PURCHASE AGREEMENT
This Purchase Agreement (the "Agreement") is made as of the 2nd day
of July, 1997, between RUBY TUESDAY, INC., a Georgia corporation, whose
address is 0000 Xxxxxxxx Xxxxx, Xxxxxx, Xxxxxxx 00000-0000 (herein
"Seller"), and RT ORLANDO FRANCHISE, L.P., d/b/a RT Orlando Franchise,
Ltd., a Delaware limited partnership, whose address is 0000 Xxxxxx Xxx,
Xxxxxxx, Xxxxxxx 00000 (herein "Buyer").
1. Introduction. Seller is currently engaged in the business of
operating restaurants under the trade name, trademark and service xxxx
"Xxxx Tuesday" at each of the locations listed on Exhibit A attached
hereto (hereinafter, the business of operating each such restaurant at
each such location being referred to individually, as the "Business" and
collectively as the "Businesses"). Seller wishes to sell to Buyer, and
Buyer wishes to purchase from Seller, certain assets of Seller used
exclusively in operating the Businesses, upon the terms and conditions
set out in this Agreement. Therefore, in consideration of the premises,
the mutual representations, warranties, covenants and agreements
hereinafter set forth and other good and valuable consideration, the
receipt and sufficiency of which is acknowledged, the parties agree as
follows:
2. Sale and Purchase of Assets; Assumption of Liabilities. The
consummation of the transactions provided for herein (the "Closing")
shall take place at the offices of Seller at such time and place as the
parties may hereto agree in writing (the "Closing Date"), provided,
however, the Closing shall take place on the date that is the later to
occur of (i) the date that the temporary liquor licenses for the
Businesses have been issued to Buyer by the Florida Division of Alcoholic
Beverages and Tobacco, or (ii) the date that Buyer has received a firm
commitment for financing for the purchase of the Businesses on terms
reasonably acceptable to Buyer; provided, however, the Closing shall not
take place unless ten (10) business days have passed after the date that
Buyer receives Seller's Uniform Franchise Offering Circular without
Buyer's exercising any rescission rights available to Buyer under
applicable franchise law. On the Closing Date:
(a) Sale and Purchase of Assets. Subject to the terms and
conditions of this Agreement, Buyer shall purchase from Seller, and
Seller shall sell, transfer, assign, convey and deliver, all of Seller's
right, title and interest in and to the following assets of Seller used
exclusively in the operation of the Businesses (the "Assets"), which
Assets shall be conveyed AS-IS, WHERE-IS:
(i) all stock in trade and merchandise in Seller's
inventory used by Seller exclusively in the conduct of the
Businesses as of the Closing Date (the "Inventory");
(ii) all furniture, fixtures, furnishings, equipment
and leasehold improvements used by Seller exclusively in the
conduct of the Businesses as of the Closing Date (the
"Personal Property");
(iii) all rights of Seller to the software used
exclusively in the conduct of the Businesses as of the
Closing Date and located at the premises where the Businesses
are conducted, including, without limitation, all rights of
Seller to use such software and the documentation related
thereto (the "Software");
(iv) all rights of Seller pursuant to all contracts,
leases (except for any interest of Seller in any lease with
any third party regarding the premises at which the
Businesses are conducted, other than the interest(s), if any,
to be subleased to Buyer pursuant to the Sublease(s) defined
below), warranties, commitments, agreements, purchase and
sale orders and other executory commitments of Seller related
solely to the Businesses as of the Closing Date (the
"Contracts");
(v) all rights of Seller in and to the underlying
land, if any, described on Exhibit G attached hereto,
together with the structure(s) building(s) and other
improvements owned by Seller and located on such land;
(vi) all rights of Seller (to the extent assignable)
pursuant to any governmental permits and licenses used
exclusively in the operation of the Businesses (the
"Permits");
(vii) Seller's telephone numbers for the Businesses
(the "Telephone Numbers");
(viii) Seller's xxxxx cash on hand at the
Businesses as of the Closing Date (the "Xxxxx Cash").
Notwithstanding the foregoing, the Assets do not include the following
assets of Seller:
(i) Seller's accounts or notes receivable;
(ii) Seller's cash on hand at or with respect to the
Businesses (other than the Xxxxx Cash);
(iii) Seller's trade name, trademarks, service marks,
copyrights and all other intellectual property or intangible
property of Seller; and
(iv) to the extent that the Businesses are conducted
on premises leased by Seller from a third party (or third
parties), all rights of Seller in any leasehold or other
interest in the premises at which the Businesses are
conducted (except for any interest(s) to be subleased to
Buyer pursuant to the Sublease(s), defined below).
(b) Assumption of Liabilities. Subject to the terms and
conditions of this Agreement, Seller shall assign, and Buyer shall assume
and agree to satisfy, pay, discharge, perform and fulfill, as applicable,
as they become due, without charge or cost to Seller except as provided
for in this Agreement, and agrees to hold Seller harmless with respect
to, the following liabilities and obligations of Seller (the "Assumed
Liabilities"):
(i) all liabilities and obligations of Seller related
to owning the Assets and operating the Businesses on and
after the Closing Date except for the Excluded Liabilities
described below; and
(ii) all liabilities and obligations of Seller under
the Contracts, the Permits and the Telephone Numbers that
arise or are attributable to events or conditions occurring
on or after the Closing Date.
Notwithstanding the foregoing, the Assumed Liabilities shall not include
the following liabilities or obligations of Seller (the "Excluded
Liabilities"):
(i) except to the extent otherwise provided in this
Agreement, any liabilities or obligations, whether or not
known, of Seller to be performed prior to the Closing Date or
arising out of or relating to Seller's ownership of the
Assets or operation of the Businesses prior to the Closing
Date; and
(ii) Seller's accounts payable, notes payable and
other obligations for or related to Seller's indebtedness to
banks or financial institutions.
3. Purchase Price. In consideration of the sale of Assets and
assumption of the Assumed Liabilities, at the Closing, Buyer shall
deliver to Seller the following:
(i) Five Million Eight Hundred Sixteen Thousand Three
Hundred Thirty-One Dollars ($5,816,331) (the "Purchase
Price"); and
(ii) any sales or other taxes due on the sale of
Assets and assumption of the Assumed Liabilities contemplated
by this Agreement (the "Transaction Taxes").
