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EXHIBIT 10.42
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement is made as of January 21, 1998, by
California Pizza Kitchen, Inc., a California corporation ("Seller"), and Jerry's
Famous Deli, Inc., a California corporation ("Buyer").
RECITALS
A. Seller is the tenant under a Ground Lease (the "Lease") covering
certain premises (the "Premises") including a building and other improvements
located at 0000 Xxxxxxxxx Xxxxxx Xxxxx, X.X., Xxxx Xxxxx, Xxxxxxx. The legal
description of the Premises is attached hereto as Exhibit A and incorporated
herein by this reference. Seller operates a restaurant in the Premises (the
"Existing Restaurant").
B. Seller desires to sell and assign to Buyer, and Buyer desires to
purchase from Seller, Seller's interest as tenant under the Lease, together with
certain furniture, fixtures, equipment and other tangible personal property used
in connection with the operation of the Premises and Existing Restaurant.
C. Seller also desires to sell and assign to Buyer, and Buyer desires
to purchase, the liquor license relating to the Premises and the Existing
Restaurant.
D. For valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Seller and Buyer agree as follows.
1. DEFINITIONS. For the purposes of this Agreement, the following terms
shall have the meanings set forth in this Article.
1.1 "Title Company" means First American Title Insurance Company, at
its office at 0000 X.X. 0xx Xxxxxx, Xxxxx, Xxxxxxx 00000.
1.2 "Closing Date" means the date upon which the closing hereunder
(the "Closing") shall occur as specified in Section 2.7 hereof.
1.3 "Excluded Assets" means (a) all items of personal property
located in the Existing Restaurant which are part of the perishable food and
beverage inventory (including but not limited to alcoholic beverages) and (b)
such other personal property, equipment or fixtures, including trade fixtures,
which contain any trademark, trade name, trade style, design or other symbol
which is used by Seller to identify its restaurant services or products
(including but not limited to china, glassware, printed or embossed paper
products,
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flatware and other smallwares) and (c) any of Seller's computer software,
signage, books and records, menus and recipes.
1.4 "Lease" means the Standard Form Ground Lease Agreement dated
April 7, 1993, as amended by the First Amendment to Lease, dated April 29, 1993,
by and between Xxxxx and Xxxxx, an Ohio limited partnership, as landlord
("Landlord"), and Seller, as tenant. Seller represents that a true, correct and
complete copy of the Lease is attached hereto as Exhibit B.
1.5 "Liquor License" means Seller's existing license to sell
alcoholic beverages for on premises" consumption under the laws of the State of
Florida which was issued by the appropriate state and/or local agencies
permitted by law to issue such licenses (such state and/or local agencies being
hereinafter collectively referred to as the "Licensing Authorities").
1.6 "Tangible Personal Property" means all of Seller's furniture,
fixtures, equipment and other tangible personal property located on or about the
Premises on the date hereof, including but not limited to the items listed on
Exhibit F, attached hereto and made a part hereof, except for the Excluded
Assets. The parties shall make a mutual inspection and inventory of the Tangible
Personal Property during the inspection period set forth in Section 2.5.6.
1.7 "Effective Date" shall mean the date on which this Agreement has
been signed by both parties, and shall be further deemed to be the date on which
the Agreement is signed by the last party signing this Agreement, provided that
a fully executed original of this Agreement is delivered to the other party
within three (3) business days thereafter.
1.8 "Escrow Agent" shall mean Xxxxxx X. Xxxxxx, in accordance with
and subject to the terms of the Escrow Agreement of even date herewith.
2. CONSIDERATION AND SALE OF ASSETS.
2.1 Tangible Personal Property. Seller agrees to sell to Buyer, and
Buyer agrees to purchase, the Tangible Personal Property. At closing, Seller
shall deliver to Buyer the Tangible Personal Property, in place at the Premises,
and Buyer agrees to accept delivery of the Tangible Personal Property in "as is"
condition as of the Closing Date and all express or implied warranties
(including any implied warranties of merchantability or fitness for a particular
purpose) are specifically excluded by mutual agreement of Buyer and Seller.
Unless prohibited by the terms of the Lease, Seller shall have the right, at any
time prior to the Closing, to remove the Excluded Assets from the Premises. Any
Excluded Assets that Seller does not remove from the Premises prior to Closing
shall be deemed abandoned in favor of, and conveyed for no additional
consideration to, Buyer as part of the Tangible Personal Property, and Buyer may
retain and use (or dispose of) such Excluded Assets without any
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payment to Seller, provided however, Buyer shall have no right to use, sell or
display to the public any such abandoned property which contains any trademarks,
trade name or other insignia of Seller, without the express further written
consent of Seller. Seller shall not remove or allow to be removed any of the
Tangible Personal Property from the Premises after the Effective Date. Prior to
the Closing Date, Seller shall repair any damage to the Tangible Personal
Property and/or the Premises caused by the removal of the Excluded Assets.
Seller shall be responsible for repair or replacement of any Tangible Personal
Property which is removed from the Premises or is damaged (except for ordinary
wear and tear) between the Effective Date and the Closing Date.
2.2 Leasehold Interest. Seller agrees to sell and assign to Buyer,
and Buyer agrees to purchase and assume from Seller, all of the tenant's
interest under the Lease, which shall include all right, tide, and interest of
Seller in the Premises and all appurtenances thereto (including, without
limitation, Seller's right, if any, to use, in common with others so entitled
from time to time, the driveways, parking spaces, sidewalks, landscaped areas,
pipes, wires and utilities servicing the Premises).
2.3 Liquor License.
2.3.1 Promptly after the Effective Date and within the Due
Diligence Period described below, Buyer shall take the customary actions to
apply for, seek and use all reasonable efforts, at Buyer's expense, to obtain
the approval and consent of all appropriate Licensing Authorities, as well as
any other governmental agency or authority having jurisdiction over such
matters, to the transfer of the Liquor License from Seller to Buyer (or the
issuance of a new license in lieu of transferring the Liquor License). Seller
shall cooperate with Buyer to apply for and secure the approval of such
transfers, including the execution of such applications, forms and other
documents as may be required by the Licensing Authorities in order to effectuate
the transfer of the Liquor License, but Buyer shall be solely responsible for
the payment of any and all costs and fees required for such transfer, including
any of its attorney's or other legal fees required (but Buyer shall not be
responsible for payment of any of Seller's attorneys fees).
