Exhibit 10.10
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement") is made as of May 11,
2000 (the "Effective Date"), by and between Sailormen, Inc., a Florida
corporation ("Purchaser"), and RMS Family Restaurants, Inc, a Georgia
corporation ("Seller").
RECITALS
WHEREAS, Seller owns and/or operates seventy-three (73) retail fast
food stores trading under the names Popeyes Chicken and Biscuits (as to 71
locations) and Churchs Chicken (as to two (2) locations) that sell chicken and
related food items (all of such activities, only to the extent conducted by the
Stores, are referred to as the "Business");
WHEREAS, Seller owns, or will own prior to the Closing, the premises of
twelve (12) stores, which are identified on Exhibit A (the "Owned Stores");
WHEREAS, Sellers leases the premises for sixty-one (6 1) stores, which
are identified on Exhibit B (the "Leased Stores");
WHEREAS, Seller desires to sell to Purchaser, and Purchaser desires to
purchase from Seller, the assets comprising the Business, all on the terms and
subject to the conditions set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the Recitals, the mutual covenants,
conditions, and agreements herein set forth and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
the parties hereto, it is hereby agreed that:
ARTICLE I
DEFINITIONS
When used in this Agreement, the following terms shall have the meanings
specified:
1.1 Accounts means all accounts receivable and associated rights
arising from the sale of goods and services in the ordinary course of the
Business and outstanding as of the Closing Date.
1.2 Affiliate means, with respect to any specified Person, (i) any
other Person "controlling", "controlled by" or "under common control with" such
specified Person, (ii) any officer, director, member or partner of such
specified Person, or (iii) any other Person of which such specified person is an
officer director, member or partner.
1.3 Agreement means this Asset Purchase Agreement, together with the
Exhibits attached hereto, as the same may be amended from time to time in
accordance with the terms hereof
1.4 Assets means, collectively, the Owned Stores, Leased Stores, Fixed
Assets, Designated Contracts, Intangible Assets, Intellectual Property, Books
and Records, and prepaid expenses, together with all goodwill associated with
the Business (to the extent such goodwill is not included in the Intellectual
Property or is not separately owned by AFC Enterprises, Inc. ("Franchisor")) and
all miscellaneous office supplies; provided, however, the Assets shall not
include the Excluded Assets.
1.5 Assignment and Assumption Agreement means the Assignment and
Assumption Agreement between Seller and Purchaser relating to the Designated
Contracts and the Assumed Liabilities, in the form of Exhibit C attached hereto.
1.6 Assumed Liabilities means Seller's obligations under the Designated
Contracts to the extent such obligations arise and accrue for periods after the
Closing Date and Seller's vacation obligations to Employees subsequently hired
by Purchaser.
1.7 Xxxx of Sale means the Xxxx of Sale from Seller to Purchaser
relating to the Assets, in the form of Exhibit D attached hereto.
1.8 Books and Records means original or true and complete copies of all
of the books, records, files, data and information of Seller concerning the
Assets and the Business (including without limitation, financial and accounting
records relating to the Assets, purchase orders and invoices, sales orders and
sales order log books, credit and collection records, correspondence and
miscellaneous records with respect to customers and supply sources and all other
general correspondence).
1.9 Closing means the meeting of the parties to be held at a mutually
agreeable location at 10:00 a.m., local time, on the "Closing Date", which shall
be the date agreed to by the Purchaser and Seller which is as early as
reasonably possible following Purchaser's obtaining the financing described in
Section 4.6, but in no event later than July 17, 2000 (and absent an agreement
shall be July 17, 2000).
1.10 Code means the Internal Revenue Code of 1986, as amended, and the
regulations promulgated thereunder.
1.11 Deeds means the Deeds, dated as of the Closing Date, conveying the
Owned Stores to Purchaser, in the forms of Exhibit E attached hereto.
1.12 Designated Contracts means all Third Party Leases and all of those
contracts, agreements, purchase orders, leases, license agreements,
relationships and other commitments that are specifically listed on Schedule 1.
12 attached hereto, including all agreements with Franchisor (collectively, the
"Franchise Agreements").
1.13 Intentionally left blank.
1.14 Intentionally left blank.
1.15 Employee means an employee of Seller whose employment duties are
devoted solely to one (1) or more of the Stores or the Business immediately
before the Closing Date.
1.16 Employee Benefit Plan means an "employee benefit plan" as defined
in Section 3(3) of ERISA and any other plans that provide compensation or other
benefits, whether or not subject to ERISA, to any present or former employee of
Seller, or any dependent or beneficiary thereof.
1.17 ERISA means the Employee Retirement Income Security Act of 1974,
as amended.
1.18 Escrow Agent means Xxxxxx Xxxxxx Xxxxx.
1.19 Excluded Assets means the Seller's corporate records and
organizational documents, and all insurance policies obtained by Seller (whether
or not related to the Business or the Stores), Inventory, Accounts and Seller's
cash and deposits.
1.20 Fixed Assets means all tangible personal property listed on
Schedule 1.20 attached hereto, which includes all furniture, fixtures, trade
fixtures, equipment, machinery and signs associated with or related to the
Stores and all building improvements, to the extent owned by Seller.
1.21 GAAP means generally accepted accounting principles.
1.22 Intentionally left blank.
1.23 Intangible Assets means (a) all telephone numbers and facsimile
numbers related to the Stores, (b) advertising and marketing information,
drawings, materials and brochures, and operating procedures related to the
Stores, (c) claims or rights, Permits, approvals and licenses related to the
Stores (but only to the extent assignable), and (d) all other intangible assets
necessary or beneficial to the operation of the Business or ownership of the
Assets.
1.24 Intellectual Property means all right, title and interest of
Seller in all of the following which are used in or necessary forthe operation
of the Business as of the Effective Date (portions of which may be restricted
under the Franchise Agreements or other licenses): (a) trade names, trademarks,
and service marks, patents, patent rights, copyrights, whether domestic or
foreign (as well as applications, registrations or certificates for any of the
foregoing), inventions, proprietary processes, trade secrets and confidential
business information (including ideas, research and development, know-how,
compositions, designs, drawings, specifications, vendor lists, pricing and cost
information and business and market plans and proposals); (b) computer software
and source code (including hard copy and soft copy as well as all data and
related documentation) excepting any such items listed on Schedule 1.24 hereto;
(c) financial models; (d) accounting systems excepting any such items listed on
Schedule 1.24 hereto; and all licenses, contracts and agreements related to the
foregoing.
1.25 Inventory means all inventories of generally acceptable quality,
usable according to Popeye's current menu and held for use or sale by Seller in
connection with the operation of the Business as of the Closing Date, including
without limitation all food supplies.
1.26 IRS means the Internal Revenue Service of the United States.
1.27 Key Employees means those Employees listed on Schedule 1.27
hereto.
1.28 Knowledge of Purchaser means the actual knowledge of any person
listed on Schedule 1.28 attached hereto.
1.29 Knowledge of Seller means the actual knowledge of any person
listed on Schedule 1.29 attached hereto.
1.30 Law means any currently existing and applicable federal, state,
local or other law or governmental requirement of any kind, and the rules,
regulations and orders promulgated thereunder.
1.31 Lease Amendments means the amendments with respect to the Third
Party Leases, effective as of the Closing Date, by and between Purchaser and
Third Party Lessors, as listed in Schedule 1.3 1.
1.32 Leased Stores means the Stores identified on Exhibit B, which
Leased Stores are subject to the Third Party Leases.
1.33 Owned Stores means the Stores identified on Exhibit A, including
the real property, all improvements and fixtures thereon, and all easements,
rights-of-way, and other appurtenances thereto.
1.34 Permits means all governmental approvals, authorizations,
registrations, permits and licenses necessary or required for the ownership of
the Assets and the conduct of the Business, including but not limited to, all of
such Permits being listed on Schedule 1.34 attached hereto.
1.35 Permitted Liens and Encumbrances means those liens and
encumbrances affecting the Assets that are specifically listed on Schedule 1.35
hereto, statutory liens for taxes not yet due, liens for Assumed Liabilities of
carriers, warehousemen, mechanics and materialmen incurred in the ordinary
course of business for sums not yet due, encumbrances under leases included in
the Assets, but only to the extent they do not interfere with Purchaser's use of
the Assets, encumbrances or restrictions of record relating to the Real
Property, but only to the extent they do not interfere with Purchaser's use of
the Real Property, and immaterial imperfections of title which do not have a
material adverse effect on the value of the Assets, including matters as defined
in Section 5. 1 3), provided Seller pays for the cost of all endorsements to
have Purchaser's selected title company affirmatively insure Purchaser and its
lender from any loss or damage arising from same.
1.36 Real Property means all real property comprising the premises of
the Stores together with all improvements and fixtures thereon.
1.37 Required Consents means those consents required from (i) parties
to the Designated Contracts that are necessary or required in order to give
effect to the transactions contemplated herein and that are specifically
identified on Schedule 1.37 attached hereto and (ii) consents from all
applicable government, regulatory or self-regulatory agencies which are
necessary or required to be obtained by Seller for the Closing.
1.38 Seller's Officer Certificates means the certificates of Seller's
officers substantially in the forms of Exhibit E attached hereto.
1.39 Stores means the seventy-three (73) fast food restaurant locations
owned and operated or leased and operated by Seller trading under the name
Popeyes (as to seventy-one (71) and Churches (as to two (2)) that sell fast
food, especially chicken and related products. "Stores Under Development" means
Stores that are in the process of being developed by Seller between the
Effective Date and the Closing Date as agreed to by Purchaser.
1.40 Third Party Leases means the lease agreements by and between
Seller and Third Party Lessors pursuant to which Seller leases the premises of
sixty-one (61) Stores, each of which lease agreements are identified on Exhibit
B.