(a) Payment of the Purchase Price. The Purchase Price shall be
paid as follows:
(i) by the delivery of the sum of (A) seventy-five
(75%) percent of the Purchase Price, plus (B) the Transaction
Taxes, all to be paid by certified check drawn on a local
bank or by wire transfer of funds; and
(ii) by the delivery to Seller of Buyer's promissory
note, dated the Closing Date, in favor of Seller in the
original principal amount equal to twenty-five (25%) percent
of the Purchase Price (the "Note") in the form attached
hereto as Exhibit B. As security for the payment of the
Note, Buyer shall deliver to Seller a Security Agreement,
dated the Closing Date, in the form attached hereto as
Exhibit C and such other documents as may be reasonably
required by Seller to perfect a security interest for the
benefit of Seller in and to Buyer's assets (including,
without limitation, UCC-1 financing statements in favor of
Seller), and Buyer shall cause Xxx Xxxxxxx to enter into a
Guaranty in the form attached hereto as Exhibit D.
(b) Other Adjustments to Purchase Price. At the Closing, or as soon as
practicable after the Closing, the Purchase Price shall be adjusted, on a
dollar-for-dollar basis, to reflect the proration of all items of expense
or income directly relating to the Assets and the operation of the
Businesses as of the Closing Date, and the net adjustments for all such
items shall be paid in immediately available funds on or before the date
that occurs sixty (60) days after the Closing Date (the "Adjustment
Payment Date"). Prorated items shall include the following: rent, real
and personal property taxes, payroll and payroll taxes, insurance
premiums, utilities, security deposits, other prepaid items and other
items customarily prorated. To the extent possible, any prorations not
determinable as of the Closing Date shall be prorated on the basis of the
most current information available at Closing; provided, however, Seller
and Buyer agree that, upon presentation, on or before the Adjustment
Payment Date, of written confirmation of (i) a change in an estimated
amount, or (ii) a determination of the amount of any proration that
cannot be determined as of the Closing Date, such amount will be
reflected in the payment(s) to be made pursuant to this Section 3(b) on
or before the Adjustment Payment Date.
(c) Allocation of Purchase Price. The aggregate amount of the
Purchase Price and the Assumed Liabilities shall be allocated among the
Assets substantially in accordance with Schedule 3(c) attached hereto.
Seller and Buyer hereby agree to use such allocation to complete and file
Internal Revenue Service Form 8594 with the Internal Revenue Service.
4. Delivery of Documents and Related Transactions.
(a) At the Closing, the following documents (the "Closing
Documents"), together with the cash portion of the Purchase Price, shall
be delivered as follows:
(i) Seller shall deliver to Buyer the following
executed documents (the "Seller's Documents"):
1) a xxxx of sale, assignment and assumption
agreement for the Assets substantially in the form of
Exhibit E attached hereto (the "Xxxx of Sale"),
transferring to Buyer all of Seller's right, title and
interest in and to said Assets, free and clear of all
encumbrances except for Permitted Encumbrances (as
defined in Section 5(c) below), pursuant to which Buyer
will accept such Assets and assume the Assumed
Liabilities;
2) a Certificate of Occasional or Isolated
Sale substantially in the form of Exhibit F attached
hereto (the "Certificate of Occasional or Isolated
Sale");
3) to the extent that the Businesses are
conducted on premises leased by Seller from a third
party (or third parties), the following:
(A) a sublease or subleases between
Seller, as sublessor, and Buyer, as sublessee, of
such premises, in form satisfactory to the
parties hereto (the "Sublease(s)"); and
(B) the written consent of each landlord
to the Sublease(s), if required;
4) to the extent that the Businesses are
conducted on premises owned by Seller, a deed conveying
Seller's interest in and to the underlying land,
together with structure(s), building(s) and other
improvements at the premises described on Exhibit G
attached hereto (the "Deed");
5) an operating agreement, a development
agreement and a support services agreement,
substantially in the form of the drafts dated July 2,
1997, July 2, 1997, and July 2, 1997, respectively,
presented by Seller to Buyer (collectively, the
"Franchise Documents"); and
6) other related documents that Buyer may have
reasonably requested on or prior to the Closing Date.
(ii) Buyer shall deliver to Seller (x) the cash
portion of the Purchase Price, and (y) the following executed
documents (the "Buyer's Documents"):
1) the Note;
2) the Xxxx of Sale;
3) to the extent that the Businesses are
conducted on premises leased by Seller from a third
party (or third parties), the Sublease(s);
4) the Security Agreement and other security
documents referred to in Section 3(a)(ii) of this
Agreement;
5) the Guaranty;
6) the Franchise Documents; and
7) other related documents that Seller may
have reasonably requested on or prior to the Closing
Date.
(b) Further Assurances and Cooperation Post-Closing. Seller and
Buyer, from time to time after the Closing (but without obligation
separate from the obligations expressly provided by this Agreement),
hereby agree to execute, acknowledge and deliver to each other such
instruments of conveyance and transfer, and will take such other actions
and execute and deliver such other documents, certifications and further
assurances, as either party may reasonably request with respect to the
assignment, transfer and delivery of the Assets and the assumption of the
Assumed Liabilities and the perfection of Seller's security interest in
the Assets pursuant to Section 3(a)(ii), in order to consummate in full
the transactions provided for herein.
(c) Employees. Buyer and Seller agree as follows:
(i) Buyer's Responsibilities. Buyer shall offer
employment, on substantially the same terms and conditions as
currently in effect, to commence on and as of the Closing
Date, to each employee of the Businesses as of the Closing
Date (including, without limitation, any employee who is
absent from work on the Closing Date on paid vacation or
pursuant to any leave of absence authorized by Seller or
required by law (hereinafter, all employees accepting
employment with Buyer being referred to collectively as the
"Transferred Employees")). Buyer agrees to give the
Transferred Employees credit for their years of service with
Seller for the purpose of determining any eligibility or
vesting provisions that may be contained in employee plans
provided to such Transferred Employees by Buyer in connection
with their employment with Buyer. Buyer also agrees to give
the Transferred Employees credit for all vacation and sick
leave accrued during their employment with Seller and to
provide, for the fiscal year ending June 6, 1998, the same
vacation and sick leave benefits to all Transferred Employees
as they would have been eligible to receive under the
Seller's policies now in effect.
