EXECUTION COPY
STOCK PURCHASE AGREEMENT
BETWEEN
VALCOR, INC.
AND
I.C.H. CORPORATION
FEBRUARY 7, 1997
TABLE OF CONTENTS
1. Definitions............................................................1
2. Purchase and Sale of Sybra Shares......................................6
(a) Basic Transaction................................................6
(b) Purchase Price...................................................6
(c) Pre-Closing Dividends and Distributions to Seller................6
(d) The Closing......................................................6
(e) Deliveries at the Closing........................................6
(f) Adjustment to Purchase Price....................................7
(g) Contingent Consideration.........................................7
3. Representations and Warranties Concerning the Transaction..............8
(a) Representations and Warranties of the Seller.....................8
(i) Organization of the Seller..................................8
(ii) Authorization of Transaction...............................9
(iii) Noncontravention..........................................9
(iv) Brokers' Fees..............................................9
(v) Sybra Shares................................................9
(b) Representations and Warranties of the Buyer.....................10
(i) Organization of the Buyer..................................10
(ii) Authorization of Transaction..............................10
(iii) Noncontravention.........................................10
(iv) Brokers' Fees.............................................11
(v) Investment.................................................11
(vi) Financing.................................................11
(vii) Due Diligence............................................11
4. Representations and Warranties Concerning Sybra.......................11
(a) Organization, Qualification, and Corporate Power................11
(b) Capitalization..................................................12
(c) Noncontravention................................................12
(d) Brokers' Fees...................................................12
(e) Title to Tangible Assets Other than the Real Property Assets....12
(f) Subsidiaries....................................................12
(g) Financial Statements............................................13
(h) Events Subsequent to Most Recent Fiscal Quarter End.............13
(i) Legal Compliance................................................13
(j) Income Tax Matters..............................................13
(k) Intellectual Property...........................................14
(l) Contracts.......................................................14
(m) Litigation......................................................14
(n) Employee Benefits...............................................15
5. Pre-Closing Covenants.................................................16
(a) General.........................................................16
(b) Notices and Consents............................................16
(c) Operation of Business...........................................16
(d) Access..........................................................16
(e) Notice of Developments..........................................17
(f) Other Transactions..............................................17
(g) Estoppel Certificates............................................17
6. Post-Closing Covenants...............................................18
(a) General.........................................................18
(b) Litigation Support..............................................18
(c) Employee Benefits Matters.......................................18
7. Conditions to Obligation to Close.....................................19
(a) Conditions to Obligation of the Buyer...........................19
(b) Conditions to Obligation of the Seller..........................20
8. Remedies for Breaches of this Agreement...............................21
(a) Survival of Representations and Warranties......................21
(b) Indemnification Provisions for Benefit of the Buyer.............22
(c) Indemnification Provisions for Benefit of the Seller............22
(d) Matters Involving Third Parties.................................22
(e) Determination of Adverse Consequences...........................23
(f) Other Indemnification Provisions................................23
9. Termination...........................................................23
(a) Termination of Agreement........................................23
(b) Effect of Termination...........................................24
10. Income Tax Matters...................................................24
(a) Income Tax Sharing Agreements...................................25
(b) Income Taxes of Other Persons...................................25
(c) Returns for Periods Through the Closing Date....................25
(d) Audits..........................................................25
(e) Carrybacks......................................................25
(f) Post-Closing Elections..........................................26
(g) Indemnification for Post-Closing Transactions...................26
(h) Post-Closing Transactions not in the Ordinary Course............26
11. Miscellaneous........................................................26
(a) Press Releases and Public Announcements.........................26
(b) No Third Party Beneficiaries Other than Affiliated Group Parent.26
(c) Entire Agreement................................................27
(d) Succession and Assignment.......................................27
(e) Counterparts....................................................27
(f) Headings........................................................27
(g) Notices.........................................................27
(h) Governing Law; Jurisdiction.....................................28
(i) Amendments and Waivers..........................................29
(j) Severability....................................................29
(k) Expenses........................................................29
(l) Construction....................................................29
(m) Incorporation of Exhibits.......................................29
EXHIBITS
EXHIBIT A Agreed Value
EXHIBIT B Disclosure Schedule
EXHIBIT C Financial Statements
EXHIBIT D Form of Estoppel Certificate
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the "Agreement") is entered into as of
February 7, 1997, by and between I.C.H. CORPORATION, a Delaware corporation (the
"Buyer"), and VALCOR, INC., a Delaware corporation (the "Seller"). The Buyer and
the Seller are referred to individually as a "Party" and collectively as the
"Parties."
The Seller holds all of the outstanding capital stock of Sybra, Inc., a
Michigan corporation (the "Sybra").
This Agreement contemplates a transaction in which the Buyer will purchase
for cash consideration from the Seller, and the Seller will sell to the Buyer,
all of the outstanding capital stock of Sybra.
Now, therefore, in consideration of the premises and the mutual promises,
representations, warranties and covenants set forth below, the Parties agree as
follows.
1. Definitions.
-----------
"Accrued Expenses and Payables" means any liability of Sybra classified as
-----------------------------
a current liability in its financial statements prepared in accordance with
GAAP, excluding any current liability classified as (i) current portion of long-
term debt, (ii) current portion of a capital lease obligation, (iii) payable to
affiliates, (iv) current or deferred income taxes payable or (v) current portion
of a reserve for store closures.
"Adverse Consequences" means all actions, suits, proceedings, hearings,
--------------------
investigations, charges, complaints, claims, demands, injunctions, judgments,
orders, decrees, rulings, damages, dues, penalties, fines, costs, reasonable
amounts paid in settlement, liabilities, obligations, taxes, liens, losses,
expenses, and fees, including court costs and reasonable attorneys' fees and
expenses.
"Affiliate" has the meaning set forth in Rule 12b-2 of the regulations
---------
promulgated under the Securities Exchange Act.
"Affiliated Group" means any affiliated group of companies within the
----------------
meaning of Code Section1504(a).
"Affiliated Group Parent" means, during the period from October 1, 1987 to
-----------------------
present, Contran.
"Applicable Rate" means the "Prime Rate" as identified in the Wall Street
---------------
Journal Money Rates section from time to time as the base rate of interest for
corporate loans.
"Buyer" has the meaning set forth in the preface above.
-----
"Cash" means cash and cash equivalents (including marketable securities and
----
short term investments) calculated in accordance with GAAP applied on a basis
consistent with the preparation of the Financial Statements.
"Closing" has the meaning set forth in Section2(d) below.
-------
"Closing Date" has the meaning set forth in Section2(d) below.
------------
"Code" means the Internal Revenue Code of 1986, as amended.
----
"Confidential Information" means any information concerning the businesses
------------------------
and affairs of Sybra that is not already generally available to the public.
"Contran" means Contran Corporation, a Delaware corporation.
-------
"Debt Repayment" has the meaning set forth in Section2(b) below.
--------------
"Determination Date" has the meaning set forth in Section2(g)(ii) below.
------------------
"Disclosure Schedule" has the meaning set forth in Section3 below.
-------------------
"Employee Benefit Plan" means any (a) nonqualified deferred compensation or
---------------------
retirement plan or arrangement which is an Employee Pension Benefit Plan, (b)
qualified defined contribution retirement plan or arrangement which is an
Employee Pension Benefit Plan, (c) qualified defined benefit retirement plan or
arrangement which is an Employee Pension Benefit Plan (including any
Multiemployer Plan), or (d) Employee Welfare Benefit Plan.
"Employee Pension Benefit Plan" has the meaning set forth in ERISA
-----------------------------
Section3(2).
"Employee Welfare Benefit Plan" has the meaning set forth in ERISA
-----------------------------
Section3(1).
"Environmental Law" means any national or local statute, law, ordinance,
-----------------
rule, regulation, order, consent, decree, judicial or administrative decision or
directive of applicable law at any time relating to (A) pollution or protection
of the environment, including natural resources, (B) exposure of persons,
including employees, to hazardous substances or other products, materials or
chemicals, or (C) protection of the public health or welfare from the effects of
products, by-products, waste, emissions, discharges or releases of chemical or
other substances from industrial or commercial activities.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
-----
amended.
"Financial Statements" has the meaning set forth in Section4(g) below.
--------------------
"Fiscal Month" means, as applicable, the four or five consecutive weeks
------------
within an accounting cycle for Sybra for Unit #740.
"GAAP" means United States generally accepted accounting principles as in
----
effect from time to time.
"Gross Revenues" means all revenues and other items of income as those
--------------
terms are normally used in accordance with GAAP.
