Exhibit 19
----------
PURCHASE AND SALE AGREEMENT
THIS AGREEMENT is made this 28th day of February, 2001 (the "Effective
Date") by and among BRAVOKILO, INC. ("BKI"), an Indiana corporation, whose
address is 0000 Xxxxxx Xxxxx Xxxxxxx, Xxxxxxxxx, XX 00000 ("Seller"), Seller's
parent QUALITY DINING, INC., an Indiana corporation, whose address is 0000
Xxxxxx Xxxxx Xxxxxxx, Xxxxxxxxx, XX 00000 ("QDI") and N.B.O., L.L.C., a Michigan
limited liability company whose address is 00000 Xxxxxxxxxxxx Xxxxxxx, Xxxxx
000, Xxxxxxxxxx, Xxxxxxxx 00000 ("Buyer").
RECITALS:
---------
A. Seller is the franchisee and operator of four (4) Burger King
Restaurants located at the following locations (singularly "Restaurant"
and collectively, the "Restaurants"):
(i) Leased Parcels (as such term is hereinafter defined):
----------------------------------------------------
(a) Restaurant No. 509
32704 Grand Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
(b) Restaurant No. 527
20905 Ecorse Road
Taylor, Michigan 48180
(c) Restaurant No. 11347
0000 Xxxxxxxxx Xxxx
Xxxxxx, Xxxxxxxx 00000
(ii) BKI Parcel (as such term is hereinafter defined):
------------------------------------------------
(a) Restaurant No. 12980
00000 Xxxxxxxxx Xxxx
Xxxxxxxxxx Xxxxxxxx, Xxxxxxxx
B. In connection with its operation of the Restaurants, (i) Seller is the
owner of one (1) parcel of real property on which one (1) Restaurant is
located (the "BKI Parcel"), (ii) Seller is the tenant of three (3)
parcels of real property on which certain Restaurants are located
(collectively, the "Leased Parcels"), and (iii) Seller is the owner of
the building for Restaurant No. 11347 (the "Building") (the BKI Parcel,
the Leased Parcels and the Building are sometimes hereinafter referred
to singularly as a "Property" and collectively as the "Properties").
The Properties are more particularly described on Exhibit A attached
hereto and incorporated herein by reference.
C. Seller desires to sell, and Buyer desires to acquire, all of Seller's
right, title and interest in and to the Restaurants and the Properties
as more particularly set forth below.
NOW, THEREFORE, in consideration of the following mutual covenants and
representations, the parties hereby agree as follows:
1. SUBJECT MATTER
--------------
a. ASSETS
------
At Closing (defined below), Buyer shall purchase from
Seller, and Seller shall sell and deliver to Buyer, all furniture, equipment
(other than leased equipment) and personal property (collectively, the "Assets")
located at or used solely in connection with the Restaurants. A list of
substantially all of the Assets and a list of the leased equipment shall be
delivered to Buyer within seven (7) days from the date hereof and Buyer and
Seller may amend such list as necessary in connection with Buyer's physical
inspection of the Restaurants. Seller shall repair or replace any Assets damaged
or removed by Seller between the date hereof and the Closing, ordinary wear and
tear excepted. The sale of the Assets will be made free and clear of all claims,
liabilities, liens and obligations, except for those which are specifically set
forth in this Agreement.
b. INVENTORY
---------
At Closing, Buyer shall purchase and pay Seller, for
all usable food, paper, then current promotional premiums, non-current
promotional premiums ("fillers") not to exceed five (5) boxes of fillers per
Restaurant, gift certificates and supply inventory in sealed boxes
(collectively, "Inventory") located at the Restaurants at the invoice price. The
closing statement between Seller and Buyer shall contain a credit to Seller for
the sum of $5,000.00 per Restaurant, representing the estimated Inventory cost.
At 8:00 p.m. on the day of Closing, the Restaurants shall be closed to the
public and Seller and Buyer shall conduct a joint inventory of the Restaurants.
Within seven (7) days after Closing, Seller and Buyer shall determine Seller's
actual cost of the Inventory, and (i) if the actual Inventory cost is greater
than the amount paid at Closing, Buyer shall pay the difference to Seller, or
(ii) if the actual Inventory cost is less than the amount paid at Closing,
Seller shall pay the difference to Buyer. The sale of the Inventory will be made
free and clear of all claims, liabilities, liens and obligations whatsoever.
c. STORE BANKS
-----------
On the date of Closing, Seller shall certify to Buyer
the actual balance of the cash in each of the Restaurants (singularly, the
"Store Bank" and collectively, the "Store Banks"). Each Restaurant's Store Bank
shall contain $1,000.00 as of the date of Closing, and Buyer shall reimburse
Seller for the sum of $1,000.00 per Restaurant at Closing.
2
d. FRANCHISE AGREEMENTS
--------------------
At Closing, Buyer shall purchase and assume from
Seller, and Seller shall sell, transfer and assign to Buyer, all of Seller's
right, title and interest in and to, and obligations under, the Burger King
Franchise Agreements for the Restaurants arising from and after the date of
Closing (singularly, a "Franchise Agreement" and collectively, the "Franchise
Agreements"). The Franchise Agreements for the Restaurants shall be delivered to
Buyer in their entirety within seven (7) days from the date hereof.
e. FRANCHISEE COMMITMENT
---------------------
At Closing, Buyer shall purchase and assume from
Seller, and Seller shall sell, transfer and assign to Buyer, all of Seller's
right, title and interest in and to, and obligations under, the Franchisee
Commitment with Burger King Corporation ("BKC") arising from and after the date
of Closing, insofar as it relates to the Restaurants with respect to the Coca
Cola Program (the "Franchisee Commitment"). A copy of the Franchisee Commitment
will be provided to Buyer within seven (7) days from the date hereof. Buyer
shall be entitled to any moneys distributed from the Soft Drink Trust Fund
established by Coca Cola (the "Trust Fund") with respect to the Restaurants at
any time after the date of Closing. Seller shall retain all amounts distributed
from the Trust Fund with respect to the Restaurants prior to the date of
Closing.
x. XXXX ADDENDUM
-------------
At Closing, Buyer shall purchase and assume from
Seller and Seller shall sell, transfer and assign to Buyer, all of Seller's
right, title and interest in and to, and obligations under, the Early Successor
Incentive Program (Fiscal 2000) Addendum to Successor Franchise Agreement for
Restaurant No. 509 (the "ESIP Addendum"). A copy of the ESIP Addendum will be
provided to Buyer within seven (7) days from the date hereof. Seller represents
and warrants that it has paid the initial franchise fee in the amount of
$30,010.96 to BKC in connection therewith.
g. BKI PARCEL
----------
At Closing, Seller shall convey to Buyer good and
marketable fee title to the BKI Parcel, together with all of Seller's right,
title and interest in all easements, hereditaments, appurtenances, improvements
now or hereafter belonging thereto, and, if the BKI Parcel is unplatted, all
future division rights provided by the Michigan Land Division Act, pursuant to a
Warranty Deed for the BKI Parcel, subject only to the Permitted Exceptions
(hereinafter defined).
h. LEASED PARCELS AND BUILDING
---------------------------
(i) At Closing, Seller shall assign to Buyer all of
its right, title and interest in and to the Leased Parcels pursuant to the form
of Assignment and Assumption of Lease attached hereto as Exhibit B. Within seven
(7) days after the date hereof, Seller shall provide to Buyer copies of each of
the leases for the Leased Parcels (singularly, a "Lease" and collectively, the
3
"Leases") (Seller's rights under the Leases shall be referred to as the
"Leasehold Interest");
(ii) At Closing, Seller shall convey all of Seller's
right, title and interest in and to the Building pursuant to a Quit Claim Deed.
