ASSET PURCHASE AGREEMENT
Exhibit 10.1
THIS ASSET PURCHASE AGREEMENT (“Agreement”) is made and entered into as of the 3rd day of
April, 2006, by and among XXXXXXX DEVELOPMENT CO — MEMPHIS, LLC, a Louisiana limited liability
company qualified and registered to do business in the State of Tennessee (f/k/a “Xxxxxxx
Development Company-Bastrop, L.L.C.”) (“Memphis LLC”), XXXXXXX DEVELOPMENT COMPANY — NASHVILLE,
LLC, a Louisiana limited liability company qualified and registered to do business in the State of
Tennessee (“Nashville LLC”), and XXXXXXX DEVELOPMENT COMPANY — MISSISSIPPI, LLC, a Louisiana
limited liability company qualified and registered to do business in the State of Mississippi
(f/k/a “Xxxxxxx Development Company-Horn Lake, L.L.C.”) (“Mississippi LLC”) (Memphis LLC, Nashville
LLC and Mississippi LLC are hereinafter sometimes referred to jointly and severally, as “Seller”),
XXXXXXX X. XXXXXXX, a Louisiana resident (“Xxxxxxx”) and XXXXXXX XXX XXXXXXX, a Louisiana resident
(“Xxxxxxx”) (Xxxxxxx and Xxxxxxx are hereinafter sometimes referred to jointly and severally as a
“Principal” or “Principals”), and AFC ENTERPRISES, INC., a Minnesota corporation (“Purchaser”).
WITNESSETH:
WHEREAS, Purchaser, operates and grants franchises for the operation of fast food restaurants
(“Popeyes Restaurants”) under the names “Popeyes” and “Popeyes Chicken & Biscuits” and certain
other trademarks, service marks, trade names and logos (collectively, the “Marks”) pursuant to a
proprietary system (the “System”) which includes, without limitation, the Marks and certain
distinctive exterior and interior layouts, designs and color schemes, special recipes, menus and
food and beverage items, and operating procedures; and
WHEREAS, Seller owns and operates thirteen (13) Popeyes Restaurants (collectively, the “Sale
Restaurants”) at the locations (collectively, the “Premises”) set forth in Exhibit A hereof
pursuant to thirteen (13) System franchise agreements with Purchaser (the “Seller Franchise
Agreements”); and
WHEREAS, as identified and set forth on Exhibit A, Seller will (i) sell fee simple
title to one (1) of the Premises to Purchaser (the “Fee Owned Premises”), (ii) lease the land
underlying seven (7) of the Premises which are owned by Seller in fee simple to Purchaser (the
“Seller Owned Premises”) and sell the buildings and improvements on the Seller Owned Premises to
Purchaser, and (iii) assign all of Seller’s right, title and interest in and to Seller’s leases for
five (5) of the Premises (the “Seller Leased Premises”) and sell the buildings and improvements on
the Seller Leased Premises to Purchaser to the extent owned by Seller; and
WHEREAS, Seller desires to sell the Sale Restaurants and all assets located on, used at the
Premises in the operation of the Sale Restaurants, including without limitation, the buildings and
improvements owned by Seller, to Purchaser; and
WHEREAS, Seller and Purchaser desire to terminate the Franchise Agreements between the parties
related to the Sale Restaurants, and amend those certain Development Agreements between Purchaser
and Memphis LLC dated August 15, 2000 and July 10, 2002 (as amended, the “Development Agreements”),
as set forth herein; and
WHEREAS, contemporaneously with the closing of the Sale Restaurants as contemplated hereby,
Seller and Purchaser desire to enter into a build-to-suit agreement and
agree on a form of management agreement to be executed, if and as required, all upon the terms
set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and conditions hereinafter set forth,
and other good and valuable consideration, the receipt, sufficiency and adequacy of which are
hereby acknowledged, Seller, Principals and Purchaser hereby mutually agree as follows:
1. Purchase of Assets. On the terms and conditions hereinafter set forth, Seller
shall transfer, sell, assign, convey and deliver unto Purchaser, all of Seller’s and its
affiliates’ right, title and interest in and to the following assets located on or used at the
Premises for the operation of the Sale Restaurants (collectively, the “Purchased Assets”), free and
clear of any and all liens, claims, charges, pledges and other encumbrances other than the liens
securing the Assumed Debt (as defined in Section 5 below), unless otherwise set forth below:
| (i) | all buildings and leasehold improvements on the Fee Owned Premises, Seller Owned Premises and to the extent owned by Seller, on the Seller Leased Premises, and all furniture, fixtures, equipment and computer hardware and software (subject to any licensing restrictions in such software), supplies, light fixtures, restaurant equipment, credit card machines, art and decor, floor and wall coverings, signs, utensils, cleaning materials, boxed and unopened usable food and paper inventory, cash tills on hand in the Sale Restaurants, and other personal property, located on or used at the Premises, or which are otherwise necessary for the operation of the Sale Restaurants in the ordinary course of business; | ||
| (ii) | all of Seller’s and its affiliates rights under all contracts, leases, maintenance agreements relating to the Purchased Assets, Sale Restaurants or Premises under the agreements listed on Schedule 1(ii) hereof (the “Assumed Contracts”); | ||
| (iii) | such rights as Seller has to use all telephone and facsimile numbers currently used in connection with the operation of the Sale Restaurants at the Premises; and | ||
| (iv) | to the extent assignable, all licenses, timelines, approvals, permits, registrations and other similar rights obtained from governmental agencies or authorities relating to the Sale Restaurants or Premises, including, without limitation, those items set forth on Schedule 1(iv) hereof; | ||
| (v) | copies of all files, books and records related to the Purchased Assets or Premises or the operation of the Sale Restaurants; | ||
| (vi) | all claims, refunds, causes of action, counterclaims, choses in action, rights of recovery, rights of set off and rights of recoupment against any other person or entity related to the Purchased Assets, Sale Restaurants or Premises; | ||
| (vii) | all goodwill associated with the Sale Restaurants and Purchased Assets; | ||
| (viii) | the prepaid deposits and other items set forth on Schedule 1(viii) hereof; |
| (ix) | the Fee Owned Premises and all easements, rights, hereditaments, rights-of-way, fixtures and appurtenances thereto, subject only to the following “Permitted Liens”: (A) inchoate liens for taxes, assessments or governmental charges which are not yet due and payable and (B) the liens and encumbrances which secure the Assumed Debt; | ||
| (x) | all warranties related to the Purchased Assets, Sale Restaurants or Premises; and | ||
| (xi) | the Assigned Leases (as hereinafter defined). |
2. Purchase Price; Closing.
(a) Purchase Price. In consideration for the Purchased Assets, Purchaser shall pay
to Seller TWELVE MILLION THREE HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS ($12,350,000.00) for the
Purchased Assets, subject to adjustment as hereinafter provided (collectively, the “Purchase
Price”). The Purchase Price shall be paid to Seller by (i) Purchaser’s assumption of the Assumed
Debt in an approximate amount of $5,000,000, and (ii) the balance, less the Holdback
(hereinafter defined), in cash by wire transfer to Seller for receipt on the Closing Date, to the
U.S. domestic banking account of Seller as Seller may direct. The Purchase Price shall be
increased by the amount of unopened and boxed, usable and saleable food and paper inventory and
cash on hand and transferred to Purchaser on the Effective Date, in accordance with Section 6
below, and any such adjustments along with rents and other items shall adjust and be paid by wire
transfer along with the cash balance of the Purchase Price. The “Holdback” shall be a portion of
the Purchase Price equal to $500,000 and will be available for offset against indemnification and
other obligations of Seller under this Agreement as follows: (i) $250,000 shall be held by
Purchaser until the six (6) month anniversary of the Closing Date, whereupon any amount not so
claimed against said principal of $250,000 shall be paid to the account of Seller by wire transfer
as set forth above and (ii) the balance of the Holdback shall be held by Purchaser until the first
(1st) anniversary of the Closing Date, whereupon any amount not so claimed against said
balance shall be paid to the account of Seller by wire transfer as set forth above. The principal
balance of the Holdback which is outstanding and not applied to any claim as set forth above shall
bear simple interest at the rate of four percent (4%) per annum from and after the Closing Date and
shall be paid in full by Purchaser on said first anniversary date along with the balance of the
Holdback.