1.41 Third Party Lessors means the lessors under the Third Party
Leases, each of which lessors and their respective addresses are identified on
Exhibit B.
ARTICLE II
PURCHASE AND SALE
2.1 Purchase and Sale; Assignment and Assumption.
(a) Purchaser and Seller hereby agree that at the Closing, and upon all
of the terms and subject to all of the conditions of this Agreement, Seller
shall sell, convey, transfer, and deliver to Purchaser, and Purchaser shall
purchase and acquire from Seller, all of the Assets and certain of the Excluded
Assets identified in section 2.2(b) below, free and clear of all liens, claims,
mortgages or encumbrances, except for Permitted Liens and Encumbrances.
(b) Purchaser and Seller hereby agree that at the Closing, and upon all
of the terms and subject to all of the conditions of this Agreement, Seller
shall assign to Purchaser, and Purchaser shall assume from Seller, the
Designated Contracts and Assumed Liabilities.
2.2 Payment of Purchase Price.
(a) At the Closing and in consideration of Seller's sale, conveyance,
transfer, and delivery to Purchaser of the Assets, Purchaser shall pay Thirty
Five Million and No/ I 00ths Dollars ($35,000,000.00) (which amount shall
include the Xxxxxxx Money Deposit as described in Section 5.8 of this
Agreement)(the "Purchase Price"). In addition, Purchaser shall issue a
promissory note payable to Seller (the "Note") in an amount equal to One
Million, Forty-Seven Thousand, Five Hundred and Sixty Five Dollars ($1,047,565),
subject to upward adjustment equal to any additional expenses incurred by Seller
for Stores Under Development (such amount as adjusted, the "Note Amount"). The
Note shall provide for twelve (12) payments of interest only (at an annual rate
of 7%) with the balance of the unpaid balance of the Note Amount due on the
first anniversary of the Closing Date. The Purchase Price shall be paid in cash
less that portion of the Purchase Price which Purchaser elects to pay by
assumption of some or all of the existing debt of Seller, as set forth on the
attached Schedule 2.2, in the total approximate amount of $9,561,000, (the
"Assumed Debt"). A portion of the Assumed Debt is secured by Assets which are
being sold hereunder (hereinafter the "Popeyes Assumed Debt") some or all of
which Purchaser may assume (but shall not be obligated to assume); the other
portion of the Assumed Debt is secured by assets which are not being sold
hereunder (the "Other Assumed Debt") some or all of which Purchaser may assume
(but shall not be obligated to assume). With respect to the Popeyes Assumed
Debt, if assumed by Purchaser, Seller agrees that Purchaser may reduce the cash
due at Closing by the amount of the Popeyes Assumed Debt. With respect to the
Other Assumed Debt, Seller will cooperate with Purchaser's efforts to obtain the
consent of the lender(s) on the Other Assumed Debt to permit a substitution of
collateral. If Purchaser is not successful in obtaining the lender's consent for
a substitution of collateral, then that portion of the Purchase Price shall be
paid in cash. All costs incurred by either party in connection with the
arranging for the assumption of the Assumed Debt by Purchaser shall be paid
one-half by each party. Notwithstanding anything contained herein to the
contrary, Purchaser shall not have an obligation to assume any of the Assumed
Debt.
(b) At the Closing and in consideration of Seller's sale, conveyance,
transfer, and delivery to Purchaser of certain of the Excluded Assets, Purchaser
shall pay to Seller an amount in addition to the Purchase Price equivalent to
the agreed sum of (i) the aggregate value of the Inventory on hand in each of
the Stores as of the Closing Date, which Inventory shall be limited to unopened
cases and boxes, plus (ii) the aggregate amount of cash on hand in each of the
Stores as of the Closing Date.
2.3 Deliveries at Closing.
(a) By Seller to Purchaser. At the Closing, Seller shall deliver or
cause to be delivered the following items to Purchaser, each properly executed
and dated as of the Closing Date and in form and substance reasonably acceptable
to Purchaser: (i) the Xxxx of Sale, (ii) the Assignment and Assumption
Agreement, (iii) titles to any of the Assets the ownership of which is evidenced
by certificates of title, (iv) the Deeds, (v) an updated version of Schedule
2.2(a) that includes all trade creditors of Seller as of the Closing Date, (vi)
evidence of Seller's compliance with Section 5.9 of this Agreement, (vii)
Seller's Officer Certificates, (viii) an opinion of Seller's counsel that Seller
is authorized to do business and is in good standing in Florida and Georgia and
Seller, and the party signing for Seller, is duly authorized to carry out the
terms of this Agreement, which Agreement is binding and enforceable against
Seller, (ix) a possession affidavit and any lien affidavit if and as required by
the title company, (x) documentation reasonably required by Purchaser or title
company evidencing Seller's authority to enter into this Agreement and convey
the Assets and Inventory, (xi) any landlord and tenant estoppels, subordination
and non-disturbance agreements, good standing estoppels for covenants,
conditions and restrictions encumbering the Real Property; memorandum of lease
and other title curative requirements reasonably requested by Purchaser, its
lender or the title company, and (xii) any other certificate(s) of Seller, as to
such matters as may reasonably be requested by Purchaser.
(b) By Purchaser to Seller. At the Closing, Purchaser shall deliver the
following items to Seller, each properly executed and dated by Purchaser as of
the Closing Date and in form and substance reasonably acceptable to Seller: (i)
the Assignment and Assumption Agreement, (ii) the Escrow Agreement, (iii) the
Purchase Price, and (iv) any other certificate(s) of Purchaser as to such
matters as may reasonably be requested by Seller.
2.4 Transfer or Sales Taxes; Pro-Rations. Each party shall be
responsible for one half of all: (a) sales or transfer taxes imposed as a result
of the transfer of any of the Assets from Seller to Purchaser, (b) transfer fees
paid to the Franchisor in connection with this sale, (c) any costs to extend
franchise agreements to satisfy Purchaser's lender's requirements, and (d) all
title insurance premiums and survey costs incurred by Purchaser. With respect to
the transfer by Seller to Purchaser of any Real Property, each party shall pay
one half of any grantor's taxes charged in connection with the recordation of
the Deed(s) conveying such Real Property to Purchaser, and all other recording
costs for recordation of such Deed(s), including without limitation any state or
local recording taxes with respect thereto. If Purchaser desires to record any
memoranda of leases with respect to the Third Party Leases, the parties shall
each pay one half of all such recording costs and expenses. All property taxes,
utility and similar expenses relating to the operation of the Stores, sales
taxes for sales at the Stores and accrued but unpaid vacation for Seller's
employees to be hired by Purchaser shall be allocated among Purchaser and Seller
on the Closing Date as of the Closing Date.
2.5 Allocation of Purchase Price. The Purchase Price shall be allocated
among the Assets in accordance with Schedule 2.5 to be completed by June 30,
2000. Such allocation shall be intended to comply with the requirements of
Section 1060 of the Code, and no party shall take any position inconsistent with
such allocation for income tax purposes, except that Purchaser's cost for the
Assets may differ from the amount so allocated to the extent necessary to
reflect Purchaser's capitalized acquisition costs.
2.6 No Assumption of Liabilities. Except with respect to the Assumed
Liabilities, Purchaser does not and will not assume any liability or obligation
of any kind of Seller, including without limitation any liability or obligation
arising from use by Seller of the Assets, performance by Seller under the
Designated Contracts, Seller's operation of the Business before the Closing
Date, Seller's employment of the Employees (including without limitation any
wages, salary severance pay, accrued vacation pay, sick leave, insurance,
Employee
Benefit Plans and other benefits of and obligations to Employees attributable to
any period prior to the Closing Date, whether absolute or contingent, accrued or
unaccrued, asserted or unasserted, known or unknown, or otberwise (the "Seller's
Liabilities").
2.7 Due Diligence. Purchaser has completed their due diligence.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF SELLER
Seller hereby represents and warrants to Purchaser as follows:
3.1 Organization of Seller. Seller is duly incorporated, validly
existing, and in good standing under the laws of Georgia and is in good standing
as a foreign corporation qualified to do business in the State of Florida.
Seller has full corporate power to carry on its business as it is now being
conducted and to own, operate and hold under lease its assets and proper-ties
as, and in the places where, such proper-ties and assets now are owned, operated
or held. Seller is duly qualified or licensed as a foreign corporation, and is
in good standing, in each jurisdiction where the failure to be so qualified
would have a material adverse effect on the results of the operations of the
Business.
3.2 Authorization; Enforceability. The execution, delivery, and
performance by Seller of this Agreement and of all of the documents and
instruments contemplated hereby to which such Seller is a party is within the
power of such Seller and have been duly authorized by all necessary action of
Seller including, without limitation, due authorization by all shareholders.
This Agreement is, and the other documents and instruments required hereby to
which Seller is a party will be, when executed and delivered by the parties
thereto, the valid and binding obligations of Seller, enforceable against Seller
in accordance with their respective terms.
3.3 No Violation or Conflict by Seller. The execution, delivery, and
performance by Seller of this Agreement and all of the other documents and
instruments contemplated hereby to which Seller is a party do not and will not
conflict with or violate any Law, judgment, order or decree binding on Seller,
the Articles of Incorporation or Bylaws of Seller, or any Designated Contract,
except as set forth in Schedule 3.3 ), or give any party to any Designated
Contract, any rightof termination, cancellation, acceleration or modification
thereunder except as set forth in Schedule 3.3. Except as set forth herein or as
to which failure to obtain would not have a material adverse effect on the
Assets or their use by the Purchaser, no consent of any other person (except
those third parties with whom Seller has entered into Designated Contracts
listed in Schedule 3.3), and no notice to, filing or registration with, or
authorization, consent or approval of, any governmental, regulatory or
self-regulatory agency (except for applicable filings under applicable state
Bulk Sales Acts and the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended (the "HSR Act")) is necessary or is required to be made or obtained by
Seller in connection with the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby.