2. PURCHASE PRICE
--------------
a. At Closing, Buyer shall (i) transfer to Seller SEVEN
HUNDRED EIGHTY-FIVE THOUSAND (785,000) shares of common stock of QDI (the
"Shares") which Buyer currently owns, which Shares shall be transferred to
Seller, free and clear of lien, security interest, pledge, hypothecation or any
other restriction or interest, in the manner set forth in Paragraph 16(n) hereof
and (ii) pay to Seller the amounts described in Paragraphs 1(b) and 1(c) hereof
(collectively, the "Purchase Price"), subject to any Closing adjustments as
provided herein.
b. The Purchase Price shall be allocated by agreement between
Buyer and Seller prior to Closing. Buyer and Seller hereby acknowledge that such
allocation shall have been arrived at by arms-length negotiation and Buyer and
Seller hereby agree, subject to the requirements of Section 1060 of the Internal
Revenue Code of 1986, as amended (the "Code"), and the Treasury Regulations
promulgated thereunder, to report consistently, in any tax return completed or
filed by any of them, the sale of assets and other items pursuant to this
Agreement in accordance with said allocation.
3. CLOSING; PRE-CLOSING INSPECTION
-------------------------------
a. Subject to the provisions of Paragraph 3(b), Paragraph 7
and Paragraph 14(b) hereof, the closing hereunder ("Closing") shall take place
on or before the date which shall be fifteen (15) days from and after the date
upon which Buyer has waived or is deemed to have waived the last of the Buyer's
Conditions set forth in Paragraph 7(b) hereof, at the offices of Counsel to
Buyer or at such other time and place as shall be mutually agreed upon by the
parties. At the Closing, the parties shall deliver the documents described in
Paragraph 16, and Buyer shall pay the Purchase Price in full.
b. Buyer shall be entitled to conduct a second inspection of
the physical condition of the Restaurants within two weeks prior to Closing in
order to confirm (i) that all of the matters set forth on Seller's Repair List
pursuant to Paragraph 6(a) hereof have been repaired to Buyer's satisfaction,
and (ii) that the condition of the Restaurants has not changed since Buyer
conducted its first inspection pursuant to Paragraph 6(a) hereof. If Buyer
discovers any items on Seller's Repair List that have not been repaired or any
new items which require repair and which were not in need of repair as of the
date of the first inspection pursuant to Paragraph 6(a) hereof, Buyer shall
prepare a list of such physical plant items to be repaired by Seller prior to
Closing. With respect to new matters discovered under (ii) above, Seller shall
notify Buyer in writing within two (2) days of its receipt of such list from
Buyer as to which items it will repair prior to Closing. To the extent Seller
agreed to repair such items and such repairs are not completed before Closing,
4
Buyer shall have the right, in its sole discretion, to (a) close at such time as
contemplated hereunder, in return for which Buyer shall be given a credit
against the Purchase Price to pay for the cost of any repairs, or (b) terminate
this Agreement. To the extent Seller does not agree to repair any such items,
Buyer shall have the right to terminate this Agreement. With respect to matters
Seller previously agreed to repair on the Seller's Repair List, the terms of
Paragraph 6(a) shall control.
4. REPRESENTATIONS AND WARRANTIES OF SELLER
----------------------------------------
Seller hereby represents and warrants to Buyer the following
as of the date hereof and as of the date of Closing, which representations and
warranties shall survive the Closing for a period of twelve (12) months:
a. Seller is a corporation duly organized and validly existing
under the laws of the State of Indiana and has the corporate power and authority
to enter into and perform its obligations under this Agreement.
b. Subject to the satisfaction of all of the Conditions
provided herein, the execution and delivery of this Agreement by Seller and the
consummation by Seller of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of Seller, and no other
corporate proceedings on the part of Seller are necessary to authorize the
execution and delivery of this Agreement and the consummation by Seller of the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by Seller and constitutes a valid and legally binding obligation of
Seller, enforceable against Seller in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
other laws of general applicability relating to or affecting creditors' rights
and to general equity principles.
c. Seller has good and marketable title to all of the Assets,
Inventory and Store Banks, subject to no liens, mortgages, pledges, encumbrances
or charges of any kind except those which will be discharged at Closing. All of
the fixtures, furniture and equipment used solely in the operation of the
Restaurants is owned by Seller, other than the leased equipment set forth in the
list delivered to Buyer pursuant to Paragraph 1(a) hereof.
d. Seller is the sole owner of the rights under the Franchise
Agreements; the Franchise Agreements are in full force and effect and unmodified
and unamended except as set forth in the documents delivered to Buyer pursuant
to Paragraph 1(d) hereof; Seller has delivered a true and complete copy of each
of the Franchise Agreements to Buyer; the Franchise Agreements are subject to no
liens, mortgages, pledges, encumbrances or charges of any kind except those
which will be discharged at Closing; all fees and other amounts due under the
Franchise Agreements have been paid; and there are no monetary defaults under
the Franchise Agreements and Seller has not received notice of any defaults
under the Franchise Agreements that have not been cured.
5
e. Seller is the sole fee owner of the BKI Parcel and the
Building, has good and marketable title to the same subject only to covenants,
conditions, easements, restrictions of record and real estate taxes not yet due
and payable and does not need the consent of any other party to sell the same to
Buyer, except such consents as will be obtained prior to Closing. Seller or its
affiliates do not own any real property adjacent to the Properties.
f. Seller is the sole owner of the tenant's rights under the
Leases; the Leases are in full force and effect and unmodified or amended except
as set forth on the documents delivered to Buyer pursuant to Paragraph 1(h)
hereof; Seller has delivered a true and complete copy of each of the Leases to
Buyer; all fees and other amounts due and payable under the Leases have been
paid; and Seller has not received notice of any defaults under the Leases which
remain uncured as of the date hereof.
g. The unaudited financial information which Seller has
provided to Buyer with respect to the Restaurants was derived from the Seller's
books and records and is the same information utilized by Seller to manage the
Restaurants. Such financial information was not prepared in accordance with
generally accepted accounting principles and does not include all accruals and
adjustments. Subject to the foregoing, to the best of Seller's knowledge, such
financial information presents fairly in all material respects the results of
operations for the Restaurants for the periods indicated.
h. Seller has paid all taxes that are due and payable with
respect to the Properties and Restaurants, including, but not limited to, real
estate taxes, personal property taxes, unemployment taxes, single business
taxes, sales/use taxes and income tax withholding on wages.
i. There is no pending litigation and, to the best of Seller's
knowledge, no threatened or contemplated litigation against or affecting Seller,
the Restaurants or the Properties that would impair the ability of Seller to
consummate the transactions contemplated by this Agreement.
j. Seller presently has, and on the Closing date will have,
all material permits, licenses, orders and approvals of all governmental bodies
necessary for it to operate the Restaurants as presently operated. Except for
such deviations as would not reasonably be expected to have a material adverse
effect on the business or operations of the Restaurants, all of such permits,
licenses, orders and approvals are in full force and effect and have been
complied with.
k. There are no third party contracts which would be binding
on Buyer as the purchaser hereunder.
l. To the best of Seller's knowledge, the Restaurants are not
in violation of any federal, state or local laws, orders, regulations or
requirements, the violation of which could reasonably be expected to have a
material adverse effect on the business or results of operations of the
Restaurants.