"Xxxx-Xxxxx-Xxxxxx Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
---------------------
Act of 1976, as amended.
"Income Tax" means any federal, state, local, or foreign income tax,
----------
including any interest, penalty, or addition thereto, whether disputed or not.
"Income Tax Return" means any return, declaration, report, claim for
-----------------
refund, or information return or statement relating to Income Taxes, including
any schedule or attachment thereto.
"Indemnified Party" has the meaning set forth in Section8(d) below.
-----------------
"Indemnifying Party" has the meaning set forth in Section8(d) below.
------------------
"Inventories" means inventories, including supplies, calculated in
-----------
accordance with GAAP applied on a basis consistent with the preparation of the
Financial Statements.
"Knowledge" means actual knowledge without independent investigation of the
---------
referenced person or, if an entity, the executive officers of the referenced
entity and, in the case of Sybra, the executive officers and regional vice
presidents of Sybra.
"Lease" means a lease by and between Sybra and USRP pursuant to which Sybra
-----
leases from USRP the Acquired Assets as defined in the USRP Agreement.
`Monthly Free Cash Flow" means, for each Fiscal Month, or portion thereof,
----------------------
the excess of Gross Revenues over Operating Expenses.
"Most Recent Financial Statements" has the meaning set forth in
--------------------------------
Section4(g) below.
"Most Recent Fiscal Month End" has the meaning set forth in Section4(g)
----------------------------
below.
"Multiemployer Plan" has the meaning set forth in ERISA Section3(37).
------------------
"Operating Expenses" shall mean reasonably necessary and customary costs
------------------
and other types of expenses, provided, however, that Operating Expenses shall
exclude (x) depreciation, amortization and other non-cash expenses, (y) interest
expense and (z) provision for income taxes, as all of those terms are normally
used in accordance with GAAP.
"Ordinary Course of Business" means the ordinary course of business
---------------------------
consistent with past custom and practice (including, without limitation, with
respect to quantity and frequency).
"Party" has the meaning set forth in the preface above.
-----
"PBGC" means the Pension Benefit Guaranty Corporation.
----
"Person" means an individual, a partnership, a corporation, a limited
------
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization, or a governmental entity (or any
department, agency, or political subdivision thereof).
"Purchase Price" has the meaning set forth in Section2(b) below.
--------------
"Real Property Assets" means the real property assets that Sybra intends to
--------------------
sell to USRP and USRP intends to purchase from Sybra as described in the USRP
Agreement.
"Reportable Event" has the meaning set forth in ERISA Section4043.
----------------
"Required Consents of Seller" has the meaning set forth in
---------------------------
Section3(a)(iii) below.
"Required Consents of Buyer" has the meaning set forth in Section3(b)(iii)
--------------------------
below.
"Securities Act" means the Securities Act of 1933, as amended.
--------------
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
-----------------------
amended.
"Security Interest" means any mortgage, pledge, lien, encumbrance, charge,
-----------------
or other security interest, other than (a) mechanic's, materialmen's, and
similar liens, (b) liens for Taxes not yet due and payable or for Taxes that the
taxpayer is contesting in good faith through appropriate proceedings, (c)
purchase money liens and liens securing rental payments under capital lease
arrangements, and (d) other liens arising in the Ordinary Course of Business and
not incurred in connection with the borrowing of money.
"Seller" has the meaning set forth in the preface above.
------
"Subsidiary" means any corporation or other entity with respect to which a
----------
specified Person (or a Subsidiary thereof) owns a majority of the common stock
or other equity interests, or has the power to vote or direct the voting of
sufficient securities to elect a majority of the directors or other persons
performing similar functions with respect to such entity.
"Sybra" has the meaning set forth in the preambles above.
-----
"Sybra Share" means any share of the Common Stock, par value $.50 per
-----------
share, of Sybra.
`Tax'' means any federal, state, local, or foreign tax, including any
---
interest, penalty, or addition thereto, whether disputed or not.
"Tax Return" means any return, declaration, report, claim for refund, or
----------
information return or statement relating to Taxes, including any schedule or
attachment thereto.
"Third Party Claim" has the meaning set forth in Section8(d) below.
-----------------
"Unit #740" means Sybra's Unit #740 located at the Park City Mall in
---------
Lancaster, Pennsylvania.
"Units Purchase Agreement" means the Units Purchase Agreement by and
------------------------
between Valhi and USRP, as amended, supplemented or modified.
"USRP" means U.S. Restaurant Properties Master L. P., a Delaware limited
----
partnership.
"USRP Agreement" means the Asset Purchase Agreement dated December 23, 1996
--------------
by and between Sybra and USRP, as amended, supplemented or modified.
"Valcor" means Valcor, Inc., a Delaware corporation.
------
"Valhi" means Valhi, Inc., a Delaware corporation.
-----
2. Purchase and Sale of Sybra Shares.
---------------------------------
(a) Basic Transaction. On the terms and subject to the conditions of this
-----------------
Agreement, the Buyer agrees to purchase from the Seller, and the Seller agrees
to sell to the Buyer, at Closing, all of its Sybra Shares for the consideration
specified below in this Section2.
(b) Purchase Price. The Buyer agrees (i) to pay to the Seller at the
--------------
Closing $14,000,000 (the "Purchase Price"), subject to adjustment as provided in
Section Section2(f) and (g) below, by delivery of cash in the amount of the
Purchase Price payable by wire transfer or delivery of other immediately
available funds, and (ii) to pay in full indebtedness of Sybra, in an amount not
to exceed $23,772,000, more particularly described in Section2(b) of the
Disclosure Schedule (the "Debt Repayment").
(c) Pre-Closing Dividends and Distributions to Seller. Immediately prior
-------------------------------------------------
to or concurrently with the Closing, the Seller will cause Sybra to pay to the
Seller an aggregate amount equal to Sybra's good faith estimate of the
consolidated Cash of Sybra as of the Closing, including, without limitation, all
of the net cash proceeds of Sybra's sale of certain of its assets to USRP
pursuant to the USRP Agreement, provided however, Seller shall not permit Sybra
to dividend Cash to the extent that, based on Sybra's good faith estimate,
remaining Cash and Inventories as of the Closing Date and after such dividend
would be less than $2,605,000. The Seller may cause Sybra to make any such
payment to it in the form of a dividend or a redemption of capital stock. In
addition, prior to the Closing, the Seller will cause Sybra to dividend to
Seller all of its right, title and interest in and to the real property
described in Section2(c) of the Disclosure Schedule.
(d) The Closing. The closing of the transactions contemplated by this
-----------
Agreement (the "Closing") shall take place at the offices of Valcor in Dallas,
-------
Texas, commencing at 9:00 a.m. local time on the second business day following
the satisfaction or waiver of all conditions to the obligations of the Parties
to consummate the transactions contemplated by this Agreement (other than
conditions with respect to actions the respective Parties will take at the
Closing itself) or such other date as the Buyer and the Seller may mutually
determine (the "Closing Date"); provided, however that the Closing Date shall be
-----------------
no later than April 14, 1997.
(e) Deliveries at the Closing. At the Closing, (i) the Seller will
-------------------------
execute, acknowledge (if appropriate), and deliver to the Buyer the various
certificates, instruments, and documents to be delivered by Seller as referred
to in Section7(a) below, (ii) the Buyer will deliver to the Seller the various
certificates, instruments, and documents to be delivered by Buyer as referred to
in Section7(b) below, (iii) the Seller will deliver to the Buyer stock
certificates representing all of its Sybra Shares, endorsed in blank or
accompanied by duly executed assignment documents, (iv) the Buyer will deliver
to the Seller the Purchase Price specified in Section2(b) above, and (v) the
Buyer will pay or cause to be paid the Debt Repayment described in Section2(b)
above.
