ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (the "Agreement") is made and
entered into as of this 14th day of August, 1998, by and between Lyon's of
California, Inc., a California corporation, I.C.H. Corporation, a Delaware
corporation and Lyon's Restaurants, Inc., a Delaware corporation ("Seller").
RECITALS
A. Seller is engaged in the business of owning and operating of a
chain of restaurants under the name "Lyon's Restaurants" (the
"Business").
B. Seller wishes to sell substantially all the assets it uses in
connection with the Business at the price and on the other
terms and conditions specified in detail below.
X. X.X.X. Corporation, through Lyon's of California, Inc.,
its wholly-owned subsidiary, wishes to so purchase and
acquire such Assets from Seller. (I.C.H. Corporation
and Lyon's of California, Inc. are hereafter referred
to, collectively, as "Buyer" with the rights and
obligations of each entity more fully set forth in
Section 1.4).
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
1. Transfer of Assets.
1.1. Purchase and Sale of Assets. On the Closing Date, as
hereinafter defined, in consideration of the covenants, representations and
obligations of Buyer hereunder, and subject to the conditions hereinafter set
forth, Seller shall sell, assign, transfer, convey, and deliver to Buyer, and
Buyer shall purchase from Seller all of Seller's right, title, and interest in
and to the assets (of every type and description, whether tangible or
intangible, wherever located and whether or not identified or disclosed on
Seller's books and records) and properties, goodwill, and business which are
owned or leased and used by Seller in the operation of the Business
(collectively, the "Property"), excluding, however, all of the Excluded Assets
(as defined in Section 1.2 below). The Property shall consist of, among other
things, the following:
1.1.1. Leases and Contracts. Seller's right, title, and
interest, including security and other deposits thereunder (i) as lessee under
those real property leases
described on Exhibit A-1 to this Agreement (collectively, the "Real Property
Leases"), (ii) as lessee under those equipment, personal property and intangible
property leases, rental agreements, licenses, contracts, agreements and similar
arrangements described on Exhibit A-2 to this Agreement (collectively, the
"Other Leases"), (iii) as a party to those other contracts, leases, orders,
purchase orders, licenses, contracts, agreements and similar arrangements
described on Exhibit A-3 to this Agreement (collectively, the "Other Contracts"
and together with the Other Leases, the "Other Leases and Contracts"), and (iv)
under those SNDA's (as defined in Section 8.9) that are being assumed by Seller
and assigned to Buyer or that are newly obtained by Seller as more fully
discussed in Section 8.9.
1.1.2. Improvements. All improvements, and all appurtenances to
such improvements, located on the real property (collectively, the "Real
Property") occupied by Seller under the Real Property Leases, including, without
limitation, buildings, outside storage areas, signage, and pylon signs,
driveways, walkways and parking areas, but in all events only to the extent of
Seller's interest in the same (collectively, the "Improvements").
1.1.3. Personal Property. All of those items of equipment and
tangible personal property owned by Seller and listed in Exhibit B to this
Agreement and all other tangible personal property now or hereafter owned by
Seller and used exclusively in connection with the Business, including, without
limitation, all such furniture, vehicles, machinery, equipment, tools, spare
parts, computers, fixtures and furnishings located at or on the Real Property
(collectively, the "Personal Property"). As used in this Agreement, the Personal
Property shall not include the Inventory. The Personal Property shall also
expressly exclude any equipment or other tangible property held by Seller
pursuant to a lease, rental agreement, contract, license or similar arrangement
(a "Contract") where Buyer does not assume the underlying Contract relating to
such personal property at the Closing.
1.1.4. Intangible Property. All intangible personal property
owned or held by Seller and used exclusively in connection with the Business,
but in all cases only to the extent of Seller's interest and only to the extent
transferable, together with all books, records and like items pertaining to the
Business, including, without limitation, the name "Lyon's Restaurants", the
goodwill of the Business, trademarks, trade names, service marks, all plans and
specifications for the Improvements, all appraisals, engineering, soils, pest
control, and other reports relating to the Real Property, catalogues, customer
lists and other data bases, correspondence with present
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or prospective customers and suppliers, advertising materials, software
programs, and telephone exchange numbers identified with the Business and all
permits, licenses, authorizations, and approvals relating to the operation of
the business (collectively, the "Intangible Property"). As used in this
Agreement, Intangible Property shall in all events exclude any software or other
item of intangible property held by Seller pursuant to a license or other
Contract where Buyer does not assume the underlying Contract relating to such
intangible personal property at the Closing.
1.1.5. Receivables. All instruments, receivables, accounts
receivable and unbilled costs and fees and, subject to Section 1.2, all causes
of action relating or pertaining to the foregoing (collectively, the
"Receivables").
1.1.6. Inventory. All supplies, goods, materials, work in
process, inventory and stock in trade owned by Seller (collectively, the
"Inventory").
1.2. Excluded Assets.
1.2.1. Excluded Assets Generally. Notwithstanding anything to
the contrary in this Agreement, the Property shall not include the following
(the "Excluded Assets"): (i) those items excluded pursuant to the provisions of
Section 1.1 above; (ii) all cash or cash equivalents; (iii) all preference or
avoidance claims and actions of Seller, including, without limitation, any such
claims and actions arising under Section 544, 545, 547, 548, 549, and 550 of the
United States Bankruptcy Code; (iv) Seller's rights under this Agreement and all
cash and non-cash consideration payable or deliverable to Seller pursuant to the
terms and provisions hereof or any subsequent agreement between Seller and
Buyer; (v) insurance proceeds, claims and causes of action with respect to or
arising in connection with (A) any lease, contract, or agreement which is not
assigned to Buyer at the Closing, or (B) any item of tangible or intangible
property located on or about or used solely in connection with a location, the
Real Property Lease for which is not acquired by Buyer at the Closing; (vi) any
lease, contract, or agreement to which Seller is a party which is not listed or
described on Exhibit X-0, Xxxxxxx X-0, or Exhibit A-3 to this Agreement; (vii)
the certificate of incorporation, taxpayer and other identification numbers,
seals, minute books, stock transfer books, blank stock certificates, and other
documents relating to the organization, maintenance, and existence of Seller as
a corporation; (viii) any Privileged Information (as defined in Section 1.2.2),
(ix) any information about employees who do not accept offers of employment from
Buyer, (x) any asset or obligation set forth in an Exclusion Notice (as defined
in Section 1.2.3), and (xi) a promissory note and accompanying trust
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deed received from sale of Seller's former Sparks, Nevada location and presently
held by Seller's senior lenders.
1.2.2. Privileged Information. "Privileged Information" shall
mean matters subject to the attorney-client privilege except for matters that
relate to the Properties or the operation of the Business. For example, matters
pertaining to deliberations of the board of directors, the bankruptcy case, the
process of selling assets, and other corporate matters shall be considered
Privileged Information, but matters pertaining to operation of the store
locations, dealings with vendors, and day-to-day operating issues shall not be
considered Privileged Information.
1.2.3. Exclusion Notices. Buyer shall have the right to deliver
written notice to Seller from time to time, but no later than five (5) business
days prior to the Closing Date, that Buyer does not desire to acquire title to
certain assets of Seller or to assume certain Real Property Leases or any Other
Leases or Contracts. Any such notice shall be considered an "Exclusion Notice."