2.3.2 If this Agreement is terminated, then Buyer shall have the
obligation to either withdraw and terminate any pending application for transfer
of the Liquor License to Buyer, in accordance with the Licensing Authorities'
procedure for such withdrawal and termination, or in the event the transfer has
been completed prior to such termination, Buyer shall take all action necessary
to transfer the Liquor License back to Seller. If this Agreement is terminated
because of the default of Seller, then Seller shall bear all costs related to
the retransfer of the Liquor License.
2.3.3 At the time of execution of this Agreement by all parties,
or promptly thereafter upon written request, Seller shall execute and deliver to
Buyer and/or Buyer's counsel all documents necessary and/or required by law for
the transfer of the Liquor License to Buyer. Buyer shall pay all filing fees and
other costs and expenses involved
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in filing and prosecuting the Liquor License transfer application with the
Licensing Authorities (but Buyer shall not be responsible for Seller's attorneys
fees). The parties hereto agree to cooperate fully and diligently in a
commercially reasonable manner in the performance of their respective duties
under this Agreement in order to secure the approval of the transfer of the
Liquor License to Buyer.
2.4 Miscellaneous. Seller shall also assign to Buyer all of its
right, title and interest in and to any permits, certificates, variances,
consents and approvals, and plans and specifications pertaining to the Premises,
including but not limited to the existing certificate of occupancy (or other
certificate permitting occupancy of the Premises) to the extent the same may
lawfully and without violation of the terms thereof be so transferred and
assigned. Buyer acknowledges that Seller makes no representation or warranty
regarding such permits, certificates, variances, consents and approvals, plans
and specifications except as set forth in Section 3. The sale, assignment and
transfer of the tenant's leasehold interest under the Lease, and the Liquor
License and the Tangible Personal Property, shall effectively vest Buyer with
good, clear, record and marketable title thereto, free and clear of all liens,
security interests and encumbrances, subject only to easements, covenants,
restrictions and encumbrances which do not materially interfere with Buyer's
intended use of the Premises and which are reasonably acceptable to Buyer, and
those exceptions set forth in Exhibit C. The leasehold interest under the Lease
is to be insurable by Buyer under a leasehold title insurance policy in
accordance with the provisions of Section 2.5.5 hereof.
2.5 Conditions Precedent; Due Diligence Period. At Buyer's option
(and with respect to Section 2.5.1, at Seller's option also), the obligations of
Seller and Buyer to conclude the transactions contemplated by this Agreement
shall be contingent upon the satisfaction of each of the following conditions at
Buyer's expense (unless otherwise expressly provided), within thirty (30) days
after the Effective Date (the "Due Diligence Period"), except as such Due
Diligence Period may be extended, at Buyer's option, for the reasons and in the
manner described below.
2.5.1 Consent and Release from Landlord. Buyer and Seller shall
execute an assignment and assumption of lease in the form attached hereto as
Exhibit D, or in such form as may be acceptable to Buyer and Seller. Buyer shall
obtain from Landlord an estoppel letter regarding the Lease in a form
satisfactory to Buyer, Landlord's consent to Exhibit D and such further consents
from the Landlord under the Lease, and any other necessary or appropriate third
parties, with respect to such matters as: Buyer's intended restaurant use of the
Premises, Buyer's proposed signage, Buyer's proposed remodeling, alterations or
improvements to the Premises, as the same may be appropriate or required
pursuant to the Lease or otherwise, and a Non-Disturbance Agreement from
Landlord in a form acceptable to Buyer. As used in this Section, the term
"Landlord" shall include any and all underlying ground lessors and mortgagees.
In addition thereto, this transaction shall be expressly contingent upon Buyer
obtaining from the Landlord, Landlord's agreement to fully and completely
release Seller from any and all liability to the Landlord arising under the
Lease
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for matters accruing from and after the Closing Date (the "Release"). Such
Release shall be in a form and substance reasonably satisfactory to Seller.
2.5.2 Zoning. Buyer obtaining satisfactory evidence that the
Premises are properly zoned to permit the construction and operation of a 24
hours per day restaurant at the Premises, as intended by Buyer.
2.5.3 Utilities. Buyer obtaining satisfactory evidence that all
utilities, including natural gas, serve the Premises in such quantity as is
necessary for Buyer's intended business activities, without payment of any costs
by Buyer, other than costs and charges imposed by the utility companies for
changing the service over to Buyer from Seller or for any modifications to such
utility services or equipment required by Buyer's intended use in the Premises.
2.5.4 Hazardous Substances. Buyer obtaining satisfactory
evidence that the Premises are free and clear of all hazardous substances.