6
m. Subject to the satisfaction of the Mutual Conditions and
the Seller's Conditions to Closing set forth in Paragraphs 7(a) and 7(c) hereof,
neither the execution and delivery of this Agreement nor the consummation by
Seller of the transactions contemplated hereby will (i) conflict with or result
in a breach of or default under any of the terms, conditions or provisions of
any note, bond, mortgage, indenture, license, agreement or other instrument or
obligation to which Seller is a party or by which it, the Restaurants or the
Properties are bound, or (ii) violate any order, injunction, decree, statute,
rule or regulation applicable to Seller, the Restaurants or the Properties.
n. To Seller's knowledge without investigation and except as
may be set forth in the environmental reports provided by Seller to Buyer
hereunder, the Properties are free from contamination resulting from releases,
discharges, or spills of hazardous substances and/or wastes, toxic and nontoxic
pollutants and contaminants, including, but not limited to, petroleum products
and asbestos ("Hazardous Substances").
5. REPRESENTATIONS AND WARRANTIES OF BUYER
---------------------------------------
Buyer hereby represents and warrants to Seller, which representations
and warranties shall survive Closing for a period of twelve (12) months as
follows:
a. Buyer is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of Michigan
and has the limited liability company power and authority to enter into and
perform its obligations under this Agreement.
b. The execution and delivery of this Agreement by Buyer and
the consummation by Buyer of the transactions contemplated hereby have been duly
authorized by all necessary action on the part of Buyer, and no other
proceedings on the part of Buyer are necessary to authorize the execution and
delivery of this Agreement and the consummation by Buyer of the transactions
contemplated hereby. This Agreement has been duly executed and delivered by
Buyer and constitutes a valid and legally binding obligation of Buyer,
enforceable against Buyer in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and other laws of
general applicability relating to or affecting creditors' rights and to general
equity principles.
c. Subject to the satisfaction of the Mutual Conditions and
the Buyer's Conditions to Closing set forth in Paragraphs 7(a) and 7(b) hereof,
neither the execution and delivery of this Agreement nor the consummation by
Buyer of the transactions contemplated hereby will (i) conflict with or result
in a breach of or default under any of the terms, conditions or provisions of
any note, bond, mortgage, indenture, license, agreement or other instrument or
obligation to which Buyer is a party or by which it is bound, or (ii) violate
any order, injunction, decree, statute, rule or regulation applicable to Buyer.
7
d. There is no suit, action or proceeding pending or
threatened against or affecting Buyer that would impair the ability of Buyer to
consummate the transactions contemplated by this Agreement.
e. Buyer is the sole beneficial owner of the Shares and has
good and marketable title thereto, free and clear of all liens, mortgages,
pledges, encumbrances, agreements, options, claims, security interests or
restrictions of any kind or nature whatsoever.
f. Buyer has all requisite legal right, power and authority to
sell the Shares to Seller and to execute, deliver and perform this Agreement
without obtaining the consent or approval of any other party. Buyer is not a
party to any agreement relating to the voting of the Shares or restricting the
transfer thereof.
g. Upon the transfer, assignment and delivery to Seller of the
Shares in accordance with this Agreement, Seller will be vested with good and
valid title to the Shares, free and clear of all liens, claims, pledges or
encumbrances.
h. Buyer acknowledges that it has been advised about, and has
been provided access to, all information regarding the affairs of QDI and its
subsidiaries that it has deemed necessary to make an informed decision with
respect to the sale of the Shares.
6. COVENANTS
---------
a. Following the execution of this Agreement, Buyer will be
given the opportunity to inspect all of the Restaurants and Buyer will, within
thirty (30) days after the Effective Date, provide to Seller a written list of
requested repairs and replacements for the Restaurants. Within ten (10) days
after receiving such list, Seller shall notify Buyer, in writing, of which items
on such list it is willing to repair or replace ("Seller's Repair List"). Buyer
shall then, within ten (10) days after receiving such written notice from
Seller, inform Seller whether it (i) will accept the fact that Seller will only
repair and/or replace the items on Seller's Repair List, or (ii) desires to
terminate this Agreement, in which case neither party shall have any further
liability or obligation hereunder. Any failure by Buyer to so notify Seller
shall be deemed to be an acceptance of Seller's Repair List. If Buyer accepts
Seller's Repair List, Seller shall then, at its expense, make the repairs and
replacements specified on Seller's Repair List prior to the date of Closing. If
for any reason such repairs and replacements are not made prior to Closing, (i)
Buyer may elect to complete the repairs and replacements itself and be
reimbursed for any reasonable costs thereof, or (ii) Buyer may terminate this
Agreement.
b. Although the Restaurants are being sold on an "as is" basis
except for the repairs and replacements specified on Seller's Repair List, and
subject to all representations and warranties of Seller set forth herein, from
the date of this Agreement through the date of Closing, Seller shall continue to
maintain and repair the Properties or the Restaurants in the manner set forth in
Paragraph 6(c)(iii) hereof.
8
c. From the date this Agreement is executed by the last of
Seller and Buyer and until the Closing date, Seller shall conduct its business
involving the Properties and the Restaurants in the ordinary course, and during
said period will:
(i) refrain from transferring (or entering into any
agreement for the transfer, sale or other conveyance of) any of the Properties
or the Restaurants or creating on the Properties any easements, liens,
mortgages, encumbrances or other interests that would affect the Properties
(including, but not limited to any refinancing of existing loans for which
mortgages currently exist and encumber the Properties) or Seller's ability to
comply with the terms of this Agreement;
(ii) refrain from entering into or renewing any
contracts or other commitments regarding the Properties or the Restaurants which
would be binding on Buyer as purchaser hereunder without the prior written
consent of Buyer, which consent may be granted or denied in Buyer's sole
discretion;
(iii) continue to maintain and repair the Properties
or the Restaurants in at least the manner which Seller has previously maintained
and repaired the Properties or the Restaurants (ordinary wear and tear
excepted);
(iv) keep in effect Seller's existing policies of
public liability and hazard and extended coverage insurance insuring the
Properties or the Restaurants or the substantial equivalent thereof;
(v) promptly comply with all notices of violation of
laws or municipal ordinances, regulations, orders or requirements of departments
of housing, building, fire, labor, health, or other state, city or municipal
departments or other governmental authorities having jurisdiction against or
affecting the Properties or the Restaurants or the use or operation thereof
which would reasonably be expected to have a material adverse effect on the
business or results of operations of the Restaurants (notwithstanding the
foregoing, Seller shall provide Buyer with copies of all notices of violations
it receives from and after the Effective Date, regardless of whether it would
have a material adverse effect on the business or results of operations of the
Restaurants); and
(vi) keep the Restaurants stocked and employed in the
ordinary course of business consistent with past practice.
d. As soon as possible but in no event later than thirty (30)
days after Closing, Buyer shall use commercially reasonable efforts to return to
Seller all new and used uniforms for management employees of the Restaurants
which are explicitly marked with the words "Quality Dining," "Bravokilo" or
derivations thereof on the outside of such uniforms.
e. With respect to all agreements to be assigned to Buyer
pursuant to this Agreement which require consent of the other party thereto,
Seller shall use its reasonable best efforts to obtain such consent and shall
furnish copies of each such consent to Buyer promptly after receipt thereof.
