1
Exhibit 10.2
WARRANT PURCHASE AGREEMENT
THIS WARRANT PURCHASE AGREEMENT (sometimes herein the
"Agreement") is executed this 25th day of October, 1996, between SHONEY'S
INVESTMENTS, INC. ("SII") and SHOLODGE, INC. ("ShoLodge").
W I T N E S S E T H:
WHEREAS, pursuant to that certain Stock Purchase and Warrant
Agreement dated as of October 25, 1991 between ShoLodge (then known as Gulf
Coast Development, Inc.) and SII (the "Warrant Agreement"), SII obtained
certain warrants to acquire shares of common stock of ShoLodge (the
"Warrants"); and
WHEREAS, the Warrants are evidenced by that certain Warrant
Certificate dated October 25, 1991 (the "Warrant Certificate") executed by
ShoLodge (then known as Gulf Coast Development, Inc.) in favor of SII, the
Warrant Certificate having been executed and issued pursuant to the Warrant
Agreement; and
WHEREAS, SII desires to transfer the Warrants to ShoLodge for
the sum of $2,050,000 in good and collected funds, on the terms and subject to
the conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and of the
mutual agreements hereinafter set forth, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. Except as specified otherwise, when used
in this Agreement, the following terms shall have the meanings specified:
"Agreement" shall mean this Warrant Purchase Agreement, as
the same shall be amended from time to time in accordance with the terms
hereof.
"Warrants" shall mean the warrants to acquire common stock of
ShoLodge evidenced by the Warrant Certificate and to be acquired by ShoLodge
from SII pursuant to this Agreement.
1.2 Singular/plural; gender. Where the context so requires
or permits, the useof the singular form includes the plural, and use of the
plural form includes the singular, and the
2
use of any gender includes any and all genders.
ARTICLE II
PURCHASE AND SALE OF THE WARRANTS
2.1 Purchase and Sale of the Warrants. SII hereby sells,
assigns and delivers to ShoLodge the Warrants, and ShoLodge hereby purchases
the Warrants from SII. Simultaneously with the execution of this Agreement, SII
has delivered, or caused to be delivered, to ShoLodge a Lost Warrant
Certificate Affidavit, which includes a transfer of rights of SII to the
Warrant Certificate.
2.2 Purchase Price for Warrants. In consideration of the
aforesaid sale, assignment and delivery of the Warrants, ShoLodge, in full
payment for the aforesaid sale, assignment and delivery, has paid to SII in
immediately available funds the sum of Two Million Fifty Thousand Dollars
($2,050,000), the receipt of which is hereby acknowledged.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SII
SII hereby represents and warrants to ShoLodge as follows,
which representations and warranties shall survive the closing of the
transaction contemplated by this Agreement:
3.1 Title to the Warrant Certificate. SII is the true and
lawful owner and holder of the Warrant Certificate and the Warrants evidenced
thereby.
3.2 Transfer of Warrant Certificate. SII has good right and
lawful authority to transfer and convey the Warrants and to execute the Lost
Warrant Certificate Affidavit to ShoLodge, and the Warrant Certificate and the
Warrants evidenced thereby have not been previously transferred, conveyed or
endorsed to any other person.
3.3 No Liens on Warrant Certificate. The Warrant Certificate
and the Warrants evidenced thereby are free and clear of any and all liens,
encumbrances or security interests of any kind.
3.4 Valid and Binding Agreement. This Agreement constitutes a
valid and binding agreement of SII, enforceable in accordance with its terms,
subject as to enforceability to bankruptcy, insolvency and similar laws
affecting creditors' rights generally and to the availability of equitable
remedies.
