurants, as such trade dress and concept is incorporated as of
the Date of Closing in the Restaurant, except for any such restaurants that are
currently in operation; provided, however, that Seller may make passive
investments in a competitive enterprise, the shares of which are publicly
traded, if such investment constitutes less than one percent (1%) of the equity
of such enterprise. Without implied limitation, the foregoing covenant shall
include: (i) until March 1, 1997 not hiring for or on behalf of Seller or any of
its affiliates any officer or employee of Buyer; and (ii) not soliciting for
hire by Seller or any of its affiliates any officer or employee of Buyer or any
ofits affiliates and not encouraging for or on behalf of Seller or any of its
affiliates any officer, employee, licensee, franchisee, supplier or other
service provider to terminate his or her relationship with Buyer or any of its
affiliates.
Section 7
Employees
Except as may be otherwise agreed by the parties as a result of good faith
negotiation, Seller shall use its best efforts, but without cost to Seller, to
insure that all existing employees of the Restaurant employed at the Location
will, if required by Buyer on or prior to the Date of Closing, remain as
employees following the Date of Closing contemplated herein. It is anticipated
and agreed that such existing employees of Seller will become employees of the
Buyer as of the Date of Closing. Buyer shall offer employment to all employees
of the Restaurant employed at the Location except those listed on the schedule
set forth in clause (b) below and all such employees who accept Buyer's offer of
employment shall become employees of Buyer as of the Date of Closing. The
parties acknowledge and agree that Buyer shall not acquire any rights or
interests of Seller in, or assume or have any obligations or liabilities of
Seller under, any employee benefit plans of Seller with the exception of
vacationsaccrued but not taken as of the Date of Closing. Under no
circumstances, however, shall the Buyer be obligated to retain any of Seller's
existing employees following the Date of Closing.
Not later than March 15, 1996, Buyer shall provide Seller with a schedule of the
employees, if any, that will not be offered employment by the Buyer following
the Date of Closing. If required by the Buyer prior to closing, Seller shall be
free in its sole discretion to either re-assign or terminate the employment of
the employees identified by Buyer on such schedule. Seller warrants that it will
not, without the prior written consent of Buyer, enter into any contract of
employment (except for the employment of hourly employees in the ordinary course
of business) with respect to any employees of the Restaurant.
Notwithstanding the foregoing, Buyer acknowledges that Seller has not provided
the existing employees of the Restaurant with a notice of employment loss under
the Worker Adjustment and Retraining Notification Act, 29 U.S.C. ss.2101, et.
seq., on the basis of the understanding and agreement of the parties that the
transaction contemplated hereunder willnot result in an "employment loss" within
the meaning of such statute.
Section 7
Removal of Assets
Seller shall not remove from the Location any of the physical Assets to be
purchased hereunder (except for items replaced in the ordinary course of
business with items of equivalent value).
Section 7
Access
Seller shall permit the Buyer, and its agents or employees, to have access to
the Restaurant during ordinary business hours for the purpose of observing the
operation of the Restaurant and reviewing the books and records of the
Restaurant, all at the sole cost and expense of Buyer. Under no circumstances
shall Buyer participate in the management of the Restaurant prior to closing and
under no circumstances shall the Buyer have any liability for any disputes or
damages arising from such management.
Section 7
Termination of Management Agreements
Seller shall, on or before the Date of Closing, and as a condition of closing:
Terminate all existing management contracts or agreements with respect to the
Restaurant.
Except for the Permitted Encumbrances, obtain a release or termination of any
liens or encumbrances on any ofthe Assets to be acquired under this Agreement,
including, without limitation, the release or termination of that certain UCC-1
financing statement executed by Seller in favor of DAKA International Inc.
("DAKA") as ---- filed with the Minnesota Secretary of State on March 30, 1994
as File Number 1661931.
Obtain the consent of the current mortgagee under that certain Combination
Mortgage, Security Agreement and Fixture Filing executed by Seller in favor of
DAKA on or about March 28, 1994.
Subject to all applicable provisions of Article I hereof, pay and discharge as
the same become due, all of Seller's trade obligations and liabilities required
to be paid on or prior to the Closing Date with respect to Seller's ownership
and operation of the Restaurant, including, but not limited to:
All amounts due vendors or other persons providing goods, supplies or services
to the Restaurant.
All utilities, including sewer, water, gas, electric and other services.
All amounts due any lessor under any lease for the Restaurant as of the Closing
Date and as of any possession date of the Restaurant as basic rent, commonarea
expense, percentage rent or other payment or charge required to be made by the
lessee or sublessee thereunder, it being understood between Seller and Buyer
that there shall be a pro rata and per diem adjustment between Seller and Buyer
of said liabilities under such lease.
All amounts due Seller's employees, including salaries, wages and other
emoluments due such employees as of the Closing Date, also including employee
payroll deductions such as FICA, state and federal withholding taxes,
unemployment compensation taxes, union or other required payments or deductions,
accrued employees' vacation pay or sick leave benefits.
ARTICLE
ASSUMPTION OF LIABILITIES
Buyer shall assume on the Date of Closing all obligations, duties and
liabilities arising under or with respect to any of the Assumed Obligations.