9
Buyer agrees to cooperate in all reasonable respects with Seller in Seller's
attempt to obtain such consents, including providing information reasonably
requested by the other parties to such agreements.
f. Seller shall give Buyer reasonable access to Seller's
financial records pertaining to the Restaurants, upon reasonable notice from
Buyer.
7. CONDITIONS TO CLOSING
---------------------
a. The obligations of Buyer and Seller to consummate the
transactions contemplated by this Agreement shall be subject to the satisfaction
prior to or at Closing of the following conditions (collectively, the "Mutual
Conditions"):
(i) Receipt of all material consents and approvals
required for the consummation of the transactions contemplated by this
Agreement, including without limitation consents of BKC and lessors relating to
the Franchise Agreements and the Leases to be assigned to Buyer. Without
limitation of the foregoing, there shall be received written approval of the
transactions contemplated herein from BKC, together with such additional
documentation concerning BKC's agreement to recognize Buyer as the franchisee of
the Restaurants;
(ii) No temporary restraining order, preliminary or
permanent injunction or other legal restraint or prohibition preventing the
consummation of the transactions contemplated by this Agreement shall be in
effect, nor shall Buyer or Seller have notice of, and have verified, the
pendency of an inquiry or investigation by any governmental authority in respect
of the transactions contemplated by this Agreement which could reasonably result
in any such order, preliminary or permanent injunction or other legal restraint
or prohibition;
(iii) Buyer and Xxxxxx X. Xxxxxxxxxxx (or an entity
to be formed by him) shall simultaneously close the transaction contemplated by
that certain Stock Sale Agreement dated as of an even date herewith. This
Agreement shall automatically terminate upon any termination of the Stock Sale
Agreement.
b. The obligation of Buyer to consummate the transactions
contemplated by this Agreement is subject to the satisfaction, in Buyer's sole
discretion, on or prior to Closing of each and every one of the following
conditions (collectively, the "Buyer's Conditions"):
(i) Buyer's satisfactory review, at its cost, of a
survey, bearing a legal description, made by a licensed surveyor selected by
Buyer, in accordance with the "Minimum Standard Detail Requirements for
ALTA/ACSM Land Title Surveys" jointly established and adopted by the American
Land Title Association and the American Congress on Surveying and Mapping in
1992 and such other survey standards as required by Buyer ("Survey"), certified
to Buyer and the Title Company (as hereinafter defined) and such other parties
requested by Buyer, showing the area, dimensions and location of each of the
Properties to the nearest monuments, streets and alleys on all sides, the
topography, the location of all available utilities and adjoining streets,
alleys or property, the location of all improvements and encroachments, the
10
location of all recorded easements against or appurtenant thereto, stating the
flood zone thereof, and not disclosing any condition unsatisfactory to Buyer.
The resolution of any unsatisfactory conditions for the Surveys shall be
addressed in the same manner as unsatisfactory conditions of title as set forth
in Paragraph 7(b)(iii) hereof. Within seven (7) days after the date hereof, if
Seller has not already done so, Seller shall provide Buyer with copies of any
surveys of the Property which it currently has in its possession;
(ii) Buyer's satisfactory review, at its cost, of a
written Phase I environmental assessment report concerning each of the
Properties, which does not disclose any condition unsatisfactory to Buyer. If
any one or more of the Phase I assessments discloses any known or suspected
environmental contamination, Buyer and Seller shall discuss Buyer's need to
order additional tests and investigations and Seller must consent to the same
before any such tests or investigations are undertaken by Buyer. The cost of any
additional tests and investigations beyond the Phase I report shall also be
borne by Buyer. Within seven (7) days after the date hereof, if Seller has not
already done so, Seller shall provide Buyer with copies of any environmental
reports with respect to the Properties which it currently has in its possession;
(iii) Buyer shall order a current title commitment
for an ALTA Owners or Leasehold Title Insurance Policy ("Commitment"), as
applicable, for each of the Properties prepared by Xxxxxx Title Insurance
Company or any other title insurance company satisfactory to Buyer ("Title
Company"), which Commitments shall not disclose any condition unsatisfactory to
Buyer, are without general exceptions, and are each in the amount of the
purchase price of the respective Property. The premiums associated with the
owner's title insurance policy shall be borne by Seller up to the first
$500,000.00 of coverage and the premiums associated with the leasehold title
insurance policies shall be borne by Seller up to the first $250,000.00 of
coverage. Buyer shall be responsible for the costs of any additional coverage or
any endorsements it requires. Within seven (7) days from the date hereof, Seller
shall provide Buyer with copies of any title insurance policies or commitments
with respect to the Properties which it currently has in its possession. Buyer
shall have forty-five (45) days from and after the Effective Date within which
to notify Seller of any objections which it may have to the state of title to
the Properties. Buyer's failure to give any notice within the time limit
provided shall be deemed approval of the survey and status of title, and these
contingencies shall be deemed satisfied. Seller, at Seller's option, shall have
15 days from its receipt of any such notice to cause such revised Commitments to
be issued evidencing that any such objection has been remedied and/or insured
over in a manner satisfactory to Buyer in its sole and absolute discretion. If
Seller is unable to cause such revised Commitments to be issued within such
15-day period, Buyer shall have the right: (i) to accept such objections as
exceptions to Seller's title to the Properties, with the same thereafter being
deemed "Permitted Exceptions"; provided, however, that in the event any of such
objections result from liens or encumbrances having liquidated amounts, Buyer
may, at its option, pay such amounts at any time prior or subsequent to Closing
and Buyer shall receive full credit for such payment(s) against the Purchase
Price; or (ii) to terminate this Agreement upon notice thereof to Seller and
neither party shall thereafter have any further liability or obligation
hereunder. At Closing, Seller and Buyer shall cause the Title Company to hand
xxxx the Commitments as effective title insurance policies insuring marketable
11
title in Buyer, subject only to the Permitted Exceptions, such hand-marked
Commitments thereby providing Buyer so-called "gap" coverage;
(iv) Buyer's satisfactory review of any UCC, tax lien
and judgment searches concerning Seller and the Properties, which do not
disclose any condition unsatisfactory to Buyer. The cost of such searches shall
be borne by Seller;
(v) Buyer's satisfactory review of all target
reservation agreement letters between Seller and BKC which may impact on the
sales volume of the Restaurants, which target reservation agreement letters must
be forwarded by Seller to Buyer within three (3) business days of Seller's
receipt thereof;
(vi) Buyer's satisfactory review of all BKC leases
("BKC Leases");
(vii) Buyer's satisfactory review of all third party
leases, ground leases or subleases concerning the Properties, as well as Buyer's
obtaining all necessary modifications or amendments thereto, provided that to
the extent Buyer desires any such modifications or amendments thereto, Buyer
shall first notify Seller of its request and Seller shall promptly deliver any
such initial request to the landlord on Buyer's behalf;
(viii) Buyer's satisfactory review of all (a)
estoppel letters and any necessary written consents to the assignment of such
leases, ground leases or subleases in a form and substance satisfactory to
Buyer, and (b) subordination, non-disturbance and attornment agreements from all
holders of mortgages encumbering the Properties in form and substance
satisfactory to Buyer;
(ix) Buyer's satisfactory review of the Franchise
Agreements with BKC;
(x) Buyer's satisfactory review of all of Seller's