Delivery of an Exclusion Notice shall not affect the Purchase Price.
1.3. Instruments of Transfer. The sale, assignment, transfer,
conveyance and delivery of the Property to Buyer shall be made by assignments, a
xxxx of sale, and other instruments of assignment, transfer and conveyance
provided for in Section 3 below and such other instruments as may reasonably be
requested by Buyer and which do not increase in any material way the burdens
imposed by this Agreement upon Seller.
1.4. Relationship Between I.C.H. Corporation and Lyon's of
California, Inc.. It is the intent of Seller and Buyer that both I.C.H.
Corporation and Lyon's of California, Inc. be fully responsible for all
obligations of Buyer under this Agreement and that any breach of or default
under this Agreement shall be the joint and several responsibility of I.C.H.
Corporation and Lyon's of California, Inc. Seller acknowledges and agrees that
the transfer of assets and assumption of liabilities on the Closing Date will be
to and from Lyon's of California, Inc. only and that I.C.H. Corporation shall
not take title to any assets from nor assume any liabilities of Seller on the
Closing Date. Buyer shall be responsible for demonstrating to the Bankruptcy
Court (as defined in Section 8.4.1) that Lyon's of California, Inc. is capable
of providing adequate assurance of future performance within the meaning of 11
U.S.C ss. 365(f)(2).
1.5. Continued Use of Corporate Name. Buyer hereby consents to
Seller's retention of the name "Lyon's Restaurants, Inc." as the corporate name
of Seller and grants to Seller a non-exclusive license to use such name as its
corporate name; provided, that if after the Closing Date, Seller intends to
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engage in the operation of any business, Seller shall change its corporate name
prior to doing so.
2. Consideration.
2.1. Purchase Price.
(a) The cash consideration to be paid by Buyer to Seller for
the Property (the "Purchase Price") shall be TwentyTwo Million Dollars
($22,000,000).
(i) Concurrently with the mutual execution and delivery of
this Agreement (the date of such mutual execution and delivery is sometimes
referred to herein as the "Execution Date"), Buyer shall deposit into an escrow
(the "Escrow") with an escrow agent or company (the "Escrow Holder") reasonably
designated by Seller One Million Dollars ($1,000,000) (the "Deposit") in
immediately available, good funds (funds delivered in this manner are referred
to herein as "Good Funds"), pursuant to joint escrow instructions to be
delivered to the Escrow Holder on or before the Execution Date. In turn, the
Escrow Holder shall immediately deposit the Deposit into an interest-bearing
account. The Deposit shall become nonrefundable upon the earlier of the entry of
the (x) Sale Order (as defined in Section 8.4.2), or (y) termination of the
transaction contemplated by this Agreement by reason of Buyer's default (a
"Buyer Default Termination"). At the Closing, the Deposit (and any interest
accrued thereon) shall be paid to Seller on account of the Purchase Price. In
the event the Deposit becomes non-refundable by reason of a Buyer Default
Termination, Escrow Holder shall immediately disburse the Deposit and all
interest accrued thereon to Seller to be retained by Seller for its own account.
If the transactions contemplated herein terminate by reason of (A) Seller's
default, (B) the failure of a condition to Buyer's obligations, or (C) the
consummation of a sale to a third party as described in Section 8.4. below, the
Escrow Holder shall return to Buyer the Deposit (together with all interest
thereon), but less Buyer's one-half share of the Escrow Holder's escrow fees and
charges.
(ii) On the Closing Date, Buyer shall pay and deliver, in
Good Funds, the balance of the Purchase Price to Seller.
2.2. Assumed Liabilities. Buyer shall, effective as of the Closing
Date, be assigned Seller's interest under the Real Property Leases and Other
Leases and Contracts and shall assume all liabilities of Seller accruing under
the Real Property Leases, under the Other Leases and Contracts on and after the
Closing Date, and under any permits or licenses arising after the Closing Date;
provided that Seller shall pay all cure amounts owing under any of the Real
Property Leases and Other Leases and
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Contracts as of the Closing which the Bankruptcy Court may order to be paid as a
condition to Seller's assumption and assignment of any Real Property Lease or
Other Lease or Contract. Other than the liabilities and obligations of Seller
expressly assumed by Buyer hereunder, Buyer is not assuming and shall not be
liable for any liabilities or obligations of Seller.
2.3. Instruments of Assumption. The assumption by Buyer of the
assumed liabilities referred to in Section 2.2 shall be further evidenced by the
Assignment of Leases and such other instruments as may reasonably be requested
by Seller and which do not increase in any material way the burdens imposed by
this Agreement upon Buyer.
2.4. Allocation of Purchase Price. The Purchase Price shall be
allocated by Buyer in its sole discretion prior to Closing and Buyer shall
notify Seller at least five (5) business days prior to Closing with respect to
such allocation; provided that such allocation shall be made in a manner
consistent with Section 1060 of the Internal Revenue Code of 1986, as amended.
Each party agrees that it will not make any returns, filing, report, or other
submission or take any position with or before any federal, state, or local tax
agency or other authority which would conflict or be inconsistent with the
allocation provided by Buyer pursuant to this Section 2.4.
3. Closing Transactions.
3.1. Closing. The Closing of the transactions provided for herein
(the "Closing") shall take place at the offices of Xxxxxx Xxxxxxxx Xxxxxx &
Xxxxxx, a professional corporation, 000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxx
Xxxxxxxxx, Xxxxxxxxxx 00000 or, at Buyer's option, at the San Francisco office
of Buyer's lender's title company.
3.2. Closing Date. The Closing shall be held on a date mutually
convenient to Seller and Buyer not later than fifteen (15) days after entry of
the Sale Order (as defined in Section 8.4.2) (the "Closing Date"); provided that
Buyer may extend the fifteen (15) day period by another fifteen (15) days by
giving written notice to Seller no later than the tenth (10th) day after entry
of the Sale Order. In no event shall the Closing Date be later than December 31,
1998 (the "Outside Date"). In the event the conditions to Closing have not been
satisfied or waived by the Outside Date, then any party who is not in default
hereunder may terminate this Agreement. Alternatively, the parties may mutually
agree to an extended Closing Date. Until this Agreement is either terminated or
the parties have agreed upon an extended Closing Date, the parties shall
diligently continue to work to satisfy all conditions to Closing and the
transaction contemplated herein shall close as soon as such conditions are
satisfied or waived.
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3.3. Seller's Deliveries to Buyer at Closing. On the Closing Date,
Seller shall make the following deliveries to Buyer:
3.3.1. An Assignment and Assumption of Leases and Other
Contracts, duly executed by Seller, substantially in the form attached as
Exhibit C to this Agreement, pursuant to which Seller assigns the Real Property
Leases and Other Contracts (the "Assignment of Leases").
3.3.2. A xxxx of sale, duly executed by Seller, substantially
in the form attached as Exhibit D to this Agreement, pursuant to which Seller
transfers the Personal Property and the Inventory to Buyer (the "Xxxx of Sale").
