EXHIBIT 10.20
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (the "Agreement") is dated as of the 28th day of July,
2004 (the "Effective Date") between ROADHOUSE GRILL, INC., a Florida corporation
("Seller"), and SOVEREIGN ROADHOUSE LLC, a Delaware limited liability company
("Purchaser").
R E C I T A L S :
Purchaser desires to purchase, and Seller is willing to sell, the
Properties (defined hereinafter) upon the terms and conditions set out
hereinafter.
NOW, THEREFORE, in consideration of the terms, covenants and conditions
set forth in this Agreement, Seller and Purchaser hereby agree as follows:
1. AGREEMENT TO SELL AND CONVEY. Seller hereby agrees to sell and
convey to Purchaser, and Purchaser hereby agrees to purchase from Seller,
subject to the terms and conditions hereinafter set forth, all of those eleven
(11) parcels of land (each a "Parcel" and collectively, the "Parcels")
particularly described on Exhibit A attached hereto, together with all of
Seller's right, title and interest in and to:
(a) all buildings, structures, and improvements on a Parcel (the
"Improvements"; together with the Parcel, the "Property"; and all eleven (11)
Properties hereinafter referred to collectively as the "Properties"), including,
without limitation, all fixtures, machinery, apparatus, equipment, fittings and
appliances of every kind and nature whatsoever now or hereafter affixed or
attached to or installed in any of the Properties (except as hereafter
provided), including all electrical, anti-pollution, heating, lighting
(including hanging fluorescent lighting), incinerating, power, air cooling, air
conditioning, humidification, sprinkling, plumbing, lifting, cleaning, fire
prevention, fire extinguishing and ventilating systems, devices and machinery
and all engines, pipes, pumps, tanks (including exchange tanks and fuel storage
tanks), motors, conduits, ducts, steam circulation coils, blowers, steam lines,
compressors, oil burners, boilers, doors, windows, loading platforms, lavatory
facilities, stairwells, fencing (including cyclone fencing), passenger
elevators, together with all additions thereto, substitutions therefor and
replacements thereof (collectively, the "Equipment"), but excluding the
following: sinks, refrigerators, shelving, dishwashers, compactors, signage and
any other restaurant trade fixtures and equipment; and
(b) all of the easements benefiting, and rights of access
appurtenant to, each Property; and
(c) all and singular, the rights and appurtenances pertaining to
each Property, including any adjacent streets, roads, alleys, accesses, and
rights-of-way.
2. PURCHASE PRICE. Purchaser shall pay Seller the sum of ($21,750,000)
for the Properties (the "Purchase Price") as allocated as set forth on Exhibit D
as follows:
(a) Deposit. On the Effective Date, Purchaser shall deposit in
escrow with the Title Company (defined hereinafter) in accordance with wire
transfer instructions to be provided by or on behalf of Seller, the sum of
$250,000 (the "Deposit") which Deposit shall be held in accordance with the
terms of this Agreement and applied to the Purchase Price at Closing (defined
below) if the transaction is consummated or paid to Seller or Purchaser as
provided in this Agreement in the event the transaction is not consummated. The
Deposit shall be held in an interest bearing money market account reasonably
acceptable to Purchaser and Seller and all interest earned on the Deposit shall
be paid to the party entitled to the Deposit.
(b) Balance of Purchase Price. The balance of the Purchase Price
shall be paid, plus or minus closing adjustments, as the case may be, less the
Deposit and all accrued interest thereon, to Seller upon Closing by wire
transfer of immediately available U.S. funds in accordance with wire transfer
instructions to be provided by or on behalf of Seller on or prior to the Closing
Date (defined below).
3. DUE DILIGENCE ITEMS. At Seller's sole cost and expense, Seller
shall, within five (5) days of the Effective Date, furnish to Purchaser true,
correct and complete copies of the following items with respect to each Property
(collectively, the "Due Diligence Items") :
(a) any title insurance policy or title insurance commitment in
Seller's possession, including all title exceptions;
(b) any survey, plot plan, subdivision plan or site plan in
Seller's possession;
(c) summary reports and other documentation in Seller's possession
regarding the environmental condition of each Property;
(d) written evidence from the appropriate governmental authority
that Seller exists and, if applicable, is in good standing in its jurisdiction
of organization and is qualified to conduct business and is in good standing in
the jurisdictions in which Seller owns Properties;
(e) all leases and all amendments thereto, and any agreements
conferring rights to use or occupy the Property ;
(f) all as-built plans and specifications for all of the
Improvements in Seller's possession;
(g) all written warranties from third parties relating to the
Improvements in Seller's possession (the "Warranties");
(h) property condition, engineering and other reports in Seller's
possession relating to the condition of the Property;
(i) all reports, including Financial Statements (as defined below)
regarding (i) the financial operation of the Property for the last three (3)
years; and (ii) the financial condition and credit standing of Seller;
(j) evidence of existing liability and hazard insurance;
(k) certificates of occupancy relating to each Parcel; provided
however that the certificates of occupancy (or satisfactory evidence that such
certificates of occupancy have been issued) for three (3) of the Properties may
be delivered at or prior to Closing;
(l) any soils reports or geotechnical reports in Seller's
possession regarding any Property;
(m) any other documents in Seller's possession reasonably
requested by Purchaser relating to the Property and/or the Seller.