financial information with respect to the Restaurants, including but not limited
to, annual sales, annual expenses, capital expenditures, benefit plans and the
most current payroll register;
(xi) All representations and warranties of Seller
contained in this Agreement being true and correct in all material respects as
of the date of this Agreement and as of the date of Closing;
(xii) Seller shall have performed and complied with
the terms and conditions of this Agreement in all material respects at or prior
to the Closing;
(xiii) The execution and delivery by Seller of all of
the documents required to be so executed and delivered by it pursuant to
Paragraph 16 of this Agreement;
(xiv) Buyer's satisfactory review, to the extent
available to Seller, of (a) the names of all contractors and subcontractors who
built the Restaurants or at any time performed any work at any of the
12
Restaurants, (b) copies of any warranties issued with respect to any of the
Restaurants, (c) copies of certificates of occupancy for the Restaurants, (d)
any building department reports or any other reports which address the physical
condition of the Restaurants, and (e) copies of all as-built architectural and
engineering drawings for the Restaurants, all of which items Seller shall
provide to Buyer within seven (7) days after the Effective Date;
(xv) Buyer's satisfactory review of all health
department reports for each of the Restaurants;
(xvi) Buyer's satisfactory review of (i) a tax letter
from the Michigan Unemployment Agency ("MUA") disclosing the Seller's current
unemployment tax liability and (ii) a disclosure of Seller's unemployment tax
experience, on MUA Form 1027;
(xvii) Buyer's satisfactory review of all
documentation, including but not limited to the BKC Facility inspection reports,
in connection with (i) the BKC 2000 ESIP program, and (ii) the Burger King
Coca-Cola Restaurant Conversion Incentive Program (the "Coke Program");
(xviii) Buyer's satisfactory review of all of the
items set forth on Exhibit C attached hereto and incorporated herein by
reference, which items Seller shall deliver to Buyer within fourteen (14) days
after the Effective Date, with respect to the employees of the Restaurants, as
well as benefits and other general management issues; and
(xix) Seller shall provide Buyer, within seven (7)
days after the date hereof, a 2-year history of all toy premiums and "Self
Liquidating Offers" ordered and sold for each of the Restaurants and Buyer shall
be satisfied with the same.
Buyer shall have the right until 11:59 p.m. EST on the date which shall
be sixty-seven (67) days from and after the Effective Date, to deliver to Seller
written notice that the Buyer's Conditions set forth in Paragraph 7(b) hereof
have not been satisfied (except for the items listed in Paragraphs 7(b)(xi),
(xii) and (xiii), which must be satisfied at or prior to Closing). If Buyer
delivers written notice to Seller within the applicable time period that any one
of the Buyer's Conditions are not satisfied, Buyer may terminate this Agreement
and the same shall be deemed null, void and without further force or effect and
neither party shall thereafter have any liability or claim against the other. In
the event Buyer fails to give notice to Seller within the applicable time period
that the Buyer's Conditions set forth in Paragraph 7(b) hereof are not
satisfied, such Buyer's Conditions shall be deemed satisfied.
Notwithstanding anything contained herein to the contrary, in the event
that Buyer is diligently pursuing such due diligence activities but has not been
able to satisfy itself as to any item within the time period specified herein,
Buyer shall have the right to extend the 67-day time period set forth in this
Paragraph 7(b) for one additional period of 30 days upon written notice to that
effect given to Seller prior to the expiration of the initial 67-day time
period.
13
Seller shall use good faith efforts to obtain any necessary consents or
approvals required in connection with the Restaurants and such other matters as
Buyer may reasonably request.
During the 67-day contingency period identified above, as the same may
be extended, Buyer and its representatives, including, but not limited to
employees, contractors, agents and inspectors, shall have the right and license
to enter upon the Properties to undertake such activities thereon so as to
enable Buyer to investigate the condition of the Properties in accordance with
the express terms of this Agreement, and otherwise satisfy itself with respect
to the Buyer's Conditions set forth in this Paragraph, provided Seller has
granted specific written consent to any such entry, specifying the purpose
thereof and the allowable activities which may be undertaken. Buyer hereby
indemnifies Seller with respect to any loss, cost or damage to the Properties or
Restaurants as a result of Buyer's activities upon the Properties or within the
Restaurants in connection with the foregoing right of entry.
c. The obligation of Seller to consummate the transactions
contemplated by this Agreement is subject to the satisfaction on or prior to
Closing of each of the following conditions (collectively, the "Seller's
Conditions"):
(i) The receipt by QDI of board approval with respect
to the transactions contemplated by this Agreement, which must be obtained, if
at all, within 30 days after the Effective Date or Seller shall notify Buyer in
writing of such fact and this Agreement shall be deemed terminated as of the
date of such notice;
(ii) The receipt by QDI of its lenders' approval of
the transactions contemplated by this Agreement, which must be obtained, if at
all, within sixty (60) days after the Effective Date or Seller shall notify
Buyer in writing of such fact and this Agreement shall be deemed terminated as
of the date of such notice;
(iii) The representations and warranties of Buyer set
forth in this Agreement shall be true and correct in all material respects as of
the date of this Agreement and as of the Closing as though made on and as of the
Closing;
(iv) Buyer shall have performed or complied in all
material respects with all obligations and covenants required to be performed by
it under this Agreement at or prior to the Closing;
(v) Buyer shall have paid the Purchase Price to
Seller required by Paragraph 2(a);
(vi) The execution and delivery by Buyer of all of
the documents required to be so executed and delivered by it pursuant to
Paragraph 16 of this Agreement;
(vii) The receipt by QDI of a fairness opinion with
respect to the transactions contemplated by this Agreement in form and substance
14
acceptable to QDI within fifteen (15) days after Buyer's Conditions are
satisfied or deemed waived pursuant to Paragraph 7(b);
d. The Mutual Conditions, Buyer's Conditions and Seller's
Conditions are referred to herein collectively as the "Conditions".
8. INTENTIONALLY OMITTED.
---------------------
9. RISK OF LOSS
------------
Prior to Closing, all risk of loss or damage with respect to
the Restaurants and Properties shall remain with Seller. In the event of damage
or casualty to a Restaurant or to a Property prior to Closing, Seller shall
repair such Restaurant or Property to the condition which existed prior to the
damage or destruction, such repair to be completed prior to Closing at Seller's
sole cost and expense, failing of which Buyer may elect to terminate this
Agreement. In addition, if, prior to Closing, either party hereto receives or
obtains notice of any type that any governmental authority having jurisdiction
intends to commence or has commenced proceedings for the taking of any portion
of a Restaurant or a Property by the exercise of any power of condemnation or
eminent domain, or notice of any taking is recorded among the public records of
the State of Michigan, Buyer shall have the right to terminate this Agreement
upon written notice to Seller. Effective at Closing, all risk of loss or damage
with respect to the Restaurants and Properties shall pass to Buyer.
10. CURRENT PROMOTIONAL TOY PREMIUMS ("TOYS") AND SELF-LIQUIDATING
--------------------------------------------------------------
OFFERS ("SLOS")
---------------
At Closing, Seller shall disclose to Buyer the Toys and SLOs
which it has ordered which will be delivered to the Restaurants after Closing.
Buyer shall then have the right to determine which of such Toys and SLOs it
wishes to accept, and the parties shall execute a letter agreement at Closing to
such effect, specifying that Buyer shall be responsible for the cost of such
accepted Toys and SLOs upon delivery of the same to Buyer.