3.3.3. An Assignment of Intangible Property, duly executed by
Seller, in the form attached as Exhibit E to this Agreement, pursuant to which
Seller assigns to Buyer its interest, if any, in and to the Intangible Property
to Buyer (the "Assignment of Intangible Property").
3.3.4. Any such other documents, funds or other things
reasonably contemplated by this Agreement to be delivered by Seller to Buyer at
the Closing.
3.4. Buyer's Deliveries to Seller at Closing. On the Closing Date,
Buyer shall make or cause the following deliveries to Seller:
3.4.1. That portion of the Purchase Price to be delivered by
Buyer directly to Seller at the Closing under Section 2.1 (and Buyer shall cause
Escrow Holder to deliver the Deposit to Seller).
3.4.2. A counterpart of the Assignment of Leases, duly executed
by Buyer.
3.4.3. A counterpart of the Assignment of Intangible Property,
duly executed by Buyer.
3.4.4. Any such other documents, funds or other things
reasonably contemplated by this Agreement to be delivered by Buyer to Seller at
the Closing.
3.5. Prorations. Rent, current taxes, prepaid advertising and other
items of expense (including, without limitation, any prepaid insurance under the
Real Property Leases or Other Leases and Contracts, or any of them) and income
relating to or attributable to the Business and/or the Real Property Leases or
the Other Leases and Contracts shall be prorated between Seller and Buyer as of
the Closing Date. All
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obligations due in respect of periods prior to Closing shall be paid in full or
otherwise be the responsibility of Seller and all obligations due in respect of
periods after Closing shall be paid in full or otherwise be the responsibility
of Buyer. Rent shall be prorated on the basis of a thirty (30) day month.
3.6. Sales, Use and Other Taxes. Any sales, purchases, transfer,
stamp, documentary stamp, use or similar taxes under the laws of the states in
which any portion of the Property is located, or any subdivision of any such
state, which may be payable by reason of the sale of the Property under this
Agreement or the transactions contemplated herein shall be borne and timely paid
one-half by Buyer and one-half by Seller.
3.7. Possession. Right to possession of the Property shall transfer
to Buyer on the Closing Date. Seller shall transfer and deliver to Buyer on the
Closing Date such keys, lock and safe combinations and other similar items as
Buyer shall require to obtain immediate and full occupation and control of the
Property, and shall also make available to Buyer at their then existing
locations the originals of all documents in Seller's possession that are
required to be transferred to Buyer by this Agreement.
4. Conditions Precedent to Closing.
4.1. Conditions to Seller's Obligations. Seller's obligation to make
the deliveries required of Seller at the Closing Date shall be subject to the
satisfaction or waiver by Seller of each of the following conditions.
4.1.1. All of the representations and warranties of Buyer
contained herein shall continue to be true and correct at the Closing in all
material respects.
4.1.2. Buyer shall have executed and delivered to Seller the
Assignment of Leases.
4.1.3. Buyer shall have delivered, or shall be prepared to
deliver at the Closing, all cash and other documents required of Buyer to be
delivered at the Closing.
4.1.4. Buyer shall have delivered to Seller appropriate
evidence of all necessary corporate action by Buyer in connection with the
transactions contemplated hereby, including, without limitation: (i) certified
copies of resolutions duly adopted by Buyer's board of directors approving the
transactions contemplated by this Agreement and authorizing the execution,
delivery, and performance by Buyer of this Agreement; and (ii) a certificate as
to the incumbency of officers of Buyer executing this Agreement and any
instrument or
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other document delivered in connection with the transactions contemplated by
this Agreement.
4.1.5. Seller shall have determined that it will not incur any
liability under the Worker Adjustment and Retraining Notification Act in
connection with the consummation of this transaction.
4.1.6. All applicable waiting periods relating to the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976 shall have expired or been
terminated and any proceedings that may have been filed or instituted thereunder
shall have been satisfactorily concluded.
4.1.7. No action, suit or other proceedings brought by any
governmental agency shall be pending before any court, tribunal or governmental
authority seeking or threatening to restrain or prohibit the consummation of the
transactions contemplated by this Agreement, or seeking to obtain substantial
damages in respect thereof, or involving a claim that consummation thereof would
result in the violation of any law, decree or regulation of any governmental
authority having appropriate jurisdiction.
4.1.8. The Bankruptcy Court shall have entered the Sale Order,
which shall not have been stayed as of the Closing Date.
4.2. Conditions to Buyer's Obligations. Buyer's obligation to make
the deliveries required of Buyer at the Closing shall be subject to the
satisfaction or waiver by Buyer of each of the following conditions:
4.2.1. Seller shall have substantially performed or tendered
performance of each and every covenant on Seller's part to be performed which,
by its terms, is capable of performance before the Closing.
4.2.2. All representations and warranties of Seller contained
herein shall continue to be true and correct at the Closing in all material
respects.
4.2.3. Seller shall have executed and be prepared to deliver to
Buyer the Assignment of Leases.
4.2.4. Seller shall have delivered, or shall be prepared to
deliver at the Closing, all other documents required of Seller to be delivered
at the Closing.
4.2.5. All applicable waiting periods relating to the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976 shall have expired or been
terminated and any proceedings that may have
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been filed or instituted thereunder shall have been satisfactorily concluded.
4.2.6. No action, suit or other proceedings brought by any
governmental agency shall be pending before any court, tribunal or governmental
authority seeking or threatening to restrain or prohibit the consummation of the
transactions contemplated by this Agreement, or seeking to obtain substantial
damages in respect thereof, or involving a claim that consummation thereof would
result in the violation of any law, decree or regulation of any governmental
authority having appropriate jurisdiction.
4.2.7. The Bankruptcy Court shall have entered the Sale Order,
which shall not have been stayed as of the Closing Date.
4.2.8. There shall not have occurred prior to the Closing Date
a material adverse change in the financial condition or results of operations of
the Business (exclusive of the effect of any locations where the real property
lease is not being assumed by Buyer and exclusive of costs and expenses directly
relating to Seller's filing of a bankruptcy case).
4.3. Termination. If any of the above conditions is neither
satisfied nor waived on or before the date by which the condition is required to
be satisfied, a party who is not then in default hereunder may terminate this
Agreement by delivering to the other written notice of termination. Any waiver
of a condition shall be effective only if such waiver is stated in writing and
signed by the waiving party; provided, however, that the consent of a party to
the Closing shall constitute a waiver by such party of any conditions to Closing
not satisfied as of the Closing Date.
5. Seller's Representations and Warranties. Seller hereby makes the
following representations and warranties to Buyer:
5.1. Validity of Agreement. Upon obtaining the Approval Order, this
Agreement shall constitute the valid and binding obligation of Seller
enforceable in accordance with its terms.
5.2. Organization, Standing and Power. Subject to the applicable
provisions of bankruptcy law, Seller has all requisite corporate power and
authority to own, lease and operate its properties, to carry on its business as
now being conducted and, subject to Seller's obtaining the Approval Order, to
execute, deliver and perform this Agreement and all writings relating hereto.