Seller and Buyer acknowledge and agree that Buyer has not agreed to assume any
of Seller's liabilities and obligations except for the Assumed Obligations. The
assumption of the AssumedObligations by Buyer hereunder shall not enlarge any
rights of third parties under contracts or arrangements with Buyer or Seller and
nothing herein shall prevent any party from contesting in good faith with any
third party any of said liabilities. Except as expressly provided herein, Buyer
does not and shall not assume any liabilities or obligations of the Seller or
any other person, corporation, partnership, or entity, incurred as a consequence
of the ownership of the Assets or as a consequence of the operation of the
Restaurant or as a consequence of this Agreement or the sale, assignment and
transfer contemplated hereunder. Without limiting the generality of the
foregoing, it is understood and agreed that Buyer shall not assume and shall not
pay any of the following liabilities:
Liabilities incurred by Seller in connection with this Agreement and the
transactions provided for herein (including, without limitation, counsel and
accountant's fees, and expenses pertaining to the performance by Seller of its
obligations hereunder).
Except as provided in Section 14.8 below, Taxes of Seller (whether relating to
periods before or after the Date of Closing), including any liability for Taxes
arising out of any transferee liability.
Liabilities of Seller with respect to any options, warrants, agreements or
convertible or other rights to acquire any shares of its capital stock of any
class.
Liabilities in connection with or relating to all actions, suits, claims,
proceedings, demands, assessments and judgments, costs, losses, liabilities,
damages, deficiencies and expenses (whether or not arising out of third-party
claims), including, without limitation, interest, penalties, reasonable
attorneys' and accountants' fees and all amounts paid in investigation, defense
or settlement of any of the foregoing.
ARTICLE
CONDITIONS
Section 9
Conditions to Obligations of Seller
Unless waived by Seller in writing, the obligations of Seller to sell the Assets
are subject to the satisfaction on or prior to the Closing Date of each of the
following conditions:
Buyer shall have delivered to Seller the documents and items identified in
Section 6.3 hereof.
Buyer shall have complied in all material respects with the covenants,
agreements and conditions of Buyer contained herein to be performed at or prior
to the closing. The transactions contemplated under the Stock Purchase Agreement
(the "SPA") executed between DAKA and certain shareholders of Seller as of March
___, 1996 shall have closed in accordance with the terms of the SPA and the
documents and other instruments attached to or referred to in the SPA shall have
been executed and delivered.
The representations and warranties of Buyer contained herein shall be true and
correct in all material respects on and as of the Closing Date with the same
effect as though made on and as of the Closing Date and all actions,
proceedings, instruments and documents required to carry out this Agreement and
the transactions contemplated hereby and all related legal matters contemplated
by this Agreement shall have been approved by counsel for Seller, and such
counsel shall have received on behalf of Seller such other certificates,
opinions, and documents in form satisfactory to counsel for Seller, as Seller
may reasonably require from Buyer to evidence compliance with the terms and
conditions hereof as of the closing and the correctness as of the closing of the
representations and warranties of Buyer. Seller shall also have received all
required authorizations, waivers, consents and permits to permit the
transactions contemplatedby this Agreement, in form and substance reasonably
satisfactory to Seller, from all third parties, including without limitation
applicable governmental authorities, regulatory agencies, Seller's lessors,
lenders and contract parties, required in connection with the transfer of Assets
or Seller's contracts, permits, leases, licenses and franchises, to avoid a
breach, default, termination, accelerations or modification of any agreement,
contract, instruments, mortgage, lien, lease, permit, authorization, order,
writ, judgment, injunction, decree, determination or arbitration award binding
on Seller or otherwise applicable to the Restaurant as a result of, or in
connection with, the execution and performance of this Agreement or as a result
of any action taken by any party holding a mortgage, lien or other encumbrance
on the Location. Seller shall diligently and in good faith undertake to obtain
the approvals, licenses and other matters referred to in subsection (e) of this
Section 9.1. Buyer shall reasonably cooperate with the Seller in the performance
by the Seller of its obligations hereunder.
Section 9
Conditions to Obligations of Buyer
Unless waived by Buyer in writing, the obligations of Buyer to purchase the
Assets are subject to the satisfaction on or prior to the Closing Date of each
of the following conditions:
Seller shall have delivered to Buyer the documents and items identified in
Section 6.2 hereof.
Seller shall have complied in all material respects with the covenants,
agreements and conditions of Seller contained herein to be performed at or prior
to the closing. The transactions contemplated under the SPA shall have closed in
accordance with the terms of the Merger Agreement and the documents and other
instruments attached to or referred to in the SPA shall have been executed and
delivered.
The representations and warranties of Seller contained herein shall be true and
correct in all material respects on and as of the Closing Date with the same
effect as though made on and as of the Closing Date and all actions,
proceedings, instruments and documents required to carry out this Agreement and
the transactions contemplated hereby and all related legal matters contemplated
by this Agreement shall have been approved by counsel for Buyer, and such
counselshall have received on behalf of Buyer such other certificates, opinions,
and documents in form satisfactory to counsel for Buyer, as Buyer may reasonably
require from Seller to evidence compliance with the terms and conditions hereof
as of the closing and the correctness as of the closing of the representations
and warranties of Seller.