2.5.5 Leasehold Title Policy. Buyer obtaining a leasehold title
insurance policy commitment in favor of and in form satisfactory to Buyer, and
issued by the Title Company, providing a firm commitment to insure Buyer's
leasehold estate under the Lease and to provide affirmative coverages, in such
form as Buyer shall reasonably require (including deletion of the "gap"
exception, survey exception and all pre-printed standard exceptions), over all
exceptions to tide (other than easements, covenants, restrictions and
encumbrances which do not unreasonably interfere with Buyer's intended use of
the Premises, which are reasonably acceptable to Buyer, and the matters listed
on Exhibit C, except for any easement exception contained in Exhibit C, if the
Survey shows that such easement lies under the Building or other structure on
the Premises in a manner so as to unreasonably interfere with Buyer's intended
use of the Premises) which are not satisfactory to Buyer. The cost for such
title insurance policy shall be home by Seller (up to a policy amount of
$1,775,000) in the event this transaction shall be completed, but otherwise
Buyer shall be responsible for any expense relating thereto. Buyer, at its cost,
may procure a survey (the "Survey") of the Premises (and the appurtenant
easement areas) prepared by a surveyor licensed to practice in the State of
Florida. In the event the title insurance commitment (or the Survey, if Buyer
has one prepared) shall contain exceptions (or survey matters), other than the
exceptions shown on Exhibit C (except for any easement exception contained in
Exhibit C, if the Survey shows that such easement lies under the Building or
other structure on the Premises in a manner so as to unreasonably interfere with
Buyer's intended use of the Premises ), which in Buyer's reasonable opinion,
shall unreasonably interfere with Buyer's intended use, construction or
operations on the Premises, then within ten (10) days after receipt of both the
title commitment and the Survey, but in any event prior to the expiration of the
initial thirty (30) day period of the Due Diligence Period, Buyer shall notify
Seller in writing of Buyer's objections thereto. With regard to any existing
liens (except public improvement liens to be assumed by Buyer), which are
defined and ascertainable in amount, Seller agrees to pay such liens at or prior
to Closing. In the event Buyer shall object to any other title or survey matter,
then Seller shall
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give written notice to Buyer, within thirty (30) days after receipt of Buyer's
notice, whether or not Seller will be able to remove such exception to the title
or Survey prior to Closing. Except for ascertainable liens, as provided for
above, Seller shall be under no obligation to remove or modify any title or
Survey matter in a manner acceptable to Buyer, and shall not be required to
commence any litigation or otherwise incur any costs or expense to remedy any
title or survey matter objected to by Buyer in so doing. In the event Seller
shall notify Buyer that Seller is unwilling or unable to remedy any such
objection by Buyer then such failure may be treated by Buyer as a failure of the
condition of title contingency contained in this Section. Seller agrees that
Seller shall not enter into, or record in the public records, any agreement,
covenant, restriction or other documents affecting the Premises, or consent to
any lien or encumbrance affecting the Premises, between the Effective Date and
the Closing Date, without the prior consent of Buyer.
2.5.6 Inspection. Buyer's approval of its inspection of the
Premises and the Tangible Personal Property, pursuant to Section 2.8 of this
Agreement.
2.5.7 Building Permit. If required by law, Buyer obtaining
issuance of a building permit based on plans and specifications prepared by
Buyer and approved by Landlord, together with any related permits for Buyer's
intended improvements on the Premises. If required by the Lease or as a
condition to Landlord's consent to this transaction, Buyer agrees to submit its
preliminary plans and specifications to Landlord for approval. Buyer also agrees
to submit its application for such permit to the appropriate governmental
authorities promptly upon receipt of Landlord's approval, if required, of the
plans and specifications. After obtaining all Landlord and third party approvals
necessary, Buyer shall diligently pursue obtaining its building permit and shall
use commercially reasonable efforts to expedite the preparation and approval of
the plans by the Landlord.
2.5.8 Liquor Licenses. Buyer obtaining the transfer of the
Liquor License authorizing sale of alcoholic beverages, for "on premises"
consumption, in and from Buyer's restaurant. Buyer shall diligently pursue
obtaining such transfer.
2.5.9 Representations. Seller's representations shall be true
on and as of the Closing Date with the same force and effect as if made on and
as of the Closing Date. Seller shall have performed, observed and complied with
all of the covenants, agreements and conditions required by this Agreement to be
performed, observed and complied with by it prior to and as of the Closing Date.
2.5.10 Condition of Property. As of the Closing Date, the
Premises and the Tangible Personal Property shall be kept and maintained in
substantially the same condition (ordinary wear and tear excepted) as the same
were in as of the Effective Date, or Seller shall have repaired or replaced
same, and Seller shall be in sole and exclusive possession of the Premises and
Tangible Personal Property.
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With the exception of the conditions contained in Sections 2.5.9 and
2.5.10 (which shall continue until Closing), Buyer shall satisfy or waive all of
the remaining conditions contained in this Section 2.5 prior to the expiration
of the Due Diligence period, and if Buyer fails to do so then Buyer may
terminate this Agreement upon written notice given to Seller prior to the
expiration of the Due Diligence Period, in which event this Agreement shall
terminate. In the event the conditions contained in Sections 2.5.1 or 2.5.8 have
not been satisfied within the thirty (30) day Due Diligence Period, then Buyer,
upon written notice (the "Extension Notice") to Seller prior to the expiration
of the Due Diligence Period, shall have the option to extend the Due Diligence
Period for one additional period of thirty (30) days. Such Extension Notice
shall specify which of the conditions, either Section 2.5.1 or 2.5.8 has not
been satisfied or waived by Buyer, and shall expressly state that all other
conditions contained in this Section 2.5 have been either satisfied by Buyer or
waived by Buyer (except Sections 2.5.9 and 2.5.10 which shall continue as
conditions until Closing). In the event at the end of the Due Diligence Period,
as so extended, if Buyer has not satisfied or is not willing to waive the
condition relied on for the extension of time in the Extension Notice then Buyer
may thereafter terminate this Agreement, in which event this Agreement shall
have no further force or effect, except as otherwise provided herein. If Seller
is unwilling to waive the condition of obtaining the Release of its obligations
under the Lease from the Landlord provided for in Section 2.5.1 above (which
waiver shall be solely at the option of Seller and may be given or denied in
Seller's sole and absolute discretion), or in the event Buyer has failed to
notify Seller in writing by 5 p.m. Eastern Standard Time on the last day of the
Due Diligence Period, as may have been extended by Buyer, in accordance with the
terms hereof, that all of the conditions contained in Section 2.5 of this
Agreement have been satisfied or waived (except for Sections 2.5.9 and 2.5.10
which shall remain until Closing), and absent a default under this Agreement by
Seller, that Buyer is prepared to close this transaction, as provided for
herein, then Seller may, in Seller's discretion, either grant a further
extension of the Due Diligence Period, upon such conditions as may be mutually
acceptable to Buyer and Seller, or Seller may at any time thereafter terminate
this Agreement, in which event this Agreement shall have no further force or
effect, except as otherwise provided herein. Notwithstanding anything contained
herein, the conditions contained in Sections 2.5.9 and 2.5.10 shall continue up
to and including the Closing Date, and in the event of a failure of either of
said conditions subsequent to the end of the Due Diligence Period and prior to
Closing, Buyer shall be permitted to terminate this Agreement. In the event the
Deposit has been paid by Buyer at the time of termination by either Buyer or
Seller, and Buyer is not in default, then the Deposit shall be returned to
Buyer. Seller agrees to cooperate with Buyer in a commercially reasonable manner
for the purpose of satisfying the foregoing conditions, provided Seller shall
not be required to incur any expense to outside persons or governmental agencies
in so doing (however, Buyer shall not be responsible for any internal expense
for Seller's employees' time or Seller's attorneys fees incurred in connection
with this transaction).