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5.3. Authorization of Seller. Upon obtaining the Approval Order, the
execution and delivery of this Agreement, the consummation of the transactions
herein contemplated, and the performance of, fulfillment of and compliance with
the terms and conditions hereof by Seller do not and will not: (i) conflict with
or result in a breach of the articles of incorporation or the by-laws of Seller;
(ii) violate any statute, law, rule or regulation, or any order, writ,
injunction or decree of any court or governmental authority; or (ii) violate or
conflict with or constitute a default under any agreement, instrument or writing
of any nature to which Seller is a party or by which Seller or its assets or
properties may be bound.
5.4. Title to Property. To Seller's knowledge (which consists of
matters actually known to Seller's senior management), Seller has good and
marketable title to the Property; provided, however, Seller makes no
representation whatsoever as to title to the Intangible Property or the
transferability thereof.
5.5. Compliance With Law. The operations of Seller are in compliance
with all applicable laws, regulations, permits, authorizations and other
governmental orders including, without limitation, applicable safety (including
OSHA), environmental (including wetlands), antipollution, building, zoning or
health laws, ordinances and regulations, except where the failure to so comply
would not be expected to have a material adverse effect on the financial
condition or results of operations of the Business or the Property taken as a
whole (a "Material Adverse Effect").
5.6. No Subsidiaries. Seller does not have any subsidiaries.
5.7. Certificates of Occupancy. Seller has, and will deliver to
Buyer at Closing, certificates of occupancy for each Lyon's Restaurant included
as part of the Property, covering all Improvements located at such restaurants,
except to the extent that the absence thereof would not be expected to have a
Material Adverse Effect.
5.8. Licenses, Permits, Etc. Seller has, and will deliver to Buyer
at Closing, all required licenses (including liquor licenses), permits and
certificates required pursuant to municipal health codes or otherwise in order
to lawfully operate each Lyon's Restaurant included as part of the Properties,
except to the extent that the absence thereof would not be expected to have
Material Adverse Effect.
5.9. Adequacy of Assets. Except for the Excluded Assets, the
Properties include all of the properties, and assets, real, personal, and mixed,
tangible and intangible, and all leases, contracts, and agreements (whether
owned or to which
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Seller is a party) which are presently used by Seller in the operation of its
business.
6. Buyer's Warranties and Representations. In addition to the
representations and warranties contained elsewhere in this Agreement, Buyer
hereby makes the following representations and warranties to Seller:
6.1. Validity of Agreement. All action on the part of each Buyer
necessary for the authorization, execution, delivery and performance of this
Agreement by such Buyer, including, but not limited to, the performance of such
Buyer's obligations hereunder, has been taken. This Agreement, when executed and
delivered by such Buyer, shall constitute the valid and binding obligation of
such Buyer enforceable in accordance with its terms.
6.2. Organization, Standing and Power. I.C.H. Corporation is a
corporation duly organized and validly existing under the laws of the State of
Delaware. Lyon's of California, Inc. is a corporation duly organized, validly
existing and in good standing under the laws of the State of California. Each
Buyer has all requisite corporate power and authority to own, lease and operate
its properties, to carry on its business as now being conducted and to execute,
deliver and perform this Agreement and all writings relating hereto.
6.3. Authorization of Buyer. The execution, delivery and performance
of this Agreement and all writings relating hereto by each Buyer have been duly
and validly authorized. The execution and delivery of this Agreement, the
consummation of the transactions herein contemplated, and the performance of,
fulfillment of and compliance with the terms and conditions hereof by such Buyer
do not and will not: (i) conflict with or result in a breach of the articles of
incorporation or by-laws of such Buyer; (ii) violate any statute, law, rule or
regulation, or any order, writ, injunction or decree of any court or
governmental authority, or (iii) violate or conflict with or constitute a
default under any agreement, instrument or writing of any nature to which such
Buyer is a party or by which such Buyer or its assets or properties may be
bound.
7. "AS IS" Transaction. BUYER HEREBY ACKNOWLEDGES AND AGREES THAT, EXCEPT
AS OTHERWISE EXPRESSLY PROVIDED IN SECTION 5 ABOVE, SELLER MAKES NO
REPRESENTATIONS OR WARRANTIES WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO
ANY MATTER RELATING TO THE PROPERTY INCLUDING, WITHOUT LIMITATION, INCOME TO BE
DERIVED OR EXPENSES TO BE INCURRED IN CONNECTION WITH THE PROPERTY, THE PHYSICAL
CONDITION OF ANY PERSONAL PROPERTY COMPRISING A PART OF THE PROPERTY OR WHICH IS
THE SUBJECT OF ANY OTHER LEASE OR CONTRACT TO BE ASSUMED BY BUYER AT THE
CLOSING, THE ENVIRONMENTAL CONDITION OR OTHER MATTER RELATING TO THE PHYSICAL
CONDITION
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OF ANY REAL PROPERTY OR IMPROVEMENTS WHICH ARE THE SUBJECT OF ANY REAL PROPERTY
LEASE TO BE ASSUMED BY BUYER AT THE CLOSING, THE ZONING OF ANY SUCH REAL
PROPERTY OR IMPROVEMENTS, THE VALUE OF THE PROPERTY (OR ANY PORTION THEREOF),
THE TRANSFERABILITY OF PROPERTY, THE TERMS, AMOUNT, VALIDITY OR ENFORCEABILITY
OF ANY ASSUMED LIABILITIES, THE TITLE OF THE PROPERTY (OR ANY PORTION THEREOF,
THE MERCHANTABILITY OR FITNESS OF THE PERSONAL PROPERTY OR ANY OTHER PORTION OF
THE PROPERTY FOR ANY PARTICULAR PURPOSE, OR ANY OTHER MATTER OR THING RELATING
TO THE PROPERTY OR ANY PORTION THEREOF). WITHOUT IN ANY WAY LIMITING THE
FOREGOING, SELLER HEREBY DISCLAIMS ANY WARRANTY (EXPRESS OR IMPLIED) OF
MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE AS TO ANY PORTION OF THE
PROPERTY. BUYER FURTHER ACKNOWLEDGES THAT BUYER HAS CONDUCTED AN INDEPENDENT
INSPECTION AND INVESTIGATION OF THE PHYSICAL CONDITION OF THE PROPERTY AND ALL
SUCH OTHER MATTERS RELATING TO OR AFFECTING THE PROPERTY AS BUYER DEEMED
NECESSARY OR APPROPRIATE AND THAT IN PROCEEDING WITH ITS ACQUISITION OF THE
PROPERTY, EXCEPT FOR ANY REPRESENTATIONS AND WARRANTIES SET FORTH IN SECTION 5
WHICH BY THEIR SPECIFIC TERMS SURVIVE THE CLOSING, BUYER IS DOING SO BASED
SOLELY UPON SUCH INDEPENDENT INSPECTIONS AND INVESTIGATIONS. ACCORDINGLY, EXCEPT
ONLY FOR SUCH SURVIVING REPRESENTATIONS, BUYER WILL ACCEPT THE PROPERTY AT THE
CLOSING "AS IS," "WHERE IS," AND "WITH ALL FAULTS."