3.4 No Litigation. Except as disclosed in Schedule 3.4 hereto, there is
no litigation, arbitration proceeding, governmental investigation, citation or
action of any kind pending or, to the Knowledge of Seller, proposed or
threatened (a) relating to the Assets or the Business or (b) that involves
Seller and that seeks restraint, prohibition, damages or other relief in
connection with this Agreement or the consummation of the transactions
contemplated hereby.
3.5 Title to and Sufficiency of Fixed Assets and Real Property.
(a) Seller owns good, valid, and marketable title to the
Assets, Inventory and Real Property (provided, however, that Seller has only a
leasehold interest in the Leased Property) that Seller is transferring to
Purchaser hereunder, free and clear of any and all mortgages, liens,
encumbrances, charges, claims, restrictions, pledges, security interests,
impositions or exceptions to title, except for Permitted Liens and Encumbrances.
Upon delivery of the Assets to Purchaser and recording of the Deeds at the
Closing, and upon Purchaser's payment of the Purch4se Price therefor, good,
valid, and marketable title to the Assets, free and clear of all mortgages,
liens, encumbrances, charges, claims, restrictions, pledges, security interests
or impositions, except for Permitted Liens and Encumbrances shall pass to
Purchaser.
(b) (1) There are no leases or other agreements for the use,
occupancy or possession of the Real Property or any portion thereof presently in
force, except for the Third Party Leases. As of the Closing Date, Seller will
have occupancy certificates, zoning letters or the local equivalent thereof for
all of the Stores other than Stores Under Development.
(2) There are no condemnation or eminent domain
proceedings pending, or to the Knowledge of Seller, contemplated against the
Real Property or any part thereof, and the Seller has received no notice of the
desire of any public authority or other entity to take or use the Real Property
or any part thereof.
(3) To the Knowledge of Seller, the streets which
abut the Real Property are each publicly dedicated and accepted rights-of-way
which provide access to the Real Property through all of the driveways through
the Real Property. To the Knowledge of Seller, all improvements are located on
the Real Property, and no Stores or Real Property is in violation of any
covenants, conditions or restrictions. To the Knowledge of Seller, all utilities
required for the operation of the Stores, or any part thereof, either enter the
Real Property through publicly dedicated rights-of way or, if they pass through
adjoining land, do so in accordance with valid public or private easements which
will inure to the benefit of Purchaser. The water, sewer (where applicable),
electrical, gas (where applicable), and phone utilities are installed and
operating and all installation and connection charges have been paid in full.
(4) Except with respect to any environmental
conditions or matters (which are addressed in Section 3.15), to the Knowledge of
Seller, no laws are, or on the Closing Date will be, violated by the continued
maintenance, operations or use of any Store, building, sign, or other
improvements presently comprising any part of the Real Property, or by the
continued maintenance, operation or use of the parking areas. Except with
respect to any environmental conditions or matters (which are addressed in
Section 3.15), to the Knowledge of Seller, there are no violations of any law
affecting any portion of the Real Property, and no notice of any such violation
has been issued by any governmental authority. Except with respect to any
environmental conditions or matters (which are addressed in Section 3.15), to
the Knowledge of Seller, no equipment, including without limitation, heating
equipment, incinerator or other burning equipment installed or located on the
Real Property violates any law in any material respect.
3.6 Condition of Fixed Assets. To the Knowledge of Seller, the Fixed
Assets are in good operating condition and repair, subject to ordinary wear and
tear, and are substantially fit for use in accordance with Seller's past
practices.
3.7 Designated Contracts. True and complete copies of all of the
Designated Contracts (including all amendments or modifications thereto) are
attached to Schedule 1.12 and, in the case of any oral Designated Contracts,
true and complete written summaries of the terms thereof are listed on Schedule
1.12. To the Knowledge of Seller, each Designated Contract is in full force and
effect and is enforceable in accordance with its terms. Seller has performed
each material term, covenant, and condition of each of the Designated Contracts
that is to be performed by them at or before the date hereof. No event has
occurred that would, with the passage of time or compliance with any applicable
notice requirements or both, constitute a default by Seller or, to the Knowledge
of Seller, any other party under any of the Designated Contracts, and, to the
Knowledge of Seller, no party to any of the Designated Contracts intends to
cancel, terminate or exercise any option under any of the Designated Contracts.
Seller has made no prior assignment of the Designated Contracts or any of its
rights or obligations thereunder.
3.8 Financial Statements; No Liabilities. Seller's audited financial
statements as to the Seller, dated as of October 25, 1998, a copy of which has
been provided to Purchaser, were prepared in accordance with GAAP applied on a
basis consistent with Seller's past practice, and present fairly the financial
condition of the Seller as of that date. Also provided to Purchaser are Seller's
unaudited internally prepared financial statements with respect to the Business,
dated as of October 31, 1999 and April 16, 2000, which were prepared in a manner
consistent with Seller's past practice and present fairly in all material
respects the financial condition of the Business as of October 31, 1999, subject
to normal year-end adjustments which are not expected to be material in amount,
and April 16, 2000. Except as disclosed on Schedule 3.8, Seller is not, as of
the date hereof, and will not be, as of the Closing Date, subject to any
liability, known or unknown, absolute or contingent, accrued or unaccrued,
asserted or unasserted or otherwise, that is related to the Business and which
should be reflected in the financial statements which is not so reflected or
that was not incurred in the ordinary course of the Business since the date
thereof (none of which results from, arises out of, relates to, is in the nature
of or was caused by any breach of contract, breach of warranty,
tort,infringement or violation of Law).
3.9 Permits. Seller possesses all Permits necessary or required for the
conduct of the Business as presently conducted. All Permits are in full force
and effect and are being complied with in all material
respects except where the failure to maintain such Permit in full force and
effect would not have a material adverse effect on the Business. True and
complete copies of all Permits are attached to Schedule 1.34. Seller agrees to
use their commercially reasonable best efforts before and after Closing to
assist Purchaser in effecting the transfer of any Permits that are transferable
to Purchaser.
3.10 Intellectual Property.
(a) Except as set forth on Schedule 1.24, Seller owns or is
licensed or otherwise has the right to use the Intellectual Property. To the
Knowledge of Seller, Seller has taken all necessary action to maintain and
protect each item of Intellectual Property that it owns or uses.
(b) Except as set forth on Schedule 1.24, to the Knowledge of
Seller, Seller has not (i) interfered with, infringed upon, misappropriated or
otherwise come into conflict with any intellectual property rights of any third
party; or (ii) received any charge, complaint, claim, demand or notice alleging
any such interference, infringement, misappropriation or violation (including
any claim that Seller must license or refrain from using any intellectual
property rights of any third party). To the Knowledge of Seller, no third party
has interfered with, infringed upon, misappropriated or otherwise come into
conflict with any Intellectual Property rights of Seller.
3.11 Fees and Expenses of Brokers and Others. Seller has retained an
intermediary and is committed to pay a fee to such intermediary in connection
with the transactions contemplated hereby. All fees and expenses of Seller
(including the fees and expenses of Seller's intermediary, attorneys and
accountants) in connection with the transactions contemplated herein shall be
paid in full by Seller, as applicable.
3.12 Books and Records. The Books and Records are complete and correct
in all material respects.
3.13 Tax Matters. Except as set forth on Schedule 3.13:
(a) Seller has filed or caused to be filed all tax returns and
reports required to have been filed by or for it on or before the Closing Date,
and all material information set forth in such returns or reports is accurate
and complete;
(b) Seller has paid or made adequate provision for all taxes,
additions to tax, penalties, and interest for periods covered by those returns
or reports;
(c) Seller is in compliance with, and the Books and Records to
be conveyed to Purchaser contain all information and documents (including,
without limitation, properly completed IRS Forms W-9) necessary to comply with,
all applicable information reporting and tax withholding requirements, and such
records identify with specificity all accounts subject to backup withholding
under Section 3406 of the Code; and
(d) There are no currently due unpaid taxes, additions to tax,
penalties or interest payable by Seller or by any other person that are or could
become a lien on any Asset or could result in any liability to Purchaser, and no
taxing authority has asserted any claim for the assessment of any such tax
liability (including additions to tax, penalties and interest).
3.14 Compliance with Law. Except with respect to environmental
conditions or matters (which are addressed in Section 3.15), to the Knowledge of
Seller, Seller's conduct of the Business and its use of the Assets and
performance under the Designated Contracts has complied in all material respects
with all Laws. Without limiting the foregoing, to the Knowledge of Seller the
portion of the Business consisting of food service operations is in compliance
in all material respects with all regulations and laws imposed or enforced by
the Department of Agriculture, the Health Department of the State of Florida and
Georgia, and any other comparable federal, state or local departments or
agencies.
3.15 Environmental Conditions.
(a) Except as disclosed in Schedule 3.15. attached hereto, to
the Knowledge of Seller:
(1) no Hazardous Material has been generated,
manufactured, refined,transported, stored, handled,
transformed, produced, processed, discharged, dispersed,
released, treated or disposed of (except in accordance with
law), or allowed to escape on, into, or from any of the Real
Property;
(2) no friable asbestos or asbestos-containing material has
been installed, used, incorporated into the building materials of, or disposed
of on or is present at any of the Stores;
(3) Schedule 3.15 attached hereto contains a complete and
accurate list of all underground storage tanks that are currently located at the
Stores and all such tanks are in compliance with all state and federal rules and
regulations related or applicable to underground storage tanks;
(4) no investigation, administrative order, consent order or
agreement, litigation or settlement with respect to any Hazardous Material is or
has been proposed, threatened or in existence with respect to the Business or
any of the Stores;
(5) Seller has not transported any Hazardous Material or
arranged for the transportation thereof to any location (i) which is listed or
proposed for listing on the "CERCLIS" list prepared by the Florida Department of
Environmental Quality, the comparable Georgia agency or the United States
Environmental Protection Agency or (ii) which is the subject of federal, state
or local removal actions, enforcement actions or any investigations which may
lead to claims for cleanup costs, remedial work, damages to natural resources or
for personal injury or property damage claims.