11. PUBLIC UTILITY SERVICES
-----------------------
Seller shall not terminate any public utility services; in the event
that such public utility services are terminated prior to Closing, Seller shall
pay the cost of any re-installation. Seller and Buyer shall cooperate to obtain
a final reading of any and all public utility service meters located at the
Restaurant prior to Closing; however, in the event final readings have not been
taken as of Closing, QDI shall be responsible for the payment of the first
utility bills issued for the Restaurants after Closing, and Seller shall xxxx
Buyer for its prorata cost of the same, allocated as of the date of Closing.
After such first utility bills, Buyer shall be responsible for the payment of
any subsequent utility bills, and in the event Seller receives the same, it
shall promptly deliver such bills to Buyer. The terms of this Paragraph 11 shall
survive Closing.
15
12. BURGER KING TRANSFER FEES
-------------------------
All fees associated with the transfer of the Franchises,
including but not limited to those charged by BKC, shall be shared equally by
Seller and Buyer.
13. ADJUSTMENTS
-----------
a. As of Closing, Buyer and Seller agree to adjust and pay
their respective pro-rata share of any or all taxes, base rents, percentage
rents, other charges due under the Leases, sewer charges, water charges, public
utility service charges, fuel charges and other pro-ratable charges attributable
to the operation of the Restaurants and Properties. Real estate taxes and
assessments (other than real property transfer or gains) and personal property
taxes which are due and payable during the tax year in which Closing occurs
shall be prorated as of the date of Closing on a due date basis, as if paid in
advance. It is the intent of the parties to make such adjustments so that,
except as otherwise set forth herein, Seller is to bear the responsibility for
all expenses of ownership of the Restaurants and Properties prior to Closing,
and Buyer is to bear the responsibility for all expenses of ownership of the
Restaurants and Properties subsequent to Closing. If, as of the date of Closing,
certain prorated charges have not yet been billed or finalized, the parties
shall estimate such charges at Closing, prorating such amounts appropriately on
the closing statement, with any necessary post-closing adjustment to be made
when actual xxxxxxxx are received or such charges are finalized
b. At Closing, Seller shall pay to Buyer, subject to the other
closing adjustments set forth herein, the sum of $120,000.00.
c. All transfer taxes assessed by the State of Michigan and
the counties in which the Properties are located as the result of the
transactions effected by this Agreement shall be the financial responsibility of
Seller.
14. EMPLOYEE RELATIONS
------------------
a. It is understood and agreed that Seller shall be
responsible for the payment to all of Seller's Employees (defined as all
employees of Seller at the Restaurants, including but not limited to, hourly
employees, salaried employees and management) all wages due and owing to them as
of the date of Closing, including, without limitation, all accrued vacation pay
and retention costs for programs instituted by Seller, if any. Buyer shall have
no obligations, responsibilities or liabilities with respect to any of Seller's
Employees whatsoever; however, Buyer shall have the right, but not the
obligation, to hire any of Seller's Employees subsequent to Closing.
b. At any time after Buyer's Conditions have been satisfied,
Buyer shall have the right, but not the obligation, to interview or otherwise
speak with Seller's Employees to determine which individuals, if any, Buyer may
desire to employ subsequent to Closing. In connection therewith, Buyer may
schedule group interviews, individual interviews, informational meetings or any
other type of meeting or interview with any level of employee or management, and
16
Seller shall cooperate with Buyer in its efforts to do so. If Buyer is
dissatisfied with the results of such interviews in any manner whatsoever, Buyer
shall have the right to terminate this Agreement.
c. Within fourteen (14) days after the Effective Date, Seller
shall provide Buyer with a schedule of employee information as set forth in
Exhibit C, which schedule shall be updated and certified as true and correct in
all material respects at Closing.
d. From and after the Effective Date, Seller shall not (i)
increase any of the salaries or wages of employees at any of the Restaurants, or
(ii) grant, promise, inform or advise any employees of any future raises,
promotions or incentives, without first obtaining the prior written consent of
Buyer, except for incidental increases granted in the ordinary course of
business.
e. From and after the Effective Date and until Closing, Seller
shall continue to order uniforms for managers and crew of the Restaurants in the
ordinary course of business consistent with past practice. Each hourly employee
of the Restaurants shall have at least one (1) uniform.
f. All Restaurant managers hired prior to the date which is 30
days prior to Closing shall have taken and completed to certification, prior to
Closing, all required city, county, state and national and food safety classes
for the operation of a fast food restaurant, in addition to the BKC BMT (Basic
Management Training) and AFS (Applied Food Safety) classes. For every manager of
the Restaurants that is not BMT certified as of the Closing, Seller shall pay
Buyer the sum of $75.00 at Closing. For every manager of the Restaurants that is
not AFS certified as of the Closing, Seller shall pay Buyer the sum of $75.00 at
Closing.
g. For purposes of this Agreement, "accrued vacation pay"
shall be defined as all unused vacation time since the employee's most recent
anniversary date of employment and the proportionate share of the current year's
vacation time, as applicable. Seller shall have the right to pay the employee
directly for such accrued vacation pay (with proof thereof delivered to Buyer),
or Seller may grant to Buyer a credit for such amount (together with ten percent
of such amount for taxes) against the Purchase Price at Closing. Examples of how
accrued vacation pay prorations shall be calculated are attached hereto as
Exhibit D.
h. Within fourteen (14) days after the Effective Date, Seller
shall deliver to all of its Restaurant managers (hourly and salaried) copies of
an introductory letter and a proposed form of retention agreement with Buyer in
form and substance mutually agreed to by Seller and Buyer.
15. INDEMNIFICATION
---------------
a. INDEMNIFICATION BY SELLER. Subject to Paragraphs 15(c) and
15(e), Seller hereby agrees to indemnify Buyer and its affiliates and their
respective officers, directors, managers, employees, members, agents and
representatives against, and agrees to hold them harmless from, any
17
out-of-pocket loss, liability, claim, damage or expense (including reasonable
legal fees and expenses) (collectively, "Damages"), as incurred, for or on
account of or arising from or in connection with or otherwise with respect to
(i) any breach on the part of Seller of any representation or warranty contained
in this Agreement, (ii) any breach on the part of Seller of any covenant
contained in this Agreement, and (iii) any matters accruing with respect to
Seller's ownership or leasing of the Properties and the operation of the
Restaurants prior to the Closing.
b. INDEMNIFICATION BY BUYER. Subject to Paragraphs 15(d) and
15(e), Buyer hereby agrees to indemnify Seller and its affiliates and their
respective officers, directors, managers, employees, stockholders, agents and
representatives against, and agrees to hold them harmless from, any Damages, as
incurred, for or on account of or arising from or in connection with or
otherwise with respect to (i) any breach on the part of Buyer of any
representation or warranty contained in this Agreement, (ii) any breach on the
part of Buyer of any covenant contained in this Agreement and (iii) any matters
accruing with respect to Buyer's ownership or leasing of the Properties and the
operation of the Restaurants after the Closing.
c. LIMITATIONS ON SELLER'S INDEMNIFICATION. Notwithstanding
the other provisions of this Paragraph 15, Seller shall not be liable to
indemnify Buyer pursuant to Paragraph 15(a)(i) for Damages unless Buyer notifies
Seller in writing of the claim or potential claim for indemnification pursuant
to Paragraph 15(a)(i) not later than one (1) year from the Closing Date.
d. LIMITATIONS ON BUYER'S INDEMNIFICATION. Notwithstanding the
other provisions of this Paragraph 15, Buyer shall not be liable to indemnify
Seller pursuant to Paragraph 15(b)(i) for its Damages unless Seller notifies
Buyer in writing of the claim or potential claim for indemnification pursuant to
Paragraph 15(b)(i) not later than one (1) year from the Closing Date.
e. PROCEDURE.