8. Conduct and Transaction Prior to Closing.
8.1. Access to Records and Properties of Seller. From and after the
date of this Agreement until the Closing Date, Seller shall afford to Buyer's
officers, independent public accountants, counsel, lenders, consultants,
engineers, and other representatives, free and full access at all reasonable
times to the Property, all records pertaining to the Property or the Business,
and to the personnel of Seller (including officers, employees, and independent
accountants but not including outside directors); provided that requests to
visit the Property or to speak with employees shall be coordinated through
senior management so as not unduly impose on the operation of the Business.
Buyer, however, shall not be entitled to access to any materials containing (a)
Privileged Information, or (b) communications or information about former
employees. Buyer shall be entitled to receive communications and information
with respect to current employees, but Buyer agrees to indemnify Seller and its
officers, directors, employees, and agents, and hold Seller and such other
parties harmless from all claims, demands, liabilities, and causes of action
arising from Seller's disclosure to Buyer of information regarding current
employees. Buyer expressly acknowledges that nothing in this Section 8.1 is
intended to give rise to any contingency to Buyer's obligations to proceed with
the transactions contemplated herein.
8.2. Operation of the Business Pending Closing. Unless Buyer
otherwise consents, during the period prior to the Closing
13
Date, Seller shall operate the Business as currently operated and only in the
ordinary course and, consistent with such operation, shall use commercially
reasonable efforts to preserve intact its current business organization and its
relationships with employees and persons having dealings with it.
8.3. Xxxx-Xxxxx Xxxxxx Cooperation. Buyer and Seller shall cooperate
with each other (at their respective sole cost and expense) to comply with, and
provide the information required by, the pre-merger notification and waiting
period rules of the Xxxx-Xxxxx-Xxxxxx Anti-trust Improvements Act of 1976
(codified in Section 18(a) of Title 15, U.S. Code), in any Federal Trade
Commission regulations, and in any provisions or regulations of or relating to
the Xxxxxxx Act. In that connection, Buyer and Seller shall use diligent efforts
to make their joint pre-merger notification filing with the Federal Trade
Commission no later than thirty (30) days following the Execution Date (but not
earlier than the Petition Date (as defined in Section 8.4.1)).
8.4. Bankruptcy Court Approvals.
8.4.1. Bankruptcy Filing. No later than September 9, 1998,
Seller shall file a chapter 11 case (the "Bankruptcy Case") in the United States
Bankruptcy Court for the Northern District of California (the "Bankruptcy
Court"). The date of such filing shall be the "Petition Date."
8.4.2. Motion to Bankruptcy Court for Approval of Sale and Sale
Procedures. Promptly after the Petition Date, Seller will file with the
Bankruptcy Court a motion (the "Motion") requesting entry of an order (the
"Procedure Order") (the terms of which are more fully described below) approving
procedures for sale of the Property to Buyer under 11 U.S.C. ss. 363 and an
order (the "Sale Order") (the terms of which are more fully described below)
confirming sale of the Property to Buyer under 11 U.S.C. ss. 363. The Motion
shall request a hearing on entry of the Procedure Order approximately fifteen
(15) days after the Petition Date and a hearing on entry of the Sale Order
approximately thirty (30) days after entry of the Procedure Order.
8.4.3. Procedure Order. The Motion shall request that the
Procedure Order include the following provisions: (i) that the Bankruptcy Court
set a date for a hearing (the "Sale Hearing") at which overbids for the Property
may be made and at which the sale of the Property to Buyer (or, if applicable, a
successful overbidder) can be confirmed; (ii) that, in the event that Buyer is
not approved by the Bankruptcy Court as the purchaser of the Property, and the
Property (or any material portion thereof) is thereafter sold to any third party
for consideration in excess of the Purchase Price and the other consideration
provided for in this Agreement
14
notwithstanding Buyer's willingness and ability to consummate the transactions
contemplated by this Agreement, Buyer will be entitled to receive from the
Seller a fee (the "Break-Up Fee") equal to (a) One Million One Hundred Thousand
Dollars ($1,100,000) (i.e., five (5) percent of the Purchase Price), plus (b)
Buyer's documented out-of-pocket expenses (including but not limited to
reasonable attorney's fees, loan commitment fees, and Xxxx-Xxxxx-Xxxxxx filing
fees) associated with Buyer's efforts to negotiate, document, and pursue the
consummation of the transaction set forth in this Agreement; (iii) that the
Breakup Fee, if it becomes applicable, be paid to Buyer concurrently with the
consummation of such third party sale; (iv) that third party offers to purchase
the Property must (a) be in writing and, together with sufficient financial
information to enable Seller to determine such third party's financial capacity,
be submitted to Houlihan, Lokey, Xxxxxx & Xxxxx, Seller's investment bankers
("HLHZ") and to Seller, Buyer, and the agent for Seller's senior lending group,
and its counsel, and to counsel for the official creditors committee not later
than three (3) business days prior to the Sale Hearing, (b) be subject to no due
diligence, financing, third party consent, or other contingencies (other than a
Xxxx-Xxxxx-Xxxxxx Act filing), (c) include an agreement to deliver to Seller a
non-refundable deposit of One Million Dollars ($1,000,000) by wire transfer
within one (1) day of such third party's bid being accepted at the Sale Hearing,
(d) if the offer contemplates continued operation of the Business for a period
of time after Closing, be on substantially the same terms (other than purchase
price and other than provisions that relate to periods prior to the date of the
Sale Hearing) as this Agreement, (e) if the offer contemplates a cessation of
the Business upon Closing, contain sufficient detail regarding such cessation to
enable Seller to determine the extra costs that Seller will incur from such
cessation, and (f) include an agreement that an order substantially similar to
the Sale Order described in Section 8.4.5 of this Agreement is acceptable to
such bidder; (v) that no prospective purchaser will be permitted to bid at the
Sale Hearing unless such party has been deemed "financially qualified" by HLHZ,
(vi) that, in order to be considered at the Sale Hearing, any initial bid for
the Property by any third party must be not less than Twenty-Three Million Eight
Hundred Thousand Dollars ($23,800,000), (vii) that subsequent bids for the
Property following such an initial bid shall be in increments of Four Hundred
Thousand Dollars ($400,000), and (vii) that, should overbidding take place at
the Sale Hearing, Buyer shall have the right, but not the obligation, to
participate in the overbidding (including through the use of the Secured
Lender's Contingent Claim Assignment (as defined in Section 8.4.7)) and to be
approved as the overbidder at that hearing.
8.4.4. Seller's Duties With Respect to Procedure Order;
Consequences of Failure to Obtain Procedure Order. Following the filing of the
Motion, Seller shall use
15
reasonable efforts to obtain entry of the Procedure Order containing the above
provisions. If (a) the Bankruptcy Court refuses to approve the financial terms
of the Breakup Fee, (b) the Bankruptcy Court refuses to enter a Procedure Order
that is substantially similar to the one requested by Seller (other than the
request for approval of use of the Secured Lender's Contingent Claim Assignment
as discussed below), or (c) a Procedure Order is not entered on or before
thirty-three (33) days after the Petition Date, then in any such case Buyer
shall have the right, upon written notice delivered to the Seller, to terminate
this transaction, in which case the transaction contemplated by this Agreement
shall terminate and Buyer and Seller shall be relieved of any further obligation
or liability hereunder. If the Bankruptcy Court enters a Procedure Order, such
notice must be delivered to Seller within three (3) business days after receipt
by buyer of the Procedure Order in order to be effective. If not delivered
within such time period, Buyer will be deemed to have accepted the Procedure
Order and neither the transaction nor this Agreement shall terminate.