Except as provided in Section 9.3 below, Buyer shall have received (i) all
health, restaurant, food, liquor and other governmental licenses, permits and
approvals necessary or appropriate, in the reasonable judgment of the Buyer, to
the continued operation and management of the Restaurant, and (ii) all required
authorizations, waivers, consents and permits to permit the continuation of the
business of the Restaurant and the transactions contemplated by this Agreement,
in form and substance reasonably satisfactory to Buyer, from all third parties,
including, without limitations, applicable governmental authorities, regulatory
agencies, Seller's lessors, lenders, the holders of any mortgages or other liens
on the Location and contract parties, required in connection with the transfer
of Assets or Seller's contracts, permits, leases, licenses and franchises, to
avoid a breach, default, termination, accelerations or modification of
anyagreement, contract, instruments, mortgage, lien, lease, permit,
authorization, order, writ, judgment, injunction, decree, determination or
arbitration award binding on Seller or otherwise applicable to the Restaurant as
a result of, or in connection with, the execution and performance of this
Agreement or as a result of any action taken by any party holding a mortgage,
lien or other encumbrance on the Location. Buyer shall diligently and in good
faith undertake to obtain the approvals, licenses and other matters referred to
in subsection (e) of this Section 9.2. Seller shall reasonably cooperate with
the Buyer in the performance by the Buyer of its obligations hereunder.
Section 9
Liquor License.
This transaction shall be submitted to the appropriate licensing authorities of
the City of New Brighton, Minnesota (the "City"), and any other governmental
authority responsible for the issuance of first-class on-sale food and liquor
licenses and Buyer and Seller shall each use their best efforts and utmost good
faith and use all diligence to secure such licenses. Pending issuance of the
food and liquor license referred to in this Section 9.3, the Buyer shall operate
the Restaurant under authority of Seller's existinglicenses under the terms of
an interim management agreement (the "Interim Management Agreement") in
substantially the form of Exhibit K attached hereto. Notwithstanding anything to
the contrary contained in Interim Management Agreement, Seller shall not be
obligated to provide Buyer with overhead, corporate, accounting, legal and other
similar services following the Date of Closing.
In the event that either party is notified that the City will not permit the
parties to continue operation of the Restaurant on the terms of the Interim
Management Agreement, or in the event that Seller's existing food and beverage
license shall become subject to any proceeding for the revocation of such
license, or in the event that the existing license should not be renewed for
reasons outside of Buyer's control, then, in any such event:
The instruments of transfer referred to in Section 6.2 shall be returned to
Seller and Buyer shall execute and deliver to Seller (or cause to be executed
and delivered) all documents and instruments necessary to revest Seller with
good and marketable title to the Assets (subject to the Permitted Encumbrances
and suchother liens and encumbrances incurred by or on behalf of Seller).
Seller shall return to Buyer all payments made by Buyer hereunder or under the
Note, together with interest on such amount from the date of payment by Buyer to
Seller, until repaid by Seller, at an annual rate of six (6) percent, less the
actual net profit recovered by Buyer for the operation of the Restaurant and
payable to Buyer under the Interim Management Agreement for the period beginning
on the Date of Closing and ending on the date of retransfer contemplated under
this Section 9.3.
If, despite the best efforts of each party to obtain a liquor license,
appropriate food and liquor licenses are terminated or not issued to Buyer until
within one year following the Closing Date or upon formal notification of denial
of such licenses by the City, whichever first will occur, and in the further
event of a dispute or controversy with regard to the payments to be made or
received in accordance with Section 9.3(a) above, then, in any such event, such
a dispute or controversy shall be submitted to a final, binding and conclusive
arbitration pursuant to Minn. Stat. ss. 572.08 et. seq. to be conducted in
accordance with the rulesand procedures of the American Arbitration Association
("AAA"). Three independent arbitrators, one to be approved each of the parties
and third by the two so chosen shall be selected, either based on mutual
agreement or from the panel submitted by the AAA. The panel shall have
authority, within its discretion to award, as part of its decision such
additional amounts for actual damages, expenses, costs and attorney fees if it
finds bad faith as to one of the parties. Additional, the panel may award
interest at the annual rate of six percent (6%) from the date determined by the
panel until such payments are paid. The decision of the arbitrators shall be
final and binding, and for the purpose of entering any award, the decision may
be reduced to a judgment of any court of appropriate jurisdiction.
Notwithstanding the foregoing, Buyer or Seller or both shall be entitled to seek
injunctive action against the City to enjoin the non-renewal or termination of
the liquor license as a result of the transaction contemplated herein. If such
injunction is granted, Section 9.3(a) shall not be implemented until final
adjudication is exhausted.
Notwithstanding anything to the contrary contained herein, or in any instrument
of transfer delivered hereunder,the Buyer shall not acquire a pecuniary interest
in the Restaurant prior to the issuance of the new licenses referred to in
Section 9.3(a) in violation of any applicable state or local law or ordinance.