(ii) Seller's Responsibilities. Seller agrees that,
except as provided in Section 4(c)(i) above, Buyer shall not
be subject to any liability with respect to, or resulting
from the termination by Seller of any of its employees from,
any profit sharing, 401(k), pension, stock option, vacation
pay, sick pay, personal leave, severance pay, retirement,
bonus, deferred compensation, group life and health insurance
or other employee benefit plan, agreement or commitment of
Seller.
The foregoing Section 4(c) does not, and shall not be deemed or construed
to, create any right in, or confer any right on, any employee or any
other third party.
(d) Bulk Sales. Buyer hereby waives compliance with any
applicable "bulk sales law" or similar law by Seller, and Seller shall
indemnify and hold Buyer harmless against any liability under any such
laws for losses resulting from non-compliance therewith or Seller's
application of the proceeds of the sale of Assets contemplated by this
Agreement.
5. Seller's Representations and Warranties. Seller represents and
warrants to Buyer the following:
(a) Organization and Authority. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Georgia. Seller possesses all requisite corporate power and
authority to own the Assets and operate the Businesses and to enter into
and perform this Agreement and the Seller's Documents. The execution and
delivery and performance of each of this Agreement and the Seller's
Documents by Seller have been duly authorized by all necessary corporate
action. This Agreement has been duly executed and delivered on behalf of
Seller by duly authorized officers of Seller, and this Agreement
constitutes, and the Seller's Documents, when executed and delivered,
will constitute, the legal, valid and binding obligation of Seller,
enforceable against Seller in accordance with their respective terms,
subject to the effects of bankruptcy, insolvency, reorganization,
moratorium and similar laws relating to or affecting the rights of
creditors and general principles of equity.
(b) Compliance with Laws and Instruments. Subject to the
consents and approvals listed on Schedule 5(b), the execution, delivery
and performance by Seller of this Agreement and the Seller's Documents
will not result in any material violation of or be in conflict with or
constitute a material default under any applicable statute, regulation,
order, rule, writ, injunction or decree of any court or governmental
authority or of the Articles of Incorporation or Bylaws of Seller or of
any material agreement or other material instrument to which Seller is a
party or is a subject, or constitute a default thereunder.
(c) Title to Assets. Seller has good, valid and marketable title
to all of the Assets, free and clear of all mortgages, liens, pledges,
security interests, charges, claims, restrictions and other encumbrances
and defects of title of any nature whatsoever, except for (i) liens for
current real, personal or other property taxes not yet due and payable,
and (ii) the liens described on Schedule 5(c) (the "Permitted
Encumbrances"). There are no existing agreements, options, commitments
or rights with, of or to any person (other than Buyer) to acquire any of
Seller's interests in the Assets.
(d) Condition of Assets. Seller makes no representation or
warranty as to the condition of the Assets, which shall be conveyed to
Buyer on an AS IS, WHERE IS basis.
(e) No Finder's Fees. Seller has not employed any broker or
finder or incurred any liability for any brokerage fees or commissions or
any finder's fees in connection with the negotiations related to this
Agreement or the consummation of the transactions contemplated hereby.
(f) No Litigation. No suit, action or other proceeding, or any
injunction or final judgment relating thereto, is pending or, to the
knowledge of Seller, threatened, before any court or governmental or
regulatory official, body or authority in which it is sought to restrain
or prohibit or to obtain damages or other relief in connection with this
Agreement or the Seller's Documents, or the consummation of the
transactions contemplated hereby and thereby, and no investigation that
might result in any such suit, action or proceeding is pending or, to the
knowledge of Seller, threatened.
(g) Legal Compliance. To the knowledge of Seller, except as
disclosed on Schedule 5(g), Seller has complied with all laws (including
rules, regulations, codes, plans, injunctions, judgments, orders,
decrees, rulings and charges thereunder) of federal, state, local and
foreign governments (and all agencies thereof), applicable to the Assets
and the operation of the Businesses for which the failure to so comply
would have a material adverse effect on the Assets or the Businesses, and
no action, suit, proceedings, hearing, investigation, charge, complaint,
claim, demand, or notice has been filed or commenced against Seller
alleging any failure so to comply,
(h) Tax Matters.
(i) Seller has filed all state, local and federal tax
returns required to be filed in connection with the ownership
of the Assets and the operation of the Businesses. All such
tax returns were correct and complete in all material
respects. All state, local and federal taxes currently due
and payable by Seller in connection with the Businesses have
been paid.
(ii) Seller has withheld and paid all taxes required
to have been withheld and paid in connection with amounts
paid or owing to any employee, independent contractor,
creditor, shareholder, or other third party employed by or
relating to the Businesses.
(i) Real Property. With respect to each Sublease and, if
applicable, the Deed:
(i) the underlying lease or sublease to which Seller
is a party (the "Lease") is the legal, valid, binding and
enforceable obligation of the Seller and is in full force and
effect;
(ii) subject to any applicable consent or approval
listed in Schedule 5(b), the Lease will continue to be legal,
valid, binding, enforceable, and in full force and effect on
identical terms following the consummation of the
transactions contemplated hereby (including the assignments
and assumptions referred to in Section 4 above);
(iii) to the knowledge of Seller, no party to the Lease
is in breach or default, and no event has occurred which,
with notice or lapse of time, would constitute a breach or
default or permit termination, modification, or acceleration
thereunder;
(iv) to the knowledge of Seller, no party to the Lease
has repudiated any provision thereof;
(v) to the knowledge of Seller, there are no
disputes, oral agreements or forbearance programs in effect
as to the Lease or Sublease;
(vi) Seller has not assigned, transferred, conveyed,
mortgaged, deeded in trust, or encumbered any interest in the
Lease, or, if applicable, the real property that is subject
to the Deed, except for Permitted Liens;
(vii) except as disclosed on Schedule 5(g), to the
knowledge of Seller, all premises subject to any Lease, or,
if applicable, the Deed, (A) have received all approvals of
governmental authorities (including licenses and permits)
required in connection with the operation of the Businesses
and for which failure to receive such approval would have a
material adverse effect on the Assets or the Businesses, and
(B) have been operated and maintained in accordance with all
laws, rules and regulations applicable to the operation of
the Businesses and for which failure to be so operated and
maintained would have a material adverse effect on the Assets
of the Businesses; and
(viii) Seller has good and marketable title to the
parcel of real property subject to the Deed, free and clear
of any security interest, lien, covenant or other
restriction, installments of special liens or assessments not
yet delinquent and recorded easements, covenants, and other
restrictions which do not impair the current use, occupancy,
or value, or the marketability of title, of the property
subject thereto.