(6) Seller has compiled with all Requirements of Environmental
Law.
(b) For purposes hereof, the following terms shall have the following
meanings:
"Environmental Claim" means any third party (including governmental
agencies and employees) action, lawsuit, claim or proceeding (including claims
or proceedings under the Occupational Safety and Health Act or similar laws
relating to safety of employees) which seeks to impose liability for (a) noise;
(b) pollution or contamination of the air, surface water, ground water or land;
(c) solid, gaseous or liquid waste generation, handling, treatment, storage,
disposal or transportation (d) exposure to hazardous or toxic substances; or (e)
the manufacture, processing, distribution in commerce, use, or storage of
chemical substances. An "Environmental Claim" includes,- but is not limited to,
a common law action as well as a proceeding to issue, modify or terminate an
Environmental Permit, or to adopt or amend a regulation to the extent that such
a proceeding attempts to redress violations of the applicable permit, license,
or regulation as alleged by any federal, state or local executive, legislative,
judicial, regulatory or administrative agency, board or authority.
"Environmental Liabilities" means and includes all costs and damages
arising from any Environmental Claim, Environmental Permit or Requirement of
Environmental Law under any theory of recovery, at law or in equity, and whether
based on negligence, strict liability or otherwise, including but not limited
to: remedial, removal, response, abatement, investigative, monitoring, personal
injury and damage to property, and any other related costs, expenses, losses,
damages, penalties, fines, liabilities and obligations, including reasonable
attorney's fees and court costs.
"Environmental Permit" means any permit, license, approval or other
authorization under any applicable law, regulation and other requirement of the
United States or of any state, municipality or other subdivision thereof
relating to pollution or protection of health or environment, including laws,
regulations or other requirements relating to emissions, discharges, releases or
threatened releases of pollutants, contaminants or hazardous substances or toxic
materials or wastes into ambient air, surface water, ground water or land, or
otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport, or handling of chemical substances, pollutants,
contaminants or hazardous or toxic materials or wastes.
"Hazardous Material" means any pollutant or solid or hazardous waste or
substance (including petroleum) that is deleterious to or would adversely affect
the value of the Real Property or Stores, and is at any time regulated by any
federal, state or local environmental law, rule, regulation, permit, pr ovision
or ordinance, including but not limited to the Resource Conservation and
Recovery Act of 1976, as amended (42 U.S.C. '6901 et seq.); the Clean Water Act
as amended (33 U.S.C. '1251 et seq.); the Clean Air Act, as amended (42 U.S.C.,
7401 et seq.); the Comprehensive Environmental Response, Compensation and
Liability Act, as amended (42 U.S.C. 9601 et seq.) ("CERCLA"); or the Emergency
Planning and Community Right-to-Know Act-of 1986, as amended (42 U.S.C. '11001
et seq.).
"Requirements of Environmental Law" means all requirements imposed by
any law, rule, regulation, or order of any federal, state or local executive,
legislative, judicial, regulatory or administrative agency, board
or authority in effect and applicable to the Assets and the Business as of the
Closing Date which relate to (a) noise; (b) pollution or protection of the air,
surface water, ground water or land; (c) solid, gaseous or liquid waste
generation, treatment, storage, disposal or transportation; (d) exposure to
hazardous or toxic substances; or (e) regulation of the manufacture, processing,
distribution in commerce, use, or storage of chemical substances.
3.16 Labor Matters.
(a) Seller is and has been in compliance in all material respects with
all applicable Laws respecting employment and employment practices, terms, and
conditions of employment and wages and hours including, without limitation, any
such Laws respecting employment discrimination and occupational safety and
health requirements, and have not and are not engaged in any unfair labor
practice;
(b) there is no unfair labor practice charge or complaint against
Seller pending or, to the Knowledge of Seller, threatened before the National
Labor Relations Board or any other comparable authority;
(c) Seller is not a party to any collective bargaining agreements;
(d) Except as set forth in Schedule 3.4, there is no complaint,
litigation, arbitration proceeding, governmental investigation, citation or
action of any kind pending or, to the Knowledge of Seller, proposed or
threatened (or a set of facts which would permit such an action) against Seller
relating to employment, employment practices, terms and conditions of employment
or wages and hours which would individually or in the aggregate have a material
adverse effect on the Business or Assets;
(e) there are no pending or threatened strikes, lockouts or other work
stoppages involving any persons employed by Seller; and
(f) there are no representation petitions or other similar petitions or
requests for representation pending or, to the Knowledge of Seller, proposed or
threatened, before the National Labor Relations Board or other federal or state
agency in connection with any persons employed by the Seller.
(g) Seller does not have any liability to any person or entity
(including governmental agencies) arising from or in connection with any
employee benefit plan maintained or established for employees of Seller. The
terms of Seller's employee benefit plan or plans, if any, comply in all material
respects with ERISA and the Code and, to the Knowledge of the Seller, all
reporting and disclosure requirements of ERISA with respect to any such employee
benefit plan have been met. Seller has not incurred any liability to the Pension
Benefit Guaranty Corporation under Sections 4062, 406' ) or 4064 of ERISA which
has not been paid with respect to any of Seller's Plans.
3.17 Health Department Permits. Seller is in compliance in all material
respects with all health department laws, rules and regulations which are
applicable to any of the Stores, whether state, county or city, and currently
valid permit(s) to operate each of the Stores is on display in each of the
Stores; copies of those licenses have been delivered to Purchaser.
(a) Seller has not received any notices of deficiencies in the
operations of any Store, with respect to health or sanitation matters, since
January 1, 1999, except as set forth on Schedule 17.
(b) Any notices which have been received, including those
listed in Schedule 3. 17 have been corrected to the full satisfaction of the
agency issuing the notice of violation or deficiency. A copy of each and every
the letter of response, from the relevant health department, confirming that the
matter has been satisfactorily resolved, has been delivered to Purchaser.
3.18 No Adverse Change. Since January 1, 1999, the Business has been
operated by Seller in the ordinary course and substantially in the same manner
as previously conducted, and there has not been: (a) any material adverse change
in the Business and in the financial condition, or results of operations of
Seller, and no fact or condition exists or, to the Knowledge of Seller, is
contemplated or threatened (other than the contemplated sale of the Assets,
general economic or industry conditions) that might reasonably be expected to
result in any such material adverse change; (b) any loss, damage, condemnation
or destruction to any of the properties of Seller with respect to the Business
(whether covered by insurance or not); (c) any borrowings by Seller other than
trade payables arising in the ordinary course of business with respect to. the
Business; (e) any mortgage, pledge, lien or encumbrance made on any of the
Assets, except for Permitted Liens and Encumbrances; or (d) any transaction,
agreement, matter, sale, transfer or other disposition of the Assets or any
matter of the type described in Sections 5.1 and 5.2 of this Agreement, other
than in the ordinary course of the business related to the Business or as
contemplated by this Agreement.
3.19 Knowledge of Seller. Those persons listed in Schedule 1.29
represent all persons, and there are no other persons, having detailed knowledge
of the Business and Assets.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Seller that:
4.1 Organization of Purchaser. Purchaser is a corporation duly
incorporated and validly existing under the laws of Florida.
4.2 Authorization; Enforceability. The execution, delivery, and
performance by Purchaser of this Agreement and of all of the documents and
instruments contemplated hereby to which Purchaser is a party are within the
power of Purchaser and have been duly authorized by all necessary action of
Purchaser. This Agreement is, and the other documents and instruments required
hereby to which Purchaser is a party will be, when executed and delivered by the
parties thereto, the valid and binding obligations of Purchaser, enforceable
against Purchaser in accordance with their respective terms.
4.3 No Violation or Conflict. The execution, delivery and performance
by Purchaser of this Agreement and all of the other documents and instruments
contemplated hereby to which Purchaser is a party do not and will not conflict
with or violate any Law, judgment, order or decree binding on Purchaser, the
Articles of Incorporation or By-Laws of Purchaser, or any contract or agreement
to which Purchaser is a party or by which it is bound, or give any party to any
contract or agreement to which Purchaser is a party, or by which it is bound,
any right of termination, cancellation, acceleration or modification thereunder,
except for contractual agreements Purchaser has with American Commercial Capital
LLC ("ACC"). No consent of any other person (other than ACC), and no notice to,
filing or registration with, or authorization, consent or approval of, any
governmental, regulatory or self-regulatory agency is necessary or is required
to be made or obtained by Purchaser in connection with the execution and
delivery of this Agreement or the consummation of the transactions contemplated
hereby.
4.4 Fees and Expenses of Brokers and Others. Purchaser is not committed
to any liability for any brokers' or finders' fees or any similar fees in
connection with the transactions contemplated hereby and has not retained any
broker or other intermediary to act on its behalf in connection with the
transactions contemplated by this Agreement. All fees and expenses of Purchaser
(including the fees and expenses of Purchaser's attorneys, accountants, and
investment banker) in connection with the transactions contemplated herein shall
be paid in full by Purchaser.
4.5 No Litigation. There is no litigation, arbitration proceeding,
governmental investigation, citation or action of any kind pending or, to the
Knowledge of Purchaser, proposed or threatened, that involves Purchaser and that
seeks restraint, prohibition, damages or other relief in connection with this
Agreement or the consummation of the transactions contemplated hereby.