8.4.5. Sale Order. The Motion shall request that the Sale Order
include the following provisions: (i) that sale of the Property to Buyer on the
terms and conditions set forth in this Agreement is approved and Seller is
authorized to proceed with this transaction; (ii) a specific finding that Buyer
is a good faith purchaser of the Property; (iii) that the sale of the Property
to Buyer shall be free and clear of all liens, charges, and encumbrances; (iv)
that Seller is authorized to assume and to assign to Buyer the Real Property
Leases and the Other Leases and Contracts pursuant to Xxxxxxx 000 xx xxx Xxxxxx
Xxxxxx Bankruptcy Code, subject to Seller's obligation to pay any necessary cure
amounts ordered by the Bankruptcy Court; (v) with respect to the Real Property
Leases, the additional findings and/or provisions set forth in Exhibit F to this
Agreement, and (vi) such other matters as Buyer shall reasonably request;
provided that Seller's failure to obtain Bankruptcy Court approval of matters
included in the Motion pursuant to this clause (vi) shall not be a breach of or
default under this Agreement and the obtaining of such approval is not a
condition to Buyer's obligations under this Agreement.
8.4.6. Seller's Duties With Respect to Sale Order; Consequences
of Failure to Obtain Sale Order. Following the entry of the Procedure Order,
Seller shall use reasonable efforts to obtain entry of the Sale Order containing
the above provisions. If (a) the Bankruptcy Court refuses to enter a Sale Order
providing for the assumption and assignment of at least ninety percent (90%) of
the Real Property Leases listed on Exhibit A-1 (other than any Real Property
Leases referred to in an Exclusion Notice), (b) the Bankruptcy Court refuses to
enter a Sale Order providing for the assumption and assignment of Other
16
Contracts and Leases which, in the aggregate, would have if not assigned to
Buyer a Material Adverse Effect, (c) the Bankruptcy Court refuses to enter a
Sale Order that, except for the matters already referred to in this Section
8.4.6, the Special Landlord Provisions referred to in Section 8.4.9, and the
items included in the Motion at the request of Buyer pursuant to clause (vi) of
Section 8.4.5, is substantially similar to the one requested by Seller, or (d) a
Sale Order is not entered on or before forty (40) days after entry of the
Procedure Order, then in any such case Buyer shall have the right, upon written
notice delivered to the Seller, to terminate this transaction, in which case the
transaction contemplated by this Agreement shall terminate and Buyer and Seller
shall be relieved of any further obligation or liability hereunder. If the
Bankruptcy Court enters a Sale Order, such notice must be delivered to Seller
within three (3) business days after receipt by Buyer of the Sale Order in order
to be effective. If not delivered within such time period, Buyer will be deemed
to have accepted the Sale Order and neither the transaction nor this Agreement
shall terminate.
8.4.7. Secured Lenders' Contingent Claim Assignment. Seller
acknowledges that Buyer and Seller's secured lenders (the "Secured Lenders")
have informed Seller that they have reached an agreement in principal regarding
such Secured Lenders using their best efforts to enable Buyer to credit bid a
portion of the claim currently held by the Secured Lenders in connection with
the sale of the Property to Buyer. Seller agrees that when the specific terms of
such agreement have been finalized, Seller will seek approval of such credit bid
as part of the Motion and will use reasonable efforts to obtain Bankruptcy Court
Approval thereof and to have such approval included in the Procedure Order.
Buyer acknowledges that Seller's obligation with respect thereto is to use
reasonable efforts to obtain such approval. Seller's failure to do so shall not
constitute a breach of or default under this Agreement nor excuse Buyer's
continued performance of its obligations hereunder.
8.4.8. Adequate Assurance of Future Performance. Buyer
acknowledges that 11 U.S.C. ss. 365(f)(2) requires, as a condition of assignment
of an executory contract or unexpired lease, that the assignee provide adequate
assurance of future performance. Buyer agrees that Buyer, rather than Seller,
shall be responsible for satisfaction of this condition.
8.4.9. Special Landlord Provisions. Seller agrees to use
reasonable commercial efforts to obtain the Bankruptcy Court's approval of the
items in paragraphs 10 and 11 of Exhibit F to this Agreement (the "Special
Landlord Provisions") as part of the Sale Order; provided that Seller's failure
to obtain Bankruptcy Court approval of the Special
17
Landlord Provisions shall not be a breach of or default under this Agreement and
the obtaining of such approval is not a condition to Buyer's obligations under
this Agreement.
8.5. Estoppel Certificates. Promptly after Seller's chapter 11
filing, Seller shall send out for execution estoppel certificates in the form of
Exhibit G to this Agreement (the "Estoppel Certificates") to each of its real
property lessors and sublessors under the Real Property Leases. Seller agrees to
use reasonable commercial efforts to obtain the execution of the Estoppel
Certificates by such lessors and sublessors; provided that Seller's failure to
obtain execution of Estoppel Certificates shall not be a breach of or default
under this Agreement and the obtaining of such executed Estoppel Certificates is
not a condition to Buyer's obligations under this Agreement. Seller agrees to
periodically deliver to Buyer copies of executed Estoppel Certificates as they
are received by Seller.
8.6. Notices of Certain Events. Buyer and Seller shall each promptly
notify the other party of:
(i) any notice or other communication from any person alleging that
the consent of such person is or may be required in connection with the
transactions contemplated by this Agreement;
(ii) any notice or other communication from any governmental entity
in connection with the transactions contemplated by this Agreement;
(iii) any actions, suits, claims, investigations or proceedings
commenced or, to its knowledge, threatened, relating to or involving or
otherwise affecting the Business or Buyer's acquisition thereof or that relate
to the consummation of the transactions contemplated by this Agreement;
(iv) the occurrence, or failure to occur, of any condition, event or
development that causes any representation or warranty contained in this
Agreement to be untrue or inaccurate; or
(v) any failure on the part of such party to comply with or perform
in any material respect any agreement or covenant to be complied with or
performed by it hereunder; provided that the delivery of any notice pursuant to
this Section 8.8 shall not limit or otherwise affect the remedies available
hereunder to Buyer or Seller.
8.7. Interim Financial Statement. Between the date hereof and the
Closing Date, Seller shall promptly provide Buyer with copies of any and all
regularly generated unaudited interim
18
financial statements of Seller and such other unaudited interim financial
statements of Seller as Buyer may reasonably request.
8.8. Employee Matters.
8.8.1. Hiring Employees. As of the Closing Date, Buyer shall
offer employment to all of Seller's employees, other than "Senior Management"
(as defined in Section 8.8.3), employed by Seller on the Closing Date other than
those persons identified in a confidential written schedule to be delivered by
Buyer to Seller no later than five (5) days prior to the Closing Date. (Any
employee of Seller who becomes employed by Buyer is hereafter referred to as a
"Transferred Employee.") Buyer's offer of employment shall be on such terms and
conditions as Buyer shall determine. Notwithstanding the foregoing, Buyer shall
have no obligation to offer employment to any employee who, as of the Closing
Date: (i) is not actively working for Seller; or (ii) is receiving or has a
present right to receive benefits under Seller's short-term or long-term
disability plans.