(i) In order for a party (the "indemnified party") to
be entitled to any indemnification provided for under this Agreement in respect
of, arising out of or involving a claim made by any third person or entity
against the indemnified party (a "Third Party Claim"), such indemnified party
must notify the indemnifying party in writing of the Third Party Claim within
twenty (20) business days after receipt by such indemnified party of written
notice of the Third Party Claim; provided, however, that failure to give such
notification shall not affect the indemnification provided hereunder except to
the extent the indemnifying party can demonstrate actual monetary prejudice as a
direct or indirect result of such failure. Thereafter, the indemnified party
shall deliver to the indemnifying party, within five (5) business days' time
after the indemnified party's receipt thereof, copies of all notices and
documents (including court papers) received by the indemnified party relating to
the Third Party Claim.
(ii) If a Third Party Claim is made against an
indemnified party, the indemnifying party will be entitled to participate in the
defense thereof and, if it so chooses, to assume the defense thereof with
counsel selected by the indemnifying party but reasonably satisfactory to the
18
indemnified party. Should the indemnifying party so elect to assume the defense
of a Third Party Claim which is not based upon a theory of successor liability,
the indemnifying party will not be liable to the indemnified party for any legal
expenses subsequently incurred by the indemnified party in connection with the
defense thereof. In the case of a Third Party Claim which is based upon a theory
of successor liability and in which the indemnified party is a co-defendant with
the indemnifying party, the indemnified party shall be entitled to be
compensated for its reasonable expense in defending such claim regardless of the
offer to assume such defense if the indemnified and indemnifying parties have
adverse positions in the matter. If the indemnifying party assumes such defense,
the indemnified party shall have the right to participate in the defense thereof
and to employ counsel, which shall be at its own expense, unless the parties are
co-defendants and have adverse positions in the matter, in which case the
indemnifying party shall bear such expense separate from the counsel employed by
the indemnifying party, it being understood that the indemnifying party shall
control such defense. The indemnifying party shall be liable for the reasonable
fees and expenses of counsel employed by the indemnified party for any period
during which the indemnifying party has not assumed the defense thereof (other
than after the twenty (20)-business day period described in Paragraph 15(e)(i)
if the indemnified party shall have failed to give notice of the Third Party
Claim). If the indemnifying party chooses to defend or prosecute a Third Party
Claim, all the parties hereto shall cooperate in the defense or prosecution
thereof. Such cooperation shall include the retention after reasonable notice of
the need therefor and (upon the indemnifying party's request) the provision to
the indemnifying party of records and information which are reasonably relevant
to such Third Party Claim, and making employees available on a mutually
convenient basis to provide additional information and explanation of any
material provided hereunder.
f. The parties hereto agree that the remedies provided by this
Paragraph 15 shall be exclusive with respect to this Agreement and the
transactions contemplated herein, and the representations and warranties of
Buyer and Seller shall survive only to the extent provided in Paragraphs 4 and
5, as applicable; provided, however, that nothing in this Paragraph 15(f) shall
prevent either party from seeking any remedies for fraud.
16. CLOSING DOCUMENTS
-----------------
At Closing, the parties shall execute and deliver the
following documents in form and content acceptable to Buyer and Seller:
a. AFFIDAVITS. Seller shall deliver to Buyer an affidavit in
the form set forth in Exhibit E attached hereto, in addition to an affidavit
stating that for purposes of Section 1445 of the Internal Revenue Code, Seller
is not a foreign person or entity.
b. OFFICER'S CERTIFICATES. The President of each of Seller and
Buyer shall deliver a Certificate to the effect that the representations and
warranties of such Seller or Buyer, as the case may be, are true at and as of
the date of Closing as if made at and as of the date of Closing, and that each
of the covenants of such Seller or Buyer, as the case may be, required to be
performed prior to the Closing have been satisfied.
19
c. XXXX OF SALE. Seller shall deliver to Buyer a Xxxx of Sale
for the Assets and Inventory, with warranties of title duly executed and
acknowledged by Seller.
d. ASSIGNMENT AND ASSUMPTION OF FRANCHISE AGREEMENTS. Seller
and Buyer shall execute an assignment assigning Seller's right, title and
interest in and to the Franchise Agreements, Franchisee Commitment and ESIP
Addendum, such assignment providing that (i) Seller will indemnify, defend and
hold harmless Buyer from and against any and all liabilities, obligations and
claims under the Franchise Agreements arising prior to Closing; provided,
however, that the Seller will not be obligated to make or bear the cost of any
physical alterations to the Restaurants subsequent to Closing; and (ii) Buyer
will assume the liabilities and obligations under the Franchise Agreements,
Franchisee Commitment and ESIP Addendum subsequent to Closing and indemnify,
defend and hold harmless Seller in respect thereof.
e. CONTRACT INDEMNIFICATION. Seller shall execute a document
whereby Seller shall indemnify, defend and hold harmless Buyer with respect to
any claims, damages, liabilities or obligations arising out of or in connection
with any third party contracts with respect to the Restaurants or Properties.
f. ASSIGNMENT OF WARRANTIES AND INTANGIBLE PERSONAL PROPERTY.
Seller and Buyer shall execute an assignment in which Seller assigns and Buyer
assumes all warranties, guaranties, bonds applicable to the Restaurants or any
part thereof, and all other intangible personal property applicable to the
Restaurants. Such assignment will provide that Seller will cooperate with Buyer,
at Buyer's expense, to secure performance by any warrantor for any work which
Buyer believes should be performed by any warrantor pursuant to such guaranties
or warranties and to secure to Buyer the benefit of all such intangible personal
property.
g. CLOSING STATEMENT. Buyer and Seller shall execute a closing
statement, setting forth all adjustments and prorations under this Agreement.
h. AUTHORITY. Each of Buyer and Seller shall deliver such
evidence or documents as may be reasonably required by the other or the Title
Company evidencing the status and capacity of Buyer and Seller and the authority
of the person or persons who are executing the various documents on its behalf
in connection with the sale, including, but not limited to, good standing
certificates, certified articles of incorporation, certified articles of
organization, certificates of co-partnership and limited partnership and
resolutions authorizing the transactions contemplated by this Agreement.
i. ENVIRONMENTAL. Seller shall deliver to Buyer all
environmental disclosures and other information required pursuant to any
applicable law, act, ordinance, rule and/or regulation of the State of Michigan
or any federal laws (collectively, the "Laws"), or Seller shall deliver to Buyer
an affidavit that the sale of the Property is not subject to the reporting
requirements of the Laws.