(b) Closing. Unless otherwise agreed by the parties, the closing of the transaction
contemplated by this Agreement (the “Closing”) shall take place on the date (the “Closing Date”)
that is thirty (30) days after expiration of the Evaluation Period (as defined in Section 7 below),
effective as of midnight on the Closing Date, so that all items of income and expense allocable to
Closing Date shall be allocable to Seller and all items of income and expense allocable to the day
after the consummation of the Closing (the “Effective Date”) and incurred in the ordinary course of
business shall be allocable to Purchaser; provided, however, the parties may agree to proceed with
Closing prior to those dates in which case the dates set forth above shall be adjusted accordingly.
The Closing shall occur at the offices of Purchaser or of Purchaser’s counsel, Xxxxx Xxxxxxx Xxxxxx
Xxxxxxx & Small, P.C., in Atlanta, Georgia (as Purchaser may elect), at 10:00 a.m. EST, on the
Closing Date or at such other time and place as shall be agreed to by Purchaser and Seller.
Purchaser and Seller shall share equally all escrow, recording and other fees of any escrow agent
or title insurance company and its agent used to consummate the transactions contemplated by this
Agreement. In the event the Closing does not timely occur, this Agreement shall terminate unless
Seller and Purchaser mutually agree to
extend the time for Closing. Seller shall grant possession of the Purchased Assets and
Premises to Purchaser on the Effective Date.
(c) Purchase Price Allocation. The Purchase Price shall be allocated among the
Purchased Assets as set forth on Schedule 2(c) hereof. Seller and Purchaser shall file with
its Federal income tax return for the taxable year that includes the date of Closing, a Form 8594
which shall disclose information consistent with this Section.
3. Seller Franchise Agreements; Development Agreements; Management Agreement;
Build-to-Suit Agreement.
(a) Termination of Seller Franchise Agreements. On the Closing Date, Seller and
Purchaser shall execute Purchaser’s standard franchise termination agreement for each of the Seller
Franchise Agreements (the “Seller Franchise Termination Agreement”).
(b) Amendment of Development Agreements. On the Closing Date, Seller and Memphis LLC
shall execute an amendment to the Development Agreements to terminate all but eight (8) of Seller’s
remaining development options, and to restructure the size of the development territory (the
“Development Agreement Amendment”), the form of which shall be agreed upon by the parties during
the Evaluation Period. The Development Agreement Amendment shall provide (i) Seller with a credit
of $105,000 to be applied against future System opening franchise fees that would otherwise be due
from Seller under the Development Agreements (and for purposes of such credit may be applied
against any type of Popeyes Restaurants opened by Seller), (ii) if Memphis LLC develops, opens and
operates two (2) “Super” Popeyes Restaurants (a new more capital intensive concept as defined by
Purchaser) within the time deadlines set forth in the Development Agreements as amended by the
Development Agreement Amendment (the “Outside Franchise Fee Waiver Date”), Purchaser will waive the
franchise fees for those two (2) Super Popeyes Restaurants (the “First Two Super Units”), and (iii)
provided that Memphis LLC opens and operates the First Two Super Units by the Outside Franchise Fee
Waiver Date and as long as each Seller and its affiliates and the franchisee operator of the First
Two Super Units is not otherwise in default under or in breach of any agreement with Purchaser, the
royalty fee due under the standard System franchise agreements for the First Two Super Units shall
be three percent (3%) of gross sales for the first three (3) years of the term of those franchise
agreements, whereupon the royalty fees shall revert to the then standard royalty fee (currently
5%). For clarification, the foregoing franchise fee waivers and reduced royalty rates only apply
to the First Two Super Units and only if they are opened and operated by Memphis LLC before the
Outside Franchise Fee Waiver Date.
(c) Management Agreement Related to Future Development. In the event Memphis LLC
desires that Purchaser manage any of its Popeyes Restaurants developed pursuant to the Development
Agreements, as amended by the Development Agreement Amendment, on the terms to be set forth
therein, Purchaser and Memphis LLC shall negotiate a form of management agreement (using
Purchaser’s standard management agreement form with mutually acceptable revisions to reflect the
terms hereof) which shall, among other terms, provide for an annual management fee payable to
Purchaser or its subsidiary for each of the managed Popeyes Restaurants, equal to the greater of
(a) four percent (4%) of gross revenues per Popeyes Restaurant or (b) $25,000 per Popeyes
Restaurant.
(d) Build-to-Suit Future Development. Prior to expiration of the Evaluation Period,
Purchaser and Memphis LLC shall negotiate a form of a build-to-suit agreement (the “Build-To-Suit
Agreement”) that provides for the development by Memphis LLC, at Memphis LLC’s
expense, of a restaurant at a site and pursuant to plans and specifications approved by
Purchaser. Memphis LLC would develop up to three (3) restaurants in Nashville, TN, Memphis, TN
and/or in another mutually agreed direct marketing area of Purchaser, to be opened within three (3)
years of the Closing Date. Purchaser’s prior written consent would be required for each
build-to-suit location (including specifically but without limitation, consent to the price of the
land acquisition, the budget for the building construction, and all other related costs and
conditions), and the parties would execute a separate Build-To-Suit Agreement for each respective
site, prior to Purchaser having any responsibilities to Memphis LLC related to that site. The
Build-To-Suit Agreement would provide for a lease in the form of the Seller Owned Premises Leases
(as defined below) except that minimum rent would be calculated based on the then current market
cap rate as reported in the “Restaurant Research Journal” published by Restaurant Research, LLC, or
other mutually acceptable research source in the event that said Journal is no longer published or
no longer publishes market cap rates. If Memphis LLC and Purchaser fail to agree on the form of
Build-To-Suit Agreement prior to expiration of the Evaluation Period, then either party may
terminate this Agreement until such time as both parties so agree on both forms.
4. Leases.
(a) Seller Owned Premises. On the Closing Date, Seller and Purchaser shall enter into
seven (7) lease agreements, each in the form of Exhibit B hereof (the “Seller Owned
Premises Leases”), for the Seller Owned Premises. The minimum base rent for each of the Seller
Owned Premises shall be as set forth on Exhibit A.
(b) Seller Leased Premises. On the Closing Date, Seller and Purchaser shall enter
into assignments, substantially in the form of Exhibit C hereof (the “Lease Assignments”),
for the third party leases (the “Assigned Leases”) identified in Schedule 4(b) hereof and
currently in effect for the Seller Leased Premises. Seller shall be responsible for obtaining any
necessary landlord or lessor consents to permit the assignment of the Assigned Leases to Purchaser
and shall pay any assignment, transfer or other costs incurred in connection therewith. Seller will
assist and cooperate with Purchaser to extend the lease terms of the Assigned Leases so that
Purchaser will have the right to at least twenty (20) years of remaining occupancy. Purchaser’s
obtaining any such amendments to the Assigned Leases and landlord consents on terms acceptable to
Purchaser shall be a condition of Purchaser’s obligations hereunder. If in the future Purchaser
further assigns an Assigned Lease (a “Future Assignment”) and is released from liability under any
of the Assigned Leases by virtue of the Lease Assignments, and the assignor under the Assigned
Leases is not also released from any liability arising after the effective date of the Future
Assignment, then Purchaser shall indemnify and hold such assignor (and Xxxxxxx and/or Xxxxxxx if
either has liability as a guarantor of any such Assigned Lease) harmless from and against any and
all liability, cost and expense first arising under the Assigned Leases after the Future
Assignment. The foregoing indemnification by Purchaser regarding a Future Assignment shall survive
Closing.