(j) Intellectual Property. To the knowledge of the Seller,
Seller has the right to use the Software, pursuant to license, sublease,
agreement or permission. After the Closing, the Software will be owned
or available for use by Buyer on substantially the same terms and
conditions as by Seller prior to the Closing.
(k) Contracts. Seller represents and warrants to Buyer with
respect to each Contract assigned to Buyer that (i) such Contract is
legal, valid, binding, enforceable, and in full force and effect; (ii)
subject to any applicable consents and approvals listed on Schedule 5(b),
such Contract will continue to be legal, valid, binding, enforceable, and
in full force and effect on identical terms following the consummation of
the transactions contemplated hereby (including the assignments and
assumptions); (iii) to the knowledge of Seller, no party is in breach or
default, and no event has occurred which with notice or lapse of time
would constitute a breach or default, or permit termination,
modification, or acceleration, under such Contract; and (iv) to the
knowledge of the Seller, no party has repudiated any provision of such
Contract.
(l) Other Litigation. Seller represents and warrants to Buyer
that Seller: (i) is not subject to any outstanding injunction, judgment,
order, decree, ruling, or charge affecting the Businesses, and (ii) is
not a party or, to the knowledge of Seller, is not threatened to be made
a party to any action, suit, proceeding, hearing, or investigation
affecting the Businesses of, in, or before any court or quasi-judicial or
administrative agency of any federal, state, local, or foreign
jurisdiction or before any arbitrator.
(m) Environmental, Health and Safety Matters. To the knowledge
of Seller:
(i) Seller has complied and is in compliance with all
Environmental, Health, and Safety Requirements for which
failure to so comply would have a material adverse effect on
the Assets or the Businesses. (As used herein,
Environmental, Health, and Safety Requirements shall mean all
federal, state, local and foreign statutes, regulations,
ordinances and other provisions having the force or effect of
law, all judicial and administrative orders and
determinations, all contractual obligations and all common
law concerning public health and safety, worker health and
safety, and pollution or protection of the environment.)
(ii) Seller has not received any written or oral
notice, report or other information regarding any actual or
alleged violation of Environmental, Health, and Safety
Requirements, or any liabilities or potential liabilities
(whether accrued, absolute, contingent, unliquidated or
otherwise), including any investigatory, remedial or
corrective obligations, relating to any of them or its
facilities arising under Environmental, Health, and Safety
Requirements.
6. Buyer's Representations. Buyer represents and warrants to Seller
the following:
(a) Organization and Authority. Buyer is a limited partnership,
duly organized, validly existing and in good standing under the laws of
the State of Delaware. The sole general partner of Buyer is X. Xxxxxxx,
Inc., a Florida corporation, and the sole limited partner of Buyer is RT
Orlando, Inc. a Georgia corporation. Buyer is duly qualified to do
business and is in good standing in each jurisdiction where the conduct
of its business currently requires it to be qualified or would require it
to be qualified after the consummation of the transactions provided for
in this Agreement and the Buyer's Documents. Buyer possesses all
requisite power and authority to enter into and perform this Agreement
and the Buyer's Documents. The execution and delivery and performance of
this Agreement and the Buyer's Documents by Buyer have been duly
authorized by all necessary action (including, without limitation, all
necessary action by the general partner of Buyer). This Agreement has
been duly executed and delivered on behalf of Buyer by the sole general
partner, as duly authorized by Buyer, and this Agreement constitutes, and
the Buyer's Documents, when executed and delivered, will constitute, the
legal, valid and binding obligation of Buyer, enforceable against Buyer
in accordance with their respective terms, subject to the effects of
bankruptcy, insolvency, reorganization, moratorium and similar laws
relating to or affecting the rights of creditors and general principles
of equity.
(b) Compliance with Laws and Instruments. The execution,
delivery and performance by Buyer of this Agreement and the Buyer's
Documents will not result in any material violation of or be in conflict
with or constitute a material default under any applicable statute,
regulation, order, rule, writ, injunction or decree of any court or
governmental authority or of the Certificate of Limited Partnership or
Limited Partnership Agreement of Buyer or of any material agreement or
other material instrument to which Buyer is a party or is subject, or
constitute a default thereunder.
(c) No Finder's Fees. Buyer has not employed any broker or
finder or incurred any liability for any brokerage fees or commissions or
any finder's fees in connection with the negotiations related to this
Agreement or the consummation of the transactions contemplated hereby.
(d) Independent Investigation. Buyer has had full opportunity to
inspect the Businesses and the Assets and to ask all questions of Seller
regarding the Businesses and the Assets. Buyer has had the opportunity
to conduct its own independent investigation relating to all aspects of
the Businesses and to obtain whatever opinions of specialists and experts
it has deemed necessary in making the decisions to enter into this
Agreement and the Buyer's Documents and to consummate the transactions
contemplated hereby and thereby. In making such decisions, (i) Buyer has
not relied on information received by it from Seller regarding the past
or present earnings of the Businesses as a determinant or indicator of
future earnings of the Businesses, and (ii) Buyer has not relied on
information received from Seller regarding the prospects of future
earnings of the Businesses.