4. CONDITIONS TO PURCHASER'S OBLIGATIONS.
(a) During the period commencing on the Effective Date and ending
on August 4, 2004 (the "APPROVAL PERIOD"), Purchaser shall be entitled to
conduct any and all physical inspections of the Property which Purchaser deems
to be appropriate.
(b) Prior to expiration of the Approval Period, in the event
Purchaser's review of the environmental condition of any of the Properties
reveals the presence of any hazardous materials or hazardous substances or the
violation of any environmental laws, ordinances, statutes. codes, rules,
regulations, judgements, orders or decrees of any governmental authority, agency
or instrumentality exercising jurisdiction over a Property (any such Property
being referred to as a "Contaminated Property"), Purchaser may elect to
terminate this Agreement as it relates to any or all Contaminated Properties by
giving written notice to Seller. In the event Purchaser elects to terminate this
Agreement as it relates to more than three (3) Contaminated Properties, Seller
may elect to terminate this Agreement. Upon such termination, the Deposit and
all accrued interest thereon shall be returned to the Purchaser and thereafter,
neither party shall have any obligations or liabilities under this Agreement
except for those expressly intended to survive the termination of this
Agreement.
(c) Seller has delivered to Purchaser a new title insurance
commitment (the "TITLE COMMITMENT") issued by Lawyers Title Insurance Company
("TITLE COMPANY") for each Property. Purchaser's objections to each Title
Commitment are set forth on Exhibit E attached hereto (the "TITLE OBJECTIONS").
Seller agrees that it shall be a condition to Purchaser's obligation of Closing
that all of the Title Objections shall have been satisfied on or before Closing;
provided, however, that with respect to those certain Developer Agreements
marked as Title Objections on Exhibit E (the "DEVELOPER AGREEMENTS"), Seller
shall have up to forty-five (45) days after Closing to either (A) cause the
Developer Agreements to be terminated of record or (B) have estoppel
certificates issued from the respective municipalities setting forth that
neither the Purchaser nor any successors in title shall have any obligations
under the Developer Agreements other than to maintain utilities located on the
applicable Property. This requirement regarding the termination of the Developer
Agreements (or the issuance of an estoppel) will be set forth as an obligation
of Seller as tenant under the applicable Leases and the failure to satisfy the
same shall be an Event of Default under such Lease. In the event that the Title
Objections are not satisfied at or prior to Closing, Purchaser shall have the
option of terminating this Agreement and receiving a refund of the Deposit.
Seller shall also provide Purchaser with an updated survey of each Property (the
"SURVEY"). In the event that a Survey is not acceptable to the Purchaser,
Purchaser shall have the option of terminating this Agreement and receiving a
refund of the Deposit, subject to the next sentence. Purchaser shall have no
right to terminate this Agreement because it objects to a Survey if the Survey
indicates only customary utility easements and rights of way common to other
properties in the surrounding area and does not indicate any encroachment which
has a material adverse effect on the use of a Property as a restaurant;
provided, however, if the legal descriptions on the Surveys do not match the
legal descriptions on the Title Commitments, Purchaser shall have the right to
terminate this Agreement. The recorded title exceptions other than those Title
Objections identified on Exhibit E are referred to herein as the "PERMITTED
EXCEPTIONS." All mortgages, judgments and mechanics liens against a Property
must be satisfied by Seller at Closing. In the event Seller is unable or
unwilling to eliminate or modify all of the Title Objections and Purchaser's
objections to the Survey (subject to this Section 4(c)), to the reasonable
satisfaction of Purchaser, Purchaser may (as its sole and exclusive remedy)
terminate this Agreement by delivering notice thereof in writing to Seller and
Title Company two (2) days prior to the Closing Date, in which event, the
Deposit and all accrued interest thereon will be returned to Purchaser and
thereafter, neither party shall have any obligations or liabilities under this
Agreement except for those expressly intended to survive the termination of this
Agreement.
(d) Prior to the Closing, Seller shall have delivered to Purchaser
all of the pre-closing and closing documents described in Section 9 of this
Agreement.
(e) At any time up to and including the date of Closing, if the
Financial Statements (as hereinafter defined) of Seller change in a material
adverse manner or there is a change in a material adverse manner from the latest
Financial Statements delivered to Purchaser, Purchaser shall have the right in
its sole discretion, upon written notice to Seller, to terminate this Agreement.
Upon such termination, the Deposit and all accrued interest thereon shall be
returned to Purchaser and neither party shall have any further obligations under
this Agreement except for those expressly intended to survive the termination of
this Agreement. For purposes of this Agreement, the term "Financial Statements"
shall mean, without limitation, the balance sheets, profit and loss statements,
reconciliations of capital and surplus, changes in financial condition, cash
flow statements, schedules of sources and uses of funds, and other financial
information of Seller which Purchaser may reasonably require from time to time.