5. Limited Assumption of Debt and Contracts. At Closing, with respect to the Sale
Restaurants only, Purchaser shall assume only the following obligations: (i) all liabilities and
obligations of Seller in the ordinary course of business first arising on or after the Closing Date
under the Assumed Contracts, and (ii) the existing indebtedness in favor of Xxxxx Fargo and AMRESCO
as identified on Schedule 5 attached hereto (collectively, the indebtedness described on
Schedule 5 is herein referred to as the “Assumed Debt”), provided the outstanding principal amount
of the Assumed Debt does not exceed $5,022,000 and is documented by instruments acceptable to
Purchaser and may be transferred to and assumed by Purchaser by documents acceptable to Purchaser.
Other than the Assumed Contracts and the Assumed
Debt, Purchaser shall not assume and is not assuming any existing or future liabilities,
debts, obligations, accounts payable, lease obligations, contracts, warranties or agreements or
other liabilities or obligations of Seller or its affiliates, regardless how such obligations may
have arisen, including, without limitation, (i) any taxes or other governmental charges (including
any taxes not yet due and payable which relate to periods prior to the Closing Date) which relate
to periods prior to the Effective Date and (ii) any liabilities regarding independent contractors
or employees of Seller, including without limitation liabilities for vacation pay, sick pay,
severance pay, profit-sharing or pension plans, bonuses, or other employee benefit or “fringe
benefit” arrangement, it being understood that Seller will terminate all of its employees and
compensate its employees and be responsible for employment compensation for all periods prior to
the Effective Date. Seller shall, as and when due, pay in full, all debts, liabilities, claims
(both current and contingent) and obligations relating to the Sale Restaurants and the Purchased
Assets allocable to Seller pursuant to the terms hereof. With respect to those Purchased Assets
which secure indebtedness of Seller (other than the Assumed Debt), Seller shall obtain releases of
all liens encumbering the Purchased Assets. Unless otherwise specifically provided for herein, all
ordinary course of business expenses with respect to the operation of the Sale Restaurants not
otherwise provided for herein which are paid or become payable after the Effective Date shall be
allocated between Purchaser and Seller as of the Effective Date. Items relating to a time prior to
the Effective Date shall be paid by Seller and those relating to a time thereafter shall be paid by
Purchaser. At Closing, (i) Seller shall assign, convey and transfer to Purchaser all of Seller’s
right, title and interest in and to the Assumed Contracts by an Assignment of Contracts
substantially in the form of Exhibit D hereof and (ii) Purchaser shall assume the Assumed
Debt by instruments acceptable to Purchaser.
6. Inventory and Cash. Seller and Purchaser will take an inventory at the close of
business on the Closing Date (the “Inventory Date”), of the cash tills and boxed and unopened
saleable food and beverage inventory and the boxed and unopened usable paper inventory
(collectively, the “Inventory”) on hand at the Premises and value same at Seller’s actual delivered
cost. Inventory shall include only those items currently and customarily used in the conduct of
business at the Sale Restaurants. The Purchase Price shall be increased on a dollar for dollar
basis for Seller’s actual delivered cost of the Inventory. Seller and Purchaser shall acknowledge
the actual amount and cost of the Inventory on an inventory acknowledgment (the “Inventory
Acknowledgment”) in the form of Exhibit E attached hereto and made a part hereof on the
Inventory Date. For the convenience of the parties at the Closing, the parties shall close on an
estimated Inventory amount of $4,000 per Sale Restaurant (a total of $52,000) and shall then adjust
such estimate outside of Closing after completion of the Inventory Acknowledgment. Seller and
Purchaser shall make adjustments to the estimate based on such actual amount, within seven (7) days
after the Closing Date. In the event the estimate was too low, then Purchaser shall pay Seller any
deficiency and in the event the estimate was too high, Seller shall refund such surplus. Seller
agrees to maintain adequate Inventory levels to meet requirements as outlined in the Popeyes
Operations Standards manual through the Closing Date.
7. Evaluation Period. (a) Purchaser and its agents, accountants and other
representatives shall have the right to conduct Purchaser’s due diligence, review Seller’s books
and records, perform lien searches, prepare surveys, flood certifications, appraisals,
environmental record searches, and enter upon the Premises to inspect, examine, appraise, and
otherwise do that which, in the opinion of Purchaser, is necessary to determine the condition of
the Sale Restaurants, Premises and Purchased Assets, all at Purchaser’s sole cost and expense. Such
evaluations may include, without limitation, the economic feasibility of these transactions, the
viability and suitability of the Premises for the intended use, the physical
condition of the Premises (including without limitation, reviewing any of Seller’s
environmental reports, and conducting environmental studies), lease terms and requirements, the
availability of necessary permits and other approvals, zoning, the condition and suitability of the
Purchased Assets, Seller’s title to the Premises, human resources issues, IT and connectivity
issues and costs, and any and all other matters that may be deemed significant to the Purchaser.
Seller will cooperate with Purchaser in making requested records, title commitments, surveys,
environmental reports, IT information, financial information, leases, personnel information, and
other information reasonably requested by Purchaser available to Purchaser for due diligence
purposes. Purchaser shall have free and complete access to all documentation, agreements and other
information in the possession of Seller or any employee, agent or independent contractor of Seller
pertaining to the ownership, use or operation of the Property, and Purchaser shall have the right
to make copies of any such information at Purchaser’s expense. In the event that Purchaser, in its
sole and absolute discretion, determines that the Premises, Sale Restaurants or Purchased Assets,
for any reason or no reason whatsoever, are unsatisfactory to Purchaser, Purchaser shall have until
6:00 p.m., local time in Atlanta, Georgia on the ninetieth (90th) day from the date hereof (such
ninety (90) day period being referred to herein as the “Evaluation Period”) to notify Seller in
writing that Purchaser has elected to terminate this Agreement. In the event the expiration date
of the Evaluation Period falls on a Saturday, Sunday or holiday, the expiration date of the
Evaluation Period shall be extended until the next business day. Purchaser shall have the right to
either shorten the duration of the Evaluation Period for an earlier Closing or extend the
Evaluation Period up to two (2) times for a period of thirty (30) days each by written notice to
Seller, and this right to so shorten or extend is absolute and not contingent upon Seller’s
consent. Notwithstanding anything in this Agreement to the contrary, if Purchaser elects to
terminate this Agreement pursuant to this Section 7, then Purchaser shall promptly deliver Ten
Dollars ($10.00) to Seller, which amount Seller acknowledges and agrees is adequate consideration
for the rights granted to Purchaser under this Agreement through the Evaluation Period, whereupon
this Agreement shall be terminated and neither Purchaser nor Seller shall have any further rights
or obligations hereunder other than those expressly intended to survive the termination of this
Agreement.
(b) Seller shall deliver to Purchaser the items listed below, within five (5) days after the
date hereof:
(i) Copies of all soils and environmental reports or inspections obtained by, prepared
for or by, or discovered by Seller in connection with Seller’s acquisition or leasing of the
Premises;
(ii) Copies of all governmental approvals obtained by Seller in connection with its
development, ownership and/or operation of the Premises, including, without limitation,
certificates of occupancy as to all portions of the improvements occupied by Seller or any
tenant, lessee or other occupant thereof;
(iii) Copies of all boundary or topographic surveys, as-built surveys, subdivision
plats and accompanying surveyor’s certificates prepared for Seller in connection with the
Premises;
(iv) Copies of all title certificates, title commitments or policies relating to the
Premises and copies of all Permitted Liens and other matters scheduled or shown as
exceptions to title or requirements thereon;
(v) Copies of any agreements or restrictive covenants that affects the development,
leasing or ownership of the Premises;
(vi) A list of, and copies of, any and all agreements or instruments pertaining to the
maintenance, management and/or operation of the Premises as currently conducted;
(vii) Copies of all loan documents evidencing the Assumed Debt; and
(viii) Those matters set forth on Schedule 7 hereof.