20
j. WARRANTY DEED. Seller shall deliver to Buyer a Warranty
Deed for the BKI Parcel in the form contemplated in Paragraph 1(g) hereof.
k. ASSIGNMENT AND ASSUMPTION OF LEASES/SUBLEASES AND QUIT
CLAIM DEED FOR THE BUILDING. Seller and Buyer shall execute and deliver an
Assignment and Assumption of Leases for each of the Leased Parcels in the form
attached hereto as Exhibit B, Buyer shall have received the estoppel and consent
letters required hereunder, and Seller shall deliver a Quit Claim Deed for all
of its right, title and interest in the Building.
l. MUA FORM 1772. Seller shall provide Buyer with a copy of
such form so that it may review and approve Seller's post-sale disclosure to
MUA.
m. XXXX-UP OF TITLE COMMITMENT. Seller and Buyer shall cause
the Title Company to hand xxxx the Commitments as effective title insurance
policies insuring marketable title in Buyer, without standard exceptions and
subject only to the Permitted Exceptions, such hand-marked Commitments thereby
providing Buyer so-called "gap" coverage.
n. STOCK CERTIFICATES. Buyer shall deliver to Seller stock
certificates, together with executed blank stock powers, representing the
Shares.
o. ASSIGNMENT OF PERMITS AND LICENSES. Seller shall execute
and deliver to Buyer assignments of all governmental permits and licenses with
respect to the Properties, to the extent they are assignable.
p. OTHER DOCUMENTS. Buyer and/or Seller shall execute such
other documents required by this Agreement and/or which Seller, Buyer or the
Title Company may reasonably require.
17. NOTICES
-------
All notices, requests, demands and other communications
required or permitted to be given under this Agreement shall be in writing and
shall be deemed to have been properly given if delivered personally or mailed
first class, postage prepaid, registered or certified mail, return receipt
requested, as follows:
If to Seller: Quality Dining, Inc.
0000 Xxxxxx Xxxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxx 00000
Attn: Xxxx X. Xxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
21
With a copy to: Xxxxx & Xxxxxxx
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxx X. Xxxxxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
If to Buyer: N.B.O., L.L.C.
00000 Xxxxxxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
With a copy to: Xxxxxxxx Xxxxxx Xxxxxxxx and Xxxx LLP
0000 Xxxxx Xxxxxxxx Xxxxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxxx X. XxXxxxxxxx, Esq.
Telephone: (000) 000-0000
Fax: (000) 000-0000
Either party hereto may change the address or addresses to
which such communications should be directed by giving written notice to the
other party of such change.
18. EXPENSES
--------
Except as otherwise set forth herein, Buyer and Seller shall
each pay their own expenses in connection with the execution and delivery of
this Agreement and the consummation of the transactions contemplated herein.
19. CAPTION HEADINGS AND CONSTRUCTION OF AGREEMENT
----------------------------------------------
The caption headings are used in this Agreement only as a
matter of convenience and for reference and do not define, limit or describe the
scope of this Agreement nor the intent of any provision. This Agreement shall be
governed by and construed and enforced in accordance with the laws of the State
of Michigan.
22
20. ENTIRE AGREEMENT; MODIFICATION
------------------------------
This Agreement sets forth the entire agreement and
understanding of the parties in respect to the transactions contemplated by it
and supersedes any and all prior agreements and understandings relating to the
subject matter of this Agreement. All the terms, covenants, representations,
warranties and conditions of this Agreement shall be binding upon, and shall
inure to the benefit of and be enforceable by the successors and assigns of
Buyer and Seller. This Agreement may be amended, modified, superseded or
cancelled, and any of the terms, covenants, representations, warranties or
conditions hereof may be waived, only by a written instrument executed by the
parties or, in the case of a waiver, by the party waiving compliance.
21. NON-WAIVER
----------
No waiver or waivers by any party of any provision of this
Agreement, whether by conduct or otherwise, shall be deemed to be a further or
continuing waiver of that or any other provision of this Agreement.
22. INTENTIONALLY OMITTED
---------------------
23. DEFAULT
-------
(a) If Buyer shall default in the performance of its
obligations under this Agreement, and such default shall continue for a period
of ten (10) days after notice of default from Seller to Buyer, then provided
Seller is not then in default under this Agreement, Seller shall have the right,
as its sole and exclusive remedy, to terminate this Agreement by giving written
notice of such termination to Buyer, in which event neither party shall
thereafter have any further liability or obligation to the other.
(b) If Seller shall default in the performance of its
obligations under this Agreement, and such default shall continue for a period
of ten (10) days after notice of default from Buyer to Seller, provided Buyer is
not then in default under this Agreement, Buyer shall be entitled either: (i) to
terminate this Agreement by giving written notice of termination to Seller, in
which event neither party shall have any further liability or obligation to the
other; or (ii) to pursue any of its remedies at law or equity against Seller,
including, but not limited to, an action for specific performance of this
Agreement. The foregoing limitation shall not limit Seller's liability for any
breach of the representations and warranties set forth herein.
24. MISCELLANEOUS
-------------
Time shall be deemed of the essence of this Agreement. Buyer
may assign its rights under this Agreement. This Agreement shall be governed by
the laws of the State of Michigan.
23
25. BROKERS
-------
Seller and Buyer each represent and covenant to the other that
they have not utilized the services of any broker or finder in connection with
the transaction contemplated herein. Seller, shall defend, indemnify and hold
Buyer harmless from any liability for brokerage commissions, finders fees or the
like arising in connection with the sale of the items contemplated hereunder
which may be claimed by any party alleging to have been retained or utilized by
Seller. Buyer shall defend, indemnify and hold Seller harmless from all
liability for brokerage commissions, finders fees or the like arising in
connection with the sale of the items contemplated hereunder which may be
claimed by any party alleging to have been retained or utilized by Buyer.
26. CONFIDENTIALITY
---------------
Buyer shall keep all information concerning this Agreement in
strict confidence, including any information provided by Seller concerning the
operations of the Restaurants, except Buyer may disclose such information to its
key employees, legal advisors, lenders and business advisors and may make such
disclosures as are required by the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). Seller shall keep all information concerning this
Agreement in strict confidence, including any information regarding Buyer's
interest in acquiring the Restaurants, except Seller may disclose such
information to its key employees legal advisors, lenders and business advisors,
and Seller may also make such disclosures as are required or appropriate under
the Exchange Act, other applicable securities laws and the rules of the Nasdaq
Stock Market.
24
This Agreement is hereby executed by the parties effective on the date
indicated on the first page of this Agreement.
SELLER:
BRAVOKILO, INC.,
an Indiana corporation
By: /s/ Xxxxxx X. Xxxxxxxxxxx
--------------------------------------------
Name: Xxxxxx X. Xxxxxxxxxxx
-------------------------------------
Its: President
--------------------------------------
Dated: February 28, 2001
-----------------------------------------
QDI:
QUALITY DINING, INC.,
an Indiana corporation
By: /s/ Xxxxxx X. Xxxxxxxxxxx
--------------------------------------------
Name: Xxxxxx X. Xxxxxxxxxxx
-------------------------------------
Its: President
--------------------------------------
Dated: February 28, 2001
-----------------------------------------
BUYER:
N.B.O., L.L.C.,
a Michigan limited liability company
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------------------------
Name: Xxxxx X. Xxxxxxxx
-------------------------------------
Its: Member
--------------------------------------
Dated: February 28, 2001
-----------------------------------------
25
LIST OF EXHIBITS
----------------
Exhibit A - Legal Description of Properties
Exhibit B - Form of Assignment of Lease
Exhibit C -Employee/Benefit/Management Due Diligence Items
Exhibit D - Accrued Vacation Pay Calculations
Exhibit E - Form of Affidavit