4.6 Financing. The Purchaser will apply for financing commitments for
not less than $32 million within ten days of the Effective Date and shall obtain
such financing commitments no later than June 30, 2000, pursuant to which the
Purchaser expects such amount to be available to consummate the Closing no later
than July 17, 2000. Copies of the financing commitments will be delivered to
Seller by June 30, 2000. Purchaser is not, and will not following the Closing,
be insolvent, will not be left with unreasonably small capital, and will not
have incurred debts which Purchaser will be unable to pay as they become due in
the ordinary course.
ARTICLE V
CERTAIN UNDERSTANDINGS AND AGREEMENT
5.1 Conduct of Seller Before Closing. From the date hereof through the
Closing Date, Seller shall conduct its business related to the Business in the
ordinary course and in accordance with past practice and shall not take any
action inconsistent therewith. Without limiting the generality of the foregoing,
Seller shall: (a) keep full and complete Books and Records; (b) maintain in full
force and effect the insurance policies heretofore maintained on the Assets and
the Business (or policies providing substantially the same coverage); (c) take
such commercially reasonable action as may be necessary to preserve the Assets
in good condition,
normal wear and tear excepted; (d) promptly advise Purchaser in writing of any
other material adverse change in the Business or to the Assets that has occurred
or which Seller reasonably believes will occur; (e) use commercially reasonable
efforts to preserve the Business intact, and to preserve for Purchaser the
existing goodwill of the suppliers, customers, and others having business
relations with Seller relating to the Business; (f) comply with all Laws
applicable to Seller and the Business; and (g) advertise and market the Stores
and Business as is customary in the retail fast food business and will keep
Purchaser advised of all advertising placements and marketing.
5.2 Negative Covenants. From the date hereof through the Closing Date
and except as otherwise permitted by this Agreement or consented to by Purchaser
in writing, Seller shall not: (a) pledge or hypothecate any of the Assets to
secure any indebtedness except as incurred in the ordinary course of the
Business; (b) assign any of the Designated Contracts; (c) other than in the
ordinary course of business related to the Business, increase or decrease the
rate of compensation of, or pay any unusual compensation to, any Employee, or
enter into any agreement to increase or decrease the rate of compensation of, or
to pay any unusual compensation to, any Employee; (d) enter into any collective
bargaining agreement, adopt an Employee Benefit Plan or amend any Employee
Benefit Plan to increase the benefits thereunder, or create or modify any
pension or profit sharing plan, bonus, deferred compensation, death benefit,
health, or retirement plan, or increase the level of benefits under any such
plan, or increase or decrease any severance or termination pay benefit or any
other fringe benefit; (e) sell or dispose of any of the Assets otherwise than in
the ordinary course of the operation of its business related to the Business;
(f) modify, amend or terminate any Designated Contract or Permit, except in the
ordinary course of the operation of its Business; or (g) agree to do any of the
foregoing.
5.3 No Shopping. From the date hereof through any earlier termination
of this Agreement or the Closing Date, whichever shall occur sooner, Seller
shall not, directly or indirectly, through any officer or director of Seller or
any Affiliate, any agent or otherwise: (a) solicit, initiate, encourage the
submission of, respond to or discuss inquiries, proposals or offers from any
person relating to any acquisition or purchase of the Business or any of the
Assets (a "Competing Transaction"); (b) enter into or participate in any
discussions or negotiations regarding a Competing Transaction, or furnish to any
other person any information with respect to the Business or the Assets; or (c)
otherwise cooperate in any way with, or assist or participate in, facilitate or
encourage, any effort or attempt by any other person to do or seek a Competing
Transaction.
5.4 Access to Information. Between the date of this Agreement and the
Closing Date and upon reasonable prior notice, Seller shall: (a) give Purchaser
and its authorized representatives reasonable access during normal business
hours to Stores, Books and Records, Employees; (b) permit Purchaser to make such
inspections concerning the Business and the Assets as it may reasonably require,
including environmental testing of the Real Property and improvements; and (c)
cause its officers to furnish Purchaser with such financial and operating data
and other information with respect to the Business and Assets as Purchaser may
from time to time reasonably request (the "Information"). All such Information
shall be kept confidential by Purchaser through and including the Closing Date
provided it may be disclosed to Purchaser's lenders, attorneys and other
professionals and as required by law. In the event that this Agreement is
terminated without Closing, Purchaser shall promptly return to Seller all
Information, without reproduction thereof, and Purchaser shall not thereafter
use any such Information for any purpose. The term "Information" does not
include information which (1) was or becomes generally available to the public
other than as a result of a disclosure by Purchaser, (ii) was available to
Purchaser on a non-confidential basis prior to its disclosure to Purchaser by
the Seller or their respective representatives or agents, or (iii) becomes
available to Purchaser on a non-confidential basis from a source other than the
Seller or their respective representatives or agents.
5.5 Efforts to Consummate. Subject to the terms and conditions herein
provided, each of the parties hereto agrees to use commercially reasonable
efforts to take, or cause to be taken, all action, and to do, or cause to be
done, all things necessary, proper 'and advisable under applicable law, and to
obtain the consents of all third parties (including, without limitation, the
Required Consents) necessary to consummate and make effective the transactions
contemplated by this Agreement. In case at any time after the Closing Date any
further action is necessary or desirable to carry out the purposes of this
Agreement, the proper officers and directors of each party to this Agreement
shall take all such necessary action as are commercially reasonable. Purchaser
and Seller shall execute any additional instruments necessary to consummate the
transactions contemplated hereby as are commercially reasonable.
5.6 Employees. Purchaser and Seller agree that Purchaser may, but is
not obligated to, offer to the Employees employment with Purchaser, provided,
however, that Purchaser shall provide vacation benefits to any Employees hired
by Purchaser (such obligation being included with the Assumed Liabilities) to
the same extent as Employee would have been entitled to receive from Seller.
Accordingly, Seller agrees that Purchaser
may conduct pre-employment screening of the Employees prior to the Closing Date.
This Section 5.6 does not establish, as to any Employee, a contract of
employment for a definite term or any term or any contractual right that his or
her employment can only be terminated for just cause, and no Employee has any
rights under this Agreement as a third party beneficiary or otherwise. Seller
agrees that it is responsible fully for all liabilities concerning Employees,
including without limitation, wages, salary, severance pay, accrued vacation
pay, unpaid sick and holiday pay, insurance Employee Benefit Plans, and other
benefits or obligations, attributable to any period prior to the Closing Date.
Seller shall pay and be liable to Purchaser and shall assume, indemnify, defend
and hold harmless Purchaser from and against and in respect of any and all
losses, damages, liabilities, taxes, and sanctions that arise under the
Consolidated Omnibus Budget Reconciliation Act of 1984 ("COBRA") and the Code,
interest and penalties, costs, and expenses (including, without limitation,
disbursements and reasonable legal fees incurred in connection therewith, and in
seeking indemnification therefor, in any amounts or expenses required to be paid
or incurred in connection with any action, suit, proceeding, claim, appeal,
demand, assessment, or judgment) imposed upon, incurred by, or assessed against
Purchase and any of their employees arising by reason of or relating to any
failure to comply with the continuation health care coverage of COBRA and
Sections 601 through 608 of ERISA which failure occurred with respect to any
current or prior employee of Seller or any qualified beneficiary of such
employee (as defined in COBRA) on or prior to the Closing Date or as otherwise
required as a result of any transactions or matter contemplated by this
Agreement.
5.7 Environmental Assessments. Seller shall provide Purchaser with
copies of Phase I environmental reviews or other environmental reports for all
Stores in its possession; the reviews need not be current.
5.8 Escrow; Xxxxxxx Money. Purchaser shall pay to Escrow Agent an
xxxxxxx money deposit in the amount of $100,000 (the "Xxxxxxx Money Deposit"),
which amount shall be held by Escrow Agent until the closing of the transactions
contemplated hereunder or the termination of this Agreement in an interest
bearing account. In the event of a closing of the transactions contemplated by
this Agreement the Xxxxxxx Money Deposit shall constitute a credit to the
Purchase Price. In the event this Agreement is terminated pursuant to 9. 1 (a)
or 9. 1 (b), or as a result of Seller's breach or default of any of its
obligations hereunder or in the event that the conditions of Article VI hereof
are not fully satisfied, then Escrow Agent promptly shall return to Purchaser
the full amount of the Xxxxxxx Money Deposit. If this Agreement is terminated as
a result of Purchaser's breach or default of any of its obligations hereunder,
and Seller is not in default of this Agreement, the Escrow Agent promptly shall
deliver to Seller the Xxxxxxx Money Deposit in full satisfaction of any breach
of contract claim Seller may have against Purchaser.
5.9 Compliance with HSR Act. If required by law, Purchaser and Seller
shall each file or caused to be filed as soon as possible after the Effective
Date with the United States Federal Trade Commission and the Antitrust Division
of the United States Department of Justice, pursuant to the HSR Act, all
requisite documents, reports and notifications in connection with the
transactions contemplated by this Agreement, and shall pay any filing fees
incident thereto.
5.10 Title Commitment. Prior to June 30, 2000 ("Objection Period"),
Purchaser may obtain a current title insurance binder from a nationally
recognized title insurance company (the "Title Company") for each Store in the
amount of the Purchase Price, committing the Title Company to issue an Owner's
or Leasehold Owner's Title Policy insuring valid and merchantable title to the
property free of all mortgages, liens and encumbrances, except Permitted Liens
and Encumbrances (hereinafter called the "Title Commitment").
5.11 Seller's Materials. Within fifteen (15) days after the Effective
Date, Seller shall provide Purchaser with copies of any surveys, title reports,
title insurance policies, abstracts, environmental reports and other information
in its possession reasonably requested by Purchaser related to the Stores,
Businesses or Real Property.