In the event Seller fails to comply with its obligations as provided above
or Purchaser elects to terminate this Agreement as provided above, the Title
Company shall upon receipt of a notice from Purchaser stating either such
circumstance, promptly return the Deposit and all interest accrued thereon to
Purchaser without the necessity of further instruction. Thereafter, this
Agreement shall be null and void and neither party shall have any further
liability or obligation to the other except for those obligations expressly
intended to survive termination of this Agreement.
5. LEASES.
(a) Seller and Purchaser will enter into a lease at Closing with
respect to each Property, and each such lease shall be substantially in the form
of Exhibit B attached hereto with such changes thereto as may be requested by
Landlord's local counsel to incorporate state-specific lease provisions. All of
the leases described in this Section 5(a) are referred to hereinafter
collectively as the "LEASES."
(b) The aggregate annual Minimum Rent (as defined in each Lease)
under all of the Leases shall equal $2,283,750 and the annual Minimum Rent shall
be allocated among the Properties as more particularly set forth on Exhibit C
attached hereto. The Annual Minimum Rent shall be subject to increase in
accordance with the terms of the Leases.
6. REPRESENTATIONS AND WARRANTIES OF SELLER. As of the Effective Date
and as of the Closing Date and in regard to the following matters, Seller
represents and warrants to Purchaser that the following representations and
warranties are true and correct as if made on the Effective Date and again on
the Closing Date.
(a) Seller is duly created, validly existing and in good standing
pursuant to the law of the jurisdiction of its organization and is duly
qualified to do business and is in good standing in the jurisdictions in which
the Properties are situated.
(b) Seller is authorized and empowered to enter into this
Agreement and perform all of its obligations under this Agreement without any
qualification whatsoever.
(c) Upon the signing and delivery of this Agreement, this
Agreement will be legally binding upon Seller and enforceable against Seller in
accordance with all of its provisions.
(d) The person signing this Agreement on behalf of Seller has been
duly authorized to sign and deliver this Agreement on behalf of Seller.
(e) Seller has not committed any act or permitted any action to be
taken which would adversely affect its ability to fulfill its material
obligations under this Agreement.
(f) The execution and delivery of this Agreement, and the
performance of Seller's obligations under this Agreement, will not violate or
breach, or conflict with, the terms, covenants or provisions of any agreement,
contract, note, mortgage, indenture or other document of any kind whatsoever to
which Seller is a party or to which any Property is subject.
(g) Immediately prior to Closing, Seller will be the sole owner of
good and marketable fee simple title to each Property, subject only to the
Permitted Exceptions. Except for the Permitted Exceptions affecting a particular
Property, there are no other liens, encumbrances or matters affecting a
Property.
(h) To Seller's knowledge, there has been no "release" of any
hazardous substances on or about any of the Properties or on or about any real
property surrounding any of the Properties which might affect any of the
Properties. For the purposes of this Agreement, the terms "hazardous substances"
and "release" shall have the definitions used in the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. Section 9601 et seq.
("Superfund Act"); provided, however, that the definition of the term "hazardous
substances" shall also include (if not included within the definition contained
in the Superfund Act), petroleum and related by-products, hydrocarbons, radon,
asbestos, urea formaldehyde and polychlorinated biphenyl compounds ("PCBs").
(i) To Seller's knowledge (1) the existing use and condition of
each Property does not violate any zoning, environmental, building, health, fire
or similar statute, ordinance, regulation or code, (2) each Property is in
compliance with all governmental permits and current zoning requirements,
including, all parking requirements, and such Property is not a non-conforming
or special use, and (3) each Property includes all rights to any off-site
facilities necessary to ensure compliance with zoning, building, health, fire,
water use or similar statutes, laws, regulations and orders.
(j) Seller has received no notice (written or otherwise) from any
governmental agency alleging a violation of any statute, ordinance, regulation
or code with respect to any of the Properties, whether or not such violation has
been cured.
(k) There are no pending nor, to Seller's knowledge, threatened
matters of litigation, administrative action or examination, government
investigation, claim or demand (a "Claim") relating to the Seller, a Property or
Seller's interest in a Property which any such Claim not covered by insurance
exceeds $50,000.
(l) There is no pending nor, to Seller's knowledge, contemplated
or threatened eminent domain, condemnation or other governmental taking or
proceeding relating to a Property or any part thereof.
(m) There are no public improvements in the nature of off-site
improvements (or otherwise) which have been ordered to be made and/or which have
not previously been assessed and there are no special or general assessments
pending against or affecting a Property which are not disclosed on the public
records.
(n) To Seller's knowledge, there are no unperformed obligations
relative to the Property outstanding to any governmental or quasi-governmental
body or authority.
(o) Excepting any contract, warranty or matter of public record,
Seller is not a party to, and no Property is subject to, any binding contract or
agreement of any kind whatsoever, written or oral, with respect to such
Property, other than this Agreement.