8.8.2. Employee Benefits. Buyer shall have no responsibility or
liability for payment of any amounts due to or under any benefit plans
maintained by Seller, or otherwise arising from events prior to the Closing Date
in connection with obligations to employees. Buyer shall be responsible for
employee benefits with respect to Transferred Employees only to the extent
specifically provided in the plans maintained by Buyer that cover such
Transferred Employees after the Closing Date.
8.8.3. Senior Management. Senior Management shall mean persons
holding the following positions with Seller: Chief Executive Officer, V.P.
Operations, V.P. Purchasing & Food Development, V.P. & Controller, V.P. Human
Resources, V.P. Facilities, and General Counsel. Buyer and Seller acknowledge
that Buyer and Senior Management have had no discussions prior to the Execution
Date regarding whether any members of Senior Management will be offered
positions by Buyer. Upon and after the Execution Date, Buyer shall be permitted
to undertake such discussions at Buyer's sole discretion. Buyer shall be under
no obligation to engage in any such discussions and the decision regarding
whether and on what term to offer positions shall be in the sole discretion of
Buyer.
8.9. Subordination, Nondisturbance, and Attornment Agreements.
(a) Buyer shall notify Seller of any holders of superior
mortgages on any of the real property currently leased to Seller from whom Buyer
desires Seller to obtain a Subordination, Nondisturbance, and Attornment
Agreement ("SNDA"). Upon Seller's receipt of such notice, but not earlier than
the Petition Date, Seller shall send out for execution an SNDA which shall
provide in substance that so long as the lease is in effect and Buyer is not in
breach or default beyond applicable grace periods thereunder: (i) Buyer shall
not be joined as a party
19
defendant in any foreclosure action or proceeding which may be instituted by or
taken by the holder of such superior mortgage, and (ii) Buyer shall not be
evicted from the leased property nor shall Buyer's leasehold estate under the
lease be terminated or disturbed nor shall any of Buyer's rights under the lease
be affected by reason of any default under such superior mortgage, any
disaffirmance of such superior mortgage, or other termination of such superior
mortgage. Seller agrees to use reasonable commercial efforts to obtain the
execution of the SNDA's from such mortgage holders; provided that Seller's
failure to obtain execution of SNDA's shall not be a breach of or default under
this Agreement and the obtaining of such executed SNDA's is not a condition to
Buyer's obligations under this Agreement. Seller agrees to periodically deliver
to Buyer copies of executed SNDA's as they are received by Seller.
(b) Seller shall request authority of the Bankruptcy Court to
assume and assign to Buyer each currently executed SNDA to which Seller is a
party. Seller agrees to use reasonable commercial efforts to obtain the
Bankruptcy Court's consent to such assumption and assignment; provided that
Seller's failure to obtain such consent shall not be a breach of or default
under this Agreement and the obtaining of such consent is not a condition to
Buyer's obligations under this Agreement.
8.10. Other Transactions. Seller agrees that prior to the
Closing it will not, and will cause its directors, officers, representatives,
and agents not to, solicit any proposals or offers for purchase of the Business
(whether by sale of assets or stock, by merger, or otherwise). Buyer
acknowledges that Seller, as a part of the chapter 11 sale process, may be
requested to provide information regarding the Business to other interested
parties and Buyer agrees that the provision of such information under such
circumstances shall not constitute a breach of this Agreement, so long as Seller
has not solicited such third party to purchase the Business following the date
of this Agreement.
9. Miscellaneous.
9.1. Damage and Destruction; Condemnation. Seller shall notify
Buyer immediately of the occurrence of any material damage to or destruction of
the Property which occurs prior to the Closing Date, or the institution or
maintenance of any condemnation or similar proceedings with respect to a
restaurant location. In the event of any material damage to or destruction of
the Property which is not fully covered by insurance, or in the event any such
condemnation or other proceedings are instituted or maintained, Buyer, at its
option, may either (i) terminate this Agreement, or (ii) consummate the purchase
provided for by this Agreement. In all other events or in the event that Buyer
elects to consummate the purchase pursuant to
20
(ii) above, all insurance or condemnation proceeds, including business
interruption and rental loss proceeds, collected by Seller prior to the Closing
Date, together with an amount equal to all deductible amounts under the
insurance policies covering such damage or destruction and amounts not covered
by insurance (which amounts shall be agreed upon in good faith by Seller and
Buyer and approved by the Bankruptcy Court), shall be credited against the
Purchase Price on Buyer's account, and all entitlement to all other insurance or
condemnation proceeds arising out of such damage or destruction or proceedings
and not collected prior to the Closing Date.
9.2. Attorneys' Fees. In the event that either party hereto brings
an action or other proceeding to enforce or interpret the terms and provisions
of this Agreement, the prevailing party in that action or proceeding shall be
entitled to have and recover from the nonprevailing party all such fees, costs
and expenses (including, without limitation, all court costs and reasonable
attorneys' fees) as the prevailing party may suffer or incur in the pursuit or
defense of such action or proceeding.
9.3. Reasonable Access to Records and Certain Personnel. So long as
the Bankruptcy Case is pending, (i) Buyer shall permit Seller's counsel and
other professionals employed in the Bankruptcy Case (the "Case Professionals")
reasonable access to the financial and other books and records relating to the
Property or the Business (whether in documentary or data form) for the purpose
of the continuing administration of the Bankruptcy Case (including, without
limitation, the pursuit of any avoidance, preference or similar action), which
access shall include (a) the right of the Case Professionals to copy, at their
expense, such documents and records as they may request in furtherance of the
purposes described above, and (b) Buyer's copying and delivering to Case
Professionals such documents or records as they may request, but only to the
extent the Case Professionals furnish Buyer with reasonably detailed written
descriptions of the materials to be so copied and offer to reimburse Buyer for
the reasonable costs and expenses thereof, and (ii) Buyer shall provide Seller
and Case Professionals (at no cost to Seller) with reasonable access to any
members of senior management of Seller that might subsequently be employed by
Buyer during regular business hours to assist Seller in the continuing
administration of the Case, provided that such access does not unreasonably
interfere with Buyer's business operations.
9.4. Notices. Unless otherwise provided herein, any notice, tender,
or delivery to be given hereunder by either party to the other shall be in
writing and may be effected by personal delivery, by delivery from a reputable
overnight courier service, or by registered or certified mail, postage prepaid,
return receipt requested, or by facsimile and shall be deemed
21
communicated as of the date of receipt. Notices shall be addressed as set forth
below, but each party may change his address by written notice in accordance
with this paragraph.
To Seller: Lyon's Restaurants, Inc.
0000 Xxxxxx Xxxxx
Xxxxxx Xxxx, XX 00000-0000
Attn: Xx. Xxxx X. Xxxxxx, Pres./CEO
Facsimile No. (000) 000-0000
With a copy to: Xxxxxx Xxxxxxxx Xxxxxx & Xxxxxx
000 Xxxxxxxxxx Xx., 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxx Xxxxxx, Esq.
Facsimile No. (000) 000-0000
To Buyer: Lyon's of California, Inc.