(f) Adjustment to Purchase Price. The Purchase Price shall be increased
-----------------------------
by the Agreed Value set forth on Exhibit A of each restaurant unit that is not
---------
purchased by USRP under the USRP Agreement and Buyer shall pay such increase at
Closing. The Purchase Price also shall be adjusted as provided in
Section5(g)(ii). In addition, as promptly as practicable, but no later than 90
days following the Closing Date, Seller and Buyer shall jointly prepare, or
cause to be prepared, in accordance with GAAP financial statements of Sybra,
including a consolidated balance sheet as of the close of business on the
Closing Date (after giving effect to the transactions contemplated in the USRP
Agreement and all dividends contemplated by this Section2) (the "Closing
Balance Sheet"). Within ten (10) days after completion of the Closing Balance
Sheet, if the aggregate amount of Accrued Expenses and Payables as set forth in
the Closing Balance Sheet, net of the aggregate amount of Cash and Inventories
as set forth in the Closing Balance Sheet, is greater than $6,895,000, the
Purchase Price shall be adjusted and the Seller shall make a cash payment in
immediately available funds to the Buyer in an amount (the "Payment Amount")
equal to the difference between U.S.$6,895,000 and the aggregate amount of
Accrued Expenses and Payables as set forth in the Closing Balance Sheet, net of
the aggregate of Cash and Inventories as set forth in the Closing Balance Sheet,
plus interest on the Payment Amount at the rate of eight percent (8%) per annum
calculated from the Closing Date through the date of such cash payment. Any
payment pursuant to the foregoing provisions shall be an adjustment (net of any
interest included in such payment) to the Purchase Price.
(g) Contingent Consideration. Buyer agrees to pay Seller additional,
------------------------
contingent consideration computed in accordance with this Section2(g).
(i) Commencing on the Closing Date and continuing through the date of
payment in full of the amounts due under Section2(g)(ii) and/or
Section2(g)(iii), as applicable, Buyer shall pay Seller an amount equal to 50%
of the Monthly Free Cash Flow of Unit #740 for each Fiscal Month, or portion
thereof. Buyer shall pay such amount to Seller by wire transfer or delivery of
other immediately available funds within 15 business days after the last
business day of each such Fiscal Month, or portion thereof.
(ii) In the event that, after the Closing Date, (a) Sybra enters into
a lease having a duration of one year or more for Xxxx #000, (b) Sybra enters
into a lease for another location at the Park City Mall, Lancaster, Pennsylvania
or (c) neither of the events described in (a) or (b) has occurred and Sybra has
not been forced by the lessor to vacate Unit #740 on or before the second
anniversary of the Closing Date (the "Determination Date"), Buyer shall pay
Seller the sum of $2,000,000. At Buyer's option, the Determination Date may be
extended from the second anniversary of the Closing Date to the third
anniversary of the Closing Date, provided that Buyer shall have given Seller
written notice of such extension on or before 30 days prior to the second
anniversary of the Closing Date, and provided further that Buyer has paid and
continues to pay all amounts due pursuant to Section2(g)(i). Buyer shall pay
the amount due pursuant to this Section2(g)(ii) to Seller by wire transfer or
delivery of other immediately available funds within 5 business days after the
Determination Date. Upon and after the date of payment in full of the amount
due pursuant to this Section2(g)(ii), Buyer shall not be obligated to pay
Seller any amounts pursuant to Section2(g)(iii) nor, pursuant to
Section2(g)(i), any amounts for periods commencing after the date of such
payment pursuant to this Section2(g)(ii).
(iii) If, prior to the payment of amounts due pursuant to
Section2(g)(ii), the lease for Unit #740 is terminated, Sybra is forced by the
lessor to vacate Unit #740 and Sybra has not entered into a lease for another
location at the Xxxx Xxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxxxx, Buyer shall pay Seller
cash in an amount equal to 50% of the cumulative Monthly Free Cash Flow of Unit
#740 (in addition to amounts payable pursuant to Section2(g)(i)), calculated
from the Closing Date to the date upon which Sybra vacates Unit #740. Buyer
shall pay the amount due pursuant to this Section2(g)(iii) to Seller by wire
transfer or delivery of other immediately available funds, within 5 business
days after the date Buyer vacates Unit #740. Unless Buyer subsequently enters
into a lease for another location at the Xxxx Xxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxxxx
upon and after the date of payment in full of the amount due pursuant to this
Section2(g)(iii), Buyer shall not be obligated to pay Seller any amounts
pursuant to Section2(g)(ii) nor, pursuant to Section2(g)(i), any amounts for
periods commencing after the date of such payment pursuant to this
Section2(g)(iii). In the event that Buyer subsequently enters into a lease for
another location at the Xxxx Xxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxxxx, Buyer shall be
obligated to pay the amounts due pursuant to Section2(g)(ii) and, pursuant to
Section2(g)(i), amounts due for all periods prior to payment in full pursuant to
Section2(g)(ii) .
3. Representations and Warranties Concerning the Transaction.
---------------------------------------------------------
(a) Representations and Warranties of the Seller. The Seller represents
--------------------------------------------
and warrants to the Buyer that the statements contained in this Section3(a) are
correct and complete as of the date of this Agreement and will be correct and
complete as of the Closing Date (as though made then and as though the Closing
Date were substituted for the date of this Agreement throughout this
Section3(a)), except as set forth in the disclosure schedule attached hereto as
Exhibit B and incorporated in this Agreement by this reference (the "Disclosure
---------
Schedule").
(i) Organization of the Seller. The Seller is a corporation validly
--------------------------
existing, and in good standing under the laws of Delaware.
(ii) Authorization of Transaction. The Seller has the corporate
----------------------------
power and authority to execute and deliver this Agreement and to perform its
obligations under this Agreement and the execution and delivery of this
Agreement has been approved by the Seller's Board of Directors. This Agreement
constitutes the valid and legally binding obligation of the Seller, enforceable
in accordance with its terms and conditions.
(iii) Noncontravention. Neither the execution and the delivery of
----------------
this Agreement, nor the consummation of the transactions contemplated by this
Agreement, will (A) violate any valid constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which the Seller is subject or any
provision of its charter or bylaws or (B) conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify, or cancel, or require any notice
under any agreement, contract, lease, license, instrument, or other arrangement
to which the Seller is a party or by which it is bound or to which any of its
assets is subject, except where the violation, conflict, breach, default,
acceleration, termination, modification, cancellation, failure to give notice,
or Security Interest would not have a material adverse effect the ability of the
Parties to consummate the transactions contemplated by this Agreement. To the
Knowledge of the Seller, and other than in connection with the provisions of the
Xxxx-Xxxxx-Xxxxxx Act and those required notices, consents and approvals
relating to the Seller as described in the Disclosure Schedule (the "Required
Consents of Seller"), the Seller does not need to give any notice to, make any
filing with, or obtain any authorization, consent, or approval of any government
or governmental agency in order for the Parties to consummate the transactions
contemplated by this Agreement, except where the failure to give notice, to
file, or to obtain any authorization, consent, or approval would not have a
material adverse effect on the financial condition of Sybra or on the ability of
the Parties to consummate the transactions contemplated by this Agreement.
(iv) Brokers' Fees. The Seller has no liability or obligation to pay
-------------
any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which the Buyer could become
liable or obligated.
(v) Sybra Shares. The Seller holds of record and owns beneficially
-------------
the number of Sybra Shares set forth in the Disclosure Schedule, free and clear
of any restrictions on transfer (other than restrictions on transfer imposed by
the Securities Act and state securities laws), taxes, Security Interests,
options, warrants, purchase rights, contracts, commitments, equities, claims,
and demands. The Seller is not a party to any option, warrant, purchase right,
or other contract or commitment (other than this Agreement) that could require
the Seller to sell, transfer, or otherwise dispose of any capital stock of
Sybra. The Seller is not a party to any voting trust, proxy, or other agreement
or understanding with respect to the voting of any capital stock of Sybra that
will exist after the Closing.
(b) Representations and Warranties of the Buyer. The Buyer represents and
-------------------------------------------
warrants to the Seller that the statements contained in this Section3(b) are
correct and complete as of the date of this Agreement and will be correct and
complete as of the Closing Date (as though made then and as though the Closing
Date were substituted for the date of this Agreement throughout this
Section3(b)), except as set forth in the Disclosure Schedule.
(i) Organization of the Buyer. The Buyer is a corporation duly
-------------------------
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation.
(ii) Authorization of Transaction. The Buyer has the corporate power
----------------------------
and authority to execute and deliver this Agreement and to perform its
obligations hereunder and the execution and delivery of this Agreement has been
approved by the Buyer's Board of Directors. This Agreement constitutes the
valid and legally binding obligation of the Buyer, enforceable in accordance
with its terms and conditions.
(iii) Noncontravention. Neither the execution and the delivery of
----------------
this Agreement, nor the consummation of the transactions contemplated by this
Agreement, will (A) violate any valid constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which the Buyer is subject or any
provision of its charter or bylaws or (B) conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify, or cancel, or require any notice
under any agreement, contract, lease, license, instrument, or other arrangement
to which the Buyer is a party or by which it is bound or to which any of its
assets is subject. To the Knowledge of the Buyer, and other than in connection
with the provisions of the Xxxx-Xxxxx-Xxxxxx Act and those required notices,
consents and approvals relating to the Buyer or any of its Subsidiaries as
described in the Disclosure Schedule (the "Required Consents of Buyer"), the
Buyer does not need to give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any government or governmental agency in
order for the Parties to consummate the transactions contemplated by this
Agreement, except where the failure to give notice, to file, or to obtain any
authorization, consent, or approval would not have a material adverse effect on
the ability of the Parties to consummate the transactions contemplated by this
Agreement.