(p) All bills and invoices which aggregate in excess of $50,000
for labor and material of any kind relating to each Property have been paid in
full and, as of the Closing Date, and, to Seller's knowledge, there will be no
liens or other claims outstanding or available to any party in connection with a
Property.
(q) Seller has not executed or entered into any other binding
agreement to purchase, sell, option, lease or otherwise dispose of or alienate
all or any portion of any of the Properties, other than this Agreement.
(r) To Seller's knowledge, all of the Improvements on each
Property are in good working order, condition and repair and are not in need of
repair or replacement (subject to ordinary wear and tear between the date of
this Agreement and the Closing Date).
(s) Seller's board of directors has approved the execution and
delivery of this Agreement.
(t) All copies of documents furnished or to be furnished to
Purchaser by Seller or on its behalf in connection with the transaction
contemplated hereby are true, correct and complete copies of the originals.
Seller has no knowledge that any of the documents or written information
provided to Purchaser by Seller or on its behalf in connection with the
transaction (including these representations and warranties) is materially
inaccurate or incomplete or contains any material untrue statements of fact or
omits any material fact.
(u) Seller is not in default of the performance or observance of
any of the material obligations, covenants or conditions contained in any
contractual obligation of Seller beyond any applicable notice or cure period.
(v) To Seller's knowledge, none of the transactions contemplated
by this Agreement will require Seller to comply with any statute or regulation
that conditions, restricts, prohibits or requires any notification or disclosure
for the transfer, lease, sale or closure of any property on which there is any
environmental condition.
(w) To Seller's knowledge, none of the following are present on
any of the Properties: (a) any landfill, waste pile, underground storage tank or
surface impoundment; (b) any asbestos-containing materials; or (c) any
polychlorinated biphenyls ("PCBs").
(x) All financial information delivered by Seller to Purchaser
including, but not limited to, the Financial Statements for the 12 month period
ending April 25, 2004 (the "April 25 Statements") are true and correct except
that Seller's balance sheet may be modified to reflect write-downs of long lived
assets between $700,000 and $1,600,000. Seller shall deliver audited copies of
the April 25 Statements to Purchaser promptly upon receipt of the same by
Seller.
(y) No officer of Seller has been convicted of a crime (excluding
misdemeanors and traffic violations).
The term "Seller's knowledge" as it is used in this Agreement shall
mean the current actual knowledge of any one of the following individuals who
are the executives with primary responsibility for the operation of Seller's
business: Xxxxx Sabi, CEO; Xxxxxxx Xxxxx, CFO; and Xxxxxxx Xxxxxxx, Corporate
Controller.
Seller acknowledges and agrees that the foregoing representations
and warranties constitute a material inducement to Purchaser to enter into this
Agreement. Seller further acknowledges and agrees that the representations and
warranties set forth above shall survive the Closing by one (1) year. Seller
agrees to indemnify, defend (with counsel reasonably acceptable to Purchaser)
and hold Purchaser harmless from and against all damages, costs, expenses,
claims and liabilities paid or incurred by Purchaser (including, but not limited
to reasonable attorneys fees and costs) as a result of any representation or
warranty set forth above not being true and correct provided such claim is
asserted by Purchaser within one (1) year of Closing.
7. COVENANTS OF SELLER.
(a) Until the Closing, Seller shall operate and/or cause each
Property to be operated in accordance with prudent management and operating
standards and practices, and
make or cause to be made all repairs, replacements and maintenance with respect
to each Property such that it is in good condition at Closing without the need
at Closing for any repairs.
(b) Until the Closing, Seller shall pay on a timely basis all
bills and discharge all obligations arising from ownership, operation,
management, repair and maintenance of each Property.
(c) Until the Closing, Seller shall (i) keep (or cause to be kept)
each Property fully insured in accordance with prudent and customary practice;
(ii) not alienate, encumber or transfer any Property or any part thereof in
favor of or to any other person or entity, and (iii) not execute any new lease
without Purchaser's prior written consent.
(d) From and after the Effective Date until the Closing Date,
Seller shall promptly give Purchaser written notice of any change in the status
of title to any Property, which change either changes the nature of any
Permitted Encumbrance or represents an additional encumbrance on such Property.
(e) From and after the Closing Date for a period of one (1) year,
Seller covenants and agrees that it shall not incur any new indebtedness
(including but not limited to bank loans, capital leases, leasehold financing
and equipment loans) in excess of $7,500,000. Seller further covenants and
agrees that the proceeds of the sale of the Properties to Purchaser shall be
used only to (A) satisfy all debt owed to Finova Capital Corporation and the
debt owed to U.S. Mortgage for the mortgage loan encumbering the Concord, North
Carolina Property, (B) for the payment of promissory notes to Xxxxx Xxxx & Sons,
Inc. for $53,075, COLHOC Limited Partnership for $49,334, and Lexington
Insurance Company for $101,855, (C) promissory notes for the payment of 2001
real estate taxes, (D) for the payment of costs and expenses incurred in
connection with the sale of the Properties to Purchaser, and (E) for working
capital or investment in improvements to the Properties. Seller covenants that
it shall deliver to Purchaser quarterly income and expense statements for the
business at each of the Properties on a Property by Property basis within
fifty-one (51) days after the end of each quarter. Seller acknowledges and
agrees that the covenants set forth in this Paragraph 7(e) shall survive the
Closing and that a breach of any of these covenants shall be a default under
each of the Leases.