Seller shall also make available to Purchaser such other items actually in the possession of any
Seller or its affiliate that are related to the operation of the Sale Restaurants that Purchaser
may, from time to time reasonably request in connection with its inspections.
8. Costs, Expenses and Prorations.
(a) Personal property taxes with respect to the Sale Restaurants and the Purchased Assets and
real property taxes allocable to year 2005 and prior years shall be the sole responsibility of
Seller. Taxes allocable to year 2006 shall be prorated between the parties on the Closing Date as
of the Effective Date based upon the most recently available tax bills therefor and adjusted upon
receipt of actual bills.
(b) Rent and other charges payable under the Assigned Leases for the Seller Leased Premises
shall be prorated between the parties on the Closing Date as of the Effective Date, regardless of
the date of billing.
(c) Bills for utilities, telephone service and other items not specifically provided for
herein which relate to a period prior to or after the Effective Date, the amounts of which are
unknown as of the Closing Date, will be prorated as of the Effective Date between Purchaser and
Seller and paid outside of Closing when the invoices therefor are received. Seller shall use
reasonable efforts to cause utilities to be transferred on the Effective Date.
(d) Each party hereto shall be responsible for all other costs and expenses, including
attorneys’ fees and other professional fees, incurred by it in connection with this matter or for
deliveries required to be made by such party.
(e) Seller shall receive credit on the closing statement delivered on the Closing Date for all
prepaid expenses and security deposits on hand with any utility provider or landlord, and Seller
shall assign all of its right, title and interest in and to any such prepaid expenses and security
deposits to Purchaser at Closing. Notwithstanding the foregoing, in the event any such deposits are
not assignable, Seller shall be entitled to a refund thereof and shall reimburse Purchaser for any
credit therefor reflected on the closing statement.
(f) Seller shall pay all fees and costs associated with Purchaser’s assumption of the Assumed
Debt, including without limitation, transfer, assumption, application, legal, recording and filing
fees (collectively, “Assumed Debt Transaction Fees”); provided, however, in the event of Closing,
Seller shall receive credit for fifty percent (50%) of the Assumed Debt Transaction Fees. Assumed
Debt Transaction Fees shall not include Seller’s attorney’s fees or any debt service payments.
(g) Seller shall pay all costs to clear title to the Purchased Assets so that they are
delivered unencumbered as provided for herein.
(h) Seller shall pay all transfer, documentary and stamp taxes due upon recording the warranty
deed for the Fee Owned Premises and any similar taxes due upon transfer of any of the other
Purchased Assets and any recording costs or release fees related to delivery of title to the
Purchased Assets as set forth herein.
9. Representations and Warranties of Seller and Principals. To induce Purchaser to
enter into this Agreement and consummate the transactions contemplated hereunder, each Seller and
Principal hereby jointly and severally represent, warrant and covenant, as of the date hereof and
as of the Effective Date, as follows:
(a) Each of Memphis, LLC, Nashville, LLC, and Mississippi, LLC are limited liability companies
duly organized, validly existing and in good standing under the laws of the states of their
respective organization as first set forth above, and each has all requisite power and authority to
enter into this Agreement and the other agreements contemplated hereby, and to perform its
obligations hereunder and thereunder. Each Seller is duly qualified, registered and authorized to
conduct business and own, operate and lease its properties as and in the places where first
indicated above.
(b) Seller has full right, title and authority to sell, transfer and assign, as applicable,
the Purchased Assets;
(b)(1) As of the Effective Date, there will be no liens, claims, charges, obligations or
encumbrances whatsoever (including, without limitation, taxes) against the Purchased Assets, except
for the Assumed Debt. Other than the lien under the Assumed Debt, Seller has good and marketable
title to the Purchased Assets and they are fully operational and in good working condition as of
the Effective Date and shall be fully operational and in good working condition as of Closing.
(c) Each of this Agreement and all other documents executed or to be executed by Seller
pursuant hereto constitutes, or when executed, shall constitute the valid obligation of Seller,
legally binding upon it and enforceable against it in accordance with their terms.
(d) The execution, delivery and performance of this Agreement and the agreements contemplated
in this Agreement to which Seller is a party do not and shall not violate the provisions of (i) the
articles of organization, operating agreements, articles of incorporation, bylaws or other
constituent documents of any Seller; (ii) any mortgage, indenture, security agreement, contract,
undertaking or other agreement to which Seller is a party or which is binding upon Seller or any of
its property or assets; or (iii) any law, regulation, judgment or order which is binding upon
Seller or any of its property or assets.
(e) To Seller’s knowledge, Seller is not in breach of any contract or agreement regarding the
Purchased Assets, the Sale Restaurants or the Premises and, to Seller’s knowledge, there is or as
of the Effective Date shall be no basis for the assertion against Seller, the Purchased Assets, the
Sale Restaurants or the Premises of any liens, claims, charges, encumbrances, liabilities, debts or
obligations, whether due or to become due, including but not limited to liabilities or obligations
on account of taxes or other governmental charges which could have an adverse affect or cause a
lien upon the Purchased Assets, or materially diminish the rights acquired by Purchaser pursuant to
this Agreement.
(e)(1) Seller has filed, or shall have filed, all tax returns (including without limitation
information returns and reports, and returns relating to income taxes, property taxes, personal
property taxes and sales taxes) required of Seller in connection with the Sale Restaurants and
shall have paid all taxes which have become due and payable in connection with the Sale
Restaurants.
(f) No consent or approval of any other party (including without limitation any lending
institution or any governmental authority, bureau or agency) is required in connection with the
execution, delivery, performance, validity or enforceability of this Agreement or the agreements
contemplated by this Agreement, other than consents or approvals which have been or will be
obtained and delivered to Purchaser on or prior to the Effective Date.
(g) There is no action, suit or proceeding pending or, to the knowledge of the Seller,
threatened against or affecting any Seller, the Purchased Assets, the Sale Restaurants, or the
Premises before any federal or state court or governmental department, commission, board, bureau,
agency or instrumentality.
(h) The Purchased Assets are the sole property of Seller, constitute all of the property
needed to conduct the Business as currently conducted (including without limitation all equipment,
utensils and other items required as of the Effective Date to operate the Sale Restaurants
consistent with Seller’s past practices and System requirements) and, to the knowledge of Seller,
are in normal operating condition, free from any material defects, damages or malfunction. Other
than the Premises and as covered by any Assumed Contracts, none of the Purchased Assets are leased
by Seller. If any of the Purchased Assets are subject to a manufacturer’s warranty or any service
agreement, Seller shall assign such warranty or service agreement to Purchaser to the fullest
extent permitted by the manufacturer or service provider. Any prepayment of such contracts shall
be solely for the benefit of Purchaser.
(i) Other than ordinary business licenses issued by applicable state and local licensing
authorities (which Seller currently has in full force and effect), there are no licenses, permits
or other governmental or regulatory authorizations needed to conduct the Business.
(j) The financial statements (including balance sheets and profits and loss and gross revenue
statements), for the Sale Restaurants that have been previously furnished by Seller to Purchaser,
are true, correct and complete in all material respects. There are no modifications that should be
made to these financial statements for them to be in conformity with generally accepted accounting
principles and practices consistently applied for such periods.