(iv) Brokers' Fees. The Buyer has no liability or obligation to pay
-------------
any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which any Seller could become
liable or obligated.
(v) Investment. The Buyer is acquiring Sybra Shares for investment
----------
and not with a view to or for sale in connection with any distribution thereof
within the meaning of the Securities Act.
(vi) Financing. Buyer will have, on the Closing Date, all funds
---------
necessary to pay the Purchase Price and related fees and expenses, and has, or
will have on the Closing Date, the financial capacity to perform all of its
other obligations under this Agreement.
(vii) Due Diligence. Subject to Buyer's thirty-five (35) day due
-------------
diligence period following the execution of this Agreement, Buyer acknowledges
and agrees (A) that Buyer has had access to and the opportunity to perform
unrestricted due diligence with respect to Sybra; (B) Buyer is acquiring the
Sybra Shares without reliance on any representations or warranties of Seller
except as expressly set forth in Section4 of this Agreement, and subject to all
of the limitations provided in this Agreement.
4. Representations and Warranties Concerning Sybra. The Seller represents
-----------------------------------------------
and warrants to the Buyer that the statements contained in this Section4 are
correct and complete as of the date of this Agreement and will be correct and
complete as of the Closing Date (as though made then and as though the Closing
Date were substituted for the date of this Agreement throughout this Section4),
except as set forth in Disclosure Schedule.
(a) Organization, Qualification, and Corporate Power. Sybra is a
------------------------------------------------
corporation validly existing, and in good standing under the laws of the
jurisdiction of its incorporation. Sybra is duly authorized to conduct business
and is in good standing under the laws of each jurisdiction where such
qualification is required, except where the lack of such qualification would not
have a material adverse effect on the financial condition or results of
operations of Sybra. Sybra has the corporate power and authority to carry on
the businesses in which it is engaged and to own and use the properties owned
and used by it. Section4(a) of the Disclosure Schedule lists the directors and
executive officers of Sybra.
(b) Capitalization. The entire authorized capital stock of Sybra consists
--------------
of 200,000 Sybra Shares, all of which are common shares, par value $.50 per
share. There are 55,199 Sybra Shares issued and outstanding. No Sybra Shares
are held in treasury. All of the issued and outstanding Sybra Shares have been
duly authorized, are validly issued, fully paid, and nonassessable, and are held
of record by the Seller. There are no outstanding or authorized options,
warrants, purchase rights, subscription rights, conversion rights, exchange
rights, or other contracts or commitments that could require Sybra to issue,
sell, or otherwise cause to become outstanding any of its capital stock. There
are no outstanding or authorized stock appreciation, phantom stock, profit
participation, or similar rights with respect to Sybra.
(c) Noncontravention. Neither the execution and the delivery of this
----------------
Agreement, nor the consummation of the transactions contemplated by this
Agreement, will (i) violate any valid constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which Sybra is subject or any
provision of the charter or bylaws of Sybra or (ii) conflict with, result in a
breach of, constitute a default under, result in the acceleration of, create in
any party the right to accelerate, terminate, modify, or cancel, or require any
notice under any agreement, contract, lease, license, instrument, or other
arrangement to which Sybra is a party or by which it is bound or to which any of
its assets is subject (or result in the imposition of any Security Interest upon
any of its assets), except where the violation, conflict, breach, default,
acceleration, termination, modification, cancellation, failure to give notice,
or Security Interest would not have a material adverse effect on the financial
condition of Sybra or on the ability of the Parties to consummate the
transactions contemplated by this Agreement. To the Knowledge of the Seller,
and other than in connection with the provisions of the Xxxx-Xxxxx-Xxxxxx Act
and the Required Consents of Seller, Sybra does not need to give any notice to,
make any filing with, or obtain any authorization, consent, or approval of any
government or governmental agency in order for the Parties to consummate the
transactions contemplated by this Agreement, except where the failure to give
notice, to file, or to obtain any authorization, consent, or approval would not
have a material adverse effect on the financial condition or results of
operations of Sybra or on the ability of the Parties to consummate the
transactions contemplated by this Agreement.
(d) Brokers' Fees. Sybra does not have any liability or obligation to pay
-------------
any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement.
(e) Title to Tangible Assets Other than the Real Property Assets. Sybra
------------------------------------------------------------
has good title to, or a valid leasehold interest in, the material tangible
assets they use regularly in the conduct of its businesses other than the Real
Property Assets.
(f) Subsidiaries. Sybra does not have any Subsidiaries.
------------
(g) Financial Statements. Attached hereto as Exhibit C are the following
-------------------- ---------
financial statements (collectively the "Financial Statements"): (i) audited
consolidated balance sheets and statements of income, changes in stockholders'
equity, and cash flow as of and for the fiscal years ended December 25, 1993,
December 31, 1994, and December 30, 1995 for Sybra; and (ii) unaudited
consolidated balance sheets and statements of income, changes in stockholders'
equity, and cash flow (the "Most Recent Financial Statements") as of and for the
--------------------------------
nine months ended September 28, 1996 (the "Most Recent Fiscal Quarter End") for
------------------------------
Sybra. The Financial Statements (including the notes thereto) have been
prepared in accordance with GAAP applied on a consistent basis throughout the
periods covered thereby and present fairly the financial condition of Sybra as
of such dates and the results of operations of Sybra for such periods; provided,
---------
however, that the Most Recent Financial Statements are subject to normal year-
-------
end adjustments and lack footnotes and other presentation items.
(h) Events Subsequent to Most Recent Fiscal Quarter End. Since the Most
---------------------------------------------------
Recent Fiscal Quarter End, there has not been any material adverse change in the
financial condition or results of operations of Sybra except as contemplated in
the USRP Agreement and this Agreement. Without limiting the generality of the
foregoing and except as contemplated in the USRP Agreement and in this
Agreement, including in Section2(c) of this Agreement, since that date Sybra
has not engaged in any practice, taken any action, or entered into any
transaction outside the Ordinary Course of Business the primary purpose or
effect of which has been to generate or preserve Cash.
(i) Legal Compliance. To the Knowledge of the Seller, Sybra has complied
----------------
with all applicable and valid laws (including rules, regulations, codes, plans,
injunctions, judgments, orders, decrees, rulings, and charges thereunder) of
federal, state, local, and foreign governments (and all agencies thereof),
except where the failure to comply would not have a material adverse effect upon
the financial condition or results of operations of Sybra and except that Seller
makes no representation regarding Environmental Laws.
(j) Income Tax Matters.
------------------
(i) Sybra has filed, or its Affiliated Group Parent has filed on
behalf of Sybra, all Tax Returns that it was required to file prior to the
Closing, and has paid all Income Taxes due and payable prior to Closing, except
where the failure to file Tax Returns or to pay Taxes would not have a material
adverse effect on the financial condition or results of operations of Sybra.
(ii) Section4(j) of the Disclosure Schedule lists all Income Tax
Returns filed with respect to Sybra for taxable periods ended on or after
December 31, 1988, indicates those Income Tax Returns that have been audited,
and indicates those Income Tax Returns that currently are the subject of audit.
The Seller has delivered to the Buyer correct and complete copies of all
federal Income Tax Returns of Sybra, examination reports relating to Sybra, and
statements of deficiencies assessed against or agreed to by Sybra since December
31, 1988.
(iii) Sybra has not waived any statute of limitations in respect of
Income Taxes or agreed to any extension of time with respect to an Income Tax
assessment or deficiency.
(iv) Sybra is not a party or subject to any Income Tax allocation or
sharing agreement except with its Affiliated Group Parent.
(v) To the Knowledge of the Seller, since October 1, 1987, Sybra has
not been a member of an Affiliated Group filing a consolidated federal Income
Tax Return (other than a group the common parent of which was Contran).
(k) Intellectual Property. Section4(k) of the Disclosure Schedule
---------------------
identifies each patent or trademark registration which has been issued to Sybra
with respect to any of its intellectual property, identifies each pending patent
application or application for trademark registration which Sybra has made with
respect to any of its intellectual property, and, to the Knowledge of the
Seller, identifies each material license, agreement, or other permission which
Sybra has granted to any third party with respect to any of its intellectual
property.