(f) Seller acknowledges and agrees that if any of the following
events occur while Purchaser is the landlord under any of the Leases that it
shall be a default under each of the Leases:
(i) a default beyond any applicable cure period or at
maturity by Seller in any payment of principal or interest on any obligations
for borrowed money having an original principal balance of $10,000,000 or more
in the aggregate, or in the performance of any other provision contained in any
instrument under which any such obligation is created or secured (including the
breach of any covenant thereunder), (x) if such payment is a payment at maturity
or a final payment, or (y) if an effect of such default is to cause, or permit
any individual, partnership, association, corporation or other entity to cause,
such obligation to become due prior to its stated maturity;
(ii) a default by Seller beyond any applicable cure
period in the payment of rent under any lease or leases that have, in the
aggregate, rental obligations over the terms thereof of $10,000,000 or more if
the landlord under any such lease or leases commences to exercise its remedies
thereunder;
(iii) a final, non-appealable judgment or judgments for
the payment of money in excess of $5,000,000 in the aggregate shall be rendered
against Seller and the same shall remain undischarged for a period of sixty (60)
consecutive days; or
(iv) except for the sale of any equity interest in
Seller by Berjaya Group Ltd. and/or its affiliates, Seller shall sell or
transfer or enter into an agreement to sell or transfer all or substantially all
of its assets, or fifty one percent (51%) or more of the direct or indirect
equity interests in Seller change ownership from that ownership in existence on
the date hereof, or more than fifty one percent (51%) of the direct or indirect
interests in Seller shall be pledged, transferred, hypothecated or conveyed in a
single transaction or series of related transactions.
Seller acknowledges and agrees that this Paragraph 7(f) shall survive the
Closing.
(g) Commencing on the date which is nine (9) months after the
Closing Date and continuing for a period of three (3) months thereafter (such
three (3) month period being hereinafter referred to as the "Put Period"),
Purchaser shall have the right, but not the obligation (the "Put Right") to
require Seller to repurchase the Concord, NC Property from Purchaser (provided
that Purchaser is at that time the owner thereof) for the sum of $2,190,476 plus
all accrued and unpaid rent under the Concord Lease (the "Repurchase Price"). In
order to exercise the Put Right, Purchaser must furnish notice thereof to Seller
such that Seller receives same during the Put Period, failing which the Put
Right shall expire and be of no further effect. In the event Purchaser timely
exercises the Put Right, then Seller shall repurchase the Concord, NC Property
and pay the Repurchase Price to Purchaser by wire transfer on the date which is
the first business day occurring after thirty five (35) days from the last day
of the Put Period (the "Repurchase Closing Date"). The reconveyance to Seller
(or its designee) shall be by instrument in the same form as the subject
Property was conveyed to Purchaser by Seller and title shall only be subject to
the same exceptions as were contained in the deed to Purchaser (and the then
current year's ad valorem taxes) and any title matters arising after Closing
which Seller as tenant under the Concord Lease has approved in writing. All
transfer expenses and other closing costs shall be allocated between the parties
and all closing documents shall be executed by the parties in the manner as is
customary for similar transactions in the jurisdiction where the subject
property is located. Purchaser shall not be required to give notice to Concord
Xxxxx Residual Limited Partnership ("Xxxxx") of the Put Right. In the event
Xxxxx elects to void the transaction pursuant to its rights under the Deed
Restrictions set forth in Exhibit C-3 of the North Carolina Special Warranty
Deed from Xxxxx to Seller dated September 29, 1999 (the "Deed Restrictions"), in
no event will Purchaser be obligated to return any of the Repurchase Price to
Seller. Notwithstanding anything to the contrary in this Paragraph 7(g) to the
contrary, in the event Xxxxx consents to an amendment to its repurchase rights
set forth in Paragraph 7 of the Deed Restrictions in form and substance
satisfactory to Purchaser setting forth that notwithstanding the definition of
Repurchase Price in Paragraph 7 of the Deed Restrictions that the price to paid
under the repurchase right shall be the current fair market value of the Concord
Property but in
no event less than the price paid for the last conveyance of the Concord
Property, then in such event the Put Right set forth in this Paragraph 7(g)
shall be null and void.
8. CLOSING. Seller and Purchaser shall consummate the transactions
contemplated by this Agreement (the "Closing") through an escrow with the Title
Company acting as escrow agent and pursuant to additional escrow instructions
which are mutually acceptable to the Title Company, Seller and Purchaser. Unless
otherwise mutually agreed to by Purchaser and Seller in writing, the Closing
shall occur on August 6, 2004 (the "Closing Date").