(e) Condition of Assets. BUYER ACKNOWLEDGES AND AGREES THAT ALL
ASSETS TO BE TRANSFERRED, ASSIGNED OR LICENSED PURSUANT TO THIS AGREEMENT
AND THE CLOSING DOCUMENTS SHALL BE TRANSFERRED, ASSIGNED OR LICENSED ON
AN "AS IS, WHERE IS" BASIS, AND THAT, EXCEPT AS EXPRESSLY SET FORTH IN
SECTION 5 OF THIS AGREEMENT, SELLER IS MAKING, AND SHALL MAKE, NO
REPRESENTATION OR WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, RESPECTING
ANY OF THE ASSETS, AS TO MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE OR ANY OTHER MATTER. FURTHER, BUYER ACKNOWLEDGES THAT BUYER HAS
INFORMED ITSELF AS TO THE BUSINESSES, AND BUYER FURTHER ACKNOWLEDGES AND
AGREES THAT SELLER MAKES, AND SHALL MAKE, NO REPRESENTATION OR WARRANTY
OF ANY KIND WITH RESPECT TO THE BUSINESSES.
(f) No Litigation. No suit, action or other proceeding, or any
injunction or final judgment relating thereto, is pending or, to the
knowledge of Buyer, threatened before any court or governmental or
regulatory official, body or authority in which it is sought to restrain
or prohibit or to obtain damages or other relief in connection with this
Agreement or the Buyer's Documents, or the consummation of the
transactions contemplated hereby, and no investigation that might result
in any such suit, action or proceeding is pending or, to the knowledge of
Buyer, threatened.
(g) Other Litigation. Buyer represents and warrants to Seller
that Buyer: (i) is not subject to any outstanding injunction, judgment,
order, decree, ruling or charge, and (ii) is not a party or, to the
knowledge of Buyer, is not threatened to be made a party to any action,
suit, proceeding, hearing, or investigation of, in, or before any court
or quasi-judicial or administrative agency of any federal, state, local,
or foreign jurisdiction or before any arbitrator.
7. Conditions to Closing.
(a) Conditions to Obligations of Buyer. All obligations of Buyer
under this Agreement are subject to the fulfillment or satisfaction,
prior to or at the Closing, of each of the following conditions
precedent:
(i) The representations and warranties of Seller
contained in this Agreement shall have been true on the date
hereof in all material respects, and shall be true in all
material respects as of the Closing as if made at the
Closing.
(ii) Seller shall have performed and complied in all
material respects with all agreements and conditions required
by this Agreement to be performed or complied with by or
prior to or at the Closing.
(iii) As of the Closing, no suit, action or other
proceeding, or any injunction or final judgment relating
thereto, shall be threatened or be pending before any court
or governmental or regulatory official, body or authority in
which it is sought to restrain or prohibit or to obtain
damages or other relief in connection with this Agreement or
the consummation of the transactions contemplated hereby, and
no investigation that might result in any such suit, action
or proceeding shall be pending or threatened.
(iv) Each consent or approval listed on Schedule
7(a)(iv) as required or necessary under contract or
applicable law for the consummation of the transactions
contemplated hereby shall have been obtained; provided,
however, those certain consents or approvals identified on
such Schedule 7(a)(iv) as being subject to deferral need not
have been obtained on or before the Closing to the extent
that Seller shall have made appropriate arrangements to
secure to Buyer the practical and economic benefits of the
agreements or other arrangements to which such consents or
approvals relate.
(v) The documents to be delivered by Seller at
Closing pursuant to Section 4(a) shall have been executed and
delivered.
(vi) Buyer shall have received a certificate from
Seller, dated the Closing Date and certifying in such detail
as Buyer may reasonably request, that the conditions
specified in Sections 7(a)(i), 7(a)(ii) and 7(a)(iv) hereof
have been fulfilled.
(b) Conditions to Obligations of Seller. All obligations of
Seller under this Agreement are subject to the fulfillment or
satisfaction prior to or at the Closing, of each of the following
conditions precedent:
(i) The representations and warranties of Buyer
contained in this Agreement shall have been true on the date
hereof in all material respects, and shall be true in all
material respects as of the Closing if made at the Closing.
(ii) Buyer shall have performed and complied in all
material respects with all agreements and conditions required
by this Agreement to be performed or complied with by it
prior to or at the Closing.
(iii) As of the Closing, no suit, action or other
proceedings, or any injunction or final judgment relating
thereto, shall be threatened or be pending before any court
or governmental or regulatory official, body or authority in
which it is sought to restrain or prohibit or to obtain
damages or other relief in connection with this Agreement or
the consummation of the transactions contemplated hereby, and
no investigation that might result in any such suit, action
or proceeding shall be pending or threatened.
(iv) Each consent or approval listed on Schedule
7(a)(iv) as required or necessary under contract or
applicable law of the consummation of the transactions
contemplated hereby shall have been obtained; provided,
however, those certain consents or approvals identified on
such Schedule 7(a)(iv) as being subject to deferral need not
have been obtained on or before the Closing, to the extent
that Seller shall have made appropriate arrangements to
secure to Buyer the practical and economic benefits of the
agreements or other arrangements to which such consents or
approvals relate.
(v) The documents to be delivered by Buyer at Closing
pursuant to Section 4(a) shall have been executed and
delivered.
(vi) Seller shall have received a certificate from
Buyer dated the Closing Date and certifying in such detail as
Seller may reasonably request, that the conditions specified
in Sections 7(b)(i) and 7(b)(ii) hereof have been fulfilled
and that all consents and approvals required or necessary to
transfer to Buyer all licenses or permits held by Seller or
the Businesses with respect to the sale or consumption of
alcoholic beverages on the premises at which the Businesses
are conducted have been obtained.
8. Term and Termination. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time prior to
the Closing:
(a) by mutual consent of Seller and Buyer;
(b) by either Seller or Buyer, if such terminating party is not
otherwise in default in this Agreement and if the Closing shall not have
occurred on or before January 2, 1998, or such other extended date, if
any, mutually agreed to by the parties in writing; and
(c) by either party if there has been a material breach of any
representation, warranty, covenant or agreement by the other party that
has not been cured or for which adequate assurance (reasonably acceptable
to such terminating party) of cure has not been given, in either case
within fifteen (15) business days following receipt of notice of such
breach.