3.5 No Violation. Neither the execution and delivery of this
Agreement nor the
-2-
3
consummation by SII of the transactions contemplated hereby
violates or conflicts with any agreement or other restriction of any kind to
which either SII is a party or by which SII is bound.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SHOLODGE
ShoLodge hereby represents and warrants to SH as follows,
which representations and warranties shall survive the closing of the
transaction contemplated by this Agreement:
4.1 Valid and Binding Agreement. This Agreement constitutes a
valid and binding agreement of ShoLodge, enforceable in accordance with its
terms, subject as to enforceability to bankruptcy, insolvency and similar laws
affecting creditors' rights generally and to the availability of equitable
remedies.
4.2 No Violation. Neither the execution and delivery of this
Agreement nor the consummation by ShoLodge of the transactions contemplated
hereby violates or conflicts with any agreement or other restriction of any
kind to which Sholodge is as a party or by which ShoLodge is bound.
ARTICLE V
MISCELLANEOUS
5.1 Expenses. All fees and expenses incurred by SII in
connection with this Agreement shall be paid by SII. All fees and expenses
incurred by ShoLodge in connection with this Agreement will be paid by
ShoLodge.
5.2 Further Assurances. From time to time, at the request of
either party, and without further consideration, SII will execute and deliver
to ShoLodge or ShoLodge will execute and deliver to SII, as the case may be,
such documents and take such action as may reasonably be requested in order to
consummate more effectively the transactions contemplated hereby.
5.3 Parties in Interest. Except as otherwise expressly
provided herein, all the terms and provisions of this Agreement shall be
binding upon, shall inure to the benefit of, and shall be enforceable by the
respective heirs, beneficiaries, personal and legal representatives, successors
and assigns of the parties hereto.
5.4 Entire Agreement, Amendments. This Agreement contains the
entire understanding of the parties with respect to this subject matter. There
are no restrictions, agreements, promises, warranties, covenants or
undertakings other than those expressly set forth herein. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to its subject matter. This Agreement may be amended only by a written
instrument
-3-
4
duly executed by the parties or their respective successors or assigns.
5.5 Headings, etc. The section and paragraph headings
contained in this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretations of this Agreement.
5.6 Notices. All notices, requests, demands and other
communications hereunder ("Notices") shall be in writing and shall be deemed to
have been duly given if hand- delivered, sent via overnight delivery service or
mailed (registered or certified mail, postage prepaid, return receipt
requested) as follows:
As to SII:
Suite 1400
000 Xxxxx Xxxxxx Xxxxxx
Xxx Xxxxx, XX 00000
With a copy to:
Tuke, Xxxx & Xxxxxxx
000 Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx, Xx., Esq.
As to ShoLodge:
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, XX 00000
With a copy to:
Boult, Cummings, Xxxxxxx & Xxxxx, PLC
000 Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxxxx, Esq.
or to such other address as any party may have furnished to the other in
writing in accordance herewith, except that Notices of change of address shall
only be effective upon receipt. All Notices shall be deemed received on the
date of delivery or, if mailed, on the date appearing on the return receipt
therefore
-4-
5
5.7 Counterparts. This Agreement may be executed
simultaneously in several counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the same
instrument.
5.8 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.
5.9 No Reliance. No third party is entitled to rely on any of
the representations, warranties and agreements of any party contained in this
Agreement; the parties to this Agreement assume no liability to any third party
because of any reliance on the representations, warranties and agreements
contained in this Agreement.
5.10 Time of Essence. Time is of the essence in this
Agreement, and all dates and time periods specified herein shall be strictly
observed.
5.11 Enforcement Expenses. The prevailing party in any action
commenced due to the breach hereof shall be entitled to recover its costs,
expenses and reasonable attorney's fees incurred in the enforcement of this
Agreement.
-5-
6
IN WITNESS WHEREOF, this, Agreement has been duly executed
and by the parties hereto on the date first above written.
SHONEY'S INVESTMENTS, INC
By: /s/ Xxxx X. Xxxxxxx
----------------------------
Title: Assistant Secretary
-------------------------
SHOLODGE, INC.
By: /s/ Xxxx Xxxxx
----------------------------
Title: President
------------------------
-6-