(l) Contracts. Section4(l) of the Disclosure Schedule lists all written
---------
contracts and other written agreements to which Sybra is a party the performance
of which will involve consideration in excess of $50,000 on an annual basis. The
Seller has delivered to the Buyer a correct and complete copy of each contract
or other agreement listed in Section4(l) of the Disclosure Schedule (as amended
to date). To the Knowledge of Seller, no party to any of such contracts has
asserted that Sybra is in breach or default as to any such contract. To the
Knowledge of Seller, none of the parties (other than Sybra) to any of such
contracts is in breach or default as to any such contract.
(m) Litigation. Section4(m) of the Disclosure Schedule sets forth each
----------
instance in which Sybra or any Employee Benefit Plan or other arrangement listed
on Section4(n) of the Disclosure Schedule (i) is subject to any outstanding
injunction, judgment, order, decree, ruling, or charge or (ii) is a party to any
action, suit, proceeding, hearing, or investigation of, in, or before any court
or quasi-judicial or administrative agency of any federal, state, local, or
foreign jurisdiction, except where the injunction, judgment, order, decree,
ruling, action, suit, proceeding, hearing, or investigation would not reasonably
be expected to involve consideration in excess of $10,000.
(n) Employee Benefits.
-----------------
(i) Section4(n) of the Disclosure Schedule lists each Employee
Benefit Plan that Sybra maintains or to which Sybra contributes and any
employment agreements, collective bargaining agreements, severance agreements or
stock-based compensation or other incentive, insurance or similar, programs
which cover current or former employees of Sybra.
(ii) To the Knowledge of the Seller, each such Employee Benefit Plan
or other arrangement listed on Section4(n) of the Disclosure Schedule (and each
related trust, insurance contract, or fund) complies in form and in operation in
all respects with the applicable requirements of ERISA and the Code, except
where the failure to comply would not have a material adverse effect on the
financial condition or results of operations of Sybra, and there has been no
transaction or any act or omission which would subject an Employee Benefit Plan
or any party dealing with an Employee Benefit Plan to a civil penalty assessed
pursuant to Section 502(i) of ERISA or a tax under Sections 4971 through 4980B
of the Code, inclusive.
(iii) All contributions (including all employer contributions and
employee salary reduction contributions) which are due have been paid to each
such Employee Benefit Plan which is either an Employee Pension Benefit Plan or
an Employee Welfare Benefit Plan.
(iv) Each such Employee Benefit Plan which is an Employee Pension
Benefit Plan has received a post-Tax reform Act of 1986 determination letter
from the Internal Revenue Service to the effect that it meets the requirements
of Code Section401(a).
(v) Sybra does not currently contribute, not has Sybra contributed to
a Multiemployer Plan since 1990, and Sybra is not currently responsible for any
`withdrawal liability" as that term is defined in Section 4201 of ERISA with
respect to any Multiemployer Plan.
(vi) The Sybra, Inc. Retirement Income Plan does not have any
`amount of unfunded benefit liabilities'' as such term is described in Section
4008(a)(18) of ERISA.
(vii) Except as required by applicable law, no Employee Welfare
Benefit Plan has any obligation for post-retirement or post employment benefits
that cannot be terminated upon no more than sixty (60) days' notice without
incurring a liability thereunder.
5. Pre-Closing Covenants. The Parties agree as follows with respect to
---------------------
the period between the execution of this Agreement and the Closing.
(a) General. Each of the Parties will use its reasonable efforts to take
-------
all action and to do all things necessary in order to consummate and make
effective the transactions contemplated by this Agreement (including
satisfaction, but not waiver, of the closing conditions set forth in Section7
below).
(b) Notices and Consents. Each Party will give any notices (and cause
--------------------
each of its Subsidiaries, if any, to give any notices) to third parties, and
each Party will use its reasonable efforts to obtain (and will cause each of its
Subsidiaries, if any, to use its reasonable efforts to obtain) any third party
consents including the Required Consents of Seller and the Required Consents of
Buyer, that the other Party reasonably may request in connection with the
matters referred to in Section3(a)(iii), Section3(b)(iii) and Section4(c)
above and the related Disclosure Schedule. Each of the Parties will (and will
cause each of its Subsidiaries, if any, to) give any notices to, make any
filings with, and use its reasonable efforts to obtain any authorizations,
consents, and approvals of governments and governmental agencies in connection
with the matters referred to in Section3(a)(iii), Section3(b)(iii) and
Section4(c) above and the related Disclosure Schedule. Without limiting the
generality of the foregoing, each of the Parties will file (and will cause each
of its Subsidiaries, if any, to file as applicable) any notification and report
forms and related material that it may be required to file with the Internal
Revenue Service, the Federal Trade Commission and the Antitrust Division of the
United States Department of Justice under the Xxxx-Xxxxx-Xxxxxx Act or
otherwise, will use its reasonable efforts to obtain (and will cause each of its
Subsidiaries, if any, to use its reasonable efforts to obtain) early termination
of the applicable waiting period, and will make (and will cause each of its
Subsidiaries, if any, to use its reasonable efforts to obtain) any further
filings pursuant thereto that may be necessary.
(c) Operation of Business. The Seller will not permit Sybra to engage in
---------------------
any practice, take any action, or enter into any transaction outside the
Ordinary Course of Business except (i) as contemplated in the USRP Agreement or
this Agreement, (ii) Sybra may pay dividends or make other distributions to
Valcor as permitted by Sybra's bank credit agreements, (iii) Sybra may repay
intercompany loans from Valcor, and (iv) Sybra may make the dividends and
distributions contemplated by Section2(c).
(d) Access. The Seller will permit representatives of the Buyer to have
------
access at all reasonable times, and in a manner so as not to interfere with the
normal business operations of Sybra, to all premises, properties, personnel,
books, records (including tax records), contracts, and documents of or
pertaining to Sybra as Buyer may reasonably request from time to time solely for
the purpose of confirming Seller's compliance with Section5(c) above. The
Buyer will treat and hold in confidence any Confidential Information it receives
or has received from the Seller or Sybra in the course of due diligence review
or the reviews contemplated by this Section5(d), will not use any of the
Confidential Information except in connection with this Agreement, and, if this
Agreement is terminated for any reason whatsoever, will return to the Seller and
or destroy, at Seller's or Sybra's request, all tangible embodiments (and all
copies) including, without limitation, all electronic media, of the Confidential
Information which are in its possession.
(e) Notice of Developments.
----------------------
(i) The Seller may elect at any time to notify the Buyer of any
development causing a breach of any of its representations and warranties in
Section4 above. Unless the Buyer has the right to terminate this Agreement
pursuant to Section9(a)(ii) below by reason of the development and exercises
that right within the period of ten (10) business days referred to in
Section9(a)(ii) below, the written notice pursuant to this Section5(e)(i) will
be deemed to have amended the Disclosure Schedule, to have qualified the
representations and warranties contained in Section4 above, and to have cured
any misrepresentation or breach of warranty that otherwise might have existed
hereunder by reason of the development.
(ii) Each Party will give prompt written notice to the other Party of
any material adverse development causing a breach of any of its own
representations and warranties in Section3 above. No disclosure by any Party
pursuant to this Section5(e)(ii), however, shall be deemed to amend or
supplement the Disclosure Schedule or to prevent or cure any misrepresentation
or breach of warranty.
(f) Other Transactions. Prior to the expiration of the time periods
------------------
specified in Section7(a)( x) and (xi), the Seller agrees, on behalf of itself
and each of its Affiliates, that, prior to Closing it will not, and will cause
each of its officers, directors, representatives and agents not to, directly or
indirectly, take any action to solicit, encourage, initiate or facilitate
(including by way of making available or furnishing information) any inquiries,
proposals or offers with respect to any merger or consolidation involving Sybra,
the acquisition of Sybra Shares or the acquisition of all or substantially all
of the assets of Sybra other than the Real Property Assets by any person other
than the Buyer or its permitted assigns. After the expiration of the time
periods specified in Section7(a)( x) and (xi), Seller shall no longer be
subject to the limitations of the foregoing sentence unless Buyer has provided
evidence reasonably satisfactory to Seller that Buyer has obtained the formal
commitment letters specified in Section7(a)(xi).
(g) Estoppel Certificates.
---------------------
(i) By no later than five (5) business days following the date of
this Agreement, Seller shall cause Sybra to send out for execution estoppel
certificates, in the form of Exhibit D, to each of its lessors or sublessors, as
the case may be.