ARTICLE
TERMINATION OF AGREEMENT
Section 10
Termination
This Agreement and the transactions contemplated hereby may be terminated at any
time prior to the Closing Date:
By mutual written consent of Seller and Buyer.
By either Buyer or by Seller if the closing shall not have occurred prior to the
close of business on May 15, 1996, provided, however, that the party seeking to
terminate this Agreement pursuant to this Section 10.1(b) may do so only if the
failure to close shall not have resulted from the failure of such party to
comply with any of the terms of this Agreement or from the inaccuracy of any
representation or warranty of such party.
ARTICLE
SELLER REPRESENTATIONS
As an integral part of this Agreement, and in order to induce Buyer to enter
into this Agreement and purchase the Assets, Seller hereby covenants, represents
and warrants to Buyer:
Section 11
Execution and Delivery; Effect of Agreement
Seller is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware with full corporate power and authority
to own or lease its properties and to conduct its business in the manner and in
the places where such properties are owned or leased or such business is
currently conducted or proposed to be conducted.
Section 11
Authority of Seller
Seller has full right, authority and power to enter into this Agreement and each
agreement, document and instrument to be executed and delivered by Seller
pursuant to this Agreement and to carry out the transactions contemplated
hereby. The execution, delivery and performance by Seller of this Agreement and
each such other agreement, documents and instrument have been duly authorized by
all necessary action of Seller and no other action on the part of Seller is
required in connection therewith.
This Agreement and each agreement, document and instrument executed and
delivered by Seller pursuant to this Agreement constitutes, or when executed and
delivered will constitute, valid and binding obligations of Seller enforceable
in accordance with their terms. The execution, delivery and performance by
Seller of this Agreement and each such agreement, document and instrument:
Does not and will not violate any provision of the Articles of Incorporation or
by-laws of Seller.
Does not and will not violate any laws of the United States, or any state or
other jurisdiction applicable to Seller or require Seller to obtain any
approval, consent or waiver of, or make any filing with, any person or entity
(governmental or otherwise) that has not been obtained or made (except that
certain governmental consents and authorizations are required in connection with
the operation of a bar and restaurant business at the Location).
Except for those consents required under the Main Lease, except for those liens
or charges to be discharged at closing, does not and will not result in a breach
of, constitute a default under, accelerate anyobligation under, or give rise to
a right of termination of any indenture or loan or credit agreement or other
permit, authorization, order, writ, judgment, injunction, decree, determination
or arbitration award to which Seller is a party or by which the property of
Seller is bound or affected, or result in the creation or imposition of any
mortgage, pledge, lien, security interest or other charge or encumbrance on any
of the Assets.
Section 11
Conduct of Business
To the knowledge of Seller:
Except as disclosed on Schedule III attached hereto, Buyer will acquire at
closing title to the Assets free from, and not subject to, any lien, mortgage,
restriction, encumbrance or other charge of any kind.
Seller is currently in possession of the Location pursuant to the Main Lease;
Seller has not defaulted in the payment of performance of any obligation of
Seller under the Main Lease.
There are no collective bargaining agreements in effect with any of Seller's
employees. Seller has and will pay all its trade payables and other obligations
relating to the Restaurant which are due or required to be paid on or prior to
the Date of Closing through the Date of Closing. Seller has prepared and filed
with the appropriate United States, State and local governmental agencies, all
tax returns required to be filed and has paid all taxes payable or which have
become due pursuant to any assessments, deficiency notice, 30-day letter, or
similar notice received by Seller, if any.
Except as disclosed on Schedule III attached hereto, there is no claim, action,
suit, proceeding, arbitration, investigation or inquiry pending before any
Federal, probate, municipal, or other court, or any governmental administrative
or self-regulatory body or agency, or any private arbitration tribunal, or to
the Seller's knowledge threatened against, or relating to affecting Seller by
reason of the Restaurant or the transactions contemplated by this Agreement.
Seller has not:
Except for the Permitted Encumbrances, mortgaged, pledged or subjected to lien
or any other encumbrance any of the Assets.
Sold, transferred, or leased any of the Assets, except for the sale of inventory
in the ordinary course of business. As used herein, the terms "Seller's
knowledge," "knowledge of Seller," or words of similar effect shall mean the
actual personal knowledge of the employees of DAKA, without attribution for the
knowledge of Xx. Xxxxxxxxx, Xxxxxx Xxxxx or any employees of Seller who report
directly to Messrs. Xxxxxxxxx or Fadel.
ARTICLE
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller that:
Section 12
Execution and Delivery; Effect of Agreement
Buyer is a corporation duly organized, validly existing and in good standing
under the laws of the State of Minnesota with full corporate power and authority
to own or lease its properties and to conduct its business in the manner and in
the places where such properties are owned or leased or such business is
currently conducted or proposed to be conducted.