If either party terminates this Agreement pursuant to the provisions
hereof, such termination shall be effected by notice to the other party
specifying the provision hereof pursuant to which such termination is
made. Except for any liability for the breach of this Agreement, upon
the termination of this Agreement pursuant to this Section 8, this
Agreement shall forthwith become null and void and there shall be no
further liability or the obligation on the part of Seller or Buyer
hereunder or with respect hereto.
9. Indemnification.
(a) Indemnification of Buyer. Subject to the limitations set
forth in Sections 9(c), 9(d), and 9(e), Seller shall indemnify and hold
Buyer, its partners and their respective officers, directors,
shareholders, employees, agents and representatives (the "Buyer
Indemnified Parties") harmless from, against, for and in respect of any
and all damages, losses, settlement payments, obligations, liabilities,
claims, actions or causes of action (whether as a result of direct claims
or third-party claims) actually suffered, sustained, incurred or required
to be paid by Buyer Indemnified Parties, net of any resulting income tax
benefits to Buyer Indemnified Parties, because of (i) the breach of any
written representation, warranty, agreement or covenant of Seller
contained in this Agreement (as the same shall have been modified at any
time at or before Closing including, without limitation, any modification
contained in any certificate of Seller concerning such matters delivered
at the Closing) or the Closing Documents; (ii) any and all Excluded
Liabilities; (iii) any contamination on or under the property that is
subject to the Deed or the Sublease(s) or in any of the Assets caused by
Seller prior to the Closing Date, or any liability for remediation or
clean-up of environmental conditions as a result of Seller's operations,
whether on or under the property that is subject to the Deed or the
Sublease(s) or elsewhere; (iv) all reasonable costs and expenses
(including, without limitation, attorneys' fees, interest and penalties)
actually incurred by Buyer Indemnified Parties in connection with any
action, suit, proceeding, demand, assessment or judgment incident to any
of the matters indemnified against in this Section 9(a).
(b) Indemnification of Seller. Subject to the limitations set
forth in Sections 9(c), 9(d) and 9(e), Buyer shall indemnify and hold
Seller, its affiliated corporations and their respective officers,
directors, shareholders, employees, agents and representatives (the
"Seller Indemnified Parties") harmless from, against, for and in respect
of any and all damages, losses, settlement payments, obligations,
liabilities, claims, actions or causes of action (whether as a result of
direct claims or third-party claims) actually suffered, sustained,
incurred or required to be paid by Seller Indemnified Parties, net of any
resulting income tax benefits to Seller Indemnified Parties, because of
(i) the breach of any written representation, warranty, agreement or
covenant of Buyer contained in this Agreement (as the same shall have
been modified at any time at or before Closing, including, without
limitation, any modification contained in any certificate of Buyer
concerning such matters delivered at the Closing) or the Closing
Documents; (ii) any and all Assumed Liabilities and all liabilities in
connection with the operation of the Businesses in respect of periods on
and after the Closing Date; (iii) any contamination on or under the
property that is subject to the Deed or Sublease(s) or in any of the
Assets caused by Buyer on or after the Closing Date or any liability for
remediation or clean-up of environmental conditions as a result of
Buyer's operations, whether on or under the property that is subject to
the Deed or the Sublease(s) or elsewhere; and (iv) all reasonable costs
and expenses (including, without limitation, attorneys' fees, interest
and penalties) incurred by Seller Indemnified Parties in connection with
any action, suit, proceeding, demand, assessment or judgment incident to
any of the matters indemnified against in this Section 9(b).
(c) Survival of Indemnification Obligations. Notice of any claim
under Section 9(a)(i) or Section 9(b)(i) of the indemnification
provisions hereof must be given prior to the date that occurs two (2)
years after the Closing Date, and any such claims not made within such
period shall be of no force or effect. Notice of any other claim under
the indemnification provisions hereof must be given within the applicable
time period of any applicable statute of limitations.
(d) General Rules Regarding Indemnification. The obligations and
liabilities of each indemnifying party hereunder with respect to claims
resulting from the assertion of liability by the other party shall be
subject to the following terms and conditions:
(i) The indemnified party shall give prompt (so as
not to materially prejudice the position of the indemnifying
party) written notice (which in no event shall exceed 30 days
from the date on which the indemnified party first became
aware of such claim or assertion) to the indemnifying party
of any claim which might give rise to a claim by the
indemnified party against the indemnifying party based on the
indemnity agreements contained in Sections 9(a) or 9(b)
hereof, stating the nature and basis of said claims and the
amounts thereof, to the extent known:
(ii) If any action, suit or proceeding is brought
against the indemnified party with respect to which the
indemnifying party may have liability under the indemnity
agreements contained in Sections 9(a) or 9(b) hereof, the
action, suit or proceeding shall, at the election of the
indemnifying party, be defended (including all proceedings on
appeal or for review which counsel for the indemnified party
shall deem appropriate) by the indemnifying party. The
indemnified party shall have the right to employ its own
counsel in any such case, but the fees and expenses of such
counsel shall be at the indemnified party's own expense
unless the employment of such counsel and the payment of such
fees and expenses both shall have been specifically
authorized in writing by the indemnifying party in connection
with the defense of such action, suit or proceeding.
Notwithstanding the foregoing, (A) if there are defenses
available to the indemnified party that are inconsistent with
those available to the indemnifying party to such extent as
to create a conflict of interest between the indemnifying
party and the indemnified party, the indemnified party shall
have the right to direct the defense of such action, suit or
proceeding insofar as it relates to such inconsistent
defenses, and the indemnifying party shall be responsible for
the reasonable fees and expenses of the indemnified party's
counsel insofar as they relate to such inconsistent defenses,
and (B) if such action, suit or proceeding involves or could
have an effect on matters beyond the scope of the indemnity
agreements contained in Sections 9(a) or 9(b) hereof, the
indemnified party shall have the right to direct (at its own
expense) the defense of such action, suit or proceeding
insofar as it relates to such other matters. The indemnified
party shall be kept fully informed of such action, suit or
proceeding at all stages thereof whether or not it is
represented by separate counsel.