2.6 Purchase Price. The purchase price (the "Purchase Price") to
be paid by Buyer to Seller for the leasehold interests of Seller in the
Premises, the Tangible Personal Property and the Liquor License is One Million
Seven Hundred Seventy Five Thousand Dollars (U.S.) ($1,775,000.00). The Purchase
Price shall be allocated as follows:
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(i) $1,420,000.00 for the Lease and leasehold improvements, and (ii) $355,000.00
for the Tangible Personal Property and the Liquor License. The Purchase Price
shall be paid, subject to prorations, adjustments and credits, as follows:
2.6.1 Payment at Closing. At Closing, Buyer shall pay to Seller
the sum of One Million Seven Hundred Seventy Five Thousand Dollars (U.S.)
($1,775,000.00), as adjusted in accordance with the terms hereof, in cash by
wire transfer to the account of Seller, in accordance with wire transfer
instructions provided by Seller. Such funds shall be delivered to the Title
Company by certified check or cash wired to the Title Company's account at the
time set for the Closing. Buyer shall receive a credit at closing in the amount
of the Deposit (as described in Section 2.7), if the Deposit has been paid in
accordance with the terms of Section 2.7.
2.6.2 (Intentionally Omitted)
2.6.3 Default. If Seller shall default under this Agreement,
then Buyer may elect to either (a) bring an action against Seller for specific
performance of this Agreement, or (b) declare this Agreement terminated, in
which event Buyer shall be entitled to the return of the Deposit (if made), and
may pursue all remedies available to Buyer under the laws of the State of
Florida, including without limitation, an action for damages and/or such other
relief as may be awarded by a court. If Buyer shall default under this
Agreement, then Seller may elect to retain the Deposit (if made), may terminate
this Agreement and thereafter pursue all remedies available to Seller under the
laws of the State of Florida, including without limitation, an action for
damages and/or such other relief as may be awarded by a court. In the event of
any breach of this Agreement by either party, the non-breaching party shall give
the breaching party written notice thereof, specifying the reasons therefore,
and such party shall have ten (10) days after receipt of such notice to remedy
such breach. In the event the breaching party shall fail to remedy such breach
within the ten (10) day period, then such party shall be in default hereunder.
No delay or omission in the exercise of any right or remedy accruing to one
party upon a default by the other party under this Agreement shall impair such
right or remedy, or be construed as a waiver of any such default theretofore or
thereafter occurring.
2.7 Closing Notice; Deposit. The Closing shall occur in Miami,
Florida on a date set by mutual agreement of the parties in the manner set forth
below, after the expiration of the Due Diligence Period, as may be extended (the
"Closing Date"). Provided the Release has been obtained (or waived by Seller),
then Buyer shall have the option of waiving all of the remaining contingencies
set forth in Section 2.5 (other than the Landlord's and any other necessary
third party's consent to the Assignment) by written notice to Seller and the
Closing shall occur on a date prior to the expiration of the Due Diligence
Period, as extended, as specified by the Buyer which shall be at least five (5)
days after the date of Buyer's notice. Notwithstanding the foregoing, in the
event Seller is then conducting business from the Premises then the following
provisions shall apply. Buyer shall give Seller written notice of its
satisfaction or waiver of all the contingencies set forth in Section 2.5
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above (except for 2.5.9 and 2.5.10 which shall remain until Closing), in the
manner provided in Section 2.5, and deliver to Seller a copy of the proposed
Release (the "Closing Notice"). The Closing Notice shall include a proposed
Closing Date which shall be at least five (5) days after the date of such
notice. A copy of the Closing Notice shall be simultaneously delivered to Escrow
Agent, at the address given for such notices in Section 6.9 and shall be
accompanied by a cashier's check, certified check or wire transfer of funds in
the amount of One Hundred Fifty Thousand Dollars (U.S.) ($150,000.00) (the
"Deposit") payable to Escrow Agent, which shall be held by Escrow Agent, in
accordance with the provisions of the Escrow Agreement between Escrow Agent,
Seller and Buyer, of even date herewith. The Deposit shall be applied as a
credit to the Purchase Price at the Closing. Upon receipt of the Closing Notice
and Deposit, Seller shall proceed with due diligence to close down and cease its
business operations from the Existing Restaurant. Seller shall have the option
of extending the Closing Date contained in the Closing Notice for an additional
period of up to fourteen (14) days, if it is deemed necessary by Seller, in the
exercise of Seller's reasonable business judgment, in order to cease its
business operations from the Premises in a commercially reasonable manner (or
such longer period as shall be required to give notice to its employees in the
manner provided by applicable law). The Closing shall take place at the offices
of the Title Company on the Closing Date. At the Closing:
2.7.1 Seller shall deliver to Buyer exclusive possession of the
Premises and the Tangible Personal Property in the condition required herein, to
the Buyer at the Premises. Seller shall deliver an original of the Lease to
Buyer at the Closing.
2.7.2 Seller shall execute and deliver to the Buyer: a duly
executed and acknowledged assignment and assumption of the Lease (in the form
attached as Exhibit D, as may be modified by mutual agreement of the parties and
Landlord), a xxxx of sale for the Tangible Personal Property and other licenses
and permits to be assigned to Buyer under Section 2.4 (in the form attached as
Exhibit E), any further documents needed to assign the Liquor License to Buyer
or confirm that Buyer owns the Liquor License (but if no such documents are
necessary, then none shall be required at the Closing), and all other
instruments required hereunder to be delivered to Buyer by Seller, and such
other documents and instruments as may be reasonably requested by the Title
Company or Buyer, including but not limited to an Owner's Affidavit as to Liens
and Possession, a Gap affidavit, Seller's affidavit that the representations set
forth in Section 3 remain true as of the Closing Date, certification by the
State of Florida that no sales taxes are due under Florida Statute 212.10,
corporate resolutions approving the transaction and a certificate of Good
Standing from the State of Florida. Buyer, Seller and the Title Company shall
agree upon the form of such documents prior to Closing. To the extent
appropriate, such instruments shall be in recordable form, duly executed and
acknowledged by Seller. The assignment and assumption of Lease shall also be
duly executed and acknowledged by Buyer, and an original shall be delivered to
Seller at Closing, along with the Release signed by the Landlord. The parties
acknowledge that the assignment and assumption of the Lease is subject to
approval by Landlord, and that Landlord may require changes to the form attached
as Exhibit D. If the parties cannot agree on the form of the assignment and
assumption of the Lease within the time period set forth in Section 2.5,
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then either party may terminate this agreement by giving written notice to the
other. If the parties agree on a changed form for the assignment and assumption
of the Lease, then they shall amend this Agreement to attach the new form for
such document as Exhibit D.