(j)(1) The sales tax returns of Seller for the Sale Restaurants that have been previously
furnished by Seller to Purchaser, are true, correct and complete in all material respects. There
are no modifications that should be made to these financial statements for them to be in conformity
with generally accepted accounting principles and practices consistently applied for such periods.
(k) To Sellers knowledge, there are no landlord disputes, material customer dissatisfaction,
material supplier dissatisfaction, material equipment malfunction or defect or material and
unfavorable employee relations relating specifically to the Sale Restaurants, which is likely to
adversely affect the value of the Purchased Assets or the conduct of the Sale Restaurants as
presently conducted.
(l) To the knowledge of Seller, all utilities necessary for the conduct of business at the
Premises are in normal working order and are reasonably adequate for the present needs of
the Premises and the Sale Restaurants. To the knowledge of Seller, there are no facts or
circumstances that will result in the termination of the present access from the Premises to
utility services, or from the Premises to existing streets, highways and roads adjoining the
Premises. Seller has no knowledge, or has not received notice, that any of the Premises are or
will be subjected to or affected by (i) any special assessments, whether or not presently a lien
thereon, or (ii) any condemnation, eminent domain or similar proceedings.
(m) With respect specifically to the Sale Restaurants and subject to the following sentence,
to the knowledge of Seller, Seller is and has been at all times in the past, in material compliance
with all laws, rules, ordinances, governmental regulations and orders of all governmental
authorities and/or jurisdictions (collectively “Applicable Laws”) applicable to the operation of
the Sale Restaurants at the Premises, including without limitation Applicable Laws relating to
zoning, building, public health and access, plumbing, electrical, fire, occupational safety,
pollution, environmental protection, and waste disposal matters. Seller has not received any OSHA,
Health Department or other governmental citation with respect to the Premises, the Sale Restaurants
and/or the Purchased Assets which has not been cured. To Seller’s knowledge there are no hazardous
substances or hazardous materials in, on or about the Premises other than cleaning solvents and
office supplies maintained in small amounts and used in the ordinary course of operation of the
Sale Restaurants in compliance with Applicable Laws.
(n) Seller has not employed any investment banker, broker, agent or finder or incurred any
liability for any investment banking fees, brokerage fees, agent’s commissions or finder’s fees
concerning the transactions contemplated hereby.
(o) No representation or warranty by Seller contained in this Agreement, nor any statement,
certificate, schedule or exhibit hereto furnished or to be furnished by or on behalf of Seller
pursuant to this Agreement, nor any document or certificate delivered to Purchaser pursuant to this
Agreement, contains or shall contain any untrue statement of material fact or omits or shall omit a
material fact necessary to make the statement contained therein not misleading.
(p) Other than with respect to the Assigned Leases and Assumed Contracts described in the
Schedules hereof, Seller is not a party to (in its own name or as successor in interest), or bound
by, any written or oral (i) lease or sublease with respect to any personal property as lessor,
lessee, sublessor or sublessee which could be binding upon or deemed assumed by Purchaser after the
Closing Date; (ii) contract or commitment involving an obligation of Seller of more than Five
Hundred Dollars ($500.00) during any twelve (12) month period which could be binding upon or deemed
assumed by Purchaser after the Closing Date; (iii) contract or commitment under which Seller has
assumed, guaranteed, endorsed or otherwise become liable in connection with the obligation of any
person, firm or corporation which could be binding upon or deemed assumed by Purchaser after the
Closing Date; (iv) barter or other trade or exchange arrangement which could be binding upon or
deemed assumed by Purchaser after the Closing Date; (v) contract or other arrangement or
understanding not included above which (1) was not made in the ordinary course of the business of
Seller; or (2) is material to the operation of the Sale Restaurants; (vi) contract with any labor
union which could be binding upon or deemed assumed by Purchaser after the Closing Date; (vii) any
contract directly relating to the Purchased Assets other than the Assumed Contracts; (viii) any
contract or commitment involving any profit sharing, pension, bonus percentage compensation, stock
option or warrants, sick pay, vacation pay, severance pay, heath care or other fringe benefit
arrangement which will be binding upon or assumed by
Purchaser after the Closing Date in connection with the acquisition of the Purchased Assets;
or (ix) any loan or financing arrangement encumbering the Purchased Assets which encumbrance will
not be released on or before the Closing Date.
(q) Seller shall, from time to time after the Closing Date, upon the reasonable request of
Purchaser, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered,
all such further documents as may be required to confirm (i) the title of the Purchased Assets
sold, transferred and assigned to Purchaser; and (ii) the possession by Purchaser of the property
purchased by it pursuant hereto.
(r) Schedule 9(r) hereof is a list of all employees (part-time and full-time) of
Seller, together with the rate of compensation, bonuses historically paid and currently payable to
each employee, and dates of employment. Except as set forth on Schedule 9(r), Seller has made no
promise or commitment, whether oral or in writing, to increase any employee’s compensation or grant
any bonus to any employee, all of which shall be satisfied on or before the Closing Date. Except as
set forth on Schedule 9(r), no fringe benefits, paid vacation or other such benefits are due any
such employees from Seller, all of which shall be satisfied on or before the Closing Date.
(s) Seller shall obtain and deliver to Purchaser tax clearance certificates from each state
wherein the Premises are located for delivery at the Closing.
(t) Seller has all material permits, licenses, orders, consents and approvals of federal,
state, local or foreign governmental or regulatory bodies that are required in order to permit
Seller to operate the Sale Restaurants as currently operated and Seller has not received any notice
threatening suspension or cancellation of any of them, and no cause exists for such suspension or
cancellation.
(u) With respect to the Sale Restaurants, Seller has not entered into any agreement that
remains effective with any party and it is not currently negotiating with any other party for the
sale of the Sale Restaurants. Unless this Agreement shall have been terminated, Seller will not
enter into negotiations with any other party for the sale of the Sale Restaurants until after the
Closing Date, and only if the Closing fails to occur by said date.
(v) Seller has not entered into any billboard leases for billboards on any of the Premises.
Seller is not in default of any of the Assumed Contracts nor would Seller be in default solely with
the passage of time or giving of notice and to the best of Seller’s knowledge, the other parties to
the Assumed Contracts are not in default thereunder and would not be in default with the passage of
time or giving of notice.
(w) To the Seller’s knowledge, no portion of the Premises is located within any “Special Flood
Hazard Area” designated by the United States Department of Housing and Urban Development, or in any
areas similarly designated by any agency or any other governmental authority.
(x) Seller has heretofore delivered true and correct copies of the Assigned Leases and all
amendments thereto to Purchaser. The Assigned Leases are accurately described on Schedule 4(b)
hereof, and Seller shall not make any amendment or modification of any of the Assigned Leases
without Purchaser’s prior written consent.
All of the representations, warranties and covenants of Seller set forth herein shall survive the
Closing hereunder except as expressly set forth in Section 12 below.
10. Representations and Warranties of Purchaser. Purchaser hereby represents and
warrants to Seller as follows:
(a) Purchaser is a corporation duly organized, validly existing and in good standing under the
laws of the State of Minnesota.
(b) Purchaser has full right, title and authority to enter into this Agreement and to
consummate the transactions contemplated hereby.
(c) This Agreement and the agreements contemplated hereby to which Purchaser is a party
constitute, or when executed, shall constitute the valid obligation of Purchaser legally binding
upon it and enforceable against it in accordance with their respective terms.
(d) The execution, delivery and performance of this Agreement and the agreements contemplated
in this Agreement do not and shall not violate the provisions of (i) the articles of incorporation,
bylaws or other constituent documents of Purchaser; (ii) any mortgage, indenture, security
agreement, contract, undertaking or other agreement to which Purchaser is a party or which is
binding upon Purchaser; or (iii) any law, regulation, judgment or order which is binding upon
Purchaser.