Section 12
Authority of Buyer
Buyer has full right, authority and power to enter into this Agreement and each
agreement, document and instrument to be executed and delivered by Buyer
pursuant tothis Agreement, including but not limited to the Note, Security
Agreement, Assignment of Contracts and Sublease, and to carry out the
transactions contemplated hereby. The execution, delivery and performance by
Buyer of this Agreement and each such other agreement, document and instrument
have been duly authorized by all necessary action of Buyer and no other action
on the part of Buyer is required in connection therewith. This Agreement and
each agreement, document and instrument executed and delivered by Buyer pursuant
to this Agreement constitutes, or when executed and delivered will constitute,
valid and binding obligations of Buyer enforceable in accordance with their
terms. The execution, delivery and performance by Buyer of this Agreement and
each such agreement, document and instrument:
Does not and will not violate any provision of the Articles of Incorporation or
Bylaws of Buyer.
Does not and will not violate any laws of the United States, or any state or
other jurisdiction applicable to Buyer or require Buyer to obtain any approval,
consent or waiver of, or make any filing with, any person or entity
(governmental or otherwise) that hasnot been obtained or made (except that
certain governmental consents and authorizations are required in connection with
the operation of a bar and restaurant business at the Location).
As of the Date of Closing, the Stock Pledge Agreement and Limited Guaranty will
represent legal, valid and binding obligations of Xx. Xxxxxxxxx and such
instruments shall be enforceable against Xx. Xxxxxxxxx in accordance with their
respective terms.
Section 12
Consents
No consent, approval or authorization of, or exemption by, or filing with, any
governmental or regulatory authority or any other third party is required to be
obtained by Buyer in connection with the execution, delivery or performance by
Buyer of this Agreement, the Note, the Security Agreement, the Assignment of
Contracts, the Stock Pledge Agreement or the Limited Guaranty, or the taking by
Buyer of any other action contemplated hereby.
Section 12
Title to Assets
As of the Date of Closing, Buyer shall own the Assets free and clear of all
liens and encumbrances, except for the Permitted Encumbrances and such other
liens and encumbrances as may have been created by Seller prior to the Date of
Closing.
Section 12
Availability of Funds
Buyer will have available at the closing sufficient funds to enable it to
consummate the transactions contemplated by this Agreement.
Section 12
Solvency
The present fair saleable value of the assets of the Buyer will, immediately
following the Date of Closing, exceed the amount that will be required to be
paid on or in respect of its debts and other liabilities (including contingent
liabilities) as they mature. The assets of the Buyer do not, and immediately
following the Date of Closing will not, constitute unreasonably small capital to
carry out its business as conducted or as proposed to be conducted. The Buyer
does not intend to, or believe that it will, incur debts beyond its ability to
pay such debts as they mature (taking into account the timing and amounts of
cash to be received by the Buyer and the amounts to be payable on or in respect
of its obligations).
Section 12
Litigation
There is no litigation pending or, to Buyer's knowledge, threatened by or
against or affecting Buyer, which seeks to enjoin, challenge the validity of
this Agreement or obtain damages or other relief in respect of the consummation
of the transaction contemplated hereby.
Section 12
Representation by Counsel
Buyer has been represented by legal counsel in connection with the
transactioncontemplated in this Agreement and has relied upon such independent
counsel with respect to all legal and tax consequence of the transaction
contemplated herein.
Section 12
Sophisticated Investor
Buyer is a knowledgeable and sophisticated investor in assets of the type to be
conveyed under this Agreement.
Section 12
No Brokers
Neither Buyer nor any of its affiliates has employed any broker, finder or agent
in connection with the transactions contemplated by this Agreement, and neither
Buyer not any of its affiliates has otherwise become obligated for any broker's,
finder's, agent's or similar fee with respect to the transactions contemplated
by this Agreement.
ARTICLE
SURVIVAL AND INDEMNIFICATION
Section 13
Survival of Warranties
All representations, warranties, agreements, covenants and obligations herein or
in any schedule, exhibit, certificate or financial statement delivered by any
party to the other party incident to the transactions contemplated hereby are
material, shall be deemed to have been relied upon by the other party and shall
survive the closing regardless of any investigation and shall not merge in the
performance of any obligation by either party hereto; provided, however, that
suchrepresentations, warranties, agreements, covenants and obligations shall
expire on the same dates as and to the extent that the rights to indemnification
with respect thereto under this Article XIII shall expire.
Section 13
Indemnification by Seller
Seller shall indemnify and hold Buyer and its respective subsidiaries and
affiliates and persons servings as shareholders, officers, directors, partners
or employees thereof (individually a "Buyer Indemnified Party" and collectively
the "Buyer Indemnified Parties") harmless from and against any damages,
liabilities, losses, taxes, fines, penalties, costs, and expenses (including,
without limitation, reasonable fees of counsel) of any kind or nature whatsoever
(whether or not arising out of third-party claims and including all amounts paid
in investigation, defense or settlement of the foregoing pursuant to this
Article XIII) (hereafter, "Losses") which may be sustained or suffered by any of
them arising out or based upon any of the following matters:
Fraud, intentional misrepresentation or a deliberate or wilful breach by Seller
of any of their representations, warranties or covenants under this Agreement or
in any certificate, schedule or exhibit delivered pursuant hereto. Any other
breach of any representations, warranty or covenant of Seller under this
Agreement or in any certificate, schedule or exhibit delivered pursuant hereto,
or by reason of any claim, action or proceeding asserted or instituted growing
out of any matter or thing constituting a breach of such representations,
warranties or covenants.