2.7.3 Buyer shall pay the Purchase Price as set forth in Section
2.6 hereof.
2.7.4 Buyer shall execute, and deliver to Seller, Buyer's
affidavit that its representations set forth in Section 4 remain true as of the
Closing Date.
2.8 Inspection of Property. Buyer shall have the right to inspect
the Premises and Tangible Personal Property during the Due Diligence Period.
Buyer shall make such inspections during normal business hours, at a time which
is mutually agreeable to the parties and after at least 24 hours prior notice to
Seller. Buyer shall not during such inspections perform any testing which
involves a physical impact or invasion of the Premises (including but not
limited to soil borings or Phase II environmental testing) without the further
prior written consent of Seller. If Buyer shall obtain a Phase I environmental
report on the Premises then Buyer shall keep the results of any environmental
reports or tests confidential, subject to the provisions of Section 6.2 and
shall promptly deliver to Seller copies of any and all reports, materials and
results developed by any consultant or environmental engineering firm. If, prior
to the expiration of the Due Diligence Period, Buyer has identified any
condition related to the Premises or Tangible Personal Property that, in Buyer's
sole discretion, is unacceptable to Buyer, Buyer shall have the right to
terminate this Agreement by written notice to Seller, and thereupon neither
party shall have any further rights or liabilities to the other hereunder,
except as otherwise provided herein. Buyer shall be liable for all damage or
injury to any person or property resulting from any such inspection or testing,
whether occasioned by the acts of Buyer or any of its employees, agents,
representatives or contractors, and Buyer shall indemnify and hold harmless
Seller from any liability resulting therefrom. This indemnification by Buyer
shall survive the Closing or the termination of this Agreement.
2.9 Risk of Loss; Seller's Inability to Transfer.
(a) If the Lease is terminated pursuant to its provisions due to
the application of the casualty or condemnation provisions therein, then either
party may terminate this Agreement at any time before the Closing and neither
party shall be liable to the other hereunder (except as provided in Section
2.8). Provided Buyer is not in default hereunder, in the event Landlord is in
default under the Lease, Seller may exercise all of its rights and remedies
under the Lease and pursuant to law, but Seller shall not voluntarily terminate
the Lease prior to Closing, without Buyer's consent.
(b) The risk of loss or damage to the Premises and/or Tangible
Personal Property by casualty or by eminent domain shall be borne by Seller up
to Closing and any risk of loss or damage by casualty or by eminent domain after
the Closing shall
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be borne by Buyer. If at any time prior to Closing all or any portion of the
Premises or the building in which the Premises is located or the Tangible
Personal Property are damaged or destroyed as a result of fire or other
casualty, or by eminent domain, or in the event that Seller shall be unable to
deliver title to the Premises or Tangible Personal Property at Closing in
accordance herewith due to such events, Buyer shall have the option of
terminating this Agreement, and neither party shall have any further rights or
liabilities hereunder, except as otherwise provided for herein. Notwithstanding
the foregoing, provided the Lease has not been terminated pursuant to subsection
(a) above, Buyer shall have the right to waive any defect in title or any remedy
it is entitled to for any damage caused to the building, Premises and/or
Tangible Personal Property by casualty or by eminent domain and proceed to
Closing without any abatement of the Purchase Price; provided, however, and in
any such instance Seller will pay to Buyer, as the case may be, all insurance or
condemnation proceeds received by Seller or to which Seller is entitled with
respect to any such damage or condemnation, subject however to the provisions of
the Lease, and the rights of Landlord thereunder, requiring that such insurance
or condemnation proceeds be used for the reconstruction and repair of the
Premises. Prior to Closing, Seller shall maintain casualty insurance on the
Premises as required by the Lease.
3. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller represents and
warrants to Buyer that:
3.1 Organization and Corporate Power. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State in
which it is incorporated. Seller has full power and authority (corporate and
other) to own and lease its assets and properties, and to execute and deliver
this Agreement and to carry out the transactions contemplated hereby, subject
only to obtaining the required approvals as may be required from the Landlord of
the Lease.
3.2 Broker or Finder. No person or persons, other than Greenfield
Xxxx Properties, Inc., assisted in or brought about the negotiation of this
Agreement in the capacity of broker or agent or finder and Seller shall be
responsible for the payment to said brokers or agents or finders of all
brokerage or finders fees due in respect of the matters set forth in this
Agreement and shall indemnify, defend and hold Buyer harmless from any liability
therefor.
3.3 Title to and Condition of Property. Seller has good and
insurable title to the Tangible Personal Property and the leasehold interest of
the tenant under the Lease, subject to all title matters of record, including
but not limited to the exceptions contained in Exhibit C. In the event either
the Lease, Liquor License or the Tangible Personal Property is currently subject
to any liens or encumbrances, due to any financing obtained by Seller, then
Seller agrees to obtain such releases as may be necessary to deliver clear and
unencumbered title to the Lease, Liquor License and Tangible Personal Property
to Buyer at the time of Closing. Seller is in sole and exclusive possession of
the Premises, except as to any non-
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exclusive easements benefiting the Premises, which Seller is in non-exclusive
possession along with all other persons having the right to use such easement.
3.4 Condemnation Proceedings. To the best of Seller's actual
knowledge without investigation, Seller has not been notified of contemplated
eminent domain proceedings affecting the Premises, Building or any areas
adjacent thereto.