5.12 Survey. Purchaser may cause a survey of the Stores and Real
Property (the "Survey") to be prepared prior to expiration of the Objection
Period. The Survey should be a Class A Urban Standards survey prepared in
accordance with the ALTA/ACSM Standard adopted in 1997; and show the location of
the property and al , I improvements, fences, lakes, ponds, creeks, streams,
rivers, easements, roads, and rights-of-way; shall identify all easements and
rights-of-way; shall show any encroachments upon and protrusions from the
property; and shall show thereon the legal description. The legal description
prepared from the Survey will be included in the respective Deeds and other sale
and lease documents.
5.13 Purchaser's Review. Prior to expiration of the Objection Period,
Purchaser shall specify to Seller those items subject to which Purchaser will
accept title to the property (the "Permitted Liens and
Encumbrances". "Encumbrances" shall mean all other liens, servitudes and other
matters affecting title to the property, other than Permitted Liens and
Encumbrances.
5.14 Seller's Obligation to Cure. Seller, at its cost and expense,
shall use commercially reasonable efforts to cure or remove all Encumbrances,
including all defects and encroachments revealed by the Survey, prior to Closing
in a manner reasonably satisfactory to Purchaser, Purchaser's lender or the
Title Company. If Purchaser does not deliver to Seller a Title Commitment or
other written notice specifying those items which are Permitted Encumbrances and
Encumbrances within the Objection Period, then all of the items reflected on the
Title Commitment and any overlaps, encroachments, easements or encumbrances
shown on the Survey shall be considered to be Permitted Liens and Encumbrances.
5.15 Purchaser's Right to Object. Purchaser shall have the right to
object to any encumbrances affecting the title arising as a matter of law (such
as a lien) or which were filed in the conveyance and mortgage records of the
Clerk of Court for the county where the Real Property is located and arising
after the effective date of the Title Commitment and such encumbrances can be
objected to at any time prior to Closing; provided, Seller shall be afforded 30
days to cure these or any other objections with respect to title.
ARTICLE VI
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF PURCHASER
Each and every obligation of Purchaser to be performed on the Closing
Date shall be subject to the satisfaction before or at the Closing of the
following express conditions precedent:
6.1 Accuracy of Representations and Warranties. The representations and
warranties of Seller, and Related Parties set forth in this Agreement shall be
true and correct in all material respects as of the Closing Date as if made as
of such time.
6.2 Proceedings and Instruments Satisfactory. All proceedings,
corporate or other, to be taken by Seller in connection with the transactions
contemplated by this Agreement, and all documents incident thereto, shall be
reasonably satisfactory in form and substance to Purchaser and Purchaser's
counsel, and Seller shall have delivered to Purchaser true and correct copies of
all documents that Purchaser may reasonably request in connection with the
transactions contemplated by this Agreement, including without limitation the
resolutions adopted by the Boards of Directors and shareholders of the Seller.
Seller also shall have delivered to Purchaser the Articles of Incorporation, as
amended and/or restated, certified by the State Corporation Commission and "good
standing" certificates issued by the said Corporation Commission for Seller.
6.3 No Litigation. No investigation, suit, action or other proceeding
is threatened or pending before any court or governmental agency that seeks
restraint, prohibition, damages or other relief in connection with the Agreement
or the consummation of the transactions contemplated hereby.
6.4 Permits. All Permits required to permit Purchaser to operate the
Business as currently being conducted shall have been obtained by, or
transferred to, Purchaser, or Purchaser shall be reasonably be satisfied that
Seller has taken all necessary actions to obtain or transfer to Purchaser such
Permits after Closing (to the extent transferable) or Purchaser and Seller shall
have entered into a mutually agreeable management agreement sufficient for
Purchaser to operate the Business.
6.5 Consents. Except to the extent waived by Seller, all Required
Consents and material other consents, approvals, and waivers from third parties
and governmental authorities and other parties necessary to permit Seller to
transfer the Assets to Purchaser and for Purchaser to operate the Business and
Stores as contemplated hereby shall have been obtained by the Closing Date.
6.6 Performance. Each of the obligations of Seller to be performed or
complied with on or before the Closing Date pursuant to the terms of this
Agreement shall have been duly performed or complied with in all material
respects on or before the Closing Date.
6.7 Environmental Matters. The Environmental Assessments and
Purchaser's own environmental due diligence shall be satisfactory to Purchaser
in its sole discretion, provided that this condition shall be deemed
waived by the Purchaser if the Purchaser does not terminate the Agreement based
on its failure to be satisfied with the environmental due diligence prior to
June 30, 2000.
6.8 Financing. Purchaser shall have obtained on terms and conditions
reasonably satisfactory to it all of the financing it needs in order to
consummate the transactions contemplated hereby and fund the working capital
requirements of the Business after the Closing Date. Furthermore, Purchaser
shall have no obligation to close if its financing terms include an interest
rate in excess of eleven percent (11%).
6.9 Franchise Agreements. The Franchise Agreements shall have been
assigned to the Purchaser.
6.10 Estoppel Certificates. All Third Party Less<)rs have signed
Landlord Consent and Estoppel Certificates which evidence that the state of all
Third Party Leases is as stated by Seller herein and that there are no material
defaults by Seller under any of the Leases.
6.11 ACC. Purchaser has received the approval of ACC to consummate this
transaction.
6.12 Title. At the time of Closing, Seller shall have cured all
Encumbrances unless waived by Purchaser in writing and Seller shall have
marketable title to the Assets.
6.13 Title Insurance. The Title Company issuing the Title Commitment
shall be prepared and able to issue appropriate owner's and lender's policies of
title insurance described therein, with all matters revealed in the Title
Commitment other than Permitted Liens and Encumbrances having been deleted
therefrom.
6.14 Material Adverse Change. There shall have been no material adverse
change in the gross revenues, customer base or prospects of the Business since
the Effective Date or in the condition of the Assets.
ARTICLE VII
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER
Each and every obligation of Seller to be performed on the Closing Date
shall be subject to the satisfaction before or at the Closing of the following
express conditions precedent:
7.1 Accuracy of Representations and Warranties. The representations and
warranties of Purchaser set forth in this Agreement shall be true and correct as
of the Closing Date as if made as of such time.
7.2 Proceedings and Instruments Satisfactory. All proceedings,
corporate or other, to be taken by Purchaser in connection with the transactions
contemplated by this Agreement (including payment of the Purchase Price), and
all documents incident thereto, shall be reasonably satisfactory in form and
substance to Seller and their counsel, and Purchaser shall have made available
to Seller for examination the originals or true and correct copies of all
documents that Seller may reasonably request in connection with the transactions
contemplated by this Agreement.
7.3 No Litigation. No investigation, suit, action or other proceeding
shall be threatened or pending before any court or governmental agency that
seeks restraint, prohibition, damages or other relief in connection with the
Agreement or the consummation Of the transactions contemplated hereof.
7.4 Purchaser's Performance. Each of the obligations of Purchaser to be
performed or complied with on or before the Closing Date pursuant to the terms
of this Agreement shall have been duly performed or complied with on or before
the Closing Date.
ARTICLE VIII
INDEMNITIES AND ADDITIONAL COVENANTS
8.1 Seller's Indemnity.
(a) Seller hereby indemnifies and holds Purchaser harmless from and
against, and agree to defend promptly Purchaser from and reimburse Purchaser
for, any and all losses, damages, costs, expenses, liabilities, obligations and
claims of any kind, including, without limitation, reasonable attorneys' fees
and other legal costs and expenses (hereinafter referred to collectively as
"Losses"), that Purchaser or any Affiliate of Purchaser may at any time suffer
or incur, or become subject to, as a result of or in connection with: (i) any
breach or inaccuracy of any of the representations and warranties made by Seller
in or pursuant to this
Agreement; (ii) Environmental Liabilities caused by events which occurred prior
to the Closing Date; (iii) any failure of Seller to carry out, perform, satisfy
and discharge any covenants, agreements, undertakings, liabilities or
obligations under this Agreement or under any of the documents and instruments
delivered by Seller pursuant to this Agreement; and (iv) claims by third parties
(including Employees) against Purchaser relating to the operation and ownership
by Seller of the Assets, the performance by Seller under the Designated
Contracts, and the conduct of the Business before the Closing Date (hereinafter
referred to collectively as "Purchaser Claims"); provided however, that
Purchaser shall have the right to be indemnified, held harmless from, defended
or reimbursed under Section 8.1 (a)(i) hereof only if such right is asserted
(whether or not such Purchaser Claims have actually been incurred) on or before
the first anniversary of the Closing Date, except the time limitation with
respect to the representations and warranties set forth in Section 3.1
(organization), 3.2 (authorization), 3.4 (litigation), 3.5(title), 3.13 (tax
matters), 3.15 (environmental matters) and 3.16 (labor matters), and the matters
described in Sections 8.1 (a)(ii) and (iv) above, shall be two (2) years.
(b) The Seller's obligation under Section 8.1(a)(1) of this Agreement
to indemnify Purchaser shall in no event exceed $3,500,000 less the Note Amount
(the "Indemnity Escrow Amount"), and the Seller shall not be required to
indemnify Purchaser under Section 8. 1 (a) hereof unless and to the extent the
aggregate amount of the Losses for which indemnification is sought by Purchaser
with respect thereto shall exceed $100,000, at which point the Seller shall
indemnify Purchaser for all additional Losses with respect thereto.
(c) If a claim against Seller arises that is covered by the indemnity
provisions of Section 8. 1 (a) of this Agreement, notice shall be given promptly
by Purchaser to Seller. Provided that Seller agrees to assume sole and exclusive
responsibility for the defense of such claim, Seller shall have the right to
contest and defend by all appropriate legal proceedings such claim and to select
lead counsel to defend any and all such claims at the sole cost and expense of
the Seller, and if Seller admits in writing to Purchaser that such claim is
covered by the indemnity provisions of Section 8. 1 (a) hereof and provides
adequate security, as determined by Purchaser in its sole discretion, for the
payment of its indemnification obligations to Purchaser, such Seller also shall
control settlement of such claim; provided, however, that the Seller may not
effect any settlement that could result in any cost, expense or liability to
Purchaser unless Purchaser consents in writing to such settlement and Seller
agrees to indemnify Purchaser therefor. Purchaser may select counsel to
participate in any defense, in which event Purchaser's counsel shall be at its
own sole cost and expense. In connection with any such claim, action or
proceeding, the par-ties shall cooperate with each other and provide each other
with access to relevant books and records in their possession.