Any liability of Seller for Taxes owed by it payable for any period prior to the
Date of Closing.
Any and all claims, debts, liabilities and obligations of any type kind or
nature which arose, result from or relate in any way to the operation of the
Restaurant prior the Date of Closing, but only to the extent that such
obligations do not constitute Assumed Obligations.
The claim of any broker, finder or other agent employed by or on behalf of
Seller.
Any and all employment practices, decisions, actions or proceedings undertaken
by Seller prior to the Date of Closing in connection with the operation of the
Restaurant.
Section 13
Limitations on Indemnification by Seller
Notwithstanding the foregoing, the right of Buyer Indemnified Parties to
indemnification under Section 13.1 shall be subject to the following provisions:
No indemnification shall be payable pursuant to Section 13.2(b) above to any
Buyer Indemnified Party, until Losses for which the Buyer may be indemnified
hereunder exceed $35,000, whereupon the full amount of such Losses in excess of
$20,000 shall be recovered in accordance with the terms hereof; provided,
however, that under no circumstances shall the aggregate amount recovered or
payable pursuant to Section 13.2(b) to any and all of the Buyer Indemnified
Parties exceed the sum payable under Section 3.1 hereof.
No indemnification shall be payable to a Buyer Indemnified Party with respect to
claims asserted pursuant to Section 13.2(b) (exclusive of claims for
indemnification for Taxes or tax related matters) after expiration of eighteen
(18) months from the Date of Closing (the "Indemnification Cut-Off Date").
Section 13
Indemnification by Buyer
Buyer agrees to indemnify and hold Seller and its respective, affiliates and
persons serving as officers, directors or employees thereof and Xx. Xxx
(individually, a "Seller Indemnified Party" and collectively the "Seller
Indemnified Parties") harmless from and against any damages, liabilities, losses
and expenses (including, without limitation, reasonable fees of counsel) of any
kind ornature whatsoever (whether or not arising out of third-party claims and
including all amounts paid in investigation, defense or settlement of the
foregoing pursuant to this Article XIII) (hereafter, "Losses") which may be
sustained or suffered by any of them arising out of or based upon any of the
following matters:
A breach of any representations, warranty or covenants made by Buyer in this
Agreement or in any certificate delivered by Buyer hereunder, or by reason of
any claims, action or proceeding asserted or instituted growing out of any
matter or thing constituting such a breach.
Any and all failures of the Buyer to pay or to perform and discharge any of the
Assumed Obligations. Any and all claims, debts, liabilities and obligations of
any type kind or nature which arose, result from or relate in any way to the
operation of the Restaurant after the Date of Closing.
Any and all employment practices, decisions, actions or proceedings undertaken
by Buyer following the Date of Closing in connection with the operation of the
Restaurant.
Section 13
Limitation on Indemnification by Buyer
Notwithstanding the foregoing, the right of Seller Indemnified Partiesto
Indemnification under Section 13.4 shall be subject to the following provisions:
No indemnification shall be payable pursuant to Section 13.3(a) above to any
Seller Indemnified Party, until Losses for which the Seller may be indemnified
hereunder exceed $35,000, whereupon the full amount of such Losses in excess of
$20,000 shall be recovered in accordance with the terms hereof.
No indemnification shall be payable to Seller or Xx. Xxx with respect to claims
asserted pursuant to Section 13.3 above after the Indemnification Cut-Off Date.
Section 13
Notice; Defense of Claims
Promptly after receipt by an indemnified party of notice of any claim, liability
or expense to which the indemnification obligations hereunder would apply, the
indemnified party shall give notice thereof in writing to the indemnifying
party, but the omission to so notify the indemnifying party promptly will not
relieve the indemnifying party from any liability except to the extent that the
indemnifying party shall have been prejudiced as a result of the failure or
delay in giving such notice. Such notice shall state the information then
available regarding the amount and nature of such claim, liability or expense
and shall specify the provision or provisions of thisAgreement under which the
liability or obligation is asserted. If within 20 days after receiving such
notice the indemnifying party gives written notice to the indemnified party
stating that it disputes and intends to defend against such claim, liability or
expense at its own cost and expense, then counsel for the defense shall be
selected by the indemnifying party (subject to the consent of the indemnified
party which consent shall not be unreasonably withheld) and the indemnified
party shall make no payment on such claim, liability or expense as long as the
indemnifying party in conducting a good faith and diligent defense.
Notwithstanding anything herein stated, the indemnified party shall at all times
have the right to fully participate in such defense at its own expense directly
or through counsel; provided, however, if the named parties to the action or
proceeding include both the indemnifying party and the indemnified party and
representations of both parties by the same counsel would be inappropriate under
applicable standard of professional conduct, the expense of separate counsel for
the indemnified party shall be paid by the indemnifying party. If no such notice
of intent to dispute and defend is given by the indemnifying party, or if such
diligent good faith defense is not being or ceases to be conducted, the
indemnified party shall, at the expense of the indemnifying party,undertake the
defense of such claim, liability or expense (with counsel selected by the
indemnified party), and shall have the right to compromise or settle the same
(exercising reasonable business judgment). If such claim, liability or expense
is one that by its nature cannot be defended solely by the indemnify party, then
the indemnified party shall make available all information and assistance that
the indemnify party may reasonably request and shall cooperate with the
indemnify party in such defense.