9. SELLER'S OBLIGATIONS AT THE CLOSING. At the Closing and in
connection with each Property, Seller shall, at its sole cost and expense:
(a) execute and deliver to Purchaser a special warranty deed (in a
form approved by Purchaser) conveying fee simple title to each Property to
Purchaser free and clear of all exceptions, liens, or encumbrances whatsoever,
excepting the Permitted Exceptions and the Lease applicable to such Property,
together with a xxxx of sale for the Equipment at each Property pursuant to
which Seller shall convey to Purchaser the Equipment located at such Property
free and clear of all exceptions, liens or encumbrances whatsoever, except the
Permitted Exceptions. In connection therewith, Seller shall obtain at its
expense whatever releases from existing lenders are required (including releases
and/or partial terminations of UCC-1 financing statements) in order to effect
the foregoing;
(b) cause the Title Company to furnish to Purchaser an owner's
policy of title insurance pursuant to the Title Commitment (the "Title Policy"),
which shall be "later-dated" to cover the Closing Date and the date on which the
Deed is recorded;
(c) execute and deliver to Purchaser the Leases;
(d) deliver an opinion of legal counsel regarding (A) the due
authorization, execution and delivery of the Leases by Seller in its capacity as
tenant thereunder and (B) that no consent or approval is required for the
execution and delivery of the Leases by Seller;
(e) deliver to Purchaser with copies of all warranties,
certificates of occupancy, licenses, permits, authorizations and approvals
required by law and issued by all governmental authorities having jurisdiction
over the Property to the extent required by law to be in the name of the
Purchaser, together with an assignment of all such warranties, certificates of
occupancy, licenses, permits, authorizations and approvals where permitted by
law together with copies of all certificates issued by any local board of fire
underwriters (or other body exercising similar functions) and the copies of each
xxxx for current real estate and personal property taxes;
(f) deliver evidence of the insurance policies required to be
maintained by tenant under the Lease, naming Purchaser and Purchaser's lender as
additional insureds;
(g) comply with all of Seller's obligations pursuant to this
Agreement and not be in default hereunder;
(h) execute and deliver a closing statement itemizing the Purchase
Price and all adjustments thereto as provided herein; and
(i) execute and deliver such other documents or instruments as may
be required under this Agreement, by the Title Company or as otherwise required
in Purchaser's reasonable opinion, to effectuate the Closing.
10. PURCHASER'S OBLIGATIONS AT CLOSING. Subject to the terms,
conditions, and provisions hereof, and contemporaneously with the performance by
Seller of its obligations under Section 9 above, Purchaser shall:
(a) pay Seller the balance of the Purchase Price;
(b) execute and deliver a closing statement itemizing the Purchase
Price and all adjustments thereto as provided herein;
(c) execute and deliver the Leases; and
(d) execute and deliver such other documents or instruments as may
be required under this Agreement, or by the Title Company to effectuate the
Closing.
Purchaser shall not be obligated to close unless the representations
and warranties of Seller set forth in Section 6 of this Agreement are true and
correct as of the Closing Date and Seller has complied with all of its covenants
set forth in this Agreement.
11. CLOSING COSTS. At the Closing, Seller shall pay (a) the cost of
preparation of the Deed, (b) all real estate transfer taxes and fees,
documentary stamp taxes and intangible taxes, (c) all premiums and fees related
to the Title Policy, general coverage (for Purchaser's lender) and endorsement
premiums, the cost of a zoning endorsement (other than in Florida) and any
escrow charges, (d) subject to Section 19 hereof, all real estate brokerage
commissions payable by reason of the transactions contemplated by this
Agreement, (e) the cost of any Phase I environmental studies or reports, the
cost of any Phase II environmental studies and reports, or engineering or
property condition reports relating to the Properties, (f) the cost of any
appraisals relating to the Properties, (g) the cost of any new surveys or
updates of existing surveys ordered by Purchaser (h) the cost of any zoning
reports required by Purchaser and (i) the cost of paying for any transfer of any
permit required by applicable law, or the cost of any required inspection
required by applicable law, or the cost of purchaser having to obtain any
building or occupancy permit as may be required by applicable law. Seller and
Purchaser shall each pay their own attorneys' fees and costs.
12. TAX PRORATION. In connection with each Property, Seller shall pay in
full, on or before Closing, all general real estate taxes and special
assessments (a) for the years prior to the current calendar year and (b) for the
current calendar year only if then due and payable. Seller shall not receive any
credit for prepaid taxes or assessments.
13. RENT PAYMENT. Rent (as defined and due) under the Leases for the
balance of the month of August shall be paid to Purchaser at Closing.