(ii) Seller agrees to cause Sybra to use commercially reasonable
efforts, without incurring any additional expenses to any lessor or sublessor
unless such expenditure is required by the terms of a particular lease (a
"Consent Fee"), to obtain the maximum number of estoppel certificates prior to
the Closing Date. Buyer agrees to pay to Seller, prior to expenditure by
Seller, an amount equal to each Consent Fee. At Closing, Seller shall credit
Buyer against the Purchase Price an amount equal to the aggregate amount paid by
Buyer to Seller in respect of Consent Fees.
(iii) Seller agrees to cause Sybra to promptly deliver to Buyer
copies of the executed estoppel certificates as they are received by Sybra prior
to and on the Closing Date.
6. Post-Closing Covenants. The Parties agree as follows with respect to
----------------------
the period following the Closing.
(a) General. In case at any time after the Closing any further action is
-------
necessary to carry out the purposes of this Agreement, each of the Parties will
take such further action (including the execution and delivery of such further
instruments and documents) as the other Party reasonably may request, all at the
sole cost and expense of the requesting Party (except to the extent that the
requesting Party is entitled to indemnification therefor under Section8 below).
(b) Litigation Support. In the event and for so long as any Party
------------------
actively is contesting or defending against any action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand in connection with
(i) any transaction contemplated under this Agreement or (ii) any fact,
situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or transaction on or prior
to the Closing Date involving Sybra, the other Party shall cooperate with it
and its counsel in the defense or contest, make available its personnel, and
provide such testimony and access to its books and records as shall be necessary
in connection with the defense or contest, all at the sole cost and expense of
the contesting or defending Party (except to the extent that the contesting or
defending Party is entitled to indemnification therefor under Section8 below).
(c) Employee Benefits Matters. The Buyer will adopt and assume at and as
-------------------------
of the Closing each of the Employee Benefit Plans identified in Section4(n) of
the Disclosure Schedule that Sybra maintains and each trust, insurance contract,
annuity contract, or other funding arrangement that the Seller has established
with respect thereto. The Buyer will ensure that on and after the Closing Date
the Employee Benefit Plans credit employment with Sybra in the same manner that
employment with Sybra prior to the Closing Date was credited for purposes of
eligibility, vesting, and benefit accrual. The Seller will transfer (or cause
the plan administrators to transfer) at and as of the Closing all of the
corresponding assets associated with the Employee Benefit Plans that the Buyer
is adopting and assuming, with such transfers to occur at or as soon as
administratively possible after the Closing without imposition of any
conditions.
7. Conditions to Obligation to Close.
---------------------------------
(a) Conditions to Obligation of the Buyer. The obligation of the Buyer to
-------------------------------------
consummate the transactions to be performed by it in connection with the Closing
is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth in Section3(a) and
Section4 above shall be true and correct in all material respects at and as of
the Closing Date;
(ii) the Seller shall have performed and complied with all of its
covenants hereunder in all material respects through the Closing;
(iii) there shall not be any injunction, judgment, order, decree,
ruling, or charge in effect preventing consummation of any of the transactions
contemplated by this Agreement;
(iv) the Seller shall have delivered to the Buyer a certificate to
the effect that each of the conditions specified above in Section7(a)(i)-(iii)
is satisfied in all respects;
(v) all applicable waiting periods (and any extensions thereof) under
the Xxxx-Xxxxx-Xxxxxx Act shall have expired or otherwise been terminated and
the Buyer shall have received the Required Consents of Buyer and all other
authorizations, consents, and approvals of governments and governmental agencies
referred to in Section3(a)(iii), Section3(b)(iii), and Section4(c) above;
(vi) all conditions have been satisfied or waived to the obligations
of the parties to the USRP Agreement and the Units Purchase Agreement and the
closings of the transactions contemplated in the USRP Agreement shall occur
simultaneously with the Closing;
(vii) all conditions have been satisfied to the obligations of the
parties to the Lease and the closings of the transactions contemplated in the
Lease shall occur simultaneously with the Closing;
(viii) all actions to be taken by the Seller in connection with
consummation of the transactions contemplated hereby and all certificates,
instruments, and other documents required to effect the transactions
contemplated hereby will be reasonably satisfactory in form and substance to the
Buyer;
(ix) Passage of the Effective Date of the First Amended Joint Plan of
Reorganization under Chapter 11, filed in the Chapter 11 cases of I.C.H.
Corporation and its related debtors, pending in the United States Bankruptcy
Court for the Northern District of Texas as Jointly Administered Case Number
395-36351-RCM-11;
(x) Buyer shall have completed a satisfactory business and due
diligence review of Sybra; provided, however, that the condition to closing set
-----------------
forth in this clause (x) shall expire on the thirty-fifth day following the date
of this Agreement;
(xi) Buyer shall have obtained formal commitment letters for the
financing of at least $31,000,000, which commitment letters shall be on terms
and conditions that are reasonably satisfactory to Buyer from a commercial point
of view; provided, however, that the condition to closing set forth in this
-----------------
clause (xi) shall expire on the thirty-fifth day following the date of this
Agreement; and
(xii) Buyer shall have received the 1996 audited financial statements
of Sybra, including the unqualified opinion of Sybra's independent public
accountants.
The Buyer may waive any condition specified in this Section7(a) if it executes
a writing so stating at or prior to the Closing.
(b) Conditions to Obligation of the Seller. The obligation of the Seller
--------------------------------------
to consummate the transactions to be performed by it in connection with the
Closing is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth in Section3(b)
above shall be true and correct in all material respects at and as of the
Closing Date;
(ii) the Buyer shall have performed and complied with all of its
covenants hereunder in all material respects through the Closing;
(iii) there shall not be any injunction, judgment, order, decree,
ruling, or charge in effect preventing consummation of any of the transactions
contemplated by this Agreement;
(iv) the Buyer shall have delivered to the Seller a certificate to
the effect that each of the conditions specified above in Section7(b)(i)-(iii)
is satisfied in all respects;
(v) all applicable waiting periods (and any extensions thereof) under
the Xxxx-Xxxxx-Xxxxxx Act shall have expired or otherwise been terminated and
the Seller and Sybra shall have received the Required Consents of Seller and all
other authorizations, consents, and approvals of governments and governmental
agencies referred to in Section3(a)(ii), Section3(b)(ii), and Section4(c)
above;
(vi) all conditions have been satisfied to the obligations of the
parties to the USRP Agreement and the Units Purchase Agreement and the closings
of the transactions contemplated in the USRP Agreement and the Units Purchase
Agreement shall occur simultaneously with the Closing;
(vii) all conditions have been satisfied to the obligations of the
parties to the Lease and the closings of the transactions contemplated in the
Lease shall occur simultaneously with the Closing; and
(viii) all actions to be taken by the Buyer in connection with
consummation of the transactions contemplated hereby and all certificates,
instruments, and other documents required to effect the transactions
contemplated hereby, which may include any instruments or documents required by
Arby's, Inc. to be executed by the Buyer, will be reasonably satisfactory in
form and substance to the Seller.
The Seller may waive any condition specified in this Section7(b) if it executes
a writing so stating at or prior to the Closing.
8. Remedies for Breaches of this Agreement.
---------------------------------------
(a) Survival of Representations and Warranties. Except with respect to
------------------------------------------
the representations and warranties of the Seller contained in Section
Section4(b), (j), (m) and (n), which shall survive for the applicable statute of
limitations, none of the representations and warranties of the Seller contained
in Section4 above shall survive the Closing. All of the representations and
warranties of the Parties contained in Section3 above shall survive the Closing
(unless the damaged Party knew or had reason to know of any misrepresentation or
breach of warranty contained in Section3 above at the time of Closing) and
continue in full force and effect forever thereafter (subject to any applicable
statutes of limitations).