3.5 Zoning, Legal Violations. To the best of Seller's actual
knowledge without investigation, (a) the Existing Restaurant and the Premises
are in full compliance with all applicable laws, ordinances and regulations, and
(b) the uses and operations that Seller conducted in the Existing Restaurant are
in full compliance with all applicable laws, ordinances and regulations, and (c)
Seller has received no notice from any governmental or quasi-governmental
authority having jurisdiction over the Premises asserting that the Premises or
the building thereon are in violation of any applicable zoning laws, ordinances
or regulations, or any legal or other requirements. To the best of Seller's
actual knowledge without investigation, neither the Premises or any portion
thereof is or has been designated as an "historical" site or otherwise has any
historical, unique or intrinsic value, such that may prevent, impair or delay
any construction on the Premises.
3.6 Status of Leases. The Lease is in full force and effect and
Seller has received no notice of any default thereunder, and is not aware of any
matters that could constitute a default under the Lease. Seller shall not enter
into any amendment of the Lease prior to Closing without Buyer's written
consent. Other than the Lease, there are no other real property leases affecting
the Premises, and Seller has not entered into any executory contracts which
would be binding on Buyer following the Closing.
3.7 Status of Licenses. To the best of Seller's actual knowledge
without investigation, Seller has received no notice of any violation, fine or
suspension relating to any permits or licenses issued with respect to the
Existing Restaurant or the Premises, and no notice asserting that the Existing
Restaurant or the Premises is being operated in violation of the terms and
provisions of any applicable licenses or permits.
3.8 Valid and Binding Obligations. The transfer documents to be
executed at the Closing will, when executed and delivered, constitute valid and
binding obligations of the Seller; enforceable in accordance with their terms.
3.9 Mechanic's Liens. No improvements made by or for Seller which
might form the basis of a mechanic's or materialmen's lien have or will have
been made to the Premises prior to the Closing Date which have not been paid in
full or will be so paid prior to Closing.
3.10 Litigation. Seller is not a party to, or otherwise involved in
any claim or litigation or any administrative or other proceedings or
investigations pertaining to the Lease or Premises.
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3.11 Hazardous Substances. To the best of Seller's actual knowledge
without investigation, Seller has not illegally generated, stored or disposed of
any hazardous substances on the Premises and is not aware of any generation,
storage or disposal of such substances (including asbestos containing materials)
on the Premises.
3.12 Liquor License.
3.12.1 To the best of Seller's actual knowledge, Seller owns
the Liquor License free of liens and other obligations or in the event such
License is subject to any financing liens, Seller agrees to have the same
released prior to Closing. Until closing, Seller shall keep the Liquor License
current, valid and transferable under this Agreement and in compliance with all
applicable laws and regulations.
3.12.2 To the best of Seller's actual knowledge, there are no
threatened or outstanding citations issued or to be issued by the Licensing
Authorities against the Liquor License and Seller has not received any notice(s)
of alleged violations (the "Violation Notice") regarding the Liquor License. In
the event that a Violation Notice or citation is issued against the Liquor
License prior to receipt of all approvals required for its transfer to Buyer,
Seller agrees to immediately notify Buyer and to provide Buyer with a copy
thereof. Seller agrees to dispose of said Violation Notice and any such citation
or citations in a diligent manner. In the even said Violation Notice and/or
citation(s) are not disposed of within 30 days from the date hereof, Buyer may,
as its option, terminate this Agreement by giving Seller at least 5 business
days prior written notice.
3.12.3 To the best of Seller's actual knowledge without
investigation, all federal, state and local taxes, assessments and other
governmental charges against the Liquor License, that are due and payable, have
been paid or provided for. No levy or assessment for federal, state or local
taxes has been made or threatened. All liens and other obligations claimed
against or incurred by Seller or affecting or relating to the Liquor License
have been, or, as of the Closing Date, will have been paid and/or satisfied
without recourse against Buyer and/or the Liquor License, and the licensee is
not or will not be on the delinquency list at the time of the transfer.
3.12.4 Seller has full right and title to sell and transfer the
Liquor License to Buyer and there are no other outstanding agreements of sale
for the Liquor License as of the effective date of this Agreement.
3.13 No Equipment Leases. Seller owns all of the personal property
and fixtures located in the Existing Restaurant, free and clear of any equipment
lease, other type of lease, lien or mortgage or in the event such equipment is
subject to any financing liens, the Seller will obtain a release of such liens
prior to Closing.
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3.14 Indemnification. Seller shall indemnify, defend and hold Buyer
harmless from and against any claim, loss, damage, cost or expense (including
reasonable attorneys' fees) resulting from or arising from any of the following:
(a) any and all liens against the Premises, Lease, Liquor License and/or
Tangible Personal Property arising out of events occurring prior to the Closing
Date except as to any lien resulting from actions of Buyer (i.e., during
inspections) or the Landlord under the Lease; and (b) any and all claims by
third parties as to obligations or liabilities of any nature whatsoever for or
with respect to events relating to the Premises, Lease, Liquor License or the
Tangible Personal Property occurring prior to the Closing Date except for those
claims that are due to acts of Landlord under the Lease or Buyer; and (c) any
liabilities with respect to which the so-called "Bulk Sales Act" or any other
law applicable to the Seller that may create remedies against any property
transferred to Buyer as contemplated herein.
3.15 Condition of Property. To the best of Seller's actual knowledge
without inspection, the structural improvements, mechanical systems, utility
systems, roof, and Tangible Personal Property are in good working condition, and
free from termites or other wood destroying organism infestation and damage.
Notwithstanding the foregoing, and subject to the provisions of Section 2.1, all
real and personal property being conveyed to Buyer pursuant to this Agreement is
being conveyed in "as is" condition without warranty of any kind and it shall be
the sole responsibility of Buyer to determine for itself during the Due
Diligence Period, the condition of the Premises, including all components
thereof, and the Tangible Personal Property.
4. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents and
warrants to Seller that:
4.1 Organization and Corporate Power. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
California and has full power and authority (corporate and other) to own, lease
and operate its assets and properties and to execute and deliver this Agreement,
and to carry out the transactions contemplated hereby.