Section 13
Calculation of Losses
In calculating the amount of any Losses under this Agreement, the parties shall
take into account, and reduce the Losses by an amount equal to (i) the net
amount of any allowable present tax benefit, as a result of the circumstance
giving rise to the Losses, (ii) the present value of any future tax benefit, as
a result of the circumstance giving rise to the Losses, and (iii) the amount of
any claim or recover available under any insurance policies or against any third
parties. For purposes of determining the net amount of any present tax benefit,
the marginal combined federal, state and local income tax rate of Buyer and
Seller shall be deemed to be forty percent (40%) and payments shall be made on
such basis. Subject to the provisions of Sections 13.3 and 13.4, Losses for
which a person isrequired to indemnify another person hereunder shall be
calculated on a dollar for dollar basis.
ARTICLE
MISCELLANEOUS
Section 14
Entire Agreement
This Agreement has been executed in conjunction with execution of the SPA and
the closing contemplated hereunder shall be subject to the closing contemplated
under the SPA. This Agreement (including the Exhibits and Schedules attached
hereto) constitutes the entire understanding of the parties with respect to the
matters provided for herein and supersedes any previous agreements and
understanding between the parties with respect to the subject matter hereof.
Matters disclosed by Seller to Buyer pursuant to any Section of this Agreement
shall be deemed to be disclosed with respect to all sections of this Agreement.
No amendment, modification or alteration of the terms or provisions of this
Agreement shall be binding unless the same shall be in writing and duly executed
by the parties hereto.
Section 14
Successors and Assigns
The terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and permitted assigns of the parties
hereto. This Agreement may not be assigned, in whole or inpart, by any party
without the prior written consent of the other party hereto. Notwithstanding the
foregoing, no assignment of this Agreement or any of the rights or obligations
hereof shall release the assignor of his or its obligations under this Agreement
and, upon any such assignment, the representations, warranties, covenants and
agreements contained in this Agreement, plus any other representations,
warranties, covenants and agreements reasonably required as a result of such
assignment, shall be deemed to have been made by the assignee as well as by the
assignor.
Section 14
Risk of Loss
Until this transaction is consummated the entire risk of loss with respect to
the Assets and business of Seller shall be borne by Seller which shall, in all
events, keep the Assets fully insured against loss, damage or destruction. From
and after the closing of this transaction, risk of loss shall be borne by Buyer.
In the event that prior to the Closing Date the Assets, or any portion thereof,
are materially destroyed or damaged by fire or other casualty or loss, or the
premises or buildings in which the Restaurant are located are so damaged or
destroyed, Seller shall promptly notify Buyer in writing, and Buyer shall have
ten (10) days after receipt of suchnotice to elect to (i) cancel and terminate
this Agreement, or (ii) consummate the purchase contemplated hereby.
In the event of such damage or destruction as described in Section 14.3(b)
above, and Buyer elects to consummate the transaction contemplated hereby,
Seller shall assign to Buyer all of Seller's rights under, and interest in, all
of Seller's insurance policies and contracts and all other rights of Seller to
seek indemnification for such loss or damage, all amounts recovered thereunder
or thereby by Buyer to remain the sole property of Buyer. If Buyer does not
rebuild, replace or restore assets which have been damaged or destroyed, or is
prevented from doing so by law or under the terms of any lease applicable to the
premises where such damage or destruction occurred, then all such amounts
recovered, other than amounts recovered for lost profits or business
interruption shall be paid to Seller and to be credited to the payment required
under Section 6.2 of this Agreement.
In the event of the damage or destruction referred to in Section 14.3(b) of this
Agreement, and Buyer shall not elect to consummate the transactions contemplated
by this Agreement, then upon termination and cancellation of thisAgreement,
Seller shall refund to Buyer, together with interest thereon, the xxxxxxx money,
if any, paid by Buyer to Seller under this Agreement.
Section 14
Counterparts
This Agreement may be executed in one or more counterparts, each of which shall
for all purposes be deemed to be an original and all of which shall constitute
the same instrument.
Section 14
No Construction Against Author
This Agreement shall not be construed more strictly against one party than
against the other by virtue of the fact that it may have been drafted or
prepared by counsel for one of the parties, it being recognized that Buyer and
Seller have each contributed substantially and materially to the preparation of
this Agreement.
Section 14
Headings
The headings of the Articles and Sections of this Agreement are included for
convenience only and shall not be deemed to constitute part of this Agreement or
to affect the construction hereof.
Section 14
Modifications and Waivers
Any of the terms or conditions of this Agreement may be waived in writing at any
time by the party which is entitled to the benefits thereof. No waiver of any of
the provisions of this Agreement shall be deemed to orshall constitute a waiver
of any other provisions hereof (whether or not similar).