(iii) The indemnified party shall make available to the
indemnifying party and its attorneys and accountants all
books and records of the indemnified party relating to such
proceedings or litigation and the parties hereto agree to
render to each other such assistance as they may reasonably
require of each other in order to ensure the proper and
adequate defense of any such action, suit or proceeding.
Whether or not the indemnifying party chooses to defend or
prosecute any claim involving a third party, all parties
hereto shall cooperate in the defense or prosecution thereof
and shall furnish such records, information and testimony and
attend such conferences, discovery proceedings, hearings,
trials and appeals as may be reasonably requested in
connection therewith.
(iv) The indemnified party shall not make any
settlement of any claims without the written consent of the
indemnifying party.
(e) Limits on Indemnification Obligation. Notwithstanding
anything in Sections 9(a) and 9(b) to the contrary or in conflict, any
amount for which Seller is obligated to reimburse Buyer may, in Seller's
sole discretion, be satisfied by reducing amounts currently due to Seller
under the Note or the Operating Agreement included in the Franchise
Documents by a like amount.
(f) Insurance Proceeds.
(i) In determining the amount of any loss, liability
or expense for which any indemnified party is entitled to
indemnification under this Agreement, the gross amount
thereof will be reduced by any insurance proceeds actually
paid to any indemnified party; provided, however, if such
party has been indemnified hereunder but does not actually
receive such insurance proceeds until after being
indemnified, such party shall reimburse the indemnifying
party for amounts paid to such party to the extent of the
insurance proceeds so received.
(ii) Following the Closing Date, if Buyer should
suffer any loss, liability or expense covered by any of
Seller's insurance policies and wishes to make a claim
against the issuer of such policy, Seller shall use its best
efforts to assist Buyer in ascertaining and establishing
coverage, pursuing such claim and collecting under such
policy. In connection with the foregoing sentence, Seller
shall not be required to incur any costs (including
attorneys' fees or demonstrable increases in insurance
premiums), other than normal overhead expenses, or to forego
any similar claim of its own with respect to the same
occurrence, in assisting Buyer in these efforts, unless
Seller shall otherwise be obligated to indemnify Buyer
pursuant to Section 9(a).
(iii) Following the Closing Date, if Seller should
suffer any loss, liability or expense covered by any of
Buyer's insurance policies and wish to make a claim against
the issuer of such policy, Buyer shall use its best efforts
to assist Seller ascertaining and establishing coverage,
pursuing such claim and collecting under such policy. In
connection with the foregoing sentence, Buyer shall not be
required to incur any costs (including attorneys' fees or
demonstrable increases in insurance premiums), other than
normal overhead expenses, or to forego any similar claim of
its own with respect to the same occurrence, in assisting
Seller in these efforts, unless Buyer shall otherwise be
obligated to indemnify Seller pursuant to Section 9(b).
(iv) If both an indemnifying party and an indemnified
party have insurance coverage respecting a particular claim
for which indemnification is provided pursuant to Sections
9(a) and 9(b), the parties agree that the insurance coverage
of the indemnifying party will be called upon before the
insurance coverage of the indemnified party is called upon.
10. Miscellaneous.
(a) Survival. Unless this Agreement is terminated pursuant to
Section 8(a) or Section 8(b) hereof, all representations, warranties,
covenants and agreements made in this Agreement or in a certificate
delivered pursuant hereto by the parties hereto shall survive the
termination of this Agreement or the consummation of the transactions
contemplated hereby for a period of two (2) years after the Closing Date,
except for the provisions of Section 9 hereof, which provisions shall
survive the consummation of the transactions contemplated hereby in
accordance with the terms of such Section 9.
(b) Notices. All notices, requests, or other communications
hereunder shall be in writing and shall be deemed to have been duly given
when delivered or refused, if delivered personally, or, if delivered by
overnight carrier, such as Federal Express, when delivered as follows:
If delivered to Seller:
Ruby Tuesday, Inc.
Attention: Legal Department
0000 Xxxxxxxx Xxxxx
Xxxxxx, Xxxxxxx 00000-0000
If delivered to Buyer:
RT Orlando Franchise, L.P.
0000 Xxxxxx Xxx
Xxxxxxx, Xxxxxxx 00000
(c) Mail Addressed to Seller. After the Closing Date, Buyer may
open all mail addressed to Seller at the premises of the Businesses.
Buyer shall promptly forward to Seller any mail that does not require
Buyer's action.
(d) Expenses. Except as otherwise provided in this Agreement,
all costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring
such expenses.
(e) Sales, Transfer, Documentary and Other Taxes. In addition to
the Transaction Taxes paid herewith, Buyer shall pay all federal, state
and local sales, documentary, transfer or other taxes or recording fees,
if any, due as a result of the purchase, sale or transfer of the Assets
hereunder, whether imposed by law on Seller or Buyer, and Buyer shall
indemnify, reimburse and hold harmless Seller in respect of the liability
for payment of or failure to pay any such taxes or the filing of or
failure to file any reports required to be filed in connection therewith.
(f) Entire Agreement. This Agreement, together with the Closing
Documents, sets forth the entire understanding of the parties hereto with
respect to the transactions contemplated hereby, and shall not be amended
or modified except by written instrument duly executed by each of the
parties hereto. Any and all previous agreements and understandings
between or among the parties regarding the subject matter hereof, whether
written or oral, are superseded by this Agreement, together with the
Closing Documents.
(g) Assignment and Binding Effect. This Agreement may not be
assigned by either party hereto without the prior written consent of the
other party. Subject to the foregoing, all of the terms and provisions
of this Agreement shall be binding upon and inure to the benefit of and
be enforceable by the successors and assigns of Seller and Buyer, but
shall not be construed as conferring any other rights on any other
person.
(h) Waiver. Any term or provision of this Agreement may be
waived at any time by the party entitled to the benefit thereof by a
written instrument duly executed by such party.