4.2 Due Authorization; Effect of Transaction. No provision of
Buyer's certificate of incorporation or by-laws, or of any agreement, instrument
or understanding, or any judgment, decree, law, rule or regulation, to which
Buyer is a party or by which it is bound, has been or will be violated by the
execution by Buyer of this Agreement or the performance or satisfaction of any
agreement or condition herein contained upon its part to be performed or
satisfied, and all requisite corporate and other authorizations for such
execution, delivery, performance and satisfaction have been duly obtained. This
Agreement will upon execution and delivery, be a legal, valid and binding
obligation of Buyer, enforceable in accordance with its terms.
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4.3 Broker or Finder. No person or persons, other than Greenfield
Xxxx Properties, Inc., assisted in or brought about the negotiation of this
Agreement in the capacity of broker or agent or finder on behalf of Buyer
(Seller being responsible for the payment to said broker or agent or finder of
all brokerage or finders fees due with respect to the transactions set forth in
this Agreement). Buyer shall indemnify and save Seller harmless from and against
any and all claims by any broker or finder other than Greenfield Xxxx
Properties, Inc. which may claim a right to a brokerage or finder's fee as a
result of such broker's contact with Buyer.
5. PRORATIONS; CLOSING COSTS.
5.1 Rents, Taxes, Assessments, Etc. All rent, real estate and
personal property taxes, common area charges, and other charges and assessments
of any nature whatsoever payable by Seller under the Lease shall be prorated
between Seller and Buyer as of the Closing Date. Notwithstanding the preceding
sentence, Buyer shall be entitled to a credit at Closing in the amount of one
(1) month's rent (plus one half of the difference between one month's minimum
rent under the Lease as in effect on the Effective Date, and any new monthly
minimum rental for the first full month following Closing which may provided for
in an Amendment to the Lease between Landlord and Buyer which is executed in
furtherance of this transaction prior to Closing), real estate and personal
property taxes, common area charges, and other charges due and payable under the
Lease.
5.2 Utilities. Prior to the Closing Date, Buyer shall contact all
utility companies serving the Premises to request that all utilities be
transferred to Buyer's account as of the Closing Date. Buyer shall pay any
deposits or other transfer fees due in connection with the transfer of utilities
to Buyer's account. Buyer shall assume the obligations for all utility costs
incurred on and after the Closing Date and Seller shall be responsible for the
payment of all utility charges incurred prior to the Closing Date.
5.3 Closing Costs. Except for documentary stamps payable upon
recordation of the Assignment and Assumption Agreement, or transfer (or sales)
taxes payable with respect to the Tangible Personal Property, which shall be
paid for by the Seller, Seller and Buyer agree to divide evenly the costs of all
escrow fees, state and local recording fees, and all other customary settlement
charges. Buyer shall at its expense pay all transfer fees with respect to the
sale, transfer and/or assignment of the Liquor License. Seller agrees to pay the
cost of the title insurance commitment and the title insurance policy premium
(for a title policy with an insured amount of $1,775,000) and for any curative
endorsements to such policy to insure over any defects in Seller's title. Buyer
shall be responsible for any additional premiums due for such policy which are
attributable to any increase in the face amount of such policy requested by
Buyer or for any endorsements that Buyer desires to add to such policy, which
are not curative endorsements. Each party shall pay its own legal fees.
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5.4 Improvement Liens. Any governmental liens, assessments or
charges for improvements to the Premises or for any quasi-public or public
facilities or improvements, whether completed or pending, which are not included
in the real estate or personal property taxes payable by Seller pursuant to the
provisions of the Lease, shall assumed by Buyer at Closing, and shall be
pro-rated between the parties based upon the installments due for such liens
during the current tax year in the same manner as real estate and personal
property taxes due under the Lease are pro-rated pursuant to Section 5.1 above.
6. MISCELLANEOUS.
6.1 Entire Agreement. Buyer and Seller agree that this Agreement,
including the Schedules and Exhibits hereto, constitutes the entire agreement
among the parties with respect to the subject matter hereof and supersedes all
prior understandings and agreements with respect thereto. The parties agree that
this Agreement is not intended to, nor shall it be construed to benefit, any
third party beneficiaries of any nature.
6.2 Confidentiality. Whether or not the transactions contemplated
hereby are consummated, the parties hereto agree to keep confidential and cause
their attorneys, bankers, brokers, consultants, accountants and other
representatives to keep confidential any and all information and data with
respect to the other party which it has received as a result of any
investigation made in connection with this Agreement and which is not otherwise
available to the patties; provided, however, that notwithstanding the foregoing,
each of the parties hereto shall be free to disclose any such information or
data (i) to the extent required by applicable law and (ii) during the course of
or in connection with any litigation, arbitration or other proceeding based upon
or in connection with the subject matter of this Agreement and (iii) in
connection with Buyer's inspections regarding the assets to be acquired hereby
and (iv) to such attorneys, bankers, brokers, consultants, accountants and other
representatives. Subject to the foregoing, prior to the Closing, each party
shall keep confidential and shall not publicize the existence or terms of this
Agreement. Buyer acknowledges that Seller is conducting an ongoing business from
the Premises and, subject to the provisions of this Section, Buyer agrees to
conduct its activities in respect to Section 2.5 in a confidential and
reasonable manner and to cooperate with Seller to keep this Agreement in
confidence until such time as Seller notifies Buyer that Seller has given notice
of the transaction contemplated herein to its employees at the Premises.
6.3 Possession. Possession of the Premises and the Tangible Personal
Property shall be delivered to Buyer at the Closing.
6.4 Waivers. Any waiver of any term or condition of this Agreement,
or of the breach of any covenant, representation or warranty contained herein,
in any one instance, shall not operate as or be deemed to be or construed as a
further or continuing waiver of any other breach of such term, condition,
covenant, representation or warranty or any other term, condition, covenant,
representation or warranty, nor shall any failure at any time or times to
enforce or require performance of any provision hereof operate
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as a waiver of or affect in any manner such party's right at a later time to
enforce or require performance of such provision or of any other provision
hereof.
6.5 Amendments. This Agreement may not be amended, nor shall any
waiver, change, modification, consent or discharge be effected, except by an
instrument in writing executed by or on behalf of the party against whom
enforcement of any amendment, waiver, change, modification, consent or discharge
is sought.