(b) Indemnification Provisions for Benefit of the Buyer. In the event the
---------------------------------------------------
Seller breaches any of its representations and warranties contained in
Section3(a) and Section4 of this Agreement, any covenants contained in this
Agreement or any representations and warranties contained in any stock transfer
or other conveyance executed pursuant to this Agreement, and, if there is an
applicable survival period pursuant to Section8(a) above, provided that the
Buyer makes a written claim for indemnification against the Seller pursuant to
Section11(g) below within such survival period, then the Seller agrees to
indemnify the Buyer from and against any Adverse Consequences the Buyer shall
suffer through and after the date of the claim for indemnification (but
excluding any Adverse Consequences the Buyer shall suffer after the end of any
applicable survival period) caused proximately by the breach; provided, however,
that the Seller shall not have any obligation to indemnify the Buyer from and
against any Adverse Consequences caused by the breach of any representation or
warranty of the Seller contained in Section4 of this Agreement other than those
contained in Section4(j), (m) and (n). Seller's indemnification obligation to
the Buyer pursuant to this Subsection and Section10 (other than with respect to
breaches of the representations and warranties of Seller contained in Section
Section3(a) and 4(b)) together with Valcor's indemnification obligations under
the USRP Agreement shall not exceed $4,000,000 in the aggregate, determined, as
of any relevant date, based upon claims actually paid as of such date by Valcor
to Buyer or USRP. Buyer agrees that it will not seek indemnification for any
claim under this Subsection unless the aggregate of all claims under this
Subsection together with all claims under the USRP Agreement , determined as of
the date any claim is made, will result in loss to Buyer and/or USRP in excess
of $250,000 in the aggregate, and then only to the extent of such excess, up to
and subject to the $4,000,000 limitation specified above.
(c) Indemnification Provisions for Benefit of the Seller. In the event
----------------------------------------------------
the Buyer breaches any of its representations in Section3 above or any of its
covenants contained in this Agreement, the Buyer agrees to indemnify the Seller
from and against any Adverse Consequences the Seller shall suffer through and
after the date of the claim for indemnification caused proximately by the
breach.
(d) Matters Involving Third Parties.
-------------------------------
(i) If any third party shall notify any Party (the "Indemnified
-----------
Party") with respect to any matter (a "Third Party Claim") which may give rise
----- -----------------
to a claim for indemnification against the other Party (the "Indemnifying
------------
Party") under this Section8, then the Indemnified Party shall promptly (and in
-----
any event within ten (10) business days after receiving notice of the Third
Party Claim) notify the Indemnifying Party thereof in writing.
(ii) The Indemnifying Party will have the right to assume and
thereafter conduct the defense of the Third Party Claim with counsel of its
choice; provided, however, that the Indemnifying Party will not consent to the
-----------------
entry of any judgment or enter into any settlement with respect to the Third
Party Claim without the prior written consent of the Indemnified Party (not to
be withheld unreasonably) unless the judgment or proposed settlement involves
only the payment of money damages and does not impose an injunction or other
equitable relief upon the Indemnified Party.
(iii) Unless and until the Indemnifying Party assumes the defense of
the Third Party Claim as provided in Section8(d)(ii) above, however, the
Indemnified Party may defend against the Third Party Claim in any manner it
reasonably may deem appropriate.
(iv) In no event will the Indemnified Party consent to the entry of
any judgment or enter into any settlement with respect to the Third Party Claim
without the prior written consent of the Indemnifying Party except to the extent
that the Indemnified Party elects to waive its right to indemnification
hereunder with respect to such claim.
(e) Determination of Adverse Consequences. The Parties shall make
-------------------------------------
appropriate adjustments for tax benefits and insurance coverage and take into
account the time cost of money (using the Applicable Rate as the discount rate)
in determining Adverse Consequences for purposes of this Section8. All
indemnification payments under this Section8 shall be deemed adjustments to the
Purchase Price.
(f) Other Indemnification Provisions. The indemnification provisions in
--------------------------------
this Section8 are the sole remedy any Party may have after the Closing for
breach of representation or warranty in this Agreement, any covenant in this
Agreement (excluding those set forth in Section6 of this Agreement) or any
representations and warranties contained in any stock transfer or other
conveyance executed pursuant to this Agreement; provided, however, that the
Buyer acknowledges and agrees that it shall not have any remedy after the
Closing for any breach of the representations and warranties in Section4 above
(other than Section4(j), (m) and (n)); and provided further, either Party shall
be entitled to specific performance of all covenants.
9. Termination.
-----------
(a) Termination of Agreement. The Parties may terminate this Agreement as
------------------------
provided below:
(i) the Buyer and the Seller may terminate this Agreement by mutual
written consent at any time prior to the Closing;
(ii) the Buyer may terminate this Agreement by giving written notice
to the Seller at any time prior to the Closing in the event (A) the Seller has
within the then previous ten (10) business days given the Buyer any notice
pursuant to Section5(e)(i) above and (B) the development that is the subject of
the notice has had or is reasonably expected to have a material adverse effect
upon the financial condition or results of operations of Sybra;
(iii) the Buyer may terminate this Agreement by giving written notice
to the Seller at any time prior to the Closing (A) in the event the Seller has
breached any representation, warranty, or covenant contained in this Agreement
in any material respect, the Buyer has notified the Seller of the breach, and
the breach has continued without cure for a period of thirty (30) days after the
notice of breach, or (B) if the Closing shall not have occurred on or before
April 14, 1997, by reason of the failure of any condition precedent under
Section7(a) hereof (unless the failure results primarily from the Buyer itself
breaching any representation, warranty, or covenant contained in this
Agreement);
(iv) the Seller may terminate this Agreement by giving written notice
to the Buyer at any time prior to the Closing (A) in the event the Buyer has
breached any representation, warranty, or covenant contained in this Agreement
in any material respect, the Seller has notified the Buyer of the breach, and
the breach has continued without cure for a period of thirty (30) days after the
notice of breach or (B) if the Closing shall not have occurred on or before
April 14, 1997, by reason of the failure of any condition precedent under
Section7(b) hereof (unless the failure results primarily from the Seller itself
breaching any representation, warranty, or covenant contained in this
Agreement); and
(v) the Buyer may terminate this Agreement by giving written notice to
the Seller at any time prior to the expiration of the time periods provided in
Section7(a)(x) and (xi) if Buyer is not satisfied with its business and due
diligence review of Sybra as provided in Section7(a)(x) or Buyer has not
obtained formal commitment letters as provided in Section7(a)(xi).
(b) Effect of Termination. If any Party terminates this Agreement
---------------------
pursuant to Section9(a) above, all rights and obligations of the Parties
hereunder shall terminate without any liability of any Party to any other Party
(except for any liability of any Party then in breach); provided, however, that
-----------------
the confidentiality provisions contained in Section5(d) above shall survive
termination.
10. Income Tax Matters.
------------------
(a) Income Tax Sharing Agreements. Any Income Tax sharing agreement
-----------------------------
between Affiliated Group Parent or any of its Subsidiaries and Sybra is
terminated as of the Closing Date and will have no further effect for any future
taxable year.
(b) Income Taxes of Other Persons. The Seller agrees to indemnify the
-----------------------------
Buyer from and against any Adverse Consequences the Buyer may suffer resulting
from, arising out of, relating to, in the nature of, or caused by any Liability
of Sybra for Income Taxes of any Person other than Sybra under (i) Reg.
Section1.1502-6 (or any similar provision of state, local or foreign law), or
(ii) any Income Tax sharing agreement.
(c) Returns for Periods Through the Closing Date. Affiliated Group Parent
--------------------------------------------
will include the income of Sybra (including any deferred income triggered into
income by Reg. Section1.1502-13 and Reg. Section1. 1502-14 and any excess loss
accounts taken into income under Reg. Section1.1502-19) on the Affiliated Group
Parent consolidated federal Income Tax Returns for all periods through the
Closing Date and pay any Income Taxes attributable to such income, including
without limitation any Income Tax on any income or gain Sybra may realize in
respect of the transactions contemplated by the USRP Agreement. Sybra will
furnish Income Tax information to Affiliated Group Parent for inclusion in
Affiliated Group Parent's federal consolidated Income Tax Return for the period
which includes the Closing Date and will pay to Affiliated Group Parent its
separate company Income Tax liability for such period, computed in accordance
with the Affiliated Group Parent tax sharing agreement in effect through the
Closing Date in accordance with Sybra's past custom and practice, including
without limitation any Income Tax on any income or gain Sybra may realize in
respect of the transactions contemplated by the USRP Agreement. The income of
Sybra for the period up to and including the Closing Date and for the period
after the Closing Date shall be determined by closing the books of Sybra as of
the end of the Closing Date.
(d) Audits. Affiliated Group Parent will allow Sybra and its counsel to
------
participate at its own expense in any audits of Affiliated Group Parent
consolidated Income Tax Returns to the extent that such returns relate to Sybra
tax periods ending on or prior to the Closing Date. Affiliated Group Parent
will cooperate with Sybra and its counsel and provide access to books and
records relating to Sybra reasonably related to such audit. Affiliated Group
Parent will not settle any such audit in a manner which would adversely affect
Sybra after the Closing Date without the prior written consent of the Buyer or
Sybra, which consent shall not unreasonably be withheld.