(i) Construction. All headings contained in this Agreement are
for convenience of reference only, and do not form a part of this
Agreement and shall not affect in any way the meaning or interpretation
of this Agreement.
(j) Exhibits and Schedules. All Exhibits and Schedules referred
to herein are intended to and hereby are specifically made part of this
Agreement.
(k) Severability. Any provision of this Agreement that is
invalid or enforceable in any jurisdiction shall be ineffective to the
extent of such invalidity or unenforceability without invalidating or
rendering unenforceable the remaining provisions hereof, and any such
invalidity or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provisions in any other jurisdiction.
(l) Counterparts. This Agreement may be executed in any number
of counterparts, each of which when executed and delivered shall be
deemed to be an original, and all of which counterparts taken together
shall constitute one and the same instrument.
(m) Applicable Law. This Agreement shall be construed in
accordance with the laws of the State of Florida.
IN WITNESS WHEREOF, the parties have duly executed and delivered
this Agreement as of the date first above written.
SELLER:
RUBY TUESDAY, INC.
By:/s/ J. Xxxxxxx Xxxxxxxxxx
Name: J. Xxxxxxx Xxxxxxxxxx
Title: Senior Vice President
BUYER:
RT ORLANDO FRANCHISE, L.P.,
d/b/a RT Orlando Franchise, Ltd.
By:/s/ Xxx X. Xxxxxxx, Xx.
X. Xxxxxxx, Inc., General Partner
Name: Xxx X. Xxxxxxx, Xx.
Title:President
LIST OF SCHEDULES AND EXHIBITS
Schedules
Schedule 3(c) Allocation of Purchase Price
Schedule 5(b) Seller's Consents and Approvals
Schedule 5(c) Permitted Encumbrances
Schedule 5(g) Compliance Disclosure
Schedule 7(a)(iv) Required Consents and Approvals
Exhibits
Exhibit A List of Restaurant Locations
Exhibit B Form of Note
Exhibit C Form of Security Agreement
Exhibit D Form of Guaranty
Exhibit E Form of Xxxx of Sale
Exhibit F Form of Certificate of Occasional or Isolated Sale
Exhibit G Legal Description for Owned Real Property
Schedule 3(c)
ALLOCATION OF PURCHASE PRICE
Schedule 5(b)
SELLER'S CONSENTS AND APPROVALS
1. All consents and approvals required or necessary to transfer to Buyer
all licenses or permits currently held by Seller or the Businesses with
respect to the sale or consumption of alcoholic beverages on the premises at
which the Businesses are conducted.
2. All consents required or necessary from any third party (or third
parties) with respect to the Sublease(s) or the Contracts.
Schedule 5(c)
PERMITTED ENCUMBRANCES
1. Liens that are immaterial in character, amount or extent, and that do
not materially affect the value, or do not materially interfere with the
present use, of the Assets.
2. UCC-1 Financing Statement filed August 5, 1996, as File No.960000161575
with the Florida Secretary of State, showing Ruby Tuesday, Inc. as
Debtor, and CLG, Inc., as Secured Party, covering equipment leased and
located as follows:
(n) Location 3929 - Pembroke Lakes Mall, 00000 Xxxxx Xxxx., Xxxxxxxx,
XX 00000 (RT South Florida Franchise, L.P.)
(o) Location 2681 - Fashion Island Mall, 00000-X Xxxxxxxx Xxxx.,
Xxxxx, XX 00000 (RT South Florida Franchise, L.P.)
(p) Location 2878 - 0000 Xxxxxxx Xxx., Xxxxxxx Xxxxx, XX 00000 (RT
Orlando Franchise, L.P.)
(q) Location 3919 - 0000 Xxxxxxxxx Xxxx., Xxxxxxxxxx, XX 00000 (RT
Tampa Franchise, L.P.)
(r) Location 2860 - 0000 X.Xxxxxxxx Xxx., Xxxxx Xxxxxxx, XX 00000 (RT
South Florida Franchise, L.P.)
3. UCC-1 Financing Statement filed August 5, 1996, as File No. 960000161579
with the Florida Secretary of State, showing Ruby Tuesday, Inc., as
Debtor, and CLG, Inc., as Secured Party, covering equipment leased and
located as follows:
(a) Location 2878 - 0000 Xxxxxxx Xxx., Xxxxxxx Xxxxx, XX 00000 (RT
Orlando Franchise, L.P.)
b. Location 3679 - 0000 X.X. Xxxxxxx Xx., Xxx. 000, Xxxxx, XX 00000
(RT Orlando Franchise, L.P.)
c. Location 3919 - 0000 Xxxxxxxxx Xxxx., Xxxxxxxxxx, XX 00000 (RT
Tampa Franchise, L.P.)
d. Location 3929 - Pembroke Lakes Mall, 00000 Xxxxx Xxxx., Xxxxxxxx,
XX 00000 (RT South Florida Franchise, L.P.)
e. Location 2609 - 0000 X. Xxxxxxx Xxxxx, Xxxxxx, XX 00000 (RT Tampa
Franchise, L.P.)
f. Location 3924 - 000 Xxxx Xxxxxxx Xxxxxxxx, Xxxxxxx Xxxxxx, XX
00000 (RT Orlando Franchise, L.P.)
4. UCC-1 Financing Statement filed September 13, 1996, as File No.
960000192921 with the Florida Secretary of State, showing Ruby Tuesday,
Inc., as Debtor and Orix Credit Alliance, Inc., as Secured Party.
Schedule 5(g)
COMPLIANCE DISCLOSURE
The Businesses are not in full compliance with certain requirements of
the Americans with Disabilities Act of 1990.
Schedule 7(a)(iv)
REQUIRED CONSENTS AND APPROVALS
1. All consents and approvals required or necessary to transfer to Buyer
all licenses or permits currently held by Seller or the Businesses with
respect to the sale or consumption of alcoholic beverages on the premises at
which the Businesses are conducted.
2. All consents required or necessary from any third party (or third
parties) with respect to the Sublease(s).
3. All consents required by Seller's current lender(s).