(d) The Seller's indemnity obligations hereunder shall be satisfied
from the funds held in an escrow account funded by the Escrow Agent at the
Closing (the "Indemnity Escrow Account"). On the Closing Date, the Seller shall
deliver to the Escrow Agent the Indemnity Escrow Amount. Subject to indemnity
claims against the Indemnity Escrow Amount, the Indemnity Escrow Amount shall be
released to the Seller as follows: (i) 28% of the Indemnity Escrow Amount shall
be released to the Seller on the date six months after the Closing Date, (ii)
48% of the Indemnity Escrow Amount shall be released to the Seller on the first
anniversary of the Closing Date, and (iii) the remainder of the Indemnity Escrow
Amount will be released to the Seller on the second anniversary of the Closing
Date. Notwithstanding any other provision of this Agreement, the Purchaser's
sole and exclusive remedy and recourse for any damages, claims or other
liabilities arising after the Closing, covered by Section 8. 1 (a)(i) and
relating to this Agreement, the Assets, the Business or any other claims against
the Seller shall be a claim or claims against the Indemnity Escrow Amount.
Seller shall retain any interest earned on the Indemnity Escrow Amount.
8.2 Purchaser's Indemnity.
(a) Purchaser hereby indemnifies and holds Seller harmless from and
against, and agrees to defend promptly Seller from and reimburse Seller for, any
and all Losses that Seller may at any time suffer or incur, or become subject
to, as a result of or in connection with: (i) any breach or inaccuracy of any of
the representations and warranties made by Purchaser in or pursuant to this
Agreement; (ii) any failure by Purchaser to carry out, perform, satisfy and
discharge any of its covenants, agreements, undertakings, liabilities or
obligations under this Agreement or under any of the documents and instruments
delivered by Purchaser pursuant to this Agreement; and (iii) claims by third
parties against Seller relating to the operation and ownership of the Assets by
Purchaser, or its successors or assigns, the nonpayment by Purchaser of the
Assumed Liabilities, and the conduct of the Business, from and after the Closing
Date until two (2) years from the Closing Date, and not otherwise (hereinafter
referred to collectively as "Seller Claims").
(b) If a claim against Seller arises that is covered by the indemnity
provisions of Section 8.2(a) of this Agreement, notice shall be given promptly
by Seller to Purchaser. Provided that Purchaser admits in writing to Seller that
such claim is covered by the indemnity provisions of Section 8.2(a)
hereof, Purchaser shall have the right to contest and defend by all appropriate
legal proceedings such claim and to control all settlements (unless Seller
agrees to assume the cost of settlement and to forgo such indemnity) and to
select lead counsel to defend any and all such claims at the sole cost and
expense of Purchaser; provided, however, that Purchaser may not effect any
settlement that could result in any cost, expense or liability to Seller unless
Seller consents in writing to such settlement and Purchaser agrees to indemnify
Seller therefor. Seller may select counsel to participate in any defense, in
which event Seller's counsel shall be at its own sole cost and expense. In
connection with any such claim, action or proceeding, the parties shall
cooperate with each other and provide each other with access to relevant books
and records in their possession.
(c) The Purchaser's obligation under Section 8.2 of this Agreement to
indemnify Seller shall in no event exceed $3,500,000, and the Purchaser shall
not be required to indemnify Seller under Section 8.2 hereof unless and to the
extent the aggregate amount of the Losses for which indemnification is sought by
Seller with respect thereto shall exceed S 100,000, at which point the Purchaser
shall indemnify Seller for all additional Losses with respect thereto, up to
$3,500,000.
8.3 Bulk Sales Compliance. Seller covenants and agrees to pay and
discharge when due all claims of any governmental entities and creditors of
Seller that could be asserted against Purchaser by reason of non-compliance with
the provisions of the bulk sales laws of the states of Florida and Georgia and
any other applicable jurisdiction. Seller agrees to indemnify and hold Purchaser
harmless from and against and shall on demand reimburse Purchaser for any and
all losses suffered by Purchaser by reason of Seller's failure to pay and
discharge any such claims.
8.4 Additional Instruments. At any time and from time to time after the
Closing, at either party's request and without further consideration, Seller and
Purchaser, as the case may be, shall execute and deliver such other instruments
of sale, transfer, conveyance, assignment and confirmation and take such other
action as Seller or Purchaser may reasonably deem necessary or desirable in
order to more effectively transfer, convey and assign to Purchaser, and to
confirm Purchaser's title to and interest in, the Assets and the consummation of
the transactions contemplated herein.
8.5 Access to Books and Records. From and after the Closing Date,
Seller will authorize and permit Purchaser and their representatives, to have
access during normal business hours, upon reasonable notice and for reasonable
purposes and in such manner as will not unreasonably interfere with the conduct
of Seller's business, to all of the Books and Records related to the Assets.
From and after the Closing Date, Seller will authorize and pen-nit Purchaser and
its representatives to have access during normal business hours, upon reasonable
notice and for reasonable purposes (which specifically includes, but is not
limited to, the "8K" audit to be performed by Xxxxxx Xxxxxxxx) and in such
manner as will not unreasonably interfere with the conduct of the Business or
Seller, to all books, records, files, documents and other correspondence related
to the Business before the Closing Date that are not included among the Books
and Records. Purchaser and Seller agree to maintain all books, records, files,
documents and other correspondence related to the Business before the Closing
Date in accordance with their respective normal document retention practices
after the Closing Date.
ARTICLE IX
TERMINATION
9.1 Termination. Time is of the essence of this Agreement. This
Agreement may be terminated and the transactions contemplated hereby may be
abandoned as follows: (a) at any time before the Closing Date by mutual written
agreement of Seller and Purchaser; or (b) by Purchaser on the Closing Date if
any of the conditions set forth in Article VI of this Agreement shall not have
been fulfilled by the Closing Date; or (c) by Seller on the Closing Date if any
of the conditions set forth in Article VII of this Agreement shall not have been
fulfilled by the Closing Date.
9.2 Rights on Termination; Waiver.
(a) If this Agreement is terminated pursuant to Sections 9. 1 (a)
hereof, all further obligations of the parties under or pursuant to this
Agreement shall terminate without further liability of either party to the other
and the Xxxxxxx Money Escrow shall be returned to Purchaser. If this Agreement
is terminated for any other reason, the parties shall be entitled to exercise
all of their rights and pursue all of their remedies hereunder in law or in
equity subject to the limitation set forth in Section 5.8 of this Agreement.
(b) If any of the conditions set forth in Article VI of this Agreement
have not been satisfied, Purchaser may nevertheless elect to waive such
conditions and proceed with the consummation of the
transactions contemplated hereby. If any of the conditions set forth in Article
VII of this Agreement have not been satisfied, Seller may nevertheless elect to
waive such conditions and proceed with the consummation of the transactions
contemplated hereby.
ARTICLE X
MISCELLANEOUS
10.1 Entire Agreement; Amendment. This Agreement and the documents
referred to herein and to be delivered pursuant hereto constitute the entire
agreement between the parties pertaining to the subject matter hereof, and
supersede all prior and contemporaneous agreements, understandings, negotiations
and discussions of the parties and the parties' representatives, whether oral or
written. There are no warranties, representations or other agreements between
the parties in connection with the subject matter hereof, except as specifically
set forth herein or therein. No amendment, supplement, modification, waiver or
termination of this Agreement shall be binding unless executed in writing by the
party to be bound thereby. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other provision of this
Agreement, whether or not similar, nor shall such waiver constitute a continuing
waiver unless otherwise expressly provided. The representations and warranties
of each party hereto shall be deemed to be material and to have been relied upon
by the other party.
10.2 Expenses. Except as otherwise specifically provided herein, each
of the par-ties hereto shall pay the fees and expenses of their respective
counsel, accountants and other experts and the other expenses incident to the
negotiation and preparation of this Agreement and consummation of the
transactions contemplated hereby.
10.3 Governing Law; Consent to Jurisdiction. This Agreement shall be
construed and interpreted according to the laws of the State of Florida, without
regard to the conflicts of law rules thereof. Each of the par-ties hereto, in
respect of itself and its properties, agrees to be subject to (and hereby
irrevocably submits to) the exclusive jurisdiction of the Circuit Court for the
City of Miami, in respect of any suit, action or proceeding arising out of or
relating to this Agreement or the transactions contemplated herein, and
irrevocably agrees that all claims in respect of any such suit, action or
proceeding may be heard and determined in such court. Each of the parties hereto
irrevocably waives, to the fullest extent it may effectively do so under
applicable Law, any objection to the laying of the venue of any such suit,
action or proceeding brought in the Circuit Court for the City of Miami, and any
claim that any such suit, action or proceeding brought in such court has been
brought in an inconvenient forum.
10.4 Assignment. This Agreement and each party's respective rights
hereunder may not be assigned, by operation of Law or otherwise, without the
prior written consent of the other party; provided, however, that Purchaser may
assign its rights hereunder to an Affiliate of Purchaser and may assign its
rights to the two (2) Stores branded as Churches. Notwithstanding any assignment
by Purchaser pursuant to this Section 10.4, any assignment by Purchaser shall
not relieve Purchaser of its obligations hereunder.