(e) No consent or approval of any other party (including without limitation any governmental
authority, bureau or agency) other than Purchaser’s lending institution and the lender of the
Assumed Debt, is required in connection with the execution, delivery, performance, validity or
enforceability of this Agreement or the agreements contemplated by this Agreement.
All of the representations, warranties and covenants of Purchaser set forth herein shall survive
the Closing hereunder.
11. Compliance with the Bulk Transfer Provisions of the Uniform Commercial Code.
Seller and Purchaser hereby acknowledge and agree that, to expedite the closing of the transactions
pursuant to this Agreement, neither party shall be under an obligation to comply with any
applicable “Bulk Transfer” provisions of the Uniform Commercial Code as adopted in Tennessee,
Arkansas or Mississippi, if such Bulk Transfer provisions exist and are applicable. Seller shall
pay all of its accounts payable in accordance with the terms hereof; and Seller and Principal shall
indemnify and hold harmless Purchaser, upon demand, from and against any and all liability incurred
by Purchaser by reason of Seller’s failure to pay any accounts payable or by reason of the failure
to comply with the requirements of such Bulk Transfer provisions.
12. Indemnification by Seller. Seller and Principals shall jointly and severally
indemnify, defend and hold harmless Purchaser, on demand, from and against any and all loss,
liability, damage or deficiency (including interest, penalties, costs, expenses and reasonable
attorneys’ fees) arising out of or due to:
| (a) | a breach of, or inaccuracy in, any representation, warranty or covenant made by Seller, or Principal, and contained in this Agreement or any other document executed pursuant hereto; |
| (b) | any and all taxes (local, State or Federal) owed by Seller relative to the Purchased Assets for any period prior to the Effective Date. | ||
| (c) | any liability, debt, obligation, account payable, contract or agreement of Seller not expressly assumed by Purchaser, or if assumed by Purchaser, which arises or is allocable to a period prior to the Effective Date; | ||
| (d) | any and all demands made by claimants, customers, governmental agencies or employees of Seller against Seller or Purchaser relating to periods prior to the Effective Date, including any and all actions, suits, proceedings, demands, assessments, judgments, costs and legal and other expenses. |
The obligation to indemnify contained in this Section 12 shall survive Closing; provided, however,
Seller and Principals will have liability (for indemnification or otherwise) with respect to any
breach of a representation or warranty set forth in the following subsections of Section 9, to wit:
(b)(1), (e), (g), (h), (i), (j), (k), (l), (s), (t), (u), and (v) only if, on or before the second
anniversary of the Effective Date, Purchaser notifies Seller or Principals of a claim in accordance
with Section 14 below.
13. Indemnification by Purchaser. Purchaser shall indemnify, defend and hold harmless
Seller from and against any and all loss, liability, damage or deficiency (including interest,
penalties, costs, expenses and reasonable attorneys’ fees) arising out of or due to:
| (a) | a breach of, or inaccuracy in, any representation, warranty or covenant made by Purchaser and contained in this Agreement or any other document executed pursuant hereto; | ||
| (b) | any material misrepresentation made by Purchaser in any other document delivered to Seller; | ||
| (c) | any and all demands made by claimants or employees of Purchaser against Seller or Purchaser first arising and relating to periods after the Closing Date, including any and all actions, suits, proceedings, demands, assessments, judgments, costs and legal and other expenses. |
The obligation to indemnify contained in this Section 13 shall survive Closing.
14. Claims for Indemnification. Whenever any claim shall arise for indemnification
under Sections 12 or 13, the following provisions shall apply:
(a) The indemnitee shall promptly notify the indemnitor of the claim and, when known, the
facts constituting the basis for such claim. Such notice shall be accompanied by any evidence of
such claim in the indemnitee’s possession or a description of the basis for such claim if such
evidence is unavailable.
(b) In the event of any claim for indemnification hereunder resulting from or in connection
with any claim or legal proceeding by a person who is not a party to this Agreement (“Third Party
Claim”), such notice shall also specify, if known, the amount or an estimate of the amount of the
liability arising therefrom. With respect to any Third Party Claim, an indemnitee shall not settle
or compromise or enter into any binding agreement to settle or compromise, or
consent to entry of any judgment arising from, any such claim, except in accordance with
subsections (c) and (d) hereof.
(c) The indemnitor shall undertake the defense of any Third Party Claim by representatives of
its own choosing reasonably satisfactory to the indemnitee. The indemnitee shall have the right to
participate in any such defense of a Third Party Claim with advisory counsel of its own choosing at
its own expense.
(d) In the event the indemnitor, within a reasonable time after notice of any such Third Party
Claim, fails to defend, the indemnitee or any subsidiary or affiliate thereof shall have the right
to undertake the defense, compromise or settlement of such Third Party Claim on behalf of or for
the account of the indemnitor, at the expense and risk of the indemnitor.
(e) An indemnitor shall not, without the written consent of the indemnitee, settle or
compromise any such Third Party Claim or consent to entry of any judgment that does not include, as
an unconditional term thereof, the giving by the claimant or the plaintiff to the indemnitee an
unconditional release from all liability with respect to such Third Party Claim.
(f) Notwithstanding the foregoing process for asserting Third Party Claims, if Purchaser is
required to make payment to any third party in respect of an indemnification obligation of Seller
or Principal indemnitor, Purchaser may offset such amount against the Holdback.
15. Pre-Closing Covenants. (a) Seller agrees that through the Closing Date, except as
otherwise contemplated by this Agreement or as permitted by the prior written consent of Purchaser,
Seller shall use commercially reasonable efforts to:
| (i) | Conduct of Business. Conduct its business and operations of the Sale Restaurants and Premises only in the ordinary course, including, without limitation, maintaining the Inventory and cash tills at reasonable levels and in compliance with Popeyes operating standards; | ||
| (ii) | Obligations. Perform its obligations under all agreements, contracts and instruments relating to or affecting the Sale Restaurants, Purchased Assets and the Premises and shall comply with all Applicable Laws; | ||
| (iii) | Other Agreements. Not enter into or assume any new agreement, contract or commitment disposing of or altering any of the Purchased Assets or the ability of Seller to convey same; | ||
| (iv) | Maintain Property. Maintain, at its sole expense, all of the Purchased Assets in as good repair, condition and working order, reasonable or ordinary wear and use and damage by fire or unavoidable casualty excepted. In the event of any fire or casualty, then at the option of Purchaser, in its sole discretion: (i) this Agreement shall terminate whereupon no party hereto shall have any further rights, liabilities or obligations hereunder, or (ii) this Agreement shall remain in full force and effect, and Seller, at the time of the Closing Date, shall transfer and assign to Purchaser all of Seller’s right, title and interest in and to the insurance proceeds received or to be received by reason of such damage or destruction, said option to be exercised by Purchaser by delivering to Seller written notice of such exercise on or before the thirtieth (30th) day following the date on which |
| Purchaser receives from Seller written notice of such damage or destruction and the amount of insurance proceeds available therefor. If Purchaser fails to exercise said option within said thirty (30) day period, then Seller shall notice Purchaser of its failure and if Purchaser fails to exercise one of the above-options within ten (10) days of receipt of the second notice, then Purchaser shall be deemed to have elected under clause (ii) above; |
| (v) | Litigation, Etc. Promptly notify Purchaser in writing of any judgments, orders or decrees entered or any suits, actions, claims, or administrative proceedings instituted, threatened or asserted against Seller with respect to the Sale Restaurants, the Purchased Assets or the Premises after the date of this Agreement and before the Effective Date. Purchaser shall have the right to terminate this Agreement at any time up to the Effective Date if it deems that such matter adversely affects the value of the Purchased Assets; | ||
| (vi) | Notice of Changes. Promptly advise Purchaser in writing of any adverse change in the financial condition, operation, business, properties or prospects of Seller relative to the Purchased Assets, the Premises or the Sale Restaurants; | ||
| (vii) | Cooperation. Cooperate with Purchaser in securing all necessary licenses, approvals, consents and estoppel letters required by this Agreement or as may be reasonably requested by Purchaser; and | ||
| (viii) | Miscellaneous. Maintain and keep in full force and effect all insurance currently maintained by Seller with respect to the Sale Restaurants and the Premises. In addition, Seller shall not (1) sell, mortgage, pledge, lease or transfer or otherwise dispose of any of the Purchased Assets other than in the ordinary course of business or in connection with Seller’s grant of liens in favor of the Agent, for which liens Seller shall be delivered releases for filing on or before the Effective Date or (2) enter into any other contract or agreement with respect to the Sale Restaurants other than in the ordinary course of business. |
(b) Employees. All employees of Seller who work at the Sale Restaurants shall be
terminated by Seller effective as of the close of business on the Closing Date. Purchaser may, but
shall not be obligated to, discuss offers of employment with employees of Seller prior to the
Closing Date and shall have the right to hire or offer employment to such employees of Seller.