14. INSPECTION. From and after the Effective Date, Purchaser and its
agents and representatives shall be entitled to enter upon the Properties for
inspection, soil tests, examination, land-use planning and for any due diligence
investigation relating to Purchaser's
proposed ownership of the Properties provided that Purchaser shall not
unreasonably interfere with the ongoing business conducted at the Properties. As
to any such investigation, Purchaser shall restore the Properties to the same
condition as existed prior to any such investigation, and shall not perform any
invasive tests without Seller's prior consent, which consent shall not be
unreasonably withheld, conditioned or delayed. Purchaser agrees to indemnify and
hold harmless Seller from and against, and to reimburse Seller with respect to
any and all claims, demands, causes of action, loss, damage, liabilities, costs
and expenses (including reasonable attorneys' fees and disbursements) asserted
against or incurred by Seller by reason of or arising out of any such on-site
investigation.
15. FURTHER ASSURANCES. Seller and Purchaser agree to perform such other
acts, and to execute, acknowledge, and/or deliver subsequent to the Closing such
other instruments, documents and other materials as Seller or Purchaser may
reasonably request in order to effectuate the consummation of the transactions
contemplated herein and to vest title to the Properties in Purchaser.
16. DEFAULT BY SELLER. In the event that Seller should fail to
consummate the transactions contemplated by this Agreement for any reason,
excepting Purchaser's default or the failure of any of the Purchaser's
obligations at Closing under Section 10 above to be satisfied or waived,
Purchaser may (A) seek a claim for damages not to exceed $250,000 and (B)
terminate this Agreement and receive back the Deposit and all accrued interest
thereon from the Title Company by giving prompt written notice thereof to
Seller. In the event Purchaser elects to terminate this Agreement and seek a
claim for damages, neither Seller nor Purchaser shall have any further
obligations under this Agreement except for those expressly intended to survive
the termination of this Agreement.
17. DEFAULT BY PURCHASER. IN THE EVENT PURCHASER SHOULD FAIL TO
CONSUMMATE THE TRANSACTION CONTEMPLATED HEREIN FOR ANY REASON, EXCEPT DEFAULT BY
SELLER OR THE FAILURE OF ANY OF SELLER'S OBLIGATIONS UNDER SECTION 9 ABOVE TO BE
SATISFIED OR WAIVED BY PURCHASER, SELLER MAY TERMINATE THIS AGREEMENT BY GIVING
PROMPT WRITTEN NOTICE THEREOF TO PURCHASER AND AS ITS SOLE AND EXCLUSIVE REMEDY
IN SUCH EVENT, PURCHASER SHALL BE LIABLE TO THE SELLER FOR LIQUIDATED DAMAGES IN
THE AMOUNT OF THE DEPOSIT AND ALL ACCRUED INTEREST THEREON ONLY AND THE TITLE
COMPANY SHALL PAY THE DEPOSIT AND ALL ACCRUED INTEREST THEREON TO SELLER. SELLER
AND PURCHASER AGREE THAT IT WOULD BE EXTREMELY DIFFICULT AND IMPRACTICAL TO
DETERMINE WITH ANY DEGREE OF CERTAINTY THE AMOUNT AND EXTENT OF DETRIMENT TO
SELLER IF PURCHASER SHOULD FAIL OR REFUSE TO PERFORM ACCORDING TO THE TERMS OF
THIS AGREEMENT. ACCORDINGLY, THE SELLER AND PURCHASER HEREBY AGREE THAT
FORFEITURE OF THE DEPOSIT AND ALL ACCRUED INTEREST THEREON SHALL BE CONSIDERED
TO BE A FAIR AND REASONABLE AMOUNT UNDER SUCH CIRCUMSTANCES AND SELLER'S SOLE
AND EXCLUSIVE REMEDY. IN THE EVENT SELLER ELECTS TO TERMINATE THIS AGREEMENT,
NEITHER SELLER NOR PURCHASER SHALL HAVE ANY FURTHER OBLIGATIONS UNDER THIS
AGREEMENT. BY PLACING THEIR INITIALS BELOW EACH PARTY SPECIFICALLY CONFIRMS THE
ACCURACY OF THE STATEMENTS
MADE ABOVE AND THE FACT THAT EACH PARTY WAS REPRESENTERD BY COUNSEL WHO
EXPLAINED, AT THE TIME THIS AGREEMENT WAS MADE, THE CONSEQUENCES OF THIS
LIQUIDATED DAMAGES PROVISION.
PURCHASER: ___/s/ XXXX HOPPEN____ SELLER: __/S/ XXXXXXX BRANT______
18. ATTORNEY'S FEES. Should either Seller or Purchaser employ an
attorney or attorneys to enforce any of the provisions hereof or to protect its
interest in any matter arising under this Agreement or to recover damages for
the breach of this Agreement, the losing party agrees to pay the prevailing
party all reasonable costs, charges, and expenses, including reasonable
attorney's fees, expended or incurred by it in connection therewith.