10.5 Notices. All communications, notices, and disclosures required or
permitted by this Agreement shall be in writing and shall be deemed to have been
given at the earlier of the date (a) when delivered personally or by messenger
or by overnight delivery service to the party or, in the case of a corporate
party, to an officer of such party, (b) three days after being mailed by
registered or certified United States mail, postage prepaid, return receipt
requested, or (c) when received via telecopy, telex or other electronic
transmission, in all cases addressed to the person for whom it is intended at
his address set forth below or to such other address as a party shall have
designated by notice in writing to the other party in the manner provided by
this Section:
If to Purchaser: Sailormen, Inc.
0000 X. Xxxxxxxx Xxxx.
Xxxxx 000
Xxxxx, XX 00000
Attention: Xx. Xxxxxx X. Xxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
with a copies to: Xxxxxx Xxxxxx, L.L.P.
X.X. Xxx 0000
Xxxxx Xxxxx, XX 00000-0000
Telephone: 000-000-0000
Facsimile: 225-381-9197
Attention: Mr. P. Xxxxx Xxxxxxx
If to Seller: RMS Family Restaurants, Inc.
0000 Xxxxxx Xxxxxxxxxx Xxxxx
Xxxxx, Xxxxxxx 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Xx. Xxxxx Xxxxx
with a copy to: Xxxxxx Xxxxxx Xxxxx
0000 Xxxxxx Xxxxxxxxx Xxxxxx, X.X., Xxxxx 000X
Xxxxxxxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Xx. Xxxx X. Xxxxxxxxx
10.6 Counterparts; Headings. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but such counterparts
shall together constitute but one and the same Agreement. The Table of Contents
and Article and Section headings in this Agreement are inserted for convenience
of reference only and shall not constitute a part hereof.
10.7 Interpretation. Unless the context requires otherwise, all words
used in this Agreement in the singular number shall extend to and include the
plural, all words in the plural number shall extend to and include the singular,
and all words in any gender shall extend to and include all genders. All
references to contracts, agreements, leases or other understandings or
arrangements shall refer to oral as well as written matters. The specificity of
any representation or warranty contained herein shall not be deemed to limit the
generality of any other representation or warranty contained herein. Nothing
listed on an Exhibit hereto shall be deemed adequate to disclose an exception to
a representation or warranty made herein unless the Exhibit identifies the
exception with reasonable particularity and describes the relevant facts in
reasonable detail. Without limiting the generality of the foregoing, the mere
listing (without inclusion of a copy) of a document or other item shall not be
deemed adequate to disclose an exception to a representation or warranty made
herein (unless the representation or warranty has to do with the existence of
the document or other item itself).
10.8 Severability. If any provision, clause or part of this Agreement,
or the application thereof under certain circumstances, is held invalid, the
remainder of this Agreement, or the application of such provision, clause or
part under other circumstances, shall not be affected thereby.
10.9 No Reliance. No third party is entitled to rely on any of the
representations, warranties and agreements contained in this Agreement.
Purchaser and Seller assume no liability to any third party because of any
reliance on the representations, warranties and agreements of Purchaser or
Seller contained in this Agreement.
10.10 Parties in Interest. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto, and nothing in this Agreement,
express or implied, is intended to or shall confer upon any other person any
rights, benefits or remedies of any nature whatsoever under or by reason of this
Agreement.
10.11 Purchaser's Default In the event the sale contracted for herein
is not consummated due to default on the part of Purchaser, and without fault on
the part of Seller, then the Xxxxxxx Money Deposit posted by Purchaser shall be
forfeited to Seller as its sole and exclusive remedy. Seller and Purchaser
expressly acknowledge and agree that the Xxxxxxx Money Deposit to which Seller
may be entitled hereunder is a reasonable forecast of just compensation for the
harm that would be caused by a breach of this Agreement, that the harm caused by
such breach shall constitute full satisfaction of Purchaser's obligations
hereunder, that the above provisions are reasonable in light of the intent of
the parties and the circumstances surrounding the execution of this Agreement,
and that their respective rights and remedies shall be limited as hereinabove
set forth.
10.12 Seller's Default. In the event of a default by Seller, under this
Agreement, and provided Purchaser is not in default, in addition to any other
remedies provided in this Agreement, Purchaser may at its sole option, by
serving a written notice: (i) cure the condition or defect and deduct the cost
from the Purchase Price at Closing (Purchaser may extend the Closing by 30 days
in its sole discretion to permit it time to cure such defects); (ii) demand
specific performance of Seller's obligations under this Agreement and receive
all damages and attorney's fees occasioned thereby; or (iii) declare this
Agreement null and void and receive a return of its Xxxxxxx Money Deposit plus
any and all damages caused by or resulting from (including reasonable attorney's
fees) Seller's default, not to exceed the amount of the Xxxxxxx Money Deposit.
10.13 Cooperation With Designated Contracts. Notwithstanding anything
which is or may appear to be to the contrary contained in this Agreement, Seller
agrees to cooperate with Purchaser to obtain such amendments (not solely
relating to the assignment and assumption of such Designated Contracts) to any
Designated Contracts as Purchaser requests provided and so long as all costs and
expenses related to such amendments shall be paid solely by Seller and Seller's
obtaining of such amendment shall not extend the Closing Date or the date for
performance of any obligation hereunder.
10.14 Role of Escrow Agent. Purchaser and Seller agree that the Xxxxxxx
Money Deposit has been made to, and is held by, Escrow Agent for the
accommodation of Purchaser and Seller. In the event any litigation should arise
between the parties to this Agreement concerning the Xxxxxxx Money Deposit, then
Purchaser and Seller hereto do solidarily and severally and jointly agree to
hold Escrow Agent harmless from, and indemnify Escrow Agent for, the payment of
any cost or other expenses that may be involved in said litigation, except for
negligence, willful misconduct or bad faith of the Escrow Agent. In the event of
a dispute, Escrow Agent's only obligation shall be to retain the Xxxxxxx Money
Deposit until a final determination has been issued or to pay the Xxxxxxx Money
Deposit into a court of competent jurisdiction.
10.15 Delivery of Deposit. Escrow Agent shall deliver the Xxxxxxx Money
Deposit in accordance with the following: (i) to the person responsible for
closing the sale, at the Closing, in the event the Closing timely occurs under
this Agreement; (ii) to Seller upon receipt of demand therefore signed by Seller
stating that Purchaser has defaulted in the performance of Purchaser's
obligation to timely close the sale contracted for in this Agreement under this
Agreement; provided, however, that Escrow Agent shall not honor such demand
until at least -3 ) calendar days after the date on which Escrow Agent shall
have received a written notice of objection from Purchaser; or (iii) to
Purchaser upon receipt of demand therefor signed by Purchaser stating that
either Seller has defaulted in the performance of Seller's obligations under
this Agreement or that this Agreement has been terminated by Seller or Purchaser
and Purchaser is entitled to the refund of the Xxxxxxx Money Deposit pursuant to
the terms of this Agreement; provided, however, that Escrow Agent shall not
honor such demand until at least 3 calendar days after the date on which Escrow
Agent shall have mailed a copy of such demand to Seller, nor thereafter if
Escrow Agent shall have received a written notice of objection from Seller.
10.16 Objections. If Escrow Agent shall have received a written notice
of objection within the time prescribed, then and in any such event, Escrow
Agent shall refuse to comply with any claims or demands on it, and shall
continue to hold the Xxxxxxx Money Deposit until Escrow Agent receives either a
written notice signed by Purchaser and Seller directing the disbursement of the
Xxxxxxx Money Deposit, or a final nonappealable order by a court of competent
Jurisdiction, entered in a proceeding in which Purchaser, Seller and Escrow
Agent are named as parties, directing the disbursement of the Xxxxxxx Money
Deposit, in either of which events Escrow Agent shall then disburse the Xxxxxxx
Money Deposit in accordance with such direction. Escrow Agent shall not be or
become liable in any way or to any person for its refusal to comply with any
such claims and demands unless it has received such direction. Upon compliance
with such direction, Escrow Agent shall be release of and from all liability
under this Agreement, unless caused by its gross negligence, willful misconduct
or bad faith.
10.17 Interpleader or Concursus. The foregoing notwithstanding, Escrow
Agent may, on notice to Purchaser and Seller, take such affirmative steps as
Escrow Agent may, at its option, elect in order to terminate its duties as
Escrow Agent, including, without limitation, the deposit of the Xxxxxxx Money
Deposit with a court of competent jurisdiction and the commencement of an action
of interpleader or concursus proceeding, the costs of which shall be borne by
whichever of the parties is the losing party. Upon the taking by Escrow Agent of
the action described above, Escrow Agent shall be released of and from all
liability under this Agreement, unless caused by its gross negligence, willful
misconduct or bad faith.
10.18 No Other Duties. Escrow Agent shall not have any duties or
responsibilities, except those specifically set forth in this Article, and,
absent gross negligence, willful misconduct or bad faith, shall not incur any
liability in acting upon any signature, notice, demand, request, waiver,
consent, receipt, or other writing, instrument or document reasonably believed
by Escrow Agent to be genuine.
10-19 Waiver of Conflict. The parties hereby waive any conflict of
interest which may arise as a result of Xxxxxx Xxxxxx Xxxxx serving as Escrow
Agent, the parties acknowledging that Xxxxxx Xxxxxx Zavis is counsel for Seller.
10.20 Marketing of Church's. Notwithstanding anything in this Agreement
to the contrary, Purchaser shall be permitted to market the two Church's Stores
to prospective buyers.
IN WITNESS WHEREOF, each party hereto has caused this Asset Purchase
Agreement to be executed in its name by a duly authorized officer as of the day
and Year first above written.
PURCHASER:
ation
By:
Xxxxxx X. Xxxx
Its: CEO
SELLER:
RMS Family Restaurants, Inc.,
a Georgia corporation
By:
Xxxxx X. Xxxxxx
Its: CFO