6.6 Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and assigns. Neither Buyer nor Seller shall be released from its obligations
hereunder due to an assignment. Buyer shall have the right to direct Seller to
assign and convey the Lease, Liquor License and the Tangible Personal Property
to any wholly owned subsidiary of Buyer at the Closing, upon prior written
notice to Seller, given no later than five (5) days prior to Closing.
6.7 Severability. If any provision of this Agreement shall be held
or deemed to be, or shall in fact be, invalid, inoperative or unenforceable as
applied to any particular case in any jurisdiction or jurisdictions, or in all
jurisdictions or in all cases because of the conflict of any provision with any
constitution, statute or rule of public policy or for any other reason, such
circumstance shall not have the effect of rendering the provision or provisions
in question invalid, inoperative or unenforceable in any other jurisdiction or
in any other case or circumstance or of rendering any other provision or
provisions herein contained invalid, inoperative or unenforceable to the extent
that such other provisions are not themselves actually in conflict with such
constitution, statute or rule of public policy, but this Agreement shall be
reformed and construed in any such jurisdiction or case as if such invalid,
inoperative or unenforceable provision had never been contained herein and such
provision reformed so that it would be valid, operative and enforceable to the
maximum extent permitted in such jurisdiction or in such case. However, this
Section shall not apply if the invalidity, inoperativeness or unenforceability
of such provision would materially change the basis on which the parties entered
into this transaction.
6.8 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument, and in pleading or
proving any provision of this Agreement it shall not be necessary to produce
more than one such counterpart.
6.9 Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given when
received whether such notice is delivered personally or by commercial courier
service (such as Federal Express) or deposited in the U.S. mail, postage
prepaid, certified or registered mail, return receipt requested. In the event
any such delivery is refused, then the notice shall be deemed delivered on the
date of refusal to accept such delivery:
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(a) TO SELLER: If to Seller to:
California Pizza Kitchen
0000 Xxxx Xxxxxxx Xxxxxxxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxxxxx
with a copy to:
Xxxxxx X. Xxxxxx
0000 Xxx Xxxxxx
Xxxxx 000
Xx Xxxxx, XX 00000
(b) TO BUYER: If to Buyer to:
Jerry's Famous Deli, Inc.
00000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxxx
with a copy to:
Katz, Barron, Squitero, Xxxxx & Xxxxxx, P.A.
0000 Xxxxx Xxxxxxxx Xxxxx, 0xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx
and/or to such other person(s) and addresses) as either party shall have
specified in writing to the other.
6.10 Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the law (other than the law governing
conflict of law questions) of Florida.
6.11 No License to Use Seller's Name. Buyer hereby acknowledges that
it is not acquiring from Seller any right, title, or interest in or license to
use of the name California Pizza Kitchen or any of the names, marks, trade
names, service marks, trademarks, logos, symbols, indicia, or forms of
advertising used in connection therewith.
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6.12 Public Announcement. Buyer and Seller will consult with each
other before issuing any press release or otherwise making any public statements
or announcements with respect to the transactions contemplated by this Agreement
and will not issue any such press release or make any such public statement or
announcement prior to such consultation.
6.13 Legal Fees. If there is any litigation relating to this
Agreement, then the prevailing party shall be entitled to recover all of its
reasonable costs and expenses relating to the litigation, including legal fees
and costs. The term "litigation" as used herein shall mean every and all stages
of such litigation, in all court with jurisdiction over the matter.
6.14 Radon. Radon is a naturally occurring radioactive gas that,
when it has accumulated in a building in sufficient quantities, may present
health risks to persons who are exposed to it over time. Levels of radon that
exceed federal and state guidelines have been found in buildings in Florida.
Additional information regarding radon and radon testing may be obtained from
your County Public Health Unit.
Buyer, at Buyer's option, may during the Due Diligence Period
perform the necessary testing to determine that the Premises are free from radon
as part of the Buyer's inspection of the Premises pursuant to Sections 2.5.4 and
2.8. The presence of radon on the Premises, in excess of levels which are
required by law to be remediated, shall entitle the Buyer to terminate this
Agreement as provided in said Section,
6.15 Time. Except as otherwise expressly stated herein to the
contrary, any time period measured in days shall mean consecutive calendar days.
If the expiration of any time period measured in days occurs on a Saturday,
Sunday or legal holiday, then such time period shall be automatically extended
until the end of the next business day.
6.16 Survival. Except as otherwise expressly stated herein to the
contrary, all affirmative representations made by either party to the other
party and all indemnifications made by either party to the other party, shall
survive the closing of the transaction provided for herein.
6.17 Property Data. Within ten (10) days after the Effective Date,
to the extent Seller has the following in its possession, Seller shall deliver
or cause to be delivered to Buyer copies of: any plans and specifications for
the building on the Premises, any environmental reports concerning the Premises,
any building or zoning permits, and any soil boring or structural integrity
reports relating to the Premises.
6.18 Indemnification by Buyer. Buyer shall indemnify, defend and
hold Seller harmless from and against any claim, loss, damage, cost or expense
(including reasonable attorneys' fees) resulting from or arising from: (a) any
and all claims by third parties as to obligations or liabilities of any nature
whatsoever for or with respect to events relating to the Premises, Lease, Liquor
License or the Tangible Personal Property occurring
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after the Closing Date, except for those claims that are due to acts of Landlord
under the Lease or Seller, and (b) any and all claims loss, damage, cost or
expense (including reasonable attorneys' fees) resulting from Buyer permitting
any other person or entity (including any person or entity to whom Buyer may
direct Seller to convey or assign the Lease, Liquor License and Tangible
Personal Property to at closing) to perform any obligation of Buyer under this
Agreement. This indemnity shall survive the Closing.
SELLER:
CALIFORNIA PIZZA KITCHEN, INC.,
a California corporation
By: /s/ Xxxxxxx Xxxxxxxxxx
-----------------------------
Name: Xxxxxxx Xxxxxxxxxx
-----------------------------
Title: Vice President
-----------------------------
Date: January 21, 1998
-----------------------------
BUYER:
JERRY'S FAMOUS DELI, INC.,
a California corporation
By: /s/ Xxxxx Xxxxxxxx
-----------------------------
Name: Xxxxx Xxxxxxxx
-----------------------------
Title: CEO
-----------------------------
Date: January 19, 1998
-----------------------------
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