(e) Carrybacks. Affiliated Group Parent will immediately pay to the Buyer
----------
any Income Tax refund (or reduction in Income Tax liability) resulting from a
carryback of a post-Closing Date Income Tax attribute of Sybra into the
Affiliated Group Parent consolidated Income Tax return, when such refund or
reduction is realized by the Affiliated Group Parent group. Affiliated Group
Parent will cooperate with Sybra in obtaining such refunds (or reduction in
Income Tax liability), including through the filing of amended Income Tax
returns or refund claims. The Buyer agrees to indemnify Affiliated Group Parent
for any Income Taxes resulting from the disallowance of such post-Closing Date
Income Tax attribute on audit or otherwise.
(f) Post-Closing Elections. At Affiliated Group Parent's request, the
----------------------
Buyer will cause Sybra to make and/or join with Affiliated Group Parent in
making certain tax return elections after Closing, as required under the
Affiliated Group Parent tax sharing agreement in effect through the Closing
Date. At Affiliated Group Parent's request, the Buyer will cause Sybra to make
or join with Affiliated Group Parent in making any other election if the making
of such election does not have a material adverse impact on the Buyer (or Sybra)
for any postacquisition Income Tax period. Seller agrees to indemnify Buyer for
any liability resulting from such elections.
(g) Indemnification for Post-Closing Transactions. Buyer agrees to
---------------------------------------------
indemnify Seller and Affiliated Group Parent for any additional Income Tax owed
by Seller and/or Affiliated Group Parent (including Income Tax owed by Seller
and/or Affiliated Group Parent due to this indemnification payment) resulting
from any transaction not in the ordinary course of business occurring on or
after the Closing Date following Buyer's purchase of Seller's Sybra Shares.
(h) Post-Closing Transactions not in the Ordinary Course. Buyer and
----------------------------------------------------
Seller agree to report all transactions not in the Ordinary Course of Business
occurring on the Closing Date after Buyer's purchase of Seller's Sybra Shares on
Buyer's Income Tax Return to the extent permitted by Reg.
Section1.1502-76(b)(1)(B).
11. Miscellaneous.
-------------
(a) Press Releases and Public Announcements. No Party shall issue any
---------------------------------------
press release or make any public announcement relating to the subject matter of
this Agreement prior to the Closing without the prior written approval of the
other Party; provided, however, that any Party or any affiliate of such Party
-----------------
may make any public disclosure it believes in good faith is required by
applicable law or any listing or trading agreement concerning its publicly-
traded securities (in which case the Party which intends, or which has an
affiliate that intends, to issue such press release or make such public
announcement will advise the other Party prior to making the disclosure and
provide the other Party opportunity to comment upon the release or
announcement).
(b) No Third Party Beneficiaries Other than Affiliated Group Parent. This
---------------------------------------------------------------
Agreement shall not confer any rights or remedies upon any Person other than the
Parties and their respective successors and permitted assigns, and as otherwise
set forth in this Section11(b). The Buyer acknowledges and agrees that
Affiliated Group Parent is intended to be and shall be a beneficiary of Buyer's
representations, warranties, covenants and indemnification obligations in
Section10 of this Agreement.
(c) Entire Agreement. This Agreement (including the documents referred to
----------------
herein) constitutes the entire agreement between the Parties and supersedes any
prior understandings, agreements, or representations by or between the Parties,
written or oral, to the extent they related in any way to the subject matter
hereof.
(d) Succession and Assignment. This Agreement shall be binding upon and
-------------------------
inure to the benefit of the Parties named herein and their respective successors
and permitted assigns. No Party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the other Party; provided however, that (i) Buyer may collaterally assign its
rights, interests and obligations hereunder to its lenders providing the
financing to complete the transactions contemplated by this Agreement, and (ii)
after the Closing, Seller may assign its rights, interests, or obligations under
this Agreement to any successor of Seller's business or any affiliate of Seller,
provided that, concurrently with such assignment Valhi, Inc. enters into an
assumption agreement with respect to Seller's obligations under this Agreement
in form and substance reasonably satisfactory to Buyer.
(e) Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(f) Headings. The section headings contained in this Agreement are
--------
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(g) Notices. All notices, requests, demands, claims, and other
-------
communications hereunder will be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly given if (and then
two business days after) it is sent by registered or certified mail, return
receipt requested, postage prepaid, and addressed to the intended recipient as
set forth below:
If to the Seller: Valcor, Inc.
----------------
Three Lincoln Centre, Suite 1700
0000 XXX Xxxxxxx
Xxxxxx, XX 00000-0000
Attention: Xxxxx X. X'Xxxxx
Tel: 000-000-0000
Fax: 000-000-0000
Copy to: Xxxxx X. Xxxxxxxxx
-------
Bartlit Xxxx Xxxxxx Xxxxxxxxx & Xxxxx
000 00xx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Tel: 000-000-0000
Fax: 000-000-0000
If to the Buyer: I.C.H. Corporation
---------------
c/o Xxxxx X. Arabia
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xx Xxxxx, XX 00000
Tel: 000-000-0000
Fax: 000-000-0000
Copy to: Xxxxx X. Xxxxx, Esq.
-------
Pryor, Cashman, Xxxxxxx & Xxxxx
000 Xxxx Xxxxxx, 00xx xxxxx
Xxx, Xxxx, XX 00000
Tel: 000-000-0000
Fax: 000-000-0000
Any Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited (next-day) courier,
messenger service, telecopy, telex, ordinary mail, or electronic mail), but no
such notice, request, demand, claim, or other communication shall be deemed to
have been duly given unless and until it actually is received by the intended
recipient; provided, however, that any such notice sent by expedited (next-day)
courier shall be deemed to have been duly given when delivered to the address
set forth above for the intended recipient. Any Party may change the address to
which notices, requests, demands, claims, and other communications hereunder are
to be delivered by giving the other Party notice in the manner herein set forth.
(h) Governing Law; Jurisdiction. This Agreement shall be governed by and
---------------------------
construed in accordance with the domestic laws of the State of Delaware without
giving effect to any choice or conflict of law provision or rule (whether of the
State of Delaware or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of Delaware. Any judicial
proceeding brought by or against any party to this Agreement in respect of
claims arising under or relating to this Agreement shall be brought only in a
court of competent jurisdiction located in the State of Delaware, United States
of America. By execution and delivery of this Agreement, each party accepts for
itself and in connection with its properties, generally and unconditionally, the
non-exclusive jurisdiction of the aforesaid courts. Each party to this
Agreement waives any objection to jurisdiction and venue of any action
instituted hereunder and shall not assert any defense based on lack of
jurisdiction or venue or based upon forum non conveniens. Nothing in this
subsection shall affect the right to serve process in any manner permitted by
law.
(i) Amendments and Waivers. No amendment of any provision of this
----------------------
Agreement shall be valid unless the same shall be in writing and signed by the
Buyer and the Seller. No waiver by any Party of any default, misrepresentation,
or breach of warranty or covenant hereunder, whether intentional or not, shall
be deemed to extend to any prior or subsequent default, misrepresentation, or
breach of warranty or covenant hereunder or affect in any way any rights arising
by virtue of any such prior or subsequent occurrence.
(j) Severability. Any term or provision of this Agreement that is invalid
------------
or unenforceable in any situation in any jurisdiction shall not affect the
validity or enforceability of the remaining terms and provisions hereof or the
validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
(k) Expenses. Each of the Buyer and the Seller will bear its own costs
--------
and expenses (including legal fees and expenses) incurred in connection with
this Agreement and the transactions contemplated hereby. Notwithstanding the
foregoing sentence, Buyer shall bear the costs of any and all transfer taxes,
including without limitation any use or sales taxes, associated with or related
to the sale of the Sybra Shares.
(l) Construction. In the event an ambiguity or question of intent or
------------
interpretation arises, this Agreement shall be construed as if drafted jointly
by the Parties and no presumption or burden of proof shall arise favoring or
disfavoring any Party by virtue of the authorship of any of the provisions of
this Agreement. Any reference to any federal, state, local, or foreign statute
or law shall be deemed also to refer to all rules and regulations promulgated
thereunder, unless the context requires otherwise. The word "including" shall
mean including without limitation.
(m) Incorporation of Exhibits. The Exhibits and any annexes and schedules
-------------------------
identified in this Agreement are incorporated herein by reference and made a
part hereof.
*****
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of
the date first above written.
I.C.H. CORPORATION
By:
--------------------------
Title:
------------------------
VALCOR, INC., a Delaware corporation
By:
--------------------------
Title:
------------------------
20815.d9