16. Conditions Precedent to Obligations of Purchaser. The following shall constitute
conditions precedent to Purchaser’s obligations to consummate the transactions contemplated herein,
and the failure of any such condition shall give Purchaser the option of waiving said conditions by
proceeding with Closing or of terminating this Agreement:
(a) Representations and Warranties. The representations and warranties of Seller
contained herein shall be true and correct as of the Closing Date; Seller shall have complied with,
performed or satisfied all agreements, covenants and conditions required by this Agreement and the
Seller Franchise Agreements that are to be complied with, performed or satisfied by Seller; and,
Seller shall have delivered to Purchaser a certificate to such effect (the “Bringdown
Certificate”);
(b) Consents. Purchaser shall have received written consents to the transfer or
assignment to Purchaser of (i) the Purchased Assets and (ii) all agreements, licenses and other
material contracts to be assumed by Purchaser hereunder, including without limitation the
Lease Assignments and Assumed Contracts, where the consent of any other party to any such contract
may, in the opinion of Purchaser’s counsel, be required for such assignment or;
(c) Non-Disturbance Agreements. Purchaser shall have received non-disturbance
agreements from any lenders who liens in the Seller Owned Premises or the Seller Leased Premises in
substantially the form attached hereto and made a part hereof as Exhibit F, or
alternatively, such lenders shall have delivered or committed to deliver releases of such liens;
(d) Actions. No action, suit or proceeding shall have been instituted before a court
or governmental body, or instituted or threatened by any court or governmental body, to restrain or
prevent the carrying out of the transactions contemplated hereby, which shall not have been
disposed of to the reasonable satisfaction of Purchaser;
(e) Operations. The Sale Restaurants shall be open and operating at Closing in
accordance with the Popeyes’ operating manual;
(f) Documents. Seller shall have executed and Purchaser shall have received the
applicable documents specified in Section 18 of this Agreement;
(g) No Material Adverse Change. There shall not have occurred any material adverse
change or loss with respect to the Sale Restaurants or Purchased Assets; and
(h) Performance. Seller shall have performed all covenants and obligations required
to be performed by it under this Agreement on or prior to the Closing Date.
17. Conditions Precedent to Obligations of Seller. The following shall constitute
conditions precedent to Seller’s obligations to consummate the transactions contemplated herein,
and the failure of any such condition shall give Seller the option of terminating this Agreement
(which shall result in termination of this Agreement in full):
(a) Representations and Warranties. The representations and warranties of Purchaser
contained herein shall be true and correct as of the Closing Date; Purchaser shall have complied
with, performed or satisfied all agreements, covenants and conditions required by this Agreement;
(b) Actions. No action, suit or proceeding shall have been instituted before a court
or governmental body, or instituted or threatened by any governmental agency or body, to restrain
or prevent the carrying out of the transactions contemplated hereby, which shall not have been
disposed of to the reasonable satisfaction of Seller; and
(c) Payment/No Default. Purchaser shall pay the Purchase Price to Seller as of the
Closing Date.
18. Documents Delivered at Closing. The following documents shall be delivered at
Closing (the “Closing Documents”):
| (a) | A xxxx of sale in the form of Exhibit G hereof; | ||
| (b) | Warranty deed, quitclaim deed containing the legal description of any new survey obtained by Purchaser, seller’s affidavit, indemnity, tax and “gap” affidavits, pay- |
| off letters and releases, and other documents customary to transfer title to real Fee Owned Premises and necessary for Purchaser to receive unencumbered title to the Fee Owned Premises and a title insurance policy therefor without exceptions other than the Permitted Liens; | |||
| (c) | The Assigned Leases and Lease Assignments; | ||
| (d) | The Seller Franchise Termination Agreements; | ||
| (e) | The Development Agreement Amendment; | ||
| (f) | The Inventory Acknowledgment (or within seven (7) days of the Effective Date); | ||
| (g) | The Bringdown Certificate; | ||
| (h) | Such other documents as shall be reasonably necessary to evidence the authority of Purchaser and Seller to act in accordance with the terms and conditions set forth in this Agreement and to consummate the transactions contemplated hereby; | ||
| (i) | The closing statement reflecting the Purchase Price, prorations and disbursements made to effect the sale contemplated hereby; | ||
| (j) | The Assignment of Contracts; | ||
| (k) | The Seller Owned Premises Leases; | ||
| (l) | All consents and other documents necessary or required by the lenders to effect the assumption and transfer of the Assumed Debt; and | ||
| (m) | Certificates of good standing and existence of each Seller, which shall be issued not more than thirty (30) days prior to the Closing Date by the relevant Secretary of State, certificates of incumbency acceptable to Seller and other customary authority documents reasonably required by Purchaser to authenticate signatures and consents. |
19. Benefit. This Agreement shall be binding upon and inure to the benefit of
Purchaser and Seller, and their respective administrators, executors, assigns and successors;
provided, however, Purchaser’s interest herein shall not be assignable and any attempt to assign,
transfer, convey or encumber Purchaser’s interest herein shall be void ab initio.
Notwithstanding anything in this Agreement to the contrary, this Agreement shall not constitute an
agreement to assign any contract or permit if an attempted assignment thereof, without the consent
of a third party, would constitute a breach thereof or in any way affect the respective rights of
Purchaser or Seller thereunder. If such consent is not obtained, or if an attempted assignment
would be ineffective or would affect the rights thereunder so that Purchaser would not receive all
such rights under such contract, Seller will cooperate at Seller’s sole expense, with Purchaser to
provide to Purchaser the benefits under any such contract including, without limitation,
enforcement for the benefit of Purchaser and at Seller’s sole cost and expense, of any and all
rights of Seller against a third party, arising out of the breach or cancellation by such third
party or otherwise; and any transfer or assignment to Purchaser of any property or property rights
or any contract that shall require the consent or approval of any third party shall be made
subject to such consent or approval being obtained. Nothing contained in this Section 19 shall
be deemed to diminish Purchaser’s right to refuse to close under this Agreement in the event any of
the conditions precedent set forth in Section are not satisfied.
20. Notices. Any notice required or permitted herein shall be deemed received upon
receipt (or upon being marked shown as rejected or undeliverable) if personally delivered, mailed
by certified U.S. mail return receipt requested, or sent by nationally recognized overnight courier
providing a receipt for delivery, with adequate postage thereon to the address of the parties as
stated below:
In the case of Purchaser:
AFC Enterprises, Inc. d/b/a Popeyes Chicken & Biscuits
0000 Xxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attn: Vice President, Development
0000 Xxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attn: Vice President, Development
with concurrent copy to:
AFC Enterprises, Inc. d/b/a Popeyes Chicken & Biscuits
0000 Xxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attn: General Counsel
0000 Xxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attn: General Counsel
In the case of any Seller:
Xxxxxxx Development Company
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
ATTN: Xxxxxxx X. Xxxxxxx, Managing Member
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
ATTN: Xxxxxxx X. Xxxxxxx, Managing Member
In the case of either Principal:
0000 Xxxxxx Xxxx
Xxxxxxxxxx, XX 00000-0000
Tel. (000) 000-0000
Xxxxxxxxxx, XX 00000-0000
Tel. (000) 000-0000
with concurrent copy to:
Xxxxxx X. Xxxxxxxxxx, Xx., Esq.