Section 14
Fees and Expenses
Each of the parties will bear its own expenses in connection with the
negotiation and the consummation of the transactions contemplated by this
Agreement, and, except as expressly provided herein, no expenses of Seller
relating in any way to the purchase and sale of the Assets hereunder and the
transactions contemplated hereby, including, without limitation legal,
accounting or other professional expenses of Seller, shall be charged or paid by
Buyer or included in any of the Assumed Obligations.
Buyer will pay all costs incurred, whether at or subsequent to the Date of
Closing, in connection with any sales, use, excise, real property and transfer
taxes and charges applicable to such transfer, all recording charges and title
company fees and premiums applicable to the recordation of deeds and mortgages
and other instruments of transfer and the issuance of the title insurance
contemplated hereunder, and all costs of obtaining or transferring permits,
registrations, applications and other tangible and intangible properties. Buyer
will pay all premiums, charges and costs ofobtaining and providing surveys,
appraisals, UCC and title searches for the benefit of Buyer with respect to the
Assets.
Notwithstanding anything to the contrary contained herein, the prevailing party
in any litigation commenced hereunder shall be entitled to such parties fees and
expenses, including reasonable attorneys fees and disbursements.
Section 14
Publicity and Disclosures
No press releases or public disclosure, either written or oral, of the
transactions contemplated by this Agreement, shall be made by a party to this
Agreement without the prior written consent of Buyer and Seller.
Section 14
Notices
Any notice, request, instruction or other document to be given hereunder by any
party hereto to any other party shall be in writing and delivered personally or
sent by registered or certified mail, postage prepaid, addressed as follows: If
to Seller: c/o DAKA International, Inc. 0 Xxxxxxxxx Xxxxx 00 Xxxxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000-0000 Attention: Xxxxxxx X. Xxxxxxxxxxx
With copy to:
Xxxxxxx, Xxxxxxx & Xxxx, LLP
Exchange Place
Boston, Massachusetts 02109
Attention: Xxxxxx X. Xxxxxxxx
If to Buyer:
0000 Xxxxxx Xxxxx
Xxx Xxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxxxx
With copy to:
Xxxxxx and Xxxxxx
0000 Xxxxx Xxxxxxxx Xxxx Xxxxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
or at such other address for a party as shall be specified by like notice. Any
notice which is delivered personally in the manner provided herein shall be
deemed to have been duly given to the party to whom it is directed upon actual
receipt by such party (or its agent for notices hereunder). Any notice which is
addressed and mailed in the manner herein provided shall be conclusively
presumed to have been duly given to the party to which it is addressed at the
close of business, local time of the recipient, on the third day after the day
it is so placed in the mail.
Section 14
Governing Law
This Agreement shall be construed in accordance with and governed by the laws of
the State of Minnesota applicable to agreements made and to be performed insuch
jurisdiction and without giving effect to the principles of conflicts of law of
such jurisdiction.
Section 14
Further Assurances
At any time or from time to time after the Closing Date, either party shall, at
the request of the other party, and at such other party's expense, execute and
deliver any further instruments or documents and take all such further action as
such party reasonably may request in order to consummate and make effective the
transactions contemplated by this Agreement.
Section 14
Severability
If any provision hereof shall be held by any court of competent jurisdiction to
be illegal, void or unenforceable, such provision shall be of no force and
effect, but the illegality, voiding or unenforceability of any such provision
shall have no effect upon and shall not impair the enforceability of any other
provision of this Agreement.
Section 14
Survival
Except as set forth in Article XIII above, the representations, warranties,
covenants and agreements set forth in this Agreement or in any writing delivered
by Buyer or Seller hereunder shall survive the closing contemplated hereunder.
Section 14
Legal Representation
The parties acknowledge that the law firm of Xxxxxx and Xxxxxx has
exclusively represented the Buyer in connection with the negotiation and
execution of thisAgreement and that Seller has retained separate legal
representation to review this Agreement. Seller has relied on its own
independent legal review and analysis and the advice of its independent legal
counsel in connection with the negotiation and execution of this Agreement and
not upon the advice of counsel of Xxxxxx and Xxxxxx. The parties further
acknowledge that Xxxxxx and Xxxxxx has performed certain services for Seller in
connection with the organization and incorporation of Seller and that Xxxxxx and
Xxxxxx may, if requested by Buyer, perform certain services for Buyer following
the Date of Closing. The parties hereby waive any claim of conflict of interest
in connection with the representation referred to in this Section 14.15 and
agree that Xxxxxx and Xxxxxx shall not be disqualified by reason of its
representation of Buyer from representation of Buyer in connection with any
dispute or controversy arising out of this Agreement or out of any of the
documents referred to herein.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered on the day and year first above written.
NEW BRIGHTON VENTURES, INC.,
a Minnesota corporation
BY: /s/ Xxxxxx X. Xxxxxxxxx
---------------------------
Its: President
AMERICANA DINING CORPORATION,
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxxxxxxx, Xx.
-----------------------------------
Its: Sr. Vice President