19. BROKERAGE COMMISSIONS. Each party represents to the other that no
broker other than Xxxxx Xxxxxx has been involved in this transaction. At the
Closing, Purchaser shall pay each of such broker a real estate commission
pursuant to a separate agreement. Seller and Purchaser agree that if any claim
for brokerage commissions are ever made against Seller or Purchaser in
connection with this transaction, all claims shall be handled and paid by the
party whose actions or alleged commitments form the basis of such claim. Seller
agrees to indemnify and hold Purchaser harmless from any loss, liability,
damage, cost, or expense (including, without limitation, reasonable attorney's
fees) paid or incurred by Purchaser by reason of any claim to any broker's,
finder's, or other fee in connection with this transaction by any party claiming
by, through, or under Seller. Except as provided in the foregoing sentence,
Purchaser agrees to indemnify and hold Seller harmless from any loss, liability,
damage, cost or expense (including, without limitation, reasonable attorney's
fees) paid or incurred by Seller by reason of any claim to any broker's,
finder's, or other fee in connection with this transaction by any party claiming
by, through, or under Purchaser, which obligation of each party shall survive
the Closing.
20. RISK OF LOSS. All risk of loss or damage to each Property prior to
Closing, including, without limitation, loss by fire, windstorm, or other
casualty (collectively, a "Casualty") or by condemnation, eminent domain or
similar proceedings or threat thereof (collectively, a "Taking"), shall rest
with Seller. If, prior to the Closing, any Property is damaged by a Casualty
which costs in excess of $50,000 to repair or rebuild or is the subject of a
Taking, Seller shall give Purchaser written notice thereof and Purchaser shall
have the option, exercisable on or before the Closing Date by written notice to
Seller, elect to either:
(a) accept title to such Property without any reduction of the
Purchase Price, in which event, at the Closing and subject to the rights of the
tenant under the Lease for such Property, Seller shall be entitled to use any
insurance or condemnation proceeds payable to Seller or its successors or
assigns by reason of such Casualty or Taking to restore the Property in
accordance with the Lease for such Property; or
(b) terminate this Agreement as to the Property suffering the
Casualty and receive 1/11th of the Deposit from the Title Company representing
the amount of the Deposit associated with such Property, in which event neither
Seller nor Purchaser shall have any further
obligations under this Agreement with respect to such Property except for those
expressly intended to survive the termination of this Agreement.
In the event Purchaser shall fail to exercise either such option, Purchaser
shall be deemed to have elected the option set forth in the foregoing clause (b)
with regard to the Property suffering the Casualty or Taking.
21. ASSIGNABILITY. Neither Purchaser not Seller may assign its respective
obligations hereunder without the consent of the other; provided, however, that
both Purchaser and Seller may, without such consent, assign this Agreement to
any of its affiliates or subsidiaries.
22. NOTICES. Any notice to be given or to be served upon either party
hereto in connection with this Agreement must be in writing and shall be given
by certified or registered mail (return receipt requested), by overnight express
delivery or facsimile (followed by hard copy by either of the two preceding
methods of delivery) and shall be deemed to have been given upon receipt. Such
notice shall be given the parties hereto at the following addresses:
To Seller: Xxxxxxx X. Xxxxx
Chief Financial Officer
Roadhouse Grill, Inc.
0000-X Xxxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Facsimile: 000-000-0000
With a copy to: Xxxxx X. Xxxxxx, Esq.
Xxxxx XxXxxxxx Xxxxx Xxxxxxxx & Xxxxxxx, PA
000 X. Xxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxx Xxxxxxxxxx, XX 00000
Facsimile: 000-000-0000
To Purchaser: c/o Sovereign Investment Company
000 Xxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
With copies to: General Counsel
[Address noted above]
and Xxxx Xxxxx LLP
2500 One Liberty Place
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, III, Esquire
Facsimile: 000-000-0000
Either party hereto may at any time, by giving five (5) days written notice to
the ot, designate any other address in substitution of any of the foregoing
addresses to which such notice shall be given and other parties to whom copies
of all notices hereunder shall be sent.
23. BINDING EFFECT. This Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their respective successors and
assigns.
24. ENTIRE AGREEMENT. This Agreement represents the entire agreement
between Seller and Purchaser with respect to the subject matter hereof, and all
prior agreements between Seller and Purchaser with respect to such subject
matter shall have no further force or effect, including, without limitation, the
Proposal Letter.
25. GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Florida.
26. MODIFICATION. This Agreement may only be modified or otherwise
amended by a written instrument executed by duly authorized representatives of
Seller and Purchaser.
27. TIME OF ESSENCE. Time is of the essence of this Agreement.
28. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original, and all of which
together shall constitute one and the same instrument.
29. RADON DISCLOSURE. Pursuant to Florida Statute 404.056(8), Buyer is
hereby notified as follows: 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 health unit.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
IN WITNESS WHEREOF, the parties hereto have executed this Purchase
Agreement effective as of the Effective Date.
SELLER: PURCHASER:
ROADHOUSE GRILL, INC. SOVEREIGN ROADHOUSE LLC
By /s/ Xxxxxxx Xxxxx By /s/ Xxxx Xxxxxx
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Its Executive Vice President and CFO Its Chief Investment Officer