Bridforth & Xxxxxx
0000 Xxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Bridforth & Xxxxxx
0000 Xxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Either party hereto may change the address to which notices are to be sent by giving written notice
of such change to the other party.
21. Governing Law. This Agreement and all rights, obligations and liabilities arising
hereunder shall be construed and governed by the substantive law of the State of Georgia, without
giving effect to the principles of conflicts of law thereof. The parties hereby agree that the
proper venue for any court proceedings arising hereunder shall be in Xxxxxx County,
Georgia and the parties hereby submit and irrevocably consent to the jurisdiction of any court
in said County for any action, suit or proceeding arising hereunder. The parties also submit and
irrevocably consent to the non-exclusive jurisdiction of the competent Federal Courts of the United
States of America, with venue laid solely in the Northern District of Georgia. The parties hereto
irrevocably waive any claim that any such suit, action or proceeding brought in any of the
aforesaid forums had been brought in an incorrect form.
22. Construction. In the event any parts of this Agreement are found to be void, the
remaining provisions of this Agreement shall nevertheless be binding with the same effect as though
the void parts were deleted. The parties have mutually participated in the preparation of this
Agreement and no interpretation hereof shall be based upon a party’s responsibility for drafting
this Agreement.
23. Execution of Agreement. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original, but all of which together shall
constitute but a single document. Execution hereof may also be made by facsimile transmission with
confirmation of receipt.
24. Schedules and Exhibits; Entire Agreement. All Schedules and Exhibits referenced
herein are attached hereto and incorporated herein. This Agreement, together with the written
agreements executed contemporaneously herewith or as contemplated hereby, contain the entire
Agreement of the parties hereto, and no representations, warranties, covenants or agreements not
embodied or incorporated herein or therein, oral or otherwise, shall be of any force of effect.
25. Headings. The headings or titles of the paragraphs of this Agreement are for
convenience only, are not a part of this Agreement and shall not be used as an aid in the
construction of any provision hereof.
26. Waiver. A waiver of any breach hereunder by any party hereto shall not constitute
a waiver by such party of any other breach or a waiver by such party of the same breach on any
other occasion; and, to be effective, any waiver hereunder must be in writing.
27. Further Assurances. Each party agrees that, upon request of the other, it shall
from time to time execute and deliver to such other party all instruments and documents of further
assurance or otherwise and shall do any and all acts and things as may be reasonably required to
carry out the obligations of the parties hereunder and to consummate the transactions provided for
and contemplated hereby.
28. Confidentiality / Public Statements / Other Negotiations.
(a) Seller and the Principals acknowledge that in connection with their association with the
business of Seller, they have confidential information pertaining to the business and the Purchased
Assets, including the terms and very existence of this Agreement (collectively, the “Confidential
Information”). In consideration of this Agreement, Seller and the Principals covenant and agree
jointly and severally that: (i) neither they nor their affiliates will disclose, directly or
indirectly, to any person or entity any Confidential Information, except (A) to Purchaser and its
attorneys, accountants or other representatives, (B) as may be necessary or appropriate in the
ordinary course of performing duties for Seller or Purchaser, (D) to Seller’s lenders and their
counsel as necessary to effect the assumption by Purchaser of the Assumed Debt, or (D) otherwise
with the express prior written consent of Purchaser, and (ii) they and their
affiliates will deliver to Purchaser promptly at any time that Purchaser may so request, all
memoranda, notes, records (including electronic data records), reports and other documents (and all
copies thereof) relating to the Confidential Information which they may then possess or have within
their control. Confidential Information does not include (w) information which is then or later
becomes generally available to the public, (x) such information which has been or is later
disclosed by Purchaser to an unrelated third party on a non-confidential basis and (y) information
which Seller or the Principals are obliged by applicable law to disclose, when supported by the
written opinion of counsel to the effect that disclosure is required by law and then only with as
much prior written notice to the Purchaser as is practical under the circumstances and only to the
extent to which such counsel advises is legally required. Information does not lose its
confidential status merely because it was known by other persons or entities.
(b) Each party agrees to consult with the other prior to any public announcement relating to
the transactions contemplated herein and the parties will mutually approve the timing, content and
dissemination of any public announcement except in situations in which disclosures are required by
applicable law.
(c) In the event of a violation or threatened violation of the covenants contained in this
Section 28, in addition to any other remedy available at law or in equity, the injured party shall
have (i) the right and remedy of specific enforcement, including injunctive relief, it being
acknowledged and agreed that any such violation or threatened violation will cause irreparable
injury and that monetary damages will not provide an adequate remedy, and (ii) costs and expenses
incurred in pursuing rights under this Section 28, including reasonable attorneys’ fees and other
litigation expenses as incurred. Seller and each of the Principals hereby confer jurisdiction to
enforce the covenants contained in this Section 28 upon the federal courts of any jurisdiction
within the United States in which it, he or she is committing an act or acts alleged to be in
violation of the provisions of this Section.
[Remainder of Page Intentionally Blank. Signature Page Follows]
IN WITNESS WHEREOF, each of Seller, Principals and Purchaser have executed or caused this
Agreement to be executed and delivered by its duly authorized officers and members, all as of the
day and year first above written.
| SELLER: | ||||||
| XXXXXXX DEVELOPMENT CO — MEMPHIS, LLC | ||||||
| By: | /s/ Xxxxxxx X. Xxxxxxx
|
|||||
| Its Member | ||||||
| XXXXXXX DEVELOPMENT COMPANY — NASHVILLE, LLC | ||||||
| By: | /s/ Xxxxxxx X. Xxxxxxx
|
|||||
| Its Member | ||||||
| XXXXXXX DEVELOPMENT COMPANY — MISSISSIPPI, LLC | ||||||
| By: | /s/ Xxxxxxx X. Xxxxxxx
|
|||||
| Its Member | ||||||
| PRINCIPALS : | ||||
| /s/ Xxxxxxx X. Xxxxxxx
|
(SEAL) | |||
| XXXXXXX X. XXXXXXX | ||||
| /s/ Xxxxxxx Xxx Xxxxxxx
|
(SEAL) | |||
| XXXXXXX XXX XXXXXXX | ||||
[Signatures Continued On Following Page]
| PURCHASER : | ||||||
| AFC ENTERPRISES, INC. | ||||||
| By: | /s/ Xxxxxxx X. Xxxxxx
|
|||||
| Its: Chief Executive Officer | ||||||
EXHIBIT AND SCHEDULE LIST
Exhibit A - Premises
Exhibit B - Seller Owned Premises Lease Form
Exhibit C - Lease Assignment
Exhibit D - Assignment of Contracts
Exhibit E - Inventory Acknowledgment
Exhibit F - Form of Non-Disturbance Agreement
Exhibit G - Xxxx of Sale
Schedule 1(ii) - Assumed Contracts
Schedule 1(iv) - Licenses and Permits
Schedule 1(viii) - Prepaid Deposits
Schedule 2(c) - Purchase Price Allocation
Schedule 4(b) - Description of Assigned Leases
Schedule 5 - Assumed Debt
Schedule 7 - Seller Due Diligence Deliveries
Schedule 9(r) - Employee List and Compensation