I.C.H. Corporation
0000 Xxxx Xxxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Attn: Xx. Xxxxx X. Arabia, Pres.
Facsimile No. (000) 000-0000
With a copy to: Xxxxx Xxxxxxx Xxxxxxx & Xxxxx
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxxxx, Esq.
Facsimile No. (000) 000-0000
9.5. Entire Agreement. This instrument and the documents to be
executed pursuant hereto contain the entire agreement between the parties
relating to the sale of the Property. Any oral representations or modifications
concerning this Agreement or any such other document shall be of no force and
effect excepting a subsequent modification in writing, signed by the party to be
charged.
9.6. Modification. This Agreement may be modified, amended or
supplemented only by a written instrument duly executed by all the parties
hereto.
9.7. Closing Date. All actions to be taken on the Closing pursuant
to this Agreement shall be deemed to have occurred simultaneously, and no act,
document or transaction shall be deemed to have been taken, delivered or
effected until all such actions, documents and transactions have been taken,
delivered or effected.
9.8. Severability. Should any term, provision or paragraph of this
Agreement be determined to be illegal or void or of no force and effect, the
balance of the Agreement shall survive except that, if Buyer cannot acquire and
Seller cannot
22
sell substantially all of the Property, either party may terminate this
Agreement, and it shall be of no further force and effect.
9.9. Captions. All captions and headings contained in this Agreement
are for convenience of reference only and shall not bc construed to limit or
extend the terms or conditions of this Agreement.
9.10. Further Assurances. Each party hereto will execute,
acknowledge and deliver any further assurance, documents and instruments
reasonably requested by any other party hereto for the purpose of giving effect
to the transactions contemplated herein or the intentions of the parties with
respect thereto.
9.11. Waiver. No waiver of any of the provisions of this Agreement
shall be deemed, or shall constitute, a waiver of other provisions, whether or
not similar, nor shall any waiver constitute a continuing waiver. No waiver
shall be binding unless executed in writing by the party making the waiver.
9.12. Brokerage Obligations. Seller is represented by HLHZ as its
exclusive sale agent with respect to the transactions contemplated herein
pursuant to a written agreement between Seller and HLHZ and HLHZ's commission,
fees and expenses are to be paid by Seller in accordance with the terms and
provisions of such order. Seller and Buyer each represent and warrant to the
other that, except for HLHZ, such party has incurred no liability to any real
estate broker or agent with respect to the payment of any commission regarding
the consummation of the transaction contemplated hereby. Except for any claims
of HLHZ (which are to be handled and satisfied by Seller in accordance with the
above referenced contract), it is agreed that if any claims for commissions,
fees or other compensation, including, without limitation, brokerage fees,
finder's fees, or commissions are ever asserted against Buyer or Seller in
connection with this transaction, all such claims shall be handled and paid by
the party whose actions form the basis of such claim and such party shall
indemnify, defend (with counsel reasonably satisfactory to the party entitled to
indemnification), protect and save and hold the other harmless from and against
any and all such claims or demands asserted by any person, firm or corporation
in connection with the transaction contemplated hereby.
9.13. Payment of Fees and Expenses. Except as provided in Section
9.2 above, each party to this Agreement shall be responsible for, and shall pay,
all of its own fees and expenses, including those of its counsel, incurred in
the negotiation, preparation and consummation of the Agreement and the
transaction described herein.
23
9.14. Investigations and Survival. The respective representations,
warranties, covenants and agreements of Seller and Buyer herein, or in any
certificates or other documents delivered prior to or at the Closing, shall not
be deemed waived or otherwise affected by any investigation made by any party
hereto nor shall they be affected by the Closing.
9.15. Assignments. This Agreement shall not be assigned by either
party hereto without the prior written consent of the other party hereto.
9.16. Binding Effect. Subject to the provisions of Section 9.15
above, this Agreement shall bind and inure to the benefit of the respective
heirs, personal representatives, successors, and assigns of the parties hereto.
9.17. Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of California.
9.18. Good Faith. All parties hereto agree to do all acts and
execute all documents required to carry out the terms of this Agreement and to
act in good faith with respect to the terms and conditions contained herein
before and after Closing.
9.19. Construction. In the interpretation and construction of this
Agreement, the parties acknowledge that the terms hereof reflect extensive
negotiations between the parties and that this Agreement shall not be deemed,
for the purpose of construction and interpretation, drafted by either party
hereto.
9.20. Counterparts. This Agreement may be signed in counterparts.
The parties further agree that this Agreement may be executed by the exchange of
facsimile signature pages provided that by doing so the parties agree to
undertake to provide original signatures as soon thereafter as reasonable in the
circumstances.
9.21. Publicity. From the date hereof through the Closing Date, no
public release or announcement concerning the transactions contemplated hereby
shall be issued by any party without the prior consent or the other parties,
except as such release or announcement be required by law, in which case the
party required to make the release or announcement shall allow the other parties
reasonable time to comment on such release or announcement in advance of such
issuance; provided that nothing in this Section 9.22 shall prevent Seller from
filing any documents with the Bankruptcy Court concerning this Agreement or the
Business nor prevent Seller or its representatives (including HLHZ) from
providing such notices in connection with the Bankruptcy Case or of the sale
procedures in Section 8.4 as Seller considers appropriate.
24
9.22. Bankruptcy Court Jurisdiction. BUYER AND SELLER AGREE THAT,
FROM AND AFTER THE PETITION DATE AND SO LONG AS THE BANKRUPTCY CASE SHALL REMAIN
PENDING, THE BANKRUPTCY COURT SHALL HAVE EXCLUSIVE JURISDICTION OVER ALL
DISPUTES AND OTHER MATTERS RELATING; TO (i) THE INTERPRETATION AND ENFORCEMENT
OF THIS AGREEMENT OR ANY ANCILLARY DOCUMENT EXECUTED PURSUANT HERETO; AND/OR
(ii) THE PROPERTY AND/OR ASSUMED LIABILITIES, AND BUYER EXPRESSLY CONSENTS TO
AND AGREES NOT TO CONTEST SUCH EXCLUSIVE JURISDICTION.
9.23. Consent Regarding Clovis and Reno. Buyer hereby consents to
Seller's exclusion of the following locations from the Real Property Leases
listed on Exhibit A-1 to this Agreement: (a) Clovis, California, and (b) Reno,
Nevada.
IN WITNESS WHEREOF, the parties hereto have executed this Asset
Purchase Agreement as of the day and year first above written.
I.C.H. Corporation, a
Delaware Corporation
By: /s/ Xxxxx X. Arabia
------------------------------------------
Name: Xxxxx X. Arabia
Its: Chairman and CEO
Lyon's of California, Inc., a
California Corporation
By: /s/ Xxxxx X. Arabia
------------------------------------------
Name: Xxxxx X. Arabia
Its: Chairman and CEO
Lyon's Restaurants, Inc., a
Delaware Corporation
By:/s/ Xxxx X. Xxxxxx
------------------------------------------
Name: Xxxx X. Xxxxxx
Its: President and Chief Executive Officer
25